House OKs MRC settlement bill

Proponents of the Outer Cove Marina settlement at the House of Representatives mustered enough votes yesterday for the passage of the $2.2 million settlement agreement and the initial allocation of $800,000 for the Marine Revitalization Corp.

The initial payment, however, will not be appropriated by the Legislature but “allocated” through Covenant 902 capital improvement project funds.

House Bill 14-270, introduced by the minority bloc headed by Rep. Arnold I. Palacios, garnered an 11-3 vote, with Reps. Oscar Babauta, Jesus Lizama, and Timothy Villagomez opposing it. Two lawmakers—Reps. Heinz Hofsch-neider and David Apatang—were absent during the voting.

The bill originally aimed to appropriate $800,000 from the Managaha Island Landing and Use fees but the House leadership said that funds from this account could no longer be tapped because they have already been appropriated in other bills.

Besides, the leadership said, the Legislature doesn’t have the money to spare.

“This is another trick by the administration. It’s the Governor’s Office that has over $12 million in CIP funding every year. The Legislature does not have money,” said House Speaker Benigno R. Fital. “The entire House is supporting the bill but the question is the funding source. Why are they trying to suck blood from Legislature? What we’ve got is only air, hot air!”

Rep. Arnold Palacios said the Legislature needs to resolve the issue now or the Commonwealth would further lose in the deal.

“This is not an issue created by this Legislature…but the fact is, this issue should be resolved before Nov. 29. If not, the Commonwealth will be held liable in the amount beyond $800,000,” said Palacios.

He cited a recent letter sent by then acting Gov. Diego T. Benavente to the Legislature, showing that MRC, represented by businessman Anthony Pellegrino, would reinstate its over $5 million claim against that government if the issue is not resolved before arbitration resumes on Nov. 29.

The settlement agreement executed between MRC and the CNMI government calls for the immediate payment of $800,000 and additional $2.2 million in deferred monthly installments over 20 years. Based on the agreement, the $2.2 million can be paid through the operating revenues of the Outer Cove Marina.

The settlement approval would also allow the government immediate access to the facility.

Pellegrino earlier sued the government over the marina deal but it was dismissed for lack of jurisdiction. The parties then began arbitration in April 2001. In January 2002, the independent arbitrator advised parties to enter into settlement negotiations.