Congressman Faleomavaega announced today he is responding to an article published by Samoa News on July 11, 2005 entitled “Aumua tells Rotary of Bush’s new economic initiative.”  As reported by Samoa News, the eight-year Capitol Hill veteran spoke out about (1) IRS section 936, (2) American Samoa’s need to find alternatives if Congress fails to extend the tax credit to our canneries, and (3) President Bush’s Strengthening America’s Communities (SAC) initiative.   

“Since Governor Togiola has hired Mrs. Amata Radewagen as a paid consultant, I am not sure whether or not Mrs. Radewagen is speaking on behalf of the local government or as a private citizen,” Faleomavaega said.  “Whatever may be the case, the information she provided to the Rotary Club and Samoa News is inaccurate and, given the seriousness of these issues, I believe it is important for me to set the record straight.”

According to Samoa News, when addressing members of the Rotary Club, ‘Mrs. Radewgen used the opportunity to unveil President George Bush’s Strengthening America’s Communities (SAC) initiative which she believes could be an important development strategy parallel to saving IRS tax code 936.’  “First, I am perplexed as to how Mrs. Radewagen could be so off in her assessment of the President’s SAC initiative since she pointed out that ‘she served on it, helped craft it, and even voted for it on the floor.’ 

“As of May 5, 2005, the Administration had not proposed new legislative authority for the President’s SAC initiative nor has it released details such as eligible recipients, methods of distributing funds, requirements for matching funds or leveraging, or criteria for awarding bonus funds.  In fact, neither the House nor the Senate has accepted the President’s proposal for fear it would wreck more than eighteen (18) existing programs including funding for the Community Development Block Grant Program (CDBG) administered by HUD and the Community Services Block Grant (CSBG) administered by the Department of Health and Human Services.”

“For Mrs. Radewagen to suggest to the public that this initiative is moving forward is simply misleading and totally without merit.  In fact, let us be clear.  The President proposes to cut $2 billion in funding for the CDBG, CSBG and related programs, a cut American Samoa would certainly feel, and a proposal Congress has yet to support.”

“While Mrs. Radewagen states that ‘SAC could work well for American Samoa,’ Congress has concerns that the President’s SAC initiative would be based on a more competitive process and less on direct payments to areas whose poverty levels are below the national average, like American Samoa.  Currently, American Samoa receives its CDBG and CSBG funding based on population and poverty.  If President Bush’s program were implemented, American Samoa may not automatically receive its funds according to formula but would more than likely have to compete against 50 other States as well as the territories in order to receive its fair share of federal dollars.”

“This is not good for American Samoa.  It is not good for other disadvantaged communities and this is why the House and Senate, including the Republican leadership, have voted against the President’s proposal to cut CDBG funding and instead voted in favor of maintaining ‘economic and community development programs such as CDBG at 2005 levels.’  Put another way, Congress has virtually ignored the President’s proposal and even the Department of Commerce (which put together an advisory commission and issued a report) has backed off and is now rethinking the whole proposal.  Therefore, the SAC initiative is not an option for our canneries or American Samoa to ‘fall back on’ as Mrs. Radewagen alleges,” Faleomavaega said. 

“Regarding opportunity zones, Mrs. Radewagen says there are no such designations for American Samoa.  In a press release dated May 21, 2005, I announced that the territorial delegates are working together to designate American Samoa, Guam, the U.S. Virgin Islands, and the Commonwealth of the Northern Mariana Islands as historically underutilized business zones (HUBZones).  This initiative would provide certain beneficial treatment in the federal contracting process for businesses operating in our districts and this would, in effect, complement IRS section 936 tax credits and benefits.”

“I am pleased to report that the intent of our bill was successfully included in the recently passed Transportation bill.  Section 10203 of the conference report designated all “Difficult Development Areas” in the territories as HUBZones for the purposes of the SBA’s small business federal contracting assistance programs.  For American Samoa, this includes the Eastern, Western and Manu’a District as well as Swains Island.” 

