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CNMI, Saipan, (Marianas Variety, May 9) - Governor Juan N.
Babauta has hired his first cousin, Nicholas M. Nekai, for a five-month job as a
financial and technical consultant for $24,500, Variety learned.

Nekai’s contract will expire on Sept. 30 unless extended by the

The hiring came four months after the governor said that the
administration would not hire Nekai due to lack of funding.

Press Secretary Pete Callaghan, however, yesterday said funding
had already been identified.

Callaghan said Nekai’s task is to track and identify some $10
million in federal grants that have been awarded to the CNMI during the last
three to five years, but remain either unspent or unaccounted for.

The governor earlier said that the administration had to either
wait for the $10 million in grants to sit idle or commit some local money to
"find" these federal funds.

"His job is to find where those monies are and make sure they
are spent for the intended purpose. If he finds $3 million, $4 million or more
in a few months, then it would be great for us — you can see the economy of it,"
said Callaghan.

He said that if within the five-month period, Nekai has not
tracked down a portion of the unspent federal grants, then his position will be

Rep. Stanley Torres, R-Saipan and chairman of the House Ways and
Means Committee, said he wants to know where the money for Nekai’s contract is
coming from.

"I want to know from what government account the administration
got the money," said Torres, declining to further comment.

Nekai has not yet returned $4,900 in salary overpayments he
received when he was still a government technical financial analyst for the
Department of Finance.

He was the subject of an audit report released on Aug. 5, 1998
by the Office of the Public Auditor.

Nekai was overpaid $6,302, but this was reduced by a garnished
bonus payment of $1,402 — leaving a balance of $4,900 as of Dec. 2002, OPA said.

Callaghan said it is Nekai’s obligation to settle this matter.

OPA stated that Nekai abused his status as an employee exempted
from overtime under the Fair Labor Standards Act by "repeatedly coming late for
work, taking time off at will and leaving work several hours earlier than the
set time."

In 1999 or a year after that report came out, he retired from
government service.

May 9, 2003

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