Nauru In Dire Straits

President Rene Harris...attempting to run his country¹s crumbling affairs.

The wreak of mob law awaited President Rene Harris when he alighted from the jet that had carried him home from Australia to Nauru and climbed in his presidential car.

A crowd of furious citizens jeered and punched at the vehicle as it left for his office.

By the end of April, Harris, a diabetic like many other Nauruans, who flits frequently between Nauru and Australia at vast public expense for the medical treatment that keeps him alive, was attempting to run his 21 square kilometres country's crumbling affairs with mounting desperation.

But the trip he's just returned from was made in a bid to stave off the seizure of some of the very last of a national asset portfolio once worth more than A$2000 million.

In Melbourne, an American money lending business, GE Capital Corporation, had begun proceedings to seize properties valued at around A$230 million including the 40-floor Nauru House because of Nauru's failure to meet repayment obligations for a loan borrowed mainly for paying interest due on hundreds of millions of dollars of other debts.

As Islands Business went to press, the Harris government was lurching to GE Capital Corporation's May 5 deadline for settling the debts owed to it. Pressure from other sources was being felt by him.

According to documents from the president's office given to Islands Business, the United States is pressing Nauru, in return for favours, to deny a newspaper report that an American lawyer and other persons said to have links with the Bush administration are United States agents involved in a scheme to use Nauru for espionage and other secret diplomatic activities. It is also asking for a list of foreigners to whom Nauruan passports have been sold.

The United States has been threatening Nauru with sanctions over the sales, which the US fears could have been made to terrorists, and to shut down offshore banks the US claims have been used for massive money laundering schemes by criminals and possibly also terrorist organisations.

At the end of April, the resignation of Harris was being demanded by Opposition MPs, who accused him of spending government funds unconstitutionally after his failure to get a budget for 2003/2004 passed by December 31, and then by March 31.
In television and radio broadcasts on April 5, Harris claimed that in the absence of a budget a way had been found to spend money legally.

On April 6, Speaker Ludwig Scotty resigned in protest against what he said was illegal spending by the government that set a "dangerous precedent" and "degraded our democratic political system." Since no other MP could be persuade to succeed Scotty, Harris was put constitutionally in the position of being able to get a budget bill or any other legislation approved.
On April 8, Harris in parliament moved that the meeting be adjourned to April 14. The motion was defeated and opposition MPs then began pressing for his resignation.

Late in April, Harris returned to Australia in what was apparently another vain bid to solve the loan crisis.
Australia's foreign minister Alexander Downer said in a statement that while Australia would stand by to help, it wouldn't pay its debts but would equip it with officials to help solve its messy financial affairs.

According to The People's Voice, a newsletter published by some MPs, ordinary Nauruans continue to be forced to queue for hours to draw their monthly limit of A$80 cash from the government-owned Bank of Nauru, which is said to be insolvent, while government ministers draw thousands of dollars in daily allowances for time spent overseas officially engaged in loan talks.

The newsletter said some cabinet ministers had claimed that "colleagues" involved in the talks and getting allowances of up to US$500 daily were also directors on the board of a company brokering the attempt to refinance the GE Capital Corporation loan.