FSM proposes phased cop/to/ constructionKDIONIA, Ponape - The FSM pro-

posed funding in two phases forconstruction of the $23.8 millionnational capital at Palikir toutilize the $13 million providedby the House Appropriations Int-erior Subcommittee, according toBudget Officer Del Pangelinan.The last chance for fiscal 1985

funding for construction of thenew FSM capital will be in a U.S.Senate-House conference committee

scheduled for early September,Pangelinan said.The House adopted the Reagan

administration proposal to prov-ide $13 million for the FSM capi-tol, but the Senate Energy andNatural Resources Committee de-leted the capitol constructionfunds.In an Aug. 20 cable to Senate

Energy and Natural ResourcesChairman James McClure of Idaho

and ranking Democrat J. BennettJohnston of Louisiana, PresidentTbsiwo Nakayama appealed for thereinstatement of the full $23.8million, but proposed a contiriTgency plan to provide $13,400,073in fiscal 1985 and $8,815,701 infiscal 1986, totalling $22,215,-774.The costs listed for Phase I

(Continued on Page 2)

The National UnionAN OFFICIAL PUBLICATION FOR THE PEOPLE AND THE ST ATE s ^' T n f M D£ H ATE 0 ST AT ES OF MICRONESIA

Volume 5 Kolonia, Ponape, August 30, 1984 Number 16

FSM hits garment import quotasHDJDNIA, Ponape - The FSM is

planning to submit comments tothe U.S. Treasury Department ex-pressing serious concerns aboutrecently proposed textile importquota restrictions which couldhinder economic development underthe Compact of Free Association,according to Status Commissionofficials.The FSM Congress adopted Aug.

10 during its third special ses-sion a resolution expressing itsdismay and concern about theTreasury Department proposal,stating that the regulationswhich will restrict the abilityof the (FSM) to export manufact-ured clothing into the UnitedStates during the period of theCompact."The resolution said that the

FSM has looked upon General Head-note 3(a) "as one of the majoreconomic attractions of the Com-pact,11 and that if Treasury canwith minimal notice restrict fu-ture clothing imports from theFSM through quota restrictions,"a justified fear exists thatother economic products and/ ormerchandise exported from the(FSM)...might suffer similartreatment."The FSM is not manufacturing

clothing for export to the UnitedStates, but interest reportedlyhas been shown in establishingplants in Truk and Ponape to as-semble garment materials manufac-tured elsewhere to transship tothe U.S. under General Hepdnote3(a) when the Compact goes into

effect.Fledging garment industries in

Guam and Saipan would be affectedby the proposed changes.The regulations changes are

scheduled to go into effect Sept.7, but court injunctions are be-ing sought to delay them untilafter the Christmas season, andTreasury is accepting cementsuntil Oct. 2, according to Status

I Commission sources who recommend-'ed that the FSM submit comments,tressing the potential impact on'the realization of negotiated be-nefits under the Compact.According to Status Commission

officials, the Treasury regulat-ions do not address General Head-note 3(a) of the U.S. tariff

(Continued on Page 5)

EDUCATION PLANNDG DISCUSSED - Congress Speaker Bethwel Henry, sec-]and from right, is urging state education directors to develop plansfor use of Compact of Free Association funds Aug. 16 during the op-ening of the FSM Educational Leadership Conference in Ponape. Fromleft clockwise at the table are Truk Assistant Education DirectorManny Sound, Kbsrae Education Director Singkitchy George, Henry, YapEducation Director Alf onso Fanechigiy and FSM Senators Peter Christ-ian of Ponape and Koichi Sana of Truk. (See story on Page 4.)

Conference last shot for X65 capital construction fundsco (Continued from Page 1)|

and II "do not allow for any con-£ tingency or funds for telephonero installation," and a delay of_p more than one year in Phase IIw would increase cost by 15 perg, cent, or $1,322,000, according tog the architects estimate, Nakayaita"* said.* Proposed Phase I funding wouldg "construct the water, sewer andH road system necessary for the ca-g pitol and...manage the orderly

future development of the capitolJji environs in Palikir Valley," hea said.g "The FSM views this project asEH very important to our nation andg additionally is of great benefit

to the people of Ponape who will£3 benefit from the added roads, se-EH wer, water and electrical facili-

ties," the President said."Further, this project repres-

ents a cornerstone of friendshipand agreements between the U.S.and FSM," Nakayama said.The Senate ccranittee stated in

its July 26 report on InteriorDepartment authizations:"While the connittee continues

to believe these capital improve-ment projects (such as roads andsanitary facilities) are of high-er priority than construction ofnew capitols, it nevertheless re-mains committed to providing fun-ding for construction of capitolsfor the Federated States of Mic-ronesia, the Republic of the Mar-shall Islands and the Republic ofPalau in future appropriationsmeasures."The FSM reguested an additional

$12 million for construction of anew Comunity College of Microne-sia canpus a Palikir which werenot included in the House, or Se-nate bills. _The Reagan administration re-

commended $40.4 million for FSMoperational and $4.4 million forCIP funding for fiscal 1985. TheHouse Appropriations Committeeincreased the operational fundingby $765,000 to $41,165,000 andthe CIP funding to $9.23 million,while the Senate committee in-creased operational funding by$2,448,000 to $42,848,000 and CIPfunds to $8.83 million.The FSM had requested $3,336,-

