Former ASESRO staffer sounds alarm for "potential destruction of evidence"
Grants coordinator for the American Samoa Economic Stimulus and Recovery Office (ASESRO) Peter James has written a letter to ASG Treasurer Falema'o Pili regarding what he calls the "potential destruction of evidence in an on-going federal investigation."
James said he hand delivered the letter to Falema'o on Sunday. He was handed a termination letter late Monday morning, along with other ASESRO employees.
In a copy of his letter, obtained by Samoa News, James points to an ongoing investigation by the US Treasury Department's Office of Inspector General (OIG) and says potential evidence "either has been or is about to be destroyed." James wrote he is compelled by professional ethics to make responsible individuals in the American Samoa Government aware of the situation.
According to James, last Friday at about 3:30p.m., he was in the ASESRO office on the third floor of the EOB when workers from the Treasury's IT department told ASESRO employees that they were instructed by Falema'o to confiscate all ASESRO computers and have their hard drives re-formatted. James said the IT representatives said that if anyone had a problem, they should contact Falema'o.
James said he immediately went to Falema'o's office to speak with him but was told the Treasurer was not available and that he would not be permitted to see him. Later that afternoon, after all the computers had been removed, James says he was finally able to speak to Falema'o, who told him that he had "very specific direct orders to do that."
"My only interest in the matter is to help you and any other ASG employees involved to avoid potential problems arising from such actions," James wrote to Falema'o. "Because, at the request of the US Treasury's OIG, ASESRO was involved in gathering information from the Development Bank of American Samoa pertaining to the Section 1602 Program, and because information gathered pursuant to those instructions resides on several of the affected ASESRO computers, reformatting those hard drives can cause such information to be destroyed.”
James continued, “It is my understanding that such actions may expose the involved individuals to liability, to the extent that data relevant to the investigation is lost as a result. I would recommend checking with US Treasury OIG before proceeding with this course of action, especially since it was recently reported on the local news that OIG has been in touch with DBAS regarding the 1602 Program.”
Copies of James's letter were forwarded to Gov. Lolo M. Moliga, Lt. Gov. Lemanu P. Mauga, Attorney General Afoa S. Lutu, Police Commissioner William Haleck, the Governor's chief legal counsel Steve Watson, Kirk Aab of the AS Treasury Department, and the US Treasury's OIG.
James, in a phone interview, told Samoa News that some of the information stored in the computers include data on all projects funded by the American Recovery and Reinvestment Act (ARRA), which includes the Section 1602 grant program administered by the Development Bank of American Samoa.
James said when their computers were being confiscated, he thought it was “odd” that they would reformat the computers, as aside from the data stored in them, there was very expensive software programs installed in the computers. Interestingly enough, James says the computer used by the ASESRO executive director Pat Galea'i was taken away long before Friday.
James, along with every other ASESRO employee, was served termination letters late Monday afternoon. This came after Governor Lolo, in his first Executive Order upon taking office, called for the removal of ASESRO executive director Pat Galea'i and moving ASESRO under the umbrella of the ASG Treasury Department.
(Galea'i is the only career service employee that worked for ASESRO, and he has since been told to report to the Department of Commerce, as that is the funding source for his salary.)
In their termination letters, ASESRO employees were told that they were being terminated because of the lack of funds. The letters were issued by Human Resources director Le'i Sonny Thompson.
According to James's termination letter, "efforts to place him in other areas at this time have been unsuccessful" and all avenues have been "exhausted". James was assured that his name will be placed on the re-employment roster for employment consideration once vacancies become available.
In responding to Samoa News questions, James said he moved to the territory over two years ago as a contract worker after former Territorial Auditor Bob Dantini conducted an audit of the ARRA programs and identified some gaps in the process. Dantini requested then Gov. Togiola Tulafono bring in someone with an accounting background and the job was advertised off-island. James applied and was hired.
At first, James's contract was only for a year, but it was extended. His current extension doesn't expire until the end of this month. As part of his contract, he is to receive a housing allowance and the use of an automobile. According to James, the government has not paid his housing allowance since June last year. He claims that he had to pay out of pocket for some travel and to date, the American Samoa Government owes him about $11,000.
