Guam Gears Up for Suit Vs. Feds

Guam gears up for suit vs feds
Friday, 02 January 2009
by Therese Hart
Variety News Staff

WASTING no time before the New Year kicked in, Gov. Felix Camacho has signed into law a bill that paves the way for the government of Guam to take legal action against the federal government for reimbursement of $400 million in Compact Impact funds.

Bill 385 was signed into law on Monday. The bill’s author, Sen. Frank Blas Jr., said the enactment of Bill 385 will now allow Guam to move forward.

Attached to the bill was an amendment that waives the government’s sovereign immunity protection as required by the financing contract that was negotiated with the Guam Economic Development and Commerce Authority and the Bank of Guam for the $20 million bridge loan that must be deposited to federal receiver, Gershman, Bricker & Bratton’s trustee by next Monday.

“We must move forward with the closure of the Ordot Dump and the construction of a new landfill to comply with the federal consent decree obligations placed on this government,” Camacho said.

In an earlier interview, Blas said Guam has spent a total of $400.87 million for the social services rendered to Freely Associated States citizens between 1987 and 2007 but the amount that the federal government reimburses to the island is not commensurate to the actual cost of hosting Micronesians.

According to the Compact Impact Reconciliation Report, Guam spent $269 million from 1987 to 2003 for medical, educational and security services provided to FAS citizens. "The total amount owed to Guam now is $400.87 million when we include the un-reimbursed amounts from 2004 to 2007," Blas told Variety during an interview last August.

Guam has been receiving $14 million in Compact Impact money every year since 2004. That amount is part of the $30 million that the federal government releases annually and shared with Hawaii and the CNMI, which are also affected by migration of FAS citizens migration.

David B. Cohen, former deputy assistant secretary of the Department of Interior, disagreed with the local government’s claim that the federal government owed Guam money.

“I don’t agree that Guam is owed $400 million,” Cohen told Variety in an interview during his visit to Guam last month.

He said the law authorizes reimbursements for the impact of migration from Palau, the Federated States of Micronesia and the Marshall Islands, but did not require Congress to appropriate funds for that purpose. “So that’s not a debt,” Cohen said.

Cohen said Guam incurs costs just as other states do, but in return, there are benefits that come with the overall package.

“Guam is incurring expenses because of decisions that are made by the federal government, but all of us do. When we’re part of the American family we get benefits because the decisions by the federal government and we incur costs,” Cohen said.

“We get benefits like the military buildup will bring a lot of money here. And the federal government never says that we will indemnify you, in other words, we will make sure that you will incur no cost because of any decision we make,” Cohen said.

Cohen said that Guam could argue that because of the influx of migrants to Guam, that Guam should pursue the matter with the federal government using a moral argument.

“I do agree that Guam has a moral argument to make and I used to make that argument behind the scenes. I think it is a very legitimate argument to make,” he said.

He said the federal government’s role in fiscal policy has reached a new level of difficulty. But Guam, he added, should move forward in pursuing the feds help in shouldering some of the costs, not just Compact Impact funds, but the military buildup as well.

“It’s a difficult fiscal environment that’s just gotten a lot more difficult, so it’s a hard issue. The folks in DC, they don’t think they owe Guam the money as a legal matter, but we need to create more awareness of what Guam needs, not only because of Compact Impact and the impact of migration, but the civilian needs because of this buildup,” said Cohen.