Deputy Assistant Secretary for Insular Affairs
David Cohen - A Record of Accomplishments, 2001-2007

Raising the Visibility of Island Issues

The visibility of island issues in Washington was raised significantly during David Cohen’s tenure.  He and his staff drafted the Executive Order that President Bush signed in May 2003 to create the Interagency Group on Insular Areas, a high-level policy group focusing on issues relating to Guam, American Samoa, the U.S. Virgin Islands and the Commonwealth of the Northern Mariana Islands.  The IGIA has addressed a number of important issues under Cohen’s leadership, including preparations for the planned military buildup in Guam.

Although members of the President’s cabinet do not often visit the insular areas, Cohen was able to convince both Secretary Kempthorne and former Secretary Gale Norton to visit almost all of the insular areas for which Interior has responsibility.

Focus on Economic Development

Cohen said that he was most proud of the Office of Insular Affairs’ efforts during his tenure to help the islands promote private sector economic development.  “We recognized that the islands’ unsustainable reliance on the public sector was keeping people poor and making it almost impossible to generate the funds needed for education, health and infrastructure,” said Cohen.  “The lack of opportunity also threatens the island way of life, because so many islanders have had to leave home in order to make a decent living.”

Under Cohen’s leadership, OIA developed a comprehensive program to help the islands improve their business climates and reach out to potential investors.  Cohen started the Island Fellows program, which for the past five summers has sent MBA candidates from Wharton, Harvard, Northwestern and other prestigious business schools to the islands to address economic development issues.  The Island Fellows have, under the guidance of distinguished economists, prepared detailed analyses of legal, regulatory, tax and land reforms that island governments could adopt to attract more investment.  They have also identified and conducted extensive research on potential business opportunities in each of the insular areas.  “We’ve gotten tremendous bang for our buck with the Island Fellows program,” said Cohen.  “The Fellows have done excellent work that businesses truly rely upon.  We’ve also ensured that a number of future high-powered business people will be friends of the islands for life.”

Cohen also initiated a series of annual Conferences on Business Opportunities in the Islands, the fourth of which was held in Guam in October 2007.  The Conferences, each of which has attracted overflow crowds, bring together high level officials of the Federal Government and island governments, businesses from around the world and businesses from the islands.  “The idea is to give the islands a high profile stage to tell their story to potential investors,” said Cohen.  “Our objective is to encourage win-win opportunities where good off-island companies can partner with island businesses to create jobs and opportunity in the islands.”

Cohen also organized Business Opportunities Missions which have brought delegations of potential investors to the Northern Mariana Islands, Guam, Palau, American Samoa and the U.S. Virgin Islands.

“I’ve traveled around the country and to several foreign nations promoting our Conferences and Missions,” said Cohen.  “These marketing efforts have created a great deal of awareness about business opportunities in the islands and have produced some exciting results.” 

As examples, Cohen cited the recent decision by Stanford Financial Group, which participated in OIA’s 2006 Business Opportunities Mission to the U.S. Virgin Islands, to establish operations and invest over $2 billion in that territory; and various investments in the Northern Mariana Islands by a group led by Sedy Demesa, a California businesswoman who participated in the 2005 Business Opportunities Mission to Saipan, including the establishment of the nursing school Emmanuel College, the purchase of the Koreana Hotel, and the establishment of the Pacific Times newspaper.

He also noted a planned $200 million resort and condominium project on Tinian by Bridge Investment Group, which was introduced to the Northern Mariana Islands through Cohen’s business opportunities marketing efforts; an agreement by Merchant Capital, a company that participated in the 2006 Business Opportunities Mission to American Samoa, to raise the financing for a fiber optic cable connection that will enable American Samoa to establish a call center industry; and the establishment of the first captive insurance company on Guam, a deal that was consummated at the 2004 Conference on Business Opportunities in the Islands.

“We don’t promote or endorse any specific business opportunity,” said Cohen.  “We simply do our research to find out which industries and companies can find good opportunities in the islands, market the islands extensively on the basis of that research, facilitate contact between the businesses we reach out to and their island counterparts, and then let the parties take it from there.  The businesses do their own due diligence.”

Focus on Accountability

While Cohen has often referred to economic development as “Priority 1” for OIA, he calls the promotion of accountability for public funds “Priority 1-A”.  Cohen has directed OIA to target its technical assistance funds to help insular area governments improve their financial management.  He oversaw a special effort to help the islands develop the capacity to submit comprehensive financial audits annually under requirements of the Single Audit Act. 

He cited some of the results of that effort in a recent speech:  “When I took office in 2002, not a single one of the 11 nations, states and territories that we serve was submitting timely or clean Single Audits.  Today, the record on timeliness is almost exactly the opposite:  only one of our 11 jurisdictions is not current with its Single Audits.”  Cohen went on to note that more and more audits submitted by insular area governments recently have been clean as well as timely.

Putting “Compact II” on the Right Track

Cohen and his team at OIA were the principal architects of the comprehensive new accountability requirements adopted with recent amendments to the Compacts of Free Association with the Marshall Islands and the Federated States of Micronesia.  These accountability requirements were crucial in convincing the U.S. Congress to pass the Compact of Free Association Amendments Act of 2003, which appropriated $3.5 billion in grants and other payments over 20 years.  Cohen testified on behalf of the Bush Administration before both the Senate and House in support of the Act.

