HUD action wasn’t U.S. Housing and Urban Development Assistant Secretary Michael Liu said his demands in early November that the state public housing agency board resign and that HUD be reimbursed $771,000 for a questionable contract were not politically motivated to help Republican Linda Lingle's gubernatorial candidacy.
political, official says
Cayetano said agency sanctions
were made to help elect LingleBy Pat Omandam
pomandam@starbulletin.comRather, Liu said, the federal sanctions on the state Housing and Community Development Corporation of Hawaii were examples of "aggressive actions" by the Bush administration to correct ethics and accountability problems within certain public housing agencies -- not just in Hawaii, but in New Orleans, San Francisco, St. Louis and elsewhere.
He added that these studies and reviews were done by career HUD staff and not by any political staff.
Former Gov. Ben Cayetano alleged that Liu's Nov. 1 letter demanding the state HCDCH board resign and the $771,000 be returned to HUD was politically timed to help Lingle win in the Nov. 5 general election.
Liu is a former Republican candidate for Hawaii lieutenant governor who has served in both houses of the state Legislature. He heads HUD's Office of Public and Indian Housing.
"The point is, we move when the case is there and when its ready," Liu said in a conference call yesterday from Washington, D.C. with Hawaii reporters. "Wherever you go, the issue of politics is raised because this is certainly, this whole area of public housing and the monies that flow through there is not independent of politics."
Liu announced yesterday a signed agreement between HUD and Gov. Linda Lingle to address "serious management weaknesses" in the state housing agency.
The memorandum of agreement imposes strict administrative requirements for the state, such as a nationwide search for a new HCDCH board director, HUD approval of its nine-member board, federal training on procurement practices for staff and board members, and a ban on awarding contracts to companies that have abused federal programs and funds.
Moreover, the agreement requires that the state seek reimbursement of $771,000 from Punaluu Builders for work it did on termite damage repair on a Waianae public housing project.
A HUD review revealed retired HCDCH executive director Sharyn Miyashiro awarded the nonbid contract to ex-husband Dennis Mitsunaga, who is the owner of Punaluu Builders. The agency said the contract was improperly awarded and wants reimbursement from the state.
Miyashiro responded that there were no bidders on the original contract and Punaluu Builders was awarded it only after the state agency cut in half the company's original $1.4 million offer to do the work. But at a state Senate briefing earlier this month, acting state public housing officials could not document exactly how that contract was awarded.
The federal review also found the contract exceeded the reasonable price for services provided, including a payment of $4,472 for a single exterior door and frame that, at retail, would cost about $750.
Earlier this month, Lingle announced the pending agreement with HUD and had no objection to it. The current HCDCH board has resigned and Lingle must appoint new members to be approved by HUD.
"The draft agreement was fairly acceptable to me when I saw it a week and a half ago, and I don't expect too much change from it," Lingle said on Thursday.
Liu said he is confident the state can recoup the money from Punaluu Builders.
Punaluu Builders officers could not be reached for comment yesterday.
Meanwhile, Liu said HUD's approval of board members is needed to ensure there are no potential conflicts of interest among those who award public housing contracts to vendors. It is a standard being upheld across the country, Liu said. "The bottom line is we don't want to see any obvious conflict of interest."
U.S. Department of Housing and Urban Development
State of Hawaii
