2007

In the initial period of his Administration, Stephen moved to continue the practice, commenced by former President Ludwig Scotty, of appointing a separate Foreign Affairs Minister, when Dr. Kieren Keke (a cousin of Stephen) was installed in that post in December 2007. Previously, each President of Nauru had concurrently acted as his own Foreign Affairs Minister, although this was customary rather than a constitutional requirement. Stephen also appointed Frederick Pitcher as Finance Minister, and his Administration inherited the austerity measures associated with the outgoing Scotty Administration.

Regarding constitutional affairs, however, one of the major issues facing the new Stephen Administration was the process of constitutional revision consultations, started by former President Ludwig Scotty. These centred mainly on proposals to elect the President of Nauru by direct, popular election, rather than indirectly by the Parliament of Nauru, and which would thus restrict somewhat the frequent recourse to the vote of no confidence, which has been a feature of Nauru's political life for many years. Since Marcus Stephen came to office in circumstances involving the overturning of the previous government's Parliamentary majority in just such a manner, it remained to be seen what the Stephen Administration's formal position and practice on this issue would be.

At a personal level, the appointment of Marcus Stephen as President of Nauru at the age of 38, together with a youthful ministerial team, marked somewhat of a generational shift from some of the political figures who have dominated Nauruan politics in recent years; e.g., he was nearly 40 years younger than Derog Gioura, who served as President of Nauru in 2003, having entered the Parliament of Nauru in 1968, before the birth of Stephen. However, the appointment of youthful heads of state in the Republic of Nauru is by no means unknown; Bernard Dowiyogo assumed the office of President of Nauru at the even younger age of 30 in 1976. It may be added that since Stephen's presidency was to last a few years, his actual experience of office was to grow to be much longer than that of several previous holders of the same office.

2008

Political turmoil

In March 2008 moves in the Parliament of Nauru to unseat the Administration of Marcus Stephen by means of a vote of no confidence were thwarted by the resignation of the Speaker, Riddell Akua.^[15] Unrest on the island which involved threats to export trade and the torching of a police station were events which occurred shortly prior to Parliamentary moves to remove President Stephen and his Administration from office.^[16]

At the end of the first three months of Stephen's presidency there was thus widespread unrest in the country.

2009

The year 2009 opened with the Stephen Administration enjoying a more consolidated position than it had experienced in its first few months of existence. (See, above: Marcus Stephen#Political turmoil.)

2010: Political turmoil and State of Emergency

In late 2009 or early 2010, the Stephen Cabinet rejected a proposed loan from Australian company Getax, which buys Nauruan phosphate. Getax offered Nauru a loan of A$25 million, with a 15% interest rate, which, according to a later investigation by newspaper The Australian, "would be likely to have resulted in the country defaulting on its repayments, triggering contract provisions that would have let Getax take over the Nauru-owned phosphate industry". The government refused the offer, Stephen later explaining: "It would have been disastrous for Nauru. It we had defaulted on one payment, we would have lost the phosphate industry. Cabinet unanimously rejected it."^[27][28]

Shortly thereafter, Getax organised and funded a trip to Singapore for all six opposition MPs, as well as three non-Cabinet government MPs. Following the trip, the latter three defected to the opposition, and the Stephen government's parliamentary majority shrank from twelve-six to nine-all, leaving Parliament deadlocked.^[27][28] Following "repeated unsuccessful bids by the opposition to lodge motions of no confidence in the government of Marcus Stephen", early elections were held in April 2010.^[29] They resulted in all sitting MPs being re-elected,^[30] prompting fresh, equally inconclusive elections in June.^[31]

Following opposition attempts to prevent a presidential election by MPs,^[32] Stephen declared a state of emergency. The government officially reported that it was continuing its functions in a transitory capacity, in accordance with articles 16 and 20 of the Constitution, until a President could be elected by a majority in Parliament. Article 16.4 states that the President will remain at his post until a new president is elected, while article 20 states that Cabinet members' mandates end when a new president is elected.^[33] The opposition challenged the state of emergency, a challenge which was thrown out by the Supreme Court in October, on the grounds that it is the President's constitutional prerogative to determine whether a state of emergency exists.^[34]

A few days later, after "Australian officials ha[d] confidentially expressed concern to the government of Nauru over Getax's alleged role in the destabilisation" of the country, Stephen's government asked Australia to investigate "the activities of Getax and any financial ties it may have with politicians in Nauru", namely members of the opposition. Stephen, and Justice Minister Mathew Batsiua, asked for an Australian investigation into money allegedly paid by Gatex to members of the opposition, which they suggested might constitute bribes. Nauru's Director of Public Prosecutions stated there had been "attempts to bring about a change of government by bribery of members of parliament", and Stephen released documents "showing opposition members on salaries of less than $150 a week spending significant sums of cash on boats, cars, voters and trips". The allegations were that Gatex had bribed opposition members, both through personal donations and by financing their election campaigns, in the hopes that the opposition would win power and sign the deal enabling the loan which the Stephen administration had rejected. The allegation was also that Getax had bribed non-Cabinet government MPs in an attempt to undermine Stephen's parliamentary majority and bring down his government, and that these actions had resulted in the early 2010 parliamentary deadlock, the 2010 elections and the accompanying political crisis. Nauru's Commissioner of Police "lacked the resources to mount an investigation that would span Singapore, Australia and Nauru"; hence Nauru's request to Australia. In response to the request, the Australian Federal Police began an investigation into the allegation that Getax had bribed Nauruan opposition MPs.^[27][35]

A few days after that, Ludwig Scotty accepted the position of Speaker in Parliament, enabling a presidential election to take place. Marcus Stephen was duly re-elected President, with a workable parliamentary majority, defeating Milton Dube by eleven votes to six.^[36] The state of emergency was consequently lifted.^[37] Scotty explained that he remained a member of the Opposition, but that he had accepted the position of Speaker so that Parliament could function (giving the Opposition a say in government), and so that a budget could be adopted. He explained that his decision was also due to the allegations over Opposition members receiving financial support from Getax.^[38]