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Pay t0 play? No way, says public auditor

Updated: Dec 16, 2022

Cruz reminds donors to observe legal limits on cash contributions to inaugural and transition committees

Benjamin Cruz

By Pacific Island Times News Staff

With the election season all wrapped up and as winning candidates prepare for their inaugural activities in the coming year, Public Auditor Benjamin J.F. Cruz has issued an advisory on the ethical standards concerning contributions to inaugural and transition committees.


"As public auditor, it is within my jurisdiction and responsibility to promote the integrity of the procurement process. Pay-to-play schemes are an affront to the trust and confidence our people place in us as public servants," Cruz said.


In early November, Cruz transmitted a letter and legal memorandum from the Office of Public Accountability’s legal counsel to candidates forewarning them of the procurement statutes concerning contributions to inauguration committees.

Guam law sets a $2,000 limit on contributions to candidates to ensure they are not beholden to big donors when elected.


However, when the election is over, winning candidates are able to solicit and receive “donations” for their inaugural activities. The amounts received are sometimes 10 to 25 times above the limit set for campaign contributions.


Cruz raised concerns that the transition committee may solicit and receive donations from vendors or prospective vendors, which might affect the vendor’s standing as a "responsible vendor." Such actions," Cruaz said, "could be alleged and found in violation of procurement laws concerning gratuities and kickbacks and giving favors to the territory."


When he first raised the concern with the Guam Election Commission, election officials said their jurisdiction was limited to the conduct of the election and does not extend to inaugural activities.

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Under Guam law, the public auditor is duty-bound "to promote the integrity of the procurement process," Cruz said, adding that he would exercise such authority to strictly enforce the statute.


He cited the "Gratuities and Kickbacks" section of 5GCA §5630, specifically the "Favors to the Territory" provision which states:


“It shall be a breach of ethical standards for any person who is or may become a contractor, a subcontract or under a contract to the prime contractor or higher tier contractor, or any person associated therewith, to offer, give or agree to give any employee or agent of the territory or for any employee or agent of the territory to solicit or accept from any such person or entity or agent thereof, a favor or gratuity on behalf of the territory whether or not such favor gratuity may be considered a reimbursable expense of the territory, during the pendency of any matter related to procurement, including contract performance warranty periods.”


Cruz said the standards of conduct, also known as the Ethics in Public Contracting provisions, will be strictly interpreted and enforced.


"This means that vendors or prospective vendors who violate the Favors to the Territory provisions can be deemed, alleged or adjudged as 'not responsible' in a procurement or procurement appeal or decision," he said.

Cruz said the Office of Public Accountability has adopted a legal memorandum finding that inaugural and transition committees should comply with the procurement statutes and regulations when procuring for upcoming inaugural and transition events.


He said he has already met with Douglas Moylan, attorney general-elect and discussed this matter in detail "to prepare for and prevent any malfeasance."


The OPA has issued a prior audit on a transition committee, OPA Report No. 19-06, Governor and Lieutenant Governor’s Transition Fund, which pointed out key concerns on proper expenditures and requirements to follow Guam procurement law.


Communications Director Krystal Paco-San Agustin issued the following statement:

"5 GCA Section 1502(d) authorizes a governor’s transition committee to accept monetary and in-kind donations for its activities, including inaugural celebrations. However, standard practice following presidential and gubernatorial elections nationally is for non-profit corporations organized under Section 501(c)(4) of the Internal Revenue Code to fundraise for and host inauguration celebrations. Consistent with the national practice and to ensure private donations for inauguration week observances celebrating the reelection of Governor Lou Leon Guerrero and Lt. Governor Josh Tenorio are not solicited by or made to government employees or agencies, these celebrations will be organized and funded by an independent non-profit social welfare corporation established by private individuals for this purpose.

"As always, the Office of the Governor and its employees will strictly observe the requirements of Guam law, including the ethical standards provided in Guam procurement law," San Agustin said.





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