Lt. Governor Villagomez Indicted?

July 27, 2008

Last evening at the welcome party I was told by a reliable source that Lt. Governor Timothy P. Villagomez had been indicted by the FBI in New York where he is attending the Lt. Governor's Association Meeting. That was all of the information that was given to me, and I can locate no news of this from the media. I am assuming the alleged indictment is in connection with the investigation to the sole source CUC-CISCO deal. On July 15th, the Saipan Tribune reported:

Federal and local authorities have begun investigating a sole-sourced contract signed by the Commonwealth Utilities Corp. for the repair of one of its Saipan power plants.

CUC executive director Antonio Muna said yesterday that the Federal Bureau of Investigation and the Office of the Public Auditor are looking into the contracting arrangement between the utility and the Commonwealth Industrial Supply Co. Inc.

In 2006, CUC hired CISCO to fix the six engines at Power Plant II in Lower Base. To date, only one engine is operational. The FBI is involved in the probe because the $885,000 used to pay CISCO came from the federal government.

CUC entered into the CISCO contract without soliciting bids or proposals from any other company. Lt. Gov. Timothy P. Villagomez, according to the governor's state of emergency declaration, approved the contract on May 14, 2006.
A July 24, 2008 Marianas Variety article reported that the federal officials subpoenaed CUC employees:
Federal authorities have subpoenaed a group of Commonwealth Utilities Corp. employees regarding an ongoing investigation that involves former CUC officials, Variety learned yesterday.

Lt. Gov. Timothy P. Villagomez who is in Buffalo, New York attending the National Lieutenant Governors Association annual meeting, is a former CUC executive director.

This reporter contacted the Attorney General’s Office for comment, but Press Secretary Charles P. Reyes Jr. said they “cannot comment on any investigation or criminal matter outside of court.”

He added, “[The AGO] also cannot comment on any allegations regarding possible charges in federal court, especially when no such charges have so far been filed.”...CISCO was supposed to fix six engines at Power Plant 2 in Lower Base, but only one engine remains operational.

CISCO’s $885,000 contract, which did not go through a bidding process, was federally funded.

Villagomez approved the contract on May 14, 2006.

Who is CISCO? The Commonwealth Industrial Supply Co. Inc. is owned by Saipan entrepreneur, John C. Jones. A July 8, 2008 Marianas Variety article quoted Greg Cruz as saying he would take the matter of the CISCO change of contract to federal officials since the deal involved federal funds. The article stated:
Taotao Tano president Greg Cruz is questioning anew the Commonwealth Utilities Corp. leadership for its transaction with Commonwealth Industry Supply Co., describing the deal as disadvantageous to the people.

Cruz disclosed a “change order” in the CUC-Cisco contract three months after the contract was signed by both parties.

On March 14, CUC entered into an $885,000 contract with the Cisco for the repair and rehabilitation of Power Plants 1 and 2. On June 6, both parties agreed to an additional $135,436 cost.

...Because the rehabilitation efforts of CUC’s power plants are federally funded, Cruz said he is asking the U.S. Department of the Interior’s Office of the Insular Affairs and other federal authorities to investigate how CUC is spending federal funds.
Was the Lt. Governor indicted or questioned? Questions have also been raised concerning CNMI Attorney General Matt Gregory's categorization of CUC. In a recent opinion he wrote that CUC is “not an agency or instrumentality of the CNMI government.” (See this post.) Other CUC deals made over the years have also come into question.

Update - July 28, 2008:

The Saipan Tribune reports:

Neither Villagomez, nor his staff, nor federal officials could be reached for comment on the rumors Sunday. Phone calls made to Villagomez's house were not answered. The local police could not confirm the report.

Meanwhile, the Saipan Tribune has received scores of e-mails and phone calls, including two from off-island, often from sources declining to be identified, reporting that the arrest or questioning occurred.

On a related note, rumors were also rife about six persons, including some government officials and employees, about to be indicted in federal court, also on issues related to CUC procurement.

The rumors come after the FBI last week subpoenaed a host of CUC officials to testify as part of a federal probe. The FBI is currently examining a 2006 contract CUC inked with Commonwealth Industrial Supply Company Inc. (CISCO), paying it to fix six engines at a local power plant. CUC paid CISCO $885,000 in federal funds for the project after failing to solicit other bids and the company never completed the work.

Villagomez was in Buffalo, New York, last week attending the annual conference of National Lieutenant Governors Association. Despite several reports of his arrest and indictment, other sources said he has already returned to Saipan and was seen at St. Jude's Church during Sunday Mass in Koblerville.

Update 2 - July 29, 2008

The Marianas Variety reports:
The Commonwealth Utilities Corp. has turned over financial records and other documents regarding federally funded projects to the Federal Bureau of Investigation.

CUC Executive Director Tony Muna said some of the agency’s employees have been subpoenaed and questioned as reported by the Variety last week.

According to Muna, the investigation was initiated before he became executive director in May and involves not just recent contracts.

“The FBI asked us for documents,” he said. “We’re an open book. There’s no reason why we should hide anything. They requested for documents just like any other agency or individuals [invoking] the Open Government Act. We provided them those documents,” he told Variety.

“As far as their action on the information they received from us, it’s kind of a wait-and-see situation,” he added.

Lt. Gov. Timothy P. Villagomez, a former executive director of CUC, was among those who signed contracts for CUC’s federally funded projects.

Press Secretary Charles P. Reyes Jr. yesterday said Villagomez returned to Saipan over the weekend from New York where he attended a national conference for lt. governors.

Villagomez did not report for work yesterday.
The Fitial administration's spokesperson, Charles Reyes, said that the allegations were "rumors and heresay at this time." The Saipan Trinune article states:
Villagomez remains silent about the unconfirmed reports. His staff members told the Saipan Tribune yesterday that the lieutenant governor is back from New York but he did not come in to work. Phone calls made to his house were not answered. At press time, Villagomez has not replied to an e-mail seeking confirmation of the reports.

The rumors started after the Federal Bureau of Investigation subpoenaed a host of former and current employees of the Commonwealth Utilities Corp. to testify as part of a probe. The FBI is investigating a federally funded contract for the repair of a Saipan power plant. The Commonwealth Utilities Corp., with Villagomez's approval, inked the deal with Commonwealth Industrial Supply Corp. in 2006. CISCO failed to deliver on its part of the contract.

According to Reyes, the Governor's Office has not received word from the U.S. government about the federal probe.

“There's a lot of uncertainty, there's a lot of speculations. As far as I know, we haven't received an official notice from any federal agency about an arrest or a pending indictment. If this is true, we'll just have to wait for them [federal government] to act and probably take it from there,” Reyes said.

This statement neither confirms nor denies the allegations. It appears that the governor's office does not have a definitive answer concerning the allegations either.


Anonymous said...

I wrote a letter to CUC regarding Alex Cajuguiran Musni. Alex was employed at CUC in 1994 as contract employee from Philippines. Lt. Gover Villagomez approved Alex training at Hach Company, Loveland, Colorado, USA. Alex did not came back to CUC instead he worked in Illinois. I was asking CUC if Gov. Villagomez approved and allowed Alex C. Musni NOT to come back to CUC to complete his contract? Do you send your contract worker for training to USA? I would like Gov. Villagomez to validate his signature. I will mail a copy of his approval and copy of Alex Visa. Please contact me at Alex is now employed at Midwestern Rust Proof Inc.