MPLA brings battle to DC

After urging local and federal authorities to look into alleged fraud and possible violations of banking laws by Gov. Benigno Fitial when he was still Bank of Saipan president, Marianas Public Lands Authority officials have taken the battle to Washington D.C. by asking Rep. George Miller (D-Calif.) to conduct a similar probe.

Fitial’s press secretary, Charles Reyes Jr., branded the move as “an act of desperation” and retaliation by MPLA officials against the governor, who is pushing for the abolition of the MPLA’s autonomy and the agency’s transfer into a department within the executive branch.

While Reyes said that the MPLA’s letter to Miller was discouraging because the U.S. congressman has been a known critic of the CNMI’s labor and immigration policies, he downplayed the move as far from getting federal lawmakers’ attention on measures for a federal takeover of the Commonwealth.

MPLA board members—chairperson Ana Demapan-Castro, Nicolas Nekai and Felix Sasamoto—signed the letter for Miller. Vice chair Manuel Villagomez did not sign it.

The concerned board members asked Miller to probe the MPLA’s Bank of Saipan’s accounts “to determine for the record that Gov. Fitial had defrauded and deceived the board of MPLA, the MPLA, and the indigenous people of the CNMI.”

The board referred to Fitial’s dealings with the MPLA when the governor was still the bank’s president some years ago, saying that Fitial offered the same collateral for both the MPLA and the Retirement Fund’s deposits with the bank.

“We believe that such improper and misleading representations by Mr. Fitial constitute fraud and deception and should be investigated,” the MPLA board told Miller.

Before the receivership, the bank secured MPLA’s over $8 million bank deposits with U.S. government securities held by D.A. Davidson in the amount of $5,259,238, and more than $6.28 million worth of loans originated by the bank and backed by the Commonwealth Development Authority.

When he was House Speaker, Fitial authored a bill that became Public Law 12-61, which reduced the required capital for government deposits from 110 percent to 100 percent, the MPLA board said.

“The law was effective on Aug. 6, 2001—a little over eight months before the Bank of Saipan closed and went into receivership,” the MPLA board said. “Upon information and belief, certain substantial depositors at the bank…withdrew their funds shortly before the bank closed and went into receivership.”

The MPLA board furnished the Office of Insular Affairs, the Federal Bureau of Investigation and the U.S. Attorney’s Office copies of the letter to Miller. The board also gave copies of the letter to the Legislature, the Office of Public Auditor and the Attorney General’s Office. It earlier asked both local and federal investigating bodies to probe the alleged fraud committed by Fitial.

Fitial’s press secretary belittled the MPLA board’s move amid pending legislation that seeks to reorganize the agency. The Legislature has scheduled a public hearing at the Multi-purpose Center in Susupe this Friday on House Bill 15-57, which alleges grave cases of mismanagement and abuse of power by MPLA’s top officials.

The bill proposes the abolition of the existing setup of the MPLA and the creation instead of a new department that will be headed by a secretary who will be subjected to the normal confirmation process for Cabinet members. Under the bill, the secretary will have a five-member advisory board, four of whom will be appointed by the four CNMI mayors and the governor will appoint another one.

Press secretary Reyes said the move by the MPLA seeking investigations on alleged fraud by Fitial shows the “vindictive” character that its board members have, “but this only undermines their credibility.”

He said MPLA officials should focus on the merits of the proposed legislation rather than initiate personal attacks against the governor.

“The timing is definitely very suspect,” Reyes said. “They’re trying to discredit the governor in retaliation for his reform program for the MPLA.”

Besides, the Bank of Saipan and the MPLA have already entered into an agreement regarding the agency’s funds with the financial institution, noted Reyes. Federal authorities have also investigated the Bank of Saipan fiasco, resulting in the prosecution and conviction of a group of businessmen led by Bert Douglas Montgomery, who are now serving time in federal prison. Criminal trial on Saipan’s federal court also led to the conviction of former BoS president Tomas Aldan.

The securities offered by the bank to the MPLA and the Retirement Fund before the bank’s initial closure and eventual rehabilitation also became subject of the receivership case before the CNMI Superior Court.

The MPLA board also asked Public Auditor Michael S. Sablan to audit governor’s counsel Howard Willens’ contract with the CNMI, if any, to determine whether the government’s procurement procedures were followed. It alleged that government funds are being used for Willens’ accommodations at the Hyatt Regency Saipan.

The OPA has also been conducting audits on the MPLA’s funds. Sablan, however, has recused himself from the audits, being a cousin of MPLA’s Demapan-Castro.