Congressional Probe Resumes

Palau

Augmented investigation hopes to uncover Trust Territory corruption.

By Ed Rampell

THE United States Congress is send ing a second team of investigators to the Republic of Palau for re newed examination of the mysterious oc currences that have racked the island nation for almost a decade a still un solved presidential assassination, a cam paign of murder and arson aimed at opponents of a proposed Compact of Free Association with the United States, and the suspicious IPSECO power project. The Congressional probers will look into the IPSECO scandals, government road and capitol relocation contracts and alleged links with drug trafficking.

Though it is a United Nations Trust Territory, Palau is administered by Wash ington and is thus subject to American ju risdiction. The Congressional watchdog agency, the General Accounting Office or GAO, is sending the investigative delega tion to continue a GAO investigation that began in 1987. Congress determined that the intricate inquiry required more time, so the follow-up team has been sent from Washington and Honolulu to Koror to ob tain additional information in what has proved an extremely complicated case.

The dubious, overpriced IPSECO power project is high on the investigators’ list. The IPSECO fiscal fiasco has become one of the Pacific’s biggest scams: in the early ’Bos, Palau entered into an agree ment to construct a badly needed power plant and fuel facility albeit one for which it could never pay. The Microne sian nation defaulted on its loans in early 1985 and IPSECO, a British firm, went bankrupt. A United States Federal court recently ruled that the Republic is liable for SUS 44 million owed to the interna tional banking cartel that financed IPS ECO. (Palau’s Washington-funded annual budget is less than SUS2O million.) The GAO and other investigators have charged that Palauan officials accepted huge payoffs from IPSECO in exchange for influence peddling. The kickback recipi ents allegedly include deceased President Lazarus Salii; his brother, former Speaker of the House Carlos Salii; High Chief Ibedul Yutaka Gibbons; and Palau Na tional Development Bank Chairman Po lycarp Basilius. Chairman Basilius was instrumental in arranging the controver sial IPSECO deal and received more than SUS2OO,OOO for his decisive role. Despite ethical concerns, influence peddling may hot be against Palauan law, though it is strictly forbidden by US law.

A US Congressional staffer said the GAO will also look into suspicious road

and capitol relocation contracts signed by President Salii, who died on August 20.

According to Palau’s constitution, the Republic’s capitol must be moved from its present provisional site at Koror to the un developed island of Babeldaob in the 19905. The contracts are worth more than SUSI billion, and are the background to behind-the-scenes power plays between two high ranking chiefly titles and their respective factions the East Coast Ba

"According to a Congressional source, Palau's troubles tie into the same group of people"

beldaob Reklai and the Koror Ibedul.

Though the Compact provides for the con struction of a cross-Babeldaob road, the Salii administration has separately con tracted out road projects.

A knowledgable Congressional source contends that “there is no competence to determine whether the roads being put in are good engineering; no plans, other than a political one.” As with IPSECO, this source asserts that “without the Compact, there’s no money for the roads: so where is the funding coming from?”

The Congressional staffer went on to say that the inquiry will also examine the drug trade in Palau. The archipelago has purportedly become a major transship ment point for narcotics, and Congress man Morris Udall, the influential Chairman of the House Committee on In terior and Insular Affairs, has alleged that Palauan politicians have been involved in drug trafficking.

The investigation will examine what it calls Palau’s “overall problems”, includ ing the political violence that has plagued the microstate. Two Palauan presidents have been killed by gunshot in only three

years, and the assassins of President Haruo Remeliik remain at large. President Salii’s Special Assistant, Joel Toribiong, was convicted in relation to a shooting inci dent at the home of the current Speaker of the House of Delegates, and a string of fi rebombings as well as alleged murder have been aimed at opponents of IPS ECO and the proposed Compact, which would seek to replace the US-adminis tered United Nations Trusteeship with a new political status granting Palau auton omy and substantial US funding. In ex change, the Pentagon would receive military access in the strategically located Western Pacific archipelago.

IPSECO critics contend that the power project was in reality aimed at forcing vot ers to grant the Compact the 75 per cent vote required to override the anti-nuclear law, since Compact funding is the only po tential source Palau has for repaying the IPSECO debt. Once the Compact had been passed, they say, the Pentagon could con struct fallback bases in Palau if the major Philippines installations close down when leases expire in 1991. The military would have a free new power plant and 25-mil lion-litre fuel storage to provide energy for the Western Pacific defence area from an oversized facility that is far too large for the needs of Palau’s 15,000 people.

According to the Congressional source, “the previous Palau administration did not look into these problems because it could incriminate itself. . . Though the probe is not investigating a particular individual, all of Palau’s troubles tie into the same group of people; and that’s why they hav en’t looked into these matters.”

The General Accounting Office does not have the power to indict, but its fact finding mission can provide evidence for future indictments. Moves are also afoot to provide the beleaguered Republic with an auditor and a prosecutor; because of the Trusteeship’s ambiguous political status the investigation will have to deal with thorny jurisdictional questions, though the US Interior Department still has respon sibility for Palau. Washington has been cracking down on corruption in its Pacific possessions, and there have already been indictments in Guam, the Common wealth of the Northern Marianas and American Samoa. But the crimes at Palau including murder, arson, drug traffick ing, and the bankrupting of an entire na tion are far more serious than any of the charges brought in other American-affili ated territories. □