In the past 10 years, millions of dollars have flowed through an obscure federal fund aimed at supporting commercial tuna fishermen in Hawaii and three U.S. Pacific island territories.
But limited oversight, a process of awarding contracts mostly behind closed doors and a reluctance to produce public records about the fund have stymied efforts to find out how the money is being spent, who is receiving it and whether it’s being used in accordance with federal law, a Civil Beat investigation shows.
Moreover, records obtained by Civil Beat under the Freedom of Information Act over the past two years show that thousands of dollars have been awarded to members of the Western Pacific Regional Fishery Management Council. Projects paid for by the fund have directly benefited council members’ own business interests. And money has also gone to contractors who support council positions on issues like increasing catch limits for the lucrative tuna fishery or opposing expansion of marine national monuments.
Monday: The limited number of records released to Civil Beat and members of Congress by federal officials over the past two years shows that money is being used to support projects that benefit council members and political allies.
Tuesday: A reporting trip to American Samoa reveals some of the projects paid for by the fund have been failures or are floundering while a new dock for longliners appears to be well-received by fishing interests and local government officials.
Wednesday: Wespac has a long history of resisting the release of financial information about its operations, underscoring the need for a formal federal investigation.
The Western Pacific Sustainable Fisheries Fund is rarely discussed openly at full meetings of the 16-member council. Decisions about how the money will be spent are made in meetings of the council’s five-member executive and budget committee that consists of the council chair and vice chairs representing Hawaii and each territory — American Samoa, Guam and the Commonwealth of the Northern Mariana Islands.
For several years, millions of dollars flowed into the fund from penalties against foreign vessels fishing illegally in U.S. waters around remote Pacific islands. In more recent years, the money has come largely from payments made by Hawaii longliners to buy the territories’ unused tuna quotas.
Wespac’s longtime executive director, Kitty Simonds, presides over the grant application process used to tap the fund. She steers the project proposals that have been requested by local officials in the territories and Hawaii. She’s listed as the principal contact for awards and signs many of the checks when money leaves the fund, records show.
Simonds has been unavailable for an interview for the past three weeks.
The secrecy surrounding the Sustainable Fisheries Fund is frustrating some members of Congress, including U.S. Sen. Brian Schatz, who put language in last year’s appropriations bill to require a full accounting of the fund.
“We just couldn’t lay eyes on what the money was spent on,” Schatz told Civil Beat. “We came to the conclusion we needed a robust accounting.”
But the response he received in August was anything but the detailed accounting he had expected. The National Oceanic and Atmospheric Administration, which oversees Wespac, provided a “Report to Congress” that amounted to six pages and only included year-by-year totals of how much money was spent along with brief descriptions of the projects.
Now, U.S. Reps. Ed Case of Hawaii and Gregorio Sablan of the Northern Marianas are demanding answers, too. Following a congressional hearing May 1 at which Simonds brushed off questions from Sablan, the two congressmen sent pages of detailed questions to her about the fund as well as other Wespac policies and practices.
“Wespac has been shrouded in secrecy for a long time,” Case told Civil Beat in a recent interview. “I have been very concerned, going back decades now, that essentially Wespac’s primary focus is not on environmental protection, not on sustainability, but is on the maximum exploitation of the resource.”
Simonds has yet to provide a response to the congressmen’s questions. Her answers were due May 16 but have not yet been submitted, according to congressional staff.
“There’s a culture inside the management of Wespac that they can do whatever they want and it’s nobody’s business,” Case said. “That’s not cool with me.”
The congressmen aren’t the only ones who have been thwarted by Wespac. Over the years, the council has been the subject of news stories about its refusal to release records to journalists and it’s fought lawsuits filed by environmental groups seeking simple budget information. Even the state of Hawaii, which has a voting seat on the council, can’t get answers to questions about what money and staffing Wespac is providing in meetings over fishing in state waters.
Civil Beat first submitted public records requests to NOAA for this story in May 2017. NOAA, which handles the requests for Wespac, was able to provide some documents within a few months, mainly hundreds of pages of correspondence between Wespac and federal officials about the council’s position on issues such as the expansion of marine monuments, for instance, or the problems faced by the commercial fishing industry.
