When it comes to public relations for Honolulu’s $5.26 billion rail project, the city’s auditor is OK with coloring books and lanyards.

But paying a consultant more than a half-million dollars to spout hyper-political, pro-rail sentiments on his blog is another story.

On Monday, Honolulu Auditor Edwin Young released his agency’s findings related to the Honolulu Authority for Rapid Transportation‘s public relations and community involvement contracts.

The audit is especially critical of a long-running blog by Doug Carlson of Carlson Communications, calling it “questionable” and slanted. Carlson was paid more than $563,000 for his work.

Since 2005, the city has spent $13.9 million on public relations contracts in general, mainly through its consultants Parsons Brinckerhoff and InfraConsult.

But some of the PR work caused the Honolulu City Council to call for an audit of the program.

And HART Executive Director Dan Grabauskas also nixed nearly $3 million in contracts after finding some of them to be excessive or unnecessary.

The audit released Monday found that most of the work that was being done by HART complied with federal rules, with a notable exception — Doug Carlson’s blog. Carlson is a well-known former local journalist and congressional staffer. His work for HART raised eyebrows when it became generally known he was living in California and writing the posts.

The commentary received little traffic yet gained a lot of attention from those who didn’t support the rail project, Grabauskas has said.

Much of this had to do with Carlson’s attacks on former Hawaii Gov. Ben Cayetano, who was running for mayor on an anti-rail platform.

“During our review of the sub-consultant’s blogs from September 2008 to November 2012, we found 118 blog posts that used questionable public involvement techniques,” the auditor’s report said.

“Rather than providing informative, useful, and accurate information on important issues relating to the project, the blog posts were editorial in nature and used disparaging remarks about certain individuals whose views were different from the author.”

What’s more, Carlson’s invoices didn’t give much detail on the services he provided. Still, HART approved the payments to Carlson.

Despite the concern over Carlson, the audit applauded Grabauskas’ efforts to rein in PR spending, saying the executive director has saved about $2.8 million by canceling contracts and shrinking the public outreach staff.

But city auditors also warned HART that it was relying too heavily on outside consultants to help with public outreach.

For years, HART has been urged by previous consultants to hire its own in-house PR staff, but has been slow to make the transition. That poses certain oversight risks, according to the audit.

“In our view, consultants have significant influence over rail project operations and how taxpayer dollars are spent, but have minimal accountability for their actions or decisions.

“If HART continues to rely on consultants to help manage and implement the rail project, it should improve its oversight and accountability of the consultants.”

In one example, city auditors were concerned that HART did not have necessary backup documentation for the consultants’ work. In fact, HART told the auditors just to contact the consultants for the information.

This concerned the auditors because the lack of paperwork prevented HART from properly overseeing the work, including a way to prevent fraud, waste and abuse. It also hindered the agency’s abilities to control costs.

The audit also points to the fact that consultants are not required to disclose their financial interests to the Honolulu Ethics Commission, something that city employees are required to do.

This was particularly concerning to the auditors because certain consultants have the authority to direct where millions of dollars in taxpayer funds are funneled.

But without documentation showing potential conflicts of interest, the auditors found it would be difficult or impossible to track this information.

“During our review, we did not find any evidence that consultants had any conflicts of interests,” the report said. “However, Honolulu taxpayers need some assurance from HART that taxpayer funds are properly spent and accounted for.”

The auditors also noted the disparity between the pay for HART’s consultants, who act like city employees, and actual city employees.

While city employees were taking pay cuts and forced days off during the recession, many consultants working for Parsons Brinckerhoff and InfraConsult received raises.

Because these increases were built into the contracts HART had to absorb the extra cost.

Grabauskas disagreed with many of the audit’s findings and recommendations in a 15-page response that said HART exceeded the requirements for public involvement.

He also defended the city’s use of consultants, saying that HART provides sufficient oversight.

“HART management has, and continues to actively and properly monitor and manage the activities and performance of its consultants,” Grabauskas said. “Under or improper influence and control by consultants has not occurred.

“While the audit report does not specify whether the result pertains only to public involvement consultants, all consultants at HART are supervised by HART staff and management who are responsible to the HART Board of Directors and City taxpayers for all management decisions and outcomes.”

Read the entire audit along with Grabauskas’ full response here.

You can read some of our previous coverage of rail contracts and the audit here:

No Public Accountability for Rail PR Contracts

Filipino PR Flap Enflames Rail Talks

Honolulu Council Members Push for Audits of HART, Sewer

Honolulu Rail PR Contractors Whacked

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