Representative-elect for Tuala uta- Larry Sanitoa has written to Senate President Gaoteote Palaie Tofau to convey concerns of residents and constituents regarding the more than $50 million bond that the American Samoa Development Authority plans to issue this month.
Sanitoa said that it was worrisome and troubling that ASDEA has no plans to seek the input and approval of the Fono before the bond closes on December 18, as publicized in the bond issue notice.
And he suggests there’s basis for a court challenge on the constitutionality of ASEDA’s authority.
As we’ve reported the new bond series is to raise $50 million to fund the new Fono building and the Hawaiki Cable.
Sanitoa, who was a faipule when the bill to authorize the first bond issue was discussed, tells the Senate President that an amendment giving ASEDA the authority to issue bonds without further debt authorization from the Legislature had been objected to by some of them and the Fono’s legal team for various reasons.
He noted that the constitution provides that any money spending laws passed must have a source of revenue.
Basically, he said, the government needs to submit a supplemental budget to the Fono for appropriation.
The supplemental budget submission must identify how the monies will be transferred to ASTCA whether by contribution, grant or loan.
In turn, ASTCA must submit a supplemental budget that the Fono will appropriate which breaks out how the money will be spent.
The Tuala-uta faipue elect also drew the senate president’s attention to another constitutional provision which statws that special or exclusive privileges are not to be granted.
He cites: Article II, Section 24 of the American Samoa Constitution: “The power of the government to act for the general welfare of the people of American Samoa shall never be impaired by the making of any irrevocable grant of special or exclusive privileges or immunities. All general laws or special acts passed pursuant to this section may be amended or repealed.
According to Sanitoa the legislature giving ASEGA the authority to issue bond violates this section of the Constitution.
Sanitoa raised other concerns. He said the new bond would now increase the debt service to over $13 million a year for ASG.
He told the Senate leader that having 13% of local funds go towards paying these loans will mean dangerously less amount of money available to provide government services for supplies and materials for our schools, very little subsidies for the college and less funding for our hospital and so on.
The faipule is also calling for more scrutiny of ASTCA’s financial status.
He said ASTCA needs to be transparent and truthful on exactly how it used the $30 mllion they loaned from the Retirement Fund in the last two years in the name of the Hawaiki Cable.
He said recent reports show that ASTCA only gave Hawaiki Cable $14.7 million, and he asks “where did the rest of the money go?”
He tells Gaoteote, “Arguably there is potential for a court challenge on the constitutionality of the ASEDA statute if it moves forward with closing this deal without the Fono’s review and approval of revenue measure to repay the bond.
“Mr President the future of the territory and the next generation is at stake. “
Sanitoa has asked for the Senate President’s help in re-emphasizing the importance of having the Fono carry out due diligence prior to ASEDA issuing the new bonds.
