When you get stuck along Beach Road, better take the Middle Road. This is a website for those who choose to tread Saipan's off the beaten path. * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * + * +

May 28, 2008

CGW Days are Numbered

Now that the CNMI's Labor and Immigration system will be under the Federal management, the buzz around the island is that the Labor Department has been very busy looking at the contract workers or foreign national workers' documents submitted to their office when they were hired to work in the CNMI from the beginning.

I've heard at least three cases where the Labor has deported recently one contract worker due to false documents submitted to the department when he was hired to work here years ago. One has a pending labor hearing case due to a fraudulent employment certificate submitted to the employer. The contract worker submitted his employment certificate from his/her country of origin that was actually non-existent. However, the employer went to the hearing and backed the contract worker for his/her competence at work, despite the major "glitch."

The Labor is deemed serious into verifying the documents submitted to them.

Now the question to the employers, if you found out that your best employee falsified documents, would you retain him/her?

May 24, 2008

People missed the movie house...or maybe not

As expected, people flocked to the Hollywood Theaters when it reopened Friday night. Almost all the movies -- especially Indiana Jones and Iron Man -- were a hit among the viewers. If only we have such a big crowd every once in a while...

May 21, 2008

Maybe they can hire a lobbyist to kill this bill

The Marianas Variety reports today that House Floor Leader Joseph Camacho is introducing legislation that would seriously restrict the use of government funds to hire lobbyists. The hiring of lobbyists by the CNMI government has of course been a touchy subject in recent years. Here are some questions for us all to ponder: Before the government uses taxpayer funds to hire a lobbyist, does it have some sort of ethical obligation to determine whether the position that it seeks to advance is in tune with the views of the citizens? For example, just as a hypothetical, would it be ethical for the government to hire a lobbyist to kill the national marine monument proposal if the overwhelming majority of the public supported it? Does winning a gubernatorial election give one the sole right to decide which causes lobbyists should be hired for with taxpayer funds?

C.U. in court!?

Rumor has it that Howard Willens, advisor to Governor Fitial, has already drafted a complaint that would initiate a lawsuit against the U.S. to block federalization. No word on whether the complaint is in final form, or whether the Governor has actually made the decision to proceed with a lawsuit. Would this be a good use of CNMI taxpayer funds? Clearly, people who favor the federalization bill recently signed by President Bush would say no. However, are there any opponents of federalization out there who nonetheless believe that this would not be a good use of CNMI taxpayer funds?

May 18, 2008

A call for recall by text messaging

Have you received one? A text message that reads: "We need to RECALL this corrupt governor! No more! If you agree pass this on to everyone u know! No more bitter times!"

Should you receive the same text message on your cell phone, would you forward it? Ignore it?

May 16, 2008

Did Anyone Notice the Temporary Exit Notice?

Saipan Tribune has run two stories about this latest directive (well, not latest according to the Labor Department) about aliens with work permit would have to fill out a form available online from the DOL that would notify the department that they are temporary leaving the island. While the form does not ask for the destination, according to sources, DOL staff had told them that even if the aliens are going to Guam for a business visit or pleasure visit would still have to file for the notice.

Tribune has repeatedly told readers that it had asked about the date of implementation of this rule and the paper said that DOL had referred them to the PL 15-108 enactment. When was the PL 15-108 implemented? How come some people that had vacation last month that were not aware of the requirement thus failed to file the document were allowed back in the CNMI?

Some workers left for Guam today and called their offices that they had heard about the news just yesterday and got so worried about the news. Now the paper again is saying that one nurse was refused entry to the CNMI due to non-compliance.

However, the news is also right about how easy it would be to file the document.

What do you think?

May 15, 2008

More names for CNMI delegate to US House of Representatives

Since we posted a partial list of possible candidates for the CNMI's first non-voting delegate to the US House of Representatives, three more names have surfaced.

Because of the federalization law, CNMI voters will elect their first delegate to the US House on Nov. 4.

The nonvoting delegates in the US Congress receive the same pay levels given to US senators and members of the House, which is $169,300 per year.

Here is an updated list:

1. Pete A. Tenorio, the current CNMI resident representative to Washington, D.C.

2. Juan N. Babauta, former governor and former CNMI resident representative to Washington, D.C.

3. Greg "Kilili" Sablan, the current executive director of the Commonwealth Election Commission

4. Robert Torres, a former attorney general and now in private law practice

5. Lynn Knight, president of HANMI and publisher of Saipan Tribune

6. Finance Secretary Eloy Inos

7. Superior Court Associate Judge Juan T. Lizama (Read today's Saipan Tribune)

One more thing. Taotao Tano's Greg Cruz said he's not running for delegate. This is the same guy who said he's not looking for a government job.

