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Lemanu responds to GAO report: ASG has a strategic financial plan

Lt. Gov. Lemanu Sialega Palepoi Mauga, who is also the acting governor

Says USDOI funding is not enough; but acting Governor Lemanu Sialega Palepoi Mauga says ASG has embarked on a strategic financial plan for use of public issued debt, to, among other things, maximize the use of local funds to “broadly address our capital project needs.”

Lemanu made the comments in his response letter included in the US Government Accountability Office (GAO) report made public last Friday to the US Congress, which notes that American Samoa’s public debt increased by more than $120 million between fiscal years 2015 and 2017. (See Monday’s edition for details.)


In his letter, Lemanu said ASG “has a duty to provide public goods and services to our people so the private sector can flourish with reciprocal improvement to the quality of their lives.”

He said that while American Samoa is grateful to the US Department of Interior for providing $10 million annually towards capital projects — such as roads, public utilities, port and airport facilities, and other physical infrastructure — this funding is “woefully insufficient” to pay for all required capital needs.

“Our government has embarked on a strategic financial plan inclusive of the use of public issued debt to not only supplement but maximize the use of local funds to advantageously and broadly address our capital needs,” Lemanu wrote.

“Our financial plan also includes public-private partnerships propelled” by new federal incentive programs such as the New Market Tax Credit, Opportunity Zones, and other operating strategies such as power purchase agreements, he added.

According to Lemanu, ASG will continue to vigilantly balance the needs of the territory with financial constraints.

“Our commitment to be fiscally responsible cannot be overstated or underscored,” he said. “We will never issue new debt without identifying the long-term repayment source to fully liquidate any debt to its maturity.”


Lemanu reminds GAO and Congress that the local economy “is narrow and fragile” as it is solely dependent on the fishing industry and ASG, which also heavily depends on this one economic pillar — the cannery.

He explained that the administration has determined to use public debt to create additional opportunities “to expand and to diversify our economy.” And this has included establishing the ASG Territorial Bank of American Samoa with the long term goal to transition this bank to the private sector.

Additionally, the territory has issued bonds to invest in building high-speed broadband capacity to the islands.

Lemanu notes that this investment “significantly shores up the territory’s economic environment which not only improves local business operations but also attracts the attention of mainland businesses who want to do business in the Pacific under US law.”

“Our administration is committed to fiscal responsibility and it neither is unafraid nor will it side step making difficult decision,” he said, noting for example that in 2018, due to project revenue shortfalls, a reduction of work hours for ASG employees was implemented for months.

Regarding the rising level of unfunded liability of the ASG pension plan, cited by GAO, Lemanu said actions are being taken with the introduction of legislation to increase employee contributions and others. “While these measures are socially and economically painful decisions, they had to be made,” he said.


Lemanu said US government policies are impacting canned tuna fish and other fish related products destined for the US market.

Example of policies include: withdrawal of federal incentives, automatic imposition of federal minimum wage hikes, prohibition of fishing in high seas by the US National Oceanic and Atmospheric Administration, “grossly insensitive enforcement” of US Coast Guard rules and regulations, and stiff competition from foreign low wage canned tuna fish producing foreign countries.

The “potential eminent loss of StarKist Samoa attributed to the above enumerated factors will cause American Samoa to emulate the financial crisis being experienced” by the territories of Puerto Rico and the US Virgin Islands, he said.

“American Samoa will be at the federal government’s doorstep requesting a bailout, if our remaining fish cannery, StarKist, is forced to relocate its facilities to a low wage canned tuna fish producing country,” Lemanu continued.

He said American Samoa has struggled for a very long time to diversify its economy by developing the tourism industry. However, these efforts have been an “exercise in futility” because of the basic component of the tourism infrastructure system — air transportation.

He said federal “cabotage law” created a monopolistic air transportation environment and “placed American Samoa in a hostage situation, subjecting visitors and residents alike to the payment of exorbitant airfares” with two weekly flights, except for the summer and Christmas holidays.

Samoa News notes that federal cabotage covers flights to and from the US, currently provided by Hawaiian Airlines.


Lemanu made clear that ASG will continue to provide a conducive business climate to foster private sector success so our people can access opportunities to improve their quality of lives by lifting themselves and their families out of poverty.

He also said it’s “abundantly clear” that the territory’s future is directly affected by policies issued by the US Congress and enforced by the federal government.

“We recognize that our needs are dwarfed and overshadowed by the needs of the 50 states, thus we are aggressively and feverishly struggling to assume responsibility for the needs of our people through the exploration of other financial options,” Lemanu wrote.

At the same time, he said, ASG will reach out to the feds to straighten and to affectively affirm partnerships dedicated to establishing a pathway aided by federal incentives, proactive federal policies, and financial investment which will finally fulfill the US political vision for American Samoa, articulated by USDOI, “of full self-reliance and economic self-sufficiency”.