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