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Pacific Islands Development Program, East-West Center

With Support From Center for Pacific Islands Studies, University of Hawai‘i

CNMI Judicial Building Faces Possible Foreclosure
Judiciary has apparently not paid off retirement fund loan

By Emmanuel T. Erediano

SAIPAN, CNMI (Marianas Variety, Jan. 30, 2013) – Finance Secretary Larrisa Larson told lawmakers yesterday that the judicial building, or Guma Hustisia, is facing foreclosure due to the judiciary’s failure to pay its loan to the Northern Mariana Islands Retirement Fund.

Larson and acting Fund Administrator Lilian Pangelinan were invited to a joint meeting by the special committees of the Senate and House tasked to address retirement issues.

Larson said her office just received a foreclosure notice from the Fund which financed, through a loan, the construction of the judicial building.

Larson could not say what the amount was. "We don’t know because we are still trying to reconcile [the figures]. And their [the Fund’s] figures are always different from ours. It is always difficult reconcile," she said.

The Fund earlier said that as of Nov. 30, 2011 the unpaid loan amounted to $1.1 million. The monthly remittance to Fund to pay the loan, which will mature on Aug. 14, 2015, was supposed to be $120,000.

Through the Judicial Building Financing Act of 1994, the Commonwealth of the Northern Mariana Islands government was able to secure a loan from the Fund to build the Guma Hustisia in 1995. Construction was completed in May 1998.

Larson said, under the law, court collections were supposed to cover the loan payments.

However, collections "have always fallen short, and over the years [the monthly payments have] dropped and never really covered the loan payments in full."

Larson said the government has been paying what it can from the collections remitted by the judiciary.

"Now the issue to address is the shortfall, but that is an historical issue and has been there since the inception of the loan," she added.

Asked what the government’s plan is, Larson said "We don’t have a recommendation at this point…. What happens if [the judicial building] is foreclosed? We are reviewing a lot of hypothetical scenarios, and we are trying to resolve [this issue]," she said. Assistant Attorney General Teresita Sablan, who also attended the meeting, said: "We are going to go into a settlement conference on judgments."

The government also owes the Fund over $300 million in unpaid employer contributions and interest.

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