provider of tax revenues for the government, which also had to face mounting social problems. An esti- mated two thousand businesses closed down, teachers’ contracts were not renewed, and many other public ser- vices had to be scaled back. By year’s end, there was even serious talk of reducing work hours for government employees. Meanwhile, the legislature passed several measures affecting the presence of guest workers, and a seemingly coordinated campaign to close the garment industry down resulted in a spate of negative media publicity. This resulted in increased pressure for Congress to adopt legisla- tion to federalize immigration and the minimum wage, and even the customs territory of the Commonwealth. Governor Teno inherited a severely depleted treasury. The new adminis- tration found that the tax-rebate holding account (holding withheld tax money for eventual rebate to the tax- payers), which was supposed to con- tain $34 million, contained only $2 million. The missing $32 million has never been identified. In addition, the Northern Mariana Islands public auditor charged that the Mari- anas Visitors Bureau had misspent up Despite a more conciliatory and less to $12 million in illegal contracts, and confrontational administration in that the governor (Lang) had spent Saipan, relations between the Com- unappropriated millions on sole- monwealth of the Northern Mariana source contracts. The governor was Islands (cnmi) and Washington also accused of lending substantial continued to deteriorate. Third-term sums to the Tinian Casino Gaming governor Pedro P Tenorio (“Teno”) Commission to meet their salaries, inherited a major fiscal quagmire and to pay a “consultant” a total of from his predecessor, Froilan C Teno- $730,000 for four years plus benefits. rio (“Lang”), and the Asian financial The “consultant,” a convicted felon, crisis that started in October 1997 has yet to deliver any product. continued to batter the economy. To compound the problem, the The shrinking tourism sector left the Asian financial crisis hit the country garment industry as almost the sole harder than any other jurisdiction in 212 the contemporary pacific • spring 2000 the Pacific. Tourism dropped dramati- the original work force of 1,200 has cally from over 700,000 visitors in been reduced to around 800, and 1997 to around 450,000 in 1998. more are likely to be let go in the near Nearly all of the Korean-owned hotels future. The casino has been plagued have either closed or been converted by lawsuits filed by contractors, sup- to apartment facilities, while resorts pliers, and employees, and the govern- closed whole wings, reduced person- ment has been demanding past-due nel, or cut hours to cope with the taxes. The Commonwealth Utilities drop in traffic. Revenue from the Corporation briefly shut off the water 10 percent hotel room tax plunged, supply for nonpayment of bills. Par- leaving the Marianas Visitors Author- ticularly intriguing is the question of ity (formerly Bureau) with reduced what happened to the more than resources for publicity to attract $700,000 developer’s fee allegedly more tourists. A reduction in tourist paid by the casino to the government arrivals also meant a cut in commer- to offset infrastructure costs. The cial flights from tourist sources. The bank that funded the purchase of the domino effect has produced a drop in two high-speed ferryboats plying the revenues for the Commonwealth waters between Saipan and Tinian Ports Authority and reduced its ability threatened to repossess for lack of to upgrade port and airport facilities. payments, and the Commonwealth The luxury shopping mall in Marpi Ports Authority refuses to decrease owned by Japan Airlines now has the per passenger boarding fee for only a few shops still in operation. the run to Tinian. Air access to the Duty Free Shopping has reduced island is limited to small aircraft from working hours to 36 a week, and all Saipan and Guam. The Federal Avia- tourism-related industries still func- tion Authority has approved plans to tioning are asking for government extend the current World War II run- relief in the form of deferred or way to allow larger aircraft to come reduced taxes, exemptions from in, but work will not be completed various administrative requirements, for several years. It remains to be seen and even some form of subsidy. if the present casino can survive the Perhaps the most visible barometer drought. of the economic situation, the Tinian To complicate matters further, the Dynasty Hotel and Casino is barely Mayor of Rota, Benjamin Mangloña, clinging to life after completing its came out publicly proposing a local first year of operation in March 1999. initiative to approve a casino on Rota. It claims to be losing a million dollars Claiming it will resolve the economic a month for lack of clientele, and a crisis on Rota by requiring that 75 visit to the main gaming hall is an percent of the employees be US citi- experience in pity for the remaining zens; that no more than 100 rooms staff, who must stand in full uniform be allowed in the hotel, with overflow at empty tables for hours on end. Of clientele going to existing establish- the three five-star restaurants opened ments; and that a more efficient reg- a year ago, only one is still operating; ulating body than Tinian’s be estab- political reviews • micronesia 213 lished, Mangloña justified his reversal while the officers and crews of the of position on casinos by saying, “I boats were arrested and charged in don’t want my people to go to bed federal court with a variety of viola- starving.” Tinian, of course, took this tions of federal laws. announcement with a certain amount With the decline of the tourism of umbrage. A petition to put the