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By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Jan. 6) - Fourteen months after disallowing loans to its directors and employees, the Development Bank of American Samoa (DBAS) has reversed the policy.

The moratorium went into effect shortly after Utu Abe Malae took over as DBAS' acting president, in September 2004, following the public outcry over loans approved for board members and their families, employees and their families, as well as ranking government officials.

Confidential reports leaked to the media show that millions of [US] dollars in loans to bank directors and employees were made before and after the 2000 elections, many of which were in arrears.

"The moratorium disallowing loans to employees and board members from the Direct Loan Program was emplaced October 2004," said DBAS acting president, Utu Abe Malae, responding to Samoa News inquiries yesterday. "At that time, loans made to employees and directors was 14 percent of the total portfolio - an excessive proportion even though the bank's auditors did not comment on it one way or anotherThe bank had a bad public image because the community perceived that bank employees and directors were helping themselves ahead of other customers. They had a valid complaint.

"Now that the bank's liquidity has improved considerably and procedures and policies are in place to prevent abuse, the board has decided to lift the moratorium," he added. "Nevertheless, procedures and policies are only as good as the people in charge of executing them or in the director's or manager's ability to self-police."

The former American Samoa Power Authority executive director said safeguards are in place to ensure conflicts of interest will not occur. He said safeguards implemented include the Code of Ethics policy "that specifically prohibits self-serving loan approvals."

"Documentation of loans is more thorough than it was a year ago thanks to procedures developed by the Credit Manager and Legal Counsel," he said. "Hopefully, with the new whistle blower policy in place, the bank's and the public's interests will have an additional safeguard in place."

Current DBAS board members are: Senator Liufau Sonoma - board chairman; Malemo Lafoia Tausaga - vice chair; Mrs. Ta'iulagi Mauga; Rep. Gaoteote Palaie Tofau, Mrs. Fiapa'ipa'i Fruean; Taulapapa Will Sword and Samana Semo Ve'ave'a Jr.

January 13, 2006

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