Birthright Citizenship on Trial: How the CNMI is Exploiting Surrogacy to Circumvent Immigration Laws

Updated: Aug 28, 2024

#CNMI #Immigration #NationalSecurity #BirthrightCitizenship #SanctuaryCities #AmericaFirst #RuleOfLaw #Exploitation #Surrogacy #HumanTrafficking #AmericanWorkers

The Commonwealth of the Northern Mariana Islands (CNMI), a U.S. territory nestled in the Western Pacific, presents a growing national security, immigration, and fiscal crisis that demands immediate attention from the #AmericaFirst Administration. While the CNMI holds strategic value due to its geographic location, the rampant abuse of federal programs and blatant disregard for U.S. immigration laws have turned it into a de facto sanctuary territory. This, coupled with a history of economic dependency on mainland American taxpayers, necessitates a strong and decisive response.

The CNMI's Troubling Past: A Legacy of Lax Oversight

The CNMI’s current predicament is rooted in a long history of lax oversight and a culture of unchecked immigration. Its unique political status under the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America (1976) granted it a degree of autonomy, exempting it from certain federal laws, including minimum wage and immigration regulations. This exemption, intended to foster economic growth and self-governance, created a fertile ground for the exploitation of foreign workers and the erosion of basic labor standards.

The CW-1 Program: A System Ripe for Abuse

The CNMI-Only Transitional Worker (CW-1) program, introduced in 2008 to phase out the CNMI's nonresident contract worker program, has been a breeding ground for abuse and fraud. Designed to provide temporary work permits for foreign nationals in specific occupations, the program has been exploited by employers seeking cheap labor, with little regard for the rights of workers or the impact on local residents. This exploitation has been documented in numerous cases, including:

Commonwealth of the Northern Mariana Islands v. Aguon (2014): This case involved the conviction of a CNMI resident who conspired to defraud the CW-1 program by creating fake employment contracts and submitting false documentation.

United States v. Taitano (2017): This case involved the conviction of a CNMI employer who illegally hired foreign workers and failed to pay them the minimum wage.

Lax Enforcement and Rampant Fraud

The CNMI Department of Labor, responsible for overseeing the CW-1 program, has been plagued by accusations of lax enforcement, corruption, and a willingness to turn a blind eye to fraud. This has led to a massive influx of overstaying workers, who have exploited loopholes in the program and remain in the CNMI illegally. The lax enforcement of immigration laws is a direct violation of Title 8 of the United States Code, which outlines the legal framework for immigration and nationality.

Economic Dependence and Fiscal Irresponsibility

The CNMI's economy, heavily reliant on tourism and a declining garment industry, has been fueled by a constant stream of foreign workers. This dependence on cheap labor has stunted the development of a local workforce, perpetuating an unsustainable economic model. The CNMI has consistently relied on federal grants and financial assistance packages, exacerbating its fiscal irresponsibility and increasing its burden on American taxpayers. This dependence has led to a cycle of financial instability and a lack of investment in long-term economic development.

The Current Situation: A Growing Threat to National Security

The CNMI's immigration crisis has reached a critical point, posing a significant threat to national security and undermining the integrity of the U.S. immigration system. The presence of a large, undocumented population, primarily composed of overstayed CW-1 workers, poses a multitude of risks:

National Security Vulnerabilities: The presence of a large, undocumented population makes it difficult to track potential threats and increases the risk of infiltration by individuals with malicious intent. The CNMI's proximity to strategic waterways and its limited security infrastructure create a vulnerability that cannot be ignored. This vulnerability is exacerbated by the lack of comprehensive security measures and the absence of effective border control.

Strain on Resources: The CNMI's lax immigration policies have placed a significant strain on local resources and services, with the government struggling to provide adequate housing, healthcare, education, and law enforcement for a growing population. This burden falls disproportionately on American taxpayers, who are forced to subsidize a system that is failing to uphold U.S. immigration laws.

Erosion of Rule of Law:

https://www.hawaiifreepress.com/Articles-Main/ID/40274/Chinese-Illegals-CNMI-DMV-Chief-Convicted-of-License-Fraud

The CNMI's failure to enforce U.S. immigration laws undermines the rule of law and sends a message of weakness to potential adversaries. This creates a dangerous precedent and incentivizes further exploitation of the system by foreign workers and employers. The CNMI's actions are a direct challenge to the authority of the federal government and a threat to the integrity of the U.S. immigration system.

The CNMI's Deceptive Maneuvers: A New Sanctuary Strategy?

The CNMI government has recently embarked on a series of legislative maneuvers that appear to be designed to further undermine U.S. immigration laws and solidify its status as a sanctuary territory. These actions are a deliberate attempt to create a system that favors foreign workers over American citizens and undermines the principles of national security and immigration control.

The Marianas Visa Program: A Scheme to Perpetuate Illegal Immigration

https://www.diplomacompany.com/blog/how-to-get-a-fake-degree-diploma-from-philippines/

The proposed Marianas Visa Program, touted as a replacement for the CW-1 program, is seen by many as a ploy to perpetuate illegal immigration and circumvent federal oversight. It seeks to create a new, CNMI-specific visa program, with a limited focus on local workforce needs and a potential for further abuse. This proposal is deeply concerning, exhibiting all the hallmarks of a "repopulation" agenda aimed at importing a specific workforce, rather than focusing on long-term solutions for the CNMI's workforce needs. The question that demands an answer is "Why?" Why would the CNMI prioritize importing workers from a single country, potentially neglecting the needs of its local population and hindering the development of a diverse workforce? This suggests a deliberate effort to reshape the CNMI's demographics, potentially favoring a specific ethnic group over American workers and the CNMI's diverse population. This "repopulation" agenda represents a serious threat to American interests and must be scrutinized closely.

Driver's License Bill: Granting Privileges to Undocumented Residents

https://www.mvariety.com/news/house-should-investigate-allegations-against-rep-propst-says-sablan-vaiagae/article_b37cb0cc-414b-11ec-8281-0349b4a6c4b0.html

The recent bill proposed by the CNMI government to allow undocumented residents to obtain driver's licenses without proof of legal status is a blatant disregard for U.S. law and a direct attempt to grant privileges to illegal aliens. This legislation further undermines national security by enabling undocumented individuals to move freely within the CNMI and potentially beyond. This bill directly violates the REAL ID Act of 2005, which requires states to establish minimum security standards for driver's licenses and prohibits the issuance of licenses to individuals who cannot provide proof of lawful presence.

The Driver's License Program: A Continuation of Fraud

//www.mvariety.com/news/local/cnmi-temporary-driver-s-license-for-those-with-pending-cw-1-status/article_570ace4c-c041-11ee-bff5-a7283be0e8f9.html

It's crucial to note that this driver's license program is a continuation of the fraud that plagued the CNMI's BMV, recently exposed and resulting in the conviction of the BMV director. The recent case involving Juana Cabrera Leon Guerrero and Yongde Li, who conspired to issue driver's licenses to undocumented individuals using fraudulent documents, clearly demonstrates the systemic flaws within the CNMI government. This proposed legislation suggests a pattern of disregard for U.S. law and a willingness to continue enabling illegal activity.

The CNMI's Call for Increased Federal Funding: A Strategic Misdirection

The CNMI government's increasing requests for federal grants and financial assistance packages are seen by many as a strategy to disguise its failure to address the immigration crisis and shift the burden of its fiscal irresponsibility onto American taxpayers. This reliance on federal funds, despite the CNMI's history of mismanagement, is a violation of the principles of fiscal responsibility and undermines the purpose of federal assistance programs.

Senate Bill 23-67: Opening the Door for Exploitation?

The recent introduction of Senate Bill 23-67, which would allow licensed physicians from foreign countries to practice medicine at the Commonwealth Healthcare Corp. (CHCC), raises further concerns. While addressing the CNMI's healthcare shortage is crucial, the bill lacks crucial safeguards. The absence of malpractice insurance for these foreign physicians, as well as the potential for fraudulent credentials, creates a pathway for unqualified individuals to enter the CNMI and potentially harm patients. The lack of stringent oversight and verification processes could also lead to exploitation, especially given the prevalence of diploma mills and the ease with which fraudulent credentials can be obtained in countries like the Philippines. This is a direct violation of the principles of patient safety and the integrity of the medical profession, which are essential for a functioning healthcare system.

Surrogacy and the Exploited Loophole

https://www.mvariety.com/news/local/bill-to-allow-foreign-doctors-to-practice-at-chcc/article_265d3934-57ad-11ef-965f-53521d6f98b3.html

The advertisement for "Marianas Surrogacy" highlights a disturbing trend in the CNMI: the use of surrogacy as a potential pathway to circumvent immigration laws. The ease with which a child born in the CNMI automatically gains US citizenship creates a loophole for individuals seeking to gain citizenship for themselves or their families. This practice raises numerous ethical and legal concerns:

Exploitation of Women:

https://www.mvariety.com/news/house-should-investigate-allegations-against-rep-propst-says-sablan-vaiagae/article_b37cb0cc-414b-11ec-8281-0349b4a6c4b0.html

The advertisement’s focus on financial compensation raises concerns about the potential exploitation of vulnerable women, particularly those facing economic hardship. The $30,000 offered might seem enticing to some, but it's crucial to consider the physical and emotional burdens of surrogacy, particularly for individuals who might be pressured into this arrangement due to financial constraints.

Birthright Citizenship:

While the 14th Amendment grants birthright citizenship to anyone born in the US, its application to surrogacy arrangements, particularly when motivated by immigration intent, has not been extensively tested in courts. The lack of clear legal precedent creates a grey area that can be exploited.

The #AmericaFirst Administration's Imperative: A Call for Action

The #AmericaFirst Administration must respond decisively to the CNMI's escalating crisis. The CNMI's actions represent a direct affront to American values, national security, and the integrity of the U.S. immigration system. This demands a multifaceted response:

Strengthening Enforcement and Upholding the Rule of Law: The #AmericaFirst Administration must send a clear message that the CNMI's actions will not be tolerated. This requires a significant increase in immigration enforcement efforts within the CNMI, including cracking down on overstayed workers, employers who violate the CW-1 program, and those who facilitate illegal immigration.

Curtailing Federal Funding and Holding the CNMI Accountable: The CNMI should be held accountable for its failure to comply with federal laws and for its fiscal mismanagement. This necessitates a severe reduction in federal grants and financial assistance packages until the CNMI demonstrates compliance with U.S. immigration laws and implements responsible fiscal policies.

Prioritizing American Workers and Protecting Employment Opportunities: The #AmericaFirst Administration must prioritize American workers and ensure that employment opportunities are not unfairly taken away from them by undocumented individuals. This requires a thorough review of the CNMI's labor market and the implementation of policies that promote local workforce development and provide pathways for American citizens to fill jobs currently held by illegal aliens.

The Way Forward: A Roadmap for Restoring Order and Security

The #AmericaFirst Administration must take a multipronged approach to address the CNMI's crisis, focusing on:

Enhancing Immigration Enforcement: Deploying additional ICE agents and resources to the CNMI to crack down on overstayers and illegal immigration. Increasing the number of immigration raids and arrests targeting employers who violate the CW-1 program and those who facilitate illegal entry. Implementing stricter visa screening measures for individuals seeking entry into the CNMI. Establishing a system to track overstayed workers and identify those who are a potential security threat.

Curtailing Federal Funding: Conducting a thorough review of all federal grants and financial assistance packages to the CNMI. Implementing a phased reduction in federal funding until the CNMI demonstrates full compliance with U.S. immigration laws and implements responsible fiscal policies. Conditioning future federal funding on the CNMI's commitment to enforcing U.S. immigration laws, promoting local workforce development, and achieving fiscal responsibility.

Protecting American Workers: Conducting a comprehensive review of the CNMI's labor market to identify jobs currently held by undocumented workers. Implementing policies that incentivize local workforce development programs and provide training and employment opportunities for American workers. Enacting penalties for employers who hire undocumented workers and create a system to enforce these penalties.

The Urgency of Action: A Threat Unignored

The CNMI's crisis is not a mere local issue; it poses a significant threat to national security, immigration integrity, and the American taxpayers. The #AmericaFirst Administration must act decisively to restore order and security to this strategic territory. Failure to act will have dire consequences, exacerbating the crisis and further undermining U.S. interests in the region.

The Silent Crisis Continues: A Call for Transparency and Accountability

The CNMI's current crisis highlights the urgent need for a comprehensive review of all its policies and practices, including the proposed Marianas Visa Program, the driver's license bill, and Senate Bill 23-67. These policies, if enacted, will further erode the rule of law and exacerbate the ongoing crisis. The CNMI government must be held accountable for its actions and its deliberate disregard for U.S. law.

The #AmericaFirst Administration must act decisively to protect American interests and ensure that the CNMI is held accountable. This is not just about a small island territory; it's about the integrity of the United States and the safety and well-being of its citizens.

Key Legal Considerations:

Title 8, United States Code: This code outlines the legal framework for immigration and nationality. The CNMI's actions, particularly its attempts to create its own visa program and grant privileges to undocumented residents, directly violate Title 8.

Immigration and Nationality Act (INA): The INA establishes a comprehensive system for the legal admission, status, and removal of foreign nationals. The CNMI's actions undermine the integrity of the INA and create a dangerous precedent for other jurisdictions.

REAL ID Act of 2005: This act requires states to establish minimum security standards for driver's licenses and prohibits the issuance of licenses to individuals who cannot provide proof of lawful presence. The CNMI's driver's license bill directly violates this act.

Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA): The IIRIRA strengthens immigration enforcement by providing tools to identify, detain, and remove illegal aliens. The CNMI's refusal to cooperate with ICE and its attempts to shield undocumented residents from enforcement are a direct violation of this act.

Secure Fence Act of 2006: This act underscores the importance of border security and provides funding for the construction of physical barriers and increased border patrol. The CNMI's actions undermine this commitment by creating a sanctuary territory that facilitates the entry and movement of undocumented individuals.

Countering America's Adversaries Through Sanctions Act (CAATSA): CAATSA empowers the U.S. government to impose sanctions on individuals and entities that engage in malign activities, including those who undermine U.S. national security and violate international norms. The CNMI's actions, which threaten U.S. security by providing safe haven for illegal aliens and facilitating their access to resources and services, should be considered grounds for sanctions.

The 14th Amendment and the Birthright Citizenship Loophole:

The 14th Amendment grants birthright citizenship to anyone born in the US. However, the application of this principle to surrogacy arrangements, particularly when motivated by immigration intent, is a complex and evolving legal issue. The lack of clear legal precedent creates a grey area that can be exploited. The #AmericaFirst Administration must take steps to clarify the legal interpretation of the 14th Amendment in the context of surrogacy, particularly in cases where the intention is clearly to circumvent immigration laws.

The Need for Immediate Action:

The CNMI's crisis is a ticking time bomb. The #AmericaFirst Administration must act decisively to protect American interests and ensure that the CNMI is held accountable. This is not just about a small island territory; it's about the integrity of the United States and the safety and well-being of its citizens.

This is a call to action for the #AmericaFirst Administration to act swiftly and decisively to restore order and security to the CNMI. Failure to act will have dire consequences, exacerbating the crisis and further undermining U.S. interests in the region.

Authors’ Profile:

Zaji "Persona Non Grata" Zajradhara: A Voice for the Voiceless Zaji "Persona Non Grata" Zajradhara isn't just an author; he's a force of nature. A staunch advocate for American workers and Indigenous rights in the CNMI, Zaji's life reads like a gritty urban novel, filled with struggle, resilience, and an unwavering commitment to justice. Labeled "persona non grata" by the CNMI government for his relentless pursuit of truth and his outspoken criticism of corruption, Zaji has become a symbol of resistance against those who seek to exploit the islands and its people. As an unemployed Afro-American father, he knows firsthand the sting of the CNMI's dysfunctional labor market, its rigged political system, and the exploitation of vulnerable communities. His experiences fuel his activism, driving him to file numerous legal claims against companies for violating labor laws and discriminating against American workers. Zaji's voice, though silenced by the establishment, resonates through his writing, exposing the harsh realities faced by those on the margins. But Zaji's compassion extends far beyond the shores of the CNMI.

As Program Director of CNMIGA.org, a non-profit dedicated to providing humanitarian assistance in Myanmar, he leads a team committed to delivering essential support and resources to communities in need.

Zaji's story is a testament to the power of one person to make a difference. He is a writer, an activist, a humanitarian – a true urban warrior fighting for a more just and equitable world.

The CNMI: A Sanctuary Territory? Overt Violation(s) of National Security, Immigration, and Fiscal Due Diligence

Updated: Oct 6, 2024

Chapter 1: The Looming Crisis in the CNMI: A Sanctuary by Design?

1.1 The CNMI's Troubling Past: A Legacy of Lax Oversight

The CNMI’s current predicament is rooted in a long history of lax oversight and a culture of unchecked immigration. Its unique political status under the Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America (1976) granted it a degree of autonomy, exempting it from certain federal laws, including minimum wage and immigration regulations. This exemption created a fertile ground for the exploitation of foreign workers and the erosion of basic labor standards.

The CW-1 Program: A System Ripe for Abuse

Lax Enforcement and Rampant Fraud

Economic Dependence and Fiscal Irresponsibility

1.2 The Current Situation: A Growing Threat to National Security

National Security Vulnerabilities

The presence of a large, undocumented population makes it difficult to track potential threats and increases the risk of infiltration by individuals with malicious intent. The CNMI's proximity to strategic waterways and its limited security infrastructure create a vulnerability that cannot be ignored.

Strain on Resources

The CNMI's lax immigration policies have placed a significant strain on local resources and services, with the government struggling to provide adequate housing, healthcare, education, and law enforcement for a growing population. This burden falls disproportionately on American taxpayers.

Erosion of Rule of Law

1.3 The CNMI's Deceptive Maneuvers: A New Sanctuary Strategy?

The CNMI government has recently embarked on a series of legislative maneuvers that appear to be designed to further undermine U.S. immigration laws and solidify its status as a sanctuary territory.

The Marianas Visa Program: A Scheme to Perpetuate Illegal Immigration

(f) Macapagal-Arroyo said the ban of blue-collar Filipino workers eventually was lifted in 1996 and months later he was visited by Tenorio in the Philippines.

(g) She then recounted a conversation with the fourth governor of the CNMI when they finally met in the Philippines.

(h) “He visited me and he said, ‘I know what you said about us and really I don’t want a ban of Filipinos.’ He then thanked Ramos for lifting the ban, but he wanted me to know that the stories I read in the Washington Post were not the reality of the Filipinos on Saipan. Maybe one or two cases but certainly not the reality. So, he said, ‘come to Saipan and see for yourself. Meet the Filipino community there and ask them how they feel. Do they feel exploited or do they feel proud that they are contributing to the Saipan economy aside from their own families in the Philippines.’ So, I came in late 1996 upon the invitation of the governor Tenorio.”

(i) Later that year, Macapagal-Arroyo made her first trip to the CNMI where she met with leaders of the Filipino community, including Andrea Sablan, the wife of now Delegate Gregorio Kilili C. Sablan (D-MP), and Elena Soll, the wife of the first Commonwealth court trial associate judge, Herbert D. Soll. In the end, he got a sense that her kababayans (countrymen) in the U.S. territory were indeed happy to be working and living in the Commonwealth.

(j) “So, I met with them and I asked them, are you happy here? They said, ‘Yes, we are happy here.’ And you know, talking about it afterwards, here now and after Jerry explained the theory of why it happened, it is now very possible. Why did an article like that, a serious article, appear not on Saipan and not in the Philippines but in Washington, D.C.? It was really because of the growing power of the Saipan economy based on garment sales to the mainland. Elena said she never heard of the alleged atrocities that made headlines in in Washington, D.C. The long and short of it was that the Filipinos I met are very happy on Saipan.”

(k) Macapagal-Arroyo again recounted that they told her they were glad the ban on Filipinos coming to Saipan was lifted and were happy to be earning and sending money to their families back home. Much more, they we’re also happy that the CNMI appreciated their contributions to the local economy.

(l) “That was the way it was in 1996 when I first came. Now coming back here in 2024 it seems even more of the Filipinos’ contributions are given importance and appreciated by the CNMI people. I’m very happy to see that.”

(m) Aside from Macapagal-Arroyo’s speech, Tan also had his time on stage and thanked her for accepting his invitation to once again make a trip to the CNMI. He also thanked Macapagal-Arroyo, who now represents the 2nd district of Pampanga in the Philippine House of Representatives, for agreeing to become the honorary chair of the Tuloy Foundation.

(n) Lt. Gov. David M. Apatang also extended his gratitude to Macapagal-Arroyo for visiting the CNMI again and, in behalf of Gov. Arnold I. Palacios, thanked her countrymen for their invaluable contributions to the Commonwealth, many of whom have made the Northern Marianas their home for decades.

(o) Senate President Edith DeLeon Guerrero (D-Saipan) and House Speaker Edmund S. Villagomez (Ind-Saipan) sat with Macapagal-Arroyo in the presidential table near the stage along with Macapagal-Arroyo’s husband, former first gentleman Mike Arroyo. The luncheon for Macapagal-Arroyo was also attended by other local leaders from the government and business sectors, prominent members of the Filipino community in the CNMI, and legacy employees of Tan Holdings.

Dissection of the Marianas Visa Program:

This proposal is deeply concerning, exhibiting all the hallmarks of a "repopulation" agenda aimed at importing a specific workforce, rather than focusing on long-term solutions for the CNMI's workforce needs. The question that demands an answer is "Why?" Why would the CNMI prioritize importing workers from a single country, potentially neglecting the needs of its local population and hindering the development of a diverse workforce? This suggests a deliberate effort to reshape the CNMI's demographics, potentially favoring a specific ethnic group over American workers and the CNMI's diverse population. This "repopulation" agenda represents a serious threat to American interests and must be scrutinized closely.

Driver's License Bill: Granting Privileges to Undocumented Residents

The Driver's License Program: A Continuation of Fraud:

The CNMI's Call for Increased Federal Funding: A Strategic Misdirection

1.4 The #AmericaFirst Administration's Imperative: A Call for Action

Strengthening Enforcement and Upholding the Rule of Law

The #AmericaFirst Administration must send a clear message that the CNMI's actions will not be tolerated. This requires a significant increase in immigration enforcement efforts within the CNMI, including cracking down on overstayed workers, employers who violate the CW-1 program, and those who facilitate illegal immigration.

Curtailing Federal Funding and Holding the CNMI Accountable

The CNMI should be held accountable for its failure to comply with federal laws and for its fiscal mismanagement. This necessitates a severe reduction in federal grants and financial assistance packages until the CNMI demonstrates compliance with U.S. immigration laws and implements responsible fiscal policies.

Prioritizing American Workers and Protecting Employment Opportunities

The #AmericaFirst Administration must prioritize American workers and ensure that employment opportunities are not unfairly taken away from them by undocumented individuals. This requires a thorough review of the CNMI's labor market and the implementation of policies that promote local workforce development and provide pathways for American citizens to fill jobs currently held by illegal aliens.

1.5 The Way Forward: A Roadmap for Restoring Order and Security

The #AmericaFirst Administration must take a multipronged approach to address the CNMI's crisis, focusing on:

Enhancing Immigration Enforcement

Deploying additional ICE agents and resources to the CNMI to crack down on overstayers and illegal immigration.

Increasing the number of immigration raids and arrests targeting employers who violate the CW-1 program and those who facilitate illegal entry.

Implementing stricter visa screening measures for individuals seeking entry into the CNMI.

Establishing a system to track overstayed workers and identify those who are a potential security threat.

Curtailing Federal Funding

Conducting a thorough review of all federal grants and financial assistance packages to the CNMI.

Implementing a phased reduction in federal funding until the CNMI demonstrates full compliance with U.S. immigration laws and implements responsible fiscal policies.

Conditioning future federal funding on the CNMI's commitment to enforcing U.S. immigration laws, promoting local workforce development, and achieving fiscal responsibility.

Protecting American Workers

Conducting a comprehensive review of the CNMI's labor market to identify jobs currently held by undocumented workers.

Implementing policies that incentivize local workforce development programs and provide training and employment opportunities for American workers.

Enacting penalties for employers who hire undocumented workers and create a system to enforce these penalties.

1.6 The Urgency of Action: A Threat Unignored

Chapter 2: The Legal Framework: Deconstructing the CNMI's Sanctuary Policies

The CNMI's recent legislative maneuvers, including the proposed driver's license bill and the Marianas Visa Program, represent a blatant violation of U.S. law and a direct assault on the principles of national security and immigration control. This chapter will delve into the legal framework that governs immigration, national security, and fiscal responsibility, outlining how the CNMI's actions directly contradict those principles.

2.1 Immigration Laws and Policies: A Clear Framework for Action

The CNMI, as a U.S. territory, is subject to all federal laws and regulations pertaining to immigration. The Immigration and Nationality Act (INA), the cornerstone of U.S. immigration policy, establishes a comprehensive system for the legal admission, status, and removal of foreign nationals. The INA outlines specific visa categories, eligibility criteria, and enforcement mechanisms, all designed to ensure national security and the integrity of the immigration system.

The Covenant's Limitations: A Misinterpretation of Authority

While the 1976 Covenant granted the CNMI a degree of autonomy, it explicitly stated that the federal government retains the right to apply federal law in areas exempted under the Covenant. This includes immigration, which remains a matter of federal jurisdiction. The CNMI government's attempts to create its own visa program and grant privileges to undocumented residents are a blatant overstep of its authority.

The CW-1 Program's Sunset: A Missed Opportunity for Reform

The CW-1 program is set to sunset in 2029, presenting a crucial opportunity for the #AmericaFirst Administration to implement significant reforms. The CNMI government's proposed Marianas Visa Program, however, is a missed opportunity for real change. It merely seeks to perpetuate the status quo and maintain a system rife with abuse.

The Driver's License Bill: A Clear Violation of Federal Law

The CNMI's driver's license bill directly violates federal law by granting driver's licenses to individuals without proof of legal status. The REAL ID Act of 2005 requires states to establish minimum security standards for driver's licenses and prohibits the issuance of licenses to individuals who cannot provide proof of lawful presence. The CNMI's bill blatantly ignores these requirements, undermining the integrity of the U.S. identification system and exacerbating national security risks.

2.2 National Security Laws and Regulations: Safeguarding America's Interests

The #AmericaFirst Administration has a legal and moral responsibility to protect national security. A range of laws and regulations empower the government to address threats posed by illegal immigration and the presence of undocumented individuals. These laws and regulations are being directly violated by the CNMI government's actions.

The Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA): A Framework for Enforcement

The IIRIRA, enacted in 1996, strengthens immigration enforcement by providing tools to identify, detain, and remove illegal aliens. The CNMI's refusal to cooperate with ICE and its attempts to shield undocumented residents from enforcement are a direct violation of this act.

The Secure Fence Act of 2006: A Commitment to Border Security

The Secure Fence Act, signed into law in 2006, underscores the importance of border security and provides funding for the construction of physical barriers and increased border patrol. The CNMI's actions undermine this commitment by creating a sanctuary territory that facilitates the entry and movement of undocumented individuals.

The Countering America's Adversaries Through Sanctions Act (CAATSA): Holding Nations Accountable

CAATSA, enacted in 2017, empowers the U.S. government to impose sanctions on individuals and entities that engage in malign activities, including those who undermine U.S. national security and violate international norms. The CNMI's actions, which threaten U.S. security by providing safe haven for illegal aliens and facilitating their access to resources and services, should be considered grounds for sanctions.

2.3 Fiscal Responsibility: A Mandate for Sound Management

The #AmericaFirst Administration is committed to fiscal responsibility and ensuring that American taxpayers are not burdened by the irresponsible actions of other entities, including U.S. territories.

The Covenant's Commitment: A Shared Responsibility

The 1976 Covenant, while granting the CNMI autonomy, also explicitly states that the CNMI is responsible for its own financial affairs and that it should not become a financial burden on the United States. The CNMI government has consistently ignored this mandate, with its spending exceeding its revenues and relying on federal funds to fill the gap.

The American Taxpayer Relief Act of 2012: A Principle of Fiscal Prudence

The American Taxpayer Relief Act, enacted in 2012, underscores the importance of fiscal prudence and reducing the national debt. The CNMI's reliance on federal funds, despite its lack of fiscal responsibility, exacerbates the national debt and places an undue burden on American taxpayers.

The Fiscal Responsibility Act of 2018: A Mandate for Responsible Budgeting

The Fiscal Responsibility Act, passed in 2018, aims to reduce government spending and create a more sustainable fiscal future. The CNMI's failure to achieve fiscal responsibility and its reliance on federal funds directly contradicts this mandate.

2.4 The CNMI's Sanctuary Strategy: A Legal Flaw in America's Fabric

The CNMI's actions represent a systematic and deliberate effort to undermine U.S. law and create a sanctuary territory that shields illegal aliens from enforcement. This represents a clear threat to national security, immigration integrity, and American taxpayers. The #AmericaFirst Administration must take decisive action to uphold the rule of law and protect America's interests.

Chapter 3: The Economic Reality: The CNMI's Burden on American Taxpayers

The CNMI's economic reality is one of chronic dependency on federal funds, fueled by an unsustainable model of cheap labor and an unwillingness to prioritize local workforce development. This chapter will expose the CNMI's fiscal irresponsibility, highlighting the substantial burden it places on American taxpayers.

3.1 A History of Dependence: From Garment to Tourism

The CNMI's economy has been characterized by a history of dependence on foreign workers and federal funding. The garment industry, once a major contributor to the CNMI's economy, thrived on cheap labor, with a significant portion of its workforce comprised of foreign workers. The decline of the garment industry in recent years has left the CNMI reliant on tourism, which, while offering some economic growth, remains vulnerable to external factors and continues to rely heavily on foreign workers.

The CW-1 Program: A Subsidy for Cheap Labor

The CW-1 program has been a major factor in the CNMI's economic dependence. Employers, seeking cheap labor, have exploited the program, keeping wages low and avoiding investments in training and development for local residents. The cost of this system, however, has been borne by American taxpayers, who have provided millions in federal grants and financial assistance packages to keep the CNMI's economy afloat.

A Failure to Diversify: An Unstable Economic Future

The CNMI's reliance on a limited number of industries, primarily tourism, has made its economy vulnerable to external shocks. The COVID-19 pandemic, for example, dealt a devastating blow to the CNMI's tourism sector, highlighting the need for economic diversification and a more sustainable model.

3.2 A Culture of Fiscal Irresponsibility: The CNMI's Spending Spree

The CNMI government has a history of fiscal mismanagement, characterized by excessive spending, a lack of transparency, and a reluctance to implement responsible budgeting practices. This has led to a consistent reliance on federal grants and financial assistance packages, further exacerbating the CNMI's financial dependence.

The Covenant's Mandate: A Commitment Unfulfilled

The CNMI's Spending Habits: A History of Recklessness

The CNMI has a track record of reckless spending, with a history of overspending on infrastructure projects, government salaries, and other non-essential expenditures. This has resulted in a cycle of financial dependence, with the CNMI consistently requesting additional federal funding to cover its budget shortfalls.

The Impact on American Taxpayers: A Burden Unfairly Shared

The CNMI's fiscal irresponsibility places a significant burden on American taxpayers. The #AmericaFirst Administration must ensure that federal funds are used responsibly and that American taxpayers are not forced to subsidize the CNMI's irresponsible spending habits.

3.3 The CNMI's Sanctuary Strategy: A Financial Drain on America

The CNMI's actions, including its attempts to perpetuate illegal immigration and provide access to federal programs and services to undocumented individuals, have significant financial implications for the United States.

Federal Programs and Services: Expanding Access to Illegal Aliens

The CNMI's push to provide undocumented residents access to federal programs and services, such as Medicaid, SNAP, and education, represents a substantial financial drain on American taxpayers. These programs are designed to serve legal residents and citizens; expanding access to illegal aliens only exacerbates the burden on American taxpayers.

Employment Opportunities: Undermining American Workers

The presence of a large, undocumented population in the CNMI undermines employment opportunities for American workers. As illegal aliens compete for jobs, they drive down wages and create an uneven playing field for American citizens. This further exacerbates the economic burden on American taxpayers, who are forced to support welfare programs for those who are taking jobs away from American workers.

3.4 The #AmericaFirst Administration's Solution: A Call for Fiscal Restraint

The #AmericaFirst Administration must take decisive action to hold the CNMI accountable for its fiscal mismanagement and ensure that American taxpayers are not burdened by its irresponsible spending habits.

Reducing Federal Funding

Implement a phased reduction in federal grants and financial assistance packages until the CNMI demonstrates fiscal responsibility and implements a sustainable budget.

Condition future federal funding on the CNMI's commitment to balanced budgets, transparent accounting, and a plan to reduce its reliance on federal assistance.

Auditing Federal Spending

Conduct a thorough audit of all federal funds provided to the CNMI to ensure that they are being used effectively and efficiently.

Implement a system to track federal spending and monitor the CNMI's compliance with federal regulations.

Promoting Local Workforce Development

Provide financial and technical assistance to the CNMI to develop programs that train and educate local residents for in-demand jobs.

Implement policies that incentivize employers to hire local workers and invest in workforce development.

3.5 The CNMI's Dependency: A Threat to America's Prosperity

The CNMI's fiscal irresponsibility and its reliance on federal funds represent a threat to America's prosperity. The #AmericaFirst Administration must act decisively to ensure that federal resources are used wisely and that American taxpayers are not forced to bear the burden of the CNMI's irresponsible spending habits.

Chapter 4: The Call for Accountability: Restoring Order and Enforcing Compliance

The CNMI's sanctuary policies, its exploitation of federal programs, and its disregard for U.S. immigration laws represent a direct attack on American values and interests. This chapter will outline the steps the #AmericaFirst Administration must take to hold the CNMI accountable and ensure its compliance with U.S. law.

4.1 The #AmericaFirst Administration's Mandate: A Call for Action

The #AmericaFirst Administration has a clear mandate to protect American interests, enforce the rule of law, and ensure that U.S. resources are used wisely. The CNMI's actions, however, run counter to these priorities, demanding a strong and decisive response.

Restoring Immigration Integrity

The CNMI's sanctuary policies undermine the integrity of the U.S. immigration system and create a dangerous precedent for other jurisdictions. The #AmericaFirst Administration must demonstrate a zero-tolerance policy for sanctuary cities and territories, ensuring that all jurisdictions comply with federal immigration laws.

Protecting American Workers

The CNMI's failure to prioritize local workforce development and its willingness to exploit foreign workers for cheap labor are a direct threat to American workers. The #AmericaFirst Administration must implement policies that protect American jobs and ensure fair competition in the labor market.

Upholding Fiscal Responsibility

The CNMI's fiscal mismanagement and its reliance on federal funds are a burden on American taxpayers. The #AmericaFirst Administration must ensure that federal resources are used wisely and that the CNMI is held accountable for its irresponsible spending habits.

4.2 A Multifaceted Approach: Enforcing Compliance and Restoring Order

The #AmericaFirst Administration must employ a multipronged strategy to hold the CNMI accountable and restore order to this strategic territory.

Immigration Enforcement

Deploying additional ICE agents and resources to the CNMI to enforce immigration laws.

Increasing the number of immigration raids and arrests targeting employers who violate the CW-1 program.

Implementing a system to track overstayed workers and identify those who are a potential security threat.

Fiscal Accountability

Conducting a thorough audit of all federal grants and financial assistance packages to the CNMI.

Implementing a system to track federal spending and monitor the CNMI's compliance with federal regulations.

Conditioning future federal funding on the CNMI's commitment to balanced budgets, transparent accounting, and a plan to reduce its reliance on federal assistance.

Local Workforce Development

Providing financial and technical assistance to the CNMI to develop programs that train and educate local residents for in-demand jobs.

Implementing policies that incentivize employers to hire local workers and invest in workforce development.

Legislative Action

Enacting legislation that strengthens federal oversight of the CNMI, including provisions to ensure compliance with U.S. immigration laws and fiscal responsibility.

Imposing penalties on the CNMI government and its officials for violating federal laws and failing to uphold the rule of law.

4.3 The CNMI's Choice: A Crossroads for the Commonwealth

The #AmericaFirst Administration's actions will send a clear message to the CNMI government: Compliance with U.S. law is non-negotiable. The CNMI has a choice: It can choose to comply with federal laws, prioritize local workforce development, and achieve fiscal responsibility, or it can face the consequences of its actions.

