Superferry exemption was forced, audit finds

It was pressure from the Hawaii Superferry that moved the state to allow it to bypass an environmental review, according to an audit to be released today.

The report by Marion Higa, legislative auditor, finds that the Department of Transportation exempted the Superferry from an environmental study after the interisland ship threatened not to come to Hawaii unless it was given the go-ahead by June 30, 2005.

Hawaii Superferry President John Garibaldi said he never misrepresented his business needs and that the deadline was required to satisfy contracts and investors.

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Hawaii's government caved in to pressure from the Hawaii Superferry, allowing it to bypass an environmental review by the state, according to an audit to be released today.

The report finds that the Department of Transportation exempted the Superferry from an environmental study after the interisland ship threatened not to come to Hawaii unless it was given the go-ahead by June 30, 2005.

"In the end, the state may have compromised its environmental policy in favor of a private company's internal deadline," according to the audit, ordered by the Legislature and prepared by Auditor Marion Higa.

The Transportation Department's exemption set in motion a series of events including ocean protests off Kauai, court rulings that stopped the ferry and emergency legislation overriding the courts.

Since then the Superferry has been carrying small loads of passengers and cars from Honolulu to Maui when it has not needed repairs, as it did from Feb. 13 to April 7. The ferry still has not resumed voyages to Kauai.

Hawaii Superferry President John Garibaldi said he never misrepresented his business needs, and the deadline was something he had to live with, too, to satisfy shipbuilding contracts, investors and a $140 million loan guarantee from the U.S. Maritime Administration.

"People had imposed time deadlines on us to meet," Garibaldi said yesterday. "We were just trying to work with it, and we were upfront in disclosing that to people."

The state invested $40 million for harbor improvements and barges for the ferry to offload vehicles, which the Hawaii Supreme Court ruled last August should have triggered an environmental review.

Because the U.S. Maritime Administration's loan guarantee was valid until January 2006, the audit concludes it was the Superferry that forced the state's hand by setting a June 30, 2005, deadline. The guarantee was contingent on there being no further environmental reviews.

The Department of Transportation acknowledges that the auditor is correct in saying that the U.S. Maritime Administration did not technically set the June deadline, said Mike Formby, deputy director for harbors. But the reality was that the Superferry needed an environmental exemption by then or else it could not come to Hawaii, he said.

"There was pressure on them (the Department of Transportation) to make a decision, and they made the best decision they could make at that time under the circumstances," Formby said. "It would be inaccurate to say the date didn't matter. It did matter. But at the same time, it would be inaccurate to say the harbors division didn't do their homework, because I think they had."

In its review, the audit found strong disagreements among Department of Transportation staff regarding whether to allow the Superferry to skip the state's environmental laws.

"In a department e-mail, the chief planning officer wrote, 'We would be crazy to go exemption,'" the audit says.

The state has said the exemption was made by Barry Fukunaga, who was then deputy director for harbors but was later promoted to state transportation director and currently serves as Gov. Linda Lingle's chief of staff.

The audit recommends that an entity should be given authority to enforce environmental laws, state agencies should document findings that lead them to make an exemption, and guidelines should ensure that all steps required to protect the environment have been followed.