| Politics/CNMI: TOP OFFICIALS INDICTED ON THEFT OF US FUNDS |
It follows a tip from concerned citizen
Haidee V. Eugenio
A 'tip' from a concerned citizen of a possible corruption case led to the indictment of the second highest elected official in the Commonwealth of the Northern Mariana Islands (CNMI), Lt. Gov. Timothy P. Villagomez, along with his sister and two other current and former government officials.
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Lt. Gov. Timothy P. Villagomez... escorted by his wife Margaret (third from right) and legal counsel Teresa Kim (right) after a hearing at the US District Court at the Horiguchi Building in Garapan, Saipan, on August 11.
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Villagomez, who turns 46 on September 10, is the first sitting lieutenant governor to be indicted in the history of the CNMI, a 14-island United States territory in the Western Pacific, located about 3300 miles from Honolulu, Hawaii.
In the afternoon of August 11, Villagomez entered the US District Court for the CNMI in handcuffs to face an indictment on three counts of wire fraud, conspiracy and theft of federal funds.
The case involved a scheme to defraud the Commonwealth Utilities Corp. (CUC) at least US$400,000 in needless chemical purchases as early as 1998 when Villagomez was still the agency’s executive director.
The latest purchase was in August 2007 when Villagomez was already lieutenant governor and he was designated by CNMI Governor Benigno R. Fitial to oversee CUC.
If convicted, Villagomez will face a maximum jail term of 10 years.
Just a week earlier, he denied on local television news that he was questioned or subpoenaed by federal authorities.
Also indicted were Villagomez’s brother-in-law, James Santos, who is the current secretary of the Department of Commerce, and his wife Joaquina Santos, who is Villagomez’s sister, along with former CUC executive director Anthony Guerrero.
Without saying a word to the local media waiting outside the federal court on the day of his indictment, Villagomez—clad in white long-sleeve and black slacks—was whisked away by his wife Margaret, relatives and legal counsel Teresa Kim into a waiting sports utility vehicle.
The following day, it was business as usual at the lieutenant governor’s office which has so far not released a formal statement about the indictment. Villagomez, who posted US$50,000 in unsecured cash bail, is free to roam around and report for work.
He remains as lieutenant governor, while Santos is on leave as secretary of the Department of Commerce.
CNMI Governor Benigno R. Fitial, deeply troubled by his lieutenant governor’s indictment, was quick to issue a formal statement: “As governor of CNMI, and as a US citizen, I cannot judge a person’s guilt or innocence. That is for the court of law to decide.”
Villagomez assumed office on January 6, 2006 under the Covenant Party which was formed by Fitial. They were both former members of the Republican Party.
Months ago, Villagomez said he would no longer run with Fitial in a 2009 re-election bid. But there were reports that he’d teamed up with his predecessor, former Lt. Gov. Diego T. Benavente, who is seeking the top post.
A sad day
The speaker of the CNMI House of Representatives, Arnold I. Palacios, described the indictments as “a sad day for the Commonwealth”.
Although this small US territory has had its share of sitting senators, other government officials and employees found guilty of corruption, fraud and other criminal acts, nothing prepared them for the lieutenant governor’s indictment.
A Federal Bureau of Investigation agent, Dana McMahon, told the local media that the FBI plans to investigate other questions concerning CUC in the near future.
The theft charge against Villagomez, the Santos couple and Guerrero has been drawing mixed reactions from the community that has been experiencing power outages and over 100 percent increase in power bills they blame on government inefficiency and corruption.
But just like any democratic society, residents of CNMI say Villagomez and his co-defendants are innocent until proven guilty.
And for some, the case is a reminder that every citizen has the duty to help maintain the integrity of public office, hold public officials accountable and protect taxpayer funds; in this case, reporting an alleged abuse of power and misuse of taxpayers' money.
Needless purchases
US Attorney for the Districts of Guam and CNMI Leonardo M. Rapadas said the three-count indictment was in connection with a “fraud committed through and against CUC, a quasi-governmental agency receiving federal funds”.
Between 1998 and 2000, when Villagomez was CUC executive director, he approved a series of purchases of the chemical “Rydlyme” from ISLA Micronesia Sales, a business controlled by his brother-in-law, Santos.
The purchases, which netted Santos’s business more than US$286,000, circumvented procurement regulations and ignored conflict of interest laws, the federal indictment said.
ISLA Micronesia Sales sold more than 8000 gallons of the cleaning agent to CUC under the deal, but CUC has since used only 350 gallons, federal investigators said.
The rest were either disposed of or kept in storage, including a 1485-gallon stockpile on the island of Rota. After the indictment, CUC said it will soon use some of the gallons of “Rydlyme” bought with federal funds.
The latest scheme was recorded in August 2007 when Villagomez was already lieutenant governor and was appointed by Fitial to oversee CUC.
The indictment says Villagomez enlisted the help of then CUC executive director Anthony Guerrero and an unidentified accomplice to secure a sole-sourced procurement deal to pay US$120,000 to Blue Pacific, owned by the lieutenant governor’s sister, Joaquina Santos.
“This last transaction again circumvented procurement regulations, violated conflict-of-interest statutes and resulted in a grossly-inflated profit to a private company owned and operated by close relatives of the lieutenant governor, one of whom was also a government official,” Rapadas added.
The purchases from the Santoses’ company had a mark-up of over 400 percent over the regular price of the chemical.
How it started
Early this year, a concerned citizen alerted the Office of the Public Auditor (OPA) about a possible corruption case.
With the involvement of federal funds in the alleged anomalous purchases, OPA reported the matter to the FBI. The FBI investigations resulted in subpoenas of CUC and local government officials and records dating back to 1998. Months later, on July 22, a federal grand jury handed down an indictment against Villagomez, Guerrero and the Santos couple, charging them with wire fraud, theft of federal funds and conspiracy charges. The indictment was sealed.
A day later, the US Marshals issued arrest warrants for the four.
Guerrero signed a plea deal with federal authorities, pledging cooperation with the case. He pleaded guilty to one count of the indictment, conspiracy and was released pending trial on a $10,000 bond. In exchange, he will not see charges for the remaining felony counts.
First Assistant US Attorney Jeffery Strand, in a press conference on August 11, lauded Guerrero for his decision to cooperate but raised concerns that Guerrero will face severe pressure in the local community due to the charges and his involvement with the government’s case.
Villagomez was supposed to have been arrested in late July when he attended the National Lieutenant Governors Conference in New York, but federal prosecutors did not want to embarrass the CNMI government.
In the early morning of August 11, Villagomez and the Santos couple surrendered themselves to federal custody.
The indictment was unsealed. In the afternoon of the same day, they were arraigned and pleaded not guilty to each of the charges against them.their tears or with eyes red with tears.
A jury trial in the federal court is set to begin on October 6, 2008. Representing Villagomez are three private attorneys, including Guam’s most famous lawyer, David Lujan.
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