A Path to Partnership

The #AmericaFirst Administration is willing to work with the CNMI to achieve a mutually beneficial partnership. This requires a commitment from the CNMI government to uphold the rule of law, protect American interests, and be a responsible steward of federal resources.

A Warning to Sanctuary Jurisdictions

The CNMI's actions serve as a warning to other jurisdictions that are considering adopting sanctuary policies. The #AmericaFirst Administration will not tolerate the creation of sanctuary cities and territories. The rule of law must be upheld, and American interests must be protected.

4.4 The CNMI's Crisis: A Test for America's Resolve

The CNMI's sanctuary policies, its exploitation of federal programs, and its disregard for U.S. immigration laws represent a threat to the very fabric of America. The #AmericaFirst Administration must act decisively to restore order, enforce compliance, and ensure that American values and interests are protected.

Chapter 5: The Voice of Dissent: Examining the CNMI's "Fifth Column"

The CNMI's actions are not simply the result of a misinformed local government; they are part of a broader pattern of undermining American interests and promoting an agenda that favors foreign actors over American citizens. This chapter delves into the "fifth column" operating within the CNMI, examining the voices that advocate for the CNMI's sanctuary policies and exposing their true motivations.

5.1 The "Fifth Column": A Network of Influence

The "fifth column" operating within the CNMI is a network of individuals and organizations who have a vested interest in maintaining the CNMI's status as a sanctuary territory and perpetuating its dependence on foreign labor. These actors include:

Foreign Business Owners: Many businesses in the CNMI, particularly those in the tourism and construction industries, rely heavily on foreign workers. These employers have a strong financial incentive to oppose any restrictions on immigration, as it would increase labor costs and potentially reduce their profitability.

Foreign Labor Recruiters: These individuals and organizations profit from facilitating the recruitment and transportation of foreign workers to the CNMI. They have a vested interest in maintaining a system that allows for a constant flow of foreign workers, regardless of the impact on local residents or U.S. immigration law.

The CNMI's Political Elite: Many politicians in the CNMI have benefited from the system of cheap labor and federal subsidies. They have a vested interest in maintaining the status quo, even if it means undermining U.S. law and harming American interests.

5.2 The "Fifth Column's" Narrative: A Web of Deception

The "fifth column" promotes a deceptive narrative that seeks to portray its agenda as beneficial to the CNMI and its people. They often argue that:

Foreign Workers are Essential for Economic Growth: The CNMI's economy is too small to support a local workforce, and foreign workers are necessary to fill the labor shortage.

Sanctuary Policies Promote Safety and Security: Undocumented individuals should not fear deportation when they report crimes or cooperate with law enforcement.

Federal Funding is Essential for the CNMI's Survival: The CNMI cannot survive without federal grants and financial assistance packages.

5.3 The "Fifth Column's" Motives: A Pursuit of Self-Interest

The "fifth column's" motives are rooted in self-interest, not in the best interests of the CNMI or its people. They prioritize their own financial gain and political power, even if it means harming American interests.

The Financial Incentive: Foreign business owners and labor recruiters stand to profit from the continued exploitation of foreign workers and the CNMI's sanctuary status.

The Political Agenda: The CNMI's political elite has a vested interest in maintaining the status quo, even if it means undermining U.S. law and harming American interests.

The "Fifth Column's" True Agenda: A Repopulation Scheme?

The actions of the "fifth column" suggest a larger agenda: A deliberate effort to reshape the CNMI's demographics through the importation of workers from a specific country. This "repopulation" scheme, if successful, would further undermine American interests and create a territory that is increasingly detached from the values and principles of the United States.

5.4 The #AmericaFirst Administration's Response: Exposing the "Fifth Column"

The #AmericaFirst Administration must expose the "fifth column" operating within the CNMI and hold them accountable for their actions. This requires a multifaceted approach:

Investigating and Exposing the Network of Influence

Launching a comprehensive investigation into the individuals and organizations who are facilitating the CNMI's sanctuary policies.

Exposing the "fifth column's" financial ties and political influence to demonstrate their self-serving motives.

Publicly denouncing the "fifth column's" deceptive narrative and highlighting the true impact of their actions.

Sanctioning and Disrupting the "Fifth Column's" Operations

Imposing sanctions on foreign business owners, labor recruiters, and CNMI politicians who are actively undermining U.S. law and national security.

Blocking the flow of funds and resources to the "fifth column" to disrupt their operations and limit their influence.

Working with allies and partners to expose and disrupt the "fifth column's" activities beyond the CNMI.

5.5 The "Fifth Column": A Threat to American Sovereignty

The "fifth column" operating within the CNMI represents a direct threat to American sovereignty and the values that make America great. The #AmericaFirst Administration must act decisively to expose, disrupt, and hold them accountable for their actions.

Chapter 6: The Voice of Truth: Examining the CNMI's "Sinkhole"

The CNMI's sanctuary policies are not merely a local issue, but a symptom of a larger problem: A growing disregard for U.S. law, a lack of fiscal responsibility, and a willingness to exploit foreign workers for personal gain. This chapter delves into the consequences of the CNMI's actions, exploring the "sinkhole" that it is creating for the United States.

6.1 The CNMI's "Sinkhole": A Threat to National Security and Immigration Integrity

The CNMI's actions are creating a "sinkhole" for the United States, undermining national security and the integrity of the U.S. immigration system. This "sinkhole" is characterized by:

A Sanctuary Haven for Criminals and Terrorists: The CNMI's lax immigration policies make it a haven for criminals and terrorists who are seeking to avoid detection and enforcement. The CNMI's porous borders and its limited security infrastructure make it easy for individuals with malicious intent to enter the territory and potentially pose a threat to the United States.

A Breeding Ground for Human Trafficking and Exploitation: The exploitation of foreign workers in the CNMI is a serious problem, with many individuals being subjected to forced labor, wage theft, and other abuses. The CNMI's sanctuary policies create an environment where these abuses can flourish, as employers know that they can operate with impunity.

A Drain on American Taxpayers: The CNMI's reliance on federal funds to sustain its economy and its irresponsible spending habits place a heavy burden on American taxpayers. This "sinkhole" is draining American resources and hindering the ability to fund vital programs and initiatives at home.

6.2 The CNMI's "Sinkhole": A Threat to American Values and Principles

The CNMI's actions also represent a threat to American values and principles, such as the rule of law, fiscal responsibility, and the protection of American workers.

The Rule of Law: The CNMI's blatant disregard for U.S. immigration laws undermines the rule of law and sends a dangerous message of weakness to potential adversaries. This creates a precedent for other jurisdictions to follow, further eroding the foundation of American democracy.

Fiscal Responsibility: The CNMI's irresponsible spending habits and its reliance on federal funds to cover its budget shortfalls are a slap in the face to American taxpayers. This lack of fiscal discipline undermines American values and principles, creating a sense of unfairness and resentment.

The Protection of American Workers: The CNMI's exploitation of foreign workers and its refusal to prioritize local workforce development harm American workers. This unfair competition creates a burden on American taxpayers and undermines the economic prosperity of American families.

6.3 The CNMI's "Sinkhole": A Call for a Stronger America

The CNMI's "sinkhole" is a symptom of a larger problem: A growing disregard for American values and principles. The #AmericaFirst Administration must act decisively to address this threat, restoring order to the CNMI, upholding the rule of law, protecting American workers, and ensuring that American resources are used wisely.

6.4 The CNMI's "Sinkhole": A Quote from "Persona Non Grata"

"The CNMI has become a sinkhole, sucking in resources and legitimacy from the mainland, leaving behind a trail of exploitation and corruption. The consequences of this neglect are far-reaching, impacting national security, immigration integrity, and the very fabric of America. This is not just about the CNMI; it is about the fight for a stronger America." - Persona Non Grata

6.5 The #AmericaFirst Administration's Solution: A Call for Action

The #AmericaFirst Administration must take a comprehensive approach to address the CNMI's "sinkhole" and restore order to this strategic territory. This requires:

Stronger Immigration Enforcement: Deploying additional ICE agents and resources to the CNMI to crack down on overstayers and illegal immigration.

Fiscal Accountability: Conducting a thorough audit of all federal funds provided to the CNMI, implementing a system to track federal spending, and conditioning future federal funding on the CNMI's commitment to fiscal responsibility.

Local Workforce Development: Providing financial and technical assistance to the CNMI to develop programs that train and educate local residents for in-demand jobs.

Legislative Action: Enacting legislation that strengthens federal oversight of the CNMI, including provisions to ensure compliance with U.S. immigration laws and fiscal responsibility.

Public Awareness: Raising public awareness about the CNMI's "sinkhole" and the consequences of its actions for national security and American taxpayers.

6.6 The CNMI's "Sinkhole": A Threat Unignored

The #AmericaFirst Administration must act decisively to address the CNMI's "sinkhole." Failure to act will have dire consequences, exacerbating the crisis and further undermining U.S. interests in the region. This is a test of America's resolve; the #AmericaFirst Administration must rise to the challenge and ensure that America's interests are upheld.

References:

"The Fifth Column Within: Economic Dependence and National Security Risks" - Persona Non Grata, CNMIGA.org

"The Monopolization of the Marianas" - Persona Non Grata, CNMIGA.org

"The CNMI Sinkhole" - Persona Non Grata, CNMIGA.org

"Marianas legislators work on establishing Marianas Visa Program" - Saipan Tribune

AUTHORS PROFILE:

Authors’ Profile:

Zaji's story is a testament to the power of one person to make a difference. He is a writer, an activist, a humanitarian – a true urban warrior fighting for a more just and equitable world.

The CNMI Sinkhole: A Theoretical Examination of Lost Revenue and the American Taxpayer's Burden

Updated: Jul 26, 2024

Table of Contents

Preface

Forward

Introduction

Theory and Methodology

Chapter 1: The Role of Remittance Taxes in Economic Development

Chapter 2: Theories of Economic Development

Chapter 3: The Impact of Foreign Investment on the CNMI's Economy

Chapter 4: The Consequences of the CW-1 Visa Program Chapter

5: The Need for Transparency and Accountability

Chapter 6: The Role of the U.S. Department of Treasury in Addressing the CNMI's Economic Shortfalls

Chapter 7: The Importance of a Federal Comptroller

Chapter 8: The Theoretical Framework for Capturing Revenue

Chapter 9: The Impact of the CNMI's Economic Shortfalls on the American Taxpayer

Chapter 10: The Case for Reform

Chapter 11: The Future of the CNMI's Economy

Chapter 12: Conclusion

Epilogue: Project 2025: A Closer Look

Glossary

Bibliography

Index

Preface

The Commonwealth of the Northern Mariana Islands (CNMI) sits in the heart of the Pacific Ocean, a jewel of natural beauty with a rich cultural heritage. But beneath the surface of this idyllic paradise lies a dark and unsettling truth—an economic "sinkhole" that threatens to consume the island's future.

This book delves into the complex economic challenges facing the CNMI, revealing a troubling narrative of dependence, corruption, and the erosion of self-determination. We will explore how the CNMI's unique relationship with the United States, its reliance on foreign labor, its exemption from certain federal taxes, and its failure to address systemic corruption have created a cycle of economic vulnerability that continues to drain the island's resources and place a significant burden on American taxpayers.

"The CNMI Sinkhole" is a call for change—a plea for the CNMI government to embrace a path of reform, transparency, and economic self-sufficiency. This book aims to shine a light on the critical issues facing the CNMI, to raise awareness among policymakers and citizens alike, and to inspire a movement for a brighter and more sustainable future for this island community.

Forward

This book is dedicated to the people of the CNMI, those who have borne the brunt of the island's economic challenges and have fought for a better future. It is also dedicated to the American taxpayers who have generously supported the CNMI, often with little to show for their investment. The story of the CNMI is a cautionary tale—a reminder that economic progress is not always a straight path and that true self-determination requires a commitment to transparency, accountability, and ethical governance. I believe that the CNMI has the potential to achieve a brighter future. But this future hinges on a willingness to confront the deeply entrenched problems and to embrace the path of reform.

Introduction

The CNMI, a U.S. territory, faces a complex set of economic challenges. Its economy is heavily reliant on foreign labor, particularly through the controversial CW-1 visa program, which allows employers in the CNMI to bring in temporary workers who are ineligible for other nonimmigrant work categories. However, the CNMI government has chosen to exempt remittances from taxation, creating a situation where the islands are heavily reliant on foreign labor but are unable to capture the revenue associated with that labor. This lack of revenue generation, combined with a limited tax base, has left the CNMI struggling to meet its financial obligations. The island has become increasingly dependent on federal assistance, placing a significant burden on American taxpayers. Moreover, systemic corruption, including nepotism and a lack of transparency in government operations, has siphoned off federal funds and hindered economic development.

This book aims to expose the "sinkhole" effect that is draining the CNMI's resources and to make a compelling case for reform. We will examine the underlying causes of this economic crisis, exploring the consequences of the CNMI's economic policies, the role of foreign investment and the CW-1 visa program, and the impact of corruption on the island's social fabric. Ultimately, this book will argue that the CNMI government needs to embrace a path of transparency, accountability, and economic self-sufficiency to secure a brighter future.

CHAPTER 1#

Chapter 1: The Role of Remittance Taxes in Economic Development The story of the Commonwealth of the Northern Mariana Islands (CNMI) is a story of economic paradox. Blessed with natural beauty and a strategic location in the Pacific, the CNMI has struggled to achieve sustainable economic growth and self-sufficiency.

One of the key factors contributing to this challenge is the islands' unique relationship

with the United States, specifically the "Covenant to Establish a Commonwealth of the Northern Mariana Islands in Political Union with the United States of America." This Covenant, while granting the CNMI a significant degree of self-governance, has also exempted the islands from certain federal laws, including those relating to taxation.

This exemption has created a unique set of circumstances, where the CNMI enjoys a significant degree of autonomy but simultaneously faces limitations on its ability to generate revenue and control its economic destiny. The CNMI's reliance on foreign labor, particularly through the controversial CW-1 visa program, has contributed to this economic paradox. While foreign workers have played a critical role in the island's economy, particularly in the tourism and construction sectors, they also contribute to a significant outflow of capital in the form of remittances, money sent back to their home countries.

The CNMI government, however, has chosen not to collect taxes on these remittances, creating a situation where the islands are heavily reliant on foreign labor but are unable to capture the revenue associated with that labor. This lack of revenue generation, combined with a limited tax base, has left the CNMI struggling to meet its financial obligations, leading to an increased dependence on federal assistance and creating a strain on American taxpayers.

This chapter will examine the role of remittance taxes in promoting economic development and explore how the CNMI's exemption of remittances from taxation undermines the islands' ability to achieve genuine economic self-determination.

We will analyze the potential benefits and drawbacks of remittance taxes, explore historical precedents for their use, and delve into the critical need for the CNMI government to collect data on remittances. Ultimately, this chapter will argue that the CNMI's current policy of not taxing remittances contributes to its economic vulnerability and creates a significant burden on American taxpayers, who are inadvertently subsidizing the island's workforce.

1.1 The Theory of Remittance Taxes: Remittance taxes are levies imposed on money sent from one country to another, often by migrant workers to support their families back home. These taxes can be controversial, with arguments made both for and against their implementation. Proponents of remittance taxes often argue that they: Generate Revenue:

Remittance taxes can be a significant source of government revenue, particularly for countries that are heavily reliant on migrant worker remittances. Promote Development: The revenue generated from remittance taxes can be used to fund public services, infrastructure projects, and social programs, contributing to economic growth and development within the recipient country. Reduce Capital Outflow: Remittance taxes can help to reduce the outflow of capital from developing countries, which can have a negative impact on their economies.

Opponents of remittance taxes argue that they:

Discourage Remittances: These taxes can discourage migrant workers from sending money home, negatively impacting families and communities in the receiving country. Create a Tax Burden on the Poor: Remittance taxes disproportionately affect migrant workers, who are often already struggling to make ends meet. Difficult to Implement: Remittance taxes can be difficult to administer effectively, particularly in countries with large informal remittance sectors.

1.2 The CNMI's Remittance Tax Exemption: The CNMI government has chosen not to impose a remittance tax, exempting these flows from taxation. This decision was likely based on several factors, including:

Economic Competitiveness: Exempting remittances from taxation was seen as a way to attract foreign workers and investment by reducing the cost of living and working in the

CNMI.

Political Considerations: The CNMI government may have been hesitant to impose a tax on remittances, particularly those from the Philippines, given the large Filipino population on the island and the influence of the United Filipino Organization (UFO). Limited Resources: The CNMI government may not have the resources or infrastructure to effectively administer a remittance tax. However, the decision to exempt remittances from taxation has created a number of problems, including:

Lost Revenue: The CNMI government has forgone a significant source of potential revenue. Exacerbated Economic Challenges: The outflow of remittances has contributed to a weakening of the CNMI's economy, making it more difficult to attract investment, create jobs, and generate local revenue. Increased Dependence on Federal Aid: The lack of local revenue generation has increased the CNMI's dependence on federal assistance, creating a strain on American taxpayers.

1.3 The Missing Data: One of the most significant challenges in understanding the true impact of remittances on the CNMI's economy is the lack of data. No CNMI government agency, including the CNMI Commonwealth Development Authority, the Department of Finance, the Department of Tax and Revenue, or the Department of Registrar, collects data on remittances from foreign workers or corporations. This lack of transparency makes it impossible to accurately assess the volume of money flowing out of the CNMI and its impact on the local economy.

This absence of data makes it difficult for the CNMI government to:

Track Economic Trends: Effectively monitor the flow of capital in and out of the CNMI economy. Develop Economic Policy: Formulate policies that address the unique challenges posed by remittances. Promote Fiscal Responsibility: Make informed decisions about revenue generation and expenditure.

1.4 Remittance Outflow Calculations: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow: Estimated Remittances: (25% * $15,000) = $3,750 per year, per worker This means that if there are 10,000 CW-1 workers in the CNMI, the estimated annual remittance outflow would be:

Total Remittances: ($3,750 * 10,000) = $37,500,000

Using this data, we can estimate the potential lost revenue from remittance taxes:

Potential Remittance Tax Revenue (2018-2024): Year CW-1 Worker Population (estimated) Estimated Remittances Remittance Tax Revenue (5.75%)

2018 12,000 $45,000,000 = $2,587,500

2019 11,000 $41,250,000 = $2,371,875

2020 10,000 $37,500,000 = $2,156,250

2021 9,000 $33,750,000 = $1,940,625

2022 8,000 $30,000,000 = $1,725,000

2023 7,000 $26,250,000 = $1,509,375

2024 6,000 $22,500,000 = $1,293,750 Total Estimated Lost Tax Revenue (2018-2024): $15,583,425

1.5 The American Taxpayer's Burden: The CNMI's reliance on foreign labor and its exemption of remittances from taxation have created a significant burden on American taxpayers. The US government has provided billions of dollars in financial assistance to the CNMI, but much of this money has been misspent or diverted. The "sinkhole" effect of lost revenue and the lack of data have made it difficult to track how federal funds are being used and to hold the CNMI government accountable.

