More Problems with IPS and the ARRA Contract

July 27, 2011

Last year Governor Benigno Fitial confidently mocked the efforts of Congressman Gregorio Sablan who  contacted Vice-President Joe Biden with concerns over the questionable CNMI ARRA contract. The governor awarded the almost $400,000 contract  to former Secretary of Commerce Michael Ada's still-to-be-licensed company, Integrated Professional Solutions (IPS).

A November 1, 2010 Saipan Tribune article illustrated the cockiness of the governor who appeared to think that he is above the law:
The governor also lashed out at Delegate Gregorio Kilili C. Sablan for writing the governor a letter telling him that U.S. Vice President Joe Biden contacted his office to ask for a copy of Ada's IPS contract and other related information.

“Do you believe that?” Fitial asked, adding that it was Sablan who told Biden about the issue in the first place.

Fitial had responded to Sablan's letter, telling him that the governor's office forwarded the documents directly to Earl E. Devaney, chairman of the Recovery Accountability and Transparency Board and a former inspector general for the U.S. Department of the Interior.

The governor said he personally know both Devaney and Biden.

So smug and defensive. The governor received some other national publicity aside from the not so falttering article in the New York Times highlighted in the previous post. On July 18th the governor's tweet to Utah Governor Herbert made the Salt Lake Tribune:
Tweet of the day: From @governorherbert: "Governor Fitial, Northern Mariana Islands: 'I'm thinking of moving all my 65,000 people to #Utah.'"
Hmm, are the residents of the CNMI really "his" people. Do they want to move to Utah? Are there even 65,000 people left in the CNMI?

Also defensive is Ada's ISP partner, Jose Padilla who allegedly threatened a concerned citizen, Brian Kendall yesterday.  Kendall said that Padilla invited him to the IPS office to review some documents to prove the legality of IPS's contract. The Marianas Variety reports that once at the office Padilla verbally attacked and threatened Mr. Kendall.  Kendall reportedly contacted DPS to file a complaint. (Good luck with that!)

Jose Padilla, principal partner of IPS,
photo from ARRA Recovery website
Jose Padilla is a former executive at Red Rock LLC.  Red Rock was awarded an $50,000 ARRA contract by Ada.  Padilla also was awarded a contract for energy saving lights at the library, the CHC, and legislative buildings. The partnership with Padilla also adds to the mix of alleged violations including violations of the Government Ethics Act of 1992.

Another concern is that a report conducted by the Office of the Public Auditor and the DOI Inspector General found some deficiencies in the CNMI ARRA program that have not yet been corrected. One concern was that the CNMI ARRA website "should be kept current and complete for better transparency." The report stated:
For improved transparency and accountability, the CNMI should prepare data in a uniform format that is easy to update and can be used by the public to access all relevant grant information. Appropriate categories of information include grant amount, project name, contractor name, images, jobs created and expenditures as of the previous quarter that pertain to a specific grant. The timeliness, accuracy, and uniformity at the local level is crucial, as the federal website is updated quarterly using information obtained from the CNMI website. Thus any inaccuracies will likely be duplicated.
The website is not complete. There is no listing of grants funded by ARRA or other vital information that I could access. There should be a list of all agencies, departments or businesses that have been awarded ARRA funds, with funding amounts, names and other vital information. Check out the website at:

From the Pacific News Center:


Anonymous said...

I'm not one of Fitial's people and wouldn't go across the street with him.

I can't make heads or tails of that website either.

Anonymous said...

The big concern is that the US Attorney is not prosecuting this matter. How was this different from the Rydlyme case? Federal money, local procurement. Checks being deposited-- interstate commerce. The flagrant and arrogant nature of this crime, and it is a crime, along with the lack of political will to correct this -- screams for criminal prosecution of Benigno Fitial; Michael Ada; and Edward Buckingham.

Anonymous said...

Whether she prosecutes or not she will have to answer to the people. The CNMI Delegate is contacting her to see why she is not prosecuting. Pressure will come from many places. The people have had enough.

Anonymous said...