NOAA has also released general financial information such as the total dollars in the fund on any given year and awards to recipients — information similar to that given to Congress. It’s also provided Civil Beat with a list of contracts for fiscal years 2012 through 2017.
But much of the detailed information on the Sustainable Fisheries Fund that would show how money has been disbursed beyond the initial contract recipient and what its benefit has been for fishery management and conservation has not been made available.
Pages from the general ledger, for instance, were not released until April — 23 months after Civil Beat’s initial request. Even then, the record contained only the first 50 pages of an estimated 500 pages that show expenditures from the fund over the past five years. Key information is unreadable and requests to get a better copy have not been addressed.
NMFS’ Pacific Islands Regional Office Administrator Michael Tosatto oversees the grant process for the federal government. An attorney, he has a long history with Wespac — first as a non-voting council member in 1997 when he was the Coast Guard’s chief of law enforcement. In 2004 he became PIRO’s deputy administrator and has been working closely with Wespac ever since. He fills the federal government’s seat on the council.
Tosatto said his agency maintains some records about Wespac and the Sustainable Fisheries Fund. But most of the financial information is in Wespac’s possession and NOAA has to wait for Wespac to pass it along before he can share it, he said.
He said delays in responding to Civil Beat’s request are because Wespac has been slow to provide records, partly because the council was seeking legal advice from NOAA about whether the information had to be released.
Tosatto contends that NOAA’s Report to Congress — the six pages provided to Schatz in August under the federally mandated accounting of the fund — was exactly what the agency was asked to provide.
“I believe our response to Sen. Schatz was 100% responsive to his request,” Tosatto said. “It was the ins and outs of the fund. He was provided all the detail that was required by law.”
“It is still an opaque budget process and that’s not acceptable.” — U.S. Sen. Brian Schatz
Nearly a year later, Schatz still isn’t happy with the response. And he feels no closer to an adequate understanding of the flow of money in and out of the fund.
“I haven’t even in my view laid eyes on something that looks like an explanatory budget document,” he says. “It is still an opaque budget process and that’s not acceptable.”
But he told Civil Beat that he is hopeful continued discussions with NOAA will shed more light on the workings of the fund.
“We are in a dialogue with NOAA and NMFS and we don’t think this has to be adversarial with the Department of Commerce,” he said. “But it is my job to figure out how this money is being spent and we don’t have the data that we need.”
The Western Pacific Sustainable Fisheries Fund has been in existence since the council was created in 1976 with the Magnuson-Stevens Fishery Conservation and Management Act. Wespac is one of eight regional fishery management councils, and the only one with a separate fund that pays for initiatives that range from major construction projects to scientific studies to contract staff.
The council advises NOAA’s National Marine Fisheries Service on ocean policies in a region spanning 1.5 million square miles. The council is required under the Magnuson-Stevens Act and other federal laws to ensure fish stocks remain sustainable while protecting endangered species and natural resources.
The fund was initially established to accept payments from foreign fishing vessels seeking to fish in U.S. waters. But since the whole point of the 1976 act was to keep foreign vessels out of the 200-mile U.S. Exclusive Economic Zone, no such deals were ever made and the fund sat empty.
Then, in 2007, the MSA was amended to allow it to receive fines and penalties assessed against vessels fishing illegally in the Pacific Remote Island Areas — Baker, Howland and Jarvis islands, Johnson Atoll, Kingman Reef, Palmyra Atoll and Wake Island. (Fines and penalties for illegal fishing in Guam, CNMI and American Samoa waters go straight to those territories, not into the fund.)
The law also allows the fund to accept money from quota-sharing agreements between the Hawaii Longline Association — which represents most of the 144-vessel fleet based in Honolulu — and Guam, American Samoa and the CNMI.
Those quota agreements now bring in $250,000 per 1,000 tons of additional bigeye quota. They began in 2013 at $150,000 apiece and have steadily increased.
