[Senate Hearing 115-501]
[From the U.S. Government Publishing Office]
S. Hrg. 115-501
PENDING LEGISLATION
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
on
S. 2182
S. 2325
__________
FEBRUARY 6, 2018
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
28-698 WASHINGTON : 2020
COMMITTEE ON ENERGY AND NATURAL RESOURCES
LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming MARIA CANTWELL, Washington
JAMES E. RISCH, Idaho RON WYDEN, Oregon
MIKE LEE, Utah BERNARD SANDERS, Vermont
JEFF FLAKE, Arizona DEBBIE STABENOW, Michigan
STEVE DAINES, Montana JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado MARTIN HEINRICH, New Mexico
LAMAR ALEXANDER, Tennessee MAZIE K. HIRONO, Hawaii
JOHN HOEVEN, North Dakota ANGUS S. KING, JR., Maine
BILL CASSIDY, Louisiana TAMMY DUCKWORTH, Illinois
ROB PORTMAN, Ohio CATHERINE CORTEZ MASTO, Nevada
SHELLEY MOORE CAPITO, West Virginia TINA SMITH, Minnesota
Brian Hughes, Staff Director
Patrick J. McCormick III, Chief Counsel
Isaac Edwards, Senior Counsel
Mary Louise Wagner, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
David Gillers, Democratic Senior Counsel
C O N T E N T S
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OPENING STATEMENTS
Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska.... 1
Cantwell, Hon. Maria, Ranking Member and a U.S. Senator from
Washington..................................................... 3
WITNESSES
Domenech, Hon. Douglas, Assistant Secretary for Insular Areas,
U.S. Department of the Interior................................ 5
Sablan, Hon. Gregorio Kilili Camacho, U.S. House of
Representatives................................................ 16
Torres, Hon. Ralph DLG., Governor, Commonwealth of the Northern
Mariana Islands................................................ 21
Jibas, Hon. Anderson, Mayor, Kili/Bikini/Ejit Local Government... 27
Gootnick, Dr. David, Director, International Affairs and Trade,
U.S. Government Accountability Office.......................... 35
Niedenthal, Jack, Member, Bikinian Elder Community............... 59
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Butters, Joseph K. (RetLCDRUSN):
Letter for the Record........................................ 76
Cantwell, Hon. Maria:
Opening Statement............................................ 3
Turnberry Solutions, LLC 2017 Lobbying Report................ 68
Derickson, Jill:
Letter for the Record........................................ 77
DFS Saipan Limited:
Letter for the Record........................................ 237
Dilley, Michael E.:
Letter for the Record (Marianas Business Plaza).............. 239
Letter for the Record (MOI, LLC)............................. 240
Domenech, Hon. Douglas:
Opening Statement............................................ 5
Written Testimony............................................ 7
Letter for the Record addressed to Hon. Catherine Cortez
Masto regarding the status of funds in the Resettlement
Trust Fund................................................. 124
Responses to Questions for the Record........................ 139
Gootnick, Dr. David:
Opening Statement............................................ 35
Written Testimony............................................ 37
Responses to Questions for the Record........................ 202
Guillo, Eden:
Letter for the Record........................................ 241
Hawaiian Rock Products (Saipan):
Letter for the Record........................................ 242
Herman's Modern Bakery, Inc.:
Letter for the Record........................................ 246
Hudkins, Merle:
Letter for the Record........................................ 249
Hyatt Regency Saipan:
Letter for the Record regarding S. 2325...................... 78
Letter for the Record regarding H.R. 4869.................... 80
IT&E:
Letter for the Record addressed to Hon. Gregorio Kilili
Camacho Sablan regarding H.R. 4869 dated 1/29/18........... 82
Letter for the Record addressed to Hon. Lisa Murkowski
regarding S. 2325 dated 1/29/18............................ 250
Jibas, Hon. Anderson:
Opening Statement............................................ 27
Written Testimony............................................ 30
Responses to Questions for the Record........................ 198
Johnston, Hon. J. Bennett:
Letter for the Record........................................ 255
Mendiola-Long, Phillip:
Letter for the Record........................................ 257
Murkowski, Hon. Lisa:
Opening Statement............................................ 1
Niedenthal, Jack:
Opening Statement............................................ 59
Written Testimony............................................ 62
Responses to Questions for the Record........................ 207
Northern Marianas Business Alliance Corp.:
Letter for the Record........................................ 261
Northern Marianas Trades Institute:
Letter for the Record........................................ 87
Nutting, Stephen:
Letter for the Record........................................ 263
Palacios, Hon. Arnold I.:
Letter for the Record addressed to Hon. Gregorio Kilili
Sablan dated 2/1/18........................................ 88
Certified copy of duly adopted H.J.R. 20-8............... 90
Letter for the Record addressed to Hon. Lisa Murkowski dated
2/2/18..................................................... 96
House Joint Resolution 20-7.............................. 98
House Joint Resolution 20-8.............................. 104
Senate Resolution 20-21.................................. 110
S. 2182, the Bikini Resettlement and Relocation Act.............. 210
S. 2325, the Northern Mariana Islands U.S. Workforce Act......... 213
Sablan, Hon. Gregorio Kilili Camacho:
Opening Statement............................................ 16
Written Testimony............................................ 18
Saipan Chamber of Commerce:
Letter for the Record addressed to Hon. Lisa Murkowski dated
2/1/18..................................................... 115
Letter for the Record addressed to Hon. Gregorio Kilili
Sablan dated 1/31/18....................................... 264
Society for Human Resource Management NMI Chapter:
Letter for the Record........................................ 266
Tan, Ronnie:
Letter for the Record........................................ 269
Tano Group Inc.:
Letter for the Record........................................ 117
(People of) Tinian and the Tinian Leadership:
Letter for the Record........................................ 270
Torres, Hon. Ralph DLG.:
Opening Statement............................................ 21
Written Testimony............................................ 23
Responses to Questions for the Record........................ 144
Press Release dated January 21, 2018......................... 272
Torres Refrigeration, Inc.:
Letter for the Record........................................ 274
Triple J Enterprises, Inc.:
Letter for the Record........................................ 119
Van Der Maas, Erick:
Letter for the Record........................................ 275
Van Der Maas, Jasper:
Letter for the Record........................................ 276
van Gils, Gerard:
Letter for the Record........................................ 277
Weisgall, Jonathan M.:
Letter for the Record........................................ 279
Zackios, Hon. Gerald M.:
Statement for the Record..................................... 281
PENDING LEGISLATION
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TUESDAY, FEBRUARY 6, 2018
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:04 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Lisa
Murkowski, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
The Chairman. Good morning. The Committee will come to
order.
I want to welcome everyone this morning as we gather to
examine two pieces of legislation related to U.S. affiliated
islands: S. 2182, the Bikini Resettlement and Relocation Act,
and S. 2325, the Northern Marianas Island U.S. Workforce Act.
Walking in this morning, it was a little bit cool outside,
so we will go to the South Pacific.
To address the legacy of U.S. nuclear testing in the
Marshall Islands, Congress has provided $110 million to the
people of Bikini for the rehabilitation and resettlement of
Bikini Atoll via appropriations and an additional $75 million
through the Compact of Free Association with the Marshall
Islands. The Trust Fund for the Resettlement of the People of
Bikini reached a high of $129 million back in 2000. Today its
market value is approximately $57 million.
I introduced S. 2182 in response to the Department of the
Interior's recent determination that it does not have statutory
authority to conduct financial oversight of the Trust Fund.
This determination just came down in November. While annual
drawdowns from the Trust Fund have historically ranged from $5
to $10 million, over $15.7 million has already been withdrawn
in FY 2018. Press reports detailed an immediate $11 million
drawdown from the Trust Fund, nearly 20 percent of its value at
the time, by the KBE Local Government Council after the
Department's announcement in November. We have heard reports of
large sums being spent on things such as an airplane, two
landing craft, an elaborate function in Hawaii and cash
payments to households on Ejit and Kili in the name of disaster
relief but without any damage assessments being conducted.
S. 2182 provides the Secretary of the Interior with
statutory authority to disapprove of Trust Fund withdrawals
until a resettlement plan for Bikini has been submitted to
Congress. It also caps the amount that can be withdrawn on an
annual basis at five percent of the Trust Fund's market value
until the resettlement plan has been submitted.
Now I need you all to know that I am very sensitive to the
notion that Washington, DC, should not dictate local decisions.
Alaskans have dealt with that mentality since we were a
territory. I have always found it far more useful to hear from
the duly elected representatives on community needs. But I am
also mindful that the Trust Fund was established for the people
of Bikini, with its statutory purpose being the
``rehabilitation and resettlement of Bikini Atoll.'' As a
result of the United States' nuclear testing, our government
has a responsibility to the Bikini people. Establishing the
Trust Fund with U.S. taxpayer dollars was part of that
responsibility, and ensuring that the Trust Fund is utilized
for the people of Bikini in a manner that is consistent with
its intent and statutory purpose is also our responsibility.
With this hearing, I hope to gain a better understanding
from our witnesses as to the rationale and the legal analysis
behind the Department's interpretation of its role. I also want
to learn how the money that has been withdrawn from the Trust
Fund is being utilized per Congress' intent.
Our second piece of legislation this morning, S. 2325,
seeks to address the Northern Mariana Islands' foreign labor
concerns as we reach the end of the transition period that was
established by Congress. This bill was developed by a
bipartisan, bicameral working group that I formed last year.
That group includes two of our witnesses today, Congressman
Sablan, we thank you, and Governor Torres, as well as staff
from our Committee, the House Natural Resources Committee and
the House and Senate Judiciary Committees. We appreciate the
good work that many have put in to getting us to where we are
today.
S. 2325 extends the transition period to 2029. It further
sets a numerical cap of 13,000 CW permits starting in FY 2019
with annual decreases of 500 permits for the remainder of the
transition period. Our goal is to ensure that U.S. workers in
the Commonwealth of the Northern Mariana Islands (CNMI) are not
at a competitive disadvantage compared to foreign labor. To
that end, our legislation requires a U.S. Department of Labor
certification on foreign worker needs and requires that the
employer pay a CW worker the highest prevailing wage.
The bill also creates a new CW-3 permit category for long-
term foreign workers who have been working in the CNMI under a
CW permit since 2014, and it gives the Secretary of Homeland
Security the authority to revoke an issued permit if it is not
being used or if the employer has violated federal labor laws.
The timing of this legislation is significant as we are
only a few weeks away from the submission of the next round of
CW permit applications. Notably, the Department of Homeland
Security has announced a significant reduction in the number of
CW permits available in FY'19, which is expected to result in
the denial of thousands of applications.
While I do believe that we have a good product in front of
us, I welcome suggestions on how we might be able to improve
it. I do want to emphasize, however, that while I am willing to
support extending the transition period, I remain committed to
the intent of the transition, which is to increase the number
of U.S. workers in the CNMI economy while reducing the
dependence on foreign labor.
I look forward to hearing from our witnesses on these two
bills, and I thank many of you for coming a long, long distance
today.
I now turn to Senator Cantwell for her comments and
remarks.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Chair Murkowski, for holding
this hearing, and thank you to our witnesses for joining us
today to discuss Senate bill 2325, the Northern Marianas Island
U.S. Workforce Act, and S. 2182, the Bikini Resettlement and
Relocation Act. As the Chair said, and as I well know, many of
you have traveled from far away.
As many of my colleagues know, this Committee was
originally created in 1816, as the Committee on Public Lands,
and in 1977 it was renamed what we call it today, the Committee
on Energy and Natural Resources. Since its earliest days, its
jurisdiction has encompassed territories and insular areas and
the scope of the Committee's jurisdiction includes five
territories: Puerto Rico, U.S. Virgin Islands, American Samoa,
Guam and the Northern Mariana Islands, in addition to the
Freely Associated States of Palau, Micronesia and the Marshall
Islands.
Today, the Committee will consider S. 2325, which would
amend labor policies in the Commonwealth of the Northern
Mariana Islands. It specifically addresses the Northern
Marianas only transitional worker permit program.
