Judge orders EPS to produce records as Sword confirms $10K monthly pay

Superior Court Associate Judge Lillian Ada Tenorio ordered Eastern Power Solutions to produce documents concerning its relationship with Gary Sword by the morning of Oct. 30 and directed lawyers to submit briefs following an evidentiary hearing into an alleged conflict of interest involving CUC's proposed $250-million solar power project.

During the Oct. 28 hearing, Sword acknowledged working for Eastern for six months at $10,000 a month before resigning after recognizing a potential conflict of interest when the company pursued CUC's solar power contract.

Sword is married to CUC board member Rosemund Santos-Sword, who participated in the board's decision to uphold the disqualification of AP Energy, one of Eastern's competitors for the project.

Eastern's legal counsel, Janet King, maintained that Sword has no financial interest in the company.

Tenorio directed Eastern to produce its business license, incorporation documents, records of payments and bank transfers to Sword, and communications concerning his work for the company by the morning of Friday, Oct. 30.

AP Energy attorney Joseph E. Horey told the court he could submit his brief by noon Thursday, Oct. 29.

Tenorio, however, indicated she was not inclined to grant the pending motion at that stage and would allow the parties to complete their submissions before issuing a ruling.

Santos-Sword, meanwhile, testified that she was not involved in the decision to award the solar power contract to Eastern, although she participated in the CUC board's Jan. 30 vote upholding AP Energy's disqualification.

Charles Cepeda, who succeeded Sword as Eastern's local agent, also testified during the hearing.

The proceedings centered on whether Santos-Sword's participation in the board's handling of AP Energy's appeal constituted a conflict of interest because of her husband's employment relationship with Eastern.

In an Oct. 26 interview with Marianas Press, Horey said his client wanted to establish the extent of Sword's relationship with the company.

"We know that there's some connection, but we don't know what the connection is," he said.

Horey argued that Santos-Sword should not have participated in deciding whether another company could continue competing against Eastern if her husband's relationship with the company created a conflict of interest.

AP Energy filed two motions last Oct. 26 seeking to enforce a subpoena for the documents and amend its petition for judicial review to raise a separate allegation concerning the treatment of bidders.

The company was disqualified for failing to submit the required audited financial statements. Horey alleges Eastern was allowed to proceed despite similar deficiencies in its financial documentation.

CUC's board voted 4-1 on Jan. 30 to uphold AP Energy's disqualification.

The legal dispute comes as the Commonwealth Public Utilities Commission is scheduled to consider Eastern's proposed power purchase agreement with CUC on Oct. 29, although approval is not guaranteed.

The court has yet to resolve AP Energy's challenge to the procurement process.