Abercrombie Claims Lingle Left ‘Financial Wreckage’; Former Governor Fights Back

Trying to shift blame for his rocky first year, Abercombie claimed the Administration of former Governor Linda Lingle left the cupboards more empty than expected when he took office.The fact is, the Lingle Administration successfully guided the state through the 2008 global financial and economic collapse. Through fiscal accountability – one of the hallmarks of her two terms as the state’s top leader – Governor Lingle and her team closed an almost $3 billion gap in state revenues, without increasing taxes. The prudent, responsible approach Governor Lingle took to balancing the budget prevented Hawaii from falling into the fiscally precarious situation many other states faced at the height of the economic downturn.In February 2010, despite the challenging economy, the nation’s top bond rating agencies, Moody’s Investors Service, Standard & Poor’s Ratings Service and Fitch Ratings, affirmed the State’s bond ratings of Aa2, AA and AA, respectively. Standard and Poor’s Ratings Service cited one of the State’s credit strengths as, “the governor’s (Lingle) willingness to implement aggressive solutions to balance the fiscal 2010-2011 biennial budget given lower general fund tax revenue forecasts.” It is important to remember that this was the highest bond rating the state had ever received and remains a historical record today.More to the point, the 2011 downgrade of the state’s bond rating was based on current management by the Abercrombie Administration, not because of past stewardship.

Abercrombie’s team contends that the Lingle Administration “essentially didn’t have an accounting system” knowing full well that this is totally contrary to the recognition of the sound fiscal management demonstrated by Governor Lingle. In fact, Gov. Lingle’s Budget and Finance Director, Georgina Kawamura, was honored with the 2010 Gloria Timmer Award by the National Association of State Budget Officers (NASBO) for the significant positive impact she had on addressing Hawaii’s challenging financial situation.

Unlike the current Administration, former State Comptroller, Russ Saito and his team made sure that the Comprehensive Accounting Financial Report (CAFR) was completed in a timely manner each year to ensure that a major disclosure document was provided to the bond rating firms and other financial organizations for their evaluation and assessment of our state governments fiscal situation. It was, and still is, available to the public to read. It’s disrespectful, and quite ridiculous to claim that those government employees who worked so hard on government accounting were off the clock in 2010.

The comment by Abercrombie, that the Lingle Administration “stopped governing for 18 months to two years” is ridiculous coming from someone who vacated his term of office. These types of comments are merely an attempt to obscure the real fact that Abercrombie was out of touch with the fiscal reality facing the state and ill-prepared to deal with it.

From the day Governor Lingle took office on December 2, 2002 to the day she left the office on December 6, 2010, she and her team demonstrated bold leadership to effectively address many of the challenges that have plagued the state for decades. Even during her final two years in office, as the global economy took its toll on Hawaii and state resources were scarce, her Administration and its partners implemented innovative initiatives that laid the foundation for many of the programs and achievements that Abercrombie now takes credit for. They include:

• Continued to partner with the Legislature, utilities, energy companies, environmental groups and the community to advance the Hawaii Clean Energy Initiative, a historic effort formed in 2008 by the Lingle Administration and the U.S. Department of Energy to help Hawaii achieve the goal of 70 percent clean energy by 2030.

• Worked collaboratively with education and community partners to win a $75 million Race to the Top grant from the U.S. Department of Education. As one of only nine states and District of Columbia to win the second round of grant awards, the federal funds are now being used to implement comprehensive initiatives to reform the Hawaii’s public education system to improve student achievement.

• Advanced more than $1.8 billion in capital improvement projects (CIP) to accelerate public infrastructure construction as part of a comprehensive effort to stimulate the economy and create jobs. Over a 16-month period between December 2008 and May 2010, the Lingle Administration successfully opened bids for, awarded contracts for or started construction on 827 capital improvement projects totaling $1,851,513,340. This investment generated approximately 23,884 direct and indirect jobs statewide in the construction industry and other related sectors.

• Partnered with Hawaii’s visitor industry, Congressional delegation, city leaders, business community and East-West Center to secure Honolulu as the host city for 2011 APEC Leaders Meeting, and worked with the Obama Administration to gain federal designation of the APEC meeting as a National Special Security Event.

