Acting Chief Procurement Officer Kenneth Kuaea faced some tough questions on Wednesday concerning a pending lawsuit by a company he and his wife operated against ASG, and an unpaid loan of $500,000 from the State Small business Credit initiative Program for the same company.
The questions came from Senators Tuanaitau Malaki and Togiola Tulafono during Kuaea’s confirmation hearing before the Senate Government Operations Committee chaired by Togiola.
The Kuaeas’ company, Klaod Solutions, filed a complaint in the High Court of American Samoa in October of 2022 contesting the award of the American Samoa Safe Travel System contract to Datahouse Consulting Inc. Klaod Solutions was one of the 7 companies that had submitted bids for the contract. The case, which is still pending in High Court, names the Office of Procurement as the defendant.
When asked if it wasn’t a conflict that he would be director of the very office that was being sued by the company he’s affiliated with, Kuaea acknowledged the concerns, but said that he is no longer working with the company. He also explained that when the Acting Attorney General met with the Office of Procurement to discuss pending disputes against ASG, he recused himself when the complaint by Klaod Solutions was discussed.
Play Audiokuaea-recuse
(Transc.) Kuaea: I don’t have any interests to— to look into the case any further. With respect to myself and at procurement office, I’ve given all of that to the deputy. And to the AG’s office. And I recuse myself from any involvement in that case.
By Kuaea’s testimony, Klaod Solutions was 100% owned by his wife Luisa. The company incorporators are himself, his wife and his wife’s sister, Patricia Suesue. He said after he and his wife were appointed as acting directors, they discussed with their attorney to put the company in a trust in their daughter, Hanna’s name. Mrs. Kuaea has been appointed as the Director of the Medicaid Office.
Senator Togiola followed up so the company is still owned by your wife since the Trust has not been set up. He advised Kuaea not to evade the questions, but to answer truthfully.
Klaod Solutions had operated a call center and, according to Kuaea, was subcontracted by a New York company. He said they had 75 employees. However, the company suffered a financial loss because during the COVID pandemic business hours were limited to 6am to 6pm, and their contract with the New York company required them to open from midnight to 7am.
ASTCA provided the company space to operate and high speed internet. Klaod Solutions received a loan of $500,000 for the operation, however, according to Kuaea, they have not made a payment towards the loan as the company suffered a financial loss because they couldn’t serve their New York client with the limited business hours allowed under the emergency declaration for COVID.
He told the hearing that 400 jobs that had been lined up for their business were lost because of the limited hours of operation during COVID. Kuaea said this time they have not made any payments, but he indicated that will try to pay up.
Kuaea explained that he was the Chief Operating Officer for Klaod Solutions, and Mrs. Kuaea was the Chief Executive Officer. He said he received a salary, while his wife worked for free. Asked if he applied for unemployment benefits for COVID, Kuaea said he didn’t but his wife did, and she received benefits. Togiola said he didn’t understand why he didn’t apply when he was the one who was paid a salary, while his wife did, yet, according to his testimony, she worked for free. Kuaea said his wife sacrificed her salary to pay the workers.
The Senate vote on Kuaea’s confirmation was on the Senate calendar for Wednesday, however, Togiola moved to delay it until the committee has received documents that Kuaea was asked to provide relating to the unemployment claim for Mrs. Kuaea and the payments that Klaod Solutions received from their service call center.
