CNMI POISED TO FIRE BANK OF GUAM AFTER LOAN REBUFF

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SAIPAN, CNMI (Marianas Variety, Dec. 31) – Gov. Juan N. Babauta says the government is "ready" to sever its more than 20-year-old business relations with Bank of Guam, adding that the bank’s partnership with the Northern Marianas is "not genuine."

Babauta said the government may pull out its multi-million dollar government deposits and assets from Bank of Guam which recently rejected the CNMI’s $19 million loan proposal.

"I am considering the option (of pulling out )," Babauta said yesterday.

"There is now a feeling that the business partnership between the CNMI government and Bank of Guam is not genuine," the governor said.

"We really needed Bank of Guam’s help, but it turned its back on us," he said.

Bank of Guam’s executive vice president and chief operating officer, William D. Leon Guerrero, declined to comment.

He said the bank has a strict confidentiality policy regarding its transactions with its clients, including the CNMI government.

"Dealings with customers are strictly confidential. We don’t discuss these with any other person," Leon Guerrero said.

The CNMI government has an estimated $12 million for monthly payroll deposited in the bank.

Robert Schrack, special assistant to the finance secretary, told Variety that the government averages about $200 million in total collected revenues yearly, and most of this money is deposited in Bank of Guam.

Babauta said he is considering "other options" to get the $19 million needed to pay the refunds and rebates.

These include borrowing from the Marianas Public Land Trust and other banking institutions.

On Dec. 24, after nearly a month of negotiations, Babauta announced that Bank of Guam had rejected the loan proposal, citing the "unconstitutionality" of the law authorizing it.

December 31, 2002

For additional reports from the Marianas Variety, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/ Marianas Variety. 

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