SAMOAN WHITE-COLLAR CRIME 

HEARING 

BEFORE THE 

SUBCOMMITTEE OX NATf\.~ .. tLviERICA_ ... \ 

AXD IXSULAR A_PF AIRS 

OF THE 

COMlVHTTEE ON RESOURCES 

1-IOUSE OF REPRESEN'rATIVES 

ONE HUNDRED FOURTH CONGRESS 

FIRST SESSION 

ON 

THE DEPARTMENT OF JUSTICE REPORT ON AMERICAN SAMOA WHITE-COLLAR CRIME ASSESSMENT 

WHICH HIGHLIGHTS SOl\'IE SERIOUS PROBLEMS AND 

SUGGESTS POSSIBLE RESOLUTIONS 

20-369cc 

AUGUST 3, 1995-WASHINGTON, DC 

Serial No. 104-50 

Printed for the use of the Committee on Resources 

U.S. GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1996 

For sale by the U.S. Govcnunent Printing Orticc 

Superi ntendent of Do{.·umcnts. Congressional Sales Office, Wi.lshington. DC 20402 

ISB N 0 - 16- 0 52335 -4 
COMMITTEE ON RESOURCES 

DON YOUNG, Alaska, Chairman 

W.J. (BILLY) TAUZIN, Louisiana 

JAMES V HANSEN, Utah 

JIM SAXTON, New Jersey 

ELTON GALLEGLY, California 

JOHN L. DUNCAN, JR., Tennessee 

JOEL HEFLEY, Colorado 

JOHN T. DOOLITTLE, California 

WAYNE ALLARD, Colorado 

WAYNE T. GILCHREST, Maryland 

KEN CALVERT, California 

RICHARD W. POMBO, California 

PETER G. TORKILDSEN, Massachusetts 

J.D. HAYWORTH, Arizona 

FRAL'<K A. CREMEANS, Ohio 

BARBARA CUBIN Wyoming 

WES COOLEY, Oregon 

HELEN CHENOWETH, Idaho 

LINDA SMITH, Washington 

GEORGE P. RADANOVICH, California 

WALTER B. JONES, JR., North Carolina 

WILLIA...'\1 .:\1. rMAC) THORNBERRY, Texas 

RICHARD mOCJ HASTINGS, Washington 

.JACK METCALF, Washington 

JAiv!ES B. LONGLEY, JR., Maine 

,JOHN B. SHADEGG, Arizona 

.JOHN E. ENSIGN, Nevada 

GEORGE MILLER, California 

EDWARD J. MARKEY, Massachusetts 

NICK J. RAHALL II, West Virginia 

BRUCE F. VENTO, Minnesota 

DALE E. KILDEE, Michigan 

PAT WILLIAMS, Montana 

SAM GEJDENSON, Connecticut 

BILL RICHARDSON, New Mexico 

PETER A. DEFAZIO, Oregon 

ENI F.H. FALEOMAVAEGA, American 

Samoa 

TIM JOHNSON, South Dakota 

NEIL ABERCROMBIE, Hawaii 

GERRY E. STUDDS, Massachusetts 

SOLOMON P. ORTIZ, Texas 

OWEN B. PICKETT, Virginia 

FRANK PALLONE, JR., New Jersey 

CALVIN M. DOOLEY, California 

CARLOS A. ROMERO-BARCELO. Puerto 

Rico 

MAURICE D. HINCHEY, New York 

ROBERT A. UNDERWOOD, Guam 

SAM FARR, California 

PATRICK J. KENNEDY, Rhode Island 

DA-'iiEL VAL KISH, Chief of Staff 

DAVID DYE, Chief Counsel 

CHRISTI:--!E KENNEDY, Chief Clerk/Administrator 

,JOH:--1 LAWRE:--!CE, Democratic Staff Director 

SUBCOMMITTEE ON NATIVE AMERICAN AND INSULAR AFFAIRS 

ELTON GALLEGLY, California, Chairman 

DON YOUNG, Alaska 

WAYNE T. GILCHREST, Maryland 

WALTER B. JONES, JR., North Carolina 

RICHARD (DOC) HASTINGS, Washington 

JACK METCALF, Washington 

JA..lV!ES B. LONGLEY, JR., Maine 

EN! F.H. FALEOMAVAEGA, American 

Samoa 

DALE E. KILDEE, Michigan 

PAT WILLIAMS, Montana 

TIM JOHNSON, South Dakota 

CARLOS A. ROMERO-BARCELO, American 

Samoa 

ROBERT A. UNDERWOOD, Guam 

TIM GLIDDEN, Staff Director/Counsel 

T.E. Mk"'ASE MANSUR, Professional Staff 

MARIE HOWARD FABRIZIO, Democratic Professional Staff 

(II) 
CONTENTS 

Hearing held August 3, 1995 .. ...... ....... ........... ... ....... .. .... ............... ..... ............... .... . 

Statements of Members: 

Faleomavaega, Hon. Eni, a U.S. Delegate from American Samoa ........... .. . . Gallegly, Hon. Elton, a U.S. Representative from California, and Chair- man, Subcommittee on Native American and Insular Affairs ... ... ........... . 

Statements of witnesses: 

Ale, Savali Talavou, Speaker of the House of Representatives, American 

Samoa ..... ... .......................... ...... .. .. ........... ........... .. ..... ............ ....... ............... . Prepared statement ...... ......... ......... .... .. .... ...... ......... ... ....... ............ .. ... ...... . Coleman, Peter Tali, former Governor of American Samoa ...... ... .... .. ..... .. ... . 

Harwell, R. Wendell, Territorial Auditor ...................................................... . Prepared statement .................................................................................. . Lutali, A.P., Governor of American Samoa ...... ...................... .... .. ........... ...... . Richard, Mark, Deputy Assistant Attorney General, Criminal Division, Department of Justice ............. ... ............. ..................................... ...... ...... .. . . Prepared statement ...... ... ..................................................... ................. ... . Stayman, Allen P., Deputy Assistant Secretary for Territorial and International Affairs, Department of the Interior ............................ ................. . Prepared statement ...... ... .. .......... ......... ..... ....... ..... .. .................. ... ... .... ..... . Togafau, Malaetasi M., Attorney General, American Samoa ...... ...... .. .... ... .. 

Additional material supplied: 

American Samoa White-Collar Crime Assessment, dated December 1994 . Bill for an Act entitled: "An Act To Create the American Samoa Medical 

Center Authority as an agency of the Executive Branch of the Amer- ican Samoa Government, To Repeal Title 13, Chapters 1 and 2 ASCA, 

To Crreate a new Title 13, Chapter 01 and To Amend Title 13, Chapter 

06, ASCA." ....... .................................................... ........ ............................... .. . Responses to Questions: 

Department of Justice, Andrew Fois ..................... .............. .. .. ..... .. .. .. ... .. Office of Governor, A.P. Lutali .... ...... .. ..................... .... ... ..... ........ ... .... ... 92, President of Senate, Letuli Toloa .......................... .. ................... ............ .. Speaker of House of Representatives, Savali Talavou Ale .... .. ............. . Territorial Auditor, R. Wendell Harwell .......................... ....... ............... . Senate Bill No. 22-109, Legislature of American Samoa ..... ... .. ...... ... ...... .. .. Title 15, Public Utilities and Energy ...... .. .. ...... ............. ............ ..... ......... .... .. . 

Communications submitted: 

Gallegly, Hon. Elton: Letter with questions of September 13, 1995, to 

Hon. Letuli Toloa .... .......... .......... ...................... .................. ........ ..... ............ . Lutali, Gov. A.P.: Letter of November 20, 1995, to Hon. Bruce Babbitt (Dept. of Interior) ......... ....................................... .... ........... .... ................................... .. . Letter of November 20, 1995, to Hon. Janet Reno (Dept. of Justice) ... 

(III) 

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AMERICAN SAMOA WHITE-COLLAR CRIME 

THURSDAY, AUGUST 3, 1995 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON NATIVE 

AMERICAN AND INSULAR AFFAIRS, COMMITTEE ON RESOURCES 

Washington, DC. 

The subcommittee met, pursuant to call, at 1:25 p.m., in room 

1100, Longworth House Office Building, Hon. Elton Gallegly 

(Chairman of the Subcommittee) presiding. 

STATEMENT OF HON. ELTON GALLEGLY, A U.S. REPRESENTATIVE FROM CALIFORNIA; AND CHAIRMAN, SUBCOMMITTEE 

ON NATIVE AMERICAN AND INSULAR AFFAIRS 

Mr. GALLEGLY. I want to welcome our witnesses today. We know 

that they have traveled a great distance to share their views on the 

subject of today's hearing, the American Samoa White-Collar Crime 

Assessment was issued by the United States Department of Justice. At the conclusion of my statement, I will defer to the delegate 

to American Samoa to add his welcoming remarks to the current 

leaders of American Samoa. 

I also want to acknowledge and thank former Governor Peter 

Tali Coleman for volunteering to share his testimony via telephone 

conference from the Queens Medical Center in Honolulu, Hawaii, 

where he is recovering from surgery. This, I think, will be the first 

time a subcommittee or a full committee will receive live testimony 

telephonically, which is certainly warranted due to the importance 

of the subject of the hearing, and given Governor Coleman's extensive years as leader in American Samoa. 

The Administration is represented today by Mark M. Richard, 

Deputy Assistant Attorney General, Criminal Division of the Department of Justice, and Deputy Assistant Secretary for Territorial 

and International Affairs Allen Stayman of the Department of Interior. The Federal Bureau of Investigation and other components of 

the Department of Justice have devoted significant resources in assessing criminal activity in American Samoa. 

The American Samoa White-Collar Crime Assessment, which 

was only recently released, and is the basis for this hearing, highlights a number of serious problems and suggests possible solutions. 

This subcommittee and the full Committee on Resources has already taken steps to address certain problems raised by the Assessment through the enactment of H.R. 1332, which contains the 

American Samoa Economic Development Act. The legislation approved by the committee provides additional funding to American 

(1) 
2 

Samoa, which is automatically withheld if stringent Federal audit 

standards are not met. In addition, in order to use the funding for 

capital improvement projects, American Samoa is required to establish independently audited, semi-autonomous agencies for various areas of public utilities and infrastructure. We have worked 

closely with the Interior Department's Office of Inspector General 

to develop the legislative language to apply Federal audit standards and enforcement mechanisms. 

In addition to the solutions provided in H.R. 1332, additional legislation will be necessary to provide for the prosecution of Federal 

crimes in American Samoa. We have an obligation to the people of 

American Samoa, and to every U.S. taxpayer to ensure that the 

misuse of Federal funds is both prevented and when necessary, 

prosecuted. At the same time, I intend to look for the alternatives 

which will be compatible with our commitment to the people of 

American Samoa as provided for in the Deeds of Cession. 

I am confident that an appropriate legislative solution can be developed with the cooperation and input from the leaders of American Samoa. The Administration, and of course, the delegate, my 

good friend, Eni Faleomavaega, from American Samoa. 

The chair would now recognize my friend, the ranking member, 

minority member from American Samoa, Mr. Faleomavaega. 

STATEMENT OF HON. ENI FALEOMAVAEGA, A U.S. DELEGATE 

FROM AMERICAN SAMOA 

Mr. FALEOMAVAEGA. Mr. Chairman, thank you for holding this 

hearing on white-collar crime in American Samoa. I know you remain busy, and this week is an especially busy one for all of us. 

I want to welcome Governor Lutali; Speaker Savali Ale; President Pro Temp Lutu Tenari Fulmaono; our Attorney General, 

Malaetasi Togafau; our Territorial Auditor, Mr. Harwell, all from 

American Samoa at today's hearings. We appreciate, Mr. Chairman, your willingness-! am sorry, Governor, your willingness to 

travel 8,000 miles to testify before the subcommittee. It is not an 

easy trip, and your efforts on behalf of the people of American 

Samoa are sincerely appreciated. 

Acting Assistant Secretary Allen Stayman from the Department 

is also here with us. I certainly want to welcome him here. Finally, 

it is my understanding that the Department of Justice chose to 

send Deputy Assistant Attorney General Mark Richard to today's 

hearing, and I look forward to hearing his testimony. 

As we proceed into this hearing, Mr. Chairman, it is important 

to keep in mind that Governor Lutali recognized in 1993 that 

white-collar crime may have been a problem in American Samoa. 

He requested assistance from the Secretary of the Interior and the 

Department of Justice, and it was at his direction that the assessment team was formed with the cooperative efforts of the Governor 

and appropriate agencies of the local government. 

The report we are considering today is not what the Governor 

had in mind over two years ago when he wrote to the Secretary of 

the Interior, but here we are, and we are considering recommendations to the Justice Department assessment team, presumably with 

departmental recommendations to follow. 
3 

Mr. Chairman, I feel it is important to note that many of the 

findings of the assessment team report are not new. Audit report 

after audit report has pointed out the shortcomings in the internal 

controls of the local government's financial operations. As noted in 

the most recent report, allegations of white-collar crime have been 

reported by the local and national media. 

Issues such as the jurisdiction of Federal courts in Samoa have 

been debated for over 30 years now. For these 30 years, it has been 

the understanding of the leaders of the local government that ASG 

would work with the Department of the Interior in preparing recommendations on how and when it would be best to proceed. Now, 

all of a sudde::1, everyone is jumping as if these are new issues discovered by some miraculous investigative process. 

I remember years ago, Mr. Chairman, the Department of the Interior was considering a proposed bill introduced by one of our colleagues to authorize an appeals process from Samoa to the Federal 

District Court in Hawaii, and even to the Ninth Circuit Court of 

Appeals. I found out that the strongest supporters of this idea were 

our tuna canneries. I don't blame them because they have hundreds of millions of dollars of investment at stake in Samoa, and 

they want to make sure the interests of their corporate stockholders are protected. I certainly did not support the proposal for the 

simple reason that our leaders of the people were not ready to examine such a fundamental change. Except for the well-to-do, how 

can the average Samoan wage earner, who makes about $6,500 per 

year, possibly afford to defend himself in Federal court, let alone 

bring his grievance to court, when incomes are so low in Samoa. 

Another classic example of Federal intrusion without local support was an instance in which an American citizen years ago filed 

suit in the Federal district court here in Washington, D.C., by 

suing the person of the Secretary of the Interior, since the Secretary was the authorized overall administrative authority over 

Samoa. This citizen claimed he was being denied his constitutional 

right to due process, since Samoa's judicial system did not provide 

for criminal trials by jury. 

This is a classic example, Mr. Chairman, whereby our Samoan 

leaders testified before the Federal district court, we even had the 

celebrated Dr. Margaret Mead testifying. All told the judge the Samoan culture ties to families and friendships would make jury 

trials a very difficult situation. Well, guess what? By a stroke of 

the pen, Mr. Chairman, the Federal district court ruled Samoa will 

now have jury trials. 

This is not the sole source of the pain I feel, Mr. Chairman. The 

real source of the hurt is that the Interior and Justice Department 

attorneys who represented Samoa's interests in court never bothered to appeal the case to the Supreme Court. To this day, Mr. Chairman, Samoa has jury trials, and I suspect Samoa would have 

had a better chance in court if it had hired a private law finn rather than depended on the Interior Department for assistar,ce. 

I cannot help, Mr. Chairman, but note the irony that 20 years 

later, it is an assessment team of the same Departmen~ of Justice 

that complains how hard it is, even today, to pick an impartial jury 

in Samoa. 
4 

I want to make it clear, Mr. Chairman, that we are aware of the 

issues raised by the assessment team, and again, it was Governor 

Lutali who stepped forward and asked for assistance, and I commend the Governor for doing so. He asked for a prosecutor and investigators to prosecute violations of local law, not for a prosecutor 

and Federal investigators to write a report to be followed by a congressional hearing. 

What really bothers me, Mr. Chairman, not only how leaks of 

this report came about obviously by someone within the agency responsible for its publication, but to suggest and imply that the Samoan culture condones stealing and lying, and that to further suggest that corruption in government is an acceptable activity within 

the context of the Samoan culture is an insult to every Samoan 

who is present at this hearing, and I resent that very much. 

I also want to note that for years I have been raising the issues 

addressed in the report publicly and suggesting that a comprehensive Federal study commission, similar to those established for Native Americans and Native Hawaiians be established for Samoa as 

well. I never advocated a political status commission, but a study 

commission to thoroughly study the governing documents and what 

little history is available and report its findings to both the Samoan 

people and the Congress. 

Until the political relationship between Samoa and the United 

States is clearly defined, Mr. Chairman, a vacuum will exist, and 

it is more likely than not that it will be the Federal Government 

that will step in to fill that vacuum. I do believe this will not help 

plan for Samoa's future. 

I submit, Mr. Chairman, that neither the U.S. nor American 

Samoa needs a relationship based upon misunderstandings and 

misinterpretations, and I do not want to see a Federal intrusion in 

the process unless and until the Samoan people and its leadership 

determine the manner in which they wish to proceed now and in 

the future. But where does this leave the future of the Samoan people? What are their rights under the current relationship? In my 

view, Mr. Chairman, there clearly was a misunderstanding in the 

early part of this century in that there was no meeting of the 

minds between U.S. negotiators and the Samoan traditional leaders who signed these two basic documents. It remains my opinion 

that to proceed in an orderly manner, we need a comprehensive 

and independent study in which both the Federal and local governments participate. 

One of the recommendations the Justice Department made is 

that limited court jurisdiction be extended to Samoa. My fear is 

that the more the Federal Government gets involved with Samoa, 

the greater the danger that Samoan culture and traditions will be 

lost or severely compromised. 

I will not now, nor will I ever, support fundamental changes to 

this basic relationship taken on a piecemeal fashion. While some of 

the recommendations made by the assessment team may resolve an 

immediate need, an unintended consequence of these actions may 

be that in the long run, they destroy the very essence of Samoan 

culture and Samoa's unique land tenure system. 

The Congress is actually addressing another facet of this problem 

through legislation which will create, for the first time, to my 
5 

knowledge, a formal authorization for appropriations for future 

congressional funding for Samoa. H.R. 1332 and Senate Bill 638 

are the vehicles for this discussion. Part of the discussion is the 

need for the Department of the Interior to maintain an office which 

directly monitors Federal interests in American Samoa on a daily 

basis. 

As you know, Mr. Chairman, I support legislation that would terminate the Office of Territorial and International Affairs, and give 

the American Samoan government greater autonomy, while at the 

same time, make the local government accountable for the use of 

the Federal funds it receives from the Congress. 

Mr. Chairman, after 29 years of uncertainty-it was not until 

1929 the Congress officially then ratified the two documents joining 

the United States and the island groups of Tutuila and Manu' a into 

some form of a political union. The statute also vested in the President "all civil, judicial, and military powers necessary to govern 

American Samoa, until such time as Congress provided for a government of the islands." 

In 1984, out of concern that the Secretary of the Interior was 

about to personally intervene for political purposes into the local 

election process in a partisan manner, Samoa's delegate to the 

House of Representatives spearheaded a legislative effort to foreclose that option. This 1984 law prohibits any change in the Revised Constitution of American Samoa unless Congress itself makes 

the change. 

But here is the problem, Mr. Chairman. This has only added 

more fuel to the fire in that if Congress were ever to examine the 

provisions of the territorial constitution approved by the Secretary 

of the Interior as it now is, Congress, in my opinion, would have 

simply to declare Samoa's constitution not in conformance with the 

Federal constitution, like all other territories' or states' constitutions. 

Mr. Chairman, these two Federal statutes are in conflict with 

one another, and one unintended consequence of the 1984 law is 

that the Secretary of the Interior now relies on the 1929 law when 

he wanted to take certain actions, and then relies on the 1984 law 

when he wishes to avoid responsibility to the Congress as well as 

to the Samoan government. 

I say this somewhat irreverently. The truth of the matter, Mr. 

Chairman, is that the 1984 law ties the Secretary's hands to a certain extent, although it is my opinion that his hands are not as tied 

as his solicitor's office claims. 

Lest my comments in opposition to Federal intrusion in Samoa's 

local affairs be misinterpreted, Mr. Chairman, let me state specifically that I am not supporting the status quo. The commission of 

white-collar crime in American Samoa is no more acceptable in 

Samoa than it is anywhere else in the United States. If some residents of Samoa are misusing Federal funds, they should be convicted and punished. If some of the residents in Samoa are not paying back loans made to them by Federal agencies, they should be 

compelled to do so. I am in agreement with the assessment team 

that these issues need attention, but I express my concern over the 

team's recommendations on how best to address these issues. 
6 

Mr. Chairman, I am not going to read the remaining part of my 

statement, but want to thank you for this opportunity to express 

my views on the matter, and I look forward and welcome the statements from our Governor, our Attorney General, and our Territorial Auditor. Thank you. 

Mr. GALLEGLY. At this time, we will introduce our first panel of 

witnesses, the Honorable A. P. Lutali, Governor of American 

Samoa; Mr. Malaetasi Togafau, the Attorney General for American 

Samoa; and Mr. Wendell Harwell, the Territorial Auditor for American Samoa. 

Let me remind the witnesses that under our committee rules, 

they must limit their oral statements to five minutes, but their entire statement will appear in the record. We will also allow the entire panel to testify before questioning the witnesses. 

The Chairman now recognizes the Honorable A.P. Lutali, Governor of American Samoa. Welcome, Governor. 

STATEMENT OF A. P. LUTALI, GOVERNOR OF AMERICAN 

SAMOA 

Mr. LlJTALI. Thank you, Mr. Chairman and honorable members 

of the committee. 

On behalf of the leaders and the people of American Samoa, I 

want to express our appreciation for the opportunity to appear 

today in this hearing on white-collar crime in American Samoa. 

With the subcommittee's permission, I will make a brief statement, and will then yield the floor to our Attorney General and our 

Territorial Auditor, who have day-to-day responsibility for enforcing accountability and preventing abuse of public funds. 

First, I want to emphasize that the White-Collar Crime Assessment by the Department of Justice was performed in response to 

my request for assistance from Justice and the FBI. I want this 

subcommittee to know that I welcome advice and support from 

Federal law enforcement authorities; however, I also recognize that 

primary responsibility for public integrity and accountability rests 

with our own local government. 

Second, you should know that our Attorney General, Malaetasi 

M. Togafau, has been actively and successfully prosecuting cases of 

public corruption over the more than two years which our administration has been in office. We are submitting documentation for the 

record which makes this clear. The statistics speak for themselves. 

Our government has, even with limited resources, actively investigated and prosecuted cases involving embezzlement, bad checks, 

fraud, bribery, corruption, and perjury. Many of the initiatives and 

reforms recommended by the Department of Justice have already 

been implemented. Our Attorney General is here today to provide 

further details and to respond to any questions you may have. 

Third, we realize that the first line of defense against public corruption lies in sound financial controls and a strong internal audit 

function. For this reason, one of my highest priorities when I took 

office in 1993 was to fill the position of Territorial Auditor with a 

person of demonstrable experience and objectivity. The auditor and 

his staff identified deficiencies and areas in which the government 

could save money. They recommended ways in which we could improve, and we acted on those recommendations. They recommended 
7 

that their audit findings be referred for prosecution, and we acted 

on those recommendations as well. 

These and other efforts demonstrate the seriousness of our commitment to improve accountability and discipline within government. I am pleased that Mr. Wendell Harwell, our Territorial Auditor, is here today to describe the work he has done and the work 

he is doing and to answer your questions. 

Fourth, I want to make it absolutely clear that nothing in the 

traditional Samoan values or culture condones or excuses the misappropriation of government funds or property. Our culture identifies dishonest conduct of this nature as criminal, and any suggestions to the contrary is unfounded and an insult to our people. 

In this respect, I would point out that the criminal jury system 

has functioned fairly and effectively in our territory for nearly 20 

years. In the constitutional litigation which brought jury trials to 

American Samoa, I testified in support of the ability of our people 

to deliver just verdicts based on evidence presented. Our subsequent experience with the jury system has demonstrated that Samoan custom and family loyalties do not prevent effective law enforcement. 

Finally, I would like to emphasize that the question of establishing Federal criminal jurisdiction in American Samoa is very complicated, and goes to the heart of the relationship with the United 

States. Any extension of Federal judicial authority should be narrowly limited so that it does not provide a vehicle for challenges 

to our traditional land tenure system. Before creating any new Federal court jurisdiction, the issue should be carefully examined by 

the relevant congressional committees and field hearings on the 

subject should be held in American Samoa. 

If the establishment of Federal jurisdiction in American Samoa 

is deemed necessary, I suggest, sir, that the Congress consider augmenting the jurisdiction of our High Court. While our High Court 

does not have Article III status, the Justices are appointed by the 

Federal Government. As a former Associate Judge of the High 

Court, I can assure you that the court has enjoyed a long history 

of respect and acceptance by our people. 

Whatever form of Federal jurisdiction is considered, it should 

provide for trials in American Samoa, not in Hawaii or on the 

Mainland. It would be fundamentally unfair to subject our people 

to the inconvenience and potential prejudice involved in off-island 

trials. If appeals into the Federal appellate system are allowed, 

cases from American Samoa should be heard in American Samoa. 

I note that the Federal Courts of Appeals typically travel within 

their respective circuits to hear cases, including travel to Puerto 

Rico. 

Furthermore, if a Federal judicial and prosecutorial function is 

located in Samoa, the judges, magistrates, and prosecutors should 

be drawn from the ranks of our local legal community and should 

not be imported from outside. We have passed the point where outside judges and prosecutors are needed to dispense justice on our 

island. Federal judges and officials in American Samoa should be 

local people, just as they are in Federal judicial districts in the 

United States. 
8 

I thank you again for the opportunity to testify. At this time, I 

would like to introduce Mr. Malaetasi M. Togafau, our Attorney 

General, and Mr. R. Wendell Harwell, our Territorial Auditor. 

Thank you very much, sir. 

Mr. GALLEGLY. Thank you, Governor Lutali. Mr. Togafau. 

STATEMENT OF MALAETASI M. TOGAFAU, ATTORNEY 

GENERAL OF AMERICAN SAMOA 

Mr. TOGAFAU. Mr. Chairman and members of the committee, I 

appreciate the opportunity to testify before your committee today 

on the subject of U.S. Department of Justice's recent assessment 

concerning white-collar crime in American Samoa. My name is 

Malaetasi M. Togafau, and I am the Attorney General of American 

Samoa. I was appointed by Governor A. P. Lutali in January of 

1993. Prior to being appointed Attorney General, I served as a District Court Judge in American Samoa. 

In my testimony, I will provide a brief history of how and why 

the Department of Justice assessment came about. I will also address some of the progress that American Samoa has made on its 

own in dealing with white-collar crime and public corruption. 

When our administration took office in January of 1993, Governor Lutali was faced with a deficit estimated by the Inspector 

General of the Department of the Interior to be on the order of 

$60,000,000. In the government's bank account was less than half 

the funds necessary to cover the first payroll. There were allegations that officials in the former administration had been responsible for a number of improprieties which required immediate investigation. 

In March of 1993, Governor Lutali wrote to the Secretary of the 

Interior requesting help in securing immediate law enforcement assistance from the FBI and the prosecutorial assistance of the U.S. 

Department of Justice. He asked for the designation of three Department of Justice officials, two FBI agents, and one prosecuting 

attorney to assist in identifying persons responsible for the financial disaster he had inherited and to review the results of the auditors and conduct whatever civil or criminal prosecutions may be 

warranted. 

Eight months later, in December of 1993, a memorandum of understanding was signed by the Interior's Office of Territorial and 

International Affairs, the U.S. Department of Justice, and the 

American Samoan government which provided for technical assistance in assessing, number one, the extent and nature of the crime 

problem, and number two, the need for investigative and prosecutorial assistance to supplement local capabilities. 

In February of 1994, an assessment team from Justice arrived in 

American Samoa and spent three months assessing the problem of 

white-collar crime. My office provided space, equipment, staff support, and communication support from our local budget. 

Early this year, a redacted version of the draft of the executive 

summary of that assessment was released to members of Congress 

and to the media. It was serialized, word for word, over a four-day 

period on the front page of the Samoa News. Thus, it was released 

and published before either Governor Lutali or I had received official copies or had been given the opportunity to comment. 
9 

While the MOU was being negotiated and while the assessment 

team was collecting data, cases had already been identified and 

were waiting for investigation. Absent indications that timely assistance would be forthcoming from Justice, I had to proceed with 

criminal investigation and prosecution of those cases. The local 

statutes of limitations, the unavailability of witnesses after a lapse 

of time, and the continuing possibility that evidence would be destroyed left no other option. 

Because of limited resources and the lack of territorial laws relevant to some of the crimes, tough choices had to be made as to 

which cases to investigate and prosecute. I created a team of two 

investigators and a criminal attorney whose activities were coordinated by a member of my staff with previous investigative experience. 

While I cannot speak for law enforcement in American Samoa 

prior to my service in American Samoa, I am proud of what has 

been accomplished during my tenure. This committee can be assured that perpetrators of white-collar and public corruption offenses in American Samoa are serving prison sentences, and additional cases are being aggressively investigated and prosecuted. 

In March 1995, Governor Lutali, through executive order, dissolved the less-than-effective special task force on narcotics and 

white-collar crime enforcement. Two days later, the Commissioner 

of Public Safety, Douglas Jessop, and myself, on behalf of the Office 

of Attorney General, created through a memorandum of understanding, a joint task force on public corruption. The task force is 

funded in part through a grant under Purpose Area 6 of the Byrne 

Memorial Law Enforcement Assistance Formula Grant that is provided by the U.S. Department of Justice through the Bureau of 

Justice Assistance. 

Last month, the joint task force on public corruption provided its 

regular quarterly report to the Governor. I would be pleased to provide a copy of the memorandum of understanding creating this unit 

and relay this task force report to the committee. 

The report shows the following. The task force has 38 open cases, 

of which 15 have been referred for prosecution, and 23 remain 

under investigation. 

A total of eight cases have been adjudicated, with six resulting 

in verdicts of guilty and two resulting in acquittal. 

Four criminal cases are pending in the High Court. Our investigations and prosecutions cover a range of white-collar 

and public corruption offenses, including embezzlement, bank 

fraud, bribery, public corruption, forgery, procurement, and tax violations. 

We have in just four months recovered more than $60,000 in 

public funds through case closures. 

Of equal importance, a new atmosphere of official conduct exists 

in our government. Our public officials and people know that the 

Governor will not tolerate the abuse of public property and resources, and would-be abusers know that violators will face detection and punishment. 

Since June of 1994, my office has taken other steps to target 

white-collar crime through the coordination of 1,600 hours of onsite law enforcement training for training six investigators, and 80 
10 

hours of prosecution training for two criminal attorneys. Many of 

these training activities are coordinated with our colleagues in the 

Honolulu resident office of the FBI. 

We believe that the American Samoan government has done everything within its current capabilities to target white-collar crime 

and public corruption in our jurisdiction, and we will continue to 

do so. Again, thank you, Mr. Chainnan, for the opportunity to testify before this committee. I am ready to provide any further infonnation on the efforts we are undertaking in the criminal justice agencies in American Samoa. Thank you. Mr. GALLEGLY. Thank you, Mr. Togafau. Mr. Harwell. 

STATEMENT OF R. WENDELL HARWELL, TERRITORIAL 

AUDITOR 

Mr. HARWELL. Mr. Chainnan, members of the subcommittee, 

thank you for the opportunity to testify on the Department of Justice Assessment of White-Collar Crime in American Samoa. 

My name is R. Wendell Harwell, and I am the Territorial Auditor 

of the American Samoa government. The territorial audit office is 

an independent agency. Although Governor A. P. Lutali has requested that I provide testimony today, the views I express here 

are my own. 

I was recruited as a part of a contract of accountability that Governor Lutali brought with him into office in 1993. There were four 

elements to Governor Lutali's plan. 

The first element was to hire a professional Territorial Auditor. I was told by Governor Lutali that it was his desire to clean up the 

American Samoa government, and he requested my assistance in 

helping him reach that objective. Since I have assumed the position of Territorial Auditor, we have upgraded the audit staff and developed an audit plan. We are presently recruiting for a second audit 

manager in order to increase the capabilities of the office. 

In the last 16 months, we have issued 20 reports and letters of 

finding. Thirteen of these reports and letters of finding included 

recommendations for improving financial controls. All the recommendations we made have been accepted by the ASG, and have 

either already been implemented or are in the process of implementation. Five of the reports or letters of finding have detected waste and/ 

or abuse. In six instances, we have issued confidential reports to 

the Attorney General requesting a criminal investigation of suspected fraud. The Attorney General has already prosecuted two of 

these cases, and currently has three cases actively under investigation. 

We currently have ten audits in progress. Two of these audits include suspected fraud, and eight include suspected fraud, suspected 

waste and/or abuse. Although it is difficult to estimate the prospective savings of the 

recommendations made by the territorial audit office in the last 16 

months, it is easily in the hundreds of thousands of dollars annually, and the publicity of the reports coupled with the publicity gen- erated by the prosecution must certainly have a restraining influence on white-collar crime. 
11 

The second element of Governor Lutali's plan was to procure, install, and implement a financial management system. The ASG is 

currently in the process of acquiring such a system. In fact, the request for proposal was issued to interested vendors just last month. This system, when procured and installed, will provide a vehicle 

for accurate and timely financial information that will allow better 

management of scarce government resources. It will also improve 

internal financial controls as well as provide analytical tools that 

will assist in the timely detection of fraud. 

The third element of Governor Lutali's plan was to acquire the 

assistance of the Office of Inspector General in determining the financial condition of the American Samoa government. The IG issued a report estimating the general fund, unreserved fund balance, and the cash position at March 31, 1993. Their report contained 15 pages detailing prior audit coverage and providing general comments on the fiscal irresponsibility of prior administrations. 

The scant page and a half of recommendations made by the IG 

were so broad as to be almost useless. For example, a recommendation to "direct the treasurer to develop and implement procedures 

to maximize cash collections and minimize cash disbursements" is 

of little use without providing some details of how that might be 

accomplished. The fourth element in Governor Lutali's plan was to require investigative and prosecutorial assistance from the United States Department of Justice. This request was made about two years ago. 

