Senators grill Pai in confirmation hearing

Public auditor nominee Michael Pai yesterday fielded questions on his personal background and his plans for the Office of the Public Auditor during a confirmation hearing that was largely friendly on both sides of the aisle.

Most of the hearing before the House Committee on Judiciary and Government Operations and the Senate Committee on Executive Appointments and Government Investigations focused on Pai’s qualification to serve as the Commonwealth’s public auditor.

But questions were also asked about Pai’s plans for addressing previous audit findings that have been referred to, and still awaiting action by, the Office of the Attorney General. Pai reported that a joint task force made up of OAG and OPA attorneys are now working on the corruption cases.

The lawmakers also picked Pai’s brain about possibly granting OPA the power to prosecute individuals found to have misused public funds. “I haven’t ruled anything out,” Pai said. “It’s not a priority for me to get prosecutorial powers. I just don’t have enough information about it.”

Gov. Benigno R. Fitial appointed Pai to replace Michael Sablan as public auditor on July 22, 2008. His nomination requires approval by both the Senate and House of Representatives. The 90 days given to the Legislature to act on the nomination ends on Sunday, Oct. 19, 2008.

If confirmed, Pai will serve as public auditor for six years.

Although lawmakers quizzed Pai with a mostly friendly tone, Pai experienced some tense moments when Rep. Rosemond Santos fired questions about his involvement in private sector companies, including one that does business with the government.

He is currently a shareholder of Universal Air Supply, an air-conditioning and refrigeration wholesale and retail company in Guam; Plexus International, a training and quality management systems firm in St. Paul, Minnesota, and Saipan Sunset Cruise Inc, a local boat cruise tours company.

In addition, he serves as treasurer of Chong’s Corp., which offers air-conditioning and refrigeration equipment and services. The company, Pai admitted, conducts “a significant amount of business with the government.”

“Do you not feel you should vacate these private sector positions to eliminate any appearance of impropriety?” asked Santos, chairwoman of the House JGO Committee.

Pai said he plans to give up his interests in Saipan Sunset Cruise once confirmed. But he is still consulting with OPA’s attorney about whether he should quit his treasurer role with Chong’s Corp., which is owned by his wife and her mother.

Pai expressed belief that he will not be violating any ethics laws as long as he recuses himself from any possible procurement case involving Chong’s and he does not use government time and resources for any work related to the company.

Several government and business leaders spoke on Pai’s behalf, attesting to his competence and good character.

Acting attorney general Gregory Baka was the first to testify in support of Pai’s nomination. He said that “someone of [Pai’s] caliber should be confirmed to serve as public auditor.”

Nhing Reyes, a senior manager at the Ernst & Young accounting firm and Pai’s former co-worker, testified about the nominee’s qualification and objectivity.

Saipan Chamber of Commerce president Jim Arenovski said Pai has the support of the business sector. “If you’re looking for a public auditor who has integrity and the ability to be fair and listen to all parties, you cannot find a better man [than Pai],” Arenovski said. Finance Secretary Eloy S. Inos echoed Arenovski’s recommendation.

Even lawmakers attending the hearing expressed their support for Pai. Those lawmakers include Rep. Diego Benavente, Rep. Tina Sablan, and Rep. Stanley Torres.

Pai has been a certified public accountant for more than 20 years. He attended the University of Hawaii, where he completed degrees in engineering and business administration.

Before putting up his own accounting firm in 1986, Pai worked for a number of corporations and an accounting firm, including the Hawaiian Telephone Company, Micronesian Telecommunications Corp., and Ernst & Young.

Pai is also an active in community activities, serving as member of the CNMI Board of Accountancy, the NMI Judiciary Historical Society, and the Pet Assistance & Welfare Services group. Pai was also a president and a board member of the Rotary Club of Saipan, and was a board member of the Saipan Chamber of Commerce.