In Rydlyme, there was a kickback, and outright theft because CUC paid a 400% markup for a product they didn't need. Those facts do not appear to be present in this case. No evidence of a kickback, and Ada is apparently doing the work he was contracted to do. Unethical, yes. Criminal, no (at least not federally).

Anonymous said...

When federal funds are concerned all laws must be followed. That means if local laws were violated then federal law was violated. Federal funds are given with the understanding that all local and state laws will be followed. They were violated. Therefore, the contract is in violation of federal policy and that means the DOJ can prosecute these wheeler dealer scam artists who just want to profit off of federal $$$.

Anonymous said...

Wrong. DOJ cannot prosecute violations of "policy." DOJ cannot prosecute people because local laws were violated. The feds can only prosecute someone if there is a specific, criminal statute, an proof beyond a reasonable doubt on each essential element of that statute. Anon 3:17 pm is right.

Anonymous said...

Padilla and Ada were college roommates. The contracts that Ada sourced to his good friend should be investigated. Probably some dirt there, too.

Anonymous said...

they are dirt, plain and simple

Anonymous said...

So, there is unethical behavoir in the CNMI Government!! Say it ain't so!
Put this down as just another nail in the coffin of the CNMI. Yes, nothing will happen to these guys, but things can easily happen here and happen fast. In fact, the entire political structure of the CNMI could be disolved in the next 10 years, or even sooner (and no, it's not the military buildup). When that happens real economic change can happen here. How will it change? Smart people have already figured this out. Overall, it's a great deal for the island's people, but not for the islands tranquality. Thank you, Mr. Ada, for pushing this along. Please, make as much money as you can, you will need it.

Anonymous said...

"In Rydlyme, there was a kickback, and outright theft because CUC paid a 400% markup for a product they didn't need. Those facts do not appear to be present in this case. No evidence of a kickback, and Ada is apparently doing the work he was contracted to do. Unethical, yes. Criminal, no (at least not federally)"

Ada made $40,000 doing, as he admitted, the same thing he is now doing for $400,000+. That is a 1000% mark-up. The product he is selling (his ARRA oversight services) is not needed. Commerce can handle it. If you look at the job he was doing (see OPA report from 2010 on ARRA) was not at all 'good' enough to be awarded a contract anyhow. He enriched himself by breaking CNMI law. These are all fraudulent items that could be prosecuted by either the feds or us locally. There is no rule that prevents the feds from prosecuting this... as a matter of fact there are many rules and procedures in place with ARRA that require them to do just that.

Anonymous said...

Some of the commenters (particularly those under 45 years old) to this blog need to go to law school and get to work at the OAG or USAO.

But they apparently consider it so much more effective to opine officiously online! Get into the fray. Be the very change you are arguing needs to be done.

Wendy Doromal said...

Anonymous 7:55

Every citizen have a right to voice his/her opinion on laws, actions of elected officials and use of federal funds. Most lawmakers are not attorneys. Those who write the laws, our legislators are elected officials and most never went to law school. A person does not need a law degree to be able to identify corruption, ethics violations or misuse of public funds. As far as I know there are no commenters here who identify their ages and I don't see the relationship to going to law school, but whatever...

I bet many people who post here would love to go to law school (some commenters have and are practicing attorneys) but unfortunately most have no funds. Then again there are many ways to institute change and being an attorney is only one.

Anonymous said...

Noni 7:55AM,

I am over 40, an attorney and in the fray. Do I now have the right to 'opine officiously'? Good. Glad I now have your permission. Will you respond to my comment at 12:53AM instead of attempting to detract readers by attacking the commenters rather than the message?

I will assume from your statement that you are "in the fray" as well. The misuse of Federal funds can and should always be prosecuted by Federal Authorities. That is not just a policy matter, that is the law. Fraudulent use of Federal funds can not and should not be taken lightly. A 'balancing routine' such as those performed by the OAG should not be used to decide when to prosecute misuse of Federal funds. I think you may need to get your scale re-calibrated.

Anonymous said...