AB the Attorney General has testified, a team was sent to American Samoa to assess the problem of white-collar crime in government. AB of last Friday when I left American Samoa, the final report on that assessment had not been received, and to my knowledge, no other assistance has been offered. 

It is difficult to comment on only a draft copy of an executive 

summary without benefit of the report itself; however, the executive summary did state that, "The assessment team found sufficient allegation of criminal activity to predicate the initiation of 

criminal investigations of individuals in the American Samoa 

House of Representatives and the following ASG departments," and 

the report listed 12 departments. 

It is my understanding that the Department of Justice has never 

shared the details underlying these allegations with the American 

Samoa government. I suggest that reports of such a general nature 

are virtually useless without supplemental details that the American Samoa government can act upon. 

Honorable committee members, the American Samoa government 

is taking action to prevent, detect, and enforce white-collar crime. 

The United States government has been very helpful in recently 

providing funding for a financial management system, and for firstyear costs of several professional accounting managers. 

I would like to second the Attorney General's hope that our 

criminal justice agencies will be supported by the Federal Government through further technical assistance and training. 

Thank you for the opportunity of allowing me to provide this testimony here today. I will be happy to answer any questions that 

you may have. 
12 

[Statement of R. Wendell Harwell may be found at end of hearing.] 

Mr. GALLEGLY. As you all know, this Subcommittee and full 

Committee on Resources has approved H.R. 1332, which establishes conditions for the future funding for American Samoa. The 

conditions were developed after extensive discussions with the Department of Interior's Office of Inspector General. 

A major concern is the lack of timely and satisfactory audits by 

American Samoa in meeting the standards of the Single Audit Act. 

Perhaps Mr. Harwell could best answer this question for us. Can 

you give me an idea, what is the most recent year for which an 

audit has been completed and meets that single act? 

Mr. HARWELL. The most recent audit was 1992. There was a disclaimer of opinion issued by the outside auditors, Deloitte & Touche. I believe the last report with a modified opinion or qualified 

opinion was 1991, sir. 

Mr. GALLEGLY. And did it meet the conditions of the Single Audit 

Act? 

Mr. HARWELL. As I remember, it did. Yes, sir. 

Mr. GALLEGLY. How do you intend to bring American Samoa's 

audits up to date and in compliance with the Single Audit Act? 

Mr. HARWELL. The most important thing, Mr. Congressman, is to 

procure and install a new financial management system. Our current automated financial management system, quite frankly, does 

not work. It does not have audit trails, and it has caused our outside auditors to disclaim an opinion. 

I suspect they will continue to disclaim an opinion until we complete the installation of the new system, which is in progress at 

this moment. 

Mr. GALLEGLY. Thank you. To the Attorney General, the assessment recommends local enactment of several things, a general 

fraud statute, subpoena authority for local law enforcement agencies, and a whistleblower law. What proposals has the administration sent to the legislature to date? 

Mr. TOGAFAU. None whatsoever, Mr. Chairman. 

Mr. GALLEGLY. None of these? 

Mr. TOGAFAU. We are in the process of drafting legislation to 

that effect. It has not been submitted to the legislature yet, because 

it is very complicated, and we have to look at different versions in 

order to meet our needs. 

Mr. GALLEGLY. I have several questions that I would like to ask, 

but we are going-when we start voting somewhere around 2:45 or 

3:00, we are going to be over there for quite a while, so in the interests of time and we have a couple other panels, with the agreement 

of the witnesses, what I would like to do is submit my questions 

for the official record and send them off to you to have you respond 

to the committee, if there is no objection. 

Mr. FALEOMAVAEGA. I have no objection, Mr. Chairman. 

Mr. GALLEGLY. So at this time, I would defer then to Mr. 

Faleomavaega. 

Mr. FALEOMAVAEGA. Mr. Chairman, thank you. I also, because of 

the situation of the time factor here, I do have a listing of questions 

as well that I would like to submit for the record and to be submitted to the Governor, to the Attorney General, and to Mr. Harwell 
13 

for their official responses, but I just have one or two questions I 

want to clear up for the record. 

The thing that really bothered me, Mr. Chairman, was how this 

whole report became public, and as I understand from the Attorney 

General's testimony, neither he nor the Governor were ever consulted on any of the findings of the assessment teams and really 

raising the issue that there was such massive corruption going on 

in the government that everybody should be prosecuted; everybody 

should go to jail; and that really bothered me, and I wanted to ask 

the Attorney General, how did you hear of the report by this assessment team? Can you clear that for the record, please? 

Mr. TOGAFAU. Thank you, Mr. Congressman. 

The first time that I was given a copy of the report, when the 

Assistant Secretary Turner came to American Samoa in April, and 

with his assistant, Nick Pula. It was Mr. Nick Pula who gave me 

the copy of that report. That was the first time I received it. 

Mr. FALEOMAVAEGA. And that is the official--

Mr. TOGAFAU. It was not through any official transmission. 

Mr. FALEOMAVAEGA. But that was the official report? 

Mr. TOGAFAU. As far as I am concerned, nothing to say it was 

the official report. It was just a copy given to me with instruction 

not to discuss it with anyone else. 

Mr. FALEOMAVAEGA. The point I am wanting to make is how is 

it that the media got hold of the report before you did? 

Mr. TOGAFAU. That, I do not know, Mr. Congressman. 

Mr. FALEOMAVAEGA. I also have questions for Mr. Harwell. You 

mentioned that some of the problems that we have had over the 

years that IG audits and management, what you call study or review, that the Department of Interior has made over the years, 

they make recommendations that are often so broad and vague, it 

really did not help, in many instances, the local officials to do their 

job. I want to ask you if in the findings of the assessment team, 

were there close consultations with your office at all times when 

they were in the process of putting this report together? 

Mr. HARWELL. No, sir. I can only recall one short discussion with 

one FBI agent, and it was not very substantive at all. 

Mr. FALEOMAVAEGA. And to your knowledge, has the assessment 

team ever given any copies of a draft version of a report for at least 

responses of the officials of the local government before making 

this report as it was publicly distributed? 

Mr. HARWELL. I know they didn't give one to me, Mr. Congressman. I got a copy of the executive summary from the executive 

branch of the government. 

Mr. F ALEOMA v AEGA. I just want to state for the record, Mr. 

Chairman, it is not the question of the substance of the report. I 

think the problem here is that we find the media has been so negative, even some of the members and our own colleagues are saying, 

"Geez, what in the world is happening down there?" I think the 

problem that bothers me is the procedure of how this assessment 

team came about in conducting the study and giving the officials 

of the local government proper and appropriate time to respond to 

some of the allegations and some of the findings. I just want to 

make that known for the record. 
14 

On the task force on public corruption as you stated, Mr. Attorney General, who made up this task force? What is the composition 

of this task force? 

Mr. TOGAFAU. There are two investigators from my office, and 

three police officers from the Department of Public Safety. 

Mr. FALEOMAVAEGA. And this task force is still in place? 

Mr. TOGAFAU. Yes. 

Mr. FALEOMAVAEGA. And there is still presence from the Department of Justice officials helping and collaborating with your office 

in doing this activity? 

Mr. TOGAFAU. No, there is no assistance from the public officials 

on that, from the U.S. currently. 

Mr. FALEOMAVAEGA. So as far as you are concerned, after the issuance of this report, all their activities are finished? In other 

words, here is the report; now, you go do it yourself. Is that my 

sense of how this MOU is presented? 

Mr. TOGAFAU. Well, I cannot address that issue, sir, because 

what we are doing right now with the task force itself, it was the 

effort between the Commissioner of Public Safety and my office 

through the approval of the Governor in order to address the issue 

that we feel is sensitive to us in order to combat white-collar 

crimes in American Samoa. 

Mr. FALEOMAVAEGA. My concern, Mr. Attorney General, is that 

when we established this assessment team with the memorandum 

of understanding that we are doing this on a friendly basis, we are 

wanting-we are not trying to point fingers as to who is committing the wrong here, but the idea is that we want to make sure 

that we have a matter of record, doing it properly, doing it in a way 

that the law should be-you know, as far as those responsible, but 

I get the impression that the team just came. Here is the report, 

dropped it off in your office, and then they left. 

I mean, was there-in the MOU, was there any provision that 

allows any sense of continuity with the Interior Department even 

since they are the lead agency for American Samoa to bring everybody together and to see that we can work this thing out together? 

Mr. TOGAFAU. As far as we are concerned right now, we are 

awaiting what would be the outcome of this assessment report. We 

have not sat down with any of the people from the Justice Department or the Interior Department and tried to implement what is 

in the report right now. 

Mr. FALEOMAVAEGA. And your understanding of this MOU, that 

you worked together with the Interior Department and Justice Department, is that you were supposed to be working together on 

this? 

Mr. TOGAFAU. That is our understanding. 

Mr. FALEOMAVAEGA. Now, my impression on how this thing came 

about is that the Justice Department just did the report, dumped 

it on your laps, they took off, and you are caught holding the bag. 

Mr. TOGAFAU. I guess so. 

Mr. FALEOMAVAEGA. I am going to submit the remaining questions I have, Mr. Chairman, for the record in the interests of time. 

Thank you, Mr. Chairman. Mr. GALLEGLY. The gentleman from Michigan, Mr. Kildee. 
15 

Mr. KrLDEE. Thank you, Mr. Chairman. I apologize again for 

being late. I had two other subcommittees on resources meeting 

also. I appreciate the fact that you are having this hearing. 

I, too, would like the privilege of submitting some questions in 

writing to you on this, and I appreciate your presence here today. 

Mr. Chairman, I would like to add my affirmative voice to the 

voice vote by which H.R. 2159 was reported out. 

Mr. GALLEGLY. Mr. Underwood. 

Mr. UNDERWOOD. No. 

Mr. GALLEGLY. No further requests, I want to thank the witnesses. I know that it has been a long journey. I have made that 

journey before, and I know that it is not the easiest trip in the 

world. I know it is a very scenic trip from 35,000 or 40,000 feet 

most of the way, but I do want to thank you for making the long 

trek, and I know my good friend, Mr. Faleomavaega, can appreciate 

the endurance it took to get here far better than I. 

Mr. FALEOMAVAEGA. Mr. Chairman, I want to thank you personally for your taking time out from your busy schedule and having 

an opportunity to meet with our Governor and the members of his 

delegation to express the concerns that he has. 

As you know, the budget situation, I sincerely hope that we continue our efforts on a bipartisan basis, and knowing the limited resources that we have to draw from the same well, and my concern 

as well as you are well aware of, that the Governor and I work very 

closely together. Hopefully, we will be able to resolve some of the 

budgetary problems that Samoa now faces, especially for this funding here. I also want to thank you for meeting with our Governor, 

and thank the Governor very much for his traveling such a long 

distance to meet with the members of our committee and other 

members and our colleagues in the House as well as in the Senate. 

I am very, very appreciative of his coming here to testify before 

this committee. 

Mr. GALLEGLY. Mr. Underwood, did you--

Mr. UNDERWOOD. Yes. Thank you for giving me a second chance, 

Mr. Chairman. 

Basically, I wanted to thank you for your appearance and thank 

you for the testimony. I am particularly drawn to the comments 

made by you, Governor, on the issue of the interplay of Samoan 

culture with the comments made about widespread corruption and 

illegalities. It has always been a strong area of interest for me, because quite often, people who are not used to a different society frequently identify culture as a culprit or as an excuse for wrongdoing, and basically, based on my own understanding of the culture 

that I grew up and certainly other cultures in the Pacific Islands, 

there are no cultures that sanction wrongdoing. There are no cultures that sanction illegal behavior of the kind that we are talking 

about. 

Certainly, to be sure, it must appear very different to Federal officials coming in, people who grew up in the Mainland. Certainly, 

there must be a lack of familiarity and a lack of understanding and 

appreciation of the nuances that are second nature to the people 

who are indigenous to an area, and that may frequently be interpreted as an excuse for corrupt and inappropriate behavior. 
16 

We should attempt to look at culture as you do, as something 

that we celebrate, something that we find comfort in, and something that will help explain things, but it certainly is neither an 

excuse for wrongdoing nor is it the culprit of wrongdoing, and I 

can't help but resist the temptation to say that if anybody wants 

to make a major production out of problems with juries in American Samoa, we ought to turn on the TV and look at the O.J. Simpson jury every day. Thank you. 

Mr. KILDEE. Would the gentleman yield? 

Mr. UNDERWOOD. Certainly. 

Mr. K.!LDEE. What about the audit that was recently conducted 

in our own House of Representatives? See how our records have 

been kept. 

Mr. UNDERWOOD. I assume that no one will use culture as a culprit in that instance, although maybe party membership. 

Mr. GALLEGLY. I would just like to say to the gentleman that I 

think his point was well taken, but we have a new vision for auditing, and I hope that maybe we will be able to have a better accounting. You know, the accounting procedures today are much, 

much better than with the old Monroe calculators, so perhaps, we 

will have a better system in place, and I thank the gentleman's 

comments. I thank the witnesses, and we will move on to the next 

panel. 

Actually, the next panel is a panel of one. It is somewhat unprecedented, and I certainly want to make a point that I hope this isn't 

viewed as precedent-setting, but because of the situation of the 

Honorable Peter Tali Coleman and his situation in the hospital in 

Hawaii, he wanted to be here, but unfortunately, he could not be, 

and through the miracle of the telephone, I am not sure whether 

it is AT&T or one of the Baby Bells that is helping us today, but 

I will have to check with John Dingell on that, but in any event, 

this is, as I have said, unprecedented, and I don't intend that this 

would be a normal situation in the future, and with the committee's concurrence, we will at this time hear from Governor Coleman 

via telephone connection. 

Mr. FALEOMAVAEGA. Mr. Chairman, I want to say that I certainly 

have no objection to this new and unique avenue of having hearings before the committee and the Congress, and certainly would 

welcome former Governor Coleman's statement and the concerns 

that he has, and all that we are trying to do is to resolve some of 

the problems that our government is faced with, and I certainly 

welcome his testimony into the committee. 

Mr. GALLEGLY. So with that, are we ready with our-I am not 

quite sure how we are going to do this, but if you are ready, put 

the Governor on. Are you there, Governor Coleman? Maybe we 

should offer an amendment to the telecommunications--

STATEMENT OF PETER TALI COLEMAN, FORMER GOVERNOR 

OF AMERICAN SAMOA 

Mr. COLEMAN. Mr. Chairman, and distinguished members of this 

subcommittee, I appreciate this opportunity to testify today on the 

subject of white-collar crime in American Samoa. 

With the Chairman's permission, I would like to offer a statement for the record at a later date, and make brief remarks at this 
17 

time. Afterwards, I will be happy to answer any questions the committee may have. 

I also want to apologize that my continuing recovery from recent 

surgery prevents me from being there to testify. 

I appreciate the Chairman's courtesy, and a special sense of 

human awareness in arranging for this telephone hook-up as an accommodation to me. 

My name is Pete Coleman. I am from a town in American Samoa 

by the name of Tali. Although I am a fonner public defender, attorney general, and governor of American Samoa, I want to speak to 

you today from the broader perspective of one who also has been 

a Federal career civil servant, who has worked both in Washington 

at what is now OTIA, and in the field reporting to OTIA; as one 

who has worked also as a congressional staffer; and as a noncareer 

political appointee; and as one, who by birth, instinct, and upbringing is Samoan, but through secondary and post-secondary education, legal training, administrative practice and professional experience, has been fully immersed in western law, custom, and convention for almost 60 years. 

If I had to describe my life's work, it would be to say my career 

has been devoted to developing and adapting western-style governmental institutions to nonwestern environments. Where I may 

have failed or succeeded will be up to history to judge. I can only 

say that I have tried my best with whatever gifts God has given 

me to serve as a bridge to understanding between peoples of different cultures. 

I am particularly disappointed that I can't be with you in person 

today, because it would have been a rare chance to appear together 

in a nonadversarial setting with my longtime political rival but certainly, good personal friend, Governor Lutali, whom I have known 

since childhood. 

Between us, we have headed the government of American Samoa 

for the entire time since we first began electing our governors in 

1977, not yet two decades ago, so our government is still in its teen 

years. 

Although neither of us has finnly closed the door on future government service, I think it is fair to say that most of our political 

ambitions are behind us. If we recognize that we are nearing the 

day others will take the helm to guide Samoa's destiny, I think we 

can make better use of the committee's time by looking forward 

than by engaging in yet another round of finger pointing, which 

has been the case so often in the past as one side or another tries 

to position itself for short-tenn political gain. 

The time has come for us to get beyond talking about how we 

have cleaned up or intend to clean up this or that mess we inherited from one another's administration. Rather, the time now is to 

work together, both Federal and local leaders, both Republicans 

and Democrats, to create a common framework of understanding, 

which would lead to a common definition of our problems, as well 

as lasting solutions to safeguard the public interest, both in American Samoa and in the rest of the United States beyond. 

Until we have a common framework of understanding, Mr. 

Chainnan, I submit to you that we will continue to talk past each 

other and never solve our problems, be they white-collar crime or 
18 

anything else. The reason we need that framework is because the 

underpinnings of our two societies are so different fundamentally. 

The American legal system which operates in Samoa is based on 

English jurisprudence as it has evolved over the centuries. It is a 

system of conflict resolution which produces clearly identifiable 

winners and losers. Our Samoan culture, on the other hand, is 

based on thousands of years of the evolution of the Polynesian heritage of conflict resolution by consensus building. Whenever possible, we as Polynesians try to avoid conflict. When we can't avoid 

conflict, we try to resolve it so that everyone goes away a winner 

if at all possible. 

Even more central to this discussion is our own unique culture, 

American culture, which although it also comes from Europe has 

an even more pronounced emphasis on the rights of the individual, 

which is firmly rooted in the Bill of Rights of our cherished U.S. 

Constitution. Samoan society, on the other hand, has a different 

foundation, the Matai system, which emphasizes group responsibility and survivability. 

I could go on to develop a whole college course on these two 

points, conflict resolution and individual rights versus collective responsibility, but I recognize our time is short here. I do believe, 

however, that these different perspectives, based on different cultural terms of reference, have led to the debate over the role of 

"Fa'a Samoa" in white-collar crime. I just wanted to point out that 

I believe that some common understanding of these differences in 

perspective and cultural reference points is fundamental to understanding each other as you prepare to craft legislation which is remedial, not just punitive. 

Beyond the question of political posturing, the other reason I 

don't want to engage in finger pointing here, just as I would hope 

that Governor Lutali would refrain from doing, is that I truly believe our problems are systemic. They transcend partisan politics, 

personalities, and administrations. 

Moreover, the problem of white-collar crime is not unique to 

Samoa nor is it unique to the American territories. Stories of political corruption abound on virtually a daily basis from French Polynesia in the eastern Pacific to Papau New Guinea in the western 

Pacific. 

Why? Because we are all trying to cope with western governmental systems implanted by now departed administering authorities, systems which were built on western experiences and assumptions of human behavior and instincts which do not necessarily 

translate well or fully into island societies. 

As we are trying to cope with these structures with limited 

human resources, oftentimes under the direction of local officials 

who don't have the western training or experience, let alone western instincts to manage the sophisticated tasks of modern government. Even where you find well trained top executives, second and 

third level officials often lack the necessary training to meet western expectations and demands for accountability. 

What I guess I am suggesting, Mr. Chairman, is that you have 

to remember that before you can get across the concept of whitecollar crime, you have to explain first just what is white-collar 

crime. After all, it is only within the span of my whole lifetime that 
19 

most Samoan men have come to even wear shirts, let alone whitecollars. Our language has no word for collar, white or otherwise. 

I say this, of course, not to suggest that Samoan government employees are some sort of savages who do not understand the concept of white-collar crime, but to make a more basic point. It is my 

metaphorical way of saying that nothing should be taken for granted in trying to devise common points of reference. Nothing is too 

basic to go unexamined when you are dealing in a bicultural environment. 

Some may argue that we can handle the white--collar crime problems ourselves if Samoa is left alone. At the same time, as a former 

Federal official, I recognize the responsibility to the American taxpayer on whom, unfortunately, American Samoa remains too dependent. 

So I believe our local leaders must reach common ground with 

you, too, but in any effort to please you, I would urge them not to 

give in to the temptation merely to engage in wholesale prosecution 

and punishment to beef up statistics just to demonstrate progress 

whenever they are called upon to testify before Congress. 

We have to remember that western style remedies have been 

tried all over the Pacific in the past and have failed. Why should 

we think it will be any different in Samoa? We need creative solutions which should include a mixture of education, off-island term 

junior apprenticeships, senior exchange programs, ·incentives, local 

development of ethical standards, performance-based rewards, and 

yes, where called for, prosecutions and punishment. 

To the extent possible, we must take politics out of the essential 

services of government, as I did over a decade ago when I created 

ASPA. ASPA works because it operates on sound management 

principles and was organized that way from its inception. It was 

built from the ground up, not improvised or built as a patchwork 

on an existing system. That same principle should be applied to the 

entire governmental structure. 

Similarly, solutions to the white-collar crime problem should be 

comprehensive, not piecemeal. In Saipan, where I lived for over 12 

years, we periodically burned down the tangantangan tree, which 

was always gratifying for the moment, but we never had time or 

resources to pull out the roots, so the weeds just grew back, and 

the trees became taller and stronger in short order. The 

tangantangan tree was brought in by well-meaning overseas administrators to protect the soil, just like our basic governmental 

structures were brought decades ago to serve and protect the people. We have to pull both up by the roots and replant new seeds 

which are appropriate to the environment in which they are planted to do the job for which they are planted, without choking out 

the natural and human resources they were meant to protect. 

However, we must not forget that unlike the tangantangan, 

when we uproot our governmental structures, we are dealing with 

human beings, with all their frailties, all their needs and wants, 

goals and aspirations, and the strengths and weaknesses that go 

with human nature, no matter what our cultural differences may 

be. 

Finally, Mr. Chairman, as you craft your legislation, hopefully in 

collaboration with our local leaders, I ask you to remember that 
20 

our governmental structure, though based on western models, has 

adapted itself to local peculiarities and needs. It is sort of like a 

boat which sinks in a lagoon. Pretty soon, it becomes part of the 

ecosystem of that lagoon, and the removal of any part of the boat 

is disruptive to the sea life which has adapted to its presence. 

Our local government is not perfect, but it is also very fragile. 

It is fine to talk about extending the Federal courts or Justice Department jurisdiction to Samoa, for example, but any such move 

should be examined and undertaken in the context of the entire 

governmental system it is meant to serve, a system which has developed its own set of checks and balances over the years, however 

imperfect. Again, I would argue for a holistic approach rather than 

quick fix, which experience teaches will be doomed to failure. 

In summary, Mr. Chairman, I believe any legislative solution to 

be developed by this committee should be based on achieving a 

common framework of understanding between dissimilar cultures. It should take into account the entire governmental structure and 

contain a comprehensive mixture of remedies which will not only 

correct any past abuses, but also lay the foundation for a future 

system of incentives and rewards for achievement of mutually 

shared goals, mutually arrived at. Thank you again for this great opportunity you have given me 

and great courtesy from you and your committee to speak here 

today. I will be pleased to answer questions you may have. 

Mr. GALLEGLY. Governor, thank you very much. I am sorry you 

couldn't physically be with us today, but we all heard your words 

very clearly, and I am sure that I can speak for my colleagues that 

aren't here with us today. 

I wish you well, and hope that you will be able to join us again 

one time in the future. At this time, I would like to defer to the 

minority ranking member, the gentleman from American Samoa, 

Mr. Faleomavaega. 

Mr. FALEOMAVAEGA. Governor Coleman, I know that Governor 

Lutali joins me and the members of our Samoan community here 

in the hearing room to express our appreciation and to thank you 

for your very thoughtful and comprehensive statement, and we appreciate your concerns, and certainly, as a member of this committee, that we will make every consideration of your contribution to 

the hearing this afternoon. We all want to wish you well from your 

recent operation, and wish you very much a very speedy recuperation from your surgery. 

Mr. COLEMAN. Thank you very much. 

Mr. GALLEGLY. The gentleman from Michigan, Mr. Kildee. 

Mr. KrLDEE. Just to thank the Governor for his testimony and 

wish him a very rapid and full recovery. 

Mr. GALLEGLY. Mr. Underwood. 

Mr. UNDERWOOD. Yes, I would like to wish the Governor a full, 

speedy recovery, and I extend my greetings on behalf of the people 

of Guam. I would also like to point out that I always thought the 

tangantangan was a word that originated on Guam, but apparently 

it is not. 

Mr. FALEOMAVAEGA. It is from Samoa. 

Mr. GALLEGLY. Thank you again, Governor, and Godspeed. 
21 

At this time, we will call our third panel. We have Mr. Mark M. 

Richard, Deputy Assistant Attorney General, Criminal Division, 

Department of Justice; Allen P. Stayman, Deputy Assistant Secretary for Territorial and International Affairs, Department of the 

Interior; and the Chair now recognizes Mr. Richard. 

STATEMENT OF MARK RICHARD, DEPUTY ASSISTANT ATTORNEY GENERAL, CRIMINAL DIVISION, DEPARTMENT OF JUSTICE 

Mr. RICHARD. Thank you, Mr. Chairman and members of the 

committee. With your permission, I would like to submit for the 

record the full statement and merely summarize it at this time, if 

that is acceptable. 

Mr. GALLEGLY. Without objection. 

Mr. RICHARD. Thank you. I am a Deputy Assistant Attorney General in the Criminal Division with oversight responsibility for the 

Division's office of international affairs as well as our internal security section, terrorism and violent crimes section, and the office of 

special investigations. 

Today, my testimony will address the white-collar crime problem 

in American Samoa, which relates in part in our judgment to the 

absence of effective mechanisms for enforcing Federal statutes. I 

would also like, with your indulgence, to explore some possible solutions to the problem. 

As a result of its status as the only U.S. territory not within the 

jurisdiction of the United States District Court, there have been no 

sustained enforcement of Federal criminal laws in American 

Samoa, with consequences that in our judgment require immediate 

attention. 

In March '93, the Department of Interior received a letter from 

Governor Lutali in which it was requested that a Justice Department prosecutor and FBI agents be detailed to the American 

Samoa government to investigate and prosecute public integrity 

and white-collar crimes. We evaluated that request and determined 

that before making such a detail, we should in fact do an assessment of both the needs and the effectiveness of such a response to 

the perceived problems. We then sent, together with the Department of Interior representatives, an assessment team to American 

Samoa consisting of one senior assistant United States Attorney, 

and two FBI agents. 

In December of 1994, the assessment team submitted a comprehensive report which, after evaluation in the Department of 

Justice, has been provided both to this committee and to the Governor. It sets out information which establishes to our satisfaction 

that white-collar crime, and in particular public corruption, appears to be significant and systemic in American Samoa. 

Despite the fact that many of these allegations of wrongdoing 

have in fact been reported over the years to appropriate authorities, very few investigations were in fact initiated by past Samoan 

administrations, and few of these investigations resulted in ultimate prosecutions. 

The assessment team's report suggests that a number of factors 

have contributed to this situation, including a lack of financial controls that would deter fraud and abuse as well as a lack of training 
22 

and experience on the part of investigators and prosecutors regard- ing white-collar crime. Admittedly, these kinds of offenses are difficult to investigate and require experienced investigators and prosecutors to handle, and they can be under the most trying situation, 

difficult to handle and require experienced personnel to address 

them effectively. 

Significantly, and coupled with these problems, are inadequacies 

in our judgment in the legal system. As I mentioned, American 

Samoa is the only territory over which no Federal district court has 

jurisdiction. Thus, although the Federal crimes set forth in Part I 

of Title 18 apply in most instances to American Samoa, there is essentially no effective mechanism for enforcing these laws. There 

are, in addition, significant gaps in American Samoa criminal law, including the absence of a general fraud statute. Significantly, under Samoan law, law enforcement agencies do not have authority to seek subpoenas prior to the filing of formal charges. 

Both the Department of Justice and Interior are committed to developing an appropriate solution to the white-collar crime problem, and other problems relating to the absence of Federal law enforcement authority in American Samoa. In this regard, there appears 

to us to be a variety of options that can be considered. 

One is the extension of limited, and I stress limited, Federal 

court jurisdiction from the District of Columbia~xcuse me, the 

District of Hawaii-to American Samoa. This option would require legislation to confer jurisdiction over Federal crimes committed on 

American Samoa under U.S. District Court for the District of Hawaii, and to authorize the United States Attorney for the District 

of Hawaii to prosecute such crimes. Such a proposal would confer 

limited criminal jurisdiction on the District of Hawaii and allow the 

United States to bring suit in the District of Hawaii to enforce civil 

statutes and to collect the debts owed to the United States by American Samoa. 

We are sensitive to the concerns of American Samoans about any proposal that would interfere with the Samoan land tenure and 

Matai title systems. Accordingly, this option of extending limited 

Federal jurisdiction would specifically exclude issues concerning Matai title or office or the tenure of communal land. We therefore 

believe that such a proposal should authorize the creation of separate jury lists for Hawaii and Samoa so that proceedings could be 

held in American Samoa. It is also anticipated, if this option is 

adopted, that at the discretion of the court, the District Court in 

Honolulu would be authorized to hold special sessions in American 

Samoa. This would, of course, obviate the need to try Samoans in 

distant locations. 

Another option, of course, is vesting Federal jurisdiction in the 

High Court of American Samoa. The substitution of the High Court 

of American Samoa for the District Court for the District of Hawaii 

would run counter to well-established legislative policy that the 

Federal district courts should have exclusive jurisdiction over the 

type of proceedings to which the United States is a party. A second concern with this approach stems from the fact that the 

Justices of the High Court are appointed by the Secretary of the 

Interior. This means that the nongovernmental party would be 
23 

forced to have its cause decided by a tribunal which is not free 

from domination by the executive branch. 

Lastly, the process of reviewing the decisions of the High Court 

present difficulties as to its complexity. There is no direct appellant 

review of the decisions of the High Court of American Samoa by 

a Federal court. In sum, the decisions of the trial divisions of the 

High Court would be subject to five levels of review. 

Under these circumstances, we would have serious concerns 

about a proposal to address the white-collar crime problem by conferring Federal jurisdiction on the High Court of Samoa. 

We do believe that some solution is essential from both a civil 

as well as a criminal perspective. There is reason to believe that 

millions of dollars in debts owed to Federal agencies by residents 

of American Samoa are at present essentially uncollectible by agencies of the Federal Government. 

The Department of Justice has agreed as an interim measure to 

detail one FBI agent for one year to American Samoa to assist following consultations with appropriate local officials in establishing 

the local Federal white-collar crime task force, and develop cases 

that could be prosecuted either in the Samoan courts under present 

regime, or in any Federal district where, by the nature of the 

crime, venue might lie without the need for additional legislation. 

Funding for this interim measure would be provided by DOl, subject to the availability of appropriate issues. 

Necessary support personnel will be detailed on an as-needed 

basis by the FBI, Department of Interior, with funding to be provided by the Department of Interior. In addition, we will request 

assistance from representatives of the Office of Inspector General 

and from other agencies, such as the Federal Emergency Management Administration and the Small Business Administration to the 

extent that they are needed to assist in investigations concerning 

their respective agencies. 

Let me add that our experience has been disappointing in the effectiveness of finding of existing Federal districts in which to bring 

prosecutions and investigations. The logistics alone, the viability of 

such inquiries make it obviously a poor substitute for having a direct U.S. district court with jurisdiction to address these problems. 

Finally, in light of the findings of the assessment team, we would 

recommend that a multi-agency Federal audit be conducted to update the 1992 GAO audit. 

Mr. Chairman and members of the committee, the Department 

of Justice is fully committed to working to try to address the whitecollar crime problem, to work with this committee in fashioning a 

response that assures that this problem is addressed in an effective 

way and consistent with all of the interests involved. 

Thank you, Mr. Chairman and members of the committee. I will 

be glad to answer any questions you may have. 

[Statement of Mark Richard may be found at end of hearing.] 

Mr. GALLEGLY. Mr. Stayman. 
24 

STATEMENT OF ALLEN P. STAYMAN, DEPUTY ASSISTANT SECRETARY FOR TERRITORIAL AND INTERNATIONAL AFFAIRS, 

DEPARTMENT OF THE INTERIOR 

Mr. STAYMAN. Mr. Chairman and members of the subcommittee, 

I am pleased to appear today to discuss the American Samoa 

White-Collar Crime Assessment. 

Governor Lutali wrote Secretary Babbitt on March 16 requesting 

aid in dealing with white-collar crime. Field work was completed 

in May of '94, which resulted in a December '94 draft American 

Samoa White-Collar Crime Assessment. Copies of the draft executive summary were made available to congressional offices and to 

the American Samoa government in February. 

A number of the recommendations found in the recently released 

final report involved Federal action. Governor Lutali, on panel one, 

has addressed recommendations for local action. 

We plan the following action on items which involve a Federal 

party. First, the Departments of Interior and Justice are committed 

to establishing limited Federal court jurisdiction for American 

Samoa. We expect to transmit draft legislation to the Congress 

shortly, which will be based on the following concepts. We wish, 

however, to discuss these concepts with concerned individuals so 

that any salient points can be accommodated. 

First, the Federal District Court for the District of Hawaii would 

have jurisdiction in civil and criminal causes and proceedings in 

American Samoa. Second, while court discretion would control, it is anticipated 

that Federal judges would be sent to American Samoa to try cases 

that arise in the territory, and that selection of juries would be 

from American Samoa. 

Three, only the Federal Government or an office or an agency of 

the Federal Government could bring an action in the Federal court. 

No non-Federal individual or entity would have standing to sue. 

Four, the subject matter jurisdiction of the Federal court would 

be limited to civil and criminal cases or proceedings to enforce Federal criminal laws or enforce the collection of debts owed to the 

Federal Government. Land tenure issues and Matai title issues 

would be expressly excluded from the Federal court's jurisdiction. 

We are acutely aware of the fears of many in American Samoa 

that application of these concepts in the territory would destroy the 

Matai title system and communal land tenure system. However, I 

submit that our concepts, if they become Federal law, will rank 

closely with the Deeds of Cession as the greatest protections of Fa' a 

Samoa. At present, a Federal judge, steeped in Federal constitutional precedent and tradition, may rule contrary to American Samoan sensibilities on these important issues, because there is no 

explicit prohibition in Federal law against the direct consideration 

of land tenure issues and Matai title issues by the Federal court. 

