SBDC CONTROVERSY NMC asks SBA to step in

In an effort to save the local Small Business Development Center, Northern Marianas College President Agnes M. McPhetres has asked the U.S. Small Business Administration in Washington to step in and investigate the planned non renewal of the SBDC program.

The subcontract of NMC’s SBDC with the University of Guam’s Pacific Islands Small Business Development Center Network has been going on for the past five years, but the agency said it would ask the Commonwealth Development Authority to take over the program when the agreement expires in December 1999.

In a letter to Johnnie L. Albertson, associate administrator for the Small Business Development Centers, Ms. McPhetres has sought her help in resolving the situation “since we have not had the opportunity to tell our side of the story.”

Similarly, Sen. Pete Reyes, in his letter to the U.S. Inspector General of the Department of Interior, asked for an investigation into charges of conflicts of interest, bribery, and fraud against Mr. Peters, who ironically was the former head of NMC’s SBDC. Ms. McPhetres has earlier sent a similar letter to the U.S. SBA
Inspector General to look into alleged violations committed by Mr. Peters.

Charges

The feud between NMC officials and Mr. Peters became public when Mr. Reyes expressed concern over an attempt of the ex-SBDC head to close down the program six months after his departure. Mr. Peters resigned to become director of the Guam-based PISBDCN.

This was followed by the letter from Ramon A. Villagomez, chairman of the Board of Regents, accusing Mr. Peters of abuse of power and attempting to secure a contract for himself while he was still the director of SBDC in connection with the a project being administered by his office.

There have been efforts to save the program as Ms. McPhetres, Mr. Villagomez and Eric Plinske, acting director of NMC’s BDC, met with UOG President Jose Nededog and Mr. Peters on Oct. 20, 1999.

During that time, Mr. Nededog said the University is committed to continue working with NMC as what they have done for years.

Vendetta

NMC officials and BDC staff as well the CNMI legislators believe that the trouble simply stemmed from the failure of Mr. Peters to corner a $10,000 contract involving a project being administered by NMC-SBDC due to possible duplication of work.

In his letter to Ms. McPhetres on Nov. 5, 1999, Mr. Peters emphasized that the memorandum of understanding between UOG and NMC ends on Dec. 31, 1999. “As I expressly pointed out, there exists no commitment at this time on the part of the PISBDCN to enter into a new agreement with NMC beyond the current MOU,” he said. The continuation of an SBDC subcenter in the CNMI and how it will be administered is still under review, he added.

“It is nothing but a personal vendetta,” said Rep. Oscar Babauta, chair of the House Commerce and Tourism.

Until now, Mr. Peters has delayed the appointment of a permanent NMC SBDC director since he does not like the College’s choice, Rik Villegas, to assume the post, according to College officials. Before he left BDC, he neglected preparing the subcontract agreement with UOG which would have assured funding for SBDC this year. For this whole year, NMC has been using its own funds to run SBDC.

According to Plinske, he already sensed that there were negotiations behind their back for the transfer of the program to CDA when Mr. Peters tried to ease him out of the scheduled meeting on June 10, 1999 attended by Andrew K. Poepoe, Honolulu district director, and Ken Lujan, SBA Guam branch manager, with CDA officials.

“So the lid was blown off. Whatever topic or agenda they had was changed and not discussed because I was there,” said Mr. Plinske.

Exasperated with the repeated refusal of Mr. Peters to fill up the position of the SBDC program director, Ms. McPhetres sent a letter to Mr. Poepoe telling him how the PISBDCN head has manipulated the whole situation.

NMC officials are also appalled at the areas of noncompliance/default cited by Mr. Peters which may lead to the termination of the program. “Unfortunately, these were the same things which he himself have neglected to do before he left. How could he say that the program is so bad in only three to four months after he left?,” asked Mr. Plinske.

Due to the problems confronting the BSDC program, the Center failed to immediately get the $93,000 CDA graduate internship grant which would have allowed them to recruit the needed number of interns.

“Just look at this from a leadership perspective. Here is this man who supposedly care to nourish this program all these years but left us with so much problems just because he did not get a $10,000 contract,” said Mr. Villegas.