Newly Elected FSM President David Panuelo meets DoI Secretary David Bernhardt in Washington DC, May 21, 2019.
by Andrew Walden
What a difference an election makes.
Just days into his administration, newly-elected Federated States of Micronesia (FSM) President David Panuelo, along with the Palauan and Marshallese Presidents, is in Washington DC meeting President Donald Trump as part of a first-ever US-Micronesia summit.
Trump with Micronesian leaders at The White House.
According high-level US officials speaking to reporters on background, the White House meeting reflects an Administration focus on US military, security, fishing, and environmental concerns shared with the three Freely Associated States. The summit is part of an ongoing series of Trump Administration officials' visits to the region.
All dressed up and nowhere to go: Jim Lyon with then-newly elected FSM President Peter Christian wearing Lyon company t-shirts at Cliff Rainbow Hotel, 2015.
Four years ago, Panuelo’s predecessor as FSM President, Peter Christian, didn’t go to the White House. Instead he began his administration by meeting in Pohnpei at his Cliff Rainbow Hotel with corrupt Hawaii businessman Jim Lyon.
They had a different plan: Grab millions in FAA Airport Improvement Project funds for Lyon -- with appropriate kickbacks.
Under the FSM Constitution, to be elected Presidient, Christian had to first win one of the four “at-large” Senate seats in the FSM’s 14-member unicameral Congress. A series of internal Lyon Associates emails, provided to Hawai’i Free Press by a source, paint the picture:
From: Jim Lyon <Jim.Lyon@LYON.US.com>
Date: March 18, 2015 at 5:34:15 PM HST
To: ** LYON Crew <LYONCrew@LYON.US.com>
Subject: LYON backs a winner!
Congratulations to Senator Peter Christian of Pohnpei!
He secured 9,000 votes out of 15,000 cast with 4 other opponents two weeks ago!
Then Christian can be elected by Congress to the FSM Presidency, as long as the 14 Senators are not distracted by discussion of Massey Halbert’s forged University of Washington Engineering Degree on MicSem (now MicronesiaFourm):
From: massy halbert <email@example.com>
Date: May 3, 2015 at 9:53:21 AM HST
To: Jim Lyon <firstname.lastname@example.org>
Do you know anyone who can hack the Micsem Website? I need it shut down at least this week.
* * * * *
From: Jim Lyon
Sent: Monday, May 11, 2015 10:37 PM
To: ** LYON Crew
Subject: Congratulations to Peter Christian!
today is his second day as the FSM President !!
* * * * *
From: Jim Lyon <Jim.Lyon@LYON.US.com>
Date: June 9, 2015 at 9:07:43 PM HST
To: Frank Lyon <Frank.Lyon@LYON.US.com>,
Subject: FSM is s sovereign nation;
they can do whatever they want.
And they want us.
* * * * *
Then, in September, the big payoff: A trip to DC to meet Hawaii Senator Brian Schatz, Esther Kiaaina, and Andy Winer to make sure that H.R.636, the FAA Extension, Safety, and Security Act of 2016, would re-authorize FAA Airport Improvement Project (AIP) expenditures in the Freely Associated States of FSM, Marshall Islands and Palau.
Lyon even used existing FSM AIP funds to pay for the trip:
From: Jim Lyon
Sent: Wednesday, September 16, 2015 4:41 PM
To: Ron Gonzales <Ron.Gonzales@LYON.US.com>;
Cc: Frank Lyon <Frank.Lyon@LYON.US.com>
Subject: I depart Monday morning;
all expenses paid via FSM AIP contract;
to Washington, DC.
We will visit Senator Schatz & FAA;
& possibly DOI Under Secretary Esther Kiaaina.
This is to get PMU moving;
& sign a 5-year - $2.4M/year deal.
Schatz and Winer came through for Lyon. The key language is in “Section 47115”:
(i)Marshall Islands, Micronesia, and Palau.—
For fiscal years 2018 through 2023, the sponsors of airports located in the Republic of the Marshall Islands, Federated States of Micronesia, and Republic of Palau shall be eligible for grants under this section and section 47116.
