What do our trash bills pay for?

Research: Lobster, 1st-class plane tickets, luxury condos, a multi-million dollar mistake, fine dining, and a BBQ grill

NOTE: The following is based on research of the federal receiver, Gershman Brickner & Bratton’s invoices and receipts for its work to open the Layon Landfill and close the Ordot Dump.
Have you wondered how the $30 you spend per month on trash service is spent?
We know it is spent as the federal receiver sees fit. We know the federal receiver was chosen by a previous administration after a federal judge placed GovGuam under receivership for failing to close the Ordot Dump.
It is a fair point that we are now paying for GovGuam’s failure over two decades to protect our water supply by doing something about the Ordot Dump. It also is a fair point that trash service drastically has improved under the receivership, except that the high costs have caused more illegal dumping and burning.
But just because GovGuam failed in the past to provide service, doesn’t mean the current administration should sit by and not question how much the off-island receiver is spending, and what he’s spending our money on. To this end, we thank Guam’s journalists and talk show hosts for bringing these expenses to light periodically. Our office did some research on what the federal receiver has been spending our money on. We share this with you so you know what the federal receiver is using your $30 per month to pay for, and how the receiver has accounted for the $13 million GBB has been paid to date.
Here are excerpts of expenses through the years:
–       The multi-million dollar Bend in the Road. The receiver built an access road from Route 4 Inarajan into Dandan, Inarajan (Layon) so that trash trucks could get to the Layon Landfill. The road was designed around a parcel of (what it thought was) private property.  We found out after the road was built that the parcel the receiver built around was government property after all. The receiver’s contractors cost ratepayers millions of dollars for a bend in the road that we didn’t need at all, but more than three years later, the receiver has held no one accountable.  Some estimates place the boondoggle at between $10 – 15 million.
–       $1.9 million to pay for GBB Special Principal Associate David Manning’s time. That’s nearly as much as the United States President was paid in the same time frame.
–       $1.7 million to pay for GBB Vice President Chris Lund’s time.  That’s even more than Vice President Biden was paid in that period.
–       $1.5 million to pay for GBB Senior Vice President Chace Anderson. That’s still more than what Vice President Biden was paid.
–       $8 million for total labor costs paid to GBB employees. Unless any of them were residing in Guam, none of them paid taxes here. The money they earned from our trash payments and the taxes they paid on those earnings went back with them to the U.S. mainland.
–       Please note this compensation for time does not take into account the money spent on subcontractors hired by the receiver, including the firm who is currently operating the Layon Landfill.
–       $674,066.13 for First Class plane tickets
–       Examples of expenditures:

  • First month of receivership: $500 to David Manning for two hours of work to “Document review, review and respond to email and media interview”
  • March 24, 2008: $180 for Chace Anderson’s dinner at Hotel Santa Fe
  • The next day: $78 for his dinner at Jamaican Grill
  • The next day: $146 for meal at Tumon Bay Lobster & Grill
  • The next day: $110 for breakfast at the Hyatt Regency Guam
  • August 5, 2008: $176.53 for shopping at Kmart, which included a 14-inch barbeque grill, a vacuum cleaner, charcoal lighter, and hickory wood chips for grilling
  • January 2009: $930.51 for David Manning to stay for two days at the Sheraton Waikiki Hotel in Hawaii
  • February 18, 2010: The first of 12 monthly $2,850 payments are made on the GBB lease of a condo at the ocean-front luxury Agana Beach Condominium. This doesn’t include the additional monthly $215.22 charge for furniture. Records show the same amount expensed for lodging as late as 2012.
  • July 2010: $540.03 to pay the power bill at this condo, which consumed 2,040 KWH in that one month alone
  • March 24, 2010: Chace Anderson charged us $16.58 for his bill at Caffe Cino and $120.88 for his dinner at Roy’s Restaurant. This included $17 in tip
  • June 2011: $398.48 for Chris Lund to stay at the Chancellor Hotel in San Francisco
  • Even though GBB keeps a $2,850/month lease on its luxury condo, we paid $1,666.65 in February 2012 and $1,361.98 the following June for Chris Lund to stay at the Marriott Resort & Spa and the Fiesta Resort, respectively
  • July 11 to August 10, 2012: $546.20 for David Manning’s phone bill to AT&T in Brentwood, Tennessee

