OPA: Probe on IPS contract key to keeping public confidence

Public Auditor Michael Pai told Gov. Benigno R. Fitial that an ongoing ethics investigation into the almost $400,000 sole-source ARRA management contract with Integrated Professional Solutions is important in “preserving and maintaining the public’s confidence in the CNMI government.”

Pai was responding to Fitial’s Dec. 27 letter wherein the governor told the Office of the Public Auditor to remove itself from any role re-investigating the award of the ARRA management contract.

Fitial blamed the public auditor for failing to raise ethical concerns back in October 2010 when the governor asked him to review the possible sole-source contract for OPA clearance.

Pai, in a Dec. 30 letter, a copy of which was obtained yesterday, said OPA is reviewing the governor’s letter “and the allegations it contains.” He said OPA will respond to the governor’s letter upon completion of its review.

Pai, an appointee of Fitial, also indicated the significance of the ongoing ethics investigation.

“This investigation serves an important function in preserving and maintaining the public’s confidence in the CNMI government,” Pai told Fitial. “Please note that this investigation is confidential. You have been informed of it for the limited purpose of carrying out OPA’s duties and responsibilities.”

Press secretary Angel Demapan said yesterday that the letter from OPA “does not warrant a response from the governor” because he said it is “simply notifying the governor that his concerns are being reviewed.”

When asked whether the Fitial administration will extend IPS’ contract, which expires in April 2012, Demapan said “an extension is not anticipated at this time.”

“The sole-source contract was for a specific purpose and timeline,” he said.

The CNMI has been awarded over $119 million in ARRA money from Feb. 17, 2009, through Sept. 30, 2011.

Based on federal tracking agency recovery.gov data, the CNMI has been awarded the least amount of American Recovery and Reinvestment Act money among 50 states and five territories, but Delegate Gregorio Kilili Sablan (Ind-MP) said the CNMI actually gets the most per capita because of its small population.

“The U.S. national average for ARRA money is $899 per capita. The CNMI gets over $2,200 per capita,” Sablan earlier said.

Most of this ARRA money is managed by Ada’s firm IPS, following the Fitial administration’s award of a $392,406 sole-source contract.

A July 2011 investigative report from the Office of the Inspector General of the U.S. Department of the Interior found that the IPS sole-source contract to manage ARRA funds that the CNMI receives may have violated CNMI Procurement and Supply regulations and may have broken several CNMI ethics rules.

Prior to the routing of the proposed ARRA management contract, Fitial wrote to Pai on Sept. 23, 2010, to request clearance from OPA because, among other things, the proposed contractor at the time was the outgoing Commerce secretary whose duties included monitoring ARRA funds.

Fitial told Pai in December that his Oct. 7, 2010, response to the governor’s letter raised no ethics issues. The governor said it’s clear that OPA failed to provide him with a sound ethical assessment during the contract review process.

“Accordingly, OPA is conflicted from undertaking an investigation into ‘ethics’ violations when it was OPA’s failure, at the outset, to raise ethical issues that substantively contributed to contract approval by other agencies of the Commonwealth government,” Fitial told Pai.

The governor instead asked Pai to explain to him and the Legislature OPA’s failure to identify in October 2010 ethical issues related to the ARRA contract.

The Senate told OPA last year to further investigate the contract award, saying that the U.S. Interior’s Inspector General July 2011 report is not definitive in its conclusion.

The Senate Committee on Executive Appointments and Governmental Investigations had also asked the CNMI Bar Association to investigate Attorney General Edward Buckingham for his involvement in a delegate candidate’s campaign gathering in 2010 and his approval of a sole-source ARRA management contract to former Commerce secretary Michael Ada’s firm IPS.

Sen. Frank Cruz (R-Tinian), EAGI chair, said they have yet to receive a report from the Bar Association as of yesterday afternoon.