May 14, 2008

A five-year term for Fitial?

There are talks about making the local elections coincide with elections in the states, Saipan Tribune reports today.

This means that, at some point--and that point could be soon--elected officials would either have their term in power cut short by one year or, more likely, get one bonus year in office.

Could we be in for two and a half more years of Ben and Tim?

May 11, 2008


Thanks to the effort of the Coalition of United Guest Workers (CNMI) led by Irene Tantiado, Dekada and the Human Dignity Movement have reunited for Saturday night's candlelight vigil in support of President Bush's signing of the CNMI immigration federalization bill.

We hope the unity shown will continue and is not only a publicity stunt, after months of bickering.

Hundreds of workers and their children held banners, placards, and candles as they silently stood beside the road across from Horiguchi Building in Garapan. Passing motorists honked their horn to show solidarity. Smiles were abundant, congratulatory remarks were heard everywhere, champagne was passed around.

Dekada president Bonifacio Sagana and Dekada lawyer Steve Woodruff and Human Dignity Movement president Jerry Custodio, along with Coalition's Irene Tantiado, Rep. Tina Sablan and Ron Hodges were among those in attendance -- all in one place.

The reunited groups vow to work toward a common goal: an improved immigration status for eligible guest workers, whether it's green card or permanent residency.

Over 6,000 signatures have been gathered so far petitioning the US Congress to grant eligible longterm guest workers green cards. The signature drive continues.

Another common goal is to support Rep. Tina Sablan's bill giving a new status to longterm foreign workers to protect these workers between now and the start of the transition period.

May 9, 2008

President Bush Signs CNMI Federalization and Delegate Bills Into Law

President Bush on Thursday signed into law S. 2739, which includes provisions to bring CNMI immigration under federal control and to allow CNMI voters to elect a non-voting delegate to the U.S. House of Representatives.

The President's signing of the bill comes as no surprise to most people, since his administration had testified earlier this year that federalization should occur "as soon as possible." However, some in the local administration had suggested that with the recent change of leadership at the Department of the Interior's Office of Insular Affairs, the Bush Administration would back off from its strong support for federalization. That notion has proven to be baseless wishful thinking.

Some local officials have presumed to interpret S. 2739 in ways that would be harmful to the CNMI and its residents. Although these local officials have asserted these views with great confidence, their interpretations appear to be out of step with the clearly stated intentions of the U.S. Congress (which, after all, is what counts). Here are some things that Saipan Middle Road's research staff has uncovered in the Senate report on the CNMI immigration federalization bill:

The intent of Congress is "to ensure effective border control and security by extending the INA with special provisions for: phasing out contract workers; minimizing adverse economic effects; recognizing local self-government; assisting the development of the CNMI economy; providing opportunities for locals to work; providing for the continued use of alien workers as necessary; and protecting workers from abuse." The "phasing out" of contract workers can occur over a long period of time, as discussed below, and even after the special guest worker program is eventually phased out, the CNMI will always be able to admit foreigners under the same rules that apply to the rest of the country.

Furthermore, "in recognition of the CNMI's unique circumstances, [the CNMI should] be given flexibility to maintain and develop businesses and...the Government of the CNMI [should be] fully involved in the implementation process."

The bill "would extend the immigration laws of the U.S. to the CNMI along with several special provisions to meet the special needs of the CNMI."

The CNMI's guest worker program will be taken over by the federal government and transformed into a Transitional Workers Program. That program will be separate from the existing federal program where foreign nationals will be enter the CNMI through H visas and other visas. "There will be two similar programs operating in the CNMI."

The Transitional Workers Program is originally scheduled to last through the end of 2014. However, the program can be extended indefinitely for periods of up to five years at a time. The Senate believes that "[i]t is most unlikely that the CNMI will be able to meet its labor needs and forego the Transitional Workers Program in five years. It is expected that there will be at least one, and probably more than one, five-year extension."

During the transition period, there will be no limit on the number of workers who can enter the CNMI (or Guam) on H visas. In the U.S. generally, there is an annual limit of 65,000 H-1B visas for professional and specialty workers, 20,000 additional H-1B visas for workers with at least a master's degree or its equivalent, and 66,000 H-2B visas for temporary non-agricultural workers. The Senate report makes it clear that the intention is "that this waiver of the numerical limitations for Guam and the CNMI is extended along with any extension of the five-year transition period.

