Pago Pago, AMERICAN SAMOA — Senate Bill 38-29 which “amends the government deposit requirements to meet the Federal Deposit Insurance Corporation (FDIC) regulatory rules for deposit of all government funds and provides for penalties for those who violate this law,” was discussed at length in a hearing of the Senate Government Operations Committee on Wednesday morning.

This bill was introduced by Senator Togiola T.A. Tulafono and adds the provision “for penalties for those who violate the law” to the first part, which was the subject of the administration bill 38-7.

Testifying were Assistant Attorney General Roy Hall, Jr., LBJ Hospital CEO Dr. Akapusi Ledua and ASPA Acting CEO Ryan Tuato’o.

The main point of contention between Committee Chairman Senator Togiola and AAG Hall was the amendment which provides for penalties for those who violate this law.

According to bill’s Preamble, “there must be a penalty for violating this section of the law requiring all ASG funding to be deposited with the Territorial Bank of American Samoa.

It stated that “it was during the Senate Hearing on August 30, 2023 regarding the ‘hacking’ of ASG accounts and monies that were inadvertently sent to the wrong bank account, it was made public that LBJ Tropical Medical Center had opened an account with an off-island bank.

“The law is clear,” it continued, “all ASG funds including those earned or received by semi-autonomous agencies of American Samoa, including the American Samoa Medical Center Authority are to be deposited into the Territorial Bank of American Samoa.

“This bill will not only reinforce what the law is, it also imposes a penalty on those directors who do not follow the law.”

Committee Chairman Togiola opened the hearing by seeking the AAG’s opinion on the amendment.

Hall directed committee members attention to the proposed amendment mentioned in (b) of the A.S.C.A. section 28.0124 which states, “Any ASG Director, including those of the semi-autonomous agencies of American Samoa, who violate this section shall be immediately removed for insubordination.”

“The position of the government is that it is opposed to this amendment to the statute,” the AAG declared. “My legal reasoning for this is that under the separation of powers of the three branches of government, I believe that this would be a direct interference with the revised Constitution of American Samoa under Article 4 Section 12, which empowers the governor to appoint or remove any officer whose appointment is not otherwise provided for.

“I believe that the powers of the Legislature should not interfere with the powers of the Executive branch, and neither should the powers of the Executive branch interfere with the powers of the Fono.

“I’m sure that we can respect the need for the separation of powers between the Executive, Legislative and the Judicial branches of government.

“One other problem that I see is that assuming that this bill is signed into law, there is a due process lacking in this provision.

“Right now as it is written, it calls for the immediate removal of the Director or the CEO of the departments or semi-autonomous agencies who violate this section of the bill without any due process.

“You cannot just create a law and say that you’re summarily dismissed from your job.

“In this case, due process would require that you establish the grounds that he has violated and you would also have to show an ‘intent to violate knowingly’ of this Act.

“Just because a director may somehow in compliance with what he believes to be federal law — that these funds should be deposited outside of American Samoa because they need to be in a FDIC account — and it turns out that he was wrong, that’s a judgement call for him and yet it was not intentional.

“He did not intend to violate the law, so there’s a due process requirement that needs to be in here, but the main objection is that in my legal opinion, it is a violation of the separation of powers,” the AAG Hall concluded.

Pursuing the issue of separation of power, Senator Togiola asked the AAG if he would agree that the confirmation authority to the Legislature or the Senate in some cases, bears equally to this process because it doesn’t matter who the governor appoints, if the Legislature does not confirm it, that appointment fails.

“Now with that authority to confirm, the inherent power to address the lack of action by the Executive if the governor fails to impose sanctions properly and his discretion to terminate that confirmed employee, then the Legislature should be able to withdraw their confirmation and express its no confidence, or even an impeachment of a director that has gone rogue,” Togiola argued.

“Do you not agree that with the confirmation authority comes certain remedies that the Legislature has to enforce its power to confirm under the separation of powers doctrine?”

AAG Hall stated that he did not agree and pointed out that if there was an implied reservation by the Fono, that would end once the Legislature confirms the appointment, and once it confirms the appointment, the power to remove the appointment is with the governor.

LEGISLATIVE JUSTICE — IMPEACHMENT

Hall then pointed out that Togiola had mentioned something that he was going to raise.

That — if the governor or executive head of the government refuses to remove a director or cabinet member for a violation or bad conduct, the Legislature would, if there was a statute or if it was in the Constitution, be able to impeach that director and bring him to Legislative justice to remove him.

He revealed that the file on this particular issue had only just been given to him the night before and according to his research that night and early that morning, it appears that the Fono does not have impeachment power over the directors or cabinet members.

“However, you do have impeachment power over the governor and lieutenant governor by law,” he stated. “But this might be something that the Legislature might want to do consider, is to add to the impeachment statute — the impeachment of directors and other high government officials.”

