Friday, February 5, 1999

Auditor’s criticism
of computer contract

STATE Auditor Marion Higa has criticized state airport officials for their method of soliciting bids for a computer system, maintaining that state procurement laws may have been violated. She contends that millions of dollars may have been lost by writing bid specifications that only IBM software could accommodate. However, writing specifications solely for the purpose of broadening competition may not be wise. In this case, more specific requirements were deemed essential for the task at hand.

The auditor cited a 1997 effort by the Airports Division to evaluate, consolidate and re-engineer its computer systems, which contained numerous different programming languages and have aged over the years. Bids were solicited for a computer system including a software tool that essentially simplifies the process of developing programs. IBM is the only seller of that tool in Hawaii and thus was the only bidder. After IBM was awarded the contract, it was chosen in a nonbid contract for the next phase of the computer overhaul because IBM was the contractor that began the project.

Transportation Secretary Kazu Hayashida notes that the process for the first contract was approved by the Department of Accounting and General Services, and the decision to use a nonbid process in the second contact was approved by the State Procurement Office.

Hayashida agrees with the auditor's criticism of deficiencies in billing and collection practices, adding that computer system advances are aimed at correcting them. The division currently is negotiating with Duty Free Shoppers over payment of $62.4 million in concession fees. Hayashida denies Higa's assertion that the Airports Division has yet to develop a plan to prepare computers for transition to the year 2000, with completion expected by June.

Criticism of the Airport Division's slow progress at modernizing its business practices may be warranted. The audit of the division should be useful in that respect. The contention that procurement laws may have been violated is less convincing because of the nature of computer needs and capabilities.


Gingrich’s reprimand

TWO years ago the House of Representatives reprimanded then-Speaker Newt Gingrich and fined him $300,000 for bringing discredit on the House by using tax-exempt donations for political purposes and submitting false information to the House Ethics Committee.

Earlier the Ethics Committee had voted to recommend the speaker's punishment after receiving the final report of the panel's investigative subcommittee and its counsel, James M. Cole. The report concluded that Gingrich had failed to seek adequate legal advice regarding his use of tax-deductible donations to help finance a college course he taught that promoted a Republican agenda and that he had made inaccurate statements to the committee.

Gingrich denied violating tax laws and described the college course as nonpartisan. But he agreed to pay the $300,000 for making misleading statements.

Now the Internal Revenue Service has cleared the organization involved in the controversy of violating its tax-exempt status when it helped to fund Gingrich's course at two Georgia schools. The IRS ruled that the Washington-based Progress and Freedom Foundation's donations to Gingrich were "consistent with its stated exempt purposes" and that Gingrich's course was "educational and never favored or opposed a candidate for public office." The IRS said the foundation "did not intervene on behalf of candidates of the Republican Party merely by promoting" themes in the course.

At the time of Gingrich's reprimand, Rep. Benjamin Cardin of Maryland, the highest ranking Democrat on the Ethics Committee, said there was ample evidence that the speaker had violated tax laws by using tax-exempt donations to promote "his partisan political crusade." The IRS decision clearing the foundation of violating the terms of its tax-exempt status invalidates Cardin's claim. In view of the IRS ruling, Gingrich's reprimand and fine seem excessive if not totally unjustified.


Convention center

EVER since the Hawaii Convention Center opened last year, local residents have been complaining that their groups are excluded from using the $350 million facility. Yes, they are, and there's a reason.

The convention center was built to attract large national and international conventions that could not be accommodated elsewhere in Honolulu. If local groups are allowed to use it, they may interfere with the scheduling of the conventions that the center was meant for.

Moreover, the convention center was not built to take business away from the city's Neal Blaisdell Center or hotel convention facilities. That would have been foolish and wasteful. It was built for the conventions that those facilities can't handle.

The Convention Center Authority is now considering bending its rules somewhat in response to residents' complaints. But forget about wedding and birthday parties. Only a strictly limited range of events would be eligible.

The proposed rules would require that the local convention be too big to be handled at the Blaisdell Center or other facilities; comply with strict transportation requirements because of the center's limited parking spaces; pay the going rental rate and book the center no longer than six months in advance, while agreeing to change plans if an offshore convention wants its date.

Not many local events can meet those requirements, but that's OK. To open the center to every local organization that wanted to hold its conference there would defeat its purpose.

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