“Regarding IRS Section 936, when asked about Section 936’s chances for survival, Mrs. Radewagen responded by saying that ‘there’s always a chance it will get extended…lightening could strike…but it could be a pretty heavy lift.” Samoa News quickly pointed out that Mrs. Radewagen ‘used to work for the Vice Chairman of the full Committee on Ways and Means, which has jurisdiction over 936’ implying that Mrs. Radewagen’s opinion should carry some weight.

“Like any of us, Mrs. Radewagen is entitled to her opinion.  At the same time, responsible journalists should point out that while Mrs. Radewagen used to work for the Vice Chairman of the full Committee, she worked as a scheduler, not as a professional staffer responsible for drafting legislation.  In fact, if you will review Mrs. Radewagen’s eight (8) years of Capitol Hill experience, you will find that at no time has she worked as a legislative assistant, legislative director, or chief of staff.  Her work on Capitol Hill has been mostly clerical.  When working with Congresswoman Deborah Pryce, she worked as a special projects coordinator but, to date, I have yet to see one project she worked on in behalf of our territory.”

“Regarding Mrs. Radewagen’s comments that she ‘supports efforts to get this extended,’ let me just say this.  At no time has Mrs. Radewagen contacted my office to express her concerns about IRS 936 or to offer her assistance.  In part, I understand this because, again, her experience in Washington is not in the area of legislation.”

“So, to clarify the 936 issue once more for the public record, let me say that Chairman William Thomas (R-CA) and the senior Ranking Democratic Member, Charles Rangel (D-NY), of the House Ways and Means Committee have agreed to my request to provide the most appropriate legislative vehicle to make sure section 936 benefits are extended to our canneries as proposed by H.R. 629, legislation I introduced to protect American Samoa’s canneries and our economy.  The House Ways and Means Committee is the committee responsible for tax legislation and no legislation or alternative can be moved without the support or involvement of the leadership and members of this committee.”

“The CEOs of StarKist and Chicken of the Sea are aware that this matter rests with the Ways and Means Committee and both are supportive of the agreement we have in place.  Neither has expressed concern that this legislation would fail and both companies fully support my efforts.  Both companies have also made it clear that they are opposed to local alternatives and that the extension of 936 as proposed by H.R. 629 is the only answer for them.  Therefore, it is troubling that our local government would hire anyone to explore alternatives that our canneries neither support nor want and that will be in direct conflict with the agreement I have in place with the Chairman and Ranking Member of the Ways and Means Committee.”

“While I support Mrs. Radewagen’s right to speak about whatever issue she so chooses, I believe it is time for the Governor to be upfront with our people about what Mrs. Radewagen’s role is in his administration.  Since the Governor hired Mrs. Radewagen as his consultant and since she has now made public statements concerning section 936, are we to understand that whatever she says publicly is also the position of the Governor?  If so, does the Governor prefer that I consult directly with her and not with him on 936 and other important matters?”

“As for my part, I have written to the Governor and the Fono on more than one occasion and kept them informed about section 936.  I have also spent the last three years meeting with the CEOs of Chicken of the Sea and StarKist to make sure the concerns of our canneries were heard and their needs addressed.”

“At the end of the day, though, only Congress can amend federal tax law of which 936 is a part and, as such, we must present a united front.  This matter is serious.  There is nothing humorous about it.  In no way is section 936 about fixing a leaky faucet or knowing which screw to turn as suggested by Mrs. Radewagen who was wrong about SAC, wrong about 936 and wrong about HUBZones.”

“Without question, the success or failure of section 936 will impact our economy now and for generations to come.  This said, now is not the time to be making partisan political statements when our future is at stake.  No matter what political views one may have or which candidate or party our government leaders support, we must work together to protect American Samoa’s future.  Our people deserve nothing less and, for this reason, I am hopeful that differences will be put aside and true public servants will work together for the good of all,” the Congressman concluded.