VIRGIN ISLANDS, GUAM, AND NORTHERN 

MARIANA ISLANDS ISSUES 

HEARINGS 

BEFORE THE 

SUBCOMMITTEE ON NATIVE Al'VI:ERICAl\f & INSULAR 

AFFAIRS 

OF THE 

COMMITTEE ON RESOURCES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTH CONGRESS 

SECOND SESSION 

ON 

VIRGIN ISLANDS AND GUAM ISSUES 

DISPOSITION OF WATER ISLAND IN THE VIRGIN ISLANDS, RESOLUTION 433, OF THE GUAM LEGISLATURE, AND CERTAIN PROVISIONS OF H.R. 3721 

JULY 24, 1996-WASHINGTON, DC 

VIRGIN ISLANDS AND NORTHERN MARIANA ISLANDS 

ISSUES 

H.R. 3634 (EXECUTIVE OFFICIALS ABSENCE IN VIRGIN ISLAND), H.R. 

3635 (AUTHORITY TO MANAGE CHRISTIANSTED NATIONAL HISTORIC SITE) AND FEDERAL-COMMONWEALTH OF THE NORTHERN 

MARIANA ISLANDS INITIATIVE ON LABOR, IMMIGRATION, LAW ENFORCEMENT, AND RELATED LEGISLATIVE REFORMS 

JUNE 26, 1996-WASHINGTON, DC 

Serial No. 104-94 

Printed for the use of the Committee on Resources 

U.S. GOVERNMENT PRINTING OFFICE 

27-245 cc WASHINGTON : 1996 

For sale by the U.S. Government Printing Office 

Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 

ISBN 0-16-053845-9 
COMMITTEE ON RESOURCES 

DON YOUNG, Alaska, Chairman 

W.J. (BILLY) TAUZIN, Louisiana 

JAMES V. HANSEN, Utah 

JIM SAXTON, New Jersey 

ELTON GALLEGLY, California 

JOHN J. DUNCAN, JR., Tennessee 

JOEL HEFLEY, Colorado 

JOHN T. DOOLITTLE, California 

WAYNE ALLARD, Colorado 

WAYNE T. GILCHREST, Maryland 

KEN CALVERT, California 

RICHARD W. POMBO, California 

PETER G. TORKILDSEN, Massachusetts 

J.D. HAYWORTH, Arizona 

FRANK A. CREMEANS, Ohio 

BARBARA CUBIN, Wyoming 

WES COOLEY, Oregon 

HELEN CHENOWETH, Idaho 

LINDA SMITH, Washington 

GEORGE P. RADANOVICH, California 

WALTER B. JONES, JR., North Carolina 

WILLIAM M. (MAC) THORNBERRY, Texas 

RICHARD (DOC) HASTINGS, Washington 

JACK METCALF, Washington 

JAMES B. LONGLEY, JR., Maine 

JOHN B. SHADEGG, Arizona 

JOHN E. ENSIGN, Nevada 

GEORGE MILLER, California 

EDWARD J. MARKEY, Massachusetts 

NICK J. RAHALL II, West V1rginia 

BRUCE F. VENTO, Minnesota 

DALE E. KILDEE, Michigan 

PAT WILLIAMS, Montana 

SAM GEJDENSON, Connecticut 

BILL RICHARDSON, New Mexico 

PETER A. DEFAZIO, Oregon 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

TIM JOHNSON, South Dakota 

NEIL ABERCROMBIE, Hawaii 

GERRY E. STUDDS, Massachusetts 

SOLOMON P. ORTIZ, Texas 

OWEN B. PICKETT, Virginia 

.FRANK PALLONE, JR., New Jersey 

CALVIN M. DOOLEY, Californi~ 

CARLOS A. ROMERO-BARCELO, Puerto 

Rico 

MAURICE D. HINCHEY, New York 

ROBERT A. UNDERWOOD, Guam 

SAM FARR, California 

PATRICK J. KENNEDY, Rhode Island 

DANIEL VAL KISH, Chief of Staff 

ELIZABETH MEGGINSON, Chief Counsel 

CHRISTINE A. KENNEDY, Chief Clerk/Administrator 

JOHN LAWRENCE, Democratic Staff Director 

SUBCOMMITTEE ON NATIVE AMERICAN & INSULAR AFFAIRS 

ELTON GALLEGLY, California, Chairman 

DON YOUNG, Alaska 

WAYNE T. GILCHREST, Maryland 

WALTER B. JONES, JR., North Carolina 

RICHARD (DOC) HASTINGS, Washington 

JACK METCALF, Washington 

JAMES B. LONGLEY, JR., Maine 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

DALE E. KILDEE, Michigan 

PAT WILLIAMS, Montana 

TIM JOHNSON, South Dakota , 

CARLOS A. ROMERO-BARCELO, Puerto 

Rico 

ROBERT A. UNDERWOOD, Guam 

TIM GLIDDEN, Counsel 

T.E. MANASE MANSUR, Professional Staff 

CHRISTOPHER STEARNS, Democratic Counsel 

(II) 
CONTENTS 

VIRGIN ISLANDS, GUAM ISSUES 

Hearing held: .......................................................................................................... . July 24, 1996 ............................................................................................ . H.R. 3721 ......................................................................................................... .. Statements of Members: 

Gallegly, Hon. Elton, a U.S. Representative from Ohio .............................. .. prepared statement .................................................................................. . Underwood, Hon. Robert A., a U.S. Delegate from Guam .......................... .. Statements of witnesses: 

Barrett-Anderson, Senator Elizabeth, Guam Legislature ............................ . Prepared statement ................................................................................. .. Bordallo, Lt. Governor Madeleine Z., Guam ................................................ .. Cristobal, Senator Hope, Guam Legislature ................................................ .. Faleomavaega, F.H., (prepared statement) .................................................. .. Lutali, A. P., (prepared statement) ................................................................ . Pangelinan, Senator Vicente C., Guam Legislature (prepared statement) . Stayman, Allen P. Director of Insular Affairs, Department of Interior ...... . Prepared statement .................................................................................. . Communication submitted: 

Resolution No. 433(LS) ................................................................................... . United Nations General Assembly Report .................................................... . 

VIRGIN ISLANDS AND NORTHERN MARIANA ISLANDS 

Hearing held June 26, 1996 .................................................................................. .. Text of: 

H.R. 3634 .......................................................................................................... . H.R. 3635 ......................................................................................................... .. Statements of Members: 

Gallegly, Hon. Elton, a U.S. Representative from California ...................... . 

Fraz~~~)i:~ vt:t~~n~\eg~t~;:·T~;;it~cy.~fth~·vi;gi~··i~i~~d~·:::::::::::::::::~~O, Hastings, Hon. Doc, (prepared statement ) .................................................. .. Statements of witnesses: 

Aloot, Sebastian, Attorney General, Commonwealth Northern Mariana 

Islands ........................................................................................................... . Prepared statement ................................................................................. .. Babauta, Juan N., Resident Representative, Commonwealth Northern 

Mariana Islands ........................................................................................... . Prepared statement .................................................................................. . Kennedy, Roger G., Director of National Parks, Department of the Interior ................................................................................................................ .. Prepared statement ................................................................................. .. Lewis, Wilma A., Inspector General of Interior ............................................ . Prepared statement .................................................................................. . McPhetres, Samuel F., President, Saipan Chamber of Commerce ............ .. Prepared statement .................................................................................. . Schneider, Hon. Roy L., M.D., Governor of Virgin Islands .......................... . Prepared statement .................................................................................. . Stayman, Allen P., Director of Insular Affairs, Department of the Interior .............................................................................................................. 128, 

Prepared statement ................................................................................. .. 

(III) 

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IV 

Communication submitted: Babauta, Juan N,: Letter of July 10, 1996 to Hon. Elton Gallegly ............ .. Federal-CNMI Initiative on Labor Immigration, & Law Enforcement, Report of June 1996 ......................................................................................... . Fleming, Evelyn C.: Letter of May 30, 1996 to Hon. Froilan C. Tenorio .... . Lewis, Wilma A.: Letter of July 10, 1996 to Hon. Elton Gallegly .............. .. San Nicolas, Jose C.: Memorandum of July 9, 1996 to Juan N. Babauta .. . Stayman, Allen P.: · Answer to question for July 24, 1996 .......................... .......................... .. Answer to question for July 26, 1996 .......................... .......................... .. Tenorio, Froilan C.: Letter of June 1, 1996 to Hon. Diego T. Benavente 

and Hon. Jesus R. Sablan ................................................ ........................... . Tenorio, Froilan C.: Letter of May 30, 1996 to Peter J. Scharwark ............ . Additional material supplied: 

Ferrara, Peter: Tinkering with the success of liberty of Oct. 10, 1995 ........ House Bill No. 10-152, H.D.1 of Commonwealth Legislature, Northern 

Mariana ............ ............................................................................................ . House Joint Resolution No. 10-1 of Commonwealth Legislature, Northern 

Mariana ....................................... ..... ............................................................ . I.G. Questions regarding the Audits in the NMI .... ...................................... . Proposed Constitutional Amendment ............................................................ . Questions for Department of Justice ............................................................ .. Questions for Wilma Lewis, Inspector General ............................................ . 

t:;!~~~ ~~~:ti~!~r~~1i~~;r~e&b·;;~k',·n~p•~~;: ~r·!~~ri~~··: Responses to Questions from Wilma A. Lewis, Department of Interior .... .. 1985 Omnibus Territories Legislation Herring ................................ ............ .. Opinion: Pacific Daily News, dated August 30, 1996 .................................. .. 

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VIRGIN ISLANDS, AND GUAM ISSUES 

WEDNESDAY, JULY 24, 1996 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIVE 

AMERICAN AND INSULAR AFFAIRS, COMMITTEE ON RESOURCES, 

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:30p.m., in room 

1334, Longworth House Office Building, Hon. Elton Gallegly 

(Chairman of the Subcommittee) presiding. 

STATEMENT OF HON. ELTON GALLEGLY, A U.S. REPRESENTATIVE FROM CALIFORNIA; AND CHAIRMAN, SUBCOMMITTEE 

ON NATIVE AMERICAN AND INSULAR AFAIRS 

Mr. GALLEGLY. This oversight hearing will cover the longstanding disposition of Water Island in the Virgin Islands, Resolution 

433 of the Guam Legislature, and certain provisions of H.R. 3721. 

I welcome our distinguished visitors from Guam, ·Lieutenant 

Governor Bordallo and Senators Barrett-Anderson and Cristobal. 

The disposal of Water Island was identified by the Committee on 

Resources as a priority issue in the Committee's Oversight Plan for 

the 104th Congress. There are many American citizens who are 

still waiting to gain title with the land where their homes stand. 

It is unconscionable that the Department has taken nearly 4 years 

to conclude this matter. At a minimum, the Department of Interior 

should give clear timeframes for resolving each aspect for the disposal of Water Island. 

The legislature of Guam has enacted Resolution 433, which requests that the Congress give Guam the authority to determine the 

method of selecting their attorney general. No doubt there is a 

compelling reason the legislature identified the selection of the attorney general as a matter of warranting a change in the current 

law. However, it is essential for Congress to hear the views of both 

the executive and legislative branches of Guam. ' 

My colleague and ranking member of the Subcommittee from 

American Samoa has recently introduced legislation with a number 

of measures affecting the insular areas of the United States. While 

a number of these were covered in other earlier congressional hearings, I expect the witnesses will comment on the provisions pertaining to their territory. 

The administration will comprise the first three panels and will 

be represented by Allen Stayman of the Office of Insular Affairsone of my favorite offices. 

(1) 
2 

The second panel will include the Lieutenant Governor of Guam, 

Madeleine Bordallo, presenting testimony on behalf of the Governor of Guam. 

The last panel includes two senators from Guam, Senator Elizabeth Barrett-Anderson, and Senator Hope Cristobal. I understand 

Senator Barrett-Anderson has been appointed by the Speaker of 

the Guam Legislature, Don Parkinson, to represent the legislature 

regarding the proposed change in the Organic Act of Guam regarding the selection of the attorney general. I also understand that 

Senator Cristobal has a special interest in the proposed Guam 

Land Act. 

[H.R. 3721 may be found at the end of hearing.] 

Mr. GALLEGLY. We will now begin with the first panel. We have 

what sounds like a series of votes, and before I yield to Mr. 

Stayman, I apologize for coming in late; there was a little glitch, 

I guess, in some meetings, although I will take total responsibility 

for it and deal with that appropriately later. But in any event, as 

you heard, it appears there is a series of votes over on the Floor, 

and due to the current leadership's position on the voting rights of 

my delegate friends here, they will have a better opportunity to 

continue this meeting than I will have. 

So with that, if you would please excuse me, Mr. Stayman, I will 

yield the gavel to my good friend, the delegate from American 

Samoa, Mr. Faleomavaega. 

Mr. STAYMAN. Thank you. 

STATEMENT OF ALLEN P. STAYMAN, DIRECTOR OF INSULAR 

AFFAIRS, U.S. DEPARTMENT OF THE INTERIOR 

Mr. STAYMAN. Mr. Chairman, and members of the Subcommittee, 

I am pleased to appear before you for this oversight hearing on 

Water Island, election of Guam's attorney general, and H.R. 3721. 

The Department of the Interior has been the owner and lessor 

of Water Island for more than 40 years. Since before the expiration 

of the master lease in 1992, the Department has sought to dispose 

of its interest in the island. The process has been long and arduous. We are confident, however, that the process is coming to a 

close, with a fair and reasonable result. 

On May 23rd, the Department outlined its plan for disposal of 

its interest in Water Island. Each sublessee will have the opportunity to purchase fee simple title to the subleased land on which 

his or her Water Island residence is located. 

In addition, the Government of the Virgin Islands will be given 

fee simple title to non-subleased portions of Water Island for public 

purposes in exchange for the assumption of certain responsibilities, 

including provision of municipal services, cleanup of storm damage, 

and establishment of conservation easements. 

In resolution of a suit by the master lessee against the Department, the parties submitted a formal settlement by which the Department will pay the master lessee $7.5 million for the lessee's 

possessory interest in Water Island. 

With the judge's expected approval of the settlement on August 

2nd, we believe that this long Water Island transfer process is 

drawing to a close. 
3 

The Legislature of Guam in Resolution 433 requests that the Organic Act of Guam be amended to require election of the attorney 

general. I believe that the issue of appointment or election of the 

attorney general is a local self-government issue which should be 

decided in Guam. Accordingly, the Department takes no position on 

the matter at this time. We would, however, likely support a position based on consensus in Guam. 

Turning to H.R. 3721, the administration has no objection to 

Title I regarding delegate balloting. 

Title II would establish an American Samoa study commission to 

conduct a comprehensive study of American Samoa's tolitical status. While the administration supports the objective o Title II, its 

general policy discourages the establishment of commissions. Moreover, I believe that initial discussions on political status should be 

undertaken at the local level and that the Federal Government 

should become involved only after some local consensus has been 

established. 

For example, both Guam and the Virgin Islands established local 

status commissions to examine status and constitution questions. 

Funding for such a local initiative could be made available from the 

Department's technical assistance program. 

Title III includes a proposal authorizing up to $10 million a year 

for fiscal years 1998 through 2003 for capital development in American Samoa. A multi-year funding source was identified by the Department and became law earlier this year, as section 118 of Public 

Law 104-134. The administration, in response to a letter from Delegate Faleomavaega, estimated that American Samoa will receive 

a minimum of $9.1 million annually from this guaranteed source 

beginning in fiscal year 1998. The proposed authorization would 

cap funding from this source at $10 million annually. 

The administration endorses the concept of Title V, clarification 

of Federal program matching. We do suggest, however, that to 

avoid possible confusion, the provision be redrafted to conform to 

language adopted earlier this month by the Senate Committee on 

Appropriations. Section 602 authorizes Guam to acquire Federal excess lands on 

the island at no cost and ahead of other Federal agencies. It would 

waive provisions of the National Environmental Policy Act and the 

Endangered Species Act, as well as other laws. Section 602 also makes no provision for habitat conservation and 

threatened/endangered species protection in the event of transfer to 

the Government of Guam. 

For these reasons, we strongly oppose section 602 as introduced. 

However, the Department is prepared to enter into discussions to 

resolve these concerns based on two principles. First, any unneeded 

Federal lands that are outside the boundary of the Guam National 

Wildlife Refuge and refuge overlay lands could be transferred to 

the Government of Guam provided that such transfers are in accordance with the National Environmental Policy Act and other 

Federal laws. 

Second, a process could be established to develop a habitat conservation plan for private or Guam owned lands, in conjunction 

with the Government of Guam, the Department of Defense and private interests, to (1) maximize the amount of unneeded Federal 
4 

land to go to the Government of Guam and (2) provide adequate 

protection to threatened and endangered species and their habitat 

in accordance with the Endangered Species Act. 

This planning approach would allow all three parties to work together to determine, after considering all lands on Guam, adequate 

habitat needed to meet threatened and endangered species requirements. It is possible that private lands, Government of Guam lands 

with compatible uses, military lands not expected to become excess 

or surplus, may meet the habitat needs of many threatened and endangered species. Other lands could then be freed for other uses. 

We look to Guam for an expression of interest in developing such 

a habitat protection agreement. 

The administration supports enactment of section 603, which 

would repeal the so-called Brooks Amendment. 

Finally, Title VIII would establish a six-member commission to 

evaluate future economic options for the Virgin Islands. Again, the 

administration supports the objective of Title VIII. However, administration policy is generally against the creation of new commissions. 

Alternatively, we would recommend that the Office of Insular Affairs and Governor Schneider explore the possibilities of an agreement for technical assistance to achieve the purposes of Title VIII. 

Mr. Chairman, thank you for this opportunity to present the administration's views. I look forward to working with the Subcommittee members and to responding to your questions. Also, let me ask that my full written statement be included as 

a part of the record. 

Mr. FALEOMAVAEGA. [Presiding.] Without objection. 

[The statement of Mr. Stayman may be found at end of hearing.] 

Mr. FALEOMAVAEGA. The chair recognizes the gentlemen from the 

Virgin Islands to be part of the hearing process this afternoon and 

certainly would like to ask both members if they have any opening 

statements. 

Congressman Frazer? 

Mr. FRAZER. No, Mr. Chairman, I have no opening statement. 

Mr. FALEOMAVAEGA. Mr. Underwood? 

STATEMENT OF BON. ROBERT A. UNDERWOOD, A DELEGATE 

IN CONGRESS FROM THE TERRITORY OF GUAM 

Mr. UNDERWOOD. Thank you, Mr. Chairman. I have an opening 

statement which I will submit for the record. 

Mr. FALEOMAVAEGA. Without objection. 

Mr. UNDERWOOD. I also have some communication from the Compiler of Laws on Guam on the issue of the elected attorney general 

that I would like to submit for the record as well as a Pacific Daily 

News Editorial on the land situation. 

Mr. FALEOMAVAEGA. Without objection. 

[The prepared statement of Hon. Robert A. Underwood follows:] 

STATEMENT OF HON. RoBERT A. UNDERWOOD, A U .S. DELEGATE FROM GUAM 

Mr. Chairman, I commend you for your leadership in holding this hearing today 

and for your continued commitment to working with the Delegates on issues important to our communities. I also wish to note and congratulate the Chairman for his 

introduction of H.R. 3879, the Northern Marianas Delegate Act. This historic bill 

is also cosponsored by Chair:nan Don Young, Subcommittee Ranking Member Eni 
5 

Faleomavaega and myself. I look forward to welcoming a new colleagus representing Guam's northern neighbors in the 105th Congress. This subcommittee continues to make substantial progress on issues affecting Guam. I am pleased that Ranking Member Faleomavaega included the provisions of the Guam Land Return Act in Title VI of his bill, H.R. 3721, and I thank Mr. 

Faleomavaega for his support for the return of excess federal property to the people of Guam. This provision would amend the Federal Property Act by changing the 

order of priority for receiving excess federal property. Under this amendment, the 

Government of Guam would have the first right of refusal for such lands. 

We have been working deligently with the Committee on Resources and our Senate counterparts on Guam land issues in the 103d and 104th Congresses. The Guam 

Land Return Act represents another important milestone in achieving a comprehen- sive solution to Guam's land issues. As this committee knows from its involvement in land legislation, over one third 

of the land on Guam is owned by the federal government. Most of these land holdings belong to the military. The end of the Cold War and military downsizing has 

given us an opportunity to make progress in resolving land issues that trace their 

origins to the manner in which the lands were originally acquired by the military after World war II. The Guam Land Return Act is important legislation that will 

help us to resolve the historical injustices of the land takings. I am aware of opposition to this title by the Department of the Interior, ostensibly over concerns over the endangered and threatened species on Guam. Interior must 

think that the birds on Guam are extremely intelligent-they are rare species that can read land deeds. Interior would have you believe that if the land deeds transferred from the military to GovGuam, then the birds would refuse to breed. I think 

Interior needs to get out more often. 

I would also point out that in a hearing held on July 11, by the Subcommittee on Fisheries, Wildlife and Oceans on non-indigenous species, Dr. Tom Fritts, Director of the National Biological Survey, responded on the record to my question about 

the habitat issue. He acknowledged that the level of development in Guam and 

Saipan is similar, and that the birds thrive on Saipan. The real problem on Guam 

is not lack of habitat, it is the brown tree snake. Dr. Fritts further answered on the record in response to a second question that the U.S. Fish and Wildlife Service 

(USFWS) has only committed approximately $40,000 of its own funds to brown tree 

snake eradication. As I have pointed out before if the Fish and Wildlife Service was truly committed to Guam's endangered species, it would put its money where its 

mouth is-in brown tree snake eradication. 

The Guam Land Return Act would not undo what the Fish and Wildlife has done 

in acquiring 370 acres of land at Ritidian for its wildlife refuge-although that is 

not a bad idea for this committee to consider. This provision gives Guam the first 

right of refusal for lands declared excess in the future. 

This committee is also accepting testimony regarding a request by the 23rd Guam 

Legislature to amend the Organic Act of Guam to allow for the election of the Attorney General. I believe that the committee should defer action this request until we have received additional input from the Guam Judicial Council and other interested 

parties. We should be careful to ensure that changes to the Organic Act are not 

made in a way to suggest that the Congress is involving itself in the politics of the 

moment on Guam. 

Mr. Chairman, as we consider issues that may be packaged in a House Omnibus 

Territories bill, I would urge this committee to consider including a Title for Guam war restitution. We had a very good hearing on this issue in the 103rd Congress, and earlier in this Congress on the Chairman's bill, H.R. 602, that included a war restitution provision. I believe that we are very close to resolving all the issues in 

the proposed war restitution amendment, and I commend the Chairman for his con- tinued support of our efforts on this issue. I hope that we can include war restitu- tion in any House Omnibus bill, and I know that this committee appreciates the 

great impact that a resolution of this issue will have on the people of Guam. 

Again, Mr. Chairman, I wish to express my gratitude for your leadership on territorial issues. We have a full plate of 1ssues to address today. I hope we can complete work on these issues so that we can clear the deck for our consideration of another 

bill very important Guam, H.R. 1056, the Guam Commonwealth Act, in the remaining days of the 104th Congress and the 105th Congress. 

Mr. FALEOMAVAEGA. I would like to turn to Mr. Frazer for his 

questions. 

Mr. FRAZER. Thank you, Mr. Chainnan. 
6 

Mr. Stayman, we know that the leases expired on Water Island 

in late 1991, and you are quite aware of the anxiety of the residents of that island. Could you tell me, within a reasonable timeframe, when I can report to the residents of the island that they 

will in fact be receiving fee simple titles. 

Mr. STAYMAN. Yes. What we have explained to them in earlier 

meetings, but it would be appropriate, of course, to update them, 

is that we intend to undertake a three-phase disposal of the island. 

What is holding us up is the suit in the Federal claims court. Recently, the judge indicated that he will enter the settlement between the Department and the former master leaseholder on or before August 2nd. At that time, we will send letters to each of the 

sublessees, offering them the opportunity to buy the sublease on 

which their residence exists. 

We expect in the September timeframe, we will transfer to the 

Government of the Virgin Islands certain areas that would be for 

public use-about 50 acres. Then, the third phase would be early 

next year, when any residual lands would be transferred to the 

Government of the Virgin Islands. 

Mr. FRAZER. It is my understanding that a company in Bryn 

Mawr, Pennsylvania leased about 156 acres and that there was an 

agreement between the Department of the Interior and this company that 40 acres would have been set aside for something like 

a preserve. Could you tell me if that area is one of the areas that 

is going to be considered transferrable to the Virgin Islands? 

Mr. STAYMAN. I am pretty certain from your description that 

what we are talking about is the so-called Spratt Bay Point, which 

is about 40 acres, and it is our expectation that that will be transferred to the Government of the Virgin Islands in phase three 

when many of the conservation lands or conservation easements 

will be transferred. We are holding that to the third phase because 

we would also like to put in that third phase those lands which 

sublessees do not want to buy. 

Mr. FRAZER. Are you aware that there is a figure that is being 

thrown around that the selling price will be about $17,500? 

Mr. STAYMAN. Yes. We have informed all interested parties-that 

is, all sublessees-that that will be the asking price per acre once 

we are able to make the offer after the court acts. 

Mr. FRAZER. And there is an understanding that the sublessees 

would be given the choice of first refusal on the subleases that they 

had, which are now expired, but would the rest of the land be open 

to anyone who is interested at this $17,500, or does it relate only 

to the sublessees? 

Mr. STAYMAN. The offer will only be extended to the sublessees. 

That is why we are planning for this third phase. There will obviously be some sublessees who do not want to buy. Those lots will 

be transferred to the Government of the Virgin Islands. 

Mr. FRAZER. There is a misunderstanding by many people in the 

Virgin Islands that the lands are not subject to past subleases and 

that they will be available for sale to anyone interested at $17,500; 

that is not correct? 

Mr. STAYMAN. That is not correct. 

Mr. FRAZER. Thank you. 

Mr. FALEOMAVAEGA. The gentleman from Guam. 
7 

Mr. UNDERWOOD. Mr. Stayman, my questions obviously pertain 

to the issue of most concern to me, that is, how to deal with the 

Federal excess lands on Guam. 

In your testimony a few weeks ago in the Senate hearing on this 

bill, you indicated the administration's unwillingness to support 

this bill, and today you come with essentially the same message except for some ideas on how this can perhaps be dealt with. You 

talked about developing a habitat conservation plan. Based on your 

conversations with Fish and Wildlife Service, could you give us 

some examples of what this may mean in terms of freeing up some 

land? 

Mr. STAYMAN. Yes. Stepping back a little bit, the habitat conservation planning process is one that there is quite a bit of experience with under this administration-! believe over 100 such plans 

have been approved, and a couple additional hundred are in negotiation. 

The administration believes that habitat protection and economic 

development need not be mutually exclusive. If all parties who 

have an interest in lands, in this case in Guam, could determine 

which lands are necessary for the critical habitat needs of threatened and endangered species, then that it may be possible to free 

up some of the lands. Once the Fish and Wildlife Service has identified interests necessary for species protection, an increase in the 

amount of land that could be transferred to Guam is possible. 

There is just one other example that I might give that might 

make it a little clearer. In my understanding of the situation in 

Guam, there are, I believe, eight bird and bat species that are endangered and for which the Fish and Wildlife Service is looking for 

habitat. One of those species utilizes golf courses. If there is an 

agreement, which satisfies the habitat needs of that particular species, then there would no longer be a need on the part of the Fish 

and Wildlife Service to get excessed DoD lands. 

Mr. UNDERWOOD. Then, based on what you are saying, if the people on Guam were willing to engage in this process, and you took 

a significant amount of acreage-let us say we are talking about 

5,000 or 6,000 acres, for example-would the administration then 

support the process for those particular lands identified in the legislation? 

Mr. STAYMAN. I do not know that I understand the 5,000. that 

you are talking about. 

Mr. UNDERWOOD. OK. For the sake of argument, let us say the 

lands that are down in southern Guam in the naval magazine 

area-and I know we have had some discussion on this particular 

property, right, that there are a couple of species out there, one of 

which inhabits caves, and that would be dealt with in a way that 

would allow that land to be freed for the purpose of releasing that 

land to the Government Guam-assuming that there was some 

successful understanding of how to deal with that land, would you 

then support the process of return that is identified in this legislation, or do you still have reservations about the way that the transfer is proposed here? 

Mr. STAYMAN. If this process is fully successful, my understanding is that-and when I say "fully successful," all habitat needs 

would be met through a plan, and they would have confidence that 
8 

all parties would be supporting that plan-they would not feel it 

necessary to ask for excess land because the plan would meet their 

needs. 

Mr. UNDERWOOD. OK. Remember that the legislation here does 

not specifically refer to Fish and Wildlife Service, but it does refer 

to putting the Government of Guam at the head of the line for the 

return of Federal excess land. So the question I am asking is that 

I am trying to understand how you see this process working. What 

I am hearing you say-and maybe I am wrong-what I am hearing 

you say is that the administration does not necessarily object to 

putting Guam at the head of the line if a habitat conservation plan 

can be arranged-or is that reaching too far? 

Mr. STAYMAN. I think that is reaching a little far. I can be honest 

to say that there is a lot of discussion on this within the administration and that the theory of the habitat conservation plan would 

be worth pursuing even if it were not 100 percent successful; if it 

were 50 or 80 percent successful, that would mean perhaps 50 or 

80 percent of the land which Fish and Wildlife Service is currently seeking for species could be gotten. Mr. UNDERWOOD. Well, then, it would seem to me that the administration's position has not really changed significantly in terms 

of the process that we are identifying here. What it seems that you 

are identifying in terms of trying to negotiate an arrangement or 

arrive at a habitat conservation plan is open to us regardless and 

independent of this legislation. We could begin this process tomorrow, could we not? 

Mr. STAYMAN. Certainly, yes. 

Mr. UNDERWOOD. Certainly. So what you are offering could be 

done independently of the legislation, but the question that I was 

asking was related specifically to the legislation. Is the administration saying that the legislation is fine assuming that we go into a 

habitat conservation plan, and the answer that I am hearing you 

say is no. 

Mr. STAYMAN. Yes. The answer is no. 

Mr. UNDERWOOD. Well, then, I would submit that nothing has 

really changed that significantly, other than a willingness to discuss the issue, and I hope that that is always part of the process. There is no need to belabor the issue on the return of excess 

lands by the Federal Government to Guam other than to note for 

the record that what I am talking about here, as is well-known to 

you, Mr. Stayman, is a very difficult historical problem that has 

been left to us. 

The problem that I think we will have in engaging in the process of working out a habitat conservation plan is that we have a number of competing interests. We have the issues of historical injus- tice, we have the problem with how the land was originally taken, 

we have attempts to try to deal with that. We have pressing needs 

on Guam, and to propose that a habitat conservation plan take 

precedence on that is to put that plan at the head of the list of all 

those competing considerations. 

I think most people on Guam are realistic enough, and I certainly am realistic enough to understand that the concerns of the 

Fish and Wildlife Service are important and should be considered, 

but I do not think in the sum total of things that they should be 
9 

the primary consideration or be, if you would, the head of the list 

on this particular issue. 

Thank you, Mr. Chairman. 

Mr. FALEOMAVAEGA. I have just a couple of questions as a followup to Congressman Underwood's questions, Mr. Stayman. 

As I read this return of Federal excess lands to the Government 

of Guam, you have competing agencies-Fish and Wildlife Service, 

the Department of Defense and the Department of the Interior. If 

I were to place a priority in terms of our national interest in these 

so-called Federal excess lands, which agency do you think will have 

the final shot on this in terms of outlining the final position of the 

administration if there are excess lands to be transferred to Guam? 

Mr. STAYMAN. Well, right now, under the--

Mr. FALEOMAVAEGA. You are making the statement that the 

habitat conservation sounds really nice and good, but I am of the 

opinion that it is our strategic and military interests that will probably have a higher consideration when it comes to really bearing down, if in fact that day ever comes, these excess lands will ever 

be transferred back to the Government of Guam. 

Mr. STAYMAN. The participation of the Department of Defense in 

this process would not be so much with respect to the excess lands, 

but with respect to those lands that they would retain. And if they 

can meet some of Fish and Wildlife Service's concerns with lands 

that they are going to retain, then Fish and Wildlife Service may be more willing to not ask under the Federal Property Act for 

transfer of the excess lands. 

Mr. FALEOMAVAEGA. If there were a national emergency today, 

Mr. Stayman, do you think Fish and Wildlife is going to have some 

sense of priority when DoD says, "We need that piece of land to put 

some military equipment; the heck with Fish and Wildlife"? Do you think that this all washes out when it comes to a national emergency? 

Mr. STAYMAN. Oh, yes, it does. National security takes precedence, but for now, these are lands that DoD says they do not need. 

Mr. FALEOMAVAEGA. I see. 

Mr. STAYMAN. And under the current law, it falls to the next 

agency which has an interest, and as far as I know, there is only 

one, and that is the Fish and Wildlife Service. 

Mr. FALEOMAVAEGA. So that for now, the opinion of the Department of the Interior is that habitat and conservation and Fish and 

Wildlife seem to be co-equal as far as any consideration of the Department of Defense. 

Mr. STAYMAN. No. As I just said, if the Department of Defense 

says they no longer need the land, then it goes to the next Federal 

agency which has an interest, and at this time, the only such agency of which I am aware is Fish and Wildlife Service. 

Mr. FALEOMAVAEGA. And as far as that line of priority goes, then, 

the Government of Guam is the least important as far as any consideration for its needs. 

Mr. STAYMAN. Under the current law, if no Federal agency wanted it-and in the case of much of this land, there is no Federal 

agency that wants it-the Government of Guam would be next in 

line. 
10 

Mr. FALEOMAVAEGA. It would be my earnest hope that the Department of the Interior will be supportive of the request based on 

the very reason why we drafted this legislation, which is to give 

the Government of Guam more access to any excess land that the 

Federal Government does not need. I would like to ask if it still 

bears true today. Is it true that one-third of the island is owned 

by the military, one-third is owned by the local government, and 

the other one-third is owned by business interests? 

Mr. STAYMAN. Yes, that is my understanding. 

Mr. FALEOMAVAEGA. And with that position, if the Government 

of Guam has a need for more economic self-sufficiency and more 

development, do you think that we are being somewhat unfair that 

the military really has a need for one-third of the whole island 

being used? Does it really justify itself that the military has a need 

for one-third of that whole island? 

Mr. STAYMAN. I would have to say that the military has endeavored to try to minimize the amount of land. I believe-and the Congressman can correct me-that they used to control one-half of the 

island, and the prospect is that they will be going to one-quarter 

and that they are making an effort to release those lands which are 

not absolutely essential to their mission. 

Mr. FALEOMAVAEGA. Would the Department of the Interior be at 

least supportive of the spirit of this legislation, which is simply to 

give more access to the excess land, if there is excess land, that 

could be identified for the needs of the Government of Guam? 

Mr. STAYMAN. Yes, absolutely, but our concern and our proposal 

is to enter into a process where that goal, maximizing the land to 

the Government of Guam, is balanced with a goal with which the 

Department is charged under law, and that is protecting the habitat and species that are threatened and endangered. We believe 

that if we enter into a process in which all parties-in this case, 

the Department of Interior, the Department of Defense, the Government of Guam and private landowners on Guam-examine all 

lands in Guam, keeping in mind those two goals, they will come 

out with a solution which is much better for everyone than the 

prospect or the process we are currently facing, which is that Fish 

and Wildlife Service is looking to excess military lands in order to 

assist them in meeting their mission. 

I go back again to the example of the moorhen. Here is a species 

that can do well against the snake, can do well in any water environment or marshland environment. There are probably many private landowners on Guam-! use the example of a golf coursewho may be able to provide habitat needed for this species. If such 

an agreement can be entered into, and the Fish and Wildlife Service has confidence that that will meet their needs and the species' 

needs, then they do not have to seek excess military land. But we 

have not gone through that process yet. 

Mr. FALEOMAVAEGA. Well, you say "the process," and maybe the 

gentleman from Guam could help me, but how long has this process been going on-6 years? 

Mr. STAYMAN. No. This process has not started. We are proposing 

to Guam that we enter into this. There was an effort many years 

ago to do this, but at that time, the Government of Guam was not 

interested. We are hopeful that given the success of the Habitat 
11 

Conservation Plan process in other areas of the country-a very good track record-that the Government of Guam might be per- suaded that this is a process worth entering into. I fully recognize that it is unlikely to be 100 percent successful, but I also do not 

believe that if we do otherwise we would be totally unsuccessful. 

I think there are opportunities to reduce the demands of the Fish 

and Wildlife Service on excess military lands on Guam, and I think 

we should enter into that process. 

Mr. FALEOMAVAEGA. Can you give us your best judgment as to 

how long the process will take, if you think there is a possibility that the process can be completed and done without having to go through Federal legislation to kind of push you to produce some results? 

Mr. STAYMAN. Accompanying me today is Mr. Gerry Jackson 

from the Fish and Wildlife Service, who is quite familiar with this. 

Could I just consult with him and ask how long, on average, these 

processes have taken in other areas? 

Mr. FALEOMAVAEGA. While I welcome Mr. Jackson's presence, the 

problem is that we do not have anybody here representing the Department of Defense, and I suspect that they are just as much 

hardliners as far as giving up any inch of whatever land the military feels is more important than even habitat. So I would welcome 

Mr. Jackson's opinion, but just give me a good guess as to how long 

you think the process is going to go, without having to go through the legislation that we are proposing here. I sure hope it is not another 6 years. 

Mr. STAYMAN. Mr. Jackson informs me that if all things go relatively smoothly, with a commitment by all parties to these two objectives, a year is a reasonable timeframe for the process. Mr. FALEOMAVAEGA. We could resolve this in one year's time? 

Mr. STAYMAN. Well, again, we are talking about a process that 

I do not think should be regarded as an ali-or-nothing process. We 

have some dozen species here, and I doubt that we could come up with a solution for all dozen. But if we come up with a solution for 

half of them, that is going to have clear benefits to the Government 

of Guam. 

Mr, FALEOMAVAEGA. I yield to the gentleman from Guam. 

Mr. UNDERWOOD. Thank you. I just wanted to touch on the issue 

of the connection with the Department of Defense since, in my capacity as a member of the Armed Services Committee, we once took 

a trip to Fort Bragg to watch some maneuvers, and we noticed that 

there were some very carefully and strategically placed ribbons for 

tanks and the soldiers to avoid certain trees where a certain woodpecker apparently lives. So indeed, some of these laws do apply to 

defense activities. Mr. Stayman, you raised an issue with regard to this particular situation, and let me try to characterize it as best I understand it. 

The Department of Defense wants the land to be turned over to the 

people of Guam as quickly as possible, and that has always been 

their expression, but Fish and Wildlife-and in your statement, you mentioned DoD's concern about restrictions on land that they will 

continue to hold, because absent the habitat conservation plan that 

is being proposed, it is conceivable that Fish and Wildlife, through 
12 

its own mechanisms, may impose restrictions on the use of property that DoD will continue to hold into the foreseeable future. 

This presents a very interesting scenario which, I guess the best 

face you could put on it is that Fish and Wildlife is putting a lot 

of pressure on the Department of Defense. The worst face you can 

put on it is that Fish and Wildlife is blackmailing the Department 

of Defense into taking a hard position on this particular item. 

The Department of Defense I know has been difficult historically 

on Guam, but in recent years, at least on the issue of land, they 

have certainly been more willing to be cooperative. 

I think people should be willing to explore the process you have 

outlined. I do not discount it. I think people should be willing to 

explore that process of coming up with a habitat conservation plan. 

It is just that there are three things that come to my mind. One 

is that the Department of Defense's position has beeri compromised 

not because of the issue of whether they want to return the land 

or whether they need the military land anymore; it is that they 

have been made to understand by Fish and Wildlife that their future use of the land that they intend to hold for the foreseeable future would be complicated by Fish and Wildlife regulations. 

The second concern is that we would go into a habitat conservation plan negotiation in which Fish and Wildlife will continue to 

hold all the cards, in which we have to get Fish and Wildlife to 

have confidence that the resulting plan would meet those things. 

So the negotiation is such that Fish and Wildlife continues to hold 

90 percent of the cards. 

And the third item is that even if there were agreement on this 

process, the part that I think Mr. Faleomavaega was touching on 

is an important one. At least the spirit of the proposed legislation 

says that the Government of Guam should be at the head of the 

line because of all the kinds of things that all of us are familiar 

with on this particular issue on land and the return of excess land, 

that the Government of Guam should be at the head of the line in 

front of all Federal agencies. And even on that, I think the administration has not yet softened its position, and that still remains a 

source of concern. 

But DoD's role in this has been a curious one and one that certainly through the land conference process which we instituted collaboratively with the Department of the Interior and which I am 

very grateful for and do not want these comments to be in any way 

disparaging of any willingness to discuss these issues-! think 

there is serious willingness, and I know that you personally would 

like to see this issue behind us, and I appreciate that, and I appreciate the willingness for dialog and to continue to creatively craft 

some solution to this-but when the Department of Defense has 

been led to believe that their existing holdings, not willing that 

they are willing to excess, is going to be compromised by Fish and 

Wildlife, and as a result of that, they then start taking a different 

position on the release of excess land, I think there is room to say 

that Fish and Wildlife has buffaloed DoD. 

Mr. FALEOMAVAEGA. I thank the gentleman from Guam for his 

comments. 
13 

Without objection, for the sake of time, I am going to submit my 

opening statement to be made a part of the record, and Governor 

Lutali's statement will also be made a part of the record. [The parpered statement of Hon. Eni F.H. Faleomavaega follows:] 

STATEMENT OF HON. ENI F.H. FALEOMAVAEGA 

Mr. Chairman, Thank you for holding a hearing this afternoon on several of the 

technical issues now facing the U.S. territories. I hope we are able to address these 

issues during the remaining days of this Congress, and I am optimistic that we can reach consensus on most, if not all, of these provisions. 

Among the issues under discussion today are some of those contained in a bill I 

introduced, H.R. 3721, a bill to establish an Omnibus Territories Act. This legislation is an attempt to combine into one bill several of the less controversial legislative initiatives which have been pending or discussed during this Congress, but 

which have not been approved by the Subcommittee. I will address the titles under 

consideration by title number: Title I. Under current federal law, American Samoa, Guam, and the Virgin Islands are all required to conduct elections for the delegates' positions by separate 

ballot. There is no legislative history on this issue which indicates a rationale for 

this requirement, and I have been unable to determine the continued need for this 

provision. In the absence of a substantive rationale for the language, the Government of 

Guam has requested that the requirement be deleted because it costs the government additional funds to print separate ballots for the delegate election. Deletion 

of the requirement would enable the government of Guam to conduct its elections 

in a more efficient manner, without jeopardizing the inte~ty of the elections. As 

introduced, H.R. 3721 included the Virgin Islands in this title. Congressman Frazer 

has requested that the Virgin Islands retain the requirement for a separate ballot. It was not my intent to force this change on the Virgin Islands, and I support deleting the Virgin Islands from Title I. Title II. The territory of American Samoa is the only unorganized, unincorporated 

territory of the United States. There is no single document which reflects the 

present unity of the running debate for decades over the intent of the Samoa chiefs 

who signed the documents joining American Samoa and the United States into a political union. Whether the intent was to cede the land and people to the United 

States, or to enter into a bilateral treaty, which would, at some point, be subject 

to further negotiations, is not clear. 

Title II would establish a federal commission which would document and report on exactly what took place 96 years ago when the Eastern part of the Samoa Island 

groups became part of the United States, and what this bilateral relationship has 

developed into since 1900. The Commission would also be directed to report on the 

various status options available to American Samoa. The Commission would be com- posed of five members, three of whom would be appointed by the Secretary of the 

Interior, one by the Speaker of the U.S. House of Representatives, and one by the 

President of the U.S. Senate. I want to emphasize the unlike the sometimes contentious negotiations on political status in Guam and the always contentious discussions on political status in 

Puerto Rico, this proposal does not, and I want to say this again, this legislation 

does not establish a political status commission. The Commission will not have the 

authority to change American Samoa's political status. The commission is modeled 

after the Commissions which studied Native Hawaiian, Native American, and Native Alaskan issues. These three commissions provided resource materials which 

have been of significant benefit to these groups and to those who are interested in 

the history of these issues. 

The establishment of the American Samoa commission has been a topic of discussion in American Samoa ever since I first proposed it several years ago. Some have 

questioned the need for a federal commission, indicating that there is more than 

sufficient talent in American Samoa to convene a commission of this nature. In re- sponse, let me say that I agree that there are many individuals in Samoa with the 

knowledge and experience to make excellent members of the commission I propose, 

and I hope that some of there individuals will sit on the Commission. The key, however, is having access to the resources of the federal government, such as the Library of Congress, and access to the records of the federal departments and agencies, including the materials contained in the National Archives. It is only through a federal commission that we can ensure that these resources are made available. 
14 

Additionally, the commission will be federally funded, which will enable the local 

goverrunent to use its limited financial resources to improve its capital infrastructure and continue to provide basic services. 

Finally with regard to the proposed study commission, I have suggested in the 

Congressional findings, and propose to include in the duties, that the commission 

study and evaluate the historical relationship of Swains Island and the Tokelau 

group of Islands to American Samoa. Swains Island was added to American Samoa 

in 1925 without consultation with the leaders in American Samoa, and I believe it 

would be useful to examine both how this occurred and any relationship between 

Swains Island and the Tokelau group which may warrant further federal consideration. 

Title III. American Samoa is the one territory most in need of economic assist- ance in developing the basic infrastructure necessary to promote successful economic 

development. It is dependent on an annual federal appropriation to assist with the 

operations of its goverrunent and for improvement to its infrastructure. Each year, an appropriation is made pursuant to a 1929 statute providing for the goverrunent 

of American Samoa. The American Samoa Government does not know from one year 

to the next how much funding it will receive, and this uncertainty makes planning 

of the larger construction projects more difficult and more expensive. 

Title III of this legislation authorizes $10 million per year for six years for capital 

improvement projects. Any appropriations made pursuant to this legislation would 

be made in the regular appropriations process through the Department of the Interior. 

The subcommittee has not asked for testimony pertaining to Title IV or H.R. 

3721, which would add Baker Island, Jarvis Island, and Howland Island to American Samoa. Our Chairman proposed in early 1995 adding these islands, and others, to the jurisdiction of the State of Hawaii. At that time, the Hawaii delegations were either opposed to or silent on the proposal, anc:l. based on this hesitancy I included 

in H.R. 3721 language which would add the three southernmost islands of this 

group to the territory of American Samoa. These islands are closer to American 

Samoa than they are to any other U.S. land mass, and at their closest point they are about 800 miles from Swains Island, the northern Island in American Samoa. 

It was my intent to seek federal sanctuary status for these islands, similar to that 

of Rose Atoll. 

I was unaware when I introduced this title that Senator Akaka had introduced 

legislation the day before to add these and other islands to the State of Hawaii. 

After the legislation was introduced, Congressman Abercrombie's office expressed some concern with this title. Yesterday, I spoke with Senator Akaka on this issue, and he has informed me that his efforts are to provide a protective umbrella for 

these islands. A recent proposal to construct a nuclear waste facility on the island on Palmyra prompted the Senator to provide this extra protection for the Pacific islands, and I want to commend him for his current effort. For these reasons, I wish 

to delete Title IV from further consideration by the Subcommittee, 

Title IV. Under prior law and pursuant to a covenant reached between the Commonwealth of the Northern Mariana Islands (CNMI) and the United States, the 

CNMI was receiving $27.7 million per year to be used for the construction of capital 

improvements in the Commonwealth. Earlier this year, we changed this law, and 

portions of that funding are now directed to insular areas with greater needs. The 

language authorizing this funding prohibited the use of the funds to match other 

federal grants. The reallocation was made in such a way that the non-matching re- quirement is now applicable to the other territories receiving the funding. I am familiar with the difficulties this creates for American Samoa, and would like to share 

this with the Members of the Subcommittee. 

American Samoa has been hit by three hurricanes in the last decade, and as is 

the case with the states, with a presidential declaration of a state of disaster, disaster assistance grants have been made available to the local government. Unfortunately, Samoa's economy was so devastated by these hurricanes, and the financial 

wherewithal of the local goverrunent is so low, that the American Samoa Government has been unable to take advantage of several of these grants because it could 

not meet the local matching requirement. Title V will permit the American Samoa 

Goverrunent to use this source of funds, already earmarked for capital improvements, to meet the matching requirement for grants for the construction of capital 

assets. 

Title VI. The people of Guam yielded much of their land to the United States 

during World War II. Now, as the federal government is contracting in size, parcels 

of this land in Guam are being considered excess. Title VI would give the government of Guam first optivn to acquire this excess property as it becomes available. 
15 

With regard to Title VII, the Subcommittee has already held a hearing on Section 

701 of the legislation, and Sections 702 and 703 are more appropriately under the 

jurisdiction of the Committee on Ways and Means. For these reasons, testimony was not solicited on this title. I will, however, say that I support all three of these provi- sions. 

Title VIII. The Virgin Islands is another territory which is struggling to make 

itself self-sustaining. The elected representatives of the U.S. Virgin Islands believe 

that a commission of experts could develop a plan which would enable the Virgin- Islands to focus their efforts in the proper direction. This title would establish a sixmember Commission, appointed by the President. The Commission would make rec- ommendations to the President and Congress on the policies and programs nec- essary to provide for a secure and self-sustaining future for the Virgi!l Islands. 

Thank you, Mr .. Chairman, for the opportunity to present this statement. I look 

forward to hearing from our witnesses. 

[The statement of Governor A.P. Lutali may be found at end of 

hearing.] 

Mr. FALEOMAVAEGA. I do have some questions, Mr. Stayman, and 

I think I will pose those for you in written form so that we can 

move our hearing along this afternoon. I want to thank you for 

your comments and also for representing the administration at this 

hearing. 

Mr. FALEOMAVAEGA. I would now like to turn the time oyer to 

the gentleman from Guam to introduce our next panel for the hearing this afternoon. f~ 

Mr. UNDERWOOD. Thank you, Mr. Chairman. 

It is my honor and privilege to introduce to the Subcommittee 

the honorable Madeleine Z. Bordallo, the Lieutenant Governor cf 

Guam, representing Carl Gutierrez, who is Governor of Guam. 

In my interactions with Governor Bordallo in the past few days 

on Guam, she was the acting Governor; I do not know if she is the 

acting Governor anymore, now that the other Governor is back on 

Guam. But we will let the Virgin Islands figure out all those prob- lems with Governors and acting Governors and whatnot. 

It is a privilege and an honor. I have worked with the gentlelady for many years, and it has always been a privilege; she has always done an excellent job of representing the island and its interests. 

Mr. FALEOMAVAEGA. I, too, would like to offer my personal welcome to Lieutenant Governor Bordallo for her presence this afternoon, and certainly the Subcommittee looks forward to hearing her 

testimony this afternoon. 

Please. 

STATEMENT OF HON. MADELEINE Z. BORDALLO, LIEUTENANT 

GOVERNOR OF THE TERRITORY OF GUAM 

Ms. BORDALLO. Thank you very much, honorable delegate Faleomavaega and the members of the Subcommittee on Native 

American and Insular Affairs. Of course, I would like to also welcome and say "Hafa adai" to Congressman Underwood. Mr. Chairman, we came in on the same flight today, and he looks so bright and cheery, and my hours are all out of sync, so please bear with 

me. 

On behalf of the people of Guam and Governor Carl T.C. 

Gutierrez, I extend a warm "Hafa adai" from the land where America's day begins. In the same spirit, I thank you for this oppor- tunity to discuss issues of importance to our people that are contained in H.R. 3721 and other matters of concern to this committee. 
16 

Your interest in matters of concern to us is indeed heartening, and 

we stand ready to work with you to accomplish these goals. 

As you are aware, the people of Guam since 1987 have outlined 

their views on a host of matters that would address the structure 

of our relationship with the United States, that will allow the peo- ple of Guam, through a Constitution, to establish their internal 

self-governance. As we speak, Guam's Commission on Self-Determination is in the middle of intense discussions with the administration on mutually agreeable language which will be submitted to 

Congress and which, with the blessings of Congress, will form the 

foundation of a new and more equitable political partnership between Guam and the United States. 

However, Mr. Chairman, I would like to focus on an issue of 

enormous significance to Guam today, and that is the issue of land. 

Guam's total land area is small, very small, just 210 square miles-smaller than even the smallest State of the Union. Of this, 

the Federal Government controls 70 square miles, or approximately 33 percent of the island's total land mass. 

Mr. Chairman, even these numbers are deceiving because the 70 

square miles encompass the most usable lands and the best 

stretches of beach and water frontage. In terms of economic development, the Federal Government controls the best parcels. Prior to the extensive land condemnations by the Naval Government during and immediately after World War II, most land was 

privately held. Mter the War, our elders, out of gratitude and patriotism and loyalty, never disputed the need for the Federal Government, especially the military, to use the land for national security purposes. 

However, fundamental fairness dictates that these lands should 

be returned to Guam when they are no longer needed for national 

security. Mr. Chairman, Guam's growing population and our economic development require that we, the people of Guam, be the first and the 

final determiners of all forms of land use except that which can be 

proven without dispute is required for national security purposes. H.R. 3721, like the Senate's companion measure, S. 1804, corrects several anomalies that occur when federally-held land has either been returned or is about to be returned to Guam. 

Please be assured that we support expedited processes of land return which make Guam's interests the priority in lands excessed 

by the Defense Department. Guam's needs and the needs of its peo- ple must always be the first priority for the return of lands 

excessed by DoD. The fact that they are being returned by DoD is 

proof that the properties are no longer required for national security purposes. 

Unfortunately and unfairly for the people of Guam, lands about 

to be returned by the Department of Defense have been grabbed by other Federal agencies. Recognizing the national security interests 

of Guam and the unique history of the United States owning Guam, lands not needed for U.S. national security must be returned to the people of Guam, not put on the auction block for any Federal interest's bid. 

In 1991, the Department of Defense agreed to transfer about 300 

acres of land located at Ritidian Point to Guam. At the last roo-
17 

ment, Guam learned that the Fish and Wildlife Service had 

claimed the land. 

The Fish and Wildlife Service turned the land into an unfunded 

wildlife refuge for native birds that effectively" have been driven to 

extinction by the brown tree snake which thrives in this refuge. 

While Fish and Wildlife conducts an expensive and only marginally 

successful breeding program for some of these birds at Front Royal, 

Virginia, they have no plan to eliminate the predatory snake in 

Guam's jungles. Without an elimination of the brown tree snake, 

all the breeding programs conducted in Virginia, California, Florida 

or elsewhere are but exercises in futility. 

Guam's lands were once taken for national defense, then again 

taken for reasons that have never been fully explained to or understood by the people of Guam-and I repeat, Mr. Chairman, we have 

so little land. H.R. 3721, like S. 1804, would prevent another such 

land grab and would help free previous land transfers from constraints on the use of returned lands. 

A prime example is the return of 927 acres of reclaimed and submerged lands in Apra, Harbor to the Government of Guam. The development of this property, which has no national security uses Q.r 

significance, is burdened with the unreasonable constraint more 

properly referred to as the Brooks Amendment. It is a Federal law 

which mandates that any profits from the lease or sale of the property must be given to the U.S. Government. The Brooks Amendment has removed any incentive for the Port 

of Guam to spend its own funds to provide the necessary infrastructure and capital improvements to upgrade the existing facilities. Subsequently, there has been no economic development on 

that land. 

Excess property, which had no national security significance to 

the Department of Defense, but which holds tremendous economic 

potential for the people of Guam, lies idle, Mr. Chairman, because 

a Federal statute mandates that the profits from that property 

must be given to the U.S. Treasury. 

We would like this committee to consider a related issue-land 

that is to be transferred should first be cleaned up. Early in the 

life of our administration, hazardous waste was discovered on land 

formerly held by the Department of Defense but which was turned 

over to the Government of Guam as the site for our new Southern 

High School. Work was halted to ensure workers' safety, and construction delays cost us over $1 million. In addition to the cost of 

delays, we also bore the cost of cleanup to ensure that costs resulting from the construction delays did not become unmanageable. 

Mr. Chairman, the people of Guam have proven that they are 

willing to work with the military or any other Federal agency, including the Environmental Protection Agency, to make sure that 

cleanup activities proceed as efficiently and economically as possible for all parties. We want to put unused lands to productive use 

for public and economic development purposes. 

The expeditious transfer of federally-held lands is necessary to 

accomplish results that are meaningful to the people of Guam as 

well as to the United States. We are confident that H.R. 3721 and 

S. 1804 are steps in this direction. After 1 exhaustive study, we believe that there are about 27,000 acres of federally-held property 
18 

that can be returned to Guam. Some of that is covered by BRAC 

decisions or H.R. 2144, making the passage of H.R. 3721 and S. 

1804 even more timely. 

Our economy could be developed even more if we had control 

over more of the prime property now held by the Federal Government. The island's best beach properties are either landlocked by 

or are part of exclusive-use military property. Of the property within a 3-mile radius of Guam's deep water port, 65 percent is federally-held. 

At stake is not just the disposal of Federal assets, but the future 

of our community. The committee's call for this hearing also invited comment on a 

Guam resolution requesting language to enable the creation of an 

elected attorney general. Mr. Chairman, I would like to briefly comment on that. 

Our administration is of the opinion that the mechanism for such 

already exists, and that is the result of the Omnibus Territories 

Act of 1985 where Guam would elect an independent prosecutor. Guam's senators have not opted to exercise that mechanism, and 

the opinion and the consensus of the people through public hearings and other public forums, we feel should be ascertained before 

any form of commitment or action is taken in this regard-in other 

words, a referendum. 

In conclusion, I would like to personally invite you, Mr. Chairman, and members of this committee to come to Guam. It is important to witness firsthand the issues under your review here, and 

it is important that you get to know us and our plight better, bear 

witness to the impact of your work on our island, as together we 

move forward in a partnership that fairly balances Guam's interests with the continuing Federal interest in national security. In Chamorro, we express our gratitude with a sincere "Dangkolu Na Si Yu'os Ma'ase." Thank you, Mr. Chairman, for allowing me 

to s:(1eak to you about these important issues. 

M:r.. FALEOMAVAEGA. Thank you, Madam Governor. 

The gentleman from Guam. 

Mr. UNDERWOOD. Thank you very much, Governor, for your very fine statement. Could you perhaps elaborate on some of the prob- lems that the Government of Guam has had with the Federal lands 

that have been turned over and some of the cleanup problems that 

we have had? 

Mr. BORDALLO. Well, delegate, as I mentioned, I think one of the 

most exasperating was when we began to build our Southern High School, and we found lands there that were not cleaned up. We had 

to halt the construction, and it cost our local government over $1 

million, as I mentioned in my testimony. This is one example. Mr. UNDERWOOD. And in terms of the overall process that has 

been identified in terms of the land return process for the Government of Guam goes to the head of the line in the return of Federal 

excess lands, maybe you could explain to the committee, or at least 

for the record, why Guam should be treated differently from other 

areas of the United States. 

Ms. BORDALLO. Getting back to the other question, I do remember another area. This is the NES again, land that was recently returned to us, BRAC '93. 
19 

First of all, Mr. Chairman, we are not in possession of that prop- erty; we do not have a deed as yet to that property. We are simply 

caretakers operating under licensed facilities. We have not even 

agreed on a lease as yet, but we are working on it. But there are 

26 areas at the Naval Air Station now known locally as Tejin that 

are contaminated, and I understand that it will take anywhere 

from 8 to 10 years to clean up. 

So these are some of the frustrating problems that we have in 

acquiring Federal property. 

Mr. UNDERWOOD. The question I had, Governor, was that the 

legislation that has been proposed by myself and the delegate from 

American Samoa in his omnibus measure holds that the Government of Guam should be treated differently than other areas under 

the United States in terms of the return of Federal excess lands. Perhaps you can elaborate on why this is justifiable in comparison 

to other areas of the United States. Ms. BORDALLO. Well, I feel certainly as you do, Delegate 

Underwood, that the Government of Guam should be placed at the 

top of the priority list. One of the reasons is that we just have so 

little land, and the Federal Government has taken over all of the 

choice areas on Guam including our beachfronts. So for this reason, 

I think the Government of Guam should be placed at the top of the 

priority list, and if there is any other habitat conservation plan 

that is being thought of, I certainly am one to recognize that importance, but I do not think that the minute Federal properties are 

available, or they are thinking about turning it over to the Government of Guam, that the habitat conservation plan should come 

first, and we should come second or third or whatever. I feel that 

because of the small area and how precious our lands are and that 

our people-we have so many people who are crying for land, original landowners-this should be considered, and I think these properties should be turned over to the Government of Guam as a top priority. Mr. UNDERWOOD. And just for the record, I wanted to clarify on 

the Brooks Amendment legislation. We have that in a different 

piece of legislation that has already made it through the Department of Defense authorization process, so hopefully it becomes 

fixed that way. I think that at least that is one thing that almost 

everybody agrees on, and now that Mr. Brooks is gone-thank you. 

Ms. BoRDALLO. And Congressman, I would mention that this 

halts our progress. We are so anxious to begin our economic plans 

for Guam, and with the Brooks Amendment, it just puts everything 

on hold. 

Mr. UNDERWOOD. Thank you very much. 

Mr. FALEOMAVAEGA. Madam Governor, is it my understanding 

that there are still 22,000 acres that the DoD was willing to trans- fer to the Government of Guam, but because of the inteJjection of 

the Fish and Wildlife Service and in concurrence with the Department of the Interior, these 22,000 acres are now at bay-! mean, 

there is nothing being done to make this transfer possible? 

Ms. BoRDALLO. That is correct. 

Mr. FALEOMAVAEGA. Do you believe that the provisions of the bill 

as proposed for this transfer will remedy that difficulty or the problems th<tt we currently have? 
20 

Ms. BORDALLO. Yes, I do. Mr. FALEOMAVAEGA. I have always wondered if our friends in the 

Department of the Interior are advocates for the Territories, or if 

they are enemies. I am somewhat puzzled by all this, seeing that 

as the primary agency that has responsibility for the Territories, 

at least a better understanding of Fish and Wildlife Service and 

the history of how the lands in Guam were literally just taken over 

by the military after the World War, without due compensation 

and without really even giving the people of Guam the opportunity 

to reclaim their lands. 

I happen to have an understanding of that, and I am really puzzled by why our friends from the Department of the Interior are 

not advocating for the needs of the Government of Guam, especially in this pending legislation. 

Madam Governor, I want to personally welcome you again and 

to thank you for taking the long trip here to Washington to testify 

before the Subcommittee. Some of the fondest memories that I have 

are of the time that you were there with Governor Bordallo and the 

hospitality and kindness that was afforded me, and the times that 

I visited the beautiful Island of Guam, I will never forget. And I 

want to thank you, and I sincerely hope that perhaps in some due 

time, the committee will have an opportunity to visit Guam again 

and to hopefully flesh out some of these issues, and that we can 

find remedies and solutions and not continue to have problems with them. So again, Madam Governor, thank you for your testimony. 

Ms. BORDALLO. Thank you, Mr. Chairman. 

In closing, I would like to add one point, and perhaps the delegate is not aware of this, but recently, I visited several of our golf 

courses when we had a tournament of champions to raise money for beautification on Guam, and some of the managers of our golf 

courses told us that they have so many birds in the golf courses. 

So perhaps the Department of the Interior people may want to go 

out and look at this. I cannot think of a better refuge for birds than 

our beautiful golf courses, so I am just suggesting that perhaps a 

visit to Guam will enlighten some of our Department of the Interior 

officials. 

Mr. FALEOMAVAEGA. Well taken. Thank you very much, Madam 

Governor. 

Ms. BORDALLO. Thank you, Mr. Chairman. 

Mr. FALEOMAVAEGA. For our next panel, we have the honorable 

Elizabeth Barrett-Anderson of the Guam Legislature, and the honorable Hope Cristobal, also a member of the Guam Legislature. 

I certainly would like to give this opportunity to our good friend, 

the gentleman from Guam, for any introductory remarks he may 

have. 

Mr. UNDERWOOD. Thank you again, Mr. Chairman. 

It is my honor and privilege to present to the committee Senators 

Hope Cristobal and Elizabeth Barrett-Anderson. As can be clearly 

seen by the presentations today, male elected officials are an endangered species on Guam, and females continue to make great strides in the political environment of Guam and certainly, as we 

heard the testimony of the Governor, it was remarkably fresh, 
21 

given the fact that she just came off a flight that I know took some 

24 hours. 

I would certainly like to welcome and extend my sincerest "Hafa 

adai" to my two colleagues from Guam. I know the committee will 

be attentive to their testimony. 

Thank you. 

Mr. FALEOMAVAEGA. If the gentleman would yield, I will also say that they are better-looking than the men of Guam. Please proceed. 

STATEMENT OF HON. ELIZABETH BARRETT-ANDERSON, 

SENATOR, GUAM LEGISLATURE 

Ms. BARRETT-ANDERSON. Thank you very much, Mr. Chairman, 

and "Hafa adai" from Guam. Robert, it is good to see you all. I 

came a day earlier to be a bit more refreshed. You are truly a 

Chamorro gentleman. You remarks were right on par for Guam. 

I have written testimony, Mr. Chairman, that I would like if it 

is appropriate to move to be accepted. I will not read from my written testimony but will speak directly to the committee. Mr. FALEOMAVAEGA. Without objection, it will be made part of 

the record. [The prepared statement of Ms. Barrett-Anderson may be found 

at end of hearing.] 

Ms. BARRETT-ANDERSON. Resolution 433 was adopted by the 

Guam Legislature last month, unanimously voted on, to request this committee and this Congress to amend the Organic Act to 

allow for an elected attorney general, specifically. The resolution seeks to change two major portions of the Organic Act dealing with the executive branch, and I will deal with those 

very briefly. 

It will provide that the executive branch will now have a third 

coequal position, and that position would be the attorney general. The Organic Act of Guam provides for the Governor and Lieutenant Governor in the executive branch. This resolution would now 

allow a third coequal position to be the attorney general. 

I believe that it is important to establish this as an organic posi- tion or, more generally called a constitutional position, because currently the attorney general position on Guam is a statutorily-en- acted local position, meaning that it is established by the laws of 

the Territory. The Attorney General of Guam is a directorship. It 

is a line agency head. It is not a constitutional position. The danger in not doing this, and if the Territory were to have 

an elected attorney general without this amendment, would be that 

any challenge would clearly hold that that local statute would be 

inorganic; it would not withstand any constitutional challenge. 

The Governor has complete, absolute and plenary authority over 

the entire executive branch of the Government of Guam. Let me 

give you an example to highlight this. Several years ago in 1986, this body authorized the Territory to establish an educational system in the Territory of Guam. In 1993, the Guam Legislature enacted the elected board of education. This administration, soon 

after coming into office, took a court challenge, and that decision 

is still pending before the trial court in the Territory of Guam, 

challenging the organic-ness of the elected board of education. 
22 

I believe the Governor is correct; I believe the Governor is correct 

in that the elected board of education is inorganic, because nothing 

can impinge on the Governor's organic authority to control the executive branch in total, and that includes education. 

So that providing that the attorney general is now a coequal po- sition in the executive branch will prevent future litigation as to 

the elected attorney general. Secondly, and I think perhaps the one item that most members 

of this Congress might be a bit uncomfortable with, is that the 

Guam Legislature has asked this Congress to specifically state that 

the attorney general will be elected. Generally, Congress provides that a territory or a jurisdiction is authorized to determine under 

local law whether it is appointed or elected. 

This amendment was placed on the floor during debate. The 

original measure did not have that. In debate, it was discussed that 

there should be no question that what the Territory wants is an 

elected attorney general. If it is left that the Territory of Guam 

may decide how it wants to select it, then obviously we can decide 

to maintain it as an appointed position or an elected position. I believe that Congress providing that it shall be elected is consistent with Congress' plenary authority over the territories and 

would be consistent with Congress' intent that Guam be self-governing. 

Mr. Chairman, I was attorney general for 7112 years, and I can 

tell you that the most important aspect of this resolution is that 

it is another example of self-government for the Territory. Let me 

express four situations where this Congress has provided self-government to the Territory. First, in 1968, with the elected Governor of Guam; second, in the 

mid-1970's, with the authorization of the Territory to go forth and 

create a Constitution. It has been 20 years, and we have not done 

it, but we still have the authority to establish a Constitution for 

the Territory. 

Third, in 1983, when the restriction prohibiting the establishment of a municipal government was deleted from the Organic Act. 

Guam can today create municipal government. We do not have municipal government. 

And then, fourth, in 1986, when this Congress gave the Territory the power to establish the Supreme Court of Guam. Unfortunately, 

we have a Supreme Court, but we do not have a Constitution for 

them to interpret. 

And the fifth one was when this Congress allowed Guam to establish its own tax code. 

Those are five clear examples of self-government. This Congress has been overly generous to the Territory in saying to Guam, "If 

you want to be self-governing, here are some of the tools to do it:" 

We are asking for the sixth example, that this Congress allow 

the Territory to have an elected attorney general as a clear and 

convincing and unequivocal statement of self-government for the 

Territory. 

Thank you, Mr. Chairman. 

Mr. FALEOMAVAEGA. Thank you. 

[The prepared statement of Hon. Elizabeth Barrett-Anderson, 

Delegate from Guam may be found at the end of the hearing.] 
23 

Senator Cristobal? 

STATEMENT OF HON. HOPE CRISTOBAL, SENATOR, GUAM 

LEGISLATURE 

Ms. CRISTOBAL. Thank you, honorable Chairman. Buenos dias 

and Hafa adai from the people of Guam. 

Honorable Chairman and members of the committee, my name 

is Hope Alvarez Cristobal, and I am the chairperson of the Committee on Federal and Foreign Affairs in the Government of Guam 

Legislature, of which my colleague, Senator Barrett-Anderson, is a 

member. 

On behalf of the people of Guam, I offer this testimony in support of the Omnibus Territories Act, H.R. 3721, Title VI, the Guam 

Land Return Act. Referencing the three sections, 601 is the name 

of the Act; 602 basically seeks to amend the Organic Act of Guam 

to add a new title, section X, to require the administrator of the 

General Services agency to notify the Government of Guam that 

property is available. Notice is to occur at least 180 days before 

transferring excess real property located in Guam to any Federal 

agency; (b) the administrator shall transfer to the Government of 

Guam all right, title and interest of the U.S. in the excess real 

property located in Guam by quitclaim deed and without reimbursement if Government of Guam does express interest in the 

availability of such Federal lands; and (c) the term "excess real 

property'' means excess property as that defined under section 3 of 

the Federal Property and Administrative Services Act of 1949 as in 

effect on the date of enactment of the Guam Land Return Act that 

is real property. 

Section 603 amends section 818(b) of Public Law 96-418 relating 

to a condition on disposal by Guam of lands conveyed to Guam by 

the U.S. 

Although we fully recognize the rationale for a general policy allowing Federal agencies to be a priority consideration as a recipient 

in acquiring any excess Federal lands, we support a different 

prioritization policy for Guam given the fact that insular landholdings in this area are rather small and limited. Limited land resources in Guam have prevented the Government from moving 

ahead with any meaningful or ambitious economic revitalization 

program. 

Much of the Guam lands acquired by the Federal Government involve the acquisition of private property through seizures or 

through condemnation processes which denied people a measure of 

full due process rights, especially in the cases of private property 

acquisition. 

· To our Chamorro people, the indigenous people of Guam, land 

tenure is viewed as inseparable to their existence and well-being. 

As an example, if I were to harvest crops from my mother's land, 

my whole relationship with family members and villagers comes 

into play. Harvesting and sharing crops is a way of establishing 

stature and strengthening ties among family members and the village community. 

We hold with high honor and respect one who shares food coming 

from the land. Ownership of land is not just as a commodity but 

as inheritance to be passed on down through the generations. Even 
24 

today, our people continue to believe that they will someday obtain 

their other lands back from the Federal Government. In the eyes 

of the Chamorro people, the lands were only to be utilized by the 

Federal Government and not owned, just like they had practiced 

for centuries. 

It is also important that the unique situation of the people of 

Guam, living on a fragile and limited land mass and environment, 

continues to be recognized. Furthermore, GSA policies which give 

higher prioritization to other Federal agencies in the use of Federal 

excess lands are incongruent to a developing people who have experienced the unjust taking of their lands. Because of the circumstances of the land takings after the war and the people's lack 

of resources then, it is only proper that the people of Guam, 

through the Government of Guam, be given priority in terms of access to these lands. 

The people of Guam felt betrayed after they discovered that the 

Department of Interior's Fish and Wildlife had obtained the socalled wildlife refuge at Litekyan. It was beyond anyone's imagination that Tun Benigno Flores, a landowner, as well as other landowners at Ritidian, would never return to his childhood playground, family fishing hold, family land, and most of all, the legacy 

of his ancestors. 

I implore Congress to place in check the Department of Interior's 

creative and innovative predation of Guam lands for parks and 

wildlife preservation and conservation. 

As a point of information, Mr. Chairman, under the Organic Act 

of Guam, the legislature is given a distinct role in the disposition 

of lands. I ask, then, that under this proposed measure, the Guam 

Legislature's role be protected and enhanced. 

Congressman, I fully support the proposed amendments by Congressman Underwood under Congressman Faleomavaega's proposed Omnibus Territories Act, H.R. 3721. 

Si Yu'os ma'ase, and I thank you for your support and for your 

invitation to testify on this very important legislation. 

Mr. Chairman, I would also like to at this point submit the testimony of one of my colleagues of the Guam Legislature with respect 

to the elected attorney general position. My colleague, Senator 

Vincente Pangelinan, had put together testimony. He is the author 

of a bill, 571, which is ready to go on the floor of the legislature. 

Ms. BARRETT-ANDERSON. Mr. Chairman and Senator Cristobal, 

that is with the exhibits that I turned in with my written testimony. 

Mr. FALEOMAVAEGA. Without objection, the statements of both 

Senators will be made part of the record and any other materials 

that you wish to submit will be made part of the record. 

[The prepared statement of Vicente C. Pangelinan, Delegate from 

Guam, may be found at end of hearing.] 

Ms. BARRETT-ANDERSON. Mr. Chairman, may I also say that I do 

support H.R. 3721. I think it is very creative, and it is going to go 

a long way to help the Territory of Guam. I enjoyed the questions 

that came from the panel here, and I hope that this full Congress 

passes it favorably. 
25 

Mr. FALEOMAVAEGA. I thank both senators for their fine testimony, and I would like to turn the time now to the gentleman from 

Guam for questions. 

Mr. UNDERWOOD. Thank you, Mr. Chairman, and thank you both 

for your eloquent testimony on the issue of land. 

I guess we have discussed land enough, but we will continue to 

discuss it inevitably, even in other fora, I am sure. 

I just want to ask a couple of questions on the proposed elected 

attorney general and the resolution. Senator Barrett-Anderson, you 

indicated that you were attorney general under the Ada administration. What do you think Governor Ada would think of this proposal? 

Ms. BARRETI-ANDERSON. Oh, I do not think there is a Governor 

on this globe who would support taking away that privilege of appointing the highest legal officer. As an appointed attorney general 

and a successful, hopefully, appointed attorney general, it is ironic 

that I would be the strongest proponent for an elected position. 

There were situations where it was very difficult in my position. 

What would Governor Ada's position be? Knowing Joe Ada, a lot 

of times, Mr. Underwood, he did not quite understand the role of 

the attorney general, and maybe that is why we worked out just 

fine. He certainly let me do my job as best I could, and other than 

the abortion issue which is stated in my testimony, that probably 

was the most difficult of times in our relationship. 

Mr. UNDERWOOD. I found it very curious in your review of 

Guam's move toward more internal self-government where you described various steps that have been taken along the way, and then 

in your presentation, you indicated that in the Guam Legislature 

there was discussion as to whether this would be permissive or 

whether what you are proposing would require an elected attorney 

general, and then you said that by requiring it, it would actually 

promote more self-government. Isn't there an inconsistency in say- ing that if I allow you to do something, and you decide whether or 

not to do it yourself, that that is in fact more self-government than 

saying to you, "I hereby mandate that you must do this"? 

Ms. BARRETI-ANDERSON. Well, Congressman Underwood, I think 

the end product is certaiiily self-government. I know what you are 

talking about, and as I said earlier, the original draft as I had prepared it put it in terms of this Congress providing the authority 

and letting the Territory then decide which way it goes. 

In response to your question, the Territory through its elected 

senators have made a self-government statement through this resolution. It will make a second self-government statement through 

bill 571 that has received I think unanimous support from the 

Committee on Judiciary to get it onto the floor of the legislature 

perhaps by the August or September session. 

So in that respect, I think we have made a self-government statement. 

Mr. UNDERWOOD. What is in bill 571? 

Ms. BARRETI-ANDERSON. Bill 571 is actually a companion to the 

resolution. If this resolution were adopted by this Congress, the 

Territory would then enact the statute that specifically states the 

manner in which an elected attorney general is selected. So they 

are companion measures. One is the bill, the statutory enactment. 
26 

And the question would be, if Congress were to pass this and the 

bill were enacted, would the Governor sign it. Well, that is a ques- tion. He would be subject to either override or sustaining the veto. 

If 571 were to be adopted in August session, it would have to 

have a provision that that bill is subject to congressional authorization as outlined, perhaps, if it is acceptable, in Resolution 433. 

Mr. UNDERWOOD. The Government of Guam currently has the 

authority to elect a prosecutor. 

Ms. BARRETT-ANDERSON. No. That is incorrect. 

Mr. UNDERWOOD. That is incorrect? 

Ms. BARRE'IT-ANDERSON. That is incorrect. The provision in the 

Organic Act does not state that, Mr. Congressman, and I will read 

it. It allows the Territory to establish an Office of Territorial Prosecutor. To me, that means it can establish an office. In my legal mind, it does not give the Government of Guam, the legislature, the authority to establish an elected prosecutor. I give you the example of the Territorial board of education. It is being challenged right now. I believe the Governor's challenge is valid. If tomorrow 

the legislature passes an elected Territorial prosecutor, I think that 

that will likewise be challenged similar to the elected board. 

You must have a change in the executive structure of the Governor. The Governor's power is complete and absolute in relation 

to his control over the executive branch of Government. 

Please understand also that I would not favor, having been a 

former attorney general, bifurcating the criminal division of the attorney general's office and elevating that to an elected position. It 

is a small enough island, it is a small enough department of law 

that I believe the elected position should not be the chief prosecu- tor; it should be the attorney general of Guam. If the Territory wants to establish a district attorney position, which is the Territorial prosecutor, I can understand that, but it 

cannot today be an elected position without congressional authority. 

Mr. UNDERWOOD. So your interpretation of the existing Organic Act does not give the Government of Guam the right to authorize 

an election for a prosecutor? 

Ms. BARRETT-ANDERSON. I do not think it would in the same 

manner that the provision that says the Government of Guam can 

establish an educational structure likewise does not say it can have 

an elected board of education. Mr. Congressman, right now, that decision with regard to the 

elected board is winding its way through-it is actually under review by Judge Gatewood. We do not know exactly how she is going 

to turn out on that. She might surprise all of us and say the elected 

board is organic. I think that is very unlikely, because it is a hard 

struggle with that decision. 

Mr. UNDERWOOD. Are there other offices that you think should 

be elected? 

Ms. BARRETT-ANDERSON. There are traditionally three positions in most jurisdictions that are elected in the executive branch, Congressman, and those are the Governor, the Lieutenant Governor 

and the attorney general. Other States do have, I think, secretaries 

of State. We do not. I do not advocate the director of revenue and 
27 

taxation being elected. Maybe if I were director of revenue and taxation for 7 years, I might be here, advocating that election. 

Historically, the problems that we have had and struggled with, 

the relationship between the Governor and the highest legal office 

of the attorney general, will plague successors of the current attorney general. It plagued my predecessors, it plagued me, it is plaguing the current attorney general, and it will always be that situation. 

I believe that the balance in the executive branch between the 

role of the Governor and the Lieutenant Governor will be very 

healthy and good for the Territory. 

Mr. UNDERWOOD. Well, I certainly appreciate your testimony and 

the energy that you have devoted to this particular issue. I think 

it is a concern that is valid in that it raises a number of issues 

about how to frame a government, how to structure a government. 

I think that normally, we think of those as kind of constitutional 

changes which should be done through local means. I still find it 

somewhat disconnected to argue that this is a good blow for selfgovernment. Indeed it could conceivably be argued that this would 

be a good blow for good government on Guam. I appreciate my understanding from members of the committee that they are awaiting 

a consensus position on this particular issue, and to that extent, I 

have asked beyond the confines of this committee hearing for formal input from the Governor as well as members of the Judicial 

Council on Guam to see whether a consensus position can be arrived at on whether or not to proceed with this particular suggestion or perhaps to suggest an alternative as to how they might best 

implement. 

Thank you very much. 

Mr. FALEOMAVAEGA. I was going to ask Senator Barrett-Anderson-was it Resolution 453 you indicated earlier? 

Ms. BARRETT-ANDERSON. Resolution 433. 

Mr. FALEOMAVAEGA. Does it have the endorsement of the Governor? 

Ms. BARRETT-ANDERSON. No, Mr. Chairman. This is strictly a 

legislative resolution. It does not go to the Governor. If bill 571 

were to be adopted next month, then it would be subject the Governor's veto or passage. 

Mr. FALEOMAVAEGA. You know, as a matter of observation, it is 

kind of a mixed bag. In various jurisdictions among the States and 

even in the Territories, the question is always raised as to whether 

the Governor and the Lieutenant Governor should go on a joint 

ticket or should run separately. The proposal as endorsed by the 

Guam Legislature about electing an attorney general also raises 

some interesting questions. There is the possible scenario where 

the Governor might be a Democrat and the elected attorney general is a Republican. 

You indicated earlier that now, as an elected officer, the attorney 

general will be coequal in this executive scenario, and I wonder if 

you might be asking for more problems than solutions to the problems. 

In its ideal form as I understand it, the reason for electing an 

attorney general would be to provide more independence, especially 

as it relates to criminal prosecutions, civil lawsuits and the like. 
28 

But at the same time, it could be just as well reversed in terms 

of being political; then it becomes a political situation more so than 

resolving the problems. And I am not saying that Guam is any different. Some States have this kind of situation and others do not. 

What you are suggesting here is that the Guam Legislature 

strongly feels that the attorney general should be elected. Is it for 

purposes of suggesting that the attorney general then become an 

independent prosecutor and not get involved in politics? 

Ms. BARRETT-ANDERSON. Because the attorney general's office 

handles both civil and criminal prosecution, it would necessarily 

mean that the attorney general elected would have full control over 

criminal prosecution. It would not be called a territorial prosecutor 

or a D.A., but it would be under that. 

Mr. FALEOMAVAEGA. But you do not feel that the attorney general could also be playing politics because as an elected officer, he 

could also be selective in his prosecutions. 

Ms. BARRETT-ANDERSON. You know, there are two sides of that 

issue, and I have been asked whether electing the attorney general 

will take politics out of it, and I have said absolutely not. I do not 

think that position can ever be out of politics. 

However, because of the complete and absolute position of the 

Governor of Guam currently over the entire executive branch, all 

line agencies, including the Department of Law, both civil and 

criminal prosecutions, I believe that it would be healthy for the 

Territory to have a bifurcation of the control of the Governor over 

that office. And I cannot tell you what the problems will be there, 

but I can tell you what the problems have been-have been-and 

that is why this Guam Legislature so unanimously opted to extend 

the resolution to this Congress, because we know what the problems have been, and it must change. 

Mr. FALEOMAVAEGA. If there are problems of abuse or the situation where the attorney general does not follow the law, doesn't the 

legislature have the power of subpoena to have the attorney general be subjected to public scrutiny on the part of the members of 

the legislature? 

Ms. BARRETT-ANDERSON. That is currently going on right now, 

Mr. Chairman, and I think that that is a poor use of legislative 

power and legislative time. I have not participated in those hearings. I believe what is going on right now is probably a management problem with the current attorney general, that he will survive. It took me 2 years, and I went through the same type of hearings. 

I do not think you can legislate management. If there are true 

problems in the attorney general's office, those should be addressed 

by the legislature, but the problems that I am talking about have 

nothing to do with an oversight investigative-type hearing, subpoenas called. I am talking about the very structure within the executive branch of the relationships between the Governor and the attorney general and the Lieutenant Governor-primarily Governor 

and attorney general. 

Mr. FALEOMAVAEGA. I suppose in the same analogy that we find 

ourselves at the national level of our Government, where the Attorney General is nominated by the President subject to Senate confirmation, it does not take away the political situation where the 
29 

Attorney General is criticized publicly by the Members of Congress 

and even at times when she has to come before the Congress and 

justify herself in some of the decisions she has to make or has 

made that may not necessarily agree or disagree with Members 

both on the Senate and the House side. 

The only point I am trying to make is that it could go both ways, 

whether you elect an attorney general, or even the current process 

where the attorney general is nominated, and I assume that this 

is how the process is right now in Guam, subject to legislative confirmation-is this how your attorney general is--

Ms. BARRE'IT-ANDERSON. There is not a nomination process, Mr. 

Chairman. It is purely an appointment at the discretion of the Governor, confirmed by the legislature. · Mr. FALEOMAVAEGA. Oh, I see, so the attorney general is not subject to legislative confirmation? 

Ms. BARRE'IT-.ANDERSON. The confirmation process, yes, but the 

nomination process is purely at the discretion of the Governor; he 

selects any candidate. 

Mr. FALEOMAVAEGA. But still subject to confirmation by the legislature. 

Ms. BARRE'IT-.ANDERSON. Yes, sir. 

Mr. FALEOMAVAEGA. OK. It is very ironic that Guam is an organized and unincorporated territory subject to--

Ms. BARRE'IT-.ANDERSON. Unorganized, Mr. Chair; we are unorganized. 

Mr. FALEOMAVAEGA. No; you are organized. 

Ms. BARRE'IT-ANDERSON. I'm sorry. I guess maybe I am wishing 

we were unorganized, but we are organized. 

Mr. FALEOMAVAEGA. You have been organized since 1950 as Irecall. 

Ms. BARRETT-ANDERSON. Yes. I stand corrected. 

Mr. FALEOMAVAEGA. American Samoa is both unorganized and 

unincorporated, and yet we have a Constitution. 

Ms. BARRE'IT-.ANDERSON. I have often desired to have the same 

kind of status as American Samoa, and your control and self-government of your island. 

Mr. FALEOMAVAEGA. I do not know about that; every time I have 

my friend, Mr. Stayman, testify before this committee, I keep feeling that we are being subjected to "big brother" here. 

The question I wanted to ask Senator Cristobal is about the excess land. Let me put this scenario, and maybe Mr. Stayman will 

want to comment on this, too. Why not allow by law the transfer 

of excessive lands to Guam first and then let Guam deal with the 

Fish and Wildlife agency, but give at least the property rights to 

the Government of Guam, and the Fish and Wildlife Service can 

then come to the Government of Guam and say OK, let us work 

something out. But at least give the deed to the lands to the Government of Guam and its possession. 

What do you think of that possible scenario? 

Ms. CRISTOBAL. I strongly support that approach, Mr. Chairman. 

It has been discussed, apparently, in this Congress before that the 

Fish and Wildlife Service owns the land as well as protects the species that are on that piece of property. So yes, you are perfectly correct. 
30 

Mr. FALEOMAVAEGA. I am going to suggest this to my good friend 

from Guam as a possible option. 

Another question-and I am sorry that our friend from Fish and 

Wildlife is not here-they are so concerned about the birds and the 

bees, and I can understand that. Have they been successfully controlling the brown snake? Aren't we just as much concerned about 

the livelihood of the brown snake, too, since it is part of the habitat 

now? 

Ms. CRISTOBAL. I understand that once we control the brown tree 

snake, those heartaches will go away. But there are a lot of heartaches that have to do with the lands, and those people are slowly 

dying, and they are not seeing their lands come back. 

With respect to the snake, Mr. Faleomavaega, I think everybody 

is fully aware of it. I just arrived from New York this morning, and 

if I may, Mr. Chairman, I would also like to add as a point of information that I attended the United Nations Committee on 

Decolonization's plenary meetings on Monday, and two paragraphs 

of the report pertain to land. And if I may, it is just 6 lines long, 

and it says: "Noting that the people of the territory have called for 

reform in the program of the administering power with respect to 

the thorough, unconditional and expeditious transfer of land property to the people of Guam," and one of the operative clauses says, 

"Also request the administering power in cooperation with the territorial government to continue the transfer of land to the people 

of the territory and to take the necessary steps to safeguard their 

property rights." So I just thought I would add that as a point of 

information that in the international arena, land rights are also 

being discussed and the return of those lands, the Federal excess 

lands, to the people. 

Mr. FALEOMAVAEGA. Without objection, we will be more than 

happy to include the rest of the statement or the document you 

have submitted as part of the record. Ms. CRISTOBAL. I appreciate that. Thank you, Mr. Chairman. 

Mr. FALEOMAVAEGA. Senator Barrett-Anderson, do you agree 

with the Lieutenant Governor's statement that a referendum 

should be held by the people of Guam first on this issue of the 

elected attorney general before Congress enacts a change in the Organic Act? 

Ms. BARRETT-ANDERSON. Mr. Chairman, I am generally very 

much an advocate of the initiative process, referendum process, as 

the repeal of existing statute. I support initiatives generally for 

many, many issues in the Territory of Guam. 

I would not oppose an initiative on this one. However, the unanimous position of my colleagues in the 23rd Guam Legislature, who 

are elected at-large in the Territory of Guam, having expressed 

their representative view that an elected attorney general is what 

the territory needs, I would say would not require or necessitate an 

initiative. 

If, however, an initiative were to be required, I would fully support that. 

Mr. FALEOMAVAEGA. And I am sure you will also agree that there 

is a coequal branch of the government on behalf of the executive 

branch or the administration, that it also has the privilege of expressing its support or maybe even opposition. But I want to note 
31 

this, assuming that this is on behalf of Guam's administration that 

perhaps a referendum should be held first, before bringing this 

issue to the Congress. 

Ms. BARRE'IT-ANDERSON. I can tell you that were I to go back to 

my colleagues in the 23rd Guam Legislature and request that we 

put this out to the electorate in the November election, I am sure 

that my colleagues-and I cannot speak for Senator Cristobal-but 

my hunch would be that my colleagues would say we have spoken in two manners, the resolution to Congress and this piece of legis- lation which is the bill that we are in full support of. So that I do 

not think the legislature would say that we will put a legislative submission on the November ballot. 

The only way, therefore, that an initiative can get forth, or a 

plebescite, would be perhaps the executive branch to organize it 

and conduct it. 

Mr. F ALEOMA v AEGA. All right. The committee Chairman has 

some questions he would like to submit to Mr. Stayman's office, 

and I will have some questions also. 

Mr. FALEOMAVAEGA. The gentleman from the Virgin Islands. 

Mr. FRAZER. I was just listening very curiously because we tend 

to have had the same problems as relates to the attorney general. 

I would just like to ask Senator Anderson, did you find during your 

7 -year tenure that there were occasions where you felt that your independence was somewhat compromised because you had been 

nominated rather than elected, and is that one of the bases for this 

bill? 

Ms. BARRE'IT-ANDERSON. Yes. My answer would be yes. And the 

clearest example in my written testimony is the enactment by the 

Governor of Guam of an anti-abortion law that was directly violative of the Roe case, and above my advice to the Governor and an 

official opinion that was issued that the bill that was pending before the Guam Legislature was unconstitutional as passed, the 

Governor of Guam did sign the bill into law. 

Mr. FRAZER. Currently, we have in the Virgin Islands a situation 

whereby the attorney general is appointed, and I have found that 

in past administrations, there has been lack of understanding on 

behalf of Governors, who thought that the attorneys general were 

their personal counsel as opposed to someone appointed to be independent in an agency where you would expect that sort of independence. 

Do you believe that the majority of the people in Guam support the proposition that this position should be elected as opposed to 

appointed? 

Ms. BARRE'IT-ANDERSON. I have no significant data to show that. 

What I would testify to is my guess and my hunch, and I believe 

my guess would be that most of the people in Guam are eager to 

elect their own attorney general. 

We have a good selection of graduates and local attorneys who 

have come back to Guam, having been educated here on the mainland, and I believe that were that position to be elected, we would 

have some very good local candidates. 

In my written packet are some articles from the Pacific Daily News, which is our only general newspaper of circulation, and of 

the six people on the street who were asked about it, I believe four 
32 

of them said that, yes, we should have an elected attorney general. 

If that is a straw poll or an example, I believe that we would have 

a good majority of the people of Guam saying they do want to elect 

their attorney general. 

There is a great amount of respect on the island for that position. 

Mr. FRAZER. Mr. Chairman, I have just one further observation. 

It seems to me that, being from a territory also, at times, we find 

the Federal Government very heavy-handed in what they believe 

is in the better interest of the territories, such as this brown snake. 

We have had the same situation at home. I have yet to see the real 

value of this brown snake as opposed to people's right to use land. 

No one has convinced me that this snake serves any real purpose. 

Now, I am sure the conservationists are going to attack me for 

that, but they will do that if they so desire. 

We have the same situation at home, and as the Congressman 

was suggesting, perhaps Guam and the territories would be in a 

better position if they first got title, then deal with Fish and Wildlife, as opposed to having Fish and Wildlife impose these crazy 

propositions, such as protecting some snake, making it impossible 

for people to properly use the land. 

Do you find that there is at times a heavy-handed approach by 

the Federal Government in such things as protection of snakes? 

Ms. BARRE'IT-ANDERSON. Historically, since our organized structure in the territory, the Federal Government has taken a heavy 

hand with regard to the Territory of Guam, as it has with all insular territories; there is no doubt. 

Mr. FRAZER. Has Fish and Wildlife said what real value this 

snake possesses? 

Ms. BARRE'IT-ANDERSON. Well, sir, what they are doing is creating the reserve not for the snake, but for the endangered species, 

the birds up there. Unfortunately, at the same time that they are 

preserving the birds, they are preserving the brown tree snake, 

which is the greatest predator to the extinction of our wildlife. 

So perhaps if they opened up the reserve and gave it back to the 

people of Guam, the brown tree snake would be eradicated because 

we would chop their heads off. 

Mr. FRAZER. Perhaps it is being considered by the majority of 

people in Guam to do so. 

Thank you. 

Mr. FALEOMAVAEGA. Senators, thank you both, and Governor 

Bordallo, Mr. Stayman representing the Department of the Interior. 

The record will be kept open for submission of any additional 

materials that you wish to be made part of the record. The gentleman from Guam. · Mr. UNDERWOOD. I was just wondering if the Chairman would 

note that only witnesses from Guam made an appearance at the 

hearing and that that counts for something in considering the legislation. 

Mr. FALEOMAVAEGA. Very good, Mr. Underwood. 

This hearing is adjourned. 

[Whereupon, at 4:07p.m., the Subcommittee was adjourned; and 

the following was submitted for the record:] 
33 

104TH CONGRESS H R 3721 2D SESSION • • 

To establish the Omnibus Territories Act 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 26, 1996 

Mr. FALEOMAVAEGA introduced the following bill; which was referred to the 

Committee on Resources, and in addition to the Committee on Ways and 

Means, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To establish the Omnibus Territories Act 

1 Be it enacted by the Senate and House of Representa2 tives ofthe United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

4 (a) SHORT TITLE.-This Act may be cited as the 

5 "Omnibus Territories Act of 1996". 

6 (b) TABLE OF CONTENTS.-

TITLE I-REPEAL THE REQUIREMENT OF SEPARATE BALLOTS 

TITLE II-MIERIC&"' SAMOA STUDY COMMISSION AcT 

TITLE III-AMERICA.c"' SAMOA ECONOMIC DEVEWPMENT ACT 

TITLE IV-INSULAR AREAS CONSOLIDATION ACT 

TITLE V-MIERICAN SAMOA CAPITAL INFRASTRUCTURE FUND 
34 

2 

TITLE VI-GUA.'d LAND RETURN ACT 

TITLE VII-AMENDMENTS TO THE REVISED 0RGA.'iiC ACT OF THE VIRGIN 

ISLANDS 

TITLE VIII-COMMISSION ON THE EcoNmnc FUTURE OF THE VIRGIN 

ISLANDS 

1 TITLE I-REPEAL THE REQUIREMENT OF 

2 SEPARATE BALLOTS 

3 SEC. 101. REPEAL OF SEPARATE BALLOT REQUIREMENT. 

4 Section 2(a) of the Act entitled "An Act to provide 

5 that the unincorporated territories of Guam and the Vir6 gin Islands shall each be represented in Congress by a Del7 egate to the House of Representatives" approved April 10, 

8 1972 (48 U.S.C. 1712(a)), is amended by striking", by 

9 separate ballot and". 

