The long-awaited federal audit of a secretive fund managed by the Western Pacific Regional Fisheries Management Council is “just the beginning” of a congressional inquiry, Hawaii U.S. Rep. Ed Case said in a joint news release Monday.

The 46-page report published Wednesday by the Commerce Department’s Office of the Inspector General found $1.24 million in questionable expenses following an 18-month investigation. That amounts to one out of every $6 that flowed through the fund between 2010 and 2019.

Case and Congressmen Raul Grijalva of Arizona, Jared Huffman of California and Gregorio Sablan of the Northern Mariana Islands requested a comprehensive review of the Western Pacific Sustainable Fisheries Fund soon after Civil Beat published its three-part special report on the fund in 2019, which revealed potential conflicts of interest, political favoritism and lax oversight when it came to using federal dollars to further commercial fishing interests.

“The results are deeply alarming,” Grijalva, who chairs the House Natural Resources Committee, said in the release. “The Inspector General’s audit is a necessary first step towards the transparency and accountability that is needed to ensure Wespac is not wasting the taxpayers’ money it is entrusted with. As damning as this report is, it raises more questions about Wespac than it answers. Their financial activities should continue to be examined.”

Wespac has disputed the findings contained in the audit, and underscored in a letter to the Inspector General that nothing illegal was found.

On Tuesday morning, the House Water, Oceans and Wildlife Subcommittee, chaired by Huffman, is holding the first hearing on Case and Huffman’s Sustaining America’s Fisheries for the Future Act, which would be the most significant update to the Magnuson-Stevens Act in 15 years.

Congressman Ed Case FAA Whistleblower Helicopters Press Conference
Hawaii Congressman Ed Case says federal dollars should be spent on sustaining and conserving vital marine ecosystems, not on controversial awards and questionable and unsupported spending. Kuʻu Kauanoe/Civil Beat/2020

The MSA created Wespac and the seven other regional councils to manage the nation’s fisheries. It also established the Sustainable Fisheries Fund for Wespac to use to aid fisheries development projects and programs in the region. The fund received $7.4 million from 2010 to 2019 from fines on foreign fleets fishing illegally in U.S. waters and from fishing agreements between the U.S. Pacific territories and Hawaii’s longline fleet that greatly increases its annual quota of 3,500 tons of bigeye tuna.

The Case-Huffman bill would add transparency and reporting requirements for the fund while removing Wespac’s direct control and giving it instead to a new four-member panel appointed by the governors of Hawaii, Guam, American Samoa and the Northern Marianas.

“The Western Pacific Council’s management of the Western Pacific Sustainable Fisheries Fund Award has long been questionable, and this audit of the Fund paints an unflattering picture of Wespac’s financial activities, to say the least,” Huffman said in the release.

Wespac leaders — including Executive Director Kitty Simonds, Chair Archie Soliai and the four vice chairs — told the congressmen in a letter last month that their bill could make management of the fund less transparent and limit input from the fisheries community.

Case said in the release that the Inspector General’s report “underscores the need for substantial reforms in the way that Wespac does business.”

“Our federal dollars should be spent on the critical mission of sustaining and conserving vital marine ecosystems, not on controversial awards and questionable and unsupported spending at the behest of council staff with potential conflicts of interest,” he said. “This report is just the beginning of our inquiry and response. We must act on the report’s findings to prevent any further waste and abuse of government funds by Wespac and potentially other regional fishery councils operating under the same rules.”

Sablan said in the release that the Inspector General’s report confirmed the concerns that led him and his colleagues to request the audit in the first place, noting the questionable expenditures and breaches of the rules on sole-source contracts and other financial controls.

“I look forward to the decision of NOAA’s Grants Management Division on the appropriate next steps to recover any money that was improperly paid,” he said.

Richard Bachman, assistant inspector general for audit and evaluation, informed Simonds Wednesday that she has 30 days to develop “a complete response that addresses each audit finding and recommendation” and to identify any areas of disagreement and why. That response will be considered by the National Oceanic and Atmospheric Administration when it decides what actions to take with respect to the findings in the audit.

Consequences could include termination of current awards, denial of future awards or several other actions.

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