The committee tasked by the Hawaii House of Representatives to examine two state audits is expected to make numerous recommendations next week to the Legislature based on its work over the past eight months.

While the draft is still being written, the committee chair, House Majority Leader Della Au Belatti, said Monday that the report may ask the state attorney general to investigate allegations of witness tampering, intimidation and retaliation on the part of State Auditor Les Kondo.

She cited the section of Hawaii Revised Statutes that addresses those offenses.

The recommendation was prompted by what Belatti described as new information that surfaced last week alleging that Kondo directly contacted a business partner of one of the witnesses.

That witness, Ross Murakami of auditing firm KMH, was called to testify under oath before the committee on Monday.

The House Investigative Committee examining two state audits meeting at the Capitol Jan. 10, 2022
The House committee examining two state audits is preparing final recommendations that may include asking the Hawaii attorney general to investigate State Auditor Les Kondo. Screenshot/2022

Murakami confirmed that his partner, Wilcox Choy, was contacted at least twice by Kondo after Murakami appeared before the House panel Dec. 15. Murakami also said that KMH’s financial audit of the Agribusiness Development Corp. was not entirely completed, reversing his earlier testimony that it had been.

Kondo strongly rejected the allegations, saying he had only informed Choy that Murakami’s earlier sworn testimony had been wrong.

“I didn’t ‘tamper,’ ‘intimidate,’ or ‘retaliate’ against Ross Murakami or anyone else,” Kondo said in an email Monday. “I notified Wilcox Choy that Mr. Murakami’s sworn testimony was factually inaccurate. While Mr. Murakami testified that, but-for my discussion with Mr. Choy, he would not have corrected the factual inaccuracies.”

“It is important that the committee’s record be appropriate, truthful, and correct,” he added. “If Chair Belatti and others are truly interested in knowing the status of the ADC financial audit, they could ask ADC, Accuity (the financial auditor), or the Office of the Auditor.”

Kondo called Belatti’s suggestion that his actions were inappropriate and may be criminal “irresponsible and outrageous.”

Meanwhile, Belatti — worried that evidence might be destroyed — demanded that any communications between Choy and Kondo be obtained through subpoena to the committee by Friday morning.

Della Au Belatti, Ross Murakami, the House Investigative Committee examining two state audits meeting at the Capitol Jan. 10, 2022
Rep. Della Au Belatti interviewing Ross Murakami about testimony he delivered in December but is now amending. Screenshot/2022

Auditor’s Office Still At Issue

The latest twist in a lengthy, convoluted and politically tinged process suggests that the tensions between Kondo and his office and Belatti and her committee will continue into the 2022 legislative session that begins Jan. 19.

While the committee is expected to recommend how the Legislature can improve the management and operations of the ADC and the special land development fund operated by the Department of Land and Natural Resources — Kondo’s office found much fault with both agencies — it is clear that there will be recommendations in the report on how to improve the office of the auditor as well.

For example, the report might entail calling for an independent performance audit as well as requiring the auditor’s office to update auditing policies and training to comport with national standards. For his part, Kondo has consistently complained that the House is interfering with his office’s independence.

While most panel members seemed open to Belatti’s suggestions, some did not sit well with committee member Rep. Dale Kobayashi, an auditor by trade.

Dale Kobayashi and the House Investigative Committee examining two state audits meeting at the Capitol Jan. 10, 2022
Rep. Dale Kobayashi argues that the committee is too much focused on Les Kondo and not on what his office had to say in two recent audits of state agencies. Screenshot/2022

Referring to what is described as Chapter 4 of the draft report — it has not been released to the public, so its content is difficult to characterize — Kobayashi said he found much of it “really shocking.”

That chapter, he said, was mostly “innuendo seemed designed to cast a negative light on the office of the auditor.”

Kobayashi said sections of the proposed draft report seemed to confirm his long-held concern that the House committee was focused on attacking Kondo rather than examining the ADC and DLNR audits.

“Much of what was said pertaining to the auditor was way over the line and can even be construed as defamatory,” he said, adding that those portions of the draft did not reflect his positions and that “much of what is said in this report is incorrect and improper.”

Belatti acknowledged Kobayashi’s concerns but did not agree with them, telling him at one point that they had heard the same arguments from him before and that his opinion was only that of one committee member. She said the report, when completed, would reflect the position of the eight-member panel.

Few committee members raised any objections on Monday. Reps. David Tarnas and Amy Perusso also agreed that it is within the committee’s purview to examine the performance of the auditor, even though the House resolution establishing the committee last year did not explicit identify that as a goal.

Other possible recommendations could be that the House establish permanent standing committees to investigate state matters, and to require that the auditor’s office share working papers with investigators — something that Kondo was largely successful in keeping confidential in a court hearing in November.

The views of all the subpoenaed witnesses — including Kondo — will be incorporated into the final report.

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