‘Babauta, DOI behind hiring of new CUC chief’

The House leadership accused Gov. Juan N. Babauta yesterday of masterminding the decision to replace Commonwealth Utilities Corp. executive director Lorraine A. Babauta with former American Samoa Power Authority chief Abe Malea.

Vice Speaker Timothy P. Villagomez disclosed yesterday that Babauta and the Department of the Interior, “in collaboration with certain CUC board of directors members” signed a $200,000 grant to hire Malea to manage CUC.

“This action is unnecessary, disconcerting, and in violation of the 1995 Partnership Agreement [between the CNMI and the DOI],” said Villagomez in a letter to Gov. Babauta yesterday.

First, Villagomez said that there are qualified indigenous individuals who could operate and manage the utility firm.

“By hiring a person outside the CNMI, you as governor are sending the message to the people of the Commonwealth that we are not qualified to run CUC when, in fact CUC, has had qualified indigenous individuals who successfully managed the corporation,” said the congressman.

The lawmaker, who is chair of the House Committee on Utilities, Transportation, and Communications and a former CUC executive director, also criticized the DOI’s involvement “as a direct interference with the local affairs of the CNMI in terms of self-government.”

Villagomez said there is no need to involve the federal agency in the CUC matter “because it undermines our ability to run our islands and affects our credibility with the federal government.”

“I caution you in involving the federal government every time we have a local situation that must be dealt with locally,” said Villagomez.

He said the most pressing problem right now at CUC is the rising cost of fuel and the government’s repeated failure to pay its utility bills.

Villagomez said that Lorraine Babauta “is partly a victim of circumstances” and that it “is disingenuous for the Executive Branch to ascribe blame to the executive director when it refuses to pay its fair share of utility costs.”

The CUC said that the central government has at least $13 million in accumulated debt with the utility firm. This figure is currently under litigation.

Moreover, Villagomez said he is concerned about Malea, whom he said had managed a smaller utility firm. “CUC is the third largest utility in the Pacific region, so what logic is there in hiring a person who managed and operated a much smaller utility to manage our larger utility?”

The lawmaker recalled that when he was with CUC, “staff at DOI warned me that it was a practice for American Samoa Power Authority to…run as many as utilities as possible.”

“CUC should not be a part of any attempt by ASPA to control all utilities of the Pacific,” said Villagomez.

The lawmaker said the hiring method is a blatant violation of the 1995 agreement, which, he said, was executed to address the issue of interference by various government agencies and officials in the management of CUC.

Based on the language of the agreement, he said it clearly prohibits micromanagement of CUC, “which is what you, as the governor, the CUC board of directors, and DOI are doing…”

Further, Villagomez said that it is a violation of laws and regulation if the CNMI government appropriated funds over $100,000 and instituted the allotment of personnel to write grants, noting that these actions are not contained in the budget.

In his letter, Villagomez urged the governor “to reconsider interfering with CUC’s management.”

“Instead, I urge you to assist CUC, the board of directors, and its executive director in resolving its problems,” he said.

He also asked for a copy of the $200,000 grant or memorandum of understanding signed with the DOI.

When reached for comments, press secretary Peter A. Callaghan said that hiring Malea “is not only good for CUC but for the entire Commonwealth.”

“The governor and the board are doing what they think is best for the islands’ power,” said Callaghan.

He said Malea is “highly recommended” and “absolutely an expert.”

“He took over the power operations of American Samoa when it was in deep trouble and it turned around completely and now they are generating cheap and plentiful electrical power. If he can do the same thing for the CNMI, the entire Commonwealth is going to benefit,” he said.

On the funding issue, Callaghan said the professional services contract was funded through a technical assistance grant from DOI.