Admin to disclose Babauta’s CUC reprogramming

The Fitial administration will issue a report on the extent of funds reprogramming for the financially troubled Commonwealth Utilities Corp by former Gov. Juan N. Babauta.

Acting Gov. Timothy P. Villagomez said Friday that such a report would be completed in 30 days.

“We hope to have it in 30 days. We’ll immediately provide this information to the Legislature. It’s the information that we had been asking the previous administration but was never given to us,” said Villagomez.

Fitial, who went off-island last week, had heavily criticized his predecessor for alleged illegal reprogramming for the utility firm.

Babauta had declared a state of emergency on utilities in May 2005, citing the near collapse situation of the CUC engines, the lack of a stable fuel supply, and the unstable power supply.

The Fitial-led House of Representatives had cited that under 1 CMC subsection 7402 and 1 CMC subsections 7302 and 7403, “no funds may be reprogrammed, and no obligation or contract for the expenditure of Commonwealth funds shall be made for any purposes other than the public purposes for which the funds are appropriated.”

The chamber had also said that the law provides that “no Covenant funds may be reprogrammed or otherwise transferred or borrowed from capital improvement and economic development accounts to government operational accounts.”

It further said that the governor is only allowed by law to reprogram up to 25 percent of funds appropriated by the annual appropriation for the operations of the government.

Babauta disclosed that since his May 19 emergency declaration, he had reprogrammed $5.1 million from local funds and $2.6 million from capital improvement projects for CUC.

The Marianas Public Lands Authority had also reprogrammed $1 million for the utility firm.

The CIP reprogramming was reportedly used with the consent of the federal government for power plant repair and improvement in Lower Base.

Meantime, shortly after he assumed the leadership, Fitial did a similar action, putting CUC back under emergency control and requesting blanket emergency authority from the Legislature to reprogram funds not only for CUC but the entire government.

Describing CUC to be “in a state of disarray,” Fitial moved farther by totally abolishing the CUC board with the intent of reducing the corporation into a division under the Department of Public Works.

“CUC is at present in a state of disarray. We need to move in and take control of CUC,” the governor has said.

Villagomez, a former CUC executive director, said that the purpose of the governor’s action is to bring in a financial management team to evaluate CUC’s exact financial situation and to improve CUC’s operation.

He said that the administration provides CUC with a $2-million subsidy, on top of the $800,000 paid for the government’s utility bills.