Pago Pago, AMERICAN SAMOA — A Complaint for Declaratory Judgment was filed in the Trivial Division of the High Court of American Samoa this week by three House Representatives named as plaintiffs, against the American Samoa Economic Development Authority (ASEDA).

At the center of the complaint is ASEDA’s interpretation through its 2015 enabling statute that it is exempt from the budgetary process — meaning it has the authority to not only seek funding, but also to use such funding for projects, all without Fono approval.

The plaintiffs are Reps. Larry S. Sanitoa, Andra T. Samoa, and Vesiai Poyer S. Samuelu, representing Tualauta District #15; Fofo District #13; and Pago Pago District #9, respectively.

Private attorney Thomas Jones of Thomas B. Jones and Associates represent the trio.

FACTUAL ALLEGATION

According to the complaint, Title 11 Chapter 19 of the American Samoa Code Annotated (ASCA) created ASEDA in 1986. In the intervening years, ASEDA went unused and it wasn’t until August 2013 that the governor re-constituted ASEDA with the appointment of 9 new members to the Board of Directors, including 2 from the Legislature.

In 2015, Title 11 Chapter 19 of the A.S.C.A. was amended to allow ASEDA to issue general obligation bonds.

Since the amendment, ASEDA has issued two series of bonds, most recently the General Revenue Bonds, Series 2018, that authorized the issuance of over $50 million in general obligation bonds, and pledged the full faith and credit of the American Samoa Government (ASG) as collateral for the bonds.

The complaint points out that despite repeated requests to have ASEDA seek Fono approval for the appropriation of the General Revenue Bonds, Series 2018 funds, ASEDA has refused such request, and has expressly relied on the interpretation that the initial bond legislation, approved in 2015, gave its Board the authority to seek funding through the sale of bonds to implement projects of their choosing.

However, the complaint says that Article II, Section I of American Samoa Constitution states that “the Legislature shall have authority to pass legislation with respect to subjects of local application except that ... Legislation involving the expenditure of funds other than budgeted shall include revenue measures to provide the needed funds.”

According to the complaint, it is self-evident that the Fono has the obligation and duty to appropriate funds for the “general welfare” of the American Samoa people, and that responsibility is codified in The Budget Procedure Act- A.S.C.A 10.0501 that was established to create a “comprehensive system for territorial program and financial management which furthers the capacity of the Governor and Legislature to plan and finance the services which they determine the territory will provide its people.”

As part of the comprehensive system, the complaint points out, the Legislature is required to: (1) consider the program and financial plan recommended by the Governor, including proposed goals and policies, recommended budget, revenue proposals, and proposed long-range program plans; (2) adopt programs and alternatives to the plan recommended by the Governor as it deems appropriate; (3) adopt legislation to authorize the implementation of a comprehensive program and financial plan; and (4) provide for a review of program accomplishments and execution of legislative policy direction.

As part of the comprehensive budgetary process, government departments and agencies, including ASEDA, are required to provide program and financial information to the Legislature/ Fono.

The complaint notes that ASEDA’s enabling statute does not exempt ASEDA from the budgetary process; nor does it limit the Fono’s obligation to oversee and approve the agency’s proposed programs and financial plans.

Despite this uncontroverted fact, say the plaintiffs, ASEDA has refused to submit to the budgetary process required by A.S.C.A 10.0501, which requires that a proposed financial plan for the Bond monies obtained through the issuance the General Revenue Bonds, Series 2018 be submitted to the governor and the Fono for approval.

In making this mistaken analysis, ASEDA relies entirely on an overly broad interpretation of its enabling statue, which states, “the Authority may issue its bonds hereunder from time to time without further authorization from the Legislature subject to the procedures and restrictions in this chapter.” A.S.C.A 11.1904 (a).

The plaintiffs claim that the interpretation suggested by the defendant would require the ASEDA enabling statute to be read in a Constitutional and Statutory vacuum, where they are not only authorized to issue bonds, but also authorized to appropriate those bond funds without oversight.

The plaintiffs say that error in ASEDA’s interpretation is further demonstrated by the fact that prior to the 2015 Amendment of the ASEDA statute, general obligation bonds could only have been obtained through the American Samoa Finance Committee, according to A.S.C.A 11.3001— which to the plaintiffs’ knowledge has not been repealed or amended — “applies to all bonds, notes, and other evidence of indebtedness of the ASG authorized by the Legislature.”

The plaintiffs argue that ASEDA has claimed that it is specifically authorized to issue bonds by the Fono, as such all bonds issued by ASEDA would fall under the requirement of A.S.C.A 11.3001, which requires that the amount and purpose of each bond issuance is authorized by the Legislature and limits the use of the bond’s proceeds to the purposes specified in the general statute or special act authorizing the issuance of such bonds.

Therefore, the plaintiffs request the court to:

(a)         Grant plaintiffs Declaratory Relief, recognizing that ADEDA must comply with the Budget Procedure Act, and submit a revised financial plan for approval by the Fono;

(b)         Grant plaintiffs Declaratory Relief, recognizing that ASEDA does not have the authority to appropriate Bond funds collected in the name of ASG without approval of the Fono; and,

(c)          Award plaintiffs such other and further relief as this court may deem proper.

The court is yet to set a hearing date for the matter.