CUC officials in hot water • Reports claim public corporation officials do junkets, hire nonessential personnel

The Commonwealth Utilities Corporation is facing a possible investigation by the Office of the Public Auditor following allegations of breach of fiduciary duties of its officials, ranging from excessive off-island trips to uncalled-for hiring of new personnel.

Some members of the Legislature yesterday bared concrete plans to ask OPA to extensively investigate and evaluate the financial status of the government-owned utility corporation.

This, following reports of excessive travel tabs incurred by CUC officials, continued hiring of personnel, implementation of across-the-board wage increase and additional $1,000 anniversary salary hike, amid what the firm called were “austerity measures.”

Reports reaching the Legislature disclosed six CUC officials headed by Board Chair Jesus T. Guerrero, vice chair Laura Manglona and members Sonny Flores and Ed Sablan, CUC legal counsel Steve Woodruff and Assistant Attorney General Murphy Peterson left the island to attend a meeting in the mainland.

Efforts to get the comment of available CUC officials, including Executive Director Timothy Villagomez were in vain since calls were not returned.

The CUC delegation left Saipan on Feb. 3 to attend a meeting scheduled on Feb. 6 and 7. The officials, who reportedly traveled first class, were scheduled to be back on Saipan on Feb. 19.

In addition, reports also claimed CUC hired 35 personnel in the past six months, including Mr. Guerrero’s brother-in-law Manuel C. Sablan as the utility corporation’s liaison officer to the Legislature, with an annual salary of $49,000.

Ironically amid cost-cutting measures, CUC also implemented a $2,000 across-the-board salary hike and an additional $1,000 anniversary increase for each of its utility employee.

Bothered by the allegations, House Public Utilities, Transportation and Communication Committee chair Rep. Rosiky F. Camacho warned CUC officials that their excessive spending might result to possible absolution of their fuel tax exemption and a much needed OPA probe.

This, he said, will also pave the way for the evaluation of the Office of Insular Affairs-Commonwealth partnership agreement and the Equity Conversion Program between the Commonwealth Development Authority and the CUC.

Mr. Camacho said if CUC is making enough money to shoulder all these expenses, there is no reason for the government to continuously absolve the utility company from the Liquid Fuel Tax.

The corporation’s exemption has a major impact on the revenues generated by the government since its implementation, said the congressman.

In addition, Mr. Camacho said the Legislature will tap the assistance of the OPA to look into the matter once the CUC submitted its financial status report which has been requested by his committee several months ago.

The CUC is yet to file the requested financial data.

On the alleged hiring of personnel including the former Coastal Resource Management director, Mr. Rosiky cautioned Mr. Guerrero to refrain from using the utility office as his campaign kitty in preparation for his mayoralty candidacy in the November polls.

Government bills

The legislator even stressed that it was so irresponsible for these CUC officials to continuously embarrass the government, asking for the payment of the outstanding utility debts in guise of its need to pay Mobil Oil when so much money has been thrown out to other unnecessary things.

“We will be asking for an evaluation, their full accountability provided under the agreement and the OPA should investigate if they are (CUC) doing what they have to do,” stressed the legislator.

The PUTC chair added that they will sending out another request on the financial status of the CUC to verify the veracity of these reports and an in-depth probe is necessary to determine their violations.

He said depleting coffers of the Utilities Corporation should not be blamed on the government’s $12.3 million overdue bills but on CUC’s overspending.

Mr. Camacho has branded CUC’s decision to cut the power and water supply of government offices as a very irresponsible act.

“I am telling the CUC chairman that it is irresponsible to disconnect public offices,” he said, advising utility corporation officials to review the agency’s finances before it should even decide to pass the buck on the government’s failure to settle its outstanding bills.

“Why don’t they clean their act and be accountable with their own expenditures first. I mean they should start cutting off-island trips. The problem is not the usage of utilities but the CUC’s being overstaffed and the agency’s overspending,” he pointed out.

CUC earlier disclosed disconnection notices have been mailed out to 40 public offices for the government’s failure to settle overdue bills that now stand at $12.3 million.

Almost 52 percent of CUC’s accounts receivable will be coming from the CNMI government whose average monthly utility bills amount to $825,000.