Acting Treasurer Carri-Lee Magalei-Tulafono testified before the Senate Government Operations Committee Tuesday that $10 million from the ARPA interest account for ASG at Zions Bank has been invested in a firm in Kansas called the McKinley Beech Tree. She said the $10 million was transferred from Zions Bank to McKinley in March under the orders of Governor Pulaali’i Nikolao Pula.
Magalei-Tulafono said, based on information related to her by Brett Butler, the first return from the $10 million investment would be $10 million and an extra $10 million by the end of April. However, she told the Committee that as of August 31 there has been no return from the investment.
As of March, the ARPA interest account had $11 million and after the transfer $1 million remains in the account.
Committee Chairman Senator Togiola Tulafono asked the Acting Treasurer how the government decided to invest the $10 million with McKinley Beech Tree. He tried to find out the specific person who made the initial contact with the Kansas firm.
Play Audio
Senate President Tuaolo Manaia Fruean pressed on whether the Acting Treasurer had sought advice from the Attorney General before she signed the transfer request.
Play Audio
Tuaolo said the Governor had assured that the interest from the ARPA funds would be use to pay down the ASG debt to the Retirement Fund, so he was surprised to hear that the money has been used as an investment.
Togiola asked the Acting Treasurer for a copy of the email from the Governor authorizing her to make the transfer and a copy was distributed to the Committee.
Dated March 16, the email from Governor Pula’alii Nikolao Pula to Magalei-Tulafono and copied to Butler said, “As Governor of American Samoa I authorize you, the Acting Treasurer of the American Samoa Government to sign the necessary documents to invest $10 million for purposes of ASG Airport Infrastructure with McKinley. Feel Free to contact me if you have any questions.”
In response to questions from Senator Utu Sila Poasa, the Acting Treasurer said there was no write up about the terms of the investment. The information she gave about receiving a return of $10 million plus an extra $10 million by the end of April or early May was from Butler.
Togiola said at the start of the hearing that the Senate wants to find out if the government is using excess funds from investments, without seeking Fono approval. He referred to the administration’s supplemental budget request which he said is taking money already approved in the budget for some departments, as well as federal grant sources. Also there are other pressing government debts such as the unpaid contributions to the ASG Retirement Fund.
The Acting Treasurer said she was not involved in preparing the supplemental budget. Noting that Butler did not pass Fono confirmation Togiola asked about his role in Treasury. According to Magalei-Tulafono, when Butler nominated her to the Governor to Acting Treasurer, she didn’t want the position. But she was told that it would be temporary and that Butler would be the Executive Treasury Specialist. When she became Acting Treasurer, Butler moved form the Governor’s Office to Treasury. Togiola indicated that the Committee would also call in Butler for questioning about the investment.
At the end of the hearing, Togiola praised Magalei-Tulafono as being one of the stalwarts of Treasury, who has come up through the ranks in serving the people of American Samoa. He said he has never questioned her dedication, honesty, and integrity, and thanked her for her candidness at the hearing.
Other individuals that the Committee will call for another hearing on the investment and supplemental budget bill are the Director of ARPA and Director of the Medicaid Office.
