US Mint coins new rule on ‘commemoratives’

A little noticed article that came out in the Jan. 25 edition of The Washington Post may have made no mention of the CNMI but it would be safe to presume that its genesis sprang from the embarrassing coin fiasco that entangled the CNMI government in an alleged scam to sell fake commemorative coins related to the World Trade Center.

The article referred to a proposed regulation proffered by the U.S. Mint calling for stiff fines against scammers who misuse the U.S. Treasury or Mint name or emblem to deceive customers. The new regulation would target deliberate deception, such as ads for “commemorative coins” that imply they are U.S. Mint products. “Tens of millions of dollars are spent on such products because of misleading ads,” says Henrietta Holsman Fore, director of the U.S. Mint. “It is sad to think that some consumers…will fall victim to deceptive advertising and purchase trinkets for loved ones, mistakenly believing they are United States Mint products.”

Three days later, on Jan. 28, the New York State Supreme Court came out with its order directing the National Collector’s Mint Inc. to pay restitution to those who purchased the “2004 Freedom Tower Silver Dollar” commemorative coins, directing the company to deposit $1.3 million in an escrow account.

In a nine-page order, NY justice Joseph R. Cannizzaro also compelled NCM to mail a letter to its consumer of the Freedom Tower coin that the coin is not a legally authorized government issued silver dollar and is not legal tender. Part of the letter would contain the following text: “[NCM] was authorized to privately mint and market the coin using the name of the government of the Commonwealth of the Northern Mariana Islands. The government of the NMI is not authorized to coin money or issue legal tender. The plated coin is not solid silver. It is made from an alloy of copper and zinc and plated with a layer of silver that is approximately one ten-thousandth of an inch or .002301477 troy ounces of silver.”

I’m sure the Babauta administration would rather have this issue forgotten but the lesson would never be learned unless we keep these things in mind. My colleague on this page, Ed Stephens, was right: The CNMI being on the fringes—literally and politically—it inevitably attracts unscrupulous characters who’d rather have their dealings kept in the dark than out in the open, so it behooves the CNMI government to do its due diligence and make sure it will not end up with another egg on its face when entertaining any Johnny that comes to town with a too-good-to-be-true scheme or investment proposal.

With that said, the government must not also go the other extreme and look at all potential investors as scam artists out to bilk or embarrass the CNMI. Some of these people are surely legitimate investors and there must be some way that the government can separate the grains from the chaff without going overboard about it.

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The Commonwealth Utilities Corp. has expressed optimism that the governor will still sign the emergency regulations that would pave the way for the implementation of the 1.5 cent fuel surcharge fee across-the-board. Methink this is too much optimism. The governor will never put his signature on any document that would increase the cost of utilities in the CNMI. This is an election year and Gov. Juan N. Babauta is surely aware that signing or approving increases in the cost of electricity would be political suicide for him at this point.

His statement, therefore, that he is holding off his approval of the emergency regulation while awaiting a rate study from CUC sounds very much like a cop-out—a way for him to get out from between the rock and hard place that the regulations have placed him without sounding like a wimp. The cop-out angle becomes more likely considering his statement that the regulations would become effective even without his signature.

The sad part about all this is that, without the added revenue expected from the surcharge fee, the CUC projects that it will have to implement four-hour rolling blackouts everyday starting March—which means the public will be the one sacrificing again. That is not to say that I support the surcharge fee—far from it. But with the government up to its neck in debts and the CUC also swimming in red ink, it is becoming clear at this point that, with this crisis looming over our heads, it seems that the public will be the one that will get shafted again, whether we like it or not.

(The views expressed are strictly that of the author. Vallejera is the editor of the Saipan Tribune.)