‘CUC paid highest rate ever for Rydlyme’

An official of the company that manufactures the descalant chemical Rydlyme testified yesterday that the price charged to the Commonwealth Utilities Corp. for the purchase of the product was the highest ever he has heard of.

As this developed, U.S. District Court Chief Judge Alex R. Munson ordered that all statements of U.S. government witness James Simmons of the Acculube Industrial Products in Los Angeles, California, be stricken off the record.

During direct examination by assistant U.S. attorney Eric O’Malley, Mark Bickler, vice president of the Illinois-based Apex Engineering Products Corp., said that, except for the CUC transactions, the highest price for Rydlyme that he is aware of was $25 per gallon.

Bickler said he never heard of $40 a gallon for Rydlyme until the CUC case came up. He said it was also in the CUC transactions where he heard of $35 per gallon.

ISLAS Micronesia and Blue Pacific allegedly charged CUC $35 and $40 per gallon for six transactions involving the purchase of Rydlyme.

James Santos owns ISLA Marianas, while his wife, Joaquina Santos, owns Blue Pacific. The Santos couple are co-defendants with Lt. Gov. Timothy P. Villagomez in the case involving the alleged needless purchase of thousands of gallons of Rydlyme.

Besides Bickler, William J. Powell of Rydlyme Pacific Inc. in Hawaii, the distributor of Rydlyme for ISLA Marianas Sales and Blue Pacific, also took the witness stand for the U.S. government.

Bickler said he has personal knowledge of the CUC transactions beginning in 1997 or 1998 when their company shipped their product to Saipan. He said their company shipped Rydlyme to Saipan four to six times.

Bickler said Powell is their marketing representative, whom they would pay a commission or a discount. In the CUC transactions, Powell got both—a commission and discount, he said.

At that time, Apex’s list price for Rydlyme was $49.50 per five gallons or about $9.95 a gallon. Bickler said Powell would mark up the price when selling to his customers. He said they can’t dictate the prices set by their representatives but they usually recommend a price range.

With respect to the last transaction in 2007, Bickler said he received an e-mail from James Santos requesting for a quotation for the purchase of Rydlyme. The quotes were for 1,000, 2,000, and 3,000 gallons of Rydlyme.

Bickler recognized a document shown him in court as a $30,676 billing that Apex sent ISLA for 3,000 gallons of Rydlyme. He said the amount includes shipping costs.

The 2007 CUC contract called for payment of $120,000 to Blue Pacific.

Bickler described the sending of four CUC employees to their plant for training as “a little out of the ordinary.”

Rydlyme is a chemical product for removing mineral deposits in engines.

Judge Munson granted yesterday the defense’s motion to strike the testimony of Simmons of the Acculube Industrial Products, saying his testimony has nothing to do with the case. Simmons’ company sells chemicals similar to Rydlyme.

O’Malley explained that Simmons’ testimony showed that there are alternative product in the market for Rydlyme at a much lesser price.

During cross-examination by Villagomez counsel, David J. Lujan, Simmons agreed that he has nothing to say about all six CUC transactions for Rydlyme.

Simmons also admitted that the U.S. government is shouldering his expenses during his stay on Saipan.

Lujan ended his cross-examination by telling the witness, “Enjoy the rest of your stay here on Saipan. Thank you very much.”

Attorney Victorino Torres, counsel for James Santos, asked Simmons if he is enjoying his stay on the island at the taxpayers’ expense.

“Yes,” Simmons replied.

Powell testified that in his transactions with ISLAS Micronesia for the purchase of Rydlyme in a five-year period, he profited $15,000 to $16,000.

Powell said he first met Santos in early 1998 or late 1997 when he was marketing Rydlyme for CUC. He was unsure whether he met Villagomez when he did a small presentation about Rydlyme at CUC in June or July 1998.

Powell admitted receiving a call from the Rota power plant, complaining about damage to the cylinders caused by Rydlyme. He said he and another person came to Saipan in January 1999 to investigate, with Santos paying for his airfare and lodging at the Hyatt Regency.

Earlier yesterday, CUC power generation division’s purchasing supervisor Joaquin Martin Cruz also testified for the U.S. government.

Cruz said when they received the Rydlyme in 1998, he did not request for the product.

Shown by the prosecution with documents, Cruz recognized them as request vouchers for Rydlyme that he prepared upon the instruction coming from the “signal” Jose S. Demapan, who was then the chief acting manager of power division; and from William M. Borja, who also served as then acting manager at the power division.