Friday, October 15, 1999

Hawaii State Seal

Hayashida says
he was unaware of
ethics conflict

A state contract awarded to
the firm that employs his wife
was deemed a conflict

By Pat Omandam


State Transportation Director Kazu Hayashida was not aware he was committing an ethics violation when he awarded two contracts to the civil engineering company that employs his wife.

Transportation spokeswoman Marilyn Kali said today Hayashida thought a conflict of interest would only apply if his wife, who is a salaried employee at Belt Collins, was a stockholder, partner or owner of the company. She is not.

Kali said Edean Hayashida had worked at Belt Collins long before her husband became transportation director. And he was not aware it was a violation if he personally awarded a contract to his spouse's company.

Once Hayashida found out it might be a conflict, he sought the opinion of the state Ethics Commission. The commission yesterday confirmed it was a conflict and Hayashida has since recused himself from personally awarding such contracts, Kali said.

In 1997, Hayashida chose Belt Collins from a short list of five companies best qualified to conduct a master plan and environmental study of an airport at Upolu Point on the Big Island. The $197,500 contract was completed on Aug. 31.

In 1998, Hayashida awarded a $300,000 contract to Belt Collins for a highways division management system. That contract is almost complete.

Kali said Hayashida signs between 40 and 50 contracts a day and relies on his staff to ensure there are no conflicts with these companies. Companies interested in potential design consultant projects at the department submit their qualifications to the department. DOT officials narrow the list to between three and five companies and a selection is made from that list, Kali explained.

She added Belt Collins has done numerous projects for the department for the past several decades.

Meanwhile, Gov. Ben Cayetano said today the state Legislature may have to review the ethics law because he doesn't agree that if a spouse of a state official works at a company it automatically means that person has a financial interest in the company.

Cayetano said the Ethics Commission cleared Hayashida of any conflict from a recent contract he awarded to his son, but the public perception remains there is a conflict of interest.

As a result, the governor said he will put out a directive to department heads that people who do have relatives who are going to be vying for contracts should not be in the position of awarding the contracts.

Still, Cayetano said the contracts awarded by Hayashida to Belt Collins did not involve a substantial amount of money and he believes it is unfair to hold Edean Hayashida personally responsible for getting the contract for her company.

"I think it is stretching things to say if you work for someone you somehow have a financial interest," Cayetano said.

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