Pago Pago, AMERICAN SAMOA — Insurance Commissioner Peter Fuimaono told the Senate Government Operations Committee last week that he was completely unaware of the American Samoa Government's $10.1 million investment of ARPA interest funds until questions raised by lawmakers prompted a formal legislative inquiry.

Appearing before the committee alongside Attorney General Gwen Tauiliili-Langkilde, Fuimaono testified that his office played no role in reviewing, approving, or arranging either the investment transaction or its associated insurance coverage.

Senate President Tuaolo Manaia Fruean asked Fuimaono whether he personally knew Governor's Executive Advisor for Finance Brett Butler and whether he had advised Butler that the $10.1 million earmarked for investment should be insured before the transaction proceeded.

Fuimaono replied that he only became acquainted with Butler in 2025 when the Pula-Pulu Administration assumed office and said the subject of insuring the investment was never discussed between them.

The questioning then turned to Southern Pacific Insurance Corporation and its involvement in the transaction. Asked whether he was familiar with Alliance Insurance Company, Fuimaono explained that Alliance was one of several companies affiliated with or partnered with Southern Pacific Insurance Corporation.

Tuaolo also asked whether Southern Pacific Insurance was owned by Fuimaono's wife, a claim the commissioner firmly denied.

The Senate President then questioned Fuimaono about his longstanding advocacy for requiring bond insurance on government contracts, particularly those funded through federal grants. Fuimaono testified that shortly after the current administration took office, he met with procurement officials and department directors overseeing ARPA-funded projects and discovered that several projects lacked bond insurance protection.

He said he subsequently advised the Governor that all government contracts should carry 100 percent bond insurance coverage to safeguard public funds and ensure projects were completed as contracted.

Tuaolo challenged the motivation behind that recommendation, asking whether the requirement was intended to direct bonding business toward Southern Pacific Insurance Corporation. 

The Senate President noted that during the administration of former Governor Lolo M. Moliga, the government did not require bond insurance for all projects because local insurance companies lacked the financial capacity to underwrite large contracts. Instead, the administration utilized a 20 percent retention policy to protect government interests.

Fuimaono offered a detailed explanation of the origins of the territory's surety bond program. He recalled being contacted by Governor Lolo in 2017 while he was working in Hawaii and asked to assist the government in developing a system that would enable local contractors to qualify for bonding on government construction projects exceeding $1 million.

According to Fuimaono, the goal was not only to protect government investments but also to help local contractors compete for major federally funded projects. After consultations with the Attorney General's Office, the Department of Public Works, and the Office of Procurement, officials reviewed applicable federal regulations and modified procurement procedures to include surety bond requirements.

Those changes eventually enabled local companies to qualify for bonding. Fuimaono noted that Paramount Builders became the first local contractor to obtain a surety bond for a government project, specifically work performed at the airport.

Despite those efforts, he acknowledged that not all ARPA-funded projects currently carry the 100 percent bond insurance coverage his office has recommended.

Referring to the government's $10.1 million investment of ARPA interest funds, Senate President Tuaolo asked Insurance Commissioner Fuimaono whether his office had reviewed Southern Pacific Insurance Corporation to determine if it possessed sufficient assets and financial capacity to back the insurance policy covering the investment.

Fuimaono testified that he had sought a meeting with the company's president as part of his office's review but was informed that the executive was off-island. He added that the manager of Southern Pacific's local office was also unavailable, presenting challenges to the investigation.

Despite those obstacles, Fuimaono said his office continued its review and eventually obtained a copy of the insurance policy. 

Upon examination, they determined that the policy had been issued by an off-island company, Trades and Merchant Trade Service, while Southern Pacific Insurance Corporation's role was that of guarantor rather than the primary insurer. 

He noted that his office is continuing to examine the policy and the financial arrangements behind the coverage to better understand the extent of the protection being provided for the government's $10.1 million investment.

His testimony differed from earlier statements by Butler, who had informed the committee that the insurance coverage was provided by Southern Pacific Insurance Corporation, a company headquartered in Louisiana with a local office in American Samoa.

Fuimaono clarified that McKinley Investments, the firm involved in facilitating the investment transaction, had applied for the insurance policy on behalf of ASG.

During the hearing, lawmakers learned that Trades and Merchant Trade Service does not possess a Certificate of Authority to conduct insurance business in American Samoa. Committee Chairman Senator Togiola Tulafono pointed out that providing insurance services in the territory without such authorization would be illegal.

Information presented to the committee showed that Southern Pacific Insurance Corporation is registered to operate in American Samoa. Its shareholders are listed as Russell Wilson, who owns 75 percent of the company, and Marshall Jablon, who owns the remaining 25 percent. Other directors identified in the company's Articles of Incorporation include Robert Harrison, James Robinson, and company president Matt Wade.

Fuimaono reiterated that his office had not participated in the selection, vetting, or review of the insurance coverage for the $10.1 million investment. He testified that he only received a copy of the policy from Butler last Friday, after the issue had already become the subject of Senate scrutiny.

As a result, he said his office is now reviewing the policy to determine precisely what protection it provides, including coverage limits, exclusions, conditions, and other key provisions. Based on his preliminary review, he said the policy appears to provide coverage for external fraud.

Senator Togiola expressed concern about whether the entities involved possess sufficient financial capacity to reimburse the government if the investment fails or if the anticipated transaction does not materialize.

He requested written documentation establishing that Southern Pacific Insurance Corporation would ultimately be financially responsible should Trades and Merchant Trade Service fail to honor the policy or provide coverage in the event of a loss.

The hearing concluded with additional questions regarding the policy's cost. Tuaolo asked Fuimaono whether he knew the source of the approximately $300,000 premium paid for the insurance coverage.

Fuimaono replied that he did not know where the money came from.