With respect to long-term guest workers, the Act would require that "the [U.S.] Administration, in consultation with the CNMI, to report to Congress, no later than the second year after enactment on the population of aliens, status of aliens under federal law, future requirements of the CNMI for an alien workforce, and recommendations on whether Congress should consider permitting such workers long-term status under" U.S. law. No guarantees here, but the issue remains alive.

On fees, the Senate report "encourages the DHS, and all other Federal agencies involved in implementing the transition program period, to keep the costs associated with the transition program period on employers and non-immigrant guest workers at the same level as is currently being assessed by the CNMI government under local law."

On the visa waiver for tourists and other visitors: "The regulations should include countries for which the CNMI has received a significant economic benefit from the number of visitors for pleasure within the one-year period preceding the date of enactment. In drafting such regulations, the Committee encourages DHS to consult with the CNMI tourism industry to determine which tourists markets have contributed to the benefit of the CNMI economy and that such benefit can be measured in terms of hotel occupancy, length of stay, and expenditures." This provides a presumption, although not a guarantee, that China and Russia should be included, and special measures could be adopted to address any security concerns.

The law would also "allow the Governors of Guam and the CNMI to request DHS to create additional Guam or CNMI-only nonimmigrant visa categories if the ones provided for do not meet other circumstances."

The intent of Congress is extremely important in interpreting the obligations of federal executive branch in implementing the new law. If they ignore this intent, it could provide a basis for a lawsuit.

Now that Congress has explained exactly what it intended, we no longer need others to tell us what Congress intended. Unless you believe that these local "experts" know more about what Congress intended than Congress itself. There is no guarantee that this will all work out as intended. There is, however, plenty of good stuff to work with if everyone pulls together to make sure that this is done right. Let's all hope and pray that it will be done right, and work together to make that happen!

May 6, 2008

Rally Anyone?

Take a break people. This is not a Unity Rally or an AMP convention, but this is the second now annually organized car rally set two weeks from now. Read the organizer's press release below. We joined last year's event and it was so much fun! It was like Amazing Race Saipan style:

Beach Road Magazine - Get ready for Saipan’s second annual Beach Road Magazine Car Rally

GUALO RAI — By insistent public demand, Beach Road Magazine, the islands’ most popular monthly lifestyle and entertainment magazine, has launched Saipan’s second annual car rally.
Slated for May 24, this year’s event promises to be even more exciting than last year’s as it takes you round the island testing your IQ and scavenger hunting skills.
“We’d like to make the car rally more challenging and fun this year,” Susan Marchitti, Beach Road Magazine account manager and the event’s overall coordinator, said.
This year, the rally is open to drivers 16 years and older. Visitors are welcome to join. Each car is required to have at least one driver and as many navigators as participants think it would take to successfully complete the course.
Last year’s car rally had 13 entries with the top three teams winning cash prizes and all participants receiving various gift certificates from numerous sponsors, including hotels and bars.
More participants are expected this year considering the prizes at stake. “There’ll be more exciting prizes this year,” Marchitti said.
Registration is $15 and space is limited to 60 cars. Grab a copy of Beach Road Magazine for the entry forms, fill them out and submit to the Glimpses of Saipan office on the second floor of the Transpac Business Center along Middle Road, Gualo Rai (near Subway restaurant) during regular business hours from 8 a.m. to 5 p.m.
A popular motoring event in the United States and Europe, a car rally is not a speeding contest. It’s a cross between a scavenger hunt and an IQ test behind the wheel that’s guaranteed to take your driving skills to the next level.
The Second Annual Beach Road Magazine Car Rally is a competitive motoring event in which drivers must successfully complete a given course by following a set of instructions. The starting point will be announced. Drivers will receive a new set of instructions at each checkpoint, which will guide them through the next section of the rally up to the finish.
Everyone will receive a prize just for making it through the course.
Winners will be announced at the Oleai Beach Bar & Grill in the evening of May 25. A special 10% discount on non-special food items will be given to car rally participants.
So polish your driving and navigational skills and get ready for the most exciting motoring event of the year.
The Second Annual Beach Road Magazine Car Rally is sponsored by Shell Marianas, Pacific Telecom Inc., DPS, American Red Cross, Pacific Islands Club, Oleai Beach Bar & Grill, Aquarius Beach Tower, and Budget Car Rental.
See Beach Road Magazine print ads for details.
The Reveler

May 4, 2008

Coalition of guest workers

Hundreds showed up in today's general membership meeting of the newly formed Coalition of United Guest Workers (CNMI) at the Garapan Central Park. But they said the word "Guest" will soon be deleted from the group's name, in light of federalization.

