Rep. Janet U. Maratita (Ind-Saipan) filed yesterday a motion for temporary restraining order and a motion for preliminary injunction in Superior Court to prevent Gov. Benigno R. Fitial, former Attorney General Edward T. Buckingham, and Saipan Development LLC from pursuing the $190-million, 25-year power purchase agreement.
Maratita, through counsel Ramon K. Quichocho, described the deal as “of constitutional magnitude” and stated that this matter is of great public concern and interest because it involves a secret deal that will cost the CNMI taxpayers and ratepayers over $200 million in 25 years.
Maratita also filed yesterday a taxpayer's lawsuit against Fitial, Buckingham, the Commonwealth Utilities Corp., and Saipan Development LLC over the signing of the power purchase agreement on Aug. 3, 2012.
The plaintiff is suing defendants Fitial, Buckingham, and CUC for taxpayer's right of action: illegal expenditure of public funds and breach of fiduciary duty.
Maratita asked the Superior Court to declare that the power purchase agreement is “unconstitutional, illegal, unconscionable, and unjust, and therefore cancelled.”
As of press time, the Fitial administration had yet to reply to Saipan Tribune's request for comment about the lawsuit.
The signing of the 41-page PPA on Aug. 3 happened a day before Buckingham left the CNMI and 11 days before Fitial left for a three-day trip to Hawaii, American Samoa, and Florida.
In the motions for TRO and preliminary injunction, Quichocho said unless and until enjoined and restrained by court's order, defendants' wrongful acts and conducts will cause Maratita and the people of the CNMI to suffer immediate and irreparable injury, loss, or damage.
Quichocho said as a result of defendants' wrongful acts, the lawmaker and the CNMI people's health, safety, and well-being will continue to be compromised and jeopardized as the meager resources of the Commonwealth are diverted to fund an illegal contract.
The lawyer asserted that Maratita's claims in the lawsuit raise substantial issues of CNMI constitutional and statutory laws and that there is a strong possibility that plaintiff will succeed on the merits in permanently enjoining defendants from expending over $190 million without the Legislature's appropriation and the Department of Finance's certification.
“It is clear that defendants, who seem to be purposely secretive about a multi-million dollar contract, will not take affirmative steps to stop the on-going insanity, without court order,” Quichocho said.
In the 21-page complaint, Maratita's introduction quoted U.S. President Franklin Delano Roosevelt's line “We have always known that heedless self-interest was bad morals, we now know that it is bad economics.”
Quichocho said the PPA between Fitial, Buckingham, CUC, and the mysterious Saipan Development LLC, and all the agreements surrounding it, “are surely bitter economics, at best.”
Quichocho said the PPA guarantees the payment of $190,827,300 to a mysterious company called “Saipan Development, LLC” that is incorporated in the State of Delaware on March 22, 2012.
The lawyer said the PPA also guarantees an undisclosed and yet-to-be-determined millions of dollars more in direct and indirect costs that the good people of the CNMI will be forced to pay.
Per the PPA, on March 27, 2012, Saipan Development LLC and the CNMI executed a Power Plant Development and Management Agreement by which Saipan Development was granted the exclusive right to develop a diesel generated electric power plant on Saipan.
Quichocho said the diesel plant agreement was made in secret and that not even the highest CUC official knew about such agreement.
“Nothing much is known about the terms and conditions of the diesel plant agreement, because it is still kept a secret and have not been leaked,” Quichocho said.
Per the PPA on March 27, 2012, Saipan Development LLC and the Department of Public Lands executed an option to lease agreement “for certain real property on the island of Saipan which is intended to be the location of the plant.”
Quichocho said the March 27, 2012 option to lease agreement was made in secret.
On Aug. 3, 2012, DPL executed an option to lease agreement between DPL and Saipan Development LLC, in which the latter was granted an exclusive option to lease the public lands occupied by CTSI and surrounding areas in Lower Base.
Quichocho said that, on Aug. 3, 2012, Fitial for CUC, and Buckingham for the Office of the Attorney General, executed the PPA with Saipan Development LLC.
Quichocho said there was no request for proposals issued for the project.
The lawyer said the PPA was leaked on Aug. 14, 2012 to the media and the public.
“On information and belief, not even the top CUC officials nor acting governor Eloy S. Inos knew about the power purchase agreement until it was leaked,” he said.
Quichocho alleged that aside from the unfair and one-sided terms in favor of Saipan Development LLC, Fitial, Buckingham, and CUC have committed the taxpayers, including the ratepayers, to pay over $200 million of costs and expenses, for 25 years, for a diesel-powered power plant.
Quichocho said assuming Saipan Development LLC's Power Plant is operational in 2013, the PPA will expire in 2038.
The lawyer said defendants Fitial, Buckingham, and CUC breached their fiduciary duty to Maratita and the good people of the CNMI by entering into agreements requiring the guaranteed expenditure of public funds for 25 years, without fund certification or fund appropriation.