A good example of Federal court action was noted by the delegate 

from American Samoa in his statement about the circumstances 

under which jury trials were extended to American Samoa. Legislation with an express prohibition would substantially strengthen 

protection for the land and Matai aspects of Fa'a Samoa. The fact 

that only Federal officials or agencies would have access to the 

Federal court is added protection. 
25 

Second, an FBI presence is necessary to initiate investigations and a Federal prosecutor is necessary to prosecute offenders. Interior is willing to provide, within budget constraints, interim technical assistance funding, if necessary. The presence of these officials will fulfill Governor Lutali's original request for an increased 

Federal law enforcement presence. These Federal officials can be 

granted authority to work closely with local law enforcement authorities under local law. We hope that the Congress will support 

requested funding for technical assistance in fiscal year '96 so that 

we can continue to support such important territorial initiatives. 

Third, we will encourage the Inspector General to work closely with American Samoa's Territorial Auditor against white-collar 

crime. Interior provided interim funding again for technical assistance for the position of territorial auditor now occupied by Mr. 

Wendell Harwell. 

Fourth, and finally, with respect to the assessment's recommendations, the Department of the Interior plans to continue as 

a member of the joint working group which was tasked with developing a plan for resolving American Samoa's financial management problems. Through the working group, Interior has taken the initiative in numerous areas over the past several years to assist the 

ASG in improving its financial management capability, which in 

turn, will lessen the opportunity for white-collar crime. Interior has 

provided $1,600,000 to ASG for a new financial management and 

accounting system, and support for the American Samoa public auditor's office. 

We have provided assistance for developing a long-term financial 

recovery plan. We provided ASG with the first installment of a 

three-year program to hire Mercy, International to co-manage the 

American Samoa hospital. 

I would like to make two additional points in conclusion. First, 

in 1994, OTIA's financial statements received an unqualified opinion by Interior's Inspector General. This means that OTIA is prop- erly managing the taxpayers' money for which it is responsible. Other Federal agencies, however, encounter significant problems in American Samoa. These problems are likely associated with programs that provide loans to individuals or businesses. 

Second, until 1983, the Secretary of the Interior had broad authority in American Samoa, including the tools to prevent fiscal crisis. In 1983, however, the Congress enacted a prohibition against the Amendment of the Constitution of American Samoa by the Secretary of the Interior without approval of the Congress. Any effective Interior action aimed at controlling ASG deficits would likely 

run afoul of this provision. 

The committee should consider the question of the proper 

amount and distribution of authority needed to correct these prob- lems. I believe that the Administration's actions in the initiation of 

the American Samoa White-Collar Crime Assessment and Interior's 

assistance through the joint working group are a good beginning. 

It is time to move on with substantive action: Federal court jurisdiction, placement of audit and investigative personnel, and authority for effective follow-up. 

We look forward to working with the subcommittee, the Department of Justice, and ASG so that these goals can be achieved. I 
26 

would be pleased to answer any questions that the committee may 

have. Thank you. 

[Statement of Allen P. Stayman may be found at end of hearing.] 

Mr. GALLEGLY. Thank you, Mr. Stayman. Mr. Richard, you indicated in your testimony that there are significant gaps in the 

American Samoa criminal law. How important is the establishment 

of the territorial general fraud statute and subpoena authority for 

law enforcement agencies in American Samoa in order to provide 

an effective mechanism for enforcing the law? 

Mr. RICHARD. I would respond this way, Mr. Chairman. What 

our experience shows us is that you need capabilities at the local 

level, but you also need a Federal response. 

It is imperative that this problem be addressed at both levels, 

and that is why part of our interim solution is to place someone, 

an FBI agent, on an interim basis there to work with local authorities, upgrading training, establishing a dialog in how to do these 

kinds of investigations. 

We welcome and look forward to an enhanced relationship with 

local authorities. We are not suggesting by any means that this is 

solely a problem that the feds want to come in and respond to. 

In answer to your question, directly in terms of legislation, it is 

a very significant-if there is a political will, if there is the expertise to handle these cases, the absence of viable legal tools, if you 

will, whether it be subpoenas or appropriate statutes are major factors, so I certainly would encourage that these issues be addressed 

and addressed rapidly if we are in good faith trying to develop the 

capability to respond to this problem. 

Mr. GALLEGLY. Thank you very much, Mr. Richard. 

I have several questions that I would like to ask of both of you, but as we are getting closer to the hour that I am going to end up 

being over for a long series of votes and the desire to have our 

fourth panelist up here, in the interest of time, what I would like 

to do is submit the questions for the record and see that we send 

them off to you and have a response in a timely fashion, if there 

is no objection from my colleague to the left here. 

Mr. Faleomavaega. 

Mr. FALEOMAVAEGA. No objection, Mr. Chairman, and because of 

the interests of time, I have several questions that I would like to 

ask both Mr. Richard and Mr. Stayman, but I realize the constraints that you are under, and this being the last day before we 

go to the August break, it is very bad. It is terrible. 

But I would like just to offer a suggestion to Mr. Richard and to 

Mr. Stayman, the concerns that I have had. I have talked to Al 

about this very issue, going right to the heart and soul of why we 

have these problems, the ambiguities and uncertainties, and the 

fact of these two basic documents that I have been harping on for 

all these years touches on the very fact of why we end up not 

knowing exactly how far and to what we should be doing, both Federal activities of the territory, and what the territory itself should 

do. I make reference to the fact that whether or not these two documents are treaties or deeds, and I will say it again for the record, 

Mr. Chairman, as far dS our friends here, Uncle Sam and the Federal Government's concerned, these documents are deeds, and as 

deeds, they have no sense or reference of being treaties. As trea-
27 

ties, the sovereignty and the essence of the Samoan people do not 

have the answers of being treated under the provisions of the Constitution, and if these documents are not treaties, then we are 

nothing but mere property under the jurisdiction of the Federal 

Government, and I am very concerned about this, and I have always said that this is one reason why we end up the way we are 

now, because of these ambiguities. 

Now, we have got two contradictions of Federal statutes, the one 

in 1929 that gives the President by the Congress whole military, 

judicial, and administrative authority over the territory, and in 

1984, we enacted another Federal statute in contradiction to the 

1929 statute, so now we have all these attorneys making all their 

various interpretations as to which statute applies, and it is my 

opinion when we had the GAO hearing a couple years ago, our 

friends from Interior said, "Well, I am sorry, Congressman, we 

don't have the authority because of the 1984 statute," and I said, "Well, what happened to the 1929 statutes?" They said, "We don't 

know," and in summary, they interpreted it by saying, "Well, by 

our interpretation, the 1929 statute has been rescinded." I said, "Where does it say?" "Nowhere." So I am very bothered by this, Mr. 

Chairman, and it is something that we need to pursue, and I know 

that certainly that maybe my colleagues are wanting to get a better 

bearing on this in another sitting of the problem. I want to say the concern that I have had of how this whole 

thing came about, and I am sure Mr. Stayman and Mr. Richard are 

very sensitive about this issue, is that when it was first made public, the fact that it came about in a most negative way, giving a 

very strong implication that the Samoan people are a bunch of 

liars, embezzlers, and indicating that this was part of our culture, 

I resent that. I don't know how this thing came about; I don't know 

how the media made this kind of interpretation, but I certainly 

don't support it, and I think it is something that we ought to be 

very, very sensitive about, and I am sure the government joins me 

in expressing that concern. 

So Mr. Chairman, I definitely will submit a list of questions to 

be made part of the record, and I thank Mr. Stayman and Richard 

for their testimony. Thank you. 

Mr. GALLEGLY. Thank you all very much. At this time, we will 

move to our fourth panel, and our fourth panel has, I think, one 

representative and that is the Honorable Speaker of the House, the 

Honorable Savali Talavou Ale. Welcome, Mr. Speaker. 

STATEMENT OF HONORABLE SAVALI TALAVOU ALE, SPEAKER 

OF THE HOUSE OF REPRESENTATIVES, AMERICAN SAMOA 

Mr. ALE. Thank you. First of all, I would like to acknowledge the 

presence of one of our legal counselors, Mr. Sulea, who accompanied myself to this hearing. 

Mr. Chairman and members of this honorable committee, I am 

very thankful for the invitation to discuss the FBI report on whitecollar crime in American Samoa. No other report has generated as 

much discussion in the territory as this one. For that reason, I 

have decided to come to present a statement in the hopes that it 

will help put the FBI comments in proper perspective. 
28 

Mr. Chairman and members of this committee, I am amazed that 

the number one investigating agency in the Nation, and indeed the 

world, has put its seal on a report fraught with conclusions based 

on hearsay. By their own count, the FBI team read and studied 

about 50 reports in the territory. 

This FBI report is an indictment of our Fa'a Samoa. That is the 

way we live. They blame our culture and political system and fail 

to present solid evidence. They apparently think we are a small 

town somewhere in TV-land, which is in the tight grip of a few corrupt politicians. 

The FBI wants you to believe our family system is a form of 

Mafia. Mr. Chairman and members of the committee, I wish they 

had given us, the real political leaders the chance of interviews. 

They would have learned things which would have helped them 

prepare a fair and useful report. 

With those few comments, Mr. Chairman and members of this 

committee, let me now offer my prepared statement for the record. 

Thank you. 

[Statement of Honorable Savali Talavou Ale may be found at end 

of hearing.] 

Mr. GALLEGLY. Thank you very much, Mr. Speaker. Mr. 

Faleomavaega. 

Mr. FALEOMAVAEGA. Mr. Chairman, as I have the chance to peruse the Speaker's statement, I am very, very appreciative of the 

comments that you made. Interestingly enough, it appears that 

from the Speaker's testimony that they were never contacted, never 

really having a chance in this three-month period when the assessment team was doing this project, that it appears that you really were never part of the process, and I think this is something that 

ought to be taken into consideration. 

I would like to ask the Speaker, in your opinion, does the assessment team's report really reflect truly what is the situation that we 

are faced with in Samoa? 

Mr. ALE. Like I said, this report really hurts my conscience, but 

they are accusing the Samoan way, our Samoan custom, and also 

reflects how the high rank members of the government runs the 

government of American Samoa. 

Mr. FALEOMAVAEGA. In your opinion-! guess, especially in the 

capacity of your position as Speaker of the House-do you think 

that you would at least have had some kind of a private orientation 

to brief you in terms of some of these findings? 

I notice that your criticism of the report is that they make allegations, but they never cite the specifics. Was that one of the concerns that you had on this report? 

Mr. ALE. Well, like I said, there was no time of interviews during 

the team's present in American Samoa. We just heard about the 

FBI team being in American Samoa, but there was no time to sit 

down and discuss some of the things. 

Mr. FALEOMAVAEGA. In your capacity as Speaker at the time 

when the report was still being collated or being drafted, were you 

at any time ever consulted or even asked to comment on some of 

these findings of the assessment team? 

Mr. ALE. We just received the report when we contacted Mr. 

Manasi. 
29 

Mr. FALEOMAVAEGA. So in other words, you received the report 

in final form but without any communication prior to that time? 

Mr. ALE. Yes. 

Mr. FALEOMAVAEGA. I also have some questions, Mr. Chairman, 

that I definitely would like to be made part of the record for the 

Speaker to respond to, and I thank you very much. 

Mr. GALLEGLY. Thank you very much. 

Mr. Speaker, I just have one question that I would like to ask 

now, but I also would like to join my colleague in adding to the 

record questions that we will submit to you for response. 

The assessment indicates the lack of financial controls have contributed to the environment, resulting in fraud and abuse of funds. 

Does the legislature support providing the necessary resources to 

enable the government of American Samoa to meet the financial 

accountability necessary to comply with the audit standards of the 

Federal Single Audit Act? Are you committed to that? 

Mr. ALE. Right now, we are reviewing the revenue business submitted by our government, and in fact, we have approved some of 

the revenue lists before we recessed. 

Mr. GALLEGLY. Thank you, Mr. Speaker. If there are no further 

questions, this will end the hearing today. Did you have--

Mr. F ALEOMA v AEGA. Yes. Mr. Chairman, I, too, would like to express my appreciation for the Speaker for appearing before the 

committee and to provide the committee with his testimony, and 

certainly again, I want to express my appreciation to our Governor 

and our Territorial Auditor and our Attorney General, and our 

Budget Director that I see here, and our dear friend, Mr. Greg 

Keener, who works for the Department of Public Safety, and other 

members of the Governor's staff and cabinet. 

Mr. Chairman, my observations in what we have gone through 

this experience of the hearing this afternoon, as I have said in my 

initial statement, while it is very easy and convenient to say that 

we have got the solutions to the problems by addressing it by way 

of holding or drafting Federal legislation, again, I am very, very 

cautious even to entertain the idea that we are going to be drafting 

legislation to corrbct some of the problems that we are faced with 

right now in Samoa. 

I feel that this is not the course to pursue, and I feel also that 

I think what the government was wanting, simply just give them 

the tools to work with and get the job going, but it seems that we 

have got a full scale, massive legislative action to be taken on the 

part of the Federal Government, supposedly to cure some of the 

problems that we are faced with. 

I don't feel that this is the trend that we should follow, and I 

think we should continue to consult closely with the Governor and 

his administration, the leaders of our legislature, and to see what 

other possible options or avenues that we could pursue to resolve 

this serious problem. 

Again, Mr. Chairman, I thank you for this initiative and your 

leadership in calling this hearing. I know that it certainly has 

quieted some of the concerns of my colleagues on this side of the 

aisle, because I was very upset, Mr. Chairman, to tell you quite 

honestly, because the implications of how this whole report came 

about was in a very negative way, and a way that I just could not 

20-369 0 - 96 - 2 
30 

believe that this is the kind of thing that we are pursuing, not only 

witch hunting, but to suggest that as if some of these problems 

were not under consideration for all these years now, and I am not 

putting the blame on any one agency or group of individuals or 

even organizations. I just feel that we got the problems. I think 

there are options that we could exercise, and I certainly look for- ward to working with you and the committee to see what other possible course of action we could pursue in the coming weeks and 

months. Again, Mr. Chairman, I thank you for your help in this hearing. Mr. GALLEGLY. I thank you and I thank all of those that made 

this long trek. Believe me, none of us take lightly the effort that 

you have made to be here today, and I am absolutely convinced 

that this hearing is going to play a very important role in working 

with and addressing this issue as we move ahead. I think this is a very important step in the process, and remain 

committed to see that we work this through and work well with the 

ranking member, and again, thank you all for being here today, 

and I look forward to working with you as we work on this issue 

and other issues affecting American Samoa. 

The hearing is adjourned. 

[Whereupon, at 3:10 p.m., the subcommittee was adjourned; and 

the following was submitted for the record:] 
31 

STATEMENT OF R. WENDELL HARWELL 

Territorial Auditor of American Samoa 

Thank you for the opportunity to testify on the Department of Justice 

Assessment of White Collar Crime in American Samoa. My name is R. 

Wendell Harwell, and I am the Territorial Auditor of the American Samoa 

Government. The Territorial Audit Office is an independent agency of the 

American Samoa Government. Although Governor A. P. Lutali has requested 

that I provide testimony today, the views that I express here are my own. 

I was recruited as a part of a contract of accountability that Governor 

Lutali brought with him into office in 1993. Governor Lutali was committed to 

the appointment of a professional Territorial Auditor, and he requested 

investigative and prosecutorial support from the U.S. Department of Justice to 

follow-up on audit findings of misconduct. 

TERRITORIAL AUDIT OFFICE 

I was told by Governor Lutali that it was his desire to "clean up the 

American Samoa Government," and he requested my assistance in helping him 

reach that objective. I brought with me to American Samoa almost 35 years of 

auditing experience -- primarily as an audit partner of an international CPA 

firm. I am a Certified Public Accountant licensed to practice in California, 

Texas, and now American Samoa, and I am also a Certified Fraud Examiner. 

Since I have assumed the position of Territorial Auditor, we have 

upgraded the audit staff and developed an audit plan. We are presently 

recruiting for a second audit manager in order to increase the capabilities of the 

office. In the last 16 months, we have issued twenty reports and letters of 

finding. Thirteen of these reports and letters of finding included 

recommendations for improving financial controls. All the recommendations we 

made have been accepted by the American Samoa Government and have either 

already been implemented or are in the process of implementation. 

Five of the reports or letters of finding have detected waste and abuse. 

Seven of the reports or letters of finding have detected possible fraud. In six 

instances, we have issued confidential reports to the Attorney General requesting 

- 8 -
32 

criminal investigation. The Attorney General has already prosecuted two of 

these cases and currently has three cases actively under investigation. The 

Territorial Audit Office currently has 10 additional audits in progress. Two of 

these audits include suspected fraud and eight include suspected waste and abuse. 

Prior to Governor Lutali's administration, the American Samoa 

Government did not employ a professional Territorial Auditor, but instead 

employed an Acting Territorial Auditor who was not a CPA or CIA and who 

was never confirmed by the American Samoa Legislature, as required by local 

law. This Acting Territorial Auditor issued only three audit reports or letters 

of finding in the 16 months preceding the Lutali administration, and none of 

these audits addressed substantive issues. 

Although it is difficult to estimate the prospective savings of the 

recommendations made by the Territorial Audit Office in the last 16 months, it 

is easily in the hundreds of thousands of dollars annually. Moreover, the 

publicity of the reports coupled with the publicity generated by the prosecutions 

must certainly have a restraining influence on white collar crime. All of this has 

been possible because our office has the support of key officials in the American 

Samoa Government, including the Governor, the Treasurer, and the Attorney 

General. 

The Governor has issued Executive Orders and General Memoranda in 

support of our recommendations, the Treasurer has made records easily 

accessible, and the Attorney General has supported our requests for criminal 

investigation, and has also called on the Territorial Audit Office for expert 

testimony when required. The Office of the Attorney General and the 

Territorial Audit Office have worked together in several cases of suspected or 

actual fraud. 

FINANCIAL MANAGEMENT SYSTEM 

The present administration inherited a computer system that was so 

unreliable that Deloitte & Touche, the American Samoa Government's external 

certified public accountants, disclaimed an opinion on their audit report on the 

- 9 -
33 

financial statements of the American Samoa Government. The Government is 

currently in the process of acquiring a new financial management system. 

This new system, when procured and installed, will provide a vehicle for 

accurate and timely financial information that will allow better management of 

scarce government resources. It will also improve internal financial controls as 

well as provide analytical tools that will assist in the timely detection of fraud. 

We believe the incidence of white collar crime decreases significantly when 

strong financial controls are coupled with a proactive criminal enforcement 

system. 

The present Administration also inherited financial records in complete 

disarray: books that did not balance, bank statements that had not been 

reconciled for months, and filing systems that were incomplete. The 

Government is currently in the process of recruiting four professional accounting 

managers for the Department of Treasury. These professional managers will 

provide proactive leadership in bringing the American Samoa Government's 

financial records up to date, in monitoring and improving existing internal 

financial controls, and in recommending additional internal financial controls. 

This financial information system along with the additional professional 

management will greatly enhance the ability of the American Samoa Government 

to detect and to prosecute white collar crime in government. Successful 

prosecution of white collar crime requires, in addition to ordinary investigative 

techniques, the technology that will provide accurate, detailed financial 

information that can be relied upon by both the prosecutors and the court. 

JUSTICE DEPARTMENT ASSESSMENT 

Regarding the assessment by the Justice Department, I would like to 

address the statement in the Executive Summary that "a striking example of the 

lack of accountability is the recent refusal by the Fono to allow an audit of its 

financial records by ASG's Territorial Audit Office after allegations were made 

that Fono members had abused their travel vouchers and intentionally overspent 

the budget." You should not conclude from this statement that the Territorial 

Audit Office does not have the will to audit the Fono. The fact is that the 

Territorial Audit Office does not have the legal authority to audit either the 

legislative or judicial branches of government. However, the legislative and 

- 10 -
34 

judicial branches are subject to audit by the Office of the Inspector General of 

the Department of the Interior, and the Inspector General has recently completed 

an audit of the Fono. 

CONCLUSION 

Finally, I want to emphasize that the American Samoa Government is 

taking action to prevent, detect, and prosecute white collar crime. The Interior 

Department has been very helpful in recently providing funding for a financial 

management system and for the first-year costs of several professional 

accounting managers. This funding will allow the American Samoa Government 

to improve its recordkeeping system, and to develop accurate accounting and 

management information. As a result, we expect to see a vast improvement in 

financial and management controls. 

- 11 -
35 

mepartmtnt of Justitt 

STATEMENT OF 

MARX M RICHARD 

DEPUTY ASSISTANT ATTORNEY GENERAL 

CRIMINAL DIVISION 

BEFORE THE 

SUBCOMMITTEE ON NATIVE AMERICAN & INSULAR AFFAIRS 

COMMITTEE ON RESOURCES 

U.S. HOUSE OF REPRESENTATIVES 

CONCERNING 

WHITE-COLLAR CRIME IN AMERICAN SAMOA 

PRESENTED ON 

AUGUST 3, 1995 
36 

t·~r. Chairman and members of the Committee, thank you for 

inviting me here today. 

I am a Deputy Assistant Attorney General in the Criminal 

Division with oversight responsibility for the Division's Office 

of International Affairs, as well as the Internal Security 

Section, Terrorism and Violent Crimes Section, and Office of 

Special Investigations. 

Today, my testimony will address the white-collar crime 

problem in American Samoa, which relates in part to the absence 

of any mechanism for enforcing federal statutes. I also would 

like to explore possible solutions to the problem. 

As a result of its status as the only U.S. Territory not 

within the jurisdiction of a U.S. District Court, there has been 

no sustained enforcement of federal criminal laws in American 

Samoa -- with consequences that require immediate attention. 

One of the most serious consequences is the evolution of a 

significant white-collar crime problem in American Samoa, 

including widespread misuse of federal and other public funds. 

Over the past years, the financial practices of the American 

Samoan Government have been the subject of repeated audits and 

investigation by the Department of the Interior and the Congress. 
37 

Those audits have revealed highly inadequate controls and 

oversight regarding the use of governmental funds. They also 

:::::·::; found indications that competitive bidding practices have 

been ignored and circumvented and that officials may have been 

involved in conflicts of interest and other abuses. 

In a March 1993 letter to Department of the Interior's 

Secretary Bruce Babbitt, newly-elected Governor Richard Lutali of 

American Samoa pledged to restore integrity, credibility and 

sound fiscal management to the territorial government. To that 

end, Governor Lutali requested that, pursuant to 48 U.S.C. 

§ 1666, a Justice Department prosecutor and FBI agents be 

detailed to the American Samoa Government to investigate and 

prosecute public integrity and white-collar crimes. 

In response to that request, the Departments of Justice 

and Interior sent an assessment team to American Samoa consisting 

of one Assistant U.S. Attorney and two FBI agents. In December 

1994, the assessment team submitted a comprehensive report, which 

has been provided to the Governor and this Committee. It sets 

out evidence that white-collar crime -- and in particular, public 

corruption -- appears to be widespread in American Samoa. The 

report also details some of the factors that pose obstacles to 

the prosecution of such crime. 

2 
38 

The team f urther found that many o f the allegations 

centered on conflicts of interest in the awarding of government 

contracts to i nd i viduals who were related, either directly or 

through extend ed families, to the offic ials approving the 

contracts. 

Other a l legations focused o n the abuse of government 

funds fo r personal benefit. De spite the fact tha t many of these 

a l l egat i ons had been reported to the appropriate authorities, and 

we re wel l - known t o the public, very few investigations were 

initiated by past Samoan Administrations, and few of those 

invest igations resulted in prosecutions. 

The assessment team's report suggests that a number of 

factors have c o ntribu t e d to this situation. They i nclude a lack 

of financial controls that would deter fraud and abuse, as well 

as a l ack of cra ining and experience o n the part of investigato rs 

and prosecutors regarding white -collar crimes. 

Coupled with these problems are inadequacies of the 

legal system. As I have mentioned, America Samoa is the o nly 

territory over which no federal district court has jurisdiction. 

Thus, although the federal crimes set forth in Part I of Title 18 

apply in most instances to American Samoa, there is no effective 

mechan ism f o r enforcing those laws. 

3 
39 

There are, in addition, significant gaps in American 

Samoan criminal law, including the absence of a general fraud 

statute . Moreover, under Samoan law, law enforcement agencies do 

not have authority to seek subpoenas prior to the filing of 

formal charges. 

The Departments of Justice and the Interior are 

committed to the development of an appropriate solution to the 

white-collar crime problem and other problems related to the 

absence o f federal law enforcement authority in American Samoa . 

There are several options under consideration: One is the 

extension of limited federal court jurisdiction from the District 

of Hawaii to American Samoa. This option would require 

legislation to confer jurisdiction over federal crimes committed 

on American Samoa on the U.S. District Court for the District of 

Hawaii, and to authorize the U.S. Attorney for the District of 

Hawaii to prosecute such crimes . Such a proposal would confer 

limited criminal jurisdiction on the District of Hawaii and allow 

the U.S. to bring suit in the District Court of Hawaii to enforce 

civil statutes and to collect the debts owed to the United States 

by American Samoans. 

We are sensitive to the concerns of American Samoans 

about any proposal that would interfere with the Samoan land 

tenure and Matai title systems. Accordingly, the option of 

extending limited federal court jurisdiction would specifically 

4 
40 

exclude issues concerning Matai title or office, or the tenure of 

communal land. We therefore believe that such a proposal should 

authorize the creation of separate jury lists for Hawaii and 

Samoa so that proceedings could be held in American Samoa. It is 

anticipated that, at the discretion of the court, pursuant to 28 

U.S.C . § 141, the District Court in Honolulu would be authorized 

to ho ld special sessions in American Samoa. In many cases, this 

should obviate the need to try Samoans in such a distant 

location. 

The creation of a separate District for American Samoa 

would of course require an expenditure of federal funds that 

seems difficult at this time, in light of the small number of 

cases that would be invol ved. 

Another option is vesting federal jurisdiction in the 

High Court of American Samoa. While we fully r ecognize that the 

High Court is a competent tribunal, we have certain concerns 

about whether it is suited to proceedings to whi c h the Federal 

Government is a party. 

The substitution of the High Court of American Samoa for 

the District Court for the District of Hawaii would run counter 

to well established legislative policy that the federal district 

courts should have exclusive jurisdiction over the type of 

proceedings to which the United States is a party. For example, 

5 
41 

18 USC § 3221 provides that the District Courts of the United 

States have exclusive jurisdiction of all offenses against the 

criminal laws of the United States. With regard to the 

collection of debts owed to the United States, 28 U. S.C. §§ 3001 

and 3002(2) provide for an exclusive collection procedure in the 

courts created by Congress. Similarly, regulatory statutes 

provide for enforcement and judicial review in the federal 

courts. 

A second concern stems from the fact that the Justices of 

the High Court are appointed by the Secretary of the Interior. 

This means that the non - governmental party would be forced to 

have its cause decided by a tribunal which is not free from 

domination by the executive branch. 1 Hence, this judicial setup 

1 The High Court is composed of the Chief Justice, an 

Associate Justice, Acting Associate Justices and Associate 

Judges. The Justices are appointed by the Secretary of Interior, 

and may be removed by him for cause . American Samoa Code §§ 

3.1001, 3.0220 . The Judges are appointed by the Governor of 

American Samoa, upon recommendation of the Chief Justice and 

confirmation of the Senate of American Samoa. ASC § 3.1004. 

The sessions of the Trial Division of the High Court consist 

of a Justice and the two Associate Judges. Hence, they are 

presided o ver by an appointee of the Secretary of the Interior. 

The sessions of the Appellate Division are held befo re three 

Justices and two Associate Judges. ASC § 3.0220 . Since there are only two permanently appointed Justices, and since the 

Justice who presided in the Trial Division does not s it on appeal 

from the decisions in which he participated, the Secretary of the 

Interior has to appoint two Acting Associate Justices to provide 

for a full appellate bench. Ibid . The Secretary of the Interior 

usually designates federal judges to be acting Associate 

Justices . It should also be mentioned two Justices and one 

Associate Judge constitute a quorum of the Appellate Division 

(ibid), and in the case of a difference o f opinion among the 

Justices and Associate Judges the opinion of two of the Justices 

prevails. ASC §§ 3.0221. 

6 
42 

would invite challenges that the procedure violates the due 

process of law . The question of appearances might be of greater 

concern in the Appellate Division, where the Secretary of the 

Interior appoints two Acting Associate Justices ad hoc. While 

the Acting Justices are federal judges, the non-government party 

could well assert that the Secretary selected them because he was 

aware of their legal views. Finally, the decisions of the High 

Court are subject to review by the Secretary of the Interior, 

which would intensify the due process problem. We cannot 

underestimate the vulnerability of this scheme to attack. 

Lastly, the process of reviewing the decisions of the High 

Court present difficulties as to its complexity. There is no 

direct appellate review of the decisions of the High Court of 

American Samoa by a federal court. The Secretary of the 

Interior's rulings are subject to review in the U.S. District 

Court for the District of Columbia. The ruling of that District 

Court is appealable to the U.S. Court of Appeals for the District 

of Columbia, which would be subject to discretionary review in 

the Supreme Court by writ of certiorari. 

In sum: the decisions of the Trial Division of the High 

Court would be subject to five levels of review. First, in the 

Appellate Division of the High Court; second, before the 

Secretary of the Interior; third, in the District Court for the 

District of Columbia; fourth, in the Court of Appeals for the 

7 
43 

District of Columbia Circuit; and fifth, in the Supreme Court. 

Decisions of the District Court for the District of Hawaii, by 

contrast, would be subject only to two levels of review . 

It might be suggested that the review of the decisions of 

the High Court would be simplified if the judgments of the 

Appellate Division of the High Court were made appealable to the 

Court of Appeals for the Ninth Circuit. This, however, would 

create the awkward situation that some decisions of the High 

Court are reviewable in the Ninth Circuit and others are not. 

Proposals to provide for the appellate review of all High Court 

decisions in the Ninth Circuit have been stalled because of 

opposition from American Samoa. 

Under these circumstances, we would have serious concerns 

about a proposal to address the white-collar crime problem by 

conferring federal jurisdiction on the High Court of American 

Samoa. 

We believe that some solution is essential from both a civil 

as well as a criminal perspec tive -- there is reason to believe 

that millions of dollars in debts owed to federal agencies by 

residents of America Samoa are at present essentially 

uncollectible by agencies of the Federal government. 

8 
44 

This Department has agreed, as an interim measure, to detail 

one FBI agent for one year to American Samoa to: (i) assist, 

following consultations with appropriate local officials, in 

establishing a local-federal white-collar crime task force; and 

(ii) develop cases that could be prosecuted either in the Samoan 

courts or in any federal district court where, by the nature of 

the crime ~. conspiracy to defraud the United States) venue 

might lie without the need for legislation. Funding for the 

interim measures will be provided by DOI, subject to the 

availability of appropriations. In this regard, it should be 

noted that without this funding source, it is unlikely that the 

FBI could fund this activity through existing appropriations. 

Necessary support personnel will be detailed on an as-needed 

basis by the FBI, DOI, and/or this Department, with funding to be 

provided by DOI, if available. In addition, we will request 

assistance from representatives of the Office of the Inspector 

General from other federal agencies, such as Federal Emergency 

Management Administration and Small Business Administration to 

the extent that they are needed to assist in investigations 

concerning their respective agencies. 

Finally, in light of the finding~ of the assessment team, we 

recommend that a multi-agency federal audit be conducted to 

update the 1992 GAO audit. 

9 
45 

Mr . Chairman, and members of the Committee, the Department 

of Justice is fully committed to combatting this white-collar 

crime problem, and in that regard, we plan to do everything we 

can to ensure that justice is done on American Samoa . 

I would welcome an questions that you might have at this 

time. 

10 
46 

STATEMENT OF ALLEN P . STAYMAN 

DEPUTY ASSISTANT SECRETARY ·OF THE INTERIOR 

FOR 

TERRITORIAL AND INTERNATIONAL AFFAIRS 

BEFORE THE HOUSE SUBCOMMITTEE ON NATIVE AMERICAN AND INSULAR 

AFFAIRS 

REGARDING THE AMERICAN SAMOA WHITE-COLLAR CRIME ASSESSMENT 

AND SOLUTIONS 

August 3, 1995 
47 

Mr. Chairman and members o f the Subcommittee on Native 

I nsular Affairs, I am pleased to appear today to 

Ame rican Samo a White -Collar Crime Assessment and measures for dealing with t his serious issue . 

American and 

discuss the 

appropriate 

American Samoa Governor A. P. Lutali wrote Secretary Bruce Babbitt, 

March 16, 1993, requesting aid in dealing with white- collar crime . 

The Office of Territorial and International Affairs (OTIA), 

responded with funding for the formation of a partnership among the 

Ame rican Samoa Government (ASG), the Department o f Justice , and 

Department of the Interior. The partnership called for Department 

of Justice personnel t o assess white -collar crime in the territory . 

The field work was completed in May 1994 , which resulted in the 

December 1 994 American Samoa White - Collar Crime Assessment . We 

support the Assessment's recommendations for an increased federal 

law e nforcement presence in American Samoa. Having delineated the 

issues and having proposed actions to attack white - collar crime, it 

r emains for Interior, Justice, and the ASG, with the aid of the 

Congress to follow through . 

RECOMMENDATIONS 

A number of the recommendations found in the Assessment involve 

federal action: 

(1) limited federal district court jurisdiction to enforce federal 

statutes in American Samoa and collect debts owed the federal 

government, 

(2 ) an FBI resident agency in American Samoa, 

(3 ) a joint local-federal white-collar crime task force, 

(4) a local-federal law enforcement advisory board, 

(5) auditing by Interior (Inspector General), the General 

Accounting Office, and independent firms until the American 

Samoa's Territorial Audit Office functions optimally, and 

(6) continuation of the joint ASG-DOI working group to implement 

the GAO admonition that ASG financial and management problems 

be fixed. 

