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CORRUPTION IN MICRONESIA (PART THREE)
Read Part 1 | 2 | 3
 
2/12/2003
 
YOUR TAXES AT PLAY IN THE FIELDS OF THE PACIFIC
 
by: Sherry O'Sullivan
TB correspondent in Canada
 
Billions of American tax dollars flow into former and current Trust Territories in the Pacific. These exotic areas include Amerika Samoa, the Federated States of Micronesia (FSM), the Marshall Islands,  the U.S. Commonwealth of the Northern Marianas Islands (CNMI), Guam, and Palau (to name a few).  Here's a brief snapshot of current events in some of these areas, all heavily funded by your tax money.
 
The FSM: Is the Fix In?
 
I recently reported on criminal corruption complaints served against Jack Fritz, Speaker of the House of the FSM unicameral Congress (see Corruption in Micronesia, Part Two). A trusted source recently informed me that the all powerful Speaker is presently traveling in Seattle and Portland to visit the large Micronesian communities located there. As usual, he is traveling on the public checkbook.  His mission?  To collect support for his four-year seat as Speaker and, ultimately, his bid for the Presidency of the FSM.  As an endnote, please recall that the FSM Congress has sealed its travel records and expenditures from public scrutiny.
 
Majuro, Marshall Islands: Too much is Not Enough
 
Allen P.Fields is a retired jurist from California.  In 1993 he traveled to Majuro and eventually became the Chief Justice in the Marshall Islands. On January 27 of this year he tendered a letter of resignation and left Majuro after some unfavorable publicity hit the islands. It seems that Fields was arrested on charges of sex solicitation and committing a lewd act in front of a policeman in a Sacramento, California park known to be homosexual hangout. Fields was among six men arrested on January 6 in that park. Fields, a longtime resident of Sacramento, claimed to have experienced a bladder problem and didn't know the park was frequented by homosexuals.
 
"When I have to go, I have to go, wherever I am," He said.  This statement leads to interesting speculation about his deportment on the bench. Fields pleaded "no contest" and was fined $100 with three years probation. Fields is reputed to have been paid $25,000 a year as a justice in the Marshall Islands, while also drawing $108,000 a year in retirement plus $513 a day as a "visiting judge" in Northern California. The Marshall Islands' President, Kessai Note, declined to accept Fields' resignation.
 
Fields is the second Marshall Islands chief justice to be charged criminally in recent months. Last October, the Marshall Islands' Attorney General filed charges of travel related theft and fraud against suspended High Court Chief Justice Charles Henry, also a retired American judge from California. Henry, who worked under Chief Justice Fields as a trial judge, is accused of stealing $14,000 in connection with government travel expenses. This writer is assuming that Judge Henry operates under the terms of a financial package similar to that of Judge Fields. Your taxes at play.
 
Palau: Good Ol' Boys Club
 
Palau enjoys a Compact of Free Association with the USA similar to those of the FSM and CNMI. All compacts provide billions of dollars in subsidies for development, as well as countless US federal programs. Last month, thirteen members of Palau's House of Delegates were facing civil and criminal charges, including cheating, forgery,  embezzlement,  misconduct in public office, and grand larceny in relation to the conversion of government travel funds for their own personal use. The total amount reported stolen was $182,000. Those indicted included the House Speaker and 12 other delegates.
 
But wait!
 
The special prosecutor decided to drop all charges if the malfeasors would agree to repay the money they'd looted. And so, they all agreed to settle the case through restitution of funds. In a public statement that was supposed to explain it away, the special prosecutor said, This will " . . . save both [the special prosecutor] and the republic the resulting expense and inconvenience." And here I always thought convictions would not only include restitution penalties, but also mete out the punishment due to public leaders who misuse their powers.
 
However, the really good news is that the formerly indicted all agreed that, in the future, they "will submit receipts or other documentation that will substantiate their travel expenditures along with travel vouchers and written trip reports containing detailed explanations of all expenditures." Stay tuned.
 
Guam:  Typhoon Alley
 
Guam is located in what is known as "Typhoon Alley." They get whomped every year and, every few years they are also visited by a deadly phenomenon known as a Super typhoon. That was the case with Super typhoon Paka in 1997 (I know. I was there at the time, trying to hang on). Damage was legion and FEMA and the US Federal Government stepped in. However, one of the caveats FEMA levied after the Paka disaster was that local agencies would have to insure their buildings as a condition of receiving future federal grant damage funds.
 
