Accounting expert to probe
HVCB operations

The HTA has contracted with
a special master to look into the
bureau's spending of state funds

The state Hawaii Tourism Authority has named John R. Candon, a forensic accounting expert, as special master to further probe the operations of the Hawaii Visitors & Convention Bureau, amid threats from the state Legislature to investigate the bureau.

Candon, who served as fee administrator in the volatile three-year bankruptcy of the former Liberty House chain, has been contracted to review the bureau's effectiveness in spending state funds on marketing Hawaii's largest industry, tourism.

Candon is to report back to the authority by the end of the year. Candon Consulting Group LLC's contract with the state is worth $80,000, including $10,000 for expenses.

The appointment follows a negative state audit of the nonprofit, private visitors bureau that questioned the bureau's spending practices and the oversight of the state tourism authority. The audit, called for by the Legislature, prompted the resignation of Tony Vericella, the bureau's top executive.

The state Attorney General's Office is conducting its own preliminary investigation of the HVCB. The tourism authority's board has approved spending $300,000 on a more in-depth audit of the visitors bureau.

And state lawmakers have talked about convening an investigative committee, which would have subpoena powers.

Most of the bureau's funding comes from a tourism marketing contract with the authority, worth $129 million between January 2000 and December 2002, plus a $22.7 million state contract to market Hawaii to business travelers.

This year, the tourism authority's board voted to remove the bureau from marketing Hawaii to international travelers, leaving it to focus on marketing to North America, the state's No. 1 source of visitors, and to business travelers.

The authority is forging contracts with the bureau and four other marketing groups, and the agency's board plans to review the contracts next month.

Candon, who is bankruptcy trustee for defunct tour company Trans Hawaiian Services Inc., has served as director of corporate transactions for accounting firm KPMG Peat Marwick. He was also vice president of Dollar Rent a Car and senior vice president of the former Bank of Honolulu in the 1980s, Candon said.

Accountant Clifford Miyashiro, a member of Candon Consulting Group, will assist Candon. Per the HTA contract, Candon's hourly rate is $255 and Miyashiro's rate is $180.

"We will focus primarily on HVCB and its effectiveness at fulfilling its obligations to the authority," Candon Consulting Group said.

Candon plans to come up with recommendations to improve the bureau's compliance with state policies and practices.

As trustee, Candon has sued Trans Hawaiian competitor Robert's Hawaii Tours Inc. and related companies, which acquired all of Trans Hawaiian's fleet, about 175 vehicles, in December 2000. Trans Hawaiian later filed bankruptcy. Candon wants compensation for the vehicles to pay creditors.


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