CNMI Fund Ad Litem Trustee Criticized Over Unfiled Reports

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Port authority counsel claims trustee ‘ignoring duty to court’

By Andrew O. De Guzman

SAIPAN, CNMI (Marianas Variety, Dec. 14, 2012) – Commonwealth Ports Authority (CPA) legal counsel Robert Torres has asked the Superior Court to order Retirement Fund trustee ad litem Joseph Razzano to show cause why he should not be sanctioned and held in contempt for failing to file status reports, and for failing to comply with Public Law 17-82 by acting on applications to terminate Fund membership and payroll deductions.

Torres also wants the court to deny the Fund trustee’s application for appointment as permanent receiver, and to schedule an immediate status conference.

Razzano "is ignoring his duty to [the] court," Torres said.

Last September, Superior Court Judge Kenneth L. Govendo instructed Razzano, who personally attended that hearing, to provide updates on the Fund’s efforts to collect the over $300 million monetary judgment against the commonwealth.

"That was the court’s last admonishment with which the then newly-minted trustee ad litem assured the court he would comply. He has not done so as to CPA," Torres told Govendo.

Torres also informed the court of the Fund’s "about-face" when it submitted an amended complaint in the U.S. District Court for the NMI, which appointed Razzano.

The submission of the amended complaint was "in utter disregard of statutory requirements," Torres said, adding that the Fund failed to inform CPA about the pension agency’s request to make Razzano the "permanent receiver" for the Fund.

"In an end-run around [the] court’s supervisory authority over [the] case and without opportunity for a hearing, the Fund is urging the federal court to appoint…Razzano, as a permanent receiver for the Fund so that he can continue to manage its operations, collect the judgment, and enforce the government’s continuing obligation to pay its legally required contributions to the Fund," Torres said.

Razzano "has done little — if anything — to preserve Fund assets, raise revenues, or collect the judgment," Torres added.

Razzano has "failed" to report to the court, to call non-complying agencies to task for failing to remit contributions, and "has outright ignored his responsibility to act on the applications of those members of the Defined Benefit Plan to terminate their memberships, stop employee contributions, and return their money to them," Torres said.

"All that [Razzano] has done, besides avoiding the jurisdiction of [the local] court, is to submit billing statements for work that has brought little, if any, value to the Fund," said Torres, adding "to reward" Razzano "would be adding insult to injury."

Torres told the court, "Immediate action is necessary to preserve the status quo and to protect CPA interests."

He said CPA has fully complied with its employer contributions and "its employees are entitled to withdraw them, with interest, without restriction."

He added, "This is a matter of vital concern to the agency, since the obligations to deduct employee contributions to the Fund ceases only when the Fund approves the withdrawal applications. Thousands of current government employees who are seeking the return of their employee contributions are being forced to making employee contributions to a Fund that will neither protect them nor let them go. Nearly 100 CPA current employees number among those affected by the trustee’s inaction."

Torres said opening another forum to undertake collection efforts "will be expensive and duplicative, at a time when Fund assets are rapidly dwindling."

Torres said "the Superior Court is the forum with jurisdiction to supervise the collection of judgment," but the Fund is "forum shopping."

Razzano, the lawyer said, "is not entitled to pick and choose which laws he elects to obey and which requirements of [the] court he is free to ignore."

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