Former TBAS financial officer claims there are major loans in arrears

Pago Pago, AMERICAN SAMOA — The Territorial Bank of American Samoa’s (TBAS) former Chief Financial Officer (LFO), Nathaniel Clayville in his statement before the House Government Operations committee last week testified that he was terminated without cause by the current TBAS Chief Executive Officer (CEO) and president David Buehler.

The immediate decision to terminate his service came after he advised Buehler to write off loans that had been in default for over 90 days and up to a year. However, after more discussions, “Buehler advised Mr. Clayville “not to write off these loans.”

This was Clayville’s testimony when he, along with local businessman, Timothy Jones appeared before the House Government Operations committee last week to give their insights into TBAS service for the community.

The hearing was chaired by Rep. Faimealelei Anthony Fu’e Allen and attended by almost all faipule.

Before the hearing started, Faimealelei make it clear that the chamber is not the court house and the issue the committee is going to hear about from witnesses is based on the concerns from the public regarding the service TBAS offers to the community.

In his opening statement, Clayville introduced himself to members of the committee.

As a professional economist, Clayville said he and his family have resided in American Samoa about 5 years now. He was employed by TBAS as a chief financial officer for one year, from March 2020 through March 2021.

In the beginning, Clayville stated that finances were not really tracked as they should have been and there were major accounts that had not been reconciled for over a year.

One of the areas he worked on was the audit for FY 2020-2021 and during that time, he was fully aware that there were some issues with the bank.

“So what we have found during this financial audit was that there were numbers of loans that had been essentially in default for over 90 days and this is something I recommended to Buehler to write off,” Clayville said, adding that local loans has been written off regularly and there was a large sum of loans from off island that passed 90 days.

In response to Faimealelei’s question, Clayville said that the amount of off island loans he’s referring to was about $1.8 milion at the time.

Clayville said he recommended to Buehler to clean up those loans, but the TBAS CEO had no intention of cleaning up those loans.

“Did you advise Buehler to take care of the off island loans first?” Vice Speaker Fetu Fetui Jr asked.

Clayville responded that, “I discussed this issue with Buehler and he advised me not to write those loans off nor did he authorize me to do it.”

“You know very well that is the violation of the bank policy,” Fetu said.

Clayville said that it was his the understanding that this was not within bank policy regulations.

“Was that the reason why Buehler fired you?” Fetu asked again.

Clayville replied, “I can only speculate that was part of the reason for it because when I was terminated, it was without cause.”

He further stated that according to the termination letter he received, nothing explained the specific reason why he was fired.

(Clayville also provided Samoa News with a copy of his termination letter).

He attempted to exercise the clause in his contract that if he is terminated without cause he receives a certain severance package. However, upon requesting that from Buehler, the CEO did come up with a list of causes at that point and he even also tried to revise the termination.

Fetu said he feels sorry for what Buehler did to the former LFO and this is a territory of the United States of America where every person has the right to due process of the law.

Fetu said that TBAS is a government owned bank and it is his belief this bank is also the people’s bank where everybody has the same rights.

He further stated that he’s still upset because the TBAS CEO is violating rights of the people and it appears to him that he doesn’t care what he’s doing.

After listening to his testimony, Ituau Malosi Faipule Logoitu’au Mark Atafua told Clayville that it’s very sad to hear what he was put through and the way the bank treated him as if he’s not important.

Several faipule were concerned with TBAS’s current financial situation.

Faipule Avagafono Tuavao Vaimaga Maiava said there are a lot of issues that need to be addressed. There’s the ATM issue, the issue about the safeguarding of people’s money, the issue of Master and Visa cards, and also the most important issue is the lack of FDIC insurance.

He pointed out that it was the CEO himself who testified before the chamber a few weeks back clearly stating that there is no guarantee that the people’s money deposited at the bank is protected due to the fact that the bank is not FDIC insured.

Faipule Lave Fatulegaee Palepoi Mauga added that not only are these many issues, but there is also a multimillion dollar lawsuit pending in court.

“TBAS’s finance team needs to justify to the people where the $3 million went. They can’t justify in their records and that’s why auditors declared it a loss,” Lavea said, referring to the TBAS financial report the House received a few weeks ago.

On the last day of the Fono Session Friday, Apr. 1, 2022, Fetu called out to ASG leaders to launch a full investigation of TBAS before it’s too late.

BACKGROUND

Samoa News points out that Faipule Lave, when stating that it needs to be justified to the people “where the $3 million went”, he is probably referring to the $3+ million loss noted in TBAS’s financials when it “restated” FY2020 Profit/ Loss, and Retained Earnings reporting.

According to notes in the FY2021 financial report, the restated amounts point to material inaccuracies in the reporting of the value of its losses in its loan portfolio — in particular it’s off-island loans — It was “unidentified loan delinquencies” that led to TBAS having to restate its allowances for loan losses — Sept 30, 2020 and 2019 respectively.

The off-island loan delinquencies were noted in the financials to be due to the COVID pandemic, which resulted in economic hardships to borrowers.