Corporation board wants legal counsel Kearney ousted

Members of the Commonwealth Healthcare Corp. board expressed disappointment and frustration with their legal counsel, assistant attorney general James Kearney, and called Saturday for his immediate ouster from the board.

The full board unanimously voted to look for an independent legal counsel who they said can better represent the board and chief executive officer Juan N. Babauta in legal matters.

Kearney is from the Office of the Attorney General and has been working with the corporation since it took over last year.

Board members claimed that Kearney showed conflict of interest and gave defective advice that led to the current conflict with the Attorney General Edward Buckingham regarding the ICS contract.

Board member Anthony Aguon believes that due to this conflict of interest, the OAG-appointed counsel has put the board’s decisions at risk. He even tossed the idea of filing an ethics complaint against Kearney, who did not show up at Saturday’s meeting.

Board member Pedro Dela Cruz said the fiasco with the ICS contract may have been averted if Kearney had given the board proper advice.

“This fiasco about ICS really bothers me because during all our meetings, a representative from AG [James Kearney] was here. This problem we have [on ICS] could have been averted if proper advice was given to the board. We need to have a legal counsel that is answerable to the board and the CEO and not who represents the ‘interests’ of others,” Dela Cruz told colleagues.

Corporation CEO Juan N. Babauta earlier told Saipan Tribune that the decision to go ahead with sole-source contract with ICS was consulted and approved by Kearney, only to find out later from Attorney General Edward Buckingham that the contract is unlawful and violates CNMI procurement regulations.

Alvaro Santos, the corporation’s chief financial officer, also sees the benefit to be derived if an independent or in-house counsel will be hired, citing the critical role that person will play in the organization’s financial matters.

“I don’t think the AG is really an advocate of the corporation, given the ongoing crisis we have now. I sensed that there is ‘inflexibility’ to the point that it has become very frustrating to even drawdown the first $1 million [from the MPLT loan],” said Santos, adding that it was Buckingman, not Finance Secretary Larissa Larson, who made the request for additional documents and other requirements for the drawdown.

“I am surprised that the request of financial documents came from AG and not the Finance secretary. Is he an accountant too? My goodness!” added Santos.

According to the CFO, if the remaining balance of $2 million was not directly negotiated with MPLT, it would be more difficult to get the approval of AG for its release.

Because funding is very scarce for the corporation, board members approved the hiring of an independent counsel on a per-need basis only, or some form of special arrangement.

Because Public Law 16-51, which created the corporation, subjects the hiring of a legal counsel to OAG approval, many expressed worry that this may be blocked by the OAG.

Babauta, to make sure the board is doing the right thing, said he will write to Buckingman to express the corporation’s desire to get an independent counsel before a request for proposal is issued. Buckingman, he said, will be asked to consur.

Both Dela Cruz and Rios told the board that during their swearing-in at the governor’s office last year, Buckingman was asked by members about having their own attorney.

“I remembered the AG saying that ‘yes, you can have one as long as you want,’” said Dela Cruz. The board also approved inviting Kearney to their next board meeting to answer members’ queries.