A market solution

The CNMI government wants to float a bond in order to raise much needed revenues. This will not do. The government will continue to waste money no matter how many bonds we may float.

Government is inherently inefficient. Nearly all political incentives encourage waste, fraud and abuse.

A politician spends to please his constituents and get himself re-elected. He may also waste government money on a public project in order to benefit from bribes or kickbacks.

A government bureaucrat spends in order to maintain his annual operating budget. He spends in order to continue to get the same amount of money (or more) each and every year.

As long as the politicians and bureaucrats are not dealing with their own assets, they remain completely free to squander our own. No amount of administration enforced “austerity measures” will ever solve this perennial problem.

Even the notable efforts of Mr. Leo LaMotte are of no consequence. Just because the Office of the Public Auditor uncovers instances of fraud and abuse, doesn’t mean that those violations, however flagrant and egregious, will ever be prosecuted by the CNMI Attorney General’s Office.

How many times has Mr. LaMotte’s office exposed a possible crook, only to have the AG’s Office sleep over it indefinitely?

The most honorable Senator from Tinian, for example, encountered a few anomalies during his municipal tenure. But did anything ever come out of Mr. LaMotte’s report (some allegation or other about using public funds to service a personal loan)?

In fact, no action was taken until federal funds were involved, which automatically gave the FBI and the U.S. Justice Department jurisdiction.

What we need is a market-based approach. The political incentives for waste, fraud and abuse must be eliminated altogether. They must be replaced with substantial profit incentives to do good.

The solution is really quite simple: handsomely reward the politicians with bonuses. Tie their performance to their financial compensation, as measured by their cost savings.

For example, if Senator Pete P. Reyes slashes $40 million off the annual budget, give him a cut of the savings. Give him a substantial commission–say, 0.30 percent, or $120,000.

Cut their base salary and let the politicians work on a cost-reduction commission/bonus basis. Such a scheme may well mitigate corruption and waste. The politician, presumably, will then be motivated to save rather than to waste.

It is at least worth a try.