000 more than the administrationproposal for operational funds,including $336,000 for he finan-cial management system; V2 mil-lion for eradication of communi-cable diseases, such as leprosy,cholera and tuberculosis, and $1million for telephone upgrading.The FSM also requested an addi-

tional $17.34 million for CIPprojects. . v

The House increase in operat-ional funds includes $200,000 forthe leprosy control program inPonape and Truk, and the Senateincrease did not specify anyfunds for disease control,but it possibly could be used forFSM-wide leprosy program in con-junction with funding being prov-ided by the World Health Orgrani-zation, according to Pangelinan.Among the CIP projects in the

House and Senate bills, the ad-ministration, House and Senateapproved a total of $2.4 million,or $600,000 each for airport ter-minals in the four states; the

administration and House provided$2 million as opposed to the Sen-ata $1.5 million for Kosrae roadconstruction; the House and Sen-ate provided $120,000 for hospit-al ccrtinjrr.cation and $400,000 fora dock warehouse in Kosrae, andthe House provided $900,000 forKosrae dock and airport fuel sto-rage tanks.In addition, the House and Sen-

ate provided $2 million for Pon-ape roads and bridges and $1.41million for Yap road constructionand the Senate provided $1 mil-lion for Yap water system devel-opment.

WHO sends leprosy drugs, U.S. funds uncertainKOIDNIA, Ponape - The FSM lear-

ned through the Trust Territorygovernment in July that the WorldHealth Organization will fund afive-and-one-half-year leprosyprogram here with possible assis-tance fron the U.S. Public HealthService and Interior Department,according to Dr. Kiosi Aniol, na-tional Health Services Coordinat-or.The program will include the

expansion of the systematic lep-rosy survey which has been con-ducted in Ponape since 1982 toTruk, Yap and Kosrae, Aniol said.WHO declared the FSM leprosy

rate epidemic with 852 known cas-es in Ponape, 317 in Truk, 41 inYap and 40 in Kosrae as of Jan-uary, 1984."I expect that with the survey

in the other three states, thenumber of cases will triple,"Aniol said."According to the survey in Po-

nape, there are more new casesbeing found here," he said.The five-and-one-half-year lep-

rosy program was launched withthe arrival in July of the firstthree-month supply of medicines,Fill bids sou^if |KOIDNIA, Ponape - Bids to sup-

ply and place an estimated 15,250cubic yards of coral fill in man-grove swamp 'or the Den VillageSanitary Facilities, Sokehs Mun-icipality, will be accepted to 3p.m. Sept. 7 by Project ManagerJack Pobuk, Central Building, P.O. Box 502, Kolonia, Ponape FSM96941.Plans and specifications for

the TTPI Office of Planning andStatistics project may be obtain-ed f ran Pobuk at the cost of $25payable by check, or money orderpayable to the Treasurer, TTPI,and delivered to Pobuk with thenotation "Den Village SamitaryFacilities Plans."

Dapson, Lamprine and Rifampisia,sent by WHO.The medicines were distributed

to the states according tothe number of known cases undertreatment, Aniol said.WHO is providing $260,000 in

medicines, medical training inand outside of the FSM, consul-tants' fees and transportationcosts for the program, accordingto Aniol.The WHO assistance will be used

to expand the survey to the otherstates, he said.The FSM asked the U.S. Congress

to provide $2 million in fiscal1985 for leprosy, tuberculosisand cholera programs. The HouseAppropriations Subcommittee onInterior and Related Agencies cutit back to $200,000 for the exp-ansion of the leprosy survey andtreatment program, while the Sen-ate Qiergy and Natural ResourcesCcmnittee increased FSM operat-ional funds by $2,448,000 whichis not earmarked but could be us-ed for the communicable diseaseprogram, according to Budget Of-ficer Del Pangelinan."A House-Senate conference is

scheduled for early September toresolve the differences," Pangel-inan said.The U.S. Public Health Service

is interested in assisting theFSM leprosy program and wouldlike to work with WHO and theInterior Department, so all ofthe resources "will be in onepot," Aniol said.He said that the amount of USPS

and Interior participation willbe determined by U.S. congress-ional budget and appropriationsaction.The U.S. Congress provide $1.6

million in fiscal 1983 and $2 mi-llion in fiscal 1984 for the Trukcholera program, and has not pro-vided any funds yet for the Pon-ape leprosy survey, Aniol said.

Congress approves sfafe project supplemental fundsPonape - (Congress Re-

lease) - The Third FSM Congressended Aug. 17 its third specialsession, after passing $2.5 mil-lion in state public project ap-propriations and $130,655.44 infiscal 1984 supplemental budgetrequests.The Congress disapproved a Ways

and Means Contnittee report on aresolution to divide among thefour states goods and servicesmade available under the recentlyconcluded agreement between theMicronesian Maritime Authorityand the Japanese fishing associa-tions.Six members disapproved the

conmittee amendment to the origi-nal resolution to divide the pro-ceeds betaveen Yap and Kosrae asagreed to by the FSM Chief Execu-tives in July, 1982.Earlier in the session, Cong-

ress adopted the resolutions ap-proving the goods and servicesagreement and the new "per ves-sel, per trip" fishing agreementwith the four Japanese fishingassociations which could net theFSM a high of $2.4 million infishing rights fees.For the first time, a state's

project funds were divided intotwo bills, including one approp-riatmg $789,700 for Truk state-wide public projects along withfunds for the Mortlocks, Fefan,Uman, Dublon, Tsis, Parem, Moenand Fono, and the second approp-riating $287,000 for the Eaichukarea.Congress approved $320,000 for

Kosrae, $720,000 for Ponape and$382,500 for Yap state publicprojects.

