The Honolulu Authority for Rapid Transportation should add a “tip hotline” to encourage people to report suspected fraud or other misconduct in connection with the Honolulu rail project, according to newly appointed HART board member Natalie Iwasa.
Iwasa, who is a CPA, has made that proposal before. It became clear during her first HART board meeting Thursday she intends to pursue the idea.
The board on Thursday was briefed on an independent audit of HART’s books for last fiscal year by the firm N&K CPAs Inc., and Iwasa noted HART Finance Committee Chair Dean Hazama and Chief Financial Officer Ruth Lohr signed a statement for the audit that they have no knowledge of any allegations of fraud by HART employees or others.
Iwasa reminded the board of her suggestion that HART establish a “tip hotline” and adopt a formal board policy on fraud. She asked N&K principal Lawrence Chew about those proposals, and Chew replied that they are a “best practice.”
“I’m just wondering if that could be a topic that we could put on the agenda, or if we could move forward in that direction, or at least discuss implementing those best practices,” Iwase told the HART board.
HART board Chairman Toby Martyn said a tip line and a fraud policy could be “an excellent point of focus” for the board once it updates and finalizes its internal audit function.
Acting HART Executive Director Lori Kahikina said in an interview after the meeting that she is also open to the idea, adding: “I’m not opposed to that if it’s best practices.” A spokeswoman for HART said the rail authority has never had a fraud or tip hotline.
HART has spent more than $4 billion so far on the Honolulu rail project, and has been the subject of a federal investigation since at least 2018 that involves the FBI and the U.S. Attorney’s office.
Both HART and city employees have been subpoenaed in connection with the inquiry, but the focus of the investigation has never been publicly disclosed by the U.S. Department of Justice.