City prosecutor’s
contracts questioned

The office awarded Carlisle's
ex-campaign manager over
$100,000 in no-bid contracts

CLARIFICATION Sunday, April 24, 2005 » Nakamura and Associates, a company owned 50/50 by former Honolulu Police Chief Michael Nakamura and Kenneth Lee, earned $81,880 over four years doing process serving for the city Prosecutor's Office. A story on Page A1 on April 17 reported Nakamura and Associates earned $101,880. The $20,000 difference was the inclusion of a 2004-05 contract in Lee's name for $20,000. Although Lee said he was still working for Nakamura and Associates under that contract, the contract itself was not in Nakamura and Associates' name and therefore the amount was not technically earned by the company. The Honolulu Star-Bulletin strives to make its news report fair and accurate. If you have a question or comment about news coverage, call Editor Frank Bridgewater at 529-4791 or email him at corrections@starbulletin.com.

Former Honolulu Police Chief Michael Nakamura, who was campaign chairman for City Prosecutor Peter Carlisle's last two re-election bids, is president of a company that made more than $100,000 over almost four years serving subpoenas and other legal documents under contracts for the prosecutor's office, according to city financial records.

Last year, Nakamura and Associates Inc. served 958 documents for the prosecutor's office and earned $22,113, according to a Honolulu Star-Bulletin computer analysis of financial records from the prosecutor's office.

But Nakamura and his company were not mentioned in a recent Honolulu Ethics Commission ruling that criticized the hiring of campaign workers and family members for process servers as violating city rules against political favoritism and nepotism.

When asked about Nakamura's service for his office, Carlisle said: "You can't reward someone for working on your campaign. That's just dead, damn wrong. But you can give them a job if they are qualified for it and are capable of doing it well."

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The Web site for Prosecutor Peter Carlisle's 2004 re-election campaign included support from former Honolulu Police Chief Michael Nakamura, who was Carlisle's campaign manager in 2000 and 2004. Nakamura's company, formed in 2000, made more than $100,000 over four years doing work for the prosecutor's office while Carlisle was in office.

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Nakamura's contract is one of several over many years that is raising questions about the ethics of hiring practices in the prosecutor's office.

In February, the commission issued an opinion that Carlisle's executive assistant, Jean Patterson, 71, violated city ethics laws forbidding nepotism and favoritism when she awarded no-bid contracts to family members and former Carlisle campaign workers to work part-time as process servers, serving legal papers for the Prosecutor's Office.

The commission found that Patterson, who served as a chief coordinator for Carlisle's 1996 and 2000 campaigns, awarded 23 out of 48 no-bid contracts to her sister, sister-in-law and three former campaign workers from June 1997 until June 2004. The commission found that the 23 contracts totaled more than $343,000.

Patterson "breached the public trust each time she selected a family member or a campaign co-worker for a contract," the report said. "This was exacerbated by the fact that she knew other possible contractors were interested in providing their services (to the prosecutor's office), but did not attempt to open the process."

The commission recommended Patterson be disciplined by a two-week suspension with no pay, which she accepted.

But the Ethics Commission report did not mention Nakamura, who served as chairman of Carlisle's 2000 and 2004 campaigns.

Nakamura's company, which was formed July 26, 2000, while he was chairman of Carlisle's campaign, was awarded several contracts, beginning with one on Oct. 26, 2000, that paid a total of $101,880, according to financial records from the prosecutor's office and the city's budget and fiscal services office. Carlisle was unopposed in the 2000 campaign and won re-election during the primary on Sept. 23, 2000.

"I can't comment on an ongoing investigation," said Chuck Totto, executive director of the Ethics Commission, when asked about Nakamura.

"Nakamura's name came up as a campaign worker during our investigation, but I can't say anything further," Totto said.

Patterson said: "The story has already come out. Ethics ruled and it's done. As far as I am concerned, it's over."

Patterson referred further questions to her attorney, Myles Breiner, who declined to comment.

Carlisle said he recommended Nakamura to Patterson for the job knowing that his recommendation "had about a 100 percent probability" of being awarded.

Carlisle defended his choice of Nakamura. "I can't think of anyone better, working in my office and backing us up. I love having the chief of police backing us up. That was an easy call."

According to the Ethics Commission opinion, Patterson was in charge of recommending people as process servers and "was not supervised" in this duty. The report said, "Although the prosecuting attorney (Carlisle) or the First Deputy Attorney (Iwalani White) signed the contracts, Ms. Patterson's recommendation had the practical effect of selecting the contractor."

The prosecutor's office routinely budgets about $100,000 to $200,000 a year for serving documents. That budget is split up among a number of process servers who are awarded contracts with an estimated amount budgeted for their individual services. At the end of the year, depending on the volume of documents the prosecutor's office needed served, the budget is amended. The final amount a process server actually earns can be affected not only by the amount of case work the office has, but also whether other process servers terminate their contracts before the end of the year, which leads to their work being divided among remaining servers.

One question raised and still unanswered by the ethics investigation is why these are no-bid contracts.

According to notes in contracts up to 2003, "no formal bid process was performed since the department will be paying these process servers in accordance with the fee schedule established" under Hawaii state law.

The contracts say there can be no competitive bidding since each process server is paid a fixed rate of $20 per document plus a fee to cover mileage.

Records the Star-Bulletin reviewed showed that Carlisle signed almost every contract from February 1997 until July 2001, when First Deputy Iwalani White took over the job.