"We have gone three years with-out public projects for the sta-tes," Speaker Bethwel Henry ofPonape said. "We felt it was timewe got some economic developmentmoney back to them."Fiscal 1984 supplemental fund-

ing requests approved included$11,000 for the FSM Postal Serv-ice, $45,000 for the AttorneyGeneral's Office, $25,000 for theStatus Commission. $15,000 forMMA and $34,655.44 for the FSMRevolving Economic DevelopmentLoan Fund.In other action, Congress de-

feated on first reading a bill toextend the reversion date forfiscal 1981 Ponape state publicprojects funds and deferred abill to establish an Environmen-tal Protection Agency until thefourth regular session to be heldin October.The Congress adopted resolut-

ions requesting the United Nat-ions to terminate the TTPI stra-tegic trusteeship upon approvalof the Compact of Free Associat-ion by the United States and ask-ing the Public Auditor to auditall marine resources developmentmatching funds provided to Truk,Yap and Ponape.. Other resolutions adopted dur-ing the session which began Aug.f* J

-Express deep concern and dist-ress over the serious illness ofYap State legislature Speaker Jo-seph Ayin.-Express dismay and concern

about recent U.S. Treasury Depar-tment action changing Headnote3(a) regulations restrictinq FSM

RECEPTION FOR CONGRESS - Ponape Gov. Resio Moses, standing far left,is hosting a reception Aug. 10 at the Village Hotel for members ofthe Third FSM Congress during its Aug. 8-17 third special session.The reception also was attended by FSM Vice President Bailey Olter,Supreme Court Chief Justice Edward King and menbers of the PonapeState Legislature and nation?! executive branch.

ability to export manufacturedclothing into the United Statesduring the Compact period.-Set forth total sums available

for appropriation frcm the fiscal1985 FSM General Fund and U.S.grant special fund.-Express condolences to the

family and friends of the lateDr. Glen E. Peterson, brother ofCollege of Micronesia ExecutiveDirector Loren Petersen.-Thank Federal Emergency Man-

agement Agency Director Louis 0.Giuffrioa for permitting FSMfiremen to attend training cour-ses at the National Fire Academy.-Ask the U.S. Interior Depart-

ment and Census Bureau to conducta 1985 FSM population census.-Congratulate Floor Leader John

Haglelgam en his 35th birthday.

Joint registration seenKDLONIA, Ponape - FSM Health

Insurance Ccmmittee and SocialSecurity Administration officialstentatively agreed to join forcesin the registration for and im-plementation of the NationalHealth Insurance Plan (NHCP), ac-cording to Budget Officer DelPangelinan.Both programs have common goals

of providing the socially desir-able benefits of health and in-come security while requiring in-dividual and employer contribut-ions to make each program finan-cially and administratively self-sufficient, the ccmmittee chair-man said.Meetings of the committee with

Assistant Social Security Admin-istrator Takeo N. George and Pon-ape State Social Security Managernadao Eli am resulted in tentativeagreements for the two programsto:1) Use the individual and em-

ployer Social Security numbers.2) Coordinate the dates and

frequency of payments individualsand employers are to make to eachprogram.3) Coordinate the registration

and public education efforts forthe initial implementation of theNHCP to see that individuals andemployers receive the benefitsand oonf crm to the legal obligat-ions of both programs.The committee also is continu-

ijig to finalize for the NHCP intime for the scheduled OctoberChief Executives Conference 1)the draft legislation, 2) theregulations and 3) the writtenproposal.

flan requited to use Compncf funds for education03

o<*>

;<nir>Nl:\, ftT>s>j::!e ••• K&-- .--vt-ate ed-ucation dli^-ors w- • • • : - urged t odevelop •?. i'ujn for us-- oi Ca.ipaeto.f: Free r^xcdatior: Ending foreducation, di.rtng ireir Aug. 16-17 ficiaca ciGi ui.i ieadf" ">hi.p Confer-ence here., acxxrdirig to nationalEduuai ics"! Division Chief Daroi*.-.iu:.The directors agreed to an Aug.

deadline for each state tosubmit operational and capitalexpenditures, ceilings and cur-rent needs for planning the div-ision of Compact block grant andspecial grant funds, Vfeital said.The conference opened with Con-

gress Speaker Bethwel Henry stat-ing? "With the termination of allfederal education programs and intheir place the advent of the rra-jor block grant (Compact Section211) and the education minorblock v"i.snt (Sections 22.1 [6] and21.6 [3]), a new approach to educ-ation planning nec-cb lo be devel-opfsi." "wi-fJiout careful transition andlam-range planning, the shiftfrcrn primarily U.S. 'federal prog-rams to Compact block grants foro&jcation coi.ild be sudden andharsh," Henry said,He said that -he draft FSM Bcl-

uo-it.irir: Code which is being rev-ia-j«ad "is an irnrortant componentin this, effort."F3M Status Camission legal

cocrtsel Greg Swart-2 outlined thecurrent status of the Compact inthe U.S. Congress, citjng propos-als to extend some U.S. federalprograms as transition programsduring the first three years ofthe Compact and citing the com-mission as the mechanism for pre-senting the need for possible fu-ture assistance.Swartz discussed the need for a

distribution formula for the $7million a year which the FSM isscheduled to receive under Com-pact. Section 221 (b) for health,education, food services, housingand technical assistance; to de-termine how a portion of the maj-or block grant could be used foreducation by determining educat-ional needs, and to determine howthe $1.9 million a year the FSMwill receive under Section 216(3) for scholarships will be dis-tributed to students attendingthe College of Micronesia andother higher education institu-tions.FSM Education Chief Daro Weital

