VZCZCXRO3662
RR RUEHKN
DE RUEHKN #0053/01 1092330
ZNY CCCCC ZZH
R 192330Z APR 09
FM AMEMBASSY KOLONIA
TO RUEHC/SECSTATE WASHDC 2262
INFO RUEHC/DEPT OF INTERIOR WASHINGTON DC
RUEHKN/AMEMBASSY KOLONIA 2625
RHMFISS/CDR USPACOM HONOLULU HI

C O N F I D E N T I A L SECTION 01 OF 03 KOLONIA 000053 
 
SIPDIS 
 
E.O. 12958: DECL:  4/17/2019 
TAGS: PGOV EAID FM
SUBJECT: FSM PRESIDENT SEEKS U.S. HELP TO REFORM COMPACT 
INFRASTRUCTURE AND FISCAL REQUIRMENTS 
 
REF: A) HUGHES-PULA TELCON OF APRIL 17; B) KOLONIA 29; C) KOLONIA 17 
 
CLASSIFIED BY: Miriam K. Hughes, Ambassador, Amembassy Kolonia, 
State. 
REASON: 1.4 (d) 
1.(C) SUMMARY.  President of the Federated States of Micronesia 
(FSM) Emanuel Mori invited Ambassador Hughes to his office on 
April 15 for a rare one-on-one meeting.  He said he had just 
fired an American contract employee of the U.S. Department of 
the Interior (DOI) whom the President believed had mismanaged 
Compact infrastructure projects and complicated communication 
with the FSM Congress and the four FSM States.  The President 
further confided that he felt overwhelmed by the complexity of 
Compact requirements.  He asked the Ambassador for help.   End 
Summary. 
 
 
 
PRESIDENT DISMISSES KEY U.S. COMPACT CONTRACTOR 
 
 
 
¶2. (C) On short notice, FSM President Mori  invited Ambassador 
Hughes to meet in his conference room on April 15.  He dismissed 
an aide who tried to come in.  In a rare one-on-one meeting that 
lasted nearly an hour and a half, the President said he had just 
fired an American contract employee of the U.S. Department of 
the Interior's Office of Insular Affairs (DOI/OIA), Robert 
Westerfield, who managed the Compact infrastructure projects. 
The President said he had considered this move for many months, 
and finally concluded he had to take action. 
 
 
 
¶3. (C) Complaints from the Congress and FSM states included 
unsatisfactory communication with this manager, incidents of 
explosive anger, lack of transparency, inordinate delays, and 
poor prioritization of projects, among other charges.  Mori said 
he had seen evidence of these problems.  He claimed that 
Westerfield had additionally ordered new cars for the PMU and 
for contract engineers in the four states, expressly against the 
President's orders.   He feared that this employee, who 
controlled access to all the contracts, might abscond with 
valuable information.  Mori said he recently discussed these and 
other charges with Westerfield, demanded copies of all 
documents, and offered him a less central position in the State 
of Yap.  It is unclear whether the American accepted the offer 
of alternate employment.  Mori said Westerfield remained angry. 
 
 
 
 
¶4. (C) The President asked Ambassador Hughes for help to find a 
better qualified candidate to manage contracts and Compact 
construction projects within the FSM National Government (FSMNG) 
Project Management Unit (PMU), which oversees all Compact 
infrastructure projects and is funded entirely by DOI's Compact 
infrastructure grants.  He said the PMU required a construction 
engineer with solid technical background and program management 
expertise.  This person would need to communicate sensitively 
and responsively with Micronesians, particularly with the FSM 
Congress and officials in the four states.  The President said 
he would welcome a qualified Department of Defense (DOD) 
representative from the U.S. Army Corps of Engineers or from a 
DOD Civic Action Team, for example.  The Ambassador agreed to 
follow up with DOI and DOD.  (Note:  Ambassador subsequently 
called OIA Director Nik Pula (Ref A), Admiral French of 
COMNAVMAR in Guam and the U.S. Charge in Palau.  Pula was aware 
of the President's decision.  He concurred with engagement of 
DOD and others to try to find a qualified replacement as soon as 
the FSMNG released a vacancy announcement.) 
 
 
 
COMPACT INFRASTRUCTURE MANAGEMENT NEEDS MORE INFORMATION SHARING 
 
 
 
¶5. (C) President Mori appeared tired and thin.  He alluded to 
hurtful attacks by the FSM Congress, which recently passed a 
bill to transfer the PMU from the President's office back to the 
Department of Transportation, Communication and Infrastructure 
(TC&I), where the PMU had previously resided.  Shortly after 
Mori vetoed this bill, the Congress voted unanimously to 
override the veto - one of many recent defeats for the President 
in the FSM Congress.  "I only attached the PMU to my office to 
get it working better," Mori explained wearily. 
 