10 TITLE II-AMERICAN SAMOA STUDY 

11 COMMISSION ACT 

12 SEC. 201. SHORT TITLE. 

13 This title may be cited as the "American Samoa 

14 Study Commission Act". 

15 SEC. 202. CONGRESSIONAL FINDINGS. 

16 The Congress finds that17 ( 1) the islands of Tutuila and Manua, and cer18 tain other islands that compose American Samoa, 

19 were ceded by the chiefs of the islands to the United 

20 States by two treaties or deeds of cession which were 

21 submitted to the United States Congress on April 

22 10, 1900, and July 16, 1904; 

HR 3721 m 
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3 

(2) American Samoa's status as an unorganized 

2 and unincorporated territory of the United States, 

3 and American Samoa's political relationship to the 

4 United States, are not clearly defined in any single 

5 document; 

6 (3) there is a need for a comprehensive study 

7 and review of the historical and legal basis of Amer8 ican Samoa's political relationship with the United 

9 States, including-

! 0 (A) a comprehensive report on American 

11 Samoa's present political relationship with the 

12 United States, as compared to other relation13 ships such as independence, commonwealth, 

14 free association and covenant; and 

15 (B) an examination of whether the treaties 

16 or deeds of cession created trust obligations to 

17 American Samoa on the part of the United 

18 States; 

19 ( 4) the economic and social needs of American 

20 Samoa are substantially affected by the nature of 

21 American Samoa's political relationship with the 

22 United States; and 

23 ( 5) there is a need for a comprehensive study 

24 also of Swains Island and its historical relationship 

25 with the Tokelau Island Group. 

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4 

1 SEC. 203. ESTABLISHMENT. 

2 There is established a commission to be known as the 

3 "American Samoa Study Commission Act". 

4 SEC. 204. DUTIES. 

5 (a) 11\ GEXERAL.-lt shall be the duty of the Com6 mtSSJOn7 ( 1) to study and evaluate all the factors that 

8 led to American Samoa's historical and present po9 litical relationship with the United States, includ10 ing11 (A) the events that led to the cession to 

12 the United States of the islands that compose 

13 American Samoa; and 

14 (B) the constitutions, statutes, treaties, 

15 and agreements that affect American Samoa's 

16 political relationship with the United States; 

17 (2) to document and report on the nature of 

18 American Samoa's political relationship with the 

19 United States; to document and also report on such 

20 political relationships as independence, common21 wealth, free association and covenant; and to docu22 ment and report on whether the deeds of cession cre23 ated trust obligations to American Samoa on the 

24 part of the United States; 

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5 

(3) to report on whether a single document is 

2 needed to set forth American Samoa's political rela3 tionship with the United States; and 

4 ( 4) to study and evaluate the impact of Amer5 ican Samoa's political status and relationship with 

6 the United States (as determined by the Commission 

7 under paragraph (2)) on the economic and social 

8 needs of American Samoa and its residents. 

9 ( 5) to study and report on whether the 1900 

10 and 1904 Instruments of Cession were indeed trea11 ties or deeds and how such instruments are recog12 nized under international law. 

13 (b) CONSULTATION.-The Commission shall, to the 

14 maximum extent practicable, consult with .American 

15 Samoans in carrying out the duties of the Commission 

16 under subsection (a). 

17 SEC. 205. MEMBERSIUP. 

18 (a) NUMEER AND .APPOINTMENT.-The Commission 

19 shall be composed of five members appointed as follows: 

20 (1) Three members appointed by the Secretary 

21 of Interior, including22 (.A) One member appointed from among 

23 three individuals nominated by the legislature 

24 of the Territorial government of American 

25 Samoa and 

HR s121 m 
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6 

1 (B) One member appointed from among 

2 three individuals nominated by the Govemor of 

3 American Samoa. 

4 (2) One member appointed by the Speaker of 

5 the United States House of Representatives. 

6 (3) One member appointed by the President of 

7 the United States Senate. 

8 (b) TI<~RMS.-Each member shall be appointed for the 

9 life of the Commission. 

10 (c) BASIC PAY.-

11 (1) RATES OF PAY.-Except as provided in 

12 paragraph (2), each member of the Commission 

13 shall be paid, to the extent of amounts made avail14 able in appropriations Acts, $150 for each day (in15 eluding travel time) during which the member is en16 gage in the actual performance of the duties of the 

17 Commission. 

18 (2) PROHIBITION OF COMPENSATION OF FED19 ERAL EMPLOYEES.-Except as provided m sub20 section (d), members of the Commission who are 

21 full-time officers or employees of the United States 

22 or the Territorial government of American Samoa 

23 may not receive additional pay, allowances, or bene24 fits by reason of their service on the Commission. 

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7 

1 (d) TRAVEL EXPENSES.-Each member shall receive 

2 travel expenses, including per diem in lieu of subsistence, 

3 in accordance with sections 572 and 5703 of title 5, Unit4 ed States Code. 

5 (e) QUORUM.-Three members of the Commission 

6 shall constitute a quorum, but a lesser number may hold 

7 hearings. 

8 (f) CHAIRPERSON; VICE CHAIRPERSON.-The Chair9 person and Vice Chairperson of the Commission shall be 

10 elected by the members. 

11 (g) MEETINGS.-

12 (1) INITIAL MEETINGS.-Not later than the ex13 piration date of the 90 day period beginning on the 

14 date of the enactment of this Act, the Secretary of 

15 the Interior shall call the initial meeting of the mem16 hers of the Commission. 

17 (2) SUBSEQUENT MEETINGS.-The Chairperson 

18 or a majority of the members of the Commission 

19 shall call any meeting of the Commission that occurs 

20 after the meeting called under paragraph (1). 

21 SEC. 206. STAFF AND SUPPORT SERVICES. 

22 (a) DIRECTOR.-The Commission shall have a direc23 tor, who shall be appointed by the Commission. 

24 (b) STAFF.-Subject to rules prescribed by the Com2: mission, the Chairperson of the Commission may appoint 

HR 3721 m 
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8 

1 and fix the pay of personnel as the Chairperson considers 

2 appropriate. 

3 (c) APPLICABILITY OF CERTAIN CML SERVICE 

4 LAws.-The Director and staff of the Commission may 

5 be appointed without regard to the provisions of title 5, 

6 United States Code, governing appointments in the com7 petitive service, and may not be paid without regard to 

8 the provisions of chapter 51 and subchapter III of chapter 

9 53 of such title relating to classification and General 

10 Schedule pay rates, except that an individual so appointed 

11 may not receive pay in excess of the maximum rate of 

12 basic pay payable for GS-16 of the General Schedule. 

13 (d) EXPERTS AND CONSULTANTS.-Subject to rules 

14 prescribed by the Commission, the Chairperson of the 

15 Commission may procure temporary and intermittent 

16 services under section 3109(b) of title 5, United States 

17 Code, but at rates for individuals not to exceed $150 per 

18 day. 

19 (e) ADMINISTRATIVE SUPPORT SERVJCES.-Upon 

20 the request of the Commission, the Administrator of Gen21 eral Services shall provide to the Commission, on a reim22 bursable basis, the administrative support services nec23 essary for the Commission to carry out its responsibilities 

24 under this Act. 

HR 3721 m 
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9 

1 SEC. 207. POWERS OF COMMISSION. 

2 (a) HEARINGS.-

3 (1) IN GENERAL.-The Commission may, for 

4 the purpose of carrying out this Act, hold hearings, 

5 sit and act at times and locations, take testimony, 

6 and receive evidence as the Commission considers 

7 appropriate. 

8 (2) LOCATION OF CERTAIN HEARINGS.-

9 (A) REQUIRED HEARINGS.-The Commis1 0 sion shall conduct at least 1 hearing at any loll cation on each of12 (i) Tutuila; 

13 (ii) Ofu; 

14 (iii) Olosega; and 

15 (iv) Tau. 

16 (B) OTHER HEARINGS.-The Commission 

17 may conduct at least 3 separate hearings in the 

18 United States at locations where significant 

19 numbers of American Samoans reside. 

20 (3) NOTICE.-The Commission shall provide 

21 notice to the public of the hearings referred to in 

22 paragraphs (1) and (2), including information re23 garding the date, topic and location of the meeting, 

24 and shall take other actions as the Commission con25 siders necessary to obtain, to the maximum extent 

26 practicable, public participation in the hearings. 

HR 3721 IH --- 2 
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10 

1 (b) DELEGATION OF AUTHORITY.-Any member or 

2 agent of the Commission may, if authorized by the Com3 mission, take any action that the Commission is author4 ized to take by this Act. 

5 (c) OBTAINING OFFICIAL DATA.-

6 (1) IN GENERAL.-The Commission may secure 

7 directly from any Federal agency information nec8 essary to enable it to carry out this Act. Upon the 

9 request of the Chairperson of the Commission, the 

. 10 head of the Federal Agency shall furnish the infor11 mation to the Commission. 

12 (2) EXCEPTION.-Paragraph (1) shall not 

13 apply to any information that the Commission is 

14 prohibited to secure or request by another law. 

15 (d) MAIL.-The Commission may use the United 

16 States mail in the same manner and under the same con17 ditions as the other Federal agencies. 

18 SEC. 208. REPORTS. 

19 (a) DRAFT REPORT.-

20 (1) IN GENERAL.-Not later than the expira21 tion of the 1-year period beginning on the date of 

22 the enactment of this Act, the Commission shall pre23 pare and publish a draft report containing the find24 ings, conclusions and recommendations of the Com25 miSSIOn. 

HR 3721 m 
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11 

1 (2) DISTRIBUTION.-The Commission shall dis2 tribute such report to appropriate Federal and 

3 American Samoan agencies and shall make such re4 port available to members of the public upon reS quest. 

6 (3) SOLICITATION OF COMMENTS.-The Com7 mission shall solicit written comments from the Fed8 eral and American Samoan agencies and other per9 sons to which copies of such report are distributed 

10 under paragraph (2). 

11 (b) FINAL REPORT.-Not later than the expiration 

12 of the 9-month period beginning on the date of the publi13 cation of the report required by subsection (a)(l), the 

14 Commission shall submit to the President and the Con15 gress a final report, which shall include16 (1) a detailed statement of the findings and 

17 conclusions made by the Commission after consider18 ation of the comments received by the Commission 

19 under subsection (a)(3); 

20 (2) the recommendations of the Commission for 

21 legislative and administrative actions that the Com22 mission determines to be appropriate; and 

23 (3) copies of all written comments received by 

24 the Commission under subsection (a)(3). 

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12 

SEC. 209. DEFINITIONS. 

2 For the purpose of this Act: 

-·-

3 (1) The term "American Samoan" has the 

4 meaning given the term "native American Samoan" 

5 in section 4 of Public Law 100-571 (16 U.S.C. 

6 410qq-3). 

7 (2) The term "Commission" means the Amer8 ican Samoa Study Commission established in section 

9 3. 

10 SEC. 210. AUTHORIZATION OF APPROPRIATIONS. 

11 There is authorized to be appropriated such sums as 

12 are necessary to carry out the provisions of this Act. 

13 SEC. 211. TERMINATION. 

14 The Commission shall terminate not later than the 

15 expiration of the 60-day period beginning on the date on 

16 which the Commission submits its final report under sec17 tion 8. 

18 TITLE III-AMERICAN SAMOA ECONOMIC 

19 DEVELOPMENT ACT OF 1995 

20 SEC. 301. SHORT TITLE. 

21 This title may be cited as the "American Samoa Eco22 nomic Development Act of 1996". 

23 SEC. 302. FINDINGS. 

24 The Congress finds that25 (1) funding for the United States territory of 

26 American Samoa has been based on the joint resoluHR s121 m 
45 

13 

1 tion entitled "Joint Resolution to provide for accept2 ing, ratifYing, and confirming cessions of certain is3 sues of the Samoan group to the United States, and 

4 for other purposes", as amended (48 U.S.C. 1661), 

5 with commitments being made on a yearly basis; 

6 (2) American Samoa is locally self-governing 

7 with a constitution of its own adoption and the di8 rect election of the Governor since 1977; 

9 (3) the territory of American Samoa has had 

10 difficulty in planning and implementing comprehen11 sive and sustainable infrastructure based solely on 

12 annual ad hoc grants; and 

13 (4) the territory of American Samoa and the 

14 United States would benefit from a multi-year fund15 ing commitment which promotes economic develop16 ment and self-sufficiency, and requires compliance 

17 with financial management accounting standards, 

18 the establishment of semiautonomous public utility 

19 authorities utilizing cost-recovery principles, and the 

20 phaseout of Federal subsidies for Government oper21 ations. 

22 SEC. 303. AUTHORIZATION OF FUNDING. 

23 (a) IN GENERAL.-There are authorized to be appro.: 

24 priated ~o the Secretary of the Interior for the Govern-, 

25 ment of kneri~fut Samoa $10,000,000 for each of fisqal 

HR 3721 m 
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14 

1 years 1998 through 2003. Such amounts shall be used for 

2 construction and repair of capital assets of American 

3 Samoa. 

4 (b) MULTI-YEAR AVAILABILITY OF APPROPRIA5 TIONS.-Amounts not expended in the year appropriated 

6 shall remain available until expended. 

7 

8 

TITLE IV-INSULAR AREAS 

CONSOLIDATION ACT 

9 SEC. 401. SHORT TITLE. 

10 This title may be cited as the "Insular Areas Consoli11 dation Act of 1996". 

12 SEC. 402. ADDmONS TO TERRITORY OF AMERICAN SAMOA. 

13 (a) IN GENERAL.-The Territory of American Samoa 

14 shall include Baker Island, Jarvis Island, and Howland 

15 Island. 

16 (b) JURISDICTION.-The islands specified in sub17 section (a) shall be subject to the jurisdiction of the Terri18 tory of American Samoa to the same extent as and in the 

19 same manner that such jurisdiction applies to all other 

20 areas within the territory. 

21 {c) RIGHTS OF THE U~·:ITED STATES.-The inclusion 

22 of islands, appurtenant reefs, and territorial waters in the 

23 Territory of American Samoa by this section shall be sub24 ject to existing rights of use, ownership, management, and 

25 operation by the Government of the United States. 

HR 3721 m 
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15 

1 SEC. 403. CONFORMING AMENDMENTS. 

2 SEC. 404. USE OF ISLANDS, REEF, AND ATOLLS. 

3 No provision of this title shall be construed as con4 gressional approval, suggestion, or intent to alter, change, 

5 affect, or reduce the current use of any of the islands, 

6 reef, or atolls specified in section 302(a). 

7 SEC. 405. ADDITIONS CONTINGENT UPON ACCEPI'ANCE BY 

8 TERRITORY OF AMERICAN SAMOA. 

9 (a) ACCEPTANCE BY TERRITORY OF AMERICA.'l 

10 SA1\IOA.-Sections 302 and 303 shall not take effect u:fi11 less the Governor and Legislature of American Samoa cer12 tify to the President that the Territory of American 

13 Samoa accepts all of the islands, reefs, and atolls referred 

14 to in section 302(a). 

15 (b) PROCLAMATION BY PRESIDENT.-Not later than 

16 30 days after receiving the last certification described in 

17 subsection (a), the President shall issue a proclamation 

18 of the new geographical jurisdiction of American Samoa. 

19 (c) EFFECTIVE DATE.-Sections 302 and 303 shall 

20 take effect upon the issuance of the proclamation de21 scribed in subsection (b). 

22 SEC. 406. DEFINITIONS. 

23 For purposes of this title: 

24 (1) BAlCER ISLAND.-The term "Baker Island" 

25 means all of tlie ... islands and appurtenant reefs at 

26 the parallel of 0 degrees, 11 to 13 minutes, of latiHR 3721 IH 
48 

16 

1 tude north of the Equator and at the meridian of 

2 176 degrees, 27 to 30 minutes, of longitude west of 

3 Greenwich, England, and the territorial waters of 

4 such islands and reefs. 

5 (2) HOWLAND ISLAND.-The term "Howland 

6 Island" means all of the island and appurtenant 

7 reefs at the paralled of 0 degrees, 45 to 50 minutes, 

8 of latitude north of the Equator and at the meridian 

9 of 176 degrees, 37 to 39 minutes, of longitude west 

10 of Greenwich, England, and the territorial waters of 

11 such islands and reef. 

12 (3) JARVIS ISLAND.-The term "Jarvis Island" 

13 means all of the islands and appurtenant reefs at 

14 the paralled of 0 degrees, 22 to 24 minutes, of lati15 tude south of the Equator and at the meridian of 

16 160 degrees, 0 to 3 minutes, of longitude west of 

17 Greenwich, England, and the territorial waters of 

18 such islands and reef. 

19 TITLE V-AMERICAN SAMOA CAPITAL 

20 INFRASTRUCTURE FUND 

21 SEC. 501. SHORT TITLE. 

22 This title may be cited as the "American Samoa Cap23 ital Infrastructure Fund Act" . 

HR 3721 m 
49 

17 

1 SEC. 502. AMENDMENT OF SUBSECTION 703(a) OF PUBLIC 

2 LAW 94-241. 

3 The second sentence of subsection 703(a) of Public 

4 Law 94-241, as amended, is hereby amended to read as 

5 follows: "Funds provided under Section 702 will be consid6 ered to be local revenues when used as the local share re7 quired to obtain federal programs and services." 

8 TITLE VI-GUAM LAND RETURN ACT 

9 SEC. 601. SHORT TITLE. 

10 This Act may be cited as the "Gua:q1 Land Return 

11 Act". 

12 SEC. 602. OPPORTUNITY FOR GUAM TO ACQUIRE EXCESS 

13 REAL PROPERTY IN GUAM. 

14 The Organic Act of Guam (48 U.S.C. 1421 et seq.) 

15 is amended by adding at the end the following new title: 

16 "SEC. xx. (a) At least 180 days before transferring 

17 to any Federal agency excess real property located in 

18 Guam, the Administrator of General Services shall notify 

19 the government of Guam that the property is available 

20 under this section. 

21 "(b) The Administrator shall transfer to the govern22 ment of Guam all right, title, and interest o.f the United 

23 States in and to excess real property loca~ed in Guam, 

\ 

24 by quit claim deed and without reimbursement, if the gov25 ernment of Guam, w:ithin.-1§.0 days after receiving notifica26 tion under subsection (a) regarding the property, notifies 

HR 3721 IH 
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18 

1 the Administrator that the government intends to acquire 

2 the property under this section. 

3 "(c) For purposes of this action, the term 'excess real 

4 property' means excess property (as that term is defined 

5 in section 3 of the Federal Property and Administrative 

6 Services Act of 1949, as in effect on the date of enactment 

7 of the Guam Land Return Act) that is real property.". 

8 SEC. 603. RELEASE OF LANDS FROM CONDITION ON DIS9 POSAL BY GUAM. 

10 (a) IN GENERAL.-Section 818(b)(2) of Public Law 

11 96-418 (94 Stat. 1782), relating to a condition on dis12 posal by Guam of lands conveyed to Guam by the United 

13 States, shall have no force or effect and is repealed. 

14 (b) EXECUTION OF INSTRUMENTS.-The Secretary 

15 of the Navy and the Administrator of General Services 

16 shall execute all instruments necessary to implement this 

17 section. 

18 TITLE VII-AMENDMENTS TO THE RE19 VISED ORGANIC ACT OF THE VIRGIN 

20 ISLANDS. 

21 SEC. 701. SHORT TITLE. 

22 This Act may be cited as the "Revised Organic Act 

23 of the Virgin Islands, amended". 

HR 3721 IH 
51 

19 

1 SEC. 702. AMENDING THE DEFINITION OF "TEMPORARY AB2 SENCE". 

3 Section 7(a) of Public Law 90-496 (82 Stat. 839), 

4 as amended, is further amended by adding at the end 

5 thereof "As used in this section, the term 'temporary ab6 sence' shall not be construed as being physically absent 

7 from the territory while on official Government business.". 

8 SEC. 703. AMENDING SECTION 3 OF PUBLIC LAW 94-392. 

9 Section 3 of Public Law 94-392 (90 Stat. 1195), as 

10 amended, is further amended as follows: 

11 (1) By inserting "hereinafter" between "obliga12 tions" and "issued". 

13 (2) By deleting "priority for payment" and in14 serting in lieu thereof "a parity lien with every other 

15 issue of bonds or other obligations hereinafter issued 

16 for payment". 

17 (3) By deleting "in the order of the date of 

18 issue". 

19 SEC. 704. CERTAIN BONDS EXEMPTED FROM PROVISIONS 

20 OF SECTION 149 OF THE INTERNAL REVENUE 

21 CODE OF,J986, AS AMENDED. '• : o.:: .... .. ' 

22 The provision of section 149(d)(3)(A)(i)(I) and 

23 149(d)(2) of the Internal Revenue Code of 1986, as 

24 amended, shall not apply to bonds issued25 (1) by an authority created by statute of the 

26 Virgin Islands legislature, the proceeds of which will 

HR 3721 m 
52 

20 

1 be used to advance refund certain bonds issued by 

2 such authority on ,July 8, 1992; or 

3 (2) by an authority created by statute of the 

4 Virgin Islands legislature, the proceeds of which will 

5 be used to advance refund certain bonds issued by 

6 such authority on November 3, 1994. 

7 SEC. 705. APPLICATION OF AMENDMENTS IN SECTIONS 703 

8 AND 704. 

9 The amendments made by sections 703 and 704 shall 

10 apply to obligations issued on or after the date of enact11 ment of this title. 

12 TITLE VIII. COMMISSION ON THE EC0-

13 NOMIC FUTURE OF THE VIRGIN IS14 LANDS 

15 SEC. 801. ESTABLISHMENT AND MEMBERSHIP. 

16 (a) There is hereby established a Commission on the 

17 Economic Future of the Virgin Islands (the "Commis18 sion"). The Commission shall consist of six members ap19 pointed by the President, two of whom shall be selected 

20 from nominations made by the Governor of the Virgin Is21 lands. The President shall designate one of the members 

22 of the Commission to be Chairman. 

23 (b) In addition to the six members appointed under 

24 paragraph (1), the Secretary of the Interior shall be an 

25 ex-officio member of the Commission. 

HR 3721 m 
53 

21 

1 (c) Members of the Commission appointed by the 

2 President shall be persons who by virtue of their back3 ground and experience are particularly suited to contrib4 ute to achievement of the purposes of the Commission. 

5 (d) Members of the Commission shall serve without 

6 compensation, but shall be reimbursed for travel, subsist7 ence and other necessary expenses incurred by them in 

8 the performance of their duties. 

9 (e) Any vacancy in the Commission shall be filled in 

10 the same manner as the original appointment was made. 

11 SEC. 802. PURPOSE AND REPORT. 

12 (a) The purpose of the Commission is to make rec13 ommendations to the President and,Congress on the poli14 cies and programs necessary to provide for a secure and 

15 self-sustaining future for the local economy of the Virgin 

16 Islands through 2020 and on the role of the Federal Gov17 ernment in providing for that future. In developing rec18 ommendations, the Commission shall19 (1) solicit information and advice from persons 

20 and entities that the Commission determines have 

21 expertise to assist the Commission in its work; 

22 (2) examine and analyze historical data since 

23 1970 on expenditures for infrastructure and serv24 ices; 

HR s121 m 
, 54 

22 

(3) analyze the sources of funds for such ex2 penditures; 

3 ( 4) assemble relevant demographic and eco4 nomic data, including trends and projects for the fu5 ture; and 

6 ( 5) estimate future needs of the Virgin Islands, 

7 including needs for capital improvements, edu8 cational needs and social, health and environmental 

9 requirements. 

10 (b) The recommendations of the Commission shall be 

11 transmitted to the President, the Committee on Energy 

12 and Natural Resources of the United States Senate and 

13 the Committee on Resources of the United States House 

14 of Representatives no later than December 1, 1997. The 

15 recommendations shall be accompanied by a report that 

16 sets forth the basis for the recommendations and includes 

17 an analysis of the capability of the Virgin Islands to meet 

18 projected needs based on reasonable alternative economic, 

19 political and social conditions in the Caribbean, including 

20 the opening in the near future of Cuba to trade, tourism 

21 and development. 

22 SEC. 803. POWERS. 

23 (a) The Commission mayHR 3721 1H 
55 

23 

1 ( 1) hold such hearings, sit and act at such 

2 times and places, take such testimony and receive 

3 such evidence as it may deem advisable; 

4 (2) use the United States mail in the same 

5 manner and upon the same conditions as other de6 partments and agencies of the United States; 

7 (3) enter into contracts or agreements for stud8 ies and surveys with public and private organizations 

9 and transfer funds to Federal agencies to carry out 

10 such aspects of the Commission's functions as the 

11 Commission determines can best be carried out in 

12 such manner; and 

13 ( 4) incur such necessary expenses and exercise 

14 such other powers as are consistent with and reasonIS ably required to perform its functions. 

16 (b) The Secretary of the Interior shall provide such 

17 office space, furnishings and equipment as may be re18 quired to enable the Commission to perform its functions. 

19 The Secretary shall also furnish the Commission with such 

20 staff, including clerical support, as the Commission may 

21 require and shall provide to the Commission financial and 

22 administrative services, including those relating to budget23 ing, accounting, financial reporting, personnel and pro24 curement. 

HR 3721 m 
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24 

1 (c) The President, upon request of the Commission, 

2 may direct the head of any Federal agency or department 

3 to assist the Commission and if so directed such head 

4 shall5 ( 1) furnish the Commission to the extent per6 mitted by law and within available appropriations 

7 such information as may be necessary for carrying 

8 out the functions of the Commission and as may be 

9 available to or procurable by such department or 

10 agency; and 

11 (2) detail to temporary duty with the Commis12 sion on a reimbursable basis such personnel within 

13 his administrative jurisdiction as the Commission 

14 may need or believe to be useful for carrying out its 

15 functions, each such detail to be without loss of se16 niority, pay or other employee status. 

17 SEC. 804. CHAIRMAN. 

18 Subject to general policies that the Commission may 

19 adopt, the Chairman of the Commission shall be the chief 

20 executive officer of the Commission and shall exercise its 

21 executive and administrative powers. The Chairman may 

22 make such provisions as he may deem appropriate author23 izing the performance of his executive and administrative 

24 functions by the staff of the Commission. 

HR 3721 m 
57 

25 

1 SEC. 805. APPROPRIATIONS. 

2 There are authorized to be appropriated such sums 

3 as may be necessary to carry out the purposes of this sec4 tion. 

5 SEC. 806. TERMINATION. 

6 The Commission shall terminate three months after 

7 the transmission of the report and recommendations under 

8 subsection (b)(2). 

0 

HR 3721 IH 
58 

STATEMENT OF ALLEN P. STAYMAN, DIRECTOR, OFFICE OF INSULAR AFFAIRS, 

DEPARTMENT OF THE INTERIOR, BEFORE THE HOUSE SUBCOMMITTEE ON NATIVE 

AMERICAN AND INSULAR AFFAIRS, REGARDING WATER ISLAND, ELECTION OF 

GUAM'S ATTORNEY GENERAL, AND H.R . 3721, A BILL TO ESTABLISH THE 

OMNIBUS TERRITORIES ACT, JULY 24, 1996 

Mr. Chairman and membe rs of the Subcommittee on Native American and 

Insular Affairs, I am pleased to appear before you for this 

oversight hearing on Water I s land , election of Guam's Attorney General, and H.R . 3721, the Omnibus Territories Act o f 1996 . 

WATER ISLAND TRANSFER 

Mr. Chairman, the Department of the Interior has been the owner and 

lessor of Water Island, United States Virgin Islands, for more than 

forty years. Since before the expiration of the master lease in 

1992 , the Department has sought to dispose of its interest in the 

island. The process has been long and arduous -- involving the 

master lessee, residential sublessees, Sprat Bay Corporation, the 

Government of the Virgin Islands, and the courts. We are confident, however, that the process is coming to a close, with a fair and reasonable result. 

On May 23, 1996, in letters to Virgin Islands Governor, Roy L. 

Schneider, Water Island sublessees and other interested parties, the Department outlined its plan for disposing of its interest in 

Water Island. 

o Each sublessee will have an opportunity to purchase fee 

simple title to the subleased land on which his or her 

Water Island residence is located for $17,500 an acre. 

o The Government of the Virgin Islands will be given 

fee simple title to non-subleased portions of Water 

Island for public purposes in exchange for 

assumption of certain responsibilities· by the 

Government of the Virgin Islands including the 

provision of public municipal services, cleanup from storm damage, and dock and ferry services . 

In resolution of a suit by the master lessee . against the 

Department, before Judge Roger Andewelt, United States Court of 
59 

2 

Federal Claims, the pa r ties s ubmitted a f ormal settlement agreement 

by which the Department will pay the master lessee $7. 5 million for 

the lessee's possessory i nterest in Water Island. Rev ised 

settlement stipulations are e xpe cted to become effective o n August 

2, 199 6 , in order t o give interested parties an opportunity to seek 

an injunc tion against t he master lease holder to prevent a transfer 

of certain funds. 

With tr.e J udge ' s expected approval o f the settlement on August 2, 

19 96, we anticipate moving forward with formal offers to the 

sublessees for sale to them of their respective parcels of land, 

and the transfer to the Government of the Virgin Islands o f the 

remaining l and on the island. We believe that t his l ong Water 

Island transfer process is drawing to a close. We are proud of the 

fair and r e asonable result that will benefit the sublessees, the 

Government o f the Virgin Islands, and the Federal government. 

GUAM ATTORNEY GENERAL 

The Legislature of Guam in Resolution No. 433 (LS) r e quests that 

the Organic Act of Guam be amended to require election of the 

Attorney General of Guam. At present, the Attorney General is a ppointed by and serves at the pleasure of the Governor of Guam. 

I be lieve that the issue o f appointment or election of the Attorney 

General is a local self- government issue, which should be decided 

i n Guam. We have been given the opinion o f the legislature. The 

Subcommittee may wish to solicit the opinion o f the Governor a nd 

Judiciary, or even the people o f Guam . 

Because thi s is strictly a self-government issue, the Department of 

the Interior takes no position on the matter, at this time. We 

would, however, likely support a· position based on consensus from 

Guam . 

H.R. 3721 -- OMNIBUS TERRITORIES ACT OF 1996 

Title I -- Delegate Balloting 

Title I would repeal the requirement that a separate ballot be used 

in e lections of delegates from Guam and the Virgin Islands. The 

rationale for this title is that the requirement of a separate 

ballot impedes voting and tabulation efficiency. The 

Administration agrees .and has no objection to title I . 

It should be noted , however, that title I deals only with the 

ballots for delegates from Guam and the Virgin Islands. The 

election of the delegate from American Samoa is treated separately 

in Public Law 95-556 (48 U. S.C. 1731, 1732). Title I would not 

affect American Samoa's ballot for delegate, which would remain 

separate from other ballots in the territory. 
60 

Title II -- American Samoa Study Commission 

Title II would establ ish a f i ve -member American Samo a study 

commission to conduct a comprehensive study of Ameri can Samoa's 

po litical status. The proposed commission would ( 1 ) study and 

evaluate all factors that l ed to American Samoa's political 

re l at i onship wi t h t he Un ited States, (2 ) document the nature o f 

that relationship, (3 ) repo rt on alt ernative political 

relat i onship s such as independence, commonwealth, free association 

and •covenant," (4 ) document whether or not the deeds o f cession 

created a trust relationship, (5) repo rt on whether or not a single 

docume nt is needed to set f orth American Samoa's po litical 

re l ationship with the Uni ted States, (6) study and evaluate the 

effect o f American Samoa's political status on the eco nomi c a nd 

social needs of American Samoa a nd its residents, and (7) study and 

report on whether or not the instruments of cessio n are treaties or 

deeds, and the recog nition given t hem in international law . 

While Administrati on policy dis courages the establishment cf 

commissions, I would l ike to address issues relating more direc tly 

to political sta tus. 

First , it is unclear what the ult i mate purpose of the commission' s activities would be . Therefore, it is difficult to determine the 

appropriateness and extent o f the Federal role in such a 

commission. 

Second , the commission's duties suggest a need f or change in 

Ame rican Samoa 's pol itical status . I believe that initial 

discussions on political status should be undertaken at the local 

level, in American Samoa, and that the Federal government shou.ld 

become involved only after some local consensus has been 

established. 

For example, both Guam and the Virgin islands established l ocal 

status commissions to examine such questions . In Guam's case, its 

locally established commission process led to a local plebiscite 

and a petition to the Congress. In the Virgin Islands' case , the 

l ocally established commission developed a plan and he ld a plebiscite. However, because no local consensus emerged from the 

electorate, the process ended before Federal involvement. 

I recommend that any such status evaluation process be initiated 

locally, in American Samoa, and that Federal involvement be delayed 

until there is a local consensus for change . 

Title III -- American Samoa Development Act of 1995 

Title III includes findings that laud the benefits of mult i-year 

funding, and a proposal authorizing up to $10 million a year for 

fiscal years 1998 through 2003 for capital development. However, 

no a dditio nal language is included that would guarantee that funds 
61 

4 

will actually be appropriated for American Samoa capital 

infrastructure in any of the years 1998 through 2003. Thus, while 

the authorization is multi-year, appropriations need not be. Since 

1929, American Samoa has received Federal funds under an unlimited 

and on-going authorization. A second, and limiting, authorization 

is unnecessary. 

Of greater significance is the fact that a true multi-year funding 

source was identified by the Department and became law earlier this 

year as section 118 of Public Law 104-134. Section 118 reallocates Northern Mariana Islands mandatory Covenant grants as a 

source of multi-year capital funding for all territories. While 

this act does not earmark specific amounts for American Samoa, it 

is anticipated that American Samoa, the territory with the greatest 

need, will receive the largest share of the Covenant funds 

available for capital infrastructure. The Administration, in 

response to a letter from Delegate Faleomavaega, estimated that 

American Samoa will receive a minimum of $9.1 million annually from 

this guaranteed source, beginning with fiscal year 1998. 

Because this law is already on the books, the Administration 

opposes enactment of title III as unnecessary. 

Title IV -- Insular Areas Consolidation Act 

Under title IV (which includes several technical errors), Howland, 

Baker, and Jarvis islands, in the Pacific, would become a part of 

the territory of American Samoa. They are currently under the 

jurisdiction of the Department of the Interior. The bill, in 

sections 402 (c) and 404, would recognize and preserve existing 

Federal uses, ownership, and management, and other current uses of 

these islands when transferred. 

Last year, a hearing was held on the Insular Areas Consolidation 

Act contained in title III of H.R. 602, which would transfe:r 

numerous Pacific islands, including Howland, Baker, and Jarvis to 

the state of Hawaii. Additionally, on June 25, 1996., Hawaii 

Senator Daniel Akaka introduced a similar bill. The Department of 

the Interior supported enactment of title III of H.R. 602, 

conditioned on a clarification that territorial waters and the 

jurisdiction of states extend only three miles from the state's 

fastland baseline. 

The proposal before us today, favoring American Samoa, · is in 

conflict with H.R. 602, which would favor Hawaii. The Department's 

primary concern is for the protection of existing Federal interests 

in these islands and the surrounding sea, not which political 

jurisdiction would receive these islands. Recognizing that the 

Constitution, in Article IV, section 3 clause 2, gives the Congress 

plenary authority over the territory of the United States, we 

believe that the Congress is the proper institution for determining 

the disposition of Howland, Baker, and Jarvis, as well as other 
62 

5 

American Pacific isl ands. I f and when such a determination is 

made, the Administration requests that attention be paid to the 

v iews expressed in departmental testimony on H.R. 602 regarding the 

territorial sea and exclusive economic zone, and that any 

legislation should be amended accordingly. 

Title V -- American Samoa Capital Infrastructure Fund 

Funds appropriated under the Commonwealth of the Northern Mariana 

Islands (CNMI ) Covenant were subject to the second sentence of 

section 703 (a) of the Covenant which states: 

Funds provided under Sectior. 702 will be considered to be 

local revenues o f the Government of the Northern Mariana 

Islands when used as the local share required to obtain 

federal programs and services. 

Section 118 of Public Law 104-134 shifts a major portion of this 

CNMI funding to ocher territories. The amendment in title V is 

intended to allow other territorial recipients of the redirected 

Covenant funds to utilize such funds as the local share for the 

purposes of federal program and services. 

The Administration endorses the concept of title V, clarification 

of federal program matching. We do suggest, however, that, to 

avoid possible confusion, the provision be re-drafted to conform to 

language adopted earlier this month by the Senate Committee on 

Appropriations. (See attachment. ) 

Title VI -- Guam Land Return Act 

Section 602 of title VI, as currently drafted, authorizes Guam to 

acquire federal excess lands on the island at no cost and ahead of 

Federal agencies. Such land acquisition is conditioned on Guam 

exercising its option within 180 days after notice by the General 

Services Administration that the property is excess to the needs of 

a transferring Federal agency. In essence, section 602 provides 

Guam with the right of first refusal on all Federal excess lands 

situated on Guam . 

Interior Concerns 

The Department has serious concerns with section 602 as currently 

drafted. By directing the Federal government to automatically 

transfer all right, title and interest in Federal excess lands to 

the Government of Guam, the Congress in section 602 would waive 

provisions of the National Environmental Policy Act (NEPA) and the 

Endangered Species Act, as well as other Federal laws. The 
63 

6 

Department of Defense and other agencies have additional concerns. Section 602 also makes no provision for habitat conservation and 

endangered species protection in the event of outright transfer to 

the Government of Guam. Finally, section 602 would contravene the 

terms of the settlement agreement that established the overlay 

refuge in lieu of designation of critical habitat for a number of 

threatened and endangered species. For these reasons, we strongly 

oppose section 602, as introduced. 

A Break with the Past --

The Orange County Experience Can Be Guam's Experience 

The Administration believes that economic development and habitat 

protection are not mutually exclusive. This Administration has 

worked hard with states and private landowners to find innovative 

solutions that allow development activities while protecting fish 

and wildlife, including threatened and endangered species. Guam 

can benefit from these innovative approaches initiated by this 

Administration. 

Orange County, California provides a recent demonstration of the 

new attitude and effective approach to reconciling development and 

habitat preservation. The Irvine Company in Orange County and the 

California Resources Agency met with Secretary Babbitt in 1993 to 

aid species preservation and give certainty to real estate 

developers. This effort led to the completion of a habitat 

conservation plan developed under the Endangered Species Act that 

involved Federal, state, county, and municipal governments, private 

land developers, and other property owners. The result was a 

consensus process in Orange County to protect the overall ecosystem 

for a number of species by setting aside habitat in one place in 

return for permission to develop and build in another. This type 

of innovative and consensus building approach could serve as a positive example to those who are interested in protecting the 

natural heritage of Guam while seeking economic opportunities. 

The Future -- Federal Land Return and Reconciliation 

The Orange County Habitat Conservation Plan was developec under 

sections lO(a) and 4(d) of the Endangered Species Act and deals 

with private lands. In Guam, a habitat conservation plan on 

private and Guam owned lands could be merged with a habitat 

protection agreement on Federal lands to provide protection for all 

threatened or endangered species on Guam. The salient point is 

attitude: the Department of the Interior seeks a reconciliation 

that meets both development and habitat protection needs. 

The Department will work hard with the military, Government of 

Guam, and private interests to develop innovative measures for 

protecting threatened and endangered species at the same time as we 

seek to protect the significant interests of Guam in future 

unneeded military lands. 
64 

7 

The Department is also prepared to enter into discussions tc 

resolve these concerns based on two principles. First, any 

unneeded Federal lands that are outside the boundary of the Guam 

National Wildlife Refuge and overlay lands could be transferred to 

the Government of Guam, provided that such transfers are in 

accordance with National Environmental Policy Act, and other 

Federal laws. 

Second, a process could be established to develop a habitat 

protection agreement, in conjunction with the Government of Guam 

the Department of Defense, and private interests, that could (1) 

maximize the· amount of unneeded Federal land to go to the 

Government of Guam, and (2) provide adequate protection to 

threatened and endangered species and their habitat in accordance 

with · the Endangered Species Act. If the parties were to approve 

such a habitat protection agreement, then lands would be 

transferred, owned, and managed in accordance with the terms and 

conditions of such agreement. With such an agreement in place, it 

may be possib.le to transfer unneeded Federal land to Guam without 

amending the Federal Property and Administrative Services Act of 

1949. 

This planning approach would allow all three parties to work 

together to determine, after considering all lands on Guam, 

adequate habitat needed to meet threatened and endangered species 

requirements. It is possible that private lands, Government o f 

Guam lands with compa tible us es, and military lands not expected to 

become excess or surplus may meet the habitat needs of many 

endangered species. Other lands could then be freed for other 

uses . 

We look to Guam for an expression of interest in developing a habitat conservation plan for private and Guam owned lands in 

conjunction with a habitat conservation agreement on Federal lands. 

Brooks Amendment 

Section 603 would repeal section 818(b) (2) of Public Law 96-418, 

which requires the repatriation of profits to the Federal 

government that are attributable to lands donated by the Federal 

government to the Government of Guam. Because profits go to the 

Federal government, there is little incentive for Guam to develop 

the lands to their highest potential. The repealer in section 603 

would allow the Government of Guam to benefit from the efforts it 

expends on developing land transferred from the Federal government. 

The Administration supports enactment of section 603 . 
65 

8 

Title VII 

Amendments to the Revised Organic Act of the Virgin Islands 

Subsection (a) of title VII is intended to deal with the transfer 

of the authority of the Governor of the Virgin Islands when the 

Governor is absent from the Virgin Islands. My testimony last 

month on section 2 of H.R. 3634 dealt with the same subject but 

included the lieutenant governor. I supported enactment of the 

H.R. 3634 provision. I recommend that the temporary absence issue 

can best be resolved by deleting sections 701 and 702 of H.R. 3721 

and inserting in lieu thereof section 2 of H.R. 3634. 

Sections 703 through 705 deal with the bonding authority of the 

Virgin Islands when its bonds are secured by the cover over of 

Federal excise taxes on rum. The provisions would allow the Virgin 

Islands to issue parity debt, rather than priority debt. Current 

law gives greater protection to earlier issuances of debt over 

later issuances, with the result that later debt is subject to 

increased interest and fees. We understand that most local 

jurisdictions now issue parity debt instruments. The bonding 

provisions of title VII would place the Virgin islands on a footing 

similar to other communities. 

The Administration has no objection to the enactment of sections 

703 and 705 of title VII. However, section 704 would amend the 

Internal Revenue Code to provide special relief for the Virgin 

Islands with regard to two outstanding tax-exempt bond issues. The 

provision would allow these two bond issues to be advance refunded, 

essentially doubling the Federal tax subsidy for each of the two 

bond issues. We object to both the special relief character of the 

provision, and to the increased Federal tax subsidy, which would 

have a paygo impact. We note that the comparable bonding provision 

in H.R. 3634 does not contain the defeasance provision of section 

704 of H.R. 3761. We recommend that section 704 of title VII be 

omitted. 

Title VIII 

Commission on the Economic Future of the Virgin Islands 

Title VIII would establish a six-member commission to evaluate 

future economic options for the Virgin Islands. One concern is the 

possibility that United States restriction on American tourism to 

Cuba will eventually be lifted. A re-opening of American tourism 

to Cuba would result in stiff competition for the Virgin Islands' 

tourism industry. 

The Administration supports the objective of title VIII, which is 

to analyze and plan for the future economic needs of the Virgin 

Islands. The thrust of Administration policy on good government is 

generally against the creation of new commissions. 
66 

9 

Also, th~re is a question of timing and funds. We believe that it 

would be difficult, if not impossible, to establish a commission 

and produce the desired recommendations by the December 31, 1997 

deadline provided in the bill . Alternatively, we recommend that 

the Office of Insular Affairs and Governor Schneider explore the 

possibilities of an agreement for technical assistance to achieve 

t he purposes of title VIII . We believe that this approach would be 

faster, less expensive, and could utilize available funds. We look 

forward to working with interested members of Congress and Governor 

Schneider regarding the development of a plan of action for this 

important effort . 

Mr . Chairman , we applaud the diligence of your subcommittee in 

examining i nsular issues. We look forward to enactment of 

legislation that will benefit the islands . 
67 

Attachment 

SEC. 502. COVENANT AMENDMENT. 

In the second sentence of subsection (a) of section 703 of the 

Northern Mariana Islands Covenant contained in section 1 of Public 

Law 94-241, strike the words "of the Government of the Northern 

Mariana Islands". 
68 

INCLUDED IN THE OVERSIGHT PLAN 

OF THE COMMITTEE ON RESOURCES 

Approved February 8, 1995 

DISPOSAL OF WATER ISLAND IN THE VIRGIN ISLANDS 

The fourth largest island in the Virgin Islands was leased by the 

Department ofthe Interior to an individual in 1951, who subleased 

parcels. The lease expired in 1991 and the Bush Administration 

consummated agreements of sale with the various homeowners. The 

Clinton Administration has sought to renegotiate the agreements of sale, 

incurring considerable time and expense to all parties. The 

Subcommittee views Water Island as one more example of residual 

matters which should have been resolved by the Department years ago 

and warrants Federal oversight to bring matter to closure. 
69 

----.-...., ..... 

A R I k 

I 

B E A N s E A 
70 

Written stateaent ot 

A. P. LOTALI 

Before the 

HOOSE COMMITTEE ON RESOURCES 

SOBCOMMITTEB OH NATIVE AMERICAN AKD INSULAR AFFAIRS 

on H.R. 3721 

THE OMHIBOS TERRITORIES ACT OF 1996 

July 24, 1996 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to have the opportunity to submit this written 

statement in support of Titles II, III, and V of H.R. 3721, the 

Omnibus Territories Act of 1996, which pertain to American Samoa. 

I regret that prior commitments prevent me from testifying in 

person at the hearing, and I ask that this statement be placed in 

the hearing record as the official position of the American Samoa 

Government. 

I commend Delegate Eni F. H. Faleomavaega for introducing the Omnibus Territories Act, which contains several initiatives 

of potential benefit to our islands. I also want to thank 

Chairman Elton Gallegly for scheduling this hearing so that the 

Subcommittee can focus on the present and future needs of 

American Samoa. 

In general, the American samoa Government supports Titles 

II, III, and V of the proposed Omnibus Territories Act, all of 

which are directed at our territory. In this statement, we will 

explain the reasons for our support and will offer some modest 

suggestions for improvement of the bill. 

TITLE II 

AMERICAN SAMOA STODY COMMISSION ACT 

Title II of the bill would create the American Samoa Study Commission, consisting of three members appointed by the 

Secretary of the Interior and two members appointed respectively by the Speaker of the u.s. House of Representatives and the 

President of the u.s. Senate. Two of the members appointed by the Secretary ot the Interior would be selected from among candidates nominated respectively by the Governor and Legislature of American Samoa. 

The Commission would be directed to study and report on the 

historical and legal basis of American Samoa's relationship with 

the United States and to make recommendations on options for 

future political status. Public hearings would be held on each 
71 

of our major islands and at three locations in the United States 

where significant numbers of American Samoans reside. The 

Commission would submit a report to the President and the 

Congress containing its findings, conclusions, and 

recommendations. 

We believe the work of the Commission would advance the 

understanding of our political history and our options for the 

future, both among our own people and among policymakers in the 

Federal Government. The Commission's efforts would benefit from 

the conduct of local public hearings in our islands and in the 

American Samoan communities in the United States. The 

composition of the Commission is properly balanced to reflect 

both local and federal interests. 

As we interpret Title II, the conclusions and 

recommendations of the Commission would be entirely advisory and 

would not be binding on American Samoa or on the Federal 

Government. To avoid any misunderstanding, we suggest that the 

non-binding character of the commission's report be expressly 

stated in the text of the bill or in the Committee report which 

accompanies the bill. 

TITLE III 

AMERICAN SAMOA ECONOMIC DEVELOPMENT ACT 

Title III of the bill would authorize the appropriation 

through the Secretary of the Interior of $10 million per year over a six-year period for the construction and repair of capital 

assets of American Samoa. We support this much-needed authority 

for a multi-year program to address the growing infrastructure 

deficiency in our islands. To make Title III even more effective, we suggest extending the effort to ten years by 

authorizing the appropriation of $10 million per year through 

fiscal year 1997 . 

The construction and repair effort envisioned by Title III 

is consistent with my recent letter to President Clinton 

proposing a major Rehabilitation Program for American Samoa. 

Such a program is overdue because our islands are suffering from a decade of relative neglect by the United States. Over the past 

ten years, annual u.s. appropriations have steadily declined 

while our population has doubled and our needs for basic 

facilities have multiplied. 

The decline in U.S. support has been exacerbated by three 

devastating hurricanes in the short span of eight years. These 

storms, each more destructive than any in the preceding 100 

years, literally flattened our islands three times. Our 

hospital, school buildings, and road system were severely 

damaged, and many essential facilities have not been adequately 

repaired or rebuilt. 

- 2 -
72 

A ten-year program of construction and repair would address 

current needs while laying a foundation for greater selfsufficiency in the future. We are pleased to report that a new garment manufacturing project has recently begun production in 

American Samoa, providing more than 400 new jobs in the local 

economy. This represents the first new major export industry in our territory since the 1960's. The multi-year development 

program contemplated by Title III of the bill could provide the 

basic modern infrastructure necessary to attract and sustain more private industry in American Samoa. 

TITLE V 

AMERICAN SAMOA CAPITAL IHFRASTROCTURE FOND 

Title v of the bill clarifies that funds provided to the 

insular areas from the Capital Infrastructure Fund will be 

considered to be local revenues when used as the local share 

required to obtain federal programs and services. In the FY96 

Interior Appropriation, Congress created the multi-year Capital 

Infrastructure Fund for the insular areas by redirecting funds 

previously appropriated for another purpose. The redirected 

funds had been eligible to serve as the local share for federal 

matching requirements, but this matching eligibility was not 

specifically carried over to the Capital Infrastructure Fund. 

The clarification in Title V will maximize the ability to 

develop necessary infrastructure with the limited amounts 

available from the Capital Infrastructure Fund. It appears that 

the clarification is consistent with the original congressional 

intent. In this regard, we understand that the Senate Committee on Appropriations has included a similar clarification in its 

version of the Interior Appropriation bill for FY97 (H.R. 3662). 

CONCLUSION 

In conclusion, I want to restate our support for Titles II, 

III, and V of H.R. 3721 and our appreciation to Delegate 

Faleomavaega and Chairman Gallegly for their interest and for 

their efforts. We respectfully urge the Subcommittee to approve 

these titles and to give favorable consideration to the modest 

improvements which we have proposed. 

- 3 -
73 

SUPPLEMENTARY SHEET 

Bouse committee on Resources 

Subcoamittee on Bative American ' Insular Affairs 

H.R. 3721 

omnibus Territories Act of 1996 

July 24, 1996 

Witness: Honorable A. P. Lutali 

Governor of American Samoa 

Address: Office of the Governor 

Pago Pago, American Samoa 96799 

Telephone: 011-684-633-4116 

Fax: 011-684-633-2269 

Topical Outline: 

1. The American Samoa Study Commission Act (Title II) should be adopted with suggested clarification. 

2. The American Samoa Economic Development Act of 1995 

(Title III) should be adopted with suggested extension. 

3. The American Samoa Capital Infrastructure Fund (Title V) should be adopted as clarification of congressional intent. 
74 

TESTit--!ONY 

BEFORE THE HOUSE OF REPRESENTRTIUES 

SUBCOMMITIEE ON NRTIUE AMERICAN C. INSULAR AFFAIRS 

7/24/96 

BY 

SENATOR Ell ZRBETH BARREll -RN!JERSON 

23RD GUAM lEG I SLRTURE 

Mr. Chairman and Members of the Committee: 

Hafa Rdai and Good Afternoon! I appear before this Committee 

to testify on Resolution #433, as unanimously adopted by the 23rd 

Guam Legislature requesting a Congressional amendment to the 

Organic Ret of Guam authorizing the Territory to elect its Attorney 

General. Attached to this testimony is a section by section analysis for 

use by the Committee. 

May I begin by thanking the Committee for scheduling 

Resolution #433 for public hearing. The Guam Legislature recognizes 

the tremendous workload of the Subcommittee. We greatly appreciate 

the Subcommittee's early attention. 

The Attorney General of Guam is a position created by local 

statute (5 Guam Code Annotated §30 1 0 1), appointed by the Gouernor 

and confirmed by the Guam Legislature. The Attorney General is the 

head of the Department of Law hauing jurisdiction ouer both ciuil and 

criminal prosecution, and is the chief legal officer to the gouernment 

of Guam. It is a cabinet leuel position, the head of an eKecutiue line 

agency, and functions completely under the puruiew of the Gouernor 

of Guam in accordance with the Gouernor's Organic Ret authority ouer 

all line agencies in the gouernment of Guam. (48 U.S.C. § 1421) 

Why an elected Attorney General? Empowering the people of the 

Territory to elect their Attorney General is a statement of greater 

self-gouernment on the part of the people of Guam. Self-gouernment 

is not just a concept inuolued in a political status change. It can be a 
75 

realistic expression of a people to decide through the power of uoting 

how It seeks to gouetn itself. Uoting for the chief legal officer of the 

Territory is a realistic step toward the goal of greater selfgouernment in much the same manner that uoting for the Gouernor is 

an eKpression of self-youernment. Electing an Attorney General is not 

an unrealistic concept which seelcs to create new legal theories of 

self-gouernment rather, it is a concept that is steep in legal history 

euoluing from English Rule where the Attorney General was appointed 

by the King, to the Jaclcsonian Era which established the rule of direct 

election of state officials. Today 46 states elect their Attorney 

General under constitutional guidelines. 

The people of Guam eKpect their Attorney General to protect 

their interest aboue all else. An appointed Attorney General, 

unfortunately, must respond to a great eKtent to the concerns of the 

Gouernor. 

The Attorney General of Guam has historically suffered from this 

dilemma. The people of Guam are franlcly tired of the constant 

criticisms focused on the uery position which the people demand the 

highest degree of legal integrity. 

As Attorney General of Guam from 1987 to 1994, I serued in an 

appointed capacity. No better example of a conflict of interest 

between an appointed Attorney General, and the Gouernor of Guam 

can be illustrated than the enactment by Gouernor Joseph F. Ada of 

the anti-abortion law ouer my stern aduice and official Opinion that 

the legislation was unconstitutional under Roe. As an elected Attorney 

General I would not haue hesitated to immediately sue the Gouernor 

to enjoin the law. As an appointed Attorney General I was placed in an 

unbearable conflict. The law fortunately was quickly challenge in a 

1983 Jane Doe law suit. The Attorney General' s Office was conflicted 

from representing the Gouernor based upon my Opinion, and 

therefore, outside counsel was hired to defend the Gouernor. Two 

years later the Eourt of Appeals for the Ninth Eircuit held the law was 

unconstitutional. The gouernment was ordered to pay treble 

attorneys fees to the plaintiff's counsel. The people of Guam should 

not be eKpected to pay for both the challenge and defense of any 

litigation so clearly unconstitutional on its face. An elected Attorney 

General would assure that such a case does not reoccur. 

Finally, a companion measure, Bill #571, introduced by Senator 

Uincente C. Pangelinan, proposes to enact a statute calling for an 

2 
76 

elected Rttorney General upon amendment of the Organic Ret. This 

measure has been reported out fauorably to pass by the Committee 

on Judiciary, Criminal Justice &- Enuironmental Rffairs. Each of these 

pieces of legislation is an unequiuocal statement of bipartisan support 

for an elected Rttorney General. Rttached to this testimony are 

articles and news releases also suggesting strong community support. 

We urge the Subcommittee to reuiew carefully Resolution #433, 

and considered its ouerwhelming benefit to the Territory's growth and 

self-gouernment. This is a "can-do" issue for the people of Guam. 

Respectfully submitted 

6¥)4h!ll~ Ell ZRBETH BRRRETI -RNDERSDN 

Rttachments: 
77 

SECTION BY SECTION 

SECTION 1. 

§ 1422. This Section of the Organic Ret establishes the "Constitutional" 

positions within the Executiue Branch. The amendment adds the 

position of Attorney General to that of the Gouernor and Lieutenant 

Gouernor. It establishes the qualifications for anyone seel<ing the 

position of Attorney General. It further exempts the Attorney 

General's Office from budgetary management of the Gouernor, which 

is important to preserue among co-equal elected offices. The Section 

specifically creates the Office of the Attorney General, administered 

by an elected Attorney General, and further delineates the powers 

and duties of that position. 

The Guam Legislature specifically amended the Resolution during 

debate on the floor to clearly and unequiuocally prouide that the 

position be elected. This was done for seueral reasons: to auoid 

potential litigation as to the intent of Congress to create a co- equal 

executiue branch position, and to preuent future legislatiue repeal. 

The Section prouides for an impeachment process by referendum 

in the same manner as the Gouernor and Lieutenant Gouernor. It also 

prouides for filing of a uacancy in the position due to a temporary or 

permanent absence of the incumbent. 

§1422(c). This is one of the most critical prouisions dealing with the 

Gouernor's power ouer the Executiue Branch. It is also the most 

litigated prouision of the Organic Ret. Resolution #433 adds an 

amendment to the sentence dealing with the establishment of a merit 

system for the gouernment of Guam. In Haeuser u. Oeoartment of Law 

(Court of Appeals for the Ninth Circuit C.R. 94-16987; argued May 9, 

1996) the Court of Appeals questioned the gouernment regarding the 

intent of Congress in adopting that certain phrase "as far as 

practicable" in reference to the creation of a merit system by the 

local Legislature. It is not unusual that the term "as far as practical" 

as opposed to "as far as practicable" is used in Congressional 

drafting. There being no legislatiue history regarding the intent of 

Congress in the use of the term, it was left to the parties to refer to 

4 
78 

old case law. The Court has not yet rendered its decision, howeuer, it 

would not be inappropriate for Congress to better clarify that the 

legislature be empowered to create a merit system gouerning the 

selection, appointment and remoual of employees therein, and to 

further create such other position(s) not intended to be within the 

merit system. (Rppellant/Rppellee Briefs nuailable) 

SECTION 2. 

§ 1421 g(c). This Section repeals the authority to create an Office of the 

Public Prosecutor. It was intended that this section would allow for 

the creation of an elected Public Prosecutor. The Section, howeuer, 

did not specifically prouide for election, and it conflicted with the 

liouernor's authority under §1422 ouer heads of all agencies. The 

earlier amendments to prouide for an elected Attorney General With 

jurisdiction ouer criminal cases moots the issue of a Public 

Prosecutor. The Public Prosecutor should therefore be repealed. 
79 
80 
81 

Should we push to elect 

Guam's attorney Recent 

general? c:ontro.....,....,.. jJolltlcal jn~ jn the aUamey .....,...r. aftiCle haa 

prnmpl.ed m""y -le ID queotion Ita impoutiallty and who lhio entity really wm.. 

lOr. Tft;o Jateotevcmti'BCIIIIaolberoiWatione, the _,_ In a )a.,....it llpinBt. lbo DireciDr oudl •the 

ol the -..ey...,.nJ 

~ ol 

~ 

&!ucalloo\, 

where the ofllae appearo ID be~ an atlome7 liorlhe ~ lhan "" ad.-le 

for aU the people. NO<It att«ney goncrala ...,..the nation...., el-.1 by lhe M- ers instead of being appolnCecl by the~. a i&lhe cat111aa Guam. 

A unanimows rcoolution peaOed laat month by the Guam ~ pel.iUOfl8 

CollJ!I""'S ID amend the Organic Act ID allow Guam ID eled. the altomey gmeral. J\n. 

othe< bill, Utat complimeDia this rcoolutioo, ill pellcling. 'l1da ....,k Sen. F ..l!oehelh B....-Andenlon will meet with the o-CammiUee on NaUvc Ameriaon and~ All"aint in Wllllhinl"'<> tom..-this laue. Sn our opinion topic for next Sunday ~ 

di8cuaM: conUnued .,....._about polltiealla~ clctnod from 

the attorney~·· ert!dibllity? Do ]'OU bellewct .. t~t, .-... attDmey geoenll would pevvlcle • beUfto -"""'to the ctKt.... (/1 Guam? 

&nd yourUJOoghto- in about. 500-.b- tn UoePrJci/it!.~ Na.a, PacH'oeN"""' 

Building in.Awm•. III"W them to(67l) 477-3079. Artielclllaon .laoeenhia •DIIIIl to ~tam.eom'l)pedoplbiohsbe a..q,tca.c.n uelf,..,..are~ln 

~.but.....U,writtaaerildoealao,.;)J 

.......... thle.....,..etupicwldt oar editoriAl boanl. For information, call 477-9711-16, oxtenaian 41.6. DEADLINF. FOR AllTICLBS: 6 p.m., '11tunclooy, July 25. 

PACIFit:DAIJ.YNEWS. Frido1,Jun<28.19!16 
·Bill No. £lJ_ 

Introduced by: 

82 

lWENTY•lHIRD GUAM lEGISLATURE 

1 996 (SECOND) Regular Session 

V. c. Pangelinan ~­

~ 

J. Won Pat-oorj~ 

F. C.rnachrCJ. 

H.A. Cristobitlt_ 

L. Leon Guerrero ~ 

A. Santos ~"'\---

AN ACT TO REPEAl AND REENACT 

SECTION 3 0 1 01, TITLE S GCA RELATIVE 

TO CREATING AN ELECTIVE ATTORNEY 

GENERAL POSITION. . 

1 BE IT ENACTED BY THE PEOPLE Of. THE TERRITORY OF GUAM: 

2 Section 1. legislative Statement. Section 1422C, Title 48 U.S. 

3 Code Annouted, as amended granls lhe territory of Guam the authority to 

4 provide by law the manner of appointment of heads of the executlv11 

s agencies and Instrumentalities. This mandate is a recognition by the 

6 United States Congress of the political maturity of the people of Guam and 

7 their proven abUity to manage the affairs of the territorial government. 

8 The Legislature further finds that the Attorney General, as head of 

9 the Department of Law. has a uniqu~ and Morinous responsibility. All 

10 agencies and lnstrument~litles of government frequently request the legal 

11 opinion of the Attorney General to use that as a guideline for official 

lZ actions. This legal opinion has at times been deemecl the force and effect 

13 of l<~w until otherwise reversed by the Court of competent jurisdiction In 

14 _,n appropriate legal action. 

15 .. Because of the nature of the responsibitity of the Att~ney Genefal, 

1 b it Is necessary to relieve him or her from any pressure that may be 

1 '1 · Imposed by the appointing authority, by Institutionalizing the post of 

18 Attomey General as an elected position to be!:t c;erve the Interest of the 

19 territory and the people of Guam. 
83 

Section Z. 5 CCA S 301 01 Is hereby repealed and reenacted 

z to read: 

3 "Section 30101. Attorney General. The Department of Law of the 

4 government of Gu;~m shall be administered by the Attorney General of 

s Guam, who shall be elected at the same time and manner as the Governor 

6 and Lieutenant, and his term of office shall be the same. as that of the 

7 Governor. The term of office of the incumbent holder shall eJCpire co· 

8 terminous wi\h the term of office of the Governor. unless sooner 

9 terminated." 
84 

TWENTY-THIRD GUAM LEGISLATURE 

1996 (SECOND) Regular Session 

Resolution No. 433 (LS) . 

Introduced by: E. Barrett-Anderson 

J.P.Aguon 

T.C.Ada 

A. C. Blaz 

J. M. S. Brown 

F. P. Camacho 

M. C. Charfauros 

H. A. Cristobal 

M. Forbes 

A. C. Larnorena V 

C. Leon Guerrero 

L. Leon Guerrero 

T. S. Nelson 

5. L. Orsini 

V. C. Pangelinan 

D. Parkinson 

J. T. San Agustin 

A. L. G. Santos 

F. E. Santos 

A. R. Unpingco 

J. Won Pat-Borja 

Relative to requesting Congressman Robert Underwood to 

introduce a measure before Congress relative to the Office 

Of The ~ttomey C..eneral by ~rn,•:-- CI n~ Sectinns §1421g(C), 

j J ·i · .;.,t.! : ..• <'"( t m §l4~2u . ul 1 ~< <' · ·'t ih<! t;r.it::>d 

States Code, the Organic Act of Guam. 

1 BE IT RESOLVED BY THE LEGISLATURE OF THE TERRITORY OF 

2 GUAM: 

1 
85 

1 WHEREAS, presently the Attorney General of Guam is an executive 

2 branch agency head appointed by the Governor of the Territory in accordance 

3 with local statutory authority creating the Department of Law, a line agency 

4 of the government of Guam (5 Guam Code Annotated §30101); and 

5 WHEREAS, the Twenty-Third Guam Legislature finds that in an effort 

6 to attain greater self-government, and to provide for a check and balance 

7 within the Executive Branch, the Territory should establish the post of an 

8 elected Attorney General; and 

9 WHEREAS, the Organic Act of Guam, which does not presently provide 

10 the government of Guam authority to establish an elected Attorney General, 

11 would in effect cause an automatic repeal of any local law enacted 

12 inconsistent with the Organic Act; and 

13 WHEREAS, historically Guam has recognized the need to create a 

14 constitutional office of the Attorney General, and to have that office elected 

15 (1977 Guam Constitutional Convention, at §6 "Attorney General", Guam 

16 Draft Constitution); and 

17 WHEREAS, as the Commission on Self-Determination continues its 

18 quest for greater self-government, it would be consistent with such concept 

19 to allow the people of the Territory to determine the manner and process for 

20 selection of its Attorney General, to include elective office; now, therefore, be 

21 it 

22 RESOT VED, by thP Twenty-Third Guam l.Pgislatu~e, that Guam's 

23 Dt:teg<tte to Congre~:>s, ..:::ongressman Robert lit•uerwooci 1S requested to 

24 petition the United States Congress to expeditiously amend the Organic Act 

25 of Guam to provide for the creation of the position of Attorney General, and 

26 to grant the people of the Territory of Guam authority to determine the 

27 manner of selection of the position of Attorney General. 

2 
86 

1 To that end, the following amendments to the Organic Act of Guam are 

2 hereby requested: 

3 Section 1. Section 1422 of Title 48 United States Code is amended to 

4 read: 

5 '§1422. Governor; Lieutenant Governor; AttorneJl General; Powers, 

6 duties. The . executive power of Guam shall be vested in [an executive officer 

7 whose official title shall be the "Governor of Guam. "1 4 governor. lieufenqnt 

8 governor qnd qn qttome11 ~neral. The Governor oj Guam, together with 

9 the Lieutenant Governor, shall be elected by a majority of the votes cast by 

10 the people who are qualified to vote for the members of the Legislature of 

11 Guam. The Governor and Lieutenant Governor jointly shall be chosen by the 

12 casting by each voter of a single vote applicable to both offices. If no 

13 candidate receives a majority of the votes cast in any election, on the 

14 fourteenth day thereafter a runoff election shall be held between the 

15 candidates for Governor and Lieutenant Governor receiving the highest and 

16 second highest number of votes cast. The first election for Governor and 

17 Lieutenant Governor shall be held on November 3, 1970. Thereafter, 

18 beginning with the year 1974, the Governor and Lieutenant Governor shall be 

19 elected every four years at the general election. The Governor and 

20 Lieutenant Governor shall hold office for a term of four years and until their 

21 successors are elected and qualified. 

22 No ,~~on who h"" ""en P.lected Governor for t'Uio full successive terms 

23 hul , ·'ii"ll' Vr! .iz1$Wlt w nold th.-, viJice urtlil one full term h.;~ tmervened. 

24 The teriE_of the elected Governor and Lieutenant Governor shall 

25 commence on the first Monday in January following the date of election. 

26 No person shall be eligible for election to the office of Governor, [or] 

27 Lieutenant Governor or Attome11 General unless he is an eligible voter and 

3 
87 

1 has been for five consecutive years immediately preceding the election a 

2 citizen of the United States and a bona fide resident of Guam and will be, at 

3 the time of taking office, at least thirty years of age, and in the case of the 

4 office of the AtfolliiJI General has fzwt admitted to nactice b<fore the 

5 Supmrre Court qf Guam and jn good standing at the time qfhis election. 

6 The Governor shall have general supervision and control of all the 

7 departments, bureaus, agencies, and other instrumentalities of the executive 

8 branch of the government of Guam, wjfb the erctption pf the office of the 

9 Attgmey General which sbaU be independent from the gtru:ral superpjsion pf 

10 the Gopemor. He may grant pardons and reprieves and remit fines and 

11 forfeitures for offenses against local laws. He may veto any legislation as 

U provided in this chapter. He shall appoint, and may remove, all officers and 

13 employees of the executive branch of the government of Guam, except as 

14 otherwise provided in this or any other Act of Congress, or under the laws of 

15 Guam, and shall commission all officers he may be authorized to appoint. He 

16 shall be responsible for the faithful execution of the laws of Guam and the 

17 laws of the United States applicable in Guam. Whenever it becomes 

18 necessary, in case of disaster, invasion, insurrection, or rebellion, or imminent 

19 danger thereof, or to prevent or suppress lawless violence, he may summon 

20 the posse comitatus or call out the militia or request the assistance of the 

21 senior military or naval commander of the Armed Forces of the United States 

22 in r:uam, which ,. .... be given at the discretion of such ~omnrander if not 

23 aisruptive of, or mwnsistent wtth, his federal responsibilities. He may, zn 

24 case of rebellio~r invasion, or imminent danger thereof, when the public 

25 safety requires it, proclaim the island, insofar as it is under the jurisdiction of 

26 the government of Guam, to be under martial law. The members of the 

4 
88 

1 Legislature shall meet forthwith on their own initiative and may, by two2 thirds vote, revoke such proclamation. 

3 The Governor shall prepare, publish, and submit to the Congress and 

4 · ·the Secretary of the Interior a comprehensive annual financial report ·in 

5 conformance with the standards of the National Council on Governmental 

6 Accounting within one hundred and twenty days after the close of the fiscal 

7 year. The comprehensive annual financial report shall include statistical data 

8 as set forth in the standards of the National Council on Governmental 

9 Accounting relating to the physical, economic, social and political 

10 characteristics of the government, and any other information required by 

11 Congress. The Governor shall transmit the comprehensive annual financial 

12 report to the Inspector General of the Department of the Interior who shall 

13 audit it and report his findings to Congress. The Governor shall also make 

14 such other reports at such other times as may be required by the Congress or 

15 under applicable Federal law. He shall also submit to the Congress, the 

16 Secretary of the Interior, and the cognizant Federal auditors a written 

17 statement of actions taken or contemplated on Federal audit 

18 recommendations within sixty days after the issuance date of the audit 

19 report. He shall have the power to issue executive orders and regulations not 

20 in conflict with any applicable law. He may recommend bills to the 

21 Legislature and give expression to his views on any matter before that body. 

22 Ther" is hP.Teby establis/1erl the office of Lieutenant Governor of Guam. 

23 ln< .... ~ucortant vo.Jvernor shat. ttavt- suet< executw.: powers artd perform such 

24 duties as may be assigned to him by the Governor or prescribed by this 

25 chapter or under the laws of Guam. 

26 There is berebJl established the office of the Attorney General to be 

27 administered bJl tbe Attome11 General of Guam who ··shall be elected in 

5 
89 

1 accordance with the amendments provided in Section 1422. The Attorney 

2 General shall be the chief legal officer of the government of Guam. shall be 

3 vested with common law powers and such additional powers and duties as 

4 may be vrescribed under the laws of Guam. not inconsistent with this chapter. 

5 The Attorney General shall prosecute all criminal violations of Guam law. 

6 provide legal advice to the government and represent the government in all 

7 civil cgses in which the government Q,f Guam may be interested. The Attorney 

8 General may not while in office. engage in the private practice of law or 

9 actively engage in partisan politics or. within one year of ceasing to hold 

10 office· run for other electipe office· The salaey of the Attorney General shall 

11 be established 1zv law. 

12 §1422a. Initiative, Referendum and Removal. (a) The people of Guam 

13 shall have the right of initiative and referendum, to be exercised under 

14 conditions and procedures specified in the laws of Guam. 

15 (b) Any Governor, Lieutenant Governor, Attorney General or member 

16 of the Legislature of Guam may be removed from office by a referendum 

17 election in which at least two-thirds of the number of persons voting for such 

18 official in the last preceding general election at which such official was 

19 elected vote in favor of a recall and in which those so voting constitute a 

20 majority of all those participating in the referendum election. The 

21 referendum election shall be initiated by the Legislature of Guam following 

22 fa) a two lhir4s pol~ of the mJ>rnbers of the Legislature in fiJ.vor of a 

23 r4erendum, or (b) a petihvn Jvr such d referendum to the Legrslature by 

24 registered voters equal in number to at least 50 per centum of the whole 

25 number of votes cast at the last general election at which such official was 

26 elected preceding the filing of the petition. 

6 
90 

1 §1422b. Vacancy in Office of Governor or Lieutenant Governor; 

2 Temporary Disability, or .Temporary Absence of Governor. (a) Temporary 

3 disability or temporary absence of Governor. In case of the temporary 

4 disability or temporary absence . of the Governor, the Lieutenant Governor 

5 shall have the powers of the Governor. 

6 (b) Permanent vacancy in office of Governor. In case of a permanent 

7 vacancy in the office of Governor, arising by reason of a death, resignation, 

8 removal by recall, or permanent disability of a Governor-elect, or for any 

9 other reason, the Lieutenant Governor, or Lieutenant Governor-elect shall 

10 become the Governor, to hold office for the unexpired term and until he or his 

11 successor shall have been duly elected and qualified at the next regular 

12 election for Governor. 

13 (c) Temporary disability or temporary absence of Lieutenant Governor. 

14 In case of the temporary disability or temporary absence of the Lieutenant 

15 Governor, or during any period when the Lieutenant Governor is acting as 

16 Governor, the Speaker of the Guam Legislature shall act as Lieutenant 

17 Governor. 

18 (d) Permanent vacancy in office of Lieutenant Governor. In case of a 

19 permanent vacancy in the office of Lieutenant Governor, arising by reason of 

20 the death, resignation, or permanent disability of the Lieutenant Governor, 

21 or because the Lieutenant Governor or Lieutenant Governor elect has 

22 <uu·ded to f'!w o.rrir P of (;overnor the GovP.rnflr shall "PPOint a new 

2J :.1eu • .:nu11i Gowr .. v., t..vith ... 1e o~uvJce una cortsent oj the tegislacure, to hold 

24 office for the unexpired term and until he or his successor shall have been duly 

25 elected and qualified at the next regular electi'!n for Lieutenant Governor. 

26 (e) Temporary disability of temporary absence of both Governor and 

27 Lieutenant Governor. In case of the temporary disability or temporary 

7 
91 

1 absence of both the Governor and Lieutenant Governor, the powers of the 

2 Governor shall be exercised, as Acting Governor, by such person as the laws 

3 of Guam may prescribe. In case of a permanent vacancy in the offices of both 

4 the Governor and Lieutenant Governor, the office of Governor shall be filled 

5 for the unexpired term in the manner prescribed by the laws of Guam. 

6 (j) Additional compensation. No additional compensation shall be paid 

7 to any person acting as Governor or Lieutenant Governor who does not also 

8 assume the office of Governor or Lieutenant Governor under the provisions 

9 of this chapter. 

10 (g) Vacancy in the office ofAttorney General. In case of the temporaey 

11 disabilicy or temporaey absence or permanent absence of the Attorncv 

12 General which occurs beyond two (2) vears from the incumbent's assumption 

13 of office. the Legislature mav determine the manner in which such vacancy is 

14 filled. In case of a permanent vacancy occurring within two (2) vears from the 

15 incumbent's assumption of office. the Governor of Guam shall call a special 

16 e!ectjon to fill the remainder of the term Q,f office of the Attorney Geneml. 

17 §1422c. Executive agencies and instrumentalities. (a) Appointment of 

18 heads; merit system. The Governor shall, except as otherwise provided in 

19 this chapter or the laws of Guam, appoint, by and with the advice and 

20 consent of the Legislature, all heads of executive agencies and 

21 instrumentalities. The Legislature shall establish a merit system [and, as far 

22 a· cticable. appn;n.'ltments 11.n.d pramotions shall :•·P. made in accordance 

23 with sudt mmt system} governing the setechon. appointment and removal qf 

24 emplo11ees within the merit SJIStem. The Legislature mall also establish such 

25 other positions in the government Q,f Guam not within SUch merit svstem. 

26 The Governor of Guam may by law establish a Civil Service Commission to 

8 
92 

1 administer the merit system. Members of the Commission may be removed 

2 as provided by the laws of Guam. 

3 (b) Powers and duties of officers. All officers shall have such powers 

4 and duties as may be conferred or imposed upon them by law or by executive 

5 regulation of the Governor not inconsistent with any law. 

6 (c) Reorganization. The Governor shall, from time to time, examine 

7 the organization of the executive branch of the government of Guam, and 

8 shall determine and carry out such changes therein as are necessary to 

9 promote effective management and to execute faithfully the purposes of this 

10 chapter and the laws of Guam. 

11 (d) Continuation in office of incumbents. All persons holding office in 

12 Guam on August 1, 1950 may, except as otherwise provided in this chapter, 

13 continue to hold their respective offices until their successors are appointed 

14 and qualified. 

15 §1422d. Inspector General: Functions; Duties. (a) Functions, powers, 

16 duties transferred. The following functions, powers, and duties heretofore 

17 vested in the government comptroller for Guam are hereby transferred to the 

18 Inspector General, Department of Interior, for the purpose of establishing an 

19 organization which will maintain a satisfactory level of independent audit 

20 oversight of the government of Guam: 

21 (1) The authority to audit all accounts pertaining to the revenue 

22 n·•r.l rereipt~ nf thP t?OVI?"nment of Gu11m. ~n1 of funds derived from 

..:.:., vvnu 1ssues, a11d · tlk au.twrtty w auJii, m accordance watt law und 

24 adminis~ive regulations, all expenditures of funds and property 

25 pertaining to the government of Guam including those pertaining to 

26 trust funds held by the government of Guam. 

9 
93 

1 (2 ) The authority to report to the Secretary of the Interior and the 

2 Governor of Guam all failures to collect amounts due the governor, 

3 and expenditures of funds or uses of property which are irregular or not 

4 pursuant to law. 

5 Section 2. Section 1421g(c) of 48 United States Code is amended to 

6 read: 

7 "§1421g(c) [Office of the Public Prosecutor;] Office of Public Auditor. 

8 The government of Guam may by law establish an [Office of Public 

9 Prosecutor and] Office of Public Auditor. The [Public Prosecutor and] Public 

10 Auditor may be removed as provided by the laws of Guam. "; and be it further 

11 RESOLVED, that the Speaker certify to and the Legislative Secretary 

12 attest the adoption hereof and that copies be thereafter transmitted to the 

13 Honorable Congressman Robert Underwood, Member of Congress; to 

14 Congressman Newt Gingrich, Speaker, United States House of 

15 Representative; to Senator Trent Lott, Assistant Majority Leader, United 

16 States Senate; to Senator Frank Murkowski, Chairperson, Senate Energy 

17 and Natural Resources Committee; to Congressman Don Young, Chairman, 

18 House Committee on Resources; to Congressman Elton Gallegly, Chairman, 

19 House Subcommittee on Native American and Insular Affairs; and to the 

20 Governor of Guam. 

DULY AND REGULARLY ADOPTED ON THE 8TH DAY OF JUNE, 1996 . 

. ~ ,..<") .<h 

[ /;bi:t;.~:ON Speaker 

ON PAT-BORJA 

Legislative Secretary 

10 
Office of 

The • People 

94 

Senator Vicente C. Pangelinan 

Twenty· Third Guam Legislature 

Chalnnan, Committee on Youth, Labor .k Parke and Recreation 

130 AspWII A-uc • 511111: 101 • A$ ... 0\WII• 96910 l'!lone (671) 411-355~ l'u (671) 412-3556 

TESTIMONY ON 

RESOLUTION 433 OF THE GUAM LEGISLATURE 

BEFORE THE SUBCOMMITTEE ON 

NATIVE AMERICAN AND INSULAR AFFAIRS OF 

THE COMMITTEE ON RESOURCES, 

U.S. HOUSE OF REPRESENTATIVES 

JULY 24, 1996 

Honorable Chairperson and members of the Subcommittee on Native 

American and Insular Affairs. as a member of the 23rd Guam Legislature, I 

would like to send a warm Hafa Adai and a D~ngkolo na Si Yu'os Ma'~se' for 

this opportunity to present testimony on Resolution 433 of the Guam 

Legislature and my proposed Bill 571 which would provide for an elected 

Attorney General position on Guam. 

The political development of the unincorporated territory of Guam, 

in its present journey toward self-determination, has undergone a series 

of laborious processes to come to where we stand today, to demonstrate 

our current level of political maturity. As a precarious creature of the 

Congress, however, our island and our people have not enjoyed the full 

benefits normally and rightfully entitled to every American citizen. As a 

secondary entity, we have been and still are often forgotten during the 

decision-making process and in its resultant policies. Our achievements, 

which include an elected Legislature in the early SO's, elected Governor 

and Delegate to the Congress in the 70's, and most recently, the 

appointment of our own Supreme Court Justices, have been results of a 

tedious process of persistent urging and lobbying by our dedicated leaders 

over a prolonged period of time. 

The compilation of these incremental successes, however slight 

they may seem to our fellow Americans in the continent, is nevertheless a 

giant step for the people of Guam. It signifies that the Congress, as a 

body, has recognized the tenet which proclaims the inalienable democratic 

right of a people to govern themselves on the matters that affect them 

directly. No longer must nor should Guam be subject to paternalistic 

governance by the Organic Act. 

Page I of 3 
95 

I appear before you today to convey the unequivocal desire of the 

people of Guam to elect their Attorney General. This expression ot their 

desire is embodied in Guam Legislature Resolution 433 and a measure 1 

introduced and now ready for floor action, Bill 5 71. The direct selection 

by the will of the people of Guam of the Attorney General is right, just, 

and prudent for the people of Guam to have an independent Attorney 

General, unfettered by incessant political intervention from a single 

individual. 

The need and the will of the people of Guam for an Attorney General 

accountable solely to the public is overwhelmingly evident. Recent events 

have shocked the Guam populace as a result of the Guam Legislative 

Judiciary Committee's oversight hearings on the Attorney General's office 

of Guam. During the hearings emerged extremely grave concerns of 

whether the handpicked Attorney General of Guam is sufficiently 

independent from political interference by the Governor. Under subpoena, 

as most employees and members of the public alike were hesitant to 

testify in the fear of reprisal, many, including current and former 

prosecutors and prominent private attorneys, informed the members of the 

Legislature that there exist extensive political interference, selective 

prosecution, poor management and sloppy performance at the Office. 

Since the Governor does currently appoint the Attorney General, the 

office of the Attorney General may be subject to the unwanted, unfair, and 

vindictive influence of the Governor's office. Although the Attorney 

General may argue otherwise, and does so indeed. the preponderance of the 

evidence and testimony to the contrary is staggering. At the Judiciary 

hearing, under sworn testimony, witnesses attested that without 

justifiable evidence, cases are often thrown out, or sometimes invidiously 

created. The Governor has cast a dark specter on the horizons of the light 

and openness and the fair play and integrity of our democratic system. To 

say the least, I and the people of Guam are utterly astonished, dismayed 

and concerned about the ability of the Attorney General to disassociate 

himself from political intervention at its highest level. We must not 

permit the power of the law as exercised by an appointed Attorney General 

to chill the basic tenets of democracy that allow the leaders and citizens 

of our community to debate and discuss issues that affect our lives 

without the fear of retribution and revenge. 

The Governor should not and must not violate the independence of the 

Attorney General's office. It is fundamental to the underpinning of our 

democratic process of openness and fair play that the Attorney General 

not be used as an apparatus of the head of the executive branch, for the 

Page 2 of 3 
96 

power of the law is too great and pervasive to be used as a political tool 

of a single person. We have seen what happens when a single person 

controls the law instead of serving the people. History is replete with 

individuals who have fulfilled their temptations although unwise and 

hurtful, simply because they have the power to do so. We have seen it 

with Napoleon, Hitler, Stalin and Marcos. 

The sunlit reasoning of democratic principles that espouses 

accountability of the Attorney General to the general populace instead ot 

to a single appointing authority is exigently appropriate now. The 

Attorney General should not be a ~te noire- he or she must represent the 

common good and the consensual public interest. 

Political maturity can be best described as the empowerment of the 

electorate to hold its directly accountable to the people. An elected 

Attorney General does not mean the absence of politics from the selection 

process, but rather that the politics and the selection process are 

invariably controlled by the people, via the ballot box. These are not new 

paths that we are forging, but rather trails that have been blazed by other 

jurisdictions as they traveled the road to political maturation. If we 

must endure a tempest along the pilgrimage, let it be so. However, I can 

feel the calm wind approaching us, signaling us of the tranquillity that 

lies ahead at the end of our journey. 

D~ngkolo na Si Yu'os Ma'~se' . Once again, I thank you for the 

opportunity to present this testimony. 

Respectfully submitted, 

..)t4nte 

·· __.:.:.::.

c. 

~ 

Pangelinan 

Membir. 23rd Guam Legislature 

Page 3 of 3 
UNITED 

NATIONS 

• General Assembly 

97 

Distr. 

LIMITED 

A 

A/AC . 109/L . 1843 

10 July 1996 

ORIGINAL' ENGLISH 

SPECIAL COMMITTEE ON THE SITUATION 

WITH REGARD TO THE IMPLEMENTATION 

OF THE DECLARATION ON THE GRANTING 

OF INDEPENDENCE TO COLONIAL 

COUNTRIES AND PEOPLES 

REPORT OF THE SUBCOMMITTEE ON SMALL TERRITORIES, 

PETITIONS, INFORMATION AND ASSISTANCE 

Rapporteur: Ms. Roslyn Lauren KHAN-CUMMINGS (Trinidad and Tobago) 

CONTENTS 

Paragraphs ~ 

I. QUESTION OF THE NON -SELF-GOVERNING TERRITORIES OF 

AMERICAN SAMOA, ANGUILLA, BERMUDA, BRITISH VIRGIN 

ISLANDS, CAYMAN ISLANDS, GUAM, MONTSERRAT, PITCAIRN, 

ST. HELENA, TOKELAU, TURKS AND CAICOS ISLANDS AND 

UNITED STATES VIRGIN ISLANDS ........................ . 1 - 9 

A. Consideration by the Subcommittee . . . . • . •. . .•. . . . . - s 

B. Draft general resolution ........................ . 

C. Draft resolutions on specific conditions 

prevailing in American Samoa, Anguilla, Bermuda, 

British Virgin Islands, Cayman Islands, Guam, 

Montserrat, Pitcairn, St. Helena, Turks and Caicos 

9 4 

Islands and United States Virgin Islands ...... .. . . ... ..... . .. 8 

1 . American Samoa 

2. Anguilla 9 

3. Bermuda .................. .. .•..•.......... . .. ..... ... .... 

96-17143 (E) 180796 200796 

111111111111111m1110 IWIIIIIIIIIIIIUIIIII 

I ... 
98 

A/AC.109/L.1843. 

English 

Page 2 

CONTENTS (continued) 

Paragraphs ~ 

4. British Virgin Islands 10 

5. Cayman Islands 11 

6. Guam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

7. Montserrat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 

8. Pitcairn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 

9. St. Helena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

10. Turks and Caicoa Islands................................. 15 

11. united States Virgin Islands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 

II. QUESTION OF DISSEMINATION OF INFORMATION ON 

DBCOLONIZATION ..................................... . . 

A. Consideration by the Subcommittee ............... . 

B. Statement by the representative of the Department 

of Public Information ........................... . 

c. Statement by the representative of the Department 

of Political Affairs ............................ . 

D. Week of Solidarity with the Peoples of All 

Colonial Territories, Fighting for Freedom, 

Independence and Human Rights (27-31 May 1996) 

E. Draft resolution on dissemination of information 

on decolonization ............................... . 

III. ADOPTION OF THB REPORT ...................... . . . ..... . 

10 - 23 17 

10 - 11 17 

12 - 15 18 

16 - 21 19 

22 20 

23 22 

24 - 25 23 
99 

A/AC . l09/ L. l843 

English 

Pa;,e 3 

I . QUESTION OF THE NON-SELF-GOVERNING TERRITORIES OF AMERICAN 

SAMOA, ANGUILLA, BERMUDA, BRITISH VIRGIN ISLANDS, CAYMAN 

ISLANDS , GUAM , MONTSERRAT, PITCAIRN, ST. HELENA , TOKELAU , 

TURKS AND CAICOS ISLANDS AND UNITED STATES VIRGIN ISLANDS 

A. Consideration by the Subcommi ttee 

1 . The Subcommittee on Small Territories, Petitions, Information and 

Assistance considered the Te rritories of American Samoa, Anguilla, Bermuda , 

British Virgin Islands, Cayman Islands, Guam , Montserrat , Pitcairn, St . Helena, 

Tokelau , Turks and Caicos I s lands and United States Virgin Islands ~ at 

its 696th to 702nd meetings, from 26 June to 8 July 1996 . 

2 . During its consideration of these items, the Subcommittee had before it 

working papers prepared by the Secretariat on those Territories (A/ AC . l09/ 204l 

and Corr. l , 2043, 2044 and Add . l , 2045, 2047 and Add . l, 2050 - 2053 , 2054 and 

Add.l, 2055 and 2056) . 

3. The Subcommittee conducted a review of the political, economic and social 

condition• in each of the Territories in the light of the information contained 

in the working papers prepar ed by the Secretariat . The Subcommittee noted that 

the information contained in the working papers was not always up to date and 

that the Secretariat relied in some instances on published sources . The 

Subcommittee requested the administering Powers to cooperate with the 

Secretariat in furnishing information on the Territories. 

4 . In the course of ita review. the Sube~ittee considered all aspects of the 

issues relating to the NOn - Self-Governing Territories and focused attention on 

the following , 

(a) Progress or lack of progreas in aacertaining the wishes of the 

population of the Territories regarding their future status; 

(b) The position of the territorial Governments and political parties and 

constitutional developments on the question of the future status of the 

Territoriea; 

(c) The general socio-economic developments and specific problems faced by 

some Tarritories in respect of environnent, drug-trafficking, etc .; 

(d) The dispatch of visiting missions and participation of representatives 

of NOn - Self-Governing Territories in the work of the Committee so that the 

ComMittee can obtain first - hand information on the wishes of the population . 

5 . The Subca.adttee noted that in aoee cases there was no up-to-date 

information to ascertain the wishes of the population regarding their future 

status. It remaina convinced that the wishes and aspirations of the people of 

the Territories should continua to guide the development of their future 

political status end that referenduaa, free and fair elections, and other forms 

of popular consultation play an impore.nt rola in ascertaining the wishas and 

aspirations of the people. The outcome or· ·s"!_lch exercises would help the 

I . .. 
A/AC . l09/ L. l843 

English 

Page 4 

100 

Subcommittee in reviewing the list of the Non-Self -Governing Territorie s with 

which the Special Committee is concerned. The Subcommittee was aware that some 

of the Territories were not seeking independence but sought other opt i ons o f 

self-determination . The Subcommittee also noted that some Territories attached 

priority to socio-economic development before making a c hoice as to their f uture 

status. 

6. The Subcommittee attached importance to a review of the list of the 

Non-Self-Governing Territories in the light of the fact that the International 

Decade for the Eradication of Colonialism by the year 2000 is well past its 

mid-point. 

7 . In view of Tokelau's own decision-making agenda and related cha nges t o the 

legislative framework ·for Tokelau , the Chairman of the Special Committee was 

requested by the Permanent Representative of New Zealand to the United Nations 

to allow the Administrator of Tokelau and the Failpule of Tokelau to appear 

before the Special Committee to allow it to hear, at first hand, how decisions 

on Tokelau's future status are being made. Accordingly, the Subcommittee 

recommended that this year the draft resolution on specific conditions 

prevailing in Tokelau be considered and adopted by the Special Committee . 

8 . The Subcommittee reiterated its view that the cooperation of all 

administering Powers was essential for the discharge of its mandate and resolved 

that it should seek the cooperation of all administering Powers through 

demonstration of a practical, flexible and innovative approach. The 

Subcommittee was conscious of the changes in the international situation and the 

consequent need to adapt its approach in tune with the changed circumstances. 

The Subcommittee expressed its readiness to work with the administering Powers 

in a spirit of constructive cooperation to achieve the goals of the United 

Nations in respect of the Non-Self - Governing Territories. The Subcommittee 

hoped that the administering Powers would take note of this new app~oach and 

come forward with cooperation. 

B. Draft general resolution 

9 . Having considered the question of the Non-Self-Governing Territories of 

American Samoa, Anguilla, Bermuda, the British Virgin Islands, the Cayman 

Islands, Guam, Montserrat, Pitcairn, St. Helena, Tokelau, the Turks and Caicos 

Islands and the united States Virgin Islands, the Subcommittee has decided to 

recommend the following draft resolution for action by the Special Committee: 

The Special Committee, 

Having considered the questions of the Non-Self- Governing Territories of 

American Samoa, Anguilla, Bermuda, the British Virgin Islands, the cayman 

Islands, Guam, Montserrat, Pitcairn, St. Helena, Tokelau, the Turks and Caicos 

Islands and th; United States Virgin Islands, hereinafter •the Territories", 

Having examiped the report of the Subcommittee on Small Territories, 

Petitions, Information and Assistance , 

I ... 
101 

A/AC.l09/L.l843 

English 

Page 5 

Recalling General Assembly resolution 1514 (XV) of 14 December 1960, 

containing the Declaration on the Granting of Independence to Colonial Countries 

and Peoples, and all resolutions and decisions of the United Nations relating to 

those Territories, including, in particular, the resolutions adopted by the 

General Assembly at its fiftieth seaaion on the individual Territories covered 

by the present resolution, 

Recognizing that the specific characteristics and the sentiments of the 

peoples of the Territories require flexible, practical and innovative approaches 

to the options of self-determination, without any prejudice to territorial size, 

geographical location, size of population or natural resources, 

Recalling General Assembly resolution 1541 (XV) of 15 December 1960, 

containing the principles that should guide Member States in determining 

or not an obligation exists to transmit the information called for under 

Article 73 e of the Charter of the United Nations, 

whether 

Expressing its concern that even three and a half decades after the 

adoption of the Declaration there still remains a number of Non-Self-Governing 

Territories, 

Conscious of the need to ensure the full and speedy implementation of the 

Declaration in respect of the Territories, in view of the target set by ttle 

United Nations to eradicate colonialism by the year 2000, 

\ 

Recognizing that in the decolonization process there is no alternative to 

the principle of self-determination as enunciated by the General Assembly in its 

resolutions 1514 (XV), 1541 (XV) and other resolutions, 

Noting with appreciation the continuing exemplary cooperation of New 

Zealand, as an administering Power, in the work of the Special Committee, and 

welcoming the recent constitutional developments in Tokelau, 

Welcoming the stated position of the Government of the United Kingdom of 

Great Britain and Northern Ireland that it continues to take seriously its 

obligations under the Charter of the United Nations tc develop self-government 

in the dependent Territories and, in cooperation with the locally elected 

Governments, to ensure that their constitutional frameworks continue to meet the 

wishes of the people, and the emphaaia that it is ultimately for the peoples of 

the Territories to decide their future status, 

Noting the stated position of the Government of the United States of 

America that it supports fully the principles of decolonization and takes 

seriously its obligations under the Charter of the United Nations to promote to 

the utmost the well-being of the inhabitants of the Territories under United 

States administration, 

~ of the special circumstances of the geographical location and 

economic conditions of each Territory, and bearing in mind the necessity of 

promoting economic •tability and divereifying and strengthening further the 

economies of the reapective Territories as a matter of priority, 

/ ... 
AC ~03 L.l843 

Engli~h 

Page 6 

102 

Consc1ous of the ?articular vulnerability ~f the small Terr1tories 1:o 

natural disasters and environmental degradat1on, 

~ of the us efulnes5 beth to the erc itories and to the Special 

Committee of the participation of appointed and elected representatives of the 

Te ritories in the work of the Special Committee, 

~nvinced that the wishes and dSpirations cf the peo ples o f the Territories 

should continue to guide the developmen t of their future po litica l status and 

that referendums, free and fair election~. and other f o rms of popular 

consultation play an important role in ascertaining the wis hes and aspirations 

of t he people , 

Convinced that any negoti ations to determine the status 0f a Territory mus t 

not take place without an active involvement and pa rtici pation of the people of 

that Territory, 

Recognizing th t all avail able o p tion s for self-determination are valid as 

long as they are in accordance ~ith the freely expressed wishes o f th~ peoples 

concerned and in conformity wi t h the clearly defined principles conta ined in 

General Assembly r e solutions 1514 (XV), 1541 (XV) and other Assembly 

resolutions, 

Mindful that United Nations v isiti ng missions provide a n effective means of 

a scertaining the situation in the Territories, and considering that the 

possibi lity of sending further visiting missions to t he Territ o r ien at an 

appropriate time and in consultation with the administering Powers should be 

kept under rev iew, 

Mi ndful also that the holding of the seminars in the Caribbean and Pacific 

regions alternately and at United Natio ns Headquarters or any other v~nue, as 

appropriate, provides an ~ffective means for the Special Committee to discharge 

its mandate and promote the goals of the International Decade for the 

Eradication of Colonialism by the year 2000, 

Mindful fur~ that some Terri tori es have not had any United Nati ons 

visiting mission for a long period of time , 

Noting with appreciation the contribution to the dev elopment of some 

Territori~s by specialized agencies and other organ izati ons of the Uni ted 

Nations system, in particular the Unit ed Nations Development Programme , and 

regional institutions such a s the Caribbean Development Bank, 

1 . Approves the report o f the Subcommittee on Small Territori es, 

Petitions, Information and Assistance relating to American Samoa, Angui lla , 

Bermuda, the British Virgin Islands, the Cayman Isl ands , Guam , Montserrat, 

Pitcairn, St. Helena , Tokelau, the Turks and Caicos Islands and the United 

States Virgin Islands; 

2 . Reaffirms the inalienable right of the peoples of the Territorie• to 

self-determination, including, if they so wish, independence, in conformity with 

the Charter of the United Nations and General Assembly resolution 1514 (XV), 

/ . 
103 

A/AC . l09/L.l843 

English 

Page 7 

cont,ining the Declaration on the Granting of Independence to Colonial Countries 

and Peoples; 

3 . Reaffirms also that it is ultimately for the peoples of the 

Territories themselves to determine freely their future political status in 

accordance with the relevant provisions of the Charter, the Declaration and the 

relevant resolutions of the General Assembly, and in that connection calls upon 

the administering Powers, in cooperation with the territorial Governments, to 

facilitate programmes of political education in the Territories in order to 

foster an awareness among the people of the legitimate political status options 

open to them in the exercise of their right to self-determination; 

4. ~the administering Powers, having ascertained the views of the 

peoples of the Territories, regularly to report to the Secretary-General on the 

wishes and aspirations of the people regarding their future political status; 

5. ~ the need to seek further ways and means to enhance the 

Special Committee's understanding of the conditions and wishes of the peoples o1 

the Territories; 

6 . Requests the administering Powers and the representatives of the 

peoples of the Territories to assist the Special Committee by inviting the 

United Nations visiting missions at appropriate times to monitor the status of 

the Territories; 

7. Reaffirms the responsibility of the administering Powers under the 

Charter to promote the economic and social development and to preserve the 

cultural identity of the Territories, and recommends that priority continue to 

be given, in consultation with the territorial Governments concerned, to the 

strengthening and diversification of their respective economies; 

8. Requests the administering Powers in consultation with the peoples of 

the Territories to take all necessary measures to protect and conserve the 

environment of the Territories under their administration against any 

environmental degradation, and requests the specialized agencies concerned to 

continue to monitor environmental conditions in those Territories; 

9. Calls upon the administering Powers, in cooperation with the 

respective territorial Governments, to continue to take all necessary measures 

to counter problems related to drug trafficking, money laundering and other 

offences; 

10. ~ that the achievement of the declared goal of eradication of 

colonialism by the year 2000 requires the full and constructive ~ooperation of 

all parties concerned, in particular the administering Powers; 

11. ~Member States to contribute to the efforts of the United Nations 

to usher in the twenty-first century in a world free of colonialism, and calls 

upon them to continue to give their full support to the Special Committee in its 

endeavours towards that noble goal; 

I ... 
A/ AC . l09 / L. l843 

English 

Page 8 

104 

12. Invites the specialized agencies and other organizations of the United 

Nations system to initiate or to continue to take all necessary measures to 

accelerate progress in the social and economic life of the Terri tories; 

13 . Decides to continue the examination of the question of the small 

Territories in order to assist the peoples of the Territories to exercise their 

right to self-determination , and to report thereon to the General Assembl y at 

its fifty·first session . 