requested a follow-up on inputneeded for the finalization ofEducation Sectoral Plan for theNational development Plan, afternoting that the Compact fundswill be received directly by thenational government which is fin-alizing the five-year plan with

input1 fran tiie stat.op,The directors agreed to delin-

eate state and national, govern-ment roles in education with thatwhich is not specified for thenational government to bo statefunctions.The national government is to

provide technical assistance onrequest from the states in curri-culum development, program devel-opment, testing and evaluation,needs assessment, monitor in1], ;ui-nimum standards, policies .'fewl-opment, student services ,-tno con-sultancy terviecs coordinationuith available staff, outside re-sources, 01 national funding.Kith input fran the states, the

national gc'.frnment wi 11 continueto develop:-Program coordination for aid

to nonpublic schools fund, vocat-ional agriculture grants, territ-

orial teacher training assist-ance?, bilingual education, insul-ar areas consolidation, GED, Jap-anese language, drivers educat-ion, teacher incentives, NationalStudent Revolving Rind, pou nat-ion education, standardized test-ing and evaluation and South Pac-ific CoitTitission programs, the-; ",M. Development Program arid Nat-ional Maritime Academy.

• i he national government withstates' i.nput will continue educ-ation information dissemination,ehartering nonpublic schools,fiscal coordination and develop-irtyit. of legislation, teacher cer-tification, postsecondary, theI'MM Education Board, a Nationalf'xiiieation Agency,. manpower devel-ops rait, scholarships criteria,pre-schcol prograns, conrnunityeducation and a resource center.

Legislature cuts proposed pay levelsKDIDNIA, Ponape - The Ponape

State ^Legislature reduced salar-ies proposed for its members byGo\'. Resio Moses in the new {jayschedule for elected and appoint-ed officials enacted July 3, ac-cording to a Health and SocialServices Coinuittee news release.The bill became law on Aug. 7

without the governor's signature,contrary to an erroneous headlinein the Aug. 15 National Unionwhich said he signed the bill.The administration proposed an-

nual salaries of $25,000 for thegovernor, down from $25,143;$23,000 for the lieutenant gover-nor, up from $22,143; $25,000 forthe State Court chief justice, up

WDPKSHDP CONSULTANTS - Consult-ants from Honolulu and Fiji tothe Warren's Christian Associationworkshop held through Aug. 3 atthe Protestant Mission in Ponapeare from left, back row, the Rev.Edith Wblfe, Mrs. Elsie Tattle,Mrs. Becky ling. Dr. Jean Renshawand Ms. lauren Buck, and frontrow, Mrs. Alice Buck, Dr. MargeryJerpstra, Dr. Rosita Aranxta,Mrs. Haoipo de Cantora, Ms. LesilaRaitiga and Mrs. Susana Evening.

from 519,144; $23,000 for the as-sociate justices, up from $17,-144, and $25,000 for the legisl-ature speaker, $23,000 for thevice speaker, floor leader andstanding eomraltee chairmen ana$19,000 for otlier members, allcurrently receiving $11,024.The legislature approved $25,-

000 for the governor, $23,000 forthe lieutenant governor, $23,000for the chief justice, $20,000for the associate justices, $20,-000 for the speaker and $17,000for all other members.The administration also propos-

ed $21,000 for department direct-ors and $19,000 for deputy direc-tors, assistants to the governorand Office of Planning, Program-ming, Budgeting and Statisticsadministrator.The cannittee set salary ranges

of $16,000-$21,000 for departmentdirectors and $13,000-$17,000which was reduced to $13,000-$16,000 by floor amendment fordeputy directors and others."The cannittee felt very

strongly that there should con-tinue to be somewhat of a gap be-tween salaries paid to the gover-nor, lieutenant governor, thechief justice and associate just-ices of the state court and tothe members of the legislature,but that compensatory levels mustbe adjusted to" more realisticallyreflect relative responsibilit-ies," according to the release.It said the administration ver-

sion "did not accurately reflectrelative responsibilities accord-ing to the understanding of theconmittee,"

Private investorsInvited to TrukM3EN, Truk - Gov. Erhart Aten

said that Truk does not. alwaysrequire local majority ownershipin a message inviting outside in-vestors to get. in on the groundfloor of the state's private sec-tor development, according toState Information Officer DediuoJcU'"1.."We are actively seeking and

encouraging private joint ventureforeign investment in those busi-ness endeavors where our localpeople can join in equity partic-ipation for the mutual profitablebenefit of all parti.es to theproject," the governor said."And we do not necessarily ex-

pect, nor require majority owner-ship .in the activity," he said."We do, however, expect a pieceof the action when it i s withingthe financial resources of ourlocal people to participate."Aten cited thp vast wealth of

the sea, potent i 3] agriculturaldevelopment and Ijv: need to deve-lop private rtw.to; enpJoymrnt toreplace government iTmbut said, "we are not.short term relationships, nor flyby night get rich quit* schemes,"as all investment proposals willbe carefully screened."If you want to get in on the

ground floor and are willing towork hard in pioneering the deve-lopment of the private sector ofour economy, I .invite you to vis-it Truk to discuss your projectswith my staff, or write my office(Office of the Governor, Moen,Truk FSM 96942) for further in-formation," he said.Truk currently has 49 import-

ers, six agricultural firms, 21fishing and fish marketing organ-izations, six bakeries, six text-ile manufacturing and marketingfirms, three cement productsfirms, five handicrafts outlets,four petroleum distributors, fiveconstruction contractors and awide variety of service estab-lishments, according to Jain.

