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HomeNewsArchivesReworked CFO Bill Has Cleared Just One Hurdle

Reworked CFO Bill Has Cleared Just One Hurdle

July 18, 2004 – Approval by a congressional committee last Wednesday of Delegate Donna M. Christensen's bill to create a federally mandated financial overseer and financial management system for the Virgin Islands was unanimous and without discussion.
However, the delegate has not overcome the opposition of her fellow Democrats back home – first and foremost the governor. And she may still face obstacles from the Bush administration as represented by the U.S. Department of the Interior and/or Republicans in Congress.
Christensen has said her bill is necessary to stop government overspending that has put the territory in bonded indebtedness exceeding $1 billion. The House Committee on Resources has now sent the measure on the full House for consideration. The next step will be a first reading of the bill on the House floor — which is likely before the body recesses in August, according to Monique Clendinen-Watson, a Christensen aide.
If the measure ends up winning House approval, it would then be taken up by the Senate, in its Committee on Energy and Natural Resources.
What the Committee on Resources approved was a substituted and significantly changed version of the bill Christensen introduced last November and revised in March.
The earlier measure had called for the Secretary of the Interior to serve as chair of the search commission that would present three candidates to the governor from which he would select his nominee to submit to the Legislature for consent. It also had provided for the Secretary Interior to "provide" a financial management system for the V.I. government. (See "Delegate Says Fiscal Reality behind Her CFO Bill".)
However, at the June 16 hearing on the bill before the Committee on Resources, the Interior Department official testifying, acting deputy assistant secretary Nikolao Pula, said Interior opposed the bill because of a belief that "solutions can be found within the local territorial government before turning to the outside for help."
Also, he said, Interior was not interested in providing a financial management system to the territory, and that, rather, "it is the responsibility of the V.I. to develop and fund its own system." (See "Strong Opinions Span the Spectrum at CFO Hearing".)
Christensen said after the hearing that she was taken aback by Interior's opposition. She then proceeded to draft a new version of her bill that omits any role for Interior to play in the process of selecting a CFO or in the securing of a financial management system.
What's New and Different
Following are changes made by Christensen in the version of the bill approved by the House Committee on Resources:
– If a chief financial officer has not been appointed within 180 days of enactment of the federal legislation, the search commission by majority vote shall appoint, from the names it had submitted to the governor, an acting CFO. The earlier version called for the Secretary of the Interior to make the appointment.
– The CFO within six months of appointment and quarterly thereafter shall submit financial status reports to the House Committee of Resources and the U.S. Senate Committee on Energy and Natural Resources. The earlier version specified only that the reports would be "available to the public."
– The revised bill states: "It is hereby authorized to be appropriated such sums as necessary for the installation of a financial management system." The earlier version called for the Interior Department within a year of enactment of the legislation to "provide" the territory such a system.
– The nominating commission shall consist of nine members. The earlier version called for eight; the additional member would be appointed by the Advocates for the Preservation of the Retirement System.
– The commission shall be chaired by the presiding judge of the Territorial Court or her designee. The earlier version called for the Secretary of the Interior to chair the nominating panel.
– The commission must hold its first meeting within 15 days of all members having been appointed. The earlier version specified within 30 days.
– The commission shall report its recommendations for nomination to the governor and the House Resources Committee and the Senate Energy and Natural Resources Committee within 60 days of its first meeting. The earlier version called for the report to go to the governor and the Secretary of the Interior; it also specified that if the commission did not take the indicated action within 60 days, the Interior Secretary should do so within 90 days of the commission's first meeting.
– The three candidates for CFO recommended by the commission must have "extensive practical experience at the highest levels of financial management" in government or business. The earlier version did not include the phrase cited here.
– The three candidates recommended by the commission "shall not have served in a policymaking or unclassified position of the government of the Virgin Islands in the 10 years immediately preceding appointment." This was not addressed in the earlier version.
