by Mindy Aguon, KUAM News Friday, March 10, 2006 Subscribe to Mindy's newsfeed   E-mail this article Printable version KUAM Toolbar Web Widgets Get RSS headlines

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Earned Income Tax Credit payments for Guam's working poor could soon be paid out. A major decision handed down by a District Court judge today, allowing Governor Felix Camacho's $90 million settlement to move forward. The decision disqualified the Attorney General from handling the case.

At the same time the judge clarified the roles of both the Governor and the Attorney General, as they relate to the EITC lawsuits and pending settlement.

"Authority to enforce the Guam Territorial Income Tax vests with the governor" - that statement was part of a twelve-page decision handed down today by District Court Judge Ricardo Martinez. The decision brings closure to a two-year-old civil class action lawsuit filed by Julie Babauta Santos against the Governor. As we reported last year the Governor and class attorney, Mike Phillips reached a $90 million settlement to pay EITC for tax years 1995 through 2004.

Attorney General Douglas Moylan at the time quickly raised opposition to the settlement, arguing a $60 million agreement he negotiated with Lieutenant Governor Kaleo Moylan, while he was acting as the island's chief executive, was in the best interest of the public. Judge Martinez's decision however allows the Governor's $90 million settlement to proceed. The court concluded that the Governor has the final authority to be both the representative for the Government of Guam and to settle the issue.

Judge Martinez added that the Governor should be represented by independent counsel in the EITC case. It should also be noted the judge clearly attempted to clarify the Attorney General's role as the chief legal officer of the Government of Guam. While AG Moylan argued that a 1998 amendment to the Organic Act gave him the authority to handle suits such as the EITC case, Judge Martinez states "Congress never amended the section to substitute the attorney general in place of the governor or anyone else."

Additionally the court concluded that the Governor is the executive officer of the territory and has power over the AG, who represents his client the Government of Guam. Judge Martinez added, "The Attorney General should not replace the Governor in setting policy whenever he disagrees with the Governor's positions."

The Governor's legal counsel, Attorney Daniel Benjamin, says he is pleased with the decision, telling KUAM News the EITC $90 million agreement can finally move forward. Benjamin adding the judge made it clear the Attorney General is subject to the same rules as other attorneys when it comes to conflicts.

While today's decision was made in the Santos EITC suit, Judge Martinez ordered the parties along with those in two other similar lawsuits to appear in court on Tuesday, March 14, to discuss whether the cases should be consolidated.

Today's ruling also indicated that it was improper for the AG to cross-examine his former clients. It also indicated that the AG should not have refused to follow the Governor's instructions in the case. In a media release issued late this afternoon the Governor reacted to the ruling by thanking the court, adding, "Now that we have such clear guidance from the courts, it is my sincere hope that the Attorney General will work cooperatively with my office in future matters."

AG Moylan issued a press release about the decision, indicating he will take the case to the Ninth Circuit Court of Appeals, when appropriate, on the issue of whether the Governor is the proper official to appear before the courts on behalf of the people of Guam in tax matters.