The gathering was festive -- lots of Bangladeshis, Chinese, Filipinos and local supporters, free food, free entertainment (live bands, dances). The group now has a formal set of officers led by Irene Tantiado. Jerry Custodio of the Human Dignity Movement is also among the officers.
The guest speaker, Guam-based businessman and senatorial bet Alfredo Antolin's message was that of "patience." He said one year after Bush signs the measure this month and the CNMI immigration will be federalized.

Dekada leaders did not show up, although the coalition has been trying to reach out to them for the sake of real unity -- the same that was shown during December's historic unity march. Maybe in a few days or weeks, we will see one solid group of guest workers in the CNMI.

May 2, 2008

SOCA 2008: Vacant seats, bickering, and photo ops

It's interesting to note that there were lots of vacant seats at the 2008 State of the Commonwealth Address...This is so unlike the previous years when the venue was filled to capacity.

No jubilant applause...just obligatory applause...and nobody stood up at the end of the governor's address and the Washington rep's address.

Is it the economy? Is it distrust with the governor or the resident representative? Is it apathy? Is it something else?

The governor cited 3 options in dealing with the inevitable signing into law of the CNMI federalization bill --

1. Litigation -- challenging S. 2739 in court. Who will shoulder the cost of the litigation? The taxpayers? or the governor himself?

2. Negotiate regarding the implementing rules and regulations -- which is a must, not an option, governor.

3. Amendment/repeal of law -- what else is new with CNMI leaders?

The governor's speech writer has no one-liner to describe the real "State of the Commonwealth" or the state of the economy...No 'pretty darn good' or 'pretty darn bad' or 'sky is falling'...

The governor also blamed the Legislature for CUC's $1.2 million monthly operating deficit.

Towards the end of his address, the governor said, "During the last eight years we have done a dismal job in Washington in educating members of Congress and their staffs about the Commonwealth -- its location, history and needs."

He underlined the word "dismal."

When he read this part of his address, Washington Rep. Pete A reacted with a sarcastic smile...

Governor Fitial went on to say that "we must do a better job in the future."

Pete A is running for a delegate seat.

Before delivering his address, Pete A stopped by Fitial's place and shook his hands...I wonder what he told the governor...

After the not-so-spectacular SOCA 2008, Pete A and Fitial repeatedly shook hands for the cameras...of course, they were not sincere about it.

Here's a complete text of Gov. Benigno R. Fitial's 16-page speech:

