Following a week of public demonstrations by members of the displaced Bikini community in Majuro over alleged mismanagement of nuclear test compensation trust funds, the Marshall Islands government placed the Bikini-Kili-Ejit or KBE Local Government into receivership late last week.
At an emergency Cabinet meeting last week, the national government’s leadership voted to place the KBE Local Government into receivership, taking authority away from the mayor and council and giving it to Minister of Finance Brenson Wase to oversee and review the local government’s financial affairs.
It is a rare move by the Cabinet to intervene in a local government. “KBE” refers to two of the islands — Kili and Ejit — where most of the displaced Bikinians live today.
The government action follows two demonstrations by KBE community members in Majuro, which rarely sees any type of public protest. Placard-carrying demonstrators protested outside the local government’s offices and later the same week marked down the main street to the national government’s capital building.
“The government will intervene,” Acting President Christopher Loeak said on behalf of the Cabinet to a crowd of Bikini protestors assembled with signs outside the International Conference Center a few days before the decision was reached to place the local government into receivership. At that demonstration, repeated chants to place the local government on receivership led Loeak and Parliament Speaker Kenneth Kedi to address the crowd. “I am with you 100 percent,” Speaker Kedi told the crowd, indicating his support for immediate receivership for the Bikini government.
Demonstrators called for the local government to be placed under receivership and forensic audits to be conducted of the use of over US$70 million from the now-bankrupted Bikini Resettlement Trust Fund.
Shortly before the Cabinet’s action, both Secretary of Finance Patrick Langrine and the President’s Office issued nearly identical statements about the KBE situation — both indicating the national government has never had any involvement in or oversight over the Bikini trust funds, and stating the national government’s willingness to introduce legislation to Nitijela (parliament) to increase transparency and accountability in the use of trust funds.
The Bikini Resettlement Trust Fund had US$71 million in it at the end of 2016, according to the last audit figures available. When the current KBE administration gained full control over this trust fund in 2017 after the U.S. government ended 35 years of oversight of trust fund use, it quickly spent the money. A report from the Arden Trust Company, which manages the trust fund, shows that by December 2020, the Bikini Resettlement Trust Fund had only US$4.8 million left. As of March this year, it had only US$100,000 left.
All regular payments for hundreds of members of the Bikini community stopped without notice or any information from the KBE Local Government in January this year, leaving the community without resources that it had relied on since 1982 when the U.S government established the Resettlement Trust Fund.
An irony of the receivership going to Ministry of Finance is that the Finance had the most financial and accountability problems identified by Deloitte auditors in six years, with the number of “findings” (problems) identified by auditors skyrocketing from just seven in 2020 to 17 for the most recently released audit for 2021. Minister Wase said after the Cabinet decision that the first order of receivership business is for staff in the ministries of Culture and Internal Affairs, which has jurisdiction over local governments, and Finance to review the situation and provide recommendations to him for next steps.