City fails to fix flaws
that led to Ewa fraudThe issue: Measures to prevent
another Ewa Villages fraud scheme
are not yet in place.AT $5.8 million, the Ewa Villages scandal was the largest theft ever of city funds. Yet nearly 18 months after measures were recommended to deter similar schemes in the future, the city has made few of the changes. It is unconscionable that the administration of Mayor Harris has neglected to make this matter a priority.
The City Council was told this week of a disturbing lack of progress on seven of the eight corrective procedures called for by auditors Deloitte & Touche in September 2000. The recommendations came a month after former city housing official Michael Kahapea was convicted in a plot that bilked the city of millions of dollars that were to be used to relocate businesses in the Ewa Villages revitalization project.
Thus far, the city has managed to institute one recommendation: To make payments directly to vendors rather than risk altered checks or unauthorized payments, as was done in the Ewa Villages project. Other than that, city agencies in charge of such projects have failed to monitor relocations or inspect project sites and have relied on second-hand reports from the budget department or contractors. Relocation costs are not being reviewed and project managers have not been trained to detect potential fraud -- and continue to resist such training.
In the Ewa Village thefts, a pivotal deficiency was that few of the city's agencies were able to discern that a problem was developing. Some officials appeared blind to the scheme as it was executed, so fraud-awareness training and supervision of these projects are important in preventing similar criminal activity.
During Kahapea's trial, Harris was in the midst of his re-election campaign, having won the mayoral post in a special election after Frank Fasi resigned to run for governor. Although his political opponents attempted to taint him with the scandal, he deflected criticism, saying the Ewa project had begun before his watch while he was Fasi's managing director.
The watch is Harris's now, and even if his attention has been focused on his bid to become governor, his title today is mayor. He is duty-bound to make sure safeguards are in place so that city taxpayers will not be defrauded in another fiasco. Harris should prod reluctant department officials to comply with the recommendations.
Meanwhile, the City Council, its attention diverted by the troubles of its own members, should keep a sharper eye on the administration's doings to discourage more foot-dragging on necessary corrective measures.
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Stadium transfer
should be specificThe issue: This year's Legislature is not
likely to approve a transfer of Aloha Stadium's
management to the University of Hawaii.THE long-standing proposal to turn over management of Aloha Stadium to the University of Hawaii seemed to have broad support at the opening of the current session of the Legislature, but it again has been pushed aside. For now, bureaucratic inertia may have won out over common sense, but a clear and specific plan should prevent that from happening again in next year's session.
Evan Dobelle, the university's new president, envisions the stadium as a money maker. The 50,000-seat arena has been managed by the state Stadium Authority since it opened in 1975. The university pays $800,000 rent for using the stadium for its home games -- a silly transfer of money between state institutions.
Aloha Stadium is the site for nearly 300 events a year and is expected to duplicate the last fiscal year's revenue of $7.2 million in the current fiscal period. UH officials believe they can increase that revenue through ticketing, marketing, parking, corporate support and greater commercial use. "It's my attitude we ought to have a Janet Jackson concert there every Saturday night," Dobelle remarked before last month's HBO extravaganza at the stadium.
UH control makes some people uncertain about continued use of the facility by high schools. That anxiety may have been heightened by an internal UH report by Steinberg & Moorad, a consulting firm hired to identify revenue opportunities for the university's athletic program. The report, which recommends more profitable ventures at the stadium, does not mention high school activities.
In legislative testimony only two weeks ago, James R.W. Sloane, the university's vice president for administration and its chief financial officer, acknowledged that "many unanswered questions and unresolved issues" must be addressed before UH gains control of the stadium. However, Sloane gave assurance that the university is "committed to working in tandem with high school athletics, high school marching bands and other users as we develop a strategy plan to include access to other activities."
The omission of high school activities in Leigh Steinberg's report should not be interpreted as a plan to discontinue them. Instead, it should be regarded as the firm's response to a question similar to that asked of a fictional sports agent in the movie "Jerry Maguire" -- inspired by Steinberg -- by Arizona Cardinals wide receiver Rod Tidwell: "Show me the money." Legislators should be shown that and more.
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Published by Oahu Publications Inc., a subsidiary of Black Press.Don Kendall, Publisher
Frank Bridgewater, managing editor 529-4791; fbridgewater@starbulletin.com
Michael Rovner, assistant managing editor 529-4768; mrovner@starbulletin.com
Lucy Young-Oda, assistant managing editor 529-4762; lyoungoda@starbulletin.comJohn Flanagan, contributing editor 294-3533; jflanagan@starbulletin.com
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