By Steve Limtiaco

HAGATNA, Guam (Pacific Daily News, Dec. 23) - The management of the Guam Economic Development and Commerce Authority was warned by the public auditor in 1999 that it was not doing a good job keeping track of spending and did not adequately justify credit-card and other expenses.

Agency officials disagreed with the public auditor's conclusion that the agency was unable to determine whether some credit-card purchases were proper.

Four years later, two of the agency's top managers have been fired by the governor for allegedly abusing their government-issued credit cards and another must choose to resign or be fired when he returns from off island. Fiscal 2000 records show that GEDCA officials had charged at least $11,000 at two local nightclubs.

Attorney General Douglas Moylan yesterday said his office has been investigating alleged credit-card abuse at GEDCA after receiving a complaint in April.

Agency Administrator Gerald Perez yesterday said GEDCA's credit-card policy was "too liberal" and inadequate when he took over early this year, and it was changed this spring, to stop on-island charges, among other things. The agency continued to use credit cards for much of this year under the new policy, for off-island travel only.

Perez said he was unaware until recently of the governor's mandate that agencies not use credit cards. Perez said GEDCA canceled its cards last month.

"The use of credit cards is a convenience, but that doesn't mean we can't function without credit cards," Perez said.

Governor's spokesman Shawn Gumataotao said the governor has asked all agencies to review the necessity of using credit cards.

Perez said the agency's old credit-card policy allowed for flexibility in spending, but he said that flexibility was intended to be the exception and not the rule.

"Those credit cards should not be used for personal expenses. Those credit cards are supposed to be used for official business on travel -- particularly lodging, restaurant charges, some entertainment," Perez said. "The key word here is 'reasonable.' It would appear upon review of past records that that may not have been the case."

Gov. Felix Camacho last Friday called for the resignation of the three GEDCA employees, citing improper use of government credit cards.

Governor's spokesman John Dela Rosa, who served as acting GEDCA administrator late last week, said the administration wrote termination letters, spelling out the reasons for the governor's action.

Reasons include: refusal or failure to perform prescribed duties and responsibilities; misuse or theft of government property; and "other misconduct," Dela Rosa said.

Dela Rosa last week said cards had been used for personal purchases and had been used excessively.

Perez would not say which employees have been terminated or asked to resign, saying his legal counsel has advised him not to comment on personnel matters.

"I can confirm that two people have been officially terminated and one person is off island," he said. "There's an adverse action process that needs to unfold in this thing."

But six of the nine employees listed on credit-card documents were at work yesterday or stopped working for the agency long ago, leaving three high-ranking positions unaccounted for: Finance and Development Director Edward Untalan; Chief Financial Officer David Sasai; and Business Development Director Lester Carlson.

When asked who the chief financial officer is, Perez said, "The chief financial officer for GEDA was Dave Sasai. ... Right now, we are in the process of regrouping."

When asked whether Untalan still is the agency's finance director, Perez said he is, "for the moment."

When asked who the business development director is, Perez said, "I can't really discuss that anymore. ... I can't continue this conversation on personnel because I've been advised not to."

Perez said he instituted tighter credit-card controls in February after noticing "quite liberal" credit-card use by agency employees.

He said the only concerns are with the three employees cited by the administration.

"These seem to be the problem individuals associated with the use of credit cards," Perez said. "I am not aware of any other employees that have used it to the degree, frequency and magnitude of these three individuals."

Perez said the first thing that caught his attention was the large number of on-island charges to GEDCA credit cards. There is no need to use credit cards for those expenses, he said.

"There's no reason why if it's a legitimate expense you couldn't get reimbursement within a couple days or so," Perez said.

GEDCA credit-card statements for fiscal 2000 and 2001 obtained by the Pacific Daily News indicate frequent on-island charges on GEDCA credit cards.

The charges were mostly at local restaurants, but included $86 in charges at the Cigar Divan and more than $600 in charges at the Navy Exchange.

A credit-card statement for June and July of 2001 specifically notes "personal" charges on Sasai's card, including more than $540 at a Lenscrafter's in California. Included in the documents is a photocopy of a check from Sasai to the Bank of Hawaii American Express account in the amount of $3,657.57.

The most frequent on-island charge was at Marty's Mexican Restaurant, where dozens of charges were made, mostly on Carlson's card, in amounts ranging from $10 to $185.

Some of the largest single expenses were at local nightclubs, including Kitano Zaka, where $2,000 was charged to former employee Joseph Cepeda's card on Dec. 15, 2000. Cepeda retired earlier this year.

The most popular nightclub for GEDCA spending, according to documents, was Liaison Karaoke Box, where more than a dozen charges were made on several cards, totaling more than $9,000. Charges at the club were to cards issued to Untalan, Cepeda and Sasai.

Perez said he cannot explain the charges at the Liaison Karaoke Box because they happened before he took over.

"I don't know what purpose it would have been to justify that magnitude of use and frequency of use. I really don't know," Perez said.

Perez said GEDCA still entertains off-island visitors, but not as frequently as in the past.

December 23, 2003

Pacific Daily News: www.guampdn.com


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