OPA clears Babauta family in La Fiesta deal

The Office of the Public Auditor has found that no relative of Gov. Juan N. Babauta benefited from the transfer of the La Fiesta property from the Northern Marianas College to the Executive Branch.

However, public auditor Michael Sablan said the recently completed investigation may not be the last that OPA would conduct in relation to La Fiesta.

In a report dated Oct. 31, 2005, Sablan raised “concerns regarding the financial prudence and feasibility of the Governor’s Office, or for that matter, any other CNMI entity, leasing and developing La Fiesta.”

According to Sablan, OPA’s specific concerns relate to the expiration of leases; future expenses of the leases; source of funds used to procure the properties and maintain them afterwards; and the feasibility of developing and using La Fiesta.

Sablan said in an interview that such concerns were not the focus of the recent investigation and would be addressed later.

“[A]fter reviewing official property records as well as other documents related to the properties that comprise the La Fiesta lease agreements and transfers, OPA did not find any relative of the governor that benefited financially from the transfer of leases for the La Fiesta property from NMC to the Governor’s Office,” a summary of the OPA report read.

In reviewing the transaction, OPA used the broad definition of “relative” found in the Government Ethics Code Act of 1992. The definition includes parents, children, brothers and sisters, aunts and uncles, nieces and nephews, in-laws, half-brothers and half-sisters, stepparents, stepbrothers and stepsisters, and stepchildren.

The only relatives of Babauta who have an interest in any of the five parcels of La Fiesta lands are the governor’s paternal uncle, Manuel M. Babauta and his wife Ana. But they sold that interest to Bernie S. Cabrera in 1987.

OPA said there was no indication in the real property records that the couple regained ownership or profited financially from the La Fiesta transfer.

Francisco I. Babauta, an uncle twice removed, is still the property owner of one of the five land parcels. But he is not a “relative” as defined by law.

The owners of the three other lots are Basilisa M. Lieto and Blanco Vende, a corporation with three shareholders (Ichiro Morii, John P. Villagomez, and Bernie S. Cabrera) who are not relatives of the governor.

Babauta, who requested the audit last year, received the findings yesterday.

He said in a statement: “I want to thank the Public Auditor’s Office for conducting a complete and thorough review. The public has a right to know that elected officials are not using their offices for personal gain or to benefit their families. I would never use my public office for personal gain.”

Babauta originally gave Northern Marianas College $3.5 million to purchase a property for the Pacific Gateway Project, which aimed to make NMC the region’s “education hub.”

Using the funds to make the initial payment, NMC bought the former La Fiesta Shopping Complex for $7.5 million on Aug. 18, 2003. The $4-million balance is to be paid in increments of $200,000 annually until paid in full.

NMC, after encountering huge financial losses and having its accreditation placed at risk, assigned its rights over La Fiesta to the Executive Branch.

“I would still very much like to see La Fiesta as a new campus for NMC students and faculty to enjoy,” Babauta said. “It would be a quick and relatively inexpensive answer to the need for a new campus.”

In the meantime, the Commonwealth Utilities Corp. is holding office at La Fiesta.