‘He’s spokesperson
for everything’
Council members criticize
By Gordon Y.K. Pang
Budget Director Malcolm Tom for
exceeding the limits of his job
Star-BulletinThe administration of Mayor Jeremy Harris, particularly Budget Director Malcolm Tom, is under siege.
Employees are upset about layoff plans. City Council members are unhappy with Harris' budget. And critics are balking at a government reorganization.
The chief architect for the plans is Tom, whose influence with Harris, many say, rivals that of Managing Director Bob Fishman's, the second-in-command.
The City Hall spotlight has been on Tom frequently since he first left a lucrative consulting job to become the city's top money man in 1995. But never has the light burned as hotly as this year.
Tom has taken a personal hit.
Real property tax assessors say Tom pressured them into raising assessments in 1995 to keep tax revenues up. They showed that values were changed just before assessment cards were mailed out.
Tom has denied the allegation and said he asked assessors to look at the values from a different perspective.
City Council members have called for an investigation by the Police Department and the FBI.
Some Council members, as well as the head of the Tax Foundation of Hawaii, said regardless of whether any wrongdoing can be proved, the incident was the clearest example that Tom has been overextending his reach as budget director.
"What right did he have to cross the department line into basically the Finance Department?" queries Lowell Kalapa, director of the Tax Foundation of Hawaii.
Councilman Mufi Hannemann said it's clear that Tom overstepped his duties. "I think he can recommend, but they say they were pressured. The way it's being described, it was not advice."
Former Corporation Counsel Darolyn Lendio offers a different opinion. Tom was worried the lower assessments would greatly affect the city's ability to maintain services.
Assessors "weren't happy" when Tom offered a differing opinion, Lendio said. "They felt Malcolm, as well as myself, were questioning their tax assessments."
Lendio said she and Tom put together a task force that included property value expert Bob Vernon and a group of litigators to combat assessment appeals. The team won the three major appeals in late 1995, she said.
(Vernon was majority owner of John Child and Co., a real estate consulting company that Tom's wife, Karen Char, now has a 52 percent stake in.)
Kalapa points to the assessment flap as reason why the reorganization proposal to merge the Budget and Finance departments is flawed. Under the reorganization plan, Tom would be a chief of budget and financial officer, second only to Fishman.
"I think the budget director's job is so challenging that just taking care of it alone is work enough," Councilman Duke Bainum said.
Hannemann, for over a year, has referred to the "troika" of Fishman, chief of staff Ben Lee and Tom that has been running the city.
Tom, critics say, is involved in too many issues that don't fall under the City Charter's definition of a budget director.
When Harbor Court developers ran into financial trouble and ended up owing the city $12 million in back lease and lease-to-fee purchase agreements, it was Tom negotiating a settlement.
When the Ewa Villages Revitalization Plan turned into a financial disaster in a real estate downturn, it was Tom who led the way in developing a bail out plan.
"He's a spokesperson on everything," said Councilwoman Donna Mercado Kim. "He's obviously one of the anointed ones."
"Finance collects taxes, Budget balances the books," Kalapa said.
"You don't want Budget to drive how Finance collects the money."
Tom said he believes that is a narrow view of government.
"The mayor has always asked his Cabinet members to assume a wide range of duties," he said. "He uses his people based on capabilities. The mayor is not a typical bureaucrat."
The mayor has frequently looked to him to assist in other areas because of his background in financial and management consulting, he said.
Those tasks include financial management of the city, thus his key involvement in the reorganization, in addition to the current budget and accompanying layoffs.
Tom defended the reorganization plan. "The day of line organizations is extinct at the senior management level," he said.
Fishman said he stands behind Harris' decisions.
"(Tom and I) never try to compete with each other," Fishman said. "At least I don't try to compete with him."
Other Tom supporters also talk about Harris' philosophy to bring private sector people into the city as part of his Cabinet.
Councilman Jon Yoshimura said Tom's strength is also his greatest weakness. "Because he has a strong private sector background, I think he's efficient but somewhat dictatorial and that style doesn't always work," he said.
Bainum also said Tom has thrown his weight around, even among those who are supposed to be his equals. "When an unnamed director tells me that the reason his budget was cut this year was because of a battle with Malcolm, I have a problem," he said.
Councilman Steve Holmes said Tom has done a good job in doing what Harris has asked of him.
"I think departments often are like little empires with people who have a set way of doing things," Holmes said. "Malcolm has challenged a lot of those assumptions."
"I just think there's a certain amount of overconfidence that (the administration) is going to make things right," Holmes said.
"He has a direct approach," said former colleague Lendio. "People are going to criticize the method, but I think it's well worth it."
Budget Chairman John Henry Felix said he likes the way Tom has challenged "traditional bureaucrats" in the push toward downsizing government and found him to be "a good listener."
But, like Tom's critics, Felix believes often "Malcolm takes on too much. He has a very full plate."
Holmes said Tom has yet to learn the greatest difference between government and the private sector. "It always takes the government too long to do things than you think going in," he said. "My sense is Malcolm is trying to produce recognizing that he's got a limited time to operate."
Malcolm James Tom
Age: 51