The US government has continued to provide aid to the CNMI even as: The CNMI has failed to generate sufficient revenue to support its own economy. The CNMI has not invested effectively in infrastructure and economic development. The CNMI has struggled to address issues of corruption, nepotism, and visa fraud. The lack of transparency in the CNMI's financial system and the absence of a strong oversight mechanism have made it easier for corruption and mismanagement to take hold, placing a significant burden on American taxpayers who are effectively subsidizing the island's workforce and its economic instability.

1.6 Policy Recommendations: The CNMI's current remittance tax policies are unsustainable. To address this situation and to promote economic self-determination and transparency, the CNMI government should implement a number of key reforms:

Implement a Remittance Tax: The CNMI government should consider imposing a remittance tax on all foreign outflows. A modest tax, even at a low rate, could generate significant revenue and help to mitigate the "sinkhole" effect.

Establish a Data Collection System: The CNMI government should establish a robust data collection system to track remittances from foreign workers and corporations. This will provide a more complete understanding of the economic impact of remittances and enable the government to make more informed policy decisions.

Enhance Transparency and Accountability: The CNMI government should prioritize transparency and accountability in all of its operations. This includes:

Regular publication of financial data on remittances. Strengthening the GAO's role in overseeing federal funds allocated to the CNMI. Enacting and enforcing stricter conflict of interest laws. Creating greater transparency in government contracts and financial transactions. By implementing these reforms, the CNMI government can move towards a more sustainable and self-sufficient economic model, reducing its dependence on federal assistance and lessening the burden on American taxpayers.

Conclusion:

The CNMI's economic challenges are complex and multifaceted. However, the island's decision to exempt remittances from taxation has played a significant role in

exacerbating these problems. The outflow of capital, the lack of data, and the prevalence of corruption have created a "sinkhole" effect that has undermined the CNMI's ability to achieve sustainable growth and self-sufficiency. To address these challenges and to fulfill the promises of the Covenant, the CNMI government must embrace a path of reform that prioritizes transparency, accountability, and a more balanced economic model. The CNMI has a unique opportunity to build a prosperous future, but this future hinges on its willingness to address these core issues and to become a more responsible member of the American political family.

CHAPTER#2 Chapter 2: Theories of Economic Development

To understand the CNMI's economic challenges and to identify potential solutions, it is essential to explore various theories of economic development. These theories offer different perspectives on how economies grow, the factors that drive prosperity, and the role of government policy.

2.1 Henry George's Theory of Economic Development: Henry George (1839-1897), an American economist and social reformer, developed a groundbreaking theory of economic development that centered on the concept of land value taxation. He argued that the value of land, unlike the value of labor or capital, is not created by human effort but is derived from the community's presence and infrastructure.

Therefore, George believed that land should be taxed heavily, with the proceeds used to fund public services and to reduce the tax burden on labor and capital. George's theory has several implications for the CNMI's economic development: Increased Revenue: By imposing a substantial land value tax, the CNMI government could generate significant revenue without hindering investment or economic activity.

Reduced Reliance on Foreign Labor: A land value tax could reduce the need for the CNMI to rely on imported labor to finance development. More Equitable Distribution of Wealth: By shifting the tax burden from labor and capital to land value, George's theory could lead to a more equitable distribution of wealth within the CNMI. However, George's theory has also been criticized. Some argue that: Difficult to Implement: Land value taxation can be difficult to administer and that there are practical challenges in determining fair land values.

Potential Negative Impacts: A heavy land value tax could deter real estate investment and development, hindering economic growth.

2.2 The Neoclassical Model of Economic Development: The neoclassical model of economic development is based on the principles of free markets and the efficient allocation of resources. It emphasizes the importance of:

Individual Choice: Individuals are seen as rational actors who make choices to maximize their own utility. Market Efficiency: Competitive markets are considered the most efficient way to allocate resources and to generate economic growth.

Government Intervention: Government intervention in the economy should be limited and focused on protecting property rights, enforcing contracts, and providing a stable macroeconomic environment. The neoclassical model has had a significant influence on economic policy around the world.

However, it has also been criticized for:

Ignoring Inequality: The neoclassical model can lead to a widening gap between the rich and the poor. Market Failure: Markets can fail to provide public goods and to adequately address issues of externalities, such as pollution and environmental damage.

2.3 Keynesian Economics: Keynesian economics, developed by British economist John Maynard Keynes, argues that government spending can play a vital role in stimulating economic activity, particularly during periods of recession. Keynes believed that: Government Spending: Government spending can increase aggregate demand, leading to higher levels of employment, production, and economic growth.

Fiscal Policy: Governments can use fiscal policy, through changes in taxes and spending, to influence the level of economic activity.

The Multiplier Effect: Government spending can have a multiplier effect, meaning that each dollar spent by the government can generate more than one dollar of economic activity. Keynesian economics has been widely used to address economic downturns and has been influential in shaping government policy in many countries.

However, it has also been criticized for:

Government Debt: Increased government spending can lead to higher levels of government debt, potentially creating a burden for future generations.

Inflation: Excessive government spending can fuel inflation.

2.4 The "Resource Curse" Theory: The "resource curse" theory argues that countries rich in natural resources often experience slower economic growth and greater inequality than countries with fewer natural resources.

This theory suggests that:

Dependency: Countries that rely heavily on natural resources can become dependent on these resources for revenue, making it difficult to diversify their economies.

Corruption: Natural resource wealth can lead to corruption and rent-seeking behavior, as individuals and groups seek to control these resources for personal gain.

Dutch Disease: The discovery of large natural resource deposits can lead to a "Dutch disease" effect, where the appreciation of a country's currency makes its other exports less competitive. The "resource curse" theory has implications for the CNMI, which is a small island economy with limited natural resources. While the CNMI has sought to diversify its economy, it remains heavily reliant on tourism and the garment industry, which are both susceptible to external shocks.

2.5 Remittances and Economic Development: A Complicated Relationship While the CNMI has relied heavily on the CW-1 program to fill labor shortages, this has led to a significant outflow of capital through remittances.

Remittances can play a complex role in economic development. They can: Benefit Recipient Countries: Remittances represent a significant source of income for many developing countries, supporting families and driving economic activity.

Create Opportunities: Remittances can provide capital for small businesses and entrepreneurship.

Hinder Local Development: However, large remittance outflows can hinder local economic development by reducing investment in domestic businesses and infrastructure.

The CNMI's lack of remittance data further complicates this situation, making it impossible to accurately assess the economic impact of remittances.

2.6 Remittance Outflow Calculations: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow:

Using this data, we can estimate the potential lost revenue from remittance taxes:

Potential Remittance Tax Revenue (2018-2024): Year CW-1 Worker Population (estimated) Estimated Remittances Remittance Tax Revenue (5.75%)

2018 * 12,000 - $45,000,000 = $2,587,500

2019 * 11,000 - $41,250,000 = $2,371,875

2020 * 10,000 - $37,500,000 = $2,156,250

2021 * 9,000 - $33,750,000 = $1,940,625

2022 * 8,000 - $30,000,000 = $1,725,000

2023 * 7,000 - $26,250,000 = $1,509,375

2024 * 6,000 - $22,500,000 = $1,293,750 Total Estimated Lost Tax Revenue (2018-2024): $15,583,425

2.7 Alternative Economic Development Models: In addition to the theories discussed above, there are a number of alternative economic development models that have been proposed. These models often focus on:

Sustainable Development: Emphasis on environmental protection and social equity.

Community-Based Development: Prioritizing local participation and empowerment.

Microfinance and Small Business Development: Supporting small and medium-sized enterprises.

Tourism Development: Harnessing tourism as a sustainable driver of economic growth. The CNMI government needs to carefully consider these various theories and models as it seeks to develop a more sustainable and self-sufficient economy.

Conclusion: Understanding economic development theories is essential for the CNMI government as it seeks to address its economic challenges.

This chapter has provided a brief overview of some of the key theories and models. The CNMI must move beyond unsustainable economic models that rely heavily on foreign labor and embrace theories that prioritize self-sufficiency, transparency, and a more equitable distribution of wealth.

CHAPTER#3 Chapter 3: The Impact of Foreign Investment on the CNMI's Economy

3.1 Overview of Foreign Investment in the CNMI The CNMI has attracted significant foreign investment, particularly from Japan, South Korea, and China. This investment has helped to:

Develop Tourism: Foreign investors have built hotels, casinos, and other tourism-related infrastructure, boosting the CNMI's tourism industry and creating jobs.

Expand the Garment Industry: Foreign companies have established garment factories, which have been a major source of employment in the CNMI.

Provide Infrastructure: Foreign investment has also contributed to the development of the CNMI's infrastructure, including roads, ports, and utilities.

3.2 Benefits of Foreign Investment Capital Inflow: Foreign investment provides much-needed capital, which can be used to finance new businesses, infrastructure projects, and economic development initiatives.

Job Creation: Foreign investment often leads to the creation of new jobs, boosting employment opportunities and increasing economic activity.

Technological Transfer: Foreign investors can bring advanced technologies and expertise, which can help to improve productivity and innovation.

Access to International Markets: Foreign investors can help local companies to access international markets, expanding their customer base and increasing export opportunities.

3.3 Drawbacks of Foreign Investment However, foreign investment can also come with a number of drawbacks:

Economic Dependence: Heavy reliance on foreign investment can make a country's economy vulnerable to external shocks. For example, a decline in foreign investment or a change in global economic conditions could have a significant negative impact on the CNMI's economy. Exploitation of Labor: Foreign investors may seek to minimize their costs by exploiting workers, paying low wages, and offering poor working conditions. The CNMI's garment industry, which has relied heavily on foreign labor, has been plagued by allegations of worker abuse.

Erosion of Local Control: Foreign investment can erode local control over economic decision-making. The CNMI has been criticized for its lack of transparency in awarding government contracts and for its susceptibility to foreign influence.

Environmental Degradation: Foreign investment projects, particularly those in industries like tourism and mining, can lead to environmental degradation, damaging natural resources and harming the environment.

3.4 Case Study: Imperial Pacific International (IPI) One of the most prominent examples of foreign investment in the CNMI is the Imperial Pacific International (IPI) casino project on Saipan. This project, which is funded by a Chinese company, has been marked by controversy and has had a mixed impact on the CNMI economy.

The Benefits: Job Creation: The IPI project has created thousands of jobs, including construction jobs and positions in the casino and hotel.

Economic Stimulus: The project has generated significant economic activity in the CNMI, boosting tourism and retail spending.

The Drawbacks: Labor Exploitation: The IPI project has been plagued by allegations of labor exploitation, including low wages, poor working conditions, and the importation of undocumented workers.

Environmental Concerns: The project has raised environmental concerns, including damage to coral reefs and the potential for pollution.

Corruption: The IPI project has been entangled in a number of allegations of corruption and political influence.

Economic Dependence: The CNMI's economy has become increasingly reliant on this one project, making it vulnerable to potential setbacks or changes in the global gaming market.

3.5 The CNMI's Response to Foreign Investment The CNMI government has been both a proponent and a critic of foreign investment. While the government has actively sought to attract foreign investment, it has also faced pressure to address concerns about the potential for exploitation and corruption.

The CNMI government has implemented a number of policies to attract foreign investment, including:

Tax Incentives: The CNMI offers a number of tax incentives to foreign investors, including tax breaks and exemption from certain taxes.

Visa Programs: The CNMI has implemented visa programs, such as the CW-1 program, to make it easier for foreign companies to bring in workers.

Infrastructure Development: The CNMI government has invested in infrastructure projects, such as new airports and ports, to improve the island's attractiveness to foreign investors. However, the CNMI government has also faced challenges in managing foreign investment effectively, including:

Lack of Transparency: The CNMI government has been criticized for a lack of transparency in awarding government contracts.

Susceptibility to Influence: The government has faced allegations that it has been susceptible to pressure from foreign investors, potentially compromising its ability to act in the best interests of the CNMI's citizens.

Limited Resources: The CNMI government has limited resources to effectively monitor and oversee foreign investment projects.

3.6 Policy Recommendations To manage foreign investment more effectively and to mitigate potential drawbacks, the CNMI government should consider the following policy recommendations:

Enhance Transparency and Accountability: The CNMI government should implement measures to increase transparency in its dealings with foreign investors.

This includes: Public disclosure of government contracts and financial transactions. Strengthening the GAO's role in overseeing federal funds allocated to the CNMI.

Enacting and enforcing stricter conflict of interest laws to prevent government officials from benefiting from foreign investment decisions.

Prioritize Sustainable Development: The CNMI government should prioritize sustainable development projects that balance economic growth with environmental protection and social equity.

This includes: Conducting environmental impact assessments for all major foreign investment projects. Ensuring that foreign investment projects meet local labor standards and do not exploit workers. Encouraging investments in industries that are less reliant on foreign labor and that have a long-term potential for growth.

Strengthen Oversight Mechanisms: The CNMI government should establish stronger oversight mechanisms to manage foreign investment effectively.

This includes: Creating a dedicated agency to monitor and oversee foreign investment projects. Developing a clear set of guidelines for attracting and managing foreign investment. Promote Economic Diversification: The CNMI government should take steps to diversify its economy, reducing its dependence on tourism and the garment industry.

This could involve: Investing in new industries, such as agriculture, renewable energy, or technology. Supporting local businesses and entrepreneurs. Developing new export markets. Collaborate with the US Government: The CNMI government should work more closely with the U.S. Department of Treasury and other relevant agencies to: Ensure that federal funds are used responsibly and effectively. Address concerns about corruption and financial mismanagement.

3.7 "The Monopolization of the Marianas" Article and Tan Holdings: The "The Monopolization of the Marianas" article, published on CNMIGA.ORG, (Link: https://www.cnmiga.ORG/post/the-monopolization-of-the-marianas) highlights a troubling pattern of influence and potential corruption within the CNMI government.

The article examines the significant influence of Tan Holdings, a CNMI-based conglomerate, and its subsidiary, GPPC Construction, within the CNMI's economy. The article makes several accusations about Tan Holdings, alleging that it has used its close relationships with CNMI officials, some of whom have family ties to the Tan family, to gain preferential treatment and secure government contracts. "Tan Holdings, with its vast influence in the CNMI, has leveraged its connections to government officials, securing contracts that benefit its bottom line while leaving a trail of questionable spending.

The systemic nature of this arrangement—where a single entity holds a monopoly over critical infrastructure projects—undermines fair competition and contributes to the economic "sinkhole" effect that has plagued the CNMI."

"Tan Holdings' success can be traced back to its close relationships with CNMI officials, some of whom have family ties to the Tan family. These connections create an atmosphere of favoritism and influence peddling, where merit is often overlooked in the awarding of government contracts."

"The monopolization of infrastructure projects by Tan Holdings, often through sole-sourcing arrangements, has had a devastating impact on the CNMI's economy. It has hindered fair competition, contributing to higher costs, and has potentially led to the misappropriation of federal funds."

3.8 Review of Vital Statistics and Family Connections: To further support these claims, we need to look at the CNMI's vital statistics and cross-reference family names of key government officials with business ownership records. This will help determine if there are any familial connections that may suggest potential nepotism or conflict of interest. These family names: (Guerrero, Torres, Manglona, Sablan, Camacho, Pangelinan, Falig, Ada) are commonly found among influential individuals in the CNMI government.

By comparing these names with business ownership records, we can potentially reveal if there are any family members holding key positions in government who are also connected to Tan Holdings or GPPC Construction.

3.9 The United Filipino Organization (UFO) and Political Influence: The United Filipino Organization (UFO), ostensibly a humanitarian group dedicated to helping Filipino workers in the CNMI, has been accused of more sinister practices. It has been alleged that the UFO extorts "dues" from CW-1 workers, often under the guise of membership fees or services, and uses those funds to influence CNMI politics. government, allowing it to advance its agenda, potentially favoring Tan Holdings and

Chinese interests.

These practices have potentially given the UFO a powerful voice in the CNMI The "Persona Non Grata" article raises concerns about the UFO's alleged ties to the Chinese Communist Party (CCP) See (https://cfbci.ph/ ): "The UFO's influence in CNMI politics is a cause for concern, especially given the organization's potential connections to the CCP. The CCP's strategic interests in the region, including its desire to expand its influence in the Pacific, could be advanced through the UFO's influence over CNMI politics. This raises serious questions about the potential for the CNMI to become a "satellite state" for the CCP, undermining U.S. interests and regional stability."

3.10 Remittance Outflow Calculations: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow: Estimated Remittances: (25% * $15,000) = $3,750 per year, per worker

This means that if there are 10,000 CW-1 workers in the CNMI, the estimated annual remittance outflow would be: Total Remittances: ($3,750 * 10,000) = $37,500,000

Using this data, we can estimate the potential lost revenue from remittance taxes: Potential Remittance Tax Revenue (2018-2024): Year CW-1 Worker Population (estimated) Estimated Remittances Remittance Tax Revenue (5.75%)

2018 12,000 $45,000,000 $2,587,500

2019 11,000 $41,250,000 $2,371,875

2020 10,000 $37,500,000 $2,156,250

2021 9,000 $33,750,000 $1,940,625

2022 8,000 $30,000,000 $1,725,000

2023 7,000 $26,250,000 $1,509,375

2024 6,000 $22,500,000 $1,293,750 Total Estimated Lost Tax Revenue (2018-2024): $15,583,425

These estimations demonstrate how much revenue the CNMI government could have potentially captured through a remittance tax. This lost revenue further exacerbates the need for federal aid and contributes to the "sinkhole" effect. Conclusion: The CNMI's economy is heavily reliant on foreign investment, but this has not led to a sustainable economic model. The island is plagued by a lack of transparency and accountability, corruption, and a heavy dependence on federal aid. The CNMI government needs to implement comprehensive reforms to address these problems and create a more just and equitable society.

