Curious how more than $1 billion in federal pandemic funds has vanished in the Commonwealth of the Northern Mariana Islands, and why – after years of former Gov. Ralph Torres swearing he was stewarding government finances excellently – the General Fund is more than $300 million in deficit? Break out a calculator for the next round of investigative reports from Kandit. We are continuing our coverage of the infamous BOOST scandal, the misuse of public money for legislative allowances, the sole source contracts and who in the Commonwealth and Guam benefitted from money that was supposed to go to the people, and more. The only function you’ll need to use on the calculator is the subtract button. Because that’s all Mr. Torres and his cronies did with the public’s treasury.
Here is the second in this series, which we paused in January after our Guam audience began complaining we weren’t paying enough attention to Guam corruption.
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The former governor’s brother, Vincent Deleon Guerrero, is the registered agent for a businessman whose companies received at least $200,000 in Torres administration business grants, according to a Bank of Saipan listing of BOOST awardees. BOOST stands for Building Optimism and Opportunities for Stability Together. It was veiled by former Gov. Ralph Torres’s administration as a grant program using federal pandemic funds for small businesses ‘in need’ of a ‘boost.’ Bank of Saipan was the administrator of the program, and turned over a list of BOOST grant awardees to the Commonwealth Legislature in December during an investigation into the corruption of the program.
According to the bank’s list, Leeahn Investments, LLC was BOOSTed on October 5, 2022 with $50,000 of public money. On December 5, 2022, Dong A Corporation received a $150,000 grant. According to the companies’s incorporation documents filed with the Commonwealth’s registrar of corporations, Dong Kyu Lee is the registered agent for Leeahn, and an owner of Dong A Corporation.
But those aren’t the only businesses in which Mr. Lee is involved. And he’s not alone in his investments. The businessman also has ownership interests in Garapan Estate LLC, JK Investment & Development LLC, Sugarking Estate LLC, and DS Saipan LLC.
Mr. Torres is the registered agent for all four of those companies, according to registration documents.
Kandit previously has reported Mr. Torres’s land lease deals with Marianas Southern Airways president Keith Stewart. The $771,000 in total transactions occurred only weeks after MSA received an initial $1.5 million in federally-funded locally-granted subsidies during the Ralph Torres administration. The paperwork for the transactions began only days prior to the $8 million sole source contract between MSA and the Torres administration. Current Secretary of Finance Tracy Norita has nixed that contract, citing the unavailability of funds. Gov. Arnold Palacios is backing her decision.
No formal word from legislature on continuation of BOOST hearings
The prior CNMI House of Representatives, which led a legislative investigation into the corruption of the federally-funded BOOST program. That inquiry was led by then-Rep. Donald Manglona and then-Rep. Celina Roberto Babauta. Both now are senators.
Ms. Babauta’s successor, Rep. Marissa Flores, has said she will not reopen the BOOST investigation. It is rumored Ms. Babauta and Mr. Manglona may open an investigation in the Senate, and that House Floor Leader Rep. Edwin Propst may open a full blown corruption investigation.
Class action lawsuit planned
Kandit has examined a reported list of more than 520 Commonwealth residents and businesses who allegedly have agreed to join in a class action lawsuit against Torres, the Bank of Saipan, its owners (the Calvo family of Guam), and against some of the recipients of BOOST grant funds and administrative funds.
The organizers’s proposed qui tam action, which they desire to file in the U.S. District Court of the NMI, is based on the results of the Babauta-Manglona legislative investigation, and their research indicating the BOOST program was corruptly administered.
Among their findings are that:
- There was no objective, judicious process for the processing of BOOST applications, and the determination of who should be awarded grants, and how much they should be granted.
- Most of the recipients are politically- and filially-related to the governor, and elected republican officials.
- Immediate family members of the BOOST selection panel were BOOSTed, with companies owned or registered to one of the panelists receiving grants.
- Several of the companies and organizations granted public monies did not exist in the Commonwealth prior to the pandemic, and in fact some were incorporated only days and weeks prior to receiving the grants.
