AG: CNMI Governor Not Liable For Power Purchase Deal

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San Nicolas still says Fitial had no authority to enact agreement

By Ferdie de la Torre

SAIPAN, CNMI (Saipan Tribune, Jan. 2, 2013) – Attorney General Joey P. San Nicolas issued on opinion Monday declaring that Northern Marianas Gov. Benigno R. Fitial is not liable for any cause of action related to his signing of the controversial no-bid $190.8-million power purchase agreement (PPA).

San Nicolas said that Fitial cannot be faulted because he reasonably relied on the certification of then attorney general Edward T. Buckingham that the power purchase agreement was proper as to form and capacity.

"The governor should be able to rely on the advice of the Commonwealth's highest legal officer and cannot be faulted when the attorney general is mistaken," San Nicolas pointed out.

He determined, however, that Fitial did not have the authority, pursuant to Executive Order 2012-07, to enter into the power purchase agreement with Saipan Development LLC (SDLLC).

He said the agreement would not address any of the grounds for the finding that the Commonwealth Utilities Corp. (CUC) was faced with an immediate disaster.

"Suspending CUC's procurement regulations was not necessary for CUC to enter a PPA that will neither take effect nor show results for a number of years," San Nicolas added.

The PPA is among the issues raised in the impeachment resolution against Fitial. The Senate and Reps. Janet Maratita (IR-Saipan) and Ray Yumul (IR-Saipan) are suing Fitial, Buckingham, CUC, and SDLLC, over the PPA signing.

In his five-page opinion, San Nicolas confirmed that Buckingham did indeed certify that the PPA was proper as to form and capacity, and that Fitial signed the PPA in reliance of Buckingham's certification.

"Simply stated, the attorney general was mistaken," San Nicolas said.

He said Fitial is not liable for actions taken in good faith reliance on the AG's representations.

He cited that the CNMI Supreme Court in a precedent case has found that a governor's actions are reasonable, and the governor is entitled to qualified immunity, "insofar as he followed the advice of the attorney general, without regard to whether the attorney general was ultimately correct."

San Nicolas also cited other state Supreme Courts' rulings that jive with this analysis.

He said the AG has a duty to provide competent legal advice to the governor and the Executive Branch.

"The governor, as a layman, cannot be faulted for the attorney general's mistakes of law," he said.

On the authority issue, San Nicolas said that Fitial's Executive Order 2012-07 and the Disaster Relief Act did not empower the governor to suspend CUC's regulations to enter the PPA.

E.O. 2012-07 identified an "imminent threat of the inability of CUC to provide critical power generation, water, and wastewater services to the CNMI."

The Disaster Relief Act was enacted to, among other things, specify the governor's emergency powers.

Pursuant to the act, the governor is authorized to issue executive orders that have "the force and effect of law when promulgated in accordance with the procedures set forth in the Act."

E.O. 2012-07, San Nicolas said, empowered the governor or his designated agent to exercise the CUC board of directors' powers. However, although Fitial has this power, he is still obligated to follow CUC's procurement regulations to the same extent as the board would be so obligated, San Nicolas said.

"Entering the PPA is not necessary to address any of the specified reasons for the CUC emergency," he added.

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