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BREAKDOWN 1: Who's making money from federal CARES funding for Guam?

By Johnnie Rosario

(Tumon, Guam) Sen. Jim Moylan is asking a question that inquiring minds want answered: while people are starving, why is the Leon Guerrero administration dedicating $3.5 million in federal CARES Act funding for credit card fees that will be paid to the Leon Guerrero family's Bank of Guam?

And Kandit began a second inquiry today based on the budgeted list of spending of $117 million of CARES Act funding provided by the governor to Speaker Tina Muna Barnes Tuesday:

Why is there a provision to grant $5,000 to a company Tony Babauta's girlfriend owns?

In a letter to Department of Administration director Ed Birn, Mr. Moylan wrote and asked:

As our office reviews the CARES Act Budget, which was presented by Governor Lou Leon Guerrero yesterday, there were several “questionable” expenditures that raised our interest, of which we wanted to bring to your attention, since it was in relation to the Department of Administration. There is a notation that $3.5 million will be budgeted to address credit card fees. For this item, I would appreciate your assistance in addressing the following questions:
The Governor’s TEAM Plan, which was presented in March, indicated that fees for credit card transactions would be waived for a certain period, hence are these the monies that will be paid to the Bank of Guam to cover that shortfall?
Considering that the TEAM Plan was established weeks, if not a month prior to the discussions associated with the CARES Act in Congress, was the government originally in a discussion with the bank to get the fees waived? Of course, the actual question here is “what would the government have done with the shortfall had the CARES Act not been enacted?”
While in theory this expense could be considered COVID-19 related, the question is, has there been a discussion with the bank to get those fees waived for 3 months, as businesses, including financial institutions, throughout the island have been providing reasonable options for island residents when it comes to obligations. Everyone, including the government of Guam is struggling financially, and this $3.5 million can instead be provided to those middle-income earning families who have 1). Been furloughed, and 2). Don’t qualify for the Governor’s cash assistance program.
$3.5 million in credit card merchant fees, equates to around $140 million in credit card transactions. Is the government anticipating this much in credit card transactions for the 3 month time frame, or is this considered relatively higher than anticipated, as many entities have been tightening their belts during this pandemic? Would your office be able to provide a breakdown of quarterly transactions that the government attains through credit card payments?
In regards to item 2, the budget states that $6 million will be used to purchase a financial reporting system, which would be able to ensure compliance with the CARES Act? Wouldn’t a standard spreadsheet assist in tracking and monitoring these monies to assure that they are being expended appropriately? I mean don’t get me wrong, I am a firm advocate for efficiency, and would recommend that the government invest in a system that would promote e-commerce activity for the island, but it seems that this reporting system being proposed is for specific purposes. Please advise what the intent of this investment is all about, and what other actions it can generate.

Guahan Sustainable Culture

Ms. Leon Guerrero's list of expenditures of $117,968,257.80 in federal funds includes a $5,000 grant to Guahan Sustainable Culture, which is the only non-governmental organization listed to receive funding through this round of funds.

The governor pointed at the grant as one way the administration will help to provide food to people. She and her administration have said that the government will purchase food from this cooperative to be distributed.

The cooperative includes the organization's founder, Michelle Crisostomo, who owns GU Hydro, a hydroponics systems and supplies company. Ms. Crisostomo is the girlfriend of the governor's former chief of staff, Anthony Babauta, who resigned in the midst of a corruption controversy.

The funding category this grant is under is named "Provision of Grants to Small Businesses to Reimburse Costs of Business Interuption (sic) Caused by Required Closures." Guahan Sustainable is the only business listed in this category, while other small businesses will have to wait to see if they qualify under guidelines that have not yet been completed and released, according to the governor's economic advisor.

It is unknown at this time whether the $5,000 regrant to Guahan Sustainable is a reimbursement, as the category name suggests, because the Governor's Office is not answering our questions. However, an April 24 story published in the Pacific Daily News shows that Ms. Leon Guerrero was lauding a drive by Guahan Sustainable in purchasing produce from farmers then donating the produce to residents.

Throughout the governor's list of expenditures, not a single penny is dedicated to a local government program to provide food vouchers to hungry families. And the one thing that comes close to it, was financially connected to her administration.

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