The Committee will also consider S. 2182, the Bikini
Resettlement and Relocation Act. The bill is an attempt to
ensure that the U.S. Government keep its promise to the people
of the Bikini Atoll and preserve the resettlement trust.
At last year's hearing, we revisited the shameful labor
abuses of the 1990s and early 2000s and the actions this
Committee took in response under the leadership of then Senator
Frank Murkowski. We learned that some of these same abuses had
returned with recent casino and hotel construction, and we also
noted press reports that indicated money laundering.
Fortunately, in contrast to the '90s, the Federal Bureau of
Investigation and U.S. Department of Labor were on the scene
and they made multiple arrests and put a halt to the abusive
labor practices, and at least five people have been indicted on
charges of harboring aliens for commercial advantage and
private financial gain. I expressed my concern at that time
there did not appear to be sufficient oversight on the part of
local government. Regarding potential money laundering,
Governor Torres indicated that his administration was intent on
strict regulatory oversight and he committed to evaluating
whether any changes in the local law and enforcement were
necessary. So I look forward to hearing about the progress on
this today, Governor.
This Committee passed a bill last year which upon enactment
in August would remove the loopholes which allowed construction
companies to get CW visas, and during the past year we have
been working on a longer-term solution to the expiring CW
program.
I would like to thank Congressman Kilili Sablan from the
Northern Marianas for his leadership in working these past
several months in a bipartisan way with the staff of the
Committee and the Judiciary Committee to identify a path
forward for a ten-year transition from the CW program. This
bill, in my view, effectively promotes continued economic
growth for the Marianas but also imposes additional safeguards
to make sure that protections are in place for workers. Those
who mistreat their employees will suffer the consequences.
The Bikini Atoll Resettlement Fund. The Marshall Islands, a
sovereign nation in free association with the United States,
consists of 34 low-lying atolls in the Pacific Islands
approximately 2,400 miles southwest of Hawaii. One of the
atolls in the northwestern quadrant of the Marshall Islands is
Bikini Atoll. Between 1946 and 1958, the United States
detonated 67 atmospheric devices in the Marshall Islands.
Before testing began, the United States moved the 167 residents
of Bikini off the island to protect them. As a result of the
weapons testing, Congress provided the people of the Atoll with
a Resettlement Trust Fund of approximately $110 million. Its
current purpose is to resettle the people of Bikini to other
islands within the Marshall Islands and to restore habitation
to Bikini.
Historically, by our mutual agreement, the Department of
the Interior would approve Bikini's withdrawals. I understand
the people of Bikini have decided that they no longer want to
continue the arrangement that had been in place for the past 27
years and the Department of the Interior has agreed to cease
its oversight, but S. 2182 attempts to ensure that the
Department of the Interior continues overseeing withdrawals
from the funds to prevent depletion. What began as a $110
million fund was $67 million in September, and shortly after
the Department of the Interior's decision, $11 million was
withdrawn.
While I agree we must respect the Bikini's desire to spend
their money in certain ways, the Department of the Interior has
a responsibility to ensure the Fund remains for several years
to come. The Federal Government must ensure that the Northern
Marianas has the tools to grow its economy, while at the same
time, ensuring protection of the fundamental labor rights. So I
view the Northern Marianas bill before us today as
accomplishing both, but the local government must remain
vigilant.
Thank you, Madam Chair, for holding this important hearing.
I look forward to hearing what the witnesses have to say today.
The Chairman. Thank you, Senator Cantwell.
Let's turn now to our witnesses, a very distinguished
panel. We appreciate you joining us here this morning.
We will be led off this morning by the Honorable Doug
Domenech, who is the Assistant Secretary for Insular and
International Affairs at the U.S. Department of the Interior.
Nice to have you here.
I mentioned Congressman Sablan, with the U.S. House of
Representatives. Thank you for joining us, and we appreciate
all your good work.
The Governor for the Commonwealth of the Northern Mariana
Islands, the Honorable Ralph Deleon Guerrero Torres, is with us
this morning. Thank you for traveling so far, we appreciate it.
We are also joined this morning by the Mayor of the Kili,
Bikini and Ejit Local Council, the Honorable Anderson Jibas.
Welcome to the Committee.
Dr. David Gootnick is the Director of International Affairs
and Trade for the U.S. Government Accountability Office (GAO).
We thank you for being here.
And Mr. Jack Niedenthal, who is a member of the Bikinian
Elder Community. We welcome you to the Committee.
We would ask that you try to keep your comments to about
five minutes. Your full statements will be included as part of
the record, and then we will have an opportunity for questions
and answers once you each have concluded your statements.
With that, Mr. Domenech, if you would like to lead us off
this morning?
STATEMENT OF HON. DOUGLAS DOMENECH, ASSISTANT SECRETARY FOR
INSULAR AREAS, U.S. DEPARTMENT OF THE INTERIOR
Mr. Domenech. Good morning, Chairman Murkowski, Ranking
Member Cantwell and members of the Committee. Thank you for the
opportunity to speak regarding S. 2182, the Bikini Resettlement
and Relocation Act, and S. 2325, the Northern Mariana Islands
U.S. Workforce Act.
The Bikini Resettlement Trust Fund was established in 1982
to aid in the relocation and resettlement of the people of
Bikini. S. 2182 would limit the distribution of expenditures
from the Trust Fund to no more than five percent of the
principle and retain the right of the Secretary of the Interior
to disapprove expenditures from the Fund.
Two weeks ago, I visited the people and places of these
enchanting islands. While I was there I met with President
Heine, her cabinet members and other members of the legislature
in Majuro and Kwajalein. I also met with the Mayor of Bikini
and the members of the Kili/Bikini/Ejit, or KBE, Council where
we discussed, in general, their plans to provide for their
peoples' future.
For more than three decades since the Bikini Resettlement
Trust Fund was established, the Department exercised a
discretionary right of veto to disapprove distributions from
the Fund. This past August the KBE Council passed a resolution
stating that the Department was not required, statutorily, to
exercise a right of veto over the Council's budget. After a
review by Interior's Solicitors Office, the Department accepted
the resolution as an amendment to the Trust Fund agreement and
decided we would no longer exercise the discretionary right of
veto over withdrawals.
In doing so, we made clear that if KBE expended all the
funds, the U.S. Government would not be responsible to
replenish them, consistent with the 1980s legislation that
satisfied U.S. obligations and settled all claims for nuclear
testing.
S. 2182 intends to reverse this decision. For decades, the
Department exercised such a discretionary right of veto which
was accomplished only with the cooperation of successive
elected leaders of the KBE Local Government. This arrangement
came to an end in August when the Mayor of Bikini and 15 of the
18 elected members of the KBE Council expressed their clear
intent to deal with their trustee bank exclusively.
In addition, it is the Department's view that the funds
that Congress appropriated decades ago lost their character as
federal once the Fund acquired them. This is consistent with
the Congressional Budget Office's view that, ``The funds belong
to the people of Bikini and thus are non-federal.''
Consequently, it is unclear how S. 2182 could serve to impose
withdrawal restrictions retroactively on these non-federal
funds that belong to a foreign entity.
It is important to note that President Heine has indicated
her support for the Department's decision to restore decision-
making to the KBE Council. Secretary Zinke has made clear that
he supports strongly restoring trust and responsibility to
local communities with which Interior deals. The people of
Bikini, through their elected leaders, have the right to
exercise local control over the funds provided to them as
compensation for the U.S. Government's nuclear testing in
Bikini. Therefore, the Administration would not be able to
support S. 2182 as currently written.
I would now like to comment on S. 2325, the Northern
Mariana Islands U.S. Workforce Act. S. 2325, among other
provisions, would extend the termination date of the temporary
Commonwealth-Only, or CW, visa transition period by ten years,
raise the annual number of CW visas to 13,000 during Fiscal
Year 2019 and create incentives to increase the percentage of
U.S. workers.
In recent years there have been significant investments in
casino and hotel facilities in the territory, increasing the
need for labor. Since 2009, the CNMI has relied on this unique
Commonwealth-Only visa system which is due to end in 2019.
The Department applauds this legislative effort to increase
U.S. workers. The Administration is committed to working with
the leadership and people of CNMI to ensure robust and healthy
economic growth and appreciates that a consistent labor market
is essential.
The Department looks forward to working with the Congress
and the Committee to provide long-term solution, a long-term
solution to the CNMI's economic challenges, to protect and
provide Americans and other U.S. eligible workers job
opportunities and to identify new opportunities for growth and
diversification.
Thank you.
[The prepared statement of Mr. Domenech follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Domenech.
Congressman Sablan, welcome.
STATEMENT OF HON. GREGORIO KILILI CAMACHO SABLAN, U.S. HOUSE OF
REPRESENTATIVES
Mr. Sablan. Thank you very much and good morning,
Chairwoman Murkowski, Ranking Member Cantwell, Senator
Heinrich, Senator Hirono and Senator Masto.
Thank you for today's hearing on S. 2325, the Northern
Mariana Islands U.S. Workforce Act. I introduced the same bill,
H.R. 4869, in the House of Representatives, and we're looking
at a hearing at the end of the month. My hope is the Senate
will act so quickly that our hearing in the House can actually
take up Chairwoman Murkowski's S. 2325.
And there is urgent reason to act. On April 1st, the window
opens to apply for foreign labor permits for Fiscal Year 2019.
USCIS has cut the permit cap in half, 5,000 below this year,
and will close the window as soon as enough applications are
received. This year, the window closed in just 11 days. Cutting
the prospective foreign workforce in half will have an
immediate and profoundly negative impact on the Mariana's
economy, which is now flush with growth, after many years of
decline.
But Congress works well, working against a deadline, and I
believe we can move quickly now because the U.S. Workforce Act
is the product of a bicameral, bipartisan, Congressional
working group and because the bill centers on two policy goals
that should find broad agreement in Congress. One, the
Mariana's economy should continue to have the labor needed to
continue development, and two, that the labor force should
increasingly be composed of U.S. workers.
To provide the necessary labor, the bill extends the
current transition period for another ten years and resets the
permit cap to last year's level of 13,000. To incentivize
hiring U.S. workers, the bill reduces the cap by 500 per year.
To further protect U.S. workers, the bill requires the U.S.
Department of Labor to certify the need for any new foreign
worker and certify they will not pull down the wages of U.S.
workers. And to help make U.S. workers more employable, the
bill increases the annual fee paid by employers to fund
apprenticeships and vocational programs and requires an annual
spending plan with specific job placement targets, plan
approval by U.S. Labor and performance reports. Of course,
another way to get U.S. workers is to look to the mainland U.S.
or to Hawaii and Alaska.
Chairwoman Murkowski, I know you have native corporations.
You have native corporations who do construction and are always
looking for opportunities along the Pacific Rim. I hope the
Governor will look to Alaska for roads and other infrastructure
projects the Commonwealth is building.
The U.S. Workforce Act also requires periodic touchback in
their home countries by foreign workers to reaffirm their non-
permanent, nonimmigrant status. At the same time, the bill
protects those foreign workers.
When I testified here last year, federal agencies, OSHA,
Labor's Wage and Hour Division, Department of Justice and
Immigration, had recently found serious violations of federal
law at a major Chinese casino project in the Marianas. Also
last year, the Department of Justice successfully prosecuted
multiple businesses that were fronts for illegal recruitment
and contracting schemes which I would call human trafficking.
The U.S. Workforce Act tackles those problems head on. From
now on, employers must present evidence to federal agents every
three months that foreign workers are being paid and that all
the other terms and conditions of employment are being met. And
employers who are in breach of federal or Commonwealth labor
laws or not using their permits will have them revoked, so
legitimate businesses can have those permits. Of course, we may
have some fine tuning to do. We will be meeting with Homeland
Security in the next few days and the Labor Department. But all
in all, we have a good bill.
We wanted to be sure the economy would have workers. Our
bill does that. We wanted to be sure that more Americans would
be getting jobs. Our bill does that, too.
And once again, I thank you, Chairman Murkowski, Ranking
Member Cantwell and all the members of our Congressional
working group.