sector, previously the largest revenue question to the voters on Rota was source for the Northern Marianas at filed on 2 July 1999 with over 600 over $150 million annually, revenues signatures, twice as many as neces- from the garment industry assumed sary, and half of the registered voters new importance. Although the indus- on Rota. try generates, on the average, $100 The Tinian Dynasty enjoyed its best million dollars annually in direct business of the year when dozens of and indirect taxes, it has long been federal agents from the Immigration a source of controversy. Most of the and Naturalization Service and Public factories are owned by Chinese or Health were on Tinian to process Chi- Korean companies, although some are nese boat people, who began to arrive owned by US companies, and all are in March 1999. The hotel was full almost fully staffed by Asian workers. of paying federal employees, and the A 20 percent “local hire” quota has casino received a contract to provide resulted in about 2,000 of the 15,000 daily meals to the 500 Chinese being workers being from the freely associ- held. The Chinese were from Fujien ated states, and a few are actually Province in Southeast China, and had from the commonwealth. The distinc- paid up to $10,000 to travel to Guam, tion between local hire and contract where they planned to request politi- worker is significant in that the cal asylum. Nearly five hundred made employer is legally required to pro- it to Guam before federal authorities, vide contract workers with medical aware that the commonwealth has no care, room and board, barracks-to- asylum provisions, determined that factory transportation, and other the military reservation on Tinian costs, with some deductions permissi- would be a better place to house any ble for room and board. Local hire new refugees. Four or five more Chi- employees do not receive these bene- nese boats were intercepted on the fits, and attempts to rectify the situa- high seas and diverted to Tinian. Each tion have been unsuccessful so far. of the leaking fishing vessels carried Allegations of sexual and physical from 75 to 120 Chinese passengers, abuse, payroll fraud, discrimination, frequently without adequate food, and fraudulent recruiting scams water, or sanitation. A tent city was reached an all-time high during the erected at the old b29 runway in year. The federal government consid- northern Tinian, and federal officials ers the garment workers “indentured came from Hawai‘i and the mainland servants” because they must work off to process and repatriate the intern- recruiting fees (paid in the country ees. The last of the 500 on Tinian of origin) before they can make any were repatriated in late June 1999, money for themselves, and they are 214 the contemporary pacific • spring 2000 not allowed to change their employ- indications of worker satisfaction. ment at will. Sometimes recruiting The fact that 20/20 teamed up with a fees amount to more than $10,000, a human rights advocacy group, Global sum hard to save when earning under Survival Network, indicated a preex- $3.05 per hour (after deductions).1 isting agenda. Working conditions have been tar- As a result of this widespread geted as substandard and inhumane, negative publicity, six new bills were and there have been organized efforts introduced in Congress to federalize to close down the industry on Saipan.2 authority over immigration and the These include monthly protests on the minimum wage, and in some cases to US mainland against retailers who eliminate the exemption for products have brand-name products made in manufactured in the commonwealth. Saipan (The Gap, Tommy Hilfiger, A seventh bill, a repeat of last year’s, etc), a billion-dollar class action suit was introduced by Senator Frank against the retailers, and movements Murkowski (R Alaska) and Senator in Congress to nullify the competitive Daniel Akaka (D Hawai‘i); it would advantage the factories gain by locat- phase in federalization over a period ing on Saipan. of eleven years, giving the attorney In the early months of 1999 the general authority to verify confor- world press was inundated with hor- mance with an agreed timetable for rendous stories about human rights the phase-in. Minimum wage is not conditions in the Northern Marianas, mentioned in this version. An eighth filed by people who had never visited measure is currently being drafted by the commonwealth. In addition to the US administration and is being US networks and wire services, stories reviewed by the cnmi government. were carried by Xinhua, afp, bbc, It would also provide a ten-year time- Radio Australia, Singapore and Hong table, but the details are not public. Kong newspapers, and many more. A crucial hearing by the Senate Most had facts creatively embellished Committee on Energy and Natural (one claimed 50,000 workers in the Resources will be held in late July industry instead of 15,000; armed 1999. The committee chairman, Sena- soldiers at the workers’ barracks tor Murkowski, succeeded in getting a when there are no armed soldiers in similar bill out of committee last year, the commonwealth, etc). The most but it died on the floor. With so many significant attack on the industry pieces of legislation pending, and with came when abc’s 20/20 did a second bipartisan support growing in both segment on prostitution and the gar- houses, it is possible that something ment industry. While the prostitution could become finalized by the end of segment was fairly innocuous, the sec- 1999. Some of the factories on Saipan tion on the garment industry used file are bound to close if any of the feder- footage of many years ago without alization legislation shows signs of identifying it as such, made no men- becoming a