February 10, 2013
Babauta resigned from his position effective February 1, 2013.
The 2011 investigation was conducted after the IG received an anonymous hotline tip that the Assistant Secretary may have used travel funds not to conduct official OIA business but to travel with another Office of Insular Affairs (OIA) employee with whom he "was involved in an improper romantic relationship." The investigation was passed to the Deputy Secretary David Hayes "for review and any action deemed appropriate."
The travel in question was a November 16 to 18, 2010, trip to a San Francisco gathering of Micronesian Chief Executives.
Research of press releases and published remarks made by former Assistant Secretary Babauta show that he regularly travelled with OIA Senior Policy Advisor Kristen Oleyte and Policy Advisor Rebecca Zepeda.
Text from the 2011 Inspector General investigation states that the female in question was a former member of the U.S. House Subcommittee on Insular Affairs (click to enlarge):
The person who previously worked on the insular affairs subcommittee with Babauta was Rebecca Zepeda who is pictured in this OIA photo on the right.
Two years ago, as the Insular Affairs House Subcommittee Staff Director, I hired a young woman who was clearly smarter than her years and has since proven she also has political street smarts. I didn’t want to leave such a valuable asset behind once I moved to Interior and so I took Ms. Zepeda with me – in addition to her smarts, the bonus is that her look is so universal for the Pacific and so no one can figure out if she’s Marshallese, Pohnpeian, Palauan, or Fijian – and I won’t give it away.The IG report states (click files to enlarge):
As indicated in the IG report, the allegations of an inappropriate romantic relationship were denied by Babauta and the woman.
The 2011 IG report states that "Babauta met with lawyers from _________ (redacted), a Guam-based law firm with offices in San Francisco on November 17, 2010, to discuss an annual Pacific Islands business summit."
Calvo and Clark, Seabridge, Inc. and Matson Navigation Company (Guam) hosted a dinner event on the evening of November 16, 2010. Photos of the event, including those of Fitial and Babauta, are posted on the law firm's website. It seems obvious that the redacted law firm is that of Calvo, Fisher and Jacob.
Perhaps the more recent 2012 investigation of former OIA Assistant Secretary Babauta is linked to the previous one. The more recent one addresses questionable travel and a questionable contract.
A May 24, 2011, memo from Assistant Inspector General John Dupuy, the Chief of Staff for U.S. DOI Secretary Salazar, indicates that an additional anonymous tip questioned Babauta and staff members' wasteful travel expenditures to San Francisco in May 2011. The event's agenda suggests that indeed, bringing 6 staffers to this meeting could have been a wasteful expense.
The memo (click to enlarge):
Once again the Guam-based Law Offices of Calvo, Fisher and Jacob was involved in the meeting, as this program agenda states.
As far back as 2010 there has been a controversy with the Micronesia Center for a Sustainable Future (MCSF) contract, which is funded by the OIA. The MCSF was originally overseen by the U.S. Department of Agriculture Graduate School, but was transferred to the University of Guam.
In the 2011 IG investigative report, the staffer questioned was quoted as saying that she "understood why someone complained to the Office of the Inspector General about the San Francisco trip because after her and Babauta's meetings and discussions, MCSF was moved to the University of Guam, and the USDA Graduate School 'lost a huge contract', but no one was spending Government dime arbitrarily."
The MCSF received a $494,000 grant from OIA in 2010.
The timeline suggests that the deal to transfer the contract to the University of Guam was underway well before the November 2010 meetings in San Francisco. In fact, a March 2012 resolution signed by the Micronesian chief executives supported the UOG to receive a contract for MCSF:
Months later, the MCSF and University of Guam signed a memorandum of understanding in July 2010. The MOU preceded the November 2010 San Francisco meetings.
A 2011 MCSF Briefing Book concluded with a four-page resolution that praised Babauta, requested an that Guam be the center for the MCSF and called for the establishment of an OIA Office on Guam by 2011. The resolution was stamped "Rescinded" (click files to enlarge):
Was this perhaps the contract that is under investigation?
Below are the Inspector General's findings in the 2011 investigation: