Compact of Tree Association
Section 177 Master Trust Fund

Chart Showing Rate of Depletion under Various Assumptions

ENJEBI RESETTLEMENT TRUST FUND

Mr. MURTHA. Thank you very much.

Mr. ANDERSON. Mr. Chairman, if I may, I would like at first to respond to something I understand was said earlier with respect to the level of the Enjebi resettlement trust fund.

That was originally scheduled to be $10 million. The amount in the Compact Act is $7.5 million because your Committee had separately appropriated $2.5 million to go with the $7.5 million to make $10 million. The Compact Act passed with the $7.5 million, but that year's appropriation didn't contain the $2.5 that was allowed for. So, there is a shortfall. This $2.5 million would make it up and bring it back to the level that was agreed on at the time the Compact Act was passed.

The second thing the Senator mentioned that we want to leave a marker on is a potential problem with the rapid depletion of the $150 million master trust fund that was set up by the Compact Act to pay out the nuclear claims for the four northern Marshall atolls. That was originally set up for $150 million with the assumption that it would earn sufficient income to pay out the $18 million required every year and be substantially intact at the end of the 15 year period.

What happened was that the payments of the first year had to come out of principal. That was $18 million that came off the top. And that $18 million didn't earn very much. Then Black Monday came along and knocked the stuffings, temporarily at least, out of the balance. And so, we started this calendar year with a fund that had taken a couple of hits.

Now, we have worked out a chart-and I am going to hand one to you and one to the reporter-which makes a couple of assumptions about what would happen if circumstances don't get more favorable and the fund doesn't earn the 12 percent originally contemplated for it. On the back page you will see when the money would run out if the assumptions on which the chart is made turn out to be accurate forecasts. In the second line you will see it assumes that there was $135 million in the trust fund on January 1 of this year. Assuming an 8 percent return, the fund would be exhausted in the 51st quarter rather than the 60th quarter which is contemplated by the Act.

Our purpose in bringing this to your attention at this time is just to make a marker, let the Committee know that if things don't improve a little, there could be a problem. And one suggestion we might make is that you ask the entities involved to include in their annual reports to your Committee a chart like this or something which will enable you to keep track of the ability of the fund to meet the commitments for it.

Mr. MURTHA. Thank you very much, Senator. We appreciate your coming before the Committee. It has been very helpful. Mr. JOHN. Thank you very much.

Mr. ANDERSON. It was an optimistic assumption that was made at the time when interest rates were high, and it seemed to be supported by recent experience. We question whether that assumption is now valid.

Mr. MURTHA. Thank you very much.

Mr. JOHN. Thank you, Mr. Chairman.

TUESDAY, APRIL 26, 1988.

RONGELAP ATOLL

WITNESSES

JETON ANJAIN, SENATOR

COOPER BROWN, ATTORNEY

HENRY KOHN, RONGELAP REASSESSMENT
ROSALIE BERTELL, SCIENTIFIC CONSULTANT
BERND FRANKE, SCIENTIFIC CONSULTANT

INTRODUCTION OF RONGELAP OFFICIALS

Mr. MURTHA. Rongelap? Senator, Welcome.
Mr. ANJAIN. Dr. Kohn will be testifying.

Mr. MURTHA. Do you want to have Dr. Kohn join us here?
Mr. ANJAIN. Yes, sir.

Mr. MURTHA. All right. Let's have Dr. Kohn join us here on the panel by popular request.

All right, Senator, if you will introduce the rest of your colleagues here.

Mr. ANJAIN. Thank you very much, Mr. Chairman. I will introduce, first of all, members of my council from the Rongelap Atoll local government. I have with me Mr. William Meco, who is the mayor, and also Hemmos Chiles, councilman; Isan Tema is also a councilman; Boris Gellan, councilman; Nictimus Antak, councilman; and Clandon Abija, also a councilman.

On my right here, Mr. Chairman, is Mr. Richard Kare, our attorney. On my immediate left is Dr. Rosalie Bertell, one of our scientific consultants. Next to her is Bernd Franke, also a scientific consultant for the people of Rongelap, and Mr. Rick Ellert, the construction engineer. And of course, you know Dr. Henry Kohn.

Mr. MURTHA. All your testimony will appear in the record. [The statements of Dr. Bertell and Dr. Frank follow:] İCLERK'S NOTE.-The attachments to Dr. Bertell's and Dr. Franke's testimony are being held in the Committee files.]