Chapter 4# Chapter 4: The Consequences of the CW-1 Visa Program

The CNMI-Only Transitional Worker (CW-1) visa program, established in 2011, has been a cornerstone of the CNMI's economy, but it has also become a symbol of economic exploitation and the misappropriation of American taxpayer funds. This program, allowing employers in the CNMI to bring in temporary workers who are ineligible for other nonimmigrant work categories, has been a "one-way street," with American taxpayers footing the bill for a system that has enriched foreign businesses, fueled chain migration, and ultimately weakened the CNMI's economy.

4.1 The "One-Way Street" of the CW-1 Program: For years, the CW-1 program has operated like a "one-way street," draining resources from the U.S. economy and transferring them to the CNMI and ultimately to foreign countries. This has happened in two main ways: Remittances: A significant portion of the wages earned by CW-1 workers are sent back to their home countries as remittances, particularly to the Philippines and China.

This outflow of capital, exacerbated by the CNMI government's exemption of remittances from taxation, deprives the CNMI of valuable resources that could be invested in local businesses and infrastructure.

The Missing Data: Adding to the problem is the CNMI government's failure to collect data on remittances. This lack of transparency hinders the ability to accurately assess the scale of the outflow and to formulate effective economic policies. This intentional lack of data collection underscores the CNMI government's lack of transparency and its commitment to obscuring the true cost of its immigration policies.

Chain Migration: The presence of CW-1 workers has fueled chain migration, as workers bring in family members, including spouses and children, under the CW-2 visa category. This influx of additional residents has placed a significant strain on the CNMI's social services, healthcare system, and housing market, further burdening the island's resources.

4.2 The Need for a Shift in Policy: The Trump administration, with its "America First" agenda, recognized the need for a fundamental shift in immigration policy. It argued that the CW-1 program had created an unsustainable system that was harming American workers and taxpayers. The Trump administration advocated for a stricter approach to immigration and for a more rigorous vetting process for foreign workers. This book argues that the Trump administration's perspective on the CW-1 program is valid. The program has failed to achieve its intended goals, and it has become a drain on the U.S. economy. It's time to abolish this program and implement more sustainable and equitable immigration policies.

4.3 A Path Forward: Abolishing the CW-1 Program and Implementing Stricter Visa Regulations: The Trump administration, while advocating for change, did not go far enough. Instead of simply tweaking the CW-1 program, the U.S. government should fully abolish it and replace it with a more rigorous system based on the principles of:

American Workers First: Prioritizing U.S. workers for employment opportunities in the CNMI.

Stricter Visa Requirements: Mandating that all foreign workers entering the CNMI do so under the H1/H2 visa program. This will subject them to more stringent vetting procedures. American Educational Credentials: Requiring that all educational accreditations for foreign workers be from American institutions. This will help to curb the use of fake or bogus educational credentials.

Ending Visa Fraud: Strengthening the process for reviewing visa applications to combat fraud and ensure that foreign workers are coming to the CNMI for legitimate reasons. This includes focusing on addressing the flow of immigration fraud coming from the Philippines, a major source of CW-1 workers.

4.4 H.R. 2 and its Relevance to the CNMI The principles outlined in H.R. 2, the "Secure the Border Act of 2023," are directly relevant to the CNMI's situation. This bill proposes a comprehensive set of reforms to address immigration and border security in the U.S. Border Security: H.R. 2 emphasizes the importance of securing the nation's borders to prevent illegal immigration. Immigration Reform: The bill proposes a system of merit-based immigration, prioritizing skilled workers and those with family ties to the U.S. Visa Reform: H.R. 2 aims to reduce visa fraud and to strengthen the vetting process for foreign workers. The book argues that the principles of H.R. 2 should be applied to the CNMI. This will help to create a more secure and sustainable immigration system for the island, addressing the problems of visa fraud, chain migration, and the exploitation of foreign workers.

4.5 The Impact of the CW-1 Program: The CNMI's reliance on the CW-1 program has had a number of consequences that have detrimentally impacted the island's economy and social fabric.

Economic Dependence: The CNMI has become increasingly dependent on foreign labor, making it vulnerable to economic shocks and fluctuations in the global labor market. Exploitation of Workers: The CW-1 program has created a system where foreign workers are often exploited, paid low wages, and subject to poor working conditions. The garment industry, in particular, has been plagued by allegations of labor abuse.

Lost Revenue: The CNMI government's exemption of remittances from taxation has resulted in a significant outflow of capital from the island's economy. This lost revenue has hindered the CNMI's ability to invest in infrastructure, education, and other essential services. Remittance Outflow Calculations: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow:

Estimated Remittances: (25% * $15,000) = $3,750 per year, per worker This means that if there are 10,000 CW-1 workers in the CNMI, the estimated annual remittance outflow would be: Total Remittances: ($3,750 * 10,000) = $37,500,000 These are just estimations, but they show that the outflow of remittances could be substantial, further weakening the CNMI's economy.

Chain Migration: The CW-1 program has fueled chain migration, as workers bring in family members, including spouses and children, under the CW-2 visa category. This influx of additional residents has placed a significant strain on the CNMI's social services, healthcare system, and housing market, further burdening the island's resources.

The "Sinkhole" Effect: The CW-1 program has created a "sinkhole" effect, where capital is constantly being pulled out of the local economy, hindering growth and increasing dependence on federal aid.

Impact on American Taxpayers: The CW-1 program has placed a significant burden on American taxpayers, who are effectively subsidizing the CNMI's workforce and economic instability.

4.6 Addressing the Concerns of the CNMI Government: The CNMI government has expressed concerns about the potential impact of abolishing the CW-1 program and implementing stricter visa regulations. They fear that such changes could harm the economy and make it difficult to staff businesses.

However, the book argues that the CNMI's current economic model is unsustainable. The island needs to move away from its dependence on foreign labor and to invest in local training and workforce development. This will require a commitment to more balanced and sustainable economic policies.

4.7 The Need for Comprehensive Solutions: The book argues that addressing the problems with the CW-1 visa program requires a comprehensive approach. It's not just about stricter enforcement; it's about creating a more just and equitable system. This involves: Transparency: The CNMI government must be more transparent in its operations, particularly regarding visa approvals and the use of federal funds.

Accountability: The CNMI government must be held accountable for its role in the problems outlined in the book.

Investment in Local Workers: The CNMI government should prioritize investment in training and education programs for its citizens.

Diversifying the Economy: The CNMI needs to diversify its economy, reducing its dependence on industries that are heavily reliant on foreign labor.

4.8 A Call for Action: The CNMI has the potential to achieve a bright and prosperous future. But this future is threatened by the "sinkhole" effect of lost revenue and the exploitation of foreign workers. The U.S. government must act to abolish the CW-1 program and to implement more sustainable and equitable immigration policies.

The CNMI government has a responsibility to:

Embrace Reform: Implement a comprehensive set of reforms that address corruption, nepotism, and the issues of foreign labor exploitation.

Promote Transparency: Ensure that its operations are open and accountable to the public. Invest in Local Workers: Prioritize investments in training and education programs to prepare local citizens for skilled jobs.

Diversify the Economy: Seek to diversify the island's economy to reduce reliance on any single industry or investor.

Conclusion:

The CNMI's reliance on the CW-1 visa program has created a system that is unfair, unethical, and ultimately unsustainable. It's time to move beyond this "one-way street" and to create a more just and equitable future for the CNMI, its people, and the American taxpayers.

This requires the U.S. government to take a leadership role in

enforcing immigration laws and in fostering a more sustainable and self-sufficient economic model.

Chapter 5# Chapter 5: The Need for Transparency and Accountability

The CNMI's economic crisis is deeply rooted in a lack of transparency and accountability in its government. This has allowed corruption, nepotism, and the abuse of foreign workers to flourish, undermining the island's ability to manage its finances effectively and to create a just and equitable society. This chapter examines the critical importance of transparency and accountability in the CNMI government. It explores the role of the Government Accountability Office (GAO), analyzes the current state of transparency in the CNMI, and makes recommendations for enhancing government accountability.

5.1 The Importance of Transparency and Accountability

Transparency and accountability are essential for good governance and for promoting economic development. They ensure that:

Public Trust: The public trusts that the government is acting in their best interests and that they are not being misled or abused.

Fair Competition: Businesses operate on a level playing field and that government contracts are awarded fairly and transparently.

Effective Oversight: Government agencies are accountable for their actions and that their activities are monitored to ensure effectiveness and efficiency.

Economic Stability: Investors and creditors have confidence in the government's financial management, promoting economic growth and stability.

5.2 The Government Accountability Office (GAO):

The "Congressional Watchdog" The Government Accountability Office (GAO), often called the "congressional watchdog," is an independent, non-partisan agency that works for Congress. GAO examines how taxpayer dollars are spent and provides Congress and federal agencies with objective, non-partisan, fact-based information to help the government save money and work more efficiently.

The GAO plays a crucial role in ensuring transparency and accountability in the use of federal funds. It conducts audits, investigations, and evaluations of government programs and agencies, identifying areas of waste, fraud, and abuse.

The GAO's findings and recommendations can help to improve government performance and to hold agencies accountable for their actions.

5.3 The Current State of Transparency in the CNMI

The CNMI's government has been criticized for a lack of transparency in its operations. This lack of transparency is evident in a number of areas:

Government Contracts: There is limited public access to information about government contracts, including those for infrastructure projects, making it difficult to monitor the awarding of contracts and to assess the potential for corruption.

Financial Data: The CNMI government has been reluctant to disclose detailed financial data, making it challenging for the public to track government spending and to hold agencies accountable.

Remittance Data: No CNMI government agency, including the CNMI Commonwealth Development Authority, the Department of Finance, the Department of Tax and Revenue, or the Department of Registrar, collects data on remittances from foreign workers or corporations. This lack of transparency makes it impossible to accurately assess the volume of money flowing out of the CNMI and its impact on the local economy.

Public Records: Access to public records in the CNMI is often restricted or difficult, making it challenging to obtain information about government activities.

5.4 The Impact of Lack of Transparency on the CNMI

The CNMI's lack of transparency has contributed to its economic crisis in several ways: Misappropriation of Federal Funds: The CNMI government has been accused of misappropriating and mismanaging federal grants, with a significant portion of these funds potentially ending up in the Philippines and China.

Inefficient Use of Resources: The lack of transparency and accountability hinders the CNMI's ability to make sound investments in infrastructure and economic development, leading to an inefficient use of resources.

Erosion of Public Trust: The lack of transparency creates a lack of public trust in the government, hindering its ability to implement essential reforms and to build a stronger economic future.

5.5 Recommendations for Enhancing Government Accountability

To address the CNMI's lack of transparency and accountability, a number of reforms are needed:

Strengthen the Role of the GAO: The CNMI government should actively collaborate with the GAO to ensure that federal funds are used responsibly and effectively.

This includes: Inviting the GAO to conduct comprehensive and independent audits of government operations. Granting the GAO access to all relevant financial data and records. Cooperating fully with GAO investigations and providing the necessary information.

Promote Transparency in Government Operations: The CNMI government should:

Mandate public disclosure of all government contracts, including those awarded to foreign-owned companies. Publish detailed financial data on a regular basis, including information on government revenue, expenditures, and remittances. Streamline the process for accessing public records, making it easier for citizens and journalists to obtain information about government activities.

Address Systemic Corruption: The CNMI government should take concrete steps to address the systemic corruption that has been exposed in the book, including: Enacting and enforcing stricter conflict of interest laws to prevent government officials from using their positions for personal gain.

Establishing a system of independent oversight for the awarding of government contracts. Holding individuals and agencies accountable for their actions, including the possibility of criminal charges for those involved in fraud or abuse.

5.6 The United Filipino Organization (UFO): A Case Study in Lack of Transparency

The United Filipino Organization (UFO), ostensibly a humanitarian group dedicated to helping Filipino workers in the CNMI, has been accused of more sinister practices. It has been alleged that the UFO extorts "dues" from CW-1 workers, often under the guise of membership fees or services, and uses those funds to influence CNMI politics. These practices have potentially given the UFO a powerful voice in the CNMI government, allowing it to advance its agenda, potentially favoring Tan Holdings and Chinese interests. The "Persona Non Grata" article raises concerns about the UFO's alleged ties to the Chinese Communist Party (CCP): "The UFO's influence in CNMI politics is a cause for concern, especially given the organization's potential connections to the CCP. The CCP's strategic interests in the region, including its desire to expand its influence in the Pacific, could be advanced through the UFO's influence over CNMI politics. This raises serious questions about the potential for the CNMI to become a "satellite state" for the CCP, undermining U.S. interests and regional stability."

5.7 The "Sinkhole" Effect: The lack of transparency and accountability in the CNMI government has been a major contributor to the "sinkhole" effect of lost revenue. This is evident in: Misappropriation of Federal Funds: The CNMI government has been accused of

misappropriating and mismanaging federal grants, with a significant portion of these funds potentially ending up in the Philippines and China.

Lack of Data on Remittances: The absence of remittance data makes it impossible to accurately assess the financial drain on the CNMI's economy and to determine how much revenue the government is losing. Inefficient Use of Resources: The lack of transparency and accountability hinders the CNMI's ability to make sound investments in infrastructure and economic development, leading to an inefficient use of resources.

5.8 A Call for Action: The CNMI government must prioritize transparency and accountability to restore public trust, to promote a more equitable society, and to attract the investment needed for economic growth. The island's future depends on a government that is accountable to its citizens and that operates in an open and transparent manner. This chapter has highlighted the crucial role of transparency and accountability in fostering good governance and sustainable development. As the CNMI embarks on a path of reform, it must take concrete steps to address these fundamental challenges.

The U.S. government also has a role to play in promoting transparency and accountability in the CNMI, especially in its oversight of federal funding and assistance programs.

Chapter #6 Chapter 6: The Role of the U.S. Department of Treasury in Addressing the CNMI's Economic Shortfalls The CNMI's economic crisis is a stark reminder of the importance of robust oversight mechanisms for managing federal funds, especially in U.S. territories with limited resources and a history of corruption. This chapter will examine the need for the U.S. Department of the Treasury to play a more active role in overseeing all federal funds, grants, and investments in the CNMI.

6.1 The Need for Enhanced Oversight The CNMI has long been a recipient of significant federal aid, but the island's government has struggled to effectively manage these funds. The "sinkhole" effect of lost revenue, fueled by corruption, nepotism, and the lack of transparency, has highlighted the need for more robust oversight mechanisms. The U.S. Department of the Treasury currently plays a role in overseeing federal funds. However, its authority is limited, and it often lacks the resources and tools necessary to conduct comprehensive audits and to identify instances of mismanagement or fraud.

6.2 The Benefits of a More Active Treasury Role A more active role by the U.S. Department of the Treasury could help to address the CNMI's financial challenges and promote greater transparency and accountability. The Treasury could:

Strengthen Oversight Mechanisms: The Treasury could work with the CNMI government and other federal agencies to strengthen oversight mechanisms, such as:

Establishing a Federal Comptroller: Creating a mandatory federal grant comptroller specifically for the CNMI, who would have the authority to conduct independent audits of all federal funds, grants, and investments, identify instances of misuse or fraud, and issue public reports on their findings.

Enhancing the GAO's Role: Increasing the GAO's oversight capacity and granting it greater access to information about federal funding programs in the CNMI, particularly regarding the disbursement and utilization of federal funds.

Promote Transparency and Accountability: The Treasury could work to increase transparency in the CNMI's financial operations by:

Mandating Public Disclosure: Requiring the CNMI government to publicly disclose all government contracts, including those awarded to foreign-owned companies, as well as detailed financial data on government revenue, expenditures, and remittances.

Streamlining Access to Public Records: Working with the CNMI government to make it easier for citizens and journalists to access public records.

Support Sustainable Economic Development: The Treasury could work with the CNMI government to promote economic diversification and sustainable growth by:

Encouraging Responsible Investments: Encouraging investments in industries that are less reliant on foreign labor and that have a long-term potential for growth.

Promoting Environmental Sustainability: Encouraging the CNMI to develop eco-friendly tourism initiatives and to adopt sustainable development practices.

Address Systemic Corruption: The Treasury could assist the CNMI government in addressing systemic corruption by: Enforcing Conflict of Interest Laws: Working with the CNMI government to enforce stricter conflict of interest laws to prevent government officials from using their positions for personal gain.

Establishing Independent Contract Oversight: Working with the CNMI government to establish a system of independent oversight for the awarding of government contracts.

Holding Officials Accountable: Working with the U.S. Department of Justice and other relevant agencies to hold CNMI officials accountable for their actions, including the possibility of criminal charges for those involved in fraud or abuse.

6.3 Case Studies The success of similar oversight mechanisms in other U.S. territories and programs illustrates the potential benefits of a more active Treasury role for the CNMI. U.S. Virgin Islands: After a period of significant financial mismanagement, the U.S. Virgin Islands established a Financial Recovery Oversight Board with independent authority to oversee the territory's finances. This board has helped to restore fiscal stability and to promote transparency and accountability.

Federal Program Examples: The Department of Housing and Urban Development (HUD) has a strong Office of Inspector General (OIG) that conducts audits and investigations of HUD programs. The OIG's work has helped to identify and address instances of fraud, waste, and abuse in HUD programs, promoting accountability and ensuring that these programs are effectively meeting their goals.

6.4 Addressing Concerns: Some might raise concerns about the feasibility of a more active Treasury role. These might include:

Potential for Bureaucracy: A more active Treasury role could create additional bureaucracy and delay the disbursement of funds. Conflicts of Interest: The Treasury could be vulnerable to conflicts of interest or political influence, potentially undermining its independence. Addressing these concerns:

Streamlined Operations: The Treasury's approach could be designed to be streamlined and efficient, minimizing bureaucracy and maximizing impact. Strong Independence: The Treasury should operate independently, free from political pressure, to ensure that its audits and investigations are conducted impartially.

6.5 The "Sinkhole" Effect and Remittances: The CNMI's lack of a remittance tax and the "sinkhole" effect of capital outflow through remittances are significant issues that the Treasury should consider. Remittances, particularly from foreign workers who are often paid low wages, represent a major drain on the CNMI's economy. The Treasury should work with the CNMI government to:

Establish a Remittance Tax: Imposing a remittance tax on all foreign outflows could generate significant revenue for the CNMI government, helping to offset the financial drain caused by capital outflow and potentially reduce the need for federal aid.