Today, it seems, we live in an age of division. But this
bill reminds us, with effort and good will, agreement is within
our reach.
And of course, Chairman Murkowski, you and I share the
experience of working successfully together as we did on the
transfer of submerged lands in the Marianas in 2013, the Rosa
Parks study in 2014, extending the labor transition period from
2014 to 2019, and last year, on H.R. 339, my bill, barring the
use of CW worker's permits for new construction workers. None
of that legislation was easy, and the U.S. Workforce Act may be
the most difficult of all. But I look forward to continuing to
work with you. I am confident we can be successful again.
Thank you very much for inviting me this morning.
[The prepared statement of Mr. Sablan follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Congressman. We appreciate you
being here.
Governor Torres, good to see you.
STATEMENT OF HON. RALPH DLG. TORRES, GOVERNOR, COMMONWEALTH OF
THE NORTHERN MARIANA ISLANDS
Mr. Torres. Good morning, hafa adai and tirow. On behalf of
the people of the Commonwealth of the Northern Mariana Islands,
I want to thank Chairman Murkowski, Ranking Member Cantwell and
other Senators and distinguished members of this Committee for
recognizing the need of this important conversation for the
community and the economy of the Northern Mariana Islands
through the Northern Mariana Islands U.S. Workforce, S. 2325.
I am here today to speak about our transition into the U.S.
immigration system, the progress we have made toward the
highest ratio of U.S. workers to foreign workers in our short
history, the challenges that have arose in pursuit of even
higher numbers and how this bill provides for time and
resources to make the goals of this transition period possible,
without harming the economy or the people of the CNMI.
If we look to the data available to us from USCIS, we can
see that within the listed CW occupations, economic growth,
local government policy and efforts have reduced the demand for
many job categories. For instance, in 2013, Northern Marianas
College successfully launched a four year Bachelor's degree in
business with training in accounting. This timeframe saw
accounting positions in the CW program fall from 8th highest in
demand to 15th in 2016. From teachers to retail workers and
throughout the economy, since the beginning of the transition
period, the CNMI has made gains toward the reduction of our
reliance on foreign workers. The GAO study speaks to this as
well, finding that the domestic labor force in the CNMI is
nearly half of the total workforce, increasing 11 percent
compared to 2009.
The bill provides for protection of U.S. workers in our
labor force through measures that are necessary for the CNMI to
more adequately hire and retain U.S. workers through wage
standards. The creation of the CW-3 category recognizes the
importance of the CNMI long-term foreign workers and will be
crucial toward providing the next generation of U.S. workers
on-the-job training that is essential for the success of our
economy. Allowing only legitimate businesses to acquire foreign
labor under the CW program is an important step toward economic
growth that is clean, sustainable, conducive to the safety and
well-being of our community.
Most importantly, this bill provides the CNMI and the
Federal Government the time to grow our economy and succeed in
our shared goal of building a strong, sustainable U.S.
workforce because even after all the gains we have made, since
I came into office, in the absence of this bill, Chairman, the
CNMI would not be able to withstand losing half of its
workforce in 2019.
The JGL--GAO, I'm sorry, the GAO has already found that
without CW-1 workers, the CNMI would stand to lose as much as
62 percent of our GDP. The effect of this massive economic
collapse will be profound. We estimate that if the economy
contracts by this amount, we stand to lose 25 percent of our
U.S. workforce as a result of business closures and an even
greater amount from the outward migration of U.S. workers that
will follow. With that, our data shows a potential reduction of
59 percent of local revenue. That would potentially leave the
CNMI with an annual operating budget of less than $100 million
before paying our debt services obligations and payments to our
federally-administered pension settlement fund.
I have witnessed tight budgets in the past, the government
austerity measures, the inability to pay for gasoline for our
police cars and the long lines at the food stamps office. This
will be far worse.
This year we saw the need for greater data, more
accountability and better screens that these funds were going
toward a training of our workers. So we have implemented a
direct funding mechanism to students to subsidize the cost of
training and track their progress because they are an important
product of our work.
We have many limitations in the CNMI that are not present
in the states. We do not have Department of Labor unemployment
statistics like a state. We do not have the U.S. Census
Bureau's American Community Survey, but through the funding
assistance we have been able to produce occasional data that
gives us some light.
Most recently, the CNMI Department of Commerce released its
2016 Household Income Expenditure Survey, which projected that
there would be an estimated 1,800 U.S. citizens in our islands
that are potentially classified as ``unemployed''. While 1,800
is a relatively small number, it is my hope to eliminate this
number as best we can. To do so, we have instituted the
strictest work requirements on food stamp recipients in the
nation. We have promoted government-sponsored job fairs and
continue to allocate dollars to training institutions and
programs. We have targeted issues that are affecting U.S.
citizens' employment, starting our first Drug Court and Drug
Rehabilitation Outpatient facility and are working toward the
implementation of the CNMI's first public transit to alleviate
the transportation issues that are preventing individuals from
obtaining a job.
This bill represents a compromise on issues that the CNMI
feels merits considerations. In our initial proposal, put
forward in collaboration with the CNMI business community, we
requested a numerical limit of 15,000, which would allow for
greater growth of the level of current rate and removal of
construction workers ban on CW-1 permits to allow for the
existing private contract and more critical, public-service
infrastructure development activities to continue on the
schedule.
Altogether, Madam Chair, thank you very much for this
opportunity for giving us this time to represent and to testify
on this august body.
Thank you, and I'm open for questions.
[The prepared statement of Mr. Torres follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Governor.
Welcome, Mayor Jibas.
STATEMENT OF HON. ANDERSON JIBAS, MAYOR,
KILI/BIKINI/EJIT LOCAL GOVERNMENT
Mr. Jibas. Madame Chair, Ranking Member Senator Maria
Cantwell, Senators, my name is Anderson Jibas, Mayor of the
Kili/Bikini/Ejit Local Government.
Senate bill 2182 came to us as a surprise. It's a bill that
will limit the use of our money in years to come. In our
calculation, a five percent restriction on our Bikini
Resettlement Trust Fund will provide us an estimate of around
$2 million next year and maybe less after the year after that.
We cannot live off $2 million a year.
As the Mayor of the people of Kili/Bikini/Ejit Local
Government, I will have to shut down our power plant, engine
fuel and we have faced power outage, cut off our food supply to
6,000-plus population and will include Ejit/Bikini Island----
May I ask? Has any of the members of this Committee been to
Kili Island?
Anyhow, just for an example. Kili Island is a three-fourths
of a mile long and wide. It has no islets or lagoon, compared
to Bikini that has 23 islets with a large lagoon. Kili Island
has limited resources. Six months out of the year it has rough
seas and sometimes with power outage from old Ejit generators
along with the limitation of traditional food and in times we
have to begin to download cargo ships because of rough seas
with no dock. I will have to lay off all of our employees,
including trust fund managers and trustees here in the United
States and so on. Bill S. 2182 will affect many of us, and I
promise it will make life even more harder than now.
Seventy-two years of exile from our own land. There were
167 of our elders that were relocated from Bikini in 1946 to
Kili Island. Today there is about 16 of them alive. All of them
have no health plan and cannot move because of illness and age.
Here I have with me members of the Council Executive and
Senator and former President Kessai Note are here with me
today. I can tell you in the delegation that came, I have seven
elders that are elders of Bikini. I know one of my witness,
your witness here, is representative on behalf of the Bikini
Community, and I can state this out that he is not an Elder of
Bikini.
I am from Kili Island where the displaced public of Bikini
were relocated in 1946 to Rongerik, Kwajalein, then to Kili and
to Ejit Island. As you know, the Department of Interior
recognizes that it did not have statutory mandate over the
Kili/Bikini/Ejit Resettlement Trust Fund annual budget and
expenditures. We fully support and welcome Doug Domenech and
the Department's decision in November 2017 on this issue.
For decades DOI had oversight over every single expenditure
from the Resettlement Trust Fund with the coincidence of
successive administrations of Kili/Bikini/Ejit Local Government
and warranted colonialism, we appreciate the U.S. acting on its
recognition of its limited role.
We, the elected body of the Kili/Bikini/Ejit Council, who
live among the people of Bikini, have determined that we should
deal directly with the Resettlement Trust Fund, not through
intermediaries. There were discrepancies and issues in dealing
with the two non-RMI natives who were, frankly, condescending
to us. The Trust Liaison Agent and the lawyer in DC would
inform us that DOI said no, or DOI said this, DOI said that. We
finally checked with DOI and DOI said they were never
contacted. Power, and in full, was in the hands of
intermediaries, not with the elected KBE Council. So the
Council began dealing directly with DOI instead of middlemen
who did not really present or represent the real needs of the
people of Bikini. Suddenly, our relationship with DOI became
direct, good, open and transparent. The Kili/Bikini/Ejit Local
Government and I, the elected leaders of Bikini, the people of
Bikini, we live with the people of Bikini and experience their
daily joys and daily hardships. We know far better than the
intermediaries or distant agencies of the United States what is
needed to make the lives of the displaced population more
bearable.
Now that things have changed, we are moving forward. Last
year, my administration asked the Department of Interior
whether its main role of veto power with the Resettlement Trust
was mandated by laws of the United States. The Department's
answer was no, it was not mandated by law. That is, the
Resettlement Trust Fund monies belong to the people of Bikini,
and their elected leaders are best suited to determine how
those monies are to be used. But now this Committee is
considering legislation that takes us backward to the whole
system, a system that says the bureaucrats and the federal
agencies know what is best for the people of Bikini.
I will explain this is why we oppose this bill. Our
ancestors moved from the beautiful island of Bikini Atoll so
that 23 thermonuclear bombs could be detonated, poisoning and
vaporized three of our islands. That has been our experience,
but you need to and must live with the consequences of removal
and displacement. Nobody knows these consequences better than
we do--certainly no agencies in Washington, DC. With all due
respect, neither does the U.S. Congress. We know best how to
provide for the people of Bikini, now and in the future. We
know how to survive the hardships of life on a rock in the
middle of the Pacific Ocean and we know the beauty of our
islands in the Bikini, where we long to live and raise our
children.
In 1988, we did not know how much it would cost to
rehabilitate and restore Bikini to a condition which permitted
us to move back. The Resettlement Trust Fund was given about
$110 million. In 2001, scientists and engineers developed the
rehabilitation and restoration plan and determined that the
cost would be around $361 million of which about $110 million
was already given to the KBE Resettlement Trust Fund. Another
$250 million was needed and was awarded by the Nuclear Claims
Tribunal, but to date, the U.S. Congress has refused to fund
the award. Let me repeat. Bikini already submitted a
rehabilitation and restoration plan in 2001, but the U.S.
Congress ignored it.
The Chairman. Mayor, I am going to ask you to summarize.
You are well over your time.
Mr. Jibas. I'm sorry, Chair, Madam Chair.
I've traveled 8,000 miles, and I will try to get all this
in. And I have submitted the statement to the Committee.
The Chairman. Yes, the full statement is incorporated as
part of the record.
Mr. Jibas. Alright, thank you.
The Chairman. Did you have final wrap-up that you wanted to
make there?
Mr. Jibas. Alright.
I have about three more pages, but yes, thank you for
letting me finish off.
And just to get to the point, we are trying to make sure
that in the last two years now with the new Administration and
this term I tried to work with DOI and Insular Affairs.
I want to give them a big thanks for all their support and
we--I ask that the Committee can work with Insular Affairs and
get all of our information and what we have been through in the
last several years.
But I want to conclude within times of climate change,
Madam Chair. In the last several years, over the course of five
years, our islands have been flooded with four feet, five feet,
into the community--three-fourths of the island, covered. Kili
Island has no islets. It's a single, isolated island in the
middle of the South Pacific Ocean with no lagoon, compared to
Bikini. And Madam Chair, we cannot go back to Bikini because it
is filled with radiation--cesium-137, strontium 90--it's
filled, we cannot live there according to studies of DOE. We
will stay there, but we cannot live on Kili Island. It's only
three-fourths of a mile wide and long. We consider it a prison.
There is not enough resources. In times of months that the
ocean is not food, six months out of the year, we cannot fish.
