House Reps fight ASEDA use of bond proceeds without Fono approval
Pago Pago, AMERICAN SAMOA — Three House Representatives filed their opposition motion to the Trial Division of the High Court of American Samoa last week in response to the American Samoa Economic Development Authority’s (ASEDA) motion to dismiss a complaint by the three over the use of proceeds of the 2018 Bond Series, without Fono approval.
Representatives Larry Sanitoa, Andra Samoa and Vesiai Poyer Samuelu, are the plaintiffs in this matter, while ASEDA is named as the defendant.
The plaintiffs state that the dismissal of an action before evidence is heard or discovery is attempted — is a drastic measure. They say the burden of providing the absence of a claim rests on the party seeking dismissal, not on the plaintiffs.
They note that in evaluating a motion to dismiss, the court must assume that the allegation in the complaint is true, and when a plaintiff alleges facts, which could, if proved at trial, warrant relief — its complaint should stand.
COURT RETAINS SUBJECT MATTER JURISDICTION; PLAINTIFFS HAVE LEGISLATIVE STANDING
There is no doubt that the House or Senate may maintain a suit against the executive branch in the proper circumstances. This capacity has also been recognized by the United States Federal Courts.
The three requirements that a plaintiff must demonstrate in order to establish standing are; (1) an injury in fact; (2) caused by the subject of the suit; and, (3) that can be redressed by the court.
“In evaluating standing, a court must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party. If needed, a court may also look beyond the pleadings themselves,” the motion says.
In the present case, defendant argues that plaintiffs lack standing because they have not fully alleged that defendant’s actions have diluted the power of their votes. In making this argument, defendant takes the narrowest possible view of plaintiffs’ allegations.
Plaintiffs have alleged that defendant is violating the Budget Procedures Acts (A.S.C.A 10.0501) — it is one of the primary mechanisms by which the Fono asserts its legislative authority over the appropriation of funds, and how it acts as a check and balance on the Executive Branch.
Under the Budget Procedures Act, the Fono has an obligation 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.
The plaintiffs state that defendant has taken it upon itself to deny plaintiffs their ability to fulfill their obligation under the Budget Procedures Act. They have independently acquired funds through the issuance of Bonds, and then appropriated those funds denying plaintiffs right and obligation to appropriate those funds through the budgetary process.
“By refusing to submit to the budgetary process, defendant has completely nullified plaintiffs votes,” the motion states.
The motion further states that defendant argues that if plaintiffs have been injured, it is the Fono and not ASEDA that injured the plaintiffs.
Defendant states that the Fono has given it the broad discretion to obtain and expend Bond monies as it sees fit without any legislative oversight.
Plaintiffs say the Fono did not choose to exempt ASEDA from the Budget Procedures Act, nor is there any mention of an exemption from any American Samoa Law or Regulations within ASEDA’s enabling statute.
The defendant argued in their motion to dismiss that plaintiffs lack standing because the court can provide no relief as the Bonds have already been issued, and substantial portions of the Bond Proceeds have already been spent.
Plaintiffs respond that while it is true that the fiscal year has ended and much of the Series 2018 Bond proceeds have been spent, there is still a substantial amount of un-appropriated money.
Of the more that $50Million in proceeds obtained through the issuance of the Series 2018 Bonds, approximately $15Million earmarked by ASEDA for expenditure on the new Fono building remains unspent and approximately $5Million in reserve debt service funds remains un-appropriated.
Almost half of the Series 2018 Bond proceeds therefore remain unspent and subject to appropriation through the Budget. Further, there is nothing preventing ASEDA from submitting a supplemental budget, which would appropriate the funds previously spend. This same type of procedure occurred with the renovations to the prison where renovations began prior to Fono approval during a recent special session.
Plaintiffs also say that if defendant’s argument was valid, that the Series 2018 Bond proceeds cannot be subject to the Budget Process, the dispute between the Fono and the Executive still smolders and this case clearly falls into the exception of the mootness rules.
THE STATUE OF LIMITATION CITED IS INAPPLICABLE
Defendants have argued that plaintiffs’ claims are untimely, in that they fall outside the 20-day window for objection to the issuance of the Bonds. However, plaintiffs note they are not challenging the issuance of the Bonds, but are challenging the appropriate procedures followed by ASEDA.
Specially, plaintiffs are challenging ASEDA’s assertion that it is not subject to the Budget Procedures Act. “Defendant continues to focus solely on the Series 2018 Bond issuance as the disease, of which we are seeking to cure.”
Defendants have asserted that plaintiffs have failed to state a claim because in ASEDA’s review the Legislature has given them authority to obtain and expend bonds with impunity; that all bond proceeds are exempt from the Budgetary Process, motion states. “This argument cuts to the heart of plaintiffs’ complaint; that there is an acute difference of opinions as to the statutory obligation and authority vested in ASEDA.”
The plaintiffs state that the only way to resolve this conflict is through a Declaratory Judgment. To bring declaratory relief actions, “the test generally is the relative certainly that litigation will eventually follow if declaratory relief is not granted.”
The Fono will be coming back into session in January and preparation for the next fiscal year will begin in earnest, the plaintiffs point out. “If ASEDA is to fully comply with its budgetary obligations for the new fiscal year, a ruling must occur prior to the deadline for budget submissions.”
The motion points out “this conflict is ongoing and is ripe for judicial review. The issue of ASEDA’s statutory obligation and authority is an ongoing concern.”