 
 
¶6. (C) The Ambassador recalled Mori's initiative of over a year 
ago.  She said both nations had hoped to make a major push to 
start up Compact infrastructure projects, which had been snarled 
for the past five years in management disputes and law suits. 
Now that some of the projects were moving, Mori said the FSM 
 
KOLONIA 00000053  002 OF 003 
 
 
could not afford to lose any momentum.  Ambassador responded 
that relocating the PMU under the Department of TC&I might 
actually facilitate communication and progress.  TC&I Secretary 
Francis Itimai had already commenced meetings to analyze delays 
in projects, starting with a five-year wait for an early 
childhood education center in Yap, which Yap's Governor Anefal 
had protested vigorously to the Ambassador and others.  She 
noted that the TC&I Secretary had responded immediately to these 
concerns.  Itimai and members of the FSM Congress had 
additionally begun to consider opening small TC&I branch offices 
in each state to enhance coordination, as called for in the FSM 
Strategic Development Plan.  Mori agreed that these were useful 
initiatives and that he could still retain close oversight of 
the PMU through his TC&I Secretary. 
 
 
 
¶7. (C) Ambassador noted that better communication with the 
Embassy and others was vital to dispel charges of lack of 
transparency, favoritism and cost overruns.  FSM Congressional 
and state officials had expressed strong concerns about their 
perceptions of secrecy, inequities among the state projects, and 
decisions on expensive construction material and elaborate 
project designs (Ref C).  Many Micronesians blamed OIA and the 
PMU for ruling out the option of prefabricated buildings, which 
had supposedly worked well in the Republic of the Marshall 
Islands.  Officials of New Zealand, Australia and China 
complained that they did not have early access to information on 
projects that might interest companies of their nations. 
 
 
 
¶8. (C)  Ambassador suggested that the PMU could launch its own 
easily accessible website to preview projects, explain bid 
procedures, and post budgets.  Mori responded, "What a good 
idea.  I will do that at once with the public information 
officer."  Ambassador added that the Embassy must be advised in 
advance and invited to groundbreaking ceremonies for projects 
that are funded with U.S. taxpayers' money.  She questioned why 
a big groundbreaking ceremony for the Chuuk road project had 
been scheduled in the dead heat of a very competitive 
gubernatorial election.  Mori said he had also questioned the 
timing, admitting he was disgusted and had declined to attend. 
He acknowledged that the incumbent governor (who recently 
emerged victorious in a close runoff vote) had helped stage an 
elaborate ceremony in Chuuk, which enabled the Governor to 
publicly claim credit for securing the biggest infrastructure 
project in FSM history.  Mori explained that the PMU advised him 
that the groundbreaking had to proceed owing to demands of the 
construction company, which would otherwise lose time and money. 
 Mori concurred with the Ambassador that in the future, a clear 
chain of command for infrastructure decisions needed to be 
established. 
 
 
 
COMPACT PROBLEMS DRAIN THE PRESIDENT 
 
 
 
¶9. (SBU) Finally, President Mori asked if the Ambassador had 
ever read the amended Compact? Ambassador Hughes responded that 
no one should attempt to read from cover to cover over 300 pages 
of such a comprehensive agreement.  Rather, she used the Compact 
as a reference resource whenever questions arose, which happened 
frequently.  The President was pensive and unusually candid, 
remarking, "Well I have tried and tried to read the Compact, and 
I just don't understand it.  It is too hard for me."  Mori, who 
is a former banker and graduate of business administration from 
Guam University, asked, "What do you call all those financial 
rules at the end?"  The Ambassador acknowledged that the Fiscal 
Procedures Agreement, which reflected U.S. federal grant 
requirements, seemed to be widely misunderstood in the FSM. 
 
 
 
¶10. (SBU) Mori confided that he feared the FSM would never be 
able to implement the amended Compact effectively.  He suggested 
that the Five Year Review of the Compact needed to be a joint, 
substantive exercise in which specific provisions are revisited. 
 He indicated that the FSM was also prepared to work with 
sympathetic members of the U.S. Congress and noted in particular 
the boost the FSM had received from the recent visit and 
friendship of Congressman Eni Faleomavaega (Ref B). 
 
 
 
¶11. (SBU)  On the margins of DOI's recent Pacific island 
business conference in Honolulu, Mori said he had met with U.S. 
Senators Inouye and Akaka, Representatives Faleomavaega and 
Bordallo, the Governor of Hawaii and some state senators, among 
 
KOLONIA 00000053  003 OF 003 
 
 
others.  He claimed that all these officials agreed that the 
Compact was very complicated and reforms needed to be 
considered, including for Compact implementation and fiscal 
requirements and procedures.  At the same time, the President 
said representatives from Hawaii and Guam complained that a 
rising influx of destitute Micronesians was taxing their budgets 
and creating "a huge public expense," particularly in health 
care.  "I am caught in a very awkward position," Mori concluded. 
 He asked for innovative guidance and understanding from the 
United States Government. 
HUGHES