C . Draft resolutions on specific conditions prevailing in 

~rican samoa Anguilla Bermuda. Britjsh Virgin 

Islands. Cayman Islands. Guam Montserrat. Pitcairn 

St. Helena Turks and Ca1cos Islands and United States 

Virgin Islands 

1. American Samoa 

The Special Committee, 

Referring to the general resolution above, 

~ the report by the administering Power that most American Samoan 

leaders express satisfaction wi~h the island's present relationship with the 

United States of America, 

~ the non-participation of the representatives of the people of 

American Samoa in the last two regional seminars, 

Noting also that the Government of the Territory continues to have 

significant financial, budgetary and internal control problems and that the 

Territory's deficit and financial condition are compounded by the high demand 

for government services from the rapidly growing population, a limited economic 

and tax base, and recent natural disasters, 

Noting further that the Territory, similar to isolated communities with 

limited funds, continues to experience lack of adequate medical facilities and 

other infrastructural requirements, especially the provision of safe drinking 

water to all villages in American Samoa, 

~ of the efforts of the Government of the Territory to cont ol and 

reduce expenditures, while continuing its programme of expanding and 

diversifying the local economy, 

l . Requests the administering Power, bearing in mind the views of the 

people of the Territory ascertained through a democratic process, to keep the 

Secretary-General informed of the wiahea and aspirations of the people regarding 

their future political status; 

2. Calls upon the administering Power to continue to assist the 

territorial Government in the economic and social development of the Territory, 

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including measures to rebuild financial management capabilities and 

strengthening other governmental functions of the Government of the Territory. 

2. Anguilla 

The Special Committee, 

Referring to the general resolution above, 

H2!ing the non-receipt of up-to-date information on the Territory from the 

administering Power and that a last visiting mission took place in 1984, 

Noting aiso that information considered by the Subcommittee was made 

available from published sources, 

Conscious of the commitment of both the Government of Anguilla and the 

administering Power to a new and closer policy of dialogue and partnership 

through the Country Policy Plan for 1993-1997, 

Aware of the efforts of the Government of Anguilla to continue to develop 

the Territory as a viable offshore centre and well-regulated financial centre 

for investors, by enacting modern company and trust laws, as well as partnership 

and insurance legislation, and computerizing the company registry system, 

~ the need for continued cooperation between the administering Power 

and the territorial Government in tackling the problems of drug trafficking and 

money laundering, 

1. ~ the administering Power, bearing in mind the views of the 

people of the Territory ascertained through a democratic process, to keep the 

secretary-General informed of the wishes and aspirations of the people regarding 

their future political status; 

2. Calls upon the administering Power and all countries, organizations 

and United Nations agencies to continue to assist the Territory in social and 

economic development. 

3.~ 

The Special Committee, 

Referring to the general resolution above, 

liS!l;.ing the results of t _he independence referendum held on 16 August 1995, 

conscious of the ~ifferent viewpoints of the political parties of the 

Territory on the future status of the Territory, 

~ the measures taken by the Government to combat racism and the plan 

to set up .a Commission for Unity and Racial Equality, 

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Noting with concern the report in the Royal Gazette of 23 November 1995 

that approximately 19 per cent of Bermuda's households live in a state of 

poverty and continue to receive some form of assistance from the Government, 

Noting also the report of the intended closure of the foreign military 

bases and installations in the Territory, 

Taking into consideration the statement made in October 1995 by the F1nance 

Minister for the transfer of those lands for development projects, 

1. Requests the administering Power, bearing in mind the views of the 

people of the Territory ascertained through a democratic process, to keep the 

Secretary-General informed of the wishes and aspirations of the people regarding 

their future political status; 

2. Calls upon the administering Power to continue its programmes of 

aocio-economic development of the Territory; 

3. Also requests the administering Power to elaborate, in consultation 

with the territorial Government. programmes of development specifically intended 

to alleviate the economic, social and environmental consequences of the closure 

of certain military bases and installations in the Territory. 

4. British Virgin Islands 

The Special committee, 

Referring to the general resolution above, 

~ the completion of the constitutional review in the Territory and the 

coming into force of the amended Constitution, and noting also the results of 

the general elections held on 20 February 1995, 

Noting further the results of the constitutional review of 1993-1994. which 

made it clear that a prerequisite to independence must be a constitutionally 

expressed wish by the people as a result of a referendum, 

Taking note of the statement made in 1995 by the Chief Minister of the 

British Virgin Islands that the Territory was ready for constitutional and 

political advancement toward• full internal •elf-government and that the 

administering Power should assist through gradual transfer of power to elected 

territorial representatives, 

~ that the Territory is emerging as one of the world's leading 

offahore financial centrea, 

N9ting j1so the need for continued cooperation between the adminiatering 

Power and the territorial Government in countering drug trafficking and money 

laundering, 

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1. Requests the administering Power, bearing in mind the views of the 

people of the Territory ascertained through a democratic process, to keep the 

Secretary-General informed of the wishes and aspirations of the people regarding 

their future political status; 

2. Also requests the administering Power, specialized agencies and other 

organizations of the United Nations system and all financial institutions to 

continue to provide assistance to the Territory for socio-economic development 

and development of human resources, bearing in mind the vulnerability of the 

Territory to external factors. 

5. Cayman Islands 

The Special Committee, 

Referring to the general resolution above, 

~ the non-receipt of up-to-date information on the Territory from the 

administering Power and that a last visiting mission took place in 1977, 

Noting also that information considered by the Subcommittee was made 

available from published sources, 

~ the constitutional review of 1992-1993, according to which the 

population expressed the sentiment that the existing relations with the United 

Kingdom of Great Britain and Northern Ireland should be maintained and that the 

current status of the Territory should not be altered, 

~ that the Territory has one of the highest per capita incomes in the 

region, a stable political climate, and virtually no unemployment, 

Noting alao the actions taken by the territorial Government to implement 

ita localization programme to promote increased participation of the local 

population in the decision-making process in the Cayman Islands, 

N9ting with coocern the vulnerability of the Territory to drug trafficking 

and related activities, 

Notipq further the measures taken by the authorities to deal with those 

problema, 

~that the Territory has emerged as one of the world's leading 

offahore financial centrea, 

1. R~ftll~ata the administering Power, bearing in mind the views of the 

people of the·Territory ascertained through a democratic process, to keep the 

Secretary-General informed of the wishes and aspirations of the people regarding 

their future political status; 

2. A1•o rcqucata the administering Power, the specialized agenciea and 

other organizations of the United Nations system to continue to provide the 

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territorial Government with all required expertise to enable it to achieve 1ts 

socio-economic aims; 

3. Calls upon the administering Power and the territorial Government to 

continue to cooperate to counter problems related to money laundering , smuggling 

of funds and other related crimes, as well as drug trafficking; 

4. Requests the administering Power, in consultation with the territorial 

Government , to continue to facilitate the expansion of the current programme of 

securing employment for the local population, in particular at the 

decision-making level . 

6. Guam 

The Special Committee, 

Referring to the general resolution above, 

Recalling that, in a referendum held in 1987, the people of Guam endorsed a 

draft Guam Commonwealth Act that would establish a new framework for relations 

between the Territory and the administering Power, providing for an increased 

measure of internal self-government for Guam and recognition of the right of the 

people of Guam to self-determination for the Territory, 

Recalling also the requests by elected representatives and non-governmental 

organizations of the Territory that Guam not be removed from the list of the 

Non-Self-Governing Territories with which the Special Committee is concerned 

pending the exercise of self-determination by the Chamorro people, 

Aware of the continued negotiations between the administering Power and the 

territorial Government on the draft Guam Commonwealth Act and on the future 

status of the Territory, with particular emphasis on· the question of the 

evolution of the relationship between the united States of America and Guam, 

cognizant that the administering Power continues to implement its programme 

of transferring surplus federal land to the Government of Guam, 

~ that the people of the Territory have called for reform in the 

programme of the administering Power with respect to the thorough, unconditional 

and expeditious tranafer of land property to the people of Guam, 

Conscious that immigration into Guam has resulted in the indigenous 

Chamorros becoming a minority in their h~land, 

~ of the potential for diversifying and developing the economy of Guam 

through comgercial fishing and agriculture and other viable activities, 

Taking note of the propoeed cloeing and realigning of four United States 

Navy installations on Guam and the request for the establiehment of a transition 

period to develop some of the closed facilities ae commercial enterprises, 

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R@callinq the dispatch in 1979 of a United Na~ions visiting mission to the 

Territory and noting the recommendation of the 1996 Pacific Regional Seminar for 

sending a visiting mission to Guam, 

1. Calls upon the administ ering Power to facilitate the exercise of 

self-determination by the Chamorro people of Guam for the Territory, as endorsed 

by the people of Guam in the draft Guam Commonwealth Act , and to keep the 

Secretary-General informed of the pr ogress to that end ; 

2 . RequeSts the admi nis tering Power to continue to assis t t.he elected 

territorial Government in achieving its political , economic and social goals; 

jr ).. . Ale"o reguoata the administering Power, in Cooperation ·with the· 

eerritor~al Government, to co~tinue the transfer of land to the- people of the 

Territory and to take the necessary steps to safeguard their property rights; 

4 . further requests the admin i stering Power to continue to recognize and 

respect the political r ights and the cultural and ethnic identity of the 

Chamorro people and to take all necessary measures to respond to the concerns of 

the territorial Government wi th regard to t he immigration issue ; 

S . Requests the administering Power to implement programmes specifically 

intended to promote the s ustainable development of eConomic activities and 

enterprises by the Chamorro people ; 

6 . Also requests the administering Power to continue to support 

appropriate me&sures by the territorial Government a i med at promoting growth in 

commercial fishing and agriculture and other viable activ ities. ~ 

7 . Montserrat 

fbe Special committee, 

Referring to the general resolution above, 

~ the non-receipt of up-to-date information on the Territory from the 

administering Power and that a last visiting mission took place in 1982, 

Noting also that information considered by the Subcommittee was made 

available from published sources, 

~ the functioning of a democratic process in Montserrat, 

taking ngte of the reported statement of the Chief Minister that his 

preference was for independence within a political union with the Organization 

of Bastern caribbean States and that self-reliance was more of a priority than 

iodepeDdence, 

HetLpq yitb opnscrp the dire conaequencea of a volcanic eruption ~ which led 

to the evacuacion of a third of the Territory's population to safe areas of the 

island, 

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Noting also the efforts of the administering Power and the Government of 

the Territory to meet the emergency situation caused by the volcanic eruption , 

including the implementation of a wide range of contingency measures for both 

private and public sectors in Montserrat , 

Noting further the coordinated reaponae measures taken by the United 

Nations Development Ptogramme and the assistance of the United Nations disaster 

management team. 

Noting with deep concern that a substantial number of the inhabitants of 

the Territory continue to live in shelters because of volcanic activity, 

1 . Reauests the administering Power, bearing in mi nd the views of the 

people of the Territory ascertained through a democratic process, to keep the 

Secretary-General informed of the wishes and aspirations of the people regarding 

their future political status; 

2. Calls upon the administering Power, the s pecialized agencies and other 

organizations of the united Nations system, as well as regional and other 

organizations to provide urgent emergency assistance to the Territory in 

alleviating the consequences of the volcanic eruption . 

8 . R.illU.m 

The Special Committee, 

Referring to the general resolution above , 

Taking into account the unique nature of Pitcairn in terms of population 

and area , 

Expressing ita satisfaction with the continued economic and social 

advancement of the Territory, as well as with the improvement of its 

communications with the outside world and ita management plan to address 

conservation issues, 

1 . Request• the administering Power, bearing in mind the views of the 

people of the Territory ascertained through a democratic proce8a, to keep the 

secretary-General informed of the wiahea and aspirations of the people regarding 

their future political statue; 

2 . Also requeata the adminiatering Power to continue ita assistance for 

the improvement of the economic, social, educational and other conditions of the 

population of the Territory . 

/ . .. 
111 

9. St . Helena 

The Special Committee, 

Referring to the general resolution above, 

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Taking into account the unique character of the Territory , its population 

and its natural resources, 

Aware of the request by the Legislative Council of St . Helena that the 

administering Power conduct a constitutional review in the Territory. 

~ the statement of 1995 by the administering Power that the Governor 

of the island would be ready to enter into debate on a constitutional review of 

St . Helena, 

~ of the establishment by the Government of the Territory of the 

Development Agency in 1995 to encourage private sector commercial development on 

the island, 

Aware of the efforts of the administering Power and the territorial 

authorities to improve the socio-economic conditions of the population of ) 

St. Helena, in particular in the sphere of food production, 

1 . ~the administering Power to conduct the constitutional review 

in the Territory, taking into account the wishes of its population; 

2 . Also requests the administering POwer, bearing in mind the views of 

the people of the Territory aacertained through a democratic process, to keep 

the Secretary-General informed of the wishes and aspirations of the people 

regarding their future political status; 

3. further rcqueata the administering Power and relevant regional and 

international organizations to continue to support the efforts of the 

territorial Government to address the socio-economic development of the 

Territory. 

10. Turk• and Caieos I1landt 

The Special Committee, 

Referring to the general reaolution above, 

~ the recent petition by the politieal ,.leadera of the Territory 

addressed to the administering Power to recall .the Governor and the deciaion by 

the administering Power to reject that petition, 

Hating with igterest the atat ... nt .. de and the information on the 

political and ecoooaic situation in the Turks and Caicos Islands provided by the 

Deputy Chief Minister of the Territory to the Pacific Regional Seminar held at 

Port Moresby in June 1996, 

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112 

Taking note of the request by the Deputy Chief Ministex of the Territory 

addressed to the Special Committee to visit the Territory and ascertain the 

wishes of the people of the TUrk• and Caicos Islands with regard to preparing 

themselves for self-government , 

Noting also the establishment in November 1995 of the Action Committee for 

Political Independence , formed by prominent political figures from different 

parties, and its stated goal of educating the population to the disadvantages of 

the present colonial status and the benefits of independence, 

Noting further the efforts by the Government of the Terr itory to strengthen 

financi al management i n the public sector, including efforts t o incr eas e 

revenue, 

Noting with concern the vulnerability of the Territory to drug trafficking 

and related activities, as well as its problems caused by illegal immigration, 

~ the need for continued cooperation between the administering Power 

and the territorial Government in countering drug trafficking and money 

laundering , 

1 . Requests the administering Power, bearing in mind t he views of the 

people of the Territory ascertained through a democratic proc ess, to keep the 

Secretary-General informed of the wishes and aspirations of the people regardi ng 

their future political etatua ; 

2 . ~the administering Power to take fully into account the wishes 

and interest• of the Government and the people of the Turks and Caicos Islands 

in the governance of the Territory; 

3 . Calls uoon the administering Power and the relevant regional and 

international organization• to continue to provide aa•istance for the 

improvement of the economic, aoeial, educational and other conditions of the 

population of the Territory; 

4. calls upon ehe administering Power and the territorial Government to 

continue to cooperate to counter problema related to money laundering , smuggling 

of funds and other related crimea , ae well aa drug erafficking . 

11. ynited State• Virgin lalanda 

Th• Special Cpmmittct. 

RefO(ring to the general reaolution above, 

~ ~t general election• were held in November 1994, 

N9ting alto that 27 . 5 per cent of the electorate participated in the 

referendum on the political atatua of the Territory on 11 OCtober 1993, and that 

80 . 4 per cent of thoae who voted aupported the existing territorial atatua 

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arrangements with the United States of America , and that the referendum left the 

status i ssue undecided , 

Not~nq further the continuing interest of the territorial Government in 

seeking associate membership in the Organization of Eastern Caribbean States and 

observer status in the Caribbean Community, 

~the necessity of further diversifying the Territory' s eConomy, 

Not i ng also that the question of Water Island is still under discussion 

between the Government of the Territory and the administering Power, 

Noting further the efforts of the Government of the Territory to promote 

the Territo ry as an offshore financial services centre, 

Noting with satisfaction that the Territory joined the International Drug 

Enforcement Conference as a full member in 1995 , which would strengthen ita 

capability to combat illegal drug trafficking, 

Recalling the dispatch in 1977 of a United Nations visiting mission to the 

Territory, 

1 . ~the administering Power, bearing in mind the views of the 

people of the Territory ascertained through a democratic process, to keep the 

Secretary-General informed of the wishes and aspirations of the people regarding 

their future political status; 

2. Requests the admi nistering Power to continue to assist the territorial 

Government in achieving its political, economic and social goals; 

3 . Also requests the administering Power to facilitate the participation 

of the Territory, as appropriate, in various organizations, in particular the 

Organization of Eastern Caribbean States and the Caribbean Community ; 

4 . Welcomes the negotiations between the administering Power and the 

territorial Government on the question of Water Island. 

II . QUESTION OF DISSEMINATION OF INFORMATION ON DECOLONIZATION 

A. Consideration by the Subcommittee 

10 . In accordance with its programme of work for 1996, adopted at its 

696th meeting, on 24 June 1996, the Subcommittee _on Small Territories, 

Petitions, Information and Assistance considered .the question of dissemination 

of information on decolonization at ita 700th to 702nd meetings, on 3 and 

8 July 1996 . 

11 . During its consideration of the question of dissemination of information on 

decolonization , the Subcommittee held consultations with representatives of the 

Department of Public Information and the Department of Political Affairs of the 

Secretariat . 

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B. Statement by the representative of the Department 

of Public Information 

12 . In his statement, the representative of the Department of Public 

Information said that the Department ' s report covered the activities undertaken 

by the Department during the period from May 1995 to April 1996 . The 

Department's multimedia activities included a wide range of issues pertaining to 

decolonization . The adoption of General Aasembly resolution 50 / 40 on 

d i ssemination of information was highlighted by the Department's news progra~es 

for broadcasting organizations worldwide and received emphasis in its press 

releases in English and French. 

13 . As part of ita regular coverage of united Nations activities, the 

Department issued a total of 48 press releases in English and French on issues 

relating to decolonization . During 1995 # a wide range of information covering 

all aspects of decolonization was processed by the staff of the Ynited Nations 

yearbook for volume 48, covering the events of 1994, as well as for volume 43, a 

bac klog edition covering events in 1989; those volumes were being published in 

1996 and 1997, respectively . In the special fiftieth anniversary commemorative 

edition, published in August 1995 , a major section entitled "Emerging nations " 

cove red issues relating to the end of the International Trusteeship system, the 

status of the remaining Non-Self- Governing Territories, the thirtieth 

anni versary of the 1960 Declaration, and the dismantling of the colonial system, 

including case studies on Algeria , Angola, Mozambique, Namibia and Southern 

Rhodesia. The Department also continued to distribute the poster on 

decolonization, publiahed in 1994 in English, French and Spanish, entitled 

"Complete Decolonization by the Year 2000- Freedom to Choose ." 

14 . The Department produced 48 radio programmes which covered a wide range of 

activ ities related to decolonization . Related activitie• within the United 

Nations system were also televised and disseminated through feeds and dubs made 

ava i lable to networks and other television stations and through packages of 

television news and video highlights provided to international news syndicators. 

The Department ' s Audio/Visual Library continued to make tapes and cassettes 

available to correspondents, delegatee, United Nations radio producers and 

outside producers on deeolonization iasuea . 

15 . The worldwide network of 68 United Nations information centres and services 

continued to distribute the Department ' s information materials relating to 

decolonization, through the local media, non-governmental organizations and 

educational institutions. The aame materials also formed part of United Nations 

Information Centres reference library collections. Whenever appropriate, the 

Centres incorporated such information in their briefings on the work of the 

Organization as well •• in their newsletters . The united Nations Information 

Centre at Port-of-Spain aaaiated the Special Committee during the Caribbean 

Regional Seminar on decolonization held from 3 to 5 July 1995 . Audio material 

recorded during th• Seminar, including special interviews, was sent to 

Headquarters for production of radio programmes for global distribution . 

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c. §J.atement. by the representativ.!LQI the Ot!partonent 

of Po litical Affairs 

16 . ! n his s tatement before ~he Subcommittee , the representative of the 

Depa~ nt of Pol i ti c al Affairs rev iewed the Department's a c tiv itie s in 1995 in 

the area of dissemination of information on decolonization . He d rew t h e 

a tten tion o f the Subcommit tee members to the provisions of the most rec ent 

Gene ra l m.b y resoluti on o n dissemination of infonnat1on on decolonization 

(r e s o lut i o n 5 0 / 40} with r e gard to the functions of D~partment of ~ical 

Affairs . 

17 . I n the l ight of the prov isions of that resolution, t h e work of the 

Depart me nt in the dis s emination of info rrr.ation was focused on three major areas: 

{a ) ora l dissemination o! i nformation thro ugh per3onal contacts of the 

Oepat·tme nt ' s o fficer s with leadi ng experts on Non-Self-Governing Territories, 

representa t ives from academia and media organizations; (b) the syste~~tic 

distribution of documents o n decolonization issues, in close cooperation with 

the Department of Publi c Infor~ation, particularly in connection with regional 

seminars a~d events in other forums, at United Nations Headquarters and 

elsewhere; and (c) various contributions prepared by the Department of Political 

Affairs for recurrent or occasional United Nations publications. All these 

activities were closely coordinated with the relevant departments and services 

of the United Nations Sec retariat, first and foremost with the Department's 

longstanding partner, the Department of Public Information . 

18 . One area in which the contribution of the Department of Political Affairs 

was considered important was , as in the previous years, the political advice and 

up-to - date information provided by the Department to the Departm nt of Public 

Information in the preparation of published materials. Continuing its past 

practice , the Department cooperated with the Department of Public I n formation in 

the preparation of relevant chapters for the 1995 United Nations Yearbgok . The 

questions covered in that contribution included, actions by the General Assembly 

and its subsidiary bodies, implementation of the resolutions on decolonization 

by the specialized agencies, foreign economic and other interests in the 

Territories, scholarship programmes and training for the inhabitants of the 

Non-Self - GoYerning Territories and other decolonization issues . In this context 

the representative of the Department of Political Affairs mentioned the updating 

of information that the Department undertook for various organizations' 

Yearbooks, including those distributed through electronic media. He also said 

that desk officers of the Department responsible for decolonization continued to 

provide an ongoing consultation for the united Nations tour guides on the 

decolonization questions for the general p~lic visiting Headquarters. 

19. The Department availed itself of the opportunity provided by the seminar• 

organized by the Special Committee away from Headquarters to disseminate 

information on decolonization. The representative of the Department stated 

that , given the diminished human resources of the Department of Political 

Affairs involved in servicing decolonization bodies and providing working 

documents on decolonization issues to the General Assembly and its subsidiary 

bodies, it was becoming more and more difficult to attend to various requests 

from academia , the general public and individuals for specific information on 

decolonization. The regional semin~ra provided a unique opportunity to 

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accomplish several major tasks at one time. It helped the Department to collect 

up-to- date information on the politi al and. constitutional developments in the 

Terri tories through d i scussions with representatives from the Non-Self-Governing 

Territories, as well as experts and non -governmental organizations active in the 

field of decolonization ; the Department achieved a great deal by directly 

disseminating in bulk various working documents of the Special Committee and its 

subsidiary bodies as we ll as other material published by the Department of 

Public Information at the venue o f the seminar. The recent Pacific Regional 

Seminar had offered an e xcellent opportunity for dissemination of information. 

The direct contact and e xchange of information with the administrator of 

Toke l au, the Chief Minister o f Gibraltar and the Deputy Chief Minister of the 

Turks and Caicos Islands, as well as representatives from New Caledonia , East 

Timor and the Falkland Islands (Malvinas ) and other participants, was useful in 

rendering the serv i ces of the Department on the work of the Special Committee . 

20 . The Department of Political Affairs also attached great importance to the 

distribution of information on decolonization, and took particular care to reply 

to individual requests for information on the wo r k of the United Nations in the 

field of decolonization , although those requests seemed to have diminished in 

recent years . The Department maintained regular and fruitful contacts with 

regional and intergovernmental organizations, both in the Caribbean and the 

Pacific regions, especially CARICOM , the Eastern Caribbean Development Bank, the 

Caribbean Development Bank and the South Pacific Forum . The valuable input from 

those organizations on the issues facing small 'island Non-Self-Governing 

Territories enabled the Department to undertake more thorough analysis of the 

problems faced by those Territories and to reflect them adequately in the 

working papers . The representative of the Department said that that source was 

becoming even more important in the absence of up-to-date information on the 

Territories from some of the administering Powers . 

21 . The representative of the Department assured the Subcommittee that the 

Department would make every effort to fulfil the mandate within the limits of 

its diminished resources and the financial constraints facing the organization . 

He concluded by saying that the Department of Political Affairs would take into 

consideration the guidelines and recommendations the Subcommittee would make at 

the conclusion of its current session . 

D. Week of Solidarity with the Peoples of All Colonial 

Territories. Fjghtinq for Freedom. Independence and 

Human Rights (27-31 MaY 1996) 

22 . In accordance with the programme of work for 1996 adopted by the Special 

Committee at its 1454th meeting, on 16 February 1996, the Subcommittee on Small 

Territories, Petitions, Information and Assistance was to consider the question 

of the Week of Solidarity at its meetings in May 1996 . Since the Pacific 

Regional Seminar was held from 12 to 14 June 1996, the meetings of the 

Subcommittee scheduled for May had to be moved to a later date . Since the dates 

tor the Week of Solidarity were in close proximity to the Pacific Regional 

Seminar, the Chairman found it most appropriate to make the statement on the 

occasion of the Week of Solidarity at the Seminar on 14 June 1996 . The 

atatement was as follows : 

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"Since 1972, in accordance with General Assembly resolution 

2911 (XXVII), the Governments and peoples of the world have been observing 

annually a Week of Solidarity with the Peoples of All Colonial Territories. 

This celebration is in full accord with the purposes and tenets embodied in 

the Charter of the United Nations and is in conformity with the principles 

enshrined in the Declaration on the Granting of Independence to Colonial 

Countries and Peoples, contained in Assembly resolution 1514 (XV). 

"Today, when our Organization takes a closer look at its achievements, 

its success in the field of decolonization is universally recognized. 

Hundreds of millions gained their freedom and independence in the surge of 

decolonization following the creation of the United Nations. Their 

membership in the United Nations as sovereign States strengthened the 

fundamental basis of the international community. 

"We remember the history of the struggles against colonialism and pay 

tribute to all those who took part in them. We remain mindful of the 

sacrifices that made it possible for hundreds of millions of peoples to 

achieve self-determination and independence . 

"However important the success in the field of decolonization, the 

task is still unfinished in that area and requires further concerted and 

determined action on the part of all those involved. There are still 

peoples who have not been able to exercise their right to 

self-determination. These are mostly peoples of small island 

Non-Self-Governing Territories located mainly in the Pacific and Caribbean 

regions. They are confronted, inter alia, by problems of their small size, 

low population, geographic remoteness, limited natural resources and 

vulnerability to natural disasters. Their situations require new and 

innovative solutions geared towards the implementation of the Intetnational 

Decade for the Eradication of Colonialism launched by the General Assembly 

in 1988 . 

"Convinced as we are that in the decolonization process there is no 

alternative to the principle of self·determination, we once again reiterate 

the legitimacy of all options of self-determination consistent with General 

Assembly resolutions 1514 (XV) and 1541 (XV) as long as it is ascertained 

that they are the freely expressed wishes of the peoples concerned. We 

should continue to exercise flexibility and realism in our endeavours to 

complete the process of decolonization . The wishes of the peoples of the 

Non-Self-Governing Territories should not be ignored when examining once 

again the options of self-determination availab~e to them. 

"In that connection, we further appeal for the strengthened and 

continued support of the administering Powers, whose cooperation with the 

Special Committee ia essential for the progress of the Territories towards 

self-determination. We count on the support of the specialized agencies, 

which should continue to assist the Non-Self-Governing Territories in 

enhancing their standard of living and promoting their self-sufficiency. 

We count on regional and international organizations, which should explore 

new avenues to provide the Hon-self-Governifti Territories with legal and 

political opportunities for participating in programmes that relate to 

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Page 22 

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their environment and livelihood. We count on support for our efforts from 

all Member States and non-governmental organizations . 

•we hope and believe that our combined, unrelenting efforts will 

ensure the fulfilment of the promise for freedom, lasting peace , sustained 

growth and sustainable development for all the peoples of our planet in 

accordance with the purposes and principles of the United Nations . " 

E. Draft resolution on dissemination of information 

on decolonization 

23 . Having concluded ita examination of the item, the Subcommittee decided to 

recommend the following draft resolution for action by the Special Committee : 

The Special Committee, 

Having examined questions relating to the dissemination of information on 

decolonization, 

Recalling General Aaaembly resolution 1514 (XV) of 14 December 1960 , 

containing the Declaration on the Granting of Independence to Colonial Countries 

and Peoples, and other resolutions and decisions of the united Nations 

concerning the dissemination of information on decolonization, in particular 

General Aaaembly resolution 50/40 of 6 December 1995 , 

Recognizing the need for flexible, practical and innovative approaches 

towards reviewing .the options of self·determination for the peoples of 

Non-Self-Governing Territories with a view to achieving complete decolonization 

by the year 2000 , 

Reiterating the importance of dissemination of information as an instrument 

for furthering the aims of the Declaration, and mindful of the role of world 

public opinion in effectively assisting the peoples of Non-Self-Governing 

Territories to achieve self-determination, 

~ of the role of non-governmental organizations in the dissemination of 

information on decolonization, 

1 . ~the activities in the field of dissemination of information 

on decolonization undertaken by the Department of Public Information and the 

Department of Political Affairs; 

2. Cqnaidera it important to cop~inue ita efforts to ensure the widest 

possible ·dissemination of information o~decolonization, with particular 

emphasis on the options of self-determination available for the peoples of 

Non-Self-Governing Territories; 

3 . Reqyasts the Department of Political Affairs and the Department of 

Public Infor.ation to take into account the suggestions of the Special Committee 

to continue their efforts to take measures through all the media available, 

including publications, radio and ·television, as well as the Internet, to give 

I ... 
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Page 23 

publici cy to the work of the United Nations in the field of decolonization and, 

i nter alia : 

(a) To continue to collect, prepare and disseminate, particularly to the 

Territories, basic material on the issues of self-determination of the peoples 

of Non - Self-Governing Territories; 

(b) To seek the full cooperation of the administering Powers in the 

discharge of the tasks referred to above ; 

(c) To maincain a working relationship with the appropriate regional and 

intergovernmental organizations, particularly in the Pacific and Caribbean 

regions, by holding periodic consultations and exchanging inf.ormation; 

(d) To encourage involvement of non -governmental organizations in Che 

dissemination of information on decolonization; 

(e) To report to the Special Committee on measures taken in the 

implementation of the present resolution i 

4 . Requests all States, including the administering Powers, to continue 

to extend their cooperati on in the dissemination of information referred to in 

paragraph 2 above . 

III . ADOPTION OF THE REPORT 

2• . Having carefully examined the situation in the Non-Self-Governing 

Territories and the question of diasemination of information on decolonization, 

the Subcommittee adopced by consensus the texts of the preceding draft 

resolutions, and conclusions and recommendations contained therein, at its 

702nd meeting, on 8 July 1996 , for action by the Special Committee . 

25. At the same meeting, the Subcommittee adopted the preaent report . 
120 

VIRGIN ISLANDS AND NORTHERN MARIANA 

ISLANDS ISSUES 

WEDNESDAY, JUNE 26, 1996 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIVE 

AMERICAN AND INSULAR AFFAIRS, COMMITTEE ON RESOURCES, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 2:10 p.m., in room 

1334, Longworth House Office Building, Hon. Elton Gallegly (Chairman of the Subcommittee) presiding. 

STATEMENT OF HON. ELTON GALLEGLY, A U.S. REPRESENTATIVE FROM CALIFORNIA; AND CHAIRMAN, SUBCOMMITTEE 

ON NATIVE AMERICAN AND INSULAR AFFAIRS 

Mr. GALLEGLY. It is a pleasure to begin this hearing on the Virgin Islands issue with a warm welcome to the distinguished Governor of the Virgin Islands, my good friend Governor Roy Schneider. Welcome, Governor. I am fortunate to have seen firsthand the 

efforts of the Governor to bring about order in the aftermath of the 

hurricanes which blasted the Virgin Islands last year. 

In addition, I am aware of a number of the measures the Governor has undertaken to improve the fiscal health of the territory and to promote economic development and self-sufficiency in the 

Virgin Islands. You are to be commended for these efforts, Governor, and I would hope that consideration of the legislative pro- posals before the Subcommittee today would further advance your initiatives. 

Today, the Subcommittee will hear testimony regarding two leg- islative proposals introduced by the Virgin Islands' Delegate Victor 

Frazer: H.R. 3634, to amend provisions of the Revised Organic Act 

of the Virgin Islands, and H.R. 3635, to transfer management authority for the Christiansted Historic Site to the Virgin Islands. 

These seem to represent straightforward proposals to improve the 

management of the Government of the Virgin Islands. 

There are two panels presenting testimony. First, the panel with 

Governor Schneider will be introduced by Delegate Frazer,. followed 

by the Administration's panel of the Director of the National Park 

Service, Roger Kennedy, and the Director of the Office of Insular 

Affairs, Allen Stayman. So with that, I guess we would ask our 

friend, Congressman Frazer, to introduce our first panel. [Prepared statement of Hon. Elton Gallegly follows:] 

STATEMENT OF HON. ELTON GALLEGLY 

As the Virgin Islands has not yet adopted a Constitution, changes to the laws of 

governance may require a congressional enactment of a change in the Organic Act 

of the Virgin Islands. The Two provisions in H.R. 3634, the Revised Organic Act of 

the Virgin Islands would clarify the meaning of the temporary absence of the Gov- ernor or Lt. Governor to not include physical absence from the territory. Modern 

telecommunications permits these executive officials of the Virgin Islands to maintain contact and effectively make decisions long-distance. In addition, the Virgin Islands would be authorized to issue parity bonds instead 

of priority bonds as now required by the Organic Act. This should result in in-
121 

creased savings to the Virgin Islands and the issuance of parity bonds is a common practice in communities in the fifty states. H.R. 3635, would direct the Secretary of the Interior to transfer management au- thority of the Christiansted Historic site upon the request of the Governor of the 

Virgin Islands and completion of an agreement. The Governor of the Virgin Islands 

has indicated the Virgin Islands could more effectively management and operate the 

six-acre site in the heart of christiansted. The Secretary is given complete discretion 

to determine the ability of the Virgin Islands to financially manage and operate the 

historic site. Also, title to the property is retained by the United States and the Secretary may terminate the agreement if the terms are not met, revoke the authority 

to manage the site. The bill clearly provides the Secretary with the discretion to 

begin and terminate the transfer of authority to manage the historic site. I would 

hope that this would be recognized and that there would not be an automatic rejec- tion to a bill to permit the saving of federal funds and the devolution of management to a local government. 

STATEMENT OF HON. VICTOR FRAZER, A DELEGATE IN 

CONGRESS FROM THE TERRITORY OF THE VIRGIN ISLANDS 

Mr. FRAZER. Good afternoon, Mr. Chainnan and Members of the 

Committee. It gives me pleasure, Mr. Chainnan, to introduce the 

Governor of the Virgin Islands, Dr. Roy L. Schneider. Governor 

Schneider speaks on behalf of the people of the Virgin Islands here 

today. 

And as I said at a hearing this morning before the Senate Committee on Resources, the Governor is the person that has been 

elected to speak on behalf of the people of the islands, and it is in 

that capacity that he is here today. 

You are quite aware that very recently the people of the islands 

awarded the Governor the Medal of Honor, the first time it has 

been so ordered to a sitting governor. And they have also named 

a hospital in St. Thomas after the Governor, the Roy L. Schneider 

Hospital and Health Complex, as evidence of their satisfaction with 

the Governor's performance. 

Mr. Chainnan, H.R. 3634, as you said, would revise the Organic Act to extend it and to pennit the Virgin Islands to come into the 

21st century. The provision of this Act is an impediment to a continuity of the Governor's authority when he leaves the island. 

It is important that anyone dealing with the Government of the 

Virgin Islands through the Governor be assured that any negotia- tions or contracts that they have with the government by way of 

the Governor of the Virgin Islands are intact when he is physically absent from the territory on official business, and it should not be 

construed as the Governor being out of the territory and, therefore, 

not be able to perfonn his duties. 

I think that provision may have had some relevance in the horse 

and buggy age. It doesn't today when someone can be reached instantaneously through our high tech means of communication. I 

think it is important that we recognize that a territory, like any 

State, could only have one governor, and the President of the United States, when he leaves the country, he is still the President of 

the United States. . So I think it is important that it be understood that we would 

like no less for the chief executive of the Virgin Islands, that when 

he is temporarily absent, he should not be considered physically absent from the territory. 

Also, Mr. Chainnan, H.R. 3635 is a bill which has been quite 

misunderstood and misquoted in the local paper. I would like to 
122 

clarify that for those who have so reported it. This bill directs the 

Secretary of Interior to enter into an agreement with the Governor 

of the Virgin Islands upon request to permit the Governor to have 

authority to manage the Christiansted National Historic Site. 

It is part of the Governor's overall plan to improve the waterfront 

areas on both St. Thomas and St. Croix. So it is not that the Governor is asking for title to the National Historic site on St. Croix. He wants to manage that portion that is in his overall improvement plan for both St. Thomas and St. Croix. 

Mr. Chairman, without further ado, I would like to introduce 

Governor Roy L. Schneider, the Governor of the Virgin Islands, 

who will speak on both bills on behalf of the people of the Virgin 

Islands. 

STATEMENT OF DR. ROY L. SCHNEIDER, GOVERNOR, U.S. 

VIRGIN ISLANDS 

Governor SCHNEIDER. Good afternoon. Mr. GALLEGLY. Welcome, Governor, and thank you, Congressman 

Frazer, for your opening comments. 

Governor SCHNEIDER. Mr. Chairman and distinguished members 

of the committee, I am here today to discuss two bills which affect 

the Virgin Islands. But before I take up the business at hand, let 

me take this opportunity to personally thank you, Mr. Chairman, 

for all the help you provided immediately after the storm. We needed you, and you were there. 

Our recovery would not be possible were it not for your involvement and personal attention and understanding. Your ability to 

deal with the Federal Emergency Management Agency has certainly worked to our benefit, and I want to particularly thank you 

for your follow-up visit to the Virgin Islands to make certain that 

we are continuing to receive the assistance so necessary after disasters of this size. 

Now, Mr. Chairman, I know I have turned in my message to you, 

and what I would like to do is to quickly summarize these two bills. 

The first bill concerns having the management of part of Christiansted, which is the eastern part of St. Croix, the largest islandChristiansted in the east, Frederiksted to the west. 

There is a portion there right at the wharf that is managed by 

the Interior Department through the National Park Service. The 

Chairman of the committee, Mr. Young, visited St. Croix and noted 

firsthand the deterioration of the buildings. As I understood it, 

from 1972, there was some agreement between the Interior Department, National Park, and the Government of the Virgin Islands to 

fix this area up. It is more than 20 years. Nothing has been done. 

Now, taking over this government a year and a half ago, reviewing what ought to be done, we are fixing up the waterfront area 

in St. Thomas, the other island, the capital. We want to do the 

same thing for St. Croix. The problem we are having, Mr. Chairman, is not that we don't have the money, we don't have the plans, 

the problem is the National Park Service. 

They want to maintain this area as "historic." We are saying to 

you, which I am putting with tongue in cheek, let us manage this 

area. Even though reading the message from Mr. Murkowski in the 

Senate to the President, where he indicates that transferring all 
123 

excess Federal lands to Guam, all excess Federal lands were transferred to Puerto Rico, all excess Federal lands are going to Vieques. We haven't taken that route. Perhaps we ought to. We are simply saying give us a chance to take an area that is 

important, not only as a historic site_, b:ut also for the economy of 

St. Croix. We now have tourists goin'g to St. Croix more than we 

did before. In 1994, 104 businesses were lost in St. Croix; the gain 

on my administration, 38 new businesses. Does that say that we 

are trying to turn things around and doing it well? 

We have for you not a dream, not a pie-in-the-sky idea. We have 

for you a plan, Mr. Chairman. This is what we are going to do with 

the Christiansted area. We are going to take this area that we 

want to put grass all around, and we are going to 1-~t the historic 

change, historic benches, lighting. 

I am sure you must have heard the past governor asked the National Park Service to light this area. They refused. Two tourists 

were killed in that area. I do not want a repeat of that. We have 

the plans there-computerized drawings-of what we will do with 

the entire site. And if your staff will take a moment to look at 

them, you will see that we are not dreaming. 

We already have everything to go, and we have the funding in 

place. I don't see why there is opposition from a Federal agency to 

an area-a government that is changing, moving, and indicating 

that we have a sense of what is necessary. 

In this transfer of management, we are saying to you, Mr. Chairman, that when it happens, if we do not go along with these plans 

that we have in a timely fashion, not over 20 years that they have 

not worked, we will then let it go back to the Interior Department 

if that is so. So we are serious about what we are doing. 

But we cannot have concern of the businesses that are now beginning to make it being pushed away from the people who come 

to their shops because the National Park Service-they don't think 

it should be there. Ask your Chairman, Mr. Young, how he found 

these buildings that they claim should not be touched. · I am saying to you I recognize as a physician the seriousness of 

making sure that we do what we said we will do and making sure 

it is done right. So I then will ask you to approve this area. We 

cannot go on what happened in the past. We are telling you what 

we plan and what we intend to do. 

The long and short of it is that the management of Fort 

Christiansvaern by the National Park Service has been like having 

a part of Christiansted declared foreign soil. H.R. 3635 would require the Secretary of Interior to enter into an agreement with the 

Governor that puts management of the fort back in the hands of 

the Government of the Virgin Islands. And I ask you to approve 

this bill and let us start doing What is right for the people of the 

Virgin Islands and the Federal Government and our nation. 

The second bill, Mr. Chairman, has to do with bringing the Virgin Islands government in line with what is done now. When the 

Governor leaves the Virgin Islands, by the Organic Act, which is 

presently the constitution of the Virgin Islands, which the Congress 

of the Virgin Islands all right to change through the territorial 

clause, we are asking you to make it possible that the Governor 

can continue to have control of the government. 
124 

Who is ready more than the Governor? Who is really the lightning rod for information to deal with investors, to deal with folks 

who are getting their-to bring us out of our problems? The Governor cannot in the short time bring someone who is acting up to 

date with all of the information that is necessary to continue our 

government activities. 

We have asked that it be placed in law that when the Governor 

leaves the Virgin Islands, he retains control of the territory. Right 

now today because the Lieutenant Governor is not in the Virgin Islands, the Governor of the Virgin Islands is the Commissioner of 

Finance. 

I have before me from our Virgin Islands session law. More than 

25 times when the Governor left the Virgin Islands and the acting 

governor, sometimes the Lieutenant Governor, sometimes the Commissioner of Finance, vetoed bills, changed the laws, and just 

caused confusion. 

I think with the new technology that we have-a fax and all the 

different telephones, there is really no need for this. When the 

President leaves America, he still retains his control of the government. We should be able to do the same things. That is truly the 

position of the Virgin Islands people. A local newspaper that usually acts against our administration 

sided with us by stating in the editorial, "We are with Governor 

Roy Schneider on the issue of removing acting governor status from 

the Lieutenant Governor when the Governor is off island. It is like 

using carbon paper in an era of photocopiers, faxes, and e-mail." 

And it went on and on. 

The issue is not one of who is acting governor. The issue is that 

the Governor needs to have some continuity in running the business of the Virgin Islands, Mr. Chairman. I am ready to answer 

any questions that you might have on these two issues. 

[Prepared statement of Governor Roy L. Schneider may be found 

at the end of the hearing.] 

Mr. GALLEGLY. Thank you again for being here, Governor. Just 

a couple questions back on the Christiansted issue. Under the current management of the historic site, could you be a little more 

specific with problems that you have identified with the status 

quo? 

Governor SCHNEIDER. The problems that we have identified basically are two: inactivity; no repair. Those are two. If you were a 

tourist coming to that area and seeing the fort, seeing the custom 

building, and seeing the general area, it looks terrible. That is not 

part of my operation. 

You have been in the Virgin Islands and see what I do to deteriorated buildings. It should be done. The Government of the Virgin 

Islands and those properties run by us should not look broken 

down. No one should take 20 plus years to do repairs to those 

buildings. It is unacceptable. 

Second, when it comes to people being able to park in the area, 

we should develop the parking area and charge for it. We can have 

revenues from that to take up the management. Thirdly, it is utterly ridiculous that we can accept that citizens coming from elsewhere or anyone should lose their lives because of inactivity, insen-
125 

sitivity that you cannot light an area when requested by the Government of the Virgin Islands. 

The other Administration, Governor Farley, did exactly that. I 

think it is terrible. It is terrible for not only the Virgin Islands, it 

is terrible for the United States that this should happen. I do not 

want a repeat of that, and we swear to you that give us a chance 

to show what we can do. We have done it already with many other 

areas. 

We now are getting ready to do it in St. Thomas. Fortunately, in St. Thomas, we have funding for that repair of the shoreline 

from the transportation area, and they are working with us also to 

do that. For example, we are putting a boardwalk-an area to walk 

from Christiansted on the coastline all the way to the other area, 

making something for tourists and indeed for the residents. They 

want us to stop at the line of the fort, go back up on ground, go around, and then get back on the boardwalk. This is utterly ridiculous, Mr. Chairman. 

Mr. GALLEGLY. Governor, obviously, there was significant infrastructure, as you have shown on your tentative plans there, and 

you have talked about having the revenue to make this happen. And, obviously, there is going to be an ongoing cost of operation. Do you plan on using user fees or would there be significantly 

greater fees to the visitors visiting? I visited there, you know, just this last year, and historically it 

is an absolutely amazing place and I think even greater potential than exists today. And I have to agree with you on that. 

But do you see significant increases for visitors who would want 

to visit the fort and visit the area? You mentioned parking fees, 

which I guess wouldn't be significant, but what about those who 

would want to visit the fort? What is it? Two bucks now or something like that? 

Governor SCHNEIDER. Yes. But I do not see thisMr. GALLEGLY. Or do you think it just increases the economic development of the area as far as shopping and things like that? 

Governor SCHNEIDER. Yes, it does. And it helps the businesses. 

In the local newspaper from St. Croix, we have some copies there 

where the businesses are crying out, ''What are you trying to do to 

us? We can't have these folks come into our shops? They have to 

go way down in the middle of town. It doesn't make any sense." 

Mr. GALLEGLY. But you don't see it costing the visitors there any 

more money to visit the historic aspects? Governor SCHNEIDER. Of course not. We think that we are simply developing something nice or nicer than it is now for visitors to see. 

It is not a matter of increasing costs. 

Mr. GALLEGLY. And the economic development in the forms of 

commercial enterprises would benefit St. Croix and the VI--

Governor SCHNEIDER. Definitely. 

Mr. GALLEGLY.-through that economic development? How have 

you been received by the Park Service? 

Governor SCHNEIDER. Well, in essence, again, I hate to say it, but 

I will say it publicly. The approach of the Park Service has been 

close to colonialism. The superintendents who run these parks believe that they were sent by God to control the Virgin Islands and 
126 

other places. They totally don't hear, I believe. Something is wrong with the auditory nerve. 

During a storm, in St. John when we needed to get to the other 

side of St. John, one of the superintendents had the gall to suggest 

to us we cannot go through on the road that had already been cut. 

We simply wanted to clear the road and let the people go from one 

side of the isiand to the other. He insisted, ''You can't do this. You are destroying the environment below." "What about the people who can't go to the Puxa 

area," I indicated to him, "if another storm comes? And that is the 

only way to go. We will go." If he gets in the way, we will bulldoze 

him over. 

Mr. GALLEGLY. Governor, with all due respect, I wish you could 

be a little more candid with our-I appreciate you being here, Governor, as always. I defer at this time to the ranking member, my good friend, Congressman Faleomavaega. 

Mr. FALEOMAVAEGA. Mr. Chairman, I too would like to recognize 

our good friend and representative for the Virgin Islands, my good friend, Congressman Vic Frazer, and certainly welcome the presence of Governor Schneider also before our Subcommittee. 

I am very happy and delighted, Mr. Chairman, that you have 

taken the initiative to have our Subcommittee consider these two 

bills that relates to the needs of the Virgin Islands. And I sincerely hope that it will be positive. I do have a sense of concern with one of the bills concerning the 

historical park. I hope that our good friend, the Chairman of the 

National Park Subcommittee, will defer to us and allow us to take 

this legislation to its fullest measure so that there won't be any conflicts, obviously, from the testimony of Governor Schneider by the statement relating to the fact that the National Park Service 

is totally objecting to this proposed change. And without the benefit of their testimony, and I don't see that 

we have any representatives of the Park Service before us for this 

hearing this afternoon, I hope that maybe at a later time we will 

have their presence before our Subcommittee. But saying that, Mr. 

Chairman, I welcome the Governor's statement. 

I think in principle I hope that our friends of the Park Service 

will be compassionate and fully understanding to the needs of the 

Virgin Islands as expressed by their elected leaders, and hopefully that there is a sincere effort on the part of the Park Service to 

work with the leaders of the Virgin Islands. 

And it is unfortunate if Governor Schneider makes the categorization or Statement of the fact that it is almost a colonial pe- riod of reign there in the Virgin Islands, and hopefully this is not 

the case. But I do want to thank Governor Schneider for his statement and also Congressman Frazer for bringing this two measures 

before the Subcommittee. 

Just one question that I have about the problems of the Governor 

leaving the territory, and I am sure as you are aware, Governor 

Schneider, we are all caught in the same situation as well. Is it 

very often in the Virgin Islands that the Lieutenant Governor also 

leaves the territory where then you end up with a member of the 

cabinet having to become the acting governor? 

Governor SCHNEIDER. Once every month. 
127 

Mr. FALEOMAVAEGA. So you feel that this also has the support of 

the legislature of the Virgin Islands, that by amending this provision of the Organic Act that the Governor be treated just like you 

would the President? Where you go you are still the Governor, obviously, but for purposes of amending or signing or vetoing legislation, this is something that ought to be kept strictly within the 

providence of the authority of the Governor, and this is basically 

what this amendment proposes to change? 

Governor SCHNEIDER. Yes, sir. 

Mr. FALEOMAVAEGA. All right. Thank you, Mr. Chairman, and 

thank you, Governor Schneider. Did you have a comment? 

Governor SCHNEIDER. Yes, sir. Mr. Chairman, I didn't get a moment to mention another part of our consideration hearing in bill 

form-is the question of the bonds-the debt payment of bonds. It 

was suggested by Mr. Frazer that we bring this up because we are 

asking the Congress to also have another change in the Organic 

Act, and this change is in the Organic Act of the Virgin Islands. 

We must do our debt service for bonds through something called 

priority debt. We are asking it to be changed to parity debt. In priority debt, after you float bonds, you place them in priority-one, 

two, three, four-for paying. In parity, all the bonds are floated on 

an even keel--even level. 

I am saying to you because of priority, which we are perhaps the 

only jurisdiction that has this when it was placed in our Organic 

Act some years ago-it hasn't been changed-we know the floating 

bonds and the collateralization of those bonds are sometimes four 

to five times, which is unnecessary because it is not required by the 

bonding agencies. 

It is required by law so we now are placing all this 

collateralization. So when we float bonds, which has been done in 

the past, we have to overcollateralize by placing moneys to pay it 

off, which we use our excise tax on rum, which the Congress has 

been so kind to have us retain in order to pay the debt. 

But in addition to that, we have to place over five funds, which 

decreased significantly our cash-flow, in order to collateralize these 

priority bonds. I am saying to you if we can change from priority 

to parity, not only would we be able to perhaps release some of 

those collateralization, we will be able now to float bonds and not 

have to pay as much to have them floated. Why do we have to do 

it? Because we don't have the funding to do all the necessary repair 

that we have to do because of the destruction by Hurricane 

Marilyn. 

But, more importantly, right now, we are on the decrees from the 

Federal Court for three or four projects. One of them we are being 

charged 2 to $4,000 a day. So I am saying to you in order for us 

to immediately correct the problem, we need that change in the Organic Act again from priority to parity debt. 

Mr. GALLEGLY. The gentleman from Guam, Mr. Underwood. 

Mr. UNDERWOOD. Yes. Thank you, Mr. Chairman, and thank you 

for your testimony, Governor Schneider, and yours as well in the 

introduction of your bills our friend and colleague, Mr. Frazer. I 

just have a couple of questions. Have you discussed any of your 

plans with the National Park Service, and what has been their reaction? 
128 

And it seems to me that given the nature of this bill, which really extends a great deal of approval authority to the Secretary under 

this, that there would be very few objections to it. And I am kind 

of surprised by your comment that the National Park Service perhaps has not been as collaborative as they could be. 

Governor SCHNEIDER. Mr. Member, we even met with the National Park personnel on the site in St. Croix with the Chairman 

of the committee, Mr. Young, and their position was the same--resistance. I don't see what else we can do. We called Mr. Roberts 

several times to discuss personally with him. We were not able to 

get through. It is something we have spoken to Mr. Stayman, 

which is somewhat below, to get this done. But, again, it has to be 

done by someone who can say yea or nay, and this is not possible. Mr. UNDERWOOD. OK. How did this property come into the hands 

of the National Park Service? Was it originally taken for this purpose? Was it always Federal property? 

Governor SCHNEIDER. I think it was always Federal property, the 

same as Water Island. And, again, that is another area-that we 

are trying to have that area transferred to the Virgin Islands Government. We did have some cooperation, and we have gotten a portion of it-the landfill area, the beach, the part where the hotel is, 

the roads-turned over to us. And they are saying that we would 

not do in Christiansted. 

As soon as we got the transfer of Water Island, an island outside 

of St. Thomas, turned over to us, in a matter of one week, I had 

the entire island with electricity. In a matter of one week, we took 

up all the debris that was there. 

In a matter of one week, we developed a commission to go in and 

talk with the people that live there and come up with plans, not 

the Governor's plan, a plan of people of the Virgin Islands with insight, with experience. And we are getting this worked out. 

We are now awaiting for them to turn over the property where 

the people are now living. That is a complicated issue because they 

are trying to deal with a person who, what you call a lease owner 

for that area, but that should be done. And I think they are moving 

ahead, and we are asking them, "Let us move ahead so we can take 

this area." 

So from the experience with my government-! can't speak what 

happened before--but since we took over, we have demonstrated to 

the Interior Department that when given the responsibility for anything, we move rapidly, and we do it right. 

Mr. UNDERWOOD. And I also just want to make a brief comment 

on the bill amending the Organic Act. I notice that in this morning's testimony you were with the Lieutenant Governor on this. 

Has he rushed home? 

Governor SCHNEIDER. I think he took his video with him. No. 

The Lieutenant Governor, as you know, is now a candidate for the 

delegate seat so anything that would enhance that position I suppose is worth talking about. But I speak for the people of the Virgin Islands. 

Mr. UNDERWOOD. Very good. And I appreciate that and understand that fully. Thank you, Governor. Mr. GALLEGLY. Governor, thank you very much for being here. 

As always, it is a pleasure to see you. Congressman Frazer, it is 
129 

always a pleasure to have you before the committee, and we look 

forward to continuing to work with you in a very positive way. Thank you very much. Now we have our second panel. We have Mr. Allen Stayman, Director of the Office of Insular Affairs, and Roger Kennedy, Director 

of the National Park Service. Mr. Stayman. 

STATEMENT OF ALLEN P. STAYMAN, DIRECTOR, OFFICE OF 

INSULAR AFFAIRS 

Mr. STAYMAN. Thank you, Mr. Chairman. Mr. Chairman, members of the Subcommittee, I am pleased to be here today to discuss 

the provisions of H.R. 3634 and to discuss the second annual report 

on the Federal-CNMI Initiative on Labor, Immigration, and Law 

Enforcement in the Commonwealth of the Northern Mariana Islands. 

First, with respect to 3634, Section 2 of the bill provides that neither the Governor nor the Lieutenant Governor of the Virgin Islands need relinquish authority while traveling outside the Virgin Islands on government business. In light of today's technology, we believe the proposed amendment is appropriate, and the Administration supports enactment of 

Section 2. Section 3 of the bill deals with bonding authority of the 

Virgin Islands when its bonds are secured by the coverover of Federal excise taxes on rum. · Section 3 would allow the Virgin Islands to issue parity debt 

rather than priority debt. This change would place the Virgin Islands on a footing similar to other communities. The Administration has no objection to its enactment. I will now turn to Mr. Kennedy to discuss the other bill. 

[Prepared statement of Allen P. Stayman may be found at the 

end of the hearing.) 

Mr. GALLEGLY. Mr. Kennedy. 

STATEMENT OF ROGER KENNEDY, DIRECTOR, NATIONAL 

PARK SERVICE 

Mr. KENNEDY. Mr. Chairman, I am sorry that I can't agree with 

the Governor on a number of matters. We apparently have a respectful disagreement, both as to fact and as to obligation. First of 

all, may I submit my formal statement for the record, and then if 

I may speak--

Mr. GALLEGLY. Without objection. 

Mr. KENNEDY. There are two Organic Acts here. One is for the 

islands and the other is for the National Park Service and System. The Organic Act of the National Park Service and System calls 

upon us to be trustees for the preservation and protection of the 

places selected by the American people-all of the American people 

to serve all of the American people. 

We oppose the enactment of H.R. 3635 essentially because it is 

a park divestiture bill. It says that, ''You will take out of the National Park System a park that is of national significance, that is 

part of a system that was developed on purpose for very good reason." 

I don't think it is probably useful to take your time as a committee for me to debate with the Governor the mutual behavior of peo-
130 

ple who work for the Park Service or people who work for the Governor. 

There are, I think, a couple of facts that may be useful in the 

record, and they are these: first, the Water Island matter, to which 

the Governor referred, does not involve any parkland at all, and it 

has not occurred. There has been no transfer of land with regard 

to Water Island. 

With regard to our holdings-that is, our responsibilities in the 

islands-let me just run through those quickly for you. There is the 

Virgin Islands National Park, which includes portions of St. John 

and portions of St. Thomas and Hassle Island, which is off St. 

Thomas. There is the Buck Island Reef, which is a national monument. 

There is the Salt River National Historic Park and Ecological 

Preserve. Christiansted is the only national historic site. And the 

question arises has there or has there not been inaction with regard to the Federal taxpayers as acting through the National Park 

Service in recent years? 

All of the historic structures in the care of the National Park 

Service are currently, despite budgetary difficulties, maintained in 

accordance with what are known as the Secretary's standards, 

which are true in all Administrations-the same standards. 

Since 1980, about $3.5 to 4 million of the Federal taxpayers' 

money-$3.5 to 4 million-has gone, excluding repairs for hurricane damage, for the restoration and preservation of historic structures in this particular place. 

Every year, the Federal taxpayers pick up the tab for about 

$200,000 in annual maintenance of these properties, and about 

$300,000 goes into programs in this park, which include the usual 

run of things we do in all national parks of an educational sort. But in addition to that, and that is on-site talks in schools and 

civic groups and the like, 27 museum exhibits, five historic furnished rooms, 17 waysides, a big, handsome park brochure, which 

has been planned and completed, and, in fact, on a sort of everyday 

basis we are operating here just about the way I suspect that we 

are operating in all national historic sites. 

What is before us is a proposal to take a unit out of the National 

Park System for developmental purposes. What is proposed, among 

other things, is the construction of a boardwalk that goes around 

the exterior of a historic fort, and the building of a restaurant in 

the commandant's quarters at Fort Christiansvaern. That is what 

is before us, Mr. Chairman. Do you want or do you not want to 

keep the National Park System entire? 

[Prepared statement of Roger G. Kennedy may be found at the 

end of hearing.] 

Mr. GALLEGLY. Is that the conclusion of your comments, Mr. 

Kennedy? 

Mr. KENNEDY. Yes, sir. 

Mr. GALLEGLY. Mr. Kennedy, correct me if I am wrong, but last 

month the National Park Service transferred the management of 

city of Rocks in Idaho to the State in accordance with legislation 

similar to this. Is this correct? 
131 

Mr. KENNEDY. I am not directly familiar with the legislation for 

city of Rocks, but I will certainly agree with whatever it is you tell 

me is true in that matter, sir. 

Mr. GALLEGLY. You and Secretary Babbitt agreed to that transfer. Is that not correct? 

Mr. KENNEDY. I don't believe that is a national historic site, sir, 

but ifyou--

Mr. GALLEGLY. I didn't say it was a national historic site. 

Mr. KENNEDY. Oh, OK. 

Mr. GALLEGLY. But I did say it was Park Service controlled land 

that provided for the benefit of the public, that the Park Service 

had jurisdiction over, that they transferred to the State. Is that 

correct? 

Mr. KENNEDY. If you say so, sir. I am not familiar with the details of that proposal, nor do I know whether it went for devel- opmental purposes or not. Mr. GALLEGLY. OK. Today, and I will tell you that I believe this 

to be very similar in nature, there apparently or it appears to be 

an attempt to politicize this action as a park closure. Is that correct? That you are referring to this as a park closure, not a transfer 

of jurisdiction? 

Mr. KENNEDY. It takes a unit out of the management of the National Park System, and it places it in the management of another 

entity. 

Mr. GALLEGLY. Right, similar to what happened with the city of 

Rocks in Idaho, which came out of the jurisdiction of NPS and went 

into another jurisdiction; in this case, the State of Idaho. Do you 

see any parallel there? 

Mr. KENNEDY. I don't much. This is a historic site with very sig- nificant historic buildings in it, visited by international visitors because of its historic character, and the National Park Service, as 

long as it remains in the custody of the National Park Service, 

would strive to sustain its historic integrity. Mr. GALLEGLY. Well, of course, there is some, obviously, historic 

parts of the city of Rocks, and anyway maybe not from a historical 

building, but go back quite a ways as well. Let us just move on to 

maybe one other question, and then I will defer to my good friend 

from American Samoa. 

If this did take place and the management of Christiansted went 

to St. Croix instead of the Park Service, there, obviously, would be 

some dollars saved to the Park Service. I think that is obvious. Is 

that some money that could be used to reopen campgrounds in Yellowstone? 

Mr. KENNEDY. Oh, I suppose you could make that argument 

about closing Independence Hall, Mr. Chairman. You could save 

some money there too I guess. 

Mr. GALLEGLY. OK. Well, are you suggesting that we do that? 

Mr. KENNEDY. No, sir, I am not, nor do I suggest that we close 

this one either. 

Mr. GALLEGLY. At this time, I would defer to my good friend from 

American Samoa, Mr. Faleomavaega. Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. I would like to 

thank Mr. Stayman and Director Kennedy for their statements. I 

just want to make sure for the record in most expressed form, Mr. 
132 

Stayman, on behalf of the Secretary of the Interior that your office 

does not object to the proposed transfer of management of the 

Christiansted Historic Site to the Virgin Island Government. Did 

I hear that correctly? 

Mr. STAYMAN. No. We, of course, are here representing the Presi- dent, as well as the Department, and we have a single position, 

and that is in opposition to that bill. 

Mr. FALEOMAVAEGA. You do not support it--

Mr. STAYMAN. No. 

Mr. FALEOMAVAEGA.-as a matter of policy? So you are in support of the National Park Service objections to this proposed bill? 

Mr. STAYMAN. Yes. 

Mr. FALEOMAVAEGA. Mr. Kennedy, thank you for your statement. 

A couple of questions. What you are saying to this Subcommittee 

is that all the Congress needs to do is just simply transfer the authority and that will be the end of it. Is that basically your problem, that Congress should give direction, and it will be done?and 

the Congress can do what it wills. We are the Administrative 

Branch, and we do what the Congress tells us to do. But I was 

asked to testify today to offer the judgment of the National Park 

Service as to whether or not this unit of the National Park System 

should be given away to a State, and our judgment is that should 

not happen, sir. 

Mr. FALEOMAVAEGA. And it is your opinion that the role of Denmark in its colonial period is one of the most historic aspects of this 

historical park? I have read some of the Dutch Colonies and historically some of the things that they have done, and I don't nec- essarily agree if that is a matter of tremendous history that one 

can be said that they are proud of. I don't know. I haven't been to the historic park, and I was just wondering if 

the comments made by Governor Schneider is such that-! hear 

that both sides are saying that, yes, we really are making every effort to find common ground or for mutual agreement. Your basic 

position is that you just simply feel that the Virgin Island Government is incapable of maintaining the park. This is what I read in 

your statement, and correct me if I am wrong on that. Mr. KENNEDY. In my statement to you, sir, I attempted to state 

as clearly as I could that our fundamental objection here is to the 

divestiture of a significant unit of the National Park System. We 

oppose that. I didn't comment myaelf on the financial capability of 

the Virgin Islands Government pnmarily because I personally have 

no knowledge of the degree to ;which the Virgin Islands Government is taking care of those portions of this general area which it 

already is responsible for. / 

There are a variety of judgments as to who is taking care of what 

well. I don't want to get into a discussion of that kind because I 

rather hope that when we get out of this room, the Governor and 

the National Park Service can get together on a program that 

works for everybody's interest, and, therefore, I don't want to get 

into a bicker about who is doing what to whom. I just don't think 

that is useful. 

Mr. FALEOMAVAEGA. Well, with due respect, sir, unless if I read 

the statement wrong here, and I quote, ''We wonder whether the 

territory possesses both the expertise and the financial resources to 
133 

manage the park well." And I continue, "The territory's record of 

managing cultural sites is uneven at best," and then you cited the 

Fort Frederick and the Fort Christian parks as falling short of the 

standards of the National Park System. 

So it seems to me that this is an indictment, as far as I am concerned, that there is a question of whether or not the leaders of the 

Virgin Islands are capable of maintaining just this one historical 

site that they are asking for. 

Mr. KENNEDY. It sort of comes down to how you or any of us here 

as a visitor would look at what the Park Service is doing and what 

the Virgin Islands Government has done with properties of equiva- lent value in recent years. And the testimony before you represents 

the professional judgment that, generally speaking, the Park Service is doing a better job of it. 

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman, and Mr. Kennedy. Thank you for your statement. Mr. GALLEGLY. There is currently a vote pending over on the 

floor, and we are going to have to run over there and vote. I would 

turn the gavel over to my colleague from American Samoa since he 

and Mr. Underwood won't be going over for the vote. But just before I leave, I can't leave without-! was sitting here thinking about Mr. Kennedy's suggestion about Independence Hall. 

I happened to have the privilege of visiting Independence Hall 

just last week with my wife. We don't have very many weekends 

in Washington, and we did go up there, and what a tremendous 

place that is. And I still stand in awe very much, the same as I 

did the first time I took my children there many years ago. And 

with all due respect to the National Park Service, which I have a 

lot of respect for, I am not absolutely convinced that the State of 

Pennsylvania couldn't do a good job. I am not advocating that, but 

since Mr. Kennedy did bring that up for consideration--

Mr. KENNEDY. I didn't bring it up for consideration, sir. I thought the idea so ludicrous, that it would be compelling to suggest the 

analogy. 

Mr. HAsTINGS. Would the Chairman yield just for a moment on 

that? · 

Mr. GALLEGLY. Yes. I would yield to the gentleman from Washington. 

Mr. HASTINGS. In light of that also, I think we can go no farther 

than this State and find some national sites that are administered 

very well by entities other than the Park Service. 

Mr. KENNEDY. We concur, sir. 

Mr. HAsTINGS. Like Mount Vernon, for example, like Monticello, 

for exampleMr. KENNEDY. Fully agree. 

Mr. HASTINGS.-that do very well. 

Mr. KENNEDY. Yes, indeed. We entirely agree. 

Mr. GALLEGLY. While we go over to vote, I will turn the gavel 

over to my good friend from American Samoa, and perhaps he and 

Mr. Underwood can continue the dialog. Did you have some ques- tions that you wanted when we came back? If you do, we will keep the hearing open. Otherwise, I don't want to hold the witnesses unless you wanted to ask a quick question. 
134 

Mr. GILCHREST. A couple of very quick questions? Mr. Kennedy, 

could you explain to us briefly how the Park Service gained title 

to this six acres in the beginning? And then what is it about the 

management of this property that could not be given to the Governor of the Virgin Islands? 

Mr. KENNEDY. I don't know the specific history of this site, and 

we will supply that for the record. I do not know whether it was 

Federal property or not, and we will supply that to you. 

Mr. GILCHREST. But it is, in fact-does the Park Service have full 

title to these six acres? 

Mr. KENNEDY. Yes, I believe so. The answer is yes. And maybe 

I can supply it right now if you would like an answer for that. 

Mr. GILCHREST. Was there ever an agreement from the very beginning historically as to the relationship between the Park Service, the Virgin Islands, and these six acres as to its continuing status? 

Mr. KENNEDY. In 1952, there was an agreement which essentially was a cooperative one between the Service and the Virgin Islands Government. 

Mr. GILCHREST. And what was that agreement? Was it a cooperative agreement that--

Mr. KENNEDY. Well, that we would-it is in the middle of a town, 

and the intention was that people would get along better, obviously, than they are at the moment. And that is not a joint management agreement. It is a cooperative agreement. 

Mr. GILCHREST. What was the longevity of that cooperative 

agreement? And suppose that the people in the community of the 

Virgin Islands decided to take away their part of the deal? 

Mr. KENNEDY. It had no terminal date. There was no sunset. 

Mr. GILCHREST. There was no sunset. Suppose now as the Governor is coming here saying that the deal was fine while it lasted, 

but we would like to manage this particular property. And then 

could you give me a specific reason why the Park Service feels that 

they don't want to turn over the management of this park even 

though the management of the park as designed in the bill, as I 

can see it, will be virtually the same as it is now? 

Mr. KENNEDY. Well, it depends on who is responsible, of course, 

for making the final decisions as to what you do in these places. 

This is a collection of buildings associated with a fort, a government house, and a succession of other largely neo-classical buildings along a waterfront and a very important Danish town or initially Danish, subsequently ours. 

We are in the history business. That is what we do. We try to 

help Americans understand about their history-all of the history, 

the good part and the bad part. And that is what we do for a living. 

Mr. GILCHREST. Just if-let us suppose it was turned over to the 

Virgin Islands. Is there an estimate as to the amount of money the 

Park Service would save? 

Mr. KENNEDY. Th~ annu~l budget of this park is about $300 operating and about $200 on average and what we put into cyclical 

maintenance; that is, taking care of the place. 

Mr. GILCHREST. So you are saying about $500,000 annually? 

Mr. KENNEDY. Probably and there undoubtedly-! know that 

there has been more money than that put into the care of these 
135 

buildings since the Nation took them over. So how much additional 

work you got to do to maintain old buildings, it is continuous. You 

could pretty much guess. 

Mr. GILCHREST. Thank you very much. 

Mr. FALEOMAVAEGA. [presiding] Thank you. I would like to ask 

a personal favor of Mr. Kennedy. Congressman Williams would like 

a minute with you--

Mr. KENNEDY. Sure. 

Mr. FALEOMAVAEGA.-so I would like to ask you if you could 

wait. He is coming right back from voting. 

Mr. KENNEDY. Oh, absolutely. I am even at his disposal. 

Mr. FALEOMAVAEGA. I am sorry. The gentleman from Guam also 

has some questions. 

Mr. UNDERWOOD. Yes, sir. Thank you for your testimony. In your 

testimony, you basically articulate some reasons why you are opposed to this transfer of authority. And reading your testimony in 

a cursory fashion, you make a statement that you are concerned 

about the capacity of the Virgin Islands to successfully deal and 

manage this property. 

You are also concerned about the historic significance of this, 

that this is part of the mandate of the National Park Service. And 

in the judgment of history, this is a valuable historical property. 

And then somewhere in the middle of your testimony, I found very 

interesting logic that you are talking about here. 

And you connect it to a larger move in which you say that in 

February of '95 you opposed a bill that called for a study of the National Park System with a view toward authorizing certain units. 

"Passage of this bill would in a small but dangerous way begin that 

process. Each of the 369 units of the National Park System in the 

49 States, D.C., American Samoa, Guam, Puerto Rico, and the VI 

was established by an Act of Congress, presidential proclamations, 

or Secretaries' orders." 

I would call that, you know-we see many of these kinds of statements in reference to particular bills. I guess the shorthand way 

of looking at that is the slippery slope theory. Once you do it for 

one, you are going to have to end up doing it for others. So of those 

three reasons, which is your primary concern? 

Mr. KENNEDY. Oh, I think it is really two that are very closely 

linked. One of them is that this is a place of national and international significance that belongs in the National Park System. It 

is important. That is what the Congress decided the first time. 

Secondly, it needs to be treated by people who are, generally 

speaking, pretty good at dealing with national historic sites. They 

get trained to do that, and they do it pretty well. It is important 

as well that those folks get along with local people. This is true 

every place that we operate-368 places. 

And in doing that, it is also essential that we recognize increasingly that there are cities and towns and territories that have got 

financial and other problems. It is just not true that cities, towns, 

and States are rolling with money and are going to do a wonderful 

job with places that are given to them unless they change their 

character substantially. Building restaurants in and boardwalks 

around historic structures may very well not be a good way to sustain their historic fabric. 
136 

Mr. FALEOMAVAEGA. Would the gentleman yield? Mr. UNDERWOOD. OK. 

Mr. FALEOMAVAEGA. Just for one second. I would like to invite 

our good friend from the Virgin Islands, Congressman Frazer, up 

on the dais since he is the recognized expert on the Virgin Islands 

before this committee. We would invite him up here and certainly would welcome any of the questions that he might want to raise 

with our panel members. So go ahead, Bob. 

Mr. UNDERWOOD. OK. We are not really concerned with the capacity-! mean, I know that in some respects they are all very much linked. But it seems to me that the concern about the slipper 

slope, if we do this to one, we are going to do this to all, are you telling me that all of the units that are currently in the National 

Park Service are all dealt with in the same way? There are no collaborative agreements? There are no other side agreements and cooperative agreements? There is not a kind of diversity of arrangements that are possible? 

Mr. KENNEDY. There are but this bill calls for the divestiture of 

management responsibility from the National Park Service to a 

State or to a territory. That being true, that is a lot different than 

a cooperative agreement, and that is a fundamental difference, and 

we do oppose that, sir. 

Mr. UNDERWOOD. Right. So the issue really is control over the 

property-over the park? 

Mr. KENNEDY. That is one word. You could say responsibility for. 

That is another word. 

Mr. UNDERWOOD. Well, as I read the bill, it says here, "To transfer the authority to manage upon a determination of the Secretary of Interior that the Government of the VI has the financial ability and commitment to maintain," so that, I think, deals with one 

issue very successfully. "Retain for the U.S. fee title to all property compromising Christiansted National Historic Site." Apparently, the Virgin Islanders 

support that. I think the people of Guam if this were in Guam 

would support a little bit stronger version of that. "Require the 

Government of the VI to continue to use the historic site for the 

purposes for which it is used." 

In my mind, that certainly extends to the Department of Interior 

and Secretary of Interior the kind of authority and, if you will, veto 

power that will continue to manage the site in a way which fulfills 

the purposes of a historic site. And, furthermore, in the last section, it authorizes the Secretary to terminate the agreement and 

revoke the authority. 

Mr. KENNEDY. Well, it is either in the National Park System or 

it is not. If the responsibility for management is in the hands of 

somebody else, it is not in the National Park System, and we think 

it should be. 

Mr. UNDERWOOD. OK. In this instance, I think that there are a 

number of safeguards that would cause one to possibly think that 

this is a distinct possibility and a good idea worth exploring. I 

would also draw attention in your statement that all of the units 

and all of these units in referencing all of the National Park Service properties-all of these units represent diverse public resources 

under our permanent stewardship. 
137 

And the word permanent strikes me as odd in this instance because really we are talking about diverse properties each individually acquired under either an executive order or under an Act of 

Congress, which, of course, is at anytime changeable. 

Mr. KENNEDY. As long as they are ours, we have got a responsibility to take a position, as we have been asked to take today, 

with regard to what our responsibilities are. Of course, the Congress makes the laws. 

Mr. UNDERWOOD. OK. Thank you. 

Mr. FALEOMAVAEGA. Mr. Frazer. 

Mr. FRAZER. Mr. Kennedy, are you opposed to taking the Kennedy Center out of the Park System? Last year were you opposed 

to that? 

Mr. KENNEDY. The Kennedy Center is a performing arts facility 

in the city of Washington for which for many years has been trying 

to raise the aggregate, I guess, of about $100 million to take care 

of its needs. Its management concluded that it was ready to not 

only raise that kind of money, but to raise about that amount of 

money more. 

So under those circumstances, where it is a performing arts center, not a historic building, not a historic structure, no obligations 

on our part there, whatever, except under those circumstances to 

mow the grass, it seemed like a pretty good idea for that to be distinguished from other national park holdings that have historic or 

natural integrity. That is a very special case. 

Mr. FRAZER. Mr. Kennedy, is it true that you are an attorney? 

Mr. KENNEDY. Yes, sir. 

Mr. FRAZER. So could I ask you a yes or no question and get a 

yes or no answer? 

Mr. KENNEDY. Since I am an attorney, I doubt it, sir, but try it. 

Mr. FRAZER. Did you oppose the taking of the Kennedy Center 

last year out of the Park System? Did you, Mr. Kennedy, oppose 

it? 

Mr. KENNEDY. I did not oppose the--

Mr. FRAZER. Did you oppose it? 

Mr. FALEOMAVAEGA. Let the gentleman respond, counsel. 

Mr. KENNEDY. If I may. Counselor, I did not oppose the movement of the national performing arts center at the Kennedy Center 

from its ambiguous status, which it was, partly managed by the 

Park Service, partly managed by the Board, which, as you know, 

as an attorney, is represented by both Houses of Congress and a 

large number of private citizens. There was no clear management 

responsibility there, sir, as you know. 

Mr. FALEOMAVAEGA. Would the gentleman yield? 

Mr. FRAZER. Yes. 

Mr. FALEOMAVAEGA. This raises a very interesting point here to 

Mr. Kennedy, and please don't think that we are trying to-here 

is a classic example. I am sure that States of the Union do not 

have Offices of Territories under the jurisdiction of the Secretary 

of the Interior. 

Now, we have two subdivisions under the authority of the Secretary of the Interior, one in terms of one having jurisdiction over 

national parks, and the other one over policy of political development as far as the Virgin Islands respecting the leadership of the 
138 

Virgin Islands, and seeing that here we have someone or a member 

of the President's Cabinet just totally opposed, both as a matter of 

policy, as well as not even having a national park, to be worked 

out on a mutual arrangement and still feel that if some kind of an 

MOU or an agreement could be reached between the Secretary of 

the Interior and the Government of the Virgin Islands, wouldn't 

you think that this might be a better way to proceed, Mr. Kennedy, 

than--

Mr. KENNEDY. Oh, an MOU, a mode of operating together in a 

cooperative way, absolutely. That is what should have happened in 

'52. It is a very desirable outcome. What isn't is the transfer of the 

fundamental authority and responsibility. Of course, we should 

work this out. That is one of the reasons why my testimony, I hope, 

is not very argumentative today. I am not trying to pick at the 

management of the Virgin Islands or discuss their financial capability or desire. I don't think that is productive. 

Mr. FALEOMAVAEGA. Well, my point here is that the Office of Territories, in my opinion, now is deferred to the National Park Service and say, ''We want to keep our park, and the heck with the 

opinions and the judgments of the leaders of the Virgin Islands." 

And this is where I am seeing a conflict where who do we really 

depend or look toward to for direction aE a territory? 

Mr. KENNEDY. Well, I try to be responsible for the National Park 

System. I can't speak for any broader responsibility than that. Mr. 

Stayman may be able to. 

Mr. STAYMAN. Yes. I don't know what further I can say. We see 

our mission as trying to help the Federal Government manage its 

relationships with the islands. They really require people to follow 

them on a day-by-day and week-by-week action. We are not an 

agency that has any capability to manage assets. We are primarily 

a granting and policy office. 

What the Park Service is doing is of a fundamentally different 

nature, and it is very appropriate that they do that. That is the 

way the government has been structured, and we support the position of the Secretary and the President on this matter. 

Mr. FALEOMAVAEGA. Maybe this is also the sense of what I am 

trying to get at, just a statement of the fact that is it my understanding that your office is the lead Federal agency advocating the 

interest of the territories before the Federal Government, or has 

this changed as a matter of policy? 

Mr. STAYMAN. We generally find ourselves in the position of 

being the greatest advocate for the interests of the islands. That 

doesn't mean that we always support the position of the Island. 

Mr. FALEOMAVAEGA. But you are the lead agency representing 

the territories that look into the policy decisions affecting Federal 

policies toward the territories? 

Mr. STAYMAN. That would be a fair statement if you would limit 

it to the relation between the Federal Government and the islands. 

You know, that is a very broad brush. Mr. FALEOMAVAEGA. Mr. Frazer. Mr. FRAZER. Mr. Kennedy or Mr. Stayman, does the Park Service 

consider the economy or the well being of the people of any State 

jurisdiction over which it has whether it is a national park or any 

property under its control? 
139 

Mr. STAYMAN. I am sorry. 

Mr. KENNEDY. I think I can respond to that question. The answer 

to your question is yes. 

Mr. FRAZER. Are you aware of the fact that-and I am not straying from the point because it is obvious from your testimony that 

the National Park Service seems to make as a priority its interests 

in this property that we are speaking of as opposed to what the 

Governor has said. 

The Governor has said it is part of an overall plan, and the issue 

here is economy. Nowhere does this bill state that it wants to divest the National Park System of the national historic site and 

Christiansted. The bill doesn't say that, but somehow you are capable of reading that into it. Are you aware that on the Island of St. 

John there is a place called Caneel Bay as a resort, Mr. Kennedy? 

Mr. KENNEDY. Yes. 

Mr. FRAZER. Do you realize that Caneel Bay is the largest employer on the Island of St. John? 

Mr. KENNEDY. Yes. Excuse me. I don't know what is the largest 

employer. 

Mr. FRAZER. Well, it is. Do you recall me trying to get an extension for lease on Caneel Bay resorts so the bankers trust can take 

it to market and you responding by saying the National Park Service is primarily concerned with protecting the park, not necessarily 

the economy of the local jurisdiction? 

Mr. KENNEDY. That was not my position, nor was that my statement. I said-you are speaking of a private conversation between--

Mr. FRAZER. No, sir, written. 

Mr. KENNEDY. Written? Good. Then I am quite sure what my response was. My response was and is that we have really three responsibilities. First, there was a donor in that instance who had 

very specific conditions under which this donation to the Nation 

was made and which created that property as an income generator 

for the Island. Without that donation, there would have been no development. 

Second, the National Park Service has an obligation to stay within its statutory authority, which is in that case statutory. And, finally, of course we have an interest in the economic welfare of that 

Island and continue to do that. That interest is very intense, and 

we are working at that. 

Mr. FRAZER. Mr. Kennedy, it seems as though you have totally 

disregarded the Governor's request or the bill as it relates to the 

economy or the well being. Because if you recognize that Caneel 

Bay Plantation Resort is the largest employer on the Island of St. 

John, then you would recognize its importance to the economy. 

If you are concerned about the people, then you would not oppose 

an extension of the lease that would permit that plantation resort 

to continue employing the largest number of people on that Island. 

Would that be true? 

Mr. KENNEDY. No. 

Mr. FRAZER. It wouldn't be true? 

Mr. KENNEDY. It would not be true that a position to adhere to 

the law and to the terms of a gift is in itself a statement that we 

have no concern for the economic welfare of the Island. Those two 
140 

things are not the same. We do have an interest in the economic 

welfare of the Island and take that very seriously. We also have 

obligations under the law. 

Mr. FRAZER. Is there any evidence that you have in your position 

that has not been proffered to this committee that the Government 

of the Virgin Islands isn't capable of managing that site in St. 

Croix? 

Mr. KENNEDY. Oh, we are now back to Christiansted? 

Mr. FRAZER. Yes, we are. You speak of divestiture and you speak 

of-as Congressman Underwood read and Faleomavaega read, in 

your own testimony you spoke to the financial ability of the Virgin 

Islands Government to manage the historic site in St. Croix. I am 

asking you is there any evidence that we are incapable of doing so? 

Mr. KENNEDY. If you would like us to submit evidence to this 

committee indicating that the Virgin Islands Government is not 

taking care of the property currently under its custody to the same 

degree that the National Park Service is taking care of the property under its custody, we could submit that to you, sir. It is not, however, my view that we should be here in the position of attacking each other with respect to how well we are doing 

our respective jobs. At least to the extent that the National Park 

Service is a presence there, we are going to be in the same town 

together. And I don't think that is a good idea so we are not going 

to attack the government. Mr. FALEOMAVAEGA. Without objection and certainly I think it 

would be great for the edification of the members of the Sub- committee, please do submit the evidenceMr. KENNEDY. Sure. Mr. FALEOMAVAEGA.-Mr. Kennedy, for the record in fairness to 

you and your office. So we want to leave this open, as well as for 

Governor Schneider and the Virgin Islands Government to have 

their presentation of facts so that this will certainly be very helpful 

to the members of the committee. 

Mr. KENNEDY. Thank you, sir. 

Mr. FALEOMAVAEGA. I thank the gentleman from the Virgin Islands. And the gentleman from Maryland. 

Mr. GILCHREST. I had a couple more questions. How many people 

are employed by the Park Service on this particular historical site? 

Mr. KENNEDY. Twelve. 

Mr. GILCHREST. Twelve? 

Mr. KENNEDY. Twelve permanents. 

Mr. GILCHREST. Twelve permanents? 

Mr. KENNEDY. Yes. 

Mr. GILCHREST. How many of those 12 permanents are from-is 

this on St. Thomas? 

Mr. KENNEDY. It is on St. Croix. 

Mr. GILCHREST. St. Croix? 

Mr. KENNEDY. Yes. We have a presence, as you know, on both 

the other islands as well. Mr. GILCHREST. I went to Bluebeard's Castle in 1965 when I was 

younger and in the Service-a great place. How many of the permanent employees on St. Croix at this historical site are from St. 

Croix or are from the Virgin Islands? 
141 

Mr. KENNEDY. The superintendent is here, and he knows these 

facts. So if you don't mind, I will just get him up here to answer 

that question. Mr. GILCHREST. That is fine. I do that all the time. 

Mr. KENNEDY. This is Francis Peltier. He is the superintendent. How many, Francis? 

Mr. PELTIER. With the exception of possibly two people, every employee is from the Virgin Islands-from that area. 

Mr. GILCHREST. Would they be retained as employees if the management were transferred to the Governor of the Virgin Islands? 

Mr. PELTIER. That is hard for me to answer, sir, since the Park 

Service would no longer be in charge then. Mr. GILCHREST. I am a strong advocate of the Park Service. I am 

a strong advocate of the idea of entrusting to the public entity our 

historical traditions and whether it is a one-acre parcel or whether 

it is the Yosemite National Park or Glacier National Park or 

Assateague in Maryland. But I also think if we are to retain the 

essence of the Park Service and its idea, then I think it is time that 

we reviewed how all of that works. 

And it also seems to me that if we have a very ardent, strident 

backlash or very ardent, strident position to not releasing even the 

smaller areas to an entity that could probably manage it as sensitively and as well because we think it sets a bad precedent, then 

the backlash to that will be like a huge gusher. In other words, I think unless we can find some ways of releasing some of the areas to an entity, for example, like the Governor 

of the Virgin Islands, that will in all of my understanding protect it as well as the U.S. Park Service protects it, that it does not set 

a bad precedent for closing down parks in the United States. 

But unless we can reach some type of reasonable agreement and 

with these kind of things, I think there will be, and may have already started, some troubling discussions about the Federal Government in general owning too much land. So I think-not that I 

want to close parks, because I don't. I like Assateague National 

Park in my district. It is a beautiful place, and the Park Service 

does a fine job. 

But what I would like to see us do is to enter into a dialog where, 

yes, some of these things are a possibility. Williamsburg in Virginia is managed by the State of Virginia, and they do a superb, excellent job. So I would just sort of put my two cents into the discussion. 

And sort of, in my judgment, for the purpose of preserving the 

Park Service, we have to enter into these discussions with sort of 

a new sense of alternatives to the conventional way that we have 

been doing things for so long. Thank you very much, Mr. Chairman. 

Mr. FALEOMAVAEGA. The gentleman from Michigan. Mr. KILDEE. Thank you, Mr. Chairman. I apologize for arriving late. As you well know, I had four different markups or hearings today. So at this time I will not ask any questions orally. I may submit some in writing. Thank you. · Mr. FALEOMAVAEGA. Thank you. And I certainly would like to 

thank Mr. Kennedy for being here on the committee. I look forward 

to continuing working with the members of your office and hope-
142 

fully that we will find a solution to the problems that we face before the committee. I would like to call the witnesses now for our 

first panel. Mr. Stayman, I guess you have the honor of continuing being there on the hot seat, and Ms. Wilma Lewis, the Interior Inspector General. 

Mr. HAsTINGS. Mr. Chairman? 

Mr. FALEOMAVAEGA. Before proceeding, we would like to give the 

gentleman from Washington his statement. 

Mr. HAsTINGS. Thank you, Mr. Chairman. We all have obliga- tions, and I have obligations, but I have a particular interest in 

this next panel that is coming up to testify. And I would like to ask 

unanimous consent to insert in the record I guess it is an editorial 

in the Washington Times of October 10 talking about the Commonwealth of the Northern Mariana Islands and the success they have 

had. And so I would like to have that for the record. 

Mr. FALEOMAVAEGA. Without objection. [Editorial may be found at the end of hearing.] 

Mr. HAsTINGS. And I also would like to submit for the record a 

statement that I have regarding some of the discussion regarding the minimum wage in that area. 

Mr. FALEOMAVAEGA. Without objection. 

[Prepared statement of Hon. Doc Hastings follows:] 

STATEMENT OF HON. DOC HAsTINGS 

Mr. CHAIRMAN. The subcommittee is meeting today to discuss issues relating to 

the Commonwealth of the Northern Mariana Islands. The Commonwealth is the 

U.S. territory over 5,000 miles from my state that, for the past 16 years, has en- joyed sustained economic growth. The Commonwealth has weaned itself of most of 

its federal dependency and is moving in the right direction toward self-sufficiency. However, the Clinton Administration proposes to federalize the minimum wage in 

the Commonwealth. In the Department of Interior's report, The Federal-CNMI Initiative on Labor, Immigration, and Law Enforcement, the Administration rec- ommends that the Congress mandate an annual 3kent increase in the Commonwealth's minimum wage until it reaches federal standards. This federalization of the 

minimum wage threatens the economic balance in the Commonwealth. The minimum wage in the Commonwealth is an issue. best left to the local government. It is impossible for Washington to micromanage the delicate economic affairs 

of the Commonwealth. This says nothing of the fact that the United States government expressly exempted the Commonwealth from federalized minimum wage standards under its governing Covenant with the U.S. The Covenant specifically ex- empted the Commonwealth from the minimum wage because it recognized imposi- tion of U.S. minimum wage laws would cause substantial harm to the Commonwealth. We should honor our commitment to the Covenant. 

The Commonwealth has undergone an extraordinary transformation since the 

signing of the Covenant agreement, but the fact still remains that a federalized minimum wage could crush its fragile economy. It would result in the loss of jobs and 

businesses in the Commonwealth. It would suddenly halt the Commonwealth's eco- nomic growth. It could even result in an increase in the Commonwealth's reliance on federal funds. 

To address the minimum wage issue, the Commonwealth has commissioned a comprehensive and independent evaluation of the impact of the minimum wage on the economy of the Commonwealth. This approach allows the Commonwealth to 

give significant consideration to its local economic needs, and develop sound policies that do not cause substantial harm to the economy. This Congress has debated increasing the minimum wage in the United States, 

and it will continue to debate the issue. Earlier this year, I opposed attempts to in- crease the minimum wage in this country and have serious concerns about efforts 

to do this in the Commonwealth of the Northern Mariana Islands. The minimum 

wage issue can be, and is being, dealt with more appropriately by the Commonwealth, and in a way that does not jeopardize its economy. Greater thought and con- sideration must be given to the economic success story in the Marianas before this 

Congress votes to mandate a federal minimum wage increase for the Common-
143 

wealth. I thank the Chairman for providing this opportunity to discuss this issue 

and look forward to hearing this afternoon's testimony. 

Mr. HAsTINGS. And also some questions to be asked of those that 

are going to testify today and ask that the questions be forwarded 

to them so that they can respond in writing. 

Mr. FALEOMAVAEGA. Without objection. 

Mr. HASTINGS. Thank you. Mr. FALEOMAVAEGA. Ms. Wilma Lewis is with us too? 

Ms. LEWIS. Yes, I am. 

Mr. FALEOMAVAEGA. All right. Mr. Stayman, do you want to proceed? 

STATEMENT OF ALLEN P. STAYMAN, DIRECTOR, OFFICE OF 

INSULAR AFFAIRS; ACCOMPANIED BY WILMA LEWIS, INTERIOR INSPECTOR GENERAL 

Mr. STAYMAN. Thank you, Mr. Chairman. I would quickly like 

to---

Mr. FALEOMAVAEGA. Could you stay a little closer to the mike? 

Mr. STAYMAN. Certainly. 

