OAG: Hocog did nothing wrong

The Office of the Attorney General has asserted that Lt. Gov. Victor B. Hocog did nothing wrong over the transfer of $400,000 in government funds to Luta Mermaid LLC, that owns the cargo ship M/V Luta, as he was only involved as a then-Rota senator over the passage of a resolution, which is not an appropriations bill.

OAG Civil Division chief Christopher M. Timmons, counsel for Hocog in his personal capacity, said that former Department of Public Lands Secretary John DelRosario’s Government Ethics Code Act claims are predicated upon a misperception that Hocog authorized a loan to his relative.

Timmons discussed Rota Local Delegation Resolution 19-3 in Hocog’s objection and opposition to DelRosario’s motion to disqualify the OAG as counsel for Hocog in his personal capacity.

OAG Solicitor Division chief James M. Zarones, counsel for Hocog and Department of Finance Secretary Larrisa Larson, joined in Timmons’ objection and opposition.

Attorney Jennifer Dockter, counsel for DelRosario, asserted that although it was an impermissible appropriation, it was an attempted appropriation nonetheless.

Dockter said that simply tacking another name to the action does not change the substance of the act.

Dockter said the OAG has a quagmire of conflict in this case as they have three named clients: Hocog in his official capacity, Hocog in his personal capacity, and Larson in her official capacity.

She said OAG also has a fourth client, although not specifically named in this matter: Commonwealth citizens.

The Superior Court will hear today, Thursday, the motion to disqualify the OAG and the motion to dismiss DelRosario’s lawsuit.

Last May, DelRosario filed a taxpayer’s lawsuit against Hocog and Larson over the alleged adoption of a Rota Legislative Delegation Resolution 19-3 without public notice that purportedly authorized payment of $400,000 to Luta Mermaid LLC, a private company owned by Hocog’s relatives.

DelRosario is suing Hocog and Larson for breach of fiduciary duties, and expenditure of public funds for an improper purpose. In addition, Hocog is being sued for violation of the Open Government Act.

DelRosario wants the OAG disqualified from serving as counsel for Hocog and Larson.

Timmons argued that there must be an appropriation to authorize an expenditure of public funds. Local appropriations bills must originate in the House of Representatives, Timmons said, and must specify the matter that may be the subject of laws enacted by the members of the respective senatorial district.

The OAG Civil Division chief cited that the audio recording of the meeting in question makes it clear that the Rota local delegation understood that Resolution 19-3 was not an appropriation bill but a resolution.

He said Rota local delegation Resolution 19-3 was not and is not an appropriations bill.

“Resolutions are statements of policy or expressions of the will of the resolving body unless they relate solely to the body’s internal procedures, “ said Timmons, citing the analysis of NMI Constitution.

He said Rota delegation Resolution 19-3 has no legal effect and did not confer a benefit upon Hocog’s relatives, or upon anyone else.

“This certainly is not the proper basis for assertion of a violation of the Government Ethics Code Act,” Timmons said.

Timmons also pointed out that DelRosario does not allege that Hocog had anything to do with the actual release of the $400,000.

He said contrary to DelRosario’s assertion that OAG “has admitted facts, which subject Mr. Hocog to liability,” these admitted facts do not support a finding that Hocog conferred benefits upon his relatives.

Accordingly, Timmons said, neither the Attorney General’s alleged duty to enforce the Government Ethics Act Code Act nor the alleged admissions by another member of the OAG can be a basis for disqualification in this case.

Timmons said Larson did not admit facts that establish Hocog’s violation of the Government Ethics Act because Resolution 19-3 was not binding.

Timmons said Larson’s defense does not implicate a former client because the AG did not advise then-governor Eloy S. Inos on this matter.

He said DelRosario makes it clear that he has no evidence that counsel for Hocog and Larson advised Inos with respect to the Luta Mermaid, LLC loan, or Rota Legislative delegation Resolution 19-3.

Instead, Timmons said, DelRosario insinuates that counsel may have “learned confidential information in its representation of the late governor that it now seeks to use against the Governor’s Office in its defense of Secretary Larson.”

Timmons said counsel for Hocog did not advise the late governor, and upon information and belief, neither did counsel for Hocog and Larson in their official capacities.

He said neither counsel possess or has access to any confidential information obtained from the late governor, let alone any confidential information related to the loan or disbursement in question.

Accordingly, he said, the duty of loyalty to former clients cannot be the basis for disqualification in this matter.

Timmons added that AG’s duty to prosecute ethics violations does not cause a conflict because the primary remedy for a violation by a member of the Legislature is impeachment, not prosecution.

In DelRosario’s reply, Dockter said that due to the conflict of interest that arises from multiple representations of the various parties to the case, the AG should be disqualified from continuing to represent them all.

“If necessary, outside counsel could be appointed either by the attorney general or by this court to ensure separate representation which comports with the Model Rules of Professional Conduct,” Dockter said

The lawyer said taxpayers such as DelRosario have been cheated out of $400,000 that, as repeated by the OAG, seemed to have been appropriated through a document that has no legal effect.

Dockter asked who is then responsible if DelRosario is correct, and neither Hocog nor Larson is responsible for the unlawful release of $400,000 of public monies.

“And more importantly, why isn’t the office charged with upholding the law and protecting taxpayers answering that question and bringing appropriate actions against the responsible parties?” Dockter asked.

Dockter noted in a motion to disqualify that Larson as part of her apparent defense in this matter states that she transferred funds to Lt. Gov. Hocog’s family business “pursuant to direct order” of then-governor Inos.