The Assessment contains a number of additional recommendations, 

which are strictly local in nature, that would aid law enforcement 

in American Samoa. I understand that Governor Lutali is addressing 

the recommendations for local action. 

FOLLOW THROUGH 

From the federal perspective, the Departments of the Interior and 

Justice view the American Samoa White - Collar Crime Assessment as 

providing the foundation for further action. We plan to follow 

through . 
48 

2 

We plan the following action on each of the items I noted earlier 

where a federal party may be involved. 

Federal Court Jurisdiction. The Departments of the Interior and 

Justice are committed to establishing limited federal court 

jurisdiction for American Samoa in all causes and proceedings that 

could be brought in American Samoa by the federal government (1} to 

enforce federal law or collect debts owed the federal government, 

or (2 } pursuant to international agreements. Federal court subject 

matter jurisdiction would be limited because (while references may 

be made to land tenure issues or Matai title issues in federal 

court proceeding} land tenure issues and Matai title issues could 

not be directly decided by the federal court. 

Co nc epts I will discuss here are incorporated in draft legislation 

now under review within the Administration. We expect to transmit 

draft legislation to the Congress shortly, when the review is 

completed. The Departments o f the Interior and Justice believe 

that the concepts I am about to outline accommodate both the needs 

of the federal government to protect federal law and property, and 

the needs of the federal government and American Samoa to protect 

the Fa'a Samoa. We wish, however, to discuss these concepts with 

concerned individuals, especially representatives from American 

Samoa. We want to include any salient points that can be 

accommodated. 

The c oncepts under consideration are: 

o The Federal District Court for the District of Hawaii would 

have jurisdiction in civil and criminal causes and proceedings 

in American Samoa. 

o While court discretion would control, it is anticipated that 

Federal judges would be sent to American Samoa to try cases 

that arise in the territory, and the selecti on of jurie s would 

be from American Samoa jury pools. o Only the federal government or an officer or agency of the 

federal government could bring an action in the federal court 

-- no non-federal individual or entity would have standing to sue. 

o The subject matter jurisdiction of the federal court would be 

limited to civil and criminal causes or proceedings to enforce 

federal criminal laws or enforce the collection of debts owed 

the federal government -- land tenure issues and Matai title 

issues would be expressly excluded from the federal court's 

jurisdiction . 

We in the Executive branch are acutely aware of the fears of many 

in American Samoa that federal court jurisdiction would bring 

common law property concepts into effect in American Samoa. The 

concern is that application of these concepts in the territory 

cculd destroy two pillars of Samoan culture -- the Matai or chiefly 

title system and the communal land tenure system. Additionally, we 
49 

3 

are aware of federal obligations in the Deeds of Cession to 

"respect and protect the individual rights of all people . to 

their lands and other property" and "that the rights of the chiefs 

in each village and of all people concerning their pro perty acco rding to their custom shall be recognized." 

I submit that our concepts, if they become public law, will rank 

c l osely with the Deeds of Cession as the greatest pro tectio ns of 

the Fa'a Samoa . At present, should land or Matai issues arise in a federal court proceeding, a federal judge, steeped in federal 

constitutional precedent and tradition, may rule contrary to 

American Samoa sensibilities on these impo rtant issues. There is 

no explicit prohibition in federal law against the direct consideration of land tenure issues and Matai title issues by a 

federal court. Legislation with such an express prohibition would 

strengthen immeasurably protection for the land a nd Matai aspects 

of Fa'a Samoa. The fact that only federal officials or agencies 

would have access to the federal court is added protection. 

We believe that careful drafting and scrupulous attention to the 

letter and spirit of the Deeds of Cession will allow us, working 

together, to address both federal and local concerns for the Fa'a 

Samoa and for enforcement of federal statutes and accountability 

f o r federal funds. 

FBI Presence. An FBI presence is necessary to initiate 

investigations, and a federal prosecutor is necessary to prosecute 

o ffenders . As soon as the Department of Justice believes it 

practicable, Interior is willing to provide (within budget 

constraints) interim technical assistance funding, if necessary, 

f o r the stationing of an FBI agent(s) and a prosecutor in American 

Samoa. The presence of these officials will fulfill Governor 

Lutali's original request for an increased federal law enforcement 

presence. These federal officials can be granted authority to work 

closely with local law enforcement authorities under local law . 

This is a good example of the need for and validity of Interi or's 

technical assistance program for the territories. Law enforcement 

in American Samoa has quickly come to everyone's attention. 

Because of the budget cycle, it normally would take two years to 

address this time-sensitive crime issue. Because the need here is 

immediate, however, we are ready, willing, and able to act now on 

interim funding for Justice personnel with resources from our technical assistance program . We hope that the Congress will 

support requested funding for technical assistance in fiscal year 

1996 so that we can continue to support such important t .erritorial 

initiatives as needs arise. 

White-Collar Crime Task Force and Law Enforcement Advisory Board. 

The Department of the Interior sees value in the recommended 

objectives for the task force and advisory board. Should the ASG 

wish, we will be glad to participate . 
50 

4 

Interim Auditing . In 1S82, Interior's Inspector General was given 

the authority of the former government comptroller to "audit all 

accounts pertaining to revenue and receipts of the government of 

American Samoa. . " (48 U.S . C. 1668 (b)) This authority "shall 

extend to all activities of the government of American Samo a, and 

shall be in addition to the authority conferred upon the Inspector 

General by the Inspector General Act . " (48 U.S . c. 1668 (c )) 

We will encourage the Inspector General to work closely with 

American Samoa's Territorial Auditor against white collar crime . 

Interior provided interim funding for the position of Territorial 

Auditor, now occupied by Mr. Wendell Harwell. Mr . Harwell is to be 

complimented for his effective efforts in his short time on the 

job . Additionally, the Attorney General, Mr . Malatasi Togafau, 

must be commended for his aggressive prosecution of crimes and his 

cooperation in providing information for the White-Collar Crime 

Assessment. 

Continuation of Joint ASG-DOI Working Group . The Department of the 

Interior plans to continue as a member of the Joint Working Group 

(established in 1992 as directed by the congressional 

appropriations committees in report language), which was tasked 

with developing a plan for resolving American Samoa's financial 

management problems. The authors of the Assessment were quite 

blunt in quoting the 1992 General Accounting Office audit: 

"What needs to happen now is that both the American Samoa 

government and Interior get serious about fixing the problems . " 

The lack of adequate financial management controls in American 

Samoa create a climate conducive to white-collar crime. Through 

the Joint ASG-DOI Working Group, Interior has taken the initiative 

in numerous areas over the past several years to assist the ASG in 

improving its financial management capability, which in turn will 

lessen the opportunity for white-collar crime. We joined with the 

ASG to form the joint working group recommended by the 

appropriations committees . We provided $1.6 million to the ASG f o r a new financial management and accounting system under our 

management controls program, and support of American Samoa's Public 

Auditor. We provided assistance for developing a long-term 

financial plan for ASG, which will include a strategy for 

increasing revenue and containing costs. We provided the ASG with 

the first installment of $1 . 1 million for a three-year program, in 

December 1994 (subject to future appropriations for two additional 

years), to hire Mercy International to co-manage the American Samoa 

hospital. Additionally, we have provided a substantial amount of 

technical assistance funds to improve financial management in 

American Samoa, including several hundred thousand dollars a year 

for training of accounting and management controls personnel under 

our Pacific Islands Training Initiative. 

I must note for the subcommittee that in 1994, in its first 

assessment under the financial reporting requirements contained in 

. the Chief Financial Officers Act of 1990, OTIA's financial 

statements received an unqualified opinion by Interior's Inspector 
51 

5 

Genera l. This means that OTIA's financial statements were reliable 

in all material respects and that the internal control structure 

provided reasonable assurance that assets were protected. OTIA is 

good at managing the taxpayer money granted to American Samoa for 

which it is responsible. Other federal agencies, however, encounter significant problems in Ame rican Samoa . These problems are likely assoc iated with programs that provide loans t o individua ls or businesses in Samoa . At present, Interior and other 

agencies lack sufficient authority to deal more e ff e ctively with 

these other federa l programs or wi th the ASG's deficit problems. 

Until 1983, the Secretary of the Interior had plenary authority in 

American Samoa, including the tools to prevent f iscal c r isis in the 

local government. In 1983, however, the Congress enacted a prohibition against the amendment of the Constitut ion of Ame rican 

Samoa by the Secretary o f the Interior without approval of the 

Congress, 48 U.S.C. 1662a. Any effective Interior action aimed at 

controlling ASG deficits would likely run afoul of t his provision. 

It is a question of the proper amount of authority to do the job . 

I believe that t he Administration's actions in the initiation of 

the American Samoa White-Collar Crime Assessment and Interior's 

assistance through the Joint ASG-DOI Working Group are a good 

beg i nning. It is time to move on with substantive action 

federal court jurisdiction, placement of audit and investigative 

personne l , and authority for effective deficit control. We look 

forward t o working with the Subcommittee, the Department of 

Justice, and the ASG so that these important goals for good 

government in Ame rican Samoa can be achieved. 
52 

Testimony by 

The Legislature of American Samoa 

offered by 

Honorable Savali Talavou Ale 

Speaker of the House of Representatives 

on the 

Federal Bureau of Investigations Report: 

American Samoa White Collar Crime Assessment 

(Redacted Version, December 1994) 
53 

Mr. Chairman and Members: 

Thank you for the opportunity to testify in regards to the FBI report: American 

Samoa, White Collar Crime Assessment (Redacted Version, December 1994). The term 

"Report' as used in this statement refers to that report, and 'Team• means the FBI 

investigators who prepared it 

BeQu.es1 

The request for services of the FBI was made by Governor A.P. Lutali only after 

two months in office. It was prompted primarily by a Department of Interior, Office of 

Inspector General audit whiCh projected a budget defiCit of $60 million by March 31, 1993. 

Under strong opposition and objections from the ASG Treasury, DOI-OIG reduced that 

deficit estimate down to $30 million, and the author of that report soon left his post. 

We want to point out that in 1983, a threat by DOl's Office of Territorial and 

International Affairs Director to replace the local Attorney General with his own man, to 

do exactly what Governor Lutali asked the FBI to do ten years later, led to the passage 

of 48 U.S.C. Section 1662(a) whiCh is mentioned in the Report. That provision prevented 

the Secretary of Interior from unilaterally amending the Constitution of American Samoa. 

Had it not been for that provision, he would have amended the local constitution to give 

himself authority to hire and fire any and all local OffiCials. It does appear that the request 

by Governor Lutali is a reversal of the past local attitude of guarding fiercely any and all 

measures of authority granted to the local government, from further federal intrusion. 
54 

The request was made soon ·after the change of local administrations, and 

immediately preceding a gubernatorial campaign that was very rough, almost bitter. For 

example, the defeated incumbent did not stay around for the inauguration. 

When the new administration took office, there was a strong feeling that the huge 

deficit resulted from possible mismanagement and/or misappropriation of government 

funds by the previous administration. Prosecution was in the minds of the new team. 

The Team and Sources 

We do not know the criteria for selection of the Team sent by the Department of 

Justice to do the Assessment. Since we were not contacted and had no discussions with 

any of them, we have only the observations of some people they met, newspaper reports 

plus this Report to go by. It appears, as indicated in the Report, that the FBI picked up 

most of their factual information from previous studies and reports. They indicated the 

use of about 50. These dealt with a wide range of issues and problems in the Territory. 

The Team reports having interviewed a number of people in and out of 

government. A listing of those interviewed would indicate the type and degree of 

reliability of source used for the report. 

We believe the Team placed too much reliance on past reports, and accepted too 

much information from people they worked closely with, and gave too much credence to 

their information and feelings. And since the Team worked out of the Attorney General's 

Office, they appear to tread softly around the present AG, his staff, and his effort to 

pursue the investigation and prosecution of white collar crime. For example, the biggest 

2 
55 

case of suspected fraud and embezzlement seen in this territory to date is the case of 

the closed Federal Credit Union for ASG Employees. The AG has had that case for 

years now. The FBI makes no mention whatsoever of that case, or why the AG has not 

moved for prosecution. 

The Team praises the assistance of a certain investigator whom they declared to 

be exceptionally qualified, having been in law enforcement since 1975. In a recent court 

appearance as a witness, the same officer, when asked about the number of cases he 

had successfully investigated in his career responded: 'One'. 

One of the Team members had worked in American Samoa previously, and we 

strongly suspect that she arrived this second time with preconceived ideas about the 

situation in the Territory. 

Assessment of Current Criminal Justice System 

We believe the Team is near accurate in its assessment of the system. The 

uncertainty of the ranking of 'common law' versus local 'custom' has never been an 

issue in the Territory. As to the effect of 'ifoga' in local court cases, it should be pointed 

out that the local population does not believe the ancient custom, esteemed and solemn 

as it is, has any effect on the outcome of criminal court cases. If performed these days, 

it is simply a social gesture expressing penitence, showing that performers have class, 

in purely customary terms. 

The lack of adequate prison facilities is a fact which the Territory began to address 

some time ago. A site for the new prison has been tentatively selected. Comments 

3 
56 

about the low pay of officers and the continual reorganization of the Department of Public 

Safety are on par. Despite criticisms of the South Pacific Islands Criminal Intelligence 

Network (SPICIN), the fact is it has become a very important tool in police work in the 

islands. 

The so-called "problematic' relations between the Attorney General's Office and 

the Department of Public Safety recognized by the Team, has existed for as long as the 

two have been separated. Blame on the lack of successful prosecution has always been 

levelled at the DPS investigators. The latter blames the ineffectiveness of prosecutors, 

and complain when cases investigated and referred for prosecution are held up 

indefinitely. 

Political Connections 

The current report repeats a charge by the DOl's Inspector General that the AG 

in the Territory declined to prosecute cases where the subject had ' political connections'. 

We feel the FBI should have cited examples, not just repeat an unsubstantiated charge. 

For a developing territory, one trying to learn how to do that which is right, the FBI report 

is most damaging in that it paints a picture of a territory in the solid grip of 'politicians•. 

That is clearly not the case. Two former Attorney General's were interviewed in 

preparation of this statement. Both deny vehemently any sort of political influence in their 

prosecutorial decisions. 

The inference is made (p.16) that the hiring of the former Delegate to Congress 

Fofo I. F. Sunia. by the Legislature was politically inspired. Nothing could be further from 

4 
57 

the truth. Mr. Sunia was hired by former House Speaker Tuanaitau F. Tuia and the 

present President Letuli Toloa. He fills a vacancy left by the death of longtime Legislative 

Research Bureau official, Mr. Va'alele Ale. President Letuli and Speaker Tuia felt, and 

I completely concur, that Mr. Sunia had the unique qualifications not only to fill that slot 

but to apply his experiences in the field of legislation to upgrading the system. Let me 

say that we have been pleased with his work, and in fact, he has assumed more than we 

originally agreed on. I can unequivocally state that NO political influence whatsoever was 

brought to bear on this appointment. 

Again, Mr. Chairman and members, let me make the point of preconceived ideas. 

We believe the writer of the FBI report had notions before arriving and cared not to 

investigate and learn the real facts. Neither legislative leader was interviewed on this 

issue. No effort was made to interview Mr. Sunia or learn thf' exact nature of the work 

he does. 

Still under the heading of "Assessment•, the FBI report states (p 17) that "A 

number of investigations were stopped at the order of superiors without explanation. In 

other matters where the investigations were completed and referred to the Attorney 

General's Office for prosecution, the cases were declined for unexplained reasons. • This 

is a very serious charge, one that should either be substantiated, or be the cause of an 

apology on the part of the report author. It might be true. But standing alone without 

examples makes it hard to accept. One can only conclude that the Team is bent on 

painting the picture of a small community, as sometimes depicted in TV shows, that is 

under the complete control of local politicians. Whatever politician obstructed justice 

5 
58 

should be revealed so that all of us practitioners of the art are not collective~y blackened, 

and the good name of the people of American Samoa is not muddied. 

Fa'a Samoa 

This is the worst, and the most ' made up' part of the FBI report. The Team clearly 

has a gross misunderstanding of the 'Faa-samoa" (the Samoan way of life). Perhaps 

they read too many reports about it, and failed to appreciate the changes of lifestyles that 

exist today, changes in education, exposure to stateside living and a hoard of other 

factors which have affected the way we live. Again, statements without concrete 

evidence and examples abound in this part of the report. For example: 

- Which government contract was awarded on preference for a relative? If such ever 

happened here, is that unique to Samoa? 

- What investigation was dropped or crime overlooked by DPS because of the influence 

of an important family? The report fails to make mention of the fact that the sister and 

daughter of a former DPS Commissioner Tuilefano Vaela'a were prosecuted, sentenced 

and fined · during that commissioner's term! 

- What lenient plea bargains were made by the Attorney General's Office? What 

prosecutions were declined? 

- Which juries were partial? Does the Team know that finding impartial juries is nothing 

unique to American Samoa? Perhaps they should have waited till after the OJ Simpson 

jury selection before filing their report. It is the job of prosecutors to determine the 

partiality stance of each juror, and that means knowing something about their family 

6 
59 

relationships. They cannot hide behind ·not knowing anything about extended families. " 

Communal Ownership 

The team sadly misunderstands the concept of communal ownership, as it exists 

and is practiced in Samoa today. Please believe that the people of this territory know the 

difference between government property and private possessions. To make the 

statement that some of us believe the communal ownership extends to government 

property indicates serious misunderstanding or else a case of simple gullibility. "Many 

believe that Fa'a Samoa lies at the heart of the ASG's financial problems." To include 

a statement such as that in an official FBI report is preposterous. Mr. Chairman, there 

is no credence at all to that statement Fa'a Samoa has exactly zero bearing on the 

financial situation of our government. Neither the fa'aSamoa nor the communal 

ownership system has anything to do with it 

It is unfortunate that the Team found grounds for their conclusions partially in a 

book written by a white woman 35 years ago about Samoan values. 

The Team further cites a letter written by Senator Moaaliitele (p. 19) as indication 

of local belief that federal law enforcement standards should not apply here. The senator 

told us in an interview for this statement, that his anger was directed at the AG for casting 

suspicion on the good name of his family. The matter investigated was trivial and 

suspicions were blown up because of the mention of his family name. Again, Mr. 

Chairman, this is another incident of the political blindness of local law enforcement 

officials. The AG had no qualms about investigating a senator and his family. 

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60 

Fono audit 

The report attempts to paint a picture of a Legislature which refuses to be audited. 

The fact is, the local audit was sudden and our staff was not adequately prepared to 

respond to the auditors in a meaningful and useful manner. It must be stated also that 

all of the paperwork involving finances of the Legislature is doubly filed at both the 

Legislature and the Treasury Department of ASG. The latter has more complete and up 

to date files. 

In the case of the OIG audit, the Legislature wanted to be sure of the statutory 

basis and the procedure which triggers the audits. It was not a case of stalling as the 

press and the FBI report allude. The OIG audit did take place and their findings have yet 

to be reported. 

Conclusion 

In conclusion, we wish to state with all emphasis that there is no sinister ' political" 

power exerted by any individuals or families in this American community. We can 

understand how the FBI can easily get that conclusion. They spent time in the company 

of a few opinionated people, mostly expatriates who for some unknown reason, continue 

to live in a place they detest. 

Neither is there a 'hold' by our fa'a Samoa on the criminal investigatory and 

prosecution procedures of the government. If there is merit to that charge, the individuals 

concerned should be the target, and not the Samoan system. 

In the recent years, a member of the Legislature from a large and powerful 

8 
61 

Samoan family was prosecuted, unsuccessfully so was a bank president who is a 

member of a prominent local family. Ukewise were the Director of Parks and Recreations 

who was acquitted and the Director of the Territorial Office of Aging who was found guilty 

and is still in prison. We fail to see, in the face of those facts, how the FBI can conclude 

that ' powerful families' and local 'political powers" exert undue influence on the system. 

It is a fact that certain investigations have gone on for a long period without any 

move to prosecution. In such cases, the personal decision of the Attorney General is the 

determining factor, not the ''fa'aSamoa" or the "communal system" of living. (All those 

AG's received their legal training in the United States.) 

If the FBI seriously believe in their findings of influence of ''fa'a Samoa' and a hold 

by politicians on the criminal justice system, then we must conclude that they have 

wasted a great opportunity to make a meaningful contribution to solving the problem. 

9 

2o-369 0 - 96 - 3 
62 

AlVIERICAN SAMOA 

WHITE - COLLAR CRIME 

ASSESSMENT 

DECEMBER 1994 

(Redacted Version) 
63 

ASSESSMENT OF WHITE-COLLAR CRIME IN AMERICAN SAMOA 

I. FOREWORD 

In a March 1993 letter to the Secretary of the U.S. 

Department of the Interior (DOI}, American samoa Governor A.P. 

Lutali requested assistance from DOI in obtaining federal 

investigators and a prosecutor to review the results of an audit 

being conducted by DOI's Office of the Inspector General. The 

audit projected a $60 million deficit in the budget of the 

American Samoa Government {ASG} by March 31, 1993. Governor 

Lutali suggested that the Department of Justice (DOJ} detail two Federal Bureau of Investigation (FBI} agents and a DOJ prosecutor to American Samoa "to serve as special investigators and a special prosecutor under local law" for the purpose of 

"conduct[ing) whatever civil and criminal prosecutions may be 

warranted." (See Appendix A.} 

As a result of this request, and pursuant to Title 48, 

United States Code, Section 1666, DOI, DOJ and ASG entered into a "Technical Assistance Memorandum of Understanding Among Office of 

Territorial and International Affairs, Department of the 

Interior, and Department of Justice and Government of American 

Samoa for Assessment of Crime Situation and Need for 

InvestigativefProsecutorial Assistance" (MOU}. The MOU, signed 

in December 1993, provided that DOJ would send a team of two FBI 

Special Agents and one DOJ attorney to American Samoa for a period of 90 days to work with ASG officials in assessing (1} the extent and nature of the white-collar crime problem, and (2} the 

need for investigative and prosecutorial assistance to supplement 

local capabilities. The MOU further provided that the team would 

prepare a report with short-term and long-term recommendations 

for review by DOI, DOJ and ASG in addressing solutions to the 

crime problems, including any legal impediments/implications of 

implementing the recommendations. (~ Appendix B). 

The DOJ assessment team included FBI Special Agents Kathleen 

M. Anderson and Leland C. Giannini (San Francisco and Dallas 

Divisions, respectively} and Assistant U.S. Attorney Ronni B. 

MacLaren ,of the u.s. Attorney's Office for the Central District 

of CalifOrnia (Los Angeles). 

The assessment team arrived in American Samoa on February 9, 

1994. Working out of the Attorney General's Office in the 

village of Utulei, the team spent three months conducting 

extensive interviews of persons in the public and private 

sectors, reviewing reports of past audits and other pertinent 

studies of the territory's finances, evaluating the operations 

and procedures of the Department of Public Safety and the 

Attorney General's Office, reviewing case files of pending and 

prior white-collar investigations and prosecutions, reviewing and 

1 
64 

researching territorial and federal law, observing court 

proceedings, etc. The results of this assessment are forth in 

the report which follows. 

The report begins with the Executive Summary and 

Recommendations of the assessment team. The body of the report 

contains a brief overview of American Samoa's political and 

cultural history, geography and people, economy and government 

structure; a discussion of the role of DOl in the administration 

of the territory; an overview of the American Samoa criminal 

JUstice system, including its laws and courts; an evaluation of 

the Attorney General's Office and the Department of Public 

Safety; a case study of a recent white-collar crime prosecution; 

an inventory of suspected and documented incidents of whitecollar crime in American Samoa (most of which involve the misuse 

and abuse of federal and local funds within the ASG Departments); 

an analysis of ASG's finances, including a summary of the 

findings and recommendations of over fifty audits; 

and a summary of investigative hearings held by the American 

Samoa legislature on issues relating to white-collar crime. 

The assessment team wishes to thank Governor Lutali and his 

staff for their warm reception and hospitality throughout the 

team's stay in American Samoa and for ensuring the cooperation of 

ASG officials in his administration. From DOI, the team wishes 

to thank Assistant Secretary Leslie M. Turner for her support and 

Lydia Faleafine, Field Representative for the Office of 

Territorial and International Affairs, for her on-site assistance 

in arranging interviews and providing important background 

material for the assessment. Finally, the team extends its 

sincere appreciation to Attorney General Malaetasi M. Togafau and 

the members of his Office, particularly Chief Investigator J. 

Craig Keener, for providing a well-equipped and friendly working 

environment for the team. 

2 
65 

II. EXECUTIVE SUMMARY 

A. Mission of the Assessment Team 

Pursuant to a December 1993 Memorandum of Understanding 

among the Office of Territorial and International Affairs (OTIA) 

of the Department of the Interior (DOI), the Department of 

Justice (DOJ), and the American Samoa Government (ASG), a team 

consisting of two Federal Bureau of Investigation (FBI) Special 

Agents and one DOJ prosecutor was detailed to the islands of 

American Samoa for a feriod of ninety days to assess the problems 

of white-collar crime in the territory. 

American Samoa consists of seven islands in the eastern 

South Pacific, located approximately 2,300 miles southwest of 

Hawaii and 1,600 miles northeast of New Zealand. It is the 

smallest u.s. territory (76.2 square miles) and the only U.S. 

possession south of the equator. Its present population is 

approximately 51,000, over ninety percent of whom are ethnically 

Samoan. 

The DOJ assessment team included FBI Special Agents Kathleen 

M. Anderson and Leland c. Giannini (San Francisco and Dallas 

Divisions, respectively) and Assistant u.s. Attorney Ronni B. 

MacLaren of the U.S. Attorney's Office for the Central District 

of California (Los Angeles). The team was stationed in American 

Samoa from February 9, 1994 to May 8, 1994. During that time, 

the team interviewed dozens of current and former ASG officials, 

including the Governor and Lieutenant Governor; the three 

District Governors; the Directors and other officials of each of 

the Departments of the Executive Branch; legislators in the 

American Samoa Senate and House of Representatives; the Chief 

Justice, Associate Justice and Associate Judges of the High 

Court; the Judge of the District Court; the court Clerk, 

Probation Officers and other court personnel; the Attorney 

General, Deputy Attorney General and Assistants Attorney General; 

and the Commissioner, Deputy Commissioner and officers of all 

ranks in the Department of Public Safety. The team also 

interviewed many individuals outside the government, including 

village chiefs, local residents, U.S. citizens working under 

contract with ASG, owners of local businesses, and attorneys 

practicin9 in the local courts. 

In addition to conducting these interviews, the assessment 

1 As used in this report, the term "white-collar crime" 

describes a variety of illegal acts carried out by nonviolent means 

and generally involving deception, concealment, fraud and 

embezzlement in order to obtain, or avoid the loss of, money, 

property or other things of value or to obtain business or person·al 

advantage. 

3 
66 

team revi ewed mo re than fifty audit reports and other studies of 

the terri tory prepared over the last ten years by DOI, the U. S. 

General Accounting Office, the Federal Emergency Management 

Ag ency, ASG Department of Legal Affairs, ASG Department of Public 

Sa f ety, ASG Department of the Treasury, ASG Economic Development 

Planning Office, the American Samoa legislature and the 

accounting firm of Deloitte & Touche. The team also evaluated 

the operations and procedures of the Department of Public Safety 

a nd the Attorney General's Office, reviewed case files of pending 

and prior white-collar crime investigations and pros ecutions, 

monitored court proceedings of current white-collar crime 

prosec utions, and researched territorial and federal law r e lating 

to i ssues of j u risdiction. 

Prior to the commencement of this assignment, the assessment 

team was direc ted by DOI and DOJ to focus its study as foll ows: 

1 . Assess the current criminal justice system in Ameri c a n 

Samoa, including the process by which a case goes 

through the system, the system's strengths and 

weaknesses and the adequacy of statutes and procedure s 

in dealing with the white-collar crime problem; 

2. Assess the current white- collar crime problem in 

American samoa; 

J. Assess the adequacy of the current system i n addressi ng 

the existing white-collar crime problem; 

4. Assess the training needs of American Samoa law 

enforcement and prosecution personnel; and 

5. Make recommendations on how the American Samoan s ystem 

can be improved. 

Each of these areas is dealt with separately below. 

B. Assessment of the current Criminal Justice system in 

American Samoa 

1. Sources of Law 

American Samoa has been 

since 1900. From 1900 until 

the Department of the Navy. 

administration of DOI. 

a territory of the United States 

1951, it was under the control of 

Since then, it has been under the 

American Samoa is an unincorporated, unorganized territory. 

It is "unincorporated" because only the fundamental provisions of 

4 
67 

the u.s. Constitution apply. 2 It is "unorganized" because 

Congress has not provided it with an organic act, under which all 

provisions of the U.S. Constitution would apply except those 

which are impractical and anomalous. Those u.s. statutes and 

treaties that expressly state that they apply to territories of 

the United States are part of the law of American Samoa. 

In 1960, DOI promulgated a Constitution for American Samoa. 

This Constitution was revised in 1966 by a constitutional 

convention in the territory. In 1967, after approval by the 

voters of American Samoa in a referendum, the Revised 

Constitution was acceded to by the Secretary of the Interior. 

(The legal force of the Revised Constitution derives from the 

fact that it was approved and promulgated by the Department of 

the Interior.) In 1983, Congress enacted Title 48, United states 

Code, Section 1662, permitting modification of American Samoa's 

Revised Constitution only by an act of Congress. 

Congress has not set sources of law for American Samoa. A 

statement of the sources of law for American Samoa is contained 

in Title 1 of the American Samoa Code. These sources of law are 

the American samoa Constitution, the u.s. Constitution, u.s. and 

Samoan statutes, the common law and custom. 

The Fono, American Samoa's bicameral legislature, may enact 

laws on matters of local application, and regulations may be 

issued pursuant to those laws, provided that the laws are consistent with the Constitution of American Samoa, fundamental 

provisions of the U.S. Constitution, and applicable laws of the 

United States. The statutory law of the territory is codified in 

the American Samoa Code. 

Article I of the Constitution of American Samoa enumerates 

certain individual civil rights, including the separation of 

church and state; freedom of religion, speech, assembly, and the 

press; the right to petition the government for redress of 

grievances; the prohibition against the deprivation of life, 

liberty, or property without due process of law; and the 

requirement of just compensation when private property is taken 

for public use. 

2 It is up to the Samoan and federal courts to determine, on 

a case-by-case basis, which provisions of the u.s. Constitution are fundamental. The right to a jury trial has been defined as fundamental in cases arising in American Samoa. See King v. Andrus, 454 F. Supp. 11 (D.C. 1977). In cases arising in other 

U.S. territories, the federal courts have defined as fundamental 

the right to the writ of habeas corpus, protection against 

unreasonable searches and seizures, and the right to just 

compensation. 

5 
68 

Article I of the American Samoa Constitution also recognizes 

and supports the chiefly and communal aspects of "Fa'a Samoa" 

(the Samoan way of life). Section 3 states that it is the policy 

of the government of American Samoa to protect persons of Samoan 

ancestry against alienation of their lands and the destruction of 

the Samoan way of life and language contrary to their best 

interests. 3 Section 1.0202 of the American Samoa Code 

reiterates the constitutional declaration that Samoan custom be 

preserved, and Section 1.0201 provides that courts can use the 

common law only if it is "suitable to conditions in American 

samoa, " thus suggesting that custom should rank above the 

imported common law. However, Section 1.0202 further provides 

that custom is a source of law only to the extent that it does 

not conflict with the "laws" of American Samoa or "laws" of the 

United States that concern American Samoa. Hence, it is unclear 

whether the drafters of the code intended to place custom above 

or below the imported common law. 

2. Court System 

American samoa's court system is provided for in the 

American Samoa Constitution; it is not part of the federal 

judicial structure. 

Article III of the American Samoa Constitution vests the 

judicial power in a High Court, District Court, and such other 

courts as may from time to time be created by law. Village 

Courts have been created by statute under this provision. 

The Chief Justice and the Associate Justice of the High 

Court are appointed by the Secretary of the Interior and hold 

office during good behavior subject to removal for cause. The 

Governor appoints associate judges of the High Court who are 

recommended by the Chief Justice and confirmed by the American 

samoa Senate. Associate judges hold office during good behavior 

until age sixty-five, and are typically Samoan leaders with a 

knowledge of local customs. The District Court judge is 

appointed by the Governor on recommendation of the Chief Justice 

and confirmation by the American Samoa senate, and holds office 

during good behavior. 

Appeals from the trial division of the High court and from 

3 In the instruments through which the United States obtained 

sovereignty over American Samoa, the United States agreed to 

"respect and protect the individual rights of all people . . . to 

their lands and other property." (Cession of Tutuila and Aunu•u, 

April 17, 1900). The United States also promised "that the rights 

of the chiefs in each village and of all people concer~ing their 

property according to their custom shall be recognized." (Cession 

of Manu'a Islands, July 14, 1904). 

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justice. 

A person convicted of a felony or misdemeanor may be 

sentenced to imprisonment; a fine; suspension of imposition of 

sentence , with or without probation; suspended execution of 

sentence with probation; detention as a condition of probation; 

or ordinary l abor. American Samoa Code, Section 46.1910 prov ides 

that, e xcept in first degree murder cases, the court may reduce 

the extent or duration of a defendant's sentence or the level of 

the crime if an ifoga ceremony (the Samoan custom of public 

apology) has been performed. The ifoga presented to the family 

of a deceased or an injured person by the family of a wrongdoer 

is not meant as compensation for the family but primarily as an 

expression of sorrow and apology. Despite the statutory 

requirements, judges have recently refused to grant significant 

reductions in sentences on account of the ifoga ceremony because 

the ceremony is performed by the family of the accused, not by 

the accused personally. 

There is only one correctional facility in American Samoa . 

All levels of offenders who receive a sentence of imprisonment 

are incarcerated at the Tafuna correctional Facility (TCF ). TCF 

is under the administ ration of the Department of Public Safety . 

It can hold up to approximately eighty-five inmates. As of rn id1994, there were fifty-two inmates detained at TCF, seven of whom were awaiting deportation and ten of whom were awaiting court 

proceedings. 