reality or the class action tion of the improvements made in the lawsuit proceeds. industry’s personnel management and In response to criticisms from ethics policies, and ignored obvious Washington about the unknown political reviews • micronesia 215 number of illegal “overstayers” in the the administration to terminate them commonwealth, the legislature passed with 90 days notice if funds were pl 11–33, known as the Amnesty Law. unavailable, many simply packed up It provided that any illegal aliens who and left. Around 150 education per- turn themselves in within a six-month sonnel left, and the public school period would be given a permit good system scrambled to hire more local for 90 days to find a legal job. Those retirees and others who may be eligi- that did not find work would be sent ble. The Commonwealth Health Cen- home at government expense. Of the ter, the Northern Marianas’ main roughly 2,000 mostly Filipino and hospital, suffered a major loss of Chinese workers who “came out,” medical personnel as well, with quali- fewer than 500 found jobs in the fied nurses leaving for more lucrative depressed economy. The legislature positions on the US mainland or in also passed, and the governor signed, Hawai‘i. No longer eligible for free the three-year-limit law. Under this housing, doctors were also leaving new law, contract workers would in record numbers. Unemployment have to leave the commonwealth for among the indigenous US citizen pop- at least 90 days before being rehired. ulation has reached an all-time high The aim of the bill was to encourage of over 16.1 percent, and there has employers to hire local employees, but been a concurrent 13 percent increase was opposed by local employers on in food stamp recipients.3 These are the grounds that it would raise the mainly new recipients under eighteen cost of doing business. A second years old, often with non–US citizen measure under consideration would parents. simply put a five-year limit on con- Negotiations between the federal tract workers, with no chance of and commonwealth governments renewal. This would prevent eventual under the terms of the covenant that naturalization should federalization established the commonwealth in 1978 occur. In addition, the legislature put took place during the year. In January an absolute cap on garment workers 1999, federal 902 representative Mr (except for new factories), and a cap Edward Cohen met with the cnmi on all others at the present levels. 902 team on Saipan for the first time. Only investors with over a million (Earlier attempts at holding talks in dollars in expansion projects Washington had been canceled with- ($200,000 in Tinian and Rota) would out explanation by the Northern be allowed to bring in new workers. Marianas).The talks were billed as The dramatic drop in government informal, and no conclusions were revenues meant reduced appropria- reached, although it was clear that tions for government operations. neither side was going to give in. Especially hard hit was the public Cohen pressed the Clinton adminis- school system, and it was touch and tration’s intention to phase in federal go whether the schools would be controls over immigration and mini- open after May 1999. When off-island mum wages, while Lieutenant Gover- contract teachers found their renewal nor Jess Sablan vowed to protect the contracts had a new clause, allowing existing terms of the covenant. Both 216 the contemporary pacific • spring 2000 sides said the talks were cordial. The the Spanish influence in the Pacific. administration’s proposed legislation This was the hundredth anniversary refers to “implementing” the cove- of Spain’s departure from the region. nant, since Article 503 gives Congress The museum was built at the reno- the authority to take back powers vated former Japanese hospital in the allocated to the commonwealth. Garapan area of Saipan. It was funded However, some in the commonwealth by money resulting from the sale of called it a “takeover” and unilateral artifacts recovered from the wrecked amendment of the covenant. The pro- Spanish galleon, Nuestra Señora de la posed legislation has been given to the Concepción, that went on the reef governor for comment, but no public south of Saipan in 1636. It also con- statement has been made on the tains extensive artifacts from that content. event. A professional staff has been In the area of financial aid under hired, and the facility has been well section 702 of the covenant, similar received by the public. attempts were made to change the samuel f mcphetres way money was allocated to the Northern Marianas. Earlier appropri- ations under 702 made by the Con- Notes gress had been rejected by the previ- 1 Many of the Chinese garment work- ous governor, who said the money ers are extremely frugal and maintain was no longer needed and could be their own savings accounts, from which traded for continued control of the some have been known to withdraw as minimum wage and immigration. As much as $20,000 saved during their three a result, nearly $100 million had years on Saipan. This sum represents accumulated, while needed capital regular wages for 40 hours per week plus improvement projects went unbuilt. sometimes as many as 20 hours of over- After the Interior Department began time weekly. sharing the money with other jurisdic- 2 Salon Magazine, an Internet publi- tions, such as Guam, the common- cation, described the conditions for gar- ment workers on Saipan as having 31,000 wealth administration prepared a list workers forced to sleep in filthy quarters of projects, including a new prison, head to foot and guarded by armed sol- the Marpi landfill, the high school diers behind barbed wire (Jeff Stein. gym, and projects on Tinian and