As an example he cited the impeachment by the US Legislature of a cabinet member of the Biden Administration because the president, not withstanding what may have been some allegations of failure to enforce the borders, decided he (the cabinet member) remain as secretary.

Consequently, the Legislature or the House of Representatives under the the Constitution, filed articles of impeachment and he has been impeached. The articles of impeachment will be sent to the Senate for his trial.

“As Senator Togiola has pointed out, and I agree with him, that impeachment would be the Legislative remedy in cases of a cabinet member or director who has already been confirmed and the governor elects not to remove him,” Hall stated.

He clarified that the term ‘inherent power’ is a power given to a state or organized political body that is not expressly written in a formal political document, or the power that a state officer or entity purports to hold under a general vesting of authority.

“Inherent power in the Legislature would rise from the Constitution, and the Constitution does not provide that,” AAG Hall explained. “So in order to create a power of impeachment of directors and cabinet members, that would have to be by statute.”

Senator Togiola seeking further clarification, asked Hall if it was also of his opinion that the Constitution does not prohibit the Legislature from adopting legislation that would authorize impeachment powers in such cases.

“Inherent, no, statutory, yes,” Hall stated.

He also pointed out that the governor’s powers to appoint and remove as granted by the Constitution, supersedes the proposed provision in the bill.

“Assuming that this should pass the Legislature, signed by the governor, it would have to have due process provisions built into it, but ultimately, it would have to be approved by the governor,” Hall explained.

Senator Togiola reminded the AAG that the proposed law was one with no remedies, that is, it requires all government departments and agencies ‘without exception’ to deposit all their funds at TBAS.

“But it has no methods of enforcing that law at the present time, and this is the purpose for this amendment,” Togiola argued. “So it begs the question, what does the government recommend?

“Do you have any recommendations on how to enforce this law?”

AAG Hall replied that under existing laws, the Legislature through the powers vested in the Senate Select Investigative Committee (SSIC) can investigate and hold hearings which would afford due process, and then presenting their findings to the governor with a recommendation for removal.

But Togiola persisted that the proposed administration law had been very clear that all government departments and agencies must deposit their funds at TBAS.

However, if the officials responsible for depositing these funds do not comply with the law, it doesn’t matter because there are no consequences they have to face due to their failure to obey the law.

Hall conceded that under existing laws, Togiola was correct that there is no mention of enforcement where it says ‘With our exception.’

However, he pointed out that the administration bill 38-7 which initially dealt with the issue, had amended that part by removing that phrase and replacing it with the phrase, “unless otherwise specifically prohibited by federal statute or regulation or as directed by order of the courts of this or any other state or territory, or of the United States …”

“But that removal only pertains to federal grants,” Togiola persisted. “It does not pertain to local funds.”

Hall answered that the matter should be referred to the appropriate agency to who will investigate to determine if TBAS is receiving all the funds that by law should be deposited here, or do not have the federal requirement that the funds should be deposited in an FDIC account.

After the lengthy exchange with the AAG, Togiola directed his next questions to the other two witnesses.

OFF ISLAND ACCOUNTS

First he asked LBJ CEO Dr. Akapusi Ledua if he had been aware of this legislation.

Dr. Ledua replied that he had not been aware of it and that he had only been informed about it last week.

Togiola brought up the testimony of the LBJ CFO Sefanaia Kaumaitotoya where he revealed that LBJ had accounts at Bank of Hawaii, Zion’s Bank and First Hawaiian Bank and he asked who had authorized the funds to be deposited in these off-island banking institutions.

Ledua answered that these off-island accounts had been established by the previous administration of LBJ.

Togiola then asked ASPA Acting CEO Ryan Tuato’o if he had known about this provision of the law which was proposed when TBAS was first established.

He replied that they had known, but they had found the need to open off-island accounts to comply with federal requirements with regard to federal grant funds — they must be deposited in a FDIC member bank.

He revealed that their accounts at Zion’s Bank was used exclusively to deposit their federal grant funds and their payroll funds. He explained that their payroll is funded 100% by local funds.

However, he stated that about 80% of their local funds are deposited at TBAS and the only time local funds are transferred from TBAS to Zion’s Bank in Utah is when additional funds are needed to meet their payroll.

Asked why they set up their payroll account in an off-island bank, Tuato’o explained that it was because Zion’s Bank hits the accounts quicker, compared to TBAS which takes a day or day and half.

Togiola concluded his questions by requesting lists of accounts in off-island banks, how much money was in these accounts, and the purposes for which these accounts were used, from the two witnesses.

The matter will be reviewed again by the committee when a representative from ASTCA and the government’s Treasurer, who is currently off-island, are available.