Governor Benigno R. Fitial
May 2, 2008

President Reyes, Speaker Palacios, Honorable Members of the Legislature and
People of the Northern Mariana Islands
Before I begin my address, let us pause for a moment of silence to remember and honor our ten fallen service members who have perished in the Iraqi war zone. Four have been added to the list since I spoke last year:
PFC John Derek Flores
CPL Victor M. Fontanilla
CPL Joe Junior Gogue Charfauros
Seaman AnaMarie SN. Camacho
The service and sacrifice of these young men and women will never be forgotten.
I am here today to report on the State of the Commonwealth. I will start with our economy, then review the Government’s response to our declining revenues, and conclude with a discussion of the Commonwealth Utilities Corporation and federal legislation.
[The Commonwealth’s Economy]
Last year I talked about Kumho Asiana’s ambitious plans for its LaoLao Bay Golf Resort. Yesterday I had great pleasure in attending the ground-breaking ceremony for this $60 million dollar luxury golf resort project. They are now on their way to build up to 120 high-end villas, and a new clubhouse and teahouse.
These three drawings will give you some perspective on the venture. The first drawing is the entrance to the hotel in LaoLao. The next faces the green on the 18th hole with the hotel on the left side. The third drawing shows the view of the hotel from above the 18th hole.
The confidence of Kumho Asiana in the Commonwealth is reassuring evidence of our eventual economic recovery. Kumho Asiana is a multi-billion dollar conglomerate, with more than two dozen subsidiaries, and is now the fifth largest family-run company in South Korea.
Our efforts to increase investment over the last two years have produced other successes as well.
• Just a few days ago MRDC took an important step toward obtaining the permits necessary before construction can begin on its Tinian project. MRDC plans to build the 405-room hotel casino Matua Bay Resort on the island and a 18-hole championship golf course –at an estimated cost for the first phase of $179 million dollars. The company hired one of Japan’s most distinguished architects to design the hotel casino resort. Here are some drawings reflecting his creativity. The round structure in front is the casino itself layered into several floors. The interior is a spacious innovative design.
• The Bridge Investment Group recently announced that it has scheduled its groundbreaking ceremony for its project in June. When
completed, the Tinian Oceanview Resort and Condominiums project will consist of a 301-room hotel and 268 condominium rooms at an estimated cost of $40 to $60 million.
• Under its new owners, the former Nikko Hotel – now the Palms Resort Saipan – will undergo extensive renovations beginning early this summer. By focusing on one wing at a time, Palm Resorts Saipan plans to keep the hotel open during this period.
Our visitor industry is showing positive signs of fighting back from the decline in arrivals last year. In December Northwest started a new daily daytime flight from Osaka to Saipan. By this one flight alone, we anticipate an increase of more than 20% in Japanese visitors during 2008.
Asiana last year added four additional daytime flights from Seoul to Saipan and, later in the year, added flights from Busan to Saipan four times a week. We have seen rapid, double digit growth in South Korean arrivals over the past two years and we expect more progress in the coming years.
I was very impressed to hear that the Rota community turned out in the early morning hours earlier this week to welcome the first of 40 charter flights from Japan to that island. These flights are sponsored by Kinki Nippon Tours and Continental Airlines. The Rota charter flights are fully booked, which will bring about 8,000 tourists to Rota.
We are continuing as well to develop the growing markets in both China and Russia. I am confident that visitor arrivals this year will be at least 15% greater than the arrivals in 2007, providing a needed boost for our hotels and other businesses catering to tourists.
Looking beyond next year, we hope that the Commonwealth will share in the economic benefits resulting from the military buildup on Guam. I
have directed all CNMI agencies to cooperate fully with the different environmental studies of our islands being conducted by federal officials. We anticipate receiving a draft Master Plan for the CNMI later this year. We read in the media about possible military uses on Tinian, Pagan, the most northern islands, and recently Goat Island. The Lt. Governor and I believe that the military planners should discuss these issues with Commonwealth representatives before – not after – they formalize their draft Master Plan.
Our expedited drawdown of federal CIP funds will also contribute to improved economic activity in the next few years. Between January 2006, when this Administration took office, and April 30, 2008, the Commonwealth drew down a total of $51 million dollars – 46% of the cumulative balance available for our use. Within the next six months, we will be implementing about $39 million dollars of our CIP funds towards projects that will stimulate our economy. By Spring 2009, the CNMI will have an Infrastructure Plan in place to satisfy the requirements necessary to qualify for future water and waste water infrastructure funding from the federal government.
[Response to Declining Government Revenues]
Now let me turn to the serious problem of declining government revenues.
I have just received approval from the U.S. Secretary of the Treasury for our plan to implement the federal stimulus legislation. As a result, the Commonwealth expects to receive about $16.1 million dollars to cover our payments to eligible CNMI residents. Under the law, tax rebates will be
