Celina Roberto Babauta wants the governor and the attorney general to grow a pair and retrieve two planes that CNMI taxpayer and federal funds purchased in 2022. The purchases were made by Marianas Southern Airways, but the paper trail on the purchases in Italy reveal the money MSA used for the purchase was connected to grants from the CNMI government.
Ms. Babauta wants Arnold Palacios and Edward Manibusan to sue for those planes to be returned to the CNMI government.
“I am writing to follow up on our meeting last year concerning the two Tecnam P2012 aircraft acquired by Marianas Southern Air (MSA) using approximately $8 million of American Rescue Plan Act (ARPA) resources entrusted to our government under the previous administration and to formally request that the Government of the Northern Mariana Islands (CNMI) consider taking legal action against Marianas Southern Air and other deceitful actors to recover two aircraft purchased with at least $4.5 million in ARPA funds,” she wrote to the two leaders earlier this week. “The use of ARPA funds, intended for pandemic relief and economic recovery, for the acquisition of these assets raises significant questions about the propriety of the expenditure made by former Governor Ralph DLG. Torres and his former Secretary of Finance, Mr. David DLG. Atalig.”
Documents Kandit received from the CNMI Department of Finance from an Open Government Act disclosure reveal that at least two 9-seater MSA planes are connected to money the CNMI government under the Ralph Torres administration gave to MSA.
On March 21, 2022, former Secretary of Finance David Atalig, Jr. issued a notice to proceed for a sole source contract between the Commonwealth and MSA that would have given MSA $8 million in federal pandemic funds for the operation of their airline and a so-called air incentive program. That program was designed to subsidize the vast majority of MSA’s charges for passenger air travel over a six-month period in exchange for charging customers lower rates.
The following day, March 22, 2022, CNMI Treasurer Asunción Agulto wire transferred $1.5 million from the Commonwealth government’s Bank of Guam account to MSA’s account, according to an online wire transfer voucher that was disclosed in the OGA documents.
According to a July 7, 2022 letter from Mr. Stewart to Mr. Atalig, that money was used to purchase two planes in Italy.
“As you know, our agreement with the Government indicates that we are to provide backup showing that the $1.5M deposit we received was spent on airline startup costs,” Mr. Stewart wrote to Mr. Atalig that day. “Attached are backup wire transfer documents that provide documentation that more than $1.5 million was paid just to Tecnam in Italy for the first two aircraft.”
A stamp of approval on the July letter from Stewart bares the signature of Mr. Atalig with a hand-written date of August 19, 2022.
A hand-written note on the letter states: “Please enter invoices under contract. Total invoices come out to $1,800,000. Letter addresses $1,500,000 transferred previously to them (see wire transfer Treasury processed attached). So remaining 300k would be covered by the $500k advance we processed.”
That advance payment indeed was made, according to a Treasury wire transfer voucher. It was for $500,000 and dated the same day as Atalig’s approval: August 19.
The “backup wire transfer documents” Mr. Stewart referred to in his July letter.
All of the documents are either invoices from aircraft manufacturer Tecnam in Italy, or receipts of wire transfers to Tecnam.
“It appears that the CNMI may have a colorable claim to ownership of these aircraft. When Marianas Southern Airways closed their doors on April 1, 2023, the aircraft were immediately brought to Guam for fuel tank modifications to enable them to fly to Hawaii,” Ms. Babauta wrote in her letter. “It is concerning that these planes are reportedly now being utilized by Mokulele Air for their interisland service within Hawaii. Southern Airways Express has publicly stated that these aircraft will be used as reserve aircraft for their subsidiary, Mokulele Airlines, and will also be available for private charter.”
The senator went on in her letter to bemoan MSA’s one-time competitor and the current sole marketer of interisland air service for the CNMI: Star Marianas. A recent spat between the Commonwealth Ports Authority and Star Marianas has once again threatened air transportation service.
“In light of Star Marianas’ nagging threat of shutting down the only inter-island air transportation service in order to bring the CNMI Government to its knees, it is incumbent upon our government to take legal action for these assets,” Ms. Babauta wrote. “With each passing day, the CNMI loses the valuable opportunity to establish a public-private partnership to initiate interisland air operations within the CNMI, potentially hindering the development of reliable interisland air service in the Marianas.”
2 Comments
elkapitan
10/05/2024 at 9:50 AM
Too Funny!!! So Babauta wants the Govt. to start it’s own airlines? Is she seriouse? This Govt. cannot even operate a bus service (with Fed funds) also as the past has shown, is unable to keep it’s own equipment operateing.
Within a few months new equipment and even the riding lawn mowers are trashed within these Govt. agencies.
From reports seems like they cannot even keep an aircon working in their late model SUV’s that is blame for the recent death of two K9’s..
Take a look at all of the Govt. yards (on all islands) full with broken down equipment and all of the run down Govt buildings across the island..(how about the past, non maintained the $7mill Court Aircon?)
I would think this should be a case for the Feds concerning Ralphy and Stewart, Atilag along with a host of others that were involved with unauthorized use of Fed funds.
Has Babauta awoken up the Feds and shared this report with them?
All accros the US there had been many stories of such misuse of Fed. funds and prosecution of State Govt employees along with Gov’s etc.
BTW, even if the NMI was to take back posession of these planes, do they even know how much it would cost to prepare them and fly them back to the CNMI? This Govt. is unable to pay for the simple necessities due to lack of funding and incompetence of the usual recycled failures.
Joe
10/05/2024 at 11:29 AM
I love reading how Dave Atalig and Ralphy boy (the wonder boys) screwed the CNMI. But hate it when the AG does nothing about it. Biba corruption!