Honorable Leaders and Members of the Fono,
In Letter #1, I warned that the Fund cannot survive without honesty about the $13.9 million debt and the principle of fiduciary duty. In Letter #2, I outlined reforms aimed at restoring fairness and sustainability. This third letter turns to the heart of governance: the budget
process itself.
The Zero-Sum Reality
Every year, as the Fono reviews the Administration’s budget, revenues are allocated across competing needs. But revenues are finite. Every dollar directed to one purpose is a dollar denied to another. When pensions, education, or healthcare are shortchanged, it is not because revenues vanished — it is because choices were made. In this zero-sum reality, government indulgence is paid for by public sacrifice. When the Fono protects its own allowances, travel, or discretionary spending while insisting others “tighten their belts,” it sends a dangerous message: rules for you, exceptions for us.
This contradiction was on full display in recent hearings. The Attorney General was questioned for receiving taxable housing and utility benefits that were merely intended to restore her previous judicial salary. Yet members of the Fono themselves receive a $65,000 “office allowance” — often without actual offices — which they may treat as non-taxable or convert into pensionable compensation. This means legislators effectively enjoy $90,000 to $95,000 in income, while criticizing others for far lesser benefits. That is not accountability; it is hypocrisy.
Who Reviews the Fono’s Budget?
As the Fono meticulously questions the Administration’s departments, the question arises: who applies the same scrutiny to the Fono’s own budget? In practice, the Fono reviews itself. This undermines credibility. Oversight that spares itself but spares no one else is not oversight — it is self-dealing.
Consider also the treatment of the Treasurer. When pressed on the $14 million now owed to the Fund, he was faulted for not recommending that the Governor use ARPA interest
earnings to repay the debt. Yet the Treasurer correctly noted that ARPA has its own director, who administers ARPA funds per strict federal guidelines. Instead of addressing the real problem — the government’s chronic failure to meet its obligations — the Senate leadership appears to have shifted blame to one individual. The Treasurer has since been removed from his position.
This pattern — criticizing others for practices that pale next to legislative privileges, or shifting blame away from structural failures — is not accountability. It is narrative manipulation: a repetition of claims designed to distract from reality and make the public question what they see plainly before them.
The Pension Equation in Context
As I reminded in Letter #1: C + I = B + E. Contributions plus investments must equal benefits plus expenses. This equation is universal, not optional. When contributions fall short, investments stagnate, or expenses balloon, the balance is disrupted. The same truth applies to the government budget. Revenues + Grants = Services + Obligations. Overspending on operations inevitably starves obligations, such as pensions. That is the disease. Political justifications, temporary stimulus, or creative accounting are only symptoms.
Accountability in Action
I urge the Fono to act on five fronts:
1. Apply equal scrutiny to itself — review legislative allowances, salaries, and pension treatment with the same rigor demanded of the Administration.
2. Integrate actuarial evidence into budget law — let contribution rates be driven by actuarial necessity, not political negotiation.
3. Prioritize debt repayment — set aside revenues specifically for retiring the $14 million owed, whether through Enterprise (ASPA, ASTCA, others) surpluses, dedicated tax streams, or phased transfers.
4. End the Allowance Loophole — Amend the law so that the $65,000 office allowance is treated as salary. This would result in member salaries of $90,000 and leadership salaries of $95,000 — transparent, equitable, and fully taxable, like every other government paycheck.
5. Respect the Separation of Powers — The Senate leadership and legal counsel should focus on their legislative duties and step aside from direct roles in ASGERF governance. The Fund must be overseen independently, free from conflicts of interest, so that trustees can act solely in the best interests of active members, retirees, and beneficiaries. Restoring this separation will strengthen both the Senate and the Fund.
Signs of Progress
It is essential to acknowledge that the Fono has taken some constructive steps during recent hearings. In a House Committee on the Retirement Fund hearing, House leadership corrected the Fund’s Executive Director after he tried to shift blame for the contribution rate increase onto the previous Governor, affirming that it was the Fund itself that asked for higher contributions. House leadership also pressed the Fund’s Vice Chair on my removal, reminding both him and the Executive Director that the Board has no legal authority to terminate a trustee — only the Governor does.
During budget hearings, the Fono also displayed diligence in addressing the Administration’s flawed submission. The proposed budget blurred the lines between established departments, semi-autonomous authorities, and line agencies, with inconsistent salaries and titles. Faced with this confusion, the Fono worked diligently to request clarifications, sort through the confusion, and adjust salaries in a manner it deemed more consistent and justifiable.
In addition, the House demonstrated proper accountability by paying for the expenses of its Retirement Committee Chairman to attend the recent NCPERS conference. This is as it should be: Fund-related travel by Fono members should be covered by the Fono’s own budget, not the Retirement Fund budget. This practice rightly places responsibility with the legislature and avoids burdening the Fund with costs unrelated to its fiduciary obligations.
These examples prove the Fono can exercise oversight when it chooses to. The challenge — and the opportunity — is to apply that same rigor to itself.
The Stakes
Markets rise and fall — but for three straight fiscal years (ending September 30, 2025), the S&P 500 and Nasdaq have delivered double-digit gains. The Fund, which reflects the performance of the financial markets, has posted positive gains over the past three years. Yet despite these gains, the Fund’s net position has been stagnant for over a decade. The threat is not Wall Street — it is Fagatogo and Utulei.
The promise of retirement is not a favor; it is an earned right. If leaders cannot model accountability, how can they expect the public to make sacrifices?
Conclusion
Letter #1 called out fiduciary breaches. Letter #2 laid out reforms. Letter #3 makes plain: accountability must begin at home. The Fono must lead by example. Anything less would betray the trust of those who built this government and still depend on it.
Respectfully submitted,
Fuiavailili Keniseli Lafaele
Trustee (pending Governor’s decision)
American Samoa Government Employees Retirement Fund
