Statement of Gov. Benigno R. Fitial

“Although GAO accepted some of our suggestions with respect to the draft report, the failure to produce the report before Congress acted on the legislation is very disappointing and the report’s prediction of adverse impact on our economy as a result of the legislation is truly alarming.

“In our Comments to the GAO regarding its draft report, we stated that publication of the report before Congress acted on Public Law 110-229 as originally requested by six Members of Congress might have served a useful purpose. Notwithstanding its many limitations, the GAO report documents the fundamental flaws in this legislation. The report repeatedly emphasizes the absence of the necessary economic data based on which the implementing agencies might fairly assess the impact of their decisions on the economy and people of the Commonwealth. The report illustrates the wide range of discretionary decisions entrusted by the Congress to the federal agencies in the absence of any detailed legislative criteria. Lastly, the GAO concludes, even with the most favorable (and unrealistic) assumptions, that the law’s implementation will most probably result in a 50-percent decline in the economic output (or GDP) of the Commonwealth by 2021 if not sooner.

“In our testimony before Congress in three committee hearings, the Commonwealth urged Congress to defer any final action on this legislation until the Members received a report from GAO. Six Members of Congress requested such a study in May 2007 to assist them in evaluating possible legislation. If this legislation had been considered on its merits by Congress in light of this GAO report, we cannot believe that the Members would have decided to inflict this potentially devastating injury on the Commonwealth. We believe that GAO’s deference to Congressional staffers in changing the purpose of the requested report and delaying its publication raises serious questions about the independence and integrity of the agency.

“With respect to the report’s prediction of adverse impact on the CNMI economy, we urged GAO not to publish this economic analysis and its projection of serious adverse impact on our community. In light of the report’s consistent – and accurate—comments about the lack of reliable economic data, we are not convinced that GAO’s analysis was either necessary or useful.

“We urged GAO to subject its analysis to a meaningful peer review by professional economists before publishing it. They refused to subject their assessment to independent economists not employed by the agency, which is the essence of peer review. We do not believe that such a serious assessment of economic injury with respect to any city, county, or State in the United States would have been published by GAO or any federal agency without this kind of peer review.

“The Commonwealth has currently engaged a team of economists to conduct a more detailed and professional assessment of the economic impact of recent federal legislation on the CNMI economy.

“We urge the Members of the Legislature and all interested citizens in the Commonwealth to read the GAO report, to consider its implications, and to participate in further discussions about how best to deal with the issues raised by this legislation.”