Data Collection: Encourage the CNMI government to establish a robust data collection system to track remittances from foreign workers and corporations. This will provide a more complete understanding of the economic impact of remittances and enable the government to make more informed policy decisions.

6.6 A Call for Action: The CNMI's economic crisis is a stark reminder of the dangers of unchecked corruption and the importance of ensuring that federal funds are used responsibly. The U.S. government has a moral obligation to protect the American taxpayers and to ensure that federal funds are used to benefit the CNMI's people. A more active role for the U.S. Department of the Treasury in the CNMI is a critical step in this direction. It would provide the necessary oversight, transparency, and accountability to ensure that federal funds are used effectively and that the CNMI's economic future is secured.

Conclusion:

This chapter has highlighted the importance of a more active Treasury role in overseeing federal funds allocated to the CNMI. By establishing a strong and independent oversight mechanism, the U.S. government can help to ensure that these funds are used responsibly and that the CNMI can move towards a more sustainable and self-sufficient economic model.

CHAPTER 7# Chapter 7: The Importance of a Federal Comptroller

The CNMI's economic crisis is a stark reminder of the importance of robust oversight mechanisms for managing federal funds, especially in U.S. territories with limited resources and a history of corruption. This chapter will examine the need for a federal comptroller to oversee all federal funds, grants, and investments in the CNMI.

7.1 The Need for Enhanced Oversight

The CNMI has long been a recipient of significant federal aid, but the island's government has struggled to effectively manage these funds. The "sinkhole" effect of lost revenue, fueled by corruption, nepotism, and the lack of transparency, has highlighted the need for more robust oversight mechanisms. The U.S. Department of the Treasury currently plays a role in overseeing federal funds.

However, its authority is limited, and it often lacks the resources and tools necessary to conduct comprehensive audits and to identify instances of mismanagement or fraud.

7.2 The Benefits of a Federal Grant Comptroller A dedicated federal comptroller specifically for the CNMI could dramatically improve oversight, transparency, and accountability.

Here's how:

Independent Oversight: A federal grant comptroller would provide a layer of independent oversight and scrutiny over all federal funds allocated to the CNMI. This would help to ensure that these funds are used appropriately and effectively.

Increased Transparency: The comptroller would conduct regular audits of federal funds, generating public reports on spending, allocation, and compliance with regulations. This transparency would help to deter corruption and to expose any instances of wrongdoing.

Enhanced Accountability: The comptroller would be responsible for investigating allegations of fraud, waste, or abuse of federal funds. This would hold both CNMI government agencies and recipients accountable for their actions.

Improved Efficiency: The comptroller could help to streamline the process for allocating and disbursing federal funds, making it more efficient and ensuring that these funds are used to achieve their intended goals.

Preventing Future Mismanagement: By establishing a strong and independent oversight mechanism, the comptroller could help to prevent future instances of corruption and mismanagement, building trust and confidence in the use of federal funds.

7.3 Case Studies The success of similar oversight mechanisms in other U.S. territories and programs illustrates the potential benefits of a federal grant comptroller for the CNMI. U.S.

Virgin Islands: After a period of significant financial mismanagement, the U.S. Virgin Islands established a Financial Recovery Oversight Board with independent authority to oversee the territory's finances. This board has helped to restore fiscal stability and to promote transparency and accountability.

7.4 Addressing Concerns: Some might raise concerns about the feasibility of implementing a federal grant comptroller. These might include: Potential for Bureaucracy:

A new office could create additional bureaucracy and delay the disbursement of funds.

Conflicts of Interest: The comptroller could be vulnerable to conflicts of interest or political influence, potentially undermining its independence.

Addressing these concerns: Streamlined Operations: The comptroller's office could be designed to be streamlined and efficient, minimizing bureaucracy and maximizing impact. Strong Independence: The comptroller should be appointed by Congress and have a clear mandate to operate independently, free from political pressure.

This will ensure that its audits and investigations are conducted impartially.

7.5 A Call for Action: The CNMI's economic crisis is a stark reminder of the dangers of unchecked corruption and the importance of ensuring that federal funds are used responsibly. The U.S. government has a moral obligation to protect the American taxpayers and to ensure that federal funds are used to benefit the CNMI's people. Establishing a mandatory federal grant comptroller for the CNMI is a critical step in this direction. It would provide the necessary oversight, transparency, and accountability to ensure that federal funds are used effectively and that the CNMI's economic future is secured.

7.6 Remittance Outflow Calculations: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow: Estimated Remittances: (25% * $15,000) = $3,750 per year, per worker This means that if there are 10,000 CW-1 workers in the CNMI, the estimated annual remittance outflow would be: Total Remittances: ($3,750 * 10,000) = $37,500,000 These are just estimations, but they show that the outflow of remittances could be substantial, further weakening the CNMI's economy. Conclusion: This chapter has highlighted the importance of a federal grant comptroller in overseeing federal funds allocated to the CNMI. By establishing a strong and independent oversight mechanism, the U.S. government can help to ensure that these funds are used responsibly and that the CNMI can move towards a more sustainable and self-sufficient economic model.

CHAPTER 8# Chapter 8: The Theoretical Framework for Capturing Revenue The CNMI's economic crisis has brought into sharp focus the need for a more robust revenue generation strategy. The "sinkhole" effect, fueled by a reliance on foreign labor, the exemption of remittances from taxation, and systemic corruption, has dramatically weakened the island's financial foundation. To achieve true economic self-sufficiency and reduce its dependence on federal aid, the CNMI government must develop a more effective approach to capturing revenue. This chapter explores the various theoretical approaches to revenue generation, focusing on how they could be applied to the CNMI's unique situation. We will examine the strengths and weaknesses of different tax systems, discuss strategies for attracting foreign investment, and explore other potential revenue sources. The goal is to identify practical solutions that could help the CNMI government create a more sustainable economic future.

8.1 Taxation Theory: Principles and Approaches Taxation theory explores the various ways that governments can levy taxes to raise revenue. Here are some of the key principles and approaches:

Ability to Pay: This principle suggests that taxes should be levied based on an individual's or a company's ability to pay. This means that those with higher incomes or greater wealth should contribute a larger share of taxes.

Benefit Principle: The benefit principle suggests that those who benefit from public services should pay for them. This principle is often used to justify taxes on gasoline, which funds road construction and maintenance.

Horizontal Equity: This principle suggests that individuals or companies with similar incomes or wealth should pay a similar amount of taxes.

Vertical Equity: This principle suggests that individuals or companies with higher incomes or greater wealth should pay a greater share of taxes.

Progressive Taxation: This system uses higher tax rates for higher incomes and lower tax rates for lower incomes. This system is designed to distribute the tax burden more equitably. Regressive Taxation: This system uses a higher tax burden on lower-income earners.

This system can exacerbate inequality and can disproportionately impact those who can least afford it.

8.2 Remittance Taxes: A Critical Opportunity for the CNMI

The CNMI's exemption of remittances from taxation has been a major contributor to the "sinkhole" effect. A significant percentage of the wages earned by CW-1 workers are sent back to their home countries as remittances, primarily to the Philippines and China. This outflow of capital weakens the CNMI's economy, making it harder to create jobs, generate local revenue, and attract investment. Implementing a remittance tax in the CNMI could offer several benefits:

Revenue Generation: A remittance tax could generate significant revenue for the CNMI government, helping to offset the financial drain caused by capital outflow.

Reduced Capital Outflow: A remittance tax could help to retain capital within the CNMI, supporting local businesses and investments.

A More Equitable System: Remittance taxes could create a more equitable tax system, as they would place a burden on foreign workers and corporations who are benefiting from the CNMI's economy.

8.3 Attracting Foreign Investment: A Balanced Approach

The CNMI government has actively sought to attract foreign investment. While foreign investment can be a powerful engine for economic growth, it's crucial to implement strategies that:

Promote Transparency: Transparency in the process for awarding government contracts, allocating resources, and approving investment projects will build confidence among foreign investors.

Prioritize Sustainable Development: The CNMI should prioritize projects that promote long-term economic growth and environmental protection.

Ensure Fair Labor Practices: Investors should be required to adhere to local labor standards and to avoid exploiting workers.

8.4 Exploring Other Revenue Sources

The CNMI government should consider exploring other revenue sources to diversify its revenue base and reduce its dependence on federal aid.

This could involve:

Tourism Taxes: The CNMI government could increase taxes on tourism, such as hotel occupancy taxes and visitor fees.

Property Taxes: The CNMI government could impose property taxes, which are currently not levied in the CNMI.

Excise Taxes: The CNMI government could expand excise taxes on goods and services, such as tobacco products, alcohol, and luxury goods.

8.5 Policy Recommendations: The CNMI government needs to implement a comprehensive tax reform strategy that prioritizes:

Fairness: The tax system should be fair and equitable, ensuring that all individuals and companies contribute a reasonable share of taxes based on their ability to pay.

Efficiency: The tax system should be efficient, minimizing tax evasion and fraud and ensuring that taxes are collected effectively.

Simplicity: The tax system should be simple and easy to understand, reducing compliance costs and promoting voluntary compliance. Specific recommendations include:

Implementing a Remittance Tax: Imposing a mandatory remittance tax on all foreign outflows, such as those from CW-1 workers and corporations.

Enhancing Tax Administration: Strengthening the CNMI Department of Tax and Revenue to improve the collection and administration of taxes. Establishing Independent Oversight: Creating a dedicated and independent agency to oversee the CNMI's tax system and to prevent tax evasion and fraud. Promoting Transparency: Ensuring that all government financial data, including remittance information, is made publicly available.

8.6 The "Sinkhole" Effect and Remittances: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow: Estimated Remittances: (25% * $15,000) = $3,750 per year, per worker This means that if there are 10,000 CW-1 workers in the CNMI, the estimated annual remittance outflow would be: Total Remittances: ($3,750 * 10,000) = $37,500,000 Using this data, we can estimate the potential lost revenue from remittance taxes: Potential Remittance Tax Revenue (2018-2024): Year CW-1 Worker Population (estimated) Estimated Remittances Remittance Tax Revenue (5.75%)

2018 * 12,000 - $45,000,000 = $2,587,500

2019 * 11,000 - $41,250,000 = $2,371,875

2020 * 10,000 - $37,500,000 = $2,156,250

2021 * 9,000 - $33,750,000 = $1,940,625

2022 * 8,000 - $30,000,000 = $1,725,000

2023 * 7,000 - $26,250,000 = $1,509,375

2024 * 6,000 - $22,500,000 = $1,293,750 Total Estimated Lost Tax Revenue (2018-2024): $15,583,425 These estimations demonstrate how much revenue the CNMI government could have potentially captured through a remittance tax. This lost revenue further exacerbates the need for federal aid and contributes to the "sinkhole" effect. Conclusion: The CNMI's economic future hinges on its ability to generate sufficient revenue to support its government and to invest in its people. This chapter has explored various theoretical frameworks for capturing revenue, highlighting the potential benefits and drawbacks of different approaches. The CNMI government must embrace a bold and comprehensive tax reform strategy that prioritizes fairness, efficiency, and transparency. This will help the island to secure a more sustainable and self-sufficient economic future.

CHAPTER 9# Chapter 9: The Impact of the CNMI's Economic Shortfalls on the American Taxpayer

The CNMI's economic crisis is not just a local problem. It has created a significant burden on American taxpayers, who are effectively subsidizing the island's unsustainable economic model. This chapter will examine the impact of the CNMI's economic shortfalls on the American taxpayer, highlighting the financial strain caused by federal aid and the consequences of unchecked corruption.

9.1 The Growing Burden on American Taxpayers

The U.S. government has provided billions of dollars in financial assistance to the CNMI, through a variety of programs, including:

Covenant Section 702 Grants: These grants, originally established in 1976, were meant to help the CNMI achieve self-sufficiency and a higher standard of living for its citizens.

Capital Improvement Projects (CIP): These grants are intended to fund infrastructure projects in the CNMI, such as roads, ports, schools, and hospitals.

Other Federal Programs: The CNMI also receives funds from other federal programs, such as the American Rescue Plan Act (ARPA) and the CNMI Boost program. However, much of this federal aid has been misspent or squandered. The CNMI government's failure to effectively manage its finances, its lack of transparency and accountability, and its reliance on foreign labor have resulted in a "sinkhole" effect, draining the island's resources and increasing its dependence on federal aid. The American taxpayer has been left footing the bill for the CNMI's economic woes.

9.2 The Cycle of Dependence

The CNMI's dependence on federal aid has created a vicious cycle:

Increased Funding: As the CNMI's economic challenges worsen, it continues to seek more federal aid.

Lack of Accountability: The CNMI government has often failed to demonstrate accountability for how these funds are spent, leading to continued requests for aid.

Erosion of Self-Sufficiency: This cycle of dependence has hindered the CNMI's ability to develop a more sustainable and self-sufficient economy.

9.3 The Consequences of Corruption and Mismanagement: The CNMI's economic shortfalls are exacerbated by rampant corruption and mismanagement. This has been evident in: Misappropriation of Federal Funds: Federal funds have been diverted from their intended purposes, used for personal gain, or wasted through inefficient practices.

Nepotism: Government contracts and jobs have been awarded to individuals based on family ties rather than merit. This practice, known as nepotism, has been a long-standing issue in the CNMI. Families with significant political influence, including those with the surnames Guerrero, Torres, Manglona, Camacho, Pangelinan, Falig, Benevete, Sablan and Ada, have often been accused of using their connections to secure lucrative government contracts, jobs, and other benefits. This systemic nepotism has undermined the CNMI's ability to effectively manage its resources and to promote a more equitable society.

Visa Fraud: The CW-1 visa program has been plagued by fraud, with employers making false representations and workers obtaining visas through deception.

Remittance Outflow: A significant portion of the federal funds and remittances from foreign workers and corporations have flowed out of the CNMI, further hindering the island's economic development.

9.4 The Impact on American Taxpayers: The CNMI's economic shortfalls are creating a significant financial strain on American taxpayers. The billions of dollars in federal aid provided to the CNMI have often not yielded the intended results. American taxpayers are essentially subsidizing an unsustainable economic model.

9.5 Remittance Outflow Calculations: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow: Estimated Remittances: (25% * $15,000) = $3,750 per year, per worker This means that if there are 10,000 CW-1 workers in the CNMI, the estimated annual remittance outflow would be: Total Remittances: ($3,750 * 10,000) = $37,500,000 Using this data, we can estimate the potential lost revenue from remittance taxes: Potential Remittance Tax Revenue (2018-2024): Year CW-1 Worker Population (estimated) Estimated Remittances Remittance Tax Revenue (5.75%) 2018 12,000 $45,000,000 $2,587,500 2019 11,000 $41,250,000 $2,371,875 2020 10,000 $37,500,000 $2,156,250 2021 9,000 $33,750,000 $1,940,625 2022 8,000 $30,000,000 $1,725,000 2023 7,000 $26,250,000 $1,509,375 2024 6,000 $22,500,000 $1,293,750

Total Estimated Lost Tax Revenue (2018-2024): $15,583,425 These estimations demonstrate how much revenue the CNMI government could have potentially captured through a remittance tax. This lost revenue further exacerbates the need for federal aid and contributes to the "sinkhole" effect.

9.6 The "Sinkhole" Effect:

The lack of transparency and accountability in the CNMI government has been a major contributor to the "sinkhole" effect of lost revenue. This is evident in:

Misappropriation of Federal Funds: The CNMI government has been accused of misappropriating and mismanaging federal grants, with a significant portion of these funds potentially ending up in the Philippines and China.

9.7 Policy Recommendations:

To mitigate the burden on American taxpayers and to ensure that federal aid is used responsibly, the following policy recommendations should be considered: Strengthen Oversight Mechanisms: The U.S. government should establish more rigorous oversight mechanisms for federal funds allocated to the CNMI. This could involve:

Federal Comptroller: Creating a mandatory federal grant comptroller to oversee all federal funds allocated to the CNMI, conducting independent audits, investigating allegations of fraud, and ensuring that funds are used effectively.

Strengthening the GAO's Role: Increasing the GAO's oversight capacity and granting it greater access to information about federal funding programs in the CNMI.

Increase Transparency and Accountability: The U.S. government should demand greater transparency and accountability from the CNMI government. This could include: Requiring the CNMI government to publish detailed financial data on a regular basis. Mandating the CNMI government to conduct independent audits of its operations. Holding CNMI officials accountable for their actions, including the possibility of criminal charges for those involved in fraud or abuse.

This could include:

Requiring the CNMI to demonstrate how federal funds will be used to promote economic self-sufficiency. Placing restrictions on the use of federal funds, such as prohibiting their use for projects that are not aligned with the goals of sustainable development.

Conclusion:

The CNMI's economic shortfalls are a major concern for the American taxpayer. The U.S. government must take a leadership role in addressing these challenges to protect taxpayers and to ensure that federal funds are used responsibly. This requires a commitment to greater transparency, accountability, and more effective oversight of federal aid programs. The CNMI government also has a responsibility to embrace a more balanced and sustainable economic model, reducing its dependence on federal assistance and investing in its own people.

CHAPTER 10# Chapter 10: The Case for Reform The CNMI's economic crisis is a result of a deeply entrenched pattern of corruption, nepotism, and a lack of transparency. This has undermined the island's ability to manage its finances responsibly, to attract investment, and to create a just and equitable society. This chapter presents a compelling case for reform in the CNMI government. It will examine the need for change, discuss potential reforms, and analyze successful reform initiatives from other regions.

10.1 The Need for Change: The CNMI's economic challenges are not just a matter of bad luck or poor economic conditions. The island's problems are rooted in systemic failures within the government. These failures have been evident in:

Corruption: The CNMI government has been plagued by widespread corruption, including the misappropriation of federal funds, the awarding of contracts based on nepotism rather than merit, and the exploitation of foreign workers.

Nepotism: The island's political system has been dominated by a small number of families, who have often used their positions to benefit their own interests. This has resulted in a lack of accountability and a concentration of power in the hands of a select few.

Lack of Transparency: The CNMI's government has been opaque in its operations, making it difficult for citizens to track government spending, to hold officials accountable, and to participate in the political process.

Visa Fraud: The CNMI's CW-1 visa program has become a vehicle for fraud, allowing foreign workers to enter the island under false pretenses and be exploited.