paid in the amount of $600 per individual, $1,200 for joint filers, and $300 per eligible child. Our plan is to begin issuing the first batch of checks by the end of this month. The Commonwealth Treasury will certainly welcome any increase in revenues due to this large infusion of cash into our economy. Even so, it is unlikely that this will be enough to offset the anticipated negatives for the current fiscal year. It remains my strongly held view that this Government should not engage in deficit financing. As shown by this chart, we have consistently tried to keep our expenses in line with revenues. I regret that it looks as though we are unable to do that in the current fiscal year. We have been unable to reach agreement on an austerity program with the Legislature.
We have tried to adjust to the declining revenues without reducing the essential public services in the CNMI. Let me illustrate some of the difficulties. The current projected expenditures in 2008 are $171 million dollars and that will have to be reduced. For 2009, the budget will be set at $160 million. All three branches of government have lived with reduced funding in recent years. But the Executive Branch has been reduced the most. From expenses of $109 million dollars in 2005, the Executive Branch has been reduced to $83 million dollars for 2008-- a reduction of
nearly 25%.
We have tried to protect our most essential public services from significant reductions. But we have been able to do that only with respect to our public school system. Looking ahead to fiscal 2009, the Executive Branch is reduced further from $83 million dollars to $74 million dollars. The Legislative Branch is allocated an increase in funding. In summary, we have made significant
reductions in the Executive Branch, but we are trying to protect essential public services.
As a result of these budgetary decisions, we have reduced the number of government employees, especially in the Executive Branch. The number of employees in the Government declined from 4137 at the beginning of fiscal year 2006 to 3216 at the end of fiscal year 2007 (last September) – a reduction of about 22%. We have reduced that number to about 3,116 in 2008.
Despite these limitations, I am proud of the way in which many agencies have stepped up to the challenge. Let me mention a few of them:
• The Department of Labor is a totally new and impressive department. For the first time in nearly 15 years, it is current in the handling of labor cases. The status of nearly all foreign workers has now been determined and those that are not employed are being repatriated. The Department has a new computer system that upgrades its ability to keep track of all transactions in the foreign worker labor pool. It has a new website where our citizens can see what jobs are available. It has a new system for citizens to bring their complaints to the Labor Department. The enforcement of the new law has been vigorous but fair, and has produced immediate results. Foreign workers who try to enter the CNMI on phony documents are now put on a return plane home. Persons who do not have real businesses are being denied the right to hire a foreign worker.
• The Department of Finance after months of difficult negotiations finally reached agreement with the Internal Revenue Service that
resulted in the payment to the CNMI of $26.4 million dollars of income tax payments. The receipt of these funds enabled us to issue long overdue refund and rebate checks to our taxpayers in December 2007. For this year I am assured that refund and rebate checks due this year will be paid.
• The Office of the Attorney General has established an Office of White Collar Prosecution staffed with two attorneys and four investigators. I supported the creation of this Office in order to emphasize our determination to prosecute government corruption. I recognize that developing these cases is often difficult, where they involve proof of criminal intent and eyewitnesses or participants are reluctant to testify. The new unit has had several successes to date – involving the Lawncare case, the Kagman High School Fraud, and the ongoing prosecution of a large-scale CUC billing scam. I expect more such prosecutions in the future.
• The Northern Marianas College has a new President whose efforts I fully support. We are determined to help the College maintain its certification. I have dedicated $380,000 to NMC to fund critical staff requirements and renovation and repairs. I am exploring a plan to leverage federal CIP funds so as to provide the needed operational funds for the College. During the past year, the College played a leading role in establishing the strategic workforce action team (SWAT) aimed at bringing together the agencies committed to providing more, and better, training for our young people ready to enter the workforce.
• The Commonwealth Health Center opened its Center for Public Health and Dialysis – the most modern center of its kind in the
Western Pacific. The Health Center was inspected and again certified by Medicare as providing quality healthcare. I am committed to the delivery of high quality, affordable healthcare services in the CNMI.
• The Defined Contribution Plan for government employees has been in successful operation for more than a year. The Plan now has more than 500 participants. We are committed to strengthening the Defined Benefit Plan. We have worked with the Retirement Fund and CDA to agree upon an initiative to authorize the issuance of pension obligation bonds. The proceeds from these bonds will reduce the Government’s unfunded liability to the Retirement Fund. I ask the Legislature to enact this initiative.
[Commonwealth Utilities Corporation]
Now let’s talk about CUC.
[Current Rehabilitation of Power Plant Facilities]
We are near the end of a rehabilitation project to address the serious maintenance and repair needs of our three power plants. We thank the Department of the Interior, Office of Insular Affairs, for the $6.5 million grant in mid-2007 to help us address the many problems of Power Plant 1.
CUC and its contractors have worked with a schedule defining the tasks and setting deadlines for the eight engines in Plant 1. As reflected by this chart, the completion date is set for September of this year. The red bars show pending rehabilitation. The green bars show completed work. The yellow bars show ongoing work. We are on schedule. With this program we will have increased the total megawatts from 28.7 to 81.2 in six months. When this work is done, CUC