The fleet lands about $100 million worth of the fresh bigeye each year that’s found in poke bowls, sashimi plates and restaurants around Hawaii and flown to markets on the U.S. mainland. It’s one of two types of tuna known as ahi in Hawaii; the other is yellowfin.
The longliners’ limit this year is 3,554 tons, as determined by the Western and Central Pacific Fisheries Commission, so they can effectively double their annual limit through these agreements.
Eric Kingma, a former Wespac official who’s now the executive director of the Hawaii Longline Association, said the association does not have any comment on how the fund is used. He said those spending decisions only involve NOAA, the council and participating territories.
Shortly after the amended law was signed by President George W. Bush, a Spanish-flagged purse seiner called the Albacora Uno was charged with illegally fishing off Howland, Baker and Jarvis islands. The boat and its catch were seized and the owners ultimately paid penalties of $5 million, which were deposited into the Sustainable Fisheries Fund in 2010 and doled out to Wespac over the next few years as grants.
Wespac had already revealed a draft proposal with far-reaching ideas for how the money would be put to use. The draft proposal pitched $5.5 million worth of projects ranging from $1,000 to produce videos to $1 million to pay for fisheries training programs and workshops, according to a story in Environment Hawaii, a nonprofit news outlet that has been covering Wespac and its meetings for the past 25 years.
Records released by NOAA show there have been 10 awards to Wespac from the fund, totaling $6.89 million. The single largest was $2.34 million in 2014 and the lowest was $175,000 in 2015. In October, the most recent grant was $511,600 thanks to two territory agreements.
The process of spending money from the fund begins with what’s called a marine conservation plan — a three-year blueprint that each territory develops to guide fisheries management with an eye toward ensuring a sustainable fishery.
Federal law mandates that the MCPs “must prioritize planned marine conservation projects” although Congress has approved more recent updates to the Magnuson-Stevens Act that allows fishery councils like Wespac to direct resources toward boosting the catch as much as preserving it.
Each governor submits their MCP to Wespac, which reviews and approves it before sending it on to NOAA for a final OK. Tosatto refers to the MCPs as a “project list” but some MCPs are more detailed than others. Guam, for instance, submitted a relatively precise plan for a fishing platform. American Samoa’s is more general, broadly citing a need for docks or ice machines, among other things.
Specific projects are proposed in grant applications — called narratives — developed by Simonds and her staff in conjunction with the territories.
NOAA reviews the narratives and makes sure they line up with the MCP for that area before signing off on grants from the Sustainable Fisheries Fund, Tosatto said, adding that the agency looks closely at whether the project is executable, if the cost breakdown is realistic and if it’s meeting the governor’s goals.
But once the money is handed over to Wespac, NOAA’s oversight fades. Technical reports are submitted to NOAA and agency staff sometimes travels to the territories and looks in on the progress of some projects, Tosatto said.
But NOAA does not follow up on the contracting process or review the expenditures handled by Simonds and her staff. It’s up to Wespac to keep tabs on the project and the contractors, which would be standard practice for grants like this around the country, he said.
American Samoa and the CNMI have been the two territories selling their quota shares to the Hawaii longliners for the past few years. Among other things, the money is slated to extend a marina in Pago Pago Harbor so U.S. longliners have a dedicated space to dock, and go to a fisheries training and demonstration program in the CNMI to help increase catch.
Tosatto and others interviewed by Civil Beat say that control of the fund and how the money is spent is squarely in the hands of Kitty Simonds. In the years when money was coming from fines on illegal fishing, Simonds mostly picked the projects that got funded and the contractors. Now that the money is coming from quota agreements with the territories, she and her staff work with local officials on the selection of projects and contractors.
But at the May 1 hearing of the U.S. House Subcommittee on Water, Oceans and Wildlife, Simonds appeared to dismiss the notion that she and Wespac were issuing contracts and deciding how money from the fund is spent.
“I can tell you that I don’t, and the council doesn’t, fully get involved in (the Sustainable Fisheries Fund),” she said in answer to a question from Rep. Gregorio Sablan about contractors with possible conflicts of interest.