Attends FEM4 workshop

FSM hits garment quotas

Ponape - Santiago Jo-ab, Special Assistant for FederalRelations to Gov= Resio Moses,participated in a July 10-12 em-ergency management workshop atthe Guam Civil Defense Officesponsored by the U.S. Federal Em-ergency Management Agency, accor-ding to a Ponape State Release.Participants from the FSM, Nor-

thern Marianas, Marshall Islandsand Guam wen through simulateddisaster exercises to prepare foractual emergencies, the releasesaid.

Continued from Page 1)

schedules which guarantees onlyduty free entry fron U.S. insularpossessions (*nd the FSM underflu: Compact) of goods which areotherwise eligible for entry.The regulations instead place

new restrictions on the practiceof transshipment of garment pro-ducts manufactured by countrieshaving bilateral textile quotaagreements with the United States,Countries ana U.S. possessions

participating in such transship-ments to the United States byproviding final assembly of gar-ment products manufactured inother countries are unintendedvictims, since the regulationsare aimed not at them, but at thequota country which is seeking toget around its quota limitation.General Headnote 3(a) is part

of General Agreement on Tariffsand Trade which will expire inJanuary, according to sources whosaid that, the U.P, Congress ir,working on a rrnre restrictive in-terrmtional trade package to re-place the present <..;A'iT agreement.Prospects of stc>£pi-ng tne regu-

lations are not good as they arebased on Reagan administrationelection year efforts to placatethe U.S. garment industry, andare not aimed at undermining theCompact, or the U.S. territories,according to Status Commissionsources.The U.S. textile industry en-

joys a long established patternof special treatment, and anotherspecial relief measure for theindustry should give no great en-couragement to U.S. producers ofother commodities, the sourcessaid.Jim Stovall, Status Commission

Washington counsel, indicatedthat the "negotiated benefits un-der the Compact...included in theminds of the negotiating partiesthe possibility of (the FSM) par-ticipaint in the textile importtransshipment process, eventhough the parties knew that non-discriminatory changes in U.S.import laws and regulations couldapply during the Compact period."Stovall indicated that the U.S.

government needed to be made aw-are and sensitive to the limitat-ions faced by the FSM in its eco-nomic development efforts.In other Compact related devel-

opments, Status Commission legalcounsel Greg Swartz reported thatthe Senate Energy and Natural Re-sources Cotmittee is scheduled tobegin Sept. 12 marking up itsversion of the Compact joint res-olution."It is unclear whether there

v£informal gatherings in *

will be sufficient time for fullSenate action before the U.S.Congress recesses in October,11Swartz said. §The House Foreign Affairs Con- g

mittee is still planning to hold za Coipact hearing on Sept. 18, he "said, adding, "The committee has >advised FSM representatives tha*: ,it will not invite FSM leaders to Ctestify, as Congress rules prohl- '£bit heads of foreign governmentsfrom testifying before Congress." jiThe Foreign Affairs Committee •»

susff suggested that. FSM leader? ,_could neet with with committeemembers inVfeshington, D.C., he said."The commission agrees with the

House Foreign Affairs Catmitteeapproach that this is a govern- 'ment-to-government agreer;saVc ,•"Swartz said.The House Interior Public Landto

and National Parks Subccrira ttrwas expected to hold hearings inSeptember for Micronesian repres-entati.ves, but. a date still hasnot been scheduled, he said,"The Interior subcommittee ap-

pears io be watching the Palauanapproval process very closely inscheduling hearings and action onthe Octnpact for the FSM and Mar-si vails," he said.The subcommittee held a hearing

July 26 on foreign policy impli-cations of the Compact with StateDepartment officials testifyingthat U.S. foreign policy inter-ests would be served in the SouthPacific by terminating the trust-eeship agreement and allowing theFSM and Marshails to conducttheir own foreign affairs andjoin regional organizations.Defense Department officials

testified in an Aug. 7 subccnirit-tee healing that U.S. securityinterests are protected underprovisions of the Compact whichgives the U.S. defense responsib-ilities for Micronesia and prohi-bits third nations from enteringthe region for military purposesunder denial agreements with theFSM and Marshails.An Aug. 9 hearing dealt primar-

ily with Kwajelain and the Mar-shall Islands, Swartz said.WATER WELL DRILLING STUDIEDLELU, Kosrae - The Guam Engin-

eering Co. Contractor ManagerJohn Badilla visited Kosrae mid-dle of June to look into the pos-sibility of drilling water wellsat in Okat, Tafunsak, the airportand dock complex site, accordingto a Kosrae State release.The wells are to be drilled to

the depth of 90 to 150 feet with-in 180 days under the supervisionof the Navy Officer in Charge ofConstruction (OICC) in Kosrae.

CM

00

oro+JCOs

Taiwan fishing boat capturedIOLONIA, Bonape - A Taiwanese

long-line fishing beat was appre-hended by and a Japanese long-liner escaped from the ESM sur-veillance vessel, Arctic, thismonth in Yap state, according toAttorney General David Neyitt.FSM agents on the Arctic board-

ed the Taiwanese 49-ton long-lin-er CT3-3182 at 3 a.m. Aug. 20 a-bout 180 miles southwest of Yapproper, after discovering thevessel activitely fishing in FSMwaters without a license asrequired by FSM law.After being instructed to fol-

low the Arctic to Colonia, Yap,the Taiwanese skipper turned offthe boat's lights and tried tohead south to escape, but the FSMenforcement officer on board for-ced him to turn on the lights andhead north, according to Nevitt.The vessel made another attenpt

to escape, attempting to ram theArctic, and on two occasions crewmembers were disarmed of knives,he said.The CT3-3282 arrived in Colonia

early Aug. 22 and a preliminaryappearance was conducted thereAug. 24 by FSM Supreme Court As-sociate Justice Richard Benson oncivil and criminal charges filedby the Attorney General's Office.The Attorney General's Office

sent a dispatch to Taiwan Fisher-men's Association Secretary Gen-•eral I. C. Jen, notifying himthat the FSM is bringing civil•and criminal charges against thecaptian and seeking fines total-ling $150,000, plus forfeiture ofthe CT3-3282, its equipment andcatch and $5,000 for repatriationof the five crew members.The Arctic sighted the Taisho

