Palacios allegedly owes DPL

Senate President Arnold Palacios (R-Saipan) is being accused of owing the Department of Public Lands over $190,000, yet allegedly continues to hold on to the lease of parcels of public land in Lower Base.

Palacios refuted this yesterday, saying that DPL and its legal counsel have recently agreed that the amount he allegedly owes is erroneous.

“A revised amount has been produced that, while significantly lower, I still believe is in error,” said Palacios, adding that the dispute continues and that he is engaged in mediation with DPL about the amount.

The Senate president said he has considered and may employ a lawyer to review this matter to ensure that the amount in dispute is correct.

“It is unfortunate that such a mundane matter as a dispute of a personal land lease would be used for political gamesmanship,” Palacios said.

The allegation was raised by Jack Muña, who told Saipan Tribune over the weekend that Palacios is leasing three parcels of public land and sub-leasing it to a private business, thereby earning thousands of dollars from the sub-lease rental of $4,500 per month.

Muña reportedly obtained documents that he acquired from DPL through Open Government Act to back his claim.

He said he provided copies of the documents to the Office of the Attorney General and the Office of Public Auditor for investigation.

Muña said Palacios himself would benefit from Senate Bill 20-35 that Palacios authored to extend public land lease terms from 40 years by an additional 15 years, for a total of 55 years.

The bill is pending in the Senate.

“I call this self-enrichment from public land and Palacios should withdraw his bill in order to have a clear and transparent bill,” Muña said.

He alleged that Palacios did not pay DPL over two and a half years—from Dec. 1, 1990, to June 30, 1992—amassing over $7,000 in arrears owed DPL.

Yet, Muña said, DPL still allowed Palacios to continue holding the public land lease.

He said Palacios finally made the first payment to DPL of $5,478 on July 30, 1992.

He believes that DPL gave Palacios special treatment. “This is totally wrong and DPL should be clear and transparent on their dealings with public land lease to everyone,” he added.

Muña said the public land lease should have been terminated a long time ago, but it looks like “transparency is no longer in the eyes of DPL nor the Legislature.”

Muña said that rumors had abounded about Palacios making substantial amount by sub-leasing the land to a business friend.

He alleged that it began on Dec. 14, 1990, when Palacios signed a lease agreement for public land in Lower Base containing 2,813 square meters, with the defunct Marianas Public Land Corp.

Muña said the lease is for 25 years and there will be 15 years of extension, with the Legislature’s approval.

Muna said that on Oct. 31, 2014, a second amendment to the lease agreement was signed by then DPL secretary Pedro A. Tenorio, then attorney general Gilbert Birnbrich, and Palacios.

He said this amendment also changed the lessee from Palacios to A&M Corp.

He said A&M Corp. was given two additional lots for a total of three public land leases containing 6,573 square meters.

Muña said that on March 2, 2016, A&M Corp. subleased the three parcels of land to South Pacific Lumber Corp. for three years commencing on April 1, 2016.

Muña said the rental fee was paid to A&M Corp., $4,500 as security deposit and $4,500 for monthly rental. He said the sublease was signed by Maria S. Palacios, A&M Corp., and Jimmy C. Whang.

Muña cited that that for the first five-year period alone, Palacios’ lease rental was $143 per month, but his sub-lease rental to Maria S. Palacios is $4,500 per month.

Muña said in his opinion, there is a conflict of interest when Palacios introduced Senate Bill 20-35.

When asked about the matter yesterday, Palacios briefly discussed the background of the land lease that began in 1988.

Palacios said that in 2013 he contacted DPL to discuss the possibility of a lease extension, when he was informed that there was an accrued balance left to be paid prior to an extension.

Palacios said he was very surprised, disagreed with that determination and followed the regulatory procedures to dispute this claim.

He said he wrote to DPL in 2015 to again state his disagreement and appeal that decision, which he believes was in error.

Palacios emphasized that the issue stems from a land lease dating back years before he became an elected official.

Palacios was elected to the House of Representatives in 2001.

He said he is not conflicted when he introduced Senate Bill 20-35.

He said the bill addresses public land leases with an existing hotel or golf course.

Palacios said the bill’s intent is to generate stable economic interest so that more job opportunities will be provided for those of Northern Marianas descent and residents, while also stimulating economic activity across the board from local small business entrepreneurship to newer industries to diversify the economy.

Palacios said he looks forward to working with DPL to resolve this land lease dispute as a private citizen.

“But more importantly, I will continue to push forward beyond this type of politically charged rhetoric for progress in our islands and for a better future for every single person who calls these islands home,” he said.