A clear conflict of interest?

If there is anyone left in the CNMI who still believes that MPLA is managing the public lands in an honest, ethical and competent manner, they will be shocked to learn that MPLA just hired Jesse Palacios.

Who is Jesse Palacios? It is well known that Jesse Palacios and his brother Glen Palacios are ardent Azmar supporters. But they are much more than that—they are part of the original Azmar upper management team. In fact, Glen Palacios is Azmar’s local representative on Saipan. Jesse Palacios is no less involved with Azmar. Azmar corporate documents submitted to MPLA as part of the permit application, name both as “key employees.” It names Glen D. Palacios as “Logistics and Production Manager” and Jesse S. Palacios as “Finance and Governmental Relations.” In a well-traveled August 1, 2004 email message from Azmar head Ken Moore (available online at http://www.chamorro.com/PaganWatch), it is clear that Jesse was helping Ken Moore with strategy on how to deal with MPLA.

Azmar, as anyone following the news last year, has been trying for years to get an exclusive permit from MPLA to relieve Pagan of its potential billions of dollars worth of pozzolan for pennies on the dollar. They almost succeeded too despite the mountain of evidence that PaganWatch provided MPLA of Azmar’s complete lack of qualifications, insufficient funding, exploitive permit terms, as well as exposing Azmar’s plans for the historic artifacts from Pagan.

What is going on? Does the MPLA board of directors not understand the meaning of conflict of interest?

Jesse Palacios does not seem to understand the meaning of conflict of interest either. While in his Finance and Government Relations role at Azmar, he was simultaneously acting director of the CNMI Department of Commerce. What is the director of the CNMI Department of Commerce doing negotiating against the government and the people paying his salary? But it doesn’t stop there. While working for Azmar, Palacios also worked on behalf of Consolidated American Energy Resources, who was also seeking a permit to mine Pagan. In fact, PaganWatch’s source at CAER identified Palacios as the one who paid the $5,000 permit application deposit to MPLA using his personal funds!

Why would MPLA hire a ranking member of the Azmar management team? The answer may lie in the mining task force that MPLA agreed to form on the same day that they denied Azmar’s permit application. The task force was to be a multi-sector group made up of stakeholders in Pagan’s future. It was to include the various agencies with jurisdiction as well as interested community groups. The purpose of the task force was to “study the potential of commercial mining projects on Pagan” and “address any future application for a mining project.” Eight months later, the task force has yet to be created.

MPLA board member Nick Nekai is in charge of the task force. A few days ago, in response to House Speaker Benigno R. Fitial’s request for a status report on the task force, Nekai explained that the first step in organizing the “multi-sector” task force was to create an “in-house” task force made up of MPLA employees. He described how this “key group of MPLA employees” was working with the MPLA board and agency to ensure “which types of pozzolan extraction methods are the most suitable.” He went on to say that MPLA had “received submissions from companies that offer revolutionary ways of determining the amount of pozzolan on Pagan.” Clearly the work of the mining task force has begun—but without the multi-sector community’s involvement.

Nekai is the same board member who moved for the controversial 15-day open negotiation with Azmar that was the last in a series of “second chances” prior to the permit finally being denied. Or was it the last? Even with the denial of the permit application, the MPLA board made it clear that it would entertain Azmar’s application again once they complied with all the requirements. Azmar’s own last word was a vow to continue to pursue a permit.

In other words, MPLA has hired a ranking member of the Azmar management team while Azmar is still in the running for a permit. Further, MPLA is back to their old business-as-usual practice of ignoring calls for meaningful participation by the public in the determination of Pagan’s future.

It is clear that MPLA is out of control. It is a failed agency that cannot be trusted with the management of public lands. The time has long arrived for action on the part of the governor to fix this problem. By law, the governor is the only one who can fire an MPLA board member. Unfortunately, the current governor is hardly likely to do so since he has long been an Azmar supporter and seems more intent on hiring than firing in these pre-election times. Nevertheless, it is his duty to ensure that MPLA has a board of directors that competently executes its fiduciary responsibility.

PaganWatch calls on MPLA Management and the MPLA board of directors to immediately dismiss Jesse Palacios due to the obvious conflict of interest, and for the governor to take appropriate action to ensure that the public lands under MPLA’s care are protected and properly managed by a competent and responsible board of directors.

Peter J. Pangelinan Perez
Cinta M. Kaipat
PaganWatch