The most serious problem at TCF is its lack of adequate 

security. The fac''ity is located in a residential area of 

Tutuila Island, adjacent to the government-subsidized housing f or 

ASG employees. The fence surrounding the facility is only twelve 

feet high and the entrance gate, leading from the main highwa y, 

usually remains open. Home and work release programs are 

liberally granted by the courts, even to inmates serving 

sentences for violent crimes. There have been incidents in the 

past where inmates convicted of violent crimes have committed 

additional violent crimes while on home or work release. 

There is no facility in American Samoa for juvenile 

offenders. With fifty percent of the territory's population 

under th~ age of eighteen, the issue of juvenile delinquency i s becoming increasingly pressing. 

4. Department of Public Safety 

The Department of Public Safety (DPS) became an independent 

department of the ASG Executive Branch in 1971. Prior to that 

time, it was part of the Attorney General's Office. DPS has 

jurisdiction over police services, corrections, fire services, 

emergency management, highway safety and motor vehicles. 

8 
69 

the District Court are heard by the appellate division of the 

High court, which consists of the Chief Justice and Associate 

Justice, acting associate justices appointed by the Secretary of 

the Interior, and all the associate judges. There is no direct 

appeal from the High Court to any other court, although a 

collateral attack on dec i sions of the High Court may be made by 

bringing suit against the Secretary of the Interior in the 

District of Columbia, provided the appellant can raise a valid 

question under u.s. law. King v. Morton, 520 F.2d 1140, 1144 

(D.C. 1975). Hence, although the federal judiciary machinery 

does not in general extend to American Samoa, a case arising in 

Samoa that raises appropriate federal or constitutional questions 

may come within the jurisdiction of the federal judiciary. 

3. Criminal Law and Procedure 

The High court has jurisdiction over criminal felony cases, 

while the District Court has jurisdiction over minor criminal 

cases. Criminal prosecutions are brought in the name of the 

Government of American samoa by the Attorney General. 

Prosecution of felonies may be initiated only by crimi nal 

information, but misdemeanors may be prosecuted by complaint or 

by criminal information. 

Under Title 3 , Chapter 1 of the American samoa Code, 

criminal cases may be prosecuted and tried only in a court having 

territorial jurisdiction over the place where the crime was 

committed. 

Section 46.1910 of the American Samoa Code provides that 

criminal procedure in the High Court and District Court shall 

conform as nearly as may be practical to the u.s. Federal Rules 

of Criminal Procedure . 

Title 46 of the American Samoa Code classifies crimes as 

felonies and misdemeanors, each having four grades. Offenses are 

categorized as follows: those against the person, family, public 

order, property, and the administration of justice; sexual 

offenses; offenses involving prostitution, abortion , gambling, 

pornography, and weapons; offenses affecting government; and 

miscellaneous offenses. 

A person charged with an offense carrying a maximum possible 

punishment of over six months imprisonment has the right to be 

tried by a jury of six persons, whose verdict must be 

unanimous. 4 One of the High Court justices presides and rules 

on all questions of law. TWo associate judges also sit with the 

4 The provisions of the U.S. Constitution requiring a jury 

trial have been held to apply to criminal trials in American Samoa. 

King v. Andrus, 454 F. Supp. 11 (D.C. 1977) . 

? 
72 

Special Task Force on Narcotics and White-Collar Crime. Th i s 

task force was formed by executive order in 1986. As originally 

conceived, the Special Task Force was to consist of 

representatives from DPS, the Attorney General's Office, the 

Customs Division of American Samoa's Department of the Treasury 

and the u .s. Drug Enforcement Administration. In practice, 

however, the Special Task Force has not been a multi-agency, 

multi-jurisdictional operation, but rather, has evolved into a 

separate unit of DPS which handles mostly drug investigations. 

The assessment team heard widespread complaints about the 

manner in which DPS administers the South Pacific Islands 

Criminal Intelligence Network (SPICIN). SPICIN is an 

organization of twenty-one South Pacific nation law enforcement 

agencies, formed for the purpose of ccllecting and sharing 

criminal intelligence. Headquartered in American Samoa, SPICIN 

has access to various law enforcement databases, including NCIC , 

NLETS, EPIC, WSIN and Interpol, which are maintained in a locked 

room at DPS. The only persons with access to these databases are 

Deputy Commissioner Michael Sala, his administrative assistant, 

two DPS officers assigned to SPICIN and two clerical employees. 

Relations between DPS and the Attorney General's Office are problematic. Most of the prosecutors in the Attorney General's 

Office do not have confidence in the ability of DPS to 

investigate cases properly. Upper management of DPS and the 

Attorney General's Office have a mutual distrust of the other's 

political motives. Obviously, this kind of relationship makes it 

difficult for investigators and prosecutors to work together as a 

team. 

Finally, there is some concern about incidents of police 

brutality. While the assessment team was in American Samoa, 

there was an incident of alleged police brutality where a 

suspect's jaw was broken during a routine arrest. A far more 

serious incident occurred in 1992 where a suspect was beaten to 

death by DPS officers. Seven DPS officers were convicted of 

charges including third-degree assault, negligent manslaughter, 

and tampe~ing with evidence. Many blame the death on a failure 

to supervise younger officers. Cases such as these reflect a 

serious need for basic training and better supervision of 

officers. 

5. Department of the Interior, Office of Inspector 

General 

The Insular Areas Act of 1982 (Title 48, United States Code, 

section 1422) provides DOl's Office of Inspector General (OIG) 

10 
71 

At the time of this assessment, DPS was being reorganized 

into the following seven bureaus: 5 

1. Special Operations 

2. Fire Services 

3. Corrections 

4. Motor Vehicles and Highway Safety 

s. support Services 

6. Uniformed Services 

7. Criminal Investigations 

The Commissioner of DPS is appointed by the Governor of 

American Samoa and serves at his discretion. The current 

Commissioner is Fonoti D. Jessup, a 28-year veteran of DPS and a FBI National Academy graduate. He is the third person to hold 

the position of Commissioner in the present administration. The 

first appointee's term was cut short by his conviction in a California court for embezzling police funds while previously 

employed as a Los Angeles Police Department lieutenant. He was 

succeeded by Governor Lutali's brother, Julius Lutali, who 

recently retired as Commissioner. 

DPS has approximately 234 employees: 103 officers (an 

average of one officer for every 494 residents) assigned to 

patrol services; thirty-six officers assigned to investigative 

and administrative duties; twenty-three corrections officers; 

thirty-two fire personnel; and forty civilian employees. 6 

DPS has a number of fundamental problems affecting not only 

its ability to handle white-collar crime investigations, but also 

its law enforcement responsibilities in general . Its officers are among the lowest-paid ASG employees. The DPS administrative 

offices are in serious disrepair and lack certain basic law 

enforcement features, such as holding cells for prisoners, 

interview rooms, and evidence processing and storage rooms. 

The department suffers from continual reorganization and 

personnel reassignment. When a newly-elected Governor appoints a 

new OPS Commissioner, the new Commissioner in turn appoints new deputies and ranking chiefs, resulting in a major upheaval of 

personnel, responsibilities every four years. There is so much 

confusion·that some officers are unaware of their own 

classifications within DPS. Most believe that promotions are based on favoritism rather than merit. 

White-collar crime investigations are handled at DPS by the 

DPS General Order No. 1-93 (Dec. 8, 1993). 

6 The American Samoa Police Hiring Supplement Program 

Application to the DOJ Bureau of Justice Assistance (Oec. 1993) . 

9 
73 

with the responsibility and authority to audit ASG's accounts 

pertaining to revenues, receipts, and expenditures of funds and 

property (a function previously performed by the u.s. Government 

Comptroller). OIG conducts periodic reviews of the government's 

financial operations and reports its findings and recommendations 

to the Governor of American Samoa as well as to DOI and the u.s. 

Congress. 

The basis for OIG's investigative authority in American 

Samoa is the Inspector General Act of 1978, which authorizes OIG 

to conduct audits and investigations relating to the programs and 

operations of DOI. Thus, investigative leads developed by OIG 

audits are.examined by OIG only if they relate to DOI's programs 

or operations. OIG's authority to investigate criminal 

violations is derived from various sections within Title 18 of 

the United States Code, as they pertain to OIG's oversight of 

DOl's programs and employee misconduct. OIG has authority to 

issue administrative subpoenas; however, enforcement of such 

subpoenas is hindered by the absence of a federal district court 

in American Samoa. 

For a short period of time, from October 1985 to April 1987, 

OIG maintained a field office in American Samoa staffed by one 

Special Agent. The agent conducted numerous white-collar crime 

investigations during the eighteen months that the office was 

open. Although the plan in setting up the office was for the 

agent to provide training in white-collar crime investigations to 

DPS officers, little, if any, training occurred and the agent 

conducted his investigations without assistance from DPS. The 

OIG investigations resulted in several successful prosecutions 

which were brought by the Attorney General's Office in the High 

Court, including stealing and embezzlement convictions of the 

president of the Development Bank and a bank attorney as well as 

the embezzlement conviction of the Ili'ili Golf Course 

bookkeeper. However, the Attorney General's Office took no 

action on any of the investigations conducted by the OIG agent 

involving ASG Department Directors. 

After leaving his post in American Samoa, the OIG Special 

Agent cited numerous investigative obstacles he had encountered 

in the territory, including the lack of authority to issue an investigative (grand jury) subpoena and the inability to enforce 

an administrative subpoena without a federal court in the 

territory. Thus, the only practical method for the agent to 

obtain necessary evidence was through search warrants. 

According to OIG, the decision to close the field office was 

based primarily on a cost-benefit study which concluded that it 

would be less expensive to conduct the required audits by paying 

personnel from OIG's Western Regional Office on a ~ diem basis. 

For purposes of this report, however, a far more important 

consideration by OIG in its decision to close the field office 

11 
74 

was its perception that the Attorney General of American samoa 

was declining cases investigated by OIG where the subject had 

"political connections.• 7 Many believe that white-collar cri me 

became an even bigger problem in American Samoa after the OIG 

field office was closed. 

6. Attorney General's Office 

The Attorney General's Office is part of the ASG Department 

of Legal Affairs. 

The Attorney General is appointed by the Governor and serves 

at his discretion. The current Attorney General, Malaetasi M. 

Togafau, was appointed by Governor Lutali in January 1993. 

As of mid-1994, the professional staff of the Attorney 

General's Office included a Deputy Attorney General and nine 

Assistants Attorney General. All but one of the Assistants were 

non-Samoans hired from off-island under two-year contracts with 

ASG. Their experience levels ranged from four to twenty years . 

None had significant prior experience in federal court. A number 

of the attorneys were working under renewed contracts and , thus, 

had been in the Office longer than two years. However, with a 

staff of less than ten attorneys working under short-term 

contracts, the turnover rate among the Assistants tends to be 

fairly high. 

Salaries for Assistants Attorney General currently range 

from $28,000 to $39,000. Attorneys working under ASG contrac ts 

receive subsidized housing. 

As of mid-1994, the criminal matters in the Office were 

divided among five Assistants. One Assistant handled exclusively 

juvenile offenses; another Assistant handled exclusively sex 

crimes and child abuse; and the remaining three Assistants 

handled a variety of other crimes. There were not enough whitecollar crime cases to keep any one of these Assistants occupied 

full time. 

The staff also includes four investigators, three of whom 

have had some formal training in conducting criminal 

investigAtions. 

Prosecution of white-collar crime under Attorney General 

Togafau has received a higher priority than it did in past 

7 GAO Report on American Samoa; oversight Hearing Before the 

Subcomm. on Insular and International Atfairs of the House of 

Representatives Comm. on Interi or and Insular Affairs, 102d cong., 

2d Sess. 13 3 (May 19, 1992) (statement of Joyce N. Fleischman, 

Deputy Attorney Inspector, Department of the Interior). 

12 
75 

administrations. In the last year, despite investigative 

hurdles, the Attorney General's Office has successfully 

prosecuted a number of former ASG officials and employees, 

including the former Director of the Territorial Administration 

on Aging (TAOA) and the former Deputy Director of the Department 

of Parks and Recreation. 

In March 1994, Attorney General Togafau issued a press 

release stating: 

Stealing from the government is a crime that not only 

adversely affects the services provided to our people, 

but crumbles the integrity of government and trust in 

leadership. Some say that misuse and theft of 

government funds and property is generally accepted and 

a natural aspect of the American Samoa Government. 

This is simply not true. 

It is true, however, that the detection, investigation 

and prosecution of white collar crimes and government 

corruption have not been as much of a priority to this 

government in the past as it should have been. 

It is also not true that prosecution of these crimes 

can be construed as politically motivated. Regardless 

of one's political affiliation, if a crime is 

committed, those responsible should be held to answer. 

Be assured that times have changed and that during my 

tenure as Attorney General, I will vigorously prosecute 

corruption in government. 

of this report, the Attorney General's 

white-collar crime invest ions, 

The Attorney General's Office has recently proposed the 

formation of a joint task force with DPS for the investigation 

and prosecution of white-collar crime. The task force would 

operate under a formal written agreement between the Attorney 

General's Office and DPS and would include three investigators 

and a prosecutor from the Attorney General's Office, four DPS 

officers and two support personnel. The task force would be 

headed by J. Craig Keener, the chief investigator at the Attorney 

General's Office. Mr. Keener is exceptionally well-qualified to 

lead the task force. He has been in law enforcement since 1975. 

13 
76 

Prior to joining the Attorney General's Office, he was a DPS 

officer in American Samoa and, before then, a police officer in 

Mill Valley, California. (Mr. Keener is also the grants program 

coordinator for the Attorney General's Office and would continue 

to spend approximately half of his time working in that 

capac i t y). 

7 . Office of Independent Counsel 

The Office of Independent Counsel was established in 1987 by 

an executive order of the Governor. The order provides that 

whenever the Attorney General receives information sufficient to 

constitute grounds to investigate the violation of any criminal 

law of the territory, or applicable federal criminal law (other 

than a misdemeanor or infraction), and the Attorney General 

determines that the investigation or prosecution by the Attorney 

General may result in a personal, financial or political confli c t 

of interest, the Attorney General shall petition the Governor for 

the appointment of Independent Counsel. To be eligible for the 

position of Independent Counsel, the person must be learned in 

the law, a member in good standing of the American Samoa Bar 

Association, and not employed by the ASG in a salaried position . 

The Independent Counsel has the authority to exercise the same 

investigative and prosecutorial functions and powers as an 

Assistant Attorney General. 

To date, there has been only one appointment of an 

Independent Counsel. This occurred in December 1987 when 

Governor Lutali appointed Independent Counsel to investigate the 

Agricultural Damage Survey Report expenditures under FEMA 

following Hurricane Tusi. The basis for the appointment was the 

potential conflict of the Attorney General arising from his 

position as the Emergency Management Coordinator and State 

Coordinating Officer of the FEMA program . 

The Independent Counsel's final report, dated March 7, 1988, 

concluded that tpere was probable cause to believe that crimes 

had been committed by persons associated with the Agricultural 

Replanting and Breeding Stock Replacement Damage survey Report. 

The report further concluded that there was no apparent conflict 

of interest which would prevent the Attorney General from 

diligent~y prosecuting the illegal acts. However, for reasons 

unknown to the assessment team, no prosecutions ever resulted 

from the investigation. 

c. Assessment of the Current Wbite-Collar crime Problem in 

Arnerican Samoa 

1. sources of Information 

There are no reliable statistics regarding white-collar 

crime in American Samoa. Indeed, there is very little published 

14 
77 

information on crime in general in the territory . American Samoa 

has not provided reliable crime statistics to the FBI for 

inclusion in the Uniform Crime Report since 1985. The latest 

statistics reported by DPS indicate that as of 1992, disorderly 

conduct and assault were the most frequently committed offenses 

in American Samoa. 

The absence of crime statistics probably stems from the fact 

that DPS has no systemized recordkeeping and, until very 

recently, the same was true for the Attorney General's Office. 8 

While DPS keeps a manual record of incidents that are reported to 

the police department, it does not maintain a record of the 

ultimate disposition of these incidents. Similarly, until a few 

months ago when a computerized recordkeeping system was installed, the Attorney General's Office kept only a manual log 

of matters which DPS referred for prosecution, but no record of 

the final disposition of these matters. Thus, it was nearly 

impossible for the team to track the history of any particular case. In addition, there appears to be little reconciliation 

between the records of DPS and those of the Attorney General's 

Office. For example, DPS records indicate that there were 235 

incidents of larceny reported in 1992, while the records of the 

Attorney General's Office show that DPS referred only six cases 

of larceny for prosecution in 1992. 

The source of most of the information about white-collar 

crime contained in this report was from interviews conducted by 

the assessment team. However, because the team lacked any 

authority to compel people to provide information, it had to rely 

solely on voluntary cooperation. The interviews were not 

conducted under oath and, thus, do not have the same reliability 

as sworn statements. A number of people refused to cooperate 

because they feared reprisal from government officials. While some of the interviewees had firsthand knowledge of wrongdoing, 

others had information based primarily on hearsay . Given the 

time constraints, the team was not able to verify all of the 

information contained in this report. The team made a concerted 

effort to ferret out any unsubstantiated rumors and, whenever 

possible, to corroborate hearsay information through other 

sources . 

.. . 

8 Iro mid-1994, the Attorney General's Office installed a computer program called "DA's Assistant" which will allow the 

attorneys to keep track of matters referred for prosecution, the 

status of pending investigations and prosecutions, and the final 

disposition of matters. 

15 
78 

2. Reported Incidents and Allegati ons of Wbite-Collar 

~ 

The most significant white-collar crime prosecution of an 

American Samoan to date was in August 1988 when Fofo I.F. sunia, 

the delegate to the U.S. House of Representatives, was convicted 

in district court in Washington, D.C. of engaging in a payrollpadding scheme. Despite this conviction, Sunia was welcomed back 

into government service by ASG. 

Clearly, as reported in interview after interview, most of 

the white-collar crime in American Samoa involves the misuse and 

theft of government funds and property. There are allegations of 

government fraud involving almost every ASG Department. The 

amounts allegedly stolen range from minuscule sums to the 

millions. The i ncidents of such crime revealed to the assessment 

team are set forth in Section XVI of this report. While the team 

believes that each of the incidents is based on reliable 

information, for the reasons stated above, none should be viewed 

as documented proof that a crime in fact occurred . 

The assessment team found sufficient allegations of criminal 

activity to predicate the initiation of criminal investigations 

of individuals in the American Samoa House of Representatives and 

the following ASG Departments: 

Department of Agriculture 

Office of Economic Development and Planning 

Department of Education 

Department of Legal Affairs, Immigration Office 

Department of Health Services 

Department of Parks and Recreation 

Department of Port Administration 

Office of Procurement 

Department of Public Safety, Corrections Bureau and Bureau 

of Motor Vehicle and Highway Safety 

Department of Public Works 

Territorial Administration on Aging 

Department of the Treasury 

Man~ of the allegations centered on conflicts of interest in 

the awar~ing of government contracts to individuals who were 

related, either directly or through extended families, to the 

officials approving the contracts. Other allegations involved 

the abuse of government funds, such as questionable travel 

expenses or the use of government manpower and materials for 

personal benefit. 

Many of the allegations were apparently reported to DPS, the 

Attorney General's Office, the Fono, and the Governor's Office. 

The local newspapers printed stories detailing the alleged 

wrongdoing as well. Despite this public awareness, very few 

16 
79 

investigations were ever initiated. 

In a number of cases where it was clear that an ASG official 

had embezzled money from the government, rather than prosecute 

the guilty official, the person was simply terminated from 

office. In at least one instance, the individual was actually 

reassigned to another government position. 

In the instances where DPS did open an investigation, few 

resulted in prosecution. A number of investigations were stopped 

at the order of superiors without explanation. In other matters 

where the investigations were completed and referred to the 

Attorney General's Office for prosecution, the cases were 

declined for unexplained or questionable reasons. 

3. Contributing Factors to the White-Collar Crime 

Problem 

a. Lack of Accountability 

Many of the past audits of ASG finances revealed problems 

which warranted further examination or investigation and should 

have resulted in prosecution of some of the offenses cited in 

this report. However, more often than not, the audits merely 

recommended ways in which funds should be disbursed in the future 

and requested ASG to reimburse the disallowed expenses. Although 

ASG has developed financial recovery plans in the past, 

subsequent audits indicate that key elements of the plans were never implemented. 

Almost every audit report and study of ASG finances in the 

last ten years has concluded the same thing: there is no 

effective system of checks and balances in the ASG 

infrastructure, creating an environment in which there is little 

accountability. 9 Coupled with inadequate oversight by the 

Department of the Interior and other federal departments/agencies 

providing money to the territory, the result has been a local 

government in which fraud and abuse is allowed to continue 

unchecked while financial conditions worsen. Despite these 

compounding problems, little corrective action has been taken. 

b . Fa'a Samoa 

Any analysis of the white-collar crime problem in American 

Samoa must take into consideration the territory's unique 

9 A striking example of the lack of accountability is the 

recent refusal by the Fono to allow an audit of its financial 

records by ASG's Territorial Audit Office after allegations were 

made that Fono members had abused their travel vouchers and 

intentionally overspent the budget. 

17 
80 

bicultural society. 

Each of the seventy-six villages in the territory is 

comprised of a group of aiga (extended families). The aiga is 

headed by a matai (chief) who represents the family on the 

village council. The matai holds title to all assets of the 

aiga. 

The relations among Samoans through their extended families 

--part of Fa'a Samoa (the Samoan way of life) -- is a pervasive 

influence that cannot be underestimated. lt is omnipresent in 

business, politics and almost every other aspect of Samoan 

society. 

Fa'a Samoa affects the criminal justice system in a number 

of different ways. As revealed during this assessment, conflicts 

of interest arising from family relations often result in the 

violation of procurement rules where an ASG official gives 

preference to a relative in the awarding of a government 

contract. As also learned during this assessment, the influence 

of an important family can cause ops· to overlook a crime or stop 

an investigation in progress. Where investigations do go 

forward, witnesses may be reluctant to cooperate where a family 

member, even a distant relative, is involved. In addition, the 

assessment team heard numerous reports that in prior 

administrations, matters would be referred to the Attorney 

General's Office for prosecution and no action would be taken, or 

if charges were filed, lenient plea agreements were arranged . 

The almost limitless reach of the extended family can also 

make finding an impartial jury a difficult task. Eight of the 

nine Assistants in the Attorney General's Office are non-Samoan 

and, thus, not likely to know whether prospective jurors are 

related through extended families to a defendant or witness in a 

case. For this reason, the current Attorney General makes an 

effort to participate in the selection of the jury in every 

criminal case tried by the non-Samoan Assistants. 

An equally important cultural consideration is the Samoan 

custom of communal ownership. All of the property of an aiga is 

communally owned by its members. There are some who believe that 

the tradl~ional Samoan view that property and wealth are communal 

assets may have fostered a similar view toward government 

property, particularly among the older generation in power. Many 

believe that Fa'a Samoa lies at the heart of the ASG's current 

financial problems. 

The ways in which Western values can sometimes clash with 

Samoan customs is the subject of a book that was recommended to 

the assessment team by many people in American Samoa as 

background material for this report. The book was written by an 

American woman who met a Samoan in the United States, married him 

18 
81 

and moved to Samoa. In her book about the differences between 

Western and Samoan customs, she discusses the Samoan custom of 

communal ownership, relating a situation where she had accused a 

relative of her husband of stealing one of her belongings: 

"Stealing, I learned, was a Western term and was never to be used 

in connection with a Samoan, particularly Samoan relatives. 

Property, mine included, belonged to the entire family." 10 

There are some Samoans who believe that federal standards of 

law enforcement should not be applied to the territory. The 

local newspaper, the Samoa News, recently printed a letter 

written by Moaali'itele Tu'ufuli, a member of the American Samoa 

Senate, to the Governor of American Samoa, blasting the Attorney 

General for "wast[ing] a lot of time and money on questionable 

investigations and prosecutions." In particular, Senator 

Tu'ufuli was angered by an investigation into the activities of a 

company with which the Senator was associated. The Senator's 

letter closed with the following statement: 

Honorable Governor, I ask you to counsel the 

Attorney General and his staff that this is not the 

United States of America. Samoa is a small place where 

our family good name, dignity, and land are most 

important to a quiet enjoyment of life. 11 

4. Effects of Government Fraud on ASG Finances 

ASG's General Fund deficit has been steadily increasing over 

the years. As of March J1, 1993, ASG had an estimated adjusted 

Unreserved Fund deficit of over $53 million (or an estimated 

unadjusted Unreserved Fund deficit of over $22 million.) 12 In 

September 1993, ASG had to borrow over $10,680,000 from FEMA in 

1° Calkins, Fay G., My Samoan Chief (1962), at 44. 

11 Samoa News, Nov. 1, 1994, at 12. 

12 Office of the Inspector General, Dep't. of the Interior, 

"Audit Report of Estimated Financial condition, American Samoa 

Government" (June 1994). 

Among the estimated adjustments that DOI-OIG auditors believe 

should be made to the Unreserved Fund balance of ASG's General Fund 

include $9.9 million in excess federal grant drawdowns, $5.2 

million in FEMA bills of collection and unresolved questioned 

costs, $4.6 million in other federal grantor unresolved questioned 

costs, and $5 million in income tax refunds. 

As of June 1994, the ASG Treasury Department had not ~ompleted 

the September 30, 1992 or the March J1, 1993 General Fund trial 

balance. 

19 
82 

order to repay some of its debts. While it is not known how much 

of the deficit is due to fraud and abuse, there is no question 

that government fraud of the kind cited in this report has 

contributed significantly to the territory's worsening financial 

condition. 

In May 1994, Gove~nor Lutali testified before the 

Subcommittee on Interior and Related Agencies of the U.S. Senate 

Appropriations Committee regarding the American Samoa ':>udget for 

fiscal year 1995 . He spoke of ASG's inability to assess their 

financial situation because of an inherently malfunctioning 

computer system, the increasing deficit, and alleged abuse and 

mismanagement of government funds which he envisioned would be 

investigated and prosecuted by DOJ personnel. Despite these 

problems, the Governor anticipated new federal grants, beyond 

DOl's operations grant of $23,090,000 and millions of dollars in 

other federal grants, including a $2.4 million food stamp program 

funded by the u.s. Department of Agriculture and $5.5 million 

from DO! capital improvement projects. American Samoa is seeking 

an additional $3 million in seed money from the u.s. Congress for a sports complex (ASG has offered to host the 1997 South Pacific 

Mini-Games). 

D. Assessment of the Adequacy of the current System in 

Addressing the Existing White-Collar Crime Problem 

The number of allegations of fraud by officials within 

almost every ASG Department is grounds for serious concern. Many 

of the incidents revealed to the assessment team were well known 

by the local residents, yet had never been addressed by law 

enforcement. As a result, many American Samoans seem to have 

lost faith in the ability of their local government to remedy the 

existing white-collar crime problem. 

The assessment team concluded that while there are a variety 

of contributing factors for the failure of the current system in 

American Samoa to adequately address the white-collar crime 

problem, the following deserve to be highlighted: 

1. Fundamental Problems at the Department of Public 

~ 

First, there are fundamental, internal problems at DPS, 

discussed above, which affect its overall law enforcement 

capabilities, ~. disorganization within its ranks, inadequate 

compensation of officers, poor facilities, lack of a 

communications system, problems with unauthorized use of 

databases, etc. These basic problems, coupled with a lack of 

training and experience of DPS officers in handling complicated 

financial or government fraud investigations, severely limit the 

ability of DPS to address the white-collar crime problem in 

American Samoa. 

20 
83 

2. Lack of Subpoena Authority 

Second, American Samoan law does not provide law enforcement 

with any authority to issue subpoenas prior to the filing of 

formal charges. CUrrently, the only method available to local 

investigators of obtaining evidence from individuals unwilling to 

cooperate is through the execution of a search warrant. The 

absence of authority under local law to compel the production of 

testimonial and/or documentary evidence is a severe handicap to 

law enforcement attempting to investigate complicated whitecollar crime cases. 

From a practical standpoint, federal subpoenas and other 

investigative processes of federal law enforcement agencies have 

little enforceability in the absence of a federal court in 

American Samoa. 

J. Absence of Certain Criminal Statutes in American 

Samoan Law 

Third, the American Samoa Code Annotated (A.S.C.A.) lacks 

criminal statutes in several important areas. While it was not 

feasible for the assessment team to perform an exhaustive 

analysis of the A.S.C.A., it is noted that the Code does not 

contain a general fraud statute, a computer fraud statute, or a 

statute prohibiting bank fraud against a financial institution 

other than Development Bank of American Samoa. 13 

In the area of government fraud, the offense of making a 

false statement to a government official is classified only as a 

misdemeanor. A.S.C.A. Section 46.4607 makes it a class B 

misdemeanor (punishable by up to six months imprisonment) for a 

person to make a materially false declaration for the purpose of 

misleading a public servant in the performance of his/her duty. 

The statute also provides an affirmative defense to the crime if 

the declarant retracted the false statement, unless the 

retraction was made after the falsity of the statement was exposed, or the public servant took substantial action in 

reliance on the statement. Apart from the fact that the crime is 

only a misdemeanor, the standards of proof are rather exacting. 

Under A.S .. ~.A. Section 46.4608, persons may not be convicted of 

this crim& absent proof of the falsity of the statement by (1) 

the direct evidence of two witnesses; (2) the direct evidence of 

one witness together with strongly corroborating circumstances; 

(3) demonstrative evidence which conclusively proves the falsity 

13 A.S.C.A. Section 28.0111 makes it a felony for any 

director, officer, employee, or agent of the Development Bank of 

American Samoa to embezzle, steal or misapply money of the bank; 

make any false entry in a book, report or record; or perform any 

other fraudulent act. 

21 
84 

of the statement; or (4) a directly contradictory statement by the defendant under oath together with (a) direct evidence of one witness or (b) strongly corroborating circumstances or (c) a judicial admission by the defendant that he made the statement 

knowing it was false. 

PUrsuant to A.s.c.A. Section 12.0219(a), violations of the 

procurement laws are also class B misdemeanors. The only 

exception is Section 12.0219(b), which makes it a class C felony (punishable by imprisonment up to seven years) for any person to 

give or receive anything of value for the purpose of securing or influencing the award of a procurement contract. 

Most of the white-collar crime prosecutions in American 

Samoa are charged under the stealing and embezzlement statutes, 

both of which are class C felonies. 

4. Absence of a u.s. District Court to Enforce 

Federal Law 

Fourth, American Samoa is the only territory of the United 

States that is not included in the jurisdiction of a federal 

district court. While the federal crimes set forth in Part I of 

Title 18 apply in most instances to American Samoa (18 u.s.c. Section 5), there is no district court with jurisdiction over federal crimes generally in American Samoa and no enforcement 

apparatus. 14 

Typically, except as provided by statute, venue for a criminal prosecution is in the district where the offense was committed. Fed. R. Crim. P. 18. ~ ~. u.s. Constitution, 

Article III, Section 2, cl. 3. Pursuant to this constitutional 

authority, Congress enacted 18 u.s.c. Section 3238 which 

provides: 

The trial of all offenses begun or committed . . . out of the jurisdiction of any particular State or district, shall be the district in which the offender, or any one of two or more joint offenders, is arrested or is first brought; but if such offender or offenders are not so arrested or brought into any district, an indi~ment or information may be filed in the district 

of the last known residence of the offender or of any one of two or more joint offenders, or if no such 

14 In particular instances, Congress has vested in the United 

states District Court for the District of Hawaii jurisdiction of 

certain cases arising in American Samoa, such as actions arising under provisions of the Clean Water Act, the Marine Protection, 

Research, and Sanctuaries Act, and the Intervention on the High Seas Act. 

22 
85 

residence is known the indictment of information may be 

filed in the District of Columbia. 

The problems with relying on Section 3238 to prosecute an American Samoan in Hawaii, assuming Hawaii were the place to 

which he/she was "first brought,• were identified by the 

criminal Division of the Justice Department as follows: 

"First, Title 18 United States Code extends to 

American Samoa (18 U.S.C. Section 5), but American 

Samoa is not within the jurisdiction of any district 

court. Second, 18 u.s.c. Section 3238, which relates 

to the venue for offenses committed outside the 

jurisdiction of a State or district is of limited 

utility, because it may require indictment, and 

possibly trial, in the District of Columbia. Third, 18 

u.s.c. Section 3041, which relates to the issuance of 

arrest warrants and the removal of prisoners to federal 

courts that have cognizance over the offense, by 

federal judges, or magistrates, or by certain state 

officials does not apply to judges or officers on American Samoa. The Criminal Division therefore 

recommend[s) [the enactment of new legislation so) that 

the venue for federal crimes committed on American 

Samoa be laid in the u.s. District Court for the 

District of Hawaii, and that the United States Attorney 

for the District of Hawaii be clearly authorized to 

prosecute such offenses. In addition, the judges on American Samoa appointed by the Secretary of the 

Interior should be authorized to issue arrest and 

search warrants and to order the transfer or removal of 

prisoners to the District of Hawaii. This could be 

done by an amendment of 18 u.s.c. Section 3041 or by a special provision applicable to American Samoa that 

would be codified in Title 48." 15 

The absence of a federal court in American Samoa, or a convenient federal court with jurisdiction over cases ar1s1ng in 

the territory, has caused the federal departments and agencies 

responsible for enforcing the federal laws applicable to American 

Samoa to ~ry to initiate proceedings through the Attorney 

General' s'·office under American Samoan law. Generally, this has 

not proven effective or satisfactory. Indeed, during the 

eighteen months (1985-87) that the OOI Inspector General's field 

office was open in American Samoa, the OIG Special Agent was unable to get the Attorney General's Office to prosecute anyone 

with political "connections." 

15 Letter from the Office of Legal counsel, u.s. Dep•t. of 

Justice to U.S. Dep't. of the Interior (Dec. 23, 1987). 

23 
86 

5. Law Enforcement's Need for Greater Independence 

The final factor is the most difficult to identify and, 

thus, the most difficult to confront. It deals with the 

inappropriate degree of influence in the American Samoa criminal 

justice system through extended family relations and politics. A 

number of different circumstances contribute to the frequency with which such conflicts of interest arise, including the small 

size and insular nature of the territory, the seemingly limitless 

reach of the extended family in Samoan culture, and the relative 

infancy of a local government still attempting to develop 

internal checks and balances. Any plan to control white-collar 

crime in American samoa must include ways to handle potential 

conflicts of interest arising from personal, financial and 

political connections. 

