Trial of Villagomez, et al begins

The prosecution and the defense began their opening salvos yesterday afternoon in the jury trial of Gov. Timothy P. Villagomez, each one making their opening arguments in a trial that will determine whether Villagomez and his co-defendants James A. Santos and Joaquina V. Santos engaged in a conspiracy to defraud CUC.

Twelve jurors plus six alternates were selected yesterday morning, followed by the opening arguments at 2pm.

Before the start of the arguments, U.S. District Court for the NMI Chief Judge Alex R. Munson called all lawyers involved in the case and one juror. After a brief discussion, the judge excused the juror from the courtroom.

Assistant U.S. attorney Eric O’Malley said the case is all about power and the people who abuse that power. He said Villagomez and the Santos couple are on trial because they cheated the Commonwealth Utilities Corp.

O’Malley cited the defendants’ involvement in six CUC transactions to purchase thousands of gallons of a descaling chemical called Rydlyme that came with a 375 percent markup and violated conflict of interest laws.

The prosecutor said the case is not about Rydlyme, but how CUC bought the chemical, how much it purchased, and the reason for the purchase.

O’Malley said most of the thousands of gallons of Rydlyme sold to CUC under the transactions were never used.

Scheme

He said the scheme started in February 1988 when James Santos and his ISLA Sales Micronesia and Villagomez, who was then CUC executive director, agreed to make CUC purchase 357 gallons of Rydlyme for $13,125.

O’Malley said Villagomez paid the company of James Santos, his brother-in-law, for the chemical. In that deal, he said, James Santos profited over $9,000.

O’Malley said the first deal came through, so another transaction was planned, involving 2,000 gallons of Rydlyme worth $70,000. However, a problem arose because procurement regulations state that there should a contract if the transaction involves $50,000 or more.

To avoid the contract requirement, O’Malley said, Villagomez split the purchase by making three purchases at $35,000 each. Villagomez allegedly justified this by purchasing 1,000 gallons of Rydlyme each for Rota and Tinian.

The government lawyer said Rota and Tinian, which have their own procurements, never asked for Rydlyme.

Under CUC’s procurement regulations, a contract cannot be divided, O’Malley said.

“He [Villagomez] doesn’t care, he just want to buy more and more Rydlyme,” he said.

Of the $70,000 CUC payment, James Santos and his company profited over $60,000, according to O’Malley.

Split transactions

O’Malley said CUC employees stopped using the Rydlyme as the chemical proved too strong, but this did not stop Villagomez from buying 3,000 more gallons of the chemical from James Santos, worth $105,000.

Again, the prosecutor said, Villagomez split the contract at $35,000 each or 1,000 gallons each for Saipan, Tinian, and Rota.

O’Malley said witnesses will tell that Rydlyme was piling up on the three islands as CUC crew did not use the chemical for the power engines.

This did not stop the fifth transaction, O’Malley said, with Villagomez authorizing the purchase of $49,000 worth of Rydlyme in December 1999. He said it was capped at $49,000 so that Villagomez could skirt the rules requiring a contract for $50,000 transactions.

In 2002, Villagomez was elected congressman and in 2006 he became lieutenant governor.

Puppet

As lieutenant governor, the prosecutor said, Villagomez was back in power to run CUC again. He said Villagomez needed a puppet in the name of Anthony Guerrero to run CUC.

With CUC experiencing power engine problems, this gave James Santos another opportunity to sell CUC more Rydlyme, O’Malley said, leading to the sixth transaction in September 2007 when CUC purchased 3,000 gallons of Rydlyme worth $120,000.

With James Santos facing an investigation in 2000 about the Rydlyme, he allegedly devised another plan by making his wife, Joaquina, put up a new company called Blue Pacific. Villagomez, as lieutenant governor, initiated a sole-source emergency contract with Joaquina Santos’ Blue Pacific. This earned blue Pacific $120,000, O’Malley said.

He said that on Dec. 7, 2007, James Santos signed a $15,000 check payable to Villagomez. That same day, Villagomez deposited the check into his personal bank account, O’Malley said.

Defense

David Lujan, counsel for Villagomez, said that evidence will show that from 1998 to 2000 there were orders to purchase Rydlyme. Lujan said evidence will show that the orders were signed by many CUC employees, including Villagomez.

The defense lawyer said evidence will show that it is William Powell who is the distributor of Rydlyme and not James Santos.

He cited some CUC employees who were sent off-island to undergo training about Rydlyme.

Lujan said evidence will show that the CUC crew who were sent for training were satisfied with how Rydlyme works.

Lujan said CUC had a legal counsel, former judge Edward Manibusan, who prepared the sole-source contract to buy Rydlyme in November 2007.

Lujan said evidence will show that there were many CUC employees who signed the contract.

“It became a legal and binding evidence,” the lawyer stressed.

Lujan said Guerrero attempted many times to get an admission from Villagomez through taped phone calls, but with “no luck.” What Villagomez told Guerrero was to talk with CUC’s legal counsel, Lujan said.

He said evidence will also show that the $15,000 was not a bribe to Villagomez from his sister.

Victorino Torres, counsel for James Santos, also made his opening arguments.

When Saipan Tribune left the courtroom late in the afternoon, Ramon Quichocho, counsel for Joaquina Santos, was making his opening arguments.