Cpt. Wally: Marisco lawsuit could have been avoided


Former Port Administration contractor Wallace Thompson claims ASG lost out on a chance to pay only $300,000 to Marisco Ltd., and was a ‘whistle blower’ — when the Port Administration tried to circumvent federal regulations concerning safety issues.

Thompson, who made the public statements during a Senate Investigative Committee hearing last week, also alleges that Port Administration lacks “professional personnel”.

The SIC is currently looking into the tugboat and barges project funded by ASG’s $20 million loan from the ASG Employees Retirement Fund. Thompson was involved as a consultant and advisor to ASG on marine issues and was a part of the Task Force for the project.

Thompson told the SIC that after 15 years with ASG/Port Administration, his contract was terminated in the midst of his advisory and consulting service for the tugboat and barges project — and to this date, there has been no sufficient explanation for the termination of his contract.


Responding to SIC questions, Thompson shared his concerns on safety issues when it comes to ASG complying with federal regulations, and also admitted he has been a “whistle blower” for safety violations, when it comes to operation of ASG vessels.

“But all the blowing of the whistle was for safety issues,” he said and gave an example, which occurred about three months ago, when the MV Sili was going to Manu’a with 100 passengers and hazardous cargo, gasoline.

“I blew the whistle with the Coast Guard. You can’t do that. The Coast Guard inspector came down, they stopped the boat from going. They gave them two choices — either you take the passengers off, or you make the trip to Manu’a without the gasoline,” he said, adding Port complyied with the Coast Guard.

“What I’m seeing with the Port Administration right now [is] they are circumventing Coast Guard regulations,” he said and cited another example of his whistle blowing, when the tug boat Sailele went to Manu’a and hit the reef.

“It wasn’t reported. I blew the whistle on that. The Coast Guard ended up fining the captain of the Sailele and gave a civil fine to the Port Administration.”

“I think it’s time to show some professionalism with the Port. When I worked as a consultant [at Port] for the last 15-years, I never experienced anything like this, and I was on three [ASG] task forces,” he said and reiterated to the SIC his blowing the whistle on safety issues has nothing to do with his contract being terminated.


He also told the SIC that when the task force on the tugboat and barges was established, he wrote to Port Director Matagi Ray McMoore saying “you’ve got to have more professional people on board.”

“The task force members were Thompson, Matagi, Fanene So’oto, who was special advisor to the port director, Terry Conden, a marine engineer and me as a captain and advisor.”

Thompson said he suggested that Silila Patane — the Harbor Master — be a member of the task force because “Silila has a wealth of information... has been with the Port for over 30 years and has been involved in previous ASG purchases on boats. The guy is a professional pilot and yet we didn’t get him [on the task force],” he said.

Thompson further claims some on the task force made their own decisions and didn’t confide with others on the task force.

For example, the vehicles that were purchased in Honolulu — some of them came on the barges and “I think several vehicles came via air freight. Who signed on the receiving order?” he asked and told the SIC that when he questioned this issue, he was told “Captain Wally, it’s none of your business. You don’t work for the government.”

“So it’s like I said... if it’s something that I see wrong, I’m going to blow the whistle,” said Thompson — whose testimony was greatly appreciated by the SIC members including Sen. Fuata Dr. Tagiilima Iatala, who stated, “we appreciate your openness to the SIC.”


Sen. Mauga T. Asuega raised several questions with the witness, including a professional opinion on the refurbishment work on the tugboat Sailele. Mauga also asked if the over run in this project of just over $800,000 could have been avoided; and if Marisco charges were reasonable or excessive.

Thompson explain the tugboat Sailele was built in 1962 and with the work done by Marisco, the tugboat will last for another 10-years “provided that ASG maintains the tugboat.” He alleges ASG is not doing a good job in maintaining its fleet.

“For the amount of work that they did, I think it was reasonable. Marisco had done all the government boats before and we didn't’ have any problems with any of the vessels that we brought down here,” he said.

Thompson also said he traveled to Honolulu to find out from Marisco what was holding up the tugboat and barges, and he was told by Marisco ASG had not paid the rest of their invoices. He said Marisco provided copies of the invoices, which were brought back to the territory and reviewed here by himself, Matagi, another port official and the governor’s special advisor on fishery and marine matters, Carlos Sanchez.

The discrepancy found was that Marisco had charged ASG about $100,000 in Hawai’i state tax and this issue was then taken up with Marisco during a follow-up meeting in Honolulu.

Marisco was told ASG shouldn’t be charged for this amount and Marisco said, ‘that’s not a problem”. The company then requested that ASG submit a letter saying that the territorial government is exempt from state of Hawaii taxes, and the $100,000 would be deducted, he explained.

They then went to see the governor, who was told about the overrun of $800,000 “and the governor was so upset,” said Thompson, adding the governor told the task force to “fix this mess” and “get us out of this mess”.

A couple of days later, the task force returned to Honolulu but before they left, Thompson said, the governor provided a letter stating that Sanchez is “the official marine representative for the governor and the government of American Samoa.”

“Whatever he (Sanchez) wants, whatever he negotiates, everything is in this letter, [and he] has the power of attorney, on behalf of ASG,” said Thompson. He said before they left for Honolulu, the governor told the task force that “if you can negotiate a deal, to bring the $800,000 down to $400,000, I’ll write a check to Marisco so we can get the tug and barges down here.”

According to Thompson, during the negotiation meeting in Honolulu, Sanchez did all the talking and one of the issues raised with Marisco was the $100,000 in taxes but again Marisco requested a letter to state ASG is exempted from such tax.

He said the task force was able to reduce the final amount down to $300,000 if ASG provided a letter that the local government is exempt from Hawai’i state taxes. “But to this day, they (ASG) never submitted a letter to Marisco.”

“Two weeks later, I find out that Carlos went back over there and told Marisco, ‘the government don’t like the numbers.’ And I guess Marisco was so upset with that decision they chased him out of the office. And it went back to $800,000... [resulting in] this lawsuit,” he claimed.

“We had an opportunity... to bring that $800,000 a year and half ago down to $300,000, [but] we dropped the ball,” he told SIC. “All these mistakes are uncalled for,” he said and again stated “we don’t have enough professionalism at the Port.”


“I really think the governor is getting some bad advice,” he said and noted that when his contract was terminated without any explanation he sought an audience with the governor without success. He also tried to get a meeting with Matagi, but to no avail.

He said no one gave him an explanation for the termination of his contract so he had no choice but to retain a lawyer for legal action.


The SIC is holding another hearing today on the tugboat and barges project, with Sanchez confirming his appearance before the committee at 1 p.m.

Samoa News was told by Sanchez, via telephone yesterday, he is looking forward to testifying before the SIC committee, especially on the over runs that are ‘documented’ expenses.

In his testimony before the SIC, and reported in Monday’s Samoa News edition, Thompson pointed out that the problem with the Marisco print-out of the expenses was that a lot of these expenses had not been earmarked for the project, and he characterized many as a “waste of money”.

Sanchez said, Captain Wally was a part of that problem.

At this time, it is unknown who the other witnesses will be and when they will appear.


Comment Here