Four key members of Congress are requesting a federal investigation into a murky fund that’s connected to commercial tuna fishermen in Hawaii and three U.S. Pacific island territories.

In a letter last week to Inspector General Peggy Gustafson, U.S. Reps. Ed Case of Hawaii, Raul Grijalva of Arizona, Jared Huffman of California and Gregorio Sablan of the Northern Mariana Islands asked for a comprehensive audit of the millions of dollars that have flowed through the Western Pacific Sustainable Fisheries Fund, stretching back to at least 2012.

They have concerns about the National Oceanic and Atmospheric Administration’s oversight and how the Western Pacific Regional Fishery Management Council has doled out the money.

“The questions that we have asked the IG to review implicate Wespac overall,” Case said in an interview Tuesday.

The request for an independent federal review follows Civil Beat’s three-part investigative series about the fund. The special report, published in June, revealed potential conflicts of interest, political favoritism and a lack of accountability as officials used federal dollars to further commercial fishing interests.

Congressmen are calling for a federal review of a fisheries development fund that receives money from Hawaii’s longline tuna industry. Cory Lum/Civil Beat

Some contracts “raise red flags” because they fail to disclose the contractors involved in providing the services, the congressmen said in their letter. They pointed at unidentified researchers and a teacher in Hawaii who received more than $300,000 in grants from the fund but their names were not disclosed and the project descriptions were vague.

The congressmen asked for a review of one sole-source contract in particular. Wespac gave a $354,525 grant to Noah Shirakawa to lease a fishing vessel and provide bottomfish training in the Northern Marianas. He’s the son of a Big Island fisherman, Ray Shirakawa, who has served on the council’s advisory committees and lobbied the state to open up restricted bottomfish areas.

The congressmen were particularly displeased by the “lack of candor” in Wespac Executive Director Kitty Simonds’ answers to their questions earlier this year about certain contracts, grants and other aspects of the fund.

“The questions that we have asked the IG to review implicate Wespac overall.” — Congressman Ed Case

They described her responses as indirect during a congressional oversight hearing in May that was held by the House Natural Resources Subcommittee on Water, Oceans, and Wildlife. Huffman chairs the committee, which is charged with developing and overseeing the implementation of laws managing domestic and international fisheries and other marine resources. Case, Grijalva and Sablan are members. Grijalva is the chair of the House Natural Resources Committee.

The committee followed the hearing up with a long list of written questions for Simonds, but her responses to those fell short of members’ expectations.

She only wrote “request acknowledged,” for instance, when asked to provide copies of all contracts entered into by the fund for the last 10 years and documentation of all amounts paid from the fund during the same time period.

“I don’t think the committee is going to let this go,” Case said.

Simonds did not respond to a message seeking comment for this story.

Proper Analysis Of Contracts ‘Impossible’

The congressmen also highlighted contracts awarded to Dean Sensui and John Gourley in the years leading up to their appointments to Wespac.

“Although there is some level of disclosure in the paperwork filed by Mr. Sensui and Mr. Gourley with the Council, a proper analysis regarding the propriety of these contracts is impossible because of the lack of detail provided to Congress,” the lawmakers said in their letter to the IG.

Westpac Meeting John Gourley and Dean Sensui chat during meeting.
The congressmen said “insufficient detail” has been provided to properly analyze the contracts with Wespac members John Gourley, right, and Dean Sensui. Cory Lum/Civil Beat

Sensui, who owns a media business called HI Production Associates, received $46,000 from the fund through no-bid contracts before he joined the council in 2016. The former news photographer was hired to take underwater videos as part of a survey of shelters where fish naturally gather.

He did not respond to a message seeking comment this week. In a past interview, he said he got the job through Makani Christensen, a political ally of Simonds. Christensen received $41,000 in contracts from the fund to charter the vessel that was used during Sensui’s underwater video surveys.

Gourley owns a company called Micronesian Environmental Services. He has received more than $70,000 in contracts from the fund for a fish study off Saipan before he joined the council.

He leveraged that work to secure a $290,000 grant in 2017 to expand the study. That money comes directly from NOAA with no council involvement. He did not respond to a message seeking comment, but has said everything has been done aboveboard.

The congressmen are also worried about “actual or perceived conflicts of interest” in awarding grant money for an economic analysis of fisheries to a person whose husband is an economist at NOAA.

Honolulu computer scientist Sunny Bak-Hospital, who’s also a licensed real estate agent, is married to Justin Hospital, an economist with the Pacific Islands Fisheries Science Center who has worked closely with Wespac.

Her firm, Mirae Info Design, has received more than $95,000 in grants from the Sustainable Fisheries Fund.

She was off island and unavailable for comment this week. In a December interview with Civil Beat, she said she keeps her work strictly separate from her husband’s and does not see any conflict of interest. 

