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By Benhur C. Saladores

SAIPAN, Northern Mariana Islands (January 5, 2000 – Saipan Tribune)---The Federal Bureau of Investigation has begun a probe of the former director of the Small Business Development Center administered by the Northern Marianas College for possible federal program fraud and other violations of U.S. laws.

The center has drawn controversy in recent weeks after the U.S. Small Business Administration terminated its contract with NMC and transferred the program to the Commonwealth Development Authority -- a move which college officials and some lawmakers described as personal vendetta by its ex-director, Jack Peters.

A letter from the U.S. Office of Inspector General indicated that the FBI office on Guam has been tasked to investigate Mr. Peters, who now heads the Pacific Islands SBDC Network based in the University of Guam.

Dated December 3, the letter came from Daniel Sanchez, special agent-in-charge at the Investigations Division of the inspector general's office, and was addressed to the resident special agent-in-charge of the FBI office in Mongmong, Guam.

Documents provided by former NMC President Agnes M. McPhetres to the federal agency to support allegations of improprieties against Mr. Peters were the basis for the probe.

"I am providing this information to you for possible investigation at this time because our extremely limited resources will prevent me from sending an agent from this office to Guam to conduct a timely investigation," said Mr. Sanchez in a three-paragraph letter.

"I would very much appreciate being kept apprised of any action you take," he told the FBI Guam office. "I would also appreciate it if you would incorporate this case into the FBI's system of Letterhead Memorandums."

Mr. Peters could not be reached for comment, although he has repeatedly denied the allegations leveled by NMC officials and some members of the CNMI Legislature.

Both Senate Floor Leader Pete P. Reyes and Rep. Oscar M. Babauta vowed last November to bring the case to the inspector general. They accused Mr. Peters of trying to corner a $10,000 contract from a federally-funded economic study administered by the college last year while still employed at NMC-SBDC.

He left the center last April when he assumed the post with the Network office in Guam.

The move to close down the sub center at CNMI's lone higher learning institution was fueled by Mr. Peter's failure to get the contract, according to the two lawmakers.

Last month, Mr. Reyes brought new charges against him of steering federal funds from the study to jockey for his current position.

SBA officials have maintained, however, that the reason for the transfer was that they were not satisfied with the way NMC handled the local program, which receives thousands of dollars in financial grants every year.

The agency did not renew its agreement with the college when its contract expired on December 31.

CDA took over the program effective January 1, 2000.

For additional reports from The Saipan Tribune, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The Saipan Tribune.

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