Senate puts Chief Procurement Officer confirmation hearing on hold

Pago Pago, AMERICAN SAMOA — Acting Chief Procurement Officer Kenneth Kuaea's involvement in a company called Klaod Solutions Inc., put him in a difficult position when he appeared before the Senate Government Operations Committee on Wednesday, Feb. 12, 2025.

Kloud Solutions, owned by Kenneth and his wife Luisa Kuaea, was one of seven companies that submitted bids in 2021 for the American Samoa Safe Travel System (TALOFAPASS). Their bid was unsuccessful, and the Office of Procurement subsequently awarded the contract to Datahouse Consulting Inc. of Honolulu.

As a result, Kloud Solutions filed a complaint in the High Court in October 2022 against ASG, contesting the awarding of the contract. The case, which names the Office of Procurement as the defendant, is still pending in the High Court.

Senator Tuana'itau M.P. Togiola questioned Kuaea about his ownership of Kloud Solutions. Kuaea responded that he did not own the company and that he was merely an employee.

Tuana'itau expressed concerns about potential conflicts of interest if Kuaea were confirmed and subsequently approved the awarding of contracts to Kloud Solutions for future government projects.

Kuaea clarified that he no longer works for the company. He assured the committee that, if confirmed, he would adhere to the guidelines for awarding contracts, ensuring that contracts would be granted to the company with the most attractive bid.

Senator Tuana'itau inquired about the $500,000 loan from the State Small Business Credit Initiative (SSBCI) program. He noted that the loan had defaulted and asked if Kloud Solutions intended to repay it.

Kuaea explained that the ASTCA CEO had approached him and his wife, suggesting a partnership to test the newly implemented high-speed internet. He mentioned that they were working on establishing a remote customer service agency and had entered into an agreement with ASTCA to develop this initiative, aiming to create jobs for the public.

Kuaea further elaborated that ASTCA had advised them to apply for funding under the SSBCI program to support the company's infrastructure development and job creation efforts. Consequently, their company applied and was awarded $500,000 in funding through the Treasury.

The CPO nominee recalled that Kloud Solutions was operating a call center when they received the funds and had been subcontracted by a New York company. However, COVID-19 struck, and restrictions required business hours to be from 6 am to 6 pm, while their contract with the New York company required them to operate from 12 am to 7 am.

As a consequence, the company suffered a financial loss, and the opportunity to create approximately 400 jobs was lost.

Tuana'itau intervened, asking if they had started repaying the funds.

Kuaea explained that they had sought a meeting with the governor to explain the reasons behind their predicament.

However, Tuana'itau pressed again, asking if they had started repayments or not. Kuaea responded that they are working on a repayment strategy to pay back the full amount due.

Committee Chairman Senator Togiola Tulafono reminded Kuaea that in his testimony, he had stated he was not part of the ownership of Kloud Solutions. However, his bio indicated that he was the Chief Operations Officer of the company.

Kuaea clarified that he was an employee of the company, and that was his title at the time.

Togiola then asked who the owner was. Kuaea replied that the company is 100 percent woman-owned — by his wife, Luisa Kuaea.

"So, are you saying your wife owns 100 percent of the shares in the company?" Togiola asked.

Kuaea affirmed, adding that when he and his wife were appointed as acting directors by the governor, they discussed with their attorney putting the company in a trust with their daughter, Hanna, as the beneficiary to avoid any conflicts of interest. Mrs. Kuaea has been appointed Acting Director of the Medicaid Office.

Togiola commented that this means the ownership of the company is still within their family. He inquired if there was a reversion clause in the trust where the ownership reverts back to Kuaea and his wife after their current appointments if they are confirmed.

Kuaea answered that he didn't know because he was not present when the establishment of the trust took place.

Togiola asked again if the trust had been established, to which Kuaea replied that they were in the process of putting it together.

"So, that means the ownership of Kloud Solutions is still with your wife because the trust has not been established," Togiola pointed out.

Kuaea replied in the affirmative.

Togiola stated that this means Kuaea had not been truthful in his testimony and advised him not to evade the questions.

The Sua senator then inquired about the status of their lawsuit against ASG through the Office of Procurement at the High Court.

Once again, Kuaea evaded the question, explaining how the case ended up in the High Court due to the inaction of the Administrative Law Judge Office. However, Togiola cut him off and asked about the status of their lawsuit pending at the High Court.

Kuaea stated that they were still waiting on the Chief Justice, noting that it has been four years since the case was filed.

"So how can you make decisions pertaining to the Office of Procurement when your lawsuit against the government through the office that you have been nominated to lead is still pending?" asked Togiola. "So that means you will be making important decisions for the same government office that you sued in court? Where is the logic in this situation?"

Kuaea revealed that the Acting Attorney General had visited their office to discuss active disputes involving the Office of Procurement, and when his pending case was brought up, he had recused himself from the meeting.

"I don't have any interest in looking into the case any further with respect to myself and the Procurement Office," Kuaea said. "I've given all that to the deputy and the AG's Office and have recused myself from any involvement in that case."

Togiola asked if he was one of Kloud Solutions' three incorporators. Kuaea replied that he was, along with his wife Luisa Kuaea and her sister Patricia Su'esu'e.

Togiola then referred to the $500,000 loan from the SSBCI program and asked if any part of that money had been repaid.

Kuaea responded in the negative, adding that they had sought opportunities for forgiveness, renegotiation, or debt relief due to the financial losses the company had incurred during the pandemic and the usage of the funds.

Togiola asked if he had applied for unemployment benefits. Kuaea said he had not, but his wife had, and she received benefits.

Togiola inquired if his wife had been paid a salary as CEO while the $500,000 was being used for their company's operations. Kuaea replied that his wife had not received a salary since the company began operations. He claimed that he was the only family member who had been paid a salary, while his wife went without a salary to ensure their employees were paid.

Togiola expressed confusion, noting that Mrs. Kuaea had not been paid but successfully applied for unemployment benefits, while Kuaea had been receiving a salary and had not claimed benefits.

Senator Togiola concluded the hearing by requesting copies of all payments made by the New York company that subcontracted Kloud Solutions during the COVID period, as well as the unemployment claim filed by Mrs. Kuaea.

Togiola informed the Acting Chief Procurement Officer that he would be summoned to appear before the committee once members had a chance to review the requested documents.