And if we cannot import food to the island, to the community or
we cannot get our monies from our Trust Funds, how can we live
off that?
And at this time of climate change, this Administration is
trying to work along with the Office of Insular Affairs and we
hope that the Committee on Natural Resources can please see to
our vision what we try to do for the people.
[The prepared statement of Mr. Jibas follows:]
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The Chairman. Thank you, Mayor.
Dr. Gootnick, welcome.
STATEMENT OF DR. DAVID GOOTNICK, DIRECTOR, INTERNATIONAL
AFFAIRS AND TRADE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Dr. Gootnick. Thank you very much.
Chairman Murkowski, Ranking Member Cantwell and members of
the Committee, let me return for a moment to the CW Worker
program in the Commonwealth.
This Committee, along with Mr. Sablan, recently asked GAO
to examine federal data on the implementation of the CW Worker
program. My testimony today is based on our prior work and
preliminary results from this ongoing analysis. I'll highlight
the aspects of our work that most closely pertain to the key
provisions of the proposed legislation.
The intent of the CNRA, among other things, was to minimize
any adverse economic consequences of ending the preexisting,
locally administered foreign worker program. However, a decade
after the passage of the CNRA, foreign workers make up more
than half of the CNMI workforce and a recent study found that
these workers held 80 percent of all jobs in the tourist
industry.
Last year, we modeled GDP under a range of assumptions on
labor and output and found that if all CW workers were removed
from the labor force, the mostly likely result would have been
an economy 37 to 50 percent below its 2015 level.
Regarding specific provisions in the proposed legislation.
First, on the reset of the cap and extension of the
transition period. From Fiscal '12 to '16, as the economy grew,
the number of CW permits nearly doubled and as has been said,
since 2016, the number has approached or hit the cap, a de
facto constraint on firms' access to foreign workers. Hiking
the cap to 13,000 would essentially meet or exceed the number
of CW permits approved for any year of the program thus far,
including 2016, when according to BEA, the economy grew by 29
percent. However, regardless of the level, with the so-called
500 or fewer provision, a downturn in the economy, if it
significantly reduces demand for CW workers, would ratchet down
the ceiling on permits for all subsequent years.
Second, regarding the recently enacted limits on
construction and construction-related workers. Our preliminary
analysis indicates that as of January 2018 CIS had approved 750
CW permits for construction workers for this year. This is a 75
percent drop on the number of construction permits as compared
to 2016. Given that some of these workers had permits issued
prior to the August 2017 legislation, we should expect that the
number of construction permits will only drop further in
subsequent years. In 2016, over a quarter of all permits were
issued to three construction firms. In the future, any large-
scale construction is going to have to rely on U.S. eligible
workers, H visas or other visa categories.
Third, on the challenges to increasing the domestic
workforce. Last year, we reported the best available data
estimated there were 2,400 unemployed, U.S. eligible workers
living in the Commonwealth. Our number differs slightly from
the Governor's. We include FAS workers, workers from the
Compact nations, who are U.S. eligible workers. Additional
workforce entrants will primarily come from the roughly 700
high school or 200 college grads each year.
According to most employers we've interviewed, efforts to
recruit U.S. and FAS workers have met with limited success, are
hampered by the high cost of recruitment, high turnover and a
higher minimum wage paid in Guam and Hawaii.
Regarding the safeguards against labor abuse. First, it's
worth acknowledging, as Ranking Member Cantwell did, that this
program was itself built, at least in part, as a response to
the labor abuses and working conditions tolerated in the years
of the garment industry, prior to federal control. Now, the
proposed legislation strengthens safeguards built into the
CNRA. In particular, it sets a more rigorous standard for
setting wages, requires businesses to ensure compliance with
occupational health and safety standards and requires employers
to document employment and payment of workers on a quarterly
basis. The key here is going to be enforcement.
Last, on new CW worker designation. Of the roughly 8,200
foreign workers with 2018 permits, about 2,300, or just under
30 percent, had maintained continuous employment since 2014 and
would qualify for the three-year permits. A significant
percentage of these longer-term workers are from the
Philippines and work in the tourist industry.
Finally, Madam Chair, GAO has not looked into the Bikini
Resettlement Trust Fund. However, at your request, we have work
underway on the use of federal funds under the Compacts of Free
Association, including an analysis of the status of the Trust
Funds established under the amended Compacts. This work will be
provided to you in May.
Madam Chair, this completes my remarks. I'm happy to answer
your questions.
[The prepared statement of Dr. Gootnick follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Dr. Gootnick.
Mr. Niedenthal, welcome to the Committee.
STATEMENT OF JACK NIEDENTHAL, MEMBER, BIKINIAN ELDER COMMUNITY
Mr. Niedenthal. Thank you, Madam Chairman.
My name is Jack Niedenthal. I have lived in the Marshall
Islands for the past 37 years. I am a U.S. citizen, and in 2000
I was given honorary Marshall Islands citizenship for the work
I have done for the Marshallese people. I have been a member of
the Bikini Atoll community since 1984 when I served as a
teacher on Kili Island, where much of the Bikini community
still resides. My wife of 30 years, Regina, is a Bikinian, as
are my five children and two grandchildren, and I am fluent in
Marshallese.
I served as the trust liaison for the Bikini Council from
1986 until 2016, during which time I helped to manage the
Resettlement Trust Fund for the people of Bikini. I also served
as translator for the Council in meetings with U.S. Government
officials and I worked with the Bikinians' outside advisors,
trustees, money managers and lawyers to help preserve the trust
for the Bikinian people.
I appear here today as a private citizen. I flew 8,000
miles to get here at my own expense because I am very concerned
about the future of the Resettlement Trust Fund, of which my
family and I are beneficiaries.
As the trust liaison, I served as the go-between with the
Council and the Office of Insular Affairs as we hashed out the
Council's annual budget under a 1990 agreement with Interior
requiring that all requests for expenditures from the Trust
Fund, and I quote, ``would require written Interior approval.''
Every year from 1990 until 2016, the Council submitted
proposed budgets to the Office of Insular Affairs that were
millions of dollars more than wise, given the size of the
trust. And every year, responsible officials there, knowing
that the trust was the Bikinians' only long-term nest egg,
pared down the total budget number in order to ensure the long-
term viability of the trust. The Bikinians were never entirely
happy with this arrangement. Beneficiaries of a trust almost
always want the money now, and there were many times when the
Bikinians were no different. However, in the end, our past
leaders also remembered how long our community had gone without
anything. They understood that these funds would one day have
to take care of their children and grandchildren because they
knew a return to Bikini would be many years away.
Those days of cooperation with the Interior Department are
gone. A recent Council resolution demanded an end to the
Department's oversight role with regard to expenditures from
the trust. It declared the Mayor fully responsible for
drawdowns of the money and stated that the trustee would no
longer have any right to question any drawdown requests.
On November 16 of last year, the Interior Department
capitulated to this demand and simply withdrew completely from
its oversight role over the trust. And as far as I know, the
trustee, a division of M&T Bank, capitulated as well and simply
wires out whatever funds it is told to without asking the
purpose of the expenditure or even asking for receipts. I can't
tell you why the Department abdicated its responsibility over
the trust. I tried to get that question answered publicly in
Majuro three weeks ago today, on January 16, when Assistant
Secretary Domenech, along with some other U.S. officials, came
to the Bikini Town Hall in Majuro. However, a stairwell full of
police refused to let me or any other Bikinian with questions
in, including elected members of the Council. He said he met
with the Council. He did not meet with the Council. My son is a
Council member. He was not allowed to go to that meeting. Yeah,
okay.
In the past, all meetings between our leaders and high-
ranking U.S. Government officials, when they were in the
Marshalls, had been open to all, and the people, especially our
elders, had been encouraged to ask questions.
I can tell you that the Trust Fund that I worked for for
over 30 years and which has provided over $220 million to the
people of Bikini is in danger of disappearing. Assistant
Secretary Domenech won't be here when that happens. He will
have moved on. You may call in the new Assistant Secretary and
ask, ``How could this trust, set up almost four decades ago
with U.S. taxpayer money, have disappeared?'' He or she will
answer, ``That didn't happen on my watch, so I can't really
tell you why.''
Well you've got the responsible official here in front of
you today, so maybe he can answer that question. I can assure
you that all the money in this trust will disappear quickly if
Congress does not intervene to stop the flow of money out of
it.
Having said that, I believe that S. 2182 is too
restrictive. Rather than set a specific limit of annual
expenditures from the trust not to exceed five percent of its
principal, I would instead propose legislation that directs the
Office of Insular Affairs to do exactly what the 1990 agreement
said, to require written Interior Department approval of the
annual budget and since this is now needed, to ensure the long-
term viability of the trust for our people.
Attached to my testimony is a draft of a proposed
alternative to S. 2182 that I believe will ensure U.S.
Government oversight and preserve the trust, but in a less
rigid manner so as to allow the Bikini local government to set
their own priorities with regard to taking care of their
people.
And this is my last point. Some might say that U.S.
participation in the budget process of this Trust Fund
represents a form of colonialism. I would argue that U.S.
involvement in the trust is actually colonialism in reverse.
In 1946, the U.S. made a promise to the Bikinian people,
which in my decades of translating for elders has been quoted
as if it were a verse from the Bible, when they were told that,
``No matter where the Bikinian people found themselves, even if
they were adrift on a raft at sea or on a sandbar, they would
be taken care of as if they were America's children.''
I was deeply offended by the last paragraph of the
Assistant Secretary's letter to the Mayor this past November in
which he stated that the Bikinians could ``never interact
again'' with the Interior Department with any issues pertaining
to the trust. No American official should ever have the right
to tell the Bikinians not to come back to them for help for
whatever, any reason whatsoever, after what the people of
Bikini have sacrificed for the United States and the world.
And with regard to my title here, Bikinian Elder. My wife's
grandmother had 14 children. My wife's mother had nine. My wife
and I have five children and two grandchildren. All of those
people call me Grandpa and Uncle and Brother and I can tell you
right now that quite honestly, I have plenty of Bikinian blood
that I need to, that I'm responsible for, and that I need to
take care of. And the person that told me to use this title of
Bikinian Elder was my wife. And if you understand what it's
like living in a maternal lineal society, when your wife tells
you to do something, you do it.
[Laughter.]
Thank you, Madam Chairman. I'll be happy to answer any
questions.
[The prepared statement of Mr. Niedenthal follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Mr. Niedenthal.
Okay, we have some stuff to work on here.
First of all, thank you all for your statements here. I do
recognize that five minutes is a limited opportunity.
Hopefully, we can get more of the information out through the
questions and answers.
I am going to begin my first round just focused on the
issue that has been raised as it relates to the Trust Fund. So
I will begin with you, Assistant Secretary Domenech.
In the past, there has been an informal notification
process with the Congress when it comes to expenditures from
the Trust Fund. But with this situation neither I nor my staff
were given any notice of the Department's new position. We
learned about this letter and this, really, reversal of
decades-long practice by way of a press release which is not a
good way to work through the responsibilities that we have with
Congress.
Is there some reason that we were not notified in advance?
Is there some reason that the Department just unilaterally
decided that we were out of the picture here?
Mr. Domenech. Madam Chairman, thank you for giving me the
opportunity to make a public apology to you and to the
Committee and to your staff for that oversight.
When all this initially happened, I was completely unaware
of the Committee's interest in this particular issue.
The Chairman. Well, it is not necessarily the Committee's
interest, it has just been a matter of fact that every year
there is basically a heads up. And so, not something about
whether or not I am interested or my staff is interested, but
that is just how it has been handled.
Mr. Domenech. Sure.
The Chairman. Until it was not.
Mr. Domenech. Well, and I don't have a good answer to that.
It was not raised by my staff at the time. I'm not blaming
them. I'm the one who made the decision, but I was just
completely unaware, having only been sworn in a couple months
before that and primarily working on hurricane recovery. It was
just something I didn't ask. I can assure you that going
forward, I will ask about every particular decision, just to at
least find out the level of interest, but it was a mistake.
