CNMI Utility Decision To Purchase New Diesel Engine A 'Tangled Web'

Commentary

By Erwin Encinares 

SAIPAN, CNMI (Saipan Tribune, March 31, 2017) – A tangled web of crisscrossing and interwoven connections—as suggested by documents obtained by Saipan Tribune—imply a wide-ranging case of conflicts in the Commonwealth Utilities Corp.’s emergency procurement of an engine.

At the same time, there is a sense of circling the wagons, with CUC officials and board members citing rules and regulations to cloak their actions, belying claims of transparency and openness.

An examination of the articles of incorporation of General Pacific Services Marianas Inc., the engine’s contractor, shows that CUC board member Albert Taitano is GPSM’s registered agent for the service of legal processes.

Rep. Ed Propst (Ind-Saipan) attempted to confirm this with CUC deputy executive director William Gilmore. “I asked Gilmore in an interview if any of the members of the board had a conflict of interest with this company,” Propst said. Gilmore reportedly said there was none.

“According to Gilmore, [Taitano] was [involved with negotiations] all throughout the process,” said Propst, “…[but] you have to disclose this [conflict] by law.”

When Saipan Tribune asked Gilmore about Taitano’s role in the contract, Gilmore said, “His role was to say yes or no to the motion that was made.”

“Taitano decided to recuse himself [during the vote],” added Gilmore, even mentioning that Taitano did not have anything to do with the formulation of the contract.

Not so fast, said Propst. “Even if Taitano claims he didn’t vote on it, that is besides the point,” he said in a separate interview, saying that the bigger question is why Taitano and GPSM president Amelia Toelkes failed to disclose their business relationship.

According to Gilmore, Taitano failed to disclose to the CUC board members why he recused himself from the vote. “I have no idea why,” he said.

Gilmore regularly attends CUC board meetings, including the board’s executive sessions.

Saipan Tribune tried to ask Taitano yesterday about his relationship with GPSM and Toelkes but he did not respond as of press time.

“With the conflict of interest, this contract must be declared null and void. It should not proceed forward and it should not take an injunction to stop this contract. Why didn’t the president of GPSM reveal this information?” asked Propst.

The CUC board had voted to procure an 8- to 10-megawatt diesel engine from GPSM.

The Public Utilities Commission, which has regulatory authority over CUC, has been silent about the issue so far. It’s a three-member body that is currently down to one member, David Guerrero, as the governor has yet to assign two new members.

Relationships

Another relationship involved in the emergency procurement that is also raising some eyebrows is that of CUC board chair Adelina Roberto and a certain Philip Roberto, said to be GPSM’s vice president.

Adelina Roberto was one of three CUC members who voted to proceed with the procurement of the engine from GPSM.

It was only after voting to push through with the engine’s procurement and two House lawmakers raising a howl of protest that the board agreed to produce a negotiating committee that is supposed to negotiate the engine’s purchase from GPSM.

CUC board member Eric San Nicolas proposed the negotiating committee, supposedly to speed things up. The committee would be headed by Adelina Roberto.

When asked about Adelina Roberto and Philip Roberto’s relationship, Gilmore said, “I believe that is a new name for me,” referring to Philip.

Saipan Tribune also asked Adelina Roberto about this but, like Taitano, she has yet to respond as of press time.

Why so secretive?

Saipan Tribune learned that CUC came up with a selection committee headed by Gilmore to handle the selection of the request for quotations, or RFQ. Gilmore said the nominees for selection of the RFQ was based on previously cancelled requests for proposals, or RFP, giving CUC the liberty to decide on who gets the deal.

“As a responder to one of two prior RFP’s that we issued and were cancelled, we used those as our sources for getting immediate quotes,” said Gilmore. ”There were four total and we called them all.”

When asked about the members of the selection committee, Gilmore consulted first with CUC legal counsel James Sirok, asking whether he was allowed to disclose the names of the members.

Sirok reportedly did not authorize Gilmore to identify the committee members, deeming the names to be “unnecessary” information.

“The selection committee operates privately. They do their deliberations, they pull their information together and they make their recommendation, which is fair and just. They all signed off on the final recommendations to the board, that was it,” added Gilmore.

Prior to consulting Sirok, Gilmore stated that the committee is composed of two representatives from the power division, a CUC contract manager, CUC chief financial officer Antonio Castro, and Gilmore himself acting as chair.

Propst attended Wednesday’s special CUC board meeting, only to be greeted by questions about his presence at the meeting.

Wednesday’s discussion on the financial aspect of procuring the engine was done through an executive session. Despite discussing the financing behind closed doors, San Nicolas told reporters yesterday that the process was “open and transparent, contrary to what Mr. Propst said.”

MD: A tangled web of connections imply a wide-ranging case of conflicts in the CUC’s procurement of an engine.

Saipan Tribune
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