Simonds, who was clearly annoyed by the questions, said plans for the money are provided by the governors of the territories and that it is the Secretary of Commerce who signs off on them.
But Sablan wasn’t swayed.
“I’m concerned about the lack of transparency here,” he told Simonds.
Simonds insisted she was not familiar with all of the contracts and would have to get back to him.
In a brief interview with a Civil Beat reporter after the congressional hearing, Simonds continued to brush off concerns that are being raised over the fund.
“The quota money, that’s not even federal money,” she said. “That’s industry money that goes to them.”
“I think people are trying to look for things that they think that we’re doing illegally,” she added. “Come on. They don’t really care.”
One contract file released to Civil Beat under its FOIA request does contain a copy of a check for $250,000 made payable to Guam and signed by Simonds. But other contract files contain checks written to numerous vendors and it is much less clear whether that money was ever in the control of the local territory.
Simonds also pointed to annual audits that are done on Wespac and said the financial accounting of her operation has always shown she’s doing a good job.
But the last three audits, the only ones available on the federal website, don’t even mention the Sustainable Fisheries Fund by name. One notes its grant number, and provides a dollar amount, but nothing about how much was spent or where that money went.
Tosatto said the audit wouldn’t break out the Sustainable Fisheries Fund separately unless the auditors noticed a problem.
The audits look at Wespac’s overall operation and its broad financial practices, he said.
“They’ve been reasonably clean audits so far,” Tosatto said.
John Gourley, who has represented the Northern Mariana Islands on the Western Pacific Regional Fishery Management Council since 2014, owns a company called Micronesian Environmental Services.
Records show his company has been paid more than $70,000 from the Sustainable Fisheries Fund as part of a study that collects fish off Saipan. That work was initially contracted before he joined the council but has continued since. He was recently awarded another $290,000 grant to expand that work, but that money comes directly from NOAA with no council involvement, Gourley and Tosatto said.
In 2013, he was paid $28,000 out of the fund for a Marianas Seafood Marketing Plan, records show.
Gourley was traveling on the mainland and said via email he could not do an interview with Civil Beat. He did note that NOAA allows Wespac members to apply for major grants such as the recent one he received.
He also wrote that the 2013 grant for the seafood marketing plan was awarded to his company after a competitive process conducted by the government of the Northern Marianas.
Gourley is one of five members of the executive and budget committee, which is made up of Wespac Chair Archie Soliai of American Samoa, Gourley of the Northern Marianas, Michael Duenas of Guam, Christinna Lutu-Sanchez of American Samoa and Dean Sensui of Hawaii.
Wespac members, including some on the executive committee, have benefited from the fund. Civil Beat also found that significant funding has been awarded to contractors who have personal or political relationships with Wespac and NOAA.
Blocking the expansion of Papahanaumokuakea Marine National Monument was a priority for Simonds.
Potential conflicts of interest have drawn the attention of members of Congress. It’s one of the specific questions Ed Case and Sablan are seeking more information on from Simonds.
They asked specifically about Gourley’s Micronesian Environmental Services as well as a company called Mirae Info Design, a computing and statistical services firm, owned by a Honolulu computer scientist named Sunny Bak-Hospital. She’s married to Justin Hospital, a NMFS economist whose reports Wespac has used to oppose marine monuments.
Bak-Hospital is a former NOAA data management specialist and applications developer who holds a master’s degree in statistics. She worked for the federal agency from 2002 to 2009.
She’s also active in the Honolulu tech scene, including as one of the original organizers of Honolulu hacker space now known as HICapacity. She’s also been active with Code for Hawaii, a volunteer instructor for Girls who Code and has started teaching code to women in prison.
Bak-Hospital’s Mirae Info Design has received more than $95,000 in grants from the Sustainable Fisheries Fund. One contract for $22,000 is described as development of data tools for a government creel survey in the Northern Marianas.
She also received a $73,688 contract for alternative estimation methods for annual catch of federally managed species in the western Pacific. That contract ended in September.
Additionally, Bak-Hospital has been paid tens of thousands of dollars more for Wespac contracts that came from other Wespac funding — for studies on spearfishing and developing a database of data analytic tools for fishery data.