The Chairman. But you would recognize that this was a
considerable reversal of policy when that letter was sent out?
Mr. Domenech. I do now.
The Chairman. Do you believe that the U.S. Government still
has an obligation to the people of Bikini, or do you think that
our obligation has been met?
Mr. Domenech. I do think we have an obligation to help them
in every possible way we can.
The Trust Fund, of course, was provided by Congress 30
years ago. That's their money, in our view, their money to
spend on their own behalf----
The Chairman. Let me ask about that, about, ``it is their
money to spend.'' The understanding now is that the Mayor,
almost unilaterally, has that discretion now to spend however
much he wants. I understand that there's some $57 million that
is now remaining in the account.
Do you feel that there is no limitation or no restriction
that should come with these dollars that came from the Federal
Government as part of this agreement, as part of this Trust
Fund, that that $57 million could be spent tomorrow in one lump
sum by the Mayor, if he should determine that he wants to spend
it on whatever it is he wants to spend it on?
Mr. Domenech. I would say that we're not aware. I have no
knowledge of exactly the decision-making in the Bikini Council
of how they decide to spend the money. We're just not engaged
in those kinds of decisions.
The Chairman. Do you think that we should be engaged?
Mr. Domenech. Well, as long as the, again, CBO has said
that the money is theirs. So I'm not sure by what mechanism we
would be involved?
Even in the earlier decision, the discretionary right of
veto was really based on having a relationship. In other words,
I can't tell the bank to tell us how much money is in the
account. I can't tell them to give me a budget. I don't have a
way to compel a foreign entity that it's to do that.
The Chairman. But a discretionary right of veto,
essentially, assumes that the Department, specifically your
oversight here, that you at least know what is going on, what
is going out the door in terms of expenditures, just as the
process has always been that there would be, whether it is a
memo going back and forth saying that this is how much is being
requested on an annual basis.
That discretionary right of veto has always been in place,
and now you are suggesting that we don't have a role. You say
there is still an obligation to the people of Bikini, but I am
confused by what you believe the role of the Department of the
Interior is at this point.
Mr. Domenech. Well, I would say, again, we don't have a way
to compel the Bikini Town Council and the Mayor to give us
those expenditures. I can't make them do it. So for the last 30
years there has been a cooperative arrangement where those
kinds of things would happen.
The Chairman. Then what has changed in the last 30 years
that would shake up that cooperative arrangement?
Mr. Domenech. In August they passed a resolution to amend
the agreement. And so, that's what actually changed in this
relationship. And after, again, working with our Solicitor's
Office, they agreed it was a rightful amendment, that we could
accept that amendment and there was no other statutory
regulation that would allow us to do additional oversight. So
we were, we felt, like we had to agree to those terms because
there was no other alternative.
The Chairman. Well, I have more questions. My time is out,
so I will turn to Senator Cantwell, but we will come back on
this.
Mr. Domenech. Thank you.
The Chairman. Thank you.
Senator Cantwell. Thank you, Madam Chair.
Governor Torres, last year when you were here we discussed
the Best Sunshine Live Casino which was operated by Imperial
Pacific International Holdings--and it was supposedly under
federal investigation for money laundering. And as you know, in
September 2016, the casino was operating out of a strip mall on
Saipan and was reporting earnings that were eight times that of
Macau's largest casino.
In your response to questions, you talked about local
mechanisms to prevent this type of fraud. You said the
Commonwealth casinos were preparing legislation to present to
the legislature, and you stated it would be a two- to four-
month process. Can you update us on that effort?
Mr. Torres. Sure. Thank you very much.
We have learned our issue with Tinian Dynasty of money
laundering. What I'm proud to say that the regulatory structure
and state of technology the CNMI has put into place to protect
our people by having the gaming commission work with our
federal agencies in making sure that all those regulatories
that have been in place are followed through. We continue to
work with our federal agencies in all the monies that has been
rolling in the CNMI. So I'm proud to announce that.
Senator Cantwell. So, you consider the problem fixed?
Mr. Torres. Well, I think, I believe, that the problem has
been addressed more seriously by having our federal partners be
part of our gaming industry on any issues that they have
concern, it's open. We have open books. They are always welcome
to come and join the gaming commission on the floor or the
vault or any issues that the federal agencies have.
Senator Cantwell. I understand that you have a lobbyist and
that they file disclosure reports that they met with the U.S.
Department of Treasury. To your knowledge, did they meet with
the Financial Crimes Enforcement Network?
Mr. Torres. I don't believe I have a lobbyist in terms of--
I'm not aware that there's a lobbyist. But I might find out and
get that to you at the end of the week.
Senator Cantwell. These are the lobbying disclosure forms.
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Senator Cantwell. Did they meet with others at Treasury
regarding lobbying on money laundering violations?
Mr. Torres. Not that I am aware of.
Senator Cantwell. Can you get back to us on that?
Mr. Torres. I will definitely get back to you. I would----
Senator Cantwell. I guess the issue that we want to see, we
don't want to see the Mariana Islands trying to get Treasury to
not enforce the law.
As you said in the last hearing you attended, we need
strong action here. The violations were outrageous. So we need
to keep moving forward on this issue.
Mr. Torres. Thank you, Senator.
And I'm proud to announce that because of our learning of
our issue that was experienced last year, we have signed a U.S.
contractor to finish the hotel of the casino that was signed, I
believe, less than a month ago. They will be hiring more U.S.
workers to finish the construction at the hotel site.
Senator Cantwell. Where are we with labor practices? How
are you ensuring that employers are held accountable for
predatory practices against workers?
Mr. Torres. Madam, I thank you again for the question.
As was stated earlier, we do have the Department of Labor
Secretary here today with us, along with our businesses,
Marianas Alliance.
We mandate our employers to have their employees'
documentation available at any given time that those
documentations are requested. We have met with the major
industries. We are strict on making sure that those employees,
the continuous U.S. workers, but also that their documentation
are legitimate.
Senator Cantwell. Do you believe that there are still
unpaid workers remaining on the Island?
Mr. Torres. I would have to say that I'm not sure. I know
that those issues that was addressed last year were being paid.
I'm not aware of any other labor that are not being paid.
Senator Cantwell. Dr. Gootnick, do you have any comments
here?
Dr. Gootnick. With respect to the issue of financial
crimes, there is no Treasury representative in the Marianas, so
a lot of the weight of enforcement is going to fall on the U.S.
Attorney. We haven't formally studied that issue.
With respect to the worker abuses that were identified last
year, I think that the sunshine, the sunlight that was shined
on that problem last year was significant. It got a lot of
public exposure and a lot of public attention. And I think
that, in addition to the enforcement concerns, was helpful in
raising the awareness of the Federal Government and many others
about these concerns.
Senator Cantwell. Well, Madam Chair, I know my time is
expired, but I will just say that these lobbying reports say
the client is the Commonwealth of the Northern Marianas
Islands. So, Governor, if you didn't hire them, I would like to
know who did.
Thank you.
The Chairman. Thank you, Senator Cantwell.
Senator Heinrich.
Senator Heinrich. Thank you, Madam Chair.
Welcome back, Congressman Sablan. It has been a long time
since we served together on the House Natural Resources
Committee, but you have been incredibly dogged and determined
into moving legislation for CNMI over the years through some
pretty hard to navigate Congresses. And I think you deserve
credit for that.
I want to step back for a moment from this legislation that
we have in front of us and just ask you, what else would be
useful in the relationship between the U.S. and CNMI in terms
of creating a more sustainable economy that benefits the
citizens of CNMI?
Mr. Sablan. Thank you very much.
I agree that, at the moment, the Northern Marianas does
need access to workers, their country, national workers. We
have spent months in trying to come to agreement on what is now
the product of the February hearing. It hasn't been easy.
There's been, at the beginning, the word I received was,
last summer, was no extension and thank God for a lot of people
who allowed me to speak. We do need this extension and the
reduction of workers on an annual basis because we do need to
get U.S. workers into the workforce.
And I know that the last time we had a hearing, we were
told there's no U.S. workers. We've done everything, we've
tried, we've reached as far as Puerto Rico.
The GAO report just showed that we had an increase of ten
percent in U.S. workers where 1,000 U.S. workers were added to
the workforce in each of the past three years. The termination
of the program in 2019, which is the product of the Chairwoman,
was to put a hammer down that said, you get this program fixed.
Senator Heinrich. Right.
Mr. Sablan. And it has forced employers to get serious and
to look at U.S. workers.
Senator Heinrich. Yes.
Mr. Sablan. Now, there are many programs, apprenticeships
that I would hope that would get U.S. workers into the
workforce and train them. That's the intention of even the
local law, when we had U.S. immigration, I mean, when we have
control of immigration.
But for non--for third country nationals to come to work in
the Marianas and train U.S. workers, but they were very lax. It
wasn't the time. It wasn't Governor Torres' time in office. But
the training is very important.
Now the continuing thing is to drop our arms and say, we
can't find U.S. workers. That needs to stop.
Senator Heinrich. Right.
Mr. Sablan. It needs to stop, and it needs to stop now.
Now this bill, I think, is the product of that. It would
spur us into getting a Northern Marianas economy that would
have U.S. workers as the main workforce and the third country
nationals who come in to fill the gaps----
Senator Heinrich. Right.
Mr. Sablan. ----where there are really no U.S. workers. I
hope that answered your question.
Senator Heinrich. That is helpful.
Madam Chair, my time is quickly expiring here, but I want
to just say a word about the Bikini Trust Fund issue and thank
you for your interest in it.
I have to say how disappointed in Interior I am. You know,
my father was in the Marshall Islands for several of those
nuclear tests. And I think just having a little window into
what our atomic veterans bear gives us an understanding and not
a full understanding of the incredible things that we wrought
on the people of Bikini and their island.
I get the sense that this Administration cannot wait to
wash their hands of that responsibility. I think this has been
mishandled. And I would just say to Mayor Jibas, I respect you,
but be careful what you wish for.
Thank you.
The Chairman. Thank you, Senator Heinrich.
Senator Hirono.
Senator Hirono. Thank you, Madam Chair, and a special aloha
to my friend, Kilili Sablan. It is good to see you.
I have a question for Mayor Jibas. As an official
responsible for the administration of the Trust Fund, are you
concerned about the long-term viability of the Fund?
Mr. Jibas. Thank you, Senator.
I'm sorry I didn't finish off the statement so we have--and
I'm sure you will get a copy of it. But we have other plans for
Bikini, and we want to make sure that we can invest for the
future of the people.
And it's not like we're just going to take the money and
just use it all at the same time, but we have future plans and
other visionary projects planned to make sure that we cannot
use up all of our Trust Funds.
Senator Hirono. So you have a plan for the long-term
viability of the Fund?
Mr. Jibas. Yes.
Senator Hirono. Do you see any continuing role for the
Department of the Interior in assisting and carrying out your
long-term plans?
Mr. Jibas. Oh, yes.
In our relationship in the past two years we have come to
an agreement and with the good relationship and the support of
Hawaii and Interior, to us, the people of the South Pacific and
Bikini Atoll, we're partners in doing this matter, in any way
all of our activities and fund movements, we have come to an
agreement that we can work along one another.
Senator Hirono. That is not the impression given to us by
the testimony from the Assistant Secretary, Mr. Domenech.
What will be your continuing role with regard to the CNMI
and the Trust Fund?
Mr. Domenech. Bikini, I assume you mean Bikini?
Senator Hirono. Bikini, yes.
Mr. Domenech. As I said earlier, of course, Interior has an
ongoing relationship with the people of the Marshall Islands.
So we do that through a number of other funds and that impacts
the Bikini citizens as well.
So, we do, of course, the larger funds are all wrapped up
in the Compact of Free Association which was structured in a
completely different way with significant oversight of the
spending by a number of federal agencies. That Trust Fund was
structured in a completely different way than the Bikini Trust
Fund that didn't have those safeguards 30 years ago.
Senator Hirono. Well, I know that there is a Trust Fund
with regard to the Compact, and the Trust Fund is very minimal,
by the way.