But not everyone paid attention. Last month Super typhoon Pongsona arrived on Guam. Surprise, the Department of Education failed to insure its buildings and will now lose out on $5.5 million in federal funds to repair their damaged schools. Ditto the Department of Parks and Recreation. And the Guam Airport Agency also failed to buy insurance coverage for typhoon losses and faces having to pay millions of dollars in post-Pongsona repair costs. Airport damage is estimated at $46 million.
 
The airport also faces additional fiscal liabilities due to decreased tourism. But my favorite "loss" is the result of an exhibit of Chinese terra cotta warriors the airport agency sponsored. The exhibit won't end until April, but the agency already forecasts that the venture will end up costing them $500,000, in spite of entrance fees.
 
The Government of Guam has other budgetary troubles. Its GovGuam Retirement Fund is projected to run out of money in "about nine years," according to its departing board chairman. The retirement fund is losing about $100 million a year, mostly due to lawmakers who have borrowed as much as $30 million each year to make supplemental payments to government retirees. These payments are not part of the retirees' regular benefits, but are characterized as "gifts from local taxpayers." One wonders if the taxpayers are invited to sign the gift cards?
 
Added to this, Guam's government ran over budget (again) and has only enough money on hand to pay its employees through this the end of this month. The administration is entertaining various borrowing schemes (guaranteed by US federal tax money), as well as Draconian personnel and benefits cuts. This raised a predictable question from one of the island's senators, Joanne Brown. She asks why payroll cuts for the executive branch are being postponed, while the legislative and court budgets have already been trimmed. Business as usual.
 
High Performance Commander
 
Yesterday, Guam's highest ranking policeman, Commander Col. Joseph P. Mafnas, was jailed for creating and signing his own performance evaluation. The signature he used was that of the former police chief. Unable to make the $25,000 bail, Mafnas was sent to jail where he was separated from the other prisoners. In 1997, Mafnas' nomination to the position of police chief was rejected after polygraph results revealed that Mafnas lied about stealing, physically injuring people and using his influence to help police cadets pass training courses. Had the altered performance evaluation not been detected, Mafnas would have received an incremental increase in pay based on the bogus evaluation.
 
Last week,  former Guam Mass Transit Authority Assistant General Manager, Antonio "Tony" Diaz was indicted after he allegedly used a government-issued credit card to rack up $10,000 in charges for his personal use.
 
Trust Territory Retirement Fund:  Where's the Beef?
 
More than 2000 families in the Marshall Islands, Palau, CNMI, and the Federated States of Micronesia depend upon something called a "prior service" retirement trust fund. This fund assists retirees who worked for the American Trust Territory administration from shortly after W.W. II until the early 1990s. Unfortunately, the trust fund is on the verge of bankruptcy and its administrator is asking for more U.S. Congressional funding. 
 
The administrator of the trust fund, Jerry Facey, says retirees now receive an average of $40 each month. The trust fund failed to issue any payments during five months last year due to lack of funds. With a balance of only $200,000, Facey says the trust will only last a few more months. 
 
In fiscal years 2000 and 2002, the US Department of the Interior provided a total of $950,000 to bail out the trust fund. As of this writing, an additional $2 million taxpayer infusion is awaiting action on the U.S. Senate floor. What is intriguing about this story is that nowhere in any report I've been able to locate, is the reason for the trust fund's failure explained or addressed. Where's the beef?
 
The Art of the Deal: Kwajalein
 
The American lease of the Reagan Test Site at Kwajalein Atoll is running out. The landowners wanted more money ($11.3 million per annum isn't enough) and a 50-year renewal. The U.S. wanted a 40-year extension and it probably would be willing to pay almost any amount of taxpayer dollars to secure its most important missile testing facility in the world.
 
What terms did they agree on? An 83-year lease at a cost to taxpayers of 1.1 billion in direct land rental, community development assistance and environmental "protection." Starting on October 1, the rental payments will go up to $15 million  annually with a further increase to $18 million starting in 2014. Both amounts are to be adjusted upwards to 67 percent of actual inflation. Not surprisingly, landowners are critical of the current system because the annual rental goes to about 70 traditional leaders for distribution.
 
END OF PART THREE - Sealed travel expense account records? Are you thinking what we're thinking? Who's minding the store? Stay tuned to www.twistedbadge.com
 
Sherry O'Sullivan has been an investigative journalist for more than 30 years.Until recently, she owned and operated the only newspaper in the Federated States of Micronesia.The government illegally expelled her and closed the newspaper for printing the results of public audits. Born and raised in Canada, O'Sullivan spent most of her adult life in other parts of the world, including the United States. Comments and/or questions may be sent c/o mike@twistedbadge.com

 

 

 
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