She is passionate about the notion that data must be collected, analyzed and used correctly, not to justify policy decisions.
Bak-Hospital said she understands congressional concerns over potential conflicts because of her husband’s position but said she keeps her work strictly separate from her husband, who she met at NOAA in 2006. They were married in 2012, she said.
“I honestly don’t see that there is any … conflict of interest,” she said.
Meanwhile her husband, Justin Hospital, the NOAA economist, conducted a study that found, in part, that expanding Papahanaumokuakea would cost the Hawaii longline industry upwards of $8 million a year due to lost fishing grounds.
Wespac built a campaign against the expansion that regularly cited that finding, despite the report’s other conclusion that the fleet would not necessarily lose that much because the longliners are free to make up the lost catch in other waters, as they have done.
Sensui has received tens of thousands of dollars through contracts from the Sustainable Fisheries Fund. A former news photographer, Sensui owns a media business called HI Production Associates.
Records show the fund has paid him $46,450 in two separate contracts to evaluate ko’a resources — essentially, a natural fish house — using structured video surveys. The contracts were awarded before he joined the council in 2016.
The underwater video he took was part of a project to compare changes in fish biomass and diversity of a known ko’a, or preferred shelter where fish aggregate, against traditional fishing knowledge.
Sensui said he did not have to bid for the job and wasn’t aware at the time that it came from the fund.
He said he got the job through his relationship with Makani Christensen, a boat operator who was familiar with the ko’a resources.
Christensen’s Keawe Consulting received $41,000 in contracts to charter a vessel in support of the ko’a resources project — in essence, supplying the boat that carried Sensui’s underwater cameras.
Christensen, a close political ally of Simonds, also ran as a 2016 Democratic primary challenger against Sen. Brian Schatz. Christensen has said his top priority if elected would be fighting the effort by Schatz and ocean conservation advocates to greatly expand Papahanaumokuakea in the Northwestern Hawaiian Islands.
Christensen did not respond to a request for comment for this story.
Blocking the expansion was a priority for Simonds. She helped organize public protests against the monument and lobbied Congress to stop then-President Barack Obama from expanding it.
Council members Christinna Lutu-Sanchez, who owns five U.S. longline boats based in American Samoa with her husband, and Archie Soliai, a StarKist executive whose office is in American Samoa, are also benefiting from decisions they’ve been involved in that have directed hundreds of thousands of dollars for the marina expansion project in Pago Pago.
As a longliner, Lutu-Sanchez will have a dedicated space to dock her boats, which provide the premium albacore tuna for the StarKist canneries there.
Lutu-Sanchez did not respond to efforts to interview her for this story, including during a recent reporting trip to American Samoa.
Soliai talked with Civil Beat in Pago Pago but said he had little idea how the funding process actually works despite his position on the executive committee and as the chair of Wespac. He indicated Kitty Simonds handles most of the details.
Soliai said the projects must meet the criteria set out in the approved marine conservation plan but beyond that he doesn’t know how projects are paid for out of the fund.
“I’m not sure what the approval process is,” he said.
Civil Beat interviewed current and former council members who say that Simonds informs the committee what projects she intends to fund based on where the quota-sharing money is supposed to go.
“We’re given a broad brush view of it,” Sensui said. “We don’t go into detail.”
The committee members provide some feedback but it’s left to council staff and territory officials to decide who should do the work. The proposed projects and grant requests do not go to the full council for approval before they’re submitted to Tosatto at NOAA.
“I don’t recall any decision-making in either executive committee of the council or the council full body,” said Tosatto, who also is a voting member of the full council. “At the end of the day, (Simonds) is the award recipient and that decision is hers to make.”
Tosatto and Mark Mitsuyasu, Wespac’s program director, said grants coming out of the Sustainable Fisheries Fund are referenced in reports from the council’s executive and budget committee. But they said there is little if any discussion about the grants or the projects they fund at full council meetings.
Mitsuyasu also said the executive and budget committee reports are not available on Wespac’s website even though they are presented publicly at meetings.
