A public agribusiness corporation that was the target of a critical audit earlier this year is still struggling to reinvigorate Hawaii’s agricultural industry.

That audit found that the Agribusiness Development Corp. lacked a strategic plan to grow more local food as well as written policies to guide its work. The corporation’s leaders told lawmakers on Tuesday that it needs more time to address some of those issues and disputed some of the recommendations.

Meanwhile, a House investigative committee charged with evaluating the ADC’s progress in complying with the audit also appears torn between digging into the agency’s issues and continuing to raise questions about State Auditor Les Kondo, who came under fire from House Speaker Scott Saiki’s office earlier this year.

On Tuesday, Kondo pleaded with the investigative committee to focus on fixing the ADC.

“The issues that we’ve reported have significant repercussions,” Kondo said. “The state has paid a high cost for ADC’s past inactions, and we continue to pay.”

Despite those concerns, ADC leaders at a hearing with lawmakers Tuesday morning spent an hour trying to highlight the progress their agency has made in the last 20 years.

ADC Executive Director Jimmy Nakatani along with staff on Tuesday defended the agency’s work in the face of criticism from state lawmakers and the state auditor. Screenshot

Most of the 22,000 acres under the ADC’s control is occupied by farmers growing a variety of crops including papaya, ginger and sweet potatoes, according to an ADC presentation. Some farmers are also growing non-food crops, such as coffee beans and Christmas trees.

But after the presentation, ADC Executive Director Jimmy Nakatani and his staff tried to downplay the audit findings during questioning by state lawmakers and outright rejected some recommendations.

One in particular is that the agency should have written rules and policies.

“Since inception, ADC appears to have operated under the notion that we are supposed to address the unique requirements, and needs for change, and we are supposed to do it quickly,” Myra Kaichi, the ADC’s senior executive assistant, said. “And rules would retard that, would slow that process.”

Rep. Mark Hashem said he did not buy that explanation and challenged the leaders to adhere to Kondo’s recommendations. He said the agency’s current rules are insufficient.

“Your organization is to the point where you need written procedures to follow in case Jimmy (Nakatani) is not there,” Hashem said.

Kaichi said that a subcommittee of the ADC’s oversight board is in the middle of revising those rules, but are running into “policy issues so huge they are asking us to get them help.”

“It’s turning out not to be as simple as we thought it would be,” Kaichi said, adding that the board may need to find a consultant to revise the rules.

Myra Kaichi, ADC’s executive assistant, explained why writing new rules for the agency may take longer than expected. Screenshot

A strategic plan for the agribusiness corporation will also take more time.

According to the auditor’s report, Nakatani previously stalled on developing a strategic plan because he didn’t see the need for one.

“The executive director thinks such a plan is unnecessary: ‘I have everything up here,’ he said, pointing to his head,” Nakatani is quoted as saying in the auditor’s report.

When Rep. David Tarnas asked what exactly he meant, Nakatani said he was quoted out of context.

In addition, Nakatani told Tarnas he did not pursue another plan because of competing priorities.

Rep. Amy Perusso, who represents part of Oahu that includes some ADC lands near Wahiawa, questioned why the agency has not put more resources into addressing the auditor’s findings.

She asked the ADC who should take charge in leading change in the agency: the ADC itself or the Legislature?

Kaichi said she hopes for a broad discussion. Nakatani told Perusso that since the audit was only published this year, the ADC would need more time to address its findings.

Kondo Fires Back At Committee

In a separate hearing Tuesday afternoon, Kondo spent about 10 minutes arguing with the committee chairwoman, House Majority Leader Della Au Belatti, over a simple factual question regarding what dates the audit began and ended.

Belatti said that he was uncooperative, but Kondo accused the committee of trying to access the auditor’s work papers, which are confidential by law.

In a closing statement, Kondo again chastised the House committee for conducting what he sees as another probe of his office.

“We do not play politics,” Kondo said. “The fact that you are attacking us clearly reflects some members’ priorities. It apparently is not a priority, and seemingly never was a priority to understand our audit and ADC’s actions to address the findings. It was never about holding ADC accountable. It was never about helping ADC to be the leader that the Legislature envisioned.”

Belatti said it’s not fair for Kondo to draw conclusions about the committee’s investigation or its members’ intentions since it is still doing its work. The committee has plans to subpoena more records from the ADC and another state land agency, and could have more hearings in October.

It’s set to have a report on its findings in time for the next legislative session in 2022.

The meetings pick up again Thursday when the committee hears from state Agriculture Director Phyllis Shimabukuro-Geiser.

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