Sunday, October 21, 2001

"We did cross the line. It was a single time."
Kaniu Kinimaka-Stocksdale
Admitting to an affair with former Schools Superintendent Paul LeMahieu

Contractor admits
fling with LeMahieu

Legislators question if her
business was deserving of the
Felix consent contract

By Crystal Kua

A Hilo woman whose company was awarded a controversial $600,000 special education contract acknowledged to state lawmakers that she had an affair with former state superintendent of schools Paul LeMahieu.

"We did cross the line," Kaniu Kinimaka-Stocksdale told a Joint Senate-House Investigative Committee yesterday. "It was a single time and it was the latter part of October of last year."

LeMahieu used similar words Friday when he said his relationship with Kinimaka-Stocksdale developed to where "we crossed the line that shouldn't be crossed."

"We regretted it. We ended it," the former public schools chief told the Star-Bulletin Friday.

Although the committee asked Kinimaka-Stocksdale few questions about the relationship, committee chairpersons said her testimony didn't clear up conflict-of-interest questions.

"It's very difficult to understand, still, how given the significant amount of this contract, plus what the contract was supposed to accomplish, with all the resistance ... that Dr. LeMahieu went to great extents to try and validate it," Sen. Colleen Hanabusa (D, Waianae) said after the hearing. "I can't see any administrator in the state of Hawaii bending over backwards like that."

Both Hanabusa and investigative committee co-chairman Rep. Scott Saiki (D, Moiliili) said they also are not satisfied with answers about whether Kinimaka-Stocksdale's company, Na Laukoa, could do the job.

"The primary issue for us was whether or not Na Laukoa was qualified to provide the services," Saiki said.

"I don't think they have a grasp on what exactly they were supposed to be providing," Hanabusa said.

The committee is investigating how the state -- through the departments of Health and Education -- spent millions of dollars to comply with the Felix consent decree, the federal court mandate to improve mental health and educational services to special needs children.

As part of the investigation, the committee also plans to subpoena LeMahieu to appear some time next month, they said.

"He wants a chance to tell us his side," Hanabusa said. "Simply because he's resigned doesn't mean he's not important to our investigation."

LeMahieu submitted his resignation to the Board of Education Thursday.

After resigning, LeMahieu said that allegations of wrongdoing surfacing from the committee aren't true because his relationship with Kinimaka-Stocksdale didn't occur until after the August 2000 contract was awarded.

He said he was truthful when he previously characterized his relationship with her as a friend and business associate because that's what they were at the time the company received the contract. He said he had seen her socially on several occasions including attending the Merrie Monarch hula festival in Hilo months before the contract was awarded.

LeMahieu used extraordinary powers granted by the federal court to award a $2.3 million contract to Pacific Resources for Education and Learning. Those powers included bypassing procurement laws that were barriers to complying with the consent decree in the granting contracts.

The PREL contract resulted in Na Laukoa receiving a $600,000 subcontract. LeMahieu at the time sat on PREL's board but he resigned from the board earlier this year.

LeMahieu originally explored awarding the contract outright to Na Laukoa to help 15 school complexes comply with the consent decree.

Kinimaka-Stocksdale, who said she first met LeMahieu in 1999, said she knew there was opposition from within the DOE to her company receiving the contract from when she attended a July 7, 2000, meeting with DOE officials .

"I think my not having a formal education bothers people," she said.

Kinimaka-Stocksdale graduated from Kapaa High School in 1968 and she is currently pursuing a degree in psychology.

Most of her career was as a hula dancer, entertainer, in public relations and as a business owner of several companies including a modeling agency, she said.

Na Laukoa -- which means to prepare for flight -- helped kids with behavioral problems through Hawaiian cultural practices, she said.

LeMahieu has said that the umbrella contract was awarded to PREL because Na Laukoa lacked the administrative support to handle a large contract.

Kinimaka-Stocksdale had trouble giving the committee details on what the company does to carry out the contract, referring questions to someone else connected with the company. Saiki said afterwards that her inability to answer those questions is a concern.

She also pointed to the success the company has had in helping seven schools reach provisional compliance. Hanabusa said that credit for compliance should go to the schools.

Kinimaka-Stocksdale denied suggestions made at previous hearings that she was supposed to get $170,000 under the contract and said that figure has wreaked havoc with her company. She said she's made $36,000 so far under this contract.

She also said that she never told another service provider that she and LeMahieu had an "intimate" relationship. "I told her that we were close friends. I never mentioned the word intimate."

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