Over $1M in ARPA funds paid to dissolved nonprofits

The House Special Committee on Federal Assistance and Disaster-Related Funding held a special committee meeting yesterday to discuss the need for subpoenas against nonprofit heads who (collectively) received over $1 million in American Rescue Plan Act funds.

During yesterday’s special committee meeting, committee vice chair House floor leader Rep. Ed Propst (D-Saipan) brought up a request for subpoenas duces tecum/testificandum against the heads and employees of nonprofit organizations Second Wind, Women of Destiny, COVID Care Force Micronesia, and One Marianas Initiative.

Collectively, these nonprofits received $1.1 million from ARPA (mostly through the Building Optimism, Opportunities, and Stability Program, or BOOST Program) with no return of investments to show for it. In addition, some of the nonprofits have since been dissolved.

Specifically, Second Wind and Women of Destiny (both represented by Grace Sablan Vaiagae) collectively received $700,000 in ARPA funds (both BOOST and non-BOOST related) and have since been dissolved as of this year.

Meanwhile, both COVID Care Force Micronesia and One Marianas Initiative received $250,000 through BOOST with allegedly nothing to show of it.

COVID Care Force Micronesia is represented by Kevin C. Guerrero and James Michael Petitte while One Marianas Initiative is represented by James Michael Petitte and Ivan Mereb.

“We are looking at extraordinary amounts paid to these non-profits. My concern is…how was the money actually spent? I have looked at a journal of payments made out [by these non-profits] and I think this is something that we really need to look at. How were these non-profits operated, what did they spend the money on, and I would like to recommend that this body consider subpoenas for these non-profits and its directors and for those who worked for these nonprofits,” he said.

In addition, Propst asked that these nonprofits’ bank records be subpoenaed too.

“I firmly believe once we get the subpoenas out, we will be in a much better position to discuss what happened. Again, these are supposed to be nonprofits organizations and there’s also the concern of what they intended to do, and what the actual delivery of services was,” he said.

Another concern Propst raised was that these nonprofits failed to pay some of their bills before dissolution.

“It has come to our attention that while some of these nonprofits have been dissolved, there are challenges for legitimate businesses where rent is still owed and other billings. I am deeply concerned that these payments were not settled before they dissolved and that makes it very difficult for legitimate businesses to try and collect now that they’ve been dissolved. All the more reason why we should try and understand what [was produced] from this substantial amount of money and why these individuals were paid so much. Again, I’m sorry to have to bring up the past but the biggest complaints we’ve had time and time again is that many of the awardees who just started up business, not existing struggling businesses, were awarded big chunk of change and we are not seeing what the return of investment is on that. Originally, Covid funds under ARPA were supposed to be helping out those who need help, including businesses. There is an urgent need to get this information to us,” he said.

In addition, Propst asked that Department of Finance Secretary Tracy Norita be contacted for up-to-date documents on these nonprofits.

“Unfortunately, we don’t have any federal agents doing any investigation on this so its really up to this body,” he said.

The special committee is set to reconvene next week to discuss the next steps regarding this matter.