GovGuam seeks $11M from Paka cleanup - KUAM.com-KUAM News: On Air. Online. On Demand.

GovGuam seeks $11M from Paka cleanup

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by Mindy Aguon

Guam - A questionable settlement to a company that provided debris removal following Supertyphoon Paka back in 1998 has resulted in years of litigation and now a concerted effort by the government to get $11 million back. Following the supertyphoon in 1998, DRC, Inc. was hired by the government to conduct cleanup work for debris removal. 

Six years later, the company sued the government for $7 million plus interest for lack of payment. The government filed a motion for summary judgment contending no contract existed to pay DRC any more than what it already had, but the Federal Emergency Management Agency then authorized payments for GovGuam expenditures related to the cleanup.

On March 14, 2008 DRC and GovGuam, through then-governor Felix Camacho's chief of staff George Bamba, entered into a settlement agreement for $11.1 million and ten days later, the payment was made. Several weeks later the Attorney General's Office learned of the settlement as they had not authorized it. In February 2011 the presiding judge granted the AG's Office motion to set aside the settlement agreement. It's that decision that DRC has asked the court to reconsider.

And the AG's Office has asked for permission to amend their pleadings as they seek that money back from DRC. Two years ago Bamba defended his actions of settling the claim with DRC claiming he did so at the advice of the AG's Office. Two years ago, Bamba said what would happen if the settlement were invalidated, saying, "If he invalidates the settlement, then the government would still have to pay the vendor. Where we going to get the money? Well, we had the money from the congressional appropriation, but now since it was earmarked specifically for that purpose to resolve that case. The Government of Guam would have to give the money back to the treasury of the United States, which we don't have."

Bamba said it would be ironic to go after a company that the government owes money to believing they would just sue again and it would result in additional costs to the government. But Assistant Attorney General David Highsmith is pursuing the return of the $11 million as the presiding judge's order issued earlier this year authorized the AG's Office to oversee the settlement negotiations. Highsmith says they're willing to negotiate with DRC, but they want to get that money back first. Earlier this month they argued a motion asking to amend their pleadings to make the counterclaim.

DRC meanwhile has also moved to have the judge recuse himself from the case, claiming he has a conflict of interest with the former assistant AG Bill Bischoff, who was working on the lawsuit.  Both the judge and Bischoff have interest in an unrelated case dealing with a coral pit in Dededo.

Highsmith says the judge will have to first decide on the recusal motion before deciding whether to allow the government to amend its pleadings to pursue the return of the $11 million dollars.

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