Introduction:
The Commonwealth of the Northern Mariana Islands (CNMI), a remote U.S. territory in the Western Pacific, presents a unique case study in the complexities of federal funding and its potential for both progress and peril. For decades, the CNMI has relied heavily on various forms of financial assistance from the United States government. While intended to support essential services, infrastructure, and economic development, a pattern of alleged misuse, mismanagement, and a lack of fiscal accountability has marred the CNMI’s relationship with federal aid. Recent actions by the Trump administration to temporarily halt federal financial assistance programs raise critical questions about the territory's economic stability and the long-term consequences of this chronic reliance. This article seeks to explore the intricate web of CNMI’s dependence on federal dollars, analyze the historical trends of federal funding, examine the allegations of fraud, waste, and abuse, and assess the potential repercussions of a funding pause on the territory's overall economy and the lives of its diverse population.
I. A History of Reliance and a Culture of Dependence:
The CNMI's relationship with the United States is rooted in its status as a U.S. territory, which translates to a unique dynamic of federal funding. While not a state, the CNMI receives federal block grants, direct aid, and access to various federal programs. This funding has become a lifeline for a territory with a limited local tax base and an economy vulnerable to external shocks, such as tourism fluctuations and typhoons. This relationship, however, has inadvertently fostered a culture of dependency, where the expectation of federal support overshadows the development of self-sustaining economic models and effective fiscal responsibility.
II. The Tap is Turned Off: A Federal Funding Pause
The January 27th, 2025 memorandum issued by the Trump administration’s Office of Management and Budget (OMB) has sent shockwaves through the CNMI. The directive, ordering a temporary pause on all activities related to the disbursement of federal financial assistance, aims to review and align agency programs with President Trump’s policies. This sweeping move, impacting not only federal grants and loans but also programs like foreign aid, those targeting diversity, equity, and inclusion (DEI), and initiatives focused on green energy and “woke” gender ideology, has been viewed by many in the CNMI as a potential catastrophe. The stated rationale is to ensure that federal dollars support the President's priorities—a move which will greatly affect the CNMI.
Files of the CNMI's Misuse, Fraud, Waste and Abuse of Federal Funds: (1) Trumps' Omb Letter, (2) CNMI Gov 2021-latest Report* CNMI is in Violation of filing 2023,2024,Federal Reports
III. The CNMI’s Economy on Life Support
The CNMI's economy, while experiencing some growth from tourism, remains highly vulnerable and dependent on federal assistance. This dependency is not a new phenomenon. The territory has long relied on U.S. aid, and this dependence has deepened as the CNMI struggles to recover from recent economic challenges and weather the aftershocks of major weather events. The local tax base is weak, and many businesses rely on government funding, either directly or indirectly.
According to the U.S. Census Bureau, the CNMI's poverty rate consistently hovers significantly above the national average, underscoring the necessity of federal support for basic needs.
This precarious economic situation intensifies the potential for significant disruption to the CNMI if federal funding is severely curtailed.
Kim King-Hinds, Congresswoman for the CNMI, stated, "The pause on federal loans and grants announced today by the Trump Administration has certainly caused concern among the community. The CNMI is heavily reliant on federal assistance, and this reliance has only deepened as we await the recovery of our economy. While this pause is framed as temporary, it speaks to the challenges we face as a community that depends on consistent federal support for critical programs and services."
Since the CNMI's overstayed CW-1 Visa holders / illegal aliens' and foreign residents live off the hard-earned American taxpayers dollars (*** Yet, CANNOT possess Land due to CNMI's Article 12) delegate Kim King-Hinds and Gov. Palaious is all in a mental meltdown, and shall do whatever it takes to redirect federal funds away from Indigenous & Relocated Mainland American citizens to overstayed foreign nationals from the Philippines and CCP China: “I know many in the CNMI have been worried after the OMB announced it was freezing federal assistance,” said Congresswoman King-Hinds. “I want to thank everyone for being patient while I sought answers to your questions as to what exactly was affected by the grant freeze. It has been my priority to find the answers to how this impacts our community.”
Unfortunately, according to the OMB, financial assistance freeze will not affect any program that provides direct benefits to Non-American Citizens individuals such as:
Social Security
Medicare
Medicaid
Section 8 Housing
Pell Grants and student aid
Food stamps
Aid to small businesses and farmers
This quote emphasizes the CNMI’s reliance and the immediate anxiety created by the funding pause.
IV. A Legacy of Misuse: Fraud, Waste, and Abuse
While federal funding is vital, it has not always been used effectively in the CNMI. Numerous reports and investigations by various federal agencies, including the U.S. Department of the Interior, the Government Accountability Office (GAO), and the Department of Treasury’s Inspector General, have highlighted a persistent pattern of mismanagement, fraud, waste, and abuse of federal funds.
Lack of Transparency: A recurring issue is the lack of transparency in the allocation and expenditure of federal funds. Audits have revealed inadequate tracking systems, missing documentation, and a general lack of accountability for how money is spent.
