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Galea'i: Dismantling ASESRO is a cover-up of 1602 project

reporters@samoanews.com

Executive Director of the Office of Federal Programs (OFP) Pat Galea'i has written a letter to Gov. Lolo M. Moliga regarding what he calls violations of various provisions of several federal laws and regulations. In a memo dated Jan. 23, Galea'i said the violations of federal laws and regulations by the new administration "may place American Samoa in danger of losing federal monies, as well as potential fines, penalties, and damage awards."

The violations include but are not limited to:

The Whistleblower provision (section 1553 of Division A, Title XV) of the American Recovery and Reinvestment Act of 2009 (ARRA)

Cost allowability provisions of OMB Circular A-87 (Item 19, General Government), and

The Fair Labor Standards Act - Amended (FLSA)

The American Samoa Economic Stimulus and Recovery Office (ASESRO) was established to meet the enhanced federal requirements for transparency and accountability. "Pursuant to this goal, it is tasked with oversight and monitoring of all ARRA-related activities in the territory, including the reporting of any instances of waste, fraud, or abuse," Galea'i wrote. "ARRA funds will continue to be at work here in the territory for several more years."

Galea'i told Lolo that oversight is weakened by transferring this function to the ASG Treasury, as the Treasurer is now responsible for not only overseeing his own $1 million award, he will also be signing all future ARRA disbursements not only for compliance, but also as the drawdown authority. Galea'i pointed out that the US Treasury recently expressed a lack of confidence in the ASG Treasury as a repository and caretaker of federal funds, requiring OFP to maintain SSBCI funds with the Territorial Office of Fiscal Reform (TOFR) rather than ASG Treasury, due to a long history of unacceptable audit reports.

Galea'i wrote that if he feels the Governor's Office is not the appropriate place for an oversight agency such as ASESRO, there may be other valid organizational structures, but there are conflicts inherent in placing it within the ASG Treasury. He said given the territory's economic situation, it is universally held that the federal government (through various federal assistance programs), will be an essential partner in turning around the present economic state of affairs. "How are we to convince the federal government to make additional resources available while we are in the process of gutting oversight of such funds," he asked.

He noted that the official justification given for dismantling ASESRO is the failure of the Fono to pass a budget for the office. However, Gaela'i wrote to Lolo, "the lack of a budget is widely recognized to be related to the unauthorized leaking to the press of a preliminary memo from an ASESRO staff member to me. This leaked document, which was immediately disavowed and discredited by my office, caused personal embarrassment plus damage to your political campaign. Additionally, it also mentioned the Senate President, in his capacity of Development Bank of American Samoa (DBAS) Board Member, who then, along with other political allies of your campaign and the Senate President in the Fono, stonewalled the approval of the ASESRO budget." Galea'i said that until that unauthorized leak, ASESRO had no history of problems with the Fono, and was generally considered a model agency with a stellar reputation.

Galea'i said that during Lolo's tenure as DBAS president, the Interim Section 1602 Report which was requested by and later issued to the federal OIG, catalogued violations of prescribed process by DBAS. He added that with Lolo making his very first executive order (EO# 0001-2013) upon taking office, an act removing him from his position as ASESRO Executive Director and beginning the dismantling of ASESRO and its absorption into AS Treasury, "it gives the prima facie appearance of being direct retribution for politically damaging criticism of your performance at DBAS."

The ASESRO head said evidence of the act being a reprisal includes Lolo's refusal to meet with him regarding an orderly transition process despite weeks of repeated requests, and a complete lack of communication from the acting treasurer regarding any discussion of outstanding issues in the transition.

He claims he did meet with Lolo's special assistant Iulogologo Joseph Pereira earlier last month where he was informed by Iulogologo that he wouldn't have a chance to speak to the Governor about the ASESRO reorganization. Galea'i said Iulogologo conveyed the Governor’s "anger" over ASESRO's Interim Section 1602 Report, adding that Iulogologo stated in explicit terms that Galea'i would be the "scapegoat" for the "damaging" 1602 Report and that he and his office "would have to pay the price of the report having been leaked."

Galea'i said that since assuming power, the Governor's Office personnel including Chief of Staff Fiu John Saelua, Iulogologo Pereira, and Brian Thompson, among others, "have systematically engaged in practices violating the federal government's OMB Circular A-87 (Item 19, General Government) regarding grant cost principles, by commandeering grant-funded assets for use by the Governor's Office. According to Galea'i, such grant-funded assets include office furniture, vehicles, and other equipment. "This took place both before and after the issuance of the Executive Order 0001-2013, and the prescribed process (properly signed property transfer forms) has been ignored.” He claims that when their grants coordinator reminded Iulogologo of the potential problems with such violations of the OMB Circular, Iulogologo replied that they were aware of the issue and he didn't need to worry about it.

Galea'i said that ASESRO staff, both before and after being transferred to the ASG Treasury have been treated with contempt and had their rights under the FLSA violated. "Most of these employees had nothing at all to do with the offending 1602 Report and are only innocent collateral damage in your war on ASESRO.

As an example, Galea'i said Brian Thompson from the Governor's Office told ASESRO employees that they weren't wanted in the new administration and they should all just quit. Furthermore, despite having been Treasury employees for several weeks, Galea'i said no communication from the new command structure has been forthcoming, and there have been no directions to continue working, to cease working, to change or adapt any processes to the new executive director, etc…

According to Galea'i, pay for all ASESRO employees has been systematically delayed, despite clear FLSA requirements that employees of all levels of government must be paid for work performed.