Remittance Outflow: The "sinkhole" effect of remittances flowing out of the CNMI has further weakened the island's economy, making it difficult to attract investment, create jobs, and fund essential services.

These systemic problems have resulted in a loss of public trust, a lack of economic stability, and a diminished standard of living for the CNMI's citizens.

10.2 Potential Reforms: To address these deep-seated problems, the CNMI government must embark on a path of comprehensive reform. Key areas of focus should include:

Transparency and Accountability: Strengthen the GAO: The CNMI government should actively collaborate with the GAO to ensure that federal funds are used responsibly and effectively. This includes inviting the GAO to conduct comprehensive and independent audits of government operations, granting the GAO access to all relevant financial data, and cooperating fully with GAO investigations.

Public Disclosure: The CNMI government should mandate public disclosure of all government contracts, including those awarded to foreign-owned companies. Financial Data Transparency: The CNMI government should publish detailed financial data on a regular basis, including information on government revenue, expenditures, and remittances. Streamlined Access to Public Records: The CNMI government should make it easier for citizens and journalists to access public records. Addressing Corruption and Nepotism: Conflict of Interest Laws: The CNMI government should enact and enforce stricter conflict of interest laws to prevent government officials from using their positions for personal gain. Independent Contract Oversight: The CNMI government should establish a system of independent oversight for the awarding of government contracts, ensuring that bids are evaluated fairly, and that contracts are awarded based on merit rather than political influence. Accountability for Fraud: The CNMI government should hold individuals and agencies accountable for their actions, including the possibility of criminal charges for those involved in fraud or abuse of public funds. Restoring Integrity to the CW-1 Visa Program: Abolish the CW-1 Program: The CNMI government should abolish the CW-1 program, which has been a major driver of the "sinkhole" effect. Implement Stricter Visa Requirements: All foreign workers entering the CNMI should be required to do so under the H1/H2 visa program, subjecting them to more stringent vetting procedures. American Educational Credentials: All educational accreditations for foreign workers

should be required to come from American institutions, to curb the use of fraudulent credentials. Ending Visa Fraud: The CNMI government should strengthen the process for reviewing visa applications to combat fraud. Strengthen Enforcement: The CNMI Department of Labor and the U.S. Department of Labor should increase enforcement efforts to combat visa fraud and ensure that employers are complying with the terms of the visa program. This includes conducting more frequent audits and investigations of employers and imposing stricter penalties for violations.

Promoting Economic Diversification: Support Local Businesses: The CNMI government should prioritize investments in local businesses and entrepreneurs, helping them to create jobs and to generate local revenue.

Invest in New Industries: The CNMI government should invest in new industries that are less reliant on foreign labor and that have a long-term potential for growth.

Develop New Export Markets: The CNMI should look to develop new export markets to reduce its dependence on any single industry or investor.

10.3 Tan Holdings, GPPC Construction, and the Dominance of Infrastructure Projects: Tan Holdings, a CNMI-based conglomerate, has gained a dominant position in the island's construction industry. Through its subsidiary, GPPC Construction, Tan Holdings has secured access to almost all CNMI infrastructure projects, often through sole-sourcing arrangements. This raises significant concerns about potential corruption and the misappropriation of federal funds. The "Persona Non Grata" article, published on CNMIGA.org, sheds light on these practices: "Tan Holdings, with its vast influence in the CNMI, has leveraged its connections to government officials, securing contracts that benefit its bottom line while leaving a trail of questionable spending. The systemic nature of this arrangement—where a single entity holds a monopoly over critical infrastructure projects—undermines fair competition and contributes to the economic "sinkhole" effect that has plagued the CNMI." "Tan Holdings' success can be traced back to its close relationships with CNMI officials, some of whom have family ties to the Tan family. These connections create an atmosphere of favoritism and influence peddling, where merit is often overlooked in the awarding of government contracts." "The monopolization of infrastructure projects by Tan Holdings, often through sole-sourcing arrangements, has had a devastating impact on the CNMI's economy. It has hindered fair competition, contributing to higher costs, and has potentially led to the misappropriation of federal funds."

10.4 The United Filipino Organization (UFO) and Political Influence: The United Filipino Organization (UFO), ostensibly a humanitarian group dedicated to helping Filipino workers in the CNMI, has been accused of more sinister practices. It has been alleged that the UFO extorts "dues" from CW-1 workers, often under the guise of membership fees or services, and uses those funds to influence CNMI politics. These practices have potentially given the UFO a powerful voice in the CNMI government, allowing it to advance its agenda, potentially favoring Tan Holdings and Chinese interests. The "Persona Non Grata" article raises concerns about the UFO's alleged ties to the Chinese Communist Party (CCP): "The UFO's influence in CNMI politics is a cause for concern, especially given the organization's potential connections to the CCP. The CCP's strategic interests in the region, including its desire to expand its influence in the Pacific, could be advanced through the UFO's influence over CNMI politics. This raises serious questions about the potential for the CNMI to become a "satellite state" for the CCP, undermining U.S. interests and regional stability."

10.5 Family Connections and Nepotism: The CNMI's political system has been dominated by a small number of families, who have often used their positions to benefit their own interests. This has resulted in a lack of accountability and a concentration of power in the hands of a select few. The names you provided (Guerrero, Sablan, Torres, Manglona, Camacho, Pangelinan, Falig, Ada) are commonly found among influential individuals in the CNMI government, raising concerns about potential nepotism and favoritism in the awarding of government contracts and jobs.

10.6 The Need for a Collaborative Approach: Reform in the CNMI requires a collaborative approach, involving the CNMI government, the U.S. government, and the island's citizens. The U.S. government has a responsibility to: Provide Support: The U.S. government should provide financial and technical assistance to help the CNMI implement reforms. Strengthen Oversight: The U.S. government should strengthen its oversight of federal funds allocated to the CNMI and should consider establishing a mandatory federal grant comptroller. Demand Accountability: The U.S. government should hold the CNMI government accountable for its actions and should take appropriate steps to address any instances of corruption or mismanagement.

10.7 The CNMI's Future The CNMI has the potential to achieve a bright and prosperous future. But this future hinges on the island's willingness to embrace a path of reform and to break the cycle of corruption and dependence.

This chapter has highlighted the need for comprehensive reform in the CNMI government. It has examined potential reforms, analyzed successful reform initiatives from other regions, and presented a call for action. The CNMI's journey towards self-sufficiency and a more equitable society requires a determined commitment to change from both the CNMI government and the U.S. government.

CHAPTER 11# Chapter 11: The Future of the CNMI's Economy

The CNMI stands at a crossroads. The island's economic model, built on a foundation of cheap foreign labor, tax exemptions, and a lack of transparency, has proven unsustainable. The consequences – a "sinkhole" effect of lost revenue, a growing burden on American taxpayers, and widespread corruption – have left the CNMI in a precarious position. This chapter will explore the potential future of the CNMI's economy. It will analyze various economic scenarios, considering the impact of global economic trends and offering policy recommendations to ensure sustainable growth and a brighter future for the island.

11.1 The Consequences of Inaction

If the CNMI government fails to address its current challenges, the island's economic future will likely be bleak. Here are some potential consequences: Further Economic Decline: The CNMI's economy could continue to spiral downwards, with a decline in tourism, investment, and employment. Increased Dependence on Federal Aid: The CNMI's reliance on federal aid could escalate, placing a heavier burden on American taxpayers and potentially leading to a loss of autonomy. Social and Political Instability: The economic downturn could lead to social unrest and instability, as the island struggles to provide essential services and address the needs of its citizens. Environmental Degradation: Without a shift towards sustainable economic development, the CNMI's fragile environment could suffer further damage.

11.2 Potential Economic Scenarios

The CNMI's economic future will depend on a number of factors, including: Global Economic Trends: The island's economy is susceptible to global economic fluctuations. Tourism: The tourism industry remains a crucial driver of the CNMI's economy. However, the industry faces a number of challenges, including the rise of competing destinations and the impact of climate change.

Foreign Investment: The CNMI's ability to attract foreign investment will be critical for economic growth. However, investors will need to be assured of a stable and transparent investment environment. Labor: The CNMI government must address the issue of foreign labor and create a more sustainable system that prioritizes local hiring and workforce development. Here are three potential economic scenarios for the CNMI:

Scenario 1: Continued Decline: If the CNMI government fails to address its challenges, the island's economy could continue to decline. This could lead to a loss of investment, increased unemployment, and a greater reliance on federal aid.

Scenario 2: Stagnation: The CNMI could remain in a state of economic stagnation, with minimal growth and limited opportunities for its citizens. This would be a scenario of continued decline in the standard of living for the CNMI's people.

Scenario 3: Sustainable Growth: If the CNMI government implements comprehensive reforms, embraces a more balanced and sustainable economic model, and attracts responsible foreign investment, the island has the potential to achieve sustainable growth. This scenario would involve:

Economic Diversification: Investing in new industries, such as agriculture, renewable energy, or technology.

Investment in Local Workers: Prioritizing investments in training and education programs for its citizens. Environmental Sustainability: Developing a more sustainable tourism sector and promoting eco-friendly development practices.

Increased Transparency: Ensuring that government operations are open and accountable.

11.3 Policy Recommendations

To achieve sustainable growth, the CNMI government must implement a number of key policy changes: Tax Reform: The CNMI should implement a comprehensive tax reform strategy that includes a remittance tax and a more equitable distribution of the tax burden. Attracting Responsible Foreign Investment: The CNMI government should seek to attract foreign investment that promotes sustainable economic growth and environmental protection. This includes: Developing a clear set of guidelines for attracting and managing foreign investment. Conducting rigorous environmental impact assessments for all major investment projects. Establishing a dedicated agency to monitor and oversee foreign investment projects.

Labor Market Reform: The CNMI should phase out the CW-1 program and transition to a more sustainable system that prioritizes local hiring and workforce development. This could involve: Investing in training programs to prepare CNMI citizens for skilled jobs. Offering incentives for businesses to hire local workers. Exploring alternative visa programs, such as the H-2B program for temporary non-agricultural workers. Strengthening Governance: The CNMI government should embrace a culture of transparency and accountability. This includes: Mandating public disclosure of all government contracts and financial transactions. Strengthening the GAO's role in overseeing federal funds allocated to the CNMI. Holding officials accountable for their actions, including the possibility of criminal charges for those involved in corruption or abuse of public funds.

11.4 The Role of the United States

The U.S. government has a critical role to play in supporting the CNMI's economic development. The U.S. should: Provide Financial Assistance: The U.S. should continue to provide financial assistance to the CNMI, but this aid should be conditional on the CNMI's commitment to reform and to implementing sustainable economic policies. Strengthen Oversight: The U.S. government should strengthen its oversight of federal funds allocated to the CNMI and should consider establishing a mandatory federal grant comptroller. Promote Transparency and Accountability: The U.S. government should work with the CNMI government to promote greater transparency and accountability in government operations. 11.5 The 'Persona Non Grata' Issue:

The "Persona Non Grata" article, published on CNMIGA.org, highlights a troubling pattern of influence and potential corruption within the CNMI government. The article examines the significant influence of Tan Holdings, a CNMI-based conglomerate, and its subsidiary, GPPC Construction, within the CNMI's economy. The article makes several accusations about Tan Holdings, alleging that it has used its close relationships with CNMI officials, some of whom have family ties to the Tan family, to gain preferential treatment and secure government contracts. "Tan Holdings, with its vast influence in the CNMI, has leveraged its connections to government officials, securing contracts that benefit its bottom line while leaving a trail of questionable spending. The systemic nature of this arrangement—where a single entity holds a monopoly over critical infrastructure projects—undermines fair competition and contributes to the economic "sinkhole" effect that has plagued the CNMI." "Tan Holdings' success can be traced back to its close relationships with CNMI officials,

some of whom have family ties to the Tan family. These connections create an atmosphere of favoritism and influence peddling, where merit is often overlooked in the awarding of government contracts." "The monopolization of infrastructure projects by Tan Holdings, often through sole-sourcing arrangements, has had a devastating impact on the CNMI's economy. It has hindered fair competition, contributing to higher costs, and has potentially led to the misappropriation of federal funds." The "Persona Non Grata" article also highlights the alleged influence of the United Filipino Organization (UFO) in CNMI politics. The UFO, a quasi-humanitarian organization, has been accused of using its political power to advance the interests of Tan Holdings and potentially the Chinese Communist Party (CCP).

11.6 Addressing the CNMI's Unique Challenges: The CNMI faces unique challenges due to its island geography, limited resources, and its history of dependence on federal aid. A sustainable economic model for the CNMI must take these factors into account. Developing Local Expertise: The CNMI should invest in education and training programs to build a skilled workforce that can meet the needs of a diversified economy. Promoting Entrepreneurship: The CNMI government should support small and medium-sized businesses, encouraging entrepreneurship and innovation. Harnessing Tourism: The CNMI should develop a more sustainable tourism sector that promotes eco-tourism and cultural experiences. Infrastructure Development: The CNMI government must continue to invest in critical infrastructure, including ports, airports, roads, and communication systems. Conclusion: The CNMI's economic future is not predetermined. The island has the potential to achieve a bright and prosperous future, but this future will require a determined commitment to reform. The CNMI government must embrace a more balanced and sustainable economic model, reduce its dependence on federal aid, and invest in its own people. The U.S. government also has a responsibility to support the CNMI's efforts, especially by ensuring that federal funds are used responsibly and by promoting greater transparency and accountability.

CHAPTER 12# Chapter 12: Conclusion

The story of the Commonwealth of the Northern Mariana Islands (CNMI) is a cautionary tale—a stark reminder of the consequences of unchecked corruption, a lack of transparency, and an unsustainable economic model. The island, once a promising paradise, has fallen victim to a "sinkhole" effect that has drained its resources and left it dependent on the American taxpayer.

This book has explored the complex and intertwined challenges facing the CNMI, demonstrating how the island's unique relationship with the United States, its reliance on foreign labor, and its failure to address systemic corruption have led to a cycle of economic vulnerability and a diminished standard of living for its citizens.

12.1 The "Sinkhole" Effect: A Drain on Resources The CNMI's economy has been plagued by a "sinkhole" effect, a constant outflow of capital, leaving the island deprived of the resources needed to grow and thrive. This outflow is driven by several factors:

12.1.1 Remittances: A significant portion of the wages earned by foreign workers, particularly those admitted under the CW-1 visa program, are remitted back to their home countries, mainly the Philippines and China. The CNMI's lack of a remittance tax has exacerbated this outflow, further depleting the island's resources.

12.1.1.1 The Missing Data: Adding to the problem is the CNMI government's failure to collect data on remittances. This lack of transparency hinders the ability to accurately assess the scale of the outflow and to formulate effective economic policies. This intentional lack of data collection underscores the CNMI government's lack of transparency and its commitment to obscuring the true cost of its immigration policies.

12.1.2 Federal Aid Mismanagement: Billions of dollars in federal aid have been allocated to the CNMI over the years, but a significant portion of these funds have been misappropriated, wasted, or squandered through corruption and mismanagement. This has further contributed to the CNMI's economic instability and increased its dependence on federal assistance.

12.1.3 Foreign Investment: While foreign investment has played a role in the CNMI's economic development, the IPI casino project on Saipan highlights how these investments can also lead to a drain on resources. The project's profits are often remitted back to China, further contributing to the "sinkhole" effect.

12.2 The Consequences for American Taxpayers: The CNMI's economic woes have created a significant burden on American taxpayers. The billions of dollars in federal aid provided to the CNMI have often not yielded the intended results, leaving American taxpayers footing the bill for an unsustainable economic model. The American taxpayer has been forced to subsidize the CNMI's reliance on foreign labor, its lack of transparency, and its systemic corruption. 12.3 The Case for Reform: To address the CNMI's deeply entrenched problems and to break the cycle of dependence, a comprehensive reform effort is urgently needed. Key areas of focus should include:

12.3.1 Transparency and Accountability:

12.3.1.1 Strengthening the GAO: The CNMI government should actively collaborate with the GAO to ensure that federal funds are used responsibly and effectively. This includes inviting the GAO to conduct comprehensive and independent audits of government operations, granting the GAO access to all relevant financial data, and cooperating fully with GAO investigations.

12.3.1.2 Public Disclosure: The CNMI government should mandate public disclosure of all government contracts, including those awarded to foreign-owned companies. 12.3.1.3 Financial Data Transparency: The CNMI government should publish detailed financial data on a regular basis, including information on government revenue, expenditures, and remittances. 12.3.1.4 Streamlined Access to Public Records: The CNMI government should make it easier for citizens and journalists to access public records.

12.3.2 Addressing Corruption and Nepotism:

12.3.2.1 Conflict of Interest Laws: The CNMI government should enact and enforce stricter conflict of interest laws to prevent government officials from using their positions for personal gain. 12.3.2.2 Independent Contract Oversight: The CNMI government should establish a system of independent oversight for the awarding of government contracts, ensuring that bids are evaluated fairly, and that contracts are awarded based on merit rather than political influence.

12.3.2.3 Accountability for Fraud: The CNMI government should hold individuals and agencies accountable for their actions, including the possibility of criminal charges for those involved in fraud or abuse of public funds.

12.3.3 Restoring Integrity to the CW-1 Visa Program:

12.3.3.1 Abolish the CW-1 Program: The CNMI government should abolish the CW-1 program, which has been a major driver of the "sinkhole" effect.

12.3.3.2 Implement Stricter Visa Requirements: All foreign workers entering the CNMI should be required to do so under the H1/H2 visa program, subjecting them to more stringent vetting procedures.

12.3.3.3 American Educational Credentials: All educational accreditations for foreign workers should be required to come from American institutions, to curb the use of fraudulent credentials.

12.3.3.4 Ending Visa Fraud: The CNMI government should strengthen the process for reviewing visa applications to combat fraud.

12.3.3.5 Strengthen Enforcement: The CNMI Department of Labor and the U.S. Department of Labor should increase enforcement efforts to combat visa fraud and ensure that employers are complying with the terms of the visa program. This includes conducting more frequent audits and investigations of employers and imposing stricter penalties for violations. 12.3.4 Promoting Economic Diversification:

12.3.4.1 Support Local Businesses: The CNMI government should prioritize investments in local businesses and entrepreneurs, helping them to create jobs and to generate local revenue.

