Report: Ex-Interior official Babauta mistreated employees, misused grants

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ST. THOMAS - The Interior Department's Office of the Inspector General released a report this week revealing that former Assistant Secretary of the Interior for Insular Areas Anthony Babauta funneled grants and contracts to friends and mistreated employees.

Babauta, who served as one of the federal government's most important links to the territories, was placed on leave in November 2012 soon after the investigation began, and resigned his post in January 2013.

According to the Inspector General's report, the investigations began after allegations were leveled against Babauta that he was directing federal grants to friends, mistreating employees through sexual harassment and discrimination, misusing government equipment and personnel, and taking personal trips under the guise of official business.

The report cleared him of the accusations of improper travel, but found evidence to support the other allegations.

"We did not find any evidence to confirm that Babauta used government travel for personal gain, but we identified certain trips for government business in which Babauta appeared to benefit personally," the Inspector General said.

Federal money for friends

Babauta was found to have given federal dollars and contracts to groups that were not eligible, or for which the grants were not recommended by an evaluation committee. The money was also given to people Babauta had a personal relationship with previously, according to the report.

"Our investigation found that, against the advice of his staff and grant specialists, Babauta directed the award of two Office of Insular Affairs grants to the University of Guam to support the Micronesian Center for a Sustainable Future," the Inspector General said in the report.

The investigation found evidence he gave federal funds to a former boss, and friend of 15 years, who was then working at the University of Guam - Babauta's home territory - to manage the center and that about $32,600 of that grant was misused.

The Graduate School in Guam was awarded a $494,000 contract modification to manage the Micronesian Center for a Sustainable Future, a contract suggested by Babauta's friend.

The investigation found that the project coordinator for the center would keep rental cars longer than they were needed so he could use them for personal business, and because he did not have a valid Guam license, he would have friends rent the cars for him.

"He admitted he was involved in two motor vehicle accidents while operating rental cars reserved for MCSF," the report said.

Of the grant money provided by Interior to the center, the investigators determined that $32,636.34 was deemed unallowable.

"The unallowable costs included funding for gifts, hotel room charges, rental car charges, food, flowers, furniture, and meeting expenses," the report states.

When the investigators interviewed Babauta, he admitted that he should not have been involved with funding a friend's program.

"In retrospect, he agreed that he should have recused himself, given his personal relationship with the people involved. He said he tried to be fair when awarding grant monies, and because he was from Guam, he always made sure not to appear to be favoring Guam in the award process. Babauta said he had never used his position as assistant secretary to funnel grant or other monies to Guam or his friends in Guam," the report stated.

Acting Assistant Secretary for Insular Affairs Eileen Sobeck, who took over when Babauta left the position, informed the University of Guam senior official that the Office of Insular Affairs was terminating the grants and that the remaining funds - approximately $378,818 - were being deobligated and returned to the federal government, according to the report.

Mistreatment of employees

"Our investigation also supported the allegations that Babauta made inappropriate comments to employees and conducted himself unprofessionally at times," the report said.

Through interviews with current and former Office of Insular Affairs employees, the investigators discovered that Babauta had one employee perform work outside the scope of his government duties and that Babauta lived in the guest house of a subordinate employee for several months without paying them.

The other accusations included:

- Babauta made inappropriate and sexual comments to female employees.

- Babauta rubbed the shoulders of a female employee.

- Babauta offered a female intern alcohol in his office.

- Babauta used foul language in front of, and directed at, employees.

- Babauta discriminated against older, male employees.

One employee recalled hearing Babauta comment on a female co-worker's high-heeled shoes: "I've always thought that a woman should have a pair of hooker shoes to wear."

When interviewed about the allegations, Babauta denied them and said perhaps some comments or actions were misinterpreted. He said when one woman told him that a comment about her shoes made her uncomfortable, he was taken by surprise, but from that point forward made sure to keep his distance and not be alone with her. The employee confirmed those actions, according to the report.

Misuse of government equipment and personnel

The investigation found that:

- Babauta had an employee drive him to personal events, run personal errands in a government vehicle, and generally perform work outside the scope of his official duties.

- Babauta requested that an employee draft a PowerPoint presentation for his daughter.

- Babauta had an employee pick up his daughter in a government rental vehicle while traveling in Guam.

- Babauta had an employee pick up his girlfriend at an airport and then drive them around over the weekend.

- Babauta had an employee drop off and pick up his clothes at the dry cleaners.

No prosecution

The Inspector General's report indicated that the investigation in to Babauta's actions were given to the U.S. Attorney's Office for the Districts of Guam and the Northern Mariana Islands. On July 30, 2013, the U.S. Attorney's Office declined this case for criminal prosecution, according to the report.

Prior to being confirmed as assistant secretary by the U.S. Senate, Babauta served as former Interior Secretary Ken Salazar's senior adviser. Babauta previously worked on the U.S. House of Representatives Natural Resources Committee, as its staff director for the Subcommittee on Insular Affairs, Oceans, and Wildlife. He advised the full committee on U.S. policy towards U.S. territories and other U.S. affiliated island nations.

He is a native of Guam, spent much of his childhood on the U.S. mainland and is a graduate of Gonzaga University.

- Contact reporter Aldeth Lewin at 714-9111, or email

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