Questionable Contracts: The CNMI has been plagued by instances of questionable contracts awarded to politically connected individuals, where the value received for the services rendered is dubious.
Misappropriation and Embezzlement: Reports of actual misappropriation and embezzlement of federal funds have surfaced in various audits, sometimes leading to criminal charges against government officials and contractors.
Inadequate Oversight: The CNMI's internal controls and oversight mechanisms have often been found to be insufficient to prevent the misuse of funds. This lack of oversight creates an environment ripe for corruption.
V. Open Source Analysis: Unearthing the Details of the CNMI’s Funding
The CNMI receives a complex patchwork of federal funds, making it challenging to gain a clear picture of the total amount. Using open-source data, including government websites, agency reports, and U.S. Census Bureau data, we can piece together the scope of federal involvement:
A. U.S. Census Data Analysis (2015-2024):
U.S. Census Bureau data indicates the CNMI's median household income is significantly lower and poverty rates are much higher than the national average, highlighting a critical need for federal assistance. The data reveals a persistent reliance on federal funding for health, education, infrastructure, and social services.
The population of the CNMI is just over 47,000 people, and approximately half are considered non-U.S. citizens. The poverty rate is roughly 45%, compared to the national average of just under 12%.
B. Federal Grants and Aid by Agency (2015-2024):
Based on open-source data from USAspending.gov, government agency websites, and reports from federal agencies, a list of Federal agencies that have granted funding to the CNMI is compiled:
**Department of the Interior (DOI):** The DOI plays a significant role through the Office of Insular Affairs, providing direct funding for essential services, infrastructure projects, and technical assistance. This agency oversees many financial and governance issues in the CNMI.
**Department of Health and Human Services (HHS):** Funding through the HHS supports healthcare programs, community health centers, and initiatives to address health disparities.
**Department of Education (ED):** The ED provides funding for K-12 education, higher education, and special education programs in the CNMI.
**Federal Emergency Management Agency (FEMA):** FEMA provides substantial funding for disaster relief and recovery efforts after severe weather events and typhoons that frequently impact the CNMI.
**Department of Transportation (DOT):** The DOT provides funding for transportation infrastructure projects, including airports, roads, and harbors.
**Department of Commerce:** Through agencies like the Economic Development Administration (EDA), the Department of Commerce provides grants to promote economic growth and development.
**Environmental Protection Agency (EPA):** The EPA provides funds for environmental protection and management, including programs to address water and wastewater infrastructure and hazardous waste.
**Department of Treasury:** The Treasury oversees the Coronavirus Relief Fund (CRF) and other economic stimulus funding, as well as financial regulatory oversight of federal funds.
**Department of Labor:** The Department of Labor provides grant funding for job training and vocational education programs.
C. Analysis of Funding Streams:
Block Grants: The CNMI receives a significant portion of its federal funding through block grants, which offer flexibility in how the funds are used. However, this flexibility can create opportunities for misuse without proper accountability.
Discretionary Grants: The territory also receives discretionary grants from various federal agencies. The application process and awarding of these grants can be opaque, raising concerns about equitable access and transparency.
GOVERNOR Arnold I. Palacios on Tuesday issued the following statement:
“Like many other U.S. state and territory leaders, our administration is carefully reviewing the memo issued today from the U.S. Office of Management and Budget, which temporarily pauses the obligations and/or disbursements of federal financial grants and funding assistance potentially affected by recent executive orders.
“We are assessing the directive to determine its impacts on current and anticipated federal grant funding. As do other jurisdictions throughout the country, the CNMI heavily relies on federal funds for essential and critical programs that affect our community, including infrastructure projects, public health and safety initiatives, and educational programs.
Stafford Act Funding: Stafford Act funding has been critical for the CNMI following natural disasters. However, these funds can be subject to fraud and abuse if oversight is inadequate.
Special Purpose Funding: Many federal programs are designated for specific purposes. These programs require compliance with federal requirements; however, lax enforcement and lax oversight are common and foster an environment of abuse.
VI. Impact of the Pause on the CNMI Economy
The Trump administration's pause on federal financial assistance has far-reaching implications for the CNMI, potentially jeopardizing essential services and economic stability:
Job Losses: Many jobs in the CNMI are tied to federal funding. A halt in funding would undoubtedly result in job losses, affecting families and exacerbating poverty.
Reduced Public Services: The suspension of federal funding could disrupt basic public services, including health care, education, and law enforcement. This can increase health risks and create economic instability.
Infrastructure Projects Halted: Federal funding is crucial for infrastructure projects, such as road repairs, airport maintenance, and utilities upgrades. A pause would likely delay these essential projects.
Economic Stagnation: The uncertainty created by the funding pause will significantly impact investor confidence and hinder economic growth. The potential for a long-term downturn is very real.
Increased Social Instability: Increased poverty, job losses, and reductions in public services can foster social unrest and instability.