"I know I signed off on the contracts, but if I looked at the name and didn't know it, it didn't mean anything to me," Carlisle said.

In addition to Nakamura, Carlisle said he recommended Constante Domingo, who was identified in the commission report as one of the three campaign workers to whom Patterson awarded contracts in violation of city ethics laws. The other two workers identified were Clifford Goo and Richard Mitchell.

"He was also an easy call," Carlisle said of Domingo. "I'd worked with him and he was a good worker. And in my opinion, there was no conflict with either of them."

Domingo's first contract was for $5,000 and was signed by Carlisle on Feb. 7, 1997. Carlisle signed additional contracts for Domingo through 2000 that totaled more than $31,000. Domingo terminated his contract in October 2000, which is when Nakamura was brought in to replace him, according to contracts reviewed by the Star-Bulletin.

Carlisle stressed that the work the process servers did was done well and was not in question.

In the ethics report, Patterson defended herself by saying she "was unaware of any prohibition against nepotism or rewarding campaign volunteers with city contracts." The report also states that "Patterson believed that some state legislators rewarded campaign loyalists with government contracts or employment."

Nakamura declined to comment.

Nakamura, 58, served as police chief from 1990 to 1997. In 1996, he confronted rumors about his health, publicly announcing that he has "a chronic, progressive neuromuscular condition."

In September 2004, Nakamura, who by then was getting around on a motorized scooter, was the victim of a hit-and-run accident that left him with two broken legs.

Nakamura did not serve papers, but his business partner, Kenneth D. Lee, 41, of Wahiawa did, according to payment documents from the prosecutor's office.

Nakamura is president, secretary and director of Nakamura and Associates, and Lee serves as vice president, treasurer and a director, according to state business records.

"I served 99 percent of the documents for Nakamura (and Associates)," Lee said.

After Carlisle discovered Patterson's conduct, he drew up this year's contracts in a corrective fashion. A note attached to the latest contracts for this year said, "The Department of the Prosecuting Attorney is preparing guidelines to be used in the selection of process servers."

Lee, who said he still works for Nakamura and Associates, was awarded a $20,000 contract. State business records indicate the company was involuntarily dissolved in 2004.

"I don't know why the media blows these ethics things up," Lee said. "It's all politics. If you know someone, you get the job. (Gov. Linda) Lingle hires her friends and (Mayor) Mufi (Hannemann) hires his. But the media comes after the little guy making piddly money."

Lee said he worked as a process server under former city Prosecutor Keith Kaneshiro.

"Kaneshiro had his brothers working for him (as process servers)," Lee said. "That's the way it works: If you know Keith Kaneshiro, you get the job."

According to the ethics report, Patterson also defended her actions, saying that prior administrations "had entered into contracts for process serving with an officer of that administration."

Carlisle said that when he confronted Patterson in early 2004, "She said, 'Why is it wrong for me when it was OK for the guy who sat in your seat?'"

Carlisle, recalling the conversation, said: "I still said there was no excuse. It's not acceptable and it needs to go to the Ethics Commission."

In 1997, Kaneshiro's brother, Kevin, earned $8,502 and another brother, Gary, earned $9,925, according to city contracts. Another family member, Jocelyn Kaneshiro, earned $541.

In 1996, Kaneshiro signed contracts for Gary, Kevin and Jocelyn each to earn $9,950, according to city contracts.

Kaneshiro confirmed Friday that the three family members worked for his office.

"But I didn't hire them and I didn't supervise them," Kaneshiro said. "We didn't operate the process servers, the investigators did."

Kaneshiro said his office hired process servers to reduce the burden on the office's investigators.

When asked how Patterson's conduct could go unchecked for seven years, Carlisle said he "inherited the process server system."

He said he ran the prosecutor's office like a private law firm, in which he ran the 104 deputy prosecuting attorneys and Patterson ran the non-lawyer staff. He stressed he had no problem with her staff and would hire 99 percent of them if he were in private practice.

When pressed about the family and campaign hirings, Carlisle said: "People were hired and nobody knew the relationships. If you've lived in a culture that did this, then it seems OK. I was surprised by it and felt ultimately something needed to be done."

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Ethics panel decries favoritism
based on campaign support

In its report criticizing the hiring of family members and campaign workers, the Honolulu Ethics Commission cited city regulations and its analysis of them.

The commission quotes the regulation, saying it: "Prohibits a city officer or employee from using his or her official position to secure or grant special treatment or consideration beyond that which is available to all persons. This law is intended to prevent favoritism by government personnel when they make decisions. Nepotism is a subset of favoritism; it is favoritism towards relatives."

The report further quoted: "Nepotism erodes public trust in government institutions, their integrity and operations. It creates reasonable concerns that the decisions of government are not based on merit or objectivity, but on family relations. ... The adage 'blood is thicker than water' applies in the government context. It expresses why a decision by a public officer is suspect when it affects the financial interests of the officer's family member."

In its analysis of city regulations, the commission said: "Favoritism resulting from campaign support is not a proper basis upon which to select contractors any more than family membership is. Such conduct grants unwarranted advantage to the campaign workers while other qualified persons are denied the opportunity for contracts. Moreover, the fact that some campaign workers were being offered publicly funded contracts on an annual basis raises a serious concern that the contracts were political payoffs or other quid pro quo for past and/or future support."

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