Mr. FALEOMAVAEGA. I am hard of hearing. Mr. STAYMAN. The invitation requested that there be repres:enta- tives from the Department of Justice, Labor, and INS. So we have 

Mr. Waxman here from the Department of Justice, Mr. Hurst from 

INS, and Mr. John Frazer from the Department of Labor. 

Mr. FALEOMAVAEGA. Our good friends for the territories. 

Mr. STAYMAN. OK. I already gave part of my statement with respect to the 3634. I would ask that my entire statement be put in 

the record, Mr. Chairman. 

Mr. FALEOMAVAEGA. Without objection. 

Mr. STAYMAN. And I will summarize the section with respect to 

a second annual report on the CNMI Labor, Immigration, and Law 

Enforcement Initiative. The Federal-CNMI Initiative was funded 

with a $7 million appropriation by the Congress in Public Law 

103-332. 

The Administration issued its second annual report on the initiative on June 4 of this year. We believe that the 10-page report with 

executive summary and recommendations brings the reader up to 

date on programs in the CNMI. 

In our report, we note that the combined efforts of the Government of the Commonwealth of the Northern Mariana Islands and 

Federal agencies are making progress in fulfilling the goals of the 

initiative. Governor Tenorio has strongly endorsed the CNMI's actions and the increase in Federal law enforcement presence. The Federal agencies and the CNMI are working cooperatively, with the Office of Insular Affairs acting as an ombudsman, to fashion appropriate responses to the consequences of enormous growth in the CNMI. However, sustained follow-through from both the 

local and Federal Governments is needed if initiative goals are to 

be achieved. I would like to highlight for the committee the recommendations 

contained in the report. First, that Congress finalize enactment of 

Section 2 of S. 638 to establish the minimum wage in Federal law 

including the annual 30-cent increases in the minimum wage contained, till very recently, in CNMI law. And, two, that Congress di-
144 

rect the CNMI to utilize Covenant funds for prison and detention 

facilities. 

On minimum wage, CNMI workers at present lack Federal minimum wage protection, with the result that the Department of 

Labor is limited to enforcing only the overtime provisions of the 

Fair Labor Standards Act. S. 638, which passed the U.S. Senate 

and is before this Subcommittee for action, anticipated possible 

CNMI backsliding on the minimum wage issue and incorporated 

CNMI's annual 30-cent increases. Despite this congressional action, 

however, the CNMI wage policy continues to vacillate. 

S. 638 would bring fairness and stability to CNMI wage rates 

and important new revenue to the local government. The 30-cent 

increases were enacted by the CNMI Government and continue to 

be endorsed by the CNMI Chamber of Commerce, the Contractors 

Association, and the Hotel Association. ' 

The only opposition is from the garment industry, which, despite 

its claims of hardship, continues to expand. New companies have 

been granted licenses and production continues to soar. Garment 

imports from the CNMI increased 30 percent in 1995 and rose over 

40 percent in the first two months of 1996 over the same period 

last year. 

Other American Pacific jurisdictions, Hawaii and Guam, have 

prospered for decades while paying minimum wages either equal to 

or higher than the Federal minimum wage. The CNMI can similarly prosper. We need not resort to the costly bureaucratic mechanism of a Federal wage board. I will stop right there. You have my 

full statement. And the panel would be happy to answer any questions you may have. 

Mr. FALEOMAVAEGA. Thank you, Mr. Stayman. Ms. Lewis. 

STATEMENT OF WILMA A LEWIS 

Ms. LEWIS. Mr. Chairman and members of the Subcommittee, I 

was actually invited to appear here today to testify regarding our 

audit activities on the CNMI. The Office of Inspector General is an 

active participant in the CNMI Federal Task Force and, by all indications, a very productive participant as well. Would you .like me 

to proceed with respect to the audit activities at this time, or would 

you prefer to hear from--

Mr. FALEOMAVAEGA. No. Please, by all means, proceed. 

Ms. LEWIS. Thank you very much. I was asked to include in my 

testimony today a discussion of our audit activities during the 

course of the past three years; in particular, our recent audit on 

the management of public land issued in March of this year and 

testimony regarding the response and constructive actions, or lack 

thereof, by the Commonwealth to resolve issues raised in our audit 

reports. 

I should also mention, Mr. Chairman, that I was informed that 

I may be asked questions pertaining to certain ongoing disputes regarding property interests on Water Island in the U.S. Virgin Islands. I have decided to recuse myself from that matter because prior 

to my current position as the Inspector General, I served as the Associate Solicitor for the Division of General Law in the Department's Office of the Solicitor. During my tenure as the Associate 
145 

Solicitor, staff whom I supervised, in conjunction with the Department of Justice, represented the Department in litigation involving 

Water Island. 

Therefore, in order to protect the integrity of my position and 

that of the Office of Inspector General, I have decided to delegate 

all decisionmaking responsibility regarding any Office of Inspector 

General involvement in Water Island to the second in command in 

the office, the Chief of Staff and General Counsel, Richard Reback. 

So I would ask if there are any questions with respect to Water Island, that they be directed to Mr. Reback. 

Mr. GILCHREST. Mr. Chairman, could I interrupt just for a second? 

Mr. FALEOMAVAEGA. Please, by all means. 

Mr. GILCHREST. Where is Mr. Reback? 

Ms. LEWIS. Mr. Reback--

Mr. GILCHREST. He is in the building? 

Ms. LEWIS. Yes, he is. 

Mr. GILCHREST. So we could ask him during the course of this 

hearing those questions dealing with Water Island? 

Ms. LEWIS. Yes. He will be addressing any questions that the 

Subcommittee may have with respect to Water Island. 

Mr. GILCHREST. And if we don't, like I can't stay here much past 

quarter to four. I could give Mr. Reback the questions, and he could 

respond to us at a later date? 

Ms. LEWIS. Yes. That is correct. 

Mr. GILCHREST. Mr. Chairman, I would like at this time to ask 

unanimous consent to submit--

Mr. FALEOMAVAEGA. Without objection. 

Mr. GILCHREST.[Cont.]-for the record the series of questions 

that we have. Thank you. 

[Water Island questions for the Inspector General follow:] 

QUESTIONS FOR WILMA LEWIS, INSPECTOR GENERAL 

The disposal of Water Island has been identified as an oversight priority of the 

Committee at the beginning of the 104th Congress. I have been sent copies of com- munications by at least one Water Island lessee to your office regarding the handling of the existing lease arrangements with the sublessees of Water Island and 

the process of negotiating contracts for the purchase of the: lots on Water Island. I have a number of questions. • What is the amount of annual lease rent that are being collected by the Department from each lessee? Is this amount being collected from all of the sublessees, 

including those in Sprat Bay [who are at times referred to as sub-sub-lessees)? Did 

this requirement to collect rent end or change at the expiration of the 40 year lease? 

Are these funds being properly collected and accounted for? • What management practices have attributed to the delay in resolving the 

transfer of title to Water Island properties? • The Environmental Impact Statement was issued in May 1996. Why wasn't 

this initiated after the 1992 expiration of the lease? • The Department's position regarding the possessory interest of the hotel property was not upheld in Federal Court, and the issue is still unresolved. What was the Department's position on the value of the possessory interest to the hotel and 

what was the ruling of the Court? • The judgement of the Department has cost the Federal Government millions 

of dollars and has deprived many citizens of their right to enjoy the use of their 

property, and has created an incredible level of stress and anxiety as citizens are forced to battle with the Federal Bureaucracy for fair, equitable, and timely settlement of their property rights. The Department is urged to take whatever steps are necessary to expeditiously conclude the disposal of Water Island and transfer title 

accordingly to those lessees seeking to purchase their property. 
146 

• What is the total aggregate loss of revenues identified in your statement abot 

nine audit reports? 

I.G. QUESTIONS REGARDING THE AUDITS IN THE NMI 

• When the audit was issued regarding the mismanagement of public lands i 

the NMI, approximately $700 million in lost revenue was sited. Based on the la1 

response by the Governor of the NMI, what do you now estimate the total in lm 

revenue? 

• What other audits have been conducted in the last three years and what cos1 or loss of revenues have you identified? Have there been timely replies to the at 

dits? What percentage of I. G. recommendations have been implemented? • There have been reports of misuse of government funds by officials in differer 

segments of the NMI Government. What steps do you recommend to insure th 

proper and adequate accounting of public funds in the NMI? 

Mr. FALEOMAVAEGA. And you will direct it to Mr. Reback? 

Mr. GILCHREST. I would like them to be in the record, as well a 

directing them to Mr. Reback. 

Mr. FALEOMAVAEGA. That is fine. 

Mr. GILCHREST. Thank you. 

Ms. LEWIS. Turning then to our audit activities, during the pas three years, we have issued nine audit reports, which have covere1 

a wide array of issues pertaining to the Commonwealth's efforts t' 

develop and effectively implement policies, procedures, and control 

related to public land, financial management, and program oper ations. 

While some progress has been made over the years, the result 

of our audits have clearly shown that the Commonwealth has paic insufficient attention to matters relating to opportunities for, in 

creasing revenues and collections on the one hand, and, reducinJ 

expenditures and operating costs on the other. These lost opportu nities have cost the Commonwealth millions of dollars in foregon1 

or uncollected revenues and in unnecessary or inappropriate ex 

pencl.itures. 

Let me discuss the public land audit that we recently issue1 

since that was one of the audits that was specifically mentioned iJ 

my invitation. With respect to that audit, we addressed thre 

areas: land exchanges, lease management, and homestead adminis 

tration. In each of these areas, we found significant problems. With respect to land exchanges, the Commonwealth routine!: 

failed to use current appraisals in valuing the land to be ex 

changed. They failed to exchange land of comparable value; thus 

public land was exchanged for private land of lesser value. 

The public land was undervalued, and the private land was over 

valued. Based on our review, we determined that the Common 

wealth lost public land valued at $118.4 million and would lose ad 

ditional land valued at $70.1 million if pending exchanges are com 

pleted. 

In addition to using outdated appraisals, we found that the Com 

monwealth lost potential lease revenues in the amount of $25.: 

million on exchanged public land that was leased to a developer b~ 

private landowners. 

In other words, the Commonwealth did not consider the revenw 

that could be realized from the commercial development of ex 

changed public land. The total losses identified in this one are~ 
147 

alone;, that is the value of land exchanged or to be exchanged and 

lost; potentiallease revenues, were over $200 million. 

In the area of lease management, the actual and potential losses 

identified totaled approximately $470 million. About half a million 

dollars was in lost rental on a couple of the leases that we reviewed, and the potential loss of another approximately $465.7 million over the unexpired terms of six leases that we reviewed. 

This resulted from the Commonwealth's failure to ensure that 

the minimum lease rental payments were based on the appraised fair market value of the property, and their failure to have gross receipt rental payments, and interest on past-due rentals properly assessed. In addition, lease rental payments were not collected in 

a timely fashion, and default was not pursued in a timely fashion. 

We had, for example, some indications from our audit that public land leased by the Commonwealth for 25 years was leased for a 

minimum rental payment of approximately $152,000. Seven days later, the lessee sublet that property for $720,000 over a 25-year lease. Similarly, there was a 25-year lease by the Commonwealth 

for approximately $18.7 million, while the fair market value of the 

minimum rental payment should have been more in the vicinity of 

$262 million. Finally, in the area of homestead administration, we found that 

from 1985 through 1994, 208 homestead recipients improperly received a total of $7 million from the unauthorized sale or lease of 

their homestead lot. On a site visit, we found indications of commercial development on the lots, apartment buildings, office buildings, restaurants, grocery stores, and so forth. The Commonwealth did not respond to the draft report that we 

issued. Following the issuance of the final report, we received a response from the Commonwealth that we found very inadequate, especially in view of the millions of dollars at stake. 

When we evaluate a response to an audit report, we look for 

three things: a plan of action, a projected timeframe within which 

the action plan would be completed, and the identification of a responsible official. The Commonwealth's response was deficient in 

all of these respects. Their response was very indefinite and noncommittal with respect to actions that would be taken to implement the recommendations. They failed in certain instances to address the root causes of the problems as identified in the recommendations. And they failed to present any strategy for dealing with certain tough resource issues that have a bearing on the implementation of the recommendations. Based on their response, we 

considered six of the seven recommendations unresolved; that is, there was either a failure to agree with or to adequately address 

the recommendations. 

I can lump the remaining eight audit reports that we did during the past three years into basically three categories: revenue assessment and collection, expenditure control, and general financial 

management and program operations. We have focused on these 

areas over the years because of the persistent problems that our 

audits have revealed. 

In the area of revenue assessment and collection, we conducted 

two tax audits in which we concluded that the Commonwealth lost 

millions of dollars in tax revenues from the period October 1990 
148 

through December 1993. There were deficiencies in the auditing of 

tax returns and the imposition of tax penalties; in the investigation 

of potential criminal violations of the tax laws; and in the collection 

process. 

In addition, we concluded that from fiscal years 1991 through 

1993, the tax _system didn't produce sufficient revenues to fund governmental operations and Federal obligations and was in need of 

revision. We found a similar problem with the Commonwealth Utilities Corporation, which, due to a rate structure that was insufficient to meet its needs, defaulted on contractual obligations, totaling over $92.8 million for fiscal years 1988 through 1993. 

In the area of expenditure control, we conducted an audit of contracting and contract administration for the Commonwealth Utilities Corporation for fiscal years 1989 through 1993 and found a 

number of deficiencies-acceptance of unsubstantiated contract 

claims; purchases of goods and services totaling about $16.6 million 

without competition; the expenditure of hundreds of thousands of 

dollars, for consulting services that were not necessary; and construction projects that were not completed. So there were a number 

of problems that we found in the area of expenditure control. 

Finally, in the area of general financial management and program operations, we conducted three follow-up audits on the Capital Development Funds and the Economic Development Loan Fund 

to determine whether recommendations made in prior audit reports 

had been implemented. These recommendations that had been previously made were designed to address problems related to accounting and control of Federal funds provided for capital improvement and economic development, and the effective and efficient operation of the respective programs. We found that of 30 recommendations made to the Commonwealth, 27 were not implemented fully or effectively. 

During the past three years, our audits have resulted in 63 recommendations, 54 of which were directed to the Commonwealth, 

and the remaining nine to the Office of Insular Affairs. The Commonwealth has reported that 36 of the 54 recommendations have 

been implemented and that nine of the remaining 18 have been resolved. (In other words, there has been concurrence with the recommendations.) 

Our experience, however, has demonstrated that it is not always 

the case that recommendations reported as implemented have, in 

fact, been implemented fully and effectively. As such, we would be 

unable to comment on whether or not there has been actual implementation in the absence of follow-up audits. 

As indicated in one of our audits that we did during the past 

three years-the audit on the status of improvements-the Commonwealth has made some improvements in the areas of financial 

management, expenditure control, revenue collection and program 

operations over the years. However, improvement on a much broader scale and of a much greater magnitude is necessary. 

The Office of Inspector General is committed to continuing its efforts to pursue an audit strategy designed to identify the major and 

persistent problem areas and to make recommendations intended 

to address those problems. Our efforts, together with a real commitment from the Commonwealth government in implementing 
149 

audit recommendations and the focusing of assistance from the Office of Insular Affairs in identified problem areas, should go a long 

way toward helping to alleviate the problems. 

Finally, we are encouraged by this Subcommittee's interest in 

our audit activities in the Commonwealth. The Department of the 

Interior does not have the same level of authority or influence in 

the insular areas as it does with the Department's offices and bureaus to ensure that audit recommendations are resolved properly 

and implemented fully and effectively. Accordingly, we believe that 

periodic oversight hearings of this nature would serve the useful 

purpose of encouraging resolution and implementation of audit recommendations in the insular areas. I request that a copy of my full written testimony be placed in 

the record. Thank you for the opportunity to testify, and I would 

be happy to respond to any questions that the Subcommittee may 

have. 

[Prepared statement of Ms. Wilma A. Lewis may be found at the 

end of hearing.] 

Mr. FALEOMAVAEGA. Thank you, Ms. Lewis, for a very comprehensive statement. I would like to know if the other gentlemen 

and members of the panel also would have statements that they 

would like to present before the Subcommittee. Or maybe at a later 

point in time that you may want to submit statements for the 

record, you are certainly welcome to do so. Mr. WAXMAN. Sir, just speaking from the Justice Department, 

the Chairman's letter inviting Mr. Stayman to come testify asked 

that he provide testimony but bring us to answer questions. We are 

happy to try and answer any questions you have either here or 

questions you may submit in writing later on. But we don't have 

any affirmative testimony to offer. We did contribute those portions 

that are attributed to our respective agencies, both to the 1995 and 

the 1996 report of the Task Force on CNMI. 

Mr. FALEOMAVAEGA. All right. The gentleman from Maryland, 

questions? 

Mr. GILCHREST. Mr. Chairman, I have one quick question to the 

gentlelady that just spoke. Is there an aggregate number for the 

losses that you have illustrated in your statement? Do you have the 

total amount? 

Ms. LEWis. If one were to add up all of the losses that we referenced in our audit report on the public lands, is that correct? 

Mr. GILCHREST. Yes. 

Ms. LEWIS. It would come to about $670 million. 

Mr. GILCHREST. That is over what period of time? 

Ms. LEWis. If I could, let me just inquire from the Assistant IG 

for Audits. 

Mr. GILCHREST. So something is not done-the figure that you 

just read to us, what was it-$600 million? 

Ms. LEWis. In the vicinity of $670 million has the Assistant IG 

for Audits indicated, in the context of the discussion of lease management, the leases were generally for 25-year periods of time. So 

we looked to see what the loss would be over the course of the 

leases. 

It was approximately $470 million, half a million of which had 

already been lost, and an additional $465.7 million which would be 
150 

lost over the unexpired term of the leases; so that would be over 

the course of the 25-year period of time. 

Mr. GILCHREST. And at this point, there is a program in place to 

prevent that from happening? 

Ms. LEWIS. Well, I do not believe that there is such a program in place. As I indicated, we got a response from the Governor of the 

Commonwealth that, in our view, was not adequate to address the 

types of problems that we have identified. 

For example, there was an indication in the response that new 

regulations had been issued in this area. But one of the main issues with respect to the exchange of land, for example, is the absence of current appraisals. 

One of the areas in which it was indicated in the response that 

they want to maintain flexibility is precisely in that area. There 

was an indication that there would be no strict requirement as to 

how current the appraisal has to be. Well, therein lies a large part 

of the problem because we found, for example, where there might have been 1992 appraisals, 1990 or 1991 appraisals might have 

been used, which were very different from the more current appraisals. So I can't say that there is a program in place, at least 

as we have been informed. 

Mr. GILCHREST. But you are saying that if nothing is done, we 

are going to lose about $600 million? 

Ms. LEWIS. That is correct. Now, let me make sure I clarify that. 

That includes value of land lost as well. 

Mr. GILCHREST. Right. 

Ms. LEWIS. Yes. That is correct. 

Mr. GILCHREST. So are you making a recommendation as to what 

this Subcommittee should do as far as oversight, or can you give 

us any recommendations that we could develop legislation to help resolve these problems? 

Ms. LEWIS. Well, we received the response from the governor I 

believe it was at the end of May. And usually what we do when 

we receive a response that we find unresponsive is we try to give 

an additional period of time, say, 30 days, to work with the particu- lar audited to see if there can be more progress with respect to 

those matters. 

We have not done that at this point. I would hope that we could 

get a more responsive answer from the governor, but failing that, 

then it would really be up to some other entity like this Congress 

to try to encourage those with the responsibility in the Commonwealth to do something about the problems. 

The response that we received insufficient resources to do the 

type of monitoring that we recommended. And, obviously, we are 

sympathetic to the fact that resources are scarce. 

They are scarce all over, but the problem that we had with the 

response is that it did not provide for us any indication of a plansome sort of a strategy that, notwithstanding the insufficient resources, some steps would be taken to try to address the problem. the response was more of the nature that, ''Well, we will go as far 

as we can go with what we have, but we don't expect to go very far." And we found that kind of response to be insufficient. 
151 

Mr. GILCHREST. Well, thank you very much. We would like to 

work with you and the Commonwealth to help find some solution 

to this. Thank you, Mr. Chairman. 

Ms. LEWIS. We would be happy to do that. 

Mr. FALEOMAVAEGA. You know, as an observation, Ms. Lewisand I certainly commend you and the members of your staff for 

doing a very comprehensive work as far as auditing of the Northern Marianas Government and its resources. 

And I sincerely hope that with the same gusto and every effort 

the fact that the Congress has expended over $20 million in the 

last four years in trying to get the Secretary of the Interior or the 

Interior Department to properly audit an account for some $2 billion in Indian Trust Funds that we have no idea what has happened to these funds that belong to the Native Americans. 

And I make this comparative observation in passing-the fact 

that we do have a responsibility to some 2 million Native Americans in our country and certainly the responsibility of the Secretary of the Interior. As I recall, you know, the Covenant that was 

passed by . the Congress in this relationship with the Commonwealth has only been in existence for 20 years. 

And I hope that there is a sense of sensitivity also, and I am not 

making any excuses for the leaders of the Commonwealth of the 

Northern Marianas for whatever their inabilities may be in not 

being able to come up with the goods, so to speak, with the recommendations and some of the suggestions that have been made 

over the process of conducting these audits. 

But I just wanted to put it in perspective that it has only been 

in the past 20 years that the Northern Mariana Government has 

been in existence. And as you had said earlier, they have limited 

resources. There are political turmoils, the ups and downs of getting elected, whether it be for governor or other offices, and so 

things have not necessarily been consistent in terms of policies and 

the fact that they have had now about four or five governors within 

the span of the last 20 years, which means different policies, different people in place in government, and the responsibilities that 

they bear. 

I say this so that it doesn't get to the point where we look at 

NMI with only 45,000 people in this Commonwealth. I wish that 

perhaps the IG could do the same thing in the auditing of the Congress. And as you may well have known, an attempt was made, 

and we can't even keep an accounting of our own records even here 

in this very institution. 

I would like to see the IG also do an auditing of the billions of 

dollars that are being spent in the State of California perhaps and 

see what deficiencies there may be. It is so easy for us to pinpoint 

and saying the needs of 45,000 people, but when you compare that 

with 33 million people in the State of California, then things get 

a little fuzzy. 

And I commend you for the work that you are doing, and I am 

sure that our witnesses or friends from the NMI will respond to the 

concerns that your office has pointed out in your testimony. And 

I would like to clear this for the record again, Ms. Lewis. You are 

saying that the aggregate revenue losses of the NMI has been or 
152 

will be for the period of a 25 year lease period is in excess of $670 

million? 

Ms. LEWIS. That is correct. 

Mr. FALEOMAVAEGA. Of lost revenues? 

Ms. LEWIS. Yes. I should add that the total would be based on 

the numbers that I have given you, approximately $677 million. I 

mentioned to you that individuals who had homestead leases had 

improperly used their leases and had, we believe, built commercial 

and other types of inappropriate things on the property. That was 

valued at $7 million. So that is not really a loss that one might consider in the context that you are raising the question, but rather, 

an improper use. 

Maybe the Commonwealth might be able to go after those individuals. That is a question that they have referred to the Attorney General to determine whether or not they would be able to do that. 

So it is questionable with respect to whether they could get that 

$7 million. Excluding that, it would be about $670 million. 

Mr. FALEOMAVAEGA. What basically is the annual budget of the 

NMI currently? 

Ms. LEWIS. I am not aware of the what the annual budget is. It's 

$220 million I understand. 

Mr. FALEOMAVAEGA. 220? 

Ms. LEWIS. Yes. 

Mr. FALEOMAVAEGA. Total budget. How much of that is local revenues? 90 percent? I am sorry. Did I-90 percent of the $220 million budget is locally obtained-local revenues per se. OK. All right. You indicated, Ms. Lewis, that some 30 recommendations as part of the audit report process, and 27 were never implemented or complied with. Can you give us an idea why they were not responded to? 

Ms. LEWIS. As I indicated, when we do the audit reports, the 

auditee can agree with the recommendations, which is considered 

resolution. Then there is implementation. We get information from 

the auditee indicating that they have a plan of action to implement and that they have implemented that plan. We take that at face 

value. We wouldn't know for sure whether or not the implementa- tion has taken place unless we do a follow-up audit and go in and 

evaluate the actions taken. 

With respect to why the 27 out of the 30 recommendations were 

not fully and effectively implemented, I do not have an answer for 

that. That is what our audit report found, however. 

Mr. FALEOMAVAEGA. Mr. Stayman, you have indicated that one 

of the basic recommendations that the Interior Department is now 

submitting is made part now of Senate Bill 638, to establish a minimum wage and Federal law for the CNMI. 

You know, three or four years ago, I had recommended to the 

previous Governor of CNMI---currently probably American Samoa 

is the only jurisdiction under Federal labor laws that has this industrious committee established every two-year period by the Federal Department of Labor, and in doing so conduct an evaluation 

with representations from both management, as well as from labor 

and local leaders, and in the process make recommendations as to 

the minimum wage for American Samoa, which is below the Federal minimum standards. 
153 

And I was just wondering if the Department of Interior had an 

opportunity to examine that possible option, assuming that the economic situation in NMI is not up to standard with the Federal or 

U.S. standards? Have you had a chance to examine that option? Mr. STAYMAN. Yes. Let me step back. This recommendation is 

not a new one. It was made in our report over a year ago, and 

based upon that recommendation, the U.S. Senate did move legisla- tion I think nearly a year ago, which has been pending before this 

Subcommittee. 

Let me just say something real quickly, and then I think the rep- resentative from the Department of Labor can give a more detailed 

answer. We believe that the economies of Samoa and CNMI are 

fundamentally different. 

And a more appropriate analogy or comparison would be between 

Guam and the CNMI. And history shows that Guam can support 

a minimum wage, and they have a pretty vibrant economy there. 

In addition, the Chamber of Commerce of the CNMI supports the 

minimum wage. Finally, the Government of the CNMI has for the past two years supported this same proposal. It has only been really in the course 

of the last six months that there has been a falling back from that 

position. It is unfortunate that we are in this position. We are confronting a lot of problems in the CNMI, and minimum 

wage was one of the things that we thought-you know, using the 

vernacular, it was a no-brainer. Everybody agreed to it. It would 

have positive effects in the immigration and labor areas where we 

were trying to come up with policies to mitigate the problems. But we find ourselves now essentially backtracking to pick up what we think was a relatively simple and positive action that 

could be taken that would help contribute to the solution of the 

range of problems there. Having said that, I think the real expert is the Department of Labor so I will defer to them. 

Mr. FRAZER. Mr. Faleomavaega, if I could just add a little bit. 

You started the question by asking if we had evaluated the industry committee process. It is, in fact, only in American Samoa that 

operates and is among the options that we looked at for this recommendation last year-was that model-that industry committee 

model. 

Allen has indicated many of the reasons why we felt that the recommendation we made was a superior one. Maybe it would help if 

I could outline briefly some of the reasons that led us away from 

using or recommending the industry committee model for the 

Northern Marianas. 

First of all, it is, as you know, not a predictable transparent process. It is a process that every two years requires an economic study and the convening of a committee, and it, in that regard, is somewhat susceptible to special interest coming to bear in American 

Samoa with the tuna canneries and government being the predominant employers. It is a manageable process, but that is quite a different situation in the Northern Marianas. 

Another particular problem that we are concerned about is that 

you can get, as you know, in American Samoa different minimum 

wage rates for different industry sectors, and that leads to, in some 

cases-can lead to competitive imbalances in terms of competition 
154 

for the labor market. And in an economy like the Northern Mari- anas that has become so dependent on foreign workers, that could 

have a really distorting effect in the economies. 

And, most importantly, I think from a perspective of interest to 

us all, the industry committee process is expensive. Our estimate 

for the-if it were to be applied in the Northern Marianas would 

be that it would cost about three-quarters of a million dollars to 

carry that out every two years. That is a huge cost for a process to go through to try to look at industry by industry what a minimum wage change should be. So we looked very carefully at that as an option and decided it 

was not the best option given where the Commonwealth was at the 

time and where there seemed to be support in the Commonwealth 

for how to implement and Federalize the minimum wage. And that 

is what underlies our recommendation. 

Mr. FALEOMAVAEGA. Mr. Chairman, I know I have taken too 

much time. I would certainly like to turn the Chair back to you, and the gentlemen from Guam and Michigan have not had a chancet~ 

Mr. GALLEGLY. [presiding] Thank you very much for taking over 

while we went over to vote. I assume that our relationship with 

American Samoa has not changed since I left so, Mr. Kildee. 

Mr. KILDEE. Thank you very much, Mr. Chairman. We granted statehood to American Samoa while you were gone. I would like to 

ask a question to Ms. Lewis. I am looking more for corrective action rather than punitive action. What remedies or procedures should be put in place to assure that revenues are not lost and that 

proper purchasing procedures are followed in the Northern Marianas? 

Ms. LEWIS. One of the main things that we discussed was the 

issue of current appraisals as I mentioned before. I think that the 

failure to use current appraisals has created a large problem with 

the land exchange program. That is one of the areas that we 

touched on that we didn't think was adequately addressed. 

The other thing is that there seems to be some sort of a problem with respect to actual collection and pursuing collections of lease 

payments-going after defaulted entities with respect to lease payments or timely payments. The collection process seems not to be 

working as well as it should. 

The issue of training personnel comes up and the need to train, although they have indicated in the past that they have started 

training programs, which I think is a positive step. But that is one 

area that I think some help would be beneficial. 

Mr. KILDEE. Do you think that the-! could probably ask the Acting Attorney General when he gets up here-that the Government 

of Northern Marianas might welcome some training? I know tax 

revenue is not the easiest part of our legislation. The tax code is 

not the most simple part of legislation. Do you think that the Federal Government here at the request of the Government of the 

Northern Mariana Islands might offer some type of training in collection of revenue? 

Ms. LEWIS. I believe that Mr. Stayman indicated that there is a 

program that his office offers that he might be able to address. 
155 

Mr. STAYMAN. In my office, Mr. Congressman, there is a series 

of programs which we lumped together and called Technical Assistance Programs, and they are funded several million dollars annually. One of those subprograms is called the Management Control 

Initiative, and it is a pot of money to which heads of government 

may apply to assist the government in developing their financial 

management capabilities. 

In addition to purchasing and training people on specific computer systems and financial software, we also regularly provide 

technical assistance from the Federal IRS. It is a program which 

is available to all States and municipalities, but because of the 

costs and sometimes the lack of a training funding available in the 

islands, we underwrite that. And, in fact, just on Frida:r I did meet 

with the Director of Finance from the CNMI regarding their interest in these programs. 

Mr. KILDEE. I would be interested in pursuing this further by 

looking at some corrective action because I am sure the Government of the Northern Marianas would prefer to be collecting more 

of these revenues. It would be very, very helpful so anything that 

you might in writing furnish the committee later on how we as a 

committee might proceed to try to find some corrective action for 

this would be very helpful. Thank you, Mr. Chairman. 

Ms. LEWIS. If I could just add for a moment, written policies and 

procedures was another area that we found lacking and it is possible that with written policies and procedures in place, this situation could improve. 

The written policies and procedures would address issues, for example, about the minimum lease rental payments, where we found 

that in many instances, the value of the property was not appraised at the fair market value. Therefore, you had the situation 

where minimum lease payments were a lot less than they really 

should have been. 

There is some indication that the way they have leased the property in the past is to take eight percent of the fair market value 

to compute the lease. But that is not something that is done on a 

formal basis. It is very informal, I think, as the Governor has also 

acknowledged. 

So if there are some written policies and procedures that are 

going to be put into place, this would provide guidance in terms of 

how to compute rental payments, for example. Gross receipts payments-that is another rental payment that is supposed to come in 

over and above the minimum rental payment. For gross receipts received by the lessee, there is some percentage is supposed to be 

coming to the Commonwealth. So I think that written policies and 

procedures would help here as well. 

And, if I could mention one other thing, as Congressman 

Faleomavaega was speaking to the need to be sensitive to the insular areas, in particular, with respect to their ability to comply with 

various recommendations. We have been trying to work with all of 

the insular areas because what we have found over the years is 

that, for the most part, we conduct audits, and then we do followup audits a few years later, and find the same basic types of problems arising from year to year. 
156 

Our office recently had a meeting with Mr. Stayman in which we 

were collaborating on what the real problems are and trying to give 

some indication, based on our audit reports, as to the areas where 

it might be productive to spend technical assistance funds. 

And I think if we continue to do that, that might help to address 

the problems by focusing the assistance in the areas where the 

problems systemically have been over the years. So we are trying 

to work with the insular governments and also working within the 

Department of the Interior to try to do what we can to address the 

situation. 

Mr. KILDEE. I would encourage you to continue to do that. Thank 

you. 

Mr. FALEOMAVAEGA. Would the gentleman yield? 

Mr. KILDEE. I would be happy to yield. 

Mr. FALEOMAVAEGA. I might respond to Ms. Lewis's statement. 

I think we all know what the problem is basically and fundamentally. Some of these insular areas just simply do not have the expertise where the lack of educational opportunities for the younger 

generation, whether Chamorros or Samoans, to become accountants, to become engineers, to become doctors, to become lawyers so 

the process, while the government continues to function with a lack 

of this depth of experts, that we don't have the expertise so we 

have to rely on outside help, whether it be by Labor, whether it be 

because of consultations or whatever, but this is the problem. And hopefully in the years to come that there will be more educated people, whether it be in the Virgin Islands or Guam or even 

in Samoa that the people themselves will then be able to-and in 

my humble opinion, the bottom line is education. And we just need 

more local people in the population to become experts in their given 

fields. 

And I suspect that even in American Samoa I can account for 

only two Samoans who are CPA's. And this is unheard of, I am 

sure, in many of the communities throughout the United States. So 

with that lack of depth as far as if you talk about finances, accounting, and all of that, it just simply is not there. And I hope 

that the sensitivity will be such that you don't blame the people because they are stupid, but just simply because they just don't have 

the resources. 

Ms. LEWIS. Well, one of the additional things that we have been 

trying to do in the office is, in some instances, to be more proactive, 

and that is to go in on the front side, on occasion, instead of just 

on the back side of issues and look at controls that might be in 

place for a particular program or activity. We could render some 

advice with respect to how to set it up, as opposed to waiting until 

it is set up and then going in and saying all of the things that are 

wrong with it. So to the extent that we can provide some assistance 

in that regard, we would be willing to do that as well. 

Mr. GALLEGLY. I will defer to you in just a second, Bob. You 

know, in the interest of time, because the meeting is really kind 

of running-we still have three panels to go-without objection, I 

am going to ask that we submit my questions to Justice and Labor, 

and they can respond to me in writing in a timely fashion in the 

spirit of trying to move this hearing along. And without objection, 

I will defer to the gentleman from Guam, Mr. Underwood. 
157 

[Questions for Department of Labor follow:] 

QUESTIONS REGARDING THE MINIMUM WAGE 

• What is the cost to administer the Wage Review Board Process in American 

Samoa? • How long would it take for the Department of Labor to Implement a Wage Review Process in the NMI? • What industries or occupations in the NMI would not be covered if the Federal 

minimum wage extended immediately in full? • How would various NMI Industries be affected with the full extension of the 

Federal Minimum Wage, a graduated $.30 per year increase, or a wage review process? 

• How does the cost of doing business in the NMI compare with that in Guam on an industry by industry basis? 

[Questions for Department of Justice follow:] 

DEPARTMENT OF JUSTICE 

• How many personnel are assigned to and what is the cost to maintain and operate the INS office in Guam? What is the level of work load in Guam for tourists, 

quest workers, permanent residents, and other significant work assignments, and 

how does that compare to the NMI? • If the INA were applied to the NMI, but excluded as a port-of-entry and as a place of asylum, and with specific industry categories of guest workers authorized 

in the INA, what number of personnel would be required and what would be the 

annual cost to the INS? • Given the close proximity of Guam to Rota and Saipan, what level savings could be gained through cooperative action by the Guam and NMI INS offices? • How would the new $1.5 million computer system being installed in the NMI 

for immigration help the INS to implement the administration of the INA partially applied and with specific industry categories of guest workers in the NMI? • If Congress were to authorize the prospective administration of the INA par- tially-applied to the NMI, and given the manpower requirements, what is a realistic 

lead time that would be necessary to adequately train personnel, develop regulations for the administration of new specific industry categories of guest workers in 

the NMI, integration of computer systems, and the establishment of physical offices/ 

work areas in the NMI? [One year? Two year?) • What problems have Justice or INS employees detailed to the NMI encoun- tered in dealing with the NMI Government Officials regarding immigration and or law enforcement matters? • What percent of the United States are aliens, obviously excluding aliens who 

have since become citizens no matter how recent? • How does that compare to the NMI? • At what level of aliens (percentage or ratio of aliens to citizens) should the 

United States be concerned from an immigration management and sovereignty point of view? 

Mr. UNDERWOOD. Thank you, Mr. Chairman, and it is good to see 

you again, Ms. Lewis and Mr. Stayman. 

Ms. LEWIS. Thank you. Nice to see you. 

Mr. UNDERWOOD. Just for my edification on this issue of the 

management of public lands, two basic questions. Who lost the 

money, and who was it lost to? One. Secondly, is there an acknowledgement of the scope of the problem as you have explained it by 

the CNMI, or are there any factors in this process which could said 

to be mitigating or influencing the numbers that you have arrived 

at? 

Ms. LEWIS. Who lost the money and who was it lost to? With respect to the land exchange process, one would not be talking about 

hard dollars, if you will. It is not like the loss of the lease payment, 

for example, as a result of not having the minimum payment at the 

level that it should be-at the fair market value. 
158 

What you have is a situation where public land is being exchanged for private land, and it is being exchanged for land not of 

a comparable value. So in the final analysis what you end up with 

is that the assets of the Commonwealth Government are lessened, 

and this can ultimately turn into hard dollars. For example, if they 

lease the less valuable land that they have now exchanged for the 

more valuable public land, ultimately they could lose lease revenues. Similarly, if they were to sell the land, they would be getting 

less in terms of dollars for it ultimately than if they had exchanged 

it for land of comparable value. So it is not hard dollars with respect to the actual exchange, but certainly down the road it can be 

converted into hard dollars at a later time. 

Mr. UNDERWOOD. In a climate of a lack of appraisals, did you do 

an assessment of the value of the land yourself? 

Ms. LEWIS. No. We did not do an assessment of the value of the 

land. What we did was look to see whether they were using the 

most currently available appraisals. And what we found on anumber of occasions was that they were using appraisals that were 

dated or else the documentation in the file did not indicate from 

whence they were getting the numbers they were using. But we did 

not go in and independently do an appraisal of the land. 

Mr. UNDERWOOD. OK. So just on the question of-could you just 

respond briefly to did the CNMI Government accept-not necessarily accept your recommendations, but did they just generally 

accept that the problem is as you described it, or are there factors 

which may explain some of this? 

Ms. LEWIS. There was no indication from the response that they 

rejected the recommendations that we made or the facts that we 

produced. It was more a question as to whether the Commonwealth's response was as responsive as we had hoped. 

Mr. UNDERWOOD. Just briefly, Mr. Stayman, in the general report, there has always been a lot of discussion about the CNMI and 

the problems that it continues to encounter. And, you know, one 

scenario posits that if the minimum wage would just be raised, 

that all the other things would kind of kick into place, and that a 

number of problems would be resolved. 

Another scenario posits that if there was better control of immigration that would be kind of the key point. And a third part talks 

about the enforcement of labor provisions or kind of making it 

sound like a law enforcement problem. I guess I am concluding 

based on your report that basically it is the minimum wage that 

the report is hanging its hat on. Is that a fair characterization? 

Mr. STAYMAN. At this time, yes. You know, we have to go back 

and all appreciate what a tremendous challenge the CNMI has before it. And I want to take the opportunity to commend the Governor for his commitment. He is facing a daunting task. 

Imagine if you can the population of your island tripling in 15 

years. The CNMI 15 years ago was, you know, the island equivalent of a sleepy small town in Kansas, and now it is something 

akin to downtown Manhattan. And they are confronting problems 

across the board. 

The solution is going to require action in a variety of areas, but 

our general policy is that we believe that the CNMI government is 

in the best position to analyze their problem and build the capabil-
159 

ity and be able to on an ongoing basis manage that problem. You 

are never going to fix these problems. There is always going to be 

crime. There is always going to be abuse and stuff like that. 

Minimum wage was one of the things-we knew it wouldn't solve 

the problem, but we thought it would contribute to or let me put it another way-it would dampen the demand for immigrants. See, 

right now, they have an economy that basically is two parts. One 

is the public sector. 

U.S. citizens and the locals work at above minimum wage in that 

sector, and then in the private sector, that which we generally 

want to support and have grow, they have a much lower wage, and 

the workers tend to be aliens. By evening the minimum, giving everyone the same wage, that 

would create or get rid of the disincentive for locals and U.S. citizens to work in the private sector. And, therefore, there wouldn't 

be this demand for immigrants. Moreover, there would be a flow 

of additional revenue into the Treasury that could be used to help finance the tremendous demands on infrastructure. 

So, you see, we saw it as a relatively simple thing to do. The government at the time agreed with it. The Chamber of Commerce 

agreed with it, and we didn't think it would solve the problem, but 

it would help us with the trends. 

Mr. UNDERWOOD. Yes. I understand. Thank you very much. 

Mr. GALLEGLY. I guess we have no further questions. I appre- ciate all of our witnesses this afternoon, and please forgive my absence with the voting schedule and running back and forth. And I 

have the good fortune of having the gentleman from American 

Samoa to always stand in for me in my absence, which is a littleit is not really traditional around here to do such a thing, but it 

has worked very successfully. And we will continue to do so as long 

as it works as well as it has in the past. Mr. F ALEOMA v AEGA. Mr. Chairman, I would also ask unanimous 

consent to also allow other members of the committee to submit 

questions to our famous panel here from Justice and Labor and 

INS if they have further questions that they may have. 

Mr. GALLEGLY. Without objection. That is a good idea. 

[Questions may be found at the end of hearing.) 

Mr. GALLEGLY. Thank you all very much. The next panel we 

have is the Acting Attorney General representing Governor Tenorio 

here, Mr. Aloot, and we have a Representative, Juan Babauta. Mr. 

Babauta, welcome. Mr. BABAUTA. Thank you, Mr. Chairman. 

STATEMENT OF RESIDENT REPRESENTATIVE JUAN BABAUTA 

Mr. BABAUTA. Thank you, Mr. Chairman, for the opportunity to 

testify before your committee. Before I begin, I want to thank you 

for the recent assistance of you and your staff on two important issues concerning the NMI. Your letter to Secretary Babbitt regard- ing the need for his attention to the new group of former U.S. 

Trust Territory employees who may be eligible for pensions is 

much appreciated. And your joint letter with Chairman Young to the Federal Communications Commission supporting the NMI and Guam's effort to 

obtain a domestic area code is also appreciated. It was most effec-
160 

tive, and we have been assigned an area code for your information. 

Thank you for your help. 

My position on reform in the NMI is already on record with this 

committee. I testified here in January of 1995 regarding your proposals in H.R. 602 on minimum wage and immigration. My written 

testimony reiterates my position which has not changed, Mr. Chairman. My detailed response to the Interior Department's two recommendations in this year's report are also in my written testimony. 

In summary, first, I appreciate the need for more prison facilities 

as Interior recommends. However, I remind the committee that 

this need is a symptom of the root problem in the NMI, and that 

is unrestricted immigration. 

Second, I support a fair and just minimum wage in the NMI. But 

rather than the simplistic 30 cent annual increase proposed by Interior, I prefer the Federal Minimum Wage Review Board process 

that has been successfully in use in American Samoa. This is an 

area where, obviously, I disagree with Mr. Stayman from Interior. 

And as you know, Mr. Chairman, this was a proposal that you also 

supported. 

Mr. Chairman, on a separate issue, I am here also to speak 

about the reform I consider most necessary and I think least controversial, and that is giving the people of the Northern Marianas 

representation here in this Congress. When I testified on H.R. 602, I said to myself that two principles 

should apply for congressional policy in the Northern Marianas. 

One is that any policy should fulfill the fundamental Federal responsibility to protect civil rights. And, second, that it reduces Federal involvement and promote local responsibility in the islands. 

Application of those two principles led me to support your legislative proposals. Applications of those principles also supports representation in the Congress for the Northern Mariana Islands. 

There may be no explicit civil right to such representation, but 

200 years of practice have established an irrefutable precedent. 

And if Congress wishes to promote a greater degree of responsibility in the Northern Marianas, how better than to end our political 

exclusion from the American family. Let us sit on the panels that 

decide on Federal policy toward the Northern Marianas. Let us be 

responsible for taking care of our own interests here in this Congress. 

Mr. Chairman, our case is simple. We are citizens of the United 

States. Yet, we lack the most basic right of citizenship, a voice in 

our nation's government. We have been asking for 20 years. The 

Marianas Political Status Commission that originally negotiated 

the Covenant of political union between the Northern Marianas 

and the United States asked for a delegate. 

In 1985, the Commission on Federal Laws, appointed by President Reagan, and including Congressman Robert J. Lagomarsino of 

this committee, asked that Congress consider legislation giving the 

Northern Marianas a delegate. 

Most recently, the Tenth Commonwealth Legislature, under the 

leadership of Speaker Diego T. Benavente and Senate President 

Jesus R. Sablan, petitioned the Congress for a delegate to this 
161 

House. Copies of those resolutions have been attached to my written statement which was submitted to this committee. 

Our desire is clear, and the only objection to a Northern Marianas delegate ever documented has been our small population in 

1975 compared to Guam and the Virgin Islands when they were 

given delegates. Twenty years later, that objection no longer applies. 

If you look at the histories of the Virgin Islands, American 

Samoa, the State of Washington, the State of Michigan, Montana, 

and the Dakota Territories, the Northern Marianas has reached a 

threshold of population set by precedents both historical and contemporary. 

Mr. Chairman, in opening your hearing on H.R. 602, you said 

that "the territories are due the same treatment as other political 

divisions of the United States," and I couldn't agree more. But the 

Northern Marianas does not even ask that. All we ask is for the 

opportunity to be represented in this Congress. Give the people of 

the Northern Marianas what all other U.S. citizens living within 

the nation's borders have, and that is a voice here in this body. 

Thank you, Mr. Chairman. 

Lastly, I want to extend my appreciation to your staff, Mr. 

Manase Mansur, for all the help that he has given us over this last 

year and in previous years. He has been extremely helpful to my 

office, to me, and to my staff, and in that sense, to the people of 

the Northern Marianas. And I really appreciate that. Thank you. [Prepared statement of Mr. Juan N. Babauta may be found at 

the end of hearing.] 

Mr. GALLEGLY. Thank you very much. Mr. Aloot. 

STATEMENT OF THE HONORABLE SEBASTIAN ALOOT, ACTING 

ON BEHALF OF ATTORNEY GENERAL, NORTHERN MARIANA 

ISLANDS GOVERNOR FROILAN TENORIO 

Mr. ALOOT. Yes. Mr. Chairman, as you have indicated or has 

been indicated, I am the Acting Attorney General of the Commonwealth of the Northern Mariana Islands. I appreciate the opportunity to appear before you and the committee concerning the recent Department of Interior report on labor, immigration, and law 

enforcement, and what I believe was to be the Department of Interior Inspector General's report on management of public lands. Due 

to the shortness of time, I ask that my prefiled written testimony 

be submitted for the record. 

Mr. GALLEGLY. Without objection. 

Mr. ALOOT. I did have a brief summary of my longer testimony. 

I am going to lay that to the side and deal directly with what I 

think initially was an issue that perhaps struck a chord it appeared among the committee, and that is the IG audits; in particular, the audit on management of public lands. 

Let me just point out that out of all the audits identified by the 

Interior Inspector General as part of her summary of testimony, all 

but one deal with activities by the prior Administration of the Commonwealth of the Northern Marianas. Even the audit of the management of public lands, completed in 1996 or at least issued in 

1996, my brief recollection is three or four of the 20 some leases 
162 

looked at were done by the present Administration. Most, again, 

were in the past Administration. 

Turning to the audit of the management of public lands, yes, 

problems were encountered; problems that I believe the officials of 

this Administration and I believe past Administrations knew about, 

and then the question is what corrective action should be taken. 

There is a underlying, I believe, mischaracterization that is part 

of the Inspector General's land report. It starts out from the assumption or that the question presented is what did the Commonwealth do with the lands the United States gave the Commonwealth? 

Point in fact, the United States had no lands to give to the Commonwealth. Those lands historically were and are the property, the 

culture, the heritage, if you will, of the people of the Marianas Islands. The United States never had title to them. Now, point in 

fact, the United States merely returned what it had taken under 

the guise of the Trust Territory Government. 

Be that as it may, what I think the other mischaracterization or 

misleading part about the audit, because I will get to what I believe are solutions that you were probing for, and that is the concept of valuation. I believe that Delegate Underwood raised the 

precise question that should have been asked and the IG should 

have continually asked herself or her people, and that was what 

was lost and who was it lost to? 

It appears that they used the-they adopted an approach that 

one must use two things-the most recent appraisal of property, 

which I believe if you did a full audit with any sort of historical 

understanding would not have been the approach you used, because one of the problems of land valuation in the Commonwealth 

and I believe throughout Micronesia is the very validity of the appraisals themselves. Land appraisals are difficult to do in the best 

of circumstances. They are much more difficult in Micronesia and 

in the Commonwealth, assuming people even want to do it correctly. 

The second point-and I think it is even more critical when you 

assess what was lost and to whom it was lost to. I have to tell you 

that my sense, my V!iluation of the IG audit, which I believe was 

done in good faith, is that it is one dimensional. It assumes that 

the only reason, the only factors one considers in leasing out land, 

be it private or public, is how much can you get for it and how fast 

can you get it? 

And while perhaps in private leases that is inappropriate, indeed, that might be the only legitimate business approach. I believe 

that government officials have to look at more factors. For example, 

there was an article that appeared not too long ago, the Mayor of 

Detroit, I believe, was getting awards for his foresight in giving 

away public land-public lots within the city when the person who 

got this free land agreed to put in a commercial establishment that 

gave rise to secondary economic benefits~mployment, taxes. I believe, and I know the Governor believes this, that those are legitimate factors to consider in determining when and at what level one 

grants a lease of public land. 

The final point on that before I go on to the other points is I hope 

the Interior Inspector General continues on the audit of leases of 
163 

public land to make sure that the Commonwealth gets value for 

dollar. And one of the leases I think I would recommend that she 

look at is the United States lease of the American Memorial Park 

at the Kanapeg Reservation. 

Our calculations are that the United States entered into a lease, 

leased that property, that 177 acres over a 100-year term, for the 

grand sum of $1 per month per acre. So, obviously, I would think 

the Executive Branch would agree that there must be legitimate 

factors that warrant public land leases that consider benefits other 

than dollars. At least I would hope so. 

With respect to the corrective action, having said I think that 

there are explanations for perhaps some of the gross characterizations that you see, there have been problems. I will tell you that 

I now have four lawyers assigned almost-well, three lawyers, one 

being employed assigned almost full time to issues like this. 

Today, while-yes, this is late enough-while we are doing this 

hearing, my new government contract procurement lawyer is arriving in my office in Saipan. Her job will be to focus on these kinds 

of issues in the government procurement contract area. 

I have committed a lawyer working, in essence, full time to develop, initiate, prosecute, and prevail in land fraud cases. That is 

where public land was stolen from the public and made private. I 

think the record will show that our approach to that issue is we 

are prepared and have or brought cases against the very prominent 

people. We don't make distinctions. We are an equal opportunity 

prosecutor in that regard. 

We have another attorney who we plan to hire, because we just 

got approval to do this, to deal with the issues of lease payment 

recovery. At the present time, I am trying to function in that regard, and I am engaged in back rent collection negotiations. 

So I think that to the extent that there are legitimate concerns 

about how land was leased or acquired in the Commonwealth, the 

solution is not only the development of regulations to ensure that 

this does not happen again, and no set of regulations or law will 

guarantee that it will never happen again, but is also ensured 

through vigorous enforcement so that every one knows that there 

is a price. 

And I assure you, while I did not come prepared to give you case 

names and filings, I assure you that at least in the current office 

of the Attorney General there is and will be a price. 

OK. I would like to now get back on track to some of the issues 

I think are just as important outside the area of land and management of land but also--

Mr. GALLEGLY. Mr. Aloot, I know that you have a lot of things 

on the table there today, and I know you have come a long way. 

And we are really getting behind, and I have gone double over the 

time already. If there is any way that you could kind of summarize, 

I would sure appreciate it, without denigrating the message that 

you have to present. 

Mr. ALOOT. Sure. Focus on just-let us try three issues very 

briefly-the report, which I think is the principal driving force behind the hearing. I believe there are two elements I would like to 

address very briefly that are part of that report that I find either 

misleading or unacceptable to the Commonwealth and then deal 
164 

very quickly with the recommendations because I think the have 

already been dealt with by other witnesses. 

First, we are troubled by the paternalistic observation in the 

Task Force Report that Native Chamorro and Carolinian culture 

and influence has somehow been diminished because there are 

large numbers of, I will stress, nonvoting foreign workers in the 

Commonwealth. 

The indigenous people of the Northern Marianas and their cultures have survived three centuries of Spanish domination and pe- riods of German and Japanese occupation, all preceding the 50 

years of affiliation with the United States. Their culture will pre- vail not due to their isolation, but due to the strength of their peo- ple. In fact, many of us believe that immigration and interaction 

can enrich our culture much as it has done in the United States 

itself. 

The other misleading suggestion in the Task Force Report is that 

the children of foreign workers are overwhelming the Commonwealth's public school system. The fact is that 80 percent of these 

overwhelming numbers are children of Micronesians, which the 

Commonwealth is required to permit entry into our borders by virtue of U.S.-negotiated compacts. 

I will report to you that we are now engaged in litigation before 

the Federal District Courts to clarify our immigration obligations under those compacts. I will also report to you that Guam and the 

Commonwealth have recently initiated litigation seeking to force 

the Executive Branch to finally discharge its long-ignored duty to 

seek annual appropriations to address the negative impacts of such 

free immigration by Micronesians into the Commonwealth and into 

Guam. 

I can also indicate that the State of Hawaii is prepared to join 

our litigation. Clearly, the source of the immigration problem in the 

Commonwealth and responsibility for paying the cost lies on both 

sides of the Pacific. 

Turning to the minimum wage, I believe that the delegate from 

American Samoa and Representative Babauta and indeed I believe 

it was the representative of the Labor Department actually all 

agreed. We support a study. 

We support a minimum wage, be it tiered or at some accelerated 

rate based on fact, not fiction, based on what is the economic reality of the Commonwealth, not the economic policy of and may I 

add social engineering goals of people in Washington. It is too expensive for the United States. That is fine. Governor 

Tenorio has decided that the Commonwealth will pay for that 

which the United States does not think they can afford, which is 

for once having a minimum wag~ debate based on the realities of 

the Commonwealth, not on the policy goals of Washington. I don't 

think that is an abnormal message in the current pofitical structure of America. 

I also need to emphasize much debate has been made on the 

minimum wage going up 30 cents, 50 cents, or the minimum wage is not comparable to the Federal minimum wage. I think it is important for everyone to understand that in the Commonwealth 

minimum wage does not stand alone like it does in the United 

States. 
165 

In the Commonwealth, one is entitled to the minimum wage-let 

us assume the original minimum wage of $2.75 an hour-but the 

Commonwealth requires benefits to be provided to foreign workers 

that are not provided in the United States. 

Our Department of Commerce conservatively estimates that 

when you add the value of the medical insurance, housing, food, 

local transportation and the like to our minimum wage, that the 

Commonwealth, even before the most recent increase, had an effective minimum wage of at least $4.68 an hour. 

The support that the Chamber of Commerce provides or has 

given for an increase in the minimum wage, I hope that they indicate when they testify that support is predicated upon an equal decrease in the non-salary benefits that are required under Commonwealth law. 

So I think if the reality of the Commonwealth's approach to minimum wage and its desire to have for once a local determination of 

its local economic needs and social needs in light of locally based 

facts, if the reality is known or understood, the Commonwealth already matches in benefits and salary the Federal minimum wage. 

Because I know it has been a long day for a lot of us, I would 

just like to make sure I haven't missed anything that I think is important for this committee to hear from us. I think I have every- thing. I will just make one observation, one plea from me. 

There is much talk in this halls of government about authority and responsibility. Authority is the power to say yes. Responsibility is the wisdom to say no when one has the power to say yes. This 

Congress clearly has the authority to say yes to the legislative pro- posals concerning the Commonwealth that are now before it. 

We urge you to show the wisdom to say no to what, in fact, is 

an unwarranted Federal intrusion into our local decisionmaking 

process as we continue to implement local solutions to local prob- lems involving local resources. I thank you for the opportunity to 

give this I guess modified testimony, and I will be happy to answer 

any questions that you might have. 

[Prepared statement of Mr. Sebastian Aloot may be found at the 

end of hearing.] 

Mr. GALLEGLY. I thank you very much, Mr. Aloot. Inasmuch as 

I relinquished my time so that you would have an opportunity to 

better present your testimony today--

Mr. ALooT. I appreciate it. 

Mr. GALLEGLY.-I would ask unanimous consent to submit an 

opening statement that I had for the record. 

[Prepared statement of Hon. Elton Gallegly follows:] 

STATEMENT OF HON. ELTON GALLEGLY 

Afo we commence the Oversight hearing on Northern Mariana Island issues on labor, immigration, law enforcement, and related legislative refor.ns, let me extend a welcome to those who have traveled from the Marianas. While potential reforms 

affecting the NMI still generate discussion in Washington and in the NMI, I believe 

there are reasonable approaches with sound solutions which will benefit the residents of the NMI. 

This hearing should provide an opportunity to obtain further information regard- ing the application of a federal minimum wage, the management of immigration and 

alien guest workers, law enforcement practices, and other matters in the NMI. The 

views of the administration and the NMI regarding the progress in these areas since 
166 

the last Subcommittee hearing in January 1995, should be particularly relevant to 

further consideration of NMI legislative reforms. The hearing agenda also includes the oversight of management problems regard- ing the disposal of Water Island in the Virgin Islands. The Interior Inspector General, Wilma Lewis has been asked to appear, not only to address IG audits per- formed in the NMI, but to also provide additional information to the Subcommittee regarding the disposition of the Water Island property. The Administration will lead off as the first of three panels, and will include the Interior Inspection General, Wilma Lewis, Allen Stayman of the Office of Insular 

Affairs, and representatives of the Department of Justices and Labor. The second panel will include John Babauta, Resident Representative of the NMI 

and the Governor's representative. I understand the Resident Representative may be accompanied by other NMI officials and I ask that he introduce those present. And, finally, the Subcommittee will hear testimony presented by the President of the NMI Chamber of Commerce, Mr. Sam McPhetres. Other witnesses invited to 

represent different human rights organizations in the NMI, although not appearing, 

may submit their statements for the record. 

Mr. GALLEGLY. And I just had one question for Representative 

Babauta. Is the legislature in the NMI prepared to enact necessary 

local legislation for the election of a delegate if the Congress authorized such action? 

Mr. BABAUTA. Mr. Chairman, having served in the legislature, I 

prefer not to speak on behalf of the legislature. The Speaker is certainly in this room, and I regret I failed to introduce him to the 

committee. If you would like, he is here. 

Mr. GALLEGLY. Speaker Benavente is present? 

Mr. BABAUTA. Yes. The Speaker is here in this room. If I may ask for him--

Mr. GALLEGLY. If Speaker Benavente would like to come forward 

and just be recognized, perhaps he could answer that question for 

me. 

Mr. BENAVENTE. Thank you, Mr. Chairman, and good afternoon 

to you and the committee. My answer to the question is yes. As a 

matter of fact, we have discussed this during the process of discussing the resolutions that we have adopted recently in the Tenth Leg- islature and also in the past three legislatures that I was a member of. 

As a matter of fact, our constitution and the Covenant provides for a mechanism or a process for this changeover. And all we would 

need is actually a law that would allow for this election, and I believe that that will be possible, and we can do it. 

Mr. GALLEGLY. Thank you and welcome this afternoon. Mr. 

Faleomavaega. 

Mr. FALEOMAVAEGA. I just want to say, Mr. Chairman, I would 

be more than happy to accommodate whatever your wishes might 

be to make sure that the proper authorizing language to provide the delegate representation for the Northern Marianas. We have 

had some precedents, and I am sure there will be no problem in 

doing this. 

And I am very happy that there is a sentiment on behalf of the 

Chairman and interest, hopefully, that this matter might be provided for the NMI. Just a couple of quick questions. I know we are 

way over the time. What is the per capita income in the NMI? 

What is the average wage income in the Northern Marianas? Does 

anybody have any-submit it for the record if by chance you don't 

know that. Is it above the minimum wage? 
167 

Mr. ALOOT. Yes, it is. We will get the infonnation submitted for 

the record. 

Mr. F ALEOMA v AEGA. Please provide that. I understand, and 

please correct this for the record, there are currently 7,000 Chinese 

workers in the gannent factories in NMI, and I was just wondering that if there had been any workers' rights' abuses of some of these 

workers in NMI, and, if so, has our Attorney General's Office been 

very successful in prosecuting abuses of the workers? You know, 

those who are working there at NMI, have you had any problems with this issue? 

Mr. ALOOT. Well, first, let me say that I think the proper and 

less inflammatory word is violations of labor laws. 

Mr. FALEOMAVAEGA. If you wish. I would be more than happy 

toMr. ALOOT. I personally--

Mr. FALEOMAVAEGA. I am still learning English so please help 

me. 

Mr. ALooT.-reserve the word abuse for more serious matters. 

But certainly we have faced and uncovered the same kinds of violations of labor laws, civil rights laws that are found everywhere in 

the United States. I don't think I need to run down the list of cities 

that have been in the newspapers from one or more of the 50 

States in the last three months. So we have identified them. 

Some of the problems I think go beyond our borders because they involve perhaps-some of the predicate acts for some of the violations do not occur within our jurisdiction. We have a very active 

and I think good relationship with the on-site Federal officials, par- ticularly the U.S. Attorney's Office, to try to share infonnation. We 

have perhaps the best, closest relationship of any jurisdiction with 

the Republic of the Philippines on a joint enforcement of our--

Mr. FALEOMAVAEGA. Mr. General, all I want is just assurance 

from your office that you are aggressively pursuing or prosecuting those who do abuse labor law violations. 

Mr. ALooT. Well, of course, I would say that--

Mr. FALEOMAVAEGA. That is all I am trying to pursue here. 

Mr. ALooT. Of course, I would say that I think we are. I would 

like to do more. I have to tell you that we have increased, for example, just this last month, the number of attorneys in the office 100 

percent. I have a simple rule, and that is 100 percent-100 percent of the time. I think everyone who works for me delivers. But to be 

honest with you, I am never going to be happy with the level of 

enforcement, but I think the record will show that it is aggressive, and it is across the board. 

Mr. FALEOMAVAEGA. You mentioned also, Mr. Babauta, about the 

unrestricted immigration policy-whether it is a matter of policy or 

local law, that also this is a Federal law that allows your fellow Micronesians from FSM can immigrate to Saipan unrestricted. Is this 

the problem that you are faced with? And what is the estimate of 

the population? Now, I know you are about 45,000, but right now 

the Tumaural population is almost less than 50 percent right now? 

Mr. BABAUTA. Yes, much less than that. The population that 

combines-the figure that combines the Chamorro and the Carolinians is roughly about 22,000. The total population of the NMI, 

according to the mid-year 1995 census, is about 60,000. 
168 

Mr. FALEOMAVAEGA. I see. And you are having a very difficult 

problem right now in providing health care similar to the impact 

costs that our friends in Guam also are having. Is the Federal Government giving any assistance to the NMI with regard to this prob- lem-compact impact? 

Mr. BABAUTA: No. We have not, Mr. Chairman. 

Mr. FALEOMAVAEGA. Have you requested assistance in this matter? 

Mr. BABAUTA. We have over and over in the past two-three 

years-five years, and the assistance under the compact impact have not been forthcoming. 

Mr . .ALOOT. If I may inteiject, I think I indicated-if I didn't, I 

apologize-Guam, the Commonwealth, and I think by next week 

the State of Hawaii will be in litigation with the Executive Branch 

seeking the very compact impact assistance that this Congress as 

already authorized and needs only to be appropriated based on a 

report of that impact. 

Mr. FALEOMAVAEGA. Just one more basic question, Mr. Chairman. I am sorry that we are still running-could I get the assurance from Mr. General that you will respond to the Stated statement of the Inspector General and some of the things that are stated there? You will provide a full response to the allegations stated 

in the Inspector General's report that was--

Mr . .ALOOT. Were there allegations against my office? 

Mr. FALEOMAVAEGA. No, against the NMI. 

Mr . .ALOOT. Oh, I think that the Governor has responded. I think 

the Inspector General indicated that she was not satisfied. I certainly will commit to review the Governor's response and to the extent that it was a lack of clarity, or there is new information pro- vided, or ask the appropriate official to provide it. But I can't as- sure you that the Inspector General will be happy with our response. 

Mr. FALEOMAVAEGA. I thought you had committed four of your 

attorneys and your staff that you were going to review this more 

thoroughly, and I thought--

Mr . .ALOOT. No, no. The attorneys are not to review that Inspector General's report. It is to go after people that owe us money or 

owe us land and get it back. 

Mr. FALEOMAVAEGA. Thank you, Mr. Chairman. 

Mr. GALLEGLY. The gentleman from Michigan. Mr. KILDEE. Just very briefly. Mr. Babauta, you are very correct 

in your observation about the members of the committee who rep- resented places that at one time or still are represented by a nonvoting delegate. Michigan was represented by Gabriel Richard, a 

Catholic priest, who is one of the co-founders of my university, University of Michigan. And I think probably the only two States that didn't have that 

outside the original colonies was California-! think you came in 

directly as a republic to the Union-and Texas, but the rest of us 

did go through that. So as a history major, I appreciated that statement very, very much. 

I fully support you having a representative here in the Congress of the United States. I think that is the least we can do for those 

who share with us that American citizenship. I think we can do 
169 

even more, but I think that is the first step we should take--is to 

give you representation here. And certainly we will support that. 

Just one brief question, Mr. Chairman. You mentioned that when 

you take into account, Mr. Aloot, the employee benefits-housing, medical care, that the minimum wage is about 4.68--could you give just briefly a description of the nature of the medical care that the 

people are able to receive there? 

Mr. ALOOT. Well, this may come off wrong, but I describe it as 

the Hillary health plan. It is full, across-the-board, 100 percent. Mr. KILDEE. OK. Well, that probably pleases--

Mr. ALOOT. Oh, no. 

Mr. KILDEE. Pretty broad then, right? Surgery-these matters--

Mr. ALOOT. Yes. 

Mr. KILDEE.-are all covered? 

Mr. ALOOT. Pregnancy. Correct me if I am wrong anybody, but 

I believe it is 100 percent across the board. 

Mr. KILDEE. Straight comprehensive then? 

Mr. ALOOT. Yes. 

Mr. KILDEE. So when you look at the dollar minimum wage and 

add in the benefits, it would come up to what you feel at least--

Mr. ALOOT. The minimum--

Mr. KILDEE. A minimum of 4.68 then. 

Mr. ALOOT. 4.68. Certain other industries I have been told-! 

don't have a figure--! have been told it is higher because of the 

way that industry-for example, they have a right to deduct for 

housing, but they don't. 

Mr. KILDEE. Someday I would like to come to the Northern Marianas and look at your health care system. 

Mr. ALOOT. You are more than welcome. Mr. KILDEE. Because I think maybe we could learn something from you on that. Thank you. Thank you very much. Mr. ALOOT. All rightie. 

Mr. GALLEGLY. Mr. Underwood. 

Mr. UNDERWOOD. Thank you, Mr. Chairman. And I too want to 

add my words, and, of course, as Mr. Babauta and I have discussed 

over a number of months, I have introduced legislation to give a 

delegate to the Northern Marianas-to grant a delegate, although I would add that being a nonvoting delegate is not all that it is 

cracked up to be, Mr. Babauta. So you might want to keep that 

under consideration. Indeed, with representation, responsibility and accountability 

grows, and I think one of the major difficulties that we are having in the course of dealing with issues with the Northern Marianas 

and kind of missing each other in the dark sometimes and not really understanding what is going on is precisely the lack of represen- tation on the Hill on a daily basis, an office, a central point from 

which to understand and explain what the issues are at stake. If 

we had that, perhaps there would be far less misunderstanding. Mr. Aloot, your testimony concerns me in a couple of ways. One 

is that I am never really persuaded by the idea that when the 

question was raised about the enforcement of labor standards and 

laws and the word abuses were used and you used violations and 
170 

then you made comparisons to other areas, indeed, there is always 

violations of laws and standards in other areas. 

I think the question has to be addressed very seriously, and I 

would certainly ask for the record that some kind of documentation 

be given to the Subcommittee in terms of the number of allegations 

made, the number of charges that emanated from your office as a 

result of the allegations, and the number of convictions, and to 

chart that over some time so we can see whether there has been 

any effective action on this. 

There are three-and I ask the question of Mr. Stayman because 

his report was moving in that direction, and basically the focal 

point of trying to deal with the issues that have been of some concern over the Northern Marianas have been, one, tb.e one general 

strategy or the one seen-not remedy but certainly one strategy to 

attack it is the full application and enforcement of labor laws and 

standards, and that if somehow or other that was adequately taken 

care of, that that would basically resolve most of the issues that 

concern many members of Congress. 

Secondly, the alternative viewpoint, although all of these are important, would be dealing with the minimum wage. And I might 

add that even though the minimum wage is a complex issue, I 

want to point out that in the case of Guam, H2 workers who are 

brought to Guam are paid a prevailing wage, which is the wagenot a minimum wage, but a prevailing wage, which, in many instances, is three times as much. 

And the obligation to house them, and the obligation to provide 

medical care, and the obligation to bring them to Guam and take 

them back home is there as well. And so that merely adding on the 

cost of what labor recruitment on that is not very persuasive to me 

I would like to state. And then the third triad of this is the immigration control. Now, 

I guess of those three, the responses have always been kind of interesting to me. One is that no one is interested-and certainly 

least of all I-I am not interested in taking away or denying any 

prerogatives that the CNMI has legitimately garnered and which 

are sometimes the envy of people from Guam. 

Mr. ALOOT. May I add that I believe Guam is seeking those 

very--

Mr. UNDERWOOD. Yes. Sure, sure. I am fully aware of what I am 

seeking, Mr. Aloot. In the case of local control of immigration, the 

counterargument is local prerogatives, and I respect them. The 

issue of minimum wage is then-it kind of goes into a very odd argument about, you know, if you add this to that and if you separate 

out the garment industry and it is a complex issue, and indeed 

minimum wage is always a complex issue everywhere, but generally I don't get the sense that it is the same argument about local 

control as the energy is behind immigration. And then we have the application of labor laws and standards 

and strict enforcement, and then we get words which say, well, you 

know, there is the myth and there is the fact. I want to get a sense 

from what is the Tenorio Administration's position on this? 

I mean, where do they see this, or are they in a sense saying that 

there are no real serious difficulties, and that if there are no serious difficulties, then I wish someone would just say that. "We deny 
171 

that there are serious difficulties. We don't know what all this inquiry and all this is going on, and we are shocked that all this is 

going on." 

Is there a problem, and if there is a problem, do you see that 

these three scenarios, which have been advanced by various peo- ple-stricter enforcement, raising the minimum wage, or Federalizing immigration-is a viable strategy? 

Mr. ALooT. All right. I would have to say that only a fool would 

say that there are no problems, and we are not fools. I also believe 

that each of the strategies that have been advanced will play a 

role. There is some question as to what impact each of those strategies will have, and which ones should be perhaps first, second, and 

third on the list. But they each need to be pursued to be fully effective across the board. 

But the critical point here, I think, is the assignment of priorities 

among those three alternatives. I believe that the Commonwealth 

has earned, I believe that the Commonwealth has a right to continue to stay the course that Governor Tenorio has laid out, which 

is admit the problems, honestly assess them, and vigorously implement corrective action. 

I don't think that is wrong. I don't think it is asking what any of the jurisdictions that you represent, including Guam, would believe that it is-that would be their right as a member of the American family. At least have a chance to fail. I can almost see some 

meaningful success on the horizon, and I think that I have a-I 

personally-to me reform means more than a word. It is an attitude. It is a commitment. 

It is a willingness to put it on the line, and I believe that there 

are many people who are in this process working for the Commonwealth. Many of them no one will ever know who are willing to put it on the line, and they deserve a chance to succeed. Mr. UNDERWOOD. Thank you. Mr. Babauta, do you have a comment? 

Mr. BABAUTA. I don't have any comment. 

Mr. UNDERWOOD. Do you have any comments on the general direction of, you know, addressing all the issues that apparently concern the CNMI which are grabbing attention here in Washington? And the discussion has always circulated around either Federalizing the minimum wage or dealing with the minimum wage in 

some way, controlling immigration, or perhaps applying stricter enforcement of labor laws and standards. As I understand it, and I 

could be wrong, Mr. Stayman's report focuses right on the minimum wage as a way to deal with the situation. 

Mr. BABAUTA. I think part of the strategy in the Interior's report is to focus on addressing the issue of minimum wage and while it 

ignores the issue of the open door policy of immigration into the 

NMI and hoping that some implementation of control on minimum 

wage would address and solve, at least partially, the problem of immigration. While I partly agree with that, I still think that it has 

to be-both issues have to address the head-on. 

Mr. UNDERWOOD. I appreciate that, and I want to add my words 

of welcome to Speaker Benavente. Mr. BABAUTA. Thank you. If I may just add a comment beforeif I may, Mr. Chairman? 
172 

Mr. GILCHREST. [presiding] Please do. Yes, sir. Mr. BABAUTA. I want to express another thank you to Delegate 

Faleomavaega and Delegate Underwood for all of their assistance 

that they have given me and my office and my staff over the past 

several years. In fact, ever since I have been here in Washington, 

Congressman Underwood especially has extended a great help to 

the NMI on issues of telecommunications and being a sponsor of 

the delegate bill and the service academies. And, in fact, I have 

sought his assistance for constituent assistance from the NMI, and 

I have to tell you I will continue to burden you with this as long 

as you don't give me a delegate. 

Mr. UNDERWOOD. That was why I was your main sponsor. 

Mr. BABAUTA. The least I could do for you is that, you know, if 

someday I move to Guam and live there, I would certainly vote for 

you. So with that, I just want to thank you. 

Mr. UNDERWOOD. Thank you. 

Mr. GILCHREST. Thank you very much. Are there any other questions from any of the members? I apologize for-we always have a 

scattered schedule-for not being here during the course of your 

input and the questions. It is an issue that we are sensitive to as 

far as the economics and the human side of wages, and what, after 

all, is going to be the most benefit to the people who are working 

for the wages and the people who are paying the wages to stabilize 

the circumstances. So we will continue to look at this, and I will 

rely heavily on my colleagues. 

Mr. FALEOMAVAEGA. Mr. Chairman? 

Mr. GILCHREST. Yes, sir. Mr. FALEOMAVAEGA. I would be remiss if I did not also express 

my appreciation in seeing this Honorable Speaker Benavente in the 

presence of our committee and certainly welcome him and look forward in getting the benefit of his leadership and wisdom and making sure that issues affecting the Northern Marianas on behalf of 

the legislative side of the Government of the Northern Marianas, 

that we will certainly look forward in working together with you, 

Mr. Speaker, and the members of your chamber. 

Mr. ALOOT. Excuse me. If I could note, Delegate Underwood did 

ask for some information on the specific activities of the Commonwealth. I will seek if I can have leave of the committee to send 

such additional information on our activities, which I will say just 

include the-we have now begun-taken a first step in implementation of our computerized immigration tracking system, which the 

United States INS is very enthusiastic about the potentials that 

system has for the United States immigration system. 

The Task Force indicates that there has been a series of arrests 

and convictions for drugs and the like. What the Task Force Report 

does not report adequately, I believe, is that those are joint Federal-Commonwealth law enforcement task forces using Commonwealth funds in some cases, but certainly Commonwealth law enforcement officers. 

So I think that and some other changes I think will give flesh 

to the bones of reform that I have mentioned. If I can provide that 

in the next two weeks, I think that will be enlightening. 

Mr. GILCHREST. Thank you very much. We will be looking forward to seeing that information. One of the problems here in 
173 

Washington, we are trying to get rid of the flesh and go down to 

the bones. But you make an excellent analogy. 

We do appreciate all of you coming this long distance here to 

Washington, and we have a sense of appreciation for the problems 

that you are going through with the political ramifications of the 

minimum wage depending on which party you are in. 

But we will do our best to pragmatically look at the issue. We 

won't demagogue the issue. We will look at it as pragmatically as 

possible. Thank you all so much for coming, and have a safe trip 

home. Panel three is Mr. Sam McPhetres, Chamber of Commerce, 

and Mr. Bill Campbell, Northern Marianas, Protection & Advocacy 

Systems, Incorporated. Mr. McPhetres, thank you very much for 

coming, and I don't have a little background. Where are you from, 

sir? 

Mr. McPHETRES. I am from Saipan, sir. 

Mr. GILCHREST. Pardon? 

Mr. McPHETRES. I am from Saipan. 

Mr. GILCHREST. You are from Saipan. 

Mr. McPHETRES. I am President of the Saipan Chamber of Commerce. 

Mr. GILCHREST. You sort of look like you are from New Jersey. 

Mr. McPHETRES. It is because I am very unused to this. 

Mr. GILCHREST. Oh, I see. Well, thank you very much for coming, 

sir. We look fonvard to your testimony. 

Mr. McPHETRES. Thank you, sir. 

STATEMENT OF SAMUEL MCPHETRES, PRESIDENT, CHAMBER 

OF COMMERCE, SAIPAN 

Mr. McPHETRES. I would in the interest of time dispense, with 

your permission, with reading my prepared statement and proceed 

with a brief summary of some of the key issues. 

Mr. GILCHREST. Your full statement will be entered into the 

record. 

Mr. MCPHETRES. Thank you. In the beginning, I would like to 

also state that the Saipan business community is fully behind the 

push for a delegate to the House of Representatives, and we will 

support every move we can make on this issue. We think it is extremely important. 

To go through the main points here very briefly, I would like to 

state that the Saipan Chamber of Commerce has been in favor of 

the continued increase in the minimum wage as stated by Public 

Law 8-21 of the Northern Marianas. 

As the Acting Attorney General stated, we are also concerned 

that all consideration of this take into account the mandated benefits which we are required to provide to our employees by local law. 

If they are nonresident workers, they are required to receive room 

and board, transportation, health care. 

I might add with the health care issue, something that has not 

been brought up, this is health care 24 hours a day, seven days a 

week. No matter what the issue is, the employer is responsible for 

whatever happens to their employees while they are in the Island 

of Saipan or in the Commonwealth. 

We feel that the increase in minimum wage will help us to decrease a dependence on alien workers because it will force employ-
174 

ers to be more discriminating on who they hire, looking for higher skilled people, people motivated, and people who will be better 

trained. And with that in mind, I would move on and respond to 

any questions you may have on this. 

On the issue of immigration, we do consider that there is a major crisis pending. We now have, and I am not sure, the Interior has 

had one set of figures on the population. A recent census by the 

Northern Marianas Government has come up with a slightly different set of figures. 

Based on the Northern Marianas audit, there are approximately 40,000 nonresident workers in the Commonwealth. We now have 

3,000 more hotel rooms under construction and a possible casino or 

two on the Island of Tinian. Each of these projects will entail the 

arrival of a large number of nonresident workers if we cannot entice U.S. citizen workers to come. This could lead to a major prob- lem in a variety of areas. 

This morning at the Senate hearing, I suggested, and I am quite serious, that somehow we need to be able to sit down and do some 

serious planning. This has not been done. It is not being done, and 

to my knowledge, there is no attempt at having this done. 

I say this sounds like a little strange thing coming from a Chamber of Commerce, but the stability in the marketplace, stability in 

the environment is absolutely essential to doing good business. And 

we have been doing a lot of firefighting in the last few years. We 

would like to avoid that. A similar example would be the zoning law, which we may have 

had some problems with it, but at least it gave people an idea of 

what to expect. The zoning law was then suspended for three 

years. We have no zoning at the present time. And several investors have disappeared because of this. 

The other element of immigration is related to law enforcement. 

Much of our crime that is going on in the Commonwealth at this 

point in time is internal to various ethnic and national groups. 

We have found over the past several months that the Tongs or 

Triads from China have been exercising a protectionist racket in 

the Commonwealth directed internally to other Chinese businesses. 

We have a problem with prostitution. This was mentioned in the 

report. This is also an issue that has been brought up with the Chinese population. 

The Chamber is very active in supporting Federal initiatives. We 

have, in fact, held seminars and workshops with Federal law enforcement personnel, Federal regulators to educate the public in 

the Commonwealth about what their responsibilities are and to get 

some dialog going. We think we have been quite successful in this 

in a lot of areas. 

Our seminars have been very popular, and we haV"e had a very, 

very good response to them. And we wish to assure this committee 

that we will continue to do so. We offer our full cooperation with 

all the Federal authorities dealing in the Northern Marianas for 

whatever purpose, which brings me to the final point I would like 

to make very briefly, and that is Federal-Commonwealth relations. 

Sometimes we have problems that are definitely of our own making. There is no question about that. Sometimes these problems are 

coming to us from outside. And I would like to point out two spe-
175 

cific examples. I am sorry our Inspector General has already left. 

I must agree with her findings. I have no problem with those in 

many respects. 

However, I might note that many of the issues that she raised 

have actually involved local custom. For better or for worse, homesteads have never been perceived and legally required to be longterm homesteads. With the value of land and the competition for land, there has 

been a great deal of interest in getting a homestead and then turning around and seeing how much can be made off of it. This is still, 

I think, the case. There have been bills presented in the legislature 

to make this illegal, but as the IG stated, this is a fairly common 

practice. It is not illegal, I might add. The other thing about the audit is, and the Acting Attorney General stated it quite well, the issue of justifying the audits on the 

basis that these lands once belonged to the United States. 

As a long-term Trust Territory employee, I am quite familiar 

with the situation under the trusteeship, and I can say flatly the 

United States never owned a square meter of land in the Trust 

Territory. And this is a common misunderstanding that leads to 

points of friction between the Federal Government and the people in the Commonwealth, whatever the motivations of the audit itself. The second thing I would point out is that the NLRB has recently apparently-this has been reported to me-I have not been 

able to actually verify it, but my sources are quite believable-that 

there is a ruling coming down the pipeline that employers will be 

required to renew their nonresident contract employees at the end 

of their contracts unless they have cause to dismiss the employee. In other words, the local control over immigration and our local 

hire preference laws will be completely overturned by this kind of 

regulation. We have a regulation in the Marianas which requires 

every employer to hire local people first whenever they are quali- fied, whenever they apply for a job before any nonresident workers. 

And if a nonresident worker's contract expires and a local hire ap- plies for that job, the local hire person is supposed to get pref- erence. Under this new ruling which is coming down, and I have seen 

part of it in text, the employer will be required to rehire the non- resident worker, which goes against everything we believe is American. And we think it is not right, and we would ask this committee 

to look into it. In the interest of time, Mr. Chairman, I will cease 

my comments at this time and make myself available for any ques- tions you may have. It is kind of lonely up here. [Prepared statement of Mr. Samuel F. McPhetres may be found 

at the end of hearing.] 

Mr. GILCHREST. Well, thank you very much, and we realize you have come a long way to testify so we want to make sure that you 

get across to us the information that you feel is important. I just have a few questions, and then I will yield to my colleagues. You are saying-because I am not sure if I understood your earlier statement about .whether you were or were not in favor of the 

minimum wage increase. It seemed that you saidlou were in favor 

of the minimum wage increase because that woul cause employers 

to be more selective as to who they were hiring, but they should 
176 

take into consideration those of us who are causing the minimum 

wage to go up. The other benefits that the employees have, which 

is food, lodging, health care, and so forth, how would that work? 

Mr. McPHETRES. Our position, Mr. Chairman, is that somehow 

we have to get the Marianas legislature to reduce the mandated 

benefits as the actual cash wage increases. If we maintain the legally mandated benefits, which can go up as high as $2 an hour 

in benefits, in value, and the minimum wage goes up to let us say $4.25, it is actually a $6.25 minimum wage to the employer. Mr. GILCHREST. I see. So that adds a more interesting, yet prag- matic, dimension to the issue of minimum wage. The issue of immigration which you said was a problem for a number of reasons, one 

of which was the problem of different groups fighting amongst themselves in the Commonwealth, the difficulty of law enforce- ment, the difficulty of the immigration problem because you can't 

get-I suppose-! think you made reference to getting-enticing Americans to the Commonwealth as opposed to hiring people from 

other nations in the South Pacific or a Asia? 

Mr. MCPHETRES. That is correct, sir. 

Mr. GILCHREST. Do you feel that the American workers would be 

more suitable, less troublesome? Why would the American workers 

be better than the--

Mr. McPHETRES. Well, I think there are two facets to the answer 

of that question, sir. The first one is we feel that the-the Chamber 

particularly-feels that we really ought to get more American in- vestment in the Commonwealth. I am not just talking about workers. I am talking about the overall investment pattern. We have 

very little investment by citizens of the United States. The minimum wage in this private sector discourages us from 

hiring U.S. citizens in many cases because, for example, I can hire 

a 10 year experienced CPA from the Philippines for $3 an hour. If 

I add $2 an hour to that, it is $5 an hour in terms of benefits. I 

can hire three of those for $15 an hour. I have to pay $15 an hour 

for one U.S. citizen. 

Mr. GILCHREST. Most of the people that come in to work in the 

Commonwealth as immigrants, generally speaking, what would 

they be doing? Is it labor intensive? 

Mr. McPHETRES. No. It is everything, sir. Mr. GILCHREST. So there is a whole variety of things. Mr. McPHETRES. Well, I will go back to the census. I would defer 

to whichever census is correct. I will act on the Northern Marianas 

census. We have approximately 40,000 jobs that are occupied by nonresident workers. 

Mr. GILCHREST. Are these annual jobs or are these permanent jobs? 

Mr. McPHETRES. These are permanent jobs. Mr. GILCHREST. 40,000 that pretty much go unfilled or they are 

filled byMr. McPHETRES. They are filled by nonresident workers. Mr. GILCHREST. They are filled by nonresident workers who are 

by their very nature transitional? 

Mr. MCPHETRES. Exactly. 

Mr. GILCHREST. Just one other. You bring up a lot of issues here. 

Well, you just answered that one question-40,000 workers. I have 
177 

some other questions. If we have time, I will come back. If I don't, 

I will fly out to Saipan, and we can talk about it over a cup of tea. 

Mr. McPHETRES. We would love to have you there, sir. Mr. GILCHREST. Where are you from? Are you from the States? 

Mr. McPHETRES. Once a long time ago I was in Alaska. Mr. GILCHREST. Alaska. 

Mr. McPHETRES. I used to work here when Senator Bob Bartlett 

was the first Senator from Alaska. Mr. GILCHREST. Are you enjoying your stay in the South Pacific? 

Mr. McPHETRES. When I left high school, I said I would never 

get cold again. 

Mr. GILCHREST. You would never be cold again. So it doesn't 

snow there? 

Mr. McPHETRES. No, no, not very often. 

Mr. GILCHREST. Thank you very much. I will yield to the gen- tleman from American Samoa. 

Mr. FALEOMA:VAEGA. Thank you, Mr. Chairman. Mr. McPhetres, 

I am just curious. I am getting different numbers in terms of what 

is the real population of NMI? Is it 45,000 or is it 60,000? 

Mr. McPHETRES. If you are talking about warm bodies, the 

CNMI census, which was just released last month, is 59,000 plus. Mr. FALEOMAVAEGA. So it is 60,000? 

Mr. McPHETRES. Yes. I noticed that Mr. Stayman quoted a different figure. I am not sure, you know, what the balance--what the 

adjustments are. But the census was carried out last year in the 

Northern Marianas-house-to-house census so I am relying on 

that. 

Mr. FALEOMAVAEGA. And in your statement, 40,000 of those are 

expatriots? 

Mr. McPHETRES. That is correct. 

Mr. F ALEOMA v AEGA. Which leaves the Chamorro population of 

20,000? 

Mr. McPHETRES. Actually, if you look at the figures, the census 

is kind of strange. They were supposed to be following the U.S. census. However, there are some classifications there which don't fit 

very well. You go down from the top, Chamorro, Carolinian, and 

white, Trukese, Ponape, and Oriental, and so you really can't get into that. There is a citizenship classification, and it comes down 

to approximately 20,000 U.S. citizens of which 2,000 are from the 

mainland, 18,000 are Carolinian and Chamorro. 

Mr. FALEOMAVAEGA. I assume that the Census Bureau did conduct a 1990 census on NMI? 

Mr. McPHETRES. That is correct. The population at that time 

was 40,000. 

Mr. F ALEOMA v AEGA. More blessings to you because for the first 

time in 90 years in our relationship with the United States, the 

Census Bureau finally took an official census in the 1990 census. 

That is after 90 years of association with the U.S. I have a question concerning the minimum wage again. I asked 

earlier, and I think this is something that I am trying to resolve 

in my own mind, about the application or nonapplication of mini- mum wages in NMI. And I suppose basically the bottom line--a 

question that I have is that is the cost of living in NMI about the 

same as here in the U.S.? 
178 

Mr. MCPHETRES. It is much, much more expensive. 

Mr. FALEOMAVAEGA. More expensive? 

Mr. McPHETRES. Yes, sir. When I go to the supermarket here, I 

have a hard time. My blood pressure rises rather quickly. 

Mr. FALEOMAVAEGA. A loaf of bread in NMI would cost how 

much? 

Mr. McPHETRES. $2. Mr. FALEOMAVAEGA. $2. 

Mr. McPHETRES. A melon, a cantaloupe is anywhere from 3 to 

$5. 

Mr. FALEOMAVAEGA. And what is the per capita income right 

now of the NMI? • 

Mr. McPHETRES. I would have a hard time answering that question, sir, because I don't know whether you mean total population, 

which includes the 40,000 workers, most of whom are on minimum 

wage, or the U.S. permanent citizen workers, most of whom earn 

well above minimum wage. 

Mr. FALEOMAVAEGA. Well, this is a real essential question that 

I have, and I certainly would love to ask Mr. Sanderson-our 

friends from the Interior Department if they could provide that for 

the record-what is the per capita income of NMI? Because it ties 

into my problems with the minimum wage, Mr. McPhetres. 

Mr. McPHETRES. I understand. Mr. FALEOMAVAEGA. And when we make comparisons, currently, 

the U.S. poverty level is now at about what-14,000 per annum, 

and the poverty level income in the United States-! am just trying 

to get a mechanism here to make a sense of measurement as to 

what we are talking about. The feeling basically as I read your 

statement is that you are for the minimum wage as is currently the 

law by local adoption. Right? 

Mr. McPHETRES. You get into a sensitive area here at the moment, sir. The once Acting Governor last week or two weeks ago 

vetoed the one law which would have raised everything for one 

time at 30 cents for everybody except construction and the garment 

industry, which would have left 8-21 in place, which would mean 

the annual increment for everyone across the board 30 cents. That 

is the one we are in favor of. 

Mr. FALEOMAVAEGA. Do you agree with the gentleman from the 

Department of Labor saying that it is too costly to apply the current system that is now being used in American Samoa under the 

auspices of theMr. McPHETRES. I agree. Yes. 

Mr. FALEOMAVAEGA.-U.S. Department of Labor? 

Mr. McPHETRES. Yes. 

Mr. FALEOMAVAEGA. You don't think that an industrial committee every two years could be organized in such a way that will give 

a better measurement of the economic situation of NMI? 

Mr. McPHETRES. As he said, it would cost three-quarters of a 

million dollars every two years. I am not sure it is worth that. I 

commend the Governor for hiring the Hay Group to study the minimum wage issue and include-and this is extremely important to 

a consideration-that you include the government salary rates, as 

well as the private salary rates because there are two different 

worlds. 
179 

One of the things that has handicapped the private sector from 

ii,s development is that we are unable to compete with the government on the benefits package that they offer to their employees. 

And until we can consider that as a factor, we cannot attract competent local workers from the government to take equivalent jobs 

in the private sector. 

Mr. FALEOMAVAEGA. Isn't one of the problems also how the private sector is competing with the government on these extended 

leases, assuming that these lands do not belong-! assume thatthese tracts of lands that are given to developers and resort people, 

are they government-owned land or privately owned? 

Mr. McPHETRES. Both. Right now, if I could just complete the 

thought here, sir, this is one of our problems. I talk about stability 

in government. A few years ago our big issue is what we call the 

Article 12 cases, when land had been leased from-private land 

had been leased to developers, found that they were being threatened in Court by having their leases nullified because of various 

technicalities. This had been resolved, but in the process, a lot of 

potential investors said, "I am not going to touch this place." 

The other thing that we had a few years ago was a tax law. The 

tax law was passed at midnight, which would have raised excise 

taxes 300 percent on the various goods, particularly aimed at the 

tourist industry. We had people closing down major luxury gift 

shops because they couldn't afford that. People were running away. 

We are looking for stability. We are looking for something which 

all comes down to one of my fetishes as a college instructor, the P 

word. If we can't get some "planning," we are going to keep going 

like this. 

Mr. FALEOMAVAEGA. Do you agree with the Inspector General's 

assessment, the total losses in revenue potential by these lease 

agreements in excess of $777 million that the NMI stands not 

toMr. McPHETRES. I have a hard time accepting that, not that I 

think that it is wrong. I am just not exactly sure what the grounds 

are. For example, the Governor is in the process of leasing public 

land for a private school. This private school is for the benefit of 

the Northern Marianas. They will be paying taxes. They will be 

hiring people. They will be contributing to the economy. 

Should they be paying a lease price, the same as someone who 

is coming in there and building-! will take a wild stab here-a 

mall which is filled with profitmaking stores and eventually will return back to the Northern Marianas in 25 years? 

Mr. FALEOMAVAEGA. What is your understanding of the recent 

visit of some of the staff people from the prominent leaders of the 

House when they visited NMI, and under whose auspices, and 

what did they hope to accomplish in their visit there with the leaders of NMI? Did they meet with the Chamber of Commerce? 

Mr. McPHETRES. Yes, they did, sir. We had a rather productive 

meeting with them. The rest of your question I am really not in 

a position to answer. The group I believe was sponsored by the 

Government of the CNMI. They made the schedule. We were able 

to meet with them, and we tried to give them the broadest possible 

view of the differing points of view which exists within the Cham-
180 

ber because we are not completely unified in everything. The Garment Association, for example, is a member of the Chamber. Mr. FALEOMAVAEGA. So the Government of CNMI paid for 

theMr. McPHETRES. I can't answer that, sir. I have no idea. All I 

am'saying is they sponsored the group. They led them-this schedule and were in charge of them while they were there. 

Mr. FALEOMAVAEGA. I would like to ask our friends again from 

the Office of Insular Affairs to pursue this and perhaps hopefully 

provide this for the record if possible. 

Mr. McPHETRES. You may want to ask the Acting Attorney General if he is still here. 

Mr. FALEOMAVAEGA. If he is still here, I will pursue that to be 

made part of the record as I am very curious about it. You do agree 

that the total budget for NMI at this point is $220 million? 

Mr. MCPHETRES. That is the budget that has been submitted. 

Yes, sir. 

Mr. FALEOMAVAEGA. And that 90 percent is all local revenue? 

Mr. MCPHETRES. I have a problem with that. I am aware that 

I think Federal categorical grants coming in are close to 75 to $100 

million a year. Now, whether you include that in the budget figure, 

I am not a bookkeeper. I don't do that sort of thing. 

Mr. FALEOMAVAEGA. So it is more than $220 million? 

Mr. McPHETRES. Actual expenditures I believe would come up t~ 

Mr. FALEOMAVAEGA. Maybe my question wasn't stated properly, 

but it is more than $220 million? 

Mr. McPHETRES. I would take a wild guess at that, sir. 

Mr. FALEOMAVAEGA. Thank you very much, Mr. McPhetres. Thank you, Mr. Chairman. 

Mr. GILCHREST. Thank you, Mr. Faleomavaega. Mr. Kildee. 

Mr. KILDEE. Thank you, Mr. Chairman. Mr. McPhetres, you 

seem to have a very comprehensive health care program in the 

Northern Marianas. From where do you attract your physicians? 

Mr. McPHETRES. Well, there are two separate questions there. 

There is mandated-employers are responsible for the health care 

of their nonresident employees. They are then-the employees who 

go to the hospital are then-the expenses are paid for by their employers. There is not a comprehensive health insurance program 

for, you know, universal health insurance. 

We have one hospital. We have about three or four private physicians in private practice with their own clinics. We have the FHP, 

which has its own clinic for Saipan. I am talking Saipan now. 

There are smaller clinics on the Islands of Rota and Tinian. 

