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Case re Ngardmau Waterfall Account Resolved with Warnings

In general, complaints filed with the Office of the Special Prosecutor are closed and remain confidential if there is no prosecution. However, sometimes a situation arises that makes the facts of a complaint a learning tool for all regardless of the complaint not proceeding to the prosecution stage. Such is the case of the Ngardmau Waterfall account.

I delayed releasing the attached letter and information to the public because I wanted to reassess whether such action on the part of the OSP would be effective as a learning tool for all the States. After much thought and upon receipt of other complaints alleging misuse of government funds and equipment in the Republic, I decided to release the information in this case informing everyone, if they did not know so already, that “borrowing” government funds, such as what occurred in this case, violates the law.  The government is not a bank for any individual to use when they are short on funds, regardless of the status of said individual.

The Ngardmau Waterfall case came to the Office of the Special Prosecutor requesting investigation into possible misuse of government funds. Funds are collected from visitors to the Ngardmau Waterfall, which funds are then to be deposited into the Ngardmau State general fund as revenue for the State. Investigation showed that as far back as 2006, there were allegations that government personnel, and allegedly some private individuals, “borrowed” money from the fund with the intention of paying the fund back later, usually by the next pay period. Over time, the monies borrowed eventually amounted to a large deficit for the State of Ngardmau without repayment in sight.

As our office has found with many of the States in the Republic, good record keeping was and remains a challenge. Although our investigators poured through years of boxes containing bank statements, deposit records, and the like, the Ngardmau Waterfall records were sparse, severely incomplete, with deposits that did not match alleged collections. Moreover, one of the individuals involved in keeping the records passed away (Decedent). After Decedent’s death, no records of the account “borrowing” system could be found. State workers were interviewed, but less than a handful were forthright enough to admit having borrowed money, and while those individuals explained the borrowing process that many took part in over the years, they would not name any others but themselves. The amount of money ultimately claimed to be missing exceeded $13,500.

The Governor sought to reclaim the missing money from Decedent’s family, who paid what was demanded but then questioned such payment when no evidence was produced that  Decedent took all or any of the money. Eventually, the Ngardmau State Legislature heard of the payment by Decedent’s family, and believing such demand was inappropriate under the circumstances,  the Legislature appropriated the amount needed to repay Decedent’s family. The appropriation was allegedly not turned over because the complaint was under investigation by the Office of the Special Prosecutor. The Ngardmau State Legislature appropriated the money a second time, which was eventually paid back to Decedent’s family after the OSP completed its investigation and met with the Governor and four members of the Ngardmau State Legislature.

As the Special Prosecutor, I requested to meet with the Ngardmau State Government in order to discuss the case, challenges to prosecution based on lack of good record-keeping by the State, and a proposed resolution of settlement. The resolution would be used as a learning tool and return the appropriated money to Decedent’s family as intended by the Legislature.

The conditions of closing the case were as follows:

  • A letter to the Governor would be written with copies of the letter given to each state employee and members of the Legislature informing all that it is unlawful to “borrow” money from the government;
  • The letter would be made public as a learning tool for the States so this practice of “borrowing” does not occur or continue anywhere in the Republic;
  • The appropriation would be implemented by the Governor and released as intended to Decedent’s family; and,
  • The Governor would share the monthly receipts and deposits of the Ngardmau Waterfall account with the Office of the Special Prosecutor for the following year to make sure the “borrowing” stops and the account is accurately maintained for the benefit of the people of Ngardmau State.

Our proposed resolution was accepted by the Ngardmau Governor and the Legislature.

A quote I came across recently said, “In a democracy, it is the duty of every citizen to think.”  I hope this resolution and its publication will aid in that endeavor, help prevent future violations, and promote a healthier democracy through increased knowledge and involvement by the Palauan citizens.

Kom kmal mesulang,

April Dawn Cripps

Special Prosecutor

Download Letter to Ngardmau Governor