‘Finance, OAG obviously not paying attention to collecting $400K from M/V Luta ex-owners’

Sen. Edith E. DeLeon Guerrero (D-Saipan) is wondering why the Department of Finance and the Office of the Attorney General have not collected a single penny out of the $400,000 that the former owners of M/V Luta have agreed to pay as part of a settlement agreement in 2019.

At a Senate session Thursday, DeLeon Guerrero said a collection could have been achieved had there been more due diligence taken to monitor the collection of these public funds.

“…It is quite obvious that no attention was given to outstanding CNMI public funds receivables,” said the senator.

DeLeon Guerrero

DeLeon Guerrero made the comment in response to Gov. Ralph DLG Torres’ message to the Legislature last Dec. 29 about vetoing a Senate local bill that sought to earmark the $400,000 repayment by Luta Mermaid LLC and local poker fees in order to provide funds for the Rota Interisland Medical Referral patients, medical subsistence program, and Rota Municipal Scholarship.

Torres said that, according to Finance and OAG, although the defendants in the Luta Mermaid litigation have agreed to repay the settlement amount of $400,000, no payment has been made to the Commonwealth yet. The governor said the OAG has also informed him that an order to show cause motion will be filed shortly to enforce the settlement terms in the lawsuit.

Torres found the earmarking of these funds to be “irresponsible” at the time since the funding is not readily available and there is no additional information offered by the Rota Legislative Delegation with regard to when the payments will be made.

The governor strongly encouraged the Rota Legislative Delegation to earmark and appropriate these funds for the Rota Interisland Medical Referral patients, medical subsistence program, and the Rota Municipal scholarship as soon as they become available.

DeLeon Guerrero said a news article came out back in August 2019 stating that a resolution has been reached with a consent judgment to recover the $400,000 in public funds that were advanced to Luta Mermaid LLC.

DeLeon Guerrero said the attorney general went on saying that “the settlement represents a victory for the people of the Commonwealth” and that with the resolution of the case, the CNMI will be able to look to their personal assets in the event the settlement agreement is breached.

Two years later, the senator said, another news article came out in August 2021, saying that the AG is waiting on Finance to see if any payment has been made before filing a motion with the court to enforce the consent judgment.

She said the AG also stated that $55,894 was agreed for the assignment of a salary as partial satisfaction of the judgment with an amortization of 48 months at 3% interest per annum.

DeLeon Guerrero said in January 2022 or three years from 2019, another article came out, this time about the governor’s veto of Senate Local Bill 22-4.

Sen. Paul A. Manglona (Ind-Rota), who is the author of Senate Local Bill 22-4, said he knows Torres’ reasoning for vetoing it, as the governor stated in his letter that he does not see any funding that is readily available. Manglona said that Torres said in the same breath that he has information that the AG will be filing an order to show cause for the former owners of M/V Luta to pay pursuant to the settlement agreement between the government and the former owners of the vessel.

“So I see a contradictory statement coming from the governor there,” he said.

Manglona said he hopes to reintroduce the bill by putting a more definitive statement as to the funding. “And hopefully by then, the attorney general would have given us [more information on] what are his action,” said Manglona.

The CNMI government sued the then-owners of cargo ship M/V Luta in 2017 for allegedly refusing to return the $400,000 in public funds that were loaned to them for the vessel’s operations.

On July 23, 2019, the CNMI and Luta Mermaid LLC reached a settlement agreement in which the former owners of the vessel agreed a repayment plan for the $400,000.