House questions Fitial’s takeover of CPA

The House of Representatives has objected to the governor’s takeover of the Commonwealth Ports Authority.

The members of the Lower House voted 18-0 to adopt a resolution to express their disapproval of Gov. Benigno R. Fitial’s move to declare a state of disaster emergency for CPA and shift the autonomous agency to the Governor’s Office.

Speaker Arnold I. Palacios abstained. His brother, Rex Palacios, is the chairman of the CPA board of directors, which was suspended when the governor placed CPA under his direct control.

Rep. Rosemond Santos was absent.

The lawmakers said the reason cited by Fitial for his action does not justify a state of disaster emergency declaration. They also accused the governor of trying to keep the Legislature out of the loop.

“The House finds that the issuance of this State of Disaster Emergency is nothing more than an unoriginal attempt to circumvent legislative oversight,” they stated in the resolution.

“[The] governor’s use of extraordinary State of Emergency powers is disingenuous and sets an irreparably damaging policy precedent. This brazen ‘emergency’ strategy may become the model for future executives that cannot and will not follow proper legal procedures,” they added.

Fitial had said the declaration was necessary because of the CPA board’s repeated failure to muster a quorum to act on measures that would save CPA from further financial damage.

The ports authority is nearing a technical default on the 1998 indenture on its airport revenue bonds. If the default occurs, CPA could be forced to pay the entire principal and interest of the bonds immediately. Bank of Guam, which serves as the bond trustee, could also issue a default notice and take over the Saipan International Airport.

But according to the House, CPA’s situation does not call for the use of the governor’s emergency authority. The lawmakers argued that the constitutional power was not intended to be used to assist any government agency in repaying a debt.

The Constitution, they pointed out, cites events such as “invasion,” “civil disturbance,” “natural disaster,” and “calamity” as justifications for the use of emergency powers. Further, an analysis of the Constitution offers an example of what rises to the level of a state of emergency as “the unavailability of public utilities, transportation, or communications.”

“In this case, none of those events has occurred and there is no legally sufficient basis for the declaration of a State of Disaster Emergency, indeed the takeover of CPA is far afield of what the Constitution and statutes of the Commonwealth contemplated as a situation requiring extraordinary emergency intervention,” the resolution stated.

The House members said that while they recognize the gravity of defaulting on a bond obligation, there are far less extreme alternatives than a state of emergency or reorganization plan. One such alternative, they said, is to replace the “wayward” board members at CPA.

Speaking for the administration, press secretary Charles P. Reyes Jr. implied that the House might not have a full grasp of CPA’s financial problem.

“Why would they object when we’re trying to save CPA? Maybe we need to provide them more information,” he said.

He added that the governor used his state of emergency power to safeguard the bond agreement and, ultimately, to preserve the entire commonwealth’s borrowing viability for many years to come.

On Monday, Fitial issued an executive order placing CPA under the Governor’s Office for 120 days. By law, however, such reorganization plan cannot go into effect until the Legislature has had 60 days to review—and possibly to amend or void—the proposal.

Citing the urgency of CPA’s financial trouble, the governor on Tuesday issued the state of emergency declaration. This allowed him to take over the ports authority immediately. Using his state of emergency powers, Fitial on the same day signed directives raising CPA rates, imposing austerity measures, and ending the incentive program for airlines flying to the Northern Marianas.