DBAS confirms OIG probe into 1602 program


Questions continue to arise regarding the federally funded Section 1602 program, administered by the Development Bank of American Samoa, which was overseen by then-DBAS president and now-Governor Lolo Moliga.

In response, DBAS Acting President Jason Betham has confirmed that in December 2012 an official from the Office of Inspector General of the US Department of Treasury notified him that he will be submitting a request for records for the $30 Million Section 1602 Grant in Lieu of Low Income Housing Tax Credit program within the custody of the Development Bank of American Samoa.

According to Betham, the official confirmed that the request is due to a complaint received by his office from a party who requested that their identity be kept confidential.

The official also confirmed to DBAS that their Office has a copy of the Interim Report on the 1602 program issued by ASESRO and its Director Pat Galeai, in which ASESRO gave two main recommendations including the recommendation for the U.S. Department of Treasury to investigate DBAS’s administration of the 1602 program.

Betham explained that in 2010, officials from DBAS and ASESRO were involved in scoring the initial group of applicants for the 1602 grant funds for affordable housing for qualified low income tenants.

“Since late 2010, DBAS has provided to the U.S. Treasury and its Office of Inspector General, as well as ASESRO, numerous records for all the 132 projects under the American Samoa 1602 program,” Betham explained, adding that since May 2011, “each and every disbursement for the 1602 program had to be pre-approved by both DBAS and ASESRO before the U.S. Treasury would authorize any draw down of 1602 funds to be disbursed.”

Betham says he has advised the Governor and the DBAS Board of Directors and with their support, he has informed the OIG official that DBAS will “continue to fully cooperate with any official request for records and that DBAS will provide all records regarding the 1602 program as requested or required for the U.S. Department of Treasury’s review."

He aded that DBAS has not yet received any official request or subpoena, but since the holidays are over, he anticipates receiving an official request in the near future.

Betham said any further inquires on this matter should be directed to the Office of Inspector General of the U.S. Department of Treasury.

In the meantime, DBAS urges all 132 project owners of the American Samoa 1602 program to fully comply with all Section 1602 requirements in order to avoid recapture of Section 1602 federal grant funds.

Betham said that since 2010, DBAS has conducted workshops and published numerous notices regarding Section 1602 program rules, in an effort to assist Section 1602 project owners in meeting the program requirements.

He concluded, “DBAS looks forward to continuing to work with the U.S. Treasury Office of Inspector General and expects that any investigation or review by the U.S. Treasury of the DBAS administration of the 1602 program will assist DBAS to make improvements where needed so that this program will continue to help meet the housing needs of low-income families in our Territory while complying with federal grant requirements.”


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