The Caroline Islands had a complicated colonial history, administered successively by Spain, Germany, and Japan. Some of the bloodiest battles in World War II were fought here as Allied troops attacked Japanese bases. After the war, the Carolines were included in the United Nations (UN) Trust Territory of the Pacific (TTPI) created with the United States as administering authority in 1947. A long series of negotiations began in the 1970s to bring the TTPI to political independence. In this process, four Caroline Island groups decided to remain in a confederation, separate from Palau. In July 1978, voters on these islands ratified a Constitution that was the founding document of the FSM. After national elections, the present national and state governments were installed, and the Constitution took effect in May 1979. The governments of the FSM and the United States executed a Compact of Free Association (CFA), which was approved in June 1983 and signed into effect in November 1986. Provisions of the CFA include U.S. rental payments and free immigration access of FSM citizens to the United States. The CFA ended in 2001, at which time there was an automatic one-year extension of the financial aid portion of the CFA and a two-year interim period of negotiations began.
This history, combined with a general distrust of centralized authority on the part of islanders, has produced a political structure that is distinctive for a nation of such small size. Three levels of government operate in FSM: national, state, and municipal. In addition, traditional governance exercised by local leaders continues to play a major role. The national Constitution delineates executive, legislative, and judicial branches, but each state also has its own Constitution, differing in some detail from the others. At the national level, the executive branch is headed by a president who is both chief executive and head of state. He and his vice president must be from different states within the federation. They are chosen from among the members of the FSM Congress by majority vote of that body and must then resign their congressional seats, which are filled by special election. They cannot serve more than two consecutive terms of four years each.
FSM's Congress is a unicameral body of 14 senators, but the Constitution provides for two kinds of members, with different terms of office. One member is elected at large from each state for a four-year term. Ten members are elected for two-year terms from congressional districts within each state that are based on population. There must be at least one such district in each state, and Congress must reapportion itself into districts at least every 10 years. Among the senators elected to two-year terms in 1997, there was one from Kosrae, one from Yap, three from Pohnpei, and five from Chuuk. Any citizen 18 years of age may vote, but a member of Congress must be at least 30 years old.
There are no political parties based on ideological lines. Rather, voting often follows family, clan, and island allegiances. Frequently, a local chief may "instruct" his people to vote in a certain way, creating bloc voting on many candidates and issues. In the 1999 elections for two-year terms, all 10 incumbents were returned to Congress; one ran unopposed in Chuuk, and all three were unopposed in Pohnpei. The four At-Large seats were taken by incumbents, except for the Pohnpei seat, which was taken from Resio S. Moses by Vice President Leo A. Falcam. Former President Jacob Nena won the At-Large seat in Kosrae.
In the March 2003 elections, five newcomers were elected to Congress—three from Chuuk, one from Kosrae, and one from Pohnpei. President Falcam was defeated in Pohnpei by Resio Moses and Mohner Esiel. Vice-president Redley Killion won a seat from Chuuk, and was poised to succeed Falcam when the new Congress was to meet to choose a president on 11 May 2003, but until Congress met, Falcam remained in office.