‘OAG micromanaging healthcare corp.’

Chief executive officer Juan N. Babauta of the Commonwealth Healthcare Corp. yesterday accused Attorney General Edward T. Buckingham of “micromanaging” the corporation, hobbling its efforts to solve its dismal financial situation.

Babauta’s statement was made during a special meeting of the corporation’s board of trustees, to which Buckingham was invited to attend by board chair Joaquin Torres.

“You, in many, many respects, have micromanaged [the corporation],” Babauta told Buckingham after the latter explained why he issued a notice to cease and desist all activities between the corporation and International Consulting Services, the Idaho-based company being eyed to provide billing and collection services for the Commonwealth Health Center.

According to Babauta, the AG’s role is to look at any contract such as that of ICS only to ensure that it is legally sufficient. Instead, he asked for documents such as workflows and benchmarks that are no longer legal issues.

For Buckingham to be involved in an argument concerning ICS’ commission rate is also one example “that does not involve the legal sufficiency of the contract,” Babauta said.

ICS was originally approved a six-year contract that will pay it an 11 percent commission in the first three years and 11.5 percent in the last three years. A meeting between the OAG and the corporation last April 27 resulted to an agreement to reduce the fee to the industry standard level.

Buckingham maintained, however, that the need for his office to assess the “enforceability” of the ICS contract is an action that is both legal and factual in nature. He added that his legal judgment says the contract is “vague” and “unclear” on the roles and responsibilities of both ICS and the corporation.

The AG also stressed that with the ICS being sole-sourced, both OAG and the Procurement Division were not involved in the contracting process that would have ensured the benefits of a “competitive” contract for the corporation.

“There was no evidence of competition. None,” Buckingham emphasized, adding that Babauta, as corporation CEO, does not have the right to make the decision to sign the contract by himself without both the Procurement Division and the OAG.

Babauta noted that the board asked their legal counsel, assistant attorney general James Kearney, if there was any problem on the contract, who responded that there was none.

The CEO also claimed that Kearney came to his office to “demand” that the corporation implement the reduction-in-force before the OAG signs the loan from the Marianas Public Land Trust, underlining that the timing was “inappropriate.”

Buckingham repeatedly insisted that Kearney told him that he neither reviewed nor approved the ICS contract. As Kearney was not at the meeting, the AG said the matter should be discussed “at an appropriate time” to give Kearney the opportunity to answer any “accusation.”

Moreover, Buckingham emphasized that it was a “bad move” on the part of the corporation to have its assets potentially hauled to court by MPLT because of the loan, which will be disadvantageous to the CNMI.

“You may not like that in terms of micromanagement. I, as a lawyer, felt that that was and is a bad deal for the Commonwealth in terms of exposure,” he added.

Echoing Babauta’s “micromanaging” sentiment, Dr. Trenton Scheibe said that OAG has a “conflict of interest” as it cannot serve both the corporation and the governor’s office at the same time.

“The government is getting involved in [the corporation] and by not letting the board and the CEO do what they need to do, you are micromanaging,” he said.

Scheibe also asked if there is any legal statute that would allow the corporation to hire its own legal representation. He said both the OAG and the governor should stop micromanaging if they really want to help both the corporation and the community in general.

He questioned previous instances where the OAG allowed for other sole-source contracts, citing the case Michael J. Ada, former Commerce secretary who is now affiliated with Integrated Professional Solutions LLC or IPS. IPS was awarded a $392,406 sole-source, 18-month contract to manage the American Recovery and Reinvestment Act program in the CNMI.

Buckingham explained that while he did not like what happened with that contract, the Office of the Public Auditor opined that the sole-sourcing of IPS made a strong case to be justified.

The AG said that it is a “little late and a little cheap” to be critical about the IPS but pointed out that that contract went through Procurement Division, Finance Department, and his office, as opposed to the ICS contract.

Buckingham said that while the views expressed were different, the exchange was healthy, appropriate, and good.