City budget director faces
allegations that he pressed
for higher Waikiki values

By Gordon Y.K. Pang
Star-Bulletin

City Council members fear the public will lose confidence in the real property tax system because of charges that Budget Director Malcolm Tom meddled with property assessments.

Eight of nine Council members have signed a letter to acting Police Chief Lee Donohue calling for an investigation.

"The nature of these allegations goes to the very heart of public trust in government and, left unresolved, will erode citizen confidence in the management of the City and County of Honolulu," Council members said in the letter.

The ninth Council member, Steve Holmes, is out of town.

Ray Higa, retired property tax administrator, told Council members Tuesday that he received a memo in 1995 from then-Finance Director Russell Miyake asking him to reconsider assessments for an unspecified number of Waikiki properties at higher 1994 levels to keep tax revenues higher.

Miyake's letter says the assessments were based on untested formulas.

Six Waikiki landowners who protested their higher assessments that year successfully appealed them.

Other employees of the Finance Department's Real Property Tax Division also have said that they believe Tom pressured Miyake and Higa to change assessed valuations that are used to calculate property taxes paid by homeowners.

Tom has denied the allegations and said yesterday that assessors, if they had concerns about the process, should have raised them three years ago.

"When people hear they've been tampering with tax assessments, their confidence in government is lost," Councilwoman Donna Mercado Kim said. "What assurances do they have that they're paying their fair share?"

"If in fact we've been tampering with real property taxes, it could happen to them," Councilman Mufi Hannemann said.

Councilman Jon Yoshimura said he doesn't know if anything illegal was done. "But I do think something that shouldn't have happened, happened," he said. "The budget director has no business interfering in the matters of the Finance Department.

Donohue, through spokesman Brandon Stone, said police will take a look at any information involving criminal activity brought to them. But Stone said Donohue is inclined to turn over any in-depth investigation on the issue to the FBI or the attorney general's office.

"We may do some initial inquiries as the Council has asked," Stone said. "But we want to avoid the appearance of any political taint on the situation."

Tom said yesterday: "What's happening now is, clearly emotions are running very high, there are a lot of changes occurring in that division, and it's a situation where you have high emotions."

Tom denied exerting any pressure but acknowledges that he has asked Miyake and his successor, Roy Amemiya, to take a second look.

"No one has ever asked anybody in that department to review their work," Tom said.

If the assessors felt there were improprieties, they should have immediately brought their concerns to Miyake, Tom said.

Mayor Jeremy Harris said in a release that allegations that Tom meddled with tax assessments are "unwarranted" and "unfair."

The attacks, Harris said, are "nothing more than a political vendetta and character assassination."

The mayor added that, like Tom, he supports the Council's call for an independent investigation.

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Budget director could be denied
say in forfeiture funds

Star-Bulletin staff

City Council Budget Chairman John Henry Felix says he will recommend to his colleagues that they shelve a bill giving the budget director authority to determine how asset-forfeiture funds are spent.

City Prosecutor Peter Carlisle had objected to the proposal on Monday, arguing that it took away the only discretionary fund he had.

On Tuesday, police officials also balked at the bill.

Police Maj. Gordon Young said the drug-forfeiture fund was intended to augment the department's budget, not supplant it.