Northern Marianas may face legal action over unpaid bills

Transcript

The way has been paved for the Northern Marianas Government to face legal action regarding millions of dollars worth of unpaid bills.

The Commonwealth Utilities Corporation launched legal action last year to collect the debts.

The government had countered that CUC was part of the state so it wasn't possible for it to sue another arm of the state.

As Koro Vaka'uta reports, a Superior Court judge has now ordered on the side of CUC.

The judge's order stated that CUC was a utility corporation, not a political subdivision such as a municipality.  It denied the government's motion of dismissal on the basis that the Legislature granted CUC the power to bring lawsuits and specifically mandated that CUC bill government consumers for utility services.  

The company's lawyer Michael White welcomes the decision and hopes the matter can be resolved shortly.

MICHAEL WHITE: We want to get the bills paid and that's our objective and that's really our only objective.  We didn't file this lawsuit to embarrass anybody.  It's just to call attention to the problem and to have the court recognise that, yes we're entitled to get paid for the services that we provide to the central government and other agencies.     

Mr White says CUC had no alternative but to begin legal proceedings against the government.

MICHAEL WHITE: The government wasn't paying it's bills and neither were the independent agencies that owed CUC money and just like any other business, CUC depends on its revenues to keep going.  No business can survive with a huge unpaid account receivable like CUC has from the government agencies.

Mr White says there are about 20 million dollars worth of unpaid bills relating to government agencies.  The Assistant Attorney-General, David Lochabay, disputes this.

DAVID LOCHABAY: We strongly disagree with that.  The amount due is in question, it's certainly not any 20 million dollars.  Nobody knows what it is.  If necessary, sometime in the future we would need to sit down and resolve the dispute about what amount is due but that's for the future.  Nobody can answer that question right now, Mr White or me, nobody.    

Mr Lochabay says the government is now weighing up its options but he is not satisfied with the decision.   

DAVID LOCHABAY: The corporation had relied on the central government for many times in the past for assistance when the corporation didn't have any money.  And over the past few years the corporation had in fact been directly controlled by the central government under a series of emergency decrees.     

Included in the original action were the Commonwealth Healthcare Corporation, the Public School System, and the central government.  More than half of the money owed relates to the healthcare agency. CNMI representative Roman Benevente says it's not an impossible situation to resolve.  He says the government could generate more funds to deal with the issue.  However the CHC hospital's dire circumstance may have been alleviated earlier.

ROMAN BENEVENTE: CHC has been very complacent in the past with collecting bills and what not and with the non-resident workers that we've had in the past have literally gone away with free loads of like delivery of babies and other types of services at the hospital.

Mr Benevente also says an alternative way of generating power needs to be investigated as the CUC charges some of the highest costs in the region.