WATCH: Terlaje pursues repayment of illegal transfer from war claims fund

Speaker Therese Terlaje took the government’s cash director to task for an illegal transfer of funds the administration made from the Guam War Claims Fund. She wants the money returned.

Ms. Terlaje questioned Department of Administration director Ed Birn in a legislative session Tuesday on a bill to pay war claims to the survivors of the Japanese occupation of Guam, who missed the prior claims deadline. Public Law 35-61 created the local war claims mechanism that was rushed by the last Guam Legislature to pay claimants prior to the payment of federal war claims. The law, which was enacted in the midst of Congressional approval of federal war claims, contained provisions that guided the use of the anticipated federal money as a reimbursement to the GovGuam treasury for amounts already paid out by the time the federal money arrived.

The law, the speaker pointed out to Mr. Birn, says, “All money reimbursed to the government of Guam for payment of claims… shall be deposited in the [Guam War Claims] Fund.” It also prohibited anyone except the legislature from touching that money once it was deposited into that fund.

“This Fund shall be exempt from the Governor’s transfer authority; and any funds remaining shall be subject to legislative appropriation.” – excerpt from §11301(d) of the Guam War Claims Fund statute

TERLAJE: Didn’t you say earlier that you received reimbursement for the payments that the governor had made for war claims?

BIRN: Yes, I did.

TERLAJE: But you’re saying there is no money in this account?

BIRN: Well, the way the legislation was written; and I think the administration was on record as saying at the time, it’s kind of backwards (sic). We created a fund when the money was paid out, there was a deficit in that fund, and then when the money was received, the fund was made good. And that seems to me an appropriate way to act.

TERLAJE: An appropriate way? So what is the problem? There was supposed to be a fund created. You were supposed to transfer money into that fund. You were supposed to use that money to pay war claims, which was done, war claims was paid. But it says that any money reimbursed to the government of Guam for payment of claims shall be reimbursed to the fund. And if we were reimbursed for payment of claims, the question is, why was the money not deposited in the fund?

BIRN: I think, senator, it was. The fund had a deficit when the money was paid out and that deficit was made good when the refund was received. So the fund now is balanced.

TERLAJE: So the money was put into the fund. You’re saying the reimbursement was put into the fund?

BIRN: Yes, because the fund had a minus number.

TERLAJE: The other section of this same law says that the fund shall be exempt from the governor’s transfer authority and any funds remaining in the fund shall be subject to legislative appropriation. So the money was reimbursed, it should have been deposited into the fund according to the law, and it should have remained there subject to legislative appropriation. And I know you’re trying to tell us that there was a deficit balance in the fund, but not if the law was followed and the money was transferred to the fund. That’s a positive balance. If the governor did what was said in subsection c, transfer sums available from the General Fund to this special fund, or this war claims fund to pay the adjudicated claims and then used that money and paid out claims, and then when the money was reimbursed from the [U.S.] Treasury to Guam, it should all still be in that fund. 

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