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Rep. Tina Sablan concerned about ‘potential kickbacks, favoritism’ in awarding emergency contracts

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THE House Special Committee on Federal Assistance and Disaster Related Funding convened on Wednesday morning to look into the expenditure plan for the federal Covid-19 funding provided to the CNMI, and address concerns regarding the management of the funds.

Present to address the committee’s inquiries were the governor’s authorized representative or GAR Patrick Guerrero, Secretary of Finance David DLG Atalig, the governor’s Covid-19 Task Force Chairman Warren Villagomez, and Gerald Deleon Guerrero of CNMI Homeland Security and Emergency Management.

In his opening statement, Guerrero said his role as GAR is to “administer federal disaster assistance programs on behalf of state and local governments, and other grant or loan recipients. The GAR is responsible for state compliance with the [Federal Emergency Management Agency]-State agreement,” according to 44 CFR § 206.41, a portion of the Code of Federal Regulations that states the appointment of disaster officials.

He said as a result of a disaster declaration, the CNMI is allowed to implement “emergency protective measures to protect life, health, and safety.”

Guerrero said he could provide information on hazardous and overtime pay, contracts, accounting expenditures — including local matching funds — and to answer, to the best of his ability, with the help of Atalig and other task force members, any and all questions that the committee had regarding FEMA disaster funding.

 

The House Special Committee on Federal Assistance and Disaster Related Funding on Wednesday met with administration officials. Photo by K-Andrea Evarose S. Limol

For his part, Atalig said, “I am here to support our GAR, and share any information on CARES Act funding and any funding related to this Covid-19 pandemic, and how we are managing funds in dealing with expenditures for this health emergency. Other than that, I am at your disposal for as long as you allow us to be here.”

Rep. Tina Sablan asked Guerrero, “How are you and the administration ensuring that there is no favoritism or potential for kickback in the awarding of contracts? For example, a number of us in the Legislature have received complaints about emergency contracts for meals that were awarded to a company owned by the governor’s chief of staff.”

She added, “You mentioned that companies are welcome to submit their quotes and submit their proposals, but how do companies even know about these opportunities if that has not actually been advertised, and could you address the concern of favoritism, such as with that particular contract with Mr. [Angel] Demapan’s company?”

Atalig said there are about five or six different food vendors and a couple more added this week.

“This company that you are alluding to is not being favored because they are providing just one meal a day, and being rotated by different agencies that are ordering. Their orders are not even at the level of some of the other vendors that we are paying. We try to rotate this and share the wealth among all of the available providers out there for meals,” Atalig said.

Sablan said, “This is a problem, even for public perception,” noting previous statements made by the GAR regarding the absence of an open bidding process for meal providers.

She reiterated that “one of the very first companies contracted to provide the service happens to be a company owned by the [governor’s] chief of staff.”

Atalig replied, “I don't even know what the arrangements are…. However, at the same time, they were one of the companies that were contacted that could provide the service. The GAR and the attorney general always reiterate that in an emergency, [we need to] get a contract or get services for a two- to three-week period, then give [ourselves] time to seek other sources to be more competitive. We have been doing that.”

Asked for comment the Torres administration said:

“Procurement processes for emergency contracts are handled by the Emergency Operations Center and includes legal review by the Office of the Attorney General. It is the expectation of the administration that the various layers of review ensure that all emergency expenses are in accordance to governing laws and regulations.”

In a separate statement, Chief of Staff Angel A. Demapan said:

“As chief of staff, I do not participate in the awarding of any emergency contracts or expenses relative to the government’s Covid-19 response. This is a process handled by Homeland Security & Emergency Management in collaboration with other partner agencies and the Office of the Attorney General.

“Furthermore, I have not been a business owner in the CNMI since the closure of my retail store in the aftermath of Super Typhoon Yutu.”

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