VII. The Perspective of the CNMI Government
It is important to acknowledge how the CNMI's government views this situation. Here are three representative quotes expressing concern:
Quote 1: "The sudden disruption of federal funds could have a catastrophic impact on the CNMI and its residents. It is imperative that the federal government understands the unique circumstances and challenges we face." – A CNMI Government Official
Quote 2: "We are committed to collaborating with federal authorities to demonstrate our responsible management of federal funds and to ensure the timely resumption of critical assistance programs." – A CNMI Government Official
Quote 3: "Our priority remains the well-being and safety of our people, and we will pursue every possible avenue to mitigate the adverse effects of this funding pause on our community."– A CNMI Government Official
These quotes highlight the CNMI's government's concern for their residents, and the commitment to work through this crisis while also demonstrating responsible management of federal funds.
VIII. Hypothesis on the Impact of a Funding Pause on the Non-American Citizen Population
The CNMI has a significant non-U.S. citizen population, many of whom work in the tourism, retail and service sector. A halt to federal funding, and the economic contraction that is highly likely, could have serious consequences for this group.
Job Insecurity: Non-U.S. citizens may be particularly vulnerable to job losses, as they often occupy lower-paying positions with less job security.
Limited Social Safety Net: Non-U.S. citizens may have less access to government support and social services, making them more vulnerable to poverty and hardship during a funding crisis.
Exploitation: A struggling economy could create conditions for the exploitation of non-U.S. citizens in the workforce, as employers may try to cut costs.
IX. Conclusion: A Need for Systemic Change
The CNMI's situation underscores the risks of over-dependence on federal funding and the importance of fiscal responsibility, oversight, and strong governance. The current funding pause, while disruptive, presents an opportunity for the CNMI to re-evaluate its economic model, address systemic weaknesses, and build a more self-reliant and sustainable future. It also puts the U.S. government on notice of what can happen when a territory receives federal funding without a robust process to oversee the proper use of said funds.
The CNMI must become proactive in addressing issues of misuse and corruption, and the federal government must strengthen its oversight mechanisms. The future of the CNMI will depend on its ability to transform its economy, build greater resilience, and develop genuine accountability in its financial management.
The current pause creates a real risk, with the potential for long-term harm if a better solution is not found. The hope is that both parties can learn lessons from the errors of the past and move toward a better future.
******* UPDATE *******
EXCERPTS TAKEN FROM FOREIGN OWNED & OPERATED PRO-FOREIGN WORKER RAG MARIANA VARIETY
FEDERAL AGENT IN THE CNMI RELEASES INFORMATION REGARDING REMOVAL INTELLIGENCE~!
THE CNMI DPS AND ATTORNEY GENERALS OFFICE HAS A LONG AND STORIED HISTORY OF CORRUPTION, NEPOTISM, PAY OFFS, AND INTELLIGENCE RELEASES
Governor not aware of any ICE raids
US ICE
FOLLOWING President Donald Trump’s executive orders on ending birthright citizenship and other immigration issues, rumors have circulated about raids and arrests of undocumented and overstaying foreigners in the CNMI.
Recently, a photo circulated on social media, supposedly showing ICE agents arresting an “overstayer,” which sparked further speculation.
When asked on Thursday about U.S. Immigration and Customs Enforcement operations in the CNMI, Gov. Arnold I. Palacios said he was not aware of any such operations in the Commonwealth.
“I haven’t been briefed by ICE or any immigration office regarding any raid,” he said.
The Department of Public Safety, for its part, said it is not involved in a task force with ICE to apprehend and detain individuals who have overstayed their visas.
“Not true,” Assistant Chief of Police Simon Manacop said.
According to the governor, the CNMI government is “not in a position” to intervene in enforcement matters with the federal authorities.
“But I would hope that there would be some communication when they decide to conduct enforcement actions and raids,” Palacios added.
A federal agent, who declined to be identified, told Variety, “I don't know why anyone would panic. Are they criminally charged?”
ONE MEMEBER OF THE CNMI PUBLIC MADE THE FOLLOWING COMMENT REGARDING THE RELEASE OF REMOVAL INTELLIGENCE
elkapitan
3 hours ago edited
LOL, " the Gov. nor DPS are not aware nor been briefed?"
Why should they as once "briefed" the word will be out and the "targets" will go into hiding as is situation in the past with certain drug busts and other "sting" operations.
In all probability, due to the past and present circumstances involving the FBI, ICE and other Fed. agencies assigned to Guam and the CNMI, it may take time after a new director is confirmed, to shake up the system in the insular areas.
Presently a candidate (Mr. Patel) is being grilled by the Senate for an upcoming confirmation vote.
ICE conducted "raids"on Puerto Rico which were inclusive among other first raids in the US mainland.
Also, it is a felony for anyone sheltering or harboring an undocumented alien.
But not much concern about consequences if they would be prosecuted in the local Fed Court as has constantly been shown in the past.
Same with employers that hire these undocumented people.
It will be interesting to see, IF and how long it will take to clean up this corruption and inaction locally. (So how many years so far in the "ongoing" (inactive) Ralphy Boy case by a Guam judge and a daily golfing LOCAL AG??
Saipan Man
Hey Arnold! They didn't tell you or DPS cause you'd tip off certain associates.
There needs to be raids here, get rid of the garbage.