As appointees of the Governor, both the DPS Commissioner and 

the Attorney General are potentially subject to political 

influence in carrying out their respective law enforcement 

responsibilities. Although apparently not a problem in the 

current administration, the assessment team was apprised of numerous instances in the past where political pressure was used 

to stop criminal investigations. To ensure that police and 

prosecutors are insulated from political influence, it is 

imperative that they have sufficient independence. 

Local law currently provides that in cases where an investigation or prosecution by the Attorney General may result 

in a personal, financial or political conflict of interest, the 

Attorney General can petition the Governor to appoint independent 

counsel. As stated above, however, the Governor has only once utilized this provision, and in that case, no prosecution 

resulted from the independent counsel's findings that there was sufficient evidence of a crime. 

There has been much discussion in American Samoa about 

changing the office of Attorney General from an appointed to an elected position. Opponents to this idea, however, argue that an elected Attorney General would simply become beholden to the 

powerful families in the territory. With only 10,000 American 

Samoans generally voting in an election year, the race for 

Attorney Ceneral· could be determined by as few as 200 votes, the 

equivalent of a voting block of one extended family. 

Another possible solution is the appointment of a special 

prosecutor to investigate and prosecute crimes under Samoan law. 

A successful model for this type of appointment can be found in 

the Republic of Palau . The special Prosecutor in Palau is 

appointed for a term of five years by the President of Palau and 

confirmed by the Senate. He/she must be licensed to practice 

before all courts in the Republic of Palau and any other 

recognized jurisdiction. The Special Prosecutor cannot be 

24 
87 

removed except for cause and without the President first 

consulting the President of the Senate and the Speaker of the 

House of Delegates and receiving their concurrence. The duties 

of the Special Prosecutor include investigation and prosecution 

of violations of the laws of the Republic of Palau and any of its 

sixteen states. 16 

In American Samoa, it would appear that the Governor alone, 

and not DOI, has the authority to appoint a special prosecutor to 

prosecute crimes under Samoan law. In 1983, Congress enacted 

legislation (48 u.s.c. Section 1662a) providing that amendments or modifications to the American Samoa Constitution may be made 

only by acts of Congress. The congressional debate on the 

legislation indicated concern about DOI making unilateral 

modifications of the American Samoa Constitution. Under the 

American Samoa Constitution, the Governor is generally authorized 

to make executive appointments. To the extent that an appointment of a special prosecutor by DOI could be construed as conflicting with or modifying the Governor's appointment 

authority, the appointment would be a modification of the 

American Samoa Constitution and thus a violation of 48 u.s.c. Section 1662a. 

The appointment by DOI of a special prosecutor to handle 

violations of federal law applicable to American Samoa, on the 

other hand, would not violate the American Samoa Constitution. 

E. Assessment of the Training Needs of American Samoa Law 

Enforcement and Prosecution Personnel 

1. DPS Officers/Investigators 

DPS currently lacks even basic training. Before its 

officers can be expected to engage in complicated white-collar 

crime investigations, they must receive basic training in areas such as (a) the laws governing search and seizure, arrest, 

detention, and civil rights; (b) interview and interrogation 

techniques; (c) defensive tactics; (d) report writing; 

(e) testifying in court; and (f) forensic science techniques. 

Any subsequent training in the area of government fraud 

investiga~ions should include instruction on how to use ASG's 

computer system, the Financial Information Management system 

(FMIS). With proper instruction, officers can use FMIS to trace 

the flow of money through drawdowns, invoices and other documents 

relating to certain grants (where the money has not been 

commingled). Although FMIS has been undependable in the past in 

producing reliable financial statements, it can provide at least 

16 Telephone interview with William T. Whisenhunt, Special 

Prosecutor for the Republic of Palau (Dec. 1994). 

25 
88 

some kind of a paper trail to help investigators determine 

whether there has been any fraudulent use of government funds. 

2. Prosecutors 

There is currently a wide disparity in the experience level 

of the lawyers in the Attorney General's Office (ranging from 

four to twenty years). There is no in-house training program of 

any kind. The Office budget includes funds for each Assistant to 

attend one off-island conference per year. 

The less experienced attorneys would greatly benefit from an on-going training program in trial skills and strategies, rules 

of evidence, witness preparation, use of summary charts and other 

types of graphic evidence, etc. 

26 
Office of the Assisi.Jlnl Anomey Gutenll 

The Honorable Elton Gallegly 

Chairman 

Subcommittee on Native American 

and Insular Aff airs 

Committee on Resources 

u.s. House of Representatives 

Washington, D.C. 20515 

Dea r Mr. Chairman: 

89 

U. S. Department of Justice 

Office of Legislative Affairs 

,Ja nuary 3 0 , 1 996 

This responds to the questions posed in your letter of 

September 13, 1995, following up on the Subcommittee's hearing of 

August 3, 1995, concerni ng white collar crime in Ame rica n Samoa. 

The questions, and our responses thereto, f ollow. 

Question: You indicated in your prepared statement that audits 

indicated that competitive bidding practices may have be en 

ignored and circumvented and may have resulted in confl icts o f 

interest and abuse of governmental funds by government officia ls. 

How could these problems be limited if American Samoa followe d 

the federal procurement procedures prescribed b y the U. S. Code of 

Federal Regulations? 

Answer: Imposing federal procurement procedures on the 

American Samoa Government is not likely to a vo i d or limit 

conflict of interest problems or the abuse of federal funds. 

Federal grant policy provides that state and local 

governments (including territories) follow the ir own rule s 

and procedures rather than those of the fede ral government . 

American Samoa appears to have adequate procurement rules. 

The key lies in ensuring compliance with those rules. 

Questi on: How could adhering to federal fina ncia l a ccounting 

standards and practices deter fraud a nd abuse? 

~: In our view, it would certainly be advisabl e 

for the American Samoa Government to comply with 

generally accepted accounting standards. Adherence to 

such standards might assist in deterring fraud and 

abuse by improving accounta bility, so that fraud and 

abuse could be more easily detected. In add iti on, the 
90 

effort required to meet rigorous accounting standards 

would help raise the consciousness of government 

officials to the importance of sound financial 

management practices. However, a more effective 

deterrent to fraud and abuse would be a strong law 

enforcement presence and vigorous prosecution of those 

who violate federal and territorial laws. With respect 

to which standards the American Samoa Government should 

adopt, we would recommend the state and local 

government standards developed by the Government 

Accounting standards Board. 

Question: Have you provided assistance to American Samoa to 

develop legislation to address gaps in American Samoa criminal 

law? 

Answer: We have not provided such assistance to date. 

As noted in the testimony of Deputy Assistant Attorney 

General Richard before the Subcommittee on August 3, 

1995, however, the Department of Justice is working 

with the Department of the Interior to develop an 

appropriate solution to crime problems in American 

Samoa. Such a solution could include the extension of 

limited federal court jurisdiction from the District of 

Hawaii to American Samoa. 

Question: What are the projected federal costs of the various 

options to extend federal district court jurisdiction to American 

Samoa? If these figures are not available, would you submit 

preliminary estimates for the record. 

Answer: We estimate that the costs for the United States 

Attorneys in extending jurisdiction to American Samoa would 

be about $575,000 per year. This estimate -- which is very 

rough and subject to change -- assumes an office staffed in 

American Samoa, consisting of two Assistant United States 

Attorneys, one paralegal, and two support staff members. It 

also assumes $25,000 in security-related expenses. 

Preliminary estimates of costs that would be incurred by the 

U.S. Marshals Service range from approximately $300,000 to 

$360,000. These estimates assume that court would be held 

in American Samoa (and not, for example, in Hawaii). We 

note that these estimates relate solely to costs likely to 

be incurred by this Department (other than the FBI, which is 

discussed in the next question) and do not include any 

construction costs (~, for a courthouse and/or holding 

cells). We further note that the Courts would also incur 

expenses if jurisdiction is extended to American Samoa. In 

this connection, you may wish to contact the Administrative 

Office of the United States Courts. 
91 

Question: What are the proj ected costs of a Federal Burea u of 

Investigation office in American Samoa? 

Answer: We estimate the cost of a t emporary (i. e., 

1 year, as described in Mr. Richard 's testimony of 

August 3, 1995) assignment of an FBI agent to Ameri can 

Samoa to be approximately $150,000. This estimate is 

based on the 2-year assignment of an FBI agent to the 

Northern Mariana Islands (also a joint effo rt with t he 

Department cf the Interior) , which wa s funded for 

$300,000. This is a rough estimate, inasmuch as no 

office space has been identified at this time. As 

noted in Mr. Richard's t e stimony, funding for this 

interim assistance is to be provided by the Department 

of the Interior, subject to the availability of 

appropriations. 

We trust that these answers are responsive to your 

questions. Please feel free to call upon us if we may be of 

additional assistance in connection with this or any other 

matter. 

~ ......... ....,,,)'[ cis ~ I r 

cc: Honorable Eni F.H. Faleomavaega 

Ranking Minority Member 

Attorney General 
AP. lutall, Gcvemor 

Tluooo P. Sunia. L!. Govornor 

92 

OFFICE OF THE GOVERNOR 

American Samoa CJovemment 

Pago Pago, American Samoa 967118 

Fcbnwy 9, 1996 Toleohooe; (084) 833-4118 

~or. (884) ~221!0 

Serial: 131 

Honorable l:lton Gallcgly, 

Chairman, Subcommittee on Native Arneric~n 

and Insular Affairs 

Coullllittcc on Resourc~s 

1522 Longworth House Office Building 

Washington, D.C. 2021S 

Dear Chairman Gallegly: 

I apologize for the delay in responding to the questions which you forwarded to me in 

September, 1995 following the Subcommittee's heJring on White Collar Crime in American 

Samoa. I am enclosing D.ll3wers to your questions together with some pertinent statutory 

material. 1 appreciate the cooperation of the Subcommittee suff in keep ins the hear'.ng record 

open for this response . 

Since the heo.ring on White Collar Crime, I have sent letters on this subject to Attorney 

General Janet Reno md Secretary of the Interior Bruce Babbitt. Copies of those letters are 

enclosed for inclusion in the hearing record. 

Sincerely, 

c:?P Pat 

A.P. LUTALI 

Governor 

Enclosures: 

ee: Delegate Eni F.H. Faleomavae2a (w/enclosures) 
93 

Subcollllllitt~~ on Native American and Insular Affairs 

Hc:uing on American Samoo. Whit• Collar Crime 

August 3, 1995 

-·----.. -· .. -·-·------------,--------···----·-·-------------.. ---··-·---

Answers to Questions Submjtted to Goyernor A P I.!!IaJI 

1. Q: H.R. 13332 also requires American Samoa to t'Stllhli.m under local law 

independently audited, nml-autonomous Rgencie.c for certain areas Of public 

utilities infrastructure, In order to expend federal funds Cor related areas of 

capital improvement projecu. What effort.~ have you made to establish semi· 

autonomous agendes in American Samoa? 

A: Our Legislarure has established the American Samoa Community College (ASCC) as 

an autonomous instirution and the American Samo2 Power Authority (ASPAl as a 

semi-autonomous agency . Copie ~ nf the stanl!ory chaners for ASCC and ASPA ar~ 

endoied. I have submitted. and the Legis!arure Is currently considering. a bill whi~h 

would establish the American Samoa Medical Authority (ASMCA) a~ a semi· 

autonomous agency . A copy of the proposed leilslation is endus~ll . 

2. Q: What are you doing to ensure that federal bidding procfdurl!li are beluil followed 

!"or capital improvement projects In American Samoa? 

A: Our Inca! procurement laws include provisions whi~h rc:4uirc competitive bidding. In 

addition, federal construction grants typically coull!in conditions and stipulations 

regardi!li the qualitlcat!on and ~~~=~tiun uf cormactors. The Attorney General and 

the Chief Procurement Oftker arc working closely with the CIP Committee to make 

sure that all contract awanls ~omply with applicable federal and local statutes. 

3. Q: Do you concur that thll poteutlal for conflkta of interest and abuse can be 

minimized by followln~: the procurement procedures In the code of federal 

regulations? 

A: We believe tllat the potential for c;onflict of interest and abuse is minimized by 

fullowiug local procurement rules, whieh are similo.r to federal procurement 

~gulatioru, and by following the federal procurement requirements which are 

specified in fedenJ grant progr=. 

4. Q: Your statement emphasizes tbe complexity of establishing federal criminal 

jurisdiction in American Samoa and suggest field hurllll be held In American 

Samo11. Why do you believe Consremonal field bearing are neussary etven the 

extent of testimony beina pre£ented today? 

20-369 0 - 96 - 4 
94 

Subcomminee on Native American and Insular Affairs 

Hearing on American Samoa White Collar Crime 

August 3, 1995 

............... -.............. _ ............... ------------------------.... ---·----··-----·----- Answers to Questions Submitted to Governor A.P. LutaH, page two 

A: Field hearings are necessary in order for the Subcommittee·to understand local 

conditions and to learn the views of the people and leaders of American Samoa. 

Because of the distance and expense involved, it is not reasonable to expect 

representatives of our affected institutions and organizations to appear at hearings 

held in Washington, D.C.. The question of federal court jurisdiction in American 

Samoa has been srudied and debated for decades by attorneys, judges, scholars and 

public officials, and the range of sensitive issues and concerns cannot possibly be 

covered in a single half-day hearing. 

5. Q: How will American Samoa address the significant gaps in American Samoa 

criminal law Identified In the Department of Justice Report? 

A: At my direction, our Attorney General is working with the local legislature to 

revise and upgrade the criminal code in American Samoa and to cure the 

deficiencies identified by the Justice Department. 
95 

AMERICAN • SAMOA GOVERNMENT 

PAGO PAGO. AMERICAN SAMOA 96799 

LEGISLATURE OF AMERICAN SAMOA 

CERTIFICATION 

Senate Chamber 

October 1, 1992 

I certify that Senate Bill No. 22-109 passed thini reading on 

this date In the Senate during its Sixth Special Session of the 

Twenty-second Legislature of American Samoa. 

I I 

..__£c7> 

Leo'o V. Ma'o 

SECRETARY OF THE SENATE 

Honse Chamber 

October 8, 1992 

I certifY that Senate Bill No. 22-109 passed third nadlng on 

this date In the House or Representatives during its Sixth 

Special Session of the Twenty-second Legislature or Americ:an 

Samoa. 

' " r.,tvrwf•uo: 
96 

S.B. NO. 22·109 PUBLIC LAW NO. 22~~ 

THE TWEN"IY-SEC0!'.1) LEGISLATURE OF A.'.tERICA.'\1 SAMOA 

Sixth Special Session 

Dc~n and bdd at FGpt<>go, TutuiiQ, AmeriCAn Sam<>A 

on Monday, the twenty~ighth day or September 

one thousand nine hundred and ninety two 

A.'ll ACT ESTABLISHING A.."i Ll'JSTITUTION OF HIGHER LEARNING KNOWN AS THE 

A.\IERICk"i SAMOA COMMlTNITY COLLEGE WITiiiNTHE EXEClll'IVE BRANCH OF 

THE GOVER.NMElli"T; A."lD CREATING CHAPTER 20 UNDER TITLE 16 ASCA. 

BE IT ENACTED BY THE LEGISLATURE OF A.\1ERICA,'II SAMOA: 

Section 1. There is created a new chapter 20 under Title 16 wbich reads: 

"Chapter 20 

~~RICA~SAMOACOMML~TIYCOU£GE 

Sections: 

162001 Establishment of American Samoa co=unity college. 

16.2002 Powers and duties of the college. 

16.2003 Establishment of the board of bigber education. 

162004 Board of higher education, powers and duties. 

16.2005 President of the college. 

16.2006 Personnel. 

162007 Assumption of Role. 

162008 Budget. 

162009 Fiscal Management. 

162010 Independent Audit Reports, Consultants, Annual Reports. 

16.2011 American Samoa community college land grant endowment fund. 

16.2001 Establishment of the American Samoa conu:nunity college. 

There is established an institution of higher learning known as the American Samoa 

co=unity college within the executive branch of the government. 
97 

162002 Powers and duties of the college. 

The American Samoa community college: 

(1) may sue and be sued; 

(2) may adopt and use a seal; 

(3) may make contracts, as authorized in this chapter, 

(4) may adopt, amend and repeal bylaws; 

(5) may purchase or lease and hold personal property it considers necessary or 

convenient in the tranSaction of its business, may dispose of personal property held by it; 

( 6) has the power in the name of the government to purchase. lease, or sell real 

estate, and accept title to that real estate in the name of the government; to accomplish the 

purposes of this chapter; 

(7) may procure or contract for the procurement of supplies, equipment, materials, 

personal services other than by employees. and construction \llith any public or private entity 

upon terms and conditions as it finds necessary to the full and convenient exercise of its 

purposes and powers, subject to all applicable laws and rules of American Samoa; and shall 

receive and account for its inventory of materials; 

(8) shall develop a program of education to meet the current and future needs of 

American Samoa, which shall be accredited under appropriate procedures existing in the 

United States for higher education; 

(9) shall develop and establish a Samoan and Pacific Studies Program to promote 

interest in, and a"'-areness of the culture, including language, and affairs of American Samoa 

and other islands of the Pacific; the Samoan and Pacific Studies Program shall include, but 

not limited to programs for the development of cultural, educational, training, and research 

programs for the people of Polynesia and other islands of the Pacific:. 

(10) shall develop and establish an Adult Education and Literacy Program for 

American Samoa; 

(11) shall develop and establish a program in response to Federal laws relating to 

the Land Grant Program; 

(U) shall fix schedules of tuition rates and fees for educational service and shall 

establish rules and procedures, in accordance with 4.1001 et seq. for the provision of such 

services; 

(13) may accept on behalf of the government from any other government or 

governmental agency, or from any other public or private body, or from any other source, 

grants, contributions of money or propeny which the college may use for or in aid of any 

of its purposes; 

(14) adopt other rules pursuant to 4.1001 et seq~ not inconsistetll with the 

provisions of this chapter or -with the rules of government, that are necessary and proper for 

the administration and operation of the college; 

(15) exercise all other powers, not inconsistent with the provisions of this chapter 

or with the rules of the government, which may be reasonably necessary or incidental to the 

establishment, maintenaiice, and operation of an institution of higher learning. ·· 

16.2003 Establishment of - board of higher education. 
. 98 

(a) The board of higher education is established. The board shall consist of the 

director of education and 7 members, 6 of whom are appointed by the Governor with the 

advice and consent of the Legislature. The board members shall serve without compensation 

or other emoluments. 

(b) In order to provide continuity in the work of the board, the term of office of 

6 of the Board members shall be for 4 years and shall be so arranged as not to expire at the 

same time. Members shall serve until their successors have been qualified. Vacancies shall 

be filled in the same manner as original appointments. 

(c) The 7th member of the board is a 2nd year student of the college elected at 

a schoolwide election during the first week of school. This member serves a one-year term 

and may be reelected. Vacancies are filled by an election held within 1 week of the 

knowledge of a vacancy. 

162004 Board of higher education - Powers and duties. 

The Board of higher education, in addition to other provisions of this chapter: 

( 1) shall serve in a supervisory capacity and as such. shall function to super.ise 

the implementation of the powers and duties of the college; 

(2) shall select its chairman and other officers from among its 0~11 membership; 

(3) may change the name of the college, "'ith approval of the Legislature; 

( 4) shall review and approve the educational program of the college; 

(5) shall grant diplomas, certificates, degrees or other honors; and 

(6) shall adopt the seal of the college. 

162005 President of the college. 

The board of higher education shall recommend to the Gov.ernor a list of three 

candidates, in the order of descending priority, who have received the highest consideration 

of the board. The Governor shall appoint the president of the college only from the 

proffered list of reco=endations. Subject to government employee la-ws 7.0101 ct. seq. and 

rules and procedures of the college, the President serves at the pleasure of the Board. 

162006 Personnel. 

All officers and employees of the college, except the president, are appointed or 

hired and compensated in accordance with the requirements of the government employee 

Jaws 7.0101 et. esq., except that the college may adopt administrative rules, pursuant to 

4.1001 et seq. to supplant government employee laws and rules in the specific categories of 

personnel recruiunent, aSsignment, ttansfer, employment,termination of employee services, 

disciplinarY actions, and compensation at levels comparable to higher education 

management and employee levels. 
99 

16.2007 Assumption of role. 

The college shall assume, upon approval of this Act, full responsibility and right to 

operate all items of property, including any construction in progress, equipment, and 

machinery used under the previous status of operation by the college. All property jointly 

used by the college and government, except the infirmary located on campus, are hereby 

transferred to the college: Future capital contributions to the college from the government 

must be by separate authorization and appropriation. The Legislature has the exclusive 

power to provide supplemental funding for the operations of the college. 

16.2008 Budget. 

(a) The basic source oi financing the college is the government through its regular 

budget process. The government shall provide a minimum appropriation from local revenues 

for the operation and programs of the college based on the acrual cost of 52820 per full 

time equivalent student, as has been determined by current, acrual fall and projected spring 

and summer class schedules, with an annual inflationary adjusttnent of 4.8 percent . 

(b) At Lfte appropriate time the college shall submit to the Governor, upon 

appro,·al of the board, a budget of estimated expenditures for the next fiscal and academic 

years. The budget shall contain separate estimates for capital outlay expenses and 

operational expenses and shall be submitted in such form and detail as may be required by 

applicable laws and rules of the governmenL 

(c) Each budget sbal1 identify clearly the amount or amounts requested to be 

appropriated, the amount or amounts available or estimated to be available from gifts, 

grants, donations, or other sources, and the amount or amounts for which application is 

being made or is to be made for federal aid. 

16.2009 Fiscal ManagemenL 

Further to 16.1001 and 16.1004, the college is responsible for the management and 

operation of its fiscal affairs. It shall establish procedures based on principles of sound 

bookkeeping and fiscal management, "'ith the approval of the board, for the administration 

of all accounting systems, including but not limited to general ledger, fixed assets, accounts 

receivable, accounts payable, pa;Toll, and cash. The college shall submit quarterly 

performance reports to the office of program planning and budget as required by 10.0509. 

162010 Independent audit reports - consultants - Annual Reports. 

(a) The college shall employ a firm of independent certified public accountants 

to examine and report each year upon the starus of fmancial records and accounts, and may 

renew that employment annually. Copies of these reports shall be furnished by the college 

to the Governor and the Legislature. 

(b) The college may make intergovernmental or eontractual agreements for expert 

consultants to advise or consult with it in all maners related to the operation of the college, 

including ruition fees, systems design, plant design. planning, budgeting, and legal matters. 

(c) The college shall provide an annual report for each fiscal year, which shall 
100 

include descriptions of financial and programmatic activities of the college during the year, 

to the Governor and the Legislature not later than 31 December. 

162011 American Samoa community college land grant endowment fund. 

(a) For the purpose of compliance with federal laws designating the American 

Samoa co=unity college as a land grant college established for the benefit of agriculture 

and mechanical arrs, there is established the American Samoa community college land grant 

endowment fund. The fund shall be maintained separate and apan from any other funds 

of the government. Use of the fund shall be administered and controlled by the board of 

higher education. Independent records and accounts shall be maintained in connection with 

the fund by the Treasurer of American Samoa. An annual fiscal year financial statement 

of the fund shall be submitted by the board of higher education and the treasurer to the 

Governor and Legislature no later than 15 December 1987. 

(b) The $3,000,000 received from the Cnited States government in support of the 

college as a land grant college is hereby credited to the fund. The board of higher 

education and government shall comply with all conditions pertaining to the fund and the 

income therefrom as set forth in federal laws, including but not limited to the requirement 

that the principal sum shall remain forever undiminished. 

(c) All income from investment of the principal sum shall be credited to the 

account of the fund. and shall be appropriated by the Legislature in the annual fiscal year 

appropriations act solely for the operation of the land grant programs of the college. 

Appropriations of income shall be made only after the board of higher education has 

submitted to the Legislature reco=endations on the use of the income. The Legislature 

may author,ze reinvestment of the income to accumulate sufficient funds for specific 

purposes, related to land grant operations. 

(d) The board of higher education has full power and authority, subject to 

approval of the Legislatur~ to direct the investment and reinvestment of the fund "'1thout 

distinction between principal and income as it considers desirable; as long as the investment 

income is available for appropriation in a=rdance -with subsection (c) in property as 

defined in subsection (e) provided that the investment shall yield a fair and reasonable 

annual rate of return, which is fixed at no less than 5 percentum per annum of the amount 

invested. The board may invest and reinvest the fund in property in which a prudent man 

familiar with those matters and using car~ skill prudence, and dl1igence would invest in the 

conduct of an enterprise of like character and with like aims, insuring that the invesrments 

of the fund are diversified so as to minimize the risk of large losses unless to do so would 

clearly not be prudent. The power to manZle<>e investments includes, but is not limited to, 

the power to hold, purchase, sell, convey, assign, transfer, dispose of, lease, subdivide, or 

partition any assets held or proceeds thereof, to execute or cause to be executed rele,-ant 

documents; to enter into protective agreements, executives proxies, and grant consent; and 

to do all other things necessary or appropriate to its position as an owner or creditor. 

TransactionS in marketable securities must be carried out" at prevailing market prices. 

. (e) Except as otherwise provided herein, the word "property" means real property, 

United States government securities and agency issues, state and municipal bonds, corporate 

bonds, real estate mortgages, common and preferred stock, mutual funds, convertibles, real 
101 

estate investment trusts, and other securities selected by the board -.ith the care of a 

prudent man. The word "property" excludes lands for sites or experimental farms of the 

college. and buildings including the purchase, erection, and preservation or repair thereof, 

except as permitted by federal laws." 

Sec 2. Repealer. 

"Existing Chapter 20 of Title 16 is repealed." 

JJ lft./L. 

~l~ 

PRESIDE~! OF THE SL"iATE ~ SPEAKER OF TilE HOUSE 
102 

A BILL FOR AN ACf &~TITLED: "AN ACf TO CREATE THE 

AMERICAJ."' SAMOA MEDICAL ~lER AUTHORITY AS AN AGENCY 

OF THE EXECUTIVE BRANCH OF TilE AMERICAN SAMOA 

GOVER.~MENT, TO REPEAL TITLE 13, CHAPTERS 1 AND 2 ASCA. TO 

CREATE A NEW TITLE 13, CHAPTER 01 AND TO AMEND TITLE 13 

CHAPTER 06, ASCA." 

BE IT ENACTED BY THE LEGISLATURE OF AMERICAN SAMOA: 

Section l. 

Title 13, Chapter 01, Sections 0101 through 0132 (entitled "Health Care 

Planning") are repealed in their entirety. 

Section 2. 

Title 13, Chapter 02, Sections 0201.1 through 0205.1 (entitled "Health 

Facility Certification") are repealed in their entirety. 

Section 3. 

There is created a new Chapter 01 under Title 13 which reads: 

Chapter 01 

Ac\!IERICAN SAMOA MEDICAL CENTER AUTHORITY ACT 

Sections: 

13.0101 

13.0102 

13.0103 

13.0104 

13.0105 

Establishment of the .--\merican Samoa Medical Center 

Authority 

Powers and Duties of the Medical Center Authority 

Board of Directors of the Medical Center Authority 

Powers and Duties of the Board of Directors 

Transfer of the existing Hospital Resources and Maintenance 

l 
103 

of Provision for Health Services 

13.0106 Accot.mring and Financial Management 

13.0!07 Legal Representation 

13.0108 Severability 

13.0109 Effective Date 

13.0101 Establishment of the American Samoa Medical Center AuthoritY 

There is established a governmental agency within the executive branch of 

the government known as the American Samoa Medical Center Authority 

("Medical Center Authority"). 

13.0102 Powers and Duties of the Medical Center Authoritv 

The Medical Center Authotity: 

(1) may sue and be sued as set forth in 43.1201 ct seq. ASCA; 

(2) may adopt and use a seal; 

(3) may make contracts, as authorized by this Chapter; 

(4) has the power in the name of the goveminent to purchase, lease 

and hold, tranSfer or sell real estate, and to accept title to that real 

estate in the name of the government, to accomplish the purposes 

of this Chapter; 

(5) may purchase or lease and hold personal property it considers 

necessary or convenient in the transaction of its business, and may 

dispose of personal property held by it; 

(6) shall provide, consistent with available resources, quality 

medical services as required by statute;_ 

(7) shall operate, manage and supervise all the facilities of the Medical 

2 
104 

Center Authority consistent with the requirements of this Chapter 

and the laws and rules of the American Samoa government 

including. but not limited to, the Administrative Procedures Act, 

Section 4.1001 et seq. ASCA except that the Medical Center 

Authority has the power to adopt, implement and exercise rules of 

employment regarding any employees necessary for the provision of 

professional and medical services by the Medical Center Authority 

which may be needed to accomplish the purposes of this Chapter. 

(8) except as relates to contracts for the procurement of medical 

services, supplies, equipment, drugs and materials, the Medical 

Center Authority shall be subject to the procurement rules of the 

Procurement Act. With regard to procurement for medical services, 

supplies, equipment, drugs and materials inherent to its operation. 

the Medical Center Authority shall adopt, implement and exercise 

rules regarding all rights, duties and authority relating thereto as is 

necessary to accomplish the purposes of this Chapter subject to all 

existing applicable laws and rules. For the purposes of procurement 

of such goods and services, the Chief Financial Officer, or a 

designee approved by the Medical Center Authority, shall act as or 

be of the Chief Procurement Officer. The Medical Center Authority 

shall account for and inventory all medical services, supplies, 

equipment, drugs and materials received under this section; 

(9) may enter into agreements and obtain. receive, manage and expend 

all private and public grant funds, in the name of the American 

Samoa government, which may be available for the purpose of 

transacting its b'ilsiness; 

(10) may receive bequests, gifts and donation:; of all kinds of property in 

fee simple or truSt for charitable or public purposes and perform all 

acts necessary to cany out the purposes of such bequests, gifts, 

donations or trusts, with the power to manage, selL lease or 

otherwise dispose of same in accordance with the terms of the 

bequest, gift, donation or trust; 

(11) shall prepare an annual budget sufficient ro support its operations 

3 
105 

and planned improvements, and to provide basic health care 

services of acceptable quality and scope and shall submit its annual 

budget to the Governor for transmittal to the Legislature as part of 

the Governor's annual budget 

(13) shall coordinate with the Department of Health on activities 

directed toward health promotion and illness prevention; 

(14) may do other things needful and necessary to the full and 

convenient exercise of the above powers and duties. 

13.0103 Board of Directors ofthe Medical Center Authority 

(I) The Medical Center Authority is governed by a Board of five (5) 

Directors appointed by the Governor and confirmed by the Senate. 

At least two (2) of the Directors shall be experienced in financial 

and business management matters; at least one (I) member shall be 

an active or retired health care professional; at least one (1) member 

shall have experience in health or public administration; and, there 

shall be one (1) member appointed at large . . No more than one (1) 

director may have his or her primary residence outside of American 

Samoa. No director may be appointed to serve while employed at 

the same time by any facility owned, in trust or otherwise, or 

operated by the Medical Center Authority. No director may be 

removed from office by the Governor without cause as provided for 

in the Administrative Procedures Act, Section 4.101 et. seq. ASCA. 

(2) At least two (2) Directors appointed to the initial Medical Center 

Authority Board of Directors shall have a minimum of two (2) prior 

years experience as a member of a hospital Board of Directors. 

(3) The Chief Executive Officer and the Medical Director shall serve 

as ex officio members of the Board without a vote in any matters. 

(4) Upon the-effective date ofthis Chapter, the Governor shall establish 

staggered4erms- by appointing five Directors for terms of one (1), 

two (2), three (3), four (4), and five (5) years respectively. All 

4 
106 

subsequent appointments sball be for four ( 4) year terms, or for the 

unexpired portion of a term. Recess appointments may be made to 

fill vacancies caused by death. resignation, or removal for cause if 

the vacancy occurs while the Senate is not in session. Recess 

appointments expire at the conclusion of the next following regulat 

or special session of the Senate if they are not confumed during 

that session. Incumbent members may continue to serve after the 

expiration of a term until a successor is appointed and confirmed. 

CI.III'elltly incumbent Directors acting under Executive Order No. 

17-1993 may continue to serve as appropriate under 

subsection (a) above. 

( 5) The Board of Directors shall meet at least four ( 4) times per year. 

A quorum sball consist of three (3) Directors. 

(6) Board members shall be compensated at the rate of five thousand 

dollars ($5,000.00) per year, except the chairperson who is to 

receive six thousand dollars (56,000.00) per year. The non· 

resident director shall also receive expenses for necessary travel, 

lodging. meals and telecommunication in the performance of his or 

her duties. 

13.0104 Powers and Duties of the Board of DirectQrs 

All powers and duties vested in the Medical Center Authority shall be 

exercised by the Board of Directors. In carrying out its functions, the Board 

shall also: 

(l) elect officers at its first meeting, including a chairperson, vicechairperson, and others as the Board deems advisable. Thereafter. 

the Board sball elect officers annually at the first meeting of each 

fiscal year; 

(2) appoint and remove, supervise and prescribe the duties and 

compensation of the Chief Executive Officer. the Chief Financial 

Officer and the Medical Director as appropriate and who shall 

perform all the duties assigned to them subject to all applicable 

5 
107 

laws and rules, the bylaws of the Medical Center Authority, and the 

directions of the Board; 

(3) adopt, amend and repeal bylaws; 

(4) develop, implement and exercise policies, programs and rules for 

the administration,management and operation of the Medical Center 

Authority as is necessary to the implementation of the purpose of 

this Chapter; 

( 5) provide for an accurate accounting and financial management 

system, and review the monthly operation statements and such other 

financial reports as it deems necessary; 

(6) submit reports to the Governor as he directs from time to time; 

(7) exercise all other powers and duties not inconsistent with the laws 

and rules of American Samoa which are reasonably necessary to the 

administration, management and operation of the Medical Center 

Authority and the Board. 

