02-03-06

Hi friends, this is Harry Blalock; General Manager for radio stations KZMI & KCNM. It's that time once again to take a look at the issues of the week, and to offer some Food For Thought.

One of the most discussed issues in the Commonwealth these days has to do with the Governor's decision to support legislation that would abolish the Marianas Public Land Authority's board of directors and bring the agency under the control of the Executive branch. If you believe everything you read in the newspapers, you might think that there are a significant number of people who are not in support of this idea, saying that the Governor is trying to get too much power and control. I was sitting in the press conference last week at the Governor's office when one of the Filipino reporters asked the Governor what he thought about some people's accusation that he was trying to grab too much power. As soon as she said that, I immediately started wondering what people were saying that, and whether it was indeed a genuine concern, since it wasn't something I had heard anybody say, and I feel I'm pretty well plugged into the community. I've even been talking to people recently who aren't exactly supporters of the current administration, but they have agreed that something had to be done about what's going on at M.P.L.A. and they support the Governor's move. It has been my observation in the past that the newspaper reporters here seem to enjoy creating controversy, even if the controversy is only in their minds. I'm getting the definite feeling that this is one of those situations, since I can't find anyone, except maybe a few M.P.L.A. board members, and their families, that is opposed to the Governor's plan to abolish the M.P.L.A. board of directors and replace them with a strictly advisory board.

Now I don't believe that all boards have been abusive and have sought to personally enrich themselves from their position, since there are boards like the Marianas Visitors Authority board that does not pay themselves a per diem for attending meetings, and does not take exorbitant per diem fees while traveling. However, there are some boards that have been extremely generous to themselves, and some might say to a criminal extent, since it is our money they are giving to themselves. Part of the problem with the way these autonomous agencies are set up is that they make up their own rules, and decide how much they are going to pay themselves in per diem rates for meetings and travel. They are not subject to the approval of the legislature, the executive branch, and most importantly they are not subject to the approval of you as voters, since most of these board seats are appointed positions. So if you feel these board members have been abusive of their positions and have not been safeguarding the public's interest, there is really nothing you can do about it. Since they are allowed to make up their own rules and regulations as they go along, they simply come up with rules that benefit them and allow them to take as much money as they want. This isn't necessarily illegal, since they were given the authority to promulgate their own rules. But this is obviously a system that isn't working, since these people are accountable to no one, and don't need the public's consent or approval for what they do.

As an example of what has gone wrong in these boards, let's take a look at some facts and figures from the Public Auditor's interim report on expenditures by the Marianas Public Land Trust Board of Trustees, issued November 15, 2005. First it's important to know what the purpose of the board was intended to be. MPLT was created to manage all monies received for the use of public lands and to use the interest on the money received from the Federal Government for the lease of Tanapag Harbor to develop and maintain a memorial park in honor of the soldiers who died during World War II. The CNMI Constitution directs the Trustees to transfer to the general revenues of the Commonwealth the remaining interest accrued on the trust proceeds except that the Trustees may retain the amount necessary to meet reasonable expenses of administration. The CNMI Constitution also states that the Trustees are to be held to strict standards of fiduciary care.

The report states that during the 3-year period, 2002 - 2004, the MPLT Board members, the Executive Director and an independent contractor spent $297,920 for board compensation, and an additional $500,195 for travel expenses. According to the report, virtually no interest was transferred to the general revenues of the Commonwealth. In 2004, the Trustees began paying themselves $150 for meetings lasting 4 hours or less, and $300 for meetings lasting anything over 4 hours. As if that wasn't bad enough, the Trustees decided to make this increase in per diems for meetings retroactive to 2002. They found a way to put a substantial amount of money in their own pockets. The number of board meetings held during that 3-year period also increased significantly. On average each board member, with the exception of one board member who was appointed in mid 2004, received over $50,000 in compensation during that 3-year period.

It is important to note that CNMI law provides for the compensation of board members of government corporations and councils. 1 CMC Section 8247 (a) sets the compensation at $30 for half-day meetings or less and $60 for a full day. In February 2004, the MPLT board of Trustees increased their rates to the aforementioned levels. According to the report, when asked about the new rates, the Executive Director told OPA that the public was given an opportunity to comment on the rates to be adopted when the Board publicly announced that it intended to adopt these new rates in it's bylaws, but no comments were received. OPA's opinion was that the announcement was so vague that the general public would not have known that the Board of Directors intended to pay themselves at a rate of $300 for whatever they deem appropriate.

MPLT bylaws state that the regularly scheduled Board of Trustee meetings are the third Friday of each month. However, OPA noted that during the three-year period under review, the Board met significantly more often than the 12 regularly scheduled meetings provided for in the bylaws. During fiscal year 2002, the Board met 50 times, in fiscal year 2003 the number of meetings increased to 115, and in fiscal year 2004, 90 meetings were held. The MPLT Board of Trustees explained the increased number of meetings in a Resolution on Trustee Compensation, which stated in general that the frequency of meetings has dramatically increased due to the proactive efforts of the Trustees to maximize investments; develop the Economically Targeted Investment Program; attend to litigation involving MPLT; and to consider and pursue local investments as well as proactively manage security investments on the mainland. The report states that OPA notes the Trustees' explanation for the increase in the number of Board meetings per year, but at the same time has to wonder why the Trust pays money managers to manage trust investments and attorneys to handle litigation. OPA also noted that the duration of board meetings is not recorded in the official minutes of meetings or in any other document provided to OPA.

MPLT Board members also receive compensation for time spent traveling to a MPLT sanctioned seminar or meeting. This travel compensation is paid at $300 per day rate, and is in addition to their per diem. According to the Executive Director, Trustees who are unemployed or self-employed are the only Trustees receiving travel compensation. When the decision was made to provide travel compensation, MPLT felt that unemployed or self employed Trustees must be compensated for time away from the CNMI as travel was taking time away from their businesses. Trustees employed in either the private or public sector are not supposed to be paid travel compensation. OPA's review of Trustee compensation shows that all of the board members, with one exception, have received travel compensation.

After hearing all this, who do you really think the Trustees of MPLT have been taking care of, your interests or their own pocketbooks? Maybe I'm misguided and naïve, but I always thought when you agreed to serve on a public board such as that, you were giving back to the community and volunteering your time. At least that's the way it works with the Chamber of Commerce's board and organizations like the Rotary Club's board. The members don't receive any per diem, or look at what they can get for serving on the board, they are doing it to improve their community and look out for their business interests by serving voluntarily on the boards. This mindset has been lost on many of those who have been appointed to serve on many of the government boards. Now again, not all boards and board members are guilty of this, but many of them are, and frankly, they need to be thrown out on their ear. Enough is enough, they have been using their positions to pad their pocketbooks at our expense, and I wholeheartedly support the Governor's efforts to put a halt to this immediately, and to implement consistent per diem rates and travel policies across the board for any government employee or board member. We don't have the money to waste on such foolishness anymore. The Governor is slashing budgets of all government departments across the board, he has no choice, we simply don't have enough money coming in to cover our previous expenses. If that is the situation, don't you think the autonomous agencies should also be expected to be fiscally prudent and safeguard every penny entrusted to their care? They have been using the money entrusted to them as their personal piggy bank and travel slush fund, and this has to stop. It wasn't ethical or proper before, but now we very honestly cannot afford this kind of behavior any longer. We are teetering on the brink of bankruptcy, and these board members would push us over as long as they got their travel compensation and inflated per diems. Enough is enough!

I'm Harry Blalock, thanking you once again for giving me a generous slice of your valuable time, and allowing me to share my Food For Thought.