Larson: Inos directly ordered transfer of funds to Luta Mermaid LLC

Deputy AG Tenorio believes monies transferred were for public purpose

Department of Finance Secretary Larrisa Larson disclosed that when she transferred government funds to Luta Mermaid LLC she did so pursuant to a direct order of the then-governor, the late Eloy S. Inos.

Luta Mermaid LLC owns M/V Luta, a 150-foot long 500-ton cargo ship. Larson allegedly caused $400,000 to be transferred from the CNMI General Fund Account to Luta Mermaid LLC’s bank account on March 27, 2015 or two days later after a memorandum from the Rota Legislative Delegation was sent to Larson. The memorandum stated that Resolution 19-3 was adopted by the Rota Legislative Delegation on March 20, 2015.

Larson, through deputy attorney general Lillian A. Tenorio, said any unlawful results of her actions complained of in the lawsuit of former Department of Public Lands secretary John DelRosario are the product of reasonable mistake.

Tenorio discussed the release of funds to Luta Mermaid LLC in Larson’s answer and defenses to DelRosario’s lawsuit. Tenorio said Larson is not a lawyer and cannot be expected to navigate through sometimes conflicting and complex laws as if she had extensive legal training.

Tenorio said Larson had authorized payment of public funds through resolution before pursuant to CNMI Public Laws 11-79 and 12-64, and believed that the monies transferred to Luta Mermaid LLC were for a public purpose.

DelRosario filed last May a taxpayer’s lawsuit against Lt. Gov. Victor B. Hocog and Larson over the alleged adoption of a Rota Legislative Delegation resolution without public notice that purportedly authorized payment of $400,000 to Luta Mermaid LLC, a private company owned by Hocog’s relatives.

DelRosario, through counsel Jennifer Dockter, is suing Hocog and Larson for breach of fiduciary duties, and expenditure of public funds for an improper purpose. In addition, Hocog is sued for violation of the Open Government Act.

Rota Legislative Delegation Resolution 19-03 was approved “to authorize the Department of Finance to pay for fuel, lubrication, and other costs necessary for the maiden voyage of the vessel from Louisiana to its new home port in Rota, and to provide for the personnel and operational costs of the Office of the Mayor of Rota.”

DelRosario requested the Superior Court to issue a judgment declaring, among other things, that Rota Legislative Delegation Resolution 19-3 void ab initio (from the beginning), and all acts taken in furtherance of such resolution null and void.

In Larson’s defenses to the lawsuit, Tenorio said at no time did Larson knowingly and deliberately violate her fiduciary duties and breach the public trust.

“The monies transferred to Luta Mermaid LLC were for a public purpose,” Tenorio pointed out.

She cited that it is well documented that the island of Rota has suffered severe supply shortages in the past due to the inability of cargo ships to dock at Rota when the weather was bad.

The deputy AG said the purpose of transferring the subject funds was to pay for bringing the ship, Luta Mermaid, to the CNMI so the ship could transport necessary provisions and supplies to Rota even during inclement weather.

Tenorio said the boat will also provide shipping for agricultural products and other goods produced on Rota to Guam and other islands and thereby give the Rota economy a badly needed boost.

Ferdie De La Torre | Reporter
Ferdie Ponce de la Torre is a senior reporter of Saipan Tribune. He has a bachelor’s degree in journalism and has covered all news beats in the CNMI. He is a recipient of the CNMI Supreme Court Justice Award. Contact him at

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