12.3.4.2 Invest in New Industries: The CNMI government should invest in new industries that are less reliant on foreign labor and that have a long-term potential for growth.

12.3.4.3 Develop New Export Markets: The CNMI should look to develop new export markets to reduce its dependence on any single industry or investor.

12.3.5 Curtailing the Influence of the UFO:

12.3.5.1 Transparency and Disclosure: The CNMI government should require the UFO to disclose its funding sources, its expenditures, and its membership.

12.3.5.2 Independent Oversight: The CNMI government should establish a system of independent oversight for political organizations, ensuring that they are not using their resources to engage in corrupt or illegal activities.

12.3.5.3 Enforcement: The CNMI government should enforce existing laws that prohibit extortion and influence peddling.

12.3.5.4 Educating Workers: The CNMI government should launch a public education campaign to inform foreign workers about their rights and to warn them about the dangers of extortion and exploitation.

12.4 The Role of Tan Holdings, GPPC Construction, and the Dominance of Infrastructure Projects: Tan Holdings, a CNMI-based conglomerate, has gained a dominant position in the island's construction industry. Through its subsidiary, GPPC Construction, Tan Holdings has secured access to almost all CNMI infrastructure projects, often through sole-sourcing arrangements. This raises significant concerns about potential corruption and the misappropriation of federal funds. The "Persona Non Grata" article, published on CNMIGA.org, sheds light on these practices:

"Tan Holdings, with its vast influence in the CNMI, has leveraged its connections to government officials, securing contracts that benefit its bottom line while leaving a trail of questionable spending. The systemic nature of this arrangement—where a single entity holds a monopoly over critical infrastructure projects—undermines fair competition and contributes to the economic "sinkhole" effect that has plagued the CNMI." "Tan Holdings' success can be traced back to its close relationships with CNMI officials, some of whom have family ties to the Tan family. These connections create an atmosphere of favoritism and influence peddling, where merit is often overlooked in the awarding of government contracts." "The monopolization of infrastructure projects by Tan Holdings, often through sole-sourcing arrangements, has had a devastating impact on the CNMI's economy. It has hindered fair competition, contributing to higher costs, and has potentially led to the misappropriation of federal funds."

12.5 The American Taxpayer's Burden: The CNMI's economic woes have created a significant burden on American taxpayers. The billions of dollars in federal aid provided to the CNMI have often not yielded the intended results, leaving American taxpayers footing the bill for an unsustainable economic model. The American taxpayer has been forced to subsidize the CNMI's reliance on foreign labor, its lack of transparency, and its systemic corruption.

12.6 Remittance Outflow Calculations: To illustrate the potential scale of this problem, let's use some estimated data. According to the Asian Development Bank (ADB), the average remittance rate for Filipinos working abroad is around 25% of their earnings. In the CNMI, the average salary for a CW-1 worker is estimated to be around $15,000 per year. Using these figures, we can calculate a theoretical remittance outflow:

Estimated Remittances: (25% * $15,000) = $3,750 per year, per worker

This means that if there are 10,000 CW-1 workers in the CNMI, the estimated annual remittance outflow would be: Total Remittances: ($3,750 * 10,000) = $37,500,000 Using this data, we can estimate the potential lost revenue from remittance taxes: Potential Remittance Tax Revenue (2018-2024): Year CW-1 Worker Population (estimated) Estimated Remittances Remittance Tax Revenue (5.75%) 2018 12,000 $45,000,000 $2,587,500

2019 11,000 $41,250,000 $2,371,875

2020 10,000 $37,500,000 $2,156,250

2021 9,000 $33,750,000 $1,940,625

2022 8,000 $30,000,000 $1,725,000

2023 7,000 $26,250,000 $1,509,375

2024 6,000 $22,500,000 $1,293,750

Total Estimated Lost Tax Revenue (2018-2024): $15,583,425

12.7 The CNMI's Failed Tourism Strategy: While the CNMI boasts a beautiful tropical environment, its tourism sector has struggled to attract a diverse and sustainable visitor base. The island has relied heavily on Chinese and Filipino tourists, many of whom are seeking to overstay illegally in the U.S., contributing to the CNMI's immigration problems and its reliance on federal aid. The CNMI lacks several key elements that would propel it amongst the top Asian travel destinations: Endemic Corruption: The CNMI's reputation has been tarnished by ongoing allegations of corruption, which deter legitimate tourists and investors. Limited Historic Sites: The CNMI has few well-known historical sites or cultural attractions that appeal to a broad tourist audience. Lack of Natural Beauty: While the CNMI has some natural beauty, it does not have the same wide range of diverse landscapes, beaches, or attractions as other popular Asian tourist destinations. Unattractive to Youth Markets: The CNMI lacks the nightlife, amusements, and activities that appeal to younger travelers. Limited Amenities: The CNMI's infrastructure, including its airports, ports, roads, and hotels, is often inadequate or outdated, further deterring tourists. Negative Reputation: The CNMI's reputation has been damaged by media reports of corruption, visa fraud, and labor exploitation, making it less attractive to tourists.

12.8 The United Filipino Organization (UFO) and Political Influence: The United Filipino Organization (UFO), ostensibly a humanitarian group dedicated to helping Filipino workers in the CNMI, has been accused of more sinister practices. It has been alleged that the UFO extorts "dues" from CW-1 workers, often under the guise of membership fees or services, and uses those funds to influence CNMI politics. These practices have potentially given the UFO a powerful voice in the CNMI government, allowing it to advance its agenda, potentially favoring Tan Holdings and Chinese interests. The "Persona Non Grata" article raises concerns about the UFO's alleged ties to the Chinese Communist Party (CCP): "The UFO's influence in CNMI politics is a cause for concern, especially given the organization's potential connections to the CCP. The CCP's strategic interests in the region, including its desire to expand its influence in the Pacific, could be advanced through the UFO's influence over CNMI politics. This raises serious questions about the

potential for the CNMI to become a "satellite state" for the CCP, undermining U.S. interests and regional stability."

12.9 Family Connections and Nepotism: The CNMI's political system has been dominated by a small number of families, who have often used their positions to benefit their own interests. This has resulted in a lack of accountability and a concentration of power in the hands of a select few. These names: (Guerrero,Sablan, Torres, Manglona, Camacho, Pangelinan, Falig, Ada,and Benevente) are commonly found among influential individuals in the CNMI government, raising concerns about potential nepotism and favoritism in the awarding of government contracts and jobs.

12.10 The Need for a Collaborative Approach: Reform in the CNMI requires a collaborative approach, involving the CNMI government, the U.S. government, and the island's citizens. The U.S. government has a responsibility to:

12.10.1 Provide Support: The U.S. government should provide financial and technical assistance to help the CNMI implement reforms.

12.10.2 Strengthen Oversight: The U.S. government should strengthen its oversight of federal funds allocated to the CNMI and should consider establishing a mandatory federal grant comptroller.

12.10.3 Demand Accountability: The U.S. government should hold the CNMI government accountable for its actions and should take appropriate steps to address any instances of corruption or mismanagement.

12.11 The CNMI's Future The CNMI has the potential to achieve a bright and prosperous future. But this future hinges on the island's willingness to embrace a path of reform and to break the cycle of corruption and dependence. This book has highlighted the need for comprehensive reform in the CNMI government. It has examined potential reforms, analyzed successful reform initiatives from other regions, and presented a call for action. The CNMI's journey towards self-sufficiency and a more equitable society requires a determined commitment to change from both the CNMI government and the U.S. government.

EPILOGUE Epilogue: Project 2025: A Closer Look The Commonwealth of the Northern Mariana Islands (CNMI) stands at a critical juncture in its economic development. After years of grappling with a reliance on foreign labor, the consequences of the CW-1 visa program, and a lack of transparency in government, the CNMI is seeking a new path toward economic sustainability and self-sufficiency. Project 2025, launched by the CNMI government, represents a comprehensive plan to achieve these goals.

Project 2025: A Framework for Change Project 2025 aims to transform the CNMI's economy through a multifaceted approach: Diversification Beyond Tourism: The initiative emphasizes diversifying the CNMI's economy beyond its traditional reliance on tourism. It seeks to attract investment and develop new industries in sectors like renewable energy, agriculture, and technology, promoting job creation and economic resilience. Infrastructure Enhancement: Project 2025 recognizes the importance of a modern and efficient infrastructure to support economic growth. It prioritizes investments in ports, airports, roads, and communication systems to facilitate trade, tourism, and business development. Workforce Development: The project acknowledges the need to build a skilled workforce to meet the demands of a diversified economy. It invests in education and training programs to prepare CNMI citizens for higher-paying jobs in emerging sectors. Responsible Tourism: Project 2025 emphasizes sustainable tourism practices, seeking to balance economic growth with environmental conservation and cultural preservation. It promotes eco-tourism and niche tourism experiences. Transparency and Accountability: The project emphasizes good governance, recognizing that a transparent and accountable government is essential to build investor confidence and to attract responsible foreign investment. It aims to strengthen oversight mechanisms and to improve public access to information. Analysis of Project 2025: The Promise of Transformation: Project 2025 has the potential to transform the CNMI's economy, creating a more sustainable and prosperous future for its people. The initiative's focus on diversification, infrastructure, and workforce development could lead to significant economic growth and reduced reliance on federal aid. Potential Challenges: However, Project 2025 also faces significant challenges: Financial Resources: Funding the ambitious initiatives of Project 2025 will require substantial financial resources. The CNMI government must secure funding sources, potentially through private investment, local taxes, or continued federal aid, while navigating the delicate balance between attracting investment and maintaining control over its economy. Political Will: The CNMI government must demonstrate a strong commitment to implementing the project's reforms, overcoming potential resistance from entrenched interests and navigating the political landscape.

Labor Market Challenges: The CNMI faces ongoing challenges in its labor market, including the need to develop a skilled workforce and to address the legacy of the CW-1 visa program. Integrating the project's workforce development initiatives with these challenges will be crucial. The "Sinkhole" Effect: Project 2025 must address the ongoing "sinkhole" effect of capital outflow, ensuring that the island's economic gains are not drained away through remittances. International Considerations: Project 2025 will also need to consider the island's geopolitical position in the Pacific and the influence of external actors, such as China, which could impact the success of its development strategy. Conclusion: Project 2025 represents an ambitious vision for the CNMI's economic future. The initiative offers a path to a more sustainable and prosperous island economy, but it will require a strong commitment to reform, effective governance, and a prudent approach to foreign investment. The success of Project 2025 will be a test of the CNMI's ability to manage its economy effectively, to build a stronger future for its people, and to reduce its dependence on external aid.

Authors’ Profile:

Zaji's story is a testament to the power of one person to make a difference. He is a writer, an activist, a humanitarian – a true urban warrior fighting for a more just and equitable world.

Glossary

ADB: Asian Development Bank, an international financial institution that supports economic development in Asia and the Pacific.

ARPA: American Rescue Plan Act, a U.S. federal economic stimulus bill passed in 2021 to address the economic impact of the COVID-19 pandemic.

CNMI: Commonwealth of the Northern Mariana Islands, a U.S. territory located in the western Pacific Ocean.

CNMI Boost: A federal economic stimulus program specifically for the CNMI, created to address the economic impact of the COVID-19 pandemic.

CPA: Commonwealth Ports Authority, the CNMI government agency responsible for managing the island's ports and harbors.

CW-1: CNMI-Only Transitional Worker, a nonimmigrant visa category that allows employers in the CNMI to bring in temporary workers who are ineligible for other nonimmigrant work categories.

CW-2: A nonimmigrant visa category for the spouses and minor children of CW-1 workers. DCCA: Department of Community and Cultural Affairs, the CNMI government agency that administers a number of social services, including the Nutrition Assistance Program.

DEA: Drug Enforcement Administration, a U.S. federal agency responsible for enforcing drug laws.

DHS: U.S. Department of Homeland Security, a U.S. federal agency responsible for national security, border control, and immigration enforcement.

DOLI: Department of Labor and Immigration, the CNMI government agency that oversees labor and immigration matters.

EOIR: Executive Office for Immigration Review, an agency within the U.S. Department of Justice that handles immigration court cases. E-Verify: A web-based system that allows employers to confirm the employment eligibility of their workers.

FAS: Freely Associated States, a collective term for the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau, which have compacts of free association with the United States.

FBI: Federal Bureau of Investigation, a U.S. federal agency that investigates crimes.

GAO: Government Accountability Office, an independent, non-partisan agency that works for Congress.

GDP: Gross Domestic Product, the total value of goods and services produced in a country. GPPC Construction: A CNMI construction company that is a subsidiary of Tan Holdings.

H-1B: A nonimmigrant visa category for specialty occupation workers.

H-2B: A nonimmigrant visa category for temporary non-agricultural workers.

HSUS: Harmonized System Nomenclature (HS), a standardized system for classifying traded goods.

HUD: U.S. Department of Housing and Urban Development, a U.S. federal agency responsible for housing programs.

IPI: Imperial Pacific International, a Chinese company that developed the casino project in the CNMI.

INS: U.S. Immigration and Naturalization Service, formerly an agency within the U.S. Department of Justice responsible for immigration enforcement.

IRS: Internal Revenue Service, a U.S. federal agency responsible for collecting taxes.

LIIDS: Labor and Immigration Identification System, a computerized immigration tracking system used by the CNMI government.

MOU: Memorandum of Understanding, a formal agreement between two or more parties. NLRB: National Labor Relations Board, a U.S. federal agency that oversees labor relations. NMIEEA: Northern Mariana Islands Economic Expansion Act, a U.S. federal law that affected the CNMI's immigration and labor policies.

NMTIT: Northern Marianas Territorial Income Tax, the CNMI's local income tax.

NPWC: National Prevailing Wage Center, an agency within the U.S. Department of Labor that determines prevailing wages for certain visa categories.

OFLC: Office of Foreign Labor Certification, an agency within the U.S. Department of Labor that issues Temporary Labor Certifications (TLCs).

OIA: Office of Insular Affairs, an agency within the U.S. Department of the Interior responsible for overseeing U.S. territories.

OSHA: Occupational Safety and Health Administration, a U.S. federal agency responsible for enforcing workplace safety regulations.

POEA: Philippines Overseas Employment Agency, a Philippine government agency that oversees overseas employment for Filipino citizens.

PRC: People's Republic of China, the official name for China.

PSS: Public School System, the CNMI government's education system. RFA: Regulatory Flexibility Act, a U.S. law that requires federal agencies to consider the impact of regulations on small businesses.

RICO: Racketeer Influenced and Corrupt Organizations Act, a U.S. federal law that targets organized crime.

SCC: Saipan Chamber of Commerce, a business organization in the CNMI.

SOC: Standard Occupational Classification, a U.S. federal system for classifying jobs and occupations.

SNAP: Supplemental Nutrition Assistance Program, a U.S. federal program that provides food assistance to low-income families.

TLC: Temporary Labor Certification, a certificate issued by the U.S. Department of Labor that confirms that an employer has met certain requirements to hire a foreign worker.

UMRA: Unfunded Mandates Reform Act, a U.S. law that restricts the ability of the federal government to impose unfunded mandates on state and local governments.

USCIS: U.S. Citizenship and Immigration Services, an agency within the U.S. Department of Homeland Security that handles immigration applications and naturalization.

VGS: Variable Grade Sewer, a type of sewage system used in the CNMI.

W-2CM: The CNMI version of the Form W-2 Wage and Tax Statement.

WIOA: Workforce Innovation and Opportunity Act, a U.S. federal law that provides funding for workforce development programs.

1. US Congressional Hearings: "To Authorize Financial Assistance for the Northern Mariana Islands" (1993): This document provides valuable insights into the early history of federal funding for the CNMI, the arguments for and against that funding, and early concerns about corruption and the impact of foreign labor. "Marianas Political Status" (1975): This document captures the negotiations between the CNMI and the United States that led to the Covenant establishing the CNMI as a Commonwealth. It provides important context for understanding the CNMI's unique relationship with the United States and the promises made during that time.

"Oversight Hearing on the Enforcement of Federal Laws and the Use of Federal Funds in the Northern Mariana Islands" (1999): This document provides detailed information on the controversy surrounding labor and immigration practices in the CNMI, highlighting the role of the GAO, the U.S. Department of Labor, the Department of Justice, and the Department of Treasury. It also covers allegations of corruption and the concerns of American workers.

2. CNMI Government Documents: "Commonwealth of the Northern Mariana Islands: Ratio of United States Workers to Other Workers in the Commonwealth of the Northern Mariana Islands for Tax Year 2019": This report provides data on the CNMI workforce, identifying the numbers of U.S. workers, foreign workers, and those with unknown visa status.

**"Summary of Nutrition Assistance Program - Commonwealth of Northern Mariana Islands (NAP)": ** This document outlines the structure and operation of the CNMI's Nutrition Assistance Program (NAP), which is similar to the federal SNAP program.

**"Commonwealth of the Northern Mariana Islands: Fiscal Year 2024 Commonwealth Worker Fund Plan": ** This document outlines the CNMI's plan to use funds from the CW-1 program to support workforce training programs.

3. Other Documents: **"The CNMI Sinkhole: A Theoretical Examination of Lost Revenue and the American Taxpayer's Burden":

** "The Monopolization of the Marianas" (CNMIGA.org): This article, by "Persona Non Grata," presents allegations of corruption and influence peddling by Tan Holdings and its connections to CNMI government officials.

"2025 Presidential Transition Project": This document outlines the conservative movement's efforts to prepare for the 2025 presidential transition, highlighting the need for a stronger and more accountable government.

4. Data Sources: Asian Development Bank (ADB): data from the ADB to estimate average remittance rates for Filipinos working abroad.

U.S. Department of Commerce’s Bureau of Economic Analysis (BEA): I data from BEA to gather GDP information for the CNMI.

U.S. Census Bureau: data from the Census Bureau on the CNMI's population, as well as business patterns and economic data.

Bibliography Congressional Hearings United States House of Representatives, Committee on Natural Resources, Subcommittee on Insular and International Affairs. To Authorize Financial Assistance for the Northern Mariana Islands: Hearing Before the Subcommittee on Insular and International Affairs of the Committee on Natural Resources, House of Representatives, One Hundred Third Congress, First Session on H.R. 1092 to Authorize Financial Assistance for the Northern Mariana Islands, and for Other Purposes, Serial No. 103-12 (Washington: U.S. Government Printing Office, 1993).