FACT: The most recent $100 million-plus bond sale was made possible only through 11th hour changes to the real property law that redefined ‘property’ to include Chamorro Land Trust Corporation (CLTC) leasehold interest and equated assessed and appraised valuations for tax purposes at 100% of market value, among other things.
FACT: Those changes were made solely to make CLTC leasehold interest subject to taxation, elevate the public debt ceiling imposed by federal law and enable more borrowing. This was verified by John Camacho, Revenue and Taxation Department director.
FACT: Multiple freedom of information requests over several years, most recently within the past few months, confirm that there is no reliable, verifiable inventory of CLTC properties. Fewer than 500 of more than 3,000 residential and agricultural CLTC leases have been surveyed and accurately appraised as verified by Monte Mafnas, Director of Land Management and CLTC Executive Director and John Camacho of Rev & Tax.
FACT: Appraised/assessed valuations assigned to the remainder are nothing more than guesswork by Revenue and Taxation in collaboration with the Department of Land Management. Those valuations were applied in a last-minute rush to meet deadlines set for the bond sale using one-size-fits-all, plug-in numbers that assign the same values for similar-sized parcels regardless of location, access, utility availability or other factors required for a valid appraisal and assessment.
FACT: All moneys collected from CLTC taxes are by law designated for deposit into a special fund, the Chamorro Loan Guarantee Fund. No benefit accrues to the government or to the general public but only to Chamorro leaseholders.
The newly-taxable CLTC leasehold interests were without doubt part and parcel of the justification package submitted for review by bond underwriters and investors.
Though perhaps not explicitly stated, there was certainly an implication that the newly-taxable properties would broaden the Guam tax base and improve GovGuam creditworthiness. We can only speculate about what other desperation moves are in the works as the GovGuam financial meltdown proceeds.
What does all this point to? We know that without the events and actions listed above there would have been no $110 million ‘Series B’ bond. It looks suspiciously like a well-orchestrated attempt to obfuscate and obscure GovGuam’s true financial status for political advantage. Should that at some point be established it could be viewed as financial fraud.
My view? Take a guess.