Legal action urged vs. MSA

Sen. Celina Babauta (D-Saipan) is asking Gov. Arnold I. Palacios and the Office of the Attorney General to take legal action against Marianas Southern Airways for the recovery of two Tecnam P2012 aircrafts allegedly purchased through American Rescue Plan Act funds.

Babauta, in a letter to Palacios and Attorney General Edward Manibusan, followed up on a meeting they had last year regarding the two Tecnam P2012 aircraft MSA purchased through a sole-source, ARPA-funded, contract with the previous administration.

In addition, Babauta encouraged that legal action be taken to recover these planes if proven that they were purchased through CNMI ARPA monies.

“I am writing to follow up on our meeting last year concerning the two Tecnam P2012 aircraft acquired by Marianas Southern Air using approximately $8 million of American Rescue Plan Act resources entrusted to our government under the previous administration and to formally request that the government of the Northern Mariana Islands consider taking legal action against Marianas Southern Air and other deceitful actors to recover two aircraft purchased with at least $4.5 million in ARPA funds,” she said.

Babauta expressed that if ARPA funds were in fact used for the purchase of these planes, the CNMI has a claim to ownership of these planes.

“The use of ARPA funds, intended for pandemic relief and economic recovery, for the acquisition of these assets raises significant questions about the propriety of the expenditure made by former governor Ralph DLG Torres and his former secretary of Finance, David DLG. Atalig. As you are aware, Marianas Southern Air, a joint venture between Southern Airways Express and Saipan-based MP Enterprises, was awarded a sole-source contract valued at $8 million by the previous administration to purchase two Teenam P2012 aircraft. It is my understanding that these funds were derived from the American Rescue Plan Act. It appears that the CNMI may have a colorable claim to ownership of these aircraft,” she said.

Babauta adds that it is concerning that since Marianas Southern Airways closed its doors back in April 2023, the planes have reportedly been used by Mokulele Air (operated by Southern Airways Express) for interisland travel within Hawaii.

“When Marianas Southern Airways closed their doors on April 1, 2023, the aircraft were immediately brought to Guam for fuel tank modifications to enable them to fly to Hawaii. It is concerning that these planes are reportedly now being utilized by Mokulele Air for their interisland service within Hawaii. Southern Airways Express has publicly stated that these aircraft will be used as reserve aircraft for their subsidiary, Mokulele Airlines, and will also be available for private charter. I believe this constitutes a significant breach of the original contract and a misuse of public funds,” she said.

Babauta argues that these assets must be returned (or compensated for) as it belongs to the people of the CNMI.

“The people of the CNMI deserve to have these assets returned or compensated for. Given the substantial public interest in this matter and the financial implications the CNMI has encumbered, I urge you to initiate a thorough investigation into the circumstances surrounding the purchase of these aircraft, including the specific terms and conditions of the ARPA grant. It is essential to determine if there were any violations of federal or local laws governing the use of these funds. If the findings support the assertion that the aircraft were improperly purchased using ARPA funds, I strongly recommend pursuing legal action against duplicitous actors who conspired and committed this fraud to recover these assets for the benefit of the CNMI and its people,” she said.

“By taking legal action, the government can protect the interests of taxpayers and ensure that ARPA funds are used appropriately,” she adds.

Babauta adds that now more than ever, the CNMI must take legal action over these planes with current disputes between the Commonwealth Ports Authority and Star Marianas Air, Inc. threatening the continuity of inter-island transportation.

“In light of Star Marianas’ nagging threat of shutting down the only inter-island air transportation service in order to bring the CNMI Government to its knees, it is incumbent upon our government to take legal action for these assets. With each passing day, the CNMI loses the valuable opportunity to establish a public-private partnership to initiate interisland air operations within the CNMI, potentially hindering the development of reliable interisland air service in the Mariana,” she said.

“The purpose of this letter is to reiterate my strong belief that the CNMI has a legal claim to these Tecnam P2012s. I am confident that you both share my understanding of the critical role reliable air service plays in the economic well-being of the CNMI. Therefore, I urge you to take swift and favorable action to secure these aircraft for the benefit of the CNMI. I am confident that your office possesses the necessary legal expertise to pursue this matter effectively,” Babauta adds.