Not satisfied with the reply from Marshall Islands officials, U.S. Interior Department Insular Affairs Director Nikolao Pula has scheduled talks with top government leaders this week in Honolulu. Finance Minister Jack Ading confirmed Thursday that he will lead a delegation to Honolulu to meet Pula.
Pula put the Marshall Islands on notice in a January 31 letter to Ading that the U.S. can withhold grant funding and is authorized by provisions of the Compact of Free Association to obtain any financial records related to possible misuse of federal grants to this country. Any hold up in U.S. federal funds would have a devastating impact on the Marshall Islands as U.S. funding accounts for nearly two-thirds of the country’s annual budget of $129 million, and about half of the government’s workforce is paid for by U.S. grants.
Pula asked for written updates with detailed information on the Marshall Islands investigation to “aid the U.S. in determining the need for any actions on our part,” adding that timely provision of this information “will hopefully avoid the necessity of taking remedial actions such as withholding notification of grant awards or future payments on grants that have been awarded to the Marshall Islands.”
The Marshall Islands responded to Pula on February 11 — the date by which Pula had requested a reply — with a three-page letter from Justice Minister Brenson Wase.
Wase’s letter provided a snapshot of the investigation, with the names of six government workers so far charged, what ministries they work for, and the amounts they are alleged to have stolen. It also lists the four businesspersons allegedly involved in the scheme.
Pula’s January 31 letter said he was “encouraged by the prompt efforts of your government in investigating the possible misuse of grant assistance.”
As “a further confidence-building measure,” he recommended the Marshall Islands consider getting help for the Attorney General’s Office from an independent professional fraud investigator or qualified firm.
Wase, however, assured Pula that the Marshall Islands is using everything at its disposal to investigate the situation. “I truly believe we have the means and capability to handle this and seek your patience and understanding as our law enforcement and regulatory authorities continue to advance forth with their investigation, prosecution and recovery efforts,” Wase said.
The Marshall Islands government’s first investigation into misuse of federal funds is complete, “and we intend to expand the scope of this investigation to cover other government funds,” Wase told Pula. “There are clear indications that the scheme through which these funds were embezzled took a lot of planning and collusion involving senior and middle level government officials.” He added, “government officials colluded with some unscrupulous individuals, in violation of the trust placed in them.”
Pula commended “prompt investigatory and criminal enforcement action that has been taken by your attorney general into what appears to be a wide-ranging conspiracy to defraud the government of the Marshall Islands.”
The fact that this involves U.S. funding “raises significant concerns among U.S. agencies,” Pula said.
Wase’s letter to Pula reported that the investigation shows that nine U.S. grants are involved in the alleged theft of funds so far charged in the High Court. These include bioterrorism, HIV prevention, maternal and child health, and family planning grant funds.
Wase suggested that U.S. and Marshall Islands officials discuss the investigation and prosecutions on the “margin” of a meeting in San Francisco on March 21 that was previously scheduled to discuss U.S.-funded development projects.
In response, Pula called for a meeting in Honolulu this week.
