Feb. 1, 2003 – When District Court reconvenes on Monday on St. Thomas, the V.I. government will argue for the validity of circumventing the bidding process in awarding a $3.6 million contract for major sewer repairs on St. Croix to a new local company with no track record, facilities or equipment but with connections to top V.I. officials.
The Attorney General's Office is scheduled to call as witnesses Sonia Nelthropp, the Public Works Department's director of wastewater and waste management; Charles Bornman, Public Works senior engineer; and Olga Meyers, Property and Procurement deputy commissioner.
Attorney General Iver Stridiron said he understood that the U.S. Attorney's Office had subpoenaed Ohanio Harris, assistant to the governor, to testify. Harris has become a focal point in the case, as president until last March of the contracted firm, Global Resources Management, and in his communications with Public Works and Property and Procurement officials concerning the contract.
U.S. Attorney David Nissman went to court on Jan. 23 with a motion asking Chief District Judge Thomas K. Moore to compel V.I. officials to show why the contract awarded on Dec. 30 to Global Resources Management should be allowed to stand. The motion accused the V.I. government of fraudulently using a declaration of emergency to bypass the competitive bidding process.
Gov. Charles W. Turnbull and Stridiron harshly criticized Nissman's challenge at a hastily called press briefing on Jan. 24, but on Wednesday, the day before the scheduled hearing, the governor canceled the contract. Stridiron then asked Moore to cancel the hearing, while Nissman asked that it proceed. Moore sided with the U.S. attorney, and the hearing got under way Thursday morning.
Moore in December 2001 ordered the V.I. government to complete specific projects and repairs to the wastewater system by mid-2002. Many of those orders are included in the specifications of the contract awarded to Global Resources. The motion filed by Nissman's office said the specified work received no attention for nine months, until the declaration of an emergency by the governor.
Two top administration officials, Property and Procurement Commissioner Marc Biggs and Public Works Commissioner Wayne Callwood, were called by the U.S. Attorney's Office to testify on Thursday, and much of what they said had to do with Harris, assistant to the governor since 1999, and Ashley Andrews, a St. Croix lawyer.
Andrews is president and chief executive officer of Global Resources Management; according to Nissman, Harris was the president until March 8, 2002.
Another figure in the company is Esdel Hansen, Global's utilities director. Hansen, who retired recently from a Public Works position which he oversaw work on St. Croix's sewer system, is married to former senator and 2002 gubernatorial candidate Alicia "Chucky" Hansen.
Callwood: reservations about company's capability
Callwood testified about his discussions with Harris and about meeting with Andrews and a group of prospective partners with Global Resources from Boston. He said Harris told him he was tired of seeing contracts go to off-island firms and was glad to know there was a St. Croix company that wanted a piece of the action.
Callwood related having told Harris there had been invitations for local companies to get in on the bidding but no one had seemed to be interested. He said he also told Harris that repairing the sewer system was serious work and it had to be done by a serious company.
Nissman, who conducted the questioning of Callwood, illustrated the hazardous nature of the kind of work to be done by recalling the death of a worker on St. Thomas last year when a trench dug for laying sewer pipe collapsed around him.
When Nissman asked Callwood if he had felt pressured by "big people" in the V.I. government, the commissioner chose his words carefully.
"Weren't you concerned that Andrews came with a lot of big people behind him and that you alone would not be able to stop it?" Nissman asked him.
"I had some reservations after my second meeting with Mr. Andrews about whether the company would be able to do the work," Callwood said.
But he said most of the reservations coming from his department were from Nelthropp. It was Nelthropp and Bornman who did most of the work on the Global Resources contract, he said.
Concerns arising through the contracting the process, Callwood said, included the need for a business license, for a construction license and for a bond.
While the Global contract application was being processed, the government canceled a contract with another company for other sewer repairs. Both Nissman and Moore asked why the company, which was chosen to supervise system repairs at the Anguilla landfill, was not allowed to go ahead with work near the St. Croix racetrack.
"I don't know. Ms. Nelthropp might know all that," Callwood replied.
Biggs: concern about contracting process
Biggs, in his testimony, said he was especially concerned about the contract process because of Turnbull's declared state of emergency for the territory's wastewater system. It was important to see that the contract was properly executed and that all of the application requirements were met, he said.
Under questioning by Special Assistant U.S. Attorney William Dillon, Biggs said he, too, was approached by Harris but did not feel pressured to execute the Global contract.
On cross examination, Assistant Attorney General Michael Law asked Biggs: "Were you ever pressured by Ohanio Harris to give this contract to Global Resources Management?"
"No," Biggs replied.
Law also asked whether Biggs knew "if Global Resources Management Inc. submitted a construction license and an engineer's license."
As he sifted through an indexed binder holding documents pertaining to the contract, Biggs said: "Attached is a license for engineer and business-management and a construction license."
Biggs told Dillon that the first time he saw a fully executed contract was on Wednesday, when the Global contract was sent to his office to be processed as a cancellation.
When Dillon asked about Global's presenting the bond required for a contract, Biggs said he never saw a fully executed bond, only a bond form.
On Friday, Andrews said in an interview that he did have a bond.
Dillon also asked what Biggs would have done if he had known that Harris was the immediate past president of the company. Biggs answered that he would have sought a legal opinion from the attorney general about whether to accept the contract, because the V.I. Code restricts public officials from having such a business affiliation within a year of leaving office.
Andrews: interference with 'legally sufficient' contract
Nissman told the court that one of his concerns is that if the government continues to sidestep competitive bidding in awarding contracts, it could lead to lawsuits from companies denied an opportunity to bid. And an injunction granted by a sympathetic judge in such a case, he said, could effectively shut down the entire sewer system repair project that the federal government has mandated. (See "U.S. makes case against bypassing bids process".)
Moore noted that the government's contract with Global Resources contains a provision granting the company the right, in case of cancellation, to sue the government for the $3.6 million it would have received if the contract had been allowed to stand.
Andrews said on Friday that he holds no animosity toward the governor for having canceled the contract with Global Resources. But he said what he termed the "legally sufficient contract" was interfered with, although he declined to say who he considered responsible for the alleged interference.
Because Nelthropp was off i
sland and because the V.I. government has a list of witnesses it wants to present in support of its contention that the Global contract was justified, Moore continued the hearing to Monday.
Stridiron expressed confidence that the testimony heard on Thursday weighed in favor of the V.I. government.
Nissman said he insisted that the show-cause hearing should proceed despite the cancellation of the Global contract not because he wanted to punish anyone in the Turnbull administration, but because he wants to see the system work well and the sewer system get fixed as soon as possible.
The show-cause motion was filed jointly by Nissman and Donald G. Frankel, an attorney for the Environmental Enforcement Section of the U.S. Justice Department's Environmental and Natural Resources Division, and in cooperation with the U.S. Environmental Protection Agency's Office of Regional Counsel.
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