Questions Remain on Desk Audit Contract

MAI's Sergio Loya and Arthur Smith with former Rota Mayor Inos and
 Former Commerce Secretary Michael Ada
 (from Saipan Tribune)

















October 20, 2010

Both the Marianas Variety and Saipan Tribune have published letters to the editor from the president of MAI, Arthur Smith. While sincere, there are still questions concerning the contract that was awarded to the company to perform the desk audit.  Mr. Smith said, "We appreciate the opportunity to serve Governor Fitial and his administration as well as the people of the CNMI."

Apparently Mr. Smith is overlooking the background of the governor, his many scandals and relationships with questionable people and criminals.  He has to overlook a lot and the list keeps growing.  There are the questionable deals between Jack Abramoff and the governor, the Tan-Fitial-Abramoff connection, the buying of the speakership, the governor's driver who was arrested for dealing ice from the governor's vehicle, massage-gate, gun-gate, parole-gate, the bad blood between the governor and federal officials, election-gate, the refusal to respond to Open Government Act requests and on and on.

Surely someone who has been in business for 34 years knows that state or territorial contracts that have so many connections to the governor's associates would be both scrutinized and criticized. Lynn Knight is currently a program manager for MAI, a former anti-federalization lobbyist, and is still Governor Fitial's Communication Director in Washington, DC.  MAI received a contract previously from CEDS when Lynn Knight was the Chair. It is not clear if that was a sole-source contract, who funded it or if it ended before the contract with the CNMI government began.

How would this scenerio play out in say New Jersey, Illinois or any other state?

The Saipan Tribune story published today raised even more questions. The Marianas Variety reported that eight companies submitted bids for the desk audit contract, while the Saipan Tribune, reporting on the story for the first time today, claimed that there were only two bids. The other company named y the Tribune was Saipan-based KIS Corporation owned by Dr. Ken Schankweiler.

The Saipan Tribune reported:
MAI's proposal as of January 2010 was over $1.217 million at 2,500 full-time employees of the CNMI government. This was equal to $487 per FTE for the entire organizational review pursuant to RFP09-OPM-099.

Ada, in a Jan. 20 letter to MAI president Arthur L. Smith, sought MAI's submission of a fee proposal only for DPS and Finance with total FTEs of 391.

The desk audit contract was for 180 days from the notice to proceed, or not later than Sept. 30, 2010.

In February, special assistant for management and budget Vicky Villagomez wrote to MAI, substituting Finance with DCCA and asked MAI to submit a fee proposal for this substitution.

The following month, the Fitial administration awarded a contract to MAI for $254,459.12, which was part of the $360,000 Office of Insular Affairs grant that the CNMI received, press secretary Angel Demapan said when asked for confirmation.
Was a letter for a modified proposal also sent to the other bidder/s?

While stories in the Variety reported that MAI received a contract for $300,000, the Saipan Tribune reports today the actual contract was for $254,459.12. Adding to the confusion is the fact that in July 2009 the governor's press secretary Angel Demapan said the desk audit contract was for $300,000.

Then there is the issue of the evaluating board. From the Saipan Tribune:
The four-member evaluation team included former press secretary Charles Reyes Jr., former acting personnel director Francisco S. Ada Jr., former personnel training director Dr. Peter C. Eche, and Marie T. Muna.
Like Governor Benigno Fitial, Lt. Governor Eloy Inos, Lynn Knight and Edward Arriola, MAI's registered agent in the CNMI, Charles Reyes also worked for Tan Holdings. Is it usual practice for a government to use the governor's  press secretary as a contract evaluator?

Transparency and full disclosure may help to stop speculation. The Governor's Office should put the RFP, proposals and contracts for this and the recently awarded ARRA contract online.

UPDATE:
The DOI's Office of Insular Affairs is investigating this contract according to KSPN2 News. Lynn Knight claimed that the probe is "politically motivated."  Please!

It appears that the OIA is also interested in Lynn Knight's contract with Fitial where she serves as the Governor's Communications Director for Washington DC. She refused to disclose the amount of that contract, which she says is paid for by CNMI funds.  The bankrupt CNMI government can afford to pay her to ...what does she do there?

4 comments:

Anonymous said...

Writing a letter defending the obvious ties made it worse.

Anonymous said...

We need a law or popular initiative to put all CNMI- or federally-funded RFPs, proposals and contracts online.

It's the people's money!

Anonymous said...

we need to get rid of the creeps running the cnmi into the ground. hopefully, the US VP will take some action.

Anonymous said...

I'm not so sure it was "sincere". It's business. What were the "chances" of three former tan employees being part of this deal (Guv,Ed,Lynn)? Coincidence? Believe that and you probably think the moon's made of swiss cheese.