Mr. KILDEE. So rather than insurance, you actually directly provideMr. McPHETRES. In some cases, the employers provide or actually have insurance, but it is not legally required. The only thing 

that is required is that the bills be paid by the employer. 

Mr. KILDEE. OK. An employee who required surgery could have 

the surgery done locally? 

Mr. MCPHETRES. Yes, sir. 

Mr. KILDEE. OK. And the employer is responsible there for the 

health care then of the employee? 
181 

Mr. McPHETRES. One of our major problems, sir, is the sevenday-a-week, 24-hour-a-day provision. If it were just employment-related accidents or something, I don't think anybody would have any 

problem. But if there is a traffic accident on a weekend, too many 

beers, something like that resulting in an injury off-duty time, the 

employer is still responsible. 

If the employee abandons his job, the employer is still responsible until that individual leaves the island, which reminds me, if 

I might interject one other thing, while the talk was about the 

labor abuse, and there is generally a widespread feeling that this 

is a common issue in the Northern Marianas, I would like to point 

out that in spite of this, we have a major problem with overstayers; 

that is, people whose contracts had expired. 

They do not wish to return home, who remain behind, and who 

are a kind of black market economy, which creates a problem for 

a lot of people. And we are hoping that the LIIDS program-the 

computerized program, which is now being put in place, will help 

us to resolve that problem. But I point that out to note that as bad 

as things may or may not be perceived to be in the Marianas, it 

is still a very popular place for the nonresident workers. 

Mr. KILDEE. Thank you very much. Thank you for your testimony. Thank you, Mr~ Chairman. 

Mr. GILCHREST. Thank you, Mr. Kildee. Mr. McPhetres, what is 

the major industry of the Northern Marianas? 

Mr. MCPHETRES. We have two major industries, sir. One is tourism and one is garment industry. 

Mr. GILCHREST. Which one has more employees? 

Mr. McPHETRES. The garment industry I believe. That has 7,000 

employees. 

Mr. GILCHREST. 7,000? 

Mr. McPHETRES. Right. I think there is about five in the tourism-related industry. 

Mr. GILCHREST. You have somewhere in the neighborhood of 

12,000 people working in those two industries, I would assume predominantly immigrant employees? 

Mr. McPHETRES. Well, if I say that many employees, I am talking about immigrant employees, with the exception of one factor I 

should note, that the law in the Marianas requires that any company that has more than 100 employees must have 20 percent local 

hire. Unfortunately, there are not enough local bodies. The local 

workforce consists of about 8,000 people, 5,000 of whom work for 

the government. So that leaves 3,000 people left to fill those 40,000 

jobs I mentioned earlier. 

Mr. GILCHREST. How many residents are there? 

Mr. McPHETRES. Permanent residents? 

Mr. GILCHREST. Permanent residents. 

Mr. McPHETRES. About 20,000. 

Mr. GILCHREST. About 20,000. 

Mr. MCPHETRES. 20-25,000. 

Mr. GILCHREST. You have about 5,000 working for the government? 

Mr. MCPHETRES. That is correct. 

Mr. GILCHREST. And about 3,000 working in other various capacities? 
182 

Mr. MCPHETRES. That is correct. Mr. GILCHREST. And you mentioned earlier there is going to be 

how many hotels built? 

Mr. MCPHETRES. Present plan there are-we have 3,000 hotel 

rooms in place now. I am using round figures. 3,000 in place now. 

There is another 3,000 under construction or already being approved for construction. In addition to those hotels, there is a casino being planned-at least one casino. Two are on the boards. 

Mr. GILCHREST. You mentioned that the casinos may create problems? 

Mr. McPHETRES. Well, yes, sir. The casinos are relegated to the 

Island of Tinian, which at the present time has very little infrastructure. There is a plan now to build a $500 million hotel. 

Mr. GILCHREST. Who is going to do that? 

Mr. McPHETRES. A Chinese company. 

Mr. GILCHREST. A Chinese-mainland Chinese? Taiwan? 

Mr. McPHETRES. From Hong Kong. I understand it is a Hong 

Kong company with mainland ties. 

Mr. GILCHREST. And they want to do that because they think 

there is going to be a huge tourist industry there? 

Mr. McPHETRES. They believe that there is going to be a lot of 

money involved. Yes, sir. 

Mr. GILCHREST. Now, that Hong Kong firm, what happens in 

three of four years from now? Will that firm fall under the new 

Chinese government? Will they retain their interest? 

Mr. McPHETRES. I cannot speak to that. I have no idea. 

Mr. GILCHREST. And the Commonwealth is welcoming this economic boom, or do they have some reservations? 

Mr. McPHETRES. The feeling in the Island of Tinian-just a little 

background. 1989, Tinian is the only island that voted to accept 

commercial gambling-casino style commercial gambling. 

Mr. GILCHREST. That is the only island that can accept--

Mr. McPHETRES. Yes. 

Mr. GILCHREST.-legally this type of activity? 

Mr. McPHETRES. Casino-type gambling. Yes. Mr. GILCHREST. This was the zoning that you were talking 

about? . Mr. McPHETRES. No. This a local initiative. 

Mr. GILCHREST. A local initiative by Tinian that they want this? 

Mr. McPHETRES. By the people of Tinian. 

Mr. GILCHREST. They want this casino and this hotel? 

Mr. McPHETRES. Yes, sir. They have a law that allows up to five 

of them. Mr. GILCHREST. Pardon? 

Mr. McPHETRES. They have a law that allows up to five casinos. 

Mr. GILCHREST. Now, this, I suppose, is a local issue. They are 

happy about it? 

Mr. McPHETP..ES. They are ecstatic about it. Yes, sir. 

Mr. GILCHREST. They are ecstatic. Woo. Well, I am glad they are 

happy with it. And you see this as a problem because sometime in 

the future the culture and the whole environment of Tinian is 

going to change? 

Mr. McPHETRES. Well, at one point, one of my occupations as a 

consultant, I was hired to do a socioeconomic impact study of ca-
183 

sino gambling on Tinian. And we don't have enough time to go into 

that in great detail but--

Mr. GILCHREST. Well, this study would include, as you said earlier, or you made some mention to the fact that they didn't have 

the infrastructure? 

Mr. McPHETRES. That is right. 

Mr. GILCHREST. Which means roads, electricity, sewage treatment plant? 

Mr. McPHETRES. Roads, power, water, sewage--

Mr. GILCHREST. The whole ball of.--

Mr. McPHETRES.-solid waste. 

Mr. GILCHREST. Is there any measure to ensure that that is in 

place prior to--

Mr. McPHETRES. Well, as is normal there and, I mean, in the 

Commonwealth, investors are required to put in their own infrastructure. So part of the cost of this 500 million hotel will be to put 

in their own water treatment plant, their own generating plant, 

their own whatever else is required. 

Mr. GILCHREST. How big is Tinian? 

Mr. McPHETRES. Are you familiar with Manhattan Island? 

Mr. GILCHREST. Manhattan? 

Mr. McPHETRES. About half the size of Manhattan. 

Mr. GILCHREST. Half the size of Manhattan. How many people 

live on it now? 

Mr. McPHETRES. 2,000. 

Mr. GILCHREST. 2,000. What does the island look like? Is it 

mountainous? Is it flat? 

Mr. MCPHETRES. It is flat. 

Mr. GILCHREST. Broad, sandy beaches? 

Mr. McPHETRES. Its claim to fame was to be the launching place 

of the Enola Gay in 1945. It had the largest American airbase in 

the world at the time. 

Mr. GILCHREST. It is half the size of Manhattan. Is it subject 

to--

Mr. McPHETRES. I am just estimating now. 

Mr. GILCHREST.-typhoons? 

Mr. MCPHETRES. Oh, yes. 

Mr. GILCHREST. Well, that is half a world away-actually more 

than that probably. All right. Well, this is all very fascinating to 

a young man from Alaska I am sure, and I thank you so much for 

your testimony. And we are grappling with this issue of-we talked 

earlier today in the full committee about whether or not Puerto 

Rico should be a Commonwealth, a sovereign State, or a sovereign 

country. And I am not sure if that will ever happen to this particular Commonwealth. 

But we as the-I hate to say-I dare not say the colonial powers 

of these communities out there in the far-flung Pacific, but I would 

hope that we would stay engaged with these rather beautiful small 

communities to ensure that the kinds of health and safety and the 

quality of life issues and freedoms that we hold dear here on the 

mainland are certainly extended to the lives of the people that live 

out there. 

Mr. McPHETRES. We appreciate that very much, and we will 

hope that you can help us attract more Americans to come out. 
184 

Mr. GILCHREST. And I think maybe there ought to be a program 

because I would venture a guess-! think I would be safe by betting a million dollars that 85 percent of the American citizens have 

no idea what the Northern Marianas are. They might think it is 

a community in Brooklyn, and that we actually have territories. 

Mr. McPHETRES. I deal with that every day in my job, sir. 

Mr. GILCHREST. I think if there could be a program to reach more 

Americans, whether it is through the colleges or advertisements on 

TV, you might have a number of young students go out there out 

of curiosity, and you might even have a number of spouses finding 

some place to escape to depending on what their conditions are. 

Mr. McPHETRES. One thing if I may add, that the public school 

system is now attracting mainland U.S. teachers. We now, I believe, have close to 200 on the island. Historically, they would stay 

for one year, but I think there will be five to ten percent of each 

group that will stay on after that and build up a population, the 

idea being not to Americanize the islands, but to try to get more 

local-more U.S. citizen participation in the activities there. 

Mr. GILCHREST. I was going to say maybe if there is a place for 

a retired member of Congress, but I would have to talk to Mr. 

Meades about that to see if it is OK 

Mr. McPHETRES. I think we could arrange something. 

Mr. GILCHREST. Thank you very much, sir, and have a safe trip 

back. The hearing is adjourned. 

[Whereupon, at 5:50 p.m., the Subcommittee was adjourned; and 

the following was submitted for the record:] 
185 

104THCONGRESS H R 3634 2D SESSION 

• • 

To amend provisions of the Revised Organic Act of the Virgin Islands which 

relate to the temporary absence of executive officials and the priority 

payment of certain bonds and other obligations. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 13, 1996 

Mr. FRAZER (for himself, Mr. BALDACCI, Mr. BISHOP, Mr. THOMPSON, Ms. 

NORTON, Mr. MORAN, Mr. WYNN, Mr. HAsTINGS of Florida, Mrs. MEEK 

of Florida, Mr. LUTHER, Mr. RoMERO-BARCELO, Mr. HILLIARD, Ms. 

McKINNEY, Mrs. CLAYTON, Mr. RANGEL, Mr. DORNA.'<, Ms. JACKSONLEE, Mr. LEWIS of Georgia, Mr. FLAKE, Mr. HAYWORTH, and Mr. 

MENENDEZ) introduced the following bill; which was referred to the Committee on Resources 

A BILL 

To amend provisions of the Revised Organic Act of the 

Virgin Islands which relate to the temporary absence 

of executive officials and the priority payment of certain 

bonds and other obligations. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the "Virgin Islands Organic 

5 Revision Act of 1996". 
186 

2 

1 SEC. 2. TEMPORARY ABSENCE OF OFFICIALS CLARIFIED. 

2 Section 14 of the Revised Organic Act of the Virgin 

3 Islands (48 U.S.C. 1595) is amended by adding at the 

4 end the following new subsection: 

5 "(g) An absence from the Virgin Islands of the Gov6 ernor or the Lieutenant Governor, while on official busi7 ness shall not be a 'temporary absence' for purposes of 

8 this section.". 

9 SEC. 3. AMENDMENTS TO PRIORITY OF BONDS AND OTHER 

I 0 OBLIGATIONS. 

II (a) AUTHORITY TO ISSUE 0BLIGATIONS.-Section 3 

I2 of the Act entitled "An Act to authorize the government 

I3 of the Virgin Islands to issue bonds in anticipation of reve14 nue receipts and to authorize the guarantee of such bonds 

15 by the United States under specified conditions, and for 

16 other purposes", approved August 19, 1976 (48 U.S.C. 

17 1574c), is amended18 (1) by striking "priority for payment" and inI9 serting in lieu thereof "a parity lien 'vith every other 

20 issue of bonds or other obligations issued for pay21 ment"; and 

22 (2) by striking "in the order of the date of 

23 issue". 

•HR 3634 m 
187 

3 

(b) APPLICATION.-The amendments made by this 

2 section shall apply to obligations issued on or after the 

3 date of the enactment of this Act. 

0 

•HR 3834 m 
188 

104TH CONGRESS H R 3635 2D SESSION 

• • 

To direct the Secretary of the Interior to enter into an agreement with 

the Governor of the Virgin Islands, upon request, that provides for 

the transfer of the authority to manage Christiansted National Historic 

site. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 13, 1996 

Mr. FRAZER (for himself, Mr. BALDACCI, Mr. BISHOP, Mr. THOMPSON, Ms. 

NORTON, Mr. MoRAN, Mr. WYNN, Mr. HAsTINGS of Florida, Mrs. MEEK 

of Florida, Mr. LUTHER, Mr. RoMERO-BARCELO, Mr. HILLIARD, Ms. 

MCKINNEY, Mrs. CLAYTON, Mr. RANGEL, Mr. DORNAN, Ms. JACKSONLEE, Mr. LEWIS of Georgia, Mr. FLAKE, Mr. HAYWORTH, and Mr. 

MENENDEZ) introduced the following bill; which was referred to the Committee on Resources 

A BILL 

To direct the Secretary of the Interior to enter into an 

agreement with the Governor of the VITgin Islands, upon 

request, that provides for the transfer of the authority 

to manage Christiansted National Historic site. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
189 

2 

1 SECTION 1. TRANSFER OF AUTHORITY TO MANAGE AND 

2 CONTROL CHRISTIANSTED NATIONAL ms. 

3 TORIC SITE. 

4 (a) IN GENERAL.-Upon the request of the Governor 

5 of the Virgin Islands, the Secretary of the Interior shall 

6 enter into an agreement with the Governor which transfers 

7 to the Governor the authority to manage Christiansted 

8 National Historic site, located in Christiansted, Virgin Is9 lands. 

10 (b) CONTENTS OF AGREEMENT.-The agreement 

11 under subsection (a) shall include provisions which12 (1) transfer the authority to manage Christian13 sted National Historic site upon a determination by 

14 the Secretary of the Interior that the Government of 

15 the Virgin Islands has the financial ability and com16 mitment to maintain and operate the site without fi17 nancial assistance from the Federal Government; 

18 (2) retain for the United States fee title to all 

19 property comprising Christiansted National Historic 

20 site; 

21 (3) require the Government of the Virgin Is22 lands to continue to use Christiansted National His23 toric site for the purposes for which it is used on the 

24 date of the enactment of this Act, in accordance 

25 with standards and plans approved by the Secretary 

26 that shall be specified in the agreement; and 
190 

3 

1 ( 4) authorize the Secretary to terminate the 

2 agreement and revoke authority transferred by the 

3 agreement, if the Secretary finds that the Govern4 ment of the Virgin Islands is not complying with re5 quirements under paragraph (3) or is otherwise not 

6 in compliance with the agreement. 

0 

•BR 8686 m 
191 

STATEMENT OF GoVERNOR ROY L . SCHNEIDER 

HR 3634 & HR 3635 

Mr. Chairman and distinguish members of the Committee. 

I am here today to address two bill that affect the Virgin Islands. But before I 

take up the business at hand, let me take this opportunity to personally thank you, Mr. Chairman, for all the help you provided immediately after the storm. We needed you and you were there. Our recovery would not be possible were it not for your involvement and attention and understanding. Your ability to deal with the Federal 

Emergency Management Agency has certainly worked to our benefit. And I want 

to particularly thank you for your follow-up visits to the Virgin Islands to make cer- tain we are continuing to receive the assistance so necessary after a disaster of this 

size. 

We are also grateful to Chairman Don Young who found the time to come to the 

Virgin Islands and see fll'St hand the damage caused by Hurricane Marilyn. And 

thank God for us that his interest in our problems did not end there. One of the 

bills before you is a direct result of Mr. Young's observation of the difficulties we are having coordinating our plans for the town of Christiansted with the use and 

management of the National Historic Site at Fort Christiansvaern. You might say 

that HR 3635 is just what doctor ordered. Let me give you some background. On our big island of St. Croix, the largest town 

is Christiansted. When the Danes built this town they constructed Fort 

Christiansvaern to protect it. This is now a National Historic Site. 

The town and the Fort grew up together. Christiansted itself has actually grown around the Fort, enclosing it. They are so close that the parking lot is the only land 

between the wall of the Fort and the main business area of the town. Since the direct hit of our first Hurricane-Hugo in 1989-the economy of St. Croix and Christiansted has suffered. Plans were made to renovate the entire wa- terfront, creating an attractive new shopping area. We have started construction. The boardwalk is underway. The King's Alley project is near completion. There will 

be historic lighting and street signs. We will have landscaping and park benches. 

Everything will be tied into a coordinated revitalization of downtown Christiansted. I am attaching to these remarks a two page summary of the details of our plan. I also present to you a computer rendering of the waterfront area so you can see what it is that we plan to do and are doing. Now, Mr. Chairman, the biggest roadblock to our plans has not been money, as you might have expected. It has been the National Park Service. They don't want 

to cooperate. There are times I have wondered if they even possess common sense. Take the boardwalk for example. In order to tie the heart of Christiansted with 

its eastern historic district of Gallows Bay, it is logical and necessary to extend the 

boardwalk continuously from one to the other. This means the boardwalk would follow the waterfront around the base of the Fort. There would be no destruction of 

the Fort, its walls, or any of its property. A simple boardwalk would take the visitor 

from one end of Christiansted to the other. But the Park Service said no. It wasn't 

historic. Because no one had ever done it before it couldn't be done now. This is non- sense. It would mean the boardwalk must be interrupted. A stroller must leave the 

waterfront, hike all the way around the Fort, and continue on the other side. 

With HR 3635, the Virgin Islands could make a simple management decision to 

have one continuous boardwalk. But this is only one example of how the Park Service is separating the town of Christiansted from its historic alliance and union with 

Fort Christiansvaern. We are having problems with the use of the parking lot. It 

cannot be used, according to the Park Service, to load and unload passengers from 

taxi vans. Yet it is the only safe and convenient place downtown to do so. Nor can the lot be used for holiday events like the historic Christmas Festival. We get bureaucratic double-talk when we ask. The long and the short of it is that management of Fort Christiansvaern by the 

National Park Service has been like having a part of Christiansted declared foreign soil. HR 3635 would require the Secretary of the Interior to enter into an agreement with the Governor that puts management of the Fort back in the hands of the Government of the Virgin Islands. 

Congress does not give up ownership of the property. It does not provide money for the operation and maintenance of the Fort. Those responsibilities are passed to 

the Virgin Islands. If we do not maintain the Fort, the Federal Government takes over again. But we will do our job, and I believe we will do it better than the Park 

Service. Fort Christiansvaern will once again become user-friendly for the people of 

St. Croix as well as the non-resident visitor. 
192 

We already have plans to raise money from parking fees at the parking lot. This 

is the same lot that the previous Governor tned to light, at our expense, but the 

Park Service said no. What is wrong with lighting the parking lot? Why not eliminate a dark area in the downtown Christiansted? This is the lot where a few years back a young woman was raped at night and a tourist was shot and killed. 

I know the Park Service will oppose this bill. They don't trust us to manage this 

property and manage it well. But right now what we are doing in Christiansted 

looks better and has better care than the Fort. We repaired our storm damage 

quicker then the Park Service. And we will take care of the Fort which is central 

to the Christiansted revitalization. 

I am sorry for the deterioration of relations between the Part Service and the people of Christiansted. It shouldn't's be this way. The Fort and the town are one. Yet 

the Park Service has acted like a bad corporate citizen. There is a Big-BrotherKnows-Best attitude that has driven a wedge between the "feds" at the Fort and 

the people who live in and around Christiansted. 

Let us manage the Fort as HR 3635 proposes. If we don't improve the property and bring it back to life, then you can take it back. But let us try. I know we will 

succeed. 

The second bill before this Committee is HR 3634. It makes two important 

changes in the Organic Act of the Virgin Islands. Our Delegate, Victor Frazer, was kind enough to introduce this bill as he did HR 3635. But I readily admit the rec- ommended changes to the Organic Act are my own. One of my first concerns upon becoming Governor was the realization that each 

and every time I left the Tern tory the powers of my Office fell to someone else. Usually this is the Lt. Governor, but not always. When the Lt. Governor is also off-island, a succession of Cabinet officials become "acting" Governor depending on which 

of them is physically in the Territory. The Orgaruc Act requires this transfer of powers. It was enacted at a time when 

communications were not as immediate and reliable as they are today. Now I can be reached anywhere, even at my seat while flying on commercial aircraft. Fax ma- chines and portable phones are common. I am in continual contact with my staff 

in the Territory and know about problems and policy choices as they arise. 

Travel is often important and required when doin~ the business of the Territory. Sometimes the Lt. Governor or a member of the Cabmet or both can accomplish the 

task that demands travel. But often it is the Governor who must appear before the 

Congress or negotiate with the head of the Federal Agency. When we needed a Disaster Loan, who but the Governor could or should have appeared before you? The 

point is simple. Governors are re9.uired to travel. In doing so they should not be con- cerned about disrupting the continuity of their operation of the Executive Branch. 

The President does not give up his powers when traveling outside Washington or away from the nation. 

There are those who have speculated that this request for a change is indicative 

of a lack of trust between the Governor and the Lt. Governor. Their speculation is 

shortsighted. It overlooks the times when a Cabinet Officer is left in charge. It fails 

to realize that not everyone in the line of succession can be briefed on each and 

every issue that may arise during the absence of the Governor. 

The Governor is a lightening rod for information and ideas. He usually has the 

most current and reliable information before making a decision. He knows the status of ne~otiations and who is calling the shots. This fact has no better examJ.>le 

than the mtricate process of obtaining a Community Disaster Loan. I have been m- timately involved with FEMA and my own Administration in working out the details of this critical loan. It would not be possible to brief each Gubernatorial succes- sor on every phone call and decision made during this process. Not to mention that 

the federal officials involved would want to know if each "acting" Governor was making decisions based on all the conversations and information made available to 

the Governor. 

This uncertainty is unnecessary. Modern communications have made it easy to 

keep in touch. The powers of the Governor can be retained in that person, wherever 

he or she might be. The first amendment to the Organic Act made by HR 3634 does 

just that. I made a decision to recommend this change after the frequent travel re- quired of me after Hurricane Marilyn. 

The second amendment would allow the Virgin Islands to obtain parity debt instead of priority debt. The Organic Act now requires that all bonds of the Government of the Virgin Islands secured by the Matching Fund be issued on a priority 

basis. This means that early bond purchasers have a priority over subsequent is- sues. Thus, as the Territory issues debt, it becomes more and more expensive as each new bond issue requires additional premiums and over-collateralization to protect the subsequent creditors from the pnority issues before them. 
193 

Most States and communities are not locked into requirements for priority debt. They issue parity debt. Each new bond issue stands equal to the others and is 

collateralized only to the extent necessary to secure the debt. In this amendment, the Virgin Islands would be permitted to issue parity debt. Thus it would compete on a level playing field with other communities issuing bonds. Since we now have a proven track record in the bond market. It is no longer 

necessary for the Congress to require that our bonds be doubly protected. We have 

not defaulted on any of our bond issues. Our current rating indicates we are not 

likely to do so. An authorization to switch from priority to parity bonds is fair to 

the Virgin Islands. Now let me tell you why parity bonds are important to the Virgin Islands. Without them, it will be too expensive to issue more debt. If we cannot borrow more funds, we cannot build the new schools and improve public facilities that are now required after Hurricane Marilyn. 

Of course FEMA will restore public buildings to their pre-storm condition. And 

it will make improvements under the hazard mitigation section of the Stafford Act. 

But a school with a pre-storm life of only two or three years shouldn't be put back 

the way it was. Not if, as planned, it was scheduled for replacement or improvement. The storm simply accelerated our need to replace the old schools. To build 

those schools and other public buildings, I need bond proceeds. We also are under a Federal Court Decree to build a new jail. We have no funds for construction costs. Parity bond authority will allow the Virgin Islands to go to the bond market without 

penalty of over-collateralization. Mr. Chairman, those are the reasons I support HR 3634 an HR 3635. They are good bills. They allow the Virgin Islands to be more self-governing. Thank you and the members of this Committee for considering this legislation. And please again accept my thanks and that of the people of the Virgin Islands for 

all you did to help us after the hurricane. I am sorry so many natural disasters in 

your own District have made you such an expert on the Stafford Act, Mr. Chairman. But it has certainly been of benefit to the Virgin Islands to have such an experi- enced disaster-fighter at the helm. 

CHRISTIANSTED WHARF REVITALIZATION PLAN 

Restoration of the Christiansted National Historic Site to a mid-nineteenth cen- tury appearance is an admirable effort by the National Park Service but not a realistic approach to an area that is playing a key role in the central business district 

(CBD) or Christiansted. 

Addendum three amended the original memorandum of agreement between the: 

National Park Service and the Government of the Virgin Islands by agreeing to 

eliminate two parking areas, among others things, that would have an adverse impact on Christiansted. The areas in question are: • The area bounded by King Street, the Steeple Building, the Wharf, Hamilton 

Jackson Park and the Custom House. • The area east of Hospital Street and west of Fort Christiansvaern. In assessing the proposed changes one must consider the role Christiansted Wharf 

plays in the function of the town as the business center, employment center cultural 

center and tourist center on the island of St. Croix. It is a key element not only as a major parking lot providing parking for customers in the CBD, but as a focal 

point for various activities that have made Christiansted the town that is it today. Activities such as our cultural Christmas festival parades, civic and military pa- rades, concerts, modern dance street performances and multi- cultural activities, the 

main pick-up and drop-off point for tourists contributing to our growing tourist industry and a point of departure for tourists to shop downtown, the Women Race, 

the triathlon transition area, and fireworks activities to name a few. 

This is today's Christiansted and the wharf is where it all happens. Restoration 

of that area must incorporate the vision of today and the days to come, not solely the appearance of the mid-nineteenth century. Today's function of the area far 

outweight that the past. 

The Government envisions a restoration plan that complements the area's present role in the scheme of things, yet still maintains the integrity of the National Historic Site. In addition the plan incorporates the following: • The proposed boardwalk along Christiansted shoreline. • Activities that would cater to the tourist industry such as cultural events, 

buggy rides originating in the area, etc. • Urban furnishings with a historic quality throughout the area. • Vendor activities. 
194 

• Resurfacing the Hospital Street with sidewalk and resurfacing of streets within the historic site. • Restoration of the Scale House and the Old Custom House to their mid-nineteenth century appearance. • Landscaping and hydroseeding of lawn areas. • Restoration of the historic well at the corner of Hospital Street and Queen Street as a fountain or other. • Decorative historic chain fences in various areas. • Restoration of the Thurland Home that is unique in its historic architecture. • Wedding picture backdrop/open theater (Shakespeare in the park). • Historic street signs. • Parking accommodations. 

With respect to accommodating parking that would be eliminated in the wharf, 

and in keeping the idea of more grassed area on the historic site, the parking area east of the fort will be enlarged and improved to have a surface constructed of bricks 

that would allow grass to grow between the bricks thereby given the appearance of a grassed area. This parking lot will be structured and managed as a pay parking 

lot. It is estimated that $125,000 in parking fees can be generated each year and 

will be used to fund maintenance of the historic site. 

STATEMENT OF ALLEN P. STAYMAN 

Mr. Chairman and members of the House Subcommittee on Native American and 

Insular Affairs, I am pleased to be here today to discuss the provisions of H.R. 3634, 

and the Second Annual Report on the Federal-CNMI Initiative on Labor, Immigra- tion, and Law Enforcement in the Northern Mariana Islands. With regard to the 

park issues raised H.R. 3635, a representative from the National Park Service is 

here to discuss them. 

H.R. 3634 

Section 2 of H.R. 3634 provides that neither the Governor nor Lieutenant Gov- ernor of the Virgin Islands need relinquish authority while traveling outside the 

Virgin Islands on Government business. 

When the Revised Organic Act was enacted, transportation and communications were far more limited than today. Therefore, it was necessary for a governor or lieutenant governor, respectively, when travelling, to delegate authority. Today, however, with instant, world-wide communications, an elected official can fully execute 

the duties of office even while not physically present in the territory. Section 2 

would amend the Revised Organic Act to construe the term "temporary absence" so as to not include the Governor's or Lieutenant Governor's physical absence from the 

territory while on official government business. In light of today's technology, the 

proposed amendment is appropriate. 

THE ADMINISTRATION SUPPORTS ENACTMENT OF SECTION 2. 

Section 3 of H.R. 3634 deals with the bonding authority of the Virgin Islands 

when its bonds are secured by the coverover of Federal excise taxes on rum. The 

provisions would allow the Virgin Islands to issue parity debt, rather than priority debt. Current law gives greater protection to earlier issuances of debt over later 

issuances, with the result that later debt is subject to increased interest and fees. 

We understand that most local jurisdictions now issue parity debt instruments. The 

bonding provisions of Section 3, for the future, would place the Virgin islands on a footing similar to other communities. 

The Administration has no objection to the enactment of section 3. 

FEDERAL-CNMI INITIATIVE LABOR, IMMIGRATION, & LAW ENFORCEMENT SECOND 

ANNUAL REPORT 

The Federal-CNMI Initiative on Labor, Immigration, and Law Enforcement was funded with a $7 million appropriation by the Congress in Public Law 103-332. The 

Administration issued its second annual report on the Initiative on June 4, 1996. 

We believe that the ten-page report with executive summary and recommendations 

brings the reader up-to-date on progress in the CNMI. 

The goals of the Initiative, which are implied in the Initiative's name, are to: • aid the CNMI in building institutions that protect against illegal labor prac- tices and ensure fair treatment for all workers, 
195 

• assist the CNMI in enforcing its immi~ations laws, and offer options for action 

should immigration continue unabated (With resulting societal and infrastructure 

costs), and • improve CNMI and Federal law enforcement capabilities through additional 

funding and staffing, and new prison facilities. 

In the report, we note that the combined efforts of the Government of the Commonwealth of the Northern Mariana Islands (CNMI) and Federal agencies are making progress in fulfilling the goals of the Initiative. Governor Tenorio has strongly endorsed the CNMI's actions and the increase in Federal law enforcement presence. The Federal agencies and the CNMI are working cooperatively, with the Office of 

Insular Affairs acting as an ombudsman, to fashion appropriate responses to the 

consequences of enormous growth in the CNMI. However, sustained follow-through from both the local and Federal governments is needed if Initiative goals are to be 

achieved. 

RECOMMENDATIONS 

I would like to highlight for the Committee the recommendations contained in the 

Initiative report. The Federal agencies participating in the Initiative recommend: 

(1) that the Congress finalize enactment of section 2 of S. 638 to establish the 

minimum wage in Federal law including the annual 30-cent increases in the mini- mum wage contained (until very recently) in CNMI law, and 

(2) that the Congress direct the CNMI to utilize Covenant funds for prison and 

detention facilities. 

On minimum wage, CNMI workers, at present, lack Federal minimum wage pro- tection, with the result that the Department of Labor is limited to enforcing only the overtime provisions of the Fair Labor Standards Act (FLSA). S. 638, which is 

before this subcommittee for action, anticipated possible CNMI backsliding on the 

minimum wage issue, and incorporated CNMI's annual 30-cent increases. Despite this congressional action, however, CNMI wage policy continues in vacillation. First, the 30-cent increase scheduled for last January was delayed to July 1. More re- cently, the CNMI Legislature rolled back the 30-cent increase to 15--cent for garment and construction workers, and eliminated all future scheduled increases. Currently, there is a dispute in the CNMI as to whether or not this minimum wage rollback bill was signed to vetoed. 

S. 638 would bring fairness and stability to CNMI wage rates and important new revenue to the local government. The 30-cent increases were enacted by the CNMI 

Government and continue to the endorsed by the CNMI Chamber of Commerce, the 

Contractors Association and the Hotel Association. The only opposition is from the 

garment industry, which, despite its claims of hardship, continues to expand-new companies have been granted licenses and production continues to soar. Garment 

imports from the CNMI increased 30 fercent in 1995 to $426 million and rose over 40 percent in the first two months o 1996 over the same period last year. Other 

American Pacific jurisdictions, Hawaii and Guam, have proposed for decades while 

paying minimum wages either equal to or higher than the Federal minimum wage. The CNMI can similarly prosper, and we need not resort to the costly bureaucratic 

mechanism of the Federal Wage board. We believe that passing more ofthe benefits 

of the CNMI's economic growth on to the workers who make that growth possible is an important part of our joint efforts to respond to the tremendous growth and 

change which the CNMI has experienced over the past fifteen years. Mr. Chairman, 

the Administration urges that the House of Representatives take positive action on s. 638. 

With regard to incarceration, existing prison and detention facilities and proce- dures are woefully inadequate. It is commonly believed that facilities in the CNMI 

accommodating 200 persons are necessary. One item on our agenda for this coming 

year is the work with the CNMI for specific determinations of need and capacity. In the meantime, the Administration recommended in the report that the Congress stipulate that existing CNMI Covenant funding be devoted, as first priority, to pris- on and detention construction. We Understand that Governor Tenorio is amenable 

to using fiscal year 1995 Covenant funds for this purpose, and we look forward to 

CNMI legislative action on this matter. 

AGENDA 

During this next year the Initiative agencies will deal with a number of issues, including immigration. New census figures show that the CNMI population grew in 

the fifteen short years from 1980 to 1995 from 18,000 to 60,000, and that in the 

process, the indigenous population shrank from 72 percent of 38 percent of the total 

population. With regard to the imposition of immigration controls, it should be noted 
196 

that the Immigration and Nationality Act (INA) may not fully address the immigration problems in the CNMI. Full application of the INA could have unintended eco- nomic consequences for the CNMI. However, should the CNMI not establish more effective control of immigration by early next year, the Federal agencies participating in the Initiative will develop options to increase the Federal role in CNMI immigration. In developing these options, consideration must be given to local self-government and local economic needs. 

To summarize, the Initiative is moving toward its goals. First, with respect to 

labor, local labor department officials are receiving training for recognizing and 

dealing with illegal employer activity, the Department of Labor continues its wage 

hour investigations, National Labor Relations Board caseloads are up substantially, and the Administration continues to recommend that the Congress support wage 

stability with enactment of S. 638 and the CNMI's 30-cent annual minimum wage 

increases into Federal Law. For immigration, the new computerized tracking system 

is moving from prototype to implementation, and if necessary, Initiative members 

in the next year will develop options for increasing the Federal role in immigration. 

With re~ard to law enforcement, dollars are up, staffing is up, and caseloads are up. Additionally, the Administration recommends that prison and detention facilities be constructed with funds available under the CNMI Covenant. 

Mr. Chairman, over the past year the Initiative has a record of accomplishment. But more importantly, for this year, it has had an agenda for action. We believe 

that the Initiative's goals will be met 

STATEMENT OF ROGER G. KENNEDY 

Thank you for the opportunity to offer the Department of the Interior's views on H.R. 3635, a bill to direct the Secretary of the Interior to enter into an agreement 

with the Governor of the Virgin Islands to transfer authority to manage Christiansted National Historic Site. 

Mr. Chairman, we oppose enactment of H.R. 3635 for two basic reasons. First, 

H.R. 3635 is essentially a national park closure bill. As we have stated before, we do not want to begin the process of parcelling out units of the National Park System. Needless to say, transferring this unit to the Government of the Virgin Islands 

would set a bad precedent. Also, we are concerned that the Government of the Virgin Islands is not equipped to manage a nationally significant cultural site. At Christiansted National Site the public learns about the role of Denmark in the 

colonization and subsequent development of the Virgin Islands. The buildings themselves are tangible reminders of a segment of America's heritage that is rapidly disappearing. Located on Saint Croix, it is one of four units of the National Park System in the United States Virgin Islands and provides operational support for an- other one of the parks in the islands, Buck Island National Monument. 

As a result of a grass-roots petition to seek national recognition of the site, the 

Secretary of the Interior des1gnated the Virgin Islands National Historic Site 

through the order of March 4, 1952. It was redesignated by the Secretary's Order 

of January 16, 1961, as Christiansted National Historic Site. A series of memm::anda 

of agreement outline the relationship between the Virgin Islands Government and 

the National Park Service. 

The 1952 agreement established the cooperative spirit between the two entities. 

The five subsequent agreement defined the various roles and responsibilities of the 

National Park Service and the Government of the Virgin Islands regarding such 

subjects as museum exhibits, use of the buildings, restoration of the historic scene, 

and control of traffic. 

In February of 1995, I appeared before the Subcommittee on National Parks, Forests and Lands to oppose a bill that called for a study of the National Park System 

with a view toward deauthorizing certain units. Passage of H.R. 3635 would, in a small but dangerous way, begin that process. Each of the 369 units of the National 

Park System in 49 states, the District of Columbia, American Samoa, Guam, Puerto 

Rico, and the Virgin Islands was established by an Act of Congress, Presidential 

Proclamations, or Secretary's Orders. They represent the initiatives of Congress and numerous Administrations to preserve and protect our Nation's natural and cultural 

heritage and to provide for recreational opportunities. All of these units represent 

diverse public resources under our permanent stewardship for the use and enjoyment by present and future generations. Without the laws, proclamations, and or- ders that established our parks, it is possible that many of our nationally significant resources would be lost forever. 

All 369 units of the system are nationally significant in their own right. Whether 

it is Yellowstone, Glacier, and Independence National Historical Park, or Christian-
197 

sted National Historic Site, each place is important, not just to a few individuals, 

but to all of us. The National Park Service and congressional leaders of the past intended that the 

system be broadly representative of diverse natural and cultural elements of our na- tion. Clearly, Christiansted National Historic Site represents a chapter in our na- tion's history not found anywhere else. And clearly, Congress has entrusted the National Park Service to manage these resources in perpetuity. 

If the stewardship responsibility of Christiansted National Historic Site were to 

be transferred to the Government of the Virgin Islands, it could be viewed as an indication that the national significance of this valuable resource no longer exists. 

We also question the Government of the Virgin Islands' ability to manage this re- source to the standards e.:+,ablished in the National Park System. We wonder wheth- er the territory possesses both the expertise and the financial resources to manage 

the park well. The territory's record of managing cultural sites in uneven at best. 

The Government of the V1rgin Islands' parks are geared toward active, day-use 

recreation, like ball fields and basketball courts, and we applaud the territory's efforts for providin~ these services. However, its administration of its two cultural 

sites, Fort Fredenck in Fredericksted and Fort Christian in Charlotte Amalie, falls 

short of the standards set by the National Park System. In 1984, the territory as- sumed title and control of Government House, a structure located within the na- tional historic site. Unfortunately, the territory has not been able to maintain this 

structure adequately. Furthermore, we understand, that within the last size 

months, the Governor proclaimed that the territory should not undertake any new obligations because of its financial burdens. 

Additionally, we are concerned by indications that one of the territory's reasons for desiring management control of the site is economic development. Certainly it 

is within the Governor's purview to stimulate economic development in the territory-it is sorely needed, but not at the expense of the historic site. The territory 

has developed plans to construct a boardwalk near the Fort and an earlier plan proposed to build a restaurant in the commandant quarters of Fort Christianvaern. The 

National Park Service's job is to protect the nation's heritage for current and future 

generations, not to promote economic development. 

As Assistant Secretary Frampton stated in a recent letter to Governor Schneider, 

the National Park Service fully supports partnerships as part of the effect to pre- serve the outstanding resources in the Virgin Islands. We will be pleased to work 

with the Governor to resolve the issues of concern to him and to preserve the com- patibility of the Fort and the town. 

Mr. Chairman, this concludes may prepared remarks. I would be pleased to an- swer any questions. 
PEI'ER FERRARA 

Tinkering 

·with the 

success 

of liberty 

· oaepartoflbeUiut- StalllJ lbat bas "''ioyed a ariDg economy since 

IDcladJac•aino CO!'· .....UU.O )'eaR ot growth at an· JDcredlble 13 percent or more. Illl part of our country where 

-.1 1acames tbr worl<ers have more _.,_rate than doubled, while the bas plummeteel tram J.S percent to.4 pcrceAL 

Grou dcimeatlc product has lllcroued mare tban fowfold, ,.et lall8llaa .. YlrtualiJ II<ICieXbteot Wbere .. thlo-.omic paradise? 

11'1 the CammliloDwealth ci( the Nor1bA.rn Marianas Islands, the .....ne.t-- diSiaDI us. pos- '-'<la, "wbere' America's day beiiiDL" 1W the put lS yean, the aaa • .,_, alaboratDry o( liberty, a Vibnntly'successful expcri-

'Rzxes were slashed 

to minimal levels, 

with 1W property, sales or inheritance 

taxes at alL Income 

taxes were rut by 90 

percent. 

moar:ID 1be llJireCUiated free m.ar~o&. Bill all Ia DOt wcll in paradise. 

'Ibe-...oethe 

~ 

aintonadmin- to this booming economic auccess bas .,_, to try to shut it clown. . '11>e UniledStateslibcrated these Islands from Japan during World 

war u. in some of the most brutal ftgbting of the entire war. From 194S to 1978. the Northern Mari198 

anas Wands Wuc a trust tenitory o( the United Nllioas, under the 

Dri>II!Ctlon olthc United States. But III197S,the islands u.erwhclmiDg- ly chose ·to oeoerthdr ilea with the UaliiOd Nalloal and to become llll 

AmerlcanCOIIliiiOIIWeal The peo- ple Ot the Nonbcm Marianas are 

- ~ cllizeaa. . lA ·1978, .when ·wasbinJton llll'llllcl-.iOftl'tothenewO>p>-

III<IIIOOe<h~t, the lslllids .ull!ere4 with a fraelle subs!st=:e 

::'r:t.-"d"r:-'~~ne."M: roado - IIIIP8vecl. Elecltlclty wu · nnrellabfe, with rqular b.....n.out. and blackouts. Mnst boalo8 dl.! nat ......, have ruan1ng 

...... · . 

~ 

u-did the Norlbem M.arlanas ouch a rcmakable turn· ll'DIIIIdl'l'be; did It the old Casb- .!Do>od wo;r. tree llllrloet capitalism. 

h~~~:J~ Wulilnctna. and seeing !he ~le IUCOcso of the free 

llllldootAIImtia--=llasJapan, 

'lllhnm and~ the )"'ung us. 

CtiiDIIIOinPell ai10pted a racllc& 

free llllrloet reclme. ~ - olaobecl to minimal leoelt, with aa prapcny, ..tea or 

lllber!.wace - at .n. ·IDc:unc - -catbyliO pcrceat. Cop-

. lta1 pine - - aaessed at leBa thAn bait the us. rille. Clio' 

ll'lll1hil tbek OWil ............ they 

ellmlnillocl ~ - IBrilrl,-- dMIIed...,..., IDei to a !Dinlmum. 

The Northern Marianas llso opened their dooni to foreifn m-., with 'rirtuilly no rcstric-

. t1oas onlnveslmeatand capital flow. '[bey a1ao ~an open door policy .... fQrclan labor, allowing . b....,_ to freely hire foreign 

"suestW<Iltims." 

Rellu1alllrY burdens have .been llllmiDh.ocL lJceases and permits tor fb:relan eatry, oew busmesses, COII&InK:tlon aDd cleoelopmcnt an: qulcldy and easily granted. 

IDoarporatlng and stsrting a new business lo ectually simpler and easier than In most U.S. states. E....,. Gibe.-reculation wtder local control has.,_, rationally restrict· ed. to avoid harming economic 

~.-.lts,lnjust!Sycars hsve been described above. nus u.s. ·. commonwealthhasOIIIoyedexceptional sustained economic growth, a steadily rising standard of living, . and dramatic iilcreases in life expec:tancy and the .....,rage level of oducation. Once a dismsl outpost of failed state socialism, the islands have now been thoroughly inte- grated into the dynamic er.onomy of the Pacific Rim. 

PetuJ.Femm>isaseniolfellow of the National Cmtu for Policy Analysis. 
199 

PREPARED STATEMENT OF WIJ.JU. A. LEwiS 

Supplemental Sheet for the Testimony of: 

Wilma A. Lewis 

Inspector General 

Department of the Interior 

1849 C. Street N.W. 

Washington, DC 20240 

Phone: (202) 208-5745 

Hearing on the Federal-Commonwealth of the Northern Mariana Islands 

Initiative on Labor, Immigration, and Law Enforcement and Related 

Northern Mariana Islands Legislative Reforms Before the 

Subcommittee on Native American and Insular Affairs, 

Committee on Resources, 

U.S. House of Representatives 

June 26, 1996 

Summary of Testimony 

- Discussion of audit reportS issued by the Department of the Interior's Office of Inspector 

General to the Commonwealth of the Northern Mariana Islands during the past three years: 

-- Management of Public Land 

-- Status of Improvements in Financial Management and Program Operations 

-- Assessment and Collection of Income Taxes 

-- Income Tax Revenues 

-- Contracting and Contract Administration, Commonwealth Utilities Corporation 

-- Utilities Rate Structure, Commonwealth Utilities Corporation 

-- Followup of Recommendations Concerning Capital Development Funds 

-- Followup of Recommendations Concerning the Economic Development Loan 

Fund, Commonwealth Development Authority 

-- Followup of Recommendations Concerning the Economic Development Loan 

Fund, Mariana Islands Housing Authority 

- Status of recommendations made in the audit reportS. 

- Long-range audit strategy of the Office of Inspector General for audits of the 

Commonwealth of the Northern Mariana Islands. 

- Comments regarding the importance of oversight hearings as they pertain to the resolution 

and implementation of Inspector General audit recommendations in the insular areas. 
200 

Mr. Chairman and members of the House of Representatives Subcommittee 

on Native American and Insular Affairs, Committee on Resources: 

I am pleased to be here today to provide comments for the hearing on the 

Federal-Commonwealth of the Northern Mariana Islands initiative on labor, 

immigration, and law enforcement and related Northern Mariana Islands 

legislative reforms. Specifically, I have been asked to comment on audits 

performed in the past 3 years by the Department of the Interior's Office of 

Inspector General in the Commonwealth of the Northern Mariana Islands 

(CNMI, or the Commonwealth). I have been asked to include in my 

testimony a discussion of: (1) our most recent CNMI audit report, issued 

in March 1996, on the management of public lands in the CNMI and (2) the 

response and constructive actions, or lack thereof, by the Commonwealth to 

resolve issues raised in our audit reports. 

I also have been informed that I may be asked questions pertaining to certain 

ongoing disputes regarding property interests on Water Island in the United 

States Virgin Islands. I have decided to recuse myself from this matter. 

Prior to my current position as Inspector General, I served for 19 months 

as the Associate Solicitor for the Division of General Law in the 

Department's Office of the Solicitor. During my tenure as the Associate 

Solicitor, staff whom I supervised, in conjunction with the Department of 

Justice, served as counsel for the Department of the Interior in related 

litigation involving Water Island. Accordingly, in order to protect the 

integrity of my position and of the Office of Inspector General, I have 

delegated all decision-making responsibility regarding any Office of 

Inspector General involvement in ongoing Water Island matters to Richard 

Reback, Chief of Staff and General Counsel in the Office of Inspector 

General. I therefore request that any questions regarding Water Island be 

directed to Mr. Reback. 

During the past 3 years the Office of Inspector General has issued nine audit 

reports to officials of the CNMI. These audits have covered a variety of 

financial and program areas and have included audits whose objective was 

to report on the Commonwealth's implementation of recommendations made 

in audit reports dating back as far as October 1982. The nine audit reports 

contained 63 recommendations for corrective action based on weaknesses or 

deficiencies identified during the audits. (Fifty-four of the 63 
201 

recommendations were addressed to the Commonwealth, and 9 were 

addressed to the Office of Territorial and International Affairs, now the 

Office of Insular Affairs.) 

The following is a summary of the findings in the nine audit reports: 

- Management of Public Land (March 1996): We reported that the 

Commonwealth had lost $118.4 million on completed exchanges of public 

land, could lose $70.1 million on pending exchanges, and lost revenues of 

$25.1 million on exchanged public land that was leased to a developer by 

landowners. These problems arose because the Commonwealth did not 

effectively develop and implement management policies, procedures, and 

controls related to land exchanges. Specifically, the Commonwealth did not 

exchange public land for private land of comparable value, use current land 

valuations in land exchanges, and consider the revenue that could be realized 

from the commercial development of exchanged public land. In addition, 

we reported that lease revenues of $565,000 were lost and that the 

Government may lose additional lease revenues of $469.2 million over the 

unexpired period of the 12 leases we reviewed because of the Jack of 

properly implemented policies and procedures to ensure that appropriate 

lease agreements were established and effectively managed. Specifically, 

minimum lease payments were not based on the appraised fair market value 

of the property; gross receipts rental payments and interest on past-due 

rentals were not properly assessed; and collection actions were insufficient. 

Finally, we found that 208 homestead recipients improperly received a total 

of $7 million from the unauthorized sale or lease of their lots and that 12 of 

the 23 homestead lots reviewed were awarded to applicants who were 

ineligible or who did not have the greatest need. We made seven 

recommendations for corrective action. 

The Commonwealth did not respond to our November 1995 draft audit 

report. Following the issuance of our final audit report, we received a 

response from the Governor of the Commonwealth which stated that new 

land exchange regulations had been issued effective May 25, 1996, and that 

the Governor's certification or the Legislature's declaration or determination 

of a public purpose would be required as the first step in a land exchange. 

Based on our initial evaluation of the response, we considered the two 

recommendations pertaining to land exchanges unresolved because the new 

2 
202 

regulations provided by the Governor are essentially a restatement of 

previous land exchange regulations issued in January 1988--regulations that 

were ineffective in preventing the conditions described in our audit report. 

For example, the regulations were not changed to address our 

recommendation that land exchanges should be of comparable value based 

on current appraisals. 

In addition, the Governor's response stated that it was not possible to 

develop and implement changes needed to comply fully with our 

recommendations pertaining to lease management in a short time, but that 

the Division of Public Lands was "seriously considering" issuing regulations 

governing the leasing of public lands. While we agree that the Division of 

Public Land's decision to hire two new employees and request an additional 

attorney with responsibilities in the area of lease management are positive 

steps, the absence of any definitive plans from the Commonwealth regarding 

the development of policies and procedures to correct the deficiencies in 

lease management and to guide the actions of Commonwealth employees 

compels us to consider our recommendations regarding lease management 

unresolved. 

The Governor's response also stated that it would be impossible to perform 

the recommended inspections and reviews pertaining to homestead lots 

because of insufficient staff. While we appreciate the challenges that the 

problem of insufficient resources always poses, we do not believe that the 

Commonwealth's intent to simply "do what it can" to accomplish the 

inspections in the face of its expectation that it will not "go very far with it, 

given the current understaffing" is a satisfactory response . Accordingly, we 

consider our recommendations regarding homestead administration 

unresolved. 

Finally, the Governor's response indicated that an Attorney General's 

opinion has been requested on the possibility of seeking recovery of illegal 

and/or improper monetary gains resulting from the sale and/or lease of 

homestead lots, in accordance with our recommendation. However, the 

recommended inspections and reviews would, of course, be necessary in 

order to pursue any available recovery. 

3 
203 

In view of the foregoing, we consider six of the seven recommendations 

unresolved (that is, responsible Commonwealth officials did not adequately 

address or agree with the recommendations). We believe that, given the 

significant problems in the Commonwealth's management of its public lands 

and the millions of dollars at stake, the Commonwealth's response to the 

audit report is inadequate. 

- Status of Improvements in Financial Management and Program 

Operations (November 1995): This report summarized major long-standing 

problems in financial management and program operations as identified in 

significant audit reports issued by our office, by the Commonwealth Public 

Auditor, and by independent public auditors from October 1982 through 

August 1995. We concluded that, although the Commonwealth had made 

improvements in financial management, expenditure control, revenue 

collection, and program operations, further improvements were needed. 

Although we did not make any new recommendations, we identified goals 

for improvement. We also reported that the Commonwealth could achieve 

improvements by working with the Department of the Interior's Office of 

Insular Affairs to identify priorities for future technical assistance and by 

implementing the recommendations made in previous audit reports. 

- Assessment and Collection of Income Taxes (March 1995): We 

reported that the Commonwealth lost an estimated $13.8 million and may 

lose an additional $17.5 million in tax collections because it did not conduct 

an effective audit function of tax returns, did not impose applicable tax 

penalties, and did not investigate potential criminal violations of its income 

tax laws. Also, voluntary compliance with tax laws may have been hindered 

because the Commonwealth did not have an income tax investigative and 

prosecution function, an effective collection process, and adequate security 

over taxpayer records. Of the report's 17 recommendations for corrective 

action, all were considered resolved and reported as implemented. 

- Income Tax Revenues (November 1994): We reported that the 

Commonwealth's income tax system did not produce the tax revenues 

needed to fund governmental operations and to match Federal funds for a 

1994 Federal capital improvement grant. Taxes estimated at $23 million 

would not be realized because of the Commonwealth's failure to revise its 

tax laws by the end of 1993. We also found that low income taxpayers 

4 
204 

were subject to excess taxation. Of the report's two recommendations for 

corrective action, both were considered resolved and reported as 

implemented. 

- Contracting and Contract Administration, Commonwealth Utilities 

Corporation (November 1994): We reported that the Utilities Corporation 

was not compensated by a contractor for revenues lost when the Corporation 

agreed to offset a contractor's unsubstantiated claim for $3.6 million in 

compensation against the Corporation's own claim for $3.7 million in 

liquidated damages. The Corporation's claim against the contractor was 

based on lost revenues that it attributed to equipment downtime and 

additional operating costs. In addition, the Utilities Corporation had 

incurred $343,000 in additional contract costs for foreign currency 

exchanges and was expected to incur between $1.3 million and $4.8 million 

more because of incorrect conversions from U.S. dollars to Japanese yen 

when making contract payments. Further, the Utilities Corporation 

obligated $13.9 million in excess of funds available, purchased goods and 

services totaling $16.6 million without competition, and incurred costs of at 

least $863,000 for consulting services that were not necessary and 

construction projects that were not completed. Of the report's 11 

recommendations, 6 wtre considered resolved and reported as implemented, 

and 5 were considered resolved but not yet implemented. 

- Utilities Rate Structur;e, Commonwealth Utilities Corporation 

(September 1994): We reported that the Utilities Corporation defaulted on 

obligations totaling over $92.8 million and thereby incurred additional loan 

interest charges of more than $16.4 million. This occurred because the 

Corporation did not establish a rate structure that would produce sufficient 

revenues to provide for its (1) operating costs and (2) debt service and 

contractual obligations for capital improvement projects and purchases of 

equipment. Of the report's four recommendations, one was considered 

resolved and reported as implemented, and three were considered resolved 

but not yet implemented. 

- Followup of Recommendations Concerning Capital Development 

Funds (July 1994): We reported that the Commonwealth and the Office of 

Insular Affairs did not implement fully or effectively 9 of the 12 

recommendations made in our February 1992 audit report. (Seven of the 12 

5 
205 

recommendations were addressed to the Commonwealth, and 5 were 

addressed to Insular Affairs.) These recommendations were designed to 

ensure that: (1) the Commonwealth established an effective financial 

management system to account for and control funds provided by the 

Department of the Interior for capital improvement projects and (2) Insular 

Affairs provided effective oversight of projects financed with Federal funds. 

As a result of the Commonwealth's failure to implement the 

recommendations, funds of over $2.2 million targeted for capital 

development were not used for allowable purposes and loan agreements 

were not executed to ensure that the funds were used for revenue-producing 

projects. (The $2.2 million was in addition to $11 million that we 

questioned in the 1992 report.) We made 11 new recommendations during 

the followup audit (3 to the Commonwealth and 8 to Insular Affairs), all of 

which were considered resolved and reported as implemented. 

- Followup of Recommendations Concerning the Economic 

Development Loan Fund, Commonwealth Development Authority (July 

1994): We reported that the Commonwealth did not implement fully or 

effectively any of the 20 recommendations made in our September 1990 

audit report. These recommendations were designed to ensure that the 

Commonwealth complied with Federal laws regarding use of the Loan Fund 

and took legal action against officials who failed to carry out their fiduciary 

responsibilities. As a result of the Commonwealth's failure to implement 

the recommendations, the principal in the Loan Fund decreased by $3 

million. Further, the Development Authority had not accrued and/or 

collected interest charges of over $2.8 million on Loan Fund assets that 

were used improperly. (These amounts were in addition to $11.6 million 

that we questioned in the 1990 report.) We made six new recommendations 

during the followup audit, of which three were considered resolved and 

reported as implemented and three were considered unresolved. 

- Followup of Recommendations Concerning the Economic 

Development Loan Fund, Mariana Islands Housing Authority (July 

1994): We reported that the Commonwealth did not implement fully or 

effectively the three recommendations addressed to the Commonwealth in 

our February 1991 audit report and that Insular Affairs had implemented the 

one recommendation made to that office in the same report. These 

recommendations were designed to ensure that the Commonwealth 

6 
206 

reorganized the Housing Authority so that it could be operated efficiently 

and effectively for the purpose of providing low income housing and that 

Insular Affairs performed periodic on-site program reviews. As a result of 

the Commonwealth's failure to implement the recommendations, the 

principal in the Direct Family Home Loan Program decreased by $980,000, 

mainly because the Housing Authority continued to use Program assets 

improperly. Further, the Housing Authority had not accrued interest 

charges of about $500,000 on Program assets that were used improperly. 

(These amounts were in addition to the $2.5 million that we questioned in 

the 1991 audit report.) We made five new recommendations during the 

followup audit (four to the Commonwealth and one to Insular Affairs), all 

of which were considered resolved and reported as implemented. 

As the foregoing demonstrates, these nine audit reports covered a vast array 

of issues pertaining to the Commonwealth's efforts to develop and 

effectively implement policies, procedures, and controls related to the 

purchase, use, and disposal of public land; financial management and 

program operations; the assessment and collection of income taxes and the 

establishment of a taxation system capable of producing sufficient revenues; 

the acquisition of plant, equipment, goods, and services related to its power, 

sewer, and water facilities; the establishment of a utilities rate structure that 

would produce sufficient revenues to provide for debt service, capital 

improvement projects, and new equipment costs; and oversight and control 

over expenditures of capital and economic development funds. The results 

of these audits have clearly shown that the Commonwealth has paid 

insufficient attention to matters relating to opportunities for increasing 

revenues and collections and for reducing expenditures and operating costs. 

As described earlier, these deficiencies have cost the Commonwealth 

millions of dollars in foregone or uncollected revenues and in unnecessary 

or inappropriate expenditures. 

The most current information available to us from officials within the 

Commonwealth and Insular Affairs regarding implementation of audit 

recommendations made during the past 3 years indicates the following: 45 

of the 63 recommendations have been resolved and reported as implemented; 

9 of the 63 recommendations have been resolved but are not implemented; 

and 9 of the 63 recommendations are unresolved. Several of these 

7 
207 

unresolved and unimplemented recommendations were made in audits dating 

back to July 1994. 

Thus, to date, responsible officials within the Commonwealth have reported 

that they have implemented 36 of the 54 audit recommendations made 

during the past 3 years and that 9 of the remaining 18 recommendations 

have been resolved. However, as our followup audits on earlier 

recommendations concerning the Capital Development Funds and the 

Economic Development Loan Fund showed, recommendations, although 

resolved, are not always implemented. Further, recommendations reported 

as implemented are not always implemented fully or effectively. 

Specifically, only 4 of 25 resolved recommendations from earlier audits of 

those programs had been implemented fully or effectively at the time of the 

followup audits, notwithstanding the passage of several years.

1 Based on 

the followup audits, we made 22 new recommendations to correct longstanding weaknesses and deficiencies in those programs. Of the 22 new 

recommendations, 13 were directed to the Commonwealth, and 9 were 

directed to the Office of Insular Affairs. Nineteen of these 22 new 

recommendations have now been reported as implemented. 

The long-range strategy developed by our office for the Commonwealth lias 

focused , and will continue to focus, on revenues and expenditures of 

government operations. This is because our audits have repeatedly raised 

questions about the Commonwealth's ability and determination to: (1) raise 

sufficient revenues locally to fund governmental operations and a portion of 

its infrastructure needs and (2) carry out its operations in an efficient and 

cost -effective manner. 

We are encouraged by this Subcommittee's interest in the Office of 

Inspector General's audit activities within the Commonwealth. We beli<!ve 

that oversight hearings such as this, if held periodically, could serve as the 

necessary catalyst to encourage government offi£ials in the insular areas to 

( 

1 Thirty-six recommendations were made in the earlier audits, 32 of which were not 

implemented fully or effectively at the time of the followup audits. Of the 36 

recommendations, the Commonwealth had agreed with 20 of the 30 recommendations 

made to it and the Office of Insular Affairs had agreed with 5 of the 6 recommendations 

made to that office. 

8 
208 

resolve and implement Inspector General audit recommendations. Such 

hearings would serve a particularly useful purpose because the Department 

of the Interior does not have the same level of authority or influence in the 

insular areas as it does in its own offices and bureaus to ensure that audit 

recommendations are resolved properly and implemented fully and 

effectively. In the absence of appropriate oversight of resolution and 

implementation activities, the benefits that can be achieved from the 

implementation of audit recommendations may not be fully realized. 

This concludes my prepared statement. I would be happy to respond to any 

questions that the Subcommittee may have concerning my testimony. 

9 
209 

P REPARED STATEMENT OF J UAN N . BABAUTA 

Resident Representative Juan N. Babauta 

Subcommittee on Native American and 

Insular Affairs 

June 26, 1996 

Mr. Chairman: 

Thank you for the opportunity to testify. 

My position on reform in the Northern Marianas is on record with this 

Subcommittee. I testified here in January 1995 on proposals you made in 

H.R. 602, regarding minimum wage and immigration. I will, however, 

su=arize my position here this afternoon and in that context comment on 

the two proposals in this year's report by the Interior Department on the 

joint CNMI-Federallaw enforcement initiative. 

I will also use some of my time - as I do each time I testify before 

Congress - to repeat my call for the reform I consider most necessary, 

least controversial, and most easily accomplished: giving the people of the 

Northern Marianas representation here in Congress. 

Core Problem: Unrestricted Immigration 

Seventeen months ago I testified before you on H.R. 602. Two general 

principles should apply in determining congressional policy towards the 

Northern Marianas, I said: first, any policy should fulfill the fundamental 

federal responsibility to protect human and civil rights throughout our 

nation; and second, any policy should favor reduced federal involvement at 

the local level and promote instead increased local responsibility. 

Applying those two principles, I testified in favor of the Chairman's 

proposals to institute federal wage review boards in the Northern Marianas 

and to put a cap on immigration. 

I opposed, however, direct federal management of our borders. I 

opposed federal management because the joint initiative had begun. Its 

purpose was to restore professionalism and reinstill confidence in the 

Northern Marianas' ability to manage immigration locally. I said the 

initiative should be given a chance to prove its worth. 

Seventeen months later, I am not encouraged. 

To me the core problem for CNMI immigration is not the mechanics of 

administration. Rather the problem is the sheer, overwhelming number of 

immigrants. Immigration has no limit; it is wide open, unrestricted. 

This is not what was intended when Congress approved the Covenant 

and provided for local control of immigration. As the Senate Interior 

Committee wrote at that time: • .. . this provision is included to cope with the 

problems which unrestricted immigration may impose upon small island 

communities. Congress is aware of these problems." 

Local control of immigration was conceived as a tool for protecting the 

indigenous people. If we choose to use it as such, I believe we should retain 

that control. If we decide we do not care to preserve our status in our islands, then the argument for local control ceases. 

And we have not acted to preserve our status. 
210 

Resident Representetive Juan N. Babaute 

Subcommittee on Native American and 

Insular Affairs 

June 26, 1996 

The CNMI recently released its preliminary report of the 1995 middecade census. Immigration remains unchecked. Indigenous people are outnumbered 2 to 1. And a government economist predicts another 32,000 

residents will be added by the turn of the century, leaving the indigenous 

outnumbered by over 4 to 1. 

Thousands of these new residents will be the children of alien workers, 

but they will also be US citizens by virtue of their birth in the Northern 

Marianas. These children of "temporary" workers are being born in our hospital at a rate double or triple the rate of babies born to indigenous 

parents, and within a generation have the potential to become a controlling 

political force in the Northern Marianas. 

The indigenous people of the Northern Marianas have put themselves at 

risk of losing control of their own home by allowing themselves to become a 

minority. 

We have done so out of what I consider a misguided notion that 

economic development in the Northern Marianas can only be accomplished along with unlimited population growth. It is a notion promoted by those 

who benefit from having the largest possible labor pool at the lowest possible 

wage. 

It is a notion I do not accept; and it is a notion I believe a cap on 

immigration would dispel. 

Indeed, look at the garment industry. An existing cap on the number of 

garment workersl did not prevent that industry from adding $100 million in 

sales from FY94 to FY95 - 30% annual growth. 

Placing a cap on new immigration will not bring economic ruin to the 

CNMI. It will help stop the erosion of the control indigenous people have over their own home; and a cap will provide breathing room for us to 

consider what kind of a future we want for our islands. 

Recommendation 412: Prison Facilities 

This year's report on the joint law enforcement initiative makes two 

recommendations. The second - investment in prison facilities - is 

required largely because of unchecked immigration, which results in 

overburdening of all public facilities: schools, roads, health care, and public 

safety. Increased drug trafficking, government corruption, and crimes of 

violence are closely linked in the Northern Marianas to immigrants and 

immigration. But building better prisons, necessary though it may be, 

treats the symptom and not the disease. 

And it seems a strange distortion that funds designated by the Covenant 

to help raise the standard of living of the people of the Northern Marianas 

are now recommended to be used instead to raise the standard of living of 

criminals. 

In fact, Covenant funds should not be the sole source for prison facilities 

in the Northern Marianas. Because one-third of the inmates2 are 

2 
Resident Representative Juan N. Babauta 

Subcommitte& on Native American and 

Insular Affairs 

Jur.e 26,1996 

211 

immigrants from the Freely Associated States--over whom the Northern 

Marianas immigration laws have no control. These immigrants are pennitted to enter by virtue of the Federal compacts with the Microne~ian 

nations. In approving the Compacts the Congress also agreed to offset the 

fiscal costs to the Northern Marianas and other US Pacif1c islands. And 

Congress nrdered an annual report on these costs. Unfortunately, in ten 

years the Interior Department has never delivered any report. 

By acknowledging the need for an $11 million investment in prison 

facilities, however, Interior has indirectly reported to Congress on one cost 

of the Compacts of Free Association. It seems clear, therefore, that fiscal 

responsibility for construction of prison facilities and for operational costs 

attributable to inmates from the freely associated states should be born by 

the Federal government.3 

Recommendation itl: Federal Minimum Wage 

Interior's first recommendation is for federalization of minimum wage 

with a thirty cent annual increase until the CNMI reaches the Federal 

minimum. 

I have previously called thit. proposal "a blunt economic instrument" 

and it should not be confused with CNMI Public Law 8-21, which also set up 

a mandatory thirty cent annual increase. That law contained an important 

feedback mechanism: a wage review board to advise the CNMI Legislature 

on the effects of each year's increase. 

Unfortunately, the well balanced local law has fallen by the wayside. In 

1994 the Governor did away with the board. When it was reinstated in 1995 

by the Legislature, he appointed as board chairman a highly placed official 

in the garment industry. Not surprisingly, this reconstituted board first 

recommended delaying any increase in the minimum wage and then 

recommended doing away altogether with the step-wise approach to raising 

the minimum wage-all on the thinnest of economic analysis. Last week, 

the Governor is reported to have signed into law this second 

recommendation. 

The Interior Department report calls this chain of events "vacillation." I 

would not be so kind. And let me add that these events have occurred for one primary reason: the undue influence of the garment industry in the 

government of the Northern Marianas. For at the same time the local 

minimum wage law was being systematically taken apart, the Chamber of 

Commerce, the local hotel association, the contractors association, and 

others in the community were expressing their support for increasing the 

minimum wage. 

In light of these facts, I continue to support the proposal to use the 

federal wage board system to determine the minimum wage in the 

Northern Marianas. Take the decision out of the political arena and base it 

on economics. 

3 
Resident Representative Juan N. Babauta 

Subcommittee on Native American and 

Insular Affairs 

June 26, 1996 

212 

The Simplest Reform: Representation in Congress 

I began this testimony on Northern Marianas legislative reforms by 

expressing the general principles that Congress should protect civil rights 

throughout our nation and should promote local responsibility. 

In keeping with these two principles I believe this subcommittee must 

take up the question of representation in Congress for the people of the 

Northern Marianas. 

There may be no explicit "civil right" to such representation, but two 

hundred years of practice have established an irrefutable precedent for 

people living in non-State areas to have a voice in their nation's law-making 

body. And if Congress wishes to promote a greater degree of 

"responsibility" in the Northern Marianas, I would maintain there is no 

better way than to end our political exclusion from the American family. 

The case of the people of the Northern Marianas is simple: We are citizens of the United States. We live within the borders of the United 

States. We are governed by the laws of the United States enacted by this 

Congress. Yet we lack what would seem the most basic right of our 

citizenship: a voice in our nation's government. 

And so we ask to be represented here. We ask to have our own delegate 

here in the House of Representatives. 

We ask for no special treatment. For Congress has since 1790 admitted 

delegates to the House to represent the residents of non-State areas of our 

nation. Chairman Young, Mr. Hastings and Mr. Metcalf, Mr. Kildee, Mr. 

Williams and Mr. Johnson of this Subcommittee all hail from geographic areas once represented in Congress by delegates. And Mr. Faleomavaega, 

Mr. Romero-Barcel6, and Mr. Underwood are present day representatives 

of non-State areas- three of the five such in the 104th Congress. 

What we ask, therefore, is only what Congress has regarded as necessary and proper for 200 years, even up to this very moment. 

I am not the first nor the only person from the Northern Marianas to 

request representation in Congress. The Marianas Political Status 

Commission that negotiated the Covenant of political union between the 

Northern Marianas and the United States made this same request. I quote 

from the summary report of their third round of negotiations in 1973: The Marianas' representatives have requested that the new 

Commonwealth government be entitled to have a non-voting 

delegate in the United States Congress, similar to the nonvoting delegates in Congress representing Guam and the 

Virgin Islands.4 

The Commission's request was supported in principle by the Special 

Representative of Presidents Nixon and Ford, Ambassador F . Haydn 

Williams. 

In 1985, representation for the Northern Marianas was again 

recommended, this time by the Commission on Federal Laws called for in 

Section 504 of the Covenant. The Commissioners, appointed by President 

4 
Resident Representative Juan N. Babauta 

Subcommittee on Native American and 

Insular Affairs 

June 26, 1996 

213 

Reagan and including Congressman Robert J. Lagomarsino, long a member of this Committee, made as their very first recommendation a 

Northern Marianas delegate in the US House of Representatives. 

I ask that the Commission's recommendation be made part of the 

record. 

More recently the Commonwealth Legislature has repeatedly petitioned 

the Congress for a delegate to the House. Though political control has 

changed back and forth in the last three Legislatures, by joint resolution 

they each have asked to have what all other constituent parts of the US 

have: representation in Congress. 

I ask that the most recent of those joint resolutions be added to the 

record. 

The only explicit objection to Northern Marianas representation is found 

in the analysis of the Covenant by the Marianas Political Status 

Commission. 

During the negotiations the MPSC, with the support of the 

Executive Branch of the U.S. Government, was not able to 

obtain a firm commitment for such a non-voting delegate. The 

principal reason given was the small population in the 

Marianas compared with the population in Guam and the 

Virgin Islands at the time those territories were given nonvoting delegates. 

The Northern Marianas' population of 15,000 at that time was 

considerably less than the populations of Guam (86,926) and the Virgin 

Islands (63,200) had been when those territories were granted nonvoting 

delegates in 1972. 

Two years after approving the Covenant without a provision for a 

Northern Marianas delegate, however, Congress reduced the population 

standard by granting a delegate to American Samoa with a resident 

population of27,000, most of whom were not US citizens. 

Today, with a US citizen population of 27,512 and a total population of 

59,913 the Northern Marianas is clearly within the threshold of population 

established by precedents both historical and contemporary. 

Mr. Chairman, in opening your hearing on H.R. 602 you said that "the 

territories ... are due the same treatment as other political divisions of the 

United States. • That is a sound goal. But the Northern Marianas does not even ask that. All we ask is for the same treatment as the US territories: 

the opportunity to be represented in Congress. 

Give the people of the Northern Marianas what all other US citizens 

living within this nation's borders have: a voice in Congress. 

Thank you. 

1 An administrative moratorium on the number of workers in the garment industry was 

lifted in 1996 by the Governor. A legislative attempt to reimpose that moratorium was 

vetoed, the veto then overridden. 

2 Marcil 1993 data. 

5 
Resident Representative Juan N. Babauta 

Subcommittee on Native American and 

Insular Affairs 

June 26, 1996 

214 

3 These coats should also be a federal T811ponaibility with respect to any inmates detained 

wtder the exercise of Federal law. 

4 Summary Report of the Marianas Political Statues Commission on the Third Session of 

Status Negotiations, December 19, 1973. 

6 
215 

WELCOMING 

AMERICA'S 

NEWEST 

COMMONWEALTH 

The Second Interim Report of the 

Northern Mariana Islands Commission 

on Federal Laws to the 

Congress of the United States 

August 198:; 
216 

Northern Marlene Islands Commission on Federal Laws Washington, D.C. 20240 (202) 343-561 

--R.I'llhl 

ChairMtd 

~ 

,_A,TVJc»oChoii' ~ -

~ 

JooiJ.~ 

-C.IIorja 

~ 

0..., L r:atcone 

~., 

Han.-

~ 

J. "--

-0\.G 

~ 

............... 

The Honorable Thanas P. O'Neill, Jr. Speaker of the liouse of Representatives 

Focm H-204 

The Capitol 

Washirgton, D.C. 20515 

Dear Mr. Sp!a.l<er: 

I have the honor of subnittirg to you the second interim 

report of the l'Orthern Mariana Islands Ccmlission on Feee:-al 

r..a..s. The Ccmlission, appointed by the President pursuant to 

section 504 of the Covenant to Establish a Camcn...,alt.'l of 

the Northern Mariana Islan::!s in Political Union Iii th t.'le 

United States of Allerica (approved by Public Law 94-241, 90 

Stat. 263, March 24, 1976), is instructed "to survey the laws 

of the United States an::! to l!lake recCIIII'en:lations to the 

United States Corgress as to which laws of the United States 

not applicable to t.'le ~rthern Mariana Islanes should be :naCe 

aoolicable and to what extent an::! in what manner, and which 

aPplicable laws shall.d be :naCe i napplicable an::! to ..nat 

extent an:! in what manner. • 

The C=ission is required to make its final r!!!;X'rt and 

rec<:ll'm!n:lations to Corgress within one year after ter:nination 

of the Trusteeship h;reenent pursuant to which the United 

States now administers the ~rthern Mari ana Islands. Before 

that time, the Ccmlission is authorized to "make such interim 

reports an::! recCIIII'enCat ions to t.'le Cor.,.ress as it cons ic!ers 

ap,r~iate to facilitate the transi tion of the Northern 

Mariana Islan::!s to its n"" political status. • 

The enclosed secon:l interim report of the C=ission is 

ccmprehensive an:l for all practical pur;x:::ses may be the final 

report of the Canmi.ssion. The date the Trusteeship h;r....,..nt 

will be terminated is not now lcnown, howew::, and 

develcpnents bet>oeen now and that date may make desirable 

subftission of furthe:: recamendations to Congress by t.'le 

Canmi.ssion. Accordin;1y, even tlx:ugh the Canmi.ssion' s staf! 

will be disban:led after subftission of this report, the re;:ert 

is labelled as interim rather than final. 

Legislation to implement the 

recamoendations is incorporated within the 

C=iss ion urges the Congress to enact this 

its earliest opportunity. 

Carmi ss ion' s 

report. The 

legislation at 

" 

7\''\Cerely, 

..f5ct._.;_ 1.' ~ , . .. Beni.Qno R. d~. Fitial 
217 

- 53 -

R.EX:Cf".ME..'IIC£D OIANGES IN FEDERAL I.AW 

A nonvotina delegate to the United States Conaress. 

Recatl!'endation. 

Legislation should be enacted to pr011ide the Northern Mariana 

Islands representation in the !Jnited States Congress by conferring 

the status of nonvoting Celegate to the United States House of 

Representatives on the Resident Representative to the united States 

for the Northern Mariana Islan:ls. 

The statutes. 

All legislative powers granted tl'le Federal Governnent by the 

united States Constitution are vested in the Congress of tl'le United 

States, ·Nhich consists of the Senate an:! the House of 

Representatives. U.s. Const., Art. I, § 1. The members of the 

Senate an:! of the Rouse of Representatives are elected by the 

citizens of the States of the united States. Id. S 2, cl. 1; Amen:!. 

XVII, arrendinc;1 Art. I, S 3, cl.l. -

Present acclicabilitv. 

The United States Constitution contains no provision for 

repr<9sentation in Congress of citizens residing in areas within the 

jurisdiction of the United States but not oart of any State. Ellen 

prior to acoption of the Constitution, however, section 12 of the 

Ordinance of 1787--which established the pattern for subsequent 

congressional leqislation on territorial government--authorized a 

delegate to Corgress fran the Nortlwest Territories. 1 Stat. 52. 

The delegate selected was afforded •a seat in Congress with a right 

of debatiro, but not of voting. • Id. Provision for a nonvoti.n;; 

delegate to Congress to represent areas within the united States that 

are not part of the united States has been =n practice since that 

time. See generally E. Brcwn, The Territorial Celecate to Conaress 

and Ot.''ler Essavs 3-38 ( 1950); c."lacter 7, "The t:eleqate ln Terrltonal 

Relatlons," in E. J?aneroy, The Territories and the United States, 

1861-1890 (rev. ed. 1969); ard c:hacter 7, sectlon 3, •status of 

Delegates an:! Resident Canmissioner,• in 2 t.. Ceschler, Ceschler's 

Precedents of the United States House of Recresentatives ( 1977) 

(lio.Jse C'oCUI"ent 94-661). 

At the present time, the District of Columbia, Guam, the Virgin 

Islands, and i\rrerican Samoa are represented by nonvotirq "Celegates• 
218 

- 54 -

to the United Stl!ltes House of Representatives 'While Puerto Rico is 

rep:-esented by a nonvoting "Resident Ccnmissioner. "* 

Delegates to the House of Representatives (including the 

!esident Canmi.ssioner fran Puerto Rico) provide their constituencies 

with a 110ice in the legisll!ltive p:-ocess. .l>J.trough they cannot 110te 

on the floor of the Hcuse, they serve on camli.ttees an:l, unless the 

Rules of the House of Representatives p:-ovide otherwise, 11re 

J;ecnitted to vote in canmittee. They receive the same canJ;ensation, 

allowances, an:i benefits as do Members of the House of 

Rep:-esentatives. 

The Northern Mariana Islan:ls is net represented in tl-.e Congress 

of the United States. 

Section 901 of the Covenant autrorizes, an:i Article V of the 

Constitution of the ~rthern Mariana Islands p:-ovides for, election 

by the J;eople of the Northern Mariana tslan:is of a Resident 

lep:-esentative to the United States. See also 1 Code of the Northern 

Mariana Islan:is SS 4101 ~ ~· (1984), as anen:led by Northern 

Mariana Islands Public Law 3-92 (1984). This representative, 

ho-..ever, does not have the status of a nonvoting delegate to the 

United States Congress. 

Discussion. 

"No right is 110re precirus in a free co.mtry than that of having 

a 'J!Oice in the election of those woo make the laws under 'Which, as 

good citi zens, we lTLlSt live. • Wesberrv v. Sanders, 376 U.S. 1, 17 

(1964). See also Revnolds v. Sims, 377 u.s. 533, 555, 564-65 (1964); 

Grav v. Sanders, 372 u.s. 368, 381 (1963). The Congress of the 

United States has plenary power to make the laloiS uneer 'Which the 

people of the Northern Mariana Islan:is, as c;ood citizens, rnust live. 

U.S. Const., Art. IV, S 3, cl. 2; Trusteeship l\greerent, Art. 3. 

Nothing in the United States Constitution or in the Covenant, 

however, requires that the people of the Northern Mariana Islands be 

granted 11 'J!Oice in the United States Congress, to speak on the laws 

under lot!ich the people of t.'le Northern Mariana Islan:is lTLlSt live. 

Indeed, the population of the Northern Mariana Islan:ls is such that 

""!re it able to elect a full-fledged Martler in the Hcuse of 

Representatives, the Northern Mariana Islan:ls ..ould be 

disproportionately over-represented in the House. 

*Public Law 91-405, S 201, 84 Stat. 845 (1970), D.C. Code 

S 1-401 (1981) (District of Col1..111bia); 48 u.s.c. SS 1711-1715 (Guam 

an:i the Virgin Islan:is); id. SS 1731-1735 (.>merican Sanoa); id. 

SS 891-894 (Puerto Rico). 
219 

- 55 -

Prevision of a delegate to the ilcuse of Re?~esentatives, cOJpled 

with the large rreasure of local self-<;over:-vrent granted oy Article I 

of the Covenant, constitutes a reas0nable canpranise between the 

re:,uirerrents of re;:resentative derr=rac; are the realities of small 

population ard distant location. 

Much that ....as said in support of creation of the office of 

CEle<;;ate to the United States House of Representatives fnm !'rnerican 

Sanca applies with e:,ual strength in favor of establishing an office 

of nonvotirg delegate fran the Northe:-n ·'1ariana Islan:!s: 

The justification fur direct te:-:-i.torial 

representation for American Saroa in Corgress c;;ces back to 

li90, wherein the Congress provided for a ncnvotirq 

del~ate fran "the territo~J scuth of the River Ohio," 

whic~ later became the State of Tennessee. Since that 

time, same 30 other U.S. territories have been reoresented 

by nonvotirq delegates to the Congress before they became 

States of the Union. 8:lpulations of the different 

territories have varied rrcm as rnanv as 5,000 to 259,000 

when they were represented by nonvatin;l delegates. 

The rapidly chanc;;irq economic and sccial conditions 

in beth t he continental United States and thrcughout the 

Pacific area provide a canpellirq reas::n for direct 

representation of the Territory of !'merican Sarroa in the 

House of Represenotives. Presently, the of!:shore areas 

are net affected by general legislation unless ~~ey are 

scecificallv rrenticned in the legislation cr the 

le.;islation- is made applicable to t he territories and 

possessions of the United States. In manv instances, the 

legislative objectives of the offshore areas ran;e, inter 

alia, rrcm education and welfare assistance to medical and 

health insurance, housirq, a;;ricultural assistance, 

une:nploym:mt ccmpensation, ;:revailirq wage rates, small 

businesses, labor unions and management, Unmigration, 

airport construction assistance, foreign trade, camrercial 

fishirq, highway and harbor construction assistance, air 

routes, water and electricity, oil an::l watc.'1 quotas, 

veterans benefits, and ~any others. 

Under provisions of [this legislation], a nonvoting 

delegate rrcm !'rnerican Sarroa can II'Ore effectively represent 

and inter;;ret the needs, welfare an::l interests of the 

territory. Fur:thetliiOre, the nonvotirq delegate will carry 

the responsibility of maintainirg the contacts and liaison 

with the various camnittees of the Congress and the 

officials of the executive branch of the Fer-eral 

Governnent. .additionally, the nonvoting delegate will 

relieve other Members of Congress of the necessity of 
220 

- 56 -

dealing with irdividual problems ard related subject areas 

that directly affect the interests of the Territory of 

.american SCIIT'Oa. 

[This legislation] is in keeping with the best of 

Arrerican traditions to encourage qreater r;:articication by 

the local residents in the affairs of their g::>vernnent. 

OVer the years, Congress has continually provided greater 

self-<Jovernnent ard responsibility for its territories. 

The enact:lrent of [this legislation] would especially lessen 

any lingering i.ropressions of .american colonialism, as it is 

trought of in sane quarters of the world. 

House Report 95-1458, at 3-4 (1978). 

Congress sl"ould now enact legislation to provide for nonvotil'I;l 

representation of the "brthern Mariana Islands in the united States 

House of :Representatives. Every area within the Arrerican p:>litical 

systen that has a permanent population is represented in the Congress 

of the United States. The oeoole of the Northern Mariana Islards 

have now done all that is required of then to bec::zre part of that 

political system ard Cori;lress, in approving the Covenant, has given 

its assent. 

To be sure, the 1-brthern Mariana Islards has a snaller 

pq>ulation than any of the jurisdictions now represented in Concress. 

Its population of 17,000 persons, l'xlwever, is not of an order of 

magnitude different fran Arre::-ican Sai!Oa' s pcpulation of approximately 

31,000. .~ noted in the excerpt quoted frcr.~ the House Report, above, 

nonvoting delegates have represented as few as 5,000 persons. 

The proposed legislation ..ould confer the status of nonvotirg 

delegate on the Resident ~presentative to the Ulited States for the 

Northern Mariana Islards. This !:OSition was autrorized by section 

901 of the Covenant ard has been established by Article V of the Constitution of the Northern Mariana Islards... See also 1 Code of 

the Northern Mariana Islards SS 4101 et seo. (1984), as amerded by N::lrthern Mariana Islands Public Law 3-9"2 (1984). The negotiators of the Covenant drafted section 901 with a view toward the p::lSSibility 

that ConQress miQht confer nonvotirq delegate status on the Resident 

Representative. :Reoort of the Joint Draftina Ccmnittee on the 

Neootiatina History of the Covenant, at C-4 ( l975), reonnted 1n 

Heanncs before the Subcalmittee on Territorial and Insular Affairs 

of the Hcuse Ccmnittee on Intenor and Insular Affairs on H.J. Res. 

549 et ai. to AoDrove the •covenant to Establish a <:annonwealth of 

*'ttle Constitution of the Northern Mariana Islands was deemed 

approved by Presidential Proclamation 4534 in 1977. 42 Fed. Rea. 

56593. 
221 

- 57 -

the ~~rthern Mariana Islands,• 94th Cong., 1st Sess. 374, 406 (1975). 

see also Senate Report 94-433, The covenant to Establish a 

Carmonwealth of the Northern l'ariana Islands 65, 90 ( 1975). Sectlon 

901 proVldes that the Resident Fe?resentative "lTUst be a citizen and 

resident of the Northern Mariana Islands, at least twenty-five years 

of age, and, after tetmination of the Trusteeship Agree~rent, a 

citizen of the United States." Article v of the Constitution of the 

)lt)rthern ~lariana Islands adds that the Resident Representative shall 

have been a resident and daniciliary of the Northern Mariana Islards 

for at least seven years i.Jmlediately preceding the date of taking 

office and pr011ides for popular election of the Resident 

Representative to a bolo-year tetm. 

'!he Celeqates fran Qlam, the Viroin Islards, and American Sanoa 

likewise rrust be at least twenty-five years of aqe on the date of 

their election ard I'IIIJSt be inhabitants of the territories fran whic!'l 

they are elected. 48 u.s.c. SS 1713, 1733. The l'lel~tes fran Guam 

ard the Virgin Islards at election ITIJSt have been citizens of the 

United States for at least seven years. Id. S 1713(b). The Delegate 

frart J\lrerican Salroa, 'Nhere most residentS are nationals rather than 

citizens of the United States, is required to owe alleQiance to the 

United States.* Id. S 1733(b). The Celeoates fran Guam, the Virgin 

Islards, and M-eriCan Sanca are pa;lularly ·elected ard, at the time of 

election, may not be a candidate for anv other office. Id. SS 17ll, 

1713(d), 1732(a), 1733(d). - -

The cualifications and election procedures for the office of 

Resident 'Reoresentative to the tlhited States for the )lt)rthern Mariana 

Islands are thus basically consistent with the qualifications ard 

election procedures for the territorial D!leqate offices. !he 

legislation here PrCXlOSed, which confers delegate status on the 

Fesieent Representative, establishes aualifications am election 

Procedures for that office similar to those for the office of 

territorial Delegate. Because there is no inconsistencv between the 

reauirenents in the proposed legislation ard those in the C011enant, 

there is no need to amend either the Covenant or the COnstitution of 

the Northern Mariana Islands.** The proposed legislation does, 

*The distinction between "citizens" and "nationals" of the 

United States is not well-defined. Nationals-like citizens--ewe 

allegiance to the United States ard are entitled to its protection, 

but do not aualify for SCll1! ric;Jhts ard privileqes granted by statute 

only to citizens. 

•-ro avoid the necessity of amendment of either of these 

fundamental <'.cCUIIEnts, the orooosed leoislation also retains the 

title, "P.esiclent Pepresentative,·· rather. than substituting the nore 

ccmmon title, "Delegate." PUerto Rico's "Resident Commissioner" is a 

precedent for this variation in nomenclature. 
222 

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however, impose t!'le additional requirenent that the Resident 

Re(;resentative, on the date of election, be a candidate for no othetoffice. 

Regular general elections in the Northern Mariana Islands ar-e 

held on the first Sunday in Noverber in cdd-numbered years. 

Constitution of the Northern ~riana Islands, Art. VIII, S 1 and 

Schedule on Transitional Matters S 10; Presidential Proclamation 

4534, 42 Fed. Reg. 56593 (1977), The Resident Representative, under 

Northern Mariana Islands law, is elected at that time to a two-year 

term. Constitution of the Northern Mariana Islands, Art. V, SS 1, 2; 

Northern Mariana Islands Constitutional Convention, !lnalvsis of the 

Constitution of the Cam"Onwealth of the Northern Mariaona Islands 

124-25 (1976 ).• !he Resident Representative takes office on the 

second Monday in Jaruary of the follo.~in;, year. Constitution of the 

Northern Mariana Islands, Art. VIII, S 4. 

By ccntrast, Representatives and Delegates to the Corgress are elected on the first Tuesday after the first Monday i n November in everrnumbet:ed years and take office on t."te third day in Jaruary of 

the followin;, year. 2 u.s.c. S 7, Re(;resentatives and the Delegates 

fran the District of Col\M!lbia, Gua'll, the Virgin Islands, and American 

Sarroa serve two-year terms. o.c. Code S l-40l(a) (1981) (District of 

Colul.lllbial; 48 u.s.c. S 1712(al {Guam and the Virgin Islands); id. S 1732(a) {Airerican Sanoa). !he Resident Camnissioner fran Puerto 

Rico, however, serves a four-year term. ~· S 891. 

The legislation here (;X"Op:)Sed allO\oiS the ;::eople of the Northern 

Mariana Islands to elect the Resident Representative as provided in 

their Constitution, even though the Resident Representative will be elected an:i take office in different years (an:i on different days) 

than t."te Re(;resent.atives and other Delegates. The uniform federal 

election date was established in 1871 to make voting in more than one 

jurisdiction diffiC'..llt and to prevent news of results in earlier 

elections fran influencirg the rutcane in later elections. 45 Cong. Globe 112, 141 (1871).*- These ccncerns are of little mc:rrent in the 

case of the Northern Mariana Islands at the (;resent time. .&. fe~t~ 

persons may in fact be able to vote for both the Resident 

Representative for t."le Northern Mariana Islands and a Representative 

"'l'he Resident Representative's term may be inc::eased to no nore 

than four years by pqlUlar initiative. Constitution of the Northern 

Mariana Islands, Art. v, S 2. 

**t'rior to 1871, each State set its 0o1n election date. JS• See 

u.s. Const., Art. 1, S 4, cl.l. 
223 

-59-

or Delegate fran another jurisdiction. But roter registration 

requirerrents, the Resident Representative's limited powe::s in Col'l;lress, arx! the time arx! liDney required to travel bee.oeen the 

Northern Mariana Islands a...g other jurisdictions make 161likely 

intentional efforts to subvert the electoral process by taking 

a:ivantage of the discr'epan<:-f in election dates. As for preventing 

earlier election results fran influencing the o..ttcane in later elections, tn:ldern COIIII\6\ications have made that goal elusive even 

when elections are held on t~e same day but in different tUne zones. 

Requidng election of the Resident Representatiw on the same 

day as the election of Representatives ard other Delegates to the 

Hcuse of Representatives is a reasonable alternative to t.'le proposal 

here made. F.!Ut to achieve this unifotrnity the Northern Mariana 

Islan:!s would either have to amerd its oonstitution to change its 

regular general election fran the first Sunday in November in 

oclc:l-nultlered :;rears to the first Tuesday after the first Monday in 

Novenber in even-numbered :;rears or suffer the costs of holding an 

extra election e'lll!ry other :;rear. (~ile a federal statute would 

su~;ercede t.'le provisions of the Constitution of the Northe::n Mariana 

Islards re;arding election of the Resident Rep:esentative, it would 

not affect the provisions as they relate to election of other public 

official.'! in the Northern Mariana Islands. The extra election would 

still be required 16\less the pecple of the Northern Mariana Islards 

anerded the it· oonstitution.) 

Urder the proposed legislation, the first Resident 

Rep:esentative with the status of nonvoting Delegate to the Hoose of Representatives ~o~CUld be elected at the regular general election in 

the first odd-l'll.llltlered :;rear subsec;UEmt to enact:tent of the legislation. The effective date of the proposed legislation is not 

pc:stponed until after tetmination of the trusteeship, e'lll!n though the 

Covenant will not be fully implemented until that time. the date for termination of the trusteeship is net :;ret known, arx! may not arrive 

for several :;rears. In the meantime, Con;ress will make many legislative decisions affecting the Northern Mariana Islands, 

decisions in ..tlich the Northern Mariana Islards should have a voice. 

!rdeed it is in this period, ..t\en many members of Congress are little 

acquainted with the particular needs of the Northe::n Mariana Islards, 

that participation by the nonvoting Resident Representative may be 

most important. !n E!ltlracing the Covenant, the pecple of the Northern Mariana Islands have already made t.>)eir decision to be part of the United States. No pur';lCS& is served by delaying their election of a oonvot:ing Resident Representatiw to the United States 

House of Representatives until sane uncertain date in the future when 

the trusteeship is finally tetminated. 
224 

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Proposed lecislative lanJUaoe. 

The following language, if enacted by the United States 

Corgress, would implement the Carmission' s recamerrlation: 

An Act to confer the status of 

tmited States Hcuse of 

Resident Representative to 

Northern Mariana Islards. 

nonvoting Delegate to the 

Rep:esentatives on the 

the United States for the 

Be it enacted bv the Senate and HOJSe of 

Recresentatives of the United States of America in Conaress 

assanbled, that the Northern Mariana Islards shall be 

rep:esented in the United States Corqress by the Resident 

Representative to the United States autl-orized by section 

901 of the Covenant to Establish a Camcnwealth of the 

Northern Mariana Islards in Political Union with the United 

States of Allerica (ap~oved by Public taw 94-241, 90 Stat. 

263). The Resident Representative shall be a nonvotirg 

Delegate to the Ha.tse of Re~esentatives, elected as 

hereinafter ~ovided. 

Sec. 2. Cal The Resident Representative shall he 

elected by the people qualified to vote foe the pq>ularly 

elected officials of the Northern Mariana Islards at the 

regular general election, on the day ard month set by 

section 1 of Article VII! of the Constitution of the 

Northern Mariana Islands, in the first odd-nuntlered year 

subsequent to enactment of this Act ard thereafter as 

p:ovided in the Constitution of the Northern Mariana 

Isl.ards. The Resident Representative shall be elected at larQe, by separate ballot, and by a majority of the votes 

cast for the office of Resident Representative. If no 

cardidate r~ives such majority, on the fourteenth d.ay 

followi1"9 such election a runoff election shall be held bebieen the candidat·es receivirg the hiQhest ard the secon:i 

hi9hest I'U'IIber of votes cast for the office of Resident 

Re~esentative. In case of a permanent vacancy in the office of Resident Representative by reason of death, 

resignation, or pet'lllllnent disability, the office of 

Resident Representative shall rEmain vacant until a 

suc:cessx shall haw been elected ard qualified. 

(b) The ter:m of the Resident Representative shall 

camence on the second Monday of January followirg the date 

of the election. 

Sec. 3. To be eli~ible for the office of "Resident 

Re~;resentatill'!, a candidate shall: 

Cal be at least twenty-five years of age on the date of the election; 
225 

- 61 -

(b) t:e a citizen of the United States, J,%OVided, 

however, that pdor to termination of the Trusteeship 

Agreanent for the founer .Japanese Mandated Islands, 61 

Stat. 3301, the candidate may t:e a person defined as a 

United States citizen or United States national in section 

8 of the Schedule on Transitional Matters of the 

Constitution of the Northern Mariana Islands, as approved 

by Presidential Proclamation 4534 of October 24, 1977: 

(c) have been a resident and daniciliary of the 

~rthern Mariana Islands for 'it least seven years >r ior to 

the date of takin;J office: 

(d) not be, on the date of the election, a candidate 

for arrt other office. 

sec. 4. Acting pursuant to legislation enacted in 

accordance with the Constitution of the Northern l".ariana 

Islands, the Goverrment of the Northern Mariana Islands 

will determine the order of nanes on the ballot for 

elect·ion of Resident Representative, the meth:ld by whic.'l a 

special election to fill a vacancy in the office of 

Resident Representative shall be conducted, the ~trod by 

lotlich ties bet._n candidates for the office of Resident 

Representative shall t:e resolved, and all other :natters of 

local appliotion pertaining to the election an:! the office 

of Resident Representative net othet".,ise expressly ,rcvided 

for herein. 

