Governor Lolo Moliga is confident that the Retirement Fund Board and its advisers have conducted the due diligence needed before approving the use of Fund monies to purchase the American Samoa Economic Development Authority bonds.
And he says the sale of bonds is the same concept that was used by the late Governor Lutali to finance the Executive Office Building in Utulei, so it’s not a new idea.
And besides he says, the overseas markets have been so volatile and the Retirement Fund has lost millions of dollars as a result.
So rather than lose more money, he feels it’s prudent and smart investment to put the pension plan money to work for the people who own it.
The governor was responding to KHJ News’ request for reaction to statements by Faoa Aitofele Sunia, the former attorney for the Retirement Fund, and candidate for governor.
Faoa cited as one of the reasons for his resignation that he had advised the board against using Retirement Fund money to purchase the ASEDA nonds but his advice was ignored.
Same with the termination of the Bank of Hawaii lease of the Centennial Building.
Governor Lolo told KHJ News that he does not control where the Retirement Fund invests its money…that is the function of the Board of Trustees.
He says he’s sure the board would not have approved the purchase of the ASEDA bonds if they didn’t think it was a good investment.
ASEDA is to repay the bonds at 7 and a half percent, whereas the ASG loans which were repaid with part of the bond purchase netted an interest of 8%.
The governor expressed confidence that the board would have made sure the repayment was guaranteed.
He said while previous boards of the Retirement Fund have invested heavily in the US and international markets, the current board is investing some of the Retirement Fund money locally and he doesn’t see anything wrong with that.
He says this was the same method that Governor Lutatli used to finance the three story EOB in Utulei and there were no problems.
Faoa’s running mate, Rep Larry Sanitoa, has raised concerns about ASEDA’s ability to repay the bonds when ASG is struggling with local revenues.
He cited the Legislative Financial Office report which projects a shortfall of $17 million for FY2016.
Lolo said Sanitoa should read the audit report carefully and he shouldnt use raw data and present them the way he has.
The governor repeated the same advise for the LFO.
Lolo went on to say that the figures in the preliminary reports are just projections and his administration is monitoring collections and expenditures on a daily basis.
He said its tough sailing and its been that way since they came into office but he said they have paid off debts and maintained operations.
Lolo said, “We are trying to live within available resources but as far as getting rid of the debt, we wont succeed as long as there’s carry over deficits from the previous years.”