He said when he inquired about the debt, he was told that there wasn’t enough money to pay for the expenses. He said his rent was paid up until May 2012, at which time the Attorney General's Office said James would have to pay for his own rent and be reimbursed later. James said he was content with the plan, but it's been nine months and he still hasn't been reimbursed.
He said Galea'i was trying to get a supplemental budget to cover the expenses for ASESRO but nothing ever went through.
James said that what happened last Friday is a violation of federal laws and regulations under the cost allowability provisions of OMB Circular A-87 (Item 19, General Government), as grant-funded assets were commandeered for use by the Governor's Office.
(Grant-funded assets include office furniture, vehicles, and other equipment. The prescribed process has been ignored, as there were no signed property transfer forms.)
He said a locksmith was on site to change the office locks and they were told that the keys would be with the Treasurer's secretary. He said on Monday morning, they retrieved the key from the secretary and they were let in to the office to collect their personal belongings.
Samoa News asked James, “So, what caused all this?” He said it all started when the feds granted the money for the Section 1602 program, which came from ARRA funds. This meant ASESRO was the responsible reporting agency as the program fell under their watch.
Because of the involvement of ARRA funds, the DBAS president at the time, Governor Lolo, agreed with Pat Galeai that they would jointly develop a process to award the funds and ensure that everything was taken care of correctly.
James said however somewhere down the line, DBAS went ahead and started awarding projects without letting ASESRO know, claiming that they couldn't get a hold of Galea’i when they tried to contact him.
James said this led to some irregularities, with the discovery that some board members had approved loans for themselves, family members, and friends. The former ASESRO grant coordinator said some applicants with high scores who qualified for loans were denied, while those with low scores got approved; and added that some people who were approved and awarded loans didn't even apply for loans.
When rumors started circulating in the community about questionable loan awards, James said that's when Galeai assigned ASESRO workers to look into the DBAS records. It’s also when they were denied access to the records by DBAS employees and he couldn't understand why, as the executive order that created ASESRO tasked them with oversight of ARRA funds.
As a result, Galea’i informed the federal government that ASESRO staff was not able to review DBAS records so drawdowns for Section 1602 funds were halted until ASESRO was able to verify documents from DBAS. At that point, any drawdown had to go through ASESRO for approval before any money could be disbursed. James said, per a request from the US Treasury Department, they started putting together a preliminary report and it was then that DBAS allowed them limited access to some of the records.
Before the preliminary report was issued, a letter to Galea’i from a staff member was leaked to the press and a snowball effect took place. The document, although discredited by ASESRO, caused personal embarrassment and damage to former DBAS President Lolo, who was then campaigning for Governor.
The prelim report also refers to the Senate President (who is also a DBAS board member) by title, not by name, and James says the end result was the ASESRO budget being denied.
James and Galea’i agree that before the unauthorized leak, ASESRO never had any problems with the Fono and was generally considered a model agency with a stellar reputation.
He said when their budget was denied, Governor Togiola kept the office open until the end of his term "because he knew there was work that needed to be done."
James said. "Under requirements of ARRA, there were certain obligations that needed to be done and there is no other office that can do it," he continued, adding that ASG accepted the money and therefore, there are strict guidelines that needed to be followed.
He said even before the executive order was issued dismantling ASESRO, the Governor's Office had already stripped ASESRO of their cars and computers, including the vehicle he was using, which he was entitled to under his contract.
"Grant funded equipment has to be used for grant purposes," he said, adding that all equipment was bought with ARRA money. He said ASESRO had one vehicle that was purchased with local funds and ironically, that vehicle was an older one and was not confiscated. "The one vehicle they legally could have confiscated wasn't taken," James said.
He claims that all the furnishings from their conference room, including tables and chairs, are now in the Governor's conference room.
Altogether, James says ASESRO had a total of 7 cars but he doesn't know if they are all with the Treasury Department or if some have been handed over for use by the Governor's Office.
James said ASESRO still needs to carry out important projects like gathering information and preparing a final report once the 1602 program comes to an end this year. The final report is to be given to the OIG.
He said everything related to ARRA money has to be filed because of federal requirements, and he is curious how they are going to file the next quarterly Section 1602 report, which is due the first week of April, as, to his knowledge, nobody has come by to ask them how to file the report, what website to go to, and what the password is.
Unconfirmed reports say the US Treasury officials conducting a review of the Section 1602 program are arriving this week.
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