Sec. 5. Until the Rules of the Hcuse of 

Re).%esentatives are arrended to provide other•Nise, the 

Resident Representative for the Northern Mariana Islands 

shall receive the sane cancensation, allowance, and 

benefits as a Mallber of the RoUse of Representatives, and 

shall be entitled to W'latever privileges ard ilmtunities 

that are, or hereinafter may be, granted to the nonvotirg 

DeleQate fran the Territory of QJan. 

• * * 

~nd grant colleoes. 

'Recamendation. 

Lecislation should be enacted to permit land-;rant fundin;J of a poet-seCondary educational in1titution in the Northern Mariana 

Islands. 
226 

MEMBERS 

OF 

THE NORTHERN MARIANA ISLANDS COMMISSION ON FEDERAL LAWS 

Benigno R. Fitial, Chairman* 

Member, House of Representatives, 

Northern Mariana Islands Commonwealth Legislature Saipan, Northern Mariana Islands 

pedro A. Tenorio, Vice Chairman 

Lieutenant Governor, Commonwealth of the Northern Mariana Islands 

Saipan, Northern Mariana Islands 

Joel J. Bergsma•• 

Chief Counsel, House of Representatives, Northern Mariana Islands Commonwealth Legislature Saipan, ~orthern Mariana Islands 

Jesus c. Borja Attorney at Law, Borja, Mitchell, and Salas 

Saipan, Northern Mariana Islands 

Dewey L. Falcone••• 

Attorney at Law, Falcone and Falcone 

Los Angeles, California 

Robert J. Lagomarsinot Member, United States House of Representatives Ventura, California 

Edward DLG. Pangelinan Attorney at Law7 Legislative Assistant to Congressman Ben Blaz, United States Rouse of Representative~ 

Saipan, Northern Mariana Islands and Olney, Maryland 

. * 

. ... t 

• 

Replaced James A. Joseph on February 19, 19~5 • Replaced Agnes M. McPhetres on February 19, 1985 • Replaced Myron B. Thompson on February 19, 1~85. 

Replaced the late Congressman Philip Burton on March ~. 198• 
227 

HOUSE OF REPRESENTATIVES 

TENTH NORTHERN MARIANAS COMMONWEALTH LEGISLATURE 

FIRST REGULAR SESSION, 1996 

HOUSE JOINT RESOLUTION NO • .tJI:l 

==~==-==---=='-==:~== ·=··~·--

A HOUSE JOINT RESOLUTION 

To request thatlhlt United States Congress establish a non-voting Delegatelrom 

the Northam Mariana Islands Within the U.S. House of Representatives. 

Offered by Reprasentatlvee: Diego T. Benavente, 

Joaquin G. Adriano, David M. Apatang, Vlcento M. Atalig, Jesus T. Attao, oscar M. Babauta. 

Roslky F. Camacho. Crispin I. Deleon Guerrero, Melvin 0. Falsao, Maria (MaiUa) T. Peter, 

Kart T. Reyes, Pete P. Reyes, Manuel A Tenorio, P.Micr.ael P. Tenorio arod Ana S. Teregeyo 

Dllte: January 17, 1996 

HOUSE ACTION 

Adopted: January 17. 1996 

SENATE ACTION 

Adopted: January 18, 1998 
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228 

I TI!NTH NORTHERN MA1Ui\NAS COMMONWEAJ:m • J.cGISIA'nHu: 

II FIHST REGULAR SI3SSION, I 99& 

11. j. R. NO. I 0·1 

li--------------------------------------·------- !1 

II 

il 

II 

I! 

1: 

A IIOUSE JOINT IU:SOLl.lTION 

To request that the United States Congress establish n non-voting 

Delegate from the Northern Mariana Islands within the U.S. llnuse of 

Representatives. · 

IJ \! TAKING NOT!! that the Covenant negotiating history makes it rlear that 

11 Section 901 does not preclude the Governmenr of the North em Marianas from II 'II requesting that a Delegate from the Northern Mariana Islands be established in the 

i Congress of United States; 

\! FINDING that the current status of CummOttwealth-fcderal relations, which 

:! has been marred by miscommunication, mi.~tnrcrpretation, and mtsinfnrm:nion is 

i \ further e"'u:crhatcd by the Jack of a constant and vigilant Commonwealth vokc 

l i and presence tn the House of Representatives and its various mmmittee• and II subcommittees; 

FINDING that the Northern Marianas C:CJmmonwcalth Legislature has 

' overwhclming;ly approved two resolutions, namely House joint J{esolutlon 8-5 and 

S<.'llate Joint Resolution 9-6, urging the Congrcs. of the United States to establish a 

Delegate from the Northern Marian:u within the U.S. House of Rcpres<.'llt:utves; 

OBSERVING that i\rtlcle V, S<.'<"tlon 2, of the Commonwealth Constitution as 

amended by Cnn•tltutlonal Amendment 24, provides that the United States may 

mnfcr the status of nonvoting member delcMate In the \Jnitecl States Congress on 

the Resident Repr~sen tatlvcs; 

ROCOGNIZING with araUlude that on August l 0, 1994, Guam Delegate Robert 

Underwood Introduced ll.ll. 4927 In the 103rd Congress, to provide a nonvoUnl( 

: delegate to the House of ~epre5entatlves to te.present the Commonwe2hh of the 

: Northern Mariana lsli:mds; 

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3 

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II .I 

229 

HOtJSf;JOINT RF.'iOl.liT!ON NO. 10·1 

-----···· ·---· ·------

BELIEVING fervently thar the pursuit of the dclc1~ate seat is imperative in 

auainlng full st<ltus as a member of the llmerican political family in which thus 

far the Northern Mariana Islands remains the only ll.S. in.ular area not ro be 

represented in the Unit~d States Con11rcs.•; 

HOI.DING TO HE TRUE that non-voting delegate status for the Resident 

Representative would neither diminish the full force and effcn of the C:ovenatll to 

Establish a Commcmwealth of the Northern Mariana Islands in l'olltical Union 

with the United States of llmcrica nor in any sense abrogate, qualify, or release 

rightful claims to lm·al self-government C<mlained in Artklc I, Section 103 of the 

Covenant; ltls 

RESOLVED by the House of Representatives of the Tenth Norrhcrn Marianas 

Commonwealth l.eglslature, the Senate mncurring, thar the 104th Congress of the 

United States of America is hereby requ<:sted to: 

(I) CONFl::ll the status of nonvoting dcler.ate in the United Stales 

Congress on the llesidelll Reprc•entativ(?; 

(2) I'IIOVTDE that the Delegate from the Northern Mariana Islands 

receive the same cumpens:nion, <~lluwance, b<:ncflts and be entitled to those 

same privileg<:s :md immunities as '\ Mcmhcr of the United Slates !louse of 

Representatives; 

(3) WOllK Cl.OSELY with the present llc.•idcnt !leprcscntative in the 

dro~fting of federal legislation necessary to realize the Delegate from the 

Northern Mariana Islands; and 

Rr:SOLVING ~1lRTHER that the Speaker of the House and the President of the 

Senate shall certify and the House Clerk and the Senate Legislative Sel·retary shall 

attest 10 the adoption of this Resolution and thereafter transmit t·enilied <:opies to:· 

the Honorable WJII!am jeffenon Clinton, !'resident nf the United States; the 

IIonornble Newt Gingrich, Speaker of the U.S. House of llepresent<~tives; the 

Honorable Richard Armey, Majority Leader C)f the U.S. House tlf llcpresent:~lives; 

the Honorable Richard Gephardt, Minority Leader of the U.S. House of 

Representatives; the Honorable t:lon Young, \1.~. House of Representatives; the 

Honorable Stan GallcKIY. U.S. House of lleprescntatlves; the Honoro~hle GeorKc 

Miller, U.S. House of Rei)rescnratlves; the llonorahlc Enl F . .). l'aleumavaega, U.S. 

House of Reprcscmatlves:· the Honorahlc llobert tltiderwou<.!. U.S. House of 

Representatives; the . Honorahlc 1:!1.-anm· Tl<'lmcs Norton, U.S. !louse of 

Page 2 
230 

HOUSE JOINT RI'.SOI.lJTJ(>N NO. 1 0-1 

----·-----·· ·---··· 

l Representative<; the llonnrable Carlos Romero-Karc-elo, U.S. House of 

2 Representatives; the Honorable Vicwr Frazer, U.S. llousc of lleprcsentntive<; the 

3 Hononble Al Gore, Vice Presi<knt of the Unttetl States anc.l President of the U.S. 

4 Senate; the llonorablc Robert Dole, Majority l.eauer of the U.S. Senate: the 

5 Honorable Torn D"schle, Mlnmity Leader of the U.S. Senate; the Honur.tble Frank 

() Murl:.owski, U.S. Sena•c; the Honorable J. Bennett johnston, U.S. Senate; the 

7 Honorable D-<>nicl Inouye, U.S. Senate; the llnnor.lblc: Daniel 1\l:.aka, U.S. Senate; and 

8 the llouorable Kruce Babbill, Scrret:>.ry of the li.S. Department of Interior. 

i\doptctl hy the House: of ltcpresentauvcs ou January I i, l <J?Ii 

and by the Sen:ue on January 18, 19% 

~I~ CI!RTlFII'l) IIY: 

Speaker of the llouse 

i\Trt~'TID liY: 

l':agc 1 
231 

PREPARED STATEMENT OF SEBAS'I'lAN ALooT 

TESTIMONY OF SEBASTIAN ALOOT 

ACTING ATTORNEY GENERAL 

COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS 

before the 

UNITED STATES HOUSE OF REPRESENTATIVES 

SUBCOMMITTEE ON NATIVE AMERICAN AND INSULAR AFFAIRS 

June 26, 1996 

Thank you Mr. Chairman. My name is Sebastian Aloot and I am the Acting 

Attorney General of the Commonwealth ofthe Northern Mariana Islands ("CNMI"). 

appreciate this opportunity to testify before your Committee concerning the recent 

report by the Department of the Interior on the labor; immigration and law enforcement 

initiative in the CNMI (the "Task Force Report") and related issues. 

1. The Covenant and Self-Detennination 

This Congress began with much discussion of the Contract with America. A 

generation ago, the people of the Northern Mariana Islands entered into their own 

contract with America-the "Covenant to Establish a Commonwealth of the Northern 

Mariana Islands in Political Union with the United States of America." That contract, 

remarkable for its time, translated America's thirty year trusteeship over the Northern 

Mariana Islands into a unique political relationship as part of the United States but 

preserving local self-determination over such things as immigration, minimum wage and 

taxation. It also signaled the beginning of the end of the Trust Territory Government, 

something one Micronesian leader characterized as a system of federal administration 

where the United States had the territory and the Micronesians had the trust. Although 

much has changed in the intervening two decades, the vision of the leaders that crafted 

the Covenant and the reasons for its preservation of local control over what are 

essentially local issues have not. 

At the outset we note that in defining the relationship between the 

Commonwealth and the U.S. government, Section 902 of the Covenant prescribed a 

very specific consultative process for addressing "all matters affecting the relationship" 

between the two. While we have invoked these procedures to address our concerns, 

we note that the U.S. government never has. Instead, we have found ourselves 
232 

continually coming to Washington to address matters before Congress that could 

otherwise be dealt with under the express terms of the Covenant 

2. The Benefits and Cost of Economic Success 

The most obvious of the changes in the past 21 years has been the phenomenal 

economic growth of the Commonwealth. In the last decade alone, the total reported 

business gross revenue has skyrocketed from some $224 million in 1985 to nearly $1.5 

billion last year. In the same period, both the Gross Island Product and domestic loans 

have more than tripled and bank deposits have increased nearly four-fold . Visitor 

entries are five times what they were in 1985 and visitor expenditures have increased 

from $122 million to $522 million during the decade. 

The results of this robust economy have been dramatic. Formerly a forgotten 

and dependent federal reservation, the Commonwealth is now virtually self-supporting. 

General Federal funding of its operations declined from two-thirds of the General Fund 

revenues in 1978 to zero after 1992. While Federal funding is still provided for capital 

improvement projects and direct federal grants, the amount of Federal funds received in 

FY 1995 is now only about 10% of total revenues. Formerly a government with 

significant and growing deficits, the Commonwealth now o~.erates with a surplus and 

the elimination of past deficits is within our grasp. 

However, the benefit of modernization and dramatic economic growth has not 

been without its cost. Like the rest of America, we have witnessed an increase in 

crime, in the use of drugs, in social dislocations and in violations of civil rights and labor 

laws. At the same time, increased public and governmental scrutiny has shed light on 

poor working and living conditions, particularly among the many alien workers in the 

Commonwealth, and has prompted even more complaints, some substantiated and 

some not, of improper or illegal conduct on the part of private employers or 

governmental entities. We in the CNMI continue to be troubled by the continued 

characterization of these problems as "human rights abuses· by those outside the 

CNMI, when in reality these problems are exactly the same problems that the rest of 

America is experiencing in the last quarter of the twentieth century. The issue is not 

that they have happened ... the issue is what is being done to address them. 

3. The Tenorio Administration Takes Charge and Responsibility 

When the Tenorio Administration came into office in January, 1994, it faced a 

host of problems, including a stagnant economy, fiscal mismanagement and chaotic or 

ineffective law enforcement, particularly in the area of labor and immigration. And when 

Governor Tenorio appeared before the last Congress, he was not coy about the 

Commonwealth's past failures in these areas. Nor was he reticent about his intention to 

honestly address those problems. Since then, he has not hestitated from making the 

hard, sometimes unpopular, decisions necessary to implement corrective action. He 

has put into place the major steps to redress years of inattention and the problems that 

2 
233 

had arisen during that time. As a result, the focus of public debate has now shifted to 

the degree of success that these solutions are now beginning to achieve. 

4. Executive Branch Task Force Report 

Earlier this month, the Department of the Interior released its second annual 

interagency task force report on labor, immigration and law enforcement in the CNMI. 

The Task Force Report acknowleges that the CNMI and Federal agencies are making 

clear progress in law enforcement but nonetheless makes two recommendations for 

legislation: (1) to federalize "the minimum wage in the ·CNMI and (2) to direct the CNMI 

to spend Covenant funds for construction of new prison facilities. 

The Report chronicles the activities of federal agencies addressing their federal 

responsibilities in the Commonwealth, much of which has been paid for with funds 

originally commited to infrastructure development in the Commonwealth. This has been 

done with the support and urging of Governor Tenorio, who recognizes that protection 

and enhancement of our human infrastructure is perhaps as important to our future as a 

community than the quality of our roads. While we appreciate the fact that these 

agencies have been asked to do their job, we are concerned that it is being done with 

our Covenant funds, not with federal dollars. We are not alone in that concern. The 

House Appropriations Committee in its report on the Interior Appropriations bill for 

FY'97 expressed concern about the lack of financial commitment by other Federal 

agencies to the immigration, labor and law enforcement initiative in the CNMI and 

warned that the Committee would be closely watching with respect to future funding 

decisions on the initiative. We are also concerned about the inherent inefficiencies in 

having Washington study the problem, rather than allowing us to devote the same 

resources to getting more of the job done. 

And in fact, we are getting the job done. Perhaps the best example of the 

progress in addressing the problems facing alien workers comes from the Philippines, 

where most ofthe foreign workers in the CNMI are from originally. In the face of 

growing concerns over reports of labor problems encountered by Filipinos working in 

the CNMI and against a backdrop of serious abuses of its citizens in other parts of the 

world, the Philippine government imposed a highly publized ban on the deployment of 

several classes of workers to the Commonwealth. Based on the Tenorio 

Administration's labor reform and enforcement initiatives and a spirit of cooperation 

unmatched by other jurisdictions, that ban was lifted early last month. Indeed, a week 

ago I accompanied Governor Tenorio to Manila to meet with President Ramos. I can 

report that the topic of discussion was not the past issues that divided us but the 

cultural, historical and economic issues that bind us together. 

3 
234 

s. The Succeufullmplementatlon of the Computerized Alien 

Tracking System has Helped to Address Immigration 

Concerns 

A key area addressed in the Task Force Report involves the immigration of guest 

workers into the CNMI. Identified as an area of potential concern several years ago, 

Congress allocated a portion of CNMI Covenant monies to fund the design and 

implementation of a computerized tracking and identification system to monitor alien 

residents and guest workers. Known as the Labor and Immigration Identification and 

Documentation System or "LIIDS"; this prototype system has recently become 

operational and is making dramatic progress. Already thousands of guest worker 

records have been entered into the data base. with some 27,000 expected to be 

processed by next month. 

This information is used to support the issuance of CNMI entry permit cards that 

will dramatically facilitate enforcement efforts. Through a special high security 

application integrated with an image capture/storage/retrieval system, it will far surpass 

what any INS system currently can do. Conceptually it will have the capability to 

capture information on arrival and departure in real time, immediately to access 

individual status and issue secure documentation to all foreign workers and alien 

residents upon arrival - requirements that the INS can not fulfill with its current system. 

The LIIDS project is being developed in consultation with the U.S. Immigration and 

Naturalization Service which is providing an Independent Validation and Verification 

process. In fact, the INS is enthusiastic about this project liS a prototype to be 

developed for other applications in the United States . 

. This system is expected to advance significantly the ability of the CNMI to track 

the whereabouts of guest workers and to monitor labor and immigration status and for 

entry and exit control purposes. The CNMI has geographical advantages in controlling 

entry since air and sea are the only options, all which will be closely monitored and 

regulated. Those who overstay their tourist or work permits are the real concern, and 

the LIIDS system will be designed to address this problem. In addition, we have 

established a separate deportation fund that will provide the necessary financial 

resources to pay for the actual deportation of those who are in the CNMI illegally. 

Actual deportee numbers are projected to increase four-fold this year with the 

implementation of the new system and enhanced enforcement. 

We believe that LIIDS, and the concerted effort being devoted to immigration 

issues, will enable the CNMI to overcome the real problems in administering the 

immigration system. However, the concerns discussed in the Task Force Report raise 

policy questions that go beyond the simple administration of the immigration laws, but 

challenge our fundamental right to control our own economic Mure. The simple fact of 

the matter is that our economy has outgrown the number of U.S. citizens available. We 

do not have the adult population to sustain our work force and economy. Even if our 

4 
235 

entire able-bodied population worl<ed in the private sector, we would still need large 

numbers of foreign guest worl<ers for some years to come. 

This is not a unique situation. There are many examples around the globe 

where countries with excess labor export worl<er$ to countries with insufficient 

populations. The exporting country benefits from the payments their citizens receive 

and by having more jobs. The employing country benefits from growth, lower costs, 

and greater competitiveness. We are mindful of the need to monitor the situation, to 

guard against abuses, to correct problems as they occur and to take care that 

employers carry their fair "Share ·of infrastructure· and other costs. 

But we are troubled by the paternalistic observation in the Task Force Report of 

the perceived "irony" that local control of immigration has had the opposite affect from 

what was intended, because "native Chamorro and Carolinian culture and influence" 

somehow is thought to have been diminished, based solely on current population 

numbers. The island culture has managed to survive three centuries of Spanish 

domination, and periods of German and Japanese occupation all preceding the 50 year 

affiliation with the United States. In fact, many of us believe that immigration can enrich 

our culture, much as it has done in the United States itself. The conclusion that the 

CNMI has failed to carry out a clear policy based on public understanding and assent, 

by acquiescing to the "desires of those who can make the most profit from bringing in 

alien worl<ers" loses sight not only of this history but also of why temporary worl<ers are 

on the islands in the first place. Their contribution to the economy is the investment 

and development that they make possible. When you consider the contribution to our 

Gross Island Product and our tax base of the businesses that employ nonresident 

worl<ers, their presence does not just help our economy, it is a significant part of our 

economy. 

We are particularly troubled by the misleading figures used in the Task Force 

Report to support conclusions that are not justified by the facts. For example, in an 

apparent effort to demonstrate the distorting impact of guest worl<ers on the future 

composition of the population, the Report states as follows: 

Already twenty-five percent of the CNMI school population of 

8,880 students are children of aliens. Virtually the entire 

increase in these children of aliens has occurred within the 

last decade, with most of the increase in the last five years. 

Based on the under-five population, geometric increases in 

this student population can be expected in the next decade. 

Task Force Report at 4 

The clear implication of this passage is that these are the children of guest 

WOfkers who are having so many children in the CNMI that the schools, an.d eventually 

the Commonwealth, will be overtaken. What this Report ignores, and what makes the 

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236 

Report so misleading, is the fact that fully 80% of these students are the children of 

Micronesians for whom CNMI is required by U.S. law to provide educational and other 

services under the terms of the Compact of Free Association. We are now engaged in 

litigation before the Federal courts seeking to clarify our immigration obligations to 

citizens of the Micronesian Freely Associated States. In addition, Guam and the 

Commonwealth have recently initiated litigation seeking to force the Executive Branch 

to finally discharge its long-ignored duty to seek annual appropriations to address the 

negative impacts of free immigration by Micronesians. The State of Hawaii is now 

considering whether to join this litigation. I hope that by clarifying this important point, 

this Committee will begin to see that the problem of immigration lies on both sides of 

the Pacific. 

The problem is not that guest workers are in the CNMI in the first place, but that 

they may not be temporary. That is a problem that can be, and is being dealt with 

through the LIIDS program. To keep these workers out in the first place is not a 

solution, but only another probably larger problem. We agree with the recognition 

expressed by the Task Force that any immigration control options "must give 

consideration to self-government in the CNMI and local economic development needs." 

But we can not agree with the conclusion that should the CNMI somehow fail to make 

immigration control "become more effective" (whatever that means) within the next 

year, that the federal role in local immigration matters should automatically increase. 

No one in the INS, let alone the CNMI, wants that result. 

6. A More Rational Approach to the Minimum Wage laaue 

There seems to be no more vexing policy issue in Washington, D.C. regarding 

the CNMI than the minimum wage. Like the long and contentious debate in both the 

Senate and the House in recent months, whether or not to raise the minimum wage is 

an issue about which there can be, and is, an honest difference of opinion. It is one 

that confounds the most responsible decision makers. Just like the U.S. Congress, the 

CNMI legislature has members on both sides of the issue. And depending on the 

composition of the legislature at any given time, the legislation that is enacted will likely 

change. This issue has been vigorously debated in the CNMI for many years, long 

before the Tenorio administration took office. And it has been the subject of debate on 

the mainland for decades. Dismissing this legitimate pL<blic debate as a "policy of 

vacillation," the Task Force Report would pre-empt the democratic process in the CNMI 

and arbitrarily impose a Federal scheme that bears little relation to the circumstances in 

the Commonwealth. 

a. The Unique Fact8 In the CNMI Require Something More 

Than a "0ne-Size-Fit8-AII" Federal Solution 

The Task Force recommendation to increase the minimum wage to the required 

level on the U.S. mainland is an arbitrary adjustment that ignores fundamental 

differences between the two jurisdictions. In the Commonwealth, guest workers receive 

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237 

many employee benefits, such as housing, local transportation, food and medical care 

(and not just insurance, but full medical cara), that their counterparts on the mainland 

do not receive. These benefits have been valued by our Department of Commerce as 

the effective equivalent of a minimum wage of~. a figure that is well in excess of 

the current minimum wage on the mainland (even including the recent increase passed 

by the House of Representatives, assuming it were ultimately to be enacted). There 

may well be other facts that dictate yet a different figure or varying figures, depending 

on the industry. A fundamental problem has been the absence of any thorough 

analysis of the composition of existing wage packages, the impact of increasing wages 

on the workers or on the viability ·of the principallabor"intensive industries in the CNMI, 

which are the very heart of its economy. 

In certain non-mainland areas where there is federal jurisdiction over the 

minimum wage, Congress has recognized these differences and has relied on local 

industry committees when implementing minimum wages rather than an across the 

board approach. Significantly, this has been done only after a thorough review of the 

particular economy, local wage levels, economic conditions, employment data, trends, 

industry production costs and financial conditions. In fact, Congress has required that 

attention be given to "economic and competitive conditions" to be sure that 

employment in the industry "will not be substantially curtailed." 29 USC 208(b). In 

American Samoa, for example, there are 14 separate categories of businesses 

including the hotel, tour and travel service, construction, printing/publishing, hospital, 

wholesaling, and financial industries to name only a few. Each industry has a differing 

wage rate ranging from $2.25 to $3.50 per hour. See 29 CFR Part 697. 

As explained in more detail below, the CNMIIegislature has adopted a similar 

approach in the current law which recognizes industry differences within the CNMI. 

Moreover, completion of the comprehensive and independent study that is currently 

underway will provide for the first time the data and analysis that will permit a more 

rational resolution to this complex issue. 

b. The Elusive "Agreemenf' Between the CNMI and the 

Department of Interior 

One of the more troubling aspects of the current debate in Washington, D.C. with 

respect to the CNMI is the unexplained significance given to the minimum wage 

formulation reflected in Public Law 8-21 . It is as if it constituted some kind of binding 

agreement between the CNMI and the Federal government against which all minimum 

wage formulations are to be measured. This CNMIIaw set up an automatic schedule of 

incremental, across-the-board, 30 cent increases in the minimum wage over a period of 

years until the federal minimum wage level was reached. Exempted from this public 

law were several categories of workers including farmers, fishermen and domestic 

household workers, the very workers which have been the subject of the most 

egregious of the alleged labor problems. Moreover, the law created a Wage and Salary 

Review Board, chaired by a garment industry representative, to review the differences 
238 

among industries. While this solution to the minimum wage problem reflected the 

particular political consensus at the time. it did not reflect a particularly rational or 

studied analysis of the impact of such an increase on the economy of the CNMI. In 

fact, to the extent that we can determine, there was no economic evaluation in setting 

these proposed wage levels. 

Yet the Task Force Report elevates Public Law 8-21 to a new level, suggesting 

that any departure from it is somehow an inexcusable breach of an explicit contract. 

The· Report, for example, states that the approach embodied in the current law (Public 

Law 10-13) "voids the original intent1o systematically move the CNMI wage to the 

Federal level" (emphasis added). Yet the Report offers no explanation as to~ Public 

Law 8-21 should constitute the "original intent" any more than the preceding statutory 

scheme or the current law (Public Law 10-13). Each is a legitimate statute in so far as it 

was achieved through the democratic process by the elected representatives of the 

CNMI at the time. Since Public Law 8-21 was enacted in 1993, there has been a new 

legislature and a new Governor in the CNMI, and a complete turnover in control of the 

U.S. Congress. For the 104th Congress to pass the legislation requested in the Task 

Force Report that would hold the current CNMIIegislature and the Tenorio 

Administration to the policies of Public Law 8-21 as enacted by the previous CNMI 

legislature and the previous G<:>vemor fails to recognize the inherent dynamics of the 

democratic process. It is particularly troubling given the obvious shortcomings of Public 

Law 8-21 which failed to address household domestics, the group with the most 

significant allegations of abuse, or to study adequately the underlying conditions 

needed to determine the affect of a wage increase on the overall CNMI economy. 

c. The Cum~nt Approach to the Minimum Wage in the CNMJ 

Provides a Rational Process for Reaching a Sound 

Solution 

After months of additional debate and discussion abou1 the best way to 

implement changes in the minimum wage, the current legislature passed, and the 

Governor signed, legislation that is designed to reach a long-term solution to the 

problem of what to do with the minimum wage, as well as addressing some immediate 

problems. Specifically, this new law, Public Law 10 -13, increases the minimum wage 

by 30 cents across the board, effective July 1st in all industries (except the construction 

and garment industries which will phase in the same increase evenly over a two-year 

period). 

Significantly, as demanded by the Tenorio Administration, the new law also 

includes domestic household workers and farmer workers and fishermen, all of whom 

were exempt under the previous law which the Department of Interior now finds so 

compelling. It mandates a very substantial 50% increase in the monthly minimum wage 

in these categories (from the current $200 per month minimum to $300 per month). In 

addition, the Department of Labor has proposed regulations imposing minimum 

household incomes before au1hority to employ a guest worker is granted. By 

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239 

substantially increasing the minimum wage in this category, it is expected that the 

number of domestics will drop precipitously, and because they are largely foreign 

workers, they will leave the Commonwealth. Unlike hotel or garment workers, such a 

reduction in the work force of domestics will not have a direct debilitating effect on key 

industries. 

The most important feature of the new approach, however, is the mechanism to actually 

study and understand the impact of these decisions. The Governor has contracted with the 

Hay Group, a world-recognized management and human resources consulting firm that will 

undertake the first comprehensive evaluation of the minimum wage situation in the·CNMI since 

the Covenant was signed, nearly 21 years ago. Unlike the Wage and Salary Review Board, of 

which the Task Force was critical because of the presence of garment industry 

representatives, this approach is free from even the appearance of conflict of interest, and will 

produce a full-scale study with educated, realistic and objective recommendations based on 

credible information upon which decisions can then be based about the minimum wage. For 

the first time in our history, we will have an understanding of the impact our decisions will have 

on our economy. To date the debate has been characterized by emotional reactions, whim, 

and fear of what Washington might to do to the CNMI unless changes are made. At last we 

will have a basis for making a rational, intelligent and responsible decision. All that we ask 

from you is to be allowed to complete the process. 

The real question for your Committee is whether the present law in the CNMI is 

so devoid of rationality, or so offensive to Constitutional principles, that it justifies 

altering the balance reflected in the original Covenant that reserved minimum wage 

determinations to the CNMI. We do not think the record supports such intervention -

primarily because there is no record one way or the other- on the merits of changing 

the minimum wage in the CNMI. It is our expectation that the Hay Group will provide 

the basis for just such a record. 

d. The Minimum Wage Should Not Be Manipulated to Solve 

Non-Wage Problema That Can Be Dealt With Directly 

Finally, no discussion of the minimum wage is complete without looking behind the 

initial rhetoric to the real reason the increase is being proposed by the Task Force Report. 

One need not look far. The Report's rt~commendations candidly cite what appear to be the 

real reasons for seeking the increase: 

[t)here will be a favorable effect on related problems including 

illegal employer labor actions, strain on infrastructure, organized 

crime and illegal drugs. In our view, red!lcing the existing 

incentives to hire alien workers at lower wages than those 

prevailing for local workers should help slow uncontrolled 

immigration and perhaps help prevent the need for greater Federal 

control of immigration. 

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Task Force Report at pp 8-9. 

If the real purpose in raising the minimum wage is to address these problems, 

why not deal with them individually and directly rather than jeopardize the economic 

viability of the CNMI? Illegal employer labor actions, organized crime, illegal drugs can 

all be dealt with by enforcing existing laws- which incidentally, appears to be well 

underway judging by the Task Force Report's own conclusions about the increase in 

law enforcement efforts. Similarly, immigration problems can be dealt with directly 

through the LIIDS program and the local immigration laws, rather than jeopardizing the 

economic livelihood of the Commonwealth. 

To approach these problems by shutting down the economy is to throw the baby 

out with the bath water. It is simply the wrong remedy for the perceived problems. It is 

as if the proposed solution to securities fraud were to close the stock exchange. It 

would surely eliminate the problem, but at what cost? The rational solution, of course, 

is to enforce the securities laws, or enact more stringent ones, if the current laws are 

not doing the job. Surely no one would shut off the source of investment capital to cure 

the occasional incident of securities fraud. Similarly Congress should not effectively 

drive fundamental businesses out of the CNMI, just so it can ease the burden of 

attacking possible criminal activity or violations of labor laws. 

7. Prison and Detention Facilities 

The Task Force Report recommends that Congress direct the CNMI to utilize 

Covenant funds for prison and detention facilities. This issue, and the 

recommendations of the Task Force, were clearly identified to Governor Tenorio in a 

letter from the Director of the Office of Insular Affairs. We too have recognized that as 

our law enforcement efforts become more productive, our prison facilities will need to 

be improved. And we agree with the goals outllined by the Task Force Report and are 

ready to work with the federal officials in developing adequate prison and detention 

facilities. However, we must object to the proposal that this recommendation be 

legislated by Congress. We can make this decision and meet these needs in 

cooperation with federal authorities without new legislation. That is simply not needed, 

nor warranted. 

We are also concerned about the directive that Covenant funds be used for this 

purpose. While we may conclude that they should be used, they are not the only 

source. We have been actively searching for alternatives and have identified the 

Violent Offender Incarceration and the Truth in Sentencing Incentive Grant programs as 

potential sources. These programs could provide the bulk of the funds required to 

construct the recommended 200 bed facility and we would propose in that case to use 

a portion of our Covenant funds to meet the matching fund requirements of these and 

other grant programs. 

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Additionally, we will continue our work with the National Institute of Corrections 

(DOJ) to address operational and management concerns. The CNMI understands that 

the .construction of a new facility is only half of the equation. The promulgation and 

implementation of standards in training, inmate management, and other areas are 

needed to complete the task. 

8. Inspector General Report on Management of Public Lands 

Finally, you have requested our comments on the report of the Department of 

Interior's Inspector General with respect to the management of public lands in the 

CNMI. Let me begin by pointing out an underlying misassumption with the entire report. 

One stated objective in carrying out the report was to determine whether the 

Commonwealth was effective in "controlling and utilizing U.S. Government land 

transferred to the Commonwealth". The problem, of course, is that these lands were 

not U.S. Government lands. They were controlled by the Japanese Government and 

Japanese nationals prior to June 1944. Following the Second World War they were 

managed by the Trust Territory Government, which was created by the United Nations. 

While it is true that the U.S Government administered the Trust Territory Government 

until creation of the Commonwealth, the Trust Territory Government was not a part of 

the U.S. Government, and the public lands were not S. Government lands. The have 

always belonged to the people of the Northern Mariana Islands first in trust and now 

directly. 

Wrth respect to the particular recommendations of the IG Report, the 

Commonwealth is well underway in its implementation of new procedures. For 

example, new land exchange regulations became effective last month that require land 

exchanges to be based on appraisals of fair market value. 

With respect to the management of leases, the Division of Public Lands has had an 

informal policy of renting public lands at 8% of the value of the land. This has 

intentionally been a flexible policy, however, since there may be educational, cultural, 

economic or other benefits to the Commonwealth in addition to the aCtual rent being 

paid which are important to consider. We have also assigned additional attorneys to 

assist in the collection of lease payments and recovery of lands improperly taken. We 

have hired a new manager of the Account Compliance Section who is experienced in 

both business and computer technology. We have also hired a new Land Enforcement 

Manager who is working to improve on-site inspections of lessess and permittees. 

Finally, with respect to homestead administration, we have hired a new Homestead 

Manager who has instituted new policies for the review of homestead applications to 

ensure elegibility and need. 

Governor Tenorio has responded in detail to the IG Report and I am including for 

the record a copy of that response. 

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9. Conclusion 

America was founded on the spirit of self-reliance and the concept of individual 

responsibility for solving local problems with local solutions. Having accepted 

responsibility for correcting the situation the Tenorio Administration inherited. permit us. 

as contemplated by the Covenant and as is part of the political heritage which the 

people of the Commonwealth have adopted as their own, to also retain continued 

responsibility for its solution. 

There is much talk in the halls of government about authority and responsibility. 

Authority is the power to say yes. Responsibility is the widsom to say no when one has 

the power to say yes. 

The Congress clearly has the authority to say yes to the legislative proposals 

b~fore it. In the name of the good people of the CNMI, however, I ask that you show 

the wisdom to say no to an unwarranted federal intrusion in the political decisionmaking of the Commonwealth as we continue to implement local solutions to local 

problems. 

I want to thank you, Mr. Chairman, and the Committee for this opportunity to 

appear before you. I would be happy to answer any questions or to provide any 

additional information for the record. 

Thank you. 

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PR~PARED STATEMENT OP SAMUEL F . MCPHETRES 

MR CHAIRMAN, DISTINGUISHED MEMBERS OF TillS COMMITI'EE AND 

REPRESENTATIVES OF THE COMMONWEALTH OF THE NORTHERN MARIANA 

ISLANDS. IT IS A DISTINCT HONOR TO BE HERE TODAY FOR A VARIETY OF 

REASONS. MANY YEARS AGO I WORKED FOR ALASKA SENATOR BOB BARTLETT 

SHORTLY AFTER WE ACHIEVED STATEHOOD IN ALASKA. I ALSO TAUGHT HIGH 

SCHOOL HERE AT CARDOZO HIGH FOR A COUPLE OF YEARS A LONG TIME AGO. 

IT IS ALSO SIGNIFICANT FOR ME TO BE HERE BECAUSE I WAS PRESENT AT THE 

NEGOTIATIONS LEADING TO COMMONWEALTH FOR THE NORTHERN MARIANA 

ISLANDS AND ALL SUBSEQUENT HISTORICAL EVENTS FOllOWING. 

AS CURRENT PRESIDENT OF THE SAIPAN CHAMBER OF COMMERCE I TAKE 

PARTICULAR PRIDE IN REPRESENTING A VIBRANT AND VERY ACTIVE PRIVATE 

SECTOR IN THE NEWEST AMERICAN TERRITORY. 

MR. CHAIR.'\-fA.l'{, WE WERE .'\SKED TO COMMENT ON SEVEP-"l VERY IMPORTA.l\IT 

ISSUES FACING THE COMMONWEALTH AT THIS TIME. I WILL TOUCH ON EACH 

OF THEM BRIEFLY AND WILL WELCOME QUESTIONS OR CLARIFICATIONS 

SHOULD THERE BE ANY. 

MINIMUM WAGE 

FIRST, ON THE QUESTION OF MINIMUM WAGE, LET ME MAKE IT ABUNDANTI. Y 

CLEAR THAT THE SAIPAN CHAMBER HAS CONSISTENT!. Y SUPPORTED PUBLIC 

LAW 8-21 WHICH MANDATED THE ANNUAL $.30/HR. WAGE INCREASE ACROSS 

THE BOARD. WE WERE, IN FACT, PARTICIPANTS IN THE DRAFTING OF THAT 

LEGISLATION. WE MAINTAIN THAT POSmON TODAY. WE DO FEEL, HOWEVER, 

THAT IT IS IMPORTANT FOR THIS COMMITTEE TO UNDERSTAND THAT IN THE 

CNMI THE QUESTION OF MINIMUM WAGE IS NOT SIMPLY ONE OF WAGES. IN THE 

FIRST PLACE, THE PRIVATE SECTOR IS MADE UP LARGELY OF CONTRACT 

WORKERS FROM OUTSIDE. LOCAL LAW REQUIRES THAT THE EMPLOYERS 
244 

PROVIDE TRANSPORTATION TO AND FROM WORK, ROOM AND BOARD, MEDICAL 

CARE AND REPATRIATION COSTS. THE VALUE OF THESE MANDATED BENEFITS 

VARIES FROM $1 .50 TO $2.00/HOUR. ADDED TO THE CURRENT MINIMUM WAGE 

OF $2. 7SHR, THE WAGES PAID IN REAL VALUE ACfUALL Y EXCEED THE FEDERAL 

MINIMUM WAGE. IT IS THE POSITION OF THE SAIPAN CHAMBER OF COMMERCE 

THAT AS THE LEGAL MINIMUM WAGE RISES THE MANDATED BENEFITS MUST BE 

REDUCED COMMENSURATELY. BUT TinS IS A LOCAL LEGISLATIVE MATTER 

WHICH WE MUST DEAL WITH. ANY DISCUSSION OF MINIMUM WAGE IN THE 

COMMONWEAL Til, MR CHAIRMAN, MUST INCORPORATE TinS VERY IMPORTANT 

FACTOR. FOR THE MOST PART, THE REAL MINIMUM WAGE IN THE CNMI MEETS 

OR EXCEEDS THE FEDERAL MINIMUM WAGE. I WOULD NOTE IN PASSING THAT 

VERY FEW US CITIZENS ARE MINIMUM WAGE EJ\.1PLOYEES AT ALL, CERTAINLY 

NONE WORKING FOR THE CNMI GOVERNMENT. I WOULD CONCLUDE BY SAYING 

THAT WE HOPE THAT THE FEDERAL GOVERNMENT Wll.L ALLOW US TO WORK 

TinS OUT INTERNALLY. TO FEDERALIZE THE MINIMUM WAGE WITHOUT 

DEALING W!TI! THE LOCALLY M.-"u"'DATED BB-:rE."9TS WOULD WREAK H..o\VQC 

WITH THE LOCAL ECONOMY. 

WE ALSO APPLAUD THE GOVERNOR'S ACTION IN CONTRACTING WITH THE HAY 

GROUP TO DO A SERIOUS AND PROFESSIONAL STUDY OF THE MINIMUM WAGE 

ISSUE THROUGHOUT THE COMMONWEALTH SYSTEM, BOTH PRIVATE AND 

PUBUC SECTORS. 

IMMIGRATION 

ON THE ISSUE OF FAIR TREATMENT OF NON-RESIDENT WORKERS THE SAIPAN 

CHAMBER OF COMMERCE WISHES TO ASSURE THE COMMITTEE THAT IT STANDS 

SQUARELY AGAINST LABOR ABUSE IN ANY FORM. OUR CODE OF ETinCS 

MANDATES EXPULSION FOR ANY PROVEN ABUSIVE BEHAVIOR. NO CURRENT 

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MEMBER IN THE PAST FIVE OR SO YEARS HAS BEEN FOUND IN VIOLATION OF 

ANY APPLICABLE STATUTE. IN ADDITION, THE CHAMBER MAKES IT A POINT TO 

SPONSOR WORKSHOPS AND SEMINARS FOR MEMBERS AND THE GENERAL 

PUBLIC ON LABOR ISSUES. WE HAVE HAD THE U.S. DEPARTMENT OF LABOR, 

THE CNMI DEPT. OF IMMIGRATION AND LABOR, NLRB AND OTHERS AT VARIOUS 

TIMES OVER THE PAST YEAR, FOR EXAMPLE PRESENT THEIR PROGRAMS TO THE 

PUBLIC. 

THAT SAID, THERE IS NO QUESTION THAT THERE EXISTS A SERIOUS PROBLEM 

SOMETIMES THAT PROBLEM EXISTS MORE IN PERCEPTIONS THAN FACT, BUT 

NONETHELESS IT IS TiiER.E. PART OF THE PROBLEM IS BASED ON SHEER 

NUMBERS. WITH TWO THIRDS OF THE POPULULATION NON-RESIDENTS, MANY 

OF THEM EMPLOYERS IN THEIR OWN RIGHT, THERE IS FREQUENTLY A 

BREAKDOWN IN COMMUNICATION AND UNDERSTANDING OF WHAT THE LAW IS. 

WE ARE CONSTANTLY WORKING TO EDUCATE OUR MEMBERS AND TO SET 

CAiUvlPLES :FCR TiiE ru;:sT OF THE COMlviUNITY. WE ARil ALSO READY TO WORK 

WITH LOCAL AND FEDERAL AGENCIES IN DEALING WITH THE PROBLEMS. I 

WOULD SAY, MR. CHAIRMAN,. THAT THERE HAVE BEEN MANY MANY 

IMPROVEMENTS OVER THE PAST SEVERAL YEARS AND COMPARED TO HOW 

THINGS WERE FIVE YEARS AGO, WE ARE FINDING FEWER INSTANCES OF ABUSE. 

A SIGNIFICANT REASON FOR TinS IS THE ACTIVE PARTICIPATION OF THE FAIR 

LABOR STANDARDS ADMINISTRATION AND OSHA OVER THE PAST COUPLE OF 

YEARS. 

WE WOULD LIKE TO CONCLUDE TinS SECTION BY NOTING THAT THE CHAMBER 

IS ACTIVELY SEEKING MORE AMERICAN BASED INVESTMENT THAT IS NOT 

LABOR INTENSIVE. AT THE PRESENT TIME WE HAVE TWO MAJOR INDUSTRIES 

THAT FORM THE BACKBONE OF OUR ECONOMY: TOURISM AND THE GARMENT 

INDUSTRY. WHILE THE GARMENT INDUSTRY IS NOW STATIC AT ABOUT 7,000 

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246 

EMPLOYEES, TiiE TOURISM INDUSTRY IS EXPANDING RAPIDLY. NEW HOTELS 

AND POSSmL Y A CASINO OR TWO ON TiiE ISLAND OF TINIAN WILL REQUIRE 

EVEN MORE WORKERS WHICH WILL HAVE TO COME FROM OUTSIDE. WE 

WELCOME THIS SIGN OF A HEAL TIIY GROwrH, BUT WE BELIEVE THERE NEEDS 

TO BE SOME DIVERSIFICATION INTO AREAS WHICH DO NOT REQUIRE INTENSIVE 

LABOR INVESTMENTS. TiiE LOCATION OF TiiE COMMONWEALTH SHOULD BE AN 

INCENTIVE TO AMERICAN COMPANIES DOING BUSINESS IN ASIA, FOR EXAMPLE. 

LAW ENFORCEMENT 

WE APPLAUD TiiE EFFORTS OF GOVERNOR TENORIO TO SECURE AN INCREASED 

PRESENCE OF FEDERAL LAW ENFORCEMENT AGENCIES IN TiiE 

. COMMONWEALTH. THERE IS NO QUESTION BUT THAT TIIERE IS A REAL NEED 

FOR SKILLED ASSISTANCE IN THIS AREA. WE HAVE, IN FACT, TAKEN TiiE 

INITIATIVE TO PROVIDE FORA FOR TIIESE AGENCIES TO EDUCATE TiiE PUBUC 

ON THEIR RESPONSffiiUTIES. WE HAVE ALREADY HAD A SEMINAR ON FISCAL 

FRAUD AND COUNTERFEITING WITH THE SECRET SERVICE AGENT BASED IN TiiE 

REGION AND WE WILL CONTINUE DO DO SO. 

I WILL NOTE THAT TiiE LOCAL DEPT. OF PUBUC SAFETY IS FACED WITH A 

HERCULEAN TASK GIVEN TiiE FACT THAT MUCH OF TiiE SERIOUS CRIMINAL 

ACTIVITY IS CONCENTRATED WITHIN VARIOUS ETHNIC AND NATIONAL GROUPS 

AND THAT THESE ARE VERY DIFFICULT TO PENETRATE. THERE HAS BEEN 

PROGRESS, HOWEVER AND DPS IS TO BE CONGRATIJLATED. I NOTE IN PASSING 

THAT A SPECIAL LOCAUFEDERAL TASK FORCE HAS BEEN ESTABUSHED TO 

GUARANTEE COOPERATIVE EFFORTS IN THIS AREA. 

THE BUSINESS CLIMATE IS DIRECTLY AFFECTED BY TiiE SECURITY AND WELLBEING OF TiiE COMMUNITY. THIS HAS BEEN A FACTOR IN SOME POTENTIAL 

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247 

INVESTORS DECIDING NOT TO COME TO TilE COMMONWEAL Til AFTER READING 

TilE HEADLINES FOLLOWING SOME PARTICULARLY NOTABLE CRIMINAL 

ACTIVITY. I CAN ASSURE THIS COMMITIEE TIIAT WE Wll.L CONTINUE TO 

COOPERATE FULLY WITH FEDERAL LAW ENFORCEMENT AGENCIES. 

FEDERAUCOMMONWEALTH RELATIONS 

MR. CHAIRMAN, I VENTURE INTO TilE DELICATE AREA OF 

FEDERAUCOMMONWEALTII RELATIONS WITH A CERTAIN TREPIDATION. I DO 

BELIEVE, HOWEVER, TIIAT IT IS IMPORTANT TO POINT OUT TJV.T WHILE WE DO 

HAVE PROBLEMS OF LOCAL ORIGIN, TIIERE ARE OTIIERS WHICH HAVE BEEN 

CREATED THROUGH A MISINTERPRETATION OF TIIE COMMONWEAL Til 

COVENANT OR TIIE MISUNDERSTANDING OF COMMONWEAL Til HISTORY. I 

WOULD LIKE TO POINT OUT TWO SPECIFIC EXAMPLES WHERE FEDERAL 

ACTr't'IES HAVE CONTRIBUTED OR ARE ABOUT TO CONTRIBUTE TO OUR 

PROBLEMS IN THIS AREA 

TIIE FIRST RELATES TO A RECENT AUDIT OF TIIE DISPOSITION OF 

COMMONWEAL Til PUBUC LAND BY TIIE INSPECTOR GENERAL. IT WAS STATED 

IN TilE MEDIA TIIAT TilE AUTIIORITY TO AUDIT THIS PURELY INTERNAL ISSUE 

WAS BASED ON TIIE FACT TIIAT "THE PUBUC LAND IN TilE COMMONWEAL Til 

HAD BEEN OWNED BY TIIE UNITED STATES" BEFORE IT WAS TURNED OVER TO 

TIIE CNMI. IN FACT ALL TRUST TERRITORY PUBUC LAND WAS RETURNED TO 

TilE TRUST TERRITORY DISTRICTS IN WHICH IT WAS LOCATED IN 1976, I 

BELIEVE. NO LAND IN 1liE TRUST TERRITORY WAS OWNED BY THE UNITED 

STATES UNDER THE TRUSTEESHIP. WHILE I DO NOTAL WAYS AGREE WITH OUR 

GOOD GOVERNOR ON HOW TIIESE LANDS ARE HANDLED, I DO NOT, HOWEVER, 

SEE ANY FEDERAL INTEREST IN THIS AREA IF TIIE MEDIA REPORT WAS 

ACCURATE, THIS KIND OF MISINTERPRETATION OF HISTORY HAS LARGER 

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248 

IMPLICATIONS. 

THE SECOND AREA OF GREAT CONCERN THE SAJPAN BUSINESS COMMUNITY, MR. 

CHAIRMAN, IS THE APPARENT INTENT OF T"rlE NATIONAL LABOR RELATIONS 

BOARD TO APPLY ITS REGULATIONS IN THE CNMI WITHOUT CONSIDERATION OF 

LOCAL LAW. IN PARTICULAR I HAVE RECENTLY BEEN INFORMED THAT THERE 

IS A POLICY COMING DOWN THE PIPELINE WinCH WOULD PREVENT AN 

EMPLOYER FROM NOT RENEWING AN EXPIRED NON-RESIDENT WORKER'S 

CONTRACT TO BE REPLACED BY A LOCAL HIRE. IT HAS BEEN THE CNMI LAW 

FOR YEARS NOW THAT ANY U.S. CITIZEN HAS PRIORITY OVER AN IMPORTED 

WORKER. AS IT WAS EXPLAINED TO ME , UNDER THE NEW POLICY FROM THE 

NLRB THE EMPLOYER WILL BE REQUIRED TO RENEW THE NON-RESIDENT 

WORKER UNLESS THERE IS CAUSE FOR DISMISSAL, EVEN IF A LOCAL HIRE 

INDIVIDUAL IS AVAILABLE AND APPLYING. THE NEGATIVE REPUTATION OF THE 

COMMONWEALTH IN THE LABOR AREA NOTWITHSTANDING, THE FACT IS THAT 

MANY GUEST WORKERS IN THE CNMI ARE VERY RELUCTANT TO RETURN TO 

THEIR COUNTRIES ORIGIN. THIS IS, FOR EXAMPLE, THE MAIN REASON FOR THE 

ESTIMATED THOUSANDS OF OVERSTA YERS IN THE ISLANDS AND LABOR ABUSE 

CASES FILED JUST PRIOR TO THE EXPIRATION OF CONTRACTS. BUT TO TAKE 

AWAY THE EMPLOYER'S RIGHT TO CHOOSE HIS EMPLOYEES AND TO FORCE HIM 

TO GIVE PREFERENCE TO NON-US CITIZENS OVER US CITIZENS DOESN'T SEEM 

RIGHT. AND IT GOES AGAINST THE LOCAL LAW GIVING U.S.CITIZENS PRIORITY. 

IF, OF COURSE, THERE HAS BEEN SOME ABUSE OF THE CONTRACT WORKER 

PROVEN, THEN THAT IS ANOTHER STORY. 

MR. CHAIRMAN, IN CONCLUSION LET ME STATE THAT THE SAJPAN CHAMBER OF 

COMMERCE IS FULLY BEHIND THE MINIMUM WAGE ISSUE AS I DESCRIBED 

ABOVE. LET ME REPEAT THAT IT CANNOT BE SERIOUSLY DISCUSSED WITHOUT 

CONSIDERATION OF THE MANDATED BENEFITS. WE WELCOME FEDERAL LAW 

6 
249 

ENFORCEMENT AND THE TECHNICAL ASSISTANCE GIVEN TO OUR IMMIGRATION 

AND LABOR OffiCIALS. WE ARE WORKING AT DIVERSIFICATION AND, 

HOPEFULLY, THE AMERICANIZATION OF OUR ECONOMY. I MIGHT NOTE IN 

PASSING THAT WE HAVE HAD SOME VERY FRUITFUL DISCUSSIONS WITH 

SEVERAL EUROPEAN AND ASIAN DIPLOMATS TOURING THE REGION AND HOPE 

TO SEE SOME RESULTS IN THE FUTURE. 

WE HOPE THAT THE CONGRESS AND THE ADMINISTRATION WILL CONTINUE TO 

MONITOR OUR PROGRESS AND SET RESPONSmLE GUIDELINES WHICH ARE 

CONSISTENT WITH THE PRINCIPLES OF SELF GOVERNMENT AS EMBODIED IN 

THE COVENANT AND THE CNMI CONSTITUTION. WE HAVE ALSO TAKEN THE 

INITIATIVE TO DISTRmurE THE INTERIOR REPORT ON THESE ISSUES TO OUR 

BOARD MEMBERS. WHILE WE AGREE WITH A LARGE MAJORITY OF THE 

OBSERVATIONS, WE BELIEVE THAT MORE CAN BE DONE BY WORKING 

COOPERATIVELY THAN OTHERWISE. WE DOHA VE A LOT OF WORK TO DO, BUT 

THERE HAS BEEN CONSIDERABLE PROGRESS AS 'WELL. 

THANK YOU VERY MUCH, MR. CHAIRMAN. 

7 
S~IF.~cP~ 

President and Chairman of the 

Saipan Chamber of Commerce 

P.O. Box803 

Saipan. MP 96950 

Tel: (670) 233-7150 

Fax: (670) 233-7151 

Business: 

Samuel F. McPbetres, Consulting 

P.O. Box 5324 

Saipan. MP 96950 

Tel: (670) 233-8666 

Fax: (670) 234-8381 

250 

Email: samueLf:mcphetres@saipan.com 

Synopsis: Toe Saipan Chamber of CU~~~~D~:rCe (SCC) supports the increase in 

rniniiD1an wages as long as the mandated employee benefits are adjusted 

accordingly. 

The sec is concerned about the increasing non-resident population and the 

concommitlant social problems that have developed. The organization supports the 

technical and logistical support from federal agencies to local agencies but does DOt 

support a fi:deral take-over. 

The sec appreciates the presence of federal law enfOrcement agencies in the 

Commonwealth and promises to continue the full cooperation of the business 

community. 

The sec is not in mvor of any federal takeover of rninimmn wage or immigration 

but continues to urge cooperative efforts by the federal and Commonwealth 

authorities to resolve problems under the aegis of the Covenant and the CNMI 

Constitution. 

Saipan Chamber of CoiiiiDerl:e 8 
251 

FEDERAL - CNMI INITIATIVE 

ON 

LABOR, IMMIGRATION, & LAW ENFORCEMENT 

SECOND ANNUAL REPORT 

June 1996 
252 

Table of Contents 

Executive Summary 

I. Background 

II. Findings 

A. Areas of Progress 

B. Areas of Concern 

Immigration 

Minimum wage 

Prison Facilities 

Shadow Contracts and Letters of Invitation 

Costs 

III. Recommendations 

A. Minimum Wage 

B. Prison 

IV. Initiative Agenda 

A. Immigration options 

B. CNMI-INS Coordination 

C. Shadow Contracts 

D. Non-payment of wages/costs 

E. Interior Inspector General 

F. Prostitution 

G. Prison/Detention Facilities 

H. International Issues 

Appendices: 

Appendix A -- Summary of Initiative Activities and Plans 

Appendix B -- Attached Agency Reports 

Appendix C -- Attached Census Data 

Appendix D -- CNMI Support for Minimum Wage Increase 
253 

EXECUTIVE SUMMARY 

The combined efforts of the Government of the Conunonwealth of the Northern Mariana Islands 

(CNMI) and the Federal agencies are making progress in fulfilling the goals of the FederalCNMI Initiative on Labor, lnunigration, and Law Enforcement. Governor Tenorio has strongly 

endorsed the CNMI's actions and the increase of Federal law enforcement presence. The 

Federal agencies and the CNMI are working cooperatively, with the Office of Insular Affairs 

acting as an ombudsman, to ·address the problems of responding to the consequences of 

enormous growth in the CNMI. However, sustained follow-through from both the local and 

Federal governments is needed if Initiative goals are to be met. 

The Federal agencies participating in the Initiative reconunend the following: 

(I) Recommend that the Congress finalize enactment of section 2 of S. 638 to establish 

in Federal law the annual 30-cent increases in the minimum wage contained in 

existing CNMI law. 

(2) Recommend that the Congress direct the CNMI to utilize Covenant funds for prison 

and detention facilities. 

With regard to the imposition of inunigration controls, it should be noted that the lnunigration 

and Nationality Act (INA) may not entirely address the inunigration problems in the CNMI. 

Full application of the INA could have unintended consequences for the CNMI. Effective 

immigration control may require legislation on inunigration specific to the CNMI at either the 

local or Federal level. Should the CNMI not establish more effective control of inunigration 

within a year, the Federal agencies participating in the Initiative will develop options to increase 

the Federal role in local inunigration as is necessary to establish inunigration control. These 

options must give consideration to self-government in the CNMI and local economic 

development needs. 
I. BACKGROUND 

The Initiative was funded with a $7 million appropriation by the Congress in Public Law 103· 

332 for fiscal years 1995 and 1996. Of this amount, $4 million was allocated by the Department 

of the Interior for Federal agency action and $3 million for CNMI action. The latter included 

$1 .5 million for a computer system to track alien workers in the CNMI. The Congress endorsed 

the Initiative due to allegations of maltreatment of alien workers in the CNMI. Such allegations 

included the non-payment or late payment of wages, excessive work hours, poor working and 

living conditions, involuntary servitude, forced prostitution, rape , beatings, intimidation, racial 

discrimination, and other allegations of labor and civil rights violations by private employers, 

recruiting agencies, and local officials under color of law. 

Also of concern to the Congress was the effect that the large alien population increase has had 

on the social, economic, and political institutions of the CNMI. This increase resulted from 

large number of alien workers, from tourists, and from workers overstaying the periods of their 

visas and work permits, and from the inability of local officials to track and depon overstaying 

tourists and alien workers. The local immigration and labor systems have been characterized by 

meritorious and frivolous labor complaints, fraudulent employment credentials, and the 

preferential hiring of low-paid alien workers over resident workers. Finally, this population 

increase was associated with increased drug trafficking, white collar crime and government 

corruption, a strain on local government services and infrastructure, and a concern about the 

future political impact of children of alien workers born in the CNMI who, by binh, are United 

States citizens. 

During the past year, Federal agencies have met on numerous occasions to coordinate planning 

and action, both in Washington, D.C. and Saipan. A field task force of federal agencies, co· 

chaired by the Office of Insular Affairs Representative in Saipan and the United States Attorney 

for Guam and Saipan, has been formed in Saipan and meets monthly to discuss progress and to 

develop plans for the Initiative. Members of the Federal interagency working group have also 

traveled to the CNMI from Washington, D.C. , from regional offices on the mainland and 

Honolulu, and from Guam where they have met with Federal field officials. Chairman Frank 

Murkowski, Senator Daniel Akaka, and staff from the Senate committee on Energy and Natural 

Resources traveled to thc.GNMI in February 1996 to meet with Federal agency representatives, 

local government officials, and the business community to gain first-hand knowledge about these 

issues. In April 1996, the CNMI government financed a visit by eight House staff members to 

the CNMI. 
255 

2 

Jl. FINDINGS 

A. AREAS OF PROGRESS 

o CNMI Governor Froilan Tenorio has supported increased budgets and staffing for the 

CNMI Attorney General's office, the CNMI Department of Labor and Immigration, and 

work on the computer tracking system for alien workers in order to improve local labor, 

immigration, and law enforcement capabilities. In addition, the Governor has called for 

a greater Federal law enforcement presence in the CNMI and has supported local 

cooperation with Federal law enforcement agencies. 

o 1be Initiative has brought increased Federal resources and staff to the CNMI to enforce 

Federal law. Full-time Federal staffing in the CNMI increased by eight (six .t.wo-year 

assignments, two temporary duty assignments). Federal agencies are also providing 

training to local agency personnel. Casi:loads for the Federal District Court, the United 

States Attorney, the Department of Labor, the National Labor Relations Board, and law 

enforcement agencies have all risen dramatically. 

Federal District Court: For the two full calendar years of 1994 and 

1995, there were 25 criminal cases on the U.S. District Court docket in 

the CNMI. With the increased law enforcement stemming from the 

Initiative, there have been 20 criminal cases brought in first three months 

of 1996, a four-fold increase. 

United States Attorney: In the fiscal year 1995, the United States 

Attorney's Office filed 14 criminal cases against 19 defendants, and 

opened a total of 22 investigations. In the first ·five months of fiscal year 

1996, the Office has flied 12 criminal cases against 22 defendants and has 

opened 21 investigations. On the civil side, in the first five months of 

fiscal year 1995, the Office flied or answered in ten cases and received 11 

matters. In the first five months of fiscal year 1996, the Office has 

answered or filed 3 civil cases and has received 15 matters. 

U.S. Marshals Service Incarcerations: For the twelve-month period 

ending March 31 , 1995, the Marshals Service handled 14 incarcerations. 

For the past year's identical period, ending in March 1996, the figure 

almost doubled to 25. 

National Labor Relations Board: Approximately 60 unfair labor practice 

charges and seven representation petitions have been ftled with 'the NLRB 

Honolulu Regional Office in fiscal year 1995. 42 new cases are under 

investigation in fiscal year 1996. 
256 

Department of Labor: In 1994, the Department of Labor's Wage and 

Hour Division, operating from a one-person office in Guam, investigated 

10 flllllS. 1be collective back wage amount found due to employees was 

$1,232,951. During the period April 1995 through March 1996, with two 

investigators in Saipan, 21 firms were investigated and found to owe 

employees over $1 ,693,000 in unpaid wages .. 

B. AREAS OF CONCERN 

o The CNMI Government has had difficulty in controlling immigration. 

While progress is being made in developing the necessary institutional capability, there 

continues to be inadequate enforcement of immigration laws and regulations. For 

example, several moratoria on the importation of alien workers have come and gone, 

with no impact. Records on the number of alien worker permits are of lillie help in 

tracking alien workers because information is lacking_ on when or whether workers leave 

the CNMI. 

The prototype of the new computerized alien tracking system that would aid enforcement 

is continuing to progress. During prototype development to date, 23,010 alien records 

have been entered into the database. CNMI estimates that by July 1996 that the total 

may reach 27,000. This information is being stored in the database to be used for 

issuance of alien worker identification (ID) cards and to support queries for ID and 

status information. The prototype became operational at the end of May 1996. 

In parallel with implementation of the prototype is the CNMI Project Team's planning 

and development of the full operational Labor and Immigration support system. That 

development is to be supported by the Department of the Interior (DOl) and by the 

Immigration and Naturalization Service (INS), in the form of Independent Validation and 

Verification (IV & V) process. Critical to initiation of development is publication of a 

comprehensive Project Plan, to be reviewed and accepted by all parties. That plan has 

been expected since early April and, while INS and DOl have commented on a draft 

plan, there is concern that the plan is not yet complete. 

Based on CNMI projected completion, it is expected that by the mid-1997 the 

computerized alien tracking system will be have progressed from prototype into a fully 

implemented operational system, for labor and immigration status determination and for 

entry and exit control purposes. In the meanwhile, census data are the best means of 

traclcing the number of aliens present in the CNMI. 

Preliminary figures from the 1995 CNMI census show a total population of 59,913 

people, up 38 percent from 1990. Of these, the Arnerican-i:itizen population is 27,512 

(46 percent) and the alien population is 32,401 (54 percent). 1be percentage of the 
257 

4 

population born in the CNMI stayed nearly constant at about 38 percent from 1990 to 

1995, after decreasing from 72 percent in 1980. 

The census data show that the dramatic change in ethnic composition of the CNMI 

continues, both through immigration and through births to aliens. Most of the U.S. 

citizens born in the CNMI since 1990 have been born to non-native mothers and for the 

last few years, most have been born to Asian mothers. The population pyramid shows 

concentrations in the working-age group (twenty to forty) , and in children under five . 

The twenty-to-forty concentration is a result of immigration. The under-five 

concentration is made up of persons almost entirely born in the CNMI. 

Already twenty-five percent of the CNMI school population of 8,880 students are 

children of aliens. Virtually the entire increase in these children of aliens has occurred 

within the last decade, with most of the increase in the last five years. Based on the 

under-five population, geometric increases in this student population can be expected in 

the next decade. 

Little is known about the numbers of illegal aliens in the CNMI. Although most aliens 

arrive legally, a number fail to leave after their contracts or tourist visas expire. Since 

good records are not kept on alien workers and the census does not identify illegal aliens, 

ottly a rough guess exists. The CNMI Central Statistics Division of the Department of 

Commerce estimates the number illegal aliens in the CNMI to be approximately 2,300. 

Federal sources believe that the number of illegal aliens could be substantially higher. 

The rate of actual deportations, as opposed to ordered deportations, is approximately 

1()0.200 per year and is almost certainly not keeping up with the rate of increase in the 

illegal population residing in the CNMI. 

The presence of "temporary" alien workers and their progeny have already altered the 

composition of the population in dramatic ways. It is ironic that local control of 

immigration was insisted upon by the CNMI Covenant negotiators in order to prevent an 

inundation by immigrants with a resulting loss of native Chamorro and Carolinian culrure 

and influence. Yet, local control has had exactly the opposite of the intended effect. 

The reason is simple enough: instead of carrying out a clear policy based on public 

understanding and assent, the CNMI government has acquiesced to the desires of those 

who can make the most profit from bringing in alien workers. The same interests have 

been able to prevent the government from charging employers the full cost of 

infrastrucrure and services needed by alien workers, and have impeded efforts to increase 

the minimum wage. 

o CNMI Minimum Wage Policy is one of vacillation. 

No issue has become more contentious nor is more misunderstood than the issue of 

raising the minimum wage in the CNMI. The public and most business sectors realized 
258 

5 

that a long-overdue gradual increase in the minimum wage to the level in effect on the 

mainland and in most territories, including Guam, would stimulate the economy, increase 

local revenue, and provide beller paying private sector job opportunities for local 

workers, particularly the young, entry-level, wage earner. As a result, the legislature 

passed and the previous Governor signed a law raising the minimum wage in 30-cent 

annual increments to reach the current mainland level by the year 2000. 

However, the CNMI Legislature in mid-December 1995 voled a six-month delay in 

implementing the scheduled January 1, 1996, 30-cent increment in the existing CNMI 

minimum wage law. Included in the legislation was the establishment of a Wage and 

Salary Review Board, chaired by the personnel director of a company that owns a 

number of garment factories that import several thousand alien workers. The wage 

board and the garment industry have issued statements about marginal costs, international 

competition, and employment levels. Economists opposing minimum wages have been 

cited and requests been made for further study of wages and incomes to be based on 

upcoming, but yet-ro-be published census data. The Governor's eleventh-hour veto of 

the delay was over-ridden by the CNMI legislature just before the January 1 deadline. 

Six weeks later, the governor proposed reinstating the 30-cent minimum wage increase 

on April 1, 1996. The CNMI House of Representatives concurred, but the Senate did 

not. In April 1996, the Governor changed his mind and opposed the increase before July 

1. In May 1996, the CNMI Legislature voted to roll the 30-cent increase hack to !5 

cents for garment and construction workers, leaving in place a one-time 30-cent increase 

for all other workers. The real consequence of this new CNMI legislation is the 

elimination of all automatic annual minimum wage increases. This voids the original 

intent to systematically move the CNMI wage to the Federal level. 

This vacillation on the CNMI's own minimum wage law occurs against the backdrop of 

thriving and competing econotnies in Hawaii and Guam which for decades have paid the 

United States minimum wage or more. A resolution of the Hawaii legislature, in late 

March, strongly censured the CNMI on its backsliding minimum wage policies. All 

three economies are heavily dependent on Japanese tourism. The CNMI Chamber of 

Commerce, Contractors Association, and Hotel Association have each formally expressed 

support for the annual incremental increases in the minimum wage as was established in 

CNMI public law 8-21. They continue 10 argue that the increases are reasonable and that 

the law provides needed long-term stability in wage policy. 

While most CNMI businesses support an increase in the minimum wage, the policy is 

strongly influeOCed by the single industry that opposes it -- the garment industry. Those 

suggesting garment companies must compete with low wages in other Asian countries, 

ignore the facts that they are exempt from United States duties and quotas, and that they 

also compete directly with other United States businesses paying United States wages to 

United States citizens and residents subject to United States immigration control. 
259 

6 

The CNMI garment industry has portrayed itself as a declining industry on the verge of 

extinction in the face of rising wage costs. In fact, the CNMI has increased garment 

shipments in every year since the industry's inception in 1984 and is now expanding 

production at an increasing rate. Garment imports from the CNMI increased in value 

from $300.6 million in 1993 to $329 million in 1994 (up 9 percent), to $425.9 million 

in 1995 (up an additional 30.4 percent), and were up another 40.7 percent in the first two 

months of 1996 over the same period last year. On top of this increase, the local 

administration has approved expansion of the industry with another II garment factory 

licenses. 

The influence of the garment industry is distorting CNMI immigration, labor, and 

economic policy. The clear need is not for the industry to better compete, but for it to 

turn garment industry profits to the benefit of the entire CNMI community through better 

wages paid to potential local hires and greater contribution to the costs associated with 

importing alien workers. 

Enforcement of wage and hour laws is thwarted by numerous companies in the CNMI 

that are thinly capitalized. Some CNMI companies hire foreign workers, short their pay 

for as long as they can, and if caught, file for bankruptcy. The foreign worker is often 

never fully paid. 

o Shadow contracts and letters of invitation are issues that need a solution. 

The U.S. Department of Labor's Wage and Hour Division has resolved enforcement 

cases and obtained judgements against employers violating overtime laws. A Wage 

Hour Investigation found one firm with several garment manufacturing establishments 

obtained kickbacks of back wages previously paid to employees. We also understand that 

shadow contracts may exist under which alien minimum wage workers are required to 

pay kickbacks to persons in their home countries from their earnings for recruiting, 

transportation costs and other fees. Such shadow contracts would likely violate United 

States labor laws if they existed in the United States. Direct enforcement, in other 

countries, against parties to such contracts is extremely difficult. 

The local government has issued numerous letters of invitation to prospective investors 

to conduct business in the CNMI. These letters are used to support applications for exit 

visas in countries such as China. Many recipients of such letters enter the CNMI with 

limited business prospects and little capital. We are concerned with recent news accounts 

that attribute an increase in organized crime to those who entered the CNMI on these 

letters of invitation. While the CNMI asserts that the issuance of these letters has 

ceased, there are reports that they continue to be available, and foreign nationals continue 

to enter via these letters. 
260 

7 

o Prison and detention facility construction must be a priority. 

In appropriating funds for the Initiative, the Congress cited the need for adequate prison 

and detention facilities as one of the goals of the Initiative. While preliminary analysis 

indicates a need for a 200-bed facility, no firm steps have been taken by the CNMI to 

meet this need. We believe it is time to move on the prison issue. We have written the 

Governor, asking to work together to address this pressing need. 

o The importation of alien workers is accompanied by significant societal cost. 

Many activities of the CNMI and Federal governments are forced to address the presence 

of alien workers in the CNMI: not all health care services for alien workers are covered 

by insurance; police and coun services for alien workers go unreimbursed; and 

electricity, water, and sewer costs are subsidized by the CNMI and Federal governments. 

The CNMI's continuing need for capital infrastrucrure funding (currently being 

subsidized by the Federal government at a rate of $11 million a year under Public Law 

104-134) is panially driven by uncontrolled irnrnigration. Without the large alien 

temporary worker population, the CNMI would need substantially less new capacity in 

hospital, education, road, water, sewer and electric facilities. If their costs to the CNMI 

government were fully covered, it can be argued that the Federal taxpayer would not be 

called upon to subsidize costs beyond existing appropriations that more appropriately 

should be borne by employers (who benefit from cheap alien labor) and their customers. 

In addition to the calculable dollar costs of services, infrastrucrure, and wages noted 

above, there is a moral cost for a society where frauds are cornrnonly perpetrat~d on 

alien workers. An effective bonding or escrow procedure should be mandated to protect 

workers. Funhermore, there are also moral costs when the CNMI is the venue where 

alien women, some underage, are brought allegedly for purposes of "hostessing" but may 

also be engaged in prostirution. 

o CNMI policies have consequences overseas. 

By actions on March 29 and May 12, 1995, the Philippine government prohibited 

Philippine nationals from working in the CNMI as household workers, farmers, 

waitresses/receptionists and other related workers in bars and night clubs, and in jobs 

employing non-professional women. During the intervening year, the CNMI government 

worked 10 lift the ban. Finally, in mid-May 1996, the Philippine government rescinded 

the ban on Philippi_ne workers in w CNMI. 
261 

8 

III. RECOMMENDATIONS 

Last year's report, dated April 24, 1995, contained five recommendations: (1) confirm existing 

CNMI mirtimum wage increases in Federal law, (2) phase out CNMI Covenant financial 

assistance, (3) reserve $3 million a year in CNMI Covenant funds for the Initiative, (4) require 

an annual report on the Initiative and coordination of immigration issues by CNMI and the 

Immigration and Naturalization Service, and (5) phase in full application of the Immigration and 

Nationality Act in the CNMI if alien workers exceed 1992 levels and law enforcement in the 

CNMI remains deficient. 

Recommendations (2) on financial assistance and (3) on Irtitiative funding were implemented with 

the enacanent of Public Law 104-134. Recommendation (I) on minimum wage was passed by 

the Senate in S. 638, but the House Committee on Resources has not yet acted on the measure. 

In the coming year, recommendations (4) and (5) will receive further consideration and may be 

revised by the Federal agencies participating in the Irtitiative. 

The Federal-CNMI Irtitiative would be strengthened if the Congress would take action on the 

following recommendations by the participating Federal agencies (except National Labor 

Relations Board which, as an independent agency does not make recommendations). Agency 

participants in the Initiative can provide a legislative drafting service for these recommendations. 

(I) Recommend that the Congress rmalize enactment of section 2 of S. 638 to establish 

the minimum wage in Federal law including the annual 30-cent increases in the 

minimum wage contained in existing CNMI law. 

Currently, the Federal minimum wage provisions of the Fair Labor 

Standards Act do not apply in the CNMI. Congressional 

enactment is necessary to ensure workers are paid at least the 

minimum wage and to provide predictable wage increases for a 

stable labor environment and economic growth sought by the 

CNMI Chamber of Commerce, the CNMI Contractors' 

Association, and the CNMI Hotel Association. Increasing the 

minimum wage will stimulate the local economy by raising the 

purchasing power of workers and increasing government revenues 

through greater tax collections from workers. Moreover, 

increasing the mirtimum wage will not increase unemployment 

among United States citizen residents, who have jobs that pay 

above the projected minimum wage. Minimum wage increaSes, 

therefore, primarily affect alien workers. Since the growth of the 

alien labor force may be slowed by increasing the minimum wage, 

there will be a favorable effect on related problems including 
262 

9 

illegal employer labor actions, strain on infrastructure, organized 

crime and illegal drugs. In our view, reducing the existing 

incentives to hire alien workers at lower wages than those 

prevailing for local workers should help slow uncontrolled 

immigration and perhaps help prevent the need for greater Federal 

control of immigration. 

(2) Recommend that the Congress direct the CNMI to utilize Covenant funds for prison 

and detention facilities. 

Several task force agencies suggest that as law enforcement in the 

CNMI becomes more effective, current substandard facilities must 

be replaced by an up-to-date 200 bed facility that would house 

local prisoners, immigration detainees, and Federal prisoners. 

IV. INITIATIVE AGENDA 

During .the next year, agencies participating in the Initiative will examine the following issues, 

among others: 

o If immigration control by the CNMI does not become more effective, develop options 

to increase the Federal role in local immigration as is necessary to establish immigration 

control. These options must give consideration to self-government in the CNMI and 

local economic development needs. 

o Devise a plan for information sharing and cooperation between the CNMI and the 

Immigration and Naturalization Service (INS) including identification, and if necessary, 

CNMI exclusion or deportation of persons who represent security or legal risks to the 

CNMI or the United States. 

o Develop specific information during the next year as to the scope, nature, and frequency 

of any requirement that alien workers sign shadow contracts that diminish the effective 

minimum wage paid in the CNMI, and consider possible changes in CNMI and Federal 

law. 

o Develop a means for addressing non-payment of wages to employees and unreimbursed 

costs to the CNMI government. 

o The stationing of Department of the Interior (DOl) Office of Inspector General (OIG) 

personnel in the CNMI, contingent upon adequate funding for this purpose, to provide 

investigative support for the Initiative to an extent consistent with the OIG's authority 

under the Inspector General Act of 1978, as amended. 
263 

Appendix A 

SUMMARY OF ACTIVITIES AND PLANS 

CNMI-FEDERAL JOINT EFFORTS 

The Initiative provides a framework for the CNMI govenunent and Federal goverrunent to work 

jointly on labor, immigration, and law enforcement issues. The result is intended to be a 

synergy that increases the effectiveness of both. There is daily communication between local 

and Federal administrative and law enforcement personnel. Federal training of local personnel 

is on-going on several fronts. 

The Initiative provides funding and impetus for coordination of numerous facets of the Initiative 

that are conducted by individual agencies in the CNMI and Federal goverrunents under the 

individual and distinct authorities accorded those agencies. The following is a outline of agency 

action, both Federal and CNMI. 

FEDERAL ACTIONS 

Of the $7 million appropriation, $4 million has been allocated through reimbursable support 

agreements to Federal agencies to enhance their ability to address labor, immigration, and law 

enforcement issues. The reports of individual Federal agencies are attached with a synopsis 

appearing here: 

DepanunentofLabor 

The initial agreement provided $1.6 million to the Department of Labor (DOL) to make 

available Federal staff to expand local enforcement resources and to train CNMI labor 

enforcement, certification and immigration personnel in order to improve the local goverrunents' 

ability to enforce its own labor and immigration laws. 

o The Wage and Hour Division has established an office in Saipan with two senior 

investigators. These investigators have directed joint DOUCNMI investigations in 

industry sectors where high levels of noncompliance have been found in the past. In 

addition, the Federal staff have prepared and presented educational and training 

workshops for_ specific employer groups as well as the general business community in 

order to promote employers' understanding of United States labor laws that are 

applicable in the CNMI. These investigators have undertaken two major initiatives that 

involved in close coordination with the CNMI labor department to develop a training 

plan and a compliance assessment plan. Wage and Hour conducted twenty-one 

investigations during the period April 1995 through March 1996, with enforcement 

actions resulting in the payment of $1 ,693,771 in previously unpaid back wages to more 

than 1,600 workers. 
264 

10 

o Investigate activities relating to transportation or coercion of women for prostitution. 

o Aid the CNMI in developing a plan for construction of correction and detention facilities. 

o Continue to seek international cooperation that complements Federal efforts in the CNMI 

with regard to labor, immigration, and law enforcement policies. 
265 

2 

During the next 18 months, the enforcement plan provides for an expansion of 

on-going enforcement efforts in the garment, construction, hotellrestaurant/night club 

and the security industries, and the reinvestigation of a sample of firms previously 

investigated to determine the current compliance status of these firms. The education 

component will focus on businesses that have no formal association or industry group 

representation. An outreach effort will focus on efforts to insure that new workers 

understand their rights. The Division will continue discussions with the CNMI 

government regarding structural changes in the local labor laws. 

o The Department of Labor's Solicitor continued to work with the Wage and Hour Division 

on a jointly developed enforcement strategy focusing on industries with poor compliance 

records. In fiscal year 1995, efforts were concentrated on the private security guard 

industry . Solicitor filed actions in the U.S. District Court against the largest security 

companies in the CNMI. Three different cases (two security and one garment) were filed 

resulting in judgements totaling over $1,342,174 for back wages and liquidated damages 

impacting over 420 persons. A fourth case is under appeal. Solicitor has also 

successfully negotiated settlements for OSHA violations. Solicitor's staff was a part of 

a Federal delegation to meet with officials of the Philippine government to discuss labor 

conditions in the CNMI. Information was exchanged on how to improve the conditions 

of nonresident alien workers and the enforcement of Federal law. 

Plans: It is anticipated that Labor's enforcement activity will generate additional Wage 

and Hour and OSHA cases that will be referred to the Solicitor in the next eighteen 

months. Solicitor will coordinate with Wage and Hour and OSHA regarding training of 

CNMI staff and the community. 

o The Occupational Safety and Health Administration (OSHA), through a cooperative 

education program at the Northern Marianas College, has conducted 14 of the 34 

educational seminars and workshops planned for employer and employee groups. 

Participants numbered over I ,000, mostly from the garment and construction industries. 

~. In addition to completing the current training effort, OSHA plans during the next 

year to increase the number of these strike force visits from two or three a year to four 

to six a year. OSHA believes that team inspections rather than a resident inspector is the 

most effective way to achieve the desired result of compliance with OSHA by the 

garment industry, labor camp owners, and construction operations. 

o Employment and Training Administration (Office of Labor Certification) has provided 

technical assistance to the CNMI for review of the local labor certification system. 

Plans: Con~ assistance to local labor certification. 
266 

3 

National Labor Relations Board 

o The National Labor Relations Board (NLRB) is charged with providing an orderly 

process for protecting and implementing the respective rights of employees, employers 

and unions in their relations with one another by (1) determining and implementing, 

through secret ballot elections, whether there shall be union representation and, if so, 

which union; and (2) providing remedies for unlawful acts called unfair labor practices. 

During the past year, 60 unfair labor practices (affecting 1500-2000 workers) and seven 

representation petitions have been filed with the NLRB. NLRB has been successful in 

reaching settlements in five cases involving back pay and reinstatement of employees. 

As of March 1996, NLRB has a larger than anticipated number of CNMI cases. At the 

initial investigation stage there are 42 unfair labor practice charges involving various 

employers employing over 1000 employees. 

Plans. The NLRB has sent an experienced attorney to the CNMI for three months from 

April to July 1996 to investigate and handle legal assignments and to serve as a source 

of infonnation to people in the CNMI. NLRB anticipates an increased presence would 

also allow for training and enforcement in the CNMI regarding the National Labor 

Relations Act. 

Department of Justice 

The initial agreement provided $2.2 million to the Department of Justice to increase federal law 

enforcement presence in the CNMI and to provide technical assistance to the CNMI to improve 

their ability to enforce their local laws. 

o lnunigration and Naturalization Service (INS) has two responsibilities with the Initiative. 

The first is the assignment of an experienced immigration investigator in May 1996 to 

the CNMI for two years to assist immigration enforcement. The second involves 

assisting the CNMI to develop its computerized Labor and Immigration Identification and 

Documentation System (UIDS). 

Plans. The INS investigator will assist the CNMI Immigration and Labor Department 

in implementing effective systems and business processes. INS will conduct an 

Independent Validation and Verification (IV & V) process of the LIIDS as it progresses 

and make recommendations for optimal system effectiveness. 

o The United States Attorney for Guam and the Northern Mariana Islands reported an 

increased caseload in the CNMI in 1995. The number of cases for 1996 is running at 

almost double the 1995 rate . 
267 

4 

Plans. The United States Attorney will coordinate and follow-through with the 

prosecution of cases now being developed by the numerous Federal investigative 

agencies. 

o The Drug Enforcement Administration (DEA) conducted a narcotics assessment in the 

CNMI and has based its plans on how to address the drug problem in the CNMI on that 

assessment. D EA has conducted three training sessions with the officials of the CNMI 

and has established an Ad-Hoc Task Force with the local government. DEA has initiated 

fifteen investigations and has made several arrests relating to the sale of crystal 

methamphetamine. Since October 1995, a senior special agent from the Guam DEA 

office has been assigned to primary duty to deal with CNMI issues. 

Plans. DEA believes that the training of local law enforcement officials will produce the 

best overall result for drug enforcement in the CNMI, and plans to focus its efforts in 

the training area. 

o The Criminal Section of the Civil Rights Division at Justice is coordinating with FBI 

agents stationed in the CNMI a review of allegations and information for application of 

federal criminal civil rights statutes. 

f!Mls. The Criminal Section of Civil Rights has instituted a plan to review allegations 

that may warrant investigations. In early summer, a senior attorney will travel to the 

CNMI for an on-site evaluation. 

o The Federal Bureau of Investigations (FBI) has assigned an additional Special Agent in 

Saipan for two years. This assignment makes a total of three FBI agents stationed in the 

CNMI, two already assigned prior to the Initiative. The additional agent will focus on 

investigations of civil rights violations, public corruption, and organized crime. 

o fum.,. The FBI has initiated liaison with various community support groups and local 

law enforcement agencies to provide information and training concerning federal criminal 

civil rights violations. The FBI will continue its relationship with the Criminal Section 

of the Civil Rights Division and the U.S. Attorney's Office in the CNMI to coordinate 

the review of allegations of federal criminal civil rights violations as well as violations 

of other federal criminal statutes. 

o National Institute of Corrections personnel have conducted trammg in correctional 

management for CNMI law enforcement officials. The immediate results were the 

development of five correctional policies and procedures and identification of the need 

for a corrections action plan. 

f!Mls. With corrections and detention facilities in the CNMI woefully inadequate, new 

corrections facilities are recommended by several agencies. The Administration has 
268 

5 

communicated its concerns to the Governor and intends to work with the CNMI to 

address this need. 

o The United States Marshals Service projects that the enhanced Federal investigatory and 

prosecutorial initiative will increase the requirement to provide valuable support services 

on behalf of and to the Federal Judicial District of the CNMI. An additional, full-time 

Deputy U.S. Marshal was permanently assigned on October 1, 1995, augmenting the 

Marshals Service's capabilities by 100%. This strategic decision proved to be a 

fortuitous one as incarcerations rose 245% in the first quarter of fiscal year 1996. 

Plans. In addition to ensuring that adequate Marshals Service personnel staffing levels 

be maintained to meet the anticipated and steadily increasing workload requirements, the 

Marshals Service is in the process of finalizing a Partnership Agreement between their 

office, the CNMI Department of Safety, and the Guam Department of Corrections. The 

purpose of the Partnership between the key providers of detention service in this region 

will be "to share and align the Partners' resources to the mutual benefit of the 

participating regional detention service professionals." A pending " First Act of 

Partnership" will be the temporary housing of CNMI's Federal pre-sentenced detainees 

in the Department of Correction's detention facility on Guam. The Marshals Service is 

pursuing the implementation of a videoconferencing capability between Guam and Saipan 

to support this temporary acconunodation. An anticipated "Second Act of Partnership" 

will involve the creation of shared training and employee development opportunities 

between the participating detention service professionals. 

o Child Exploitation and Obscenity Section (CEOS) of the Criminal Division is interested 

in working on prosecutions of individuals who transport, or conspire to transport, young 

women to the CNMI for purposes of criminal sexual activity, including, but not limited 

to, prostitution. CEOS is also interested in the prosecution of individuals who travel to 

the CNMI to engage in criminal sexual activity, including, but not limited to, 

prostitution. As a preliminary step to undertaking prosecutions, CEOS has conducted 

telephone interviews with federal government personnel in both the CNMI and Guam, 

many of whOm provided information regarding the transportation of women and travel 

to meet these women in violation of the Mann Act. 

Plans. CEOS expects to complete the preliminary phases of this project shortly. At that 

time, CEOS will develop a strategy to initiate investigations leading to prosecution of 

individuals organizing these criminal activities. 

Department of Treasury 

The initial agreement provided $200,000 to the Department of Treasury for improving CNMI 

law enforcement. 
269 

6 

o The Bureau of Alcohol, Tobacco, and Fireanns has provided assistance to the CNMI 

over the last year which has resulted in several cases targeting anned career criminals, 

numerous anned drug traffickers. and a case which is auempting to determine the source 

of illegal explosives. ATF made arrests for explosives and fireanns, and prosecutions 

have involved charges under the career criminal starute . 

Plans. Cooperative enforcement efforts with an emphasis on training for CNMI law 

enforcement officers will be a priority. Training will include fireanns trafficking 

investigative techniques, interviewing and interrogation techniques, arson-for-profit 

investigations, undercover techniques, and operational security techniques. 

o The United States Secret Service has participated in major investigations culminating in 

arrests, including bank fraud, justice obstruction, mail theft and drug distribution. 

Several cases have been investigated including counterfeit currency. credit card fraud, 

theft and forgery of US Treasury checks. Secret Service rotates an agent through Saipan 

for two weeks out of every two-month period. 

. To continue participation in Task Force efforts and to support the Federai-CNMI 

labor, Immigration and Law Enforcement Initiative to the extent possible. 

o The United States Customs Service has stationed several rotating special agents in the 

CNMI to work with CNMI customs and public safety persmmel with the primary 

objectives of investigating illicit drug trafficking, illegal anns export, violations of 

currency controls, money laundering, illegal transhipment of textiles, and other CNMI 

and Federal law violations. Ten investigations in the last six months, have resulted il} 

five arrests and the seizure of counterfeit currency, unregistered fireanns. and drug 

paraphernalia. Two training sessions have focused on safety and mental preparation for 

armed confrontation, inspections at airports and seaports, and canine operations. The 

U.S. Customs Service has established a U.S. Treasury Task force in the CNMI 

consisting of one or two U.S Customs Special agents and officers from the CNMI 

Department of Public Safety and the CNMI Customs. 

. U.S. Customs Service plans to continue the task force and is prepared to support 

the initiative with temporary details. It is believed that more work can be done to 

enhance the enforcement efforts in the labor area by concentrating on investigations of 

the garment industry and the transshipment of textile products through the CNMI. 

Department or the Interior 

o The Department or the Interior Inspector General has expanded its investigation of public 

corruption in the CNMI as its contribution to the Initiative. A senior agent from the 

OIG's Guam f~eld offtce is assigned to the Initiative and frequently travels to the CNMI 
270 

7 

in furtherance of investigations. This agent has extensive experience conducting public 

corruption investigations in the territories. Currently, the Interior Office of Inspector 

General has five investigations that have been initiated as a result of Initiative efforts to 

ferret out public corruption in the CNMI. 

Plans. If it is recommended that the Inspector General establish a physical presence in 

the CNMI for Initiative purposes, funding will be necessary. 

CNMI ACTIONS 

Of the $7 million appropriation, $3 million was granted by the Office of Insular Affairs, 

Department of the Interior to the CNMI for local action. 

$1.5 million of the $3 million of federal assistance was provided to establish a computerized 

labor and immigration identification system. The CNMI accepted the grant on December 31, 

1995. 

Labor and Immigration Identification and Documentation System 

Amount authorized: $1,500,000 

The Labor and Immigration Identification and Documentation System (LIIDS) is an ambitious 

undertaking of the CNMI government to develop a computer system to track and to manage the 

entry and exit of tourists and to control the influx of alien laborers required by the CNMI 

economy. The system will improve and automate the method of reviewing labor and 

immigration documentation for issuance of permits and identification cards, bener serving the 

government and the private sector. 

The CNMI is working closely with the INS on developing the system. The CNMI has 

developed a prototype system and data base that is currently operational. It has included all 

labor permining actions taken since July 1995. By June 1996, the LIIDS program is scheduled 

to have a prototype system that (I) will be able to log individual foreign worker identity, and 

labor and immigration data, (2) build a standard data base for this information, (3) issue entry 

permits that verify an individual's initial entry status, and (4) issue identity cards for each 

foreign worker. The LIIDS will be used beginning in late May 1996 to issue alien labor 

identity cards to all workers whose data has been entered in the UIDS data base since it went 

on-line. 

Th.is model has helped the CNMI define its existing formal and informal processes of managing 

labor and immigration services, and has already led to improved management practices. The 

model is now being used to bener define the user requirements and functionality of the ultimate 

system. 
271 

8 

1be CNMI has recently inc:reased its Labor and Immigration professional staff to complete and 

maintain the LIIDS. It has added an information systems manager, a logistics and training 

engineer and a systems teclmician, and will soon hire a software engineer. The next step in the 

LIIDS development will focus on airport arrivals and deparrures for passport and tourist visa 

control. While early contractual and staffing interruptions caused delays, INS, CNMI, and OIA 

believe that the project is now progressing at a satisfactory pace. The CNMI expects the project 

to be completed in 18 months. 

Full implementation will require additional attention from those involved in the Initiative to 

develop robust operational support for management control of all alien workers and arrival and 

deparrures of international travelers. 

Local Project 

The remaining $1.5 million federal assistance to the CNMI was granted to carry out mutually 

agreed projects to address problems related to immigration and alien labor. It was accepted by 

the CNMI government on December 12, 1994. The first project plans were submitted in 

January 1995. Ten CNMI projects are currently operational. 

Labor Code Revision 

Amount authorized: $83,000 

The CNMI's labor code was inherited from the Trust Territory government and has been revised 

slightly since the establishment of the Commonwealth. Existing law reflects a time and an 

economy in which alien labor played a small role . 

The CNMI in June 1995 contracted with an attorney to review existing law and draft new 

legislation better reflecting the current needs of the CNMI. 1be contract also requires the 

submission of draft regulations to implement the legislation. The CNMI legislarure will enact 

or reject the code revision as it sees fit. The project is scheduled to be completed in June 1996. 

Administrative Judge- Labor 

Amount authorized: $108,000 

Although the CNMI has not yet requested reimbursement for this project, the Administrative 

Judge has been hired and is functioning . The CNMI reports that the backlog of pending labor 

cases is rapidly being reduced. -· 

Assistant Attorney Generai!Labor 
272 

9 

Amount authorized: $77,000 

The CNMI has not reported on this project. 

Criminal Code Revision 

Amount authorized: $117,000 

The Commonwealth criminal code is an amalgam of the Trust Territory Code, the Model Penal 

Code and provisions from various state jurisdictions. It is said to be typical of a criminal code 

of twenty years ago. The project goal is the revision and expansion of the code to reflect the 

needs of the CNMI within the American jurisprudence system. The project was initiated in June 

!995 and should be completed in 1996. The CNMI legislature retains the right to enact or reject 

the revision. 

Rota Attorney General 

Amount authorized: $77,000 

Funds were requested to allow the Attorney General to maintain a full-time Assistant Attorney 

General in Rota. The new official has been hired and is now in residence on Rota. 

Criminal Attorneys 

Amount authorized: $230,006 

This project was requested in response to the large caseload of criminal prosecutions in the 

Criminal Division of the Commonwealth. Two prosecuting attorney positions have been filled. 

Informant Pavment Fund 

Amount authorized: $20,000 

The funds were requested to allow the Department of Public Safety a source of payment for 

confidential information. The Department is using Justice Department administrative guidelines 

for use of the funds. 

Deoortation Fund 

Amount authorized: $30,000 

The funds were approved in November 1995 to allow the CNMI a source of funds for 

deportation. No funds have been requested to date . 
273 

10 

Investieative Unit 

Amount authorized: $375,000 

The CNMI requested these funds to address its need for special investigative expertise not 

available within its ttaditional law enforcement service. The open nature of the CNMI economy, 

coupled with a heavy influx of visitors and alien workers has made the CNMI a potential target 

of international criminals and increased opportUnities for official corruption. The CNMI 

Attorney General's Investigative Unit has been augmented with additional funding and staffing 

and offices in Tinian and Saipan. 

The investigative unit is under the confidential conlrol of the CNMI Attorney General. Its focus 

is on white collar crime, official corruption, alien smuggling and organized crime. The unit has 

been functioning since the summer of 1995. 

Protective Services 

Amount authorized: $75,000 

The Protective Services program has been subgranted to Karidat, a non-governmental 

organization providing social services in the CNMI. Karidat provides outreach to alien workers 

who may be in need of special assistance due to disagreements with or abuse by their employers. 