‘Slush Fund’ Warrants Scrutiny

Since May 2017, Civil Beat has been requesting contracts and a detailed accounting of the Sustainable Fisheries Fund as well as other Wespac financial and administrative records through the Freedom of Information Act. 

NOAA, which has handled the FOIA request for Wespac, has released hundreds of pages of records but is still working on providing basic budget documents like the general ledger that shows all the money going in and out of the agency and the special fund.

Congress has been similarly stymied in its efforts to obtain information.

Congressman Ed Case speaks about the Mueller report.
Congressman Ed Case says he is pursuing the Wespac inquiry because he wants to make sure fisheries resources remain sustainable and not simply exploited for commercial fishermen. Cory Lum/Civil Beat/2019

In July 2017, the Senate Appropriations Committee directed NOAA to provide a complete account of the last five years of activity of the fund and any other fund or grant program under Wespac’s control. The scope was expanded in 2018.

NOAA’s reports were deemed “incomplete” by Case and his House colleagues. U.S. Sen. Brian Schatz of Hawaii, who initially pushed through the language in the appropriations bill, has also expressed his disappointment in NOAA’s responses and the audits Wespac has pointed to as proof of good financial accounting. The last three audits don’t even mention the fund by name.

“Both the House and Senate have expressed concerns about NOAA’s oversight of the Fund,” the congressmen said in their letter to the IG. “The responses from these inquires have only raised further concerns.”

Case said he had a meeting with Chris Oliver, assistant administrator for NOAA Fisheries, and was told that the agency is taking concerns about the fund seriously.

But Case said he left feeling worried that the agency was more focused on the end result — whether the fishery is being managed sustainably — than how Wespac was handling the money.

If Wespac is “basically operating a slush fund, which is taxpayer money,” Case said, “It’s not OK no matter what the result is.”

Simonds has said she sees the money that flows into the fund as money that comes from and belongs to the fishing industry.

The Sustainable Fisheries Fund was initially seeded by millions of dollars in fines against foreign vessels fishing illegally in U.S. waters around remote Pacific islands. But in the absence of such penalties in recent years, the only source of funding has come from Hawaii’s longline tuna fishermen.

The Hawaii Longline Association, which represents most of the 144-vessel fleet, has had agreements with U.S. Pacific island territories — Guam, American Samoa and the Commonwealth of the Northern Mariana Islands — to use half of their tuna quota in exchange for $250,000 payments into the fund.

Congress has been stymied in its efforts to obtain information from NOAA and Wespac.

The longliners have hit their quota early for the past several years. This year, the fishery closed July 26 when they caught their allotted 3,554 metric tons of bigeye tuna in the Western and Central Pacific Ocean.

But it reopened soon thereafter thanks to their fishing agreement with the Northern Marianas that lets them catch another 1,000 tons. When that one runs out, an agreement with another territory can kick in.

The fund is supposed to be used for fishery development projects. Aside from funding research, Civil Beat found the money has gone toward extending a marina for longliners in American Samoa, which many agreed was a good project, but also little-used boat ramps, a struggling fish marketplace and rusting ice machines. 

Simonds oversees the grant application process that’s used to tap into that money. The project proposals come from local officials in the territories and Hawaii.

Case doesn’t buy the argument that it’s somehow not public money because it comes from the fishing industry. He sees it as paying for increased use of a public resource.

“Is the ocean private property or is it the commons?” he said.

Ethical Rules, Internal Controls Need Accounting

Case did not have a timetable for when the IG would determine if it would conduct the requested audit or how long that would take, but he estimated it could be awhile.

In addition to the audit, the congressmen asked for an accounting of what internal controls are used to prevent conflicts of interest, a determination of whether any expenditures violated ethical rules, a determination of whether the goods and services contracted were actually delivered and a list of all contractors who received money from the fund and how much.

Money from the Sustainable Fisheries Fund is being used to expand a dock for longliners in American Samoa. Nathan Eagle/Civil Beat

They also want the inspector general to determine if NOAA followed all public transparency requirements concerning the fund’s contracts, whether NOAA’s oversight was proper and if there are any conflicts of interest regarding NOAA employees.

Michael Tosatto, regional administrator of NOAA’s National Marine Fisheries Service, did not respond to a message seeking comment Tuesday.

At the end of the day, Case said this is about the overall health of the ocean and oversight of public money.

He considers the oceans to be in “mortal danger” due to over utilization of the resource on an unsustainable basis throughout the world as well as threats from climate change and pollution.

“The bottom line is: Are we going to pay attention to our oceans before it’s too late?” Case said. “And also, I just don’t like federal funds being used in this fashion.”

Read the letter to the IG below.

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