under scrutiny

Palau finances under scrutiny

THE United States Department of Interior has decided to monitor Palau’s government more closely, particularly its finances. This has set off protests from there, and from nearby islands.

Interior felt that it had to make the move in the light of the devastating report on the Republic of Palau’s financial practices corruption, conflict of interest, fiscal irresponsibility and lax contracting laws filed by the Con gressional watchdog agency, the General Accounting Office (GAO). The Depart ment’s Inspector General had made similar findings, on such matters as the corruption involved in the construction of the islands’ huge power plant, and on many other similar matters.

Further, Interior, taking a long view, noted that its previous hands-off policies had been set in motion at a time when it looked as if Palau were in transition to Associated State status (like Federated States of Micronesia and the Marshalls).

This had been stalled because of protrac ted disagreements within Palau over the terms and conditions of the proposed relationship to the Mainland. In repeated referendums a large majority of Palau’s voters supported the proposed Compact even though it meant the possible pres ence of nuclear weapons. But that support never reached the required majority of 75 per cent set for such matters in the Palau Constitution. So Palau has stayed a Trust Territory and appears, to Interior, not to be in transition anymore.

With these considerations in mind, Interior officials wrote a draft Secretarial Order earlier this year; if adopted it would establish the position of Secretary’s resident representative, who would have the power to examine Palau’s financial activities and to veto what the official regarded as inappropriate financial trans actions. The same official would also review the action of the island legislature, the OEK.

An effort by Interior to conduct some quiet negotiations on the Secretarial Order, while in draft form, blew up as Palau’s officials objected vehemently and distributed the supposedly private docu ment far and wide.

Typical of the reaction was a statement by the President of Palau’s Senate, Joshua Koshiba, who accused Interior Assistant Secretary Stella Guerra of trying to build

herself an “ivory tower” on Palau, from whence she could rule by dictatorship.

Palau’s President Etpison and House Speaker Shiro Kyota were similarly incensed.

Meanwhile, similarly-placed political leaders in other islands joined in the chorus, accusing Interior of seeking to restore colonial rule. In the Marianas, House of Representatives Speaker Pedro R. Guerrero attacked Interior for the plan, saying it stemmed from the refusal

of the islanders “to be coerced” by the U.S. into approving the disputed Com pact of Free Association. The CNMI House subsequently passed Guerrero’s resolution supporting the Palau position.

The Congressman in charge of the territories subcommittee of the House of Representative, Ron de Lugo (Democrat Virgin Islands) wrote an angry letter to Interior saying that the draft contains “language that is so broad or ambiguous that it suggests a colonialistic design that

may not actually be intended.”

On Guam, the newspaper, Pacific Island Daily, editorially warned that “a super power dealing with a small emerging nation is likely to be seen as a bully,” and urged the Department of Interior “to show respect to the Republic of Palau.”

The paper’s use of the word “respect” reflected the prevailing tone of the press coverage. It has concentrated, to date, on the perhaps awkward approach of the Department of Interior, and on the symbolism involved in restricting the powers of an island government. What has been remarkably lacking, probably because of Interior’s reluctance to air Palau’s dirty linen, were discussions of the underlying problem of how Palau handles Uncle Sam’s money. Had Palau managed Interior’s millions carefully or raised its own funds, there would have been no need for a Secretarial Order.

Meanwhile, there has been little sub stantive discussion of the draft. Two middle-level Interior officials were sent to Palau, but no specifics were discussed.

Palau’s leaders asked for a meeting with Assistant Secretary Stella Guerra, but there were scheduling conflicts, and they then sought one with Secretary Manual Lujan. A meeting was offered with him, in his desert hometown of Albuquerque, New Mexico, where he was holidaying at the time. But the invited Palau leaders declined because of the short notice.

According to Interior officials in Washington, repeated requests to Palau for substantive, written comments on the draft received no replies that Interior deems substantive.

Palau’s officials have said that what they want is help on law enforcement and economic development matters, not an other level of Mainland supervision.

Palau now wants a meeting, preferably in Palau, or in New York, for further discussions of the draft order. New York was suggested because Palau’s leaders are trying to get support from the United Nations on the subject, in light of Palau being the last of the United Nations trust territories. □

THE chiefs of the Solomon Islands’

Western Province have decided to send medical supplies to relatives at Siwai and Buin on Bougainville. □