AG holds off release of MPLT loan to CHC

Despite the submission of required documents and justifications on how the Commonwealth Healthcare Corp. will use the remaining $2 million from an already approved loan from the Marianas Public Land Trust, nothing has been released yet from the scheduled drawdown on the loan.

The reason: the Office of the Attorney General is holding off on the release of the funds until the corporation provides it more documents.

Healthcare corporation board chair Joaquin Torres and chief financial officer Alvaro Santos confirmed this with the Saipan Tribune yesterday, with Santos adding that all requirements have already been submitted as far as he is concerned.

He said he is now confused over what additional information and documents Attorney General Edward Buckingham is asking for from Healthcare Corp. CEO Juan N. Babauta.

Under the memorandum of agreement on the $3 million MPLT loan, the corporation is scheduled to draw down $500,000 from the loan every two weeks. Since the initial release of $1 million last month, nothing from the balance has been released yet.

As a consequence, Torres said the corporation won’t be able to pay its employees their salaries this Friday, the hospital might be forced to shut down, employees may have to be furloughed, and, as a worst-case scenario, a possible mass resignation of physicians.

He said the hospital has already been generating some revenue but this is not enough to cover all the payroll scheduled on Friday.

As of this month, the delay in the release of the housing allowance of CHC employees reaches five months. With the situation as it is and without the MPLT loan, Torres said he cannot promise when the corporation will to able to meet this obligation.

In an email to Saipan Tribune on Monday, Babauta said the $500,000 they expected to drawdown since last week is for payroll and a portion of housing benefits. “On just these two items, the cost will be way over $500,000. The difference will come from what little money we can scrape up from revenues,” said Babauta.

Babauta and Dr. Jeremy Richards, director for Medical Affairs, together with the management team, have been working since yesterday on a preliminary contingency plan that is expected to be finalized by Friday. Among the options are the partial shutdown of the hospital, which means only the emergency room will be open, and putting affected employees in other units on an emergency furlough.

Late Tuesday afternoon, Babauta called for an emergency meeting attended by Torres, House Speaker Eli Cabrera (R-Saipan), Senate President Paul Manglona (Ind-Rota), Sen. Jovita Taimanao (Ind-Rota), MPLT chair Pedro Deleon Guerrero, as well as corporation board members, hospital department heads, and supervisors. The meeting started past 5pm and lasted some hours.

Torres described the meeting’s atmosphere as “pretty intense, very serious, and a lot of disappointments.”

When asked why Buckingham is holding off releasing the funds, Torres could only think of one thing: “It’s the ICS [International Consulting Service] contract, which I think should be separated from this MPLT loan issue.”

Torres said that Buckingham informed Babauta on Tuesday that the ICS’ contract is unlawful and ordered a stop on the contract, giving the corporation 45 days to rectify the issue. “And we’re correcting that, so there shouldn’t be a problem in releasing the money for the payroll,” he said.

Torres and Babauta were scheduled to meet with Gov. Benigno R. Fitial yesterday afternoon but this was cancelled. The main agenda was to request a redeclaration of emergency at the hospital to maximize all options and resources for CHC, which also lacks important supplies.

The governor last declared a state of emergency at CHC on March 6; it expired on April 6. Procurement regulations are suspended during a state of emergency and government funds can be reprogrammed to CHC.

Torres said that a redeclaration of emergency will enable the corporation to reprocess the ICS contract—which means documents will be reviewed and signed by all parties concerned, including the AG.