By Troy Torres
It wasn't just that Bic Sobti raked in millions in government contracts during the pandemic in both Guam and the CNMI. Or that Sobti didn't have a business license to sell medical supplies and equipment in either territory at the time of the sales. Or that it is questionable how he paid taxes in the CNMI for the $4 million he was paid at a time, when he didn't even have a business license there.
If the Commonwealth Legislature, or the Federal Bureau of Investigation were to look into the expenditure of federal pandemic funds that enriched Mr. Sobti, they may want to examine how much he charged for products first responders needed, as the world was gripped by the coronavirus pandemic.
Purchase orders, invoices, price quotes, and payment vouchers to and from Sobti's company, Guam-based International Royal, and the Commonwealth government show he was paid more than $4.2 million for bulk purchases of disposable gloves, face masks, hazmat suits, hoodies, hand sanitizers, toilet tissue, and antibacterial soap.
A closer look at the documents reveal Sobti charged the Commonwealth government bulk prices that were, in some instances, exponentially more than retail prices at the store. For example, Sobti sold the generic blue face masks that became the de facto symbol of defense against COVID-19 for $2.99 each. A box of 50 of those masks sell at KMart for $13. The Torres administration blew $1.1 million in one purchase order on those masks.
The handheld thermometers store greeters use to take your temperature on your wrist, and are sold between $8 and $20? Sobti sold 1,000 of them to the CNMI for $90 a piece.
N95 masks are sold for $3 a piece on the retail shelves. Sobti sold 500 of them to the CNMI in one purchase order for $7.64 a piece.
Alcohol sprays that retail for $2.98 a bottle? Sobti sold 10,000 of those for $10.95 each to the Commonwealth.
He made a killing off protective gowns that retail for $13.99 a piece, selling the CNMI 2,000 of them for $29.95 each. Dupont Tyvek hazmat disposable suits that can be purchased for $10 a piece was sold to Saipan for $44.95 each. Sobti sold 400 of those in one purchase order.
Guam paid him, too
The fleecing of federal funds didn't happen only in Saipan. On August 16 last year, Kandit exposed that - up until that time - the government of Guam had paid Sobti nearly $1 million for an array of so-called coronavirus necessities. By that time, the Guam Department of Education had purchased $812,754.43 in PPEs from him. Other executive line agencies had purchased $66,451.68 in PPEs and uniforms from Sobti up until August 2020, according to public documents.
Of the 17 purchase orders issued from the Department of Labor, Guam Behavioral Health and Wellness Center, Department of Public Health and Social Services, and the Bureau of Statistics and Plans, five were made using the governor's emergency procurement powers.
Those five purchase orders included the sale of a $340 sneeze guard that another vendor was selling for only $220; $213.88 for 24 rolls of paper towel, three boxes of face masks (50 per box), and 12 bottles of hand sanitizers; $616.64 for 90 rolls of paper towel, four boxes of face masks, and 36 bottles of hand sanitizers; $9,990 for 200 oximeters; and $8,500 for 100 infrared thermometers.
GBHWC spent $3,491.40 at Royal Bics on 36 polo shirts, 36 pairs of pants, and 3 pairs of shoes just two days before the public health emergency started. The agency's emblem is embroidered onto the shirts's sleeves, according to Purchase Order No. P206A02866.
In the middle of the public health emergency, on July 31, 2020, DPHSS purchased 35 grey blazers "with embroidery logo wash & wear, no lining, shoulder pads optional," and 175 pairs of charcoal grey pants for $13,989.50.
Education superintendent Jon Fernandez provided Kandit a list of 16 purchase orders issued by DOE for the purchase of PPEs and medical supplies for use by DOE staff, teachers, and students in the new school year. Of the 16, Royal Bics was awarded six contracts totaling $812,754.43.
Here is the breakdown:
$90,568.53 for hand sanitizers
$12,495.00 for N95 masks and alcohol wipes
$150,295 for thermal body scanner and camera
$209,089.55 for rubbing alcohol
$158,400 for disposable masks
$191,906.35 for gloves and eye goggles for nurses.
