CNMI Commonwealth Utilities Corp Management Crisis Worsens

Issues that led to the termination of executives still linger, concern over toxic culture 

By Junhan B. Todiño

SAIPAN, CNMI (Marianas Variety, July 29, 2016) – The issues surrounding the termination of high level executives of the Commonwealth Utilities Corp. will make it harder for CUC to fill stipulated-order positions required by the U.S. Environmental Protection Agency, board member David J. Sablan Jr. said in an interview Thursday.

“Many of them [applicants] are very smart and they realize that if this is the kind of atmosphere that they’re going to be involved in many wouldn’t like to work with CUC,” he added.

He said many applicants are experts in utility service with long years of experience.

“Right now I am sensing that staff and middle management of CUC have become disenchanted with the people on the board who don’t seem to be concerned about the future of CUC and the services that we provide to the people of the commonwealth,” he added.

Sablan was asked to comment on the news story that the office of water and wastewater division chief engineer John Riegel was forcibly opened.

Riegel is on leave and has an ongoing contract dispute with CUC management which has taken him to court.

Sablan said management has not shown any respect for the property of a person who is still using the office.

“This is almost like being in an organization with a bunch of Gestapo agents,” he said.

In his opinion as a corporation executive for many years dealing with employment contracts, Sablan said Riegel’s contract has not ended.

But there seems to be a conspiracy to try to change the contract without Riegel’s consent, he said, adding that there should be two parties in a contract agreeing on terms and conditions.

He said Riegel and CUC management have agreed to extend the contract.

“They mutually agreed and the contract was signed by CUC officials and Riegel himself,” he added.

But some board members are now trying to change the contract so they can have a freer hand to remove Riegel “if they are not satisfied with the things that he may say or do,” Sablan said.

“In my opinion, putting on my corporate hat, he [Riegel] has a valid and enforceable contract,” Sablan said. “This attempt to change the contract is a travesty on the part of the board and management who are doing this to one of our key employees in the utility.”

He said his colleagues on the board should instead work with Riegel to try to improve the water system rather than holding a hammer over his head.

“This is not the way to run an organization. I‘ve been involved in my entire business career in running organizations, some of which are larger than CUC, and I can tell you based on my experience as an executive, and on my experience as member of various boards and commissions in the past, that this is not the way to develop a harmonious and working relationship with your management. Riegel is a key member of our management team in the water and wastewater division. But he’s being harassed by certain members of the board.”

Asked for comment, CUC acting executive director Gary Camacho said they opened Riegel’s office because the chief engineer, who is off-island, did not leave the office key.

Camacho said they needed to get some documents including diagrams and maps requested by engineers and staff of the water and wastewater division.

“We didn’t break the door,” Camacho said, adding that they went in in the presence of acting chief engineer Robert Malate and several staff during office hours on Wednesday.

Camacho reiterated their offer for a one-year extension of Riegel’s contract, adding that he wants Riegel to continue working with CUC.

CUC management said Riegel’s contract expired on July 15, 2016.

But Riegel maintains that he and management already signed a two-year extension of his contract last year.


CUC board member David J. Sablan Jr. also believes that the firing of Matt Yaquinto as chief financial officer in May was “inappropriate and probably illegal.”

Sablan said the board should stop all the “shenanigans” that are going on right now at CUC and focus on providing the best utility services to the people of the commonwealth.

Asked about the role of CUC’s legal counsel in the current controversies, Sablan said: “I am not sure what kind of advice our legal counsel is providing to certain numbers of the board. I’m certainly not part of that and frankly I do not agree with some of the things that some of my colleagues on the board are doing. I said this in the past: we are going down the wrong lane here with regard to improving utilities for the people of the commonwealth.”

He added, “The priorities are skewed in terms of what we should be concentrating and focusing on and that is to be providing the best possible electric, water, and sewer utility services at the least possible cost.”

In addition, “there must to be a clear definitive line between the policy makers and the members of the board, and the operations and administration of CUC. We on the board should only deal with a few members of our management team because that’s the way we keep things in harmony…and how things can be run efficiently at CUC. The members of the board should always speak with the executive director, the financial controller and certain higher executive members of management.”

Right now, Sablan said, his colleagues on the board “don’t seem to understand that this is the process when communicating with our management team. We don’t get involved in looking at every single department or what they are doing and trying to make adjustments without going through the proper communication channels.”

He said board members should be involved in making policy and planning for the future, and in addressing major financial requirements to continually provide the best utility services that CUC can give to the people of the commonwealth. That is our mandate.”

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