I hope that you are aware that many of us, particularly
from the Hawaii delegation, have been working very hard to
restore Medicaid eligibility for Compact citizens.
And if you are aware of that, I would appreciate your
support in restoring Medicaid eligibility for them because it
costs in certain places, such as Hawaii and Guam, millions of
dollars, much, much more than what is in the $30 million
appropriated every year for that particular Trust Fund. I have
a familiarity with that.
And you are nodding your head. Can I count on you for
support for restoring Medicaid funding or Medicaid eligibility?
Mr. Domenech. I'd have to go back, I'm sorry.
I'm happy to look at that and work with your staff on it. I
just honestly don't know enough about it.
But just to differentiate slightly, of course, we're
talking about Compact impact funding.
Senator Hirono. Yes.
Mr. Domenech. That's the $30 million that is distributed
based on population----
Senator Hirono. Yes.
Mr. Domenech. ----to Hawaii and other places.
Senator Hirono. Yes, I am very familiar, Mr. Assistant
Secretary.
Mr. Domenech. I know, I'm just, for the record.
Senator Hirono. So, yes.
Mr. Domenech. And I would----
Senator Hirono. I want to, excuse me.
Mr. Domenech. Okay.
Senator Hirono. My time is running out.
I want to thank the Chair for her indulgence because she
knows that some of us have been working on this for a long
time.
For Congressman Sablan, regarding the worker permit. I
think you mentioned that you are talking about a need to
increase the CW visa cap for public health reasons.
Can you talk a little bit more about the situation in the
CNMI and why you need to raise the cap so that you can take
care of the residents' health?
Mr. Sablan. You're asking me, right Mazie?
Senator Hirono. Yes.
Mr. Sablan. Okay, Senator.
Senator Hirono. Yes, I am asking you.
Mr. Sablan. Yeah, in H.R. 339, which is now public law, we
actually gave USCIS, we reserve a number of permits for public
health and engineers for our power plant. That bill took a lot
of time in getting through Congress and when the time came it
was a little, just a little bit late. We had a month and many
of them didn't use it. Many of the nurses actually at the
hospital decided that hey, they actually got time off, vacation
time off. They just got paid a retroactive pay for back pay and
so, many of them decided to go home for 30 days for, you know,
vacation and get reapproved, other than using the permits that
started in the next fiscal year.
Madam Chair, if I may, because I forgot to do earlier. If I
may insert for the record, I have 14 letters here, and I think
you have more testimonies of people supporting your bill.
Thank you.
The Chairman. Those will be accepted without objection.
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Mr. Sablan. But that's why, Senator Hirono, we tried to
support that. It was for nurses and engineers at our public
power plant.
Senator Hirono. Thank you.
Thank you, Madam Chair.
The Chairman. Thank you, Senator Hirono.
And thank you for raising the issue of Medicaid out there.
We recognize the importance there.
Senator Cortez Masto.
Senator Cortez Masto. Thank you, and thank you all for
being here today. I know many of you have traveled a long way.
I am new to the Committee so I am trying to understand the
history and, more importantly, our obligation here in Congress.
So, Assistant Secretary, I would like to start with you.
You cite Public Law 100-446. I have that in front of me, trying
to understand your authority over this Trust Fund for Bikini.
Let me make sure I understand what you are saying, because in
the actual law it states that under the terms of the Settlement
Trust Fund, the Secretary may approve expenditures not to
exceed $2 million in any year from income for projects on Kili
or Ejit. Do you now say that you no longer have that authority
or you are not going to follow that authority?
Mr. Domenech. Well, thank you for that question.
According to our solicitors, as I said, their analysis of
the resolution that was passed by the town council was that
this was an informal agreement that required their cooperation.
In other words, we don't, we can't compel them to give us a
budget.
Senator Cortez Masto. No, I understand that. But an
informal agreement does not trump Congress' law and this public
law. You would agree with that? This is the law.
Mr. Domenech. Yes.
Senator Cortez Masto. This is what is mandated under the
law of Congress when we allocated the funds to the Trust Fund.
Correct?
Mr. Domenech. Yes.
Senator Cortez Masto. Okay. So this law basically gives the
Department of the Interior that authority over that $2 million.
Are you saying you are no longer going to follow that
obligation under public law?
Mr. Domenech. We are not going to follow that based on the
fact that the law did not require them to give us a budget and
it didn't require the bank to tell us how much money was in
there. So, I can't compel those things to happen.
Senator Cortez Masto. It also says that one year prior to
completion of the rehab and resettlement program the Secretary
of the Interior shall report to Congress on future funding
needs on Bikini Atoll.
Mr. Domenech. That's correct.
Senator Cortez Masto. You are no longer going to do that?
Mr. Domenech. No, we are going to do that.
Senator Cortez Masto. Okay, so you are going to exercise,
so you are going to choose what to follow under the public law
is what it sounds like to me. Some you are going to exercise,
some you are not which I do not really quite understand,
particularly as an attorney, practicing since 1990.
Let me follow up a little bit more here because it also
says one final thing here which is interesting to me--that
following completion of the rehabilitation and resettlement
program, funds remaining in the Resettlement Trust Fund in
excess of the amount identified by the Secretary as required
for future funding needs shall be deposited in the United
States Treasury as miscellaneous receipts. How do you interpret
that?
Mr. Domenech. Just the way you've read it that at the end
of this whole process that whatever funds are left will come
back to the Treasury.
Senator Cortez Masto. But your argument is saying they are
not federal funds, so we do not have any authority over them.
But at some point in time, they become federal funds again and
we get to put them back in the Treasury?
Mr. Domenech. Well, I mean, that's a reasonable question,
I'm happy to take to our solicitor.
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Senator Cortez Masto. Yes, listen, I appreciate all the
comments today. I appreciate your rights to control to your
destiny and protect your communities. I absolutely support
that. But at the end of the day, I also am an attorney and the
law is the law, and there are things that have to be followed
for a reason. That is really what I am trying to get an
understanding of.
I am going to further get information to really find out
what is our obligation which it sounds like to me, we have more
of an obligation than what is happening here, but I am open to
it and further exploring that.
I have about a minute left, so let me jump over to Governor
Torres. Governor, this is a difficult problem. It is about the
supply and trying to get workers there and doing everything you
can to, obviously, make sure there are American workers. But if
American workers are not coming to do the job, you need
somebody to do it. Is that correct?
Mr. Torres. Yes.
Senator Cortez Masto. I understand that you also held off-
island recruitment of U.S. eligible workers, including in Las
Vegas where I represent Nevada, and I am from Las Vegas. Is
that correct?
Mr. Torres. Yes.
Senator Cortez Masto. Can you talk a little bit about the
challenges you are having in getting people and recruiting
Americans to come to the island to work?
Mr. Torres. Sure.
So, we're 8,000 miles away from here, traveling just so
that--it took me about 30 hours to travel here to DC. We have,
in fact, collective knowledge of the Northern Marianas Business
Alliance with us, one of it is the Pacific Imperial which is
our casino.
A couple years ago they spent close to $1.5 million going
to Las Vegas, Atlanta, New Jersey, trying to recruit for their
gaming because gaming in Saipan is obviously the first
industry. We don't have the experience. We don't have the
knowledge on operating the--dealers and so forth.
Out of $1.5 million, I believe they only were able to hire
147 employees. Six months into the recruitment we were hit by
the worst typhoon in history, and it was a disaster for the
CNMI. It took about six months to restore back the power. Right
after the disaster, 90 percent of them left within 30 days.
We have other casino and other industry that went down to
FSM has also tried to get employees which is very difficult to
get U.S. workers out here in the mainland because of our
minimum wage and, of course, it's far from home.
Senator Cortez Masto. Minimum wage is not as competitive as
some of the islands around, correct?
Mr. Torres. Well, Guam is about $14 or $12.
Senator Cortez Masto. Okay
Mr. Torres. Ours is $7.55.
Senator Cortez Masto. Thank you.
I know my time is running out.
Dr. Gootnick, did you have anything to add to that?
Dr. Gootnick. Only that, along with federal control of
immigration, there was the application of minimum wage laws in
the Mariana Islands in 2009, I believe. And at the time, the
wage was $3.00 an hour. It's now, this fall, going to merge
with the federal minimum wage at $7.25. There was a belief, at
the time, that raising the minimum wage to the U.S. minimum
wage would attract U.S. workers to the Commonwealth.
I'm not sure that there's a lot of evidence that it's done
that, partially because of Guam and Hawaii minimum wage. But we
still see that a very high percentage of the workers in the
Mariana Islands are making the minimum wage. I believe it's
roughly 60 percent and at foreign workers, it's a higher
percentage. So, it's hard to get people to come all that way
for U.S. minimum wage.
Senator Cortez Masto. Yes. No, and I appreciate that.
Thank you for the conversations today. Let me just finally
add, labor protections, obviously, are so important. I know
that you not only have a U.S. Attorney there, but you have an
Attorney General, who I have worked with in the past.
I think it's so, to me, this is my concern and many of my
colleagues, to make sure we are not exploiting the labor. I
don't care whether they are American workers or foreign
workers. We need to do everything we can to protect that labor
force.
Thank you for coming today.
The Chairman. Thank you, Senator Cortez Masto, and thank
you for asking some of the questions that I had in terms of
what that legal obligation is and understanding, clearly, the
parameters of the law.
Senator Smith.
Senator Smith. Thank you very much, Chair Murkowski. And
thank you, all of you, for being here and testifying before us
today. I appreciate it very much.
Governor Torres, I have a question for you. I understand
that last year I saw a report that OSHA, the federal agency
that oversees worker safety, of course, in the United States
has found extremely dangerous working conditions at one of the
largest construction sites in the CNMI. In fact, I understand
that three employees died after being exposed to hydrogen
sulfide gas in a confined space. And also, that apparently the
FBI raided the construction site after reports of worker's
deaths. I know that everybody on this Committee believes that
any workers, anywhere in the United States, should have a safe
workplace to be in. Could you just tell us a little bit about
what has been done since last year to stop this kind of abuse?
Mr. Torres. Thank you for the concern and the question.
Senator, that issue was a rude awakening for the whole
community, especially for me, as well as the Governor. We've
worked well, since then, with the owners of the industry. We've
worked with Department of Labor, to make sure we meet on a
monthly basis making sure that those construction workers are
treated fairly, right, the right way and making sure that their
wages are being paid on time.
We have the Department of Labor here as well as our
Secretary, and we mandate the employers to provide proper
documentation on all the employees whether they're construction
workers or working in the casino industry. I believe that since
then, we've been, we've met those regulations and we've been
good in making sure that we don't repeat those.
Senator Smith. Can you see some evidence of improvements?
Mr. Torres. Sure.
Yes, yes, Senator, sorry.
Senator Smith. Fine, thank you.
I have another question that relates to the challenges
around like who gets temporary work, who gets the visa? How do
you work around the visa caps issue that you are dealing with?
I understand that last year foreign construction workers
claimed many of the allocation of visas and I understand that
you have high need for this, but that that has also caused some
shortages in other areas that are particularly important,
especially in the public health arena. Could you tell me
whether the bill that you are talking about supporting today
which includes provisions to make sure that CW visas don't all
go to one industry and leave a shortage in other areas--can you
tell me how you think that might help?
Mr. Torres. Thank you very much.
What we have here is a bill that gives protection for U.S.
workers and also the need of continued contract workers. The
construction workers that we have are not allowed or banned
into the CW workers and they're--we're moving forward in giving
them the H-2B visa. That will open up more occupations to
address our shortfall on other areas of occupation whether it's
nurses, engineers.
But I want to just point out that we do need construction
workers for our government projects like for EPA regulations
that are mandated. We need those construction workers to fill
out our infrastructures.
Senator Smith. Are you looking for some consultation
between you and Homeland Security on how this all ought to
work?
Mr. Torres. Yeah, we continue to have a good dialogue with
our Secretary and our Assistant Secretary----
Senator Smith. Okay.
Mr. Torres. ----in addressing those issues of occupations
and how do we best make our CW workers in the CNMI with
occupations.