will be able to produce electricity up to 90% of its capacity – an efficiency level
not seen for many years.
[Fuel Costs and Customer Rates]
We all know how fuel costs have increased over the past two years. At this time last year, the cost of a barrel of crude oil was about $70. You can see from this chart that it is now approaching $120. CUC was permitted under its charter to set rates that would reflect the increased cost of its fuel and did so until the Legislature intervened.
Last year the Legislature voted to override my vetoes of six proposed laws.
Four of these bills negatively affected CUC’s cash flow. The most important of
these was Public Law 15-94, which substantially reduced the electric rates and
charges for residential customers.
I vetoed this legislation because I feared it would drive CUC into insolvency. As a result of these laws, CUC is presently operating at a deficiency of $1.2 million per month. It was unable to find money to pay for a full shipment of fuel in April. There are no funds available in the Commonwealth to subsidize CUC.
Since the new Legislature convened in January, we have urged it to repeal Public Law 15-94. The House of Representatives agreed with this approach. But the Senate declined to go along. I still believe that the quickest means of providing some relief to CUC is to repeal Public Law 15-94. I appreciate the recent action of the Legislature in passing Bill No. 16-79, which provides for a six month suspension of Public Law 15-94. I plan to sign this bill promptly.
[Action by the Public Utilities Commission]
Three of the five members of the Public Utilities Commission have been appointed, enough to provide a quorum and to get organized. I will be proposing candidates for the two additional positions in the near future.
The Commission has authority under its statute to provide interim rate relief. The CUC is now in the process of preparing a request for rate relief that is needed to put the agency back on an economically sustainable basis. It could be filed as early as next week.
The Commission is an independent agency. It will make its own determination of what evidence must be provided to support a reasoned and appropriate decision. The agency is authorized to retain such professional assistance as it needs to do the job. I am confident that the members will perform their tasks with distinction and expedition.
[Short-term Needs of CUC]
CUC has serious short-term cash needs even if relief is provided by the Legislature or by the Commission. Appropriations are needed to assist CUC over the next three or four months. The Secretary of Finance and I will be conferring with the Legislature about how best to achieve that objective.
[Privatization of CUC]
Privatization of CUC still remains one of my important objectives. But I recognize that certain steps need to be taken before we can seriously revisit the privatization question. First, we need to complete the rehabilitation program and make certain it has achieved its goals. Second, we need to consider further a performance management contract as a useful first step in professionalizing our management of the utility. Third, we need to make certain that we produce a RFP
that addresses all of the problems identified by the Public Auditor in upholding the protest to our last RFP on this subject.
Lastly, we need to persuade the Legislature that privatization must be presented in a way that ensures all qualified candidates a fair and equal chance at
success. In that connection, I believe that there is no place in such a process for
preferences for local concerns. I would like to see the Legislature eliminate all such preferences across the board, but certainly in any privatization effort involving the critical services now performed by CUC.
[Alternative Energy Sources]
We have an RFP outstanding with respect to alternative energy sources. More than a dozen companies have expressed their interest in submitting proposals across a wide range of green technologies – wind, solar, biodiesel,ocean waves, and geothermal. The present schedule provides for submission of proposals by May 16, 2008. We believe that this RFP can withstand any protest
and look forward to having the various proposals evaluated carefully and professionally.
[Federal Legislation]
During the past year I have spent much of my time in dealing with the federal proposals relating to minimum wage and immigration in the Commonwealth – as a witness in three Congressional hearings and in many meetings with Members of Congress and their staffs to explain our position on the issues.
I was greatly assisted in these efforts by the Commonwealth’s business community. I would like to thank the former and current presidents of the Chamber of Commerce – Juan Pan Guerrero and Jim Arenovski – for their
willingness to step up to this challenge and represent their members so ably. In
addition, I would like to thank Lynn Knight, President of the Hotel Association
of the NMI, for her dedicated contributions on behalf of the Commonwealth. Let me briefly summarize where we stand.
[Minimum Wage]
When Congress increased federal wage levels nationwide last year, it directed that the Secretary of Labor file a report in early 2008 examining the impact of a second 55 cent increase scheduled for May 2008 for American Samoa and the Commonwealth. The Department’s report was based on the best available data. It concluded that “it seems likely that the current economic decline may be made worse with any future minimum wage increase for the CNMI.
Members of the Senate Energy Committee have supported the deferral of this increase, both during and after the hearings on February 28, 2008, in which I testified.
However, deferral has been opposed by both Senator Kennedy and Representative
Miller. In a letter to the Secretary of Labor, they were very critical of the
Department’s report. In particular, they complained about the lack of reliable data to support the Department’s conclusions regarding likely injury to the economies of the Commonwealth and American Samoa. In light of this opposition, we are not
optimistic about obtaining this deferral.