Refusal to provide financial records
The trail ends in 2013. In June 2013, the Attorney General’s Office stopped remitting the federal receiver’s invoices and expenditure reports to the Department of Administration for proper accounting. The DOA Division of Accounts tried repeatedly to contact the AG’s Office for remittance (both over the phone and via email).
Egregious conflict of interest and vacation from duties
The administration repeatedly was denied access to the financials and the spending habits of GBB by the Attorney General’s Office. The AG’s Office later admitted that the reason it could not disclose the information was because the AGO was representing the federal receiver, and not the government (people) of Guam. This egregious conflict of interest and vacation from the AG’s duties to the people was the main reason for the government’s motion to remove the AG from the Layon case.
Tennessee company isn’t meeting fiduciary responsibility to Guam
In a brief filed on behalf of the government of Guam today, Attorney Rawlen Mantanona noted GBB’s lack of financial management and commitment to its fiduciary responsibility to the people of Guam.  Excerpts of this point can be found below:
The receiver has been given total control over GSWA and all of its functions, and he has a duty to operate GSWA in accordance with Guam law and the requirements of the Section 30 bond indenture… However, based on information revealed in the past 10 months…it appears that GSWA has been operated in such a way that there is nowhere near enough money to pay for either the remaining consent decree projects or GSWA’s own debts.
Before May 21, 2013, the Receiver did not make a single report to this Court or to the Government that would indicate that the funds provided by the Section 30 bonds might be insufficient to complete the Consent Decree projects.  In fact, prior to the Quarterly Status Hearing held on May 21, 2013 the Receiver regularly reported that the Consent Decree projects were over $30 million under budget.
At the hearing held on the May 21, 2013, however, the Receiver disclosed for the first time that it expected the total cost of these same projects to be more than $63 million over budget… Now, almost a year later, the Receiver still does not have a plan for dealing with this shortfall, and it is now also  clear that the Ordot Dump will cost tens of millions more than the Receiver’s estimate for that project.
Moreover, in addition to this capital funding shortfall, the Receiver is now reporting that GSWA will never be self-sufficient operationally… GSWA has not even been reimbursing the Government for 75% of the debt service…as required by the bond indenture.
The Government is deeply troubled by the fact that despite years of representations that the Consent Decree projects were well within the budget and GSWA was financially healthy, this has not actually been the case.  The simple fact is that the Receiver has for years been spending far more money than the GSWA can afford based on its current revenue without reporting to the Court.
Government recommends court end ‘double billing’ by Receiver
Attorney Mantanona also asked the District Court to limit the work done by the Receiver in an effort to save money.  He notes GBB receives about $2 million annually for operating the Layon landfill and closing the Ordot Dump.  This compensation, however, is in addition to the millions GBB pays a subcontractor to run the landfill.  Attorney Mantanona wrote, in part:
Today, the construction of the “state-of-the-art, environmentally safe Layon Landfill has been under the operational management of GGH Guam, LLC, the assignee of third party contractor Herzog Environmental, Inc…. GGH Guam LLC is paid approximately $6.3 million a year to operate the Layon Landfill.
Because the Layon Landfill is being operated by a third-party contractor and the Receiver’s duties with regard to Layon are complete, it makes economic sense to avoid a duplication of fees by transitioning oversight of the Landfill to the GSWA Board once there has been a full and transparent accounting of the Receiver’s expenditures.  The Government therefore agrees with the Board that the management of the Layon Landfill should be transitioned to the GSWA Board following such an accounting to eliminate double billing and reduce the Receiver’s role to finishing the closure of the Ordot Dump.

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