Representative James Comer
Chairman, Committee on Oversight and Accountability
2157 Rayburn House Office Building
Washington, DC 20515
Subject: Urgent Call for Federal Oversight and Accountability in the Mismanagement and Misuse of Federal Funds in the CNMI
Dear Representative Comer,
I am writing to bring to your urgent attention a matter of grave importance involving the misuse and outright theft of hundreds of millions of dollars in federal funds allocated to the Commonwealth of the Northern Mariana Islands (CNMI). These funds, intended for disaster recovery, pandemic relief, and essential developmental programs, have been systematically defrauded by a network of individuals connected to the CNMI government, including family members, friends, and associates of prominent officials.
Despite my repeated appeals to various federal agencies, including the U.S. Department of the Interior (DOI) and the Office of Inspector General (OIG) of the U.S. Department of the Treasury, no meaningful action has been taken. This letter seeks your Committee's intervention to hold the perpetrators accountable, recover the misappropriated funds, and ensure justice for American taxpayers and the residents of the CNMI.
A Breeding Ground for Corruption
The CNMI, a U.S. territory in the Pacific, has become a haven for corruption. Over $550 million in federal relief and development funds has been misused, mismanaged, or outright stolen. An independent audit conducted by Ernst & Young identified $51.96 million in questioned costs, revealing systemic failures in transparency, accountability, and compliance.
*** Below are the most recent CNMI Audits of Federal Funds*** a Violations in and of itself to conduct audits so far delayed...Non-of the 2022-2023 AUDITS OF FEDERAL FUNDS are Available
These abuses include:
Misuse of Coronavirus Relief Funds (CRF): $20.34 million was spent without adequate documentation, flouting basic accountability standards.
Improper Procurement Practices: $18.35 million in expenditures violated procurement regulations, with contracts awarded to insiders without fair competition.
Mismanagement of Nutrition Assistance Program (NAP): Over $3.37 million in food assistance funds were unaccounted for due to failures in reconciling program benefit costs.
Violations of Procurement Rules for SLFRF: $2 million in state and local fiscal recovery funds were spent in disregard of federal procurement regulations.
Systematic Deflection and Lack of Accountability
The CNMI government’s response to these findings has been to deny responsibility, blame auditors, and offer weak promises of corrective action. Governor Arnold Palacios has acknowledged the need for forensic audits, yet no concrete steps have been taken. The newly seated Delegate to Congress, Kimberly King-Hinds, and her husband: CNMI Chief Criminal Prosecutor Chester Hines have similarly refused to investigate these matters, likely due to their own connections to the alleged perpetrators.
The funds stolen from the CNMI have been funneled through various shell companies and quasi-humanitarian groups, including organizations connected to China, Russia and the Philippines. These activities not only undermine the purpose of federal aid but also pose a threat to U.S. national security by enabling foreign entities to benefit from American taxpayer dollars.
My Efforts to Report Fraud and Seek Justice
As an American taxpayer and Program Director of a registered international NGO with valid UEI/NCAGE codes, I have taken every possible step to report this corruption:
Contacting the U.S. Department of the Interior and Treasury Department’s OIG (specifically Ms. Kelly Kardon ) with detailed evidence of fraud.
Offering to provide all related emails, documentation, and current audit reports for review by federal investigators.
Despite these efforts, my calls for action have been ignored, while my organization has received zero funding from the over $1.4 billion allocated to the CNMI in recent years. Instead, funds have been diverted to individuals and entities with ties to the CNMI government.
A Call to Action
I urge the Committee on Oversight and Accountability to:
Initiate Comprehensive Forensic Audits: Examine all federal funds allocated to the CNMI over the past ten years, including ARPA and CARES Act monies.
Investigate Criminal Activity: Probe potential money laundering, fraud, and other criminal activities tied to the misuse of federal funds.
Prosecute Offenders: Ensure those responsible for defrauding taxpayers are held accountable to the fullest extent of the law.
Demand Oversight and Reforms: Require the CNMI government to implement transparent systems for managing federal funds, with periodic reporting to the GAO and Congress.
Closing
This is not a matter of politics but one of justice, accountability, and responsible governance. The American people deserve to know that their tax dollars are being used as intended—to help those in need and to build a brighter future for all. I urge your Committee to take immediate action to investigate and address the corruption in the CNMI.
I am prepared to provide any supporting documentation and further details as required. I can be reached at the contact info below- and look forward to your response.
Thank you for your attention to this urgent matter.
Sincerely,
Zaji Zajradhara
Program Director, CNMIGA.ORG
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