13.0105 Transfer of the existing Hospital Resources and Maintenance of 

Provision for Health Services 

( 1) At a date fixed by the Board of Directors, the government shall 

transfer to the Medical Center Authority the right to use, control, 

and occupy all property and facilities then in use by the existing 

hospital. Any property which is jointly used for the hospital and 

other government functions shall be equitably allocated between 

government agencies and the Medical Center Authority. In the 

event of a dispute, the y-e.allocation of existing resources shall be 

determined by the Governor. Upon completing the re-allocation, 

the Medical Center Authority shall provide the Governor with an 

inventory summarizing the disposition of all property. 

(2) · During the transfer of the property and· facilities, all laws and rules 

relating to the provision of health care services shall continue in 

6 
108 

effect until duly changed. 

(3) All America Samoa employees assigned to facilities at the time 

of transfer shall continued to be employed by the Medical Center 

Authority subject to any rules of employment applicable to said 

employees adopted by the Medical Center Authority under this 

Chapter. 

13.0106 Accounting and Financial Management 

(I) The Medical Center Authority shall establish and is responsible for 

the financial management of its operations and shall administer all 

of its accounts including, but not limited to, general ledger, fixed 

assets, accounts receivable, accounts payable. payroll, revenues and 

cash through the Medical Center Authority revenue fund. The use 

of the accounts is restricted to transactions authorized by the 

Medical Center Authority and no funds deposited therein may be 

withdrawn for any other purpose. A financial audit to be made by 

a competent certified public accountant shall be conducted at the 

end of each fiscal year and provided to the Governor and the 

Legislature. . 

(2) All revenues relating to the Medical Center Authority and its 

purposes including, but not limited to, third-party payments for 

services, federal funds from whatever source, including ~edicaid 

and Medicare, public and private grants, tax revenues specifically 

eannatked by law for Medical Center Authority purposes, 

donations, gifts, · Department of the Interior grant-in-aid funds 

eann&ked for health, and funds appropriated by the Legislature for 

the Medical Center Authority shall be deposited into the appropriate 

Medical Center Authority accounts. The Treasurer shall deposit 

one-twelfth of the amount annually appropriated by the Legislarure 

for the Medical Center Authority into the authority's accounts no 

later than the fifth of each month. Any funds which are 

appropriated by the Legislature for the Medical Center Authority 

and whim are deposited according to this provision shall be 

expended upon check or warrant of the Board of the Medical 

7 
109 

Center Authority, as other income is so expended. 

(3) The Medical Center Authority shall be responsible for all debts and 

liabilities incmred in its operation after the date of transference. At 

the time of transference, the Medical Center Authority shall 

itemize all existing medical debts and liabilities and submit its list 

to the Treasurer. All debts and liabilities incurred before the 

transference shall be paid for by the Treasurer from the general 

fund appropriations designated for that purpose. 

13.0107 Le£al Representation 

The Attorney General of American Samoa, as the attorney for the 

American Samoa Government, shall represent the Medical Center Authority with 

respect to all legal matters. The Medical Center Authority may, at the discretion 

of the Attorney General, retain the services of a private attorney. 

13.0108 everabilitv 

If any section or pan of a section of this Chapter is determined to 

by a court of competent jurisdiction to be invalid, it shall not invalidate or 

impair the force or effect of any other section or pan of a section of this 

Chapter, except insofa1· as such other section or part of a section is dependent 

for its operation upon the section so held to be invalid. 

13.0109 Effective Date 

The effective date of shall take effect upon approval by the Legislature 

and the signing by the Governor. 

Section 4. 

Title 13, Chapter 06, Section 0601 is amended to read: 

(a) Medical attention shall be provided free of charge by the 

government to the following persons: 

8 
110 

(1) all American Samoans, including those men or women who 

are foreigners but are married to American Samoans, and 

their children if they are residing in American Samoa at the 

time of treatment; 

(2) foreigners who have resided in American Samoa for at least 

ten (10) years prior to treatmen~ 

(3) civil service employees of the United States of America 

assigned to duty in American Samoa and persons who are 

exempt from payment of medical charges by virtue of 

contracts with the government and spouses and children of 

such persons and employees. 

(b) Free treatment is limited to persons presenting themselveslr"~ 

-to Medical Center Authoritv facilities and does not 

include house visits or consultation at other places unless made at the 

convenience of the physician or medical officer, but contained in this 

section may be construed as limiting the right of the 

Authoritv to make a reasonable charge for the use of llllf- Medical Center Authority facilities. 

(c) Free treannent shall include drugs and medicines prescribed by the 

physician or medical officer, but the cost of eyeglasses shall be prepaid by all 

patients. 

(d) Dental treatment shall be rendered in the same manner and under 

the same conditions as medical treatment 

Section 5. 

Tide 13, Chapter 06, Section 0602 is amended to read: 

9 
111 

(c) All money received as a result of charges made Wlder this section 

shall be deposited in ms~~~ 

10 
Title 15 

PlllLlC CTILITIES A!'-'D ENERGY 

Chapters: 

01 .-\.merican Samoa Power Autbority 

02 Notice of Sen-ice Termination 

03 Office of Communications 

0~ (Resened) 

OS Emergency Energy Management 

Chapter 01 

112 

\~)There is established a governmental agency 

~~o ·i: hin the executive branch of the gove:nmcnl 

kn0wn as the American Samoa Power Authoritv: ~d . 

~b) a division within the American Samoa 

puwer authority known as the water ~d wastewater utility division. 

Hi.itory: 1982, PL 17-56 § ~; 1991, PL 14 . 

Anwndments: 1991 Esu,blis!lcs a L)iv:Si.Jn of We::: and 

W~::water t.:r.ili1y iD the Americ.u Samoa PO\Io.'Cr .'\ui:O.:::f.:y and 

1..:- .;.::ow 1hc Authorily 10 boi'TO""'· 

15,0102 

. ·\MERIC.-\..' SAMOA POWER AUTHORITY 

Powers and duties of the authority . 

The . .>.merican Samoa power authority: 

\!)may sue ~d be sued as set forth in ~3' 1203 

an.i .. 3.1205; 

Sec Lions: 

15.0101 

E.O!O~ 

1.5.010.3 

OlO~ 

1:.010.:: 

1.5.0106 

15.010i 

15.0108 

1.5.0109 

15.0110 

1.5.0110.1 

1.5.0111 

Establishment of the American 

Samoa power authority. 

Powers and duties of the authority. 

Board of directors of the authority. 

Board of directors-Powers--

Duties. 

Personnel. 

Transfers of existing systems of 

generation-Transmis ~ion and 

distribution. 

Accounting and budgeL 

Independent audit reports--

Utility consultants--Annual reports. 

Transition period. 

Implementation. 

Notice to customers. 

Penalty fees--Prohibit. 

R.c Ucr '.~ ComtTM:nt: 

SectiJn 1 ,~ rl.l'7-9i created ch~ptcr 01 in Title IS. rt. 17 -S6 

I'H:'-.:ame dr .. ;::·:: 10 Nov('tnhcr )QS2 upon approval hy !he 

(j.._·:·;r:o:.:"Jr .. i!c: ~ ::!':-: emcr&cncy ncC'..:f 10 c.stahli ~h. hy law, lt""~v.'cr 

authllfilf ft)r ~= operation or the ch:.cuic p-twcr system in !he 

Territory .. (p~:L-nCI:). 

15.0101 Estahlishment of the American 

Sumoa power authority. 

(2) may adopt ~d use a seal: 

(3) may make contrac:s, as authorized in this 

chapter; 

l:fi may adopt, amend. and repeal bylaws: 

(5) may purchase or lease ~d hold pe'sonal 

prc'perty it considers necessary or convenie~t in 

the tr~saction of its business, and may dispose 

t•i ;xrs..>nal property held by it: 

tb) has the power in the name of the go,ern· 

mc:~t to purchase, lease, or sell real estate, and 

to ~cccpt title to that real estate in the name of 

the government, to accomplish the purpose of this 

chapter: 

(i) shall make all arrangements for the generation. purchase, transmission, distribution, and sale 

or other disposition of electric energy generated 

by facilities of the authority or purchased by the 

authority within the Territory; 

(8) shall develop ~d publish tariffs and 

schedules of rates, charges, and services ~d other 

rules for providing electric energy in accordance 

with the Administrative Procedure Act, 4.1001 

rt srq.; thc.'e rates and chuges carry into eifect, 

as near as may be, the standards prescribed for 

ratemaking in PL 95-Ql7, the Public l.;tility 

Regulatory Policies Act, effective 9 November 

1918, 16 U.S.C. 2621 et seq.; 

(9) shall, through il' water and wastewater 

15-1 
utility division. make all arrangements for the 

production, distribution. and sale of p.Jtable water. 

and the collection and disposal of wastewater, and 

the operations and maintenance of the water and 

wastewater systems within the Territory of 

American Samoa; 

( 1 0) shall develop and publish tariffs and 

schedules of rates, charges, and services and other 

rules of providing potable water and for waste· 

water, disposal in accordanc~ with the Administrative Procedure Act, -+.1001 et seq.; 

(11) may bllfrow money and incur indebtedness 

for Clpital improvements. and may mortgage, 

assign, hypothecate and give security interests 

in authority propcny and eam~d rewnue to secure 

such indebtedness: provided that nc' mortgage of 

or security interest in real property of the 

authurity or oi the guvc:rnmc:nt may be given: 

provided that any indebtedness so created shall 

be that l•f the authority alc,ne. and shall not be 

an ohligation L'r debt oi the government. unless 

otherwise provided by law and pro,·ided that total 

indebtedness shall not exceed 50% of the 

authority's equity unk~s approved toy the: FtmCI; 

(12) may contract for the procurement ,,i 

supplies, equipment, materials. personal sen· ices 

other than by employees, and construction with 

any public or private entity upon terms and 

conditions as it finds necessary to the full and 

convenient exercise of its purposes and powers, 

sul:-ject to all applicable laws and rules of 

American Samoa: the authority shall receive and 

account for its inventory of materials, supplies 

and equipment; and 

(13) may do other things needful and necessary 

to the full and convenient exercise of the above 

powers, including but not limited to the construction of facilities on property owned by the 

government. 

History: 1982, PL 17-5~ § 3; 1990, 1,. 21-:!9; PL 22-14. 

Amendments: 1990 Extends gevcmment ton liability 10 tlac 

American Samoa Power Authruity by ar.1e!ldin~ r.ections 15.0102 

:llld 43.1202.' . 

15.0103 Board of directors of the au113 

thority. 

(a) The authority is gov~rned by a board of 5 

directors, appointed by the Governor and confirmed by the Legislature. At least 2 of the 

directors shall be experienced in the management 

of electric utilities, at least one shall have a 

financial background, and at least one shall have 

a legal background. No fewa than 2 directors 

shall be from outside AmciC!ll Samoa. 

(b) The rirst director arp_Ji:Hcd is aprointed to 

a term expiring on 30 June 1982. The second 

directOr is appointed to a term expiring on 30 

June 1983. The third dir~ctur is appointed to a 

term c"fliring on 30 June 1984. The fourth and 

fifth directors are appointed tJ terms expiring on 

30 June: 1985. All sub~eque~t appointments are 

for -t-ycar terms, or f,•r the unex?ired portion o~ 

a tc:rm. Recess appointments may be made to fill 

vacancies caused by dc:!th. resignation. 0r 

removal for cause ii the HC!llC)' occurs while 

th.: Legislature is not in session. Recess appointments expire at the wnciusion of the next 

following regular or speci:!l session of the 

Legislature ii they are nLll amfirmcd during that 

session. Incumbents may cuntinue to serve aftrr 

th.: expiration oi a term ur.ril a successor is 

appointed and confirmed. Tne Governor designates th.: chairman annually from among the 

membership of the board of directors, and the 

board selects its vice-chairman. Currently 

incumbent directors under the executivcly ordered 

authority may be reappointed. 

(c) The board of directors shall meet at least 

4 times per year. A quorum is 3 directors, at least 

one of whom is experienced in the management 

of electric utilities and one of whom is from 

oul~ide American Samoa. 

(d) Compensation is at a ratcofS5,000 per year 

for directors and S6,000 per year for the chairman. Travel, lodging and meal expenses will be 

provided for outside directors. 

HisiOry: !982. Pt. 17-56 § 4. 

15.0104 Board of directors--Powers--

Dutic.~. 

15-2 
.-'.\\ f'.'wrrs and duties vested in the authorit~ 

arc nrrci,cd by the hoard of directors. In 

carryin[: llUt this function. the board shall also: 

(I) ekct at its first meeting a vice-chairman. 

who shall preside at all meetings in the absence 

c•i the chairman, and other officers as it may 

de~m desirable from among its members: elect 

its officers annually thereafter at its first meeting 

in October: 

t2) appvint and prescribe the compensation for 

the executive director, who is the chief operating 

c•tiiccr ,,i the authority and exercises all executive 

functions. and the business and finance manager. 

pc:rati~..,ns managt:r. and plant ·managers. who 

peri,,rm duties assi!Cned bv the executive director. 

>u~jcct k' all applicable laws and rules. the 

b' :1ws of the authority, and directions 0f the 

hc•ard: 

i ~~ ad.: pt. amend and repeal hy laws: 

i-'' Jrvck•p pc1\ici~s and prllgrams fur tht· 

administratic'n. management and operation of the 

authority: 

I}) appwvc the annual budget of the authority: 

16) review the munthly t•perating statements t'f 

the auth.)rit,·. and such .nhcr financial repc,rts as 

it dt:t:r~ls iit·l·l"~S.ary: 

l7) ~ubmit mLinthly upcrating statements to the 

Govern•'' nc'l later than the twentieth working day 

after the end 0f the pr~,·ious month, and such 

other financial statements as he directs fwm time 

tv time:: 

(S) c:xt:rcisc: all other p.1wers n~.1t incunsistcnt 

with the laws and rules of American Samoa 

which are reasonably necessary to the administration, management, and operation of the 

authority and the hoard. 

Hi~tory: 195:!. PL 17-Sti § 5. 

E.0105 Personnel. 

All officers and ~mployees of th.: authority 

other than executive director, business and finance 

manager, operations manager and plant managers 

are appointed and CQmpensatcd in accordance 

with the requirements of the government employee la\~S. 7.0101 ct seq. except the: board may 

114 

aJopt administrative rules. pursuant to -Ut\1] 

ASCA ~t seq. to supplant government empk•y<< 

laws and rules in the: specific catc:g,•ries ,,f 

pers..,nnd recruitment. employment, tc:rmin~ti,•n 

L'f employee services, disciplinary actions. and 

compensation at levels comparable to pre,·ailim: 

utility levels. -

H~1u11: l~s:. PL 17-56 § 6. 

15.0106 Transfers of existing systems of 

gener.ttion--Tr.msmission and 

distribution. 

0i Electric Ctility. At a date fixed by the :,,,ard 

c•f directors. the: government shall transfer to the 

~uthL•rity the right to operate all itt:ms of prvpet<\. · 

including l.'4.JnStruction in pnJgress, e4uipmcrn J.nJ 

r.tachinery us~d in conncctiLlD with the thon 

nisting electric utility t'pt·ration of the government.' Property jointly usd for electric utility anJ 

g,"·ernmc:ntal non-utility functions must be 

equitably allocated be: tween the government :1.r.d 

the authority: provided that the allocation assures 

tile C<.'ntinuing efficient functioning of tho 

electrical generations, transmission, and distrih-

:i,•n fL:nctions of the gtl\·crrtm~nt. In the c:·;;:~: 

l'i dispute. the allocation is determined by the 

c,,,unor. 1lte property accounts for the authorit: 

~rc valued for ratcmaking purposes at the deprc· 

ciatcd acquisition c•,st of the property as uf th~ 

date of transfer, and are included in the rate: base 

of the authority. Future capital contributions in 

the authority from the government must be by 

separate authori7.ation and appropriation. Tne 

Legislature has the exclusive power to provide 

supplemental funding by appropriation for the 

operations of the authority. These appropriations 

may be designated as loans and not as part of the 

permanent capital. The appropriations may require 

repayment to the government at rates of interest 

specified in the appropriations bills. 

(b) Water and wa~tewaterutility. At a date fixed 

by the Governor and the board of directors of the 

power authority, the government shall transfer 

to tbe authority the right to operate all items of 

propcny, including construction in Jlrogress, 

15-3 
equipment :l!ld machinery used in connection with 

the then-existing water and wa;tewatcroperations 

of the government. Prcl pcny jointly used for 

water, wastewater and g0\'ernmental non-utility 

functions shall be equ itabl y allocated between the 

government and the authc,rit,·. prc>vidcd that the 

allocatiun assures the continuing efficient 

functioning of water pruductiun and distribution, 

and wastewate r w lkctic> n :mJ dispesaL In the 

~nt uf dispute. the al!un tivn shall be determined by the Go,·<rnor. The propcny accounts 

for the water and wastewater utility arc \'alucd 

fc>r ratcmaking purpos es at the depreciated 

acquisit ion cost of the pwpcny as of the date c•f 

transfer, and shall be included in the rate base 

0f the wa te r and wastewater utility. Future capital 

contributions to the authorit y fwm the gnq:rn -

mc nt shall be hy sepa rate authorization and 

appropriatk>n. The legislature has the cxclusi,·c 

power to prc>Yide supplemental funding by 

appropriatiun fur perati c• n~ <>f the water and 

wastewater s,·strms of the ;,:Jth\JritY . Appmpriations made to the Authority aftcrOctc>bcr L J9SS 

for the operation elf the water ys trm may ~ 

designated as loans an d rna\' require repayment 

10 ~c government ~t ra i~S a)i ir.trrr~l spt'citicd 

in the appropriations acts. Apprc>priations made 

to the authority after October 1. 19:-iS for the 

operation of the wastewater system shall be 

designated as subsidies for fiscal year J9S9 and 

thereafter in the amount of 5600.000 annually. 

The wastewater operation suhsidy shall he 

adjuslcd annually on September 30 of each year, 

beginning in 1992, in proportion to the change 

in numher of wa51twater customers compared to 

the number of such customers on June 30, 1991, 

and in proportion to the annual increase in the 

American Samoa Consumer Price Index. 

Hislor)·: t982, rL 17-56 § 7: 1991, rL t• § 3. 

Amcndmtnl'>: 1991 rr. :2·14 c.".t.:i~l is ~c::.; atli\·i:.;on o(~ a.ter .:.nd 

wastewater utility in the Amcriun S.J.mN Power Authoriry and 

lo allow th.c authority to borrow; adds (hj It) create the water and 

wast-:watcr utility and dcsig.noue eltctric t~tilil)" a (3). 

•15.0107 Accountin!! and hudgct. 

115 

The authority shall assumo responsibi lity t(> r 

the accounting and tinancial management of the 

clccrric utility, and water and wastewater systems. 

and shall administer 0r contract with the govern -

ment for the administratiun of all accounting 

systems, including general kdger, fixed assets. 

accounts receivable, accounts payable, payro il. 

and cash. It shall establis h prope r internal 

accounting controls nd procedures. and it shall 

prepare an annual uJ t as a part of th e Go er~

or' s budget process. 

15.0108 Independent audit rcports--

ltility c'onsult:ml<--,\nn ual rep.' 

orts. 

(al The auth,,ritv >hall ~rn ploy a firm of 

independent ~rtified puhlic acrountants with 

electric utility perien ~ ll• naminc and report 

upt>n the status oi financial rca.•rds and accounts, 

and may renew that emplt>yment annuall y. Copies 

,,f those rep.ms must he furnis hed to the Go,·crnc>r and the l...:g:slat urc·. 

[h) llt<" authc•rity m~y make intergovernmental 

i1r contracntal arrangements f<•r expert consulta.nl' 

to advis~ and con>ult with it in all matters related 

to the operatil'ns of the au th(lrity, including 

ratcmaking, system de~ ign. plann ing, budgt:ting 

and legal matters. 

(c) The authority shall pre• vide an an nual re port 

for each fiscal year to th~ Governor, the legislature, and the pet:>ple of American Samoa, not later 

than 31 December. 

lli<tory: !9SZ, rt 17.;r. j 0. 

15.0109 Transition period. 

All rates, charges, and classifications of the 

authority in effect during the transfer of property 

and facilities, and management thereof, to its 

control and jurisdiction are considered properly 

adopted and continue in effect until duly changed. 

lliUnl'}": 19:\1, 1'1 . Jj .~ f) t )f1 

15-4 
116 

1:'.0110 Impkm·:ntation. 

t_a) Electric utility. This chapt~r must he impfr· 

mented a<.:cording to the schedule prepared 

initially hy the authority task f<>rce and carried 

fCJrward. as supplemented. t'y the ~oard c>f 

JirrCI(1rS when appointed. and in no cast later 

th:lll 60 days after 10 '-.'twember 1982. the 

rffccti vt" date. 

1. h·, \V~tc: r J.nd \~o.·as tc w:ucr uti lity. Tht: tr~m~f..:r 

,_1f :he: w:ltcr :!nd w.1"\tcw:::tc: r t.!tili ty sh2!! be 

irr:pkmc: :Hcd immedi ately :!.1J thc: prn,·i:-i ... \ns 

herrin sh:1ll snw tc> w nfirm an J rc:il' the 

tr:::.n ~fe:- ~...1f the \\'J.ter and wa~ tcwJtrr utiiit~ 

r!"fc;;~c li h~ E~u;utiYe Ort.k:-:-; \ .. J::i. ll(,-l 98S :!.nJ 

i 0-i990. 

1:'.0110.1 :\otice to customers. 

When an American Sam<>a pnwcr auth, •rit: 

me ter rcJdcr visits a cuswmcr' ' prupcrt\ "' rc :1d 

a mete r, he shall leave a written " '' lice wit h a 

pr:son living or working :u that loca tit' n. The 

'vrinen notice shall c:..mtain the: fv!hJw ing inf~'rr.laiiun: the daH .. ', th~ meter rl.'ad !ng an d thr si;-na~u l.· 

,,_~f the m~..:H:r reader. lf thtrt: is nl1 ll!le ~,1n !ht" 

pn:r.1i l"S when the meter n: :-tding is ti!.J..tn . h~.· 

:l• 'liCi: m:-t: he.: f"~lSted u n lhl: <~U r '-1 r dO\Ir r\.,,1. 

Re\ i.~er·~ Cnmmenl: 

15 .r. l1 0. 1 "''•' p.:l!->."<"d J.<; 15.0111 hut v.:J..., rcnuml-'t.·rcc.! :.t 

:.-.Ciii c.ltinn tn lit within the cxistint; nun1huin~ .-..chcmc. 

lS.Olll Penalty fees--Prohibit. 

The authority is prohihittd frc'm assessing any 

fc>rm of penalty fcc ur charge on overdue 

accounts ,,f residential customers. 

Chapter 02 

:\OTIC£ OF TERMI:\ATIO:\ OF SER\'ICE 

S..-ctions: 

1~.0201 

15.0202 

1.:'.0203 

1:'.0201 

De!ioitions. 

Utility service--Termination--

Procedure. 

Penalties and claims. 

Dc!initions. 

.\s used in this chapter, unless the c.:>ntcx t 

dearly requires -' t.h~rwi!i~~ the: fullowi.r.g m~ :mi ngs 

apply: 

ll) ''Consumc::r'' means a per s~_) n. t.\J rp<.1:- ~tion. 

c-;mpany. ur assc1ciatiun who uses lilJ :s billed 

fc>r the services pru,·idcd hy a public utility: and 

1_2) ''Puhlic ut ili ty" means a pu blic c,,rr.'ra tiun. 

t..''-'mpany. person. associ;uil..'n. autheri':y. or 

rnlcrprisc funJ !hat L"'·;-,.s. opcr:..ttcs . ..:_,r C"-.liltrols 

a ~!ant l'' equipment within thr Tcrr:;,>ry fc'r the 

rrlldUC!iun llf Lkli\"L'TY of pP\\.'t" f in :my form. 

\\'.:!.!cr. ur telegraph l1r tc!t:plwnt: ~cl'\ icts. tu 

:.Ull lthL'r pc:r ~~n1. cvrp.Jrativn. CL'mr;1ny. ~_1r :!Ssvciatitln. 

1:'.0202 Ctilil! senicc--T~rmination-­

Procedure. 

ta·l r\ public utility may n, ,t term inate >ef\·ice 

h1 a consumt:r whL'St aco:,unt is not ddir.quc:nt 

,.,·ithoul lhc o .. msumer's consent. Prior to lerrr.inat -

ing fl\J\\'CL walcr. tdc:phone, or telegraph S<::v ices 

to a consumer whose account is delinqu:nt. a 

public utility shall serve notice. The notio: must 

include the name, address, and telephone numb-:r 

of the public utility and the name of a person 

employed hy the public utility for the consumer 

to contact for additional billing or payment 

information. The notice must include, in bold face 

print, a message to the effect that service will be 

trrminated after 10 working days from the date 

oi the notice 's pcstmark or from the date the 

termination notice is posted on the structure 

where the delinquent account is metered. 

(h) A notice of termination of service by a 

public utility on a consumer must be accom· 

15-5 
rtishrd r,· first cbs mail'" by attaching a copy 

uf the r.~.~tic: in :1 con:-;picuuus place on the 

structuH.· ,~,.·here.- tl1c Jelinqucnt JCC;Junt is metered. 

1S.020J Penalties and claims. 

.·\ fJub!ic utilit~ that terminates service to a 

c.Jnsumn :n 'iulatic>n of this chapter sh;:dl credit 

that con":>umc:r's J~,.'CVunt in J.ll J.mount equ:.d tv 

S25.00 for the sec-.:,-~ terminatiOn :md $10.00 for 

each full d.:n· the :'c:n ice remains terminated. 

Claims .1re h~dkJ by thr department of administratl\'C: srn·ic:s JnJ the: tinding:; of the: department 

;ue final for pu;-r--'sc:s l.1f this chapter. Tne 

pro,·isions l'f thi;-: ~cctic'n :ue in J.ddition tu .:J.n) 

•Jthrr admini~tr:!ti\ ~ ur judicial remedy avJil:.ibk 

Chapter OJ 

OFFICE OF Cmi:<.IL'dC\TIO\"S 

Sections: 

15.0301 

15.0302 

15.0301 

Partial dedication of reYcnucs. 

Sunset ProYision. 

Partial dedication of revenues. 

Thr Legislature shall appropri;lte annually the 

sum of S500,000 from revenues rw:ived by the 

office of commur.ications to pr.widc funds. 

pursuant to section ll.l906(i) for rental charges 

to pay the princip2l and interest on honds issued 

bv the ,\merican s~moa economic development 

a~thorit1 to fin:mcc the Executive office building 

of the gon:rnment during the tenn of the bonds. 

The appropriation~ shall be included in the annual 

appruprietions act tor each fiscal year, beginning 

with fiscal year 19S9. 

Hi.~lory: 1%7, PL 20-39 S 1. 

1.5.0302 Sunset provision. 

This charter is rcpeakd on the d~tc that all of 

117 

the bonds i;sucJ w finance the Exccutiw ,,fficc 

huikling c>f the gc"ernment arc fully paid. c>r 

prcwision is made f~.,1r such payment pursuant tu 

the trust indenture applicable to this bond issue. 

lii..~tory: !OS:', PL :c;._3>J ~ L 

Chapter 04 

tRESER\TD) 

Clwpter 05 

.. DIERGE\CY E\"ERGY i\L\.\"AGE\IE\"T 

Se-ctions: 

15.0501 

15.0502 

15.0503 

15.0501 

l'o" ers of Governor. 

Enforcement. 

Termination of powers. 

Powers of Gm·ernor. 

To pro,·idc fur emergency resource management. the GL'\'erill'f. aftl'r pwcl1im ing that an 

emerQencY exists "hich threatens to disrupt the 

,,xial ord~·r. c•r :11onc·:il the hcalih and safety L'r· 

the ptL'f'le llf American Samua may~ by ru!e or 

c.-\l"Cutin: l1rlkr: 

( 1) wntrol. restrict. and regulate hy rationing. 

freezing. use ,,f c;ul•ias. allocations. prohibition 

(ln shipments. prier fixing, allocation, or other 

means the usc. <ale. or distribution of fuel. 

petroleum products. or other sources of energy; 

(2) prescribe and direct activities in connection 

with hut not Jimit::d to use, conservation, salvage 

and prevention of waste or fuel or other sources 

of energy: 

(3) take such other action as may be necessary 

for the management of energy resources during 

any emergency dcclorcd by the Governor. 

lli.,.tory: 1474, PL Jj . .!3 S 1. 

15.0502 Enforcement. 

The law cnforcin~ authorities of the Territory 

of ,\mcrican S:::n11~ 'hall enforce the orders and 

15-6 

20-369 0 - 96 - 5 
118 

rul :.: :- pur~u J.nt t~) thi:; chaptt· r. 

1." .0503 Termina tion of powers. 

Tr. c ~r r~r:nc~· ~)W t.":'" S vf thr Cit..W C:" i'll\r ~h !ll 

:c;:;nr::l!C" ~,.1n the: c.._,,· c:rn ur's Licd.lrJ.tiun th J.t 

~r ::-:lc~;r rH:y no !ongc:r cxi ~t s or hy C'-' ncun ;,:nr 

:c ..:- hm v r :he: L:;; ts!Jturt t.."~ f American SJr.1 ~,. 1.1. 

15-7 
119 

OFFICE OF THE GOVERNOR 

American Samoa Government 

Pago Pago, American Samoa 967'39 

A-P_ lut3li. Govemor 

Tauosa P. Sunia. Lt. Governor 

The Honorable Janet Reno 

Atromey General 

Main Justice Building 

November 20, 1995 

lOth and Constitution Avenue, N.W. 

WashingtOn. D.C. 20530 

Dear Atromey General Reno: 

Telephonoo (684) SJ:k116 

F-<llC (684) 633-2269 

Serial: 1313 

I have learned informally that the Justice Depamnent is preparing draft legislation for 

presentation to the Congress which would establish new federal court jurisdiction over 

American Samoa. I am raking this oppol1l!Ility to share with you my deep concerns 

regarding this marter. concerns which I have previously expressed in Congressional 

testimony. 

We do not consider the question of federal judicial jurisdiction over Ameri= Samoa 

to be merely a technical or administrative issue. Rather, this is a very complicated and 

sensitive issue which goes to the heart of our relationship with !he United Staies. We 

believe the issue should be resolved by IIIlltt1al consensus, not by unilateral federal 

action raken over the objections of our people. 

Our most important concern is that if an extension of federal judicial authority is 

contemplated, ir must be stricrly limited so that it does not provide a vehicle for 

challenges to our traditional Samoan land tenure syst=. The United States has 

pledged to protect and preserve our native lands and culture, and the territorial courts 

establisbed by the U.S. Navy and the U.S. Departmem of the Interior have honored 

that pledge and have developed a body of jurisprudence which balances local customs 

with federal legal requirements. 

If any new fuderal jurisdiction over American Samoa is deemed necessary, we believe 

that Congress should codify and augrnem the jurisdiction of our existing High Court. 
Honorable Janet Reno 

November 20, 1995 

page two 

120 

While our High Coun does not currently have Article m statns. the Justices are 

appointed by the Federal Government. As a former Associate Judge of tb.e High 

Court, I can assure you tha1 tb.e Court bas enjoyed a long history of respect and 

a=ptance by our people_ 

Wbatever form of new fedJ:ral jurisdiction is proposed, it must provide for trials and 

other proceedings in American Samoa before grand juries and trial juries drawn from 

the local community_ It would be fimdamemally unfair to subject our people to the 

inconvenience. expense and potential prejudice of litigaiion or prosecutions conducted 

in Hawaii or on the U _s_ mainland before grand juries or trial juries composed of 

persons who are not residems of American Samoa. 

Funhermore, any federal judges, magistrates or prosecurors with authority over 

American Samoa must be drawn from the ranks of our local legal community, and must 

not be imported from outside. We have passed the point where outside judges and 

prosecutors are needed to dispense justice in our islands. Federal judges and other 

officials in American Samoa should be local people, just as they are in fede..--al judicial 

districtS in the United Swes. 

Finally. we reject any suggestion that the small size and remote location of our 

territory warram the imposition of outside federal judicial authority in order to save 

expenses. If the Federal Govermnem sees sufficient need to subject our people ro new 

federal court jurisdiction. it must be willing to incur the cost of providing the same 

locally-imposed court system enjoyed by other offshore territories of the Unired States. 

Sincerely, 

Governor 

cc: The Honorable Bruce Babbitt 

The Honorable Daniel K. Inouye 

The Honorable Daniel K. Akaka 

The Honorable Eni F .H. Faleomavaega 
AP. Lutaii. Governor 

Ta..ta:s& P. Sunia.. Lt. GovfWT:or 

121 

OFFICE OF THE GOVERNOR 

American Samoa Government 

Pago Pago, American Samoa 967'99 

November 20, 1995 Te~none: (884) 6.3,3-4; 'l6 

Fax:: (684) 6:!3-22Sll 

Serial: 1314 

The Honorable Bruce Babbin 

Secretary of the Interior 

1849 C Srreet. NW. Room 6156 

Washington, D .C. 2024{) 

De::rr Secretary Babbin: 

I am em:losing a copy of my lener to Anorney General Janet Reno on the issue af new federal 

coun jurisdiction over American Samoa. I can assure you that the views exp=>ed in my 

letter reflect the concerns of the leaders and rbe people of our territory. This is a complicated 

and sensitive issue which goes to the heart of our relationship with t:he United Stares. 

We ask for your help in assuring that the Administration does not propose legislation which 

pia= our land system and the inheritance of mazai titles ar risk or which exposes our people 

to litigation or prosecution off-island, before outside judicial authorities. If the Federal 

Government sees sufficient need to subject our ?COPle to new federal cou."t jurisdiction, we 

would expect it to provide the same locally a=sible coun system enjoyed by other offshore 

territories of the United Stares. 

Finally, should the Administration feel it must propose legislation in this area. we hope tbat 

the proposal will be reflective of our concerns and inclusive of our poim of view, one which 

does not ask Congress to impose ru:w federal court jurisdiction over the objections of the 

people of Amerian Samoa. 