A full-time and a part-time caseworker are available to provide advocacy services for alien 

workers in the CNMI. Karidat is able to provide short term shelter and assistance to alien 

laborers as the need arises. 
274 

Appendix B 

Federal Agency Reports 
275 

U.S. Department of Labor 

Wage and Hour 

Solicitor's Office 

Occupational Safety and Health Administration 

Employment Training Administration 
U.S. Department of Labor Activity in the CNMI 

In 1995, the Department of Labor (DOL) entered into a reimbursable agreement with the Department of Interior which 

provides for reimbursement for specified DOL enforcement, 

training and support for the Commonwealth of the Northern Maria~a 

Islands (CNMI). The reimbursable funding is being used for 

training a~d enforcement support to the CNMI government to make 

meani~gful and lasting improvements in the labor and immigration 

problems associated with the large number of nonresident workers 

being brought to the islands to work in a variety of low-wage 

industries. The vast majority of these workers are from the 

Philippines, however China, Korea, and Bangladesh are also 

supplying workers in the CNMI. 

The DOL agencies involved in these labor standards enforcement, 

training and support activities are the Wage and Hour Division, 

the Occupational Safety and Health Administration, the 

Solicitor's Office, and the foreign labor certification 

activities within of the Employment and Training Administration. 

The initial agreement provided Labor with $1.6 million over two 

years to make available Federal enforcement and support staff to 

train CNMI labor enforcement, certification and immigration 

personnel in order to improve the local governments' ability to 

enforce its own labor and immigration laws. This agreement has 

allowed the Wage and Hour Division to station additional 

investigators in the islands to direct joint DOL/CNMI 

investigations at industry sectors where high levels of 

noncompliance have been found in the past. In addition the 

Federal staff have prepared and presented educational and 

training workshops for specific employer groups as well as the 

general business community in order to ensure that employers 

understand what is required under the U. S. labor laws applicable 

in the CNMI. 

Wage Hour Division 

In April 1995, two Wage Hour investigators established an office 

in the CNMI to supplement the enforcement support previously 

provided by the senior Wage Hour investigator stationed in Guam. 

After meeting with and developing points of contact with the CNMI 

government, the Wage Hour staff undertook two major initiatives 

that involved working in close coordination with c~~I labor 

department mana~ers and staff. 

The first initiative involved the development of a training plan 

for all CNMI managers and staff involved in labor law 

enforcement. This training utilized the Division's Basic 

Investigator training material tailored to the local CNMI 

situation. The training was designed to include an emphasis on 
277 

2 

specific administrative and technical subject matter including interviewing techniques, narrative report writing and case file 

preparation. over a four month period in 1995, the customized 

basic investigator training course was provided to all CNMI labor 

department enforcement staff. During the presentation of the 

basic training classes and continuing after the completion of the 

formal classroom training, joint investigations were conducted 

with the CNMI labor department staff in order to provide on-thejob training experiences utilizing the skills learned in the 

training classes. 

The second initiative involved the development by Wage Hour staff 

of a compliance assessment plan to establish baseline compliance levels in various low-wage industries which employ the vast 

majority of the nonresident alien workers employed in the CNMI. 

As a result of this assessment, Wage and Hour focused enforcement 

efforts in the garment, security, building maintenance and hotel 

and restaurant industries in 1995. During the past year, educational outreach seminars were presented by the Wage Hour 

staff for two industry associations that together employ a large 

percentage of the nonresident alien workers on the island -- the 

saipan Garment Manufacturers Association and the Hotel 

Association of the Northern Mariana Islands. Large numbers of 

nonresident workers in the garment industry are from China and 

the Philippines while virtually all of the workers in the hotel 

industry are from the Philippines. 

Since the majority of nonresident workers in the CNMI are from 

the Philippines, the U.S. Embassy in Manila suggested a meeting between U.S. government officials and officials of the Philippine 

government to discuss how to improve the current labor conditions 

for Philippine contract workers in the CNMI. In June 1995, a delegation representing the Department's Wage and Hour Division 

and Solicitor's office and the u.s. Attorney for Guam and the 

CNMI traveled to Manila and met with the Philippine Secretary of 

Labor, the Chief of the National Investigative Service 

(Philippine FBI), the President's Special Representative for 

Overseas contract Workers as well as the u.s. Ambassador to the 

Philippines. The delegation discussed labor conditions in the 

CNMI including the recruiting practices for obtaining contract 

workers in the Philippines and the living conditions and wage 

payment arrangements of the contract workers brought to work in 

the CNMI. The discussions focused on the responsibilities of the 

various federal agencies in enforcing labor laws in the CNMI as well as actions that can be taken by both Governments to improve the conditions faced by overseas contract workers in the CNMI. 
3 

The Philippine government representatives pledged support to the u.s. officials to assist the U.S. Departments of Labor and 

Justice in enforcing federal laws in the CNMI by identifying and 

prosecuting offending employers and recruiters in the Philippines 

as well as to help locate former employees for the purpose of 

both obtaining information and for distributing back wage checks. 

During the past year, the Wage Hour investigators stationed in 

the CNMI conducted 20 investigations in the garment, security, 

building services and the hotel/restaurant/night club industries. 

These enforcement actions resulted in the finding of over 

$1,288,000 in unpaid back wages due to over 1,600 workers. 

For the remainder of FY 1996 and into FY 1997, the enforcement 

plan provides for an expansion of the on-going directed 

enforcement efforts in the garment, construction, 

hotel/restaurant/night club (both large and small firms) and the 

security industries. As a part of these investigations 

information will be gathered as to the compliance ripple-effect 

that prior investigations in a particular industry sector have 

had on businesses not previously investigated. In addition, over 

the next 18 months the Division will reinvestigate a sample of 

the firms previously investigated to determine the current 

compliance status of these firms. The results of these analyses 

and reinvestigations will allow the Division to better plan for 

future enforcement initiatives including the more frequent use of 

consent decrees, injunctions and litigation. 

For the next 18 months the education and outreach component of 

the compliance plan will focus on businesses that have no formal 

association or industry group representation. The Chamber of 

Commerce will be contacted and asked to facilitate the scheduling 

of educational outreach meetings with firms in the security 

industry as well as retailers and the smaller hotels, bars and 

restaurants not currently members of the Hotel Association. 

Another outreach effort planned for the next year will focus on 

ensuring that new workers brought to the CNMI understand their 

rights under the Federal labor statutes that apply in the 

Commonwealth. Departmental staff from the Wage Hour Division, 

OSHA and the Solicitor's office will develop and distribute 

comprehensive and easily understood literature concerning 

employee rights and employer responsibilities under applicable 

Federal labor laws. 
~9 

4 

This information will be made available through the local Wage 

Hour office, the Philippine consulate, the Philippine overseas Employment Office, Karidot (Catholic Relief Organization in the 

CNMI), the CNMI Chamber of Commerce as well as various offices of 

the CNMI Departments of Labor and Commerce. 

During the next year, the Division will continue discussions with 

local officials regarding structural changes in the CNMI labor 

laws that would help provide greater protections in ensuring 

proper and timely wage payments for employees not covered by the 

Federal labor laws. · Most of these workers are nonresident aliens 

employed as farmworkers, maids and as employees of small 

businesses in the CNMI. 

The total FY 1997 costs for maintaining two Wage Hour 

investigators in the CNMI, continued additional enforcement 

support from the senior Wage Hour investigator stationed in Guam 

and the conduct of two to three multiagency (WH and OSHA) task 

force concentrated enforcement efforts in one or two selected 

industries is estimated to be $325,200. 

Finally, the Administration's position on applying the Federal 

minimum wage to the CNMI was articulated in the previous report 

to the Congress in April 1995. In that report the Department 

proposed that the most expedient, fairest and least disruptive 

approach to applying the minimum wage provisions of the FLSA to 

the commonwealth would be to incorporate into the FLSA the 

current Commonwealth minimum wage law, including its 

$.30 an hour annual increases until the mainland minimum wage 

level is achieved. 

The CNMI government and the Legislature had agreed on the current 

CNMI law after lengthy discussion, debate and input from the 

business community in the Commonwealth. This approach would 

establish phased minimum wage increases under Federal law and 

thereby eliminate the possibility of future local action to 

either further postpone or eliminate this gradual increase in the 

minimum wage for workers in the islands. In addition, it would 

allow Federal enforcement of the minimum wage, thereby enhancing 

enforcement resources available. 

It is quite clear that the labor problems in the CNMI cannot be 

resolved without a sustained long-term commitment by the Governor 

and the Legislature to change and improve the conditions that 

have given rise to these problems. While the Governor, in the 

past, has been supportive of increasing the minimum wage, there are others in the Commonwealth who benefit from maintaining the 

status quo and will continue to resist increases in the minimum 

wage and other reforms to improve the living and working conditions of these nonresident alien workers. 
280 

5 

It is unfortunate that during the past year the Legislature was successful in passing legislation, and then overriding the 

Governor's veto of the bill, which temporarily stopped the 

scheduled $.30 per hour CNMI minimum wage rate increase (from $2.75 to $3.05 per hour) set to go into effect on January 1, 

1996. This legislation postponed the scheduled increase to July 1, 1996. 

During a February visit to the commonwealth by Senators Frank 

Murkowski and Daniel Akaka, the Governor assured the Senators 

that he would submit proposed legislation which would have 

reinstated the $.30 per hour minimum wage increase effective 

April 1, 1996. The CNMI House approved the April 1st minimum 

wage increase, however the Senate proposed an April 15th increase 

with an exemption for small businesses. In mid-April the House 

rejected the Senate version of the minimum wage increase because 

of the change that exempted small businesses. In a press conference on April 19th, Governor Tenorio indicated he now supports the postponement of a minimum wage increase until July 1, 1996, while a wage specialist from the U.S. mainland conducts a study on the issues and how increasing the minimum wage will 

affect the Commonwealth. Thus the current CNMI minimum wage remains at $2.75 an hour, as it has been since January 1, 1995. 

Federalizing the minimum wage in the CNMI will ensure that the 

wage rate increases enacted by the government and Legislature three years ago will go into effect as intended thus providing for gradual and predictable increases in the minimum wage rate 

which is paid to virtually all the nonresident workers who are employed in the low-wage labor-intensive industries in the 

Commonwealth. 
~1 

6 

Solicitor's Office Activities 

Wage and Hour Actions 

The Department's Solicitor's (SOL) and Wage and our Division (WH) 

continued with the jointly developed enforcement strategy 

focusing on industries with poor compliance records. In FY 1995, 

SOL and WH concentrated their efforts on the private security 

guard industry. After WH investigations revealed serious FLSA 

violations, SOL filed actions in the U. S . District Court against 

the largest security. companies in the CNMI . 

An action seeking preli minary and permanent injunctions, back 

wage and liquidated damages was filed in Reich v. Antonio Aldan 

Reyes dba Business Protection Service, for monetary violations of 

the Fair Labor Standards Act (FLSA) . Defendant Reyes, then CNMI 

Chief of Police, agreed to the injunctions and back wages and 

liquidated damages totaling $692,569 . 

A similar action, Reich v. Famco Security Services et al . , was filed against a private security guard company and its 

proprietors. One of the defendants is the Minority Leader in the 

Northern Marianas House of Representatives . The complaint 

alleged the firm willfully and repeatedly violated the overtime 

provisions of the FLSA by failing to meet their payroll on numerous occasions and by failing to pay the mandated overtime 

premium on those occasions when wages were paid. After agreeing 

to a preliminary injunction, all defendants subsequently 

defaulted . A judgment was entered awarding 44 employees $513,416 

in back wages and liquidated damages. The defendants have 

subsequently filed for a discharge of their debts in Bankruptcy 

Court . 

Finally, in Reich v. Saipan Manufacturers. Inc .. et al , SOL 

filed an action against this Saipan-based garment factory and its 

parent corporation for overtime violations related to defendants ' 

practice of deducting the costs of placement fees and airline 

transportation. In a consent judgment, the court awarded 

$136,189 in back wages to 376 alien workers for violating the 

overtime provisions of the FLSA. This is the first time a Saipan-based corporation agreed, in writing, to language 

prohibiting a company from taking payroll deductions, directly or indirectly, to recoup costs associated with recruitment and/or 

transportation of workers to the CNMI. Such recruitment-related 

payroll deductions are a widespread practice since a substantial 

portion of the CNMI workforce consists of nonresident alien 

workers. 
282 

SOL filed a cross-appeal of a partially adverse decision in Reich 

v . Japan Enterprises Corp . . et al . , involving Filipina nightclub 

"waitresses" employed by Japanese club owners on the island of 

Saipan. The employees worked a 42-hour, seven-night week and 

were confined to fenced-in quarters during their non-work hours. 

The Department of Labor alleged, and the court agreed, that the 

employees were not properly paid for all hours worked , including 

the time in confinement . In addition , the Department alleged 

that improper deductions were taken from the employees' wages . 

The court awarded back pay to the employees in the amount of 

$410 , 497 . Additional damages are sought on appeal . 

OSHA Actions 

On the eve of trial, SOL successfully negotiated settlements 

involving employers in Rota and Saipan . The resulting Settlement 

Agreements and Orders affirmed 119 citations against 4 employers 

and collected $147,715 in penalties . Included among these 

employers was Will i e Tan ' s L&T Companies which agreed to withdraw 

its contest to 53 citations and pay $6 0, 475 in penalties . 

Additionally, SOL initiated collection actions in U. S . District 

Court against two firms for the failure to pay OSHA penalties 

which had become final . The two firms agreed to pay $50,000 and 

$20,000 respectively, on installment terms with interest. 

Other Activity 

In June 1995, SOL staff was part of a Federal delegation who met 

with officials of the Philippine government to discuss labor 

conditions experienced by their nationals in the CNMI . 

Information was exchanged and ideas were discussed on how to 

improve the conditions of nonresident alien workers in the CNMI 

and the enforcement of Federal law . 

SOL staff traveled to China to oversee the distribution of $4 . 6 

million in back wages owed to Chinese workers which was recovered 

from American International Knitters Corporation, a garment 

factory operated by Willie Tan. In addition, the Corporation had 

pleaded guilty to criminal charges related to filing of false 

documents with the U. S . Government in relation to wage kickbacks. The final installment on the judgment is due October 1, 

1996. 

Additionally, SOL worked closely with the U.S. Attorneys for Guam 

and the CNMI as well as other law enforcement agencies for the 

purpose of improving U. S . Labor's enforcement of federal labor 

laws in the Commonwealth. Communications with the CNMI Attorney 

General have been streamlined so as to allow quick and easy 

retrieval of information on the status of businesses and the 

identification of proprietors, directors, shareholders and 

corporate officials. 
8 

Anticipated Activities 

SOL attorneys have been in regular contact with the Wage and Hour 

Director of Enforcement in the Pacific offering informal 

assistance with respect to ongoing investigations. Where Wage 

Hour is not able to obtain back wages and future compliance on a voluntary basis, or where a court order is considered necessary 

because of the employer's history or the nature of the 

violations, SOL will consider filing hot goods, preliminary and 

permanent injunctions, seeking back wages, liquidated damages, 

and other relief as appropriate . 

It is anticipated that enforcement activity will pick up and that 

additional cases will be referred to SOL in the next eighteen 

months. Additional cases are also anticipated under OSHA as a result of significantly greater enforcement activity in the CNMI. 

As a result of the greatly enhanced investigation activity to be 

conducted by OSHA, an additional $95,000 is being requested in FY 

1997. 

SOL will coordinate with Wage-Hour and OSHA regarding training of 

CNMI staff and the regulated community. 
284 

9 

OCCUPATIONAL SAFETY & HEALTH ADMINISTRATION 

PROGRAM ACTIVITIES IN CNMI 

July 1995 • March 1996 

As a part of the 1995 Congressional/DOl Federai-CNMI Labor. lminigation and Law 

Enforcement initiative, DOUOSHA received $400,000 for a two-year training and 

edu:;ation program intended to familiarize local employers and employees on their 

rights and responsibilities as regards the OSH Act. Of the $400,000, $288,000 was 

granted for the Northern Marianas College (NMC) for the development and 

administration of the training and education effort. The balance. $112,000, was 

intended to fund an additional FTE for OSHA for the purpose of providing technical 

assistance and monitoring of this program. 

The training and education program by NMC was compressed into 18 months and was 

initiated in July 1995. The program includes 34 training and education seminars and 

workshops for employer/employee groups regarding rights and responsibilities under 

OSHA, inspection procedures. appeals process, and occupational safety and health 

regulations. 

The target industries for these seminars were garment manufacturing, 

construction, and labor camps related to the first two industries. 

Seminars and workshops were to be conducted in Saipan. Rota and 

Tinian. 

The first three months of the program were dedicated to organizing staff, developing 

curricula, and q :a in ing of trainers by OSHA. 

The initial seminar and related workshops were held in Saipan in September. The 

seminar highlighted the basic requirements of OSHA in the targeted industries. Two 

hundred twenty-one attended this session. Interpreter services translated 

presentations into Chinese and Tagalog for the benefit of the audience. Ninety percent 

of the attendees represented were from the targeted industries and 90% indicated their 

companies provided temporary housing to employees. 

To date, 14 seminars have been held with 1,023 people attending, for an average 

seminar attendance of 73. Ninety-seven percent of the attendees are from either 

construction or garment manufacturing companies. 

Thu:·; far. NMC has drawn down approximately $120,000 of their $288,000. There are 

20 seminars still planned before the expiration of OSHA's agreement. NMC has 

$168,000 in funds remaining to cover the costs of these efforts. 
285 

10 

AlthoJugh OSHA was unable to acquire an extra full time position dedicated to technical 

assistance for the NMC, it has expended four on-site visits and approximately 50 

perc'ent of an existing FTE to assist on the program. This leaves approximately 

$70,000 yet to be spent by OSHA on this effort. 

We at OSHA are pleased with the training and education program administered by 

NMC. Voluntary compliance is a key aspect of the OSH Act and training and education 

is the cornerstone to voluntary compliance. The seminars that we have observed are 

of good quality and are serving to accomplish our intent. It also demonstrates that 

OSHA is using tools in addition to enforcement to achieve work place safety. 

OVERALL ASSESSMENT OF OCCUPA nONAL SAFETY AND HEALTH 

NEEDS IN CNMI 

Our enforcement efforts continue to demonstrate major areas of non-compliance with 

basiC safely and health requirements on construction sites, in garment 

manufacturing, and in labor camps. Non<ampliance appears to be directly related to 

the use of foreign contractors and foreign workers employed at these sites. 

While we believe that training and education is important, we also know that there is a 

limit to the value of such a program In CNMI. Further, while we also believe that 

consultative services have value, we are not certain that there is a need for a full time 

consultant in Saipan. Privatizing consultative services may be more practical in this 

location. 

In view of our continued finding of violations in garment manufacturing, construction, 

and labor camps, we have concluded that an increased enforcement presence 

augmented by a small maintenance level of training and education and a privatized 

consultation service is desirable. Further, based on our past experience dealing with 

resident inspectors and contract enforcement efforts contrasted with our more 

successful team inspections conducted by off-island compliance officers, we believe 

unsr·heduled team inspections Is a preferential means of maintaining our enforcement 

presence. 

PRCGRAM ACTMT/ES FOR APRIL 1898 ·DECEMBER 1990 

We plan to complete the current training and education e!Tort. We believe that at the 

conclusion of the current training program that a minimal maintenance training and 

education effort will satisfy the need to • train new employers and employees. 
286 

11 

This would include three to four seminars per year. Monies budgeted but not yet 

expended for OSHA technical assistance will be shifted to cover additional 

enforcement visits in FY-96 and into FY-97. 

Currently, OSHA is conducting two to three team inspections in CNMJ each year. 

OSHA has determined that these team inspections produce more inspections and more 

penalties than resident inspectors in other similar locations. OSHA believes that there 

is an immediate need for two to three additional team inspections each year in CNMI. 

!f the garment industry grows further, or if the number of foreign workers increases, 

there may be an eventual need for a greater enforcement effort. The increased 

enfc.rcement presence inevitably means increased litigation costs. We are of the firm 

opinion that team inspections rather than a resident inspector is the most effective way 

we will be able to achieve the desired result of compliance with the OSH Act by 

garment manufacturing. labor camp owners. and construction operations. 

Continued congressional funding at the current levels would provide a very welcome 

assistance to OSHA in CNMI. 
12 

Employment apd Trainina Administration 

In December 1995, staff from the San Francisco Regional Office of 

the Employment and Training Administration (ETA) conducted an on- site technical assistance visit to the Commonwealth of the 

Northern Mariana Islands (CNMI) to review the local labor 

certification system. As a result of observing the current 

processes and meetings with various officials in the CNMI labor 

certification program, the ETA staff provided recommendations 

which, if implemented, would resolve many of the administrative 

and technical problems found during the review of the present labor certification system. 

Senior officials in the CNMI employment service are to review the 

recommendations and will implement those that improve the 

employment service processes and reduce the dependence on non- resident alien workers. In order to improve the operations in 

the local employment service office, CNMI officials are seeking 

to hire an Employment Service Advisor who has previous experience in the operations of an employment service office including technical knowledge in the operations of a labor certification 

program ETA in San Francisco are assisting in the search for 

appropriate candidates for this position. 

Both the Federal and the local CNMI officials agree that the 

local officials would benefit from technical assistance and 

information sharing from other state employment security agencies such as the office located in Hawaii. 

Cooperation and coordination on the part of the Federal staff is 

planned on an as-needed basis through the remainder of 1996 with 

follow-up on-site visits to provide additional technical support after the CNMI staff begin to put in place the improvement initiatives. Continued support will be provided through fiscal 

year 1997. 

Continued technical support and assistance to be provided by ETA 

to the CNMI through the Department of the Interior's reimbursable 

agreement for fiscal year 1997 is estimated to cost $15,000. 
288 

13 

National Labor Relations Board 
289 

REPORT OF THE NATIONAL LABOR RELATIONS BOARD 

ON THE FEDERAL-CNMI LABOR, IMMIGRATION AND LAW 

ENFORCEMENT INITIATIVE FOR THE 

PERIOD MARCH 1995 ·MARCH 1996 

BACKGROUND 

14 

The National Labor Relations Board is an independent Federal 

Agency established to administer the National Labor Relations Act (NLRA), 

the basic law governing relations between labor unions and business 

enterprises engaged in interstate commerce. The purpose of the NLRA is 

to serve the public interest by reducing interruptions in commerce caused by 

industrial strife. It seeks to do this by providing orderly processes for 

protecting and implementing the respective rights of employees, employers 

and unions in their relations with one another. 

In its statutory assignment, the NLRB has two principal functions: 

(1) to determine and implement, through secret-ballot elections, the free 

democratic choice by employees as to whether they wish to be represented 

by a union in dealing with their employers and, if so, by which union; and 

(2) to prevent and remedy unlawful acts, called unfair labor practices, by 

either employers or unions or both. Micronesian Telecommunications, 820 

F. 2d 1097, 125 LRRM 3102 (9th Cir. 1987), acknowledged that the NLRB 

can assert jurisdiction over employers doing business in the CNMI. 

NLRB ACTIVITY IN CNMI DURING PAST YEAR 

During the past 12-16 months, about 60 unfair labor practice charges 

and seven representation petitions have been filed in our Subregion 37, 

Honolulu Regional Office involving CNMI employers and employees that 

work there. Subregion 37 estimates that these unfair labor practice 

charges, many of which are still pending, affected about 1500-2000 

employees. The representation cases resulted in six elections, involving a 

total of about 1500 employees. 
290 

15 

Subregion 37 believes that a large number of the unfair labor practice 

and representation cases were filed because of the publicity received in our 

handling of Saipan Hotel Corporation d/b/a Hafadai Beach Hotel. filed in the 

fall of 1994. 

Hafadai Case 

In Hafadai, a group of legal alien workers employed by the Hotel filed 

numerous charges alleging that the Hotel committed various unfair labor 

practices. At the same time these workers formed their own labor 

organization and filed a petition seeking an NLRB-conducted election. A 

hearing was conducted in January 1995 on the representation petition and 

as to the propriety of the Board asserting jurisdiction in the matter. 

Thereafter, a decision was issued by the Regional Director for our Region 

20 , San Francisco Regional Office (which has responsibility for Subregion 

37) and, later by the Board, finding that jurisdiction was properly asserted . 

An election was conducted on July 14, 1995 and ultimately the 

petitioning Union, Hotel Employees and Restaurant Employees Local 5, 

was certified as the collective bargaining representative of the employees. 

The Hotel declined to bargain with the Union, which resulted in an unfair 

labor practice charge alleging an unlawful refusal to bargain. On 

December 19, 1995 the Board issued a decision at 320 NLRB No. 24 

reiterating its assertion of jurisdiction in the Hafadai matter and finding that 

the Hotel had unlawfully refused to bargain with the Union. The Hotel 

sought review of this decision in the Ninth Circuit Court of Appeals , and the 

Agency filed a cross petition for enforcement. A decision is pending. 

At the same time, numerous unfair labor practice charges were filed 

against Hafadai with Subregion 37. After an extensive investigation, it was 

determined that approximately 25 employees of the Hotel were terminated 

because of their union activity and support. Because of the egregious 

nature of these and other alleged unfair labor practices, the Regional 

Director sought immediate interim injunctive relief, under Section 1 O(j) of the 

NLRA from the United States District Court for the Northern Mariana 

Islands. In June 1995 the judge granted the injunction and required the 

Hotel to immediately cease its unlawful conduct and reinstate the 

discharged employeee-. 
291 

16 

Instead of participating in an unfair labor practice trial before an 

administrative law judge, representatives of the Hotel and of the General 

Counsel of the NLRB entered into a stipulated record which is currently 

pending before the Board in Washington. It should be noted that the 

Respondent essentially admitted it discriminated against the employees 

because of their union activity and support, but contested the Board's 

jurisdiction. 

Union Organizing Activity 

While the Hafadai case arose in the hotel industry, union organizing in 

the CNMI has involved a variety of work settings, including a brewery, 

restaurants, department stores, grocery stores, shoe stores, bakeries, ·· 

supper dubs, and garment manufacturers. It has largely involved the 

nonresident workers who are of Philippine ancestry. 

In order to substantiate its organizing efforts and to show a 

commitment to the employees in the CNMI, the Hotel Employees and 

Restaurant Employees Local 5, AFL-CIO, informed us in February 1996 that 

it has established an office in the CNMI. That office has filed a steady 

stream of unfair labor practice charges in the past few weeks. We 

anticipate that the Union's presence will lead to an ongoing flow of charges. 

Pending Investigations and Litigation 

As of March 1996 the Agency had pending before it a larger than 

anticipated number of CNMI cases. At the initial investigation stage there 

were 42 unfair labor practice charges involving various employers who 

employ over a thousand employees. The Agency has issued complaints in 

seven cases, and complaint has been authorized in two additional cases. Of 

these, two cases. are awaiting determination by the Board and, as noted 

above, one significant case (the Hafadai case) is pending before the 9th 

Circuit Court of Appeals. The other complaint cases are awaiting trial before 

an administrative law judge . 

. Additionally, the Regional Director for Region 20 (which covers parts 

of California, and Hawaii, American Samoa, Guam and the CNMI) has 

recommended to the General Counsel that the Agency seek injunctive relief 

in the U.S. District Court ordering reinstatement of approximately 38 
292 

17 

employees who were unlawfully terminated from a major CNMI employer. 

Two other such requests are in the final stages of investigation and are 

being considered by the Regional Director. Such cases involve significant 

amounts of investigation, analysis, and legal preparation. 

In addition to the litigation mentioned above, the Agency has also 

been successful in reaching settlements in five cases. The settlements 

have ranged from the posting of notices to backpay and reinstatement of 

employees. 

Contact with Various CNMI Government Agencies and Officials 

Our Agency has had numerous written and oral communications with 

a variety of CNMI government officials ranging from the Director of CNMI 

Labor and Immigration to the Acting Attorney General. Most of these 

communications have arisen in the context of an apparent conflict between 

the National Labor Relations Act and the "local preference" provisions of the 

CNMI's Nonresident Worker's Act. 

In all of our contacts, we have expressed our desire to work with the 

CNMI government in a cooperative effort to resolve some of the aforesaid 

apparent conflicts. It is recognized that our positions do not always 

coincide. On several occasions we have received cooperation and 

assistance from local officials. For example, in June and July 1995 the 

government was helpful in assisting the Agency to obtain temporary work 

permits for the nonresident employees at the Hafadai Hotel who were 

ordered reinstated pursuant to the U.S. District Court's decision discussed 

above. 

However, CNMI policies are subject to change. Thus, in a matter of 

months (in December 1995), the government informed us that the CNMI 

would no longer grant temporary work permits to persons who were fired or 

non-renewed in their nonresident employment contracts with CNMI 

employers. Further, we were informed that those individuals would be 

subject to deportation. CNMI Labor & Immigration then notified certain 

individuals involved in some of our cases that they would be subject to 

deportation. This included two prominent union activists, Vicente Perez and 

Honoria Cambronero. Mr. Perez was forced to voluntarily leave the CNMI 

rather than suffer the consequences of a deportation order, notwithstanding 
293 

18 

his status in the Hafadai case referred to above (in that case, Hafadai 

admitted it refused to rehire Mr. Perez because of his union activity.) The 

proposed deportation of Mr. Cambronero did not occur because the CNMI 

Department of Labor acted to accept and consider a claim he filed with 

them, which entitled Mr. Cambronero to a temporary work permit. 

The above shift in policy meant that persons who alleged 

discrimination because of their union activity could have been deported 

before an NLRB agent could investigate their allegations. Similarly, 

employers could threaten nonresident employees with non-renewal of their 

contracts if they joined a union, complained about working conditions, spoke 

to an OSHA inspector or filed a complaint with the Department of Labor. In 

face of this, on February 16, 1996 NLRB General Counsel Fred Feinstein 

notified the CNMI Acting Attorney General in writing that the Agency would 

consider measures (including legal proceedings in the U.S. District Court for 

the Northern Mariana Islands), to prohibit the above policy and protect the 

workers' rights. 

Thereafter, the CNMI government issued an interim policy whereby 

the CNMI Department of Labor and Immigration will issue temporary work 

permits to persons who file valid claims with the NLRB. Thus these 

individuals would not face deportation if they were able to obtain work. 

The Agency has suspended its plans for legal action in light of the 

interim policy. CNMI officials have requested a greater NLRB presence in 

the CNMI, so that unfair labor practice charges could more quickly be 

investigated. The CNMI government was concerned that nonresidents 

would simply file NLRB claims to remain in the CNMI. Moreover, if the 

NLRB had a greater presence, an investigation would be able to segregate 

the nonmeritorious cases from those asserting viable claims. Further, the 

recent Congressional delegation to the CNMI has encouraged Federal 

Agencies to enforce U.S. labor laws, but to work in a spirit of cooperation . 

with CNMI governmental officials so that mutual concerns can be 

addressed. · 
294 

19 

Future Case Filing 

Based upon the foregoing and the apparent unabated growth in the 

CNMI, it is fair to say that the Agency underestimated the amount of time we 

would need a full time agent in the CNMI. Apparently there are plans for 

6,000 additional hotel rooms and an increased number of workers from the 

Peoples Republic of China. This would increase the number of nonresident 

workers and other employees who can avail themselves of U.S. labor !aws. 

The increased presence discussed above was not anticipated by our 

technical assistance request of November 28, 1 895. As a result, we will 

probably need to amend that request later in the fiscal year. Certainly a 

request for additional money so as to adequately staff our activities in the 

CNMI for fiscal year 1997 will be necessar; to handle the anticipated 

investigations, and legal proceedings, and to have a "presence" necessary 

to enforce the law. 

We anticipate that this increased presence would allow us to give 

training to CNMllabor officials and business leaders regarding the National 

Labor Relations Act. Further, we would hope to finalize more formal joint 

cooperative efforts with CNMI government officials. 

At present we have plans to send an experienced attorney from our 

San Francisco Regional Office to the CNMI for at least a 3-month period 

starting on or about April 8, 1996, or as soon as the Department of Interior 

receives the necessary Congressional funding. The U.S. Department of 

Labor has graciously allowed us to use some of their office space. That 

attorney will handle a variety of investigative and regal assignments, and 

serve as a source of information to people in CNMI who have questions 

about provisions of the NLRA. 

The per diem and air fare costs, as well as staff time, associated with 

this detail (and future details which will clearly be necessary) will be 

significant. In addition the Agency will face the costs of litigating meritorious 

unfair labor practices, including travel for the trial attorney and the 

administrative law judge, as well as court reporting and transcript costs. 

Cases, such as Hafadai, which require the Agency to seek interim 

injunctive relief in Federal Court pending disposition of the unfair labor 
295 

20 

practice allegations have the potential for additional travel and other costs, 

as do, inter alia, cases which may require a hearing to dispose of 

determinative challenged ballots or objections to a representation election. 

Proposed CNMI Rules and Regulations 

The CNMI government has specifically. requested the Agency to 

comment by the end of March on proposed rules and regulations from the 

CNMI's Department of Labor and Immigration. The Agency submitted 

comments on March 28, 1996. 

We want to emphasize that the NLRB General Counsel's office 

remains strongly of the view that, in order to effectuate the purpose and 

policies of the National Labor Relations Act, a nonresident worker must be 

permitted to remain in the CNMI pending final resolution of his case by the 

Board. This would, of course, include any legal challenges, including 

enforcement of Board Orders at the U.S. Court of Appeals. 

Future Funding of the Initiative 

The NLRB was not one of the original members of the Federai-CNMI 

Labor, Immigration and Law Enforcement Initiative. However, approximately 

1 year ago we became a member and have been most grateful for the 

assistance, support, and information supplied by the various task force 

members. 

As noted above, the NLRB has been involved in substantial litigation 

with various business entities. The cases have involved virtually every 

aspect of the CNMI's economy, and have required a significant expenditure 

of the Agency's increasingly limited staff time and budgetary resources. It is 

absolutely imperative that the Initiative continue to be funded. If the Initiative 

funding was decreased or eliminated our Agency would not be able promptly 

or effectively to carry out our mandate to enforce the NLRA. 
296 

U.S. Department of the Interior 

Office of Inspector General 

21 
297 

REPORT OF THE U.S. DEPARTMENT OF THE INTERIOR 

OFFICE OF INSPECTOR GENERAL 

ON THE FEDERAL-CNMI LABOR, IMMIGRATION AND LAW 

ENFORCEMENT INITIATIVE 

BACKGROUND 

22 

The Office of Inspector General provides policy direction for and 

conducts, supervises, and coordinates all audits, investigations, 

and other activities in the Department of the Interior (DOI) 

designed to promote economy and efficiency or prevent and detect 

fraud, waste, and mismanagement. The Inspector General is DOI's 

focal point tor independent and objective reviews of the integrity 

of operations; is the central authority concerned with the quality, 

coverage, and coordination of the audit and investigative services 

of DOI; and reports directly to the Secretary of the Interior on 

these matters. The Inspector General provides the means for 

keeping the Secretary and the Congress fully and currently informed 

about problems and deficiencies relating to the administration of 

DOI programs and operations and the necessity for corrective 

action. 

In the insular areas of Guam, American Samoa, the Virgin Islands, 

and the commonwealth of the Northern Mariana Islands, the OIG 

performs the functions of government comptroller through audits of 

revenues, receipts, expenditures, and property in accordance with 

the Insular Areas Act of 1982 (48 u.s.c. 1422). The OIG has 

additional audit responsibilities in the Federated States of 

Micronesia, the Republic of the Marshall Islands, and the Republic 

of Palau pursuant to the Compact of Free Association Act of 1985 

(P.L. 99-239). The authority of the OIG to conduct investigative 

activities in these areas is derived solely from the Inspector 

General Act of 1978, as amended. The Inspector General Act 

authorizes OIG personnel to conduct investigations only in those 

matters pertaining to the programs and operations of the 

Department. 

OFFICE OF INSPECTOR GENERAL 

PARTICIPATION ON THE CNMI FEDERAL TASK FORCE 

The OIG has been a member of the CNMI Federal Task Force since its 

inception. Indeed, prior to the creation of the task force, the 

OIG provided investigative coverage to the CNMI from its Guam Field 

Office. When the CNMI Federal Task Force ·,;as formed , the OIG 

expanded its investigation of public corruption in the CNMI as its 

contribution to the task force. A senior agent from the OIG's Guam 

Field Office is assigned to the task force and frequently travels 

to the CNMI in furtherance of task force investigations. This 

agent has extensive experience conducting public corruption 

investigations in the U.S. Territories. Currently, the OIG has 

five investigations that have been initiated as a result of task 

force efforts to ferret out public corruption in the CNMI. 
298 

CONSIDERATIONS FOR FUTURE PARTICIPATION 

BY THE OFFICE OF INSPECTOR GENERAL 

ON THE CNMI TASK FORCE 

23 

During the past year the OIG has received limited financial support 

(approximately $20,000) covering the costs of our agents' travel to 

the CNMI in furtherance of task force investigations. This 

arrangement is the result of negotiations with DOI's Director of 

Insular Affairs. The OIG did not receive any of the $7 million 

appropriated by Congress to support the Initiative and is not in a 

position, given our limited resources and small size (a total of 

only 39 agents) to absorb costs which may be associated with future 

task force activities. If additional support from the OIG is 

required, we recoDU11end that funding be provided to the OIG to 

support that effort. 
299 

U.S. Department of Justice 

Office of the Deputy Attorney General 

Drug Enforcement Agency 

National Institute of Corrections 

bnmigration and Naturalization Service 

Executive Office for the United States Attorneys 

United States Marshals Service 

Civil Rights Division/Criminal Section 

Federal Bureau of Investigation 

Criminal Division/Child Exploitation and Obscenity Section 

24/25 
300 

DRUG ENFORCEMENT ADMINISTRATION 

ASSISTANCE TO CNMI 

Based on the recommendations of a Federal interagency working group, Congress 

provided funding to various Federal agencies to be used to support a new federal initiative in 

addressing law enforcement, labor, immigration and revenue issues in the Commonwealth of t~.c 

Northern Mariana Islands (CNMI). What follows is a status report on the activities and 

accomplishments in the CNMI during the past year. Additionally, an assessment of the current 

situation was made resulting in the following Drug Enforcement Administration's 

recommendation to Congress. 

BACKGROUND 

On September 22, 1994, the Senate Subcommittee on Mineral Resources Development and 

Production heard testimony from Governor Froilan C. Tenorio of the Commonwealth of 

Northern Mariana islands (CNMI) and the Administration on labor abuse, law enforcement and 

immigration problems in the CNMI. As a result of this hearing, a federal interagency working 

group was formed to develop a coordinate Administration position on these issues. Additio.nally, 

the working group developed an initial plan for the allocation of $7 million appropriated by 

Congress under Public Law 103-332. · 

Subsequently, a Reimbursable Support Agreement was developed between the Department of ·· 

Interior (DOI), Office ofTerritorial and International Affairs and the participating Departments 

reimburse the participating Departments for direct costs in providing assistance to CNMI in 

accordance with specific plans and costs estimates. 

26 
301 

BACKGROUND lcontjnuedl: 

The Drug Enforcement Administration would enhance enforcement of Federal drug laws and 

train local law enforcement officials in drug investigative and enforcement techniques and 

practices. The working group, based on recent seizures of crystal methamphetamine ("ICE") in 

the CNMI from the Philippines, and their belief that there is a strong relationship between the 

aliens living and working in the CNMI and "ICE" trafficking in CNMI, recommended that the 

DEA station two (2) DEA agents in the CNMI for 112 ofFY95 and all ofFY96 and FY97. The 

estimated cost was $750,000. 

Before committing DEA personnel to CNMI, DEA elected to conduct the two separate on site 

assessments of the narcotics trafficking situation in the CNML The first assessment was a fact 

finding mission consisting of a series of in-depth interviews along with an extensive review of 

CNMI government records and other published statistical information in Saipan. The second 

facet of the original study entailed two Special Agents from Los Angeles, California 

participating· in actual enforcement activity in Saipan to determine the level of drug trafficking 

activity and to evaluate the sophistication of identified drug traffickers. 

Based on the results of these assessments the DEA has decided that the most efficient way to 

address the "ICE" problem was to conduct various training sessions for the CNM!law 

enforcement officials, and to establish an Ad-Hoc Task Force. DEA has received approximately 

$250,000 under P. L. 103-332. Thus far, utilizing the funds from P.L. 103-332, DEA has 

conducted three separate training schools ranging from one day to two weeks (Firearms and 

Tactical Training, Drug Identification/Certification Training Course, and Basic Narcotics Law 

Enforcement School). · DEA has also assigned a senior special agent from the Guam Post of Duty 

on a full time basis to travel to Saipan weekly (TOY) to supervise and initiate drug investigations 

with local law enforcement officers. We have initiated approximately 15 separate drug 

investigations involving "ICE" in Saipan. 

27 
302 

SUMMARY AND ACCOMPLISHMENTS 

March 8 1995 to May 19 1995 

DEA dispatched two (2) Special Agents from the Los Angeles Field Division (LAFD) to begin a 

comprehensive law enforcement assessment ·of the narcotics trafficking situation in the 

Commonwealth of the Northern Mariana Islands (CNMI). The fact finding mission consisted of a 

series of in-depth interviews and extensive review of CNMI government records and other 

published statistical infonnation in Saipan. 

Aupst 3 1995 to October 3 1995 

DEA dispatched the same two (2) Special Agents from the Los Angeles Field Division (LAFD) to 

initiate and complete the second facet of the original study in Saipan, CNMI. The agents 

incorporated actual enforcement activity to determine the level of drug trafficking and to evaluate 

the sophistication of identified drug traffickers. 

The following two cases were initiated in which pwcbases of high purity crystal methamphetamine 

were pwchased: 

The first case was a cooperative investigation involving DEA, FBI-5aipan, Saipan Department 

of Public Safety (DPS}, and Saipan Division of Customs (SOC). The investigation culminated with 

the indictment and arrest of the principal violator of Japeoese/K.orean descent and his wife, as well 

as three (3) local residaJis. Cbqes of Conspinlcy to Import (2 i USC 952), Conspiracy to Possess 

with Intent to Disttibuleand Dislribution(21 USC 841 and 846), and forfeiture of currency (485,000 

yen) have been levied apinst the defeudanls. Anolber indictment is. expected in the near future for 

the arrest of a second suspect, who is a local resident. Approximately 200 grams of crystal 

methamphetamine was seized from one of the defendants. 

The second case was a cooperative investip.tion involving DEA, FBI, Saipan DPS, and A TF. The 

principal defendant of Japanese descent sold 99% crystal methamphetamine and was arrested. 

Further investigation led to the seizure of 178.6 grams of crystal methamphetamine from the 

principal defendant. Pursuant to a plea agreement, the principal violator bas pled guilty to 

Distribution of Methamphetamine (21 USC 841 (a) (1)) which carries a minimum of 10 years 

imprisonment and is now cooperating with DEA and FBI. 

September 5 to ~tcmbcr 8 I 995 

The Firearms Training Officers from the LAFD conducted Firearms and Tactical Training for the 

Guam POD personnel as well as law enforcement personnel from Saipan. 

28 
303 

29 

SUMMARY AND ACCOMPLISHMENTS (continued); 

September 22 I 995 

Assistant Special Agent in Charge (ASAC) Sidney A. Hayakawa of the Hawaii District Office 

(HDO) dispatched three (3) Guam Post of Duty personnel to Saipan, CNMI to review 

investigative files relating to ten (10) homicides which CNMI officials claim to have some 

relation to drug trafficking. After an extensive review of the investigative case files and 

interview of the homicides investigators, the final conclusion did not support the claim of the 

CNMI officials that the homicides were drug related. 

October 1 0 to October I 3 I 995 

ASAC Hayakawa visited Agana, Guam and Saipan, CNMI and met with various government 

officials from Guam and Saipan, as well as Federal agency officials stationed in Guam and 

CNMI to discuss DEA assistance to the CNMI. 

October I 6 I 995 

ASAC Hayal:awa reassigned Senior Special Agent (SSA) Jake Fernandez of the Guam Post of 

Duty, on a full-time basis, to supervise and initiate drug investigations in Saipan, CNMI. Since 

his reassignment, SSA Fernandez has been working jointly with Saipan DPS and Customs 

personnel, along with other Federal agencies on drug related investigations. Once the proposal to 

form an AD-HOC Task Force is approved, SSA Fernandez will be in charge of this Task Force. 

It is anticipated that SSA Fernandez will spend 90% of his time on a TDY basis in CNMI. 

October 30 I 995 

DEA's Western Laboratory dispatched three (3) Forensic Chemists to conduct a one day Drug 

Identification/Certification Training Course in Saipan, CNMI. There were a total of76 students 

who attended this course. They were from DPS and Customs personnel from Saipan, Rota, and 

Tinian. 
304 

SUMMARY ANP ACCOMPLISHMENTS <continued); 

October 31 1995 

Special Agent in Charge (SAC) Robert E. Bender of the Los Angeles Field Division, based on 

the two separate assessments of the level of drug trafficking activity and composition of the drug 

traffickers in the CNMI, submitted a written request to DEA Headquarters, proposing to form an 

AD-HOC Task Force using the remaining funds allocated to DEA by the Department oflnterior 

under Public Law 103-332. The proposal would cross designate and provide Title 21 authority 

to select law enforcement officers from the Saipan Department of Public Safety and the Saipan 

Division of Customs. Additionally, the agreement would pay for the overtime for these officers, 

up to a sum equivalent to 25% of the salary of a GS-10, Step I, Federal employee per officer per 

annum and provide funding for the purchase of evidence and information. This proposal was 

presented, in lieu of opening a DEA office in Saipan, to the Governor of CNMI, the Attorney 

General of CNMI, and heads of the DPS and Customs during ASAC Hayakawa's recent visit to 

Saipan. The CNMI officials were very much in favor of the proposal and would want to see this 

proposal be implemented. 

November 7 1995 to Noyember 19 1995 

DEA dispatched three (3) Special Agents from the Office of Training, International Training 

Section, along with an agent from the Guam Post of Duty to conduct a two (2) week Basic 

Narcotics Law Enforcement School in Saipan, CNMI. Approximately 45 law enforcement 

officers attended this school. They were from DPS and Customs personnel from Saipan, Roia, 

and Tinian. 

January 3 I 1996 

30 

On January 31, 1996, DEA approved the formation of the Task Force. On February 28, 1996, 

Governor Froilan C. Tenorio presided over the official signing ceremony of DENCNMI Ad-Hoc 

Task Force agreement in Saipan, CNM!. Besides Governor Tenorio, Special Agent in Charge 

Robert E. Bender of the Los Angeles Field Division of DEA, Attorney General C. Sebastian Aloot 

of Saipan, Chief Jack S. Shimizu of the Guam Police Department, Commissioner Jose Castro of 

Saipan Department of Public Safety, Secretary ofFinancc Antonio R. Cabrera (for Saipan Customs), 

and United States Attorney Frederick A. Black, District of Guam and the CNMI, as well as other 

-Federal and local office heads were in attendance. 

Thus far, we have initiated 15 separate crystal methamphetamine drug investigations involving either 

Korean nationals, Japanese nationals, Filipino nationals or Chamorros (local residents). 
305 

31 

ASSESSMENT OF THE CURRENT SITUATION· 

Crystal methamphetamine is the drug of choice followed by marijuana and continues to be readily 

available in the CNMI. Crystal methamphetamine being imported into the CNMI from the 

Philippines and Japan is for local consummation only. Smugglers are using internal body carry to 

smuggle the drug into CNMI. Crystal methamphetamine is sold on the streets in Saipan by the 

"plate"; a $50 plate is for personal consumption, a $100 plate is approximately 1/5 gram, a $200 

plate is approximately 215 gram, and a $500 plate is approximately 1 gram. Unless you are well 

known as an established "ICE" trafficker, it is very rare and difficult to purchase an ounce or more 

of the drug in Saipan. Local businesses, private residents, gambling establishments (pokers rooms) 

and, Karaoke/bars lounges are known locations to purchase "ICE". Based on actual undercover 

negotiations, debriefing of confidential sources, and intelligence information, there is no substantial 

evidence of a truly organized effort to import or transship drugs into the CNML Although targeted 

Japanese nationals are significant traffickers by CNMI standards and have ties to Japanese organized 

crime (Y AKUZA), they appear to be operating independently, primarily for personal gains. There 

is no one faction that controls or is responsible for the drug and its distribution in the CNMI. 

Jewelry has been known to be used as a form of payment or used in exchange for "ICE". Property 

crimes (burglary cases) in the CNMl has a direct correlation to illegal drug activities. There appears 

to be various distributors who are known to each other and will exchange or sell their "ICE" to one 

another. However, there are five ethnic groups that are primarily involved in the selling of "ICE"; 

they are Filipinos, Chamorros, Chinese, Koreans and Japanese. "ICE" is also sold on school 

grounds to high school teenagers. Approximately one half of the CNMl population consists of 

immigrant workers from the Philippines and surrounding areas. These alien workers fuel the 

consummation or need for "ICE" in the CNMI. 

RECOMMENDATION TO CONGRESS: 

The main purpose of the DENCNMI Ad-Hoc Task Force is to provide training in drug 

investigations to local law enforcement officers and to apply what they learn in initiating actual drug 

investigations. This approach will instill self-confidence to the local law enforcement officers in 

initiating drug investigations and will make them become self-sufficient. Local law enforcement 

personnel in CNMI lack the resources, competence and funding necessary to adequately confront 

the "ICE" problem in the CNM!. This process has just started with the signing of the DENCNMI 

Ad-Hoc Task Force agreement. We would like to assess their progress and provide advanced 

training in investigative techniques and the utilization of technical equipment. Additionally, 

prevention and drug awareness education are key components in a successful program. Experience 

is the best teacher and time will be the best indicator as to our success. 
306 

RECOMMENDATION TO CONGRESS Ccontjnucd· 

DEA's recommendation would be to continue support and fund this Task Force in the amount of 

$250,000 for Fiscal Year 1997. If approved, the additional funds would be used to initiate drug 

investigations and to purchase technical equipment (i.e., kel-units, binoculars, tape recorders, raid 

and safety equipment, video and audio equipment, etc.}, to aid local law enforcement officers in 

conducting narcotics investigations. Additionally, the funds would also be used to upgrade their 

computers and to provide programs for case and confidential source management and to provide 

additional training in intelligence gathering and interviewing techniques. 
307 

U.S. Department of !ustice 

National Institute of Corrections 

Washington, DC 20534 

COMMONWEALTH OF THE NORTHERN MARIANA ISL&~DS 

CORRECTIONAL REVIEW 

U.S. Department of Justice 

National Institute of Corrections 

March 25, 1996 

33 

Since the initial meeting in Saipan o n November 1 and 2, 1994, the 

National Institute of Corrections (NIC) has worked with the 

Commonwealth of the Northern Mariana Islands (CNMI) and fedex·al 

criminal justice and law enforcement agencies to provide 

correctional expertise anc assistance. The $50,000 transfer from 

the Department of Interior enabled NIC to complete an assessment of 

CNMI's corrections services and future needs and to provide limited 

technical assistance and training. 

BACKGROUND 

February 6 through 10, 1995 

NIC officials completed an assessment of CNMI's correctional 

programs and future needs. All correctional facilities were 

visited. In addition to working closely with Public Safety 

personnel, we met with the Lieutenant Governor, legislators, 

juvenile authorities, immigration officials, citizen groups, the 

resident federal judge, and federal, state, and territorial 

officials in CNMI, Guam, and Hawaii. The overall impression was that there was little or no knowledge that correctional expertise 

existed. There was a consensus that change was needed. 

July 31 through August 4, 1995 

NIC officials returned to Saipan to present a modified Correctional 

Management Training Program with special emphasis on creating 

policy and p=dures. The training was well attended by top 

officials from Public Safety, Immigration, Customs, and the 

Governor's Planning Group. Before the end of the week, five 

correctional policies and the procedures had been developed and 

written. Also, this week was used to identify what would be needed 

for an action plan for corrections. 
308 

FINDINGS 

In CNMI, adult corrections is located organizationally within the 

Department of Public Safety. There is a Corrections Division with 

a Corrections Director . Public safety officers are assigned as 

needed to corrections; none are permanently assigned to 

corrections. Correctional facilities are located on three of the 

islands - Saipan, Tinian, and Rota. These facilities consist of: 

- a detention facility (unsentenced) (Saipan) 

- a jail (sentenced) (Saipan) 

- a women's unit (sentenced and unsentenced ) (Saipan ) 

- a work release unit (Saipan) 

- police lock-ups (Tinian, Rota) 

The facilities in Saipan are adjacent to each other, creating a 

small correctional complex. 

Juv enile offenders are handled by Youth Services . A juvenile 

facility has been closed for repairs . Although the repairs are 

near completion, the opening may be delayed for lack of operating 

funds and community resistance. If Youth Services needs to house 

a juvenile, the individual is housed in a local hotel. No juvenile 

was in that level of supervision during any of our visits. 

There is no immigration holding facility. If the need arises, the 

individual is held by Public Safety. There is no policy or 

procedures for handling juvenile immigrants or immigrants with 

minor children. 

The U. S . Marshals Service has a contract with CNMI to house federal 

prisoners, when needed . 

The following are some additional findings from NIC's assessment, 

made during our first visit and reconfirmed during the second 

visit: 

Correctional services in CNMI do not meet the American 

Correctional Association's Standards, the United Nations 

Standards, or any other professional correctional standards . 

- Jails and prisons have experienced court interventions for 

similar conditions of confinement or operating practice. 

- The population appears to range from 70 to 130 inmates. 

- There is very limited use of inmate counts as a security 

tool or to develop baseline , management data. 

- Although ~ic safety employees receive public safety and 

related police training, no jail or prison related training is 

provided. Most staff have not seen any other jail or prison 

operation. 

34 
309 

- There is no inmate classification system. 

housed where there is a vacant bed or space. 

Inmates are 

- Women are housed separately. (There has been, at least, one 

lawsuit concerning a possible exception to this rule . ) 

- Seven to nine public safety officers are usually assigned to 

cor r e ctional duties per shift. There is limited documentation 

of these work assignments. 

- There appears to be no post (duty) assignments for staff 

within the facility . 

- There is almost complete inmate idleness. There is little 

or no inmate programming (educational, work, or recreational). 

-All of the facilities (buildings) are inadequate . There are 

iss ues of life safety, health and sanitation, security, and 

overail general repair that affect both staff and inmates in 

all the structures. 

- The design and conditions of the facilities make renovations 

pro hibitive. 

Inmate medical screening and services appear to be 

inadequate. 

- Food services are contracted out to a private business. 

There appears to be little or no documentation of 

correctional activ ity, except by word-of-mouth . 

Perhaps the most positive finding has been that management within 

Public Safety has been open to acquiring more correctional 

expertise and initiating change. 

ASSESSMENT OF THE CURRENT SITUATION : 

The major issue continues to be facilit y construction - How to get 

the funds? Where should it be built? A.t one point, 168 acres had 

been identified as the site by the CNMI government. Then , it was 

reduced to 6 acres. At this moment, no one in the CNMI government can or will confirm anything, except that it is a priority issue. 

In the meantime, NIC is arranging for the placement of CNMI 

officials into its own training programs as well as other training 

efforts, setting up site visits to model correction programs when 

CNMI officials are traveling, and providing information, sample 

programs, and core curriculum to CNMI officials. · 

The nex t on-site training is scheduled to be the development of an inmate classification or planning for a new institution. 

35 
310 

36 

RECOMMENDATIONS TO CONGRESS : 

The National Institute of Corrections' recommendations are : 

1) New facilities are required. Funding for this purpose and 

site selection must be made a priority. If this is not done, 

funds will be expended in attorneys' fees, court costs and 

judgements, and court - ordered solutions. 

2) New facilities are not automatically equipped with trained 

staff and inmate programs and services. Every aspect of 

corrections needs to be reviewed, policies and procedures 

developed and updated, and staff identified and trained . Much 

of the change that is needed needs to be built upon change . 

As the system grows and becomes more sophisticated, the 

initial programs will need to enhanced . $100 , 000 a Ye~r for 

the next four to five years will be needed to provide for 

staff training and technical assistance to improve 

correctional management and develop and implement inmate 

programs and services. 

With the continued economic development on Saipan, Tinian, and 

Rota, these correctional issues will only worsen . Additionally, 

the need for immigration holding and detention space appears to 

heighten the need for action . 
311 

37 

INS Report to the Department of the Interior 

Concerning the Commonwealth of the Northern Mariana Islands 

March 22, 1996 

L Summary of recent activities in the Commonwealth of the Northern Mariana Islands 

(CNMI) 

The Inunigration and Naturalization Service (INS) has monitored immigration-related evenis 

in the CNMI by several means: 

o A contingent of!NS officers visited the CNMI in February to examine immigration practices 

and to assess progress of the CNMI regarding immigration issues. This group included the 

INS Assistant District Director for Examinations, Honolulu, Hawaii; the INS Officer-inCharge, Agana, Guam; and a representative from INS Headquarters Office of Information 

Resources Management (IRM). Issues discussed included: 

Development of the CNMI's Labor and Immigration Identification Documentation 

System; 

Airport arrival and departure control; 

Immigration removals from the CNMI (process and funding); 

CNMI rules applying to temporary workers. 

o The INS has selected an experienced investigator to be stationed for two years in the CNMI, 

with a target date for entry on duty of early May. He will be supervised by the INS Officerin-Charge, Agana, Guam. Among his duties will be: 

To assist the Assistant U.S. Attorney in Guam in immigration enforcement activities; 

To conduct training and mentoring of CNMI immigration staff; 

To assist in the coordination of CNMI immigration and labor departments in 

implementing effective systems and business practices; 

To represent the INS in the CNMI; 

To report on topics of immigration concern, both to the CNMI and to the INS; 

To assist Federal and local law enforcement agencies in planning and conducting 

investigations and other initiatives. 

o The INS Office of Information Resources Management (IRM) has provided technical 

assistance to the CNMI to facilitate development of a computerized system to support 

immigration processes. To date, that assistance has been monthly telephonic consultation, 

including conference calls with various staff present, regarding development methods, data 

element content, and system components. The INS plans to conduct an independent 

validation and verification of the CNMI's system as it progresses, and to make 

recommendations for optimal system effectiveness. (Attached is a synopsis ofiRM findings 

during the February on-site review.) 
312 

38 

R Assessment of immigration developments in the CNMI 

The INS will have an officer on duty in the CNMI beginning in May to assess CNMI 

immigration issues. INS officials detailed to the CNMI have made the following observations and 

assessments: 

o The CNMI is making some qualified progress on several immigration problems, including: 

Development and implementation of a computerized system of immigration processes 

(see IRM report attached); 

Implementing an arrival-departure process; 

Removing unauthorized aliens from the CNMI; 

Using safeguards on security documents and protecting computerized systems from 

unauthorized changes to the database; 

Issuing tamper -resistant documentation for temporary workers; 

Refusing entry and removing persons who fail to meet entry requirements; 

Improving the immigration department's effectiveness by re-engineering their 

processes and hiring effective persoMel. 

m Other issues 

o The CNMI must become much more effective in deporting immigration law violators, as well 

as aliens who violate other laws. When the CNMI is better able to identify persons through 

an expanded database of its temporary worlcers, law enforcement will become more effective. 

The current temporary worker data base contains about 14,000 entries. Funds must also be 

set aside to carry out deportations. 

o Detention facilities, both long term and short term, will need to be improved before CNMI 

authorities can undertake any significant enforcement initiatives to expel unauthorized 

persons. 

o The current lack of detention space that meets federal standards does not prevent CNMI 

authorities from refusing entry to unqualified persons. Currently the CNMI does return some 

individuals on the next available flight when they do not meet entry qualifications. This 

screening should be encouraged and fully used. 

o The INS comiders implementation of a computerized arrival and departure system to be the 

first priority for the CNMI immigration service in regaining immigration control. Though 

funds were allocated for this purpose, progress has lagged due to contract support problems. 

Arrival and departure control is a part of the overall support systein piaMed. The first part 

of a system implemented has been a prototype for processing applications and controlling 

entry of temporary workers. It is important to the effectiveness of the CNMI immigration 

service that development of the labor and immigration identification and documentation 
313 

39 

system continue at as rapid a pace as possible. 

o The differen= between INS and CNMI immigration laws have different kinds of impact in 

different areas. For example: 

The INS does not believe that CNMI immigration problems directly impact the 

security of other parts of the United States, in that persons traveling legally from the 

CNMI to Guam or elsewhere in the United States must go through INS inspection 

before they are admitted. 

Though persons traveling from the CNMI to the United States must go through INS 

inspection, smuggling of persons from the CNMI to the United States may occur, if 

persons leaving the CNMI succeed in entering the United States at a location other 

than a designated Port-of-Entry. 

The CNMI immigration statutes have some impact on lawful permanent residents of 

the United States who reside in the CNMI. For example, lawful residents must 

register to work legally in the CNMI, and while residing in the CNMI, are not 

considered to be residing in the United States, which could lead to loss of permanent 

resident status. 

o The INS and the Department of Justice have not taken an official position on extending the 

Immigration and Nationality Act (INA), in whole or in part, to the CNMI. In testimony given 

before the House's Native American and Insular Affairs Subcommittee on January 31, 1995 

the INS General Counsel reviewed a number of considerations pertaining to this question. 

For example, extending the INA to the CNMI: 

Would render a majority of the current temporary workers in the CNMI illegal and 

amenable to deportation; 

Could lead to greater and more permanent immigration to the CNMI; and 

Would divert INS resources to the CNMI at a time when demands on these resources 

are already very great. 
314 

40 

INS Report on the Development of the 

CNMI Labor and Immigration Identification and Documentation System (LIIDS) 

Activities and accomplishments in the CNMI over the past year 

INS IRM has been attempting to support CNMl' s development of their Labor and Inunigration 

Identification and Documentation System (LIIDS). The DOJ-DOI Interagency Agreement specifies 

that INS will perfonn an Independent Validation & Verification (IV & V) of CNMI's LIIDS 

development products, which involves review and constructive critique of deliverable documents and 

system components throughout the development process - the System Development Life Cycle 

(SDLC). IRM has received some preliminary development information and commented with 

recommendations; bo-. we have not ya m:eived any complete, final SDLC documents on which 

to perfonn IV&V. Coordination and recommendations are being provided to CNMI's LIIDS Project 

Team during their activities t!J conduct the development. 

Systems and data bases built by CNMI should have future compatibility with INS, should there be 

a need for infonnation interchange. CNMI and INS are endeavoring to accomplish this by comparing 

data dictionaries. to assure that data elements used by the CNMI match or are readily convertible to 

INS formats. 

In February, INS traveled to the CNMI to meet with a team of Federal officials, congressional staft; 

and local government officials to do on-site follow-up on the progress of the joint FederaVCNMI 

labor, inunigration and law enforcement initiative. Discussions encompassed LIIDS project 

management and progress to-date, SDLC employment, CNMI's current immigration processes and 

functional requirements, and planned actions for modernization, through re-engineering with 

incorporation of LIIDS. The Governor of the CNMI. commensurate with his overall strong 

sponsorship of Inunigration and Labor refonn initiatives, has given particular attention to the 

development of automated support to be fuUy integrated with the r~ processes. The 

LIIDS Project Manager has been given direction to proceed with priority development. The LIIDS 

Project Team has been involved in detamination and documentation of immigration and labor process 

and support system requirements, as weD as procurement of some equipment and software. 

development of software, and establishment of a demonstration or prototype system capability for 

processing of data in the initial step of a re-engineered inunigration and labor process. 

The prototype operational capability provides for (I) the capture of basic individual non-inunigrant 

identity, labor and immigration data, relating individuals to specific employers who are sponsoring 

them to work in the CNMI, (2) building of a standard data base of that information, (3) issuance of 

an entry permit/letter, to be used by the employee and employer to verifY status for the individual's 

initial entry into the CNMI, and (4) Wu&nce of an associated ID card for each worker. The first two 

steps are currently operational and the latter two expected to be implemented within two months. 

This prototype provides-e-li'asic capability for the first part of an immigration control process and, 
315 

41 

secondarily, provides a valuable learning tool to facilitate understanding and definition of 

requirements, in order to develop the complete, final operational capability LIIDS. 

Assessment of current situation 

Progress of the project has been sporadic and limited, due primarily to the lack of support staff and 

sustained contract support. There have been two unsuccessful attempts to establish contractor 

support for conduct of a thorough SDLC, which is needed to plan and initiate a sound project to 

comprehensively define immigration (and labor) process and support system requirements and to 

develop, implement and operate the new LIIDS. There have been local and Federal political 

pressures for results, which have driven the project toward establishing the limited initial capability 

as a priority, leaving less time for the conduct of a proper SDLC. 

Many of the existing CNMI immigration (and labor) processes are ill-defined, if at all. Very iittle 

automated data processing has ever been employed and there is limited integration of processes. The 

Project Team understands that these need to be comprehensively defined in conjunction with the 

immigration and labor operations managers and specialists who are the users. There is strong 

commitment from the CNMI Government managers and key personnel to define their functional 

processes, reorganize them into more effective ones and take the steps necessary to develop improved 

procedures, forms, and the associated LIIDS support. A copy of The Labor Permit Application 

Process document, prepared by the Labor component of the LIIDS Project Team, was provided as 

an example of process analysis and redefinition to be undertaken by the Project Team and related 

operational managers. The goal will be an integrated immigration and labor control and facilitation 

process, with LIIDS as the automation support tool. 

The CNMI has not adopted or developed a SDLC process of their own. It was planned that the 

contractor would introduce the SDLC process, along with the system they were to develop. That 

did not work. INS has now provided the CNMI Project Manager with a copy of INS SDLC, for their 

adoption. The INS SDLC is comprehensive and should provide a good education tool, as well as 

reference document. to be employed for the Commonwealth. 

Recommendations 

The CNMI Project Manager must be given the authority to go with the responsibility. INS IRM 

recommends emphasis first be placed on establishment of a complete project plan. The plan should 

include the definition of the Project Manager's responsibility, reflect SDLC tasks and schedule, and 

clearly identifY required support actions from budget and finance, procurement and other identified 

organizations (CNMI and Federal). 

CNMI and DOI must commit priority support to the plan and its component tasks. 

INS should continue to provide consultant support. Much of the INS support will take place through 

the on-site INS Officer. Support to LIIDS development should continue to be direct between the 
316 

42 

CNMI Program Manager/Team and INS Headquarters IRM. Comprehensive project reviews should 

take place quarterly. 
317 

EXECUTIVE OFFICE FOR UNITED STATES ATTORNEYS 

CNMI Report 

43 

The United States Attorney's Office ( "USAO") in Saipan now has 

two full-time attorneys (previously it had only one). In addition 

to handling criminal and civil cases, including appeals, the USAO 

provides temporary space for TDY investigators, task force 

personnel working on federal matters, TDY attorneys from the 

Department of Justice, the United States Department of Labor, and 

the National Labor Relations Board. The USAO presently has only 

one secretary, who performs both administrative and secretarial 

duties, and it is currently trying to recruit a second secretary. 

The USAO is continuing to respond to the build-up of 

investigators resulting from the federal law enforcement 

initiative. These include one additional FBI agent, one DEA agent 

who has been assigned to spend a significant portion of his time in 

the CNMI, regular TDY visits from United States Postal Service and 

Secret Service agents stationed in Hawaii, ATF agents stationed in 

Guam, two Fish and Wildlife agents stationed in Guam, and one onisland United States CUstoms officer assigned to task force and 

educational duties. One officer from the Immigration and 

Naturalization Service has been designated for full-time duties in 

the CNMI. In addition, the United States Marshal Service has added 

one additional full-time deputy (for a total of two Deputy United 

States Marshals) to handle the increased movement of federal 

prisoners and to aid in security duties. 

The immediate and expected result of the federal law 

enforcement initiative has been to increase the number of criminal 

cases. In the first five months of Fiscal Year (FY) 1996, the USAO 

has filed almost as many new criminal cases, 12 cases filed against 

22 defendants, as were filed in all of FY 1995, where 14 cases were 

filed against 19 defendants. Criminal matters (agency referrals 

under investigation) have risen wit.h the number of new agents, 

reaching 21 matters against 30 defendants in the first. 5 months of 

FY 1996, compared with 22 mat.ters against 21 defendants in all of 

FY 1995. On the civil side, in t.he first 5 months of this year, 

the USAO has tiled or answered in 3 cases and received 15 matters, 

compared with filing or answering in 10 cases and receiving 11 

matters in FY 1995. 

Most of the criminal cases have been resolved through guilty 

pleas or other dispositions. A recent example is an international 

drug trafficking case involving five defendants of various 

nationalities that was investigated by the FBI, DEA, and the CNMI customs agency. Other examples include two DEA-investigated cases 

involving conspiracy to possess and distribute methamphetamine, as well as several United States Postal Service-investigated cases involving postal burglary, mail theft, and obstruction of the 

mails. Presently, all federal investigative agencies in the CNMI 

have ongoing investigations, including white collar crime 
318 

44 

investigations for which indictments are expected in the near future. 

Finally, both FBI and DEA are forming joint task forces 

involving Guam police officers who are specially designated as DEA 

agents, as well as involving local CNMI officers from all branches 

of CNMI law enforcement, includ'ing customs, immigration, and the 

Department of Public Safety. These task forces are designed to 

erihance federal/local coordination and consultation, and to 

increase the number of prosecutable cases by the USAO. 
319 

OKITII:D STATII:S MARSHALS SERVICE 

Th• CgppQpnalth qf t;ht Bprthem Mariana l•lapde 

Statu• Report March 20, 1996 

45 

A significant Federal law enforcement and prosecutorial initiative is underway 

in the Commonwealth of the Northern Mariana Islands (CNMI) . Saipan, Rota, and Tinian are the three islands that comprise the CNMI. The U.S. ~rshals 

service (USMS) office is located on Saipan. 

The initiative is principally funded by the Department of Interior (DOl) and 

involves the Department of Justice (OOJ), the Department of Treasury, and the Department of Labor as its ·principal participants. The chief targets of the 

initiative are participants in, and perpetrators of, labor and immigration 

crimes in the CNMI. A major segment of the effort involves the investigation, 

apprehension, and prosecution of drug traffickers ·and violators who are 

integrally involved in the labor and immigration crimes being addressed. 

lmMNf AND KATIRXAL RISQURCIS • 

The USMS currently has one additional, DOl funded, deputy U.S. marshal (DUSM) 

in place on Saipan. The position was approved and funded to enable the USMS 

to meet the increased Service requirements generated by the initiative, which 

have materialized as originally projected. 

Thus far, the addition of the DOI funded DUSM position in Saipan allows the 

Marshals Service to adequately address the actual increases in requirements 

that are currently being generated. Absent the OOI funded position, however, 

the Marshals Service would be significantly constrained from providing the 

level and quality of services USMS customers in Saipan deserve. As the 

initiative increases in prosecutorial speed, projections indicate that USMS 

requirements will increase commensurate with prosecutorial cases. 

Therefore, the funding levels, which were originally obligated for the 

placement of a second DOI fWlded DUSM position in Saipan should be continued 

for the duration of the initiative. In addition, incz:eased workload levels 

will require either an additional $65,000 a year for anticipated contract 

guard service or a third DUSM position. Contract guards will be used to 

assist USMS personnel in courtroom prisoner productions, prisoner movement, 

and prisoner custodial requirements. On a yearly or short-term basis, the anticipated increase in Service requirements can be adequately addressed through the contracting of •guards• to support the two OUSMS currently 

positioned on Saipan. Absent the additional •guard" hire fWlding, one additional or a third DUSM position will be required. 

PITII!TXQB SIRYXCJS • 

on this issue, the initiative's partners strongly concur that a major intervention is required to provide Saipan with an adequate detention 

facility. 

The USMS currently has 6 Federal prisoners in custody in the Northern 

Marianas. Those ~ners are housed in a detention facility managed by the 

CNMI Department of Corrections on Saipan. The facility does not meet Federal 

standards and is in danger of being shut down by the Federal Courts. The 

existing facility houses approximately 170 inmates including females and those 

charged as DUIS. Several concerns must be faced: the facility has serious 

security problems; it lacks interview rooms; it is without medical facilities; 
320 

it uses temporary hoses to supply water to batha; cell cots are constructed of smoothed down concrete block; and there are no toilets in individual cells. 

Furthermore, a $40 million dollar territorial courthouse is under construction (across the street from the detention facility) . This new courthouse facility 

will probably result in increased prisoner activity, straining an already 

inadequate detention facility. 

The USMS has made arrangements with the Department of Corrections in Guam to 

provide bed apace for CNMI Federal prisoners under a cooperative agreement. A 92-bed pre-fab detention facility is currently under construction in Guam. The Federal Courts in CNMI have agreed to allow video-conferencing between CNMI prisoners housed in Guam and attorneys located in Saipan . Houaing Federal prisoners for the. CNMI in Guam, however, ia only a temporary solution. 

The USMS supports the National Institute of Corrections proposal to replace the existing detention facility on Saipan; Oft4I is in need of a 200-bed detention facility to repl•ce the existing substandard facility. It is recommended, however, that. controls be put in place to limit the use of funds solely for the detention facility construction. The USMS would require 4-6 beds for Federal prisoners in a new CNMI detention facility in Saipan, and 

would no longer require bed space for prisoners in Guam. 

The USMS requires continued fWlding for two (2) FTE deputy U.S. marshal positions on Saipan. In addition, either $65,000 will be needed for contract guard service or one additional DUSM position will be required to meet increased workload requirements. 

46 
321 

Memorandum 

REPORT TO DOI FROM CRIMINAL SECTION, CIVIL RIGHTS DIVISION 

APRIL 3, 1996 

Since the inception of the CNMI/DOI initiative, the 

Criminal Section of the Civil Rights Division has been 

prepared to review any and all allegations of potential 

violations in the CNMI of the federal criminal civil rights statutes. our section's efforts in pursuing potentially 

prosecutable criminal civil rights matters were dependent on first learning of allegations of such violations, and on having an assigned case agent of the FBI on-island with whom we could work on criminal civil rights matters. 

The FBI's assigned agent arrived in the CNMI in 

October, 1995. As we awaited his arrival there, we also wrote to several persons with whom our colleagues in the 

Employment Litigation section had had contact during their 

work in the CNMI (the litigation culminating in United 

States v. ~ CNMI et ~' civil litigation brought on behalf of Philippine national educators who had suffered 

racial discrimination in the CNMI school district) in order to solicit any allegations of which they might be aware which could implicate the federal criminal civil rights law. 

Despite these efforts, we have learned of only one incident 

for which full investigation could be authorized; that matter is currently under investigation by the FBI in the 

CNMI and concerns allegations of excessive force.used by 

officers of the Department of Public Safety on Rota. 

In order to increase this Section's ability to review 

allegations of potential criminal civil rights violations in 

the CNMI, we have now instituted a plan by which this 

Section will be made aware by the FBI not only of those 

allegations which, according to on-island review, may warrant investigation as a violation of the federal criminal 

civil rights statutes, but also of any and every inquiry 

received by the FBI from any source since the arrival of the 

assigned agent in October, 1995. In this way, we hope to be 

able to bring to the review of such allegations not only the 

investigating agent's expertise, but also the criminal civil 

rights attorney's evaluation of those allegations which 

could, by further investigation, lead to the discovery of a 

47 
322 

prosecutable offense. We will obtain that aatarial and 

review it, and will have obtained and evaluated the 

investiqation report in the excessive force incident 

described above, by the end ot May, 1996. At that tiae (in 

late May/early June), a senior Criainal section Attorney will travel to the CNMI to discuss with the FBI aqent and 

with representatives ot the United States Attorney's ottica 

the aaterial we will have reviewed and we will conduct 

further investiqation toward praparinq any suitable aatter 

tor qrand jury presentation. It by the data ot that trip there still does not exist a potentially prosecutable allaqation, the Section Attorney will work with the aqants 

and Assistants in the CNMI on doinq additional work in order 

to learn ot a prosecutable allaqation. 

At this tiae, because the Section's work on-island has 

not yet taken place, we have no tundinq raco ... ndations to 

aaka. Also, because our work concentrates on the 

investiqation and prosecution ot federal criainal civil 

riqhts violations, we have no specific responses to the 

issues outlined in Director Stayaan•s latter. 

48 
323 

49 

FEQQAL BURF.),U OF :Prfi:ST+GATXON 

The Federal Bureau of Investigation (FBI) entered into an aqreement vith the Department of Interior to provide additional law enforcement support for the Commonwealth of the 

Northern Kariana Islands (CNMI). 

The FBI had two Special Agents assigned to the CNMI who are dedicated to investigating violations of federal criminal 

statutes, including, but not lilllited. to, public =rruption, orqanize4 crime/drug matters and white co1lar cr·ime offenses. As a result of the initiative, the FBI assigned an additional 

Special Aqent to the Saipan Resident. Agency, 'l!hich brinfJS the 

total staffing of the Saipan ~esident Aqency to three FBI Special Aqent.s. The cri111inal investigative priorities of the third 

Special Agent will be the invastigation of civil riqhts, public corruption and organized crime matters. 

~he FBI has initiated contacts with various community 

support.qroups and local law enforceaent agencies and has advised 

thea of the scope of the federal interest in civil rights 

matters. This liaison has resulted in the increased awareness of 

the nature of these crimes and several specific inquiries have 

been directed to the local office. The FBI continues to receive 

inquiries in this area and will promptly exa.ine the facts and 

circuastances and advise the u.s. Attorney's Oft~ce anc\ the 

c:rblinal Section of the civil Rights Division, Depal:'tllent of 

J'uctice to determine the liltelihood of federal criminal 

prosecution and, when warranted, will investigate any and all 

credible alle~ations of violations of faderal civil riqhts 

statutes. 

The FB:r has also aet with. the C.olllllliss.ioner of the 

Departaent of PUblic Safety who has offered his •qency•s full 

support and ·assistance in the investigation of civil rights violations involving aembers of the nepartaent of Public Safety. Anc\, the C:omaissioner is impl-anting plana to incr-se and iap~ove the Civil Rights training for CNKI public safety officus. 

With. the increased presence on Saipan of other Federal 

law enforcement agenciu, other criminal matters which usually 

c_. to the attention of the !iii are being referred to these 

agencies. Accordingly, the FBI has been able to concentrate its 

efforts iD the investigation of white collar, ~anized 

oriaetillegal drugs, public corruption anc\ civil rights aatterc. 

This concentration of investigative expertise to these areas has 

recently ruulted in the prosecution of sevaral aa=bers of a major drug trafficking group with Japanese orgaDiae4 crime co~:~nections. The investigation ancl subsequent prosecution was macle possible ·~:~y the coordinated effort between the u.s. 

Attorney's Office, FB:r, Drug E:ntorc:-e:at AcSIIIinistration, Bureau 

of Alcohol, Tobacco and Firearms, u.s. Marshal's service, and 
324 

1oc::al lav eftfoJ:ceMnt. As a nsult, other aajor ca• .. vill be 

han41e<l ut111z1nfJ ~· uslc fOJ:ce concept. 

At tbi• tiae, established tundinw levels are cuffici•nt 

to a<ldr .. s curz'eftt investi911tive neecSa. · 

50 
325 

CHILD EXPLOITATION AND OBSCENITY SECTION 

STATUS REPORT ON CNMI INITIATIVE 

This is the first 

Obscenity Section (CEOS) 

Federal Task Force on the 

Enforcement Initiative. 

report of the Child Exploitation and 

of the Department of Justice for the 

Federal-CNMI Labor, Immigration, and Law 

The CEOS has the supervisory responsibility for federal 

statutes covering obscenity, child exploitation, child sexual 

abuse, and activities under the Mann Act. Mann Act statutes 

include the interstate or foreign commerce aspects of criminal 

sexual activity involving: a) the transportation of an individual, 

b) the persuasion, inducement, enticement or coercion of an 

individual to travel, c) the transportation of a minor, or 

d) travel by an individual for that purpose. CEOS is interested in 

prosecuting individuals who transport, or conspire to transport, 

young women to the CNMI for purposes of criminal sexual activity, 

including but not limited to prostitution. CEOS is also interested 

in the prosecution of individuals who travel to the CNMI to engage 

in criminal sexual activity, including but not limited to 

prostitution. 

As a preliminary step to undertaking prosecutions, we have 

been conducting extensive interviews with federal government 

personnel in both the CNMI and Guam. The interviewees have 

included representatives of the Departments of Interior, Justice, 

and Labor, many of whom have provided information regarding the 

transportation of women and travel to meet women in violation of 

the Mann Act. Each interviewee has provided different perspectives 

on the breadth of this problem and the resources which will be 

necessary to address it. 

CEOS expects to complete the preliminary phases of this 

project within the next few weeks. At that time, CEOS will develop 

a strategy to initiating investigations leading to prosecution of 

the individuals organizing these criminal activities. CEOS has 

been assured that resources will be made available within the 

Department of Justice to assist in the cases. Our present concerns are leads for the initial cases, focusing particularly on young 

victim witnesses. 

CEOS looks forward to continued work with the Federal Task 

Force on the Federal-CNMI Labor, Immigration, and Law Enforcement 

Initiative. 

51 
326 

U.S. Department of Treasury 

United States Secret Service 

United States Customs Service 

Bureau of Alcohol, Tobacco, and Firearms 

5 2 
327 

DEPARTMENT OF THE TREASURY 

UNITED STATES SECRET SERVICE 

March 20, 1996 

Department of the Interior 

Office of Territorial and International Affairs 

1849 c street, NW 

Washington, D.C. 20240 

ATTN: Debbie Subera-Wiggin 

Dear Ms. Subera-Wiggin: 

53 

Reference is made to the correspondence of Director Allen P.·· 

Stayman, Office of Insular Affairs, dated March 8, 1996, in which 

his intention to provide Congress with a brief report regarding 

enforcement efforts in the CNMI is discussed. 

None of the specific issues outlined by Mr. Stayman directly 

correlate with the primary investigative responsibilities of the 

United States Secret service. However, we believe that our previously submitted quarterly reports provide a good overview of 

the Service's accomplishments in the CNMI, both in the 

enforcement of our core violations and as an active participant 

in the CNMI Interagency Task Force. 

The information presented below will update your office on Secret 

Service efforts in the CNMI during the period of December 15, 

1995, through March 15, 1996: 

For most of the first quarter of this year,. we were able to provide a full time presence in Saipan. During 

this period, Special Agent J. DeSantis participated in 

two major task force investigations which culminated in 

three arrests. 

The first investigation resulted in the arrest of an individual for violations of 18 usc 1344 (Bank Fraud), 

18 USC 1702 (Obstruction of Justice) and 18 USC 1708 

(Theft of Mail) . 

The other significant investigation resulted in the 

arrests of two individuals for violations of Title 21, 

Section 841 (Possession with Intent to Distribute 

Dangerous Drugs) and Title 211, Section 860 

(Manufacture or Possession of Dangerous Drugs on or Near a School) . 
328 

54 

Page 2 

Three bank fraud referrals have been received from the 

Bank of Guam, and are being investigated by one or our agents who returned to Saipan on March 12 (he will 

remain at least until April 5). During that time, he 

will be presenting a case for prosecution to AUSA Fred 

Black; will conduct Secret Service business, and will 

participate in Interagency Task Force efforts. 

In terms of our view of future participation (which you 

requested), it has been our experience that the number of 

violations directly impacting upon Secret Service jurisdicti~nal 

responsibility do no justify a full-time presence on the island. 

In this age of limited resources, we would normally rotate an agent though Saipan some two weeks out of every two month period, 

deploying that agent to other regions also demanding some Secret 

service presence. However, we will continue to participate in 

Task Force efforts and to support the Federal-CNMI Labor,, 

Immigration and Law Enforcement Initiative to the extent 

possible. 

Should you have any questions or require additional information, 

please feel free to contact Assistant Special Agent in Charge Ray 

Dineen of this office at (202) 435-5716. 

Si/J~y, 

Assistant 

Ltft~ Director of 

Investigations 
329 

DEPARTMENT OF THE TREASURY 

U.S. CUSTOMS SERVICE 

HONOLULU, HAWAII 

Mr . Allen P. Stayman 

Di rector 

Office of Insular Affairs 

March 20, 1996 

U. S. Department of the Interior 

Washington, D. C. 20240 

Dear Director stayman, 

55 

In response to your letter dated March 8, 1996, requesting an overview of our agency's activiti es in the C~ , enclosed please find ~ summary of action taken to date .as well as an assessment 

of future needs to continue our role in the CNMI initiative. For 

your information, the u. S. Customs Service, Office of 

Investigation, has had TDY representatives on site in Saipan since October 1995 when our agency first received fundinq !rom 

your Department. 

U. 5. customs has been the impetus in establishing a u . s. 

Treasury Task Force in the CNMI . The Task Force will consist of one or two U. s. customs Special Agents and officers from the 

CNMI Department of Public Safety (DPS) and CNMI Customs. Other 

Treasury agencies (BATF and U. s . Secret Service) will be 

represented on an "as needed" basis. Space has been identified 

and modifications are currently underway on the 4th Floor of the 

Horiquchi Building to house the Task Force members. In November 

1995, Memorand~ of Understanding regarding the assignment of 

CNMI law enforcement officers to the Task Force were submitted to 

CNMI officials. To date, these MOU's have not been signed as 

they are currently under review by the CNMI Attorney General. 

The primary objectives of the u. S. Customs Service in the CNMI 

initiative include : 

1 . Investigati on of illicit drug trafficking across the CNMI 

border, both import ~d export . The internati onal airport, seaport, U. S. Mail and courier services will be targeted . 

2 . Investigation of violations of the Arms Export Control Act, Bank Secrecy Act and applicable money laundering statutes. 

3. Investigation of the illegal transhipment of textiles from 

the garment factories . 

4 . Gather and report violations of CNMI and uses laws and 

REPLY TO: li~CCIALAGIENT IN CHARO[, ~.0 . •ox 50 I CA. HONOLULU, HAWAII 8 e115o 
330 

regulations that will result in effective prosecution before the 

courts of the United States and the CNHI. 

Since October 1995, a total of ten investigations have been 

initiated in support of our enforcement efforts in the CNMI. The 

investigations have centered on violations of the narcotics laws, 

transit of suspected Japanese Organized Crime members, 

importation of counterfeit U. s. currency, and potential O~C 

violations. To data, these investigations have resulted in the 

arrests of S individuals and the seizures of counterfeit 

currency, unregistered firearms and drug paraphernalia. 

To help combat the drug and firearms smuggling activities of 

Japanese Organized Cr~. the U. S. Customs Attache, Tokyo is 

working with Japan's National Police Aqancy to improve communications and the exchange of information between Japanese officials and the law enforcement agencies in Saipan. On January 22, 1996, a NPA Detective Superintendent traveled froa Japan to 

Saipan to discuss current cases in Saipan involving members of 

the Japanese Organized Crime. 

U. s. Customs is sponsoring, in conjunction with CNMI Customs, a training su.inar March 22, 26 ancl 27, 1996, at the Saipan Di&IIICncl 

Kotel for an estimated 150 local and federal law entorceaent 

officers. The seain&r will be presented by a 0. s. CustoiiiS 

Senior Special Agent frca the Federal Law Enforcement Training Canter in Georgia and will focus on safety and mental preparation 

tor armed confrontation in the law enforcement field. 

From April 8-19, li96, 0. s. Customs is sanding a tour person training te&a of U. S. Customs officers troa Honolulu, Hawaii to 

work with the CNKI Customs Division. the purpose of the training 

teem is to evaluate, train and to assist them in the following areas: 

(AI Airport operations, paasenger inspection and analysis of 

airline passenger manifests. 

(BI Seaport operations and cargo inspections 

(C) Canine operations 

In october 199~ u. s. Customs received $150,000 (combined from 

FY 95 and 961 in funding from your Departaant. To elate, approximately $110,233 (73.5\ of the available! has been expended by our agency in support of the project. The major cost has bean ~or travel and par diem expenses ($102,304 obligated to date out 

ot the budgeted $120,000 for the year). These costs add up quickly when one considers that they include the rental ot 

vehicles estimated to be $28,800 per year and the daily per di~ 

56 
331 

57 

amount of $228 . Since one agent has been detailed to the .CNMI 

since December, airfare charges have been minimal. It should be 

noted though that at the current rate and without additional 

reimbursements, U. S. Customs will not be able to keep an agent 

TOY in the CNMI for the remainder of the fiscal year. It is 

estimated that an additional $25,000 will be needed to fund TOY 

expenses in FY 96. 

Attached for your review is a current budget analysis of the 

expenses for the project to date. The travel expenses have been 

obligated for travel. through May 9, 1996. It should be noted 

that eXpenses· for rent, telephone and utilities have been minimal 

to date because the commercial space is not yet ready for 

occupancy. It is believed that it will cost approximately $1,000 

per month for these expenses, primarily long distance charges for 

the computer linkage to our main system. 

Based upon current projections, it is believed that U. s. Customs 

will need approximately $180,000 to continue the CNMI program in 

FY 97. With start-up costs (such as furniture and equipment) 

already taken care of, most of the funds ·should be allocated to 

keeping' an enforcement agent(s) on site in the CNMI to work with 

the local agencies. 

Assuming that additional fUnding becomes available in FY 97, 

Customs is ·once aqain prepared to support the initiative with 

temporary details .from Honolulu and Guam . It is believed that more work can be done to enhance the enforcement efforts in the 

labor area by concentrating on investigations of the qarment 

industry and the transhipment of textiles products throuqh the 

CNMI. Customs and Immigration have historically worked hand in 

hand as the front line of defense to protect the borders from 

people, prohibited items and merchandise injurious to its . citizens. By qoing out front with training this fiscal year, it 

is hoped that the border process will be more efficient starting in FY 97. 

Although the start of the project was delayed due to budgetary 

concerns, we at U. S: Customs are committed· to being a long-term 

player in the aver-important law enforcemen.t initiative in the 

Commonwealth of the Northern Marianas i:sland·s. Please feel free 

to contact our office at (808) 541-2623 if you have any questions or if we can be of futh"r assistance . · · 

Sincerely, 

~e~ WALTER W. COLLETTE, JR. A Resident Agent . in Charge 
Bureau of Alcohol, Tobacco and Firearms 

Commonwealth of the Northern Mariana Islands 

Activity and Funding Request Report 

March 25, 1996 

The following is an activity report regarding the 

commonwealth of the Northern Mariana Islands (CNMI) for 

the period January 1, 1996, to present. This report is 

being submitted to document the activity of the Bureau 

of Alcohol, Tobacco and Firearms (ATF) in the CNMI, 

relating to the reimbursable support agreement between 

ATF and the Office of Territorial and International 

affairs, United States Department of the Interior. 

This report is also for the purpose of transmitting a funding request for assistance provided by ATF to the 

CNMI over the next year. 

ATF continues to investigate several matters in the 

CNMI. Our agents from ATF Field Offices in Guam and 

Honolulu have continued to provide assistance to the 

CNMI over the last year which has resulted in several cases targeting an armed career criminal, numerous armed drug traffickers, and a case which is attempting 

to determine the source of illegal explosives. 

One case involves a convicted felon who was found in 

possession of explosives in the village of Afetnas, 

Saipan. The defendant was indicted on Kay 4, 1995, for 

possession of explosives and has pleaded quilty to this same count on June 16, 1995. As of this date, he has 

not been sentenced due to his cooperation in providing 

additional criainal information to the Federal Bureau 

of Investigation as part of his plea agreement. 

As previously stated in the last quarterly report, a subject who was found to be in possession of a pen qun 

and aaaunition on Saipan has not yet been indicted due 

to an interstate coaaerce issue with the pen qun. The u.s. Attorney therefore has tentatively offered a plea 

aqree .. nt to the defense with respect to not including 

the araed career criminal statute to the possession of a fireara charge. Instead, the u.s. Attorney is 

offerinq in excbanqe a quilty plea for a two year 

prison tara. ATP in Guam was recently notified that 

this same s~ct was arrested aqain on or about 

Karch 8, 1996, on Saipan, for possession of another 

fireara and aaaunition. 

58 
333 

This subject, will be charqed, under the armed career criminal statute tor this second incident. 

Another investiqation reported in the last update 

involved an individual carryinq or usinq a firearm 

durinq a druq trattickinq offense. This case is 

continuinq. 

Three Japanese nationals were recommended for 

prosecution after their arrest on Saipan for possession 

of firearms and narcotics. The prosecution in this case is pendinq while court records and finqerprints 

trom a previous conviction are ' beinq obtained from a foreiqn court th~ouqh Interpol. 

Another individual found in possession ot a firearm on Saipan is to be indicted some time in March 1996. This case also involves the armelicareer criminal 

enhancement. 

The multi-aqency task torce investiqation is still 

continuinq which is tarqetinq illeqal narcotics 

tratti.ckers in the CNMI and it is anticipated to last 

several months. 

ATF continues to trace firearms recovered by the CNMI 

Department ot Public Safety, and all investiqative 

leads are beinq pursued. 

Plans are still under way tor ATF to conduct a two week 

undercover and tactical traininq session in Guam durinq 

FY 96. This traininq and tundinq are beinq arranqad 

throuqh ATF traininq at the Federal Law Enforcement 

canter in Glynco, Georqia. 

ATF continues to be a vital participant in the IntarAqancy Task Force and in February attended the 

Department of Interior meetinq on Saipan concerninq CNMI. 

ATF has also met with the Japanese Police and customs 

concerninq firearms traffickinq between Guam, Saipan and Japan. 

FUNDING PROPOSAL 

Our aqents have provided increased assistance to CNMI 

law enforcement officers in the area of criminal 

investiqation and traininq. 

59 
Additional funding will allow the agents and task terce 

officers in Guam and Honolulu to continue their 

assistance to the CNMI, with emphasis on training and 

liaison. 

our plans for the next year include. the addition of an investigative assistant to the Guam Field Office which 

will help allow our agents in the field to spend more time on developing criminal investigations. 

Investigations into armed career criminals and armed 

drug trattickers· will continue with the assistance of 

additional funding tor evidence purchase and 

subsistence tor confidential information. Additional 

funding will also be used to purchase electronic 

surveillance equipment , video surveillance equipment, 

and cellular telephones. A leased vehicle will also be 

needed. Funding will be needed for agents and 

technical staff to travel from Guam, Hawaii, and the 

continental u.s. to perform duties in the CNMI. 

Training will be a priority over the next year with ATF 

planning to train CNMI law enforcement officers in the areas of firearms trafficking investigative techniques, 

interviewing and interrogation techniques, arson-torprofit investigations, post bomb blast scene investigative techniques, undercover techniques, and 

operational security techniques. 

Finally, funding will also be needed tor office 

equipment to include a desk-top computer , monitor, printer, and associated software. This list also 

includes a typewriter, transcriber, and calculator. 

The estimated cost to carry out these plans is 

attached. 

60 
61 

AppendixC 

CENSUS 
336 

62 
337 

63 

2. ClTtZFNSHlP 59,913 43,3.40 38..2'/. 100.0'/. 100.0'1. 

Cft:iz.an 01 National 27,512 20,082 37.0% 45.9% 48.3% 

Bam in the CNMJ 21 ,721 18,752 29.7"4 38..3"4 38.6% 

84m in lhe U.S. or olh'O)( U.S. 

T errtto!y or Commonwaalth • .• 18 2.-«)5 &3.7'% ~% 5.5'% 

Born abroe4, U.S. panonl(s) 239 237 0.8% 0 .4% 0.5'% 

Narurafozod Citiz1111 1,134 888 84.8% 1.9% 1.8">4 

N<>t 1 Citizen or National 32,-401 23,283 39.3% 54.1% 53.7% 

PttmaMnl Resident 3,5:32 2.188 151 .4'16 S.Q'lG 5.0')1. 

T omponr.JY Rosldont R86i 21.075 37.0'Jo 48.2'Jo 48.6'!1. 

Ill. HOUSJNQ • Goll.I.UJ. 

1. Total Hou:ing Unib U.,UJ. a,~OIS n.l"f. 100.0% 100.0'/. 

Saip;m 12,990 7,251 79.1'16 ~.J'I6 8aA".6 

ril"'ian 832 ~29 47.3% U% 5.2% 

ROQ 921 519 n .s% S.3'J6 5.3% 

Nol'il,.m "~nds 1 s -8:3.3"' a.a"' 0.1'11o 

2.&. Houoinq Units Occupied . 11.812 un 71.1% 81.2% S3.8'l4 

Salpen 10,583 8.065 7~.1'!1o n .a'!lo r..z'!lo 

rlnian 522 31* "2.&'16 3.6'16 5'16 

R'* 89C 411 87.3Y. .U'!Io 5.1"' 

Nom.m Islands 8 -&3.3'11. O.O'!Io 0.1'!1o 

:lb. Howr.inQ Unit& V>c:.::mc 2,.UI 1~2 81.6"4 11.2% 1e.l% 

Saij)an 2.180 1,15! 87.0'J6 l5.0'J6 1~.2" 

Tonioon S6 83 52.4'11. 0.7'l' 0.8'11. 

