248 F.Supp.2d 420 (D.Virgin Islands 2003), Civ. 84-104, United States v. Government of Virgin Islands

Docket Nº:Civ. 84-104
Citation:248 F.Supp.2d 420
Party Name:United States v. Government of Virgin Islands
Case Date:March 10, 2003
Court:United States District Courts, 3th Circuit, District of the Virgin Islands

Page 420

248 F.Supp.2d 420 (D.Virgin Islands 2003)

UNITED STATES of America, Plaintiff,



No. CIV.84-104.

District Court of the Virgin Islands, Division of St. Thomas and St. John.

March 10, 2003

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[Copyrighted Material Omitted]

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David Nissman, Esq., United States Attorney, William Dillon, Esq., Special Assistant United States Attorney, David Lewis, Esq., Assistant United States Attorney, Donald G. Frankel, Esq., U.S. Department of Justice, for the plaintiff.

Iver A. Stridiron, Esq., Attorney General, Michael Law, Esq., Assistant Attorney General, Douglas Jurgens, Esq., Assistant Attorney General, for the defendant.


MOORE, District Judge.

A distinct odor emanates from the construction contract the Governor of the Virgin Islands, Charles Wesley Turnbull, signed with Global Resources Management, Inc. ["GRM"] on December 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. I have become all too familiar with the details of the St. Croix sewer system and this case and have observed the various players over the past several years. With this experience and background I am able to assess which of the various witnesses at the recent hearings on the GRM contract were telling me the whole truth. It is thus very clear to me that the Department of Public Works ["DPW"], including Commissioner Wayne Callwood and his negotiating team, tried to include contract terms that would keep control of the quality, scope, and cost of the work within DPW and not abandon that control to GRM. Unfortunately, DPW's efforts were no match for the corrupting political pressure from the Turnbull Administration through Ohanio Harris, Governor Turnbull's special assistant for St. Croix.

Between September 23, when Commissioner Callwood first attempted to forward the proposed contract with all the protective terms and attached specifications DPW could muster, and December 20, when the Governor signed the final document, the contract was stripped of DPW's attached specifications for the work, and had no firm deadlines for completion of the included projects, let alone an effective liquidated damages clause to enforce compliance with those vague deadlines. Significant new provisions were added during the contract's journey from DPW to the Governor that converted it into an open-ended contract in favor of GRM by providing for "allowance items" in excess of the "Contract Sum--$3,637,150.00" to be added by change order and limited only by "the maximum amount provided by law

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and the availability of funds." Similar provisions had facilitated the massive cost overruns through change order by another of Ashley Andrews's companies in refurbishing the St. Croix Government House. Indeed, the proverbial smoking gun of this sorry saga is Exhibit 19, a memorandum to Governor Turnbull from GRM CEO, Ashley R. Andrews, Esq., dated September 30, 2002, after the DPW team had concluded its negotiations. The memorandum evidenced the commencement of a campaign for cost overruns through change order well before the contract was formally awarded to Andrews's assetless startup company, which had only applied for its license for business management and consulting six months earlier on March 4, 2002. (See Ex. 7.)

The red flag in the memorandum to the Governor is CEO Andrews's contention that the total contract price was more than double the $3,637,150 stated in the contract and "may be subject to equitable adjustment."

The parties agree that the actual cost of the referenced allowance items may exceed the costs contained herein. The Contract Sum may be adjusted by change order to reflect the difference between actual costs and the allowances. The allowances provided herein are contained in the total contract price of $7,929,912.

(Ex. 19 (italics in original).) With the kind of political influence these proceedings have demonstrated Ashley Andrews and his business associates command within the Turnbull Administration, it is inconceivable that anyone in DPW, including the Commissioner, and surely not a DPW project manager in the field, would have been able to withstand the assault already underway to more than double the contract sum from $3,637,150 to $7,929,912.