Senator Smith. And you are getting the assurances that you
would hope for that because it seems to me that it is important
that local understanding and wishes are considered. Are you
getting what you need, do you think?
Mr. Torres. Yes.
Senator Smith. Okay.
Thank you very much.
The Chairman. Thank you, Senator Smith.
Let me just continue on with some of the questions as they
surround our situation in the CNMI.
Dr. Gootnick, you had mentioned in your testimony the
discrepancy between the number of unemployed. You had cited
2,400. The Governor had cited a figure of 1,800. But as I
understand from that, your numbers include the FAS workers in
addition to the U.S.
Dr. Gootnick. That's correct.
The Chairman. Okay.
And then based on the data that you have provided us, you
estimate that 2,352 CW workers would be eligible for the
proposed new CW-3 permit. Does the data that you have been
reviewing indicate what kind of occupation those permit holders
are engaged in?
Dr. Gootnick. Yeah, we have some very preliminary data on
that and, not surprisingly, these are workers from the
Philippines and workers in the tourist industry.
Now, I did take a look, again, very preliminarily yesterday
at the number of construction workers who would qualify under
the three-year permit. And there's a very limited number, 160
or so.
Now, the restriction in H.R. 339 is for folks who have been
there from 2015. The restriction in this for the three-year
permit is folks who have been there for 2014. So they're not
exactly analogous numbers. But the point is the three-year
permits will not go to construction workers, by and large. And
they will typically go to the workers that are the core of the
main industry of the main economic engine in the Commonwealth.
The Chairman. Great. Thank you, I appreciate that.
A question directed to either you, Governor, or the
Congressman. With a ten-year extension of the transition period
as we are proposing in our legislation, do you know of any
reason why employers would not seek to move long-term CW
workers over to an employment-based, permanent worker visa? My
understanding is, as we have talked through this, that this
could take, maybe three to four years, maybe four years at
most. It would then free up additional CW permits for other
employment needs. Could you speak to this?
Mr. Torres. Let me take first, Senator, then I'll have
Congressman. I would like to, Madam Chair, thank you again.
We have the Northern Marianas Business Alliance with us
today. They have assured us, they're 80 percent of our total
revenue, yet they only constitute 25 percent of their contract
workers are CW. So that makes a big difference on how they
approach U.S. workers versus CW workers. They continue, for the
last three years or so, we have more U.S. workers today than
we've ever had in the past 10, 15 years.
The importance of this extension will continue our success
on what we have done in the last several years because it is
important for us, as a community, as an island and also
business partners, to understand how important it is for just
workers to be part of the community. Yet, in order for us to
continue increasing U.S. workers, we need the additional
extension and, of course, the number of CW workers.
The Chairman. Congressman, do you want to add anything?
Mr. Sablan. Yes, if I may, thank you very much.
And this is apropos, I guess. Two weeks ago, a man who came
to our office some four years ago asking on how he could
convert into a status that is no longer temporary. And of
course, we don't provide legal opinions or provide legal
advice, but we did tell him that there are programs, EV
programs that takes three, four years. And we provided this
gentleman the forms. Only lo and behold, two weeks ago he came
into our office and was just gleeful and he gave us a copy of
his green card that--he copied his green card and showed us and
said, well it was because I came to your office and that I'm no
longer a CW worker. I finally, I have a green card and went
through the EV process and it took some four years. And he
actually hired a lawyer to help him do it. And so, there are
many who could qualify, but Madam Chair, when people are just
dependent on CW, people are just really saying this program
will continue to be on in 2019.
Your decision to stop it. And I hope that it doesn't now
come to, well, when we come to 2020 and there will be another
Congress and we could just get another extension. That is the
least of my desire is we, this bill is designed to encourage
U.S. workers and that non-U.S. workers, third country
nationals, will fill in the gap where they are needed. That has
to revert. That's a reversal of the present condition or
working environment in the Northern Marianas now. And I know it
for a fact. And everybody hates me for saying these things, but
it's the truth and no one here can deny that.
Now, is there a shortage of--do we still have a need for
third country nationals? Yes, we do. That's why I'm supporting
this bill. That's why I spend months since last summer working
on this bill because yes, there is still a shortage. But in the
next ten years, Madam Chair, God forbid, that we will come back
here or somebody will come back here and say that we still need
U.S. workers because I will, like that gentleman, spend my own
money to come here and remind Congress of what we've gone
through, 20 years of transition and not just that, another 20
years of control over immigration. When they passed that
legislation in the third legislature, I was the only member who
voted against that bill because it didn't have controls. And I
saw that the influx, the door was going to open and own the
influx. I voted no against that bill that opened the Northern
Marianas to third country nationals, not because we didn't need
it, but because there were no controls.
But this bill, the one we've worked on, I think, provides
sufficient controls to encourage, to suggest, to urge companies
to hire U.S. workers. They have done so in the past three
years, an increase of 1,000 every year of U.S. workers in the
workforce, U.S. workers. And that's only because, thanks to
you, you have set 2019 as the timeline and a timeline that's
not going to move.
Fortunately, we're here and I agree we need another ten
years, but again, God forbid that we ask for more after this.
The Chairman. I agree. I don't want us to be here ten years
from now saying, we have not yet addressed the issue that we
see very well in front of us.
Let me ask you, Assistant Secretary, the role that the
Office of Insular Affairs plays in the CW permit program. What
role, if any, and what are the efforts, well, CNMI, obviously,
is working to hire U.S. workers, but does the Office of Insular
Affairs play in that at all?
Mr. Domenech. We really do not.
We, as long as there is a moment here, strongly support a
vibrant economy for CNMI and all the territories and freely
associated states. These are very challenged areas that we all
care about, and so that's why we do the funding that we do with
your providing the money and try to work hard to increase their
economy.
They need labor on the island. They have a huge expansion
going on which is great news for them.
And but, you're correct, we do not have a direct role. It's
Labor or DHS or others.
The Chairman. Thank you just for clarifying that.
I mentioned that Senator Cortez Masto had asked several
questions along the line that I was going to proceed. This is,
again, directed to you, Assistant Secretary.
Just in terms of the Trust Fund itself and, I think, some
real contradictions in terms of the position of the Department
with regards to control. On the one hand, the statute says that
the Secretary may approve expenditures not to exceed $2 million
in any year for income from projects, and yet you maintain that
in terms of what you are going to follow and how you are going
to follow it, there is, in my view, what you have shared with
the Committee has been less than consistent. Also, reconciling
the terms of section 4 of the amended resettlement trust, in
terms of what happens then with regards to any unused funds to
be deposited to the U.S. Treasury. I don't think that the
answer that you gave Senator Cortez Masto was very clear. You
have indicated that perhaps you need to visit with your
solicitor, but know that this Committee is very interested in
understanding, clearly, where the lines are being drawn. And if
you are selectively interpreting different or aspects of the
statute, we certainly want to know and understand the logic
there.
I want to turn to you, Mayor Jibas. With the resolution
that you all passed, you essentially say in that resolution
nothing in the applicable public laws gives the Secretary of
the Interior a statutory authority to approve of the budget.
The 1990 Memorandum of Agreement which lays out that approval
process and that was signed by the Bikini leadership is null
and void, that that no longer is in place. Is that a correct
statement as your understanding and that of the Council?
Mr. Jibas. Thank you, Madam Chair.
The Chairman. Go ahead and push that button, thank you.
Mr. Jibas. First of all, I want to thank you for the
opportunity, once again, for the question.
I just want to get it straight on record that we operate on
a budget that's approved by the elected council and late, as in
the recent resolution passed was passed by the Council for the
Rescript from DOI.
The Chairman. Right. And when you passed that resolution
you effectively said, or determined by resolution, that the
1990 Memorandum of Agreement that sets out the approval process
is no longer applicable.
Mr. Jibas. Yes, correct.
The Chairman. So, within the laws, the applicable public
laws that provided for the funding of the Trust Fund, they
state what the purpose of the Trust Fund is. When this was
established and when those federal dollars were put in this
Trust Fund, that the purpose of the Fund is, and I am going to
quote here, ``That the terms of such Resettlement Trust Fund
are hereby modified to provide that the corpus and income may
be expended for rehabilitation and resettlement of Bikini
Atoll.''
What I want to understand here is if we are looking at what
is authorized, what is appropriate for using the Trust Funds
for, is for rehabilitation and resettlement of Bikini Atoll?
How, with these expenditures that you have just made in these
past couple months, that you have indicated in your testimony,
you have indicated that the dollars have been spent for, the
$11 million, not all of that has been spent, I understand that.
But that you have directed dollars for renovation and building
of houses that were damaged by tides and for providing health
care for those outside of Marshall Islands and providing for
educational scholarships. You have indicated in your testimony
that that is where these funds have been spent but how does
that expenditure relate to the purpose of the Trust Fund which
is rehabilitation and resettlement of Bikini Atoll?
Mr. Jibas. Thank you, Madam Chair.
First of all, we look at the Bikini Claim Resettlement
Trust Fund, a trust fund that is supposed to resettle the
people of Bikini.
The Chairman. Right.
Mr. Jibas. And as we both understand this money is not
enough to resettle the people of Bikini. At the same time, as
we encounter many challenges through the time of climate change
and as we try to survive on these isolated islands, with not
enough financial and facing health issues and education
problems, all this comes together and we try to make sure we
provide for the people. And this money is not enough to
relocate, if that answered the question.
The Chairman. Well, I understand what you are saying, that
$11 million is not sufficient to relocate, but again, these are
funds that have been placed in a trust and over the years the
purpose here, again, according to the Resettlement Trust Fund,
was to provide for the rehabilitation and the resettlement. I
guess I am trying to get specific rationale for the decisions
that you have made recently with these expenditures of funds.
Mr. Jibas. Thank you, Madam Chair.
In recent years, we are trying to live off the Resettlement
Trust Fund for the people of Bikini. And as I stated in my
statement earlier that the U.S. claim tribunal awarded the
people of Bikini $300 and some million, but it came only $110
million.
So, I notice that in this Administration we cannot relocate
on this such amount of money, but with all the challenges we're
facing we come as one as the Council has approved the Rescript
by trying to make sure they can create income-generating
projects.
And I heard in your earlier statement that we were trying
to buy a ship and we're trying to buy an airplane. We're trying
to lease an airplane if we can get such amount of money from
our Trust Fund. With the limitation of the five percent we
cannot get any money as such amount to try to lease a ship or
an airplane, trying to create other income, other shores, try
to make sure that we can, our people, can live off of some of
these interests in the next few years or decades.
We try and look and oversee our future encounters for our
younger generation. And we see that with the limited Trust Fund
and with the restructuring of the Trust Fund and this is why we
don't agree with S. bill 2182.
The Chairman. Well, let me ask the question then because it
was Mr. Niedenthal who suggested that while he, I think, I'm
going to sum your statement here, that you agree that there
needs to be oversight, that you think that S. 2182 is a little
bit too restrictive with the specific draw down cap. You have
suggested that we need to ensure that the long-term viability
of the trust is still feasible. I think you have suggested that
written approval of a long-term budget is appropriate.
Mr. Mayor, would you agree that approval of a long-term
budget would be a responsible level of oversight or not?
Mr. Jibas. Excuse me, Madam Chair.
Thank you, Madam Chair.
We do not look at long-term budget at this time.
The Chairman. Well, have you as a Council compiled a
budget, short-term and long-term, for purposes of the trust?
You have drawn down $11 million of it. You have indicated that
you haven't spent all of that, but do you have a budget for
that?
Mr. Jibas. Yes. We draw on $11 million in the last few
months, just under the indication that we were trying to create
these, generating projects for future income, but at the same
time, we only did this because we notice there was a rumor that
the office was going to stop us and restrict us on the
limitations.
And I cannot feel----
The Chairman. What office?
Mr. Jibas. The designated office who is, has the approval
of the budgets. Could be Hawaii and Interior or we heard that
somebody was going to put a restriction on our budget and we
cannot get out. We will put, with the limitation of the budget,
we cannot live off that and----
The Chairman. Isn't it accurate though that, on average,
the distribution on an annual basis has been about $5 million?