"Currently, the AS Treasurer is refusing to sign time sheets for work already done by ASESRO staff and this appears to be an attempt to force them to quit, allowing the government to avoid 'fingerprints' on their terminations," Galea'i wrote. He added that pronouncements are made to the media regularly regarding the fate of ASESRO but no communication has taken place with the employees themselves.

"This unprofessional behavior only emphasizes their status as pariahs. Rumors abound that ASESRO functions will be transferred to Treasury's Grants Section (already burdened with a reputation — per published audit reports — for frequent errors and ignorance of federal regulations that have cost ASG millions of dollars) or TOFR, but no real effort has been made by the new Executive Director to familiarize himself with the essential functions of the office," he wrote.

Galea'i is requesting the governor to reconsider all his actions regarding the ASESRO office, including reversing his termination, the dismantling of ASESRO's oversight effectiveness, the persecution of all ASESRO staff members and the misappropriation of grant-funded assets for general government purposes. "This will allow us to get on with the business of creating a better American Samoa for all citizens and inhabitants," he concluded.

Copies of the letter were forwarded to the US Vice President (ARRA Oversight Role), Chairman of the Recovery Accountability and Transparency Board (RATB), the Office of Inspector General of the US Department of Interior, Congressman Faleomavaega Eni Hunkin, the appropriate officials of the US Departments of Education and Treasury, the ASG Attorney General, and the Treasurer of American Samoa.

RESPONSE FROM THE GOVERNOR’S LEGAL COUNSEL

In an email reply to Samoa News inquiries about the letter, the Governor's Legal Counsel Steve Watson said he responded to Galea'i the morning after he received the letter, (Samoa News does not have a copy of Watson's response) and they advised Galea'i that the matter would be looked into, and any further response would be made after reviewing his concerns.

"That we will do, but it will be on our schedule, not Pat's," Watson said.

Galea'i wrote back to Watson in a January 28 letter to the letter Watson acknowledges.

He says the letter failed to address any of the issues he raised, and told Watson that the defunding of an oversight agency actively involved in researching potential violations was neither accidental nor coincidental. "That refusal to budget funds for ASESRO was orchestrated and spearheaded by legislative allies of then-candidate Moliga, including individuals (e.g. the Senate President) cited as being involved in the 1602 mess.”

"As you may recall, Lolo's allies, by refusing to show up at the Fono's investigative hearings, were able to prevent a quorum that might have settled these issues long ago. Having created the lack of funding, it is disingenuous to then pretend to be helpless in its face,” Galea'i wrote.

He went on to tell Watson that his memo "does not address the misappropriation of grant-funded assets or the very telling remarks made by the Governor's inner circle regarding me, ASESRO's mission, and staff." He added, "The core issue is the series of hasty, ill-advised actions taken by the new administration to quash the 1602 investigation and punish not only those involved (who were responding to a request from a federal oversight body), but every single employee of that agency, no matter how uninvolved."

Galea'i clarified that ASESRO was not closed, despite the lack of funding but instead, incorporated into the ASG Treasury, with the ASG Treasurer being named as ASESRO executive director by Executive Order. "It would behoove the administration to immediately walk back the steps taken to persecute those belonging to the whistleblowing agency, as already requested. Anything less would be a direct violation of the whistleblower protection afforded us by the ARRA and other federal regulations," he said.

He concluded, "We're all familiar with the phrase: 'It's not the scandal; it's the cover-up!' In this case, that certainly seems to apply."

Copies of Galea'i's letter were forwarded to Governor Lolo Moliga and Human Resources director Le'i Sonny Thompson.

Governor Lolo's special assistant Iulogologo told Samoa News via email over the weekend that the decision to let go of the ASESRO staff was based purely on the Fono's denial of the budget proposed in the FY 2013 budget.

"This was not an easy decision but the Governor's Office's fiscal year 2013 budget was cut by $500,000 reflecting funds for ASESRO and the IT Office Governor Togiola had created," Iulogologo explained. He added that $350,000 of the current budget was spent to cover the payouts for the Governor, Lieutenant Governor, and members of the Governor's staff.

According to Iulogologo, some payouts were also paid through direct payment vouchers which didn't go through the regular government payroll system and they fear that the amount might be close to $500,000. He explained that more expenditures are coming in for the hosting of the Ulu Festival and other government ceremonies hosted by the Governor's Office towards the end of the previous administration. "These unexpected expenditures preempt any strategy to seek funding to maintain ASESRO and IT personnel," Iulogologo said, adding that there were no more ARRA funds to address the expenditure needs of ASESRO and the ASG is now liable to cover expenditures of uncompleted ARRA projects because ASESRO failed to drawn down the funds prior to the deadline.

The governor’s special assistant said this could cost the ASG a minimum of $1 million in local revenues, which the government doesn't have at this time. He said Galea'i was not terminated by the Governor's Office but he is a career service employee and was told to report to the Department of Commerce since his salary came out of that agency's budget.

Iulogologo explained that ASESRO was a line agency within the Governor's Office so naturally, all the ASESRO assets are under the administrative purview of the Governor's Office and are being utilized by the same. He says that claims by Galea'i that he is a victim of being a whistleblower is unfounded.

"This was purely a financial decision," Iulogologo said, adding that Galea'i's rights as a career service employee of the ASG have been preserved and protected. Iulogologo said the Office of Federal Grants within the Governor's Office is still functioning as created by Executive Order.

Samoa News understands that letters of termination to employees of the ASESRO are to be delivered today, citing lack of funds. Unlike Galea’i, other employees of the office are appointees.



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