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Wednesday, August 2, 2000

City & County of Honolulu

Hannemann and
Harris spar over the
scandal at Ewa Villages

The challenger says it
took the mayor four years
before he called in police

Kahapea guilty on most charges

By Mary Adamski

Construction industry members posed questions about stimulating building and streamlining government red tape as two top Honolulu mayoral candidates faced off in an early forum on the campaign trail.

But the first question to Mayor Jeremy Harris and former city Councilman Mufi Hannemann last night concerned the Ewa Villages case in which $5.8 million in relocation funds was siphoned out of the city budget.

(A Circuit Court jury today found former housing official Michael Kahapea guilty on 43 of 46 counts of theft and related charges and not guilty on two counts. The jury was deadlocked on one count..)

"Don't you both share some of the blame for the scandal?" was the query at the dinner attended by 250 people, sponsored by the Building Industry Association of Hawaii, the General Contractors Association and 10 other organizations. In posing the question, moderator Keoki Kerr noted that Harris was managing director under Mayor Frank Fasi and later became mayor during the 1993-97 period, while Hannemann was on the Council that appropriated $1 million a year in relocation funds.

Mayor predicted conviction

"I believe we will get a conviction," Harris said, taking credit for setting off the police investigation that led to the charges. "I think it's clear that everyone in city bears responsibility."

Hannemann said, "It took four years before he went to the police. You can't have it both ways, take credit when good things happen, then not stand accountable and honestly say -- under oath -- what you knew about Ewa Villages and why the city made the mistakes in that case," said Hannemann, referring to the fact that Harris did not testify in the trial.

Hannemann was City Council chairman when Ewa Villages sales foundered in part due to the lagging '90s economy. He recalled that in a "management review that I commissioned as chair, it became apparent we had a problem. They said you don't have a good exit strategy, you are throwing good money after bad. If only the administration would provide timely and accurate information ... perhaps the legislative branch or somebody could have caught this."

Hannemann said "the legislative branch appropriates the money but in the end, it is the executive branch that chooses to spend or not to spend ... and provides this kind of oversight." He said the biggest tragedy of the case is that the city has repaid only $20 million of the $63 million loan it took out to buy and develop the former plantation property.

Criminal activity will occur

The mayor told the building business crowd that "Criminal activity is going to occur in any big organization. When you're running a city with $1.3 billion and almost 9,000 employees ... the question is how do you handle it once you find out about it."

When he called in white collar police detectives, "I didn't ask if it would be good or bad politically."

Harris repeatedly underscored steps his administration has taken to consolidate the process faced by the industry to meet permit requirements.

His theme linked mayor and businessman in the shared experience of tightening their operations during the past decade of economic decline.

"We found ways to do more with less property tax, running the city with $59 million less property taxes ... on a budget that is $71 million smaller than it was in 1994.

"We need to treat you like customers," the mayor told the construction industry. "Our role is to facilitate your project. Our burden is to streamline the process."

Hannemann said, "I hear you in the industry saying the one-stop permit process isn't working. It was supposed to save $25 million. It hasn't."

The reason the city collects $59 million less in property taxes, Hannemann said, "is that property evaluations and assessments are down, as you well know."

Capital spending compared

When Harris refers to 8,000 more jobs in the building industry, "It's Gov. Cayetano's $1 billion capital improvement budget ... that's why the jobs are out there," said Hannemann, comparing city capital spending versus state spending in the past few years.

Hannemann said "the mayor needs to be proactive, working with the state, leading them if we have to ... we don't always have to wait for the state.

"We need to change the message to the state, and ask 'how can we help you with education, how can we help you with the economy?' "

Both men ducked a direct answer to a question of whether they would require contractors to hire union workers on a big project such as development of a transit system.

Hannemann said jobs need to go to local workers.

Harris said that federal law would require prevailing wage be paid to workers.

City & County of Honolulu

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