Mr. Jibas. On average, yes, maybe six.
The Chairman. On average.
So you were worried that it was going to be limited to less
than $5 million?
Mr. Jibas. Right. Correct.
The Chairman. And you were concerned about that from who?
Mr. Jibas. Through the Council, as we have worked along
this year trying to find the best way to make sure our people
can survive. Because, no question, if the Interior gives us a
budget of $4 million or $3 million, I will have to cut off the
power and make sure everybody is not on payroll and no food, no
fuel, no education requests, nothing because it's not enough.
And we had to take our $10 million, put it in one of the
banks. We know that we could have put it on the market and make
the interest, the returns better, but because of the rumors
that the Office or somebody in the Departments, I'm not sure,
that want to put the restriction on our money so we can only
get $3 million or $4 million a year.
The Chairman. But you recognize that that Trust Fund is
limited?
Mr. Jibas. Yes.
The Chairman. Right.
And that maybe putting you on a budget at less than the
people would want, is financial stewardship and recognizing
that the Trust Fund is not just available for full consumption
and disposal for the people today, but that the people of
tomorrow and future generations would hopefully be able to
derive some benefit.
Mr. Jibas. Yes. Thank you, Madam, again.
Yes, that's both you and the Council of the people of
Bikini's main concern. How can the people of Bikini return to
Bikini? It's been 72 years.
How can we feed the people now that the Trust Fund is lower
and the interests are not as good? And we are trying to so we
come together and pass the resolution that we should create
generating income projects.
The Chairman. And how is--and I understand that communities
that are threatened by climate change are vulnerable, that
repairing or rebuilding new houses is expensive, but the
purpose in my questioning is this is the first time that you
have not had any oversight. And again, the oversight has been
minimal. It is a discretionary right of veto. And yet, you have
drawn down more than twice, more than twice, almost three
times, as much as has been afforded on an annual basis. You
have a Fund that is limited. And I am trying to understand why
the KBE Local Government Council believes that this level of
funding is necessary? Why you would object to oversight by way
of a long-term budget?
And just making sure that there is an appropriate process
because what has happened with the Department of the Interior's
very sudden and unannounced decision that they were going to
completely withdraw, although I think it has been confusing,
Secretary Domenech, about how much completely withdraw means
with the Department here in terms of your oversight.
And this Committee has a responsibility. This Committee has
a responsibility, not only to the people of Bikini, but to the
federal taxpayers as well.
So I am just trying to make sure that I understand, fully,
what is going on and that there is a fair process moving
forward.
Mr. Niedenthal, I wanted to ask you because I mentioned
your suggestion and your statement that you think that,
perhaps, the approach that we have taken with a limitation on
the draw down, a cap on the draw down, might be too
restrictive.
Given the current level of the Fund, is it possible to
ensure the long-term viability of the trust, in your opinion?
Mr. Niedenthal. Thank you, Madam Chair.
I think what's being ignored here quite a bit, and I'm a
little concerned about this, is the history of this. You had 40
years where the people of Bikini had nothing. They were
starving. They were struggling. And then this Trust Fund came
into being. A lot of people, and this has been completely
ignored, a lot of our people worked really hard, Senator Tomaki
Juda, who is struggling with his life right now in Hawaii. We
had former Henchi Balos, Senator Henchi Balos, Nathan Note,
Kataejar Jibas. We had all these people who worked so hard,
Ralph Waltz, Neerja Jamari, Johnny Johnson. All these Bikinians
who worked so hard to get this money. We traveled thousands of
miles. We don't have a representative in Congress. We had to
lobby for that. And we're in the middle of nowhere and nobody
cares. I mean, the seats are all empty except for you. Thank
you very much. And this is like, it's always like this for us.
And so, what happens is, for us, when we were out there and
we saw this happen, this all happened. I saw this resolution.
There was no public hearing for that resolution for the people
of Bikini. They passed it in an hour and a half in a little
room above the Town Hall. No Bikinians got to say, hey, what's
going on here? And I saw it. My son showed it to me. And I
said, there's no way that, that doesn't even pass the laugh
test. And then along comes Interior and says, yeah, it's okay.
It took us several days to get the secret letter. And he
already contradicted what her, the Senator's, question was. In
his own letter, he says they do have a responsibility for that
$2 million on Kili.
So, I'm, sort of, like really confused about how all this
came down. And then you talk about how they didn't inform
Congress, how they didn't inform the RMI government. They
didn't inform the State Department, the embassies out there.
Nobody knew what was going on.
We're all of sudden hearing all this stuff and then all of
a sudden there's $11 million in a bank account and there's,
like, no public information about this. We kept saying, hey,
let's have a public hearing. Let's talk about this. This is our
future. I'm a grandfather.
And when you talk about the long-term viability of the
trust, I mean, it's outrageous that Interior would do this to
us.
That Trust Fund, those people worked so hard for this. It
provided $220 million over 30 years, and they're trying to say,
oh, they never had contact with Interior. That's completely
false. We were in contact all the time. We had no choice. And
that system, they had total independence and total freedom over
that money. The only number that was negotiated every year was
the total amount. Interior would look at it. Talk to our money
advisors and get them an amount that would assure the long-term
viability of the trust and then the Bikinians were free to do
anything they wanted within that number. It was a system that
worked.
And suddenly, everybody decided to break it. And now, all
of sudden, as you said, $15 million, that's 20 percent of the
Trust Fund. And you're talking about is there long-term
viability?
I'm really scared because what's going to happen and they
can say whatever they want. You have Assistant Secretary
Domenech saying the Bikinians are not going to come back to us
anymore for money. And Mayor Jibas' testimony, at the end, he
says, we're not coming back to the U.S. for money anymore. But
I'm going to read this again, ``No matter where the Bikini
people found themselves, even if they were adrift on a raft at
sea or in a sand bar, they would be taken care of as if they
were America's children.''
Nobody in this room has the right to break that promise
that was made to the people of Bikini in 1946, not the Mayor,
not the Assistant Secretary. When that money runs out and these
people are starving. He's talking about, oh, we're not going to
have payroll if we this or that. When this money runs out, no
payroll, no power plant, no anything. Where do you think those
people are going to go to, the RMI government?
There's no choice here. There has to be made, the
suggestion I'm making is go back to the system that produced
$220 million over 30 years. It's not--it wasn't broken. I'm
just astounded that the Interior Department would come in and
do what they did. It's the worst thing to happen since the
Bravo shot in 1954, in my opinion.
They have threatened the people of the viability, not of
the Trust Fund, they threaten the viability of the people of
Bikini to survive. What's going to happen to these people when
there's nothing left and you have a bunch of rusted ships,
rusted cars, a plane?
I mean, these aren't, I mean, if you've lived in the
Marshall Islands for as long as I have, no one out there runs a
successful shipping business, zero. No one makes money on that
stuff. Planes? Come on. This has to be--there has to be
oversight for everybody's sake, for the United States
Government and the commitment they made to the people of
Bikini, and there has to be oversight for the people of Bikini
to survive. And if you don't do it, believe me, the first door
I'm coming back to with my five grandchildren by the end of
this year, God willing, I'm coming to the United States
Government and I'm knocking on that door. You're not going to
have a choice but to answer me. And if you don't take care of
this now, you're going to be taking care of it later. And
that's all I have to say. I'm sorry if I'm little--I'm the son
of a ball turret gunner from World War II, so----
The Chairman. Thank you.
Let me ask just a couple more questions to wrap up here.
This goes to you, Mr. Domenech. So you made a decision with
this letter with regards to the Bikini Resettlement Trust Fund.
But we've got other trusts, Resettlement Trust Funds, that are
out there. We've got the Rongelap. We've got the Marshall
Islands Trust Fund.
Given the position that you have taken with this
Administration, do you, would you expect that there be a
similar view of these other settlement trust funds?
Mr. Domenech. Well, thank you for that question, Senator,
Chairman.
That you're right, there are a number of trust funds that
exist all in the Marshall Islands, actually it's a surprisingly
large number that relate either to the nuclear, specifically to
the nuclear testing and/or the larger Compact agreements that
are in place. I assume that's the one you mean by the Marshall
Islands Trust Fund would be the Compact Trust Fund.
And as I mentioned earlier, that is structured completely
different up front by Congress in terms of who manages the
money, and it's very robust and meant to last forever, et
cetera.
The Chairman. What about Rongelap?
Mr. Domenech. Yeah, on Rongelap, my understanding, again at
this point, is that it is structured very similar to the Bikini
Trust Fund with the discretionary right of veto for the
Secretary over the budgets. However, that process has never
worked. There's not been a, not in a bad way, they've just,
there has not been a need for that kind of oversight for the
Rongelap community. And so, we have no sense of whether they
would come and ask for the same.
The Chairman. Just so that I can understand, I understand
that the cleanup on Rongelap and the ability to resettle on
Rongelap is further along than we are with Bikini. Is there a
reason for that? Is there a significant difference in the level
of funding that we have with the annual budget for Rongelap?
What's the differential here?
Mr. Domenech. It's, that's a good question.
Of course, the cleanup of both Bikini and Rongelap are
really run separately in a separate appropriation by the
Department of Energy. So they're the ones actually cleaning the
islands.
And in the case of Rongelap, they have been able to clean
it to a level that people can actually live there and the
Rongelapese want to live there. So 40 some odd citizens have
already relocated back to Rongelap.
It's a little different for Bikini. The likelihood, just
historically, at one point they were moved back to Bikini and
then it was determined that it was not clean enough for human
habitation so they moved back off. And that's my understanding
the status of the moment.
The Chairman. But it is because of funding in their, again,
their annual budgets, that Rongelap budgeted more or can you
give me more there?
Mr. Domenech. Yeah, I think it's--and again, I apologize, I
believe that is done by the Energy Department. I don't think
the Rongelap people used their trust fund for the purpose of
cleaning the island, just like the Bikini----
The Chairman. But you mentioned that you have,
structurally, the trust funds are much the same. So, there is a
discretionary right of veto that DOI or the Office of Insular
Affairs has had.
Mr. Domenech. That's my understanding.
The Chairman. So you must look at that on an annual basis,
that longer-term budget?
Mr. Domenech. I apologize. I'll have to ask my staff, but I
assume so.
The Chairman. Well, I do think that we have had some issues
raised here that deserve an answer from OIA, from the
Department of the Interior here.
I am concerned that you have, I think, confusing
interpretations of some of the statutes that are in place here
and how those are reconciled.
I understand, again, that from the Mayor's perspective and
from those who are on Bikini, the desire to effectively control
your own destiny.
I also understand that levels of oversight that allow for
that flexibility, while still maintaining some level of
appropriate control is something that whether it's Congress
through the appropriate committees or our departments typically
engage in, that that is appropriate.
So, I have never been one that says that the best decisions
are made at the top. I am, kind of, from the ground on up type
of a person, but I also recognize that when we put in place
trust settlement agreements that there is a purpose, there is a
level of oversight that is appropriate, not only for today's
leadership, but for subsequent generations. And my interest is
ensuring that we are being good stewards, not only for those
today, but for those tomorrow.
As it relates to the CNMI and our legislation, again, I
thank you, Governor Torres. I thank you, Congressman Sablan,
for your willingness to work with us to, I think, get to a good
place.
I think we had some good testimony today. I think we
recognize that the CNMI has come a long way over the years in
terms of labor practices, in terms of working aggressively to
ensure that, as you say, Congressman, we have changed the
dynamic there in terms of U.S. workers and the expectation that
we will have more U.S. workers.
So I feel that we are on a good trajectory here. It would
be my hope that we can address this soon because as we have
been told by Dr. Gootnick, in terms of the numbers and the
applicable visas that are out there, waivers that are out
there, those numbers get snapped up pretty quick here.
This is something that we do want to continue our
engagement with you and work to define good, solid solutions.
Again, as you say, Governor Torres, so we are not back here ten
years from now saying we need yet another extension. So we are
working on this together, and I appreciate that.
With that, gentlemen, the Committee stands adjourned.
[Whereupon, at 12:11 p.m. the hearing was adjourned.]
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