But within weeks of his triumphal DC trip, the schemes began falling apart faster than Lyon could patch them up.
According to a source, Lyon Associates Manila office personnel had prepared the forged University of Washington credentials for Halbert. With the fake diploma, Halbert racked up $69,837.12 in "professional premium" pay from the FSM government. In 2014, the scheme was discovered and charges were filed in FSM courts. On November 27, 2015, the last of a series of procedural maneuvers failed to derail the Halbert case before the FSM Supreme Court.
An extensive discussion on Micronesia Forum titled, “Massy Halbert resigns from National Government...and then he goes on a trip funded by the government representing TC&I”, reveals the case was dropped in December, 2015, as part of a Deferred Prosecution Agreement.
Here's what happened according to the Halbert and Lyon indictments:
HALBERT 29. In or around December 2015, Halbert entered into a Deferred Prosecution Agreement with the FSM for falsifying his educational credentials, which allowed him to receive a higher salary from the FSM government. The DPA required Halbert to pay restitution to the FSM government.
LYON 41. On or about December 9, 2015, Frank James Lyon sent an email to Co-Conspirator X stating that "[Micronesian Official 1 (Master Halbert)] is asking for $5K/month .... So you and I will have to work together on spending & get agreement with [another Engineering Company executive] on guidelines on what goes into [marketing]."
HALBERT 31. On or about December 22, 2015, Halbert sent an email to Co-Conspirator X with the subject line, "Restitution," stating, "Please ask Jim if he can give me the whole and I will put it down in full to lower the monthly."
HALBERT 32. On or about December 22, 2015, Co-Conspirator X sent a response email informing Halbert the company officials stated: "They don't have money now. They are short of money all the time."
HALBERT 33. On or about December 22, 2015, Halbert sent a response email to Co-Conspirator X, stating, "I'm shocked ... really thought they committed to help."
HALBERT 34. On or about December 22, 2015, Co-Conspirator X sent an email to Halbert, stating, "They will help you by monthly."
An email from a Lyon Associates insider alleges that head of Lyon staff at the FSM TC&I Program Management Unit (PMU), Mao Peng, planned to make the FAA cover Lyon's expense of repaying Halbert for the fine imposed after the forged credentalis supplied by Lyon were exposed:
Please see attached.
- LYON will "compensate" Massy for the fine and "recover" the cost by "bumping up" FSM-AIP invoices. The "recover" statement was made by Mao Peng in a meeting with Mr. Lyon, Jim Lyon and me present. The "bump up" statement was made by Jim Lyon with Mr. Lyon and me present.
- FSM will rehire Massy, in a TC&I management position. Same source as item 1.
Attached PDF: Massey Halbert Plea Deal FSM Forged Credentials 2015
Is Peter Christian the unnamed “Micronesian Official 2” mentioned in Jim Lyon’s indictment? Here’s what the Lyon indictment says about MO2:
h. "Micronesian Official 2" was a government official in the FSM Congress who served on a congressional committee with oversight over Engineering Company's FSM contracts.
i. From in or around 2006 through in or around 2016, the Defendant, together with his co-conspirators, provided bribe payments to FSM officials totaling at least approximately $200,000 in order to obtain approximately $7.8 million in contract payments….
ll. On or about April 15, 2016, the Defendant stated in an email that he intended to pay for an apartment for Micronesian Official 2 and that Micronesian Official 2 "handles the infrastructure committee - which I need to approve our $500K contract week [of] [M]ay 11."
The formerly jet-setting FSM President may find Pohnpei claustrophobic as he considers whether arrest warrant may await him should he get on a plane to Honolulu or Guam.
Meanwhile, a special election will soon be held for the Pohnpei at-large Senate seat vacated by President Panuelo.
Will Christian run or turn himself in?