American Samoa Minimum Wage

Claim:   House Speaker Nancy Pelosi is linked to the provision of wage and tax breaks for companies in American Samoa.

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MIXTURE OF TRUE AND FALSE INFORMATION

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Example:   [Collected via e-mail, October 2008]

Variations:   A version which began circulating in e-mail in March 2010 asserts “Snopes validates the facts below,” which is not the case.

Origins:   Prior to 2007, the U.S. territories of Northern Marianas and American Samoa were exempt from federal minimum wage standards; instead, the minimum wage standards in those territories were established by a committee appointed by the U.S. Department of Labor. The Fair Minimum Wage Act of 2007 (H.R. 2), introduced to Congress in January of that year, sought to revise U.S. federal minimum wage standards, including the gradual raising of the federal minimum wage from $5.15 to $7.25 per hour. When it came to light that the bill extended federal minimum wage standards to the Northern Marianas but exempted American Samoa, Republican critics charged that this circumstance was the doing of House Speaker Nancy Pelosi, a favor she was granting because the island’s primary employer was headquartered in her district:

Speaker Pelosi was the Congressional leader of the party that sponsored H.R. 2 (214 of the bill’s 222 cosponsors were Democrats), and it is true that Del Monte Foods’ San Francisco headquarters are located within the boundaries of the California district she represents in Congress. However, we haven’t found any evidence of a direct link between Speaker Pelosi and the decision to exclude American Samoa from the minimum wage legislation: Democrats maintained that Speaker Pelosi did not work on the details of the bill, and that the exemption for American Samoa was created at the behest of the island’s Congressional delegate:

Faleomavaega did indeed strongly advocate that American Samoa be allowed to retain its exemption from federal minimum wage standards:

As a result of the controversy, Democrats asserted that American Samoa would indeed be covered in the final version of the bill:

(The revised minimum wage regulations for American Samoa are detailed here.)

Whatever the motivation might have been for the initial exclusion of American Samoa from the minimum wage bill, news accounts do not support the claim that the exemption came about because Del Monte Food was “a major contributor to Pelosi.” The New York Post noted that “Pelosi’s spokeswoman denied receiving any campaign contributions from Del Monte, which federal campaign records confirm,” and even the conservative Washington Times observed that:

We also could find no confirmation for the claim that Speaker Pelosi’s husband owns “$17 million dollars of StarKist stock.” StarKist is a subsidiary of Del Monte Foods,* and the H.J. Heinz Company in turn owns nearly 75% of Del Monte’s stock. Various pieces of Internet flotsam alternately claim that Mr. Pelosi owns

$17 million dollars worth of “StarKist stock,” “Del Monte stock,” or “H.J. Heinz stock,” but although the Pelosis hold investments in stocks and real estate worth many millions of dollars, we could not find any hard information confirming that they own millions of dollars of stock in either Del Monte Foods or H.J. Heinz (Since the financial disclosure rules that apply to members of Congress contain a number of loopholes that can obscure members’ investment holdings, it’s also difficult to definitively rule out that the Pelosis might hold such an investment.)

The $700 billion “bailout bill” (H.R. 1424) that Congress began working on in September 2008 in response to an economic crisis in the U.S. contained hundreds of various tax provisions typically (but not necessarily accurately) described as “earmarks,” most famously an “exemption from excise tax for certain wooden arrows designed for use by children.” One of those provisions modified the Tax Relief and Health Care Act of 2006, which had created an economic development credit for American Samoa, to extend that development credit from applying to the “to the first two taxable years of a corporation” to applying to “the first 4 taxable years.” We have so far not been able to determine, from available public information, which member(s) of Congress initiated the addition of that provision.

(* In late 2008 the Korea-based Dongwon Group acquired the StarKist seafood division of Del Monte Foods.)

Last updated:   5 April 2010

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Sources:

    Lathem, Niles.   “Pelosi Bill Blasted As Pork for Tuna.”

    New York Post.   13 January 2007.

    Weisman, Jonathan.   “Minimum-Wage Hike May Reach to Samoa.”

    The Washington Post.   13 January 2007   (p. A2).

    Wildermuth, John.   “Pelosi’s Husband Prefers a Low Profile.”

    San Francisco Chronicle.   1 January 2007.

    Associated Press.   “Democrats Pledge to Extend Federal Minimum Wage to All U.S. Territories.”

    International Herald Tribune.   13 January 2007.

    The Washington Times.   “Pelosi Moves to Close Samoa Wage Loophole.”

    13 January 2007.