U.S. - Pacific
Defending Accountability
Charges of Neo-Colonialism Are Unwarranted
Much has been said and written about the proposed amendments to the Compact of Free Association with the Federated States of Micronesia and the Republic of the Marshall Islands. The so-called “accountability provisions” have received the most attention.
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The U.S. has designed a completely new system to ensure that Compact funds are used productively. First, we will target our funding to six high-priority sectors, with health and education receiving the top priority. Second, we will introduce performance standards and measures so that we can gauge the effectiveness of Compact expenditures and make appropriate adjustments. Third, we will provide for detailed plans to ensure that expenditures are supported by proper analysis, and frequent reports so that we can monitor our progress. Fourth, we will make Compact funds subject to the same standard requirements and remedies that are used for U.S. domestic grants. Finally, we will hire a new Pacific-based team to provide oversight.
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There are a number of misconceptions about the new accountability provisions. Since I head the office that will implement the new financial assistance program—including the accountability provisions—I believe that I have a responsibility to dispel myths about the new process.
Myth one: The RMI and FSM national budgets will be subject to U.S. approval.
This simply isn’t true, and this misconception underlies the complaint that the new provisions will violate the sovereignty of the governments. What is true is that bilateral committees, one for the RMI and one for the FSM, will approve how Compact funds will be used. The U.S. will have a one-vote majority on each of the bilateral committees, which will control Compact funds only. All local funds will continue to be controlled by the national legislatures.
Although the bilateral committees will have final say on the allocation of Compact funds, the committees will defer to the priorities set by the island governments which will propose the Compact budgets. The bilateral committees will not substitute their judgment for the judgment of the island governments—they will simply ensure that the proposed budgets comply with the letter and spirit of the Compact.
Myth two: The new provisions are designed to make the RMI and FSM accountable to the U.S.
When we refer to “accountability” under the amended Compact, it is not a matter of making one sovereign nation accountable to another. Accountability refers to the collective accountability that all three governments share to both the American taxpayer and to the people of the Islands. All three governments have a collective responsibility to ensure that the American taxpayer’s money will not be wasted and, just as importantly, a collective responsibility to ensure that we deliver on our promise to make life better for the people of the islands.
Myth three: The new accountability provisions were imposed by the U.S. on the FSM and the RMI.
All three governments support the new accountability provisions. In fact, some of the most enthusiastic supporters are government “line managers” in the RMI and the FSM—those with the day-to-day responsibility for delivering public services to the people. These managers have endured years of frustration, struggling to keep essential programs going while knowing that a more productive allocation of Compact funds could have made their jobs easier.
It is insulting to the island governments to insinuate that they do not want to ensure that their people receive the full benefit of the Compact assistance program. This is a goal that we all share, and we can only achieve this goal by working together to implement a strong accountability program.
Myth four: The accountability provisions are punitive.
The new provisions include standard remedies for waste, fraud and abuse—including the right to withhold funds in certain cases. These remedies are the same ones that state and local governments in the U.S. are subject to when they receive grants from the federal government. In fact, the RMI and FSM are already subject to these very same remedies when they receive U.S. domestic grants outside of the Compact. It is not reasonable to suggest that the U.S. should not have the right to exercise the most basic remedies in the event that Compact funds are misused. The exercise of remedies, however, is the very last resort. The U.S. side is well aware that the best way to protect Compact funds is to continue to have a strong, cooperative relationship with our partners in the islands.
Myth five: The FSM and RMI are not equipped to deal with the new accountability requirements.
As noted above, the new accountability provisions are based upon requirements applicable to domestic grants from the U.S. government. Since the RMI and FSM each participate in several U.S. domestic programs, they have a great deal of experience in complying with these requirements.
Myth six: The accountability provisions cannot be properly implemented by a team based in Hawaii.
We intend to implement the U.S. responsibilities for Compact oversight with a Hawaii-based team that will be supplemented with staff based in the FSM and the RMI. The Hawaii base is a good central location from which the team can interact with its counterparts and fellow team members in the Freely Associated States as well as with its federal partners in Hawaii, San Francisco and Washington, D.C. The team will make frequent monitoring visits to the FSM and RMI, and will also review and analyze all of the plans and reports that will be submitted under the Compact.
Some have argued that the Compact implementation team should be based entirely in the RMI and FSM—although this view has been advanced by different people for completely different reasons. Some believe that more in-country presence is needed to prevent waste, fraud and abuse. We believe, however, that the new Compact gives us plenty of tools to prevent or remedy the possible misuse of funds.
Others have argued that we need a larger in-country staff to provide hand-holding and guidance to the RMI and FSM governments—like benevolent colonial overlords, reminiscent of the old Trust Territory days. But those days are over, and trusteeship has been replaced with partnership. Nation-building is not the job of the oversight staff, although the Compact allows the freely associated states to fund these types of activities if they choose to.
Myth seven: The accountability provisions reflect the belief that the original Compact has been a failure.
Nothing could be farther from the truth. The Compact has been a tremendous success. America’s former Trust Territory wards have emerged as free, vibrant, sovereign democracies. The U.S. has achieved its strategic objective of denying other powers control over vast areas of the Pacific. The Freely Associated States have benefited from the U.S. defense umbrella, and their people enjoy the right to live, work and study in the U.S. Most importantly, these nations have become America’s most loyal allies in the world. Cynics say that this loyalty has been purchased with Compact aid. But no amount of money could purchase the loyalty that leads so many of these Islands’ sons and daughters to serve in the U.S. military, risking their lives to protect the freedom of all Americans.
As for criticism of the original Compact, it’s important to remember that that document invented a comprehensive new type of international relationship that was completely untested at the time. It should surprise no one, and shame no one, that with the wisdom of 17 years of experience, the parties can think of ways to improve the Compact.
The financial assistance and accountability provisions of the original Compact provide some opportunities for improvement. The U.S. and the freely associated states are committed to embracing those opportunities.
