Lingle and Kim wage war of words over Liu

Decrying a "major waste of time and resources," Gov. Linda Lingle fired back at a state Senate investigative committee that contends one of her Cabinet members broke the law in awarding a contract to a company that was not the top-ranked bidder for a new investment fund.

Lingle was especially critical of Sen. Donna Mercado Kim, who served as chairwoman of the committee that investigated the Department of Business, Economic Development and Tourism and its director, Ted Liu.

The governor characterized the investigation as a "witch hunt."

"Anybody who watched this from the beginning knows that Donna Kim has become an embarrassment to the Legislature," Lingle said.

Kim (D, Kalihi Valley-Halawa) said Lingle's comments did not surprise her, and defended the work of the committee.

"All the information that was brought out was certainly an eye-opener," Kim said.

"If she had watched with an open mind, I think she would have been surprised to see how poorly her department understood the rules and procedures."

Senators say the committee, which met at least 10 times during the 2008 session, will conclude Liu broke the law by selecting the company with the third-best ranking to manage the $8.7 million hydrogen investment fund. The fund was established in 2006 to spur local development of hydrogen energy technology.

Liu, a former international investment banker, has admitted making mistakes in the selection process but has denied accusations that he showed favoritism or knowingly did anything wrong. He said the bids were closely rated, and he chose the one that more closely fit with the state's strategic goals.

Kim said evidence indicates department employees tried to cover for Liu's unilateral decision to give the contract, worth up to $385,000, to H2 Energy LLC even though his own evaluation committee ranked Kolohala Holdings LLP as the most qualified company. The bidding did not involve the cost of the contract; it was to be awarded based on the qualifications of the bidder to manage the fund.

The choice of H2 Energy last August was later reversed after the state Procurement Office determined that the contract should have been given to the most qualified company, which was Kolohala.

Liu is expected to remain in his post. Lingle has said she will not remove him and that any criminal charges would have to come from the attorney general's office, which has opposed the investigation.

Kim acknowledged yesterday that the Senate has little power to discipline Liu.

"That doesn't mean we're going to shirk our duties and oversight and not hold people accountable," she said. "I think the public is well aware of what we've uncovered."

Lingle called the investigation nothing more than a smear campaign.

"She really doesn't care who she smears, and, really, I think her colleagues need to put a stop to this," Lingle said. "They need to make certain that she doesn't abuse her position and abuse the resources of the government."

Senate Majority Leader Gary Hooser defended Kim, adding that the five-member committee was unanimous in concluding that the contract award broke the law.

"Either it's gross incompetence in the department by many, many employees, or there was a conscious effort to circumvent the law," said Hooser (D, Kauai-Niihau).