On December 20, 2002, Governor Turnbull signed a construction contract with Global Resources Management, Inc. for "Emergency Pipe Repairs, Replacement, Cleaning and Inspection at five locations on St. Croix, U.S. Virgin Islands." These projects for the St. Croix sewer system were among the repairs the United States and the Government of the Virgin Islands ["Government"] had agreed were critical in the Fall of 2001, and that the Government had then assured this Court would be completed, with one exception, by the middle of 2002. For providing all labor, materials and equipment, and upon satisfactory performance of the contract, the Government would have paid GRM at least $3,637,150 from the Corrective Action Trust Fund I had ordered to be established in a separate bank account. Although the contract provided in Paragraph 21 that it became effective upon the date of the governor's signature, no notice to proceed was ever issued by the Government's contracting officer, Marc Biggs, the Commissioner of Property and Procurement ["DPP"].

On January 23, 2003, the United States filed an Emergency Motion seeking an order requiring the Government to show cause why it should not be enjoined from proceeding with the GRM contract. That same day, I scheduled the show cause hearing for January 30, 2003. Two days before the hearing, Governor Turnbull terminated the GRM contract in the "best interest of the Virgin Islands." The next day, January 29, the Government moved to cancel the show cause hearing as unnecessary since the GRM contract had been terminated. Simultaneously, it moved to continue the hearing to the following week so that DPW's Senior Manager for Federal Programs, Sonya Nelthropp, could testify, and it also filed its response to the United States' motion. Because the provision

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of the GRM contract providing for termination for the convenience of the Government would allow GRM to seek compensation under the contract, 1 I ruled that it was still necessary to test the validity of the contract and denied the Government's motion to cancel the hearing. The hearing on the motion to show cause began on January 30 and continued on February 3, 2003, so that Ms. Nelthropp could testify. 2


The United States filed this lawsuit against the Government of the Virgin Islands in March of 1984. In its complaint, the United States alleged that the Government was operating a number of its wastewater treatment plants ["WWTPs"] throughout the Virgin Islands in violation of the Clean Water Act, 33 U.S.C.§ 1251 et seq. and the Territorial Pollutant Discharge Elimination System ["TPDES"] permits issued for those WWTPs. In 1985, the United States and the Government of the Virgin Islands entered into a consent decree ["Original Decree"], pursuant to which the Government agreed to implement certain improvements to its wastewater system Territory-wide.

The Government failed to comply with many of the requirements of the Original Decree, setting a trend that continues to the present. In 1991, the United States moved to enforce the Original Decree and assess stipulated penalties for those many continuing violations. In 1996, the parties entered into an amended consent decree ["Amended Decree"] to resolve these disputes, which included payment of a substantial monetary penalty. Under the Amended Decree, the Government agreed to construct two new WWTPs, to implement certain improvements to a number of its WWTPs and pump stations, and to meet certain effluent limits for its WWTPs. Although the Government has completed many of the projects required by the Amended Decree and has constructed two new WWTPs, it has consistently violated the effluent limitations set forth in the Amended Decree at a number of its WWTPs.

In February, 2000, the United States filed a motion requesting that the Court immediately order the Government to cease dumping raw sewage onto the soil of St. Croix and into the surrounding seas by its persistent pump station failures and broken sewer lines. Sadly, pump failures and sewer bypasses continue even as I write this Memorandum Opinion. The motion would also require repairs to the St. Croix WWTP, which was providing no treatment and dumping dangerously septic effluent into the Caribbean Sea through a broken ocean outfall pipe.

On February 12, 2000, I issued an order requiring the Government to repair the Figtree Pump Station, the LBJ Pump Station, and the Bethlehem Gut sewer interceptor by certain deadlines, and to restore the Anguilla WWTP to operation as soon as possible. On March 13, 2000, at the Government's request, I granted certain extensions to those deadlines. After hearings on April 25 and 26, 2000, I issued an order on April 28, 2000 finding that the

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Government was not in compliance with several aspects of my February 12 and March 13 Orders. I found that there was still a bypass of raw sewage at the Figtree Pump Station, that the St. Croix WWTP was still virtually non-operational, and that the Bethlehem interceptor repair was not completed. I warned the Government that I would set new deadlines that would be "strictly enforced," and that the failure to comply with the revised deadlines would result in contempt hearings. On May 30, 2000, I issued an order with revised deadlines and again warned that contempt...

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