OPA asked to audit $1.2M legal fees

Rep. Frank Dela Cruz (R-Saipan) formally requested the Office of the Public Auditor on Thursday to audit the reported $1.2 million in legal fees being charged to the NMI Retirement Fund in connection with the pension agency’s Chapter 11 bankruptcy filing that a federal court judge later dismissed.

Dela Cruz asked that the audit be performed immediately and a response from OPA no later than July 13, 2012.

He asked OPA to determine the work performed by all legal firms in the filing of the Chapter 11 bankruptcy petition on behalf of the Fund, a listing of all legal firms involved in the case and their hourly rate charge, and the number of hours charged by each legal firm.

Dela Cruz, at the same time, asked OPA to determine whether the Fund issued a request for proposal or awarded a sole-source contract for its bankruptcy lawyers, including one from Boston.

He was referring to Boston-based Brown & Rudnick law firm.

“Was the decision to file bankruptcy and the retention of legal counsels made in public meetings pursuant to notice in compliance with the Open Government Act?” Dela Cruz asked Public Auditor Mike Pai in a two-page letter.

Pai has yet to respond media request for comment on Dela Cruz’s request.

Rep. Stanley Torres (Ind-Saipan) said it should be the Office of the Attorney General, not OPA, to investigate the charges made by the Fund’s counsels.

“The AG would have the authority to file complaint or stop the payment of funds if it finds that the law firms improperly billed or charged excessively, for example,” Torres told Saipan Tribune.

Dela Cruz said the $1.2 million in legal fees still does not include the $250,000 retainer fee that has already been paid to the same legal firms.

“To think that this case had only taken about one month to be adjudicated with an astronomical price tag leaves everybody, most especially retirees, wondering if this in fact is justified and fair. I myself wonder if these attorneys in their deep sleep at night are still working on the clock to get this legal cost to where it is now,” Dela Cruz told Pai.

Dela Cruz said there are hundreds if not thousands of legal firms near the CNMI specializing in bankruptcy proceedings.

“Why someone from Boston?” he asked.

Gov. Benigno R. Fitial placed the Fund under a state of emergency, but the Senate adopted a resolution on Thursday amending that executive order. The House needs to also approve of the Senate joint resolution for the amendments to take effect.

By Haidee V. Eugenio

Haidee V. Eugenio | Reporter
Haidee V. Eugenio has covered politics, immigration, business and a host of other news beats as a longtime journalist in the CNMI, and is a recipient of professional awards and commendations, including the U.S. Environmental Protection Agency’s environmental achievement award for her environmental reporting. She is a graduate of the University of the Philippines Diliman.

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