Maru No. 5 Japanese long-linerabout midnight Aug. 5 activelyfishing southeast of Yap properabout 19 miles inside of the FSMextended fisheries zone and pull-ed along side of it at 12:51 a.m.

Aug. 6 to get the call sign andregistration numbers.While the Arctic crew was chec-

king the numbers against its listof licensed vessels, the TaishoMaru No. 5 crew cut its fishinglines, turned off all lights andfled, according to a report byArctic skipper Stan Weinberg, whosaid that the Arctic picked upthe fishing lines and bouys leftbehind.The Attorney General's Office

filed charges in the FSM SupremeCourt seeking $3 million in civiland criminal penalties and for-feiture of the vessel, its equip-ment and catch, according toNevitt.Japanese Consul Genera]- in Guam

notified the FSM that the TaishoMaru No. 5 owners denied its fis-hing in FSM waters and said theJapanese government is investiga-ting the matter, Nevitt said.The Taisho Maru No. 5 has been

licensed to fish in FSM watersunder previous Japanese fishingagreements and the MicronesianMaritime Authority found out thatit is licensed to fish in Palaufrom the Forum Fisheries Agencyin Honiara", Solomon Islands.

Defender's office bids soughtKDIONIA, Ponape - Bid proposals

for the construction of the- FSMPublic Defender's Office Build-ing, Moen, Truk, must be submitt-ed by 5 p.m. Sept. 19, to the FSMOffice of Planning and Statist-ics, Construction Contracts andReview Division, P.O. Box 538,Kolonia, Ponape FSM 96941, accor-ding to National Planner JohnSohl.Plans, specifications and fur-

ther information may be obtainedfrom the FSM Intnigration officesin Truk, Yap and Kosrae, or Con-struction Division in Ponape.

I FSM Supreme Court CalenderTRAIL DIVISION - STATE OF PONAPE

DATE/TIME CASE NAME TYPEAug. 30 FSM v. Plais EscapeAug. 31 FSM v. Plus BurglarySept. 4 FSM v. Panuelo Negligent Homicide

Sept.

Sept.Sept.Sept.Sept.Sept.

Sept.Sept.

FSM v. Plais/Dadius Aggravated Assault5. 9 a.m. FSM v. Smith Burglary/Escape

9 a.ni. FSM v. Plais Escape9 a.m. FSM v. Plus Burglary

6. 9 a.m. FSM v. Panuelo Negligent Homicide7. 9 a.m. FSM v. Plus Burglary12. 9 a.m. Johnny v. Hifo Attorney's fees13. 9 a.m. FSM v. Smith Burglary/Escape14. 9 a.m. FSM v. Plais/fadixis Aggravated Assault

9 a.nu FSM v. Plais Escape17. 9 a.nu FSM v. Panuelo Negligent Homicide18. 9 a.nu FSM v. Plais/Dadius Aggravated Assault

PROCEEDINGResponsesResponsesResponsesResponsesPretrialPretrialPretrialPretrialTrialHearingTrialPretrialTrialTrialTrial

Otokichy guiltyOf kidnapping

M3EM, Truk - Wbnei Chief Magis-trate Engichy Otokichy and threeco-defendents were found guiltyAug. 4 of kidnapping by illegalconfinement of two youths by FSMSupreme Court Associate JusticeRichard Benson.The maximum sentence for the

crime is five years in prison,according to FSM Assistant Attor-ney General David Brown who saidthat sentencing is set for Sept.24.Otokichy and his son, Keresen

(Jack) Otokichy, a jailer and po-lice officer in Wonei, were foundguilty of kidnapping by illegalconfinement of both youths fromPenieta Village, while Awek Ternoand Ipao Fabian were found ofkidnapping one of the youths.Charges were dismissed by the

Attorney General's Office againstMichael Otokichy, another son ofthe chief magistrate, because hereportedly was following ordersof his father and was not invol-ved in the illegal confinement,Brown said.The youths were kidnapped Dec.

31 by the defendants who tookthem to Sapetiw Village and heldthem for five-seven hours, accor-ding to Brown who said that theillegal confinement included ty-ing a rope to the handcuffs onone youth and pulling him up un-til only his toes touched theground.Deprivation of rights charges

were dropped by the Attorney Gen-eral 's office and Benson foundthe defendents not guilty ofcharges of assault with dangerousweapons in allegedly using light-ed cigarettes to burn their facesand a piece of wood and a coconutpalm branch to beat them.The judge ruled the defendants

not guilty on the assault chargesbecause the court found that theprosecution had not establish be-yond reasonable doubt that theweapons allegedly used were like-ly to cause substantial bodilyinjury, Brown said.The motive for the kidnappings

which came out in the testimonywas that the defendants were in-vestigating the theft of theirmarijuana, he said.