– If there is a need to replace the deputy CFO (defined in the bill as the existing director of the Office of Management and Budget), the governor shall select the replacement. In the earlier version, the CFO would have named the replacement.
– All employees of the Office of Management and Budget shall become employees of the Office of the Chief Financial Officer.
– The heads of all government department shall provide information that the CFO deems necessary to carry out his/her functions. The earlier version called only for the heads of the Finance Department and the Internal Revenue Bureau to do so.
– The salary of the CFO would be "not less than the highest rate of pay for a cabinet officer … or a chief financial officer serving in any government or semi-autonomous agency." The earlier version specified that the salary could not be less than "the rate of pay for a cabinet officer."
– The salary of the deputy CFO would be not less than the pay of the OMB director. The earlier version stated that the salary would be not less than "the rate of pay for a cabinet officer."
The full text of the delegate's substitute bill as approved by the House Resources Committee can be downloaded as a pdf file.
Governor Vows to Fight On
Gov. Charles W. Turnbull made it clear last week – both before and after the House committee vote – that he is undaunted in his adamant opposition to the idea of a CFO.
In a three-page letter sent to members of the House committee dated July 13 – the day before the scheduled vote – Turnbull termed Christensen's bill a "prescription for dysfunctional government." He said "the premise of the proposal is so deeply flawed that no amount of fine-tuning can remedy its fatal defects."
He said the bill would give the CFO powers "normally reserved to elected officials – of budget preparation and program execution, including the power to withhold legislatively appropriated funds and to revise departmental priorities otherwise set by the governor … If the proposed CFO were to disregard the governor's policy directives, there would be no practical remedy."
The governor would be left with two "unworkable choices," he said: "to defer to, and to substitute for, the unelected CFO's judgment, or to attempt to create a budget impasse with the complicity of the Legislature."
In a Government House release shortly after the vote, Turnbull said he was "greatly disappointed" that the committee had approved the delegate's will "without d
ebate."
He stated that the CFO as proposed "would assume powers over budgeting and the allocation of scarce financial resources that are reserved under the Revised Organic Act to the people of the Virgin Islands through … their elected officials." He also stated that "the CFO would virtually be immune from removal from office, and thus would be accountable to no one," an argument he also had made in person testifying at the June 16 hearing.
The bill states that the CFO may be removed "for cause," which it further defines as "removal based on misconduct, failure to meet job requirements, or any grounds that a reasonable person would find grounds for discharge."
Turnbull further said that the bill "is strongly opposed" by both the executive and legislative branches "as well as the leadership of organized labor, other leaders and many people in the Virgin Islands. In congressional hearings, the Bush administration, particularly the Department of Interior, stood in opposition as well."
Those testifying against the measure were Interior's Pula, Turnbull and Senate President David Jones. However, the territory's Republican national committeeman, Holland S. Redfield II, expressed strong support for the bill.
Turnbull also said he understood that "congressional committees defer to members when they propose bills that affect only their constituents."
Committee Approval Was by Consent
Christensen's bill, H.R. 3589, was one of 31 bills that were considered by the Committee on Resources en masse on Wednesday. The committee chair, Rep. Richard W. Pombo, a Republican from California, said afterward that it was the largest number of bills ever approved by unanimous consent by any House committee on one agenda.
Prior to the vote, Pombo made the point that it is the custom of the House to defer to the wishes of members who bring issues that concern only their district before the committee.
The ranking Democrat on the committee, Rep. Nick J. Rahall II of West Virginia, called the delegate's measure "the most important bill on the agenda," adding that "the people of the Virgin Islands are crying out for help."
A release issued by Christensen's office after the vote stated that she and Pombo had "worked to address a number of concerns," notably the elimination of any role for the Secretary of the Interior, which were incorporated into the substitute bill.
Referring in the release to the new provision for the presiding judge or an appointee thereof to chair the nominating commission, Christensen said that "the Territorial Court has expressed some reluctance to serve in this role." However, she added, "the committee felt strongly that the independence and the impartiality of the court would bring equanimity to the process."

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