Guam Visitors Bureau employees petitioned their agency’s new board of directors last week to keep former Gov. Carl Gutierrez as their boss. The employees, according to some of them, are worried some board members will retaliate against Mr. Gutierrez – the president and CEO of the public corporation – and move to fire him for exposing alleged corruption.
”Many of us have worked through several presidents and CEOs, so please take heed when we tell you that employee morale, productivity, and engagement have never been higher than it has been under Mr. Gutierrez’s leadership,” a portion of the petition, signed by 25 GVB employees states. “Even though he led during a time when there was not a single tourist to be found thanks to COVID restrictions, that never stopped him from planning, innovating, and thinking and working outside of the box to be game-ready once borders reopened. And we were!”
According to bureau data, the number of tourists to Guam since October has exceeded projections by more than 30 percent. In the five months encompassing October through February, a quarter million visitors toured the island, which was five times more than the same period a year prior, though no where near pre-pandemic levels.
About two years ago, Mr. Gutierrez first raised public allegations of corruption and unchecked conflicts of interest on the previous 12-member board of directors. The GVB board is unique, in that the majority of its members are not selected by a public process, per se, but by an election of member companies whose paid shares into GVB determine the number of votes they have, much like a private corporation.
The problem, according to a report prepared by a Business Risk Compliance and Control Committee Mr. Gutierrez appointed to investigate how public funds are appropriated by the GVB board, is that this very governance structure creates a natural and toxic conflict of interest environment.
A question of loyalty and ethics arises, when tens of millions of dollars the government collects from the Hotel Occupancy Tax and transfers to the Tourist Attraction Fund controlled by the GVB board. Those are public funds, yet the majority of GVB board members are neither confirmed by the Guam Legislature, nor required (as other public board members are) to disclose their financial and conflicts of interests. That type of disclosure is critical, according to public statements Mr. Gutierrez has made, because the non-public board members are leaders of the very hotels, airlines, and other tourism-industry-related companies that benefit from the appropriations of Tourist Attraction Fund money they control.
”At the heart of industry stewardship of a government corporation is the clear and unequivocal avoidance of conflicts of interests,” the BRCC investigation summary states, in part. “In matters involving GVB’s nonstock members and its directors, real and apparent conflicts must contend with the directors’ fiduciary duties to the corporation. In the public eye, private interests are expected to yield to directors’ unquestioned loyalty to GVB, diligence and care for taxpayer monies.”
And according to the report summary, major conflicts of interests have resulted in multi-million dollar deals that allegedly benefitted certain board members, their companies, and vendors affiliated with them.
Mr. Gutierrez’s first public allegations led to an impasse that hobbled the previous board membership and forced the Guam Legislature to consolidate control over the TAF under Gutierrez. The GVB general membership finally was able to organize an election, and a new board recently was seated.
At its March 23, 2023 meeting, new board chairman George Chiu raised a requirement for regular performance evaluations of the agency’s president and CEO, who serves at the pleasure of the board. According to the ensuing discussion, several previous GVB presidents had not been evaluated, and evaluation criteria and a form do not exist.
”There is no formal format for evaluating,” Mr. Perez told the board, educating members that he was evaluated about 17 years ago, when he was GVB general manager, but that no formal evaluation had been conducted after the Camacho Administration. “The problem I see is having a more quantifiable way to evaluate. Right now, there’s really no basis except for subjective opinions.”
The timing of the call for evaluation of Mr. Gutierrez is suspect to GVB employees on two fronts: First, because Mr. Gutierrez has been in a battle with the board of directors the past two years and instigated a corruption investigation and report to the Office of Public Accountability and the Office of the Attorney General of Guam. Second, because several board members are new to the job and officially unfamiliar with Mr. Gutierrez’s performance.
This was the reason 25 GVB employees last week petitioned the board. Attached to their petition was their performance evaluation of their boss.
”With all due respect to the new board, we hope you recognize the value and importance of our evaluation and experience over the past nearly three years under the leadership of Mr. Gutierrez,” the petition states, in part. “Most of you are new to GVB, having only recently been elected to the board. So, we hope that, when you undertake to evaluate him, you seek the input of the employees and others who have actually had the benefit of working with Mr. Gutierrez and seeing his performance.”
The employees provided the new board a litany of praises for their boss, crediting him with a dramatic turnaround in agency operations, modernized destination marketing, and a $50 million infusion of funds to the hospitality industry small businesses affected most by the pandemic.
It isn’t just the timing of the call for an evaluation of Mr. Gutierrez that is suspicious to some employees, but also that of the call to evaluate the performance of GVB legal counsel, who serves at the pleasure of the board as well. It was attorney Joseph McDonald from legal counsel McDonald Law Group who led the corruption investigation, conducted a review of GVB’s board governance structure, and has attempted to guide the board against inherent conflicts of interest.
Mr. Chiu disseminated what he termed a “generic” evaluation form for board members to consider and to provide input at the next board meeting. According to the March 23 discussion and its continuation the following day, board members agreed any evaluation must be objective.