New law bans contract buyouts

A law prohibiting contract buyouts was enacted Wednesday along with legislation to transfer the functions of the Marianas Public Lands Authority to a department within the Executive Branch.

Authored by House Minority Leader Arnold I. Palacios, House Bill 15-62 was passed unanimously by the House of Representatives.

The Senate, which convened soon after the House session, voted 8-1 in favor of the bill. Only Sen. Luis Crisostimo voted against the measure.

Gov. Benigno R. Fitial immediately signed the bill, which now becomes Public Law 15-3.

The new law prohibits the buyout of government employment contracts for executive directors or the top administrative officer of a public corporation, board, commission, or other autonomous agency of the CNMI government.

This means that no administrative officer of an agency could be paid the remaining amount of his or her contract in the event that the employment is terminated before the end of the contract term.

“The Legislature finds that it is inappropriate for public funds to be used to pay government employment contract buyouts. Such a practice amounts to compensation for no work performed,” the law states.

P.L. 15-3 was enacted amid rumors that the MPLA board of directors attempted to buy out the contract of MPLA commissioner Edward Deleon Guerrero during a Wednesday meeting.

Citing reports received by his office, Senate Vice President Pete P. Reyes announced in the Senate session that MPLA planned to increase its budget, entertain last-minute contracts, issue homesteading permits, and buy out personnel contracts.

“Isn’t this a conspiracy to defeat the very thing that the Legislature is trying to prevent? MPLA is a loose cannon. What they’re doing is highly questionable,” the senator said.

MPLA has denied the allegation.

Board chair Ana Demapan-Castro issued a statement Wednesday, denying the board’s alleged plan to “buy out” certain employees’ contracts.

“The rumors of the MPLA ‘passing’ a budget during today’s board meeting for the purposes of ‘buying out’ employee contracts are entirely false,” said MPLA media officer Ed Arriola Jr., quoting Demapan-Castro.

Board member Nick Nekai had also denied that the board tackled the issue. “Nothing like that is happening in MPLA,” he had said.

The Marianas Visitors Authority, another autonomous agency, has actually bought out the contract of its former managing director, Vicky I. Benavente, following her husband’s failed bid for re-election as lieutenant governor.

The MVA board of directors terminated Benavente’s employment “for humanitarian reason” effective Jan. 13, 2006. The board promised to pay Benavente based on her contract, which expires in June 2006.