Investigation of ex-SBDC director pushed

The former director of the Small Business Development Center by the Northern Marianas College may have used his position to steer federal funds given to the agency to jockey for his current position, according to Senate Floor Leader Pete P. Reyes.

The Legislature, along with the Office of Insular Affairs, should investigate the recent economic conference on the CNMI for alleged wrongdoing committed by Jack Peters who now heads the Pacific Islands SBDC Network based in the University of Guam.

In a statement, Mr. Reyes claimed the ex-SBDC director steered the OIA grants to favor a certain firm owned by David O’Brien, former interim director of PISBDCN who also had direct authority over the local office here.

He claimed Mr. O’Brien, who he said did not want to pursue the post, offered proposal on behalf of his TBC Consulting Partnership to get contracts from the $275,000 OIA granted to the conference and economic study supervised by NMC.

Mr. Peters, on the other hand, was vying for the PISBDCN director position. According to Mr. Reyes, Mr. O’Brien was one of the five-member panel that would interview Mr. Peters only a week after receiving $88,000 in contracts through the NMC-SBDC where he was still the director.

“This relationship disturbs me,” the senator said, adding Mr. O’Brien initially proposed a 10 percent cut on top of the contract amount as finder’s fee and to manage the project.

Sole owner

Mr. Reyes also disclosed that Mr. O’Brien outlined four service contracts with initial amount of $24,990, on behalf of TBC where the latter said he was a partner with other UOG faculty members.

But records obtained from the Guam Department of Revenue and Taxation showed that TBC was in fact a sole proprietorship under Mr. O’Brien and his wife’s names and its license was granted only on June 3, 1999 — more than two months after the conclusion of the conference on Saipan.

The senator also charged that Mr. Peters .was trying to push the TBC proposal before the Contractors Selection Sub-committee of the conference where Mr. Reyes and three other lawmakers had knowledge of.

“Mr. Peters in his capacity as NMC-SBDC director and administrator of both grants, highly recommended TBC,” he explained. “The committee made a final selection and awarded the contracts, but [he] set it up so that the committee would not be involved with deciding the amounts of the contracts.”

Mr. Reyes said Mr. Peters handled all negotiations, drafting of contracts and amounts to be awarded alone as he quoted the project manager, Malcolm McPhee as saying that the final award was raised to $88,000.

“[Mr. Peters] increased the amount… and could be liable for grossly inflating the award, ignored an obvious of conflict of interest arrangement…, and leaving the administration of the study in terrible condition in order to extract another contract to complete the work,” he added.

Coach

Mr. Reyes, who has raised allegations of wrongdoing in recent weeks against Mr. Peters over the SBDC controversy, also claimed that Mr. O’Brien might have coached the former to get into his present job.

“Now, the entire CNMI community will understand the true intent of Jack Peters. Its really too bad because the SBDC has helped the CNMI community and has many supporters to keep the program at NMC,” he said.

Mr. O’Brien or Mr. Peters could not be reached for comment on these latest allegations, although the PISBDCN director has denied the accusations as he noted that NMC had mismanaged the federal funds granted to the sub-center.

The Commonwealth Development Authority is scheduled to take over the operations of the center early next year.