Clashing interpretations of law stall disbursement of Guam typhoon funds

Edward Birn

By Jayvee Vallejera

A procedural logjam over typhoon relief for Guam’s 19 villages came to light during a special session of the Guam legislature Thursday, with the Mayors Council of Guam and the Department of Administration clashing over $4.8 million in typhoon relief funds allocated to mayors in the wake of Super Typhoon Bavi.

At the heart of the dispute are differing interpretations over how the funding for Bavi relief efforts was written, a communication breakdown between DOA and MCOG and sharp legal conflict over how to channel the money so it could be dispersed to the island’s mayors.

Wednesday’s special session was supposed to tackle Bill 1 (9-S), which would appropriate up to $13.4 million for Super Typhoon Bavi response and recovery, among other supplemental funds. The bill remains pending.

At the special session, Jesse Alig and  Joy Jean Arceo, president and executive director of the mayors' council, respectively, took DOA to task for channeling typhoon relief funds directly to each of the island’s mayors, instead of directing it to the council, which would then disburse the funds to the mayors.

The issue came to a head when each of Guam’s 19 mayors received checks for $250,000 from DOA for Bavi typhoon relief. That caught MCOG leaders off guard and halted pending vendor payments and purchase orders across the island.

The mayors' council had been expecting that money to be channeled through the organization under standard municipal procurement rules.

Alig expressed frustration over the unexpected situation and for not being informed ahead of time. He disclosed the mayors only learned about this after receiving emails last Friday through their accountants, without proper coordination or financial reconciliation.

“I'm glad the DOA thinks it's easy to just stop the process in the middle of the game and issue checks for the mayors to deposit into their non-appropriated funds, and without any kind of reconciliation,” Alig said. “We were not consulted, and we don't know.” 

He said he had advised the mayors not to cash the checks. He said most mayors want to return the check and just have the money channeled through MCOG, as was done in the past.

Birn said 17 mayors agreed with Alig, and if they send the money back, they can do that.

Arceo said the unexpected distribution of checks imperiled more than 200 active purchase orders that her office had certified and were already in the pipeline.

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She warned that bypassing established oversight over this appropriated money would legally endanger the mayors and vendors and expose them to possible legal liabilities.

“Regardless of how you slice it, you put everyone at risk here, including the mayors,” she said.

When asked, Arceo said that the council received roughly $4.7 million for Super Typhoon Sinlaku relief efforts. For Super Typhoon Bavi, MCOG is supposed to get $4.8 million. 

While both appropriations were intended to deliver aid to Guam’s 19 villages, the administrative execution appears to be different. For Sinlaku funding, Arceo confirmed that MCOG received the funding, but about $1.8 million remains unspent because the executive order that released the money specified it must be spent within 30 days. Following that restriction, Arceo said they halted disbursements once the 30-day window passed.

For the Bavi money, DOA Director Edward Birn insisted that the law used the word “disburse” and interpreted that to mean cutting the checks directly to the mayors, bypassing MCOG.

“The legislation says disburse the money to the mayors. That's what the wording says on the legislation,” Birn said. 

Birn explained that the wording for Sinlaku and Bavi laws was different and his department was simply adhering to the plain text of the law passed by the legislature.

“For Sinlaku, we made the funds available to the Mayors Council to use up to the amount that was appropriated. For Bavi, the wording says that $250,000 should be disbursed to each of the mayors, which we've done,” he added. “Disburse means pay, so that's what we did. I wouldn't have done that if the wording were different."

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In a statement issued after the session, DOA said a disbursement is commonly understood in government finance to mean the payment of funds from a government account to a recipient.

“Consistent with the plain language of the statute, the Department of Administration prepared individual checks payable to each mayor’s office,” it added. 

DOA emphasized that executive agencies do not have the authority to rewrite statutes or substitute assumptions about legislative intent for the words adopted by the legislature.

Sen. Chris Duenas questioned Birn why DOA didn’t communicate with the council before making the arbitrary decision to bypass MCOG and thereby throw municipal operations into chaos.

“They're in total shock here,” he added.

Birn agreed that communication between MCOG and DOA could be improved, “but I will take the money back. We will do that.” 

Duenas pointed out that mayors don’t have specialized procurement personnel who have the ability and expertise to handle large state funding independently, making the council's centralized oversight necessary.

He strongly urged DOA to recall the checks and restore MCOG’s role in handling that funding.

Birn agreed to cancel the checks.

“If that’s what the mayors want to do, I will do that.”

He said the mayors need not even physically return the checks since DOA could cancel them internally.

In the DOA statement after the session, it said the department acted in good faith to execute the law as enacted while ensuring that emergency resources reach Guam’s villages as quickly as possible.

It did urge more precision in lawmaking, saying even seemingly minor differences in statutory language can produce significant legal and administrative consequences.

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