• Worked with Chinese and U.S. officials to lay the foundation for direct flights between China and Honolulu, as well as expand long-term economic development and business opportunities for Hawai’i in the emerging China market.

• Continued to aggressively overhaul Hawai’i’s child welfare system, resulting in reducing the number of children in foster care, which had risen every year to an all-time high of 3,000 in 2005 and then dropped steadily to about 1,300 by 2010, and decreased the child re-abuse rate from 6 percent in 2005 to just 2.8 percent in 2010, one of the lowest rates of child re-abuse in the nation.

• Opened the final two transitional facilities for homeless families and individuals along O’ahu’s Leeward Coast that were developed under an emergency proclamation issued by Governor Lingle in 2006 to address the health and safety crisis resulting from so many people living in parks and on beaches. Over the four-year period (fiscal years 2006-2009) when Governor Lingle successfully focused the state’s attention on the homeless crisis:

• shelter capacity throughout the state doubled from 587 to 1,188 units;
• dormitory beds statewide increased by 50 percent from 525 beds to 785 beds;
• the number of homeless people statewide who received services from outreach provider agencies increased 18.2 percent from 9,875 to 11,680;
• the number of homeless people statewide who received service in shelters increased 66.7 percent from 5,688 to 9,483;
• the number of people who transitioned into permanent housing increased 163.9 percent from 1,532 to 4,043.

An important and critical part of Governor Lingle’s transition from office was having her Department heads meet with their in-coming counterparts to ensure a smooth transition. With respect to the budget and financial situation specifically, Budget Director Georgina Kawamura met with Kalbert Young, the in-coming state budget and finance director, at least twice to ensure he understood the present situation and the challenges Abercrombie claimed he was ready to face. Every department head furnished transition documents to their successors.

Gov. Lingle met privately with Governor-elect Abercrombie after his election and offered any and all guidance he would need. What he now describes as “chilly” is pure nonsense. Those of us who saw them following their meeting saw genuine cordiality by Governor Lingle. She also told us the meeting was a good one, and Abercrombie stated they were “all set and ready to go.”

As it relates to the Governor’s residence, Abercrombie knows full well Gov. Lingle vacated the residence a week earlier than expected, which was one week before his inauguration. In fact, Russ Saito, the Director of Accounting and General Services (DAGS) personally worked with Abercrombie’s staff and his wife Dr. Nancy Caraway on their transition into the Governor’s residence right after Governor Lingle moved out. He took Dr. Caraway and her staff on a tour and went room by room, as well as throughout the yard, and noted all of the elements she wanted to review. He also set in motion cost estimates and timelines for some of the improvements she required, including a dog run. For what it’s worth, Dr. Caraway thanked Mr. Saito for his graciousness.

Recognizing the inherent challenges and responsibilities that come with the governorship, we made a decision to let the new Administration find its way, without publicly interjecting our opinions. Running the Governor’s office is difficult enough without the immediate prior Administration weighing in with criticisms, although it would have been very easy to do so.

Over the past year, we have carefully watched the current Administration as it struggled to gain its footing. We went through some challenges ourselves, so we assumed it would be just a matter of time before things clicked with Governor Abercombie and his team. Unfortunately, a year has gone by and the public is still waiting.

The public’s patience has worn thin. Residents and businesses who are struggling are not interested in Abercrombie’s blame game or his excuses about why he has made no progress in fixing the economy or creating jobs. He said during his campaign for the office that he was “ready to lead on day one.” It’s been almost 365 days since his inauguration and based on his dismal performance and internal turmoil, 70% of the Hawaii’s residents believe otherwise.

If Abercombie wants the public to have faith in him, he needs to give them a reason. Instead of casting blame, he needs to start acting like a leader – initiate new solutions, appreciate the work done by others, don’t take credit for things he didn’t do, and keep the public informed and engaged. He must observe court decisions, be transparent in his decision-making, receptive to new ideas, respectful of differing opinions, refrain from engaging in politically motivated retribution against public servants who volunteer their time to serve on Boards and Commissions and above all, be accountable for his actions.

Barry Fukunaga
Former Chief of Staff to Governor Linda Lingle