RDia 222 103 115.5% 1.:S'J6 1.3'!11 

Not1ham lslsnds 

3. Group Qu~ners 201 353 ~.1% 100.0% 100.0% 

Sa~ 176 311 -43.4" 87.5" 88.1% 

ron<an 10 15 3 .. 5 .0'!1o 4.2"4 

~- 15 27 ~.4'16 7.5'16 7.&'16 
338 

Appendix D 

CNMI Support for 

Minimum Wage Increase 

64 
339 

.. -r --·- ...._.. ... ,.u,ut;;r UJ ~ummerce 

P.O. Box 806 CK Sait>a" MP 96950 • Family Building Suite /04 Garapa11 

.)ecember 26, 1995 

Governor Froilan C. Tenorio 

Commonwealth of the Northern Mariana Islands 

Capitol Hill 

Saipan MP 96950 

Dear Governor Tenorio: 

The Joint (1995 outgoing and 1996 incoming) Board of Directors of the Saipan 

Chamber of Commerce met last week and di~cussed the current i5.~ue of 

postponement of the next increase of the minimum wage which we understand is 

before you now for signature or veto. · 

The Chamber would like. to . take thia opportunity to again reiterate its position in 

support of the cum'nt <.'lasting law which calls for an automatic and annual increase 

In the minimum wage. Supporting an lncrea~e in the cost of doing business may 

seem odd comi.Ilg from the business sector, however the Ownber toolc. the stand to 

support this legislation at the time of its implementation;· and continues to stand 

behind that decision. It Is a JX\a~f-hcn , : .'o/. ami. standing by our collective 

word as a.COmmonweall:h. · · \. · 

·. . ·""'- -~condly, the CNMI currently Q,Jits a rep ' i!C>n ·of lnatability with investors, 

whi.dl is keeping needed devetciikent at ;-~~ worse, redirecting potential 

investment to other destinations!.' such u Pa . u ..and Southeast Asia. Another 

"switchback" such aa this, In thei~pn-ational regUlations of business in the CNMI 

wm only credit these adverie ~dons .and bOkter the perceptions of barriers to 

investment in the CNMI. L . \ 

The Chamber, on behalf of the~~~ to give serious 

consideration to maintaining the current law in force.. Should you have any 

questions, the sec atanda by to asabt itl any was possible. 

Sincerely, 

Efrain F. Camacho 

Chairman of the Board 

for the Bond of Oiractul:$ 

1''-c: 01/ (610} JJ.t.11SO Fe: O/l{f1~l 1JJ.71SI 

65 
February 6th 1996 

Jack Torres, 

Chairman, 

340 

P.O. Bor 5075Ct<QB. SoO>cn.MP•/1>50 

101:(670) 2~ 

rar: 2ld-t7oo 

Wage and Salary Review Board, 

Sa.ipan. CNMI. 

Dear Chairman Torres, 

As president of the Hotel Association of the Northern Mariana Islands, I received your 

letter and questionnaire of January 31st. Please find below the Associations answers and 

commentS. We would like to thank you for the opporruniry to comment and would like 

you to take these. comments into consideration with the testimony already given on 

November 17th 1995. 

l. Each industry was asked this question before the current law was passed and the Hotel 

Association stands by its original objective of increasing the minimum wage to $4.25 

over several years at $0.30 per year unless there is a major turndown in business. 

2. A tiered wage system will be seen as unfair by employees of those industries whose 

minimum wage is lower. Also it will lead to some industries bargaining for lower 

increases. One policy for all would be the most fair. 

3. Wages can be linked to skill levels or to productivity targetS and all these factors 

should be left to the individual companies to decide what is best for them. However there 

should be a. minimum level below which employers are not able to pay. In a free marlcet 

economy lht: wages should be left to market forces, except ior the minimum wage, to stop 

unscrupulous "mployecs raking advantage. As to whether the increase in the minimum 

wage is required to remain poJiti~lly correct. i r the CNMI wanu to continue to depend 

on the US for financial and other support, it seems. it will have to listen to their 

recommendations. 

4. In a service indusrry labor is not a factor of production it is !M major e~pense . It 

needs to be balanced with other costs. It varies from industry to indusrry and company to 

company. 

66 
341 

labor willing to work at the wages and salaries offered !hen lb.erc is no need to increase 

the pay. A legislated increase in the minimum wage will ensure an increase. 

11. Tourism could easily grow to replace some of the garment induslry. The demand for 

tourist destinations from Asia is increasing at a fasl rate. The location of the CNMI 

combined with its favorable climate and natural beauty makes it an ideal place for 

vacations. A more stable political environment and clear laws on land leases would help 

in making the CNMI more atrractive to investors. The CNMI must get ready to live 

wilb.out a garment industry. Marine enterprises and research potentials are some possible 

replacements. The reef and ocean arc incn:clible sources of new products from medical to 

cosmetic to household uses. Our goal should be 10 encourage scientific and industrial 

exploration while maintainin' sufficient environmental controls for protection. 

12. We need to keep up with the increase in the cost of living and gradually increase to a 

minimum wage which is nearer Guam's and !he rest of the developed world. 

13. If !he US Minimum Wage was S8.46 per hour unemployment would probably be 

higher and more people would have less than !hey have today. Price.~ wnuld have to 

increase or service levels cut back. Bolb. could have 1he negative ertect of reducing the 

number of visitors to !he CNMI. 

In conclusion. HANMI ~ubmits to the Board that !he present minimum wage law should 

remain as it is. with gradual incremcnu that allow the necessary time to adjust our 

businesses. 10 increase our productivily and 10 malcc the pay increases without damaging 

the service to our cus1omers. 

Sincerely Yours. 

Clifford 

~ Grauers. 

Pruidcot HANMI 

67 
842 

7.-13-96 

CONTRACTORS ASSOCIATION SAID YES! FOR YEARS! 

Dear Editor: 

After seein9 some of the wa9e items in your paper, and 

hearin9 comments about why the C. N.M.I. CONTRACTORS 

ASSOCIATION didn't show up for the Wage Board's hearing, 

I would like to dig back a bit and present the facts 

on this issue .. 

Minimum wage has been a part of the Association's agenda 

for years, and recommendations have been plentiful and 

consistent throughout those years . There has been support 

for an increase at every gathering. 

To take just the last three years, and only a few of 

the examples, consider tho following items. 

1. The C.N.M.I. CONTRACTORS ASSOCIATION was asked in 

January of 1993 to again come up with our recommendation 

for a wa9e increase. (One of several times over the years) 

Our suggestion was to raise the wa9e to $2.50 in 1993, 

S3~25 in 1994, 54.00 in 1995, and match the U.S. Minimum 

Wage in 1996 . With this we requested that all benefits ·be considered for an acceptable deduction from this wage 

because those items ad considerably to the basic wage. 

2 . In April 1993 we submitted documents showing that 

based Oll 5000 workers, a raise of $1.50 p~n:· hour would 

geno:rate an additional $15,600,000 per Y""r in tAxable, 

expendable income !or contract workers, and outlined 

how thill. would help boost the economy. 

3. Aqain in April 1993, we submitted our comments to th .. Senate lhat we were apposed to S.D. 8-146 to immcdi.lt,.ly raise . the waqe to u.s. Minimum, but fully 

supported S.D. 8-197 for a gradual increase. We also ga.ve our support to Lhe comments of Mr . r;loy rnos, 

Director of Finance and Chairman of the Task Force on Mininmm waqe. 

4. In Hay of 1993, the C.N.M . I. CONTRACTOR:S ASSOCIATION, out of tota~ !rustrution ~ith the luc~l governments 

conoplete inaction, sent Hr. Herman Guerrero and myself to washington D.C. to voice our opinion on several issues, 

.i.ncludin<J Minimum Wage. we told the people ..,..,_ met with 

th~t our qroup had tried for eight ye~rs to get an 

increase pushed through, and that we ·still supported 
• gradual ·increase in the w~ge up to u . s. Minimum . 

5. In our trip report, published in the Variety on Hay 

21, 1993, we again stated thllt an increase was needed 

&nd overdue. It was agreed that the mora wa pay our workers, the more money there will be to circulate through 

the economy. 

6. On August 11, 1993, Governor Guerrero asked our 

Association to again participate in a Wage and Salary 

Review Board, and I appointed Mr. Richard Szumiel to 

this post. As of J'anuary 19, 1994, this board had met only twice under Chairman Oavid Sablan. He was faced 

with trying to <Jath.er and admiNister a board that had 

no funds for an office, supplies or even to fly in the 

Tinian and Rota aeabers. Additionally, Governor Tenorio 

reported positions to the media, and presented Speaker Diego Benavente vith a proposed bill regarding minimum 

wage without even providing a copy to the Board, much 

less any input they were there to qive. Still, at that 

time, all the associations on the island ac;reed to the 

qradual increase. 

7. on February 2, 1994, the Variety again carried the 

C.N.H.I. CONTRACTORS ASSOCIATION'S baekinq oE the law 

stating a yea:ly :ise in wages until we :each u.s. Hini111um 

Wage. At that time w~a abo stated that we had always supported a much quicker increase, yet since there was agreem<lnt with all eectors, 1Ulc1 the law vas in place, we. voted for status quo. We also saic! if the vaqe was to b<l · raised to the u.s. HiniiiWD .immediately, that ve 

would support it with, again, some discussion on benefi.ts 

given to contract workers. Whatever the waqe rate or lav or changes .. cte, we felt it important not to have to chanqe it &fain down the road. (Eleactly what just; happened!) Too .. ny. ch.anCJes just; ad to the already obvious 

indecision of the governeent, and a cli .. te of instability 

for investors. ·this appearance of instability is· what we vaneed eo avoic! by having a workable vafc lav. 

8. On November 15, U9.4, the Var1et;y a9ain pul:ll1sl\ed 

some of our thout;hts on vat;ea. The wrat;l\ of the ·u.s. Congress was upon us, and l: ·stated. t;l\at: had we paid and 

treated. contract workers the way we should 1\ave. t;here 

would have been no complaints and conqress would have no rea3on to look over our shoulders. And, once at; a in, we were aosked our position on wage increases and once again we said. YES! RAISE THE MINIMUM WAGE! 

9. On DeceMber 2, 1994, I w~• asked to zeet with Senator 

Hocog to discuss S.B. 9-142, to increase the •ini~um 

wave to S4.2S per 1\our by July 1995. At that time I showed 

him :ealistic fiOJures ot how little tl\e neOJative impact; could be, iii!" how tremendous the positive impact would 

69 
be if ' this happened . And again told him if this is what 70 

will happen, we will support it. Our concern was still 

regarding all the additional costs and benefits involved 

and how to set a fair standard for deductions of these 

costs. It was made very clear that we would live with 

whatever the wage would become if we could work that 

out, and, most importantly, IF THEY WOULD STOP CHANGING 

THE LAW ALL THE TIME! 

10. On December 26, 1994, we submitted to Speaker 

Benavente our comments on H.B. 9-272 . This was more panic 

legislation to appease the U.S., and would have made 

doing business here even more problematic. We suggested 

raising the wage and again showed figures on how to do 

it with a positive business and government impact. 

11. On November 27, 1995, I submitted to Jack Torres 

a position paper saying the yearly increases that were 

dictated by law were fair, timely, and would not put 

undo burden on our industry. 

12. On December 27, 1995, the variety printed, "Among 

the business sector , the Chamber is the only group which 

has expressed support for the .30~ per hour increase . 

THE ONLY GROUP? Do you read your paper? 

If the past few years of our support and recommendations 

isn't enough to show our position, why the hell bother 

to try anymore! It seems as though the only real 

opposition to a wage increase comes from the garment 

industry . which, curiously enough, the Chairman of the 

Wage and Salary Review Board works for ! If the gar-nient 

companies truly can not survive a wage increase then 

perhaps they could come up with their own program for 

~ncreases. They do produce significant revenues for the 

Commonwealth so we may have to look differently at them. 

But the rest of the sectors that agree with a raise in 

wage, and discussed it for years before the increase 

became law should not be made to look bad because of 

one industry that now does not agree. 

Siniitt\ 

Mike Schadec!< 

C.N.M . I . CONTRACTORS ASSOCIATION 
_,_TO QulmcN8 ftiOII lllcJWID N. JIDAa< 

U.S. Department of the Interior 

_,.,.J.I Oflke of Inspector General 

Responses to Additional Subcommittee 

Questions Regardin& Water Island, 

U.S. Virgin Islands 

Submitted for the Record Hearing 

on the Federal-Commonwealth of the Northern 

Mariana Islands Initiative on Labor, 

Immigration, and Law Enforcement 

and Related Northern Mariana Islands 

Lepslative Reforms 

(Held June 26, 1996) 

Subcommittee on Native American 

and Insular Affairs 

Committee on Resourc:es 

U.S. House of Representatives 

IUcllud N. Reback 

Cbiel ol Stair ..... Geaenl Ceuasel 

Olllc:e oldie laspedor Geaenl 

u.s. Deputlllellt ., tile IDterior 
• 

United States Department of the Interior 

OFFICE OF 1HE INSPECTOR GENERAL 

WuhiJIIIOft, D.C. 20240 

JUl. - 9 1900 

Honorable Elton Gallegly Chairman, Subco .. ittee on Native 

American and Insular Affairs 

Ca..ittee on Resources 

House of Representatives Washington, D.C. 20515-6205 

Dear Mr. Chairman: 

As requested, we are providing responses to the audit-related 

questions the Subco .. ittee on Native American and Insular Affairs 

submitted after the Inspector General's June 26, 1996, testimony at 

the hearing on the Federal-Commonwealth of the Northern Mariana 

Islands Initiative on Labor, I_.igration, and Law Enforcement and 

Related Northern Mariana Islands Legislative Reforms. In view of 

the Inspector General's recusal, responses to the questions regarding Water Island are being provided by Chief of Staff and 

General Counsel in the Office of Inspector General. All other 

questions will be addressed by the Inspector General, Ms. Wilaa A. 

Lewis, under separate cover. 

If you or any aeabers of the Subcoaaittee have additional 

questions, please contact ae at (202) 208-5745. 

Sincerely, 

; ;;?/!·.~. /!/ l //('- ·v . '. . l,;,'c- r-'J . /·'c· • • • • (__. 

Richard N. Reback 

Chief of Staff and General Counsel 

Enclosure 

cc: Honorable Eni F. H. Faleoaavaega 
347 

QuestioD 1: What is the amount of annual lease rent that is being collected by the Department from each lessee? 

answer 1: The lease agreement requires payment of a fixed rent of 

$3,000 per calendar year, plus 3 percent of qross receipts over $200,000 but not more than $300,000 and 4 percent of qross receipts over $300,000. The lease defines qross receipts as income received 

from room rentals, bar sales, and subleases. Revenues from other sources are excluded from the computation of rental payments. The 

Department collects annual rent only from the Water Isle Hotel and 

Be.ach Club, Ltd. (the Lessee), which purchased all riqhts under 

the lease from Water 7eland Incorporated in 1965. The most recent 

information we have on the amount of annual rental payments, based on our March 1988 audit report entitled "Water Island Rental 

Payments," is that the Lessee paid rent of $21,031 and $43,018 for 

calendar years 1985 and 1986, respectively. 

QuestioD 2: Is this amount being collected from all of the 

sublessees, including those in Sprat Bay (who are at times referred 

to as sub-sub-lessees)? 

Answer 2: The Department does not collect rents or fees directly from sublessees. The Lessee collects annual rents of $25 or $100 

from each of its sublessee&. In that regard, the Lessee collects an annual rent of $100 from sprat Bay but does not collect any 

rents from ·sprat Bay's sublessees. Annual rents from the Lessee's 

sublessees are included in the Lessee's qross receipts for purposes · of computing the Lessee's annual rent payment to the Department. 

gueatioD 31 Did this r~irament to collect rent end or change at 

the expiration of the 40 year lease? 

&Dswer 31 The Office of Inspector General has no inforaation 

regarding the effect, if any, that the expiration of the lease h~d 

on the Lessee's obliqation to pay rent or the Department s 

obliqation to collect rent. 
348 

QUestion 4z Are these funds being properly collected and accounted 

for? 

Answer 4: We have no current information regarding whether rental 

payments are being properly collected and accounted for. Our 

september 1985 audit report entitled "Lease to Water Island, u.s. 

Virgin Islands" found that from 1972 through 1981, documentation was not available to verify either that rent was actually paid or 

received or to substantiate the Lessee's gross receipts. For the 

years 1982 through 1984, the hotel was closed for remodeling and 

therefore the Lessee properly paid only the $3,000 annual rent. In 

response to that audit report, the Office of Territorial and 

International Affairs (now the Office of Insular Affairs) instituted a new annual reporting process to verify lease payment 

computation. Our March 1988 audit report on Water Island's rental 

payments examined Water Isle Hotel and Beach Club, Ltd.'s 

accounting records as they related to rental payments for the lease 

of Water Island and to the payment of taxes imposed by the Virgin Islands Government for calendar years 1985 and 1986. We did not find any material discrepancies in the computation of rental 

payments for those years. However, we did conclude that the Office 

of Territorial and International Affairs needed to require the 

Lessee to submit amended annual reports to ensure that any 

adjus.tments to the Lessee's gross receipts resulting from its 

financial statement audit were disclosed and any additional rent due was paid. During the resolution of the 1988 audit report, we noted that the Lessee submitted amended reports for 1987 and 1988. 

5 
349 

QUestion 5: What management;. practices have attributed to the delay 

in resolving the transfer of title to Water Island prop~rties? 

Anaver 5: We have no information directly responsive to this 

question. By way of background, our 1985 audit concluded that 

interests of the Federal Government were not adequately protected 

by the terms and conditions established in the lease. 

Specifically, Section 10 of the lease placed the Department in an unfavorable position when the lease expired because it allowed the 

Lessee to occupy the island indefinitely until a successor was found and a fair compensation was paid for possessory interests. 

Regarding renegotiation of lease terms, we reported in our 1985 

audit that section 402 of Public Law 96-205 (the Omnibus 

Territories Act), passed in 1980, stated that "[n)o extension, 

renewal, or renegotiation of the lease of real property on Water 

Island in the Virgin Islands to which the United States is a party 

may be entered into before 1992 unless such extension, renewal, or renegotiation is specifically approved by Act of Congress." 

Given this situation, we recommended that the Assistant Secretary 

for Territorial and International Affairs determine whether Water 

Island was to be retained or declared excess at the expiration of 

the lease. If water Island was to be declared excess, we recommended that the Assistant Secretary notify the General 

Services Administration that the island would be available for 

disposal but still would be subject to the current lease and 

section 402 of Public Law 96-205. If water Island were to be 

retained, we recommended that the Assistant Secretary either seek 

congressional approval to renegotiate the current lease to obtain 

more favorable terms or develop a plan of action for when the lease 

expires. The plan should address how Water Island is to be used 

and which entity would be responsible for monitoring and 

controlling its use. In response to our recommendations, the 

Assistant Secretary reported that "the House Interior and Insular 

Affairs Committee, which earlier had imposed restrictions on OTIA's 

[Office of Territorial and International Affairs] authority to revise or modify the existing lease arrangement, has indicated that 

language will be placed in an Omnibus territories bill currently 

under consideration directing OTIA submit to Congress a plan 

providing for the disposition of Water Island upon the expiration 

of the present lease in 1992. It is our intent to comply with this 

legislative directive within the time limit imposed by the 

legislation." We deemed this response sufficient for us to consider the audit to be resolved. We have received no subsequent 

information from OTIA that states whether a plan was developed or implemented for the disposition of Water Island. 

6 
Quaation 6: The Environmental Impact statement was issued in May 1996. Why wasn't this initiated after the 1992 expiration of the 

lease? 

Anavar 6: We have no information responsive to this question. 

guaation 7: What was the Department's position on the value of the 

possessory interest to the hotel and what was the ruling of the 

court? 

Answer 7: We have no information responsive to this question. 

7 
351 

REsPoNSES TO QuESTIONS PROM Wll.MA A LEWIS 

U.S. Department of the Interior 

Office of Inspector General 

Responses to Additional Subcommittee Questions 

Submitted for the Record 

Hearing on the 

Federal-Commonwealth of the Northern Mariana Islands 

Initiative on Labor, Immigration, and Law Enforcement and 

Related Northern Mariana Islands Legislative Reforms 

(Held June 26, 1996) 

Subcommittee on 

Native American and Insular Affairs 

Committee on Resources 

U.S. House of Representatives 

Wilma A. Lewis 

Inspector General 

U.S. Department of the Interior 
352 

0 United States Department of the Interior 

OFFICE OF INSPECfOR GENERAL 

Washington, D.C. 20240 

Honorable Elton Gallegly 

Chairman, Subcommittee on 

Native American and Insular Affairs 

Committee on Resources 

House of Representatives 

Washington, D.C. 20515-6205 

Dear Mr. Chairman: 

JUL. I 0 1996 

As requested, we are providing responses to the audit-related questions the Subcommittee on 

Native American and Insular Affairs submitted after my June 26, 1996, testimony at the hearing 

on the Federal-Commonwealth of the Northern Mariana Islands Initiative on Labor, Immigration, 

and Law Enforcement and Related Northern Mariana Islands Legislative Reforms. In view of 

my recusal, responses to the questions regarding Water Island will be provided under separate 

cover by Mr. Richard N. Reback, Chief of Staff and General Counsel. 

In addition, we are providing a copy of our March 1996 audit report "Management of Public 

Land, Commonwealth of the Northern Mariana Islands" and of Governor Tenorio's response, both 

of which were discussed extensively at the hearing. Also, we are providing a copy of our 

October 1995 "Status of Improvements in Financial Management and Program Operations 

Commonwealth of the Northern Mariana Islands," which summarized major long-standing 

problems in financial management and program operations that have been identified in audits of 

the Commonwealth. We request that these three documents be included in the record of the 

proceedings. 

We appreciated the opportunity to provide testimony at the hearing. If you or any members of 

the Subcommittee have additional questions, please contact me or Mr. Reback at 208-5745. 

Since-~rely, ' · J fl ~'f'N<- . ·-· "/1 

Wilma A. Lewis 

Inspector General 

cc: Honorable Eni F. H. Faleomavaega 
353 

Question 1: What is the aggregate cost of all the amounts identified in your statement? 

Amwer 1: The monetary amounts identified in the nine reports total $770,789,342. The amounts 

presented in each of the nine reports are contained in the following table: 

Funds To Be Poe.ntial 

Report Lost Revenues• Put To Bctter Additional Total 

Use' Revenuea' 

~':.'~~~~~~:~~ ~· CNMI $25,650.105 0 $195,455,214 ••$469,224,047 $690,329,366 

Status of Improvements in Financial 0 0 0 0 

Manaacment and Propm Operations, CNMi (No. 96-l-157). November 1995 

A.sacssmenl and Colloet.ion of Income 13 ,850,000 0 17,534,000 31 ,384,000 

Taxco, CNMI (No. 95-l-694), 

Man:h 1995 

Income Tax Revenues, CNMI (No. 9S-J- 23,000,000 0 0 23,000,000 

1751. November 1994 

Contracting and Contract Administration, 0 5,963,022 0 5,963,022 

Commonwealth Utilities Corporation, CNMI (No. 95-1-106), November 1994 

Utilitiea Rate Structure, Commonwealth 0 16,400,000 0 16,400,000 

Ulililica Corporation, CNMI (No. 94-

1-1323), ScJ>i.cmbcr 1994 

Followup of Recommendation• 2,029,396 205,558 0 2,234,954 

g~n~r::. ;-lJ~~~~~;~\~~~: Funda, 

Followup of Recommendations 0 0 0 0 

Concerning the Economic Development 

Loan Fund, Commonwealth Development 

Aulhorily, CNMI (No. 94-l-936), July 

1994 

PoUowup of Recommendationa 498,000 980,000 0 1,478,000 

Concerning ~ Economic Development 

Loan Fund, Mariana blands Housing 

Aulhority, CNMI (No. 94-1-942), July 

1994 

Tolal $65,027 SOl $219 003,794 $486,758 047 $770 789,342 

• Includes projected Iottes for land exchanges penchng aa of June 30, 1994. 

•• Includes projc:dcd JosiCI for the remaining terms of leases that were unexpired as of June 30, 1994. Leases are generaUy for 25-

year terms . 

. 

1

Revenues that were not reallzcd because policies, procedures, agreements, or requirements were lacking or not followed. 

1Funds that could be used more: efficiently if management took actions to implement and complete the recommendation, including 

reductions in expenditures. 

'Monetary amount. from revenue-generating functions such as rent, leases, mineral royalties, or fees that were underpaid or not. 

realized because policies, procedures, agreements, or requirements were lacking or not followed. 
354 

Question 2: When the audit was issued regarding the mismanagement of public lands in 

the NMI, approximately $700 million in lost revenue was cited. Based on the late 

response by the Governor of the NMI, what do you now estimate the total in lost revenue? 

Answer 2: The audit covered the period October 1, 1989, to Sep:ember 30, 1994, and 

other periods as appropriate and included a review of selected applications, deeds, leases, 

permits, contracts, and appraisals for transactions that were either completed or pending 

at the time. We do not have any additional information pertaining !o the exchange of land, 

the issuance of leases, or the award of homestead permits that may have occurred since 

September 1994. Accordingly, we are unable to provide any new estimates. However, 

if the types of practices identified in the report as in need of correction continued after that 

date, additional losses would have occurred. We are providing a copy of our March 1996 

audit report "Management of Public Land, Commonwealth of the Northern Mariana 

Islands" and a copy of Governor Tenorio's response to the final report as Enclosures I and 

2, respectively. We are requesting that these two documents be included in the record of 

the proceedings. 

Question 3: (a) What other audits have been conducted in the last three years and what costs 

or loss of revenues have you identified? (b) Have there been timely replies to the audits? C> 

What percentage oflnspector General recommendations have been implemented? 

Answer 3(a): Our response to Question I covers all Office of Inspector General internal 

audit reports issued in the past 3 years. Internal audits are those reviews of internal 

operations that determine whether: (I) activities are conducted in accordance with laws and 

regulations; (2) activities are conducted economically and efficiently; (3) desired results of 

programs are being achieved; and ( 4) agency financial statements are presented accurately. 

In addition, we have performed two grant audits, the objective of which was to determine 

whether Federal grant funds were used for the intended purposes and were properly 

accounted for in accordance with applicable laws and regulations. We have also reviewed and 

processed 17 single audits during the past 3 years. Single audits, which are performed by 

independent public auditors, are comprehensive financial audits required by the Single Audit 

Act of 1984 for entities receiving $100,000 or more in Federal assistance in any fiscal year. 

These various audits and associated questioned costs are presented in the following table: 
355 

R• ri Num~r .... Title luueDate ........... c-· SINGLE AUDITS 

93-A-1.563 CcMnmonwealth Dcvc CNMIHYI988 9/13/93 $4,998.398 

94-A-3.5 Commonwealth ofthe Northt:m Mariana Islands. FY 1990 10/ll/93 0 

94-A-214 Commonwealth ofthe Northern Mariana Islands. FY 1991 1/4194 0 

94-A-419 Commonweahh Pms Authoritv, FY 1993 3/14194 0 

94-A-'2' Commonweahh Devcl ....... Authoritv, FY I 989 41"-'94 $6078.308 

94-A-,74 Commonwealth Utilities Corooration, FY 1990 5/6/94 $166,,09 

94-A-78.5 Commonwealth ofthe Northern Mariana Islands. FY 1992 6/13/94 0 

94-A-818 Commonwealth Utilities Corporation, FY 1991 6/16194 0 

94-A-836 Commonwealth ofthe N~ Mariana Islands, FY 1993 6120/94 0 

94-A.-.883 Commonwealth ofthe Northern Marianas Public School System, 

FY 1990 6/27/94 0 

94-A-969 Commonwealth ofthe Northern Marianas Public School System, 

FY 1991 7112194 0 

94-A-107.5 Northern MarianasCollcKC,CNMJ, FY 1991 7/29/94 $4,600 

94-A-1083 Mariana Islands HousinR Authority, FY 1993 813/94 0 

9.5-A-784 Commonwealth Ports Authoritv, FY 1994 4/1219.5 0 

9.5-A-1131 Commonwealth ofthe Northern Mariana Islands Public School 

S.,......_FYI992 7117/9.5 0 

~I .51 Commonwealth of the Northern Mariana Islands Public School FY 1993 712.5/9.5 0 

9.5-A-1342 Commonwealth ofthe Northern Mariana Islands, FY 1994 9/1.5/95 0 

GRANT AUDffS 

~~g9 Trust and Grant Funds Provided for the AmeriCIU1 Memorial Park 1126196 $141,619 

96-E-889 Expenditures Claimed by the CNMJ for FY 1993 and FY 1994 Under Federal Aid Grants from the U.S. Fish and Wildlife Service 

6110/96 $8!58,267 

Total $12,247,701 

4

Costs identified which are either unsupported, not expended for the purpose intended, or in violation of a provision of a law, 

regulation, or agreement. 
356 

Amwer 3(b): With the exception of the audit of public lands, to which a response to the 

draft report was never provided, the CNMI has provided responses in an overall timely 

manner to internal and grant audits performed by the Office of Inspector General and to 

single audits performed by independent public auditors. The effect of failing to respond 

to our draft audit report on public lands was that the CNMI did not take advantage of the 

opportunity to present its position on our findings and recommendations, along with any 

additional information that it believed would further clarify its position relative to the 

findings and recommendations, for inclusion in our final audit report. Accordingly, the 

final report was issued without the benefit of the response, and all recommendations were 

considered unresolved. The potential for early resolution of the recommendations was thus 

delayed until the time period established for post-report responses. 

Answer 3(c): The most current information available to us from officials within the 

CNMI and the Department of the Interior's Office of Insular Affairs regarding 

implementation of audit recommendations made during the past 3 years indicates the 

following: 45 (71.4 percent) of the 63 recommendations have been resolved and reported 

by those officials as implemented; 9 (14 .3 percent) of the 63 recommendations have been 

resolved but not implemented; and 9 (14.3 percent) of the 63 recommendations are 

unresolved. (Fifty-four of the 63 recommendations were addressed to the CNMI, and 9 

were addressed to the Department of the Interior's Office of Territorial Affairs, now the 

Office of Insular Affairs.) In addition, single audits reviewed by us during the past 3 years 

identified 633 recommendations, of which 319 (50.4 percent) are resolved and reported 

as implemented. There were no recommendations presented in the two grant audits 

performed by us during the past 3 years. 

To date, responsible officials within the CNMI have reported that they have implemented 

36 (66.7 percent) of the 54 audit recommendations that were addressed to the CNMI 

during the past 3 years and that 9 (50 percent) of the remaining 18 recommendations have 

been resolved. However, as our followup audits on earlier recommendations concerning 

the Capital Development Funds and the Economic Development Loan Fund showed, 

recommendations, although resolved, are not always implemented. Further, 

recommendations reported as implemented by the auditee are not always implemented fully 

or effectively. Specifically, only 4 (16 percent) of 25 resolved recommendations from 

earlier audits of those programs had been implemented fully and effectively at the time of 

our followup audits, notwithstanding the passage of several years. 5 

Question 4: There have been reports of misuse of government funds by officials in 

different segments of the NMI Government. What steps do you recommend to ensure the 

proper and adequate accounting of public funds in the NMI? 

'Thirty ... ix recommtndations were mad~ in the earlier audita, 32 of which were no1 implemcnlcd fully or- effectively at the time of our followup audits. Of 

the 36 rcconvncndations, the Commonwealth had agreed with 20 oflhe 30 recommendations made to it. and the Office of InsulAr Affairs had qrecd with 

$ ofthe 6 reoommendati0111 made to that Office. 

4 
357 

Answer 4: We recommend the following: 

(!) Implementation of Outstandin~ Office of Inspector General Recommendations· 

Over the years, the Office of Inspector General has made numerous recommendations that 

would improve the proper and adequate accounting of funds in the CNMI if the 

recommendations are implemented fully and effectively. We summarized major longstanding problems in financial management and program operations of the CNMI in the 

October 1995 report "Status of Improvements in Financial Management and Program 

Operations, Commonwealth of the Northern Mariana Islands" (Attachment). Among other 

issues, this report highlighted the major long-standing problems in financial management 

and program operations that prior audits had identified and the basic performance goals 

and specific improvement actions that the Commonwealth should strive to achieve in the 

areas of financial management, expenditure control, revenue collection, and program 

operations. Recommendations for corrective action that were summarized in the October 

1995 report included the following: 

- Ensure that all Commonwealth accounting systems are adequately maintained and are 

capable of generating annual financial statements, which are then audited in a timely 

manner. 

- Ensure that the encumbrance and accounts payable accounting systems provide the 

current and reconciled accounting data necessary to prepare accurate annual financial 

statements. 

- Approve, on an annual basis, governmentwide budgets that limit expenditures and 

transfer authorizations to the most current and realistic revenue projections. 

- Revise the encumbrance system to ensure that accurate and timely budget data are 

available for evaluation before budget allotments are released. 

- Implement controls for property management, conduct annual physical inventories, and 

limit access to expendable supply. 

- Implement procedures for ensuring that contractors comply with the terms and conditions 

of contracts and for determining whether contractor billings are reasonable and valid. 

- Establish formal written policies and procedures to monitor and review Capital 

Development Fund projects and project expenditures for allowability and sufficiency of 

supporting documentation. 

We believe that these recommendations and others in our October 1995 report can serve 

as a guide for the Commonwealth to address major long-standing problems that have been 

identified in our previous audit reports. 

(2) Technical Assistance· 

Priorities for future technical assistance by the Federal Government should be established 

with the identified problem areas in mind, and funds and assistance should be specifically 

earmarked to address the identified problem areas. 
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(3) Congressional Oversight Hearings· 

Periodic Congressional oversight bearings could serve as the necessary catalyst to 

encourage government officials in the CNMI and other insular areas to resolve and 

implement Inspector General audit recommendations. Such hearings would serve a 

particularly useful purpose because the Department of the Interior does not have the same 

level of authority or influence in the insular areas as it does in its own offices and bureaus 

to ensure that audit recommendations are resolved properly and implemented fully and 

effectively. In the absence of appropriate oversight of resolution and implementation 

activities, the benefits that can be achieved from the implementation of audit 

recommendations may not be fully realized. 

C4) Reporting Requirement· 

A requirement for insular area governments to submit an annual report to the Congress on 

actions taken to implement Inspector General recommendations would further encourage 

the implementation of audit recommendations and help ensure proper and adequate 

accounting of public funds. 

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SECOND N0Jt'1'H£RN MARIANAS 

CONSTITUTIONAL CONVENTION • UIS 

PROPOSED COMSTITUTIONAL 

AMENDMEtn' NO. __ 2_4 __ 

A PROpOS£0 CONSTITUTIONAL AMENDMENT 

To amend Article V relative to representation in the United 

States. 

THE SECOND CONSTITUTIONAL CONVENTION ADOPTS AND PROPOSES FOR 

RATIFICATION THE FOLLOWING AMENDMENT : 

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I. Article V is omenctecl to read : 

"ARTICLE V: REPRESENTATION TO THE UNITED STATES 

Section 1: Resident Representative to the Cnitecl 

A resident representative to the United States 

s hall be elected to represent the Com"'IIn"'ealth in the 

United States and perform those related duties provided 

by la,. The qovernor shall provide a certification of 

s election pr-Offtptly to the Unite_st States Department of 

State ·and to the resident representative. 

section 2: Term of Office. ·The term of office of 

the resident representative shall be t\ofO years, except 

that on the second Monday of January 1990, the term of 

office of the resident representative shall be increased 

to four years. In the event that the United States 

confers the status of umber or non-voting delegate in 

the United States Conqres• on the resident representative 

and such status requires a different term. , the ter-m of 

office of the resident r-epr•sentative shall be that 

required by such status. 

seett.on 3: aualitic:ations. The resident 

repl'eMnt.at.ift shall be qualified to vote in the 

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PROPOSED CONSTITUTIONAL 

AMENDMENT NO . __ 24 __ 

co.-onwealth, a citizen of the United States, at 

least tventy-five years of age, and a resident and 

do-iciliary of the Caa.:~nvealth for at leas t seven 

years, i-.ediately preceding the date on which the 

resident repr.sent.ative takes office. A different 

period of reeidel\ce and d~icile aay be provided by 

law. No pereon convicted of a felony in the 

Coaaonwealth or ip any area under the jurisdiction of 

t.h• United States aay be eligible for this office unles 

• full pardon has been qranted. 

Section 4: Annual Report . The resident 

representative shall s~t a written report by the 

first day of March of each year, except that an outqoin 

residant representative shall sw..it a final \ofritten 

report by the sKond. Monday of January of the year he o 

she leaves office, to the governor and leqislature on 

the resident representative's official activities durin 

the precedinq year and aatters requirinq the attention 

of the govern.ent or people of the C~nweal th. 

Section S: Ca-pensation. The resident 

representative shall receive an annual salary and 

reasonable allowance for expenses provided by la,. The 

salary aay not be changed durinq a term of oftice. The 

staff of the office of the resident representative shal 

be exempted from the civil service. 

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PROPOSED CONSTITUTIONAL 

AMENDMENT NO. _....;2~4=-----

Section 6: Vacancy. In the event of a vacancy 

in the office of resident representative to 

the United States, the qovernor shall appoint a 

Euccessor with the advice and consent of the leqislatur~ 

unless the United States confers the status of member 

or non-votinq deleqate in the United States Conqress 

on the resident representative and such status requires 

a different method of fi11inq vacancies, in which case 

vacancies shall be filled in the manner required by 

such status. 

Section 7: rmpeachment. The resident 

representative is subject to impeachment as provided in 

art~~le II, section 8, of this Constitution for treason, 

commission of a felony, corruption or neq~ect of duty.• 

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361 

HOUSE OF REPRESENTATIVES 

TENTH NORTHERN MARIANAS COMMONWEALTH LEGISLATURE 

FIRST REGULAR SESSION, 1996 

HOUSE JOINT RESOLUTION NO.lll:l 

A HOUSE JOINT RESOLUTION 

To request that the UnHed States Congress establish a non-voting Delegate from 

the Northern Mariana Islands wtthln the U.S. House of Representatives. 

Offered by Representatives: Diego T. Benavente, 

Joaquin G. Adriano, David M. Apatang, Vicente M. Atalig, Jesus T. Attao, Oscar M. Babauta, 

Roslky F. Camacho, Crispin I. Deleon Guerrero, Melvin 0. Faisao, Maria (Malua) T. Peter, 

Ka~ T. Reyes, Pete P. Reyes, Manuel A. Tenorio, P.Michael P. Tenorio and Ana S. Teregeyo 

Date: Janu31Y 17, 1996 

HOUSE ACTION 

Adopted: January 17, 1996 

SENATE ACTION 

Adopted: January 18, 1996 
362 

TENTH NORTHERN MARIANAS COMMONWEALTH • LEGISlATURE 

ARST REGUlAR SESSION, 1996 

A HOUSE JOINT RESOLUTION 

H. j. R. NO. 10-1 

To re'luest that the United States Congress establish a non-voting 

Delegate from the Northern Mariana Islands within the U.S. House of 

Representatives. 

1 TAKING NOTE that the Covenant negouatmg history makes it clear that 

2 Section 901 does not preclude the Government of the Northern Marianas from 

3 requesting that a Delegate from the Northern Mariana islands be established in the 

4 Congress of United States; 

5 FINDING that the current status of Commonwealth-federal relations, which 

6 has been marred by miscommunication, misinterpretation, and misinformation is 

7 further exacerbated by the lack of a constant and vigilant Commonwealth voice 

8 and presence in the House of Representatives and its various committees and 

9 subcommittees; 

10 FINDING that the Northern Marianas Commonwealth Legislature has 

11 overwhelmingly approved two resolutions, namely House Joint Resolution 8-5 and 

12 Senate joint Resolution 9-6, urging the Congress of the United States to establish a 

13 Delegate from the Northern Marianas within the U.S. House of Representatives; 

14 OBSERVING that Article V, Section 2, of the Commonwealth Constitution as 

IS amended by Constitutional Amendment 24, provides that the United States may 

16 confer the status of nonvoting member delegate in the United States Congress on 

l7 the Resident Representatives; 

18 RECOGNIZING with gratitude ·that on August 10, 1994, Guam Delegate Robert 

19 Underwood introduced H.R. 4927 in the l03rd Congress, to provide a nonvoting 

20 delegate to the House of Representatives to represent the Commonwealth of the 

21 Northern Mariana Islands; 
363 

HOUSE JOINT RESOLUTION NO. 10.1 

1 BELIEVING fervently that the pursuit of the delegate seat is imperative in 

2 attaining full status as a member of the American political family in which thus 

3 far the Northern Mariana Islands remains the only U.S. insular area not to be 

4 represented in the United States Congress; 

5 HOLDING TO BE TRUE that non-voting delegate status for the Resident 

6 Representative would neither diminish the full force and effect of the Covenant to 

7 Establish a Commonwealth of the Northern Mariana Islands in Political Union 

8 with the United States of America nor in any sense abrogate, qualify, or release 

9 rightful claims to local self-government contained in Article 1; Section 103 of the 

10 Covenant; it is 

ll RESOLVED by the House of Representatives of the Tenth Northern Marianas 

12 Commonwealth Legislature, the Senate concurring, that the 104th Congress of the 

13 United States of America is hereby requested to: 

14 (1) CONFER the status of nonvoting delegate In the United States 

15 Congress on the Resident Representative; 

16 (2) PROVIDE that the Delegate from the Northern Mariana Islands 

17 receive the same compensation, allowance, benefits and be entitled to those 

18 same privileges and immunities as a Member of the United States House of 

19 Representatives; 

20 (3) WORK CLOSaY with the present Resident Representative in the 

21 drafting of federal legislation necessary to realize the Delegate from the 

22 Northern Mariana Islands; and 

23 RESOLVING FURTHER that the Speaker of the House and the President of the 

24 Senate shall certify and the House Clerk and the Senate Legislative Secretary shall 

25 attest to the adoption of this Resolution and thereafter transmit certified copies to: 

26 the Honorable William Jefferson Clinton, President of the United States; the 

27 Honorable Newt Gingrich, Speaker of the U.S. House of Representatives; the 

28 Honorable Richard Armey, Majority Leader of the U.S. House of Representatives; 

29 the Honorable Richard Gephardt, Minority Leader of the U.S. House of 

30 Representatives; the Honorable Don Young, U.S. House of Representatives; the 

31 Honorable Elton Gallegly, U.S. House of Representatives; the Honorable George 

32 Miller, U.S. House of Representatives; the Honorable Eni F.J. Faleomavaega, U.S. 

33 House of Representatives; the Honorable Robert Underwood, U.S. House of 

34 Representatives; the Honorable Eleanor Holmes Norton, U.S. House of 

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HOUSE JOINT RFSOLlTfJON NO. 10-1 

1 Representatives; the Honorable Carlos Romero-Barcelo, U.S. House of 

2 Representatives; the Honorable Victor Frazer, U.S. House of Representatives; the 

3 Honorable AI Gore, Vice President of the United States and President of the U.S. 

4 Senate; the Honorable Robert Dole, Majority Leader of the U.S. Senate; the 

S Honorable Tom Daschle, Minority Leader of the U.S. Senate; the Honorable Frank 

6 Murkowski, U.S. Senate; the Honorable ]. Bennett Johnston, U.S. Senate; the 

7 Honorable Daniel Inouye, U.S. Senate; the Honorable Daniel Akaka, U.S. Senate; and 

8 the Honorable Bruce Babbitt, Secretary of the U.S. Department of Interior. 

Adopted by the House of Representatives on january 17, 1996 

and by the Senate on january 18, 1996 

~ Speaker of the House 

(~JNG House k 

CERTIFIED BY: 

ATTESTED BY: 

Page 3 

«;JESUS R. SABLAN 

res1dent of the Senate 

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HOUS!; OF REPRESENTATIVES 

TENTH NORTHERN MARIANAS COMMONWEALTH LEGISLATURE 

FIRST REGULAR SESSION, !996 

HOUSE BILL NO. 10:152 H D 1 

AN ACT 

To enact a moratorium on any expansion of the garment manufacturing Industry in the 

CNMI, including a prohibition on the Issuance of new business licenses lor garment 

manufacturing and a Umttatlon on the Importation of allen labor to worl< in the garment 

Industry. 

onered by Representatives: Pete P. Reyes, 

Marla (Malua) T. Peter, Melvin 0. Falsao, Jesus T. Altao and David M. Apatang 

Date: February 16, 1996 

HOUSe ACTION 

Standing Committee Report: None 

Rrst ~aiding:· February 16, 1996 

Second Reading: February 22, 1996 

SENATE ACTION 

Standing Committee Report: None 

SeCOnd and Anal Reading: February 23, 1996 

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TEN1li NORniERN MARIANAS COMMONWEALlli LEGISLATURE 

H. B. NO. 10-152, H.D.1 

FIRST REGULAR SESSION, 1996 

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AN ACT 

To enact a moratorium on any expansion of the garment manufacturing 

industry in the CNMI, including a prohibition on the issuance of new business 

licenses for gannent manufacturing and a limitation on the importation of alien 

labor to work in the gannent industry. 

BE IT ENACTED BY TilE TENTH NORllll!RN MARIANAS COMMONWEALTH UOISLATUR£: 

Section 1. Ii.lJ.c. This Act shall be referred to as "Garment Industry Moratorium Ac 

'!of 1996." 

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: Section 2. E.inl1inu and Pgmpsc The garment manufacturing industry has been in 

:! existence in the CNMI since 1983. The industry was established as the result of an intensive 

; j campaign by the CNMI government to attract foreign investors. These investors would have 

1 

· the opportunity to take advantage of the Headnote 3A provision of the Harmonized Tariff 1 i Schedule of the United States which allows garments manufactured in the CNMl to enter the 

I 1· United States duty free. 

I The garment industry has had a very significant impact on the CNMI economy. It is 

:~ responsible for over $13 million in annual direct revenues to the gove~enL However, 

~ording to an OTIA funded study, "''be Impact of Aliens on the Fiscal Conditions of the 

Commonwealth of the Nonhcrn Mariana Islands," the net impact in 1992 of the garment 

industry on the CNMI was a negative $1.3 million. This figure was anivcd at by deductin& the 

per capita cost of government services from the per capita revenues generated. It therefore ! appears that even the fmancial contribution of the gannent industry 10 the economy of the 

I 

CNMI is open .to question. 

The industry also provides approximately 7,500jobs which create additional economic 

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stimulation to local sales and services. However, ninety percent of those 7,500 jobs ue held 

I, by non indigenous workers: no=ident aliens and citizens of the former Trust Territory of the 

! I !Pacific Islands. 

I The use of nonresident gannent workers is pervasive in the industry. Currently an 

! !estimated average of 400 no=idents are employed per garment manufacturer. Thus, if ten 

j I new garment factories are licensed, an additional 4,000 nonresident garment workers may be 

; , needed to operate them. The influx of so many additional nonresident workers would place a 

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H . B. No. 10-l:Sl, H.D.l 

~endous bwden on allgov.:mment services. Laborfunmlgration enforcement and hcahl 

services would be particularly affected. Sewer and solid waste disposal would be stresse.: 

beyond capacity by the intrOduction of additional gannent manufacturing facilities anc 

1 workers. The Legislature finds that neither the social structure of the CNMI nor th1 

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.1 mechanisms of goverrunent which provides public services could sustain the burdens tha 

would. be created by the entry of such large numbers of additional alien workers into the 

j i Commonwealth. I The Legislature has considered the fiscal impact of an expanded garment indusll') 

together with the social costs of sustaining an additional large transient alien population anc 

the adverse effects of the industry on the ·natural environment and infrastructures. The 

Lecislature tlsereupon finds that the health, welfare, and safety of the community dictates thai 

there be an immediate morarorium on any expansion of the garment industry. 

It is therefore the purpose of this legislation to prohibit the issuance of new business 

licenses for garment manufaCtUring and 10 limit the number of nonresident workers employed 

by the industry. These purposes were fonnerly implemented by regulation. The fonner 

regulations accomplished the following: placed a moratorium on the issuance of business 

liceiiSCs for garment manufac:turlng; placed restrictions on the issuance of nonresident worker 

c:errific:ates for garment workers; established a garment worker pool and quotas per 

manufac:turcr !or garment workers; e$1ablished reponing requirements for garment 

IIWiulac:lllrers. These regulations were admini.Jtralively repealed in 199.5. It is the intent of this 

leps~on 10 swutorily and administratively re-impo.sc the moratorium and restrictions on the 

garment industry that has served the Commonweahh well sin<:e 1987. 

Sec:tion 2. Amendment l CMC sec:tion 2453 (d) is hereby amended to read as 

follows; 

"(d) To license and regul11e businesses engaged in the construction trade and to 

license buslncssea which are oot otherwise licensed or regulated by any other 

depanme~t, agency, insaumentalityA or law of the Commonwealth. Except as 

otherwise provided by law, the Depanmcnt of Commcrc:e shall not issue or cause to be 

issued any business Ucense for the purpose of garment manufacturing." 

Sec:tion 3. Amendment Tide 4, Division S of the Commonwealth Code is hen:by 

ameiuled 10 add a new Chapter 6 to read as follows: 

i I "CHAPTER 6. 

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Restrictions on Garment Manufacturing 

Sec:tion 5601. Definition~ For purposes of this Chapter: 

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(a) "B~lness Ucense" means that license required to engage in or 

conduct business under 4 CMC section 1503. 

(b) "Engaged in Substantial Cons1rucrion or Manufacturing" means: 

(!) that manufacturing of textiles or textile products has begun 

or will begin on or before the end of the fourth month following the 

effective date of !his Act; and 

(2) the applicant provides evidence of the required working 

capital (cash) in an amount of nor less than one million dollars 

(1,000,000) and proof of its deposit in a CNMI banking institution; and 

(3} one of the following requirements: 

(I) the applicant has executed a lease or leasehold 

agreement or otherwise acquired an interest evidenced in writing in real 

propeny within the Commonwealth for the purpose of erecting thereon z 

facility for the ltWlufactute of textiles or textile products; or 

(ii) the applicant has entered into a written contract(s) for 

the conscruction (tncluding prefabrication) of a facility to be utilized for 

the manufacture of textiles or textile products on real propeny in th< 

Commonwealth acquired for such purpose; or 

(iii) the applicant 1w pw:chased or executed contract(s; 

for the purclwo of necessary capital equipment designed for anc 

typically employed in tho manufacan of textiles or textile products; or 

(iv) the applicant has recruited or caused by bindinf 

agteement to be reauited on its behalf at least eighty percent of non· 

Immigrant alien woD:en skilled in the manufacture of telttilcs or teltti!e 

products; or 

(v) the applicant bas made timely application tc 

permiuing authorities of the Commonwealth government (e.g. DEQ 

CUC, CRM) for any permits required by law to be issued as a conditior 

for the operation of a garment factory evidenced by a Department o: 

Finance receipt of payment of the applicable fees. 

(c) ~oannent Manufacturer" means any sole proprietorship, pannership 

cor11oration, film, association, or other group or combination engaged in the 

creation, production, or assembly of telttiles or textile products for purposes o: 

export. 

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(d) "Oannent Worker" means any person whose job title is listed und 

the definition of garment industry in the Dictionary of Occupational Tit! 

published by the U.S. Sc=wy of Labor. 

(e) "Qualified Garment Manufacturer" means a garment manufactur 

engaged In manufacturing textiles or textile products. 

(f) "Quota of a Manufacturer" moans the numbu of non-immigrant alic 

garment workers allowed per garment manufacturer pursuant to regulations 

effect prior to O!;tober 15, 1995. 

(g) ''Texlil~ or Te;~~;ti1e Products" includes all manmade fibers, to~ 

yarn, piece goods, made-up articles, gamients, and other textile manufactur• 

prodUCtS which iS made in whole Of in pan from any natural or manmade fib< 

or blend thereof, that arc classified under Pan 6 of Schedule 3, Pans l, 4, S, 

or 13 of Schedule 7, Put 1 of Schedule 8, or Pan 1 of the Appendix tot: 

Tariff Schedules of the United States (19 U.S.C 1202). 

Section 5602. Pmblbit!gn go Issuance of New Ucenscs Except as otherwi 

provided in this Act, the Dc:panmcnt of Commerce shall not issue or cause to be issu 

to any applicant a business license for the purpose of garment manufacturing. 

Section 5603. Re,.lricrion on Rtoew•l ofUctn•t Notwithstandinl any oth 

provision of law, the Dc:panmcnt of Commcrc:c shall not renew or cause to be renew• 

to any applicant a business licenso for the purpose of gmnent ~anufacturinl unless ti 

applicant is a qtWificd garment manufacturer and can show one of the following: 

(a) that the applicant held a valid business license for the purpose 

garment manufacturinc and was engaged in the manufacturing of textiles 

textile produc:u prior to 1anu8I)' 1, 1995; or 

(b) that the applicant was issued a valid business license for the purpo 

ot: gannent manu!actllrln: between January 1, 1995 and the effective duo 

this Act and that tho applic:ant is engaced in substantial consauction 

manufac:mring on the effective date of this AcL 

Section 5604. Reslrict!on on Inuance of Labor Ccnificarea apd Envy Permits 

(a) Tho Department of Labor and Immigration shall not issue or cau 

to be issued oc renewed any Nonresident Worker Entry Pcnnit or Nonreside 

Worker Certificate 10 or on behalf of any non-immigrant alien to be employe 

as a garment worlcer except upon a written findin: by the Seaetazy of Lab· 

and Immiption that tho applicant is: 

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.(1) n:newinJ an existing employment contract; or 

(2) recruited to replace a non-immigrant alien garment worke 

whose contract of employment with a qualified garment manufacture 

has tenninated or willrenninate within ninety (90) days; or 

(3} recruited to fill an alien garment labor employment qual 

authorized by the Secretary of Labor and Immigration prior to Octobe 

15,1995. 

Section 5605. Gannem Worker Pool. There is hereby established a ganner. 

labor pool which shall consist of all unused or unfilled non-immigrant alien ganner. 

worker positions within the quota of a manufacturer. The criteria and procedures fc 

defining and allocating these unused or unfilled positions among licensed qualifie 

garment manufacturerS shall be as set forth by regulation prior to October 15, 1995. 

Section 5606. Reportjng Requirements and Penalties Reponing rcquiremen: 

and penalties shall be as set forth by regulation prior to October IS, 1995. 

Section 5607. Autboritv IQ Implemem by Rules and Resulatjons Th 

Secretary of Labor and Immigration, the Secretary of Commerce, and the Secretary c 

Finance shall jointly promulgate regulations ro implement the purposes of this Act. T 

the extent that they do not conflict with the provisions of this Act, these regulncior. 

shall include re-promulgating regulations originally published in Volume 9, No. 

(October 15, 1987} of the Commonwealth Register as Emergency Regulation: 

republished as Final Regulations in Vol. 10, No. 1, of the Commonwealth Registt 

(January 19, 1989), subsequently amended and in effect prior to their repeal effecth 

May IS, 1995 and Octoba 15, 1~5 " 

Section 4. Rarificatjog Any proc:cdural or legal defect in the promulgation of thos 

j j fonner reg\llations referenced in 4 CMC section 5607, as enacted by this Act. is hereb 

' ratified. 

I Section.S. Limitation on App!icabj!jty Unless specifically made applicable by Joe; 

law, this Act shall apply only to the Third Senatorial Di.saict. 

j Section 6. Se.verabmJ;Y. If any provision of rhis Act or the application of any sue 

·!provision to any person or circumstance should be held invalid by a coun of compete: 

~~j~sdlction. the remainder of this Act or the application of its provisions ro persons c 

1 cu-cumsrances other than those IQ which it is held invalid sball nat be affected thereby. 

i j Section 7. Savjngs Oause. This Act and any repealer contained herein shall nor t 

~ i construed as affecting any existing right acquired under contract or acquired under statui< lj . 

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z;pellled or undct any rule, regulation or order adopted under the starutes. Repealers containec 

In this Act shall not affect any proceeding instituted under or pursuant to prior law. Th, 

enactment of this Act shall not have the effect of terminating, or in any way modifying, an: 

I; liabilicy, civil or criminal, which shall already be in existence at the date this Act become: !I 

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, I effective. 

, Section 8. Effec:riye Pate. This Act shall take effect upon itS approval by the Governo 

; ! or upon iu becoming law without such approval. 

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II =u;~, 

II. Acting Speaker 

House of Representatives 

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A'ITES"IE> BY: 
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H. B. No. 10-152.. H.D.1 

Overridden by the House of Representatives on May 28, 1996 and the Senate on 

April 10, 1996 with the affll'lllative vote of two-thirds of the members in each house. 

CERTIFIED BY: 

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~-0 .B 

Speaker of the House 

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GoV.COMM. 

(HOUSEJ. 

/() .. 11 

-01£ 

COMMONWEALTH OF THE NORTHERN MARIANA ISU\NDS 

JISSUS C. 6QRJA .... ...,.....,.. 

caller Box 1 CXX>7 

Sftlpan. MP 901150 

Telephone' (67016<14-noo 

Fax: (670) 6G4-2llt 

The Honorable Diego T. Benavente 

Speaker, House of Representatives 

Tenth Northern Marianas 

Commonwealth Legislature 

Saipan, MP 96950 

and 

The Honorable jesus R. Sablan 

President of the Senate 

Tenth Northern Marianas 

Commonwealth Legislature 

Saipan, MP 96950 

Dear Mr. Speaker and Mr. President: 

0 I JUN \996 

This is to inform you that pursuant to tli.e override of H.B. 10-152, 

H.D.1, entitled, the "Garment Industry Moratorium Act of 1996," by 

the House of Representatives and the Senate, the bill became Public 

Law No. 10-9. 

'1X6 ~~ww Fr;+N C. ~;~RI~ CC: Department of Commerce 

Department of Finance 

Special Assistant for Programs and Legislative Review 
374 

'Tfie J{ouse of 1?.§.presen.tatives 

NORTHERN MARIANAS COMMONWEALTH LEGISLATURE 

P.O. Box586 

MA'f 3 0 1995 

The Honorable Froilan C. Tenorio 

Governor 

Commonwealth of the Northern 

Mariana Islands ~itolHi!l 

Sa1pan, MP 96950 

Dear Governor Tenorio: 

Sal pan, MP 96950 

This is to inform you that the Tenth Northern Marianas Commonwealth Legislature repassed 

House Bill No. 152, HD.l, the "Gannent Indusay Moratorium Act of 1996," over your veto, by 

the affirmative vote of rwo-thirdl (2/3) of the members of each House, in the House of 

Representatives on May 28, 1996, and in the Senate of April 10, 1996. 

House Bill No. 10-152, H.D.I is now law. Please inform us of the Public Law number assigned lU LIU:S I'U;~ 

Sincerely, 
375 

COIIMONWEALTH Of THE NORTHERN MARIANA ISLANDS 

DEPARTMENT Of PUBLIC SAFETY 

Jo" M. Sablan •ulklno 

C•ll•r •ox 10007 

S.lp8n, M8rla1111lslanda HtiO 

MEMORANDUM 

Com~t~lulmtu, DPS 

Jwt M. Ctutro 

Date J11ly 09, J99(i 

To Jaao N. Babaata 

w .. hhtcto• Repnse~~lltive 

From : Director of Corredlou 

Subject: CNMI Prison Keport 

JJim,lt>rofC:,.,..altlm 

.lou C. ,<;m, N/r:ola. 

A' per your request, the totaiiMI&tc's Serving Sentence in the CNMI prison, ., of July 

1,1996 are u followed: 

Jnniatea Serving Scntcncc in Saipan ~ 

Tinian _QJ_ 

Rota _QJ_ 

TOTAL:.....6L 

Detention Facility (Uetainees): 

Awaiting Trial ..J.L_ 

A waiting Sentence --'l.L. 

TOTAL: ....J.L 

Breakdown of Inmate population by Citizenship, induding Tinian and Rota: 

CNMJ 

Guam 

Palau 

Philippine 

Chuuk 

Japane.~ 

ChiPohnapei 

Korean 

Dolainee'• 

(see attached) 
376 

1 hope that this Information provided is sufficient. Should you have any other 

concern, please feel free to contact my office. 
6126 Holiday Pay 

6213 

6218 

6219 

6224 

6225 

6'301 

6'302 

6304 

6305 

6440 

Totall'enonnel 

Pues & Sub!ocrlpliuns 

Prlnttng & Photocopying 

Proft.'!llllunal Services 

Rcpain; & Maintenance 

Travel 

llouk8 & Library MaterlalR 

Poodlll!ms 

Supplies-Office 

Suppllcs-Opcrattuns 

}/umlture /Fixture 

Toul OperatiON 

Grand Total 

377 

22,824.(16 

$] 20871403 

140.00 

550.00 

700.00 

10,597.44 

1,400.00 

350.00 

2~5,000.00 

1,400.00 

4,900.00 

1,3110.62 

$2Z!id!6!1.!!fi 

Sl.W.Q82.D9 

28,96.~.72 

$1 601 935 Q9 

2..;().00 

600.(10 

1,000.00 

10,000.00 

2,000.00 

500.00 

250,000.00 

3,000.00 

10,000.00 

0 

$277 350111 

S1 879 285 Q9 
378 

Commonwealth of the Northern Mariana Islands 

Office of the Resident Representative to the United States 

2121 R Sir«~ . NW, Woshington, D.C. 20008 • Pllono, (202) 67l-5869 • FAX, (202) 67l-S813 

Juan N. Babauta Rnident R~rnent.ative 

July 10, 1996 

Hon. Elton Gallegly 

Chairman, Subcommittee on Native American 

and Insular Affairs 

U.S. House of Representatives 

1522 Longworth House Office Building 

Washington, DC 20515 

Dear Chairman Gallegly: 

I am writing to add factual detail regarding prison inmates 

from the freely associated states to the record of the hearing your Subcommittee held June 26, 1996, on the report of the joint Federal-CNMI Labor, Immigration and Law Enforcement 

Initiative. 

The second of the two recommendations made in that report 

was that CNMI Covenant funds be directed to improving prison facilities. I testified at the hearing that this recommendation fails 

to take into account that a significant number of inmates in the 

CNMI are immigrants from the freely aBSociated states. 

Congress committed to mitigating the fiscal impacts to the CNMI 

Government of such immigrants in Public Law 99-239. 

Furthermore, I testified, Covenant funds, which Congress 

has designated to aid economic development and raise the 

standard of living of the people of the CNMI, would not be 

appropriately used paying for the costs of incarceration of 

immigrants from the freE>Iy a3sociated states. 

I provided at the hoaring a 1993 population count of freely associated state citizens in CNMI prisons. I have now received a current count, as well as information on the operational costs the 

CNMI bears. Summarizing the attached documents: 

13% of the inmate and detainee population are freely associated state citizens 

approximately $195,000 in currt>nt year and $247,274 

in projected FY97 operational costs arc attributable to 

freely associated state citizens 

approximately $1,447,368 of the estimated $llmillion 

needed for prison capital expenditures can be 

attl'ibuted to the impact of freely associated sta.te 

citizens 
Hon. Elton Gallegly 

July 10, 1996 

Page2 

379 

Thank you for adding this information to the hearing 

record. 

I would also like to take this opportunity to note that the 

Interior Department has long argued - to justify its ten year 

failure to provide an annual report to Congress on the fiscal 

impacts of immigration from the freely associated states - that it 

is simply too difficult to obtain data needed to make such a report 

from the CNMI Government. For your information, I requested 

the enclosed data from the CNMI Government on June 27 and 

received it two weeks later. 

'f!W, 

BABAUTA 1 

Representative 

cc: Allen Stayman, Office of Insular Affairs 

enc: CNMI Prison Report 
380 

. COMMONWEALTH OF THE NORTHERN MARlt\NJ\ JSU\NOS 

Office of !he Inspector General 

U.S. Department of !he Interior 

North Pacific Region 

238 Archbishop F. C. Flores Street, Suite 807 

Pacific News Building 

Agana, Guam 96910 

Attn: Mr. Peter J. Scharwark 

Dear Mr. Scharwark: 

IIAT 30 lll6 

ca1er eox tooo7 - . MP00050 

lt'""""""' !6701 6<1+-2200 

Faa:: IG70t ~221 I 

~~;~~ ?r·~ t 

lfi .jUN 0 7 1996 ;_j· ~._,_. ___ ---· · Uertfl Pcciiic ; .. ~~~~ 

~llfGu•m 

Re: Final Audit Report on Management of Public Land, No 96-I-596 

This is to provide the response requested in Inspector General Lewis' letter of March 20, 

1996, to !he Final Audit Report on Management of Public Land, March, 1996. 

First, on behalf of myself and my staff, I would like to apologize for our failure to respond 

to !he draft report. This was not due to lack of concern about !he report, but an 

adminislrative oversicht on our pan. I hope that this did not inconvenience you. 

I recognize that we have missed the deadline for responding to lhe draft report, and that the 

March report is a final report. However, I must point out one very important error in the 

assumptions underlying the audit. The Inspector General's lener stales !hat an objective of 

the audit was 'to determine whether the Commonweallh was effective in ... (2) controlling 

and utilizing U.S. Government land IJ'ansferred to lhe Commonwealth .. .. • There is an 

erroneous assumption underlying this statement. The lands being managed by the Division 

of Public Lands were not U.S. Government land IJ'ansferred to the Commonwealth. Such 

lands were lands owned by the Japanese Government and Japanese nationals prior to June, 

1944. Following World War 11, those lands were managed by the Trust Territory 

Govemmen~. which was created by the United Nations. While it is true that the U.S. 

Government administered the Trust Territory Government until creation of thoo 

Commonwcallh, the Trust Territory Government was not a pan of !he U.S. Government, and 

the public lands were not U.S. Government lands. They have belonged to !he people of lhe 

Northern Mariana Islands since 1944, first in trust and now directly. 

The Audit Report is in three parts: Land Exchanges, Lease Management, and Homestead 

Administration. We will respond to each part of !he Report separately. 
381 

I. LAND EXCHANGES 

The Report makes. three rcc:omniendations: That we should1. Develop and implement written policies and procedures which mjuire that land 

exchanJeS arc ofcompanblc value based on current appraisals; 

2. Develop and implement written policies and proc:cdures which mjuire that land 

exchanges. are made only when. they serve a public puJpOse; and, 

3. . Suspend ali pending land exchange agreements until the first two recomiiiCildations 

have been implemented. 

RESPONSES 

l. The Division of Public Lands issued new land exchange regulations on May IS, 1996, 

effective May 25, 1996. These rqulations require that land exchanges be based on 

appraisals of fair marlcct value. The regulations do not impose a strict requirement 

about hOw recent the appraisal must be, because we believe that we must relain some 

flexibility. A copy of the new rqulations are enclosed for your information. Please 

. sec especially paces 7-8 for rules dealing with appraisals. 

2. The new regulations also require the Governor's Certification or the Legislature's 

Declaration or Determination of a public purpose, as the fust step in a land exchange. 

Please sec page 10, number S.A.I, for this rule. 

3. Land exchanges were temporarily halted. However, they are now proceeding, 

pursuant to the new regulations. 

II. LEASE MANAGEMENT 

The Report makes three recommendations: That we should1. Develop and implement policies and procedures which require that lease agreements base minimum rentals on the appraised fair marlcct value; 

2. Require thJt the financial documents n:quired by our lease agreements be provided; 

and, in a related matter, make certain that lessee rental calculations are accurate; and, 

3. Insure that lease rental payments are collected, or remedies provided in the lease 

agreements are pursued in a timely manner. 

RESPONSES 

1. It is not possible to "develop and implement• the changes needed to comply fully with 

-2· 
382 

lhis recommendatior. in a short time. However, several steps have been taken or are 

being considered. 

a. The Division of Public Lands is seriously considering issuing regulations 

governing lhe leasing of public lands. If a decision is made to issue 

regulations, it will be a lenglhy process,· probably requiring lhe input of many 

concerned people, and involving one or more public hearings. It is our hope 

!hat such regulations would result in a more regularized procedure for lhe 

leasing of public land, one which would satisfy your recommendations, at least 

in part. 

b. The Division of Public Lands has had lhe informal policy of renting public 

lands at 8% of the value of the land at least since early 1988, according to 

minutes of the MPLC Board. However, we recognize !hat lhat has not always 

been done. The regulations, if issued, may be expected to address this issue, 

including both the 8% figure ilself, and the procedures for determining rent. 

However, it is my hope that the Division will not adopt a strict 8% rule, 

because we do need some flexibility in the leasing of public land. For 

example, some leases may provide other benefits to the Commonwealth-such 

· . as educational, cultural, or ecoaomii:.--in addition to the rent being paid. Such 

benefits should not be ignored. 

c. The Division is seriously considering either hiring an employee or retaining a 

consulting firm with expertise in the commercial leasin& of land. The intent of 

this step would be to bring professional expertise to lhe leasing process. Care 

must be talccn in lhis step, of course, to insure !hat lhe Division receives a 

benefit at least equal to the cost. 

2. 'The Division has hired a new manager of its Account Compliance Section. This 

individual has training and experience in bolh business and computer technology. He 

has already begun the process of modernizing the Division's Account Compliance 

methodology, including modern computer software adapted to lhe Division's needs. 

'This improved leadership in the Account Compliance Section, and modem computer 

~ology, will improve the monitoring of accounts. Included in his review of the 

problems of the Account Compliance Section is the failure of some lessees tO provide 

financial docwnents. He is developing a method of follow· up, to require 1cssees to 

provide lhe required documents. 

3. 'The new Account Compliance Manager has reviewed the delinquent account problem. 

It is ·his plan to take lhe following stepS afttr the new computer software has been 

acquired and installed, and the employees trained: To send notices of delinquency to 

all delinquent lessees and permittees; and to refer lhose aa:ounts which are not 

brought current, or at least do not make arrangements to ba:omc current within a 

reasonable time, to the Division's attorneys for collcc:tian. This will take time, 

. because he estimates that there may be as many as 200 delinquent accounts. It is not 

possible to estimate how many of those will require lepllction to collect. However, 

it is lhe Division's goal, through these steps, first to bring all accounts current (or to 

-3-
383 

write off uncollectible accounts, to the extent neccmry), and then to keep them 

cumnt tbrougb improved monitoring and enfortement. 

· 4. The division Ills hired a new l..aDd Enforc:cmcnt Manqcr, who is worldJ1I to improve 

. on-site inspections .of les3ees IIICI penni~ HOwew:r, il will.IIOl be possible to 

· inspect evr:ry leuehold IIICI permitted m:a as often as mipt be pn:fened, due to the 

. . ~arge number or illspectioas 10 be conducted, and limited staff (3 employees). The 

Land ED!or=nent staff also bas responsibility for inspecting encroachments on the 

public lalld, and bomestad lots. 

S. In connection with items number 2 and 3 above, the Division bas requested that a 

second attorney be assigned Cull time to the Division. While this will take lime, when 

it is aecomplished, it should facilitate follow up on enfon:ement of lease provisions. 

In. HOMESTEAD ADMINISTRATION 

The Report ma1ces four ru:ommendations: That we sboulcllL Require thai all deeded lots be inspected periodically, to insure that they are being 

used in accordanc:c with "Jaws, ~ and deed latriclioas. 

lb. Develop and implement policies and procedures to inJure that bomeslead permits are 

awarded to applicants who are eligible under applicable rqulations and who have the 

&realest need. 

2. Review all previously issued homestead deeds and permits and perform 011-site 

~ 

inspectioN so that assurance is provided . that deeded bomesteld loti are being used in 

with applicable laws, rqulations, and deed restridiolls. 

l. Initiate administrative IIJd/or lep1 action to re-acquire the CoDowiq homestead lots 

(that is, cuc:el the deeds and return the lob to the Division of Public Lands): 

L Lots which the recipients are using or subleasing improperly; 

b. Lots which the recipients sold in violation of the 10-yar Constitutional 

requirement for homestead ownership; and, 

c. Lots which were deeded to ineligible applicants. 

4. Request an Attorney General's opinion on the possibility or seeking recovery of illepl 

udlor improper monetary gains resulting from the sale and/or lease of homestead lots 

in violation of law; and initiate legal action to recover such Clmcis, as appropriate. 

RESPONSES 

IL It would c:urrenUy be impossible to inspect all deeded homestead lob for CXIIIIpliance 

....... 
384 

with laws, regulations and deed restrictions. We have a staff of tluce people who 

must do inspections of lots under .homestead permits, alllwe inspections, 111C1 

numerous other tasks such u watching Cor unlawful. use of the public lands. WhUe 

we are not denying that such inspections would be u~ul in the interes~ of law 

enforcement it would literally take an act of the Lqislature to appropnate money to 

staff and cq~ip such an effon. This must be releg11ed to long-range planning. 

lb. This recommendation involves several tasks: Review of homestead applications, cross 

checldng with the Divisioo of Land Registration and Survey for other interests in land 

by applicants, and review of financial information submitted by applicants. The 

Division has hired 1 new Homestead Manager, as of May I, 1995 (subsequent to the 

your audit). He has instituled a new policy of performing each of these tasks, to 

insure eligibility and need. · 

The issue of need is settled by assigning each eligible applicant to a priority group, 

according to the existing homestead regulations, as follows: 

Priority Group 1 

Cl 

C2 

Priority Group 2 

Priority Group 3 

Married with dependents, or single parent; need for housing. 

Married, with no dependents; need for housing. 

Not married; need for housing. 

Temporarily out of the Commonwealth, usually for medical, 

educational, or employment purposes, or military service. 

Under the Homestead policies established by the former MPLC Board, Jots are awarded fllSt to all members of Priority Group 1 before awarding lots to members of 

Priority Group 2, and so forth. 

2. This recommendation overlaps with la above. The Ollly new part is the review of the 

homestead deeds and permits, in addition to inspection of the lots. Review of the 

deeds themselves will not be useful without the staff to conduct on-site inspections. 

We have 1 record of all previously deeded homestead recipients, and so do not need 

to review the deeds to determine their identities or lot numbers. 

All permit files are reviewed for compliance with homestead laws and regulalions 

before deeds are issued. The village homestead lots under permit are inspected at 

least three times before a certificate of compliance is issued: (1) during the fii'St three 

months of the permit; (2) during the tint two yean, to check for compliallce with the 

requimnent that a home has been built and the permittee is living on the lot; and (3) 

at the end of the three-year permit period, to checlt Cor compliance with all 

requirements before the certificate of compliance is issued. 

This procedure is not a written policy, however. Ills the practice of the Homestead 

and Land Enforcement SectiOns of the Division of Public Lands. 

-s-
385 

3. Puts a uc1 b of this recomntendalion would require on-site inspections, u 

recommended in #la above. As mentioned above, the Division· of Public Lands does 

not currently have the slaff to · c:Onduct such· an ambitiottS inspection program. The 

Divisioa intends to do what it can to accomplish. such inspectiOIU, but it will be very .. _ ·difficult to go very far wilh it, Jiven the current understaffing. In lllldition, the Office 

of the Attorney Genenl. does· not cuaendy have sufficient attorneys to initiate the 

number of lawsuits contemplated by this recommendation. 

Part c or this recommendation would require the Homestead staff to invest a very 

large amount of time in the review of old files and additional investigation. This, 

too, is beyond our staffing at the present time. At best, they can only investigate files 

that are. brought to thdr attention for po$Sible violations of law. 

In addition, I am advised by counsel that before initiating legal action to re-;u:quire 

lots from ineligible homestead recipients, we must conduct legal research into whether 

we have the authority to set aside such deeds. The DirectOr of the Division of Public 

Lands hu requested the Attorney General to conduct research into that question. 

4. 'Ibe Director of the Division of Public Lands has requested a legal opinion from the 

Attorney General into the Cjuestion or recovering funds from homesttad recipients 

who wrongfully sold or leased their homestead lots. Initiation of legal action to · recover such funds must await the issuance of the legal opinion. 

We hope that the above response meets your needs for the immediate future. As you can see, there is a great deal to be done in order to implement the recommendations of the audit, 

and we have made a serious beginning on the task. If you require any additional 

information, pleue do not hesitate to contact me. 

sti~~ ~ ~Fc.~oRio 

Enclosure 
386 

& li-. tt-511 

1985 IJMNIBUS TERRITORIES LEGISLATION 

HEARING 

auounnr 

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

NlNETY·NlNTU CONGRESS 

FIRST S&'SSION 

ON . 

S. JHJ A 111U. TO Aill:."ill Till!: UUAM UIUIANII." A~'T. A~D t'UII OTIIEIC 1'\lki'Uiit::l 

SJ. Ilea. 19Z .IOL'IT IIDIOLUTIO."' TO A\IT1101CIU: t1NA."'I1.o\L A5!1111TA."'!"ItVII Til.: );OHTIII:K."' MAIUA."'A 

IIIlA.'~~ A."'D roa unu:x ruiii'UIII::I 

II.R. 2-178 A.'C ACT TO AM£."10 ftlt RL"\"I!t:U OKUASK" ~'T OF TilE VIIIUIN UILANI._ 1U ANt:NU TilE C:OV• 

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Till \ISITEO STATES. A."'U I"UK 0111&:11 I'UICI~ 

STATEMENT OF HON. CARL T.C. GUTIERREZ. SPEAKER. GUAM ·. LEGISLATURE 

. Mr. OU'I'IDUZ. Thank you, Mr. CbairmaD. · · 

Good monW:Ig, member~ or this diaUnguiehecl committee. With 

ma today Ia two Mnaton that will •Pt&k to two different leeuee, 

Senator Quitugua of the eclucation wlll •peak on 29(b); and Senator 

Santo. on the land ialue. But I want to take UU. opportunity to 

~bly uae to further amend 2478 u n vehicle that deali with the 

IJldependeut publlc proeecutor, independent pubUc auditor, and the 

independent civil aemc:e commiaeion. 

Thia legillation ia endorteel by Congretaman Blu, and I thank 

him for that, but creation or theee offices, Mr. Cbainnan, Ia the 10-

lution for a problem that baa plaguecl Quam all too often in recent year~-and that ia. corruption. No government ia immune rrom 

this problem. but lntely Guam eoem1 to have 1uft"ered more than 

ita •bare of abu.aes. · · There waa the lalt adminiatration'a $26 million road-pavinc acandal. Then the Federal extortion conviction of Mveral GovQuam officials, plua food 1tamp fraud, improper cont.racta, and varioUI illegal 
387 

activitlea throughout ;1overnment. Thlnp are Juat pttinc out of. 

hand, Mr. Chairman. . . . , · · · ~ 

In my view, the P.roblom of corruption on Guam atema larply · from exceealve pobtlcal interference in diviaiona of IQVernQlent 

that need freedom from poliUc:a to be effective. Attorneys Jtneral. 

on Gunm, for example, depend on the Governor for thoU" jobe.. 

Thua, very few AG'a will proeecute the adminletraUon'a political allica. Tho ·same applies to auditors-few will reveal fraud that 

would embarrau the Governor. The bottom line it, Mr. Chairman, 

that proaecuton and auditor-. without independence illike ~ard 

doga without teeth. 'The eecret to beating corruption il aimple: Give 

those guard dop the independence they need. . ·,·' . .. Before we ean move forword, however, we need Congrea' h~lp. 

Right now Federal law II tying our banda behind our back. .We 

C8llllot legally create theee office. in an independent foahion becauae the Federal Organic Act forbid. it. The act'a IWeeping grant of power to tho executive branch already haa blocked two futile at,. 

t.eme_ta by the legi.alature to create an independent special proeecutor. Both attempts were atruck down by the courta u "inorganic."· 

All I ask today II that Guam be freed from these Federal band· 

cufTe and allowed to r&X our government with our own bandll. The 

legislation Congressman Blaz and I are uqing holda the key. The 

legislation would amend the Organic Act to exprealy ,POrmit the 

legialature to create theee officea in an independent faahion. · · The pt'Opoeal authorizes the legillature to e~tabliah auch offices 

and to design procedures for ~electing officeholdent. Once the offices are establiahed b~ local law, the leciJlature could not amend 

auch law for 6 )'eiU'I, m order to enaure real indepenuence. After 

auch 6-f.ear penod, any amendment. to this law would be followed 

by add&Uonal 6-year periods during which the legialature would 

again be prohibited from maki.nJ further changea. · .· : ~ 

The propoul would not ~wre Guam to e~t.abU.h auch omc., 

nor would it dictate how they will be Oflanbed. Theae are local 

iaaues and should be decidad by the people of Guam through their 

elected repreecntaUvea. All the legislation does that we're aeeklar 

esaentially ia eliminate the Federal restriction~ that stand ill OW' 

way. . Meet members of the legialature, and I believe anoet of Guaan'• 

citizena, do strongly aupport creating these independent officee. In 

fact, the Eighteenth Guam Legislature just last week rec:entl,Y 

adopted Reeolution No. 217, which wholeheartedly endoraee thil 

propoual. 

Let mo just briefiy add.resa each of theae propoaed offices. Mr. 

Chairman. 

An independent public proeecutor, in rny view, repreeenta the 

most effective aneana available for reducing corruption on Guam. 

Proeecutora need freedom from political presaure in order to attack 

corruption within the admin.iatration'a cam_p. Yet now, aa 1 ex· 

plaiDed earlier, the attorney general ia the Governor's captive. No 

matter how honest or well meaning, he aimply muat respond to {X>" 

lit.ical preaeune to keep hia job. lt ahould thus come u no aurpnae 

that proeecutiona of high level officials nre very rare, except whe11 

a new adminiatration occaaionally decides to crack down 011 it. 

predec:euont. , 
388 

·Tho white collar crime taak force creatA..ad by the current adminlatration · refiecta this historical pattern. The task forco does have 

aome commendable accompliahment.a. Yet it i.e anything but inde. 

pendent and, in feet, i.e heeded by the' Lieutenant Governor. Predictably, the vut mo.jority of ita cases concern illegaUUea pe~ 

trated during the term of the proviollt adminiatratiODI. ·· ; .· 

The need for an independent public proaceutor goea hand in 

hnnd with the need (or an independent public euditor. Only contin· . ual oversight by nonpolitical auditors can eliminate the fraud and 

incfficicncice plaguing our government. Currently, independent 

government auditing ia limited to Isolated invcaligationa by the In· 

terior Dc.!partmcnt's inspector general. Yet the IG'a aporadic reports are issued long an.er problema ariae. This iJ too little too late. 

The Government of Guam needs an independent local auditor back 

on Guam breathing down ita neck at all t.imea. Thil ia tho only way 

that irregularitioa can be effectively deterred or at lout detected 

before they develop into finnncicl di.saat.ers. 

J.,et me turn now to the need for an independent civil service 

commission. Thill aspect of our proposal reapondl to a ape<:Uic type 

of corruption on Guam: the corrupting of our civil ~ervice merit 

ayat.om. Aa you know, about a year ago all the members of the 

Gurun Civil Service Commiuion were forced to resign or relieved or 

their dutieJS. Once again, partisan polities waa injected into a 

eyat.em duigned to protect employees from politica. ~ a result o( laat year' a mll88 firing, the whole merit ayatem has 

been undermined. Government officials are thua virtuallr. defenaeleaa when threated with political preasurce. Their rate Wlll remain 

at the mercy or the political power broken until Gwun is allowed 

to design a civi110rvice comml.Uion that is truly independent. · Tho need for an lnticpendcnt public proaec:utor, public auditor, 

and civil aervico commilllion ultimately should be addressed in a 

conatitutional convention pursuant to the Guam Commonwealth 

·Act. I am a member of the commillaion on aelf-detormination and 

am fullv committed t.o leading Guam toward Commonwealth 

atatua. But I am alao a realiat, Mr. Chairman, and I know it will be 

quite eome time b<:fore a Commonwealth Act il pa.uod, aigned into 

law, and approved by Guam voters. lt will even be longer before a 

conatitutional convention i.e then called and completed. 

We cannot aJTord to wait. The problema o( corruption, inefficien• 

cy, and political meddling are all too urgent, too Ievere, and too 

eo~~tly, and they must be addreeeed now. 

So I would like t.o leave it at that. Mr. Chairman, and I hope that 

any vehicle could be used at thiJ moment to effectuate these new 

offices. 
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390 

• 

United States Department of the Interior 

OFFICE OF THE SECRETARY 

Washinglon, D.C. 20240 

October 15, 1996 

Honorable Elton Gallegly Chairman 

Subcommittee on Native American 

and Insular Affairs 

Committee on Resources 

U. S. House of Representatives washington, D.C. 20515 

Dear Mr . Chairman : 

Enclosed are answers to written questions submitted to the 

Department of the Interior after the July 24, 1996 hearing of the 

House Subcommittee on Native American and Insular Affairs . 

All~~~L Allen P : · Stayman Direct~ ; 

Office Of~ular Affairs 
391 

Subcommittee on Native American and Insular Affairs 

Oversight Hearing on Territorial Issues 

July 24, 1996 

Ouestigns for Department of Interior 

Question 1 . The Inspector General's Office provided data from its 

March 1988 Audit Report. The Committee is interested in receiving more current data . What is the amount of annual lease rent that is 

being collected by the Department from each lessee? 

ADswer.The 1952 Water Island lease provided that the master lessee 

would pay a base annual rent of $3, 000. With the termination of the 

lease in December, 1992, the Department took the position that the 

lessee had essentially abandoned its interest in the property and 

declined to accept the annual rent . This decision was based in 

large part on the litigation position of the United States in the 

ongoing litigation with the former master lessee in the United 

States Court of Federal Claims. With the settlement of the lawsuit, 

there are no further lease payments due from the former master 

lessee. 

The lease authorized the master lessee to make subleases. The 

subleases provided for a nominal annual rental, generally in the 

range of $25 although some were higher. Upon the termination of tl'ie 

master lease, a small number of sublessees attempted to tender a $liS 

annual rental payment to the Department, but we declined to accept it . Again, this decision was based upon the litigation position of 

the United States in the ongoing litigation with the master lessee 

in the United States Court of Federal Claims. We also considered 

the cost of administering and implementing a collection program for 

the small sums of money involved . With the proposed sale of fee 

title of the Water Island tracts to the sublessees, no rent is 

currently being collected. 

Question 2. Is this amount being collected from all of the 

sublessees, including those in Sprat Bay (who are at times referred 

to as sub-sub-lessees)? 

Answer. No, as explained in response to question 1, the Department is not currently collecting any rent. 

Question 3. Did the requirement to collect rent end or change at 

the expiration of the 40 year lease? 

Answer. With respect to the master lessee, the rental requirement continued through the master lessee's occupation of the property~ 

As discussed in response to question 1, the United States took the 

litigation position that the property had been abandoned by the 

former master lessee. 
392 

2 

With respect to the subleases, it is a difficult question whether 

the rental payments could have been changed upon the termination of 

the lease . As discussed above, the decision not to collect rent was based primarily on litigation considerations. The question should 

become moot by the proposed sale to the sublessees of fee title to 

the properties. 

Question 4. Are these funds being properly collected and accounted 

for? 

Answer. Please see the answer to question 1, above. 

Question 5. What management practices have attributed to the delay 

in resolving the transfer of title to Water Island properties? 

Answer. The ongoing litigation with the former master lessee has 

been the major source of the delay . We could not proceed to 

transfer title while this challenge to the Department's title was unresolved . The Department also was required to comply with the 

National Environmental Policy Act, as amended , and with other 

related statutes such as the National Historic Preservation Act . 

Question 6. The Environmental Impact Statement was issued in May , 1996 . Why wasn't this initiated after the 1992 expiration of the 

lease? 

Answer. In fact, the preparation of the Environmental Assessment was initi ated shortly before the 1992 termination of the lease . Time was required to prepare the environmental assessment , seek 

community input, and reach a decision on the alternatives presented . 

Question 7. What was the Department's position on the value of the 

possessory interest to the hotel and what was the ruling of the 

court? 

Ans-r. The United States, through the Department of Justice, filed a summary judgment motion in the United States Court of Federal 

Claims arguing that the former master lessee was not entitled to 

compensation for its alleged possessory interest as a matter of law . The court never ruled on the motion in that the case was submitted 

to arbitration before the American Arbitration Association and 

judicial proceedings were stayed . 

During the arbitration proceeding, the United States maintained that 

the former master lessee was not entitled to compensation for its 

claimed possessory interest as a matter of either law or fact. The 

Arbitrator, rendered an award of $12 million against the United 

States. The parties subsequently compromised on a consent judgment of $7 . 5 million which was entered by the Claims Court on August 2, 

1996. 
393 

3 

The stated intention of the Department of the Interior was to offer 

parcels for sale first to sublessees of record and, in fact, offers 

have been made to a number of sublessees who were in possession of 

their parcels at the time of termination of the master lease between 

the government and Water Island Corporation . However, on the Sprat Bay side of Water Island no offers were made to the sublessees in 

possession. Instead, an offer was extended only to Sprat Bay Corporation, which had subleased and assigned all its r i ght, title 

and interest in the -majority of its parcels years ago. 

Question a. Can the Department of the Interior explain why it has 

extended an offer that is inconsistent with its stated policy regarding sales of parcels? 

Answer. The Department has followed its stated policy by extending its offer to purchase to all sublessees under the master lease . The 

sublessee for the Sprat Bay tract is the Sprat Bay Corporation. 

Question 9. The time for performance of the written contract with 

Sprat Bay has passed and there do not appear to be any written 

extensions of time to perform. Does DOI consider the contract 

voidable at the option of either party? 

Answer. The contract has been extended with the consent of both 

parties. We believe we have a contractual commitment to the Sprat Bay Corporation. 

Question 10. Does the fact that Sprat Bay has transferred and 

assigned all its right , title and interest in certain parcels meant 

DOI will be obligated to transfer title to the transferee rather 

than to Sprat Bay Corporation? 

Answer. No . 

Question 11. Does the DOI feel that it has either a legal or a mort 

obligation to extend offers to sell to the sublessee in possessi n of each parcel before making an offer to any other party? 

Answer. The Department believes it has a legal or moral obligation 

to the sublessees under the master lease. These sublessees include 

the Sprat Bay Corporation for the property subject to its sublease. 

Question 12. Has DOI considered the fact that concluding its 

contract with Sprat Bay Corporation will result in dispossessing sublessees who have been in possession of parcels for years? 

Answer. We have no reason to believe that this will be the result . The Department is unable to make a further response in that certain 

individual lot holders on Sprat Bay have filed suit against the 

Department and the Sprat Bay Corporation in the United States 

District Court for the Virgin Islands . 
394 

4 

Queation 13. What steps have been taken by DOl to insure that the 

possessory interests of each sublessee in possession at the time of 

termination of the master lease have been determined and paid before 

transferring title to Sprat Bay Corporation? 

Anawer. We are unable to respond to the question at this time due 

to the pendency of the litigation set forth in response to question 12, above. 

Question 14. Does the transfer of title from the Government to a buyer require any further Congressional authorization? If not, what 

statutory authority permits sale of the parcels? 

Answer. The sales are authorized by 48 U.S.C. 1545(a) . 
395 

United States Department of the Interior 

Honorable Elton Gallegly 

Chairman 

OFFICE OF THE SECRETARY 

Washington, D.C. 20240 

October 15, 1996 

Subcommittee on Native American 

and Insular Affairs 

Committee on Resources 

U.S. House of Representatives 

Washington, D.C. 20515 

Dear Mr. Chairman: 

After the June 26, 1996 hearing of the Subcommittee on Native American and Insular Affairs 

you submitted a number of questions in writing. Enclosed are the answers of the Department 

of the Interior. 

Sincerely, . 

A· D ci AI ll, \ . ( )1.7·-.-

Anen P. Sta~~ '\ 

Director \. __./ 

Office of Insular Affairs 
396 

QUESTIONS AND ANSWERS FOR THE DEPARTMENT OF THE INTERIOR 

I. a Is the Federal-CNMI Initiative on Labor, Immigration and Law Enforcement a Joint effort 

of the CNMI Government and Federal agencies? 

Answer. The Federal agencies work cooperatively with the CNMI government 

on issues affecting the Initiative. This does not mean that the annual report and 

actions by Federal agencies must be approved by the CNMI. Indeed, in 1995, the 

CNMI submitted a separate report. We expected that a similar procedure would 

be followed in 1996. 

b. Is the Report a combined effort of the CNMI and Federal agencies? Why is there no 

CNMI component to the Report? 

Answer. While the Federal agencies work cooperatively with the CNIVII, the 

report is not a combined effort. Our expectation was that the CNIVII would submit 

a separate report, as in 1995. 

c. Would you explain the lack of CNMI contribution to the Report? 

Answer. The Second Annual Report on the Federal-CNIVII Initiative on Labor, 

Immigration and Law Enforcement is the work product of Federal agencies. The 

CNMI responded to a number of our requests for information, which is included 

in the report. 

2. The core of the problem identified in the Report is the inability of the CNMI government to 

control local immigration. It has been pointed out in the Report that "it is ironic that local 

control of immigration was insisted upon by the CNMI Government negotiators in order to 

prevent inundation by immigrants with a resulting loss of native Chamorro and Carolinian 

culture and influence. Yet, local control has had exactly opposite of the intended effect. 

a. Is it not true that the 1995 CNMI census show a total population of approximately 60,000 

people with a population growth of 38 percent from 1990 to 1995 and the indigenous. 

American citiZen population is now outnumbered by a ration of 2 to I? 

Answer. The preliminary mid-decade census figures from the CNIVII show the 

population in 1995 to be 59,913, with the population growth you describe. The 

ratio of aliens to United States citizens, however, is 54 percent of the total 

population to 46 percent. 

b. The unrestricted presence of alien workers has a dramatic impact on the social, economic 

and political instititution as in the CNMI. It has been associated with increased drug 

trafficking, white collar crime and government corruption, an enormous strain on local 

government services and infrastructure, and a concern about the future political impact of 
397 

2 

children of alien workers born in the CNMI, who are United States citizens by birth. Is 

it now appropriate for the Federal Government to step in and take over immigration 

control to help the CNMI preserve the intent of the Covenant? 

~- The Federal agencies involved with the Initiative believe that it would 

be inappropriate for the Federal Government to assume immigration authority at 

this time. Our report on the Initiative contains no recommendation on 

immigration, but does state that the immigration issue will be considered in the 

coming year, as we assess the effectiveness and improvement in CNMI 

administration of immigration. 

c. In last year's report dated April 24, 1995, recommendation was made for a cap on alien 

workers to the 1992 levels, but the Report fails to address this recommendation and 

remains silent on the issue. Would you enlighten us of your dramatic change of position? 

Answer. The 1995 report stated that if law enforcement does not improve or if 

the alien population increases above the 19921evel, then Federal authorities would, 

in 1997, seek application of the Immigration and Nationality Act (INA) to the 

CNMI. Since the time of that report, we have concluded that the INA may not 

fully address the immigration problems in the CNMI. Full application of the INA 

could have unintended consequences. Thus, the position on immigration was 

modified in 1996 to call for the presentation of options in 1997 for consideration 

by the Congress. 

3. a. The major recommendation in the report calls for the federalization of the CNMI 

minimum wage. Is this recommendation concurred by the CNMI? 

Answer. No. While some members of the legislature and several important 

business organizations have supported maintaining the automatic minimum wage 

increases enacted by the legislature a few years ago, the legislature and the 

Governor do not now support the Administrations' proposal to incorporate into 

Federal law the then-current CNMI minimum wage law ($2.75 per hour with 

automatic $.30 annual increases until the Federal (FLSA) minimum wage is 

achieved). 

The CNMI Legislature recently passed and the Governor signed a new minimum 

wage bill that superceded the then-existing minimum wage law. The new law 

provides, effective July I, 1996, a $.15 an hour increase for the garment and 

construction industries with another $.15 an hour increase a year later, and a $.30 

an hour increase for all other industries. Workers employed on existing 

employment contracts signed before May 6, 1996, would get no increase until the 

employment contract is renewed. The provision for future annual minimum wage 

increases is not included in the new law. 
398 

3 

b. The other recommendation in the Report urges Congress to direct the CNMI to utilize 

Covenant furul.s for the construction of prison and detention facilities. How would these 

recommendationll help resolve the problems created by the unrestricted local immigration 

control in the CNMI? 

Answer. The second annual report on the Initiative calls for the usc of Covenant 

funds to build prison and detention facilities. The existing facilities are widely 

agreed to be inadequate. The result is that persons who are ordered deported are 

often found back out on the street. Ineffective deportation procedures contribute 

to immigration control problems. Construction of new facilities will not cure all 

the problems associated with unrestricted immigration. Also, increased law 

enfom:ment in the CNMI is resulting in the need for additional facilities. 

4. The Report shows that more than 25 criminal cases were in the docket of the Federal District 

Court for 1994-95 and an additional 20 criminal cases for fU"St three months of 1996, how 

many convictions were handed by the Court and where are the criminals incarcerated? 

Answer. In Federal District Court for all of fiscal year 1995 (I 0/1/94 through 

9/30/95) of 23 cases with 28 defendants, 12 cases brought conviction of 13 

persons. In the first half of fiscal year 1996 (10/1/95 through 3/30/96) of 24 

cases with 33 defendants, II cases brought the conviction of 16 defendants. 

0 
ISBN 0-16-053845-9 

90000 

9 80160 538452