Pago Pago, AMERICAN SAMOA — Moving forward with its inquiry into what it alleges as the misuse of local government funds, the Senate in its initial report on its investigation into the allegations of an American Samoa Government (ASG) investment of $10 million dollars with MckInley Investment Company states its concerns and recommendations to address what it terms as a troubling “callousness of governance“ by the Executive.

The Preliminary Report (PR) of the Senate Government Operations Standing Committee (SSCGO) was delivered to Senate President Senator Tuaolo M. Fruean on October 8, 2026. A final and more detailed report is to follow and be finalized before the end of October 2026, according to the report’s cover letter.

The cover letter also noted that while the investigation was done under the authority of the SSCGO, the entire Senate membership joined as members of the Senate Standing Committee for purposes of this investigation. It adds that record of all the SSCGO meetings have been kept of each meeting, including the video teleconferencing with witnesses in New York, Texas, Hawaii, and American Samoa on the final days of meetings.

Chairman of the SSCGO Senator Togiola I. Tulafono states that he is available for any questions concerning the investigation if needed, and that the report concludes the Committee’s inquiry into the subject matter. He added that the PR also includes SSCGO recommendations for further actions to follow up with the investigation.

PRELIMINARY REPORT

The meetings or hearings held by the SSCGO over the last few weeks according to the PR are in response to concerns brought up by the Senate President and several Senators about rumors of the Governor having put some $10 million of ASG funds into an investment scheme, which has also been raised by many people on social media networks. The reports states that in part the concerns appeared to be rooted in anger and frustration over the Governor putting such funds in investments when their overtime and retirement payments were not being paid when due.

The PR, a 6-page document with attachments, summarizes the SSCGO investigation that has been covered by Samoa News over the last few weeks, beginning on September 9, 2026, when Brett Butler of the Governor’s Office and Acting Treasurer Carrilee Magalei-Tulafono appeared before the committee to testify about the investment.

People, who have followed the hearings, are now aware that as of the date of the PR, Oct. 8, 2026, nothing has been heard further of when the investment return payments (traunces) will actually happen.

The PR attaches a copy of the ASG/ McKinley contract as well as a copy of the letter from MBT — McKinley/ Beech Tree — informing Butler that nothing would happen on Sept. 18, 2026, the date when the first installment (traunce) was to happen, as there were issues with the agreement between ASG and McKinley that needed addressing before the first payment could be made.

Further hearings continued with several key government officials testifying that Butler and Governor Pulaalii Nikolao Pula basically decided to go ahead with the investment, despite statutory provisions in place to safeguard ASG from possible fraud or mismanagement of its money. 

A further concern came to light during Butler’s testimony from when he testified that worry about the investment was not necessary because if the investment failed, the full return of the $10 million is completely insured. 

Butler informed the SSCGO that an insurance policy that protected the investment was placed with a local insurance company called South Pacific Insurance Corporation (SPI Corp), acting in partnership with, or in conjunction with another insurance company called Trade and Merchant Trust (T&M Trust). Butler gave a copy of the insurance policy to the committee, however their review found that the document was labelled a guarantee issued by T&M Trust for the protection of Beech Tree not the ASG. (This document is also attached to the PR.)

A conference hearing/ meeting on Oct. 6, 2026 with all parties concerning the insurance issue which included the CEO of T&M Trust, and its Chief Strategist, the CEO of SPI Corp., and its local representative, an attorney, concluded that no insurance policy was ever issued guaranteeing to ASG the return of its $10 Mil if the contract between ASG and McKinley failed.

Upon review by the committee of the Memorandum that was the draft contract with McKinley, the SSCGO concluded that the list of concerns presented by the Memorandum do not appear to be addressed before the contract was executed. 

“In the end Butler signed the contract with McKinley notwithstanding the lack of addressing such due diligence the Memorandum warned about, and without any demonstration of proper authority to sign such a contract for and on behalf of the ASG. Butler simply stated to the committee that the governor told him he can sign the contract,“ the PR states.

The SSCGO stated its three main concerns:

1    SSCGO found that the Executive Branch has used the ARPA interest funds without proper appropriation, even prior to this investment deal — they had taken out over $5 million. This clearly demonstrates the Executive’s willingness and commitment to ignore the Constitution and laws of the territory and spend unappropriated funds as he [Executive/ Governor] wishes.
2    The SSCGO is concerned about the lack of trust between the executive and his highly competent directors, as demonstrated by his (Executive/ Governor) willingness to avoid asking proper advice from the AG and from the CPO before moving such a large amount of ASG funds.
3    The SSCGO is very troubled by the callousness of governance as demonstrated by the governor telling Butler to sign the contract, in spite of the statute setting out the the authority of the CPO in contracting for services needed by ASG. Butler is just an advisor to the governor, his position is a contract one, he is not an ASG official.

