CNMI Crisis: Retirement Fund falls and other agencies are expected to drop

April 18, 2012

The CNMI Government is responsible for the failure of the Retirement Fund. Since 1999 officials have withheld  the government/employer's share to the Fund. Finally their unpaid obligation reached $317 million.  

While refusing to pay the employer's share, the government approved cushy contracts for the Fund's attorneys.

What did those officials who approved neglecting their financial responsibility to the Fund think would happen? Anyone who can add and subtract knows that if you take away funding sources and continue to dole out benefits then the end result will be a zero balance. Shame on every elected official who allowed the CNMI government to steal from the retirees.

The board declared that the Fund will file for Chapter 11 bankruptcy much to the shock of the fund participants. It formed a company called Pension Holding Corp. on April 11, 2012.

At a gathering of the board, fund members and retirees at American Memorial Park Glen Hunter urged Fund members to fight the bankruptcy proceedings. The Fund's legal counsel, Carolyn Kern rudely grabbed the microphone from the Saipan resident. (Watch this on KSPN. Glen Hunter -dignified and cool; Carolyn Kern -unprofessional and inappropriate.)

The Saipan Tribune posted some FAQs on the Fund here.

I withdrew all of my retirement funds from the CNMI Retirement Fund in 1996. I feel badly for anyone who is depending on the Fund for their retirement.  This is frightening. Perhaps this action will light a fire under the citizens so that they demand an end to corruption and political involvement in the

I would not trust anything that the CNMI Government has its hand in. In fact, the Commonwealth Health Center is not far from falling also. The CHC has been on life support for years. It looks like it is too late to revive this failed institution. Like the Retirement Fund it is a victim of elected officials' neglect.
It is no different than a patient seeking urgent treatment and being made to wait for years in the emergency room while those with the power to heal (elected officials) ignored, bickered or did nothing. Of course, they are responsible for the patient's death.

At a meeting between CNMI lawmakers and CHC officials that was held earlier this week, it was reported that lack of blood and supplies has reached critical levels. The CHC owes vendors money and owes employees thousand in back pay and benefits.

It was announced that the emergency room would remain open while all other departments would be forced to close down.

The AG filed a cease and desist order to the CHC concerning its sketchy contract with Idaho-based ICS. The Marianas Variety reported:
It is an order to halt an activity and not to take it up again later or else face legal action.

Attorney General Edward T. Buckingham issued the order to CHC CEO Juan N. Babauta with copies to the governor, finance, procurement, public auditor and ICS CEO Louis Kraml in Idaho.

The two-page notice arrived at Babauta’s office just after lunch and cited failure to announce the contract for public bid; and non-review of the ICS contract by the division of procurement and the office of the attorney general.

Specifically, the letter stated “This document [ICS contract] was signed prior to the declaration of emergency. Accordingly actions involving the expenditure of public funds must, as a matter of law, comply with requirements of the procurement regulations set forth.”
Read more about the questionable CHC-ICS contract here.

The governor did not attend the meeting concerning the CHC crisis or the Retirement Fund meeting.

Rep. Diego Benavante is calling for Governor Benigno Fitial to step down. Comments on the story in the Marianas Variety suggest that the idea of stepping down or being impeached is popular.

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