Which one is lying? Who is going to jail?

Gov. Ralph Torres’s administration used federal funds to pay people in his administration, family, and cronies hundreds of thousands of dollars each through what is clearly being exposed in a legislative investigation as an illegal process. The bank that administered the program and is owned by a Guam family with ties to the Torres administration has been paid close to a million dollars – at least – in grants and fees. Another Guam company subcontracted using federal funds to market the program is owned by the sister of that bank president. And cronies of the governor and his CNMI Republican Party – including the vice chairman of the Saipan Chamber of Commerce – have been paid hundreds of thousands of dollars in marketing fees.

These are facts established by hundreds of pages of records, including transcriptions of text messages, emails, and even the sworn testimony of governor’s chief of staff (former Guam Sen.) Wil Castro, and Bank of Saipan president John Arroyo, whose bank was the BOOST program administrator.

Rep. Edwin Propst summarized the scandal, here:

“Was BOOST used to reelect Ralph Torres?  Absolutely.   

“Was BOOST political?  Absolutely. 

“Was BOOST unfair in how it selected the awardees?  Absolutely. 

“Were there conflicts of interest?  Absolutely. 

“Was there misuse and abuse of BOOST funds?  Absolutely. 

“Was fraud committed?  Absolutely.  How can one business that isn’t even open receive $325,000?

“Did some legitimate businesses receive BOOST?  Of course.  But they are few and far in between.”

The Federal Bureau of Investigation on Friday – the day the BOOST hearings started – began raiding government and banking offices. Sources tell Kandit they are looking for the evidence of conspiracy by government officials, Bank of Saipan employees and shareholders, vendors (contractors and subcontractors) of the BOOST program, and BOOST program grant recipients to misuse federal funds.

The federal crimes involved, if one is convicted of any type of conspiracy, carry weighty jail sentences in a federal penitentiary.

A conviction on one count of wire fraud can send you to jail for 10 years.

A conviction on one count of money laundering can send you to jail for five years.

A conviction on one count of conspiracy to commit either of those two crimes can send you to jail for up to 20 years.

Wil Castro says he wasn’t involved in the illegal decisions. John Arroyo said Wil Castro was absolutely the decision maker. Which one of them is lying?

More than 240 businesses and sole proprietors – many of whom received business licenses only within weeks of the runoff election and are connected directly to the Torres administration and the governor’s family – received tens of thousands to hundreds of thousands of dollars under BOOST grants. A total of nearly $11 million was paid to these companies. More than 1,000 other applications from legitimate companies that struggled through the pandemic have yet to be adjudicated, and reportedly only $1 million remains for the program.

According to Mr. Castro, it was a review panel made up of himself, Secretary of Finance David Atalig, Jr., and Secretary of Commerce Edward Deleon Guerrero, who made recommendations as to who would be “BOOSTed.” But according to Mr. Arroyo, that list is missing a name: Salina Sapp.

Ms. Sapp, who also is from Guam (so is Mr. Arroyo), is part owner of Nonstop Corporation. Nonstop was paid hundreds of thousands of dollars to market the BOOST program. (We’ll get further into this angle and many others in future articles)

This review panel, according to Mr. Castro, only made recommendations, did not follow any written guidelines to support those recommendations, and has no recordings of their meetings or minutes thereof.

That met the ire of Rep. Tina Sablan during Castro’s interrogation Monday by the joint investigative committee of the CNMI House of Representatives looking into reports that the Torres administration misused federal funds as a political tool and weapon toward reelection and personal enrichment.

Mr. Castro boasted about his previous experience tending to and guarding federal funds, including normal requirements for reporting and other fiduciary duties.

 “Why would none of those standards have applied in the case of the BOOST program,” Ms. Sablan asked him.

“I’m a member of a panel,” he replied, adding “My role… was to review these applications and participate in a deliberative process that would…”

“Yes,” Ms. Sablan interrupted, growing impatient with Mr. Castro’s long-winded responses that do not answer her questions. “We’ve heard you say that.”

