Senate oversight hearing of La Fiesta will seek answers to questions

The recent initiative taken by Sens. Pete P. Reyes (Republican, Saipan), Paterno S. Hocog (Independent, Rota), and Henry H. San Nicolas (Covenant-Tinian) to seek a formal oversight hearing conducted by the 14th Legislature regarding the La Fiesta deal involving the administration and leadership of the Northern Marianas College, Nikko Hotel Saipan, Cocos Lagoon Development Corp., and the governor’s family members (Manuel M. Babauta, Ana B. Babauta, Francisco I. Babauta, Thomas Babauta Castro, Bianco Vende, and Basalisa) who own the property and granted ground leases to Nikko Hotel Saipan, is appropriate and timely in view of the fact the information that was conveyed to the island community regarding the transaction did not reflect the truth of the allocation of the funds revealed in an NMC staff meeting several weeks ago.

A full scale investigation conducted by senators and their legal staff to obtain answers to questions posed by the above-referenced senators (for example, where did the $3.5 million go? How much planning really went into this project? Were there no red flags posted all over the Pacific Gateway Project from the beginning? If so, why wasn’t anything done to clarify the true costs involved? How does NMC plan to fix this problem?) will allow the “complete truth” about the deal to be revealed.

These inquiries, along with more that are correlated with the transaction, need to be addressed and substantive answers need to be given to the island community simply because it involves public monies that should have been expended with care and discretion.

The comments made by press secretary Pete Callaghan that “the La Fiesta purchase was a good deal, as it was aboveboard” is questionable simply because if the deal were a good one, then why is NMC in the red nearly $2 million and the accreditation with WASC is hanging in the balance and there are only a handful of foreign students attending the college? Moreover, until the investigation by the CNMI Senate is thoroughly conducted and completed, then it might be somewhat premature to say it was “aboveboard” when the investigation could prove otherwise.

The governor requesting the OPA to conduct an investigation on the La Fiesta deal is not appropriate because the public auditor is an appointee of the governor. Notwithstanding the fact the OPA is an independent agency within the Commonwealth government, the fact of the matter is that the auditor was appointed by the governor and the question about the whether there will be complete objectivity throughout the investigation remains to be seen.

The governor has made it public that the La Fiesta campus is a “dream” to attract foreign students and for NMC to tap the facility can still be realized. How can any dreams be realized when the deal placed the college in fiscal disarray and there are serious warnings regarding accreditation by WASC? And as far as attracting foreign students is concerned, the projections were never substantiated with any credible research. Instead of credible research conducted and presented in a formal business and marketing plan, there has been nothing but “empty rhetoric and projections”.

During the interview with the media, the governor’s press secretary stated that the Department of the Interior, through the Office of Insular Affairs, approved the use of a $3.5 million grant to purchase the mall. Can this approval that the press secretary mentioned be produced? Was it conveyed via written correspondence? If not, if the approval was given verbally, then the Department of the Interior would not mind if someone from the CNMI Senate summoned them to ascertain if they in fact said that the $3.5 million could be expended on the purchase of the facility.

The oversight hearing to be conducted by the CNMI Senate is appropriate for the island community. What the investigation will uncover will either be as Callaghan described it (“aboveboard”) or something other than that. Whatever the case might end up being, it is vitally important that checks and balances monitor each and every transaction incorporating the handling and expenditure of public funds. To not have checks and balances on transactions could elicit corruption that would damage the credibility and image of the CNMI government.

Dr. Jesus D. Camacho
Delano, California