The SSCGO recommends the following:

1    SSCGO recommends a Joint Concurrent Resolution authorizing the Legislature to file an action in court seeking to obtain a restraining order stopping the governor from using anymore of local revenues subject to Fono appropriation unless such funds are properly appropriated in accordance with the Revised Constitution of American Samoa and the laws of American Samoa.
2    SSCGO recommends that the Senate pass a resolution referring this matter to the AG requesting the appointment of an Independent Prosecutor to investigate and prosecute any person found to have violated the laws of American Samoa relevant to violation of anti-deficiency laws, procurement laws and appropriation laws of the territory. 
    Further, the AG seek the assistance of the FBI to investigate any fraudulent acts committed against the ASG and to assist in recovery of said funds from wherever they are located.
3    That the Senate pass a resolution authorizing the SSCGO to act as an investigating Committee to work after the session to complete this investigation and other matters pending to complete all then inquiries by the Senate on matters pertaining to government operations.
4    That the Senate pass a resolution requesting the Secretary of Interior to seek the assistance of the FBI to assist our AG in the investigation of this matter for possible fraud against the territory, and to assist ASG in recovering out funds.

HOUSE AND SENATE DIFFERENCES

The House and Senate are currently at odds over involving federal authorities with the investigation into the what they see as the illegal use of public funds.

The House has tabled a concurrent resolution that was passed unanimously in the Senate calling for the SSCGO investigative materials to be sent to the U.S. Department of the Interior, along with the U.S. Department of Justice, the U.S. Department of the Treasury, and the Government Accountability Office (GAO) for review. The House, however, believes local avenues for addressing the controversy have not yet been exhausted. 

The House Speaker noted that the Fono had already approved resolutions seeking the appointment of an independent prosecutor and requesting a judicial determination regarding the legality of the administration's spending of funds without legislative authorization. He cautioned against creating the perception that American Samoa is unable to manage its own governmental affairs.

The Senate’s response was to convert it into a Senate resolution once it was notified that the concurrent resolution had been tabled. The Senate resolution was passed by senators unanimously, allowing the Senate to move forward independently with transmitting the information package to federal authorities.

The action ensures that, despite the House's reluctance to become involved at this stage, the Senate can still formally provide federal agencies with the documents and evidence gathered during its investigation into the expenditure of the $15.6 million in questioned public funds.

GOVERNOR’S PRESS CONFERENCE

In only the second press conference held by the governor since coming into office, on Wednesday, Oct. 14, 2026, updates on the controversial $10.1 million investment, ARPA-funded projects, opioid settlement funds, Medicaid funding, drug prevention initiatives, and other key issues facing the Territory were delivered.

For the $10.1 million, the governor appealed to the people of American Samoa to remain patient as efforts continue to finalize the controversial $10.1 million investment funded by interest earnings from the American Rescue Plan Act (ARPA).

It is the first time the governor and Butler appeared on stage together to publicly speak about the controversial investment. Both spoke of a transaction process continuing to develop and that they were anticipating a return on the investment. They just couldn’t say exactly when.

The governor went further, noting that the investment is more than a financial return. He said the transaction could open the door to a broader relationship with MBT that may attract additional private investment into American Samoa.

"Beyond the immediate financial benefits, this transaction represents an opportunity to establish a lasting partnership with MBT," the governor said. "Such a relationship could bring additional private capital investments to American Samoa's infrastructure, economic development projects, and long-term growth."

Notably, on the issue of insurance coverage associated with the $10.1 million, the governor said the apparent contradiction between what Butler had reported to the SSCGO and what officials representing the insurance companies testified to during the hearings could be explained easily: "The people who testified in that hearing were the wrong people," the governor said. "They were not involved with the insurance at all, although one of them may have been affiliated with a company connected to the transaction. The Fono, I'm sorry to say, was talking to the wrong people."

Asked to clarify the insurance contradiction, during the press conference, Butler said the arrangement was not negotiated directly between ASG and the insurers — MBT handled that process through an insurance broker.

He continued, "The insurance was between ASG and MBT," Butler explained. "MBT engaged an insurance broker called First Gate, which then communicated with an insurer known as Trade and Merchant."

According to Butler, Trade and Merchant subsequently retained Southern Pacific Insurance Company to act as guarantor for the transaction.

He said the administration has provided the Fono with a policy certificate documenting the arrangement.

"But regarding the engagement itself, ASG did not directly communicate with those insurance companies," Butler said. "MBT worked through its broker, which coordinated with Trade and Merchant and Southern Pacific Insurance. That was the course of the transaction."

It should be noted that if its the same document that the SSCGO refers to in its PR, the committee pointed out that its not a proof of an insurance policy document protecting the ASG investment, but proof of a guarantee issued by Trade and Merchant Trust for the protection of Beech Tree, not the ASG.