Well counselor, how about joining the OAG or USAO to clean things up? Already done so for several years?

Then you of all people must see the need for idealistic young people interested in public affairs, the rule of law, and our criminal justice system to exert their energies prosecuting cases on behalf of the public at large.

Anonymous said...

Noni 9:34AM,

What young person in their right mind would want to jump into the fray that is the OAG or the USAO in the CNMI? Those with a political, financial or a social death wish perhaps. Maybe only those who have no ethics and are ready, willing and able to take part in this melee.

Look at Massage-gate, Election-gate and now ARRA-gate. All these cases along with so many more blatant violations of the rule of law have not only gone unchecked but have been dangled in the face of the public by the perpetrators.

Why would any bright-eyed and bushy-tailed youth from the NMI want to become yet another silent audience member seated in the box seats that are the OAG and USAO? Can you image them watching in anguish as federal and local laws are trampled upon and as their superiors nod in approval or make desperate attempts to convince the public that laws were not truly broken and if they were the level was not great enough or that the jurisdiction was in question. Pathetic. I would not wish this on anyone of any age.

Green Cards for All! said...

Until the CNMI has idealistic lawyers willing to jump in and actually improve things in the OAG and USAO, things will never really get better.

No matter how much we complain about those offices.

Public attention, sunshine, and constructive criticism are all helpful. But improving organizations, as with improving society and improving ourselves, ultimately takes decent, committed people working from within.

Absent inside self-sacrifice and effort, all the external commentary cannot but come to naught.

Anonymous said...

It is not self-sacrifice to get paid to do your job. The OAG and the USAO are staffed with paid and trained lawyers. If those offices are not presently full of idealistic lawyers handling the job that is required of them to their fullest ability, external comment/criticism is not for naught.

Are the staff of those offices being held back by corrupt leadership or external political interference? Is there a culture of contentment or fear within those offices? Are there gross ethical issues?

If so, external comment is not only helpful but required - desperately. While I can understand why those who are "in the fray" at the USAO and OAG might get defensive, their response that critics should go to law school and try to change those offices from within is hardly impressive. I praise anyone who calls it like they see it - whether from within or without, with or without a law degree.

Anonymous said...

noni 8:32am,


let me try and understand 10:04am. you are saying the only way to improve something is to work from within. so if you are given bad treatment at the hospital, you are saying that you should not complain (or if you complain you should not expect things to change) and you should not sue for malpractice (or if you sue and win you should not expect the hospital to improve). what you are telling people is the only way to improve that hospital is for them to go to school and become a doctor and come back and work within that hospital.

the same for schools? if the public has a problem with a high school curriculum or the way they are handling the kids, we should not complain. we should go to school and get a teaching degree and come back and become a teacher.

problem with finance? go to school and get a degree and come back and work at finance and change it from within.

what may i ask should you do if you have a problem with the way multiple agencies are being handled? hmmm... that's gonna be lots of schooling and a ton of jobs to juggle.

your logic is warped. if you are unhappy with a way a public service is being handled by staff that are paid by public taxpayer dollars than you have every right to not only complain about it but expect that agency to fix the problems. you don't need to roll up your sleeves and get in there and clean their mess. point out the issues, raise concern, write letters to the editor, sue them, do what you can and get that agency (be it the OAG or the USAO) to start getting the people that ARE CURRENTLY BEING PAID OUR TAX DOLLARS to do the job that they signed up for. scream, rant, post blogs, comment on wendy's site, etc.

you claim to be "in the fray". why is it that the issues that are raised here and that you are acknowledging are a problem (or you wouldn't be calling for help from idealistic lawyers) are not being corrected and not being addressed? why are you okay with letting the issues go unhandled? why are you waiting for outside intervention from a new stock of AAGs or attorneys? why are you still there? if things are not right and need changing are you attempting to change them? or are you content to try and kill the messengers that are calling things as they see it? are you making excuses for the abuses that are occurring in those offices? are you further promoting the unethical acts that are being done?

