The Attorney General, Edward Buckingham, has asserted that the Governor has the ability to unilaterally cut pensions. His legal analysis was explained in an interview he did on KSPN2 on 6/18/12. In the interview he explains his interpretation of Legislative Initiative 16-11 (ratified in 2010) and how he feels it gives this power to the Governor.
Here is the clip:
HLI 16-11, also known as the Balanced Budget Initiative, can be found here: http://www.cnmileg.gov.mp/documents/house/hse_legini/16/HLI16-11.pdf.
On close inspection we were not able to find the section/provision of this Initiative that conveys to the Governor this unilateral ability to cut pension benefits.
While the initiative clearly calls for a balanced budget and a halt to draw-downs (except for essential services) should a balanced budget not be achieved, there is no mention of any right for the Governor to violate other provisions of the CNMI Constitution. The entirety of the HLI 16-11, that the AG referenced, amended one sentence in the CNMI Constitution.
In his interview the Attorney General also referenced a city in Alabama that has recently cut pensions. What he failed to mention was that there is no constitutional provision in the State of Alabama that protects benefits from being impaired or diminished. There is such a protection in the Constitution of the CNMI.
There were many factors involved that led the NMIRF to this point. One cannot overlook the enormous negative impact suffered by the NMIRF when the Governor failed to remit contributions for 19 months. We cannot forget that the AG also turned a blind eye to the constitutional protection of benefits and even defended the government’s right to withhold contributions. The judiciary eventually corrected the error when they ruled that the Governor and Legislature had violated the constitution by halting contributions.
That error in legal analysis by the OAG cost the NMIRF over $231 million. A judgment was rendered ordering the Government to pay back the mis-allocated contributions. To date, no payments have been made. To make matters worse we have now discovered that the government may still be neglecting their constitutional duty to remit employer and employee contributions to the NMIRF.