Nonstop Corporation, owned by Rob Travilla, has sued the Bank of Saipan for money Nonstop claims the bank owes it for services rendered for the controversial Building Optimism, Opportunities, and Stability Together (BOOST) program, which was federally funded. Exhibits filed along with the lawsuit confirm for the first time the pass through of BOOST revenue to Saipan’s two newspapers, and to broadcast media as well.
Nonstop is asking the Superior Court of the CNMI to award the company compensatory damages from Bank of Saipan, along with attorneys’ fees, and “such other and equitable relief as this Court decides.”
Bank of Saipan was hired by the scandal-ridden Torres administration last year to administer the BOOST program, which gave away millions of dollars to people and businesses on the promise those granted money would invest in their companies. According to Edwin Propst, the vice chairman of an ad hoc CNMI House of Representatives investigative committee looking into the corrupt abuse of federal pandemic funds, several of those “BOOSTed” companies have since shuttered their establishments.
Records subpoenaed by a joint investigative committee in the previous legislature revealed several companies were opened only days before receiving their BOOST grants, scores of whom were owned by members of the Torres administration, or their family members.
“The BOOST program was a heist,” former House member Christina “Tina” Sablan wrote in a January 17, 2023 op-ed. “Public money was stolen. Public money was squandered. Public money was exploited for political and personal profit. Only a very few, out of the thousands that applied, were grossly enriched. They were obviously well-connected.”
Nonstop was contracted by Bank of Saipan to market the program. Celina Babauta, who co-chaired last year’s legislative investigation, Mr. Propst, and Ms. Sablan all criticized the use of public funds to market a program that gave money away.
According to the Nonstop complaint, on August 8 last year, the company entered into its first agreement with Bank of Saipan. The agreement was that Nonstop would provide marketing services for the BOOST program and Bank of Saipan would pay Nonstop a flat fee of $50,000. Part of that agreement was that BOS would reimburse Nonstop “for all reasonable and necessary expenses incurred by Nonstop in connection with providing the services.”
BOS paid Nonstop the $50,000 fee and also reimbursed Nonstop for its media buys under the first agreement, according to the complaint. Neither the complaint nor exhibits filed in court reveal how much federal BOOST money was used to pay for the media buys under the first agreement.
Some time in September, the complaint states, Nonstop and BOS entered into a second agreement, which essentially was the same as the first.
“Prior to the execution of the 2nd Agreement, BOS knew and intended that Nonstop would continue placing advertisements with various third party media outlets,” the complaint states. According to Nonstop, BOS’s president, John Arroyo, regularly asked Nonstop officials during this period whether Nonstop was making ad buys with media companies. BOS, the complaint alleges, never told Nonstop to stop making the ad buys.
Since then, BOS only has paid Nonstop half of the $50,000 fee, and allegedly has not reimbursed Nonstop for the placement of hundreds of advertisements for the BOOST program that published and aired on Saipan Tribune, Marianas Variety, KKMP, and KSPN. According to the tallies of invoices presented as an exhibit of unpaid reimbursable expenses by Nonstop, BOS allegedly left Nonstop to pay $220,615.50 in total advertising fees owed to the media companies for the second agreement.
A similar third agreement also allegedly has left Nonstop with a nearly $40,000 accounts receivable.
The third agreement began in November, according to the Nonstop complaint, the same month of the two elections for CNMI governor.
“Initially, in December 2022, John Z. Arroyo stated to Nonstop management that ‘we arw [sic] suspending the program until we get a better read,'” the Nonstop complaint alleges. “Then, in January 2023, in a letter dated ‘January 30, 2021’, despite that its President was still telling Nonstop to proceed with the 3rd Agreement in November 2022, BOS claimed that its ‘final marketing agreement [with Nonstop] was fully satisfied on September 26, 2022 when the final payment was made.'”
Nonstop alleges it has made several requests for payment, and that Bank of Saipan has thus far refused to make payments.
While the documents show how much money allegedly was owed to media companies, they do not show how much was passed through Nonstop to media companies throughout the duration of the three agreements.
Mr. Propst has hinted at his desire to subpoena Mr. Travilla to testify before the corruption probe.
1 Comments
Russ Mason
11/30/2023 at 1:18 PM
At last: news!