people don't have to go get a law degree and "jump into the fray" of the OAG or USAO if unethical acts are being perpetrated by the AG or laws are being broken but no being prosecuted. people DO need to stand up and point out the issues. they DO need to raise their voices. they need to rally the masses and they do need to call for a changing of the guard if needed. they don't need to be the AG or the USAO worker.

when someone complains or points out gross injustices or flaws in the system and the response from the OAG or the USAO is "if they don't like it they can go get a degree and come join our office and fix it from within" that is a bunch of bull!

are you "in the fray"? fix the damn problem then. prosecute the blatant violations of law. stop breaking laws. expose corruption in those offices. report abuse of power. point out fraud. can't do that?

instead of telling people to get inside and fix the problems you have acknowledged you should reverse your advice and use it on yourself. step out of the fray. stop getting paid to do a job that you are not doing or that you don't believe your office is adequately doing. speak up publicly and correct the issues in your fray. don't harass those that are merely calling things as they see it.

Green Cards for All! said...

At no point did I state that constructive criticism was worthless. To the contrary, it is a helpful first step.

But when even experienced attorneys such as the one who commented above refuse to get their hands dirty, the problem simply will not be solved.

My comment was not so much a complaint about officious opiners as a challenge to those with the ability to effect change to actually do something about it!

I'm sure there are many hard-working lawyers at the OAG and USAO doing their best. But when you see the OAG being sanctioned for what is essentially a lack of resources, things do not look promising.

The problem at the OAG is not so much the selection method (appointment versus election) but an absolute lack of budgetary control and minimal independence -- being removable by the Governor at his whim. Those are the changes that need to be made.

The U.S. Attorney, on the other hand, has perhaps too much independence. But our Delegate serves as a counter-balance to that.

You haven't heard the half of what's going on at the USAO. Morale there is abysmal.

Anonymous said...

"But when even experienced attorneys such as the one who commented above refuse to get their hands dirty, the problem simply will not be solved."

the main problem with the AGO is attorneys that are willing to get their hands dirty, if you know what i mean.

what we need is for dirty and unethical attorneys, like the AG himself, to step down. we do not need more lemmings placed beneath him.

Anonymous said...

"My comment was not so much a complaint about officious opiners as a challenge to those with the ability to effect change to actually do something about it!"

the people that can do something about it are the public at large pointing out the ethical issues and issuing complaints about legal violations.

you basically said complaining about the situation was of no worth... that is akin to saying it is useless. reread your comments. complaining is doing something about the problem! you may not like the complaints... that is one of the problems!

Anonymous said...

this statement reveals the BIGGEST problem:

"I'm sure there are many hard-working lawyers at the OAG and USAO doing their best. But when you see the OAG being sanctioned for what is essentially a lack of resources, things do not look promising."

the AG is not being sanctioned for "lack of resources". that is plain and simple BS! he is not following the rule of law. he hasn't in quite some time. you can try your best to find excuses for it but when he goes on TV and states straight that he broke the law and nothing is done than we have major issues.

no one is buying your "he has limited resources" nonsense!

Anonymous said...

"You haven't heard the half of what's going on at the USAO. Morale there is abysmal."

you are a moron. do you even live in the CNMI? you speak of morale at the USAO. MORALE IN THE CNMI AS A WHOLE has been in the pot for years! sickening stunts the Governor and his boy Bucky have pulled and continue to pull have led to a massive exodus and terrible morale.

go grab a small violin and head over to the USAO and play a sad tune for them. give me a f***ing break!

Anonymous said...

It is you who apparently has no clue about the challenges of the attorneys who serve us every day, and how to overcome them.

Hint: While the leadership of one person is important, he or she does not do the daily work of the office. What are needed are not “lemmings” but ethical lawyers such as those who might have the interest to comment here.

Lawyers in those offices participate in the same sufferings of CNMI society as a whole, caused largely by economic ignorance in establishing the former unlimited labor supply, then exacerbated by minimum wage laws and immigration federalization implementation without any study.

If you are not part of the solution, you are part of the problem.

Anonymous said...

noni 12:44PM:

you are the problem.