Senate, retirees group CRA want Fund’s bankruptcy filing junked

The Senate and the Commonwealth Retirees Association separately supported yesterday a move to withdraw the NMI Retirement Fund’s Chapter 11 bankruptcy petition, echoing the U.S. Trustee and other retirees’ request for the U.S. District Court for the NMI Bankruptcy Division to dismiss it.

The NMI Retirement Fund is the first public pension agency on U.S. soil to seek bankruptcy protection, serving as a litmus test for other troubled pension agencies worldwide.

By a vote of 8-0, the Senate adopted yesterday afternoon Senate Resolution 17-87, requesting the Fund to withdraw its Chapter 11 bankruptcy petition “pursuant to the U.S. Trustee’s Motion to Dismiss Case.”

SR 17-87, authored by Sens. Frank Cruz (R-Tinian), Henry San Nicolas (Cov-Tinian), Jovita Taimanao (Ind-Rota), and Senate President Paul Manglona (Ind-Rota), was adopted along with another resolution that seeks to create a special commission to help find solutions to the Fund crisis.

In a meeting last night, the Commonwealth Retirees Association voted to support dismissal of the bankruptcy filing. CRA director and former representative Diego Benavente offered the motion.

“Our alternative to bankruptcy filing is recommending that parties involved and the government work together to address the Fund’s problems,” Benavente told Saipan Tribune last night.

The Senate, as well as CRA, called for the creation of a special commission composed of the Fund, the Legislature, the Fitial administration, and active and retired members of the Fund “to work collaboratively to rehabilitate the Retirement Fund.”

Senators and CRA both cited the U.S. Trustee’s filing on Friday to dismiss the bankruptcy petition.

Assistant U.S. Trustee Curtis Ching said the Fund’s structure and statutory existence makes it clear that it is a “governmental unit” of the CNMI. Under Title 11, a debtor must be a “person” in order to be eligible to file for Chapter 11 bankruptcy and may not be a “governmental unit.”

“As such, the [Fund] cannot be a “person” for purposes of Title 11 and is therefore ineligible to be a Chapter 11 debtor. This case must therefore be dismissed,” Ching said in a 14-page motion.

The U.S. Trustee, a component of the U.S. Department of Justice, protects the integrity of the bankruptcy system by overseeing case administration and litigation to enforce bankruptcy laws.

Accusations

The Senate also adopted a resolution objecting to lawmakers who now want to go back to receiving their salary as legislators after waiving it to receive their retirement benefits instead.

Manglona’s Senate Resolution 17-86 was adopted only after an exchange of words between Manglona and Senate floor leader Pete Reyes (Ind-Saipan), apparently the only one affected by the resolution.

In a prepared two-page statement, Reyes said he is extremely honored that Manglona found the time and effort to craft up a resolution in Reyes’ honor.

“It really is not necessary and you probably know that the resolution is useless and unenforceable,” Reyes said.

Reyes said Manglona could have drafted instead a bill that will prevent future abuse of public funds, including one that will make it illegal to create two subsistence allowances for members of the Legislature.

Reyes said that during his tenure as Senate president, Manglona came up with a scheme to appropriate funds from the Rota Legislative Delegation and assigned expenditure to Reyes. He said the scheme was intended to avoid discovery that Manglona set up another subsistence allowance account for himself and others in the delegation.

Manglona said that Reyes could take this up with the Office of the Public Auditor if he wants.