Gov. Ralph DLG Torres’ request for a line of credit with the Marianas Public Land Trust is proving to be far from being an open-and-shut case, with MPLT vice chair Maria Frica T. Pangelinan raising some concerns with the proposal.
She said in last Monday’s board meeting that MPLT’s duty is to protect and invest the public land revenues it receives from the Department of Public Lands.
“Our fiduciary duty is to safeguard the funds and invest it, based on the Constitution’s Article 11,” she said. “You have to forgive me, but I call this [line of credit request] as bailing out a very distressed government. I don’t think that it is our duty to do that.”
MPLT trustee Vianney B. Hocog of Rota described the current financial situation of the CNMI government as “very shaky.”
Pangelinan said the MPLT board then must determine the “real intent” of the line of credit request. She pointed out that the bill to authorize the line of credit, House Bill 21-44, is saying that the line of credit’s procedure would be a drawdown of funds that are needed while the governor’s letter states that it will be a drawdown to meet the bond obligation and payment to the Settlement Fund.
“The governor’s request conceptualizes the definition of investment, as defined in the Constitution. Investment is the major trust why we’re here,” she added.
Pangelinan, who is one of four former lawmakers that are members of the MPLT board, thinks the bailout is not the right approach.
“My concern is the request must be defended legally, whether it is an investment that can be accommodated under the diversified local investment portfolio,” she said.
She clarified that she has not decided yet on the governor’s request but, whatever her eventual decision may be, “it will be based…on the response on the concerns and the questions that I have and raised.
“How should we address this request and which asset allocation would be reduced to accommodate such request? What’s the category of the request?” added Pangelinan.
She asked if the line of credit would fall under the definition of an investment, loan, or an advance against future earnings.
“The discussion that we need to establish first is the definition of investment. It must be cleared by our legal counsel so we can move on. The request, is it categorized under diversified local investment?
“If it is, does it need the standard provision of investment policy? If it is a loan, then we should end the discussion because we don’t give loans. So, I really believe that the legal definition should first be defended by our legal counsel with respect to pursuing the discussion whether the loan merits the time that we need to go along with the discussion.”
Torres had asked MPLT for a credit facility through the Department of Finance in order to help the government secure its bond obligations and its court-ordered payment to the NMI Settlement Fund.