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Governor plans to take charge of ports authority

By Gemma Q. Casas

SAIPAN, CNMI (Mariana Variety, May 15, 2008) - The House of Representatives yesterday adopted a resolution opposing Governor Benigno R. Fitial’s executive orders that allow him to take over the Commonwealth Ports Authority.

The House said it would use its constitutional rights to review the executive orders within 60 days.

Press Secretary Charles P. Reyes Jr. said there was no hidden agenda when the governor exercised his executive powers to strip the CPA board of its autonomy.

"I am sorry that the House has concerns," said Reyes. "The governor’s intention was to preserve the financial integrity of CPA and resolve its crisis. This is not a political decision. This is public policy for public benefit."

He added, "We want to save the credit worthiness of the whole CNMI government. If our bond rating goes down further, we would have no financial credibility in the bond market anymore."

House Resolution 16-17, offered by Representative Victor B. Hocog, Ind.-Rota, also stated that the governor’s state of disaster emergency declaration for CPA, an autonomous government agency, "is nothing more than an unoriginal attempt to circumvent legislative oversight."

Hocog is a former CPA chairman.

Representative Heinz Hofschneider, R-Saipan, said he checked with the Bank of Guam and found out that CPA is not in arrears on its payments to bondholders Franklin Templeton of California and Oppenheimer Funds of New York.

"CPA is not in technical default. They have been paying on time. The governor has to tell the truth. There’s some grand scheme in play here," he said during the House session. "Something is terribly wrong."

He compared the governor’s action to an attempt to kill a fly with a shotgun.

Reyes said CPA is not actually in a state of technical default.

"The governor was just being proactive. We’re on our way to that situation (technical default)," he said.

CPA floated a US$20 million bond in 1998. This must be paid US$1.5 million every year until 2028.

In 2007, Fitch Ratings downgraded CPA’s debt ratio to B+ which means there is uncertainly on how it can pay the bond.

Hofschneider said, "The governor should have just removed the (CPA) board (members). This is an outright abuse of executive powers. What is the need to bring (CPA) under your wing?"

Hocog described as "unusual" that three executive orders were issued one after the other.

House Floor Leader Joseph N. Camacho, R-Saipan, said he found out that CPA can pay the monthly dues to the bank.

On May 13, the governor issued E.O. 8-3 placing CPA under his office for 120 days.

The move also means that the CPA board is technically dissolved within the period. This allows him to transfer or reprogram funds for CPA.

The governor appointed CPA acting Executive Director Lee Cabrera to administer the agency, which oversees three airports and seaports throughout the CNMI.

E.O. 8-3 needs the concurrence of the Legislature before it can take effect within 60 days.

On Tuesday, the governor issued E.O. 8-4 which declared a "State of Disaster Emergency" for CPA. This gives him immediate control over CPA for 30 days.

Subsequently, the governor issued E.O. 8-5, amending E.O. 8-3.

The House said there seems to be something wrong with the way the administration has taken over CPA.

"The governor, in his desire for total and immediate control of CPA, has avoided mandatory constitutional review of his plan by issuing a disaster emergency declaration," the House resolution stated.

It added that CPA’s "state of disaster emergency," is not within the scope of the term’s meaning under the CNMI Constitution which includes events such as "invasion," "civil disturbance," "natural disaster" and "calamity."

According to the resolution, "The House finds that the governor’s use of extraordinary state of emergency powers is disingenuous and sets an irreparably damaging policy precedent. The House hereby strongly objects to Executive Orders 8-3, 8-4 and 8-5."

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