Marisco billing included ‘off-the-wall purchases’

Vehicles, restaurant equipment, cameras, DVDs…

‘Off-the-wall purchases’ was the subject In the continuing probe into the tugboat and barges project before the  Senate Investigative Committee. Port Administration deputy director Chris King and Carlos Sanchez, the governor’s representative for fisheries and marine matters testified under oath about using funds from the tugboat and barges project.

The two were subpoenaed last Thursday by the Senate Investigative Committee, which is looking into the use of the ASG $20 million loan from the ASG Employees Retirement Fund.

Among the projects funded by the loan was the tugboat and barges project, which began with a $3 million allocation but has ballooned to more than $4 million and is expected to increase — as a civil suit against ASG by Marisco Ltd. for more than $800,000 remains unresolved in Honolulu federal court.

During their SIC testimony, Sanchez and King answered questions from senators about the outstanding debt with Marisco Ltd. and suspect purchases, which were identified through documents — invoices and Marisco billing statements — made available to the committee by Sanchez.


Capt. Wally Thompson, who testified before the SIC two weeks ago, told the SIC that Marisco was willing to bring down the outstanding debt of $800,000 to $400,000 and Sanchez went to meet with Marisco to finalize an agreement.

Thompson said the $400,000 would have been reduced down further, if ASG had provided a letter stating the territorial government qualifies for Hawai’i state tax exemption and therefore $100,000 charges in taxes would have been deducted.

He also claimed that after a meeting in Hawai’i with Sanchez, in which the Marisco people were told ‘the government don’t like the numbers.’ …”I guess Marisco was so upset with that decision they chased him [Sanchez] out of the office. And it went back to $800,000... [resulting in] this lawsuit.”

“We had an opportunity... to bring that $800,000 a year and half ago down to $300,000, [but] we dropped the ball,” Capt. Thompson told the SIC.

In his testimony last week, Sanchez told the SIC that no final agreement was ever reached with Marisco, adding that at one point, Marisco said it would give ASG five days to come up with a letter that said the local government is exempted from paying Hawai’i state tax.

He said ASG lawyers in Honolulu found there is no such exemption for American Samoa, and therefore ASG was unable to provide such a letter.

Sanchez claimed that Marisco are “very tricky people” — a statement he repeated three times during the hearing. For example, he said he wanted to talk to the company’s owner, Fred Anawat, about these invoices of outstanding debts, but the owner suddenly said he had clients to take care of. At another time, he said, Anawat was either playing cards with others or was at lunch. Sanchez said he was never able to meet with Anawat and therefore he returned to the territory.

Velega asked Sanchez, “when you came in, how much damage was already done by the original task force?” to which Sanchez replied, “the damage was already at $2.9 million.”

“Were you able to minimize the damage or lower the damage, when you came in?” Velega asked; Sanchez replied. “It was impossible”.


Another concern of the SIC, which Capt. Thompson was also asked about, was whether the original members of the task force were qualified to be involved in such a project.

Sanchez responded: “We know Matagi is not qualified to buy boats. We know Fanene So’oto is not qualified, and that’s why they hired Terry Conden and Captain Wally Thompson,” and added that the task force was “very disorganized.”

Sanchez identified suspect purchases as part of this task force ‘disorganization’ on the project. He said, they “bought cameras, TVs and DVDs etc., etc., with government money.”

Additionally, the task force spent $7,000 for stainless steel professional restaurant equipment, and this equipment is nowhere to be found, Sanchez said.

(The Marisco invoices Samoa News saw carried the names of Terry Conden/ and or Capt. Wally Thompson as the authorizing agent(s), however there were no signatures.)

Velega asked if King knew anything about this restaurant equipment and King replied, “Only after the fact, when we were going through the invoices.”

“We don’t know what that’s for. It’s not meant for vessels — it was more for a restaurant, stainless steel kitchen equipment. So I’m not too sure as to why they bought it,” said King, who noted that once he got involved in reviewing invoices and purchases, he came across “all of these off-the-wall purchases.”

SIC also raised questions about vehicle purchases that were included in this project and King said he knows three of the purchased vehicles — a van and two trucks — were specifically for the Port Administration.

He said a total of six vehicles were included in this project and the Port cars came in on the barges, towed down by the tug boat. He did not know about the other three vehicles, he said, but in reviewing invoices for the project, it was found that “there were costs for air freight, supposedly shipping one or two of the cars.”

Sanchez referred to document number 8 which he provided to the SIC and confirmed that three vehicles were for Port Administration. He also said that one was Fanene’s vehicle, shipped by plane, and Fanene was charged back out of his retirement money — which is according to the Port director.

(Samoa News spoke to Fanene when he resigned from Port Administration. At the time he confirmed that both the vehicle and air freight charges were paid back.)

However, Sanchez said one of the six vehicles cited in the invoices “was never found — not here, not in Honolulu.”


As to the Marisco lawsuit, Sanchez said ASG lost in the federal arbitration because the people — referring to Conden and Thompson — who were in the task force for ASG “went and testified against us”. He then accused Conden of a being a “double agent” working for Marisco as a surveyor, getting paid at about $700 a day, but also as a surveyor for ASG getting $35,000 annually.

“We didn’t want to send the [Port] director to testify because he didn’t know anything about anything. He was lost — he didn’t know anything,” he said of Matagi and reiterated to the committee that his role when he later became part of this project was “only after the fact, and the goal was to bring back these ASG vessels.”

According to Sanchez, in his professional opinion, he estimated that this entire project would have cost between $2 and $2.2 million, if he had been involved from the beginning.

In contrast, Capt. Thompson in his testimony to the SIC said that “for the amount of work that they did, I think it was reasonable. Marisco had done all the government boats before and we didn't’ have any problems with any of the vessels that we brought down here.” He pointed to the over-run as the result of purchases unrelated to the tugboat and barges project.


Meanwhile, two more witnesses have been subpoenaed for today’s hearing, including Matagi, who is also to provide for SIC all Port files and documents on this project. The other witness is Chief Customs Officer, Glenn Lefiti, who is to provide customs documents for all goods that arrived by surface or air —  related to this project.


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