Sen. Paul Manglona (Ind-Rota) has asked the Office of the Public Auditor to look into the use and expenditure of the Community Benefit Fund, which is one of the requirements under the license agreement the CNMI has with casino operator Imperial Pacific International (CNMI) LLC.
In a letter to Public Auditor Mike Pai, Manglona asked the OPA to look into how the Community Benefit Fund, or CBF, is being used and expended by the central government, saying he believes it should be regarded as an annual earmark for the CNMI.
The CBF is an annual contribution from IPI required under Section 16 of the Casino License Agreement, or CLA. IPI is supposed to chip in $10 million into the CBF pot by Jan. 1, 2018, and another $10 million by June 1, 2018. Subsequently, IPI would contribute $20 million to the community chest every year on or before Oct. 1, 2019.
“…The said monies are part of the consideration or payment for the exclusive casino license. The funds were pledged in exchange for government property, i.e., the casino license. Therefore, the CBF is tantamount to earmarked funds of the CNMI,” Manglona stated in his letter to OPA.
The funds, according to the CLA, would go to community benefit programs for education, scholarships, infrastructure, health care, or employee retirement benefits, as may be determined in consultation with the CNMI governor.
“Pursuant to 1 CMC 2304(a), the Ooffice of the Public Auditor has a special duty to prevent and detect fraud, waste and abuse in the collection and expenditure of all public funds. This duty should extend to the expenditure of the CBF, which is tantamount to government earmarked funds,” Manglona said in his letter, adding that, according to the CLA, IPI should have deposited a total of $40 million in the CBF as of Oct. 1, 2019, including the 2018 and 2019 contributions.
“To date, there is no official report on disbursement or expenditure, if any, of the CBF monies. These funds must be accounted for and any distribution must be disclosed for transparency,” Manglona noted.