“Unfortunately, the work of the executive and budget committee is often undertaken either behind closed doors, or in the waning hours of a long, complex council meeting.” — Former Wespac council member Rick Gaffney
Hawaii Department of Land and Natural Resources Director Suzanne Case, the state’s representative on the council and a full voting member, told Civil Beat she is only loosely aware of the Sustainable Fisheries Fund.
Even though she’s briefed on all the meetings by her designee who attends and receives all the agendas and correspondence, she’s never seen any information on the fund let alone been asked to review or approve projects.
She said there “absolutely” should be transparency and input on the fund.
“If it’s funding work by Wespac, it should be an open agenda item — whatever it’s being spent on,” she said. “It’s legitimate business of the council and should be being discussed.”
Rick Gaffney, a sports fisherman from the Big Island and former Wespac council member, said council members who are not directly involved in the executive and budget committee may not have been aware of the fund and how the money is being used.
“Unfortunately, the work of the executive and budget committee is often undertaken either behind closed doors, or in the waning hours of a long, complex council meeting, when few of the council members present are fully attentive to the matters at hand and the public has already left the building,” he said.
“If it is being utilized to fund council member’s projects there needs to be significant oversight of that decision-making process and in reviewing the end products of those expenditures,” Gaffney said.
He’s also concerned about conflicts of interest if executive committee members and council members in general are involved in approving contracts that benefit themselves or their organizations and businesses.
Much of the money, particularly when the fund was fueled by penalties on illegal fishing, has been given out as sole-source contracts with no check on whether work could have been done by others not connected to the council.
Tosatto said that while federal contracting rules don’t apply to the grants Wespac hands out, the council is encouraged to follow federal best practices. That would mean getting three bids for each project and making the award based on considerations of cost, experience and other factors.
But there are no records that would indicate Wespac follows a competitive bid process and Tosatto acknowledged that NOAA does not follow up on whether the contracts are being appropriately awarded.
Mitsuyasu, Wespac’s program director, could not recall any contract that was competitively bid but said he would check the council’s files. He said local officials in the territories are involved in the spending decisions along with Wespac staff.
It’s also not clear if members of the executive committee are pushing their own projects in the committee. NOAA’s legal counsel is present to provide advice on whether recusals are required, Tosatto said.
Tosatto is aware that questions are being asked by congressmen and others about Wespac’s handling of the fund. Implicit in those inquiries are concerns over whether NOAA itself is doing an adequate job overseeing Wespac.
He says NOAA is working on a response to questions about potential conflicts of interest and matters of policy concerning the use of the fund.
Tosatto said those questions include whether someone receiving an award should then be appointed to the council; whether a current council member should be allowed to receive a contract from the fund; and if it’s OK for federal projects to go to someone married to a NOAA employee.
For Ed Case, who served in Congress more than a decade ago but was elected again in November, ensuring that Wespac and NOAA are adequately managing important fisheries and marine resources is a fight he is eager to take on.
“From my perspective I am deeply concerned about the health of our world’s oceans. I think they’re under mortal risk right now,” he said.
Wespac has a vital role in protecting the oceans and he’s not convinced the council is following the intent of the Magnuson-Stevens Act when it comes to sustainability.
“It’s telling that the overall council does not have any insights into the use of the funds and that it is a very tightly controlled fund, which always makes you concerned about essentially a slush fund that’s available only to a few to achieve purposes that are themselves mysterious,” Case said. “So it’s a great concern that we don’t know what’s going on.”
Getting answers to those questions in the face of Simonds’ reluctance to open up the Sustainable Fisheries Fund’s records to deeper scrutiny may take much stronger congressional oversight. Case, who sits on the House subcommittee that oversees NOAA, says he’s prepared to pursue that.
He says he is working closely with Schatz and that both want to see how NOAA and Wespac respond to inquiries that are being made before calling for a full-blown federal investigation.
“We’re both committed to getting to the bottom of it,” Case said.
Civil Beat Washington, D.C., correspondent Nick Grube contributed to this report.
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