NOTE: THIS IS A REPRINT OF AN ARTICLE FROM 2010.
I am re-posting a Letter to the Editor from Betty Johnson.
AS a retiree, I received an E-notice from the Retirement Fund’s Board of Trustees today. The notice, dated October 9, 2010, asks Fund members to help support the Fund by voting “yes” on H.L. I. 17-1 and H.L.I. 16-13 on November 2. Along with the information about pension bonds is an article titled: “Receivership is Not an Option,” written by a retiree named Lorenzo LG. Cabrera. The Board asked that members pass this information on to all their friends and families.
Mr. Cabrera’s article mentions the issue of the Pension Obligation Bond initiative toward the end of his article, but most of the article is Mr. Cabrera’s opinion (and apparently that of the Board of Trustees) on why the Fund’s case in Superior Court (regarding the $281 million judgment) should not be heard instead in the federal court, and why a receivership would be “disastrous, if not fatal.”
Certainly everyone is entitled to their opinion, but the Fund’s Board of Trustees has a DUTY and an OBLIGATION to its membership to present a fair and balanced presentation of both sides of the issue; not just one side that happens to favor their view. Had the Fund published a “pro and con” opinion piece, it would have allowed Fund members a chance to consider both sides of the federal court issue. Why wasn’t a retiree who’s in favor of the federal court lawsuit invited by the Board to present an article on the “pros” of the federal court lawsuit (of which there are many)?
More curious is the Board’s use of Retirement Fund assets and resources like the Fund newsletter to try to influence Fund members and the general public against the federal lawsuit, of which they themselves are defendants! Of course the Board doesn’t support the federal lawsuit, since questions of breach of fiduciary duty may come into question in federal court. The federal lawsuit is NOT an issue on the ballot in November, so why did the Fund’s “educational material” (supposedly about voting) include an article that attempts to influence public opinion against the federal lawsuit they currently face as co-defendants? Using Fund resources for this purpose seems to be walking the fine line of impropriety. In fact, because they are defendants, it indeed seems to have crossed the line of impropriety.
Mr. Cabrera says he disagrees with the argument that the Superior Court lawsuit “lacks the teeth and therefore enforcement” (of the judgment). If that’s the case, then where’s the money they’ve collected so far? Anyone? Anyone? The difference between the Superior Court and the U.S. District Court (federal court) is that the federal court has enforcement authority to collect the debt. They have the backing and resources of U.S. Marshalls and other U.S. government agencies to assist… and at NO COST to the CNMI taxpayers. As far as the attorneys fees that Mr. Cabrera worries that a federally appointed lawyer might receive… the federal court judge would set the fee, not the lawyer. Speaking of lawyer’s fees, I understand from fellow retirees on Saipan that no one has yet been able to obtain an answer on what the Fund’s lawyers are being paid (from the assets of the retirees). Most lawyers can tell you off the top of their heads exactly what they make. Perhaps Mr. Cabrera should be questioning how much money the Fund’s own team of lawyers are being paid right now, instead of worrying how much a federal court receiver might get paid someday.
The Fund’s lawyers still haven’t collected a penny of the judgment that was awarded to the Fund over 15 months ago. What else could possibly be more important on their agendas than collecting at least a bit of the $281 million that is urgently needed to keep the Fund solvent? That should have been the top priority of the Fund’s Board and their legal team for the past 15 months, yet they continue to be docile participants in the status hearings that are held every 3 or 4 months in Superior Court. The judge schedules these hearings to learn what progress has been made on payment of the judgment (zero in 15 months). There’s been no initiative by either the court or the Fund’s legal team to get serious about enforcing payment of some of the ever-mounting debt. Instead, there’s some good-natured banter exchanged between the court’s participants. After the “Kumbaya” ritual concludes (just short of everyone getting gold stars for good behavior, and some cookies, milk, and a bedtime story), another court date is set for three or four months later when they’ll meet back in court and do it again. The Fund’s lawyer(s) will get paid well for being there; yet will accomplish nothing….again. Meanwhile, Fund members have to wait for yet another quarter of a year to pass before the next “progress” hearing. As Ross Perot once said… “What we have here is a dog that won’t hunt.” I’m thankful that Judge Govendo ruled in favor of the Fund, but even the good judge himself said that he’s limited in enforcing the judgment in his court. The federal court does not have that problem.
The CNMI government created some very bad laws over the past few years that have contributed to the rapid depletion of Fund assets. Because of the government’s non-payment to the Fund for two years or so, the Fund has been forced to withdraw its invested assets to meet pension obligations, causing the Fund’s current dire situation. And in the middle of it all are the Fund members, who are forced to sit helplessly by and watch it happen like passengers in some kind of awful, slow motion train wreck.
It seems the only person who saw the logic and advantages for seeking resolution in federal court was Bruce Jorgensen. Whether you’re a Jorgensen fan or not, if you’re a Fund member, you should be thanking your lucky stars right now that he’s representing some retirees in federal court and is seeking the court’s assistance to enforce the judgment, protect the rights and interests of Fund members, and preserve the Fund’s assets.
When all is said and done, no matter which political party is in office, or who the Fund’s hierarchy are beholden to for their government jobs or appointed positions, their loyalties should be first, last, and always to the Fund members. This should include ALL Fund members, not just those who agree with the Board’s views. As the Board well knows, there are many retirees who favor the federal court lawsuit. In the interest of fairness, why didn’t the Board give one of these retirees an equal opportunity to present a “pro” federal lawsuit statement in the same Fund publication? And, will they allow it now, so that Fund members can see both sides and make an informed decision for themselves, and not just be given the Board’s opinion as to what they should think?
Look, I’m just as worried about my pension as the rest of the Fund members are. I support the retiree’s lawsuit in federal court because I believe it’s the only real hope that’s left to preserve the Fund. I think most everyone agrees that the Fund needs to be protected from political influence and manipulation (both of which have contributed to the Fund’s meltdown over the past few years). It needs to be placed under federal court protection, where there would be accountability, enforcement to start collecting some of the judgment owed, and federal court oversight of a receivership for the purpose of conservation, not destruction, of the Fund. Just my humble opinion.
Retirement Fund member