The passage of the Compact amendments, or “Compact II”, created a number of new responsibilities for Cohen.  He has served as the first and only Chairman of each of the following bilateral committees: the Joint Economic Management Committee, which allocates and oversees U.S. grant assistance under its Compact with the Federated States of Micronesia; the Joint Economic and Financial Accountability Committee, which allocates and oversees Compact assistance to the Marshall Islands; and the governing committees established under the Compacts for the Federated States of Micronesia and the Marshall Islands, respectively. 

Through his leadership of these four committees and of OIA, which manages the Compact grants, Cohen has guided the “Compact II” implementation effort through the challenges of its formative years.  These challenges have included successful urgent responses to fiscal crises in the states of Kosrae and Chuuk in the Federated States of Micronesia.

To bring the Compact implementation effort closer to the grantees, Cohen oversaw the establishment of a new OIA office in Honolulu in 2004 and the recruitment of its staff of grants specialists in health, education, infrastructure and fiscal management.

For Palau, the third nation with a Compact of Free Association with the U.S., Cohen’s team at OIA administered $159 million in grants to fund a 53-mile road around Palau’s largest island.  The road has made significant economic development possible for the island of Babeldaob, the second largest island after Guam in the Micronesian region.  Cohen signed the rights to the newly completed road over to the Government of Palau at a ceremony in Babeldaob in October 2007.

“Although I signed the documents in October, for me the road was really opened in June when Secretary Kempthorne and Palau President Tommy Remengesau toured the road on their Harleys,” said Cohen.

Protecting the Rights of Locals and Guest Workers in the CNMI

Cohen has taken a particular interest in helping Chamorros, Carolinians, foreign guest workers and others who are suffering because of the structural problems with the Commonwealth of the Northern Mariana Islands’ economy.  He and his staff drafted and won Bush Administration support for legislation that would federalize the CNMI’s immigration system in a flexible manner that accommodates the CNMI’s special needs to attract workers, tourists, investors and other visitors. 

A modified version of that legislation, H.R. 3079, passed the House by unanimous consent earlier this month.  Cohen has testified several times on behalf of the Bush Administration before the Senate and the House in support of federalizing the CNMI’s immigration system.  He has argued that the current locally controlled system has denied private sector job opportunities to an entire generation of Chamorros and Carolinians, as well as posing concerns relating to national security, refugee protection, human trafficking and labor abuse. 

H.R. 3079 also provides for something that Cohen has long personally championed with the support of the Bush Administration:  granting the CNMI a non-voting delegate to the U.S. House of Representatives, similar to the type of representation afforded to every other territory and the District of Columbia.

Cohen has also championed the cause of protecting the rights of guest workers and other aliens in the CNMI.  In 2003, he signed a Memorandum of Agreement with then-CNMI Governor Juan Babauta under which the CNMI agreed to establish a refugee protection program, adopt a comprehensive human trafficking statute and cooperate with the Federal Government to combat human trafficking. 

Under the MOA, OIA agreed to provide $600,000 to fund the establishment of the refugee protection program and hire the U.S. Department of Homeland Security as a special consultant to aid in the program’s implementation.  Cohen has directed OIA technical assistance funding to support the Guma Esperansa women’s shelter in Saipan, a facility operated by the Catholic service organization Karidat to house victims of human trafficking and domestic violence.

The Federal Ombudsman’s Office on Saipan, a component of OIA dedicated to helping guest workers protect their rights, has been significantly strengthened during Cohen’s tenure.  Cohen has spoken out several times about the need to protect the rights of guest workers, and has testified before Congress on behalf of the Bush Administration about the tremendous contributions that the guest workers have made to the CNMI economy.  He has urged Congress, on behalf of the Bush Administration, to properly account for the interests of long-term guest workers in any legislation that federalizes the CNMI’s immigration system.  

Wide Variety of Issues

Cohen has worn several hats during the Bush Administration.  He was designated by President Bush and Secretary of State Condoleezza Rice to serve as U.S. Representative to the Pacific Community from 2005 through this year.  President Bush also designated him as his Special Representative for consultations with the CNMI under that territory’s Covenant with the U.S. 

In 2001, President Bush placed Cohen on the President’s Advisory Commission on Asian Americans and Pacific Islanders, a post from which he resigned in 2002 in order to take his current job at Interior.  In 2001, Secretary of Labor Elaine Chao appointed Cohen to chair the Special Industry Committee for American Samoa, a body then charged with establishing minimum wage rates for that territory.

Cohen said that he will miss the stunning variety of issues that his job has required him to deal with.  “I’ve had to become an expert on so many things, including cultural issues, political status, nuclear claims, war claims, coral reef protection, environmental issues, health, education, capacity building, infrastructure financing, economic and social statistics, tax issues, land issues, military issues and so much more,” said Cohen.  “All of that is in addition to our top two priorities of private sector economic development and accountability.

“I have many to thank for the great experience that I’ve had here at Interior, starting with God, my family, President Bush, Secretary Kempthorne, Secretary Norton, Deputy Secretary Lynn Scarlett, OIA Director Nikolao Pula and our phenomenal team at OIA, my colleagues in the Administration, my colleagues on Capitol Hill and, most particularly, my colleagues throughout the islands,” said Cohen.  “I’ve held this job for a longer continuous period than anyone else, and have had the opportunity to have a significant impact to help people and places that I care very much about.  You can’t ask for more than that.”