She then asked him, “With all your experience reviewing grant applications for the distribution of public funds, would you as a review panelist have insisted on keeping a record of how you would evaluate each and every one?”

“I rely on the Department of Finance and the Bank of Saipan as the administrator to ensure compliance with all applicable regulatory compliance with the use of these funds,” he replied.

But Bank of Saipan president John Arroyo sang a much different tune, when asked about his bank’s handling of the money. Not only did he testify about Mr. Castro’s and Secretary of Finance David Atalig, Jr.’s instructions on the spending of money for administration cronies, Mr. Arroyo said Castro was far more involved in spending decisions than Castro told the committee.

Mr. Castro also told the committee he did not know whose idea it was to keep extending the deadline (total of three extensions) even though they had more than enough applications totaling far more than the total amount available. He said the BOOST administrator or the secretary of finance would be able to answer that question.

Mr. Arroyo seemed amused by Mr. Castro’s claim. He said it was Mr. Castro who told Arroyo the deadlines were being extended.

Asked whether he decided to contract known administration cronies Rob Travilla and Shayne Villanueva to market the BOOST program, and if he was involved in the payments of invoices totaling hundreds of thousands of dollars to the two, Mr. Castro said those decisions were made by the Bank of Saipan.

“From time to time they would ask me, but in approving, I don’t recall,” he said, adding, “I don’t have any approval authority.”

Not so, said Mr. Arroyo under oath. Those decisions came directly from Mr. Castro and Mr. Atalig, who is scheduled to testify at 3:30 p.m. Thursday, December 22.

In fact, text messages from Wil Castro to John Arroyo show Mr. Castro directing the bank to make payments to Mr. Travilla. The instructions included sending him copies of Mr. Travilla’s vendor proposals, telling. Him to make sure the proposal was under $50,000 so he could split the contracts, and then telling him to send the invoices. 

This is a plain violation of the CNMI’s procurement laws.

As previously reported on Kandit, the text message transcripts from Karen Karen (Bank of Saipan’s loan officer), and John Arroyo to Wil Castro show Castro instructing the Bank of Saipan numerous times on the expenditure of the funds. In one exchange with Ms. Kalen, Mr. Castro even discusses how he “takes care of friends.”

This story is far from over.


  • A Rossiter

      12/22/2022 at 1:26 AM

    Troy, I heard from a very reliable source that Wil Castro’s own “One Marianas Initiative” is on the list of approved recipients TWICE, once for 100K and another for 150K! Is the committee aware of this, cuz they need to bring him back and lets see how much is squirms when asked by Tina. Leche Primo, BOS, Shayne and now Wil all had their snouts in the trough? One should also look to see if Danny Quitugua’s “Northern Marianas Descent” is a recipient too. My source said she only saw a partial list but if so, confirms his reasons to pathetically so call, “resign” from the Dems and not even wait for the paint to dry to shake hands with Torres. Lania gatchong, hayi lai un faba’ba’ba?!

  • EDITH C Iriarte

      12/22/2022 at 11:26 AM

    Give them a taste of power and show them💰💵and they turn corrupt. Shame on these so-called leaders! Ex-Gov Torres and his band of thieves are a disgrace to their families, the people who gave them their trust, the islands and themselves! They’re nothing but lowlife common thieves.

  • papalatung

      12/28/2022 at 3:09 PM

    Over the years, department heads were taking kick backs from so call contracts to private entities and corporations. For example, a department head will send subordinates to collect kick backs (cash, beers, favors, etc.) from entities that provide services for such department on a weekly basis. What sad about it, the kick backs were being collected during working hours and in plain view. It is a win win situation, because the entities get the contracts or purchase orders or work orders and the department higher up get pieces of the pies.

    Based on what had been reported, there is a probability that hundreds if not thousands of dollars had been paid out in form of kick backs from entities who received these grants. And higher ups within the CNMI government were involved in such scams.

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