Critical Money Woes Put CHC On Life Support

February 26, 2012

In 2010 I contacted the U.S.Department of Labor to investigate nonpayment of wages of nurses at CNMI hospitals. I was told that the department was aware of the problem, but hoped to settle it outside of a lawsuit since the affected personnel would receive less wages if the USDOL was to intervene.

It appears that over a year later the US Department of Labor is investigating the nonpayment of wages and other contract violations at CHS.  There are foreign employees who have not had housing allowances paid for four months, have had their insurance companies threaten to cancel policies because the CHC did not pay premiums, and have not received paychecks.  The CHC has also failed to pay 401K retirement plans and credit union loans for employees.

Federal labor investigator Dean Tenorio made a visit to CHC to interview affected personnel. The U.S. DOL's San Francisco wage and Hour Division confirmed an ongoing investigation.

The hospital's outside contractor for cleaning services is quitting for nonpayment of services.  Medical equipment and supplies are in short supply as vendors demand payments.

Doctors, nurses and other personnel are threatening to walk. At the same time the healthcare system is in crisis, CHC's CEO Juan Babauta and Dr. Larry Lamar are off-island to a Federal Region IX Conference in California. Some questioned the timing of the CEO's off-island trip. Physicians and other personnel held a meeting at the hospital to discuss Dr. Dreary's letter to the editor and to decide what action to take.

The Marianas Variety reported:
The group agreed that if the senate does not restore the entire $10 million MPLT credit line to CHC there will be a mass medical staff walk-out that will in effect shut down the hospital.

“Staff have never been this beaten-down or demoralized,” described one doctor upon leaving the luncheon meeting.

Depending upon the final outcome of the senate’s actions, Deary may or may not continue with CHC although his letter stated “I am looking for a new job.”
Money woes abound across the CNMI Government. An article in The Saipan Tribune outlined the progression of the CNMI budget which went from being primarily self-dependent to becoming more dependent on federal grants and handouts.  Beginning in 2009 the CNMI Government received more federal funds than revenue raised in the CNMI.  The paper reported:
The federal government's direct expenditures or obligations in the CNMI totaled over $258 million in 2010, while federal grants alone reached almost $190 million in 2010, exceeding CNMI revenue of over $130 million.
The garment factory economic boom of the 1980s and 1990w brought  revenue to the CNMI, but this was an industry built on quicksand and fell after trade agreements were established.  The foreign factory owners found cheaper labor in third world countries, leaving the CNMI's factories abandoned and rat and weed infested.

Since the fall of the garment industry, the CNMI legislators have proposed ideas to raise revenue from the casino industry. This seems illogical since there are no committed investors. The CNNI's casinos, the Tinian Dynasty Hotel and Casino and the Rota Casino owe their foreign workers back pay.

Leaders have consistently rejected the idea of imposing CNMI property, sales or income taxes  to raise local revenue. CNMI leaders have focused intensely on raking in more and more federal dollars through grants and programs funded by the federal tax payers. (CNMI residents do not pay federal income taxes.)

Almost every week there is a press release or news article relating what new grant the federal government awarded to the CNMI.  This week a grants workshop was held for individuals to learn how to write grants

The Marianas Variety quoted Senator Luis Cristomo who would like to see the CNMI less dependent on federal handouts:
In a separate interview, Sen. Luis P. Crisostimo, Ind.-Saipan, said the CNMI should start to be more self-reliant.

“That is what we should work on instead of begging Uncle Sam,” said Crisostimo, who recently underwent chemotherapy treatment for his palate cancer in California.

He said the federal government has “very little to give.”

“I prefer that my people have employment than have food stamps,” he added. “If you have a paycheck you know that you have earned it.”

He also believes the CNMI can “divorce” itself from the U.S. and become the newest independent democracy in the Pacific.

“It may not happen soon but it is something that we should envision,” he said.
While local and state governments across the nation are enduring major cuts in federal programs it is somewhat unsettling that there is a territory that is primarily funded by federal funds from the pockets of U.S. citizens outside of its borders. While the CNMI grabs all the federal funds it can, it wastes what little local revenue it has on off-island trips and junkets, paying the salaries of unnecessary political appointments, forgiving lease payments and fines for companies like L&T, lawsuits against the U.S. and other wasteful endeavors. Isn't it about time that the CNMI impose taxes or find other successful ways to raise revenue?


Capt said...

One can only hope that if the Hospital staff walks, and in effect, shuts down the Hospital, that the ramifications will provoke the community to take action and call for and enact changes starting with the removal of Fitial and others.

Anonymous said...

Hands out for that free money. Gimme more is all they say. that's how everything works here. Locals want free work and don't pay workers. They want free medical care. Free food. And they would spit on the people paying for everything they get for free. no respect, no pride here. gimme more.

Anonymous said...

The leaders stumble over each other to brag about who got what funds from the feds as if it were a badge of honor. They won't admit they have turned this place into a welfare state.

Anonymous said...

God help anyone who needs a doctor. I know if they leave it will force these clowns to fix things.

Anonymous said...

Easy solution. Obama, defer the hundreds of millions of dollars that you give to those useless Pakistanis every month and bail out CHC. Help your countrymen first. This is America.

Wendy Doromal said...


Yes this is America. So the CNMI should start reflecting American principles. The CNMI leadership cannot continue to waste and misspend funds at the expense of public safety and future security and then expect the U.S. taxpayers to bail out the CNMI.