Babauta pays $140K for consultant, marathon

Gov. Juan N. Babauta initially authorized the release of $250,000 in November 2003 for the payment of a Washington D.C.-based consultant and funding for the Saipan-Korean marathon.

Documents showed that Babauta asked the Department of Finance to expend $150,000 for legal services provided by telecommunications attorney Thomas K. Crowe.

He also agreed to shoulder $100,000 of the costs associated with the holding of the first annual Korean marathon.

But in a Dec. 2003 letter to the Finance Department, Babauta re-directed the funds “as the costs of these two programs was less than expected.”

The governor then instructed Finance to pay only $40,000 for the marathon, $100,000 for Crowe, and $100,000 for Daryl Owen, whom he hired to lobby for the recovery of $100,000 in cover-over tax.

In his letter, Babauta asked the department to commit funding obtained from the Jobs and Growth Tax Relief Reconciliation Act for the projects.

He said that the funds had to be taken specifically from the “China Advertising Launch,” which had a $1 million budget.

The CNMI received a total of $10 million from the federal Act. It was also the source of the $3.5 million deposit for the purchase of the $7.5 million La Fiesta complex for the Northern Marianas College.

When reached yesterday, Babauta said that Crowe’s contract finished “long time ago.”

As for the marathon, he said that the entire event, which was participated in December 2003 by some 250 Koreans, cost $200,000.

“We put in $40,000. It was promoting tourism here. Is there something wrong with promoting tourism here?” he asked.

He continued, “ If we try to do something for tourism, we get criticized. If we don’t do anything, we get crucified.”

“What’s the implication? That we’re throwing away money? That’s nonsense,” he said.

The governor also took exception to recent media reports disclosing his consultancy contracts with Owen’s consultancy firm in 2003 and 2004.

“Why are you guys digging these up now? To go after Juan N. Babauta? It’s a witch hunt. These things had been in the news before. That’s been two years ago,” he said.

Documents showed that Babauta awarded nearly $200,000 to Owen in the last two years to recover over $100 million in cover-over taxes from the federal government.

The administration said Owen’s work had resulted in the payment to the CNMI of $1.2 million in “current” cover-over funds.

The prior payment of $100 million remains unrecovered.

The administration said it is inclined to hire Owen, a top congressional lobbyist, again to go after the big chunk of funds.

Cover-over funds are the unremitted taxes, duties, and fees collected by the U.S. government from CNMI residents in the past 10 to 12 years.