MtSC holds trainingMDEN, Truk - Twenty-seven part-

icipants completed the June 4-11legal counselor training programhere sponsored by the MicronesianLegal Services Corp. with thesupport of the Western RegionalTraining Center, Denver, Colora-do, according to MLSC Deputy Dir-ector Marcia Bell.

$13.1 million Kosrae Shipping comflt/ss/on plannedBudget presentedLELU, Rosrae - Gov. Yosiwo

George presented a $13.1 millionossisolidated fiscal 1985 budgetto the Kosrae State Legislatureand urged to pass his revised taxbill, according to State Informa-tion Officer Alex Phillip.In an Aug. 3 message to Speaker

Gaius F. Nedlic, the governorsaid that the budget includes$4.76 million for state govern-ment operations, $4,325,000 formaintenance, $1,441,000 for capi-tal improvement projects and $2.6million for other projects, prim-arily from U.S. federal programs.Revenue projections would cover

this level of expenditures, butEnhanced Operations and Mainten-ance funding is uncertain and theproposed $4,325,000 maintenanceprogram had not been approved bythe FSM government nor the TrustTerritory High Commissioner.The budget includes lower-scale

government salary increases inthe new pay plan pending beforethe legislature and projected po-wer fuel cost increases with theanticipated electrification ofall four Kosrae municipalities,George said."Steps are being taken to in-

crease the efficiency of changing(electricity) consumers and mak-ing collections," he said.The installation of corputeriz-

ed financial management will in-crease State Treasury efficiencyin resource management and taxcollections, according to Georgewho said that this "will add tothe ability of the municipal andstate governements to improvetheir services through increasedrevenues, without increasingtaxes."For this reason, we hope that

the revised tax bill now with youwill be passed by the legislaturein the near future," the governorsaid.The legislature began its fifth

regular session on Aug. 13 toconsider the base salary scheduleand bills to appropriate $50,000to continue the cross-islandroad; organization of the statecourt system; appropriate $18,360for the Micronesian Legal Servi-ces Corp.; appropriate $1,122,452from the state revenue fund and$18,000 from foreign assistancefor executive, legislature andcourt fiscal 1985 operations; es-tablish employment ceilings, andnominations for the Kosrae Stateterole Board, police captain andPublic Affairs Department direc-tor.

KOLONIA, raiape - FSM and ITPj.delegations urged the MarshallIslands and Palau to continue re-gional regulation of maritimetransportation after the trustee-ship is terminated by drafting aproposal to create a MicronesianShipping Cormission, during the1984 Micronesian Shipping Confer-ence, June 27-29, in Honolulu.The document to replace TTPI

Executive Order 113 was draftedby Trust Territory Attorney Gen-eral Andrew G. Wilson II, confer-ence chairman, and FSM AssistantAttorney General Kristin Hender-son, Resources and DevelopmentSecretary Bernard Kelgenberger,senior FSM representative, saidin a July 24 report to PresidentTosiwo Nakayama.It will be finalized for review

and adoption at the next confer-ence tentatively scheduled forJanuary, 1985, in Palau, he said."The document, which will take

effect upon its execution and ra-tification by the three entities(FSM, Marshall Islands and Pal-au), spells out the compositionof the future Micronesian Ship-ping Council, its purpose and po-licies, goals and objectives andthe criteria for evaluation andgranting of future entry assuran-ces for shipping service in Mic-ronesia," Helgenberger said.With Marshalls and Palau not

represented at the conference in

PMON GETS BOAT - Gov. Reso Moe-es, left, is handing Aug. 14 inhis office the crank to the Yan-nar diesal engine on a 30-footlife boat from the scrapped MVHerkuner to Sokehs Chief Magist-rate Kusto Lieman, right, totransport copra fixm Bakin Islandto Ponape Island with Lt. Gov.Strik Yona looking on. The boatwas donated to Ponape state bythe ESM.

me Matson Navigation Co. Confer-ence Room, Sand Island, Honolulu,reportedly due to lack of travelfunds, the conference "took spec-ial interest in facilitating fut-ure participation of these twoentities by designating Palau asthe site of the next conference"and passing the co-chairmanshipto either Palau, or the Marsh-alls, he said.The FSM "has the greatest pot-

ential....to support a nationalshipping service," but its dele-gation "is in favor of a continu-ed cooperative relationship withthe other two entities in orderto secure the best possible op-tions of shipping services forits citizens," Helgenberger said.During the conference attended

by FSM and TTPI delegates and re-presentatives of the nine car-riers operating in Micronesia,the delegates reviewed the latestmodification of the Philippines,Micronesia and Orient Lines pro-posal to use the new Kosrae dockas a transshipment point for Kie-ta and lae and Papua New Guinea."This service may • be able to

supplement the FSM-Australia ser-vice which is currently providedby Nauru Pacific Lines," Helgen-berger said."It also has the potential for

interstate cargo movement as thereturn voyage f ran the Philip-pines calls (at) Kosrae on theway out to the U.S. West Coast,"he added.The proposed route is Majuro,

Ebeye, Kosrae, Ponape, Truk Sai-pan, Yap, Palau, Philippines,Kosrae, West Coast, according toHelgenberger who said, "Cargofron South Pacific ports may betransshipped from PNG to Kosraeto the other states, or Philip-pines to Kosrae for further dist-ribution. "The conference received an of-

fer by representatives of the U.S. Occupational Safety and HealthAdministration, which is operat-ing in the Northern Marianas andPalau, to conduct job safetytraining in the FSM and Marsh-alls, if they request it.The conferees also granted tar-

iff increases requested by thecarriers; granted Palau ShippingCo. a one-year entry assurance toterminate with all other entryassurances in July, 1985; grantedan entry assurance to Pacific Mi-cronesian Line, a non-vessel op-erating cannon carrier; agreed tomitigate problems caused by rest-rictive government policies, andagreed to finalize policies draf-ted during the conference for re-veiw and adoption during the 1985conference.

