Isle agency accepts
federal reforms

The state's overseer
of public housing will
adopt HUD suggestions

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The troubled state agency that oversees Hawaii's public housing has agreed to increased oversight by its outside board, to provide ethics training for staffers, and to implement new accounting and procurement procedures.

The state Housing and Community Development Corp. of Hawaii's nine-member board yesterday approved a 23-page agreement with the U.S. Department of Housing and Urban Development calling for significant reforms of its operations.

HUD, which provides millions of dollars in federal grants to HCDCH annually, designated the HCDCH as a "troubled public housing agency" earlier this year, according to Mike Liu, HUD's Assistant Secretary for Public and Indian Housing.

The designation means the federal agency can withhold funding or can place the HCDCH under receivership if the changes aren't in place within a year, Liu said.

HUD, which will work with the HCDCH to implement the reforms, oversees about 3,000 public housing agencies nationwide and 100 to 200 of them have been designated as troubled agencies, Liu said.

"These problems did not occur overnight and it will take a while to work out of them," Liu said.

In 2002, HUD accused the state agency of mismanagement and of violating procurement laws in awarding a $771,000, nonbid contract to a company headed by the former husband of the agency's then-executive director Sharyn Miyashiro.

HUD also demanded the resignations of all nine members of the HCDCH board and ordered the state agency to repay the $771,000 to the federal government.

The contractor, Punaluu Builders, is headed by Dennis Mitsunaga, who is a longtime political supporter of former Gov. Ben Cayetano and a campaign fundraiser for isle Democrats. Mitsunaga's relative Wesley Segawa was chairman of the HCDCH's board at the time.

Segawa and seven board members resigned in 2002 and were replaced by appointees of the Lingle administration. HCDCH repaid the $771,000 in January.

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