Feb. 20, 2004 – In what may be the biggest corruption case ever brought in the U.S. Virgin Islands, five people, three of them former government officials, have been charged in a 16-count federal indictment with federal and territorial crimes including conspiracy, wire fraud, bribery and conflict of interest.
In the indictment returned by a grand jury sitting on St. Thomas, the five are accused of conspiring for nearly three years to obtain a multimillion dollar contract with the V.I. government through fraudulent means. And two of them are charged with later — some six months after the contract was canceled — submitting a false claim for expenses incurred in preparing a proposal for it.
The indictment alleges that Ohanio Harris, former special assistant to Gov. Charles W. Turnbull; former Sen. Alicia "Chucky" Hansen; Campbell Malone, post auditor of the 23rd Legislature; attorney Ashley Andrews; and Hansen's husband, Esdel Hansen, conspired to corruptly obtain money through a no-bid contract between the V.I. government and Global Resources Management to repair the broken-down sewer system on St. Croix.
The indictment alleges the five conspired to form GRM for the sole purpose of obtaining the multimillion dollar sewer repair contract and, in establishing the company, made "corrupt arrangements" to obtain performance bonds and licenses while agreeing to share profits generated by the $3.3 million contract with "certain individuals" including Harris and Andrews.
Alicia Hansen is accused of accepting a $1,000 campaign contribution in exchange for getting the Legislature to pay out $25,000 to GRM for what the indictment says was a fraudulent claim. The document also alleges that the senator knew the claim was false. It also points out that her husband was hired by GRM the same month — March 2002 — that Sen. Hansen secured payment to the company of the $25,000. GRM had no assets at the time, according to the indictment.
In the summer of 2003, six months after Gov. Charles W. Turnbull voided the contract, Malone and Andrews are accused of submitting a false claim for $700,000 for expenses the pair claimed were incurred in preparing the contract proposal.
Esdel Hansen is accused of submitting information to Malone stating he did $240,100 worth of work on the contract proposal. Hansen said he worked 1,372 hours at $175 per hour, the indictment says.
Malone and Andrews also are accused of generating false financial statements in order to obtain the bonds required to perform the sewer repairs.
The two allegedly claimed that GRM had been awarded contracts for the design and construction phase of the sewer project to the tune of $9 million. The two also produced statements which "showed numerous contracts in progress that did not exist," the indictment says.
Contract suspicious from the start
The dubious GRM contract was uncovered in news reports in early 2003 and has been steeped in controversy and legal battles ever since.
In the fall of 2002, prior to November's gubernatorial election, using powers under a state of emergency first declared two and a half years earlier in March 2000 regarding the St. Croix sewage system, Gov. Turnbull waived the competitive bidding process for the repairs, mandated under a consent decree entered into by the local and federal governments in 1984.
The GRM contract was signed on Dec. 20, 2002.
In January 2003, U.S. Attorney David Nissman in cooperation with the U.S. Justice Department's Environmental and Natural Resources Division filed suit in District Court calling upon the V.I. government to show cause why it should not be stopped from executing the contract.
District Judge Thomas K. Moore found on behalf of Justice and ordered the V.I. government not to revive the contract, which Turnbull had quietly canceled two days before the initial show-cause hearing in the case.
Attorney General Iver Stridiron appealed Moore's ruling to the 3rd Circuit Court of Appeals on the grounds that under a declaration of emergency the V.I. government had the right to award the contract without going through the bidding process. Attorneys from the V.I. Justice Department also contended that the federal court had no jurisdiction in the matter.
The appeal was argued in December, but no decision has been rendered, Stridiron said on Friday night."I'm surprised no ruling has been issued," he said. "They generally would have ruled by now."
Stridiron declined to comment on the indictments, saying "We don't comment on prosecutions by the U. S. Attorney's office, nor do they comment on prosecutions by us. It's a matter of general respect for each prosecuting office. It would be inappropriate, and generally we don't do that."
He added that the government's appeal of Moore's ruling is a civil case and has no bearing on the criminal indictments.
St. Croix sewage problems legend
The crisis surrounding the St. Croix sewage system is nothing new. The V.I. government has been under a consent decree issued in 1984 and revised in 1996 to repair the ailing system, which on any given dysfunctional day pumps more than a million gallons of raw sewage into the waters around St. Croix.
In a release sent out late Friday afternoon, Nissman said: "The public sewage system on St. Croix regularly disgorged raw sewage into the sea. At various times, raw sewage overflowed into the streets in St. Croix and was pumped directly into the harbors in Christiansted and Frederiksted." He said the human feces in the raw sewage contains pathogens which "are extremely harmful to humans."
All five defendants are charged with one count of conspiracy.
Andrews, Harris, Malone and Esdel Hansen are charged with four counts of wire fraud.
Harris and Alicia Hansen are charged with one count of program fraud each.
Andrews is charged with two counts of program fraud; he also is charged with inducing a conflict of interest and two counts of fraud against the government.
Alicia Hansen is charged with accepting a bribe and conflict of interest.
Harris and Andrews also are charged with conflict of interest.
Maximum statutory penalties for the various charges are as follows:
Conspiracy – five years in prison and a $250,000 fine.
Wire fraud – 20 years in prison and a $250,000 fine.
Program fraud – 10 years in prison and a $250,000 fine.
Bribery of public officials – five years in prison and a $1,000 fine.
Making fraudulent claims – two years in prison and a $500,000 fine.
Accepting a bribe – five years in prison and a $1,000 fine.
Conflict of interest carries a minimum of one year and a maximum of five years in prison and a $5,000 fine.
According to the indictment document, "The primary purpose of the conspiracy was to make as much money as possible from the Virgin Islands government by corruptly securing government contracts … and obtaining payment for the work and for expenses claimed in preparing a proposal for such work."
In announcing the indictments, Nissman said: "At a time when essential services to the people of the Virgin Islands are in jeopardy, it is critical that those who corruptly compromise those essential services and take advantage of urgent public need in an effort to gain personal enrichment need to be held accountable."
In his scathing March 2003 order, Moore wrote: "A distinct odor emanates from the construction contract the governor of the Virgin Islands, Charles Wesley Turnbull, signed with Global Resources Management Inc. on Dec. 20, 2002, for emergency sewer repairs, and it is not the smell of sewage from the decrepit and failed St. Croix sewer system. It is the reek of politics and political influence, and quite possibly of political corruption."
James O 'Bryan, St. Thomas- Water Island administrator, and Government House spokesman, said Friday evening, he had no comment. "It's a legal matter before the court, and we decline
any comment on it," O 'Bryan said.
The V.I. Inspector General's office and the FBI collaborated on the investigation.
For additional background, see "Judge finds 'reek of politics' in sewage contract", "'Chucky' Hansen reiterates charges of racism" .
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