With the Honolulu Authority for Rapid Transportation poised to dole out about $1 billion in contracts for the Honolulu rail project this year, the city Ethics Commission is worried that there isn’t enough government oversight to ensure that private companies aren’t given sweetheart deals.

The commission is preparing to send a letter to Mayor Kirk Caldwell and Honolulu City Council members in the coming days to ask them to support legislation that would expand the commission’s oversight of HART contractors and other companies receiving city contracts.

The letter was discussed during an ethics commission meeting last week and a draft copy was provided to Civil Beat.

Ethics Commission staff say the letter, which is expected to be signed by the commission’s chair, Charles Gall, could go out on Friday.

In recent years, there have been an increasing number of complaints about independent contractors relating to “unauthorized access to confidential city information, nepotism, and use of taxpayer dollars for political purposes,” according to the letter.

However, commission staff say they lack jurisdiction to bring what they describe as “probable ethics violations” before the ethics commission, a seven-member body in charge of enforcing the city’s ethics laws.

While HART contractors hired by the city are paid with money from taxpayers, the commission’s staff say it’s hard to subject them to the laws that apply to traditional city employees.

These “individuals should be held accountable to the public because they are being paid for by millions of taxpayer dollars, function as if they were city employees, and have significant influence over city operations,” according to the letter.

“The commission’s enforcement and administration of the city’s ethics laws will protect the public against conflicts of interest, self-dealing and preferential treatment influencing government decisions.”

There have long been concerns about conflicts of interest involving the rail project which, with a $5.26 billion price tag, is the state’s most expensive public works project ever.

In December, Civil Beat reported that HART’s second in command was recently a vice president of CH2M Hill, the company that edged out other bidders for a $46.1 million engineering contract. The contract raised questions about whether HART’s deputy executive director, Brennon Morioka, played a role in deciding who would get the contract.

HART officials stressed at the time that Morioka had no involvement in awarding the contract and that state procurement law forbid him from being on the scoring committees.

Public relations firms hired by HART have also attracted scrutiny for engaging in inappropriate political activities.

Former Honolulu City Council member and current state Rep. Romy Cachola accused HART consultant Bennette Misalucha of using public money to lobby him to support the rail project.

UPDATE: However, the ethics commission found no ethical misconduct by Misalucha, according to Ethics Commission Director Chuck Totto.

Doug Carlson, who HART paid more than $536,000 for communicating on its behalf, repeatedly attacked former Hawaii Gov. Ben Cayetano on his rail blog. Cayetano was running for mayor on a platform focused on killing the rail project.

After he took over as head of the agency in 2012, HART CEO Dan Grabauskas eliminated many PR contracts, including Carlson’s.

An audit of HART’s public relations and community involvement contracts released in December raised many of the same concerns that the Ethics Commission is now articulating.

“In our view, consultants have significant influence over rail project operations and how taxpayer dollars are spent, but have minimal accountability for their actions and decisions,” according to the auditor’s report.

While the Ethics Commission drafted the letter, not every member seemed comfortable with the result at the meeting last week.

Gall, the commission chair and a construction and environmental law partner at Honolulu firm, Kobayashi, Sugita and Goda, raised questions about whether the ethics commission was overstepping its authority.

“I don’t think there is a basis for our jurisdiction over (independent contractors),” Gall told fellow commissioners, noting that the category was too broad. “That’s not something I can support.”

The words “independent contractors” were later struck from the draft of the letter and replaced with “individuals who are not city employees and that have significant involvement with city works.”

Regardless, the intent is to increase oversight of major government contractors and subcontractors.

Gall didn’t return a call from Civil Beat Thursday.

No one else on the commission raised concerns about the letter during the meeting.

Grabauskas, through HART spokesman Scott Ishikawa, declined to comment on the letter because it was “unofficial.”

There are also questions about whether expanding the jurisdiction of the commission might add an unnecessary layer of government oversight.

University of Hawaii professor Danielle Conway, who specializes in procurement law, told Civil Beat that nothing is preventing the commission from expanding its authority over contractors.

But doing so would duplicate state procurement laws that already govern conflict-of-interest issues, she said.

“The ethics commission may be attempting to make it explicitly clear that these entities and their employees, these private employees, be covered,” she said. “But essentially they are covered (by procurement law) because they are performing an inherently government function.”

Companies that violate such laws can receive negative performance ratings or be temporarily prohibited from receiving future government contracts.


Draft letter to Mayor Kirk Caldwell and City Council members:

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