As an alternative, I have developed, along with my good friend, Congressman
Faleomavaega of American Samoa, a program for economic relief for both insular areas. It is our way of dealing with our current economic problems and to offset the likely consequences of a second increase in the minimum wage level. We have asked the Appropriations Committee to support an amendment to provide $15 million each to the Commonwealth and to American Samoa.
We do not know what the eventual outcome will be in the Appropriations Committee. But we have done our very best to protect the Commonwealth’s interests.
I intend to pursue these issues with Interior Secretary Kempthorne. We will ask
the Secretary to obtain funds to conduct regular and detailed studies of the economic
factors affecting the insular areas – the same kind of economic studies that are
available to every State and local community on the Mainland and in Puerto Rico.
Without such reliable data, we will never to able to counter criticisms like those from Senator Kennedy and Representative Miller regarding the Department of Labor report.
[Immigration and Labor Legislation]
The House of Representatives approved Senate Bill 2739 a few days ago – on April 29, 2008. It now goes to the President for signature. I will not make any final decision on the Commonwealth’s response until the legislative process is finished.
The legislation in its present form is far more damaging to the Commonwealth than the proposals that were originally considered by the Senate and House Committees. We continue to believe that the legislation will do serious damage to our economy – increasing the likelihood that we will remain in an economic depression for many years to come.
In any situation like this, there are three courses of action that can be pursued
individually or simultaneously – litigation, negotiations regarding the regulations, or seeking new legislation. I am in the process of consulting with the Legislature, the business community, the indigenous community, and other interested parties about
these options.
Many have urged me to challenge the federal legislation in court. They are
concerned about its impact on our economy, where about 75% of our workforce
consists of foreign workers. They do not believe that this legislation is authorized by the Covenant. They believe that it denies our right of self-government over our local
economy and workforce. They believe it is contrary to the U.S. Constitution, because
no local community on the Mainland has been, or could be, subjected to such controls
over its local economy.
We all know that litigation is a difficult and controversial alternative. There is
both vigorous support and articulate opposition to this course of action in the
community. I respect this range of views.
The second option is preparing to participate to the fullest extent in the drafting
the regulations implementing the new law. We cannot afford to sit back and wait for
the federal agencies to solicit our opinion regarding the regulations.
One group has already responded to this challenge. Representatives from Guam
and the CNMI have joined forces in the new Marianas Integrated Immigration Task
Force. The members represent the visitor industry bureaus and the hotel associations
of both communities, joined by Mel Gray, Director of the CNMI Division of
Immigration. They are concentrating on the law’s provisions for a joint visa waiver
program in which both Guam and the CNMI can participate. Unless the regulations
implementing these provisions are drafted in a sensible manner, neither Guam nor the
Commonwealth will be able to develop the full potential of the Chinese tourist
I welcome the plan of the Chamber of Commerce to establish a committee of its
members to undertake a similar task, with a focus on the foreign worker provisions of
the new law. The goal is to ensure, to the extent possible, that the legislation as
implemented will do as little damage to the CNMI as possible.
The third option – amending this legislation – should become available when
the Congress considers immigration reform for the Nation. This is likely to happen
next year with a new Administration and a new Congress. We believe that the unique
problems of this small island community – and its unique guest worker program—will
be better understood by the immigration experts in the Judiciary Committees of the
two Houses of Congress than was the case in the shaping of the legislation that was
just approved by the Congress.
[A Lesson for the Future]
Our experience with the Congress during the past 16 months produces one
important message for the Commonwealth.
During the last eight years we have done a dismal job in Washington in
educating Members of Congress and their staffs about the Commonwealth – its
location, history, and needs. During the past 16 months, representatives of the
business community and my Administration have met with representatives of more
than 45 Members of Congress. Time and time again, they were told that these offices
(and the Members) had never heard of the Commonwealth. Under the circumstances,
it is not surprising that we were not able to muster any significant support in dealing with our minimum wage and immigration issues.
We must do better in the future. We must assign a higher priority to ongoing relationships with Members of Congress and their staffs. We cannot afford to relax and respond only when an emergency arises. It may be that having a Delegate in Congress will help address this problem, if we elect someone who has the energy and ability to put into the new job. But the problem is larger that any one person. This
November a new Congress will be elected. We need to be ready with a program for welcoming the newcomers to Washington and for educating them about our Commonwealth.
We are a strong and resilient community. We have taken many major blows over the past few years. I intend to face our challenges during the
next year with only one goal in mind – to protect the interests of this Commonwealth and achieve the potential envisioned by the Covenant.
Thank you

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