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KDIDNIA, Ponape - Public Audit-or John E. Dye released reportsrecommending that the FSM Tele-conrnunications Corp. streamlineits accounting system and citingmajor inadequacies in the fiscal1983 Yap State Legislature Fundaccounting records.A Telecom official reported

that it is following the recom-mendations of the Public Auditorin an Aug. 16 preliminary reporton its first year operations tohire a financial manager, estab-lish a general ledger and auto-mate its accounting system.The report on the Telecom ac-

counting system recommended est-ablishing a general ledger tocomply with P.L. 3-27 establish-ing the Telecommunications Revol-ving Fund and reduce excessiverepetitive recordkeeping, automa-ting accounting records, hiringan accounting manager, developingprocedures for account settlementwith Hawaiian Telephone Co. andMicronesia TeleconirunicationsCorp., automating toll call re-cords at the state communicationsstations and streamlining cashreceipts accounting, includingeliminating mailing receipts forchecks received for credit ac-counts.A general ledger required by

law "is an absolute must for man-agement so that they may make in-formed decisions and plans forthe corporation," the report saidin recommending that one be esta-blished immediately.In recommending an automated,

or computerized accounting sys-tem, it said the current manualrepetitive accounting sytem "in-creases the risk of errors occur-ing, consumes far too much timeand tends to generate fiscal re-cords which require a great dealof summarization and review be-fore they can be converted intoreadable financial statements.It also recommended automation

of toll, or long-distance ac-counts which provide 95 per centof the corporations operating re-venue and which are being prepar-ed manually by two customer ser-vice clerks who "are barely keep-ing abreast of the work."

And it said that eliminatingmailing of charge account paymentreceipts would save money in pos-tage and man hours.Mathias Lawrence, who became

Financial Manager on Aug. 1, af-ter the review was ccnpleted,said that a general ledger wasimplemented in June and wouldhave to be updated through Aug-ust, before it could be program-med into a computer as planned.After the central accounting

system, including payroll, isautomated, the corporation willbegin working on the accountingsystems at the communicationsstations and streamling cash re-ceipts accounting, Lawrenceindicated.In a May 24 report, Dye said

the inadequacies of the Yap StateLegislature Fund include erron-eously reported cash basis ac-

Auditor namedKDIONIA, Panape - Mary Ann 0'-

Kesfe, formerly with the ArizonaState Auditor General's Office,Phoenix, arrived Aug. 11 to servetwo yeaxs as a staff auditor inthe FSM Public Auditor's Office,according to Public Auditor JohnDye.Ms. O'Keefe, 23, a native of

Denver, Colorado, and graduate ofArizona State University, Tempe,in accountingwho became acertified pub-lic accountanton Aug. 1, ser-ved for morethan one yearas an auditorin the ArizonaState AuditorGeneral's Of-fice, beforecoming to Ponape.The appointment

raises the Publicto one senior auditor, two staffauditors and an administrativeassistant, in addition to DyeThe office is advertising for

three additional staff auditors,including two to be stationed inYap, Truk, or Kosrae, through theFSM Personnel Office, Dye said.

0'KEEFEof Ms. O'KeefeAuditor's staff

counting, incorrect disbursementledgers, no general ledger norbalance sheets, incomplete inputin the financial management sys-tem and bank reconciliations andjournal postings were threemonths behind.He recommended merger of the

legislature fund into the generalfund as prescribed by the 1983State Financial Management Act.Citing 48 scholarship checks

totalling $38,591 issued throughSept. 30, 1983, to the EducationDepartment but not disbursed andcashed, because the studentscould not be located, no longerneeded the money, or didn'trespond to award notices, thePublic Auditor recommendedvoiding all checks more than sixmonths old and issuing checksonly after contact is made withthe students and their addressesverified.The report also cited lack of

members1 expense account documen-tation, excess cash in non-inter-est bearing accounts and controlweaknesses.

President goes to ForumKDIDNIA, Ponape - President To-

siwo Nakayama left Ponape on Aug.22 to attend the 15th South Paci-fic Forum, Aug. 27-28, in Funafu-ti, Tuvalu, as head of the FSMdelegation.The President was accompanied

by Ponape Lt. Gov. Strik Ycma andFSM South Pacific Affairs DeputyChief Ira Akapito. They were pre-ceded by External Affairs DeputySecretary Asterio Takesy who at-tended the Aug. 21-22 pre-ForumSouth Pacific Bureau for EconomicCo-operation (SPEC) Cenmitteemeeting in Funafuti.The delegation is expected to

return to Ponape early nextmonth, according to Akapito.The Forum agenda includes re-

gional nuclear matters, decolon-isation, a single regional organ-ization, regional cooperation asit affects smaller Forum members,trade and industry, transporta-tion and ccmtunications, energy,reports on SPEC programs, budget-ary and administrative matters.

THE NATIONAL UNIONPublished by: FSM Information OfficeP.O. Box 490, Kolonia, PonapeFederated States of Micronesia 96941Telephone: 548

Kelson Johnson, Information OfficerTom Bryan, Information AdvisorEsikiel Lippwe, Broadcast Division ChiefElieser Rospel, Graphic ArtistAngle Mualia, Administrative AssistantMary Alien Maneul, Clerk TypistEsi James, Clerk Typist