Kandit has not updated its research on the government of Guam's contracts with and payments to Sobti since its last report in August 2020.
Despite the outrageous procurements, the Guam Legislature did nothing at the time to call the contracts into question. As a matter of fact, despite having knowledge that Sobti was being investigated by the Commonwealth Legislature, Gov. Lou Leon Guerrero appointed him to be a member of the airport board of directors, and the Guam Legislature confirmed the appointment.
Investigation by the Commonwealth Legislature
On July 28, 2020 the CNMI House of Representatives Special Committee on Federal Assistance and Disaster Related Funding brought homeland security and emergency management special assistant Gerald Deleon Guerrero before it to answer questions about the sole source contracts with Sobti.
Congresswoman Tina Sablan asked Mr. Deleon Guerrero how vendors were chosen to perform or provide millions in services and products for pandemic response. She asked whether lists existed from which officials called vendors. She asked whether price quotes were obtained from qualified vendors, if any lists existed. She also asked how CNMI government officials connected with Sobti, a Guam businessman.
As Ms. Sablan pointed out, International Royal is a uniform and clothing shop from Guam.
"Did the governor recommend reaching out to International Royal?" Sablan asked.
"I did not talk to the governor regarding International Royal Bics," Deleon Guerrero responded. "That was a conversation with the Task Force."
"Are you aware that a significant number of the contracts that were sole sourced for this Covid-19 response went to individuals or companies that donated to the governor's campaign?" Ms. Sablan asked Mr. Deleon Guerrero.
"I had no idea," Deleon Guerrero responded.
According to Governor Torres's 2018 campaign finance report, Sobti's company did contribute $500 to the Torres Palacios campaign.
The following day during the continued hearings, Congressman Ed Propst said the Torres administration is not being truthful in officials's claims that they have no idea how Guam businessman Bic Sobti received a $2.5 million sole sourced contract to sell PPEs to the CNMI government.
Propst said the following during the hearing:
"And I say this because we ordered over $2.5 million from a vendor we never did business with from out of Guam without even giving local vendors the opportunity in a pandemic in a time when local vendors and wholesalers and companies are struggling to survive.
"We saw the newspaper report that what - 50 percent - over 50 percent of small businesses are at a shutdown are at a reduced hours and are suffering and yet we couldn’t give an opportunity - a piece of a $2.5 million pie to local companies. Are you serious? This is an insult because even with the committee - even with the penalty of perjury - I believe we are still not getting to the truth!
"I do not believe that nobody knows who, how Royal Bics or other contracts came about. But it is up to this body, the special committee under the leadership of Speaker Attao and chairman Ralph Yumul and the members to dig deep and find out.
"‘Cause there’s something behind this and I am very confused because even, even when I’ve heard that MedPharm is over priced, when you look at simple things like price per box Nitro gloves of gloves - a box one Royal Bics was charging $23 ($22.95) and then you have MedPharm charging $8. And the quotes were four days apart, so its not like they were getting it at a time when it was critical.
"But how did no one through the whole process of the task force and everybody involved not see something so glaringly obvious. On the first time I looked at it, I said, ‘This is seriously weird. This got problems.’ And I don’t even deal with wholesaling or anything. I’m just a regular guy. And I’m sure if you guys looked at it, you would have seen the same thing.
"It doesn’t take a business professional, or a CEO, or a CFO to see huge discrepancies in this. It just takes common sense and care. And I ask and implore the special committees to continue to do the work despite the criticisms, despite the politics, because we must continue to do the work of the people."
Propst and Sablan were part of the House minority at the time this inquiry happened. Their Republican counterparts, who were in charge of the House at the time, did not pursue the inquiry further.
The democrats now are in charge of the House.
Kandit has asked for a reaction from Judiciary and Governmental Operations committee chairwoman Celina Roberto Babauta. We await her response.