SIC witnesses testify law gives gov discretion over loans
Gov. Togiola Tulafono has “discretion” over the funds allocated to projects funded by the $20 million that ASG received from the ASG Employees Retirement Fund and it’s inaccurate for anyone to say that projects allocated certain amounts were overrun, said Toetasi Tuiteleleapaga, the Governor’s Chief Legal Counsel, at yesterday's Senate Investigative Committee (SIC) hearing.
Tuiteleleapaga along with ASG Treasurer Magalei Logovi’i were the only two witnesses for the SIC hearing, which had been continued from last week. The SIC is currently carrying out a probe into the spending of the loan proceeds.
GOVERNOR’S DISCRETION — NO OVER RUNS
An ASG Budget Office report in March given to the SIC shows that several projects have expended more than the amount initially allocated and the SIC insisted this is an overrun.
For example, overruns were cited in the funding allocation for the 10th Festival of the Pacific Arts, Undersea Fiber Optic Cable and the purchase of tug boats and barges.
During yesterday’s hearing, SIC members, including chairman Sen. Lualemaga Faoa raised the same question several times dealing with the “overrun” for some of the projects and wanted to know why this has happened while funding allocations for other projects have yet to be spent — for example, the $3 million allocated to the Fono.
Tuiteleleapaga explained that the original language of the $20 million loan law — as approved by the Fono — gives the “governor discretion” on allocation of funding level as well as reallocation of funds from one project to another.
He also pointed to subparagraph (b) of the $20 loan law, which states in part that: “Unless a specific amount is appropriated for a particular project, improvement or acquisition, the Governor shall determine the application of available loan proceeds as between the various improvements set forth in this section (the “Improvements”) so as to accomplish, as nearly as may be, all of such Improvements.”
“If an amount is specifically appropriated for an Improvement, said amount shall act as a ceiling for expenditures on that particular Improvement,” the law states. “If the Governor shall determine that it has become impractical to accomplish any of such Improvements or portions thereof for any reason, including changed conditions, lack of funding or costs substantially in excess of those estimated, the Governor shall not be required to finance all of such Improvements.”
Tuiteleleapaga told SIC that there are “no specific funding levels” attached to the projects except in certain cases and therefore “it is inaccurate to state that there is an overrun” in any specific project, because that is not the case since the governor has the authority to disburse and reallocate money for projects.
Magalei in his testimony told the committee that all he does is “sign the checks” for approved amounts sent from the governor’s office.
Sen. Fuamatu J.V. Fuamatu pointed out that the Budget Office report to SIC in March shows $1.25 million of unexpended money in the loan account and wanted to know the balance left in the loan proceeds according to Treasury records.
Magalei said he does not have the actual balance on hand, but guessed it to be between $2 and $3 million, saying he could provide an updated report as soon as possible. He also promised that he would not sign any checks from the loan account if there is nothing left in the bank.
TUGBOAT AND BARGES PROJECT
Sen. Mauga T. Asuega led off the SIC focus on the tug boat and barges project, which was allocated about $3.2 million and sole sourced to Honolulu-based Marisco Ltd., but expanded to an additional $1 million.
Magalei suggested that the SIC obtain testimony from the Department of Port Administration, who was in charge of this project and would better provide more details on this service project for ASG.
On questions about the purchase by ASG of the Fo’isia vessel for Manu’a, Magalei also suggested SIC talk with Port Administration as well as the Manu’a District Governor who wanted another vessel, which was paid for by the Manu’a District’s $1 million allocation from the loan proceeds.
The Fo’isia, according to Lualemaga, remains on the dock and cannot be used at all — and therefore is a waste of money.
Responding to SIC questions, Tuiteleleapaga said his only involvement in the tugboat and barges project was when Marisco filed a lawsuit at the federal court in Honolulu which remains pending at the federal level. Since then, both sides have agreed “in general to a settlement” and both parties are reviewing it. He said he is not at liberty to disclose any additional information at this time but he hopes that both sides will reach an official settlement soon.
According to federal court records a settlement conference hearing was held last Friday before U.S. District Court Judge Barry M. Kurren and a “tentative settlement [was] reached”. No other information was available as of yesterday on this case, which went through federal arbitration last year with both sides reaching an agreement in which ASG was to pay more than $800,000 it owed Marisco in repairs and other services.
However, the case remains pending after Marisco moved to garnish the debt owed from an ASG Bank of Hawai’i account in the territory. The court has since ordered both Marisco and ASG to file supplementary briefs focusing their arguments on any controlling case law regarding garnishment of an out-of-district bank account for a bank that is headquartered within Hawai’i.
FIBER OPTIC CABLE
Asked for specific details on this project, including ASG’s return on its $3.2 million investment, Tuiteleleapaga said he didn’t come prepared to answer questions on this issue, but can provide a report later on any dividends earned after discussion with ASG partners in this venture.
ASG’s partner in the American Samoa Hawai’i Cable LLC, owner and operator of the undersea fiber optic cable, is Florida based, eLandia international — who owns majority shares of the company.
According to the Budget Office report, the fiber optic project was allocated $3 million but expended an additional $24,000.
When asked by Lualemaga as to the status of the roof repair project to the A.P. Lutali Executive Building, which is one of the projects funded with the loan proceeds, Tuiteleleapaga said the news media — referring to Samoa News — incorrectly reported last week that the water leak at the EOB was from the roof.
He said the water leak on the third floor was from the bathroom and the roof repair project is completed.
Samoa News reported last week that Tuiteleleapaga’s excuse to the SIC of why he was unable to supply documents requested by the SIC was that there was a leak in the governor’s office causing file cabinets to be moved around, and location of documents was difficult at that time. He did not identify the cause of the leak.
Samoa News noted in the story that Gov. Togiola Tulafono during the opening ceremony of the ASTCA new building, said that the EOB building roof repairs were complete in response to Congressman Faleomavaega Eni’s comments about why he was moving out of the EOB building and leasing office space in the new ASTCA building.
The SIC hearing was delayed until yesterday, because the governor’s legal counsel was unable to provide requested documents on the $20 Mil loan.