A.G. charges GHURA officials with conspiracy related to Federal Low Income Housing Tax Credits

1969

The Attorney General has filed charges of official misconduct and conspiracy against former GHURA board Chairman David Sablan current Executive Director Michael Duenas and five GHURA board members. The charges stem from federal investigations into GHURA’s awarding of Low Income Housing Tax Credits.

According to a declaration filed by the Attorney General’s Chief Prosecutor Phil Tydingco, Sablan allegedly held secret board meetings to discuss things like the awarding of millions of dollars worth of Low Income Housing Tax Credits.

Resident Commissioner Roland Selvidge allegedly admitted to investigators that the GHURA Board of Commissioners would meet secretly in what they called “working sessions” in order to come to a consensus on how they would vote on issues regarding various things like bidders, bidders’ disqualification, awards of different contracts to certain bidders, Section 8 property matters and Low Income Housing Tax Credits.

According to PNC news files the awarding of Low Income Housing Tax Credits was mired in controversy and it resulted in two separate protests and an investigation by the FBI in 2012 and an FBI raid of the GHURA offices in June 2016.

Prior to the FBI investigation two companies, Medallion LLC and Micronesia Community Development filed protests after Low Income Housing Tax Credits were awarded to the two lowest ranked applicants namely 4th ranked Great Homes LLC which was owned by the Catholic Social Services and the Calvo Finance Corporation and the fifth ranked Tower 70 which was owned by Robert Salas and Keith Farrel. Great Homes was awarded $2.3 million in tax credits and Tower 70 was awarded $2.5 million. Medallion and Micronesia Community Development were ranked number one and number two. Nothing came of either protest and eventually both projects were sold to Coretech International which meant Coretech took over the use of the federal tax credits. These tax credits were used to build two low income housing developments Summer Green residences in Tamuning and the Summer Home apartments in Machananao Yigo.

In 2012, GHURA Executive Director Marcel Camacho resigned and then issued a press release calling into question the GHURA board’s handling of the Low Income Housing Tax Credits. He made reference to certain irregularities with the tax credit program that he said would all be made clear in the end. Camacho accused the board of taking it upon themselves to award these tax credits to Great Homes and Tower 70 even though he believed there were deficiencies with the application from Great Homes that were “pointed out by an expert from the mainland that was retained by legal counsel to advise on LIHTC matters.” Finally, Camacho mentioned in his letter that the proper authorities had been notified of the irregularities in the handling of these tax credits.

Later in 2012 the FBI contacted Camacho’s replacement which was then GHURA Executive Director Ray Topasna and asked him questions concerning the awarding of these Low Income Housing Tax Credits. A few weeks prior to this Topasna was also contacted by Deputy Attorney General Phil Tydingco also for the same reason. Then in July of 2015 GHURA started getting subpoenas from the FBI. In June of 2016 the FBI conducted a search of the GHURA offices in Sinajana. In his declaration Tydingco says he reviewed documents and reports prepared by the FBI, the Office of the Inspector General for HUD and his own office.

According to the declaration, several board members admitted having secret meetings prior to the actual public board meeting. Selvidge allegedly told investigators that the regular board meetings were “rubber stamp” meetings in which there was never a dissenting vote.  Board member Deanne Torre allegedly told investigators that she believed that “there would be punitive actions against any board member who voted against Sablan and that the Governor’s Office would be notified if a board member were to cast a dissenting vote.” Former GHURA Executive Director Raymond Topasna allegedly told investigators that during working sessions they would discuss the 2011 Low Income Housing Tax Credit Award, the 2011 administrative plan for Section 8 housing and a late 2011 secret meeting to force Marcel Camacho to resign as Executive Director. Topasna also allegedly told investigators that it was standard practice for Sablan to meet with the board prior to regular meetings when they were awarding LIHTC for other years as well as when GHURA awarded Sec. 8 public assistance housing to Coretech.