Pago Pago, AMERICAN SAMOA — In the recently released US Territories Public Debt Outlook 2023 Update report — on the section pertaining to American Samoa, Gov. Lemanu P. S. Mauga responded to GAO’s findings, which is included in the report. It is the norm for GAO to request responses from governors of the US Territory, each focusing on their own territory.

Reported in Samoa News, on Monday, July 3, 2023 issue, Lemanu wrote in his response to the GAO updated report that the American Samoa Economic Development Authority (ASEDA), that as an extension of ASG, “has fulfilled its mandate to ensure 100% compliance of our bond covenants to investors.”

Samoa News should point out this is no longer the case — not with the audited TBAS 2022 financials in limbo.

According to TBAS CFO Danielle C. King, in a written response during the Annual Investor Call (AIC) that happened on June 21, 2023, “Our auditor Crowe has delayed completing the 2022 audit because they will not accept an internal review of a complaint and are requesting an outside, third-party to do a review. The Audit Committee has yet to make a decision on this request.”

ASEDA has filed notice that TBAS has not submitted an audited financial for FY 2022 and that there is no timeline as to when it will happen.

Gov. Lemanu released a statement, last week, about this failure of the government owned bank to file its audited Financial and Profit & Loss Statement, in a timely manner, as required under local law, as well as part of the government’s obligation to bond investors.

The statement said the governor had issued a letter to TBAS calling for the removal and replacement of TBAS CEO and also requested the Office of Financial Institutions (OFI) to file a complaint for suspension or removal on the CEO pursuant to A.S.C.A. § 28.1204.

“The people of American Samoa deserve effective and efficient management of the people’s bank,” Lemanu said in the statement, adding, “Accountability for failures such as these is one way to assure customers and investors that ASG is doing its part to promote effective and efficient management.”

Of concern to the governor is that the failure of TBAS to file its audited financials in a timely manner “affects far more than TBAS and its obligations under the law”. “He said that “as the bank is owned by the American Samoa Government, the lack of an audited financial statement from TBAS impacts ASG’s government-wide audit, its obligations to bond investors, and potentially the American Samoa credit rating.”

Meanwhile, Samoa News reported in its July 05, 2023 issue that the GAO report updating the Territories public debt outlook 2023 that in May 2021, Moody’s Investors Service revised its credit outlook for the government of American Samoa to stable from negative, reflecting governance improvements, including enhanced transparency and budget management. And, a GAO footnote explained that a “stable outlook” indicates a low likelihood of a rating change over the medium term. In March 2022, Moody’s reaffirmed its Ba3 credit rating for American Samoa — meaning that its bonds are subject to substantial credit risk.

Samoa News further understands the TBAS board has declined Gov. Lemanu’s request to terminate CEO David Buehler, notifying the governor in a letter of its decision. Questions to the Governor’s Office to confirm the receipt of such a letter and a response as to the possible ramifications have been unanswered to date.

OFI was also queried as to the TBAS board’s decision to not terminate the TBAS CEO, and the possible fallout, to which the IFI Commissioner Tuisivi John Marsh responded, “At the present time I have no comment.”

Where does this leave the government and the its obligations to the bond investors, and its responsibilities to the bank’s customers, i.e. depositors?

There are a lot of questions in the community about TBAS, the People’s Bank:

What is the TBAS board’s motive(s) for keeping a CEO in which the owner(s) of the bank say they no longer have confidence? For that matter, due to the TBAS board decision about the CEO, is there any confidence in their ability to manage a bank? Are they ‘banking’ on a positive audited financial to get them through these troubling times? And, why would we believe the audited financials under the leadership of a CEO and Board that had to file ‘amended financials’ to account for huge bank losses in its loan portfolio when it finally came to light? For that matter, did the board know of the losses before TBAS former CFO Nate Clayville testified at the Fono that he was told by TBAS CEO Dave Buehler not to book the loan losses in March 2022?

And then, does the governor have the power to dissolve the TBAS board, perhaps via the OFI Regulator?

Who knows what’s going on?

And to Gov. Lemanu, a simple question is posed, just asking … “Whatcha gonna do now, sir?”