4 more arrests made
in Ewa Villages case

The scandal involves the relocation
of area tenants with city money

By Gordon Y.K. Pang
Star-Bulletin

Four more people have been arrested in the widening investigation into the relocation of Ewa Village tenants using city funds.

Arrested yesterday were: a Kahaluu man, 54; a Waianae woman, 27; an Enchanted Lake man, 20, and a 28-year-old Ahuimanu man.

All are being investigated for first-degree theft, bribery of or by a witness, illegal ownership of a business, and money laundering. The Kahaluu man, listed on business registration records as the president of RJ Hauling, additionally is being investigated for second-degree forgery.

The four were released pending investigation.

Eleven people have been arrested in connection with the case, including two city employees -- Michael Kahapea, property management branch chief for the Department of Housing and Community Development, and Norman Tam, the city's fair housing officer.

City officials say Kahapea was the overseer of Ewa Village relocation contracts handed out to friends and associates. Officials say there is evidence of bid-rigging, and that some winning bidders ran bogus companies.

Most, if not all, of the nine non-city people arrested were officers of, or have ties to, four companies that received millions in reimbursements for relocation. Those companies are Titan Moving, American Hauling, RJ Hauling and Specialty Pacific Builders.

Also, the state Business Registration Division lists Kahapea as president of Wailani Corp., a Las Vegas-based water processor company that lists two of the others arrested as officers.

City Budget Director Malcolm Tom said yesterday that the process for selecting the relocation companies was correct. What was improper, he said, was when city employees "apparently were able to arrange for these moving companies to put in estimates that were too high."

Those being relocated had the option of either receiving a fixed amount for relocation or hiring their own relocation companies. If they hired their own, they needed to find three estimates and choose the lowest one, he said.

A major problem, Tom said, was that the relocations required more than simply moving, thereby eliminating more high-profile companies like Island Moving or Bekins.

"They have to move, remove all of the improvements from the existing locations, build if there needed to be a new facility, install equipment," he said.

There continues to be turmoil within the City Council over the case. Budget Chairman John Henry Felix said he will not back a move by former Budget Chairman Duke Bainum to seek an independent investigation of the Ewa Villages project.

Felix said such a study would be "not only costly but counterproductive."

Councilman Mufi Hannemann agreed, stating that Honolulu police and prosecutors should handle the matter first.

On a related matter, Felix moved to Nov. 19 a Budget Committee informational hearing on an audit of the Ewa Villages plan and other city housing projects; the meeting was originally set for Nov. 10. The audit is highly critical of the city, and says the housing fund would have a $26.6 million deficit.

Mayor Jeremy Harris' administration has objected vehemently to the audit and called on its author, KPMG Peat Marwick, to withdraw it.