Sincerely, 

Governor 

cc: The Honorable Janer Reno 

The Honorable Daniel K. Inouye 

The Honorable Daniel K. Alc!.ka 

The Honorable Eni F.H. Faleomavat:ga 
A.P. l.&.ati, C3DV"wnor 

r .. - P. Sunia, U. Governor 

122 

OFFICE OF THE GOVERNOR 

An11rie11n Sa111011 Go-.vnent 

P1190 Pllgo, Ameriew~ Samoa 116789 

September 15 , 1995 

Tolopt>ono: (&&4) ~, 16 

F111< (&&4) 833-22119 

Serial: 979 

The Honorable Elton Gallegly 

Chairman, Subcommittee on Native American 

and Insular Affairs 

Commitree on Resources 

1522 Longwonh House Office Building 

WashingtOn, D.C. 20515 

Dear Chairman Gallegly: 

Enclosed, please find my response to the questions submitted to me by Congressman Eni 

F .H. Faleomavaega in connection with the August 3, 1995 hearing held by the Subcommittee 

on the U.S. Department of Justice's Assessment of white collar crime in American Samoa. 1 

appreciate the opportunity w supplement the record. 

Please do not hesitate to contact me if you require funher information. Thank you for your consideration. 

Sincerely, 

tr~o!;M· A.P. LUTALI 

Governor 

Enclosure 

cc: The Honorable Eni F.H. Faleomavaega 
123 

I. Q. What led you to believe in early 1993 that white a~Uar crime might have been 

a problem in American Samoa? 

A. When I took office, I was advised that the American Samoa Government (ASG) 

faced a financial deficit estimated as high as $60 million, and that there were 

insufficient funds available to meet the first payroll. In addition, I was informed 

of audit reports which had identified financial irregularities and of reported 

incidents involving misappropriation of government funds and property. 

2. Q. Why did you ask the Department of the Interior for assistance in combatting 

this problem? 

A. I wanted to take strong action to show that my Administration was prepared to 

proceed with agressive investigation and prosecution of misconduct by public 

officials. Since the FBI and the Department of Justice have extensive experience 

with cases of offical misconduct, I sought their help as a prompt and effective 

means of strengthening our local ability to detect, document and prosecute white 

collar offenses. 

3. Q. What assistance did you ask for? 

A. I requested the assignment of two FBI agents and one Department 9f Justice 

attorney to serve temporarily as local officials in the investigation and prosecution 

of alleged cases of public misconduct. 

4. Q. What was the result of your request for assistance? 

A. Eight months after my request, the Department of Justice entered into a 

Memorandum of Understanding with the Department of the Interior and ASG to 

perform an assessment of the white collar crime situation in American Samoa and 

the need for investigative and prosecutorial assistance. More than a year later, 

although the assessment had not been completed, a redacted draft of the executive 

summary was released to members of congress and the media. The draft contained 

undocumented assertions of widespread corruption and misappropriation of public 

funds and suggested that the Samoan culture tolerated dishonesty by public 

officials. Thus, disclosure of the summary generated false and adverse publicity 

without providing any assistance to our law enforcement efforts. 

5. Q. Has this result met your needs? 

A. The lengthy assessment produced by the Department of Justice went far beyond the 

scope of my original request and has been a counterproductive distraction in our 
124 

Responses to Subcommittee questions 

September 15, 1995 

page two 

efforts to improve law enforcement. While the Department of Justice was engaged 

in its assessment process, our local Attorney General identified cases for 

investigation. When it became apparent that timely assistance from the 

Deparonent of Justice would not be forthcoming, he bad to proceed with 

prosecution of those eases. The statute of limitations, the unavailability of 

witnesses after a lapse of time and our own commitment to prosecuting white 

collar crime left no other option. 

6. Q. In your statement before the House Subcommittee on Native American and 

Insular Affairs on August 3, 1995, you noted you have started a white collar 

crime task force with local resources. What federal asdstal!fP do you believe 

would be benefu:ial. to you? 

A. As our Attorney General testified before the Subcommittee, the latest report of the 

Task Force shows that local prosecution of white collar offenses has been 

aggressive and successful. However, we could still benefit from the temporary 

assignment of federal investigators or prosecutors, particularly for the purpose of 

training our local law enforcement personnel in the more sophisticated techniques 

necessary for the successful prosecution of white collar offenses. 

7. Q. What is your opinion of the recommendations mntaiDed in tbe report issued 

by the Department of Justice on white collar crime in Ameriean Samoa? 

A. Federal Court Jurisdiction The question of establishing federal court jurisdiction in 

American Samoa is very complicated and goes to the heart of our relationship with 

the United States. Any extension of federal judicial authority should be narrowly 

limited so that it does not provide a vehicle for challenges to our traditional title 

and land tenure systems. Before creating any new federal court jurisdiction, the 

issue should be carefully examined by the relevant congressional committees, and 

field hearings on the subject should be held in American Samoa. 

If the establishment of federal jurisdiction in American Samoa is deemed 

necessary, Congress should consider augmenting the jurisdiction of our existing 

High Court. While our High Coun does not have Article 01 status, the Justices 

are appointed by the Federal government. As a former Associate Justice of the 

High Court, I know that the Coun has enjoyed a long history of respect and 

acceptance by our people. 
125 

Responses to Subcommittee questions 

September 15 , 1995 

page ;hree 

Whatever form of federal jurisdiction may be considered, it should provide for 

trials to be held in American Samoa, not in Hawaii or on the mainland . It would 

be fundamentally unfair to subject our people to the inconvenience and por.em.ia.l 

prejudice involved in off-island trials. If appeals into the Federal appellate system 

are allowed , case.s from American Samoa should be h!2fd in American Samoa. I 

note that the Federal Courrs of Appeal typically travel within their circuirs to hear 

cases, including travel to l'uerto Rico. 

Furthermore, if a federal judicial and prosecutorial function is located in American 

Samoa, the judges, magisrrates and prosecutors ~hould be drawn from the ranks of 

our local legal community and should not be imported from outside. We have 

passed the point where outside judges and prosecutors are needed to dispense 

justi .! in our islands. Federal judges and officials in American Samoa should be 

toea. ,,eople, just as they are in federal judicial districts in the United States. 

8. Resident FBI Agency Deployment of FBI personnel is a matter for the Federal 

government to decide. If a resident FBI agency is established in American Samoa. 

w~ would expect the normal cooperative and professional relationship between 

local and federal law enforcement officials. 

C. Local Federal White Collar Crime Task Force Any arrangement which goes 

beyond the normal relationship between local and federal law enforcement 

authorities should be temporary and should concentrate on tra.ining and technical 

assistance. 

D. Law Enforcement Adyisory Board Provisions for monitoring the implementation 

of programs and plans sbould be made in the context of each project. We see no 

need for an ongoing Advisory Board with broad-based reporting responsibility. 

E. Improvement of the Department of Public Safetv Many of the suggestions by the 

Department of Justice tor Improving our Department of Public Safety are valid. 

Some of them are already being implemented. 

F. Federal Oversight We agree that ferleral oversight of federal programs in 

American Samoa can be improverl. 

G. Local Legislation The suggestions by the Department of Justice for strengthemng 

our local criminal statutes are generally well-taken. Our Attorney General is 
126 

Responses to Subcommittee questions 

September 15, 1995 

page four 

working with our territorial legislature on the preparation and consideration of the 

suggested legislation. 

H. ASG-00! Joint Working Group The Joint Working Group (JWG) is an important 

step towards establishing imemal mechanisms to ensure federal responsibility and a 

cooperative partnership berween ASG and DOl. However, the Senat~ version of 

the FY96 Interior Appropriation would eliminate funding for the JWG. 

8. Q. Do you believe an Attorney General of American Samoa elected by popular 

vote could better serve the interests of justice :n American Samoa? Please 

explain the reasons for your answer. 

A. Popular election of the Attorney General could make the office more political and 

less professional. It could also impede cooperation berween the Office of the 

Attorney General and other executive departments and agencies, which is necessary 

for effective investigation and prosecution. 

9. Q. Do you believe an Attorney General appointed by the Governor, conf'll'11led b}' 

the legislature, to serve a four to six year term not coinciding with that of the 

Governor, and removable only for good cause by the legislature would better 

serve the interests of justice than tbe current procedure for choosing an 

Attorney General? 

A. The current system of appointment and confirmation of our Anomey General is 

working well and should not be changed. The separation of power embodied in 

our Revised Constirution properly treats law enforcement as an executive function, 

and this principle should not be violated by giving the Legislature power to remove 

the Attorney General. 

10. Q. Do you believe giving the Secretary of tbe Interior or the Attorney General of 

the United States authority to appoint a federal pi'O!ieeutor for ad hoc service 

in American Samoa would serve the interests of justice? 

A. Proper enforcement of federal law is a matter for the Federal Government to 

determine. Our government will cooperate with federal law enforcement officials 

in the normal professional manner. 
Responses to Subcomminee questions 

September 15, 1995 

page five 

127 

II. Q. Assuming there are individuals residin, in American Samoa who owe debts to 

the United States government, are there any grounds as a matter of poli<:y on 

which you would oppose the United States suing those individuals iD the High 

Coon of American Samoa to recover the unpaid oblixadons? 

A. We would not oppose the collection of legitimate federal debts from residents of 

American Samoa through suits in the Hi&h Court of American Samoa. In fact, our 

Attorney General has, at the request of Federal agencies, collected several debts 

for the Federal Government in the High Court of American Samoa. 
128 

lil.§. liuunc of ill.cprcncntatiucn 

iConnmtrre on :Resources 

[illaslnnrrton. D!C 20313 

September 13. 1995 

The Honorable Letuli Toloa 

President of the Senate 

Legislature of the American Samoa 

Pago Pago. American Samoa 96 799 

Dear Senator Letuli: 

Attached is the list of questions which I Indicated would be forwarded to you in our 

Subcommittee heanng on August 3. 1995 on the Amen can Samoa White-Collar Cnmc 

Assessment of December 1994 (Redacted Version). 

It would be helpful to the Subcommittee to rece1ve responses by the close of business on 

September 29, I 995. 

Your attention to th1s request 1s apprec1ated. 

Enclosure 

rely, S 

) hcv[t k ~EGLY ~· ( 

Cha~rman 

Subcommittee on Native American 

& Insular Affairs 
129 

Subcommittee on Native American and Insular Affairs 

Hearing on American Samoa White Collar Crime 

August 3, 1995 

QUESTIONS FOR THE PRESIDENT OF THE SENATE 

I. The establishment by local American Samoa law of an independently audited, semiautonomous agency responsible for cenain public utilities and infrastructure has 

proven to provide for improved standards of financial accountability and managerial 

operations. The American Samoa Power Authority (ASPA) has also demonstrated the 

capability of American Samoans to competently and effectively manage a complex 

operation and meet strict audit standards. When will the legislature act on proposals 

to establish other similar authorities? 

2. What type of competitive bidding practices do you believe should be required and 

enforced under local law? Consistent with the federal Code of Federal Regulations? 

Would the adoption of CFR bidding standards prevent potential conflicts of interest 

and abuse? 

3. In view of what was presented in the assessment, should the Depanment of Interior or 

the Government of American Samoa set the priorities for capital improvement 

projects? 

4. How should federal criminal jurisdiction be established for American Samoa? 

5. The assessment indicates the lack of financial controls have contributed to an 

environment resulting in fraud and abuse of funds. What level of resources will the 

legislature provide the necessary resources to enable the government of American 

Samoa to meet the financial accountability necessary to comply with the audit 

standards of the federal single audit act? 

6. When will the legislature to enact a general fraud statute to meet the concerns raised 

in the assessment? 
LETULI TOLOA 

Presidt:nt 

130 

AMERICAN • SAMOA GOVERNMENT 

OFFICE OF THE PRESIDENT OF THE SENATE 

LEGISLATURE OF AMERICAN SAMOA 

December 27, 1995 

Tel ' 1684 1 6334565 

633-5231 

The Honorable Elton Galleg1y 

Chai=an 

Subcommittee on Native American 

& Insular Affairs 

Re: Responses to Questions on White Collar Crime 

Dear Chairman Gallegly: 

I acknowledge receipt of your letter regarding the 

referenced material. 

The following are my anwers to the questions you sent. 

1. At present time we have committees from the 

House and Senate on fact-finding tours in 

Hawaii and California. The objective of the tours is to obtain facts to enlighten the 

Legislature on the pros and cons for the establishment of a Hospital Authority to operate 

the LBJ Medical Center. After the proposal for 

a Hospital Authority is disposed of, we might 

revive the proposal for a Port Authority to 

manage and operate the port and the airport. 

2 . (a) Compe titive bidding should be in 

accordance with the requirements of the 

local procurement state and regulations. 

(b) Yes. The local laws should be patterned 

after the Code of Federal Regulations. 

(c) Yes, CFR bidding standards are the 

results of the vast experience of the 

federal government in the problems of 

conf lict of interest and abuse. 

P. o . Box48S. Legislature of Amvrican Samoa. P~ Pago, Americ:1n ~oa ---Q6799 
131 

Page 2 

December 27, 1995 

The Honorable Elton Gallegly 

Chairman, Subcommittee on Native 

American and Insular Affairs 

3. I believe the American Samoa Government is in 

a better position to evaluate and set the 

priorities for capital improvement. 

4. By including American Samoa in the jurisdiction 

of the federal district court in Hawaii. 

5. The Legislature will provide the highest level 

of resources upon receiving facts that will support 

the need. 

6. Hopefully, the next session of the Legislature. 

I hope my answers to the committee's questions will be 

helpful in preparing your assessment. 

On behalf of the Senate and the people of American Samoa, 

I thank you for your interest in our welfare. 

Sincerely, 

~ President of the Senate 
r AU\ vou s AL:: 

SP;::Ao< ::; ::l: 

132 

l~,. ~~ ~~~llo>- · 

LEGISLATURE OF AMERICAN SAMOA 

HOUSE OF REPRESENTATIVES 

OF:O!CE OF THE SPEAKER 

December 28, 199 5 

The Honorab le Elton Gallegly 

Chairmrln, Subcommittee on ~ative 

Ame ric an ar.d Insular Affairs 

Washington, D.C. 20515 

Dear Mr. Chairman: 

Attached herewith are response s to questions rel ated to 

Subcommi ttee hearing on August 03, 1995 on the American Samoa 

White - Collar Crime Assessment of December 1994. 

I would like to apologize for the late submission of a nswers 

and hope t his would help t he committee. Please adv ise if any 

other information needed . 

STA /j ml 

encl / 

Soifua, 

~tf"TLVv~L~ Speaker of the House 

of Representativ es 
~--\L-\\ \.'l 1 S : · 

.::' :: \--. ~:~ 

133 

Subccm.':litt ~t.! o n :\J.ti\"2 :\m c!. i~.1 n .1nd Insular Affairs 

e~'1r ins on .~t.!l·ic~ n. Sa \).1 \\" !l ite Co l lar Crime 

:\ lt..": tiSt 3 , l~l9 5 

AXSKERS TO ~UES TIONS 

FOR THE SPEAK ER OF THE HOUSE 

Question :<o. l. 

The establishment by locJ.l .:'\rne!·ic.J. n Samoa la\v of an inde pende n t ly 

a udi ted, semi a utonomou s ag c~· res ponsible for certain public il ti · 

and infrastructure ha s proven to prov i de for improved standards o f 

fi:1a nc i a l accountability and rnanage::- ial operations. The American Sarno.:. 

Pm,·er .>.uthori ty (ASPA) has also demo nstrated the capability of Amer h'~" 

Samoa ns to competently and effectively manage a compl e x operation and 

~eet strict audit standards. Khen will the legislature act on propooa lc 

to establis h other similar authorities? 

~es:Jonse: 

: a~ h appy to report t ha t t h e people of the Territory of American Samo '·' 

are pro--.:C. of the p er:orrnance record of the American Samoa Power .1\uthor.:.:.·; 

i.n t he past se\·eral years, especially the authority • s cornmittment to 

~aintaining a financial operation consistent with the Territorial 

guidelines issued by the federal offices of Management a nd Budge t and 

the Te~ritorial and International Affairs of the Interior department. 

Your Corom ittee properly pointed out t ha t Power Authority has c l early 

de~onstrated its superlative skills in all areas of comp lex const ructi c :1. 

\\e are wi t n essing a steady progress of the 1vork delegated t o t he 

Authority pertaining to the improvemen t of our infrastructure. This 

bright ?icture represents on one side the competency of ASPA 1 s mana ge~e~t 

and ... :orkers. 

T~e other side of the picture is not so bright. It portrays the 

gov ern~en t•s concern o ver the costs invo lved in operating the Power 

Aut~ority. For the current fiscal year, ASPA wil l operate in a budge t 

that exceeds S2 0 mi llion , which is 13 % of the gove rnment's total budge t. 

So l<hi le profession al bookkeepe rs and expert engineers p roduced 

cD:n:,-,endable results the Te!:r i tory plainly cannct afford anothe!: author:. t· · 

t~at ~eq ui res this much money to o perate. 
134 

:;·..: ss :. .:. :.:-. ::(:. 2 . 

:-:~ ~:. :~-; ~ :.~ ~s ~~ e~:~~·: e ~~~d i~g ?ractices do you believe sho uld be 

-- ~-:~ ~~a ;: ~ ~~s~ =~~ u~6er :ocal law? Cons istent with the ~edera~ 

:c~& ~~ =s~~ :a : ~sg~: a:~c~s? ~culd he adoption of CFR bidding 

~~ ~~~==~ ~=~~~~ = ;==~~~i~: C8~ licts of interest and abuse? 

..... .::.:.S:.~ :::.:_::. _~-, :.:-.<:: _.:._s3 ~S3:':' e:-,t ;;:-esented t o 'JOUr Subcommittee did not 

.:.:-. :>.:.-:..:-:: 'l:: ::.. ·::. ::s:s 0: ~:-.e r.r.e rican Samoa Gove rnment ~ s opera tion in 

:_ _.-_~..: ,::;.~:. ::::.~;:-.~.r:: .::::-. :-:-:s:-.:.:-.s . :'a ·..1;:.-dat e the Committee' s :~forma tion, 

~~= ~ : s ~~ :~ ~1ca ~~ :~at ~~e sys t em followed by the territoria l ·d:..·.-::: ... -:~: . . :. _:-. .;:.:--:::.,.._·...::::-:.:-.c; its st;.;.t_;iiE::s ar.d so2rv ices ner~d sign ificant 

~~a~~~s as 3U~g~ s~ SG. I~ act , our procurement rule s basica lly 

.:. ~::-:.::-0~ ~ss~ ~~ =~~ ~ede =a l government's . Competitive offe rs are 

~~~~:~~ci ~ ~a~~s 0~ ?r~~~~s~&nt by formal advertising and p roposals 

~ ~as~s ?~ ~rsc~r~~~nt by ~egotiations. The Chief Procurement 

J:::~~~ :3 ~0s~s~s:~:e to r~ach as ~uch qual i fied sources as possibl~ 

~:~ ~~ a~~~= :: :~g . H& :s resuired to ensure f ree and open competit i on 

s :s ~~~sis~~ ~~ ~it h the procu rement of t ypes of supplies a nd se rvi ces 

~-~ ~0ssa~- ~s ~~~~ ~~~ :equ ire ~ent s of the agency conc erned . 

cas~s G~ public exigenc y a nd nu=chases in arnou~t: : 

alsc ~as ica lly identical to f~der al exemptio~s 

~~ ~:~~: s~~~~arts ~s~at!ist~d in the CFR for t he ~ederal govern~cnt 

~~ ~~~~-~~~ ~d s~~t= act0rs ~~r~ adopted by the territorial government. 

::::. :..:::: :.:--.e::r;:'".:.. r<.:: ~.j ~ssit.:.o:-: t hat the American Samoa Gover:1men t 

~ .... : ........ ~-..:~r::- r.;-:-.': !:''J. _:;._..-.;s ~jrr.; ade::r-!~at ~ for our situation. Th e human ·.vea.kncs:..i<.::: 

~.~., '' ss~~ ict ~~ i~t~rest ', ''abuse'' , and o t her unethical arrangement ~ 

~~~~:~:~~ i~ ~isc=~~a~c i~s ~otcd i n the Assessment were not unique to 

~.:c c,: c.a :-. 3<>::1')2. I:' ur.":t!':ical conduct of personnel in•1olved is not ~s= =~~~~~ . ~~~ ~;st~~s ca~~0~ provide the sol utior . 

-·- -,.:_~~ ~~ ~~a ~ ~' s 9r~!;~nt~~ in the assessment, should the Dc par ~nt 

--- ::-.~r.::-1.-:.:::- r;,r t:_;---,r; fj(J•;t;[:- ::"J.::":. ~ of Arn e:: r ican Samoa s et th~ prio r~tl~ S 

~~ ~ s~~it~l l~~ ~~~~~nt ~r0J~cts ? 

"> .... ~---.:.'.::::-. i:-.'i ,..~t.:..[ ... .:.t..r..:.~ ~:-:lr ... rr//';i:'!r.::~.t Projects , proximity is a !ilUjor 

•.;' ... :-.~::.:..'.i'.;!"-:.t't ir ... n. .': sir.c'..: ':.h r: ':JO./E:: rnment of American Somou i s situu.b ..:ti 

-·- ~ ~~~~~:::- 0~~~r 1~ti0~ ~0i~t than Interior ASG should set ri oriti~~~ 
135 

Subcommittee on Native American and Insular Affairs 

Page 3 . ..... ....... .. .... . .. . ........ ....... . . . .. ..... ... .... •. · · · · · 

As a review the records of C. I . P.' s approved and funded in the recent 

past it manifested Interior ' s prefe r e ntial to projects initiated by 

the American Samoa Power Authority. According to our informa t ion, 

Interior ' s partiality toward ASPA is due to the Authority ' s good 

record on financial accountability and proven management skills . 

The mark is badly missed . Prioritizing of capital improvement proi ec c s 

is based solely on need . Keeping good financial records is purely 

clerical. Let me remind the Committee that the American Samoa 

Government has employed a highly qualified and reputable auditor fro~ 

San Francisco. 

Question No. 4. 

How should federal criminal juris dic tion be established for Amer c~n 

Samoa? 

Response: 

The question on federal criminal jurisdiction will be referre d to the 

Judiciary Branch here in American Samoa. The position of the j udi c i a r ;· 

is paramount in this regard . 

Question No . 5 . 

The assessment indicates the lack of financial controls have ntr ibut~c 

to an environment resulting in fraud and abuse of funds. What l evel 

of resources will the legislature provide the necessary resourc es to 

enable the government of American Samoa to meet the financial accoun tability necessary to comply with the audit standards of the f edera l 

single audit act? 

Response: 

Much blame for the financial problems of American Samoa has been p l accc 

on poor accountability. Although this may be generally true, I wish 

to refer your Committee's review to some of the factors that c o ntr ibutcc 

to the assessors' conclusion. 

A. It is crucial to understand that Federal Emergency 

Management Agency (FEMA) funds approved to aid the 

Territory in the 3 hurricanes that devastated American 

Samoa within the last decade (Tusi- 1987, Ofa- 1990, 

Val - 19921 were deposited into the government general 

fund and commingled with local operations funds. And 

when FEMA asked for financial reports at the completion of hurricane recovery operations, ASG agencies designated 

to account for FEMA funds were unable to provide the 

financial reports. The American Samoa Gove rnment 

expended commingled funds indiscriminately and the 

financial managers could not produce expense records 

identifying FEMA funds used on disaster related 

expenditures .. 
136 

Subcommittee on Native American and Insular Affairs 

Page 4 ........ .. ............. . .........••........................... 

B. Simultaneously, the American Samoa government's 

financial managers had overestimated government 

revenue . (A problem unrelated to accountability 

but ti e s in with the overall picture). It is 

believed the governme nt then used disaster funds 

to meet its ope ration costs. In addition, the 

go vernment's financial management system failed to 

properly keep accounting records and produce 

reliable financial reports. Further, the key 

position of government comptroller remained vacant 

f or a number of years during this period. One of 

the results wa s the government treasury's inability 

to assemble the necessary information for the 

Compr e hen sive Annual Financial Report for fiscal 

year 1992. The FY 1992 CAFR (without the auditor's 

certification) was finally published in 1995. 

Que stion No. 6. 

When will the legislature to e nact a general fraud statute to meet 

the concerns raised in the assessment? 

Re s po ns e : 

The Legis lature 's legal staff and the Attorney Gene ral's legal staf f 

have be e n instructed t o research and draft a fraud statute suitable 

for o ur jurisdiction . 
A. P. LUTALI 

Gor~rnor 

TAUESE P. SUNIA 

/.J. G1nunor 

137 

OFFICE OF THE TERRITORIAL AUDITOR 

American Samoa Government 

Pago Pago, American Samoa 96799 

September II. 1995 

A. Wendell Harwell, CPA. ~:co: 

TtrritnnLll .\uJI/or 

Telephone: (684}633-519 1 

Facsmile : (684)633-1039 

Honorable Eni F. A. Faleomavaega 

Congress of the United States 

House of Representatives 

Washington. D.C. 20515-5201 

Dear Representative Faleomavaega: 

The following is in answer to the questions posed to me in your letter of August 18, 1995: 

I. Question: 

Answer: 

2. Question: 

Answer: 

3. Question: 

Are there any impediments to you performing your audit functions in an 

independent manner'' If so. please state the impediments and an,· 

recommendations you have to remove or reduce those impediments·> 

There are no impediments to me in performing audit functions relating to the 

executive branch of the American Samoa Goverrunent (ASG). This office 

does not have the legal authority to audit the Legislative or Judicial branches 

of the ASG. as I believe you arc aware. 

Is there authorized and appropriated sufficient funding to fully perform your 

audit functions? 

While additional funding (and additional stam would certainly increase the 

audit coverage by this office. I believe the present (and proposed future 1 

funding of this office to be reasonable in view of the size of the ASG . 

Please provide an organizational structure of your office and explain the 

sources and amounts of funding for the Territorial Audit Office for tiscal year 

1995. 
138 

Honorable Eni F. H. Faleomavaega September 11, 1995 

3. Answer: 

Question: 

Answer: 

An organization chart of the Territorial Audit Office (TAO) is anached. An 

offer has been made to an applicant for the position of audit manager. The 

vacant position for Technical Assistant will be filled subsequent to the 

employment of an audit manager. 

Funding for the TAO was provided as follows for fiscal year 1995 : 

Local ASG funds 

Grant from the DOl 

$249,500 

~ 

$296 000 

Given the staffing you expect when current recruiting is completed, on 

aver.:~ge . how often will each agency in the executive branch of the American 

Samoa Government be audited? 

Dela ine & Touche are the ASG's external certified public accountants. and 

that linm audits not only the fmancial statements of the ASG, but also 

conducts a Single Audit. A Single Audit includes independent auditors' 

reports on the following: 

Internal Control Structure 

Compliance with Laws and Regulations Related to the Audit of 

General Purpose Financial Statements 

Internal Control Structure Used in Administering Federal Financial 

Assistance Programs 

Schedule of Federal Financial Assistance 

Compliance with General Requirements Applicable to Federal 

Financial Assistance Programs 

Compliance "ith Specific Requirements Applicable to Major Federal 

Financial Assistance Programs 

Compliance with Specific Requirements Applicable to Nonmajor 

Federal Financial Assistance Programs 

A Single Audit is designed to, among other things, preclude the necessity of 

a government to provide a separate audit on each financial assistance 

program. Consequently, this office believes it a waste of scarce financial 
139 

Honorable Eni F. H. Faleomavaega September II, 199 5 

4. 

5. 

Answer 

(Continued) 

Question: 

Answer: 

resources to duplicate the work of the external auditors. Our main focus is 

on (a) the strengthening of internal fmancial controls and systems. and (b) 

cost saving measures attributable to the introduction of good business 

practices and/or the reduction of fraud, waste and abuse. 

For example. we have conducted limited scope audits of the Off-Island 

Medical Referral Program of the LBJ Tropical Medical Center and of the 

ProcuremenL Control ar.d Use of Government Vehicles. The implementation 

of the recommendations made in only these two audits will results in savings 

of hundreds of thousands of dollars each year. We are conducting, at the 

present time. audits of the procurement system of the ASG and its 

componer.ts. We believe these audits will also result in substantial savings 

to the ASG. Additionally, we have just completed audits (now released in 

draft form for response by the auditee) of several federal grants that have 

already resulted in criminal prosecution of one individual. 

Therefore. this office has no expectation of auditing each agency in the 

Executive Branch of the ASG each year. Instead, we prioritize our audits by 

asking the question "Which department, agency, program or activity has the 

most potential for the strengthening of internal financial controls or the 

reduction of fraud. waste and/or abuse?" 

Are there any agencies within the executive branch of the American San10a 

Government not included in your audit plan? 

As discussed in the answer to Question 4 (above), the ASG's external 

auditors. Deloine & Touche, are responsible for fmancial audits of all agencies 

and grants. The focus of the Territorial Audit Office is primarily to strengthen 

financial internal controls and to reduce fraud, waste and abuse. 

For example. this office is, among other things, currently engaged in 

conducting an audit of the procurement system of the ASG and of its 

components. government wide. The scope of our audit work on the 

procurement system is much more comprehensive than that performed by the 

external auditors. Since the external auditors' role is to report on the fair 

presentation of the financial statements taken as a whole, and to perform fairl y 

specific audit steps regarding federal funds, the scope of their examination 

is directed specifically to that end. Any recommendations as to internal 

financial controls are a by-product of the Single Audit. Conversely, our 
140 

Honorable Eni F. H. Faleomavaega September II, 199 5 

5. 

6. 

7. 

Answer 

!Cont inued\ 

ou~stion· 

:\nswcr: 

t)uc sllon : 

\nswer: 

role is to examine financial controls (along with compliance therewith) and 

systems in much greater detail in order to, specifically, recommend 

improvements to financial controls and to reduce fraud, waste and abuse. 

Our audit plan includ~s depanments. agencies, programs and activities that 

we bclic\·e require the greatest improvements in financial internal controls 

and'<1 r will result in the grcJtest reward from the reduction of fraud. waste and 

abuse. 

In vour opinion. docs the Territorial Auditor have the authority to audit the 

American Samoa Power Authority and the Hospital Authority·) 

Yes. TI1e Territorial Auditor believes he has the authority to audit any 

J epanmcnt. Jgcncy or component of the American San1oa Govcmmem. 

including the American Samoa Power Authority and the Hospital Authority . 

In fact. the Territorial .·\udit Office has already reported on the Off-Island 

\kJic ::~l Referral Program within the last year. 

Do you be !ie,·e greater independence should be given to the Territorial 

Auditor of .-\merican Samoa'/ If so, do you have any recommendations on 

how best to J o this. 

·n1e Territori::~l .·\uditor believes that he is completely independent at the 

prcscm 11m c. TI1c I em to rial Auditor was appointed by the Governor. and 

contirrned by both houses of the legislature. While the Territorial Auditor 

has a responsibility to send issued reports to the Governor. the President of 

!he s~n3 tC :.lfld the Speaker of the House. the selection and scope of audits 

is at th<: sole <.liscrctton of the Territorial Auditor. The Territorial Auditor. by 

statute. cJIUlot sutTer a reduction of salary and cannot be removed without a 

two-thirds ,·ote of both houses. Additionally, the present Territorial Auditor 

has incl uded in his contract "ith the ASG a covenant that he may resign with 

a subst::~ntia l tinancial penalty to the American Samoa Government if the 

budget or staff uf the Territorial Audit Office is reduced (other than by a 

proportional reducllon as a pan of a general reduction in government 

opcr:1tionsl to :.lfl <:.xtcnt which materially and adversely affects the ability of 

the Tcrrit ori::~ l Auditor to perform his duties. The Territorial Auditor would 

not ha,·c accepted the position without the ability to be and to remain to he 

mdcpendcnt. 
141 

Honorable Eni F. H. Faleomavaega September II, 1995 

8. Question: 

Answer: 

9. Question: 

Answer: 

If during the course of an audit possible criminal activity is discovered, how 

are referrals made to the Attorney General or the Commissioner of Public 

Safety? 

If possible criminal activity is discovered during an audit, a Special 

Confidential Report is prepared detailing the suspected irregularities. 

and providing supporting documentation. Such Special Confidential Reports 

are. by statute. given only to the Attorney General. The present Territorial 

Auditor personally reviews each Special Confidential Report with the 

Attorney General and/or an Assistant Attorney General at the time of issuance. 

These reports are treated as confidential and privileged client/attorney 

communications. 

Have any criminal referrals been made since you have become Territorial 

Auditor? If so. what has been the result of these referrals? 

Prior to the Territorial Auditor's verbal testimony to the Sub-Committee on 

August 3, 1995. the present Territorial Auditor had issued six Confidential 

Special Reports to the Attorney General requesting investigation of possibk 

criminal activity. 

Three of those referrals have already been prosecuted, one has been 

administratively settled. and one is still under investigation. One referral 

was not prosecuted due to the difficulty of proving the allegations; the internal 

controls of the particular agency audited were so lax as to preclude 

determination as to who specifically had access to certain stolen cash (those 

controls have now been strengthened). 

Subsequent to the Territorial Auditor's verbal testimony to the SubCommittee on August 3. 1995, four additional Confidential Special Reports 

have been issued to the Attorney General requesting investigation of possible 

criminal activity. 

We believe our working relationship with the Attorney General and his Office 

to be excellent. 
142 

Honorable Eni F .. H. Faleomavaega September II, 1995 

10. Ques:ion: 

Answer: 

Is there in existence a system or procedure to track audit recommendations 

once they have been made? If so, please describe the system or procedure. 

Who determines when an audit recommendation has been complied with? 

The Territorial Audit Office maintains a system of tracking Territorial Audit 

Office recommendations on computer. The Territorial Auditor has the sole 

authority to determine successful implementation of and compliance with 

audit recommendations. 

If you have additional questions. please do not hesitate to call or write. 

Yours very truly. 

R. Wendell Harwell. CPA. CFE 

Territorial Auditor 

0 
ISBN 0 - 16-052335-4 

9 780160 523359