”’Editor’s Note: Hawaii Reporter has sought for more than 14 months public record documents from the City & County of Honolulu that document the city’s more than $20 million in expenditures on the $1 billion proposed Bus Rapid Transit System (BRT), a light rail system planned for various parts of Oahu beginning in Waikiki. Council Member John Henry Felix assisted Hawaii Reporter in submitting the original request for copies of the BRT contracts in March 2002, but his written request was never even acknowledged by the City administration before he left office in December 2002. Council Member Charles Djou continued where Felix left off, submitting another request when he took office in January 2003, and resubmitting follow up letters several times over the next four months. In May 2003, the city Department of Transportation Services released several file boxes of contracts that listed on each contract the primary contractors and subcontractors for more than $12 million of the $20 million reportedly expended on the BRT. Djou and Hawaii Reporter immediately resubmitted another request for the remainder of the contracts with no answer from the city Department of Transportation Services to date. This report is published after dozens of hours reviewing several thousand pages of city documents naming contractors and subcontractors working on the BRT and what they were paid, as well as state Campaign Spending and Department of Commerce and Consumer Affairs records.”’
Hawaii’s powerful Democrat elected officials, in power for 40 consecutive years, have traditionally had their political campaigns funded by supporters who in return receive lucrative government contracts or zoning, permitting and other benefits for their businesses from those government officials.
This indisputable fact has been documented in thousands of pages of investigative reports at the state Campaign Spending Commission, the Honolulu Police Department and Honolulu City Prosecutor. These agencies are working to break this cycle by exposing the system and prosecuting the players.
At stake are billions of dollars collected from taxpayers in Hawaii, which in turn are paid to these contractors and then passed on to the campaigns of prominent Democrats. Former Gov. Benjamin Cayetano fed this cycle by authorizing billions of dollars from taxpayers be directed to public construction projects, bid and non-bid, saying the infusion of cash would spur the local lagging economy.
The latest major construction project that Oahu’s Democrat mayor is pushing for — the BRT — will cost taxpayers more than $1 billion just to construct and considerably more to operate and maintain. The consulting projects implemented to launch the BRT are being awarded to many companies recently in the news for making excessive and illegal contributions to the mayor and other prominent Democrats such as former Gov. Cayetano, former Lieutenant Gov. Mazie Hirono and former Maui Mayor Kimo Apana.
The system is called “pay to play,” deemed so last year by Bob Watada, director of the state Campaign Spending Commission, who has investigated and is in the process of fining more than 100 companies for violating state campaign spending laws in an effort to participate in the political pay to play game.
Honolulu Mayor Jeremy Harris’ campaign and administration have been under investigation by a multitude of law enforcement agencies for nearly two years for operating such a system that, according to those doing business with the city, encourages or demands contributions in exchange for city business, permitting and zoning.
No where is this more clear than when looking at the BRT and the more than $20 million in contracts awarded to date. More than 40 percent, or 16 of 36 of the consultants working on the BRT, are under investigation, indictment or have been convicted for illegal contributions, and in some cases, for money laundering contributions to these candidates. Those alphabetically include:
*”Char & Associates”, a company owned by Peter Char, close friend of the mayor and treasurer of the mayor’s campaign, who died while under investigation. His wife, Lynette, is a city employee with the Dept. of Enterprise Services. Char & Associates received up to an estimated $216,297 in BRT city contracts, though the city does not specify in the documents the exact amount this subcontractor was paid.
*”ECS Inc.” was fined $49,300 by the state Campaign Spending Commission for making a total of $80,000 in contributions including $30,000 to Harris, some of which was deemed excess and illegal. This company received up to $521,065 in consulting contracts for the BRT, though the exact amount was not disclosed by the city on the copies of the contracts reviewed by Hawaii Reporter.
*”Geolabs Inc.” was fined over $64,000 for laundering $120,000 with around $60,000 going to the campaign of Harris. In total, the people associated and employed with Geolabs Inc. gave close to $290,000 total to the campaigns of Harris, Apana, Cayetano and Hirono. The city BRT consulting contract received by Geolabs is up to $468,000, though the exact amount of the BRT contract was not disclosed by the city.
*”Hawaii Design Associates” was fined $1,000 by the state Campaign Spending Commission for making excessive contributions to the campaign of Harris. This company received up to $550,100 in the contracts reviewed by Hawaii Reporter, however the exact amount received by this company was not disclosed on the copies of the contracts provided by the city.
*”Helber Hastert Fee” was fined $500 by the state Campaign Spending Commission for excess contributions to Harris and is pending prosecution by the Honolulu City Prosecutor. This company received up to $150,000 from the city for the BRT consulting work, though the exact amount was not disclosed by the city on the BRT contracts.
*”KPMG Consulting” is one of several accounting firms under investigation by the state Campaign Spending Commission for excessive contributions to the mayor, and is the former employer of Malcolm Tom, the third highest official in the city. This accounting firm received up to $161,438 from the city for the BRT, though the exact amount was not disclosed by the city.
*”Masa Fujioka and Associates”, fined $1,000 for $2,000 in excess contributions to the campaign of Harris, received up to $324,438 for its city BRT consulting contract, though the exact amount was not disclosed on the city contract reviewed by Hawaii Reporter.
*”Mitsunaga & Associates Inc.” is owned by Dennis Mitsunaga, an individual under investigation by the federal government for more than a year and a half for a variety of illegalities including misusing federal construction funds provided to the state. Known as one of the most powerful political people in Hawaii, including a fundraiser for many high-profile Democrat candidates, Mitsunaga had to repay the U.S. Department of Housing and Urban Development more than $700,000 the agency considered was used inappropriately. Mitsunaga, still under investigation by the federal government, has a variety of companies. The one with his namesake received up to $399,995 so far on the BRT project, though the exact amount is not disclosed by the city.
*”MK Engineers” is currently under investigation by state Campaign Spending Commission for making excessive political contributions to Hawaii Democrat politicians. This company received BRT contracts up to $73,600, though the exact amount was not disclosed by the city. (See “BRT Sub-contractor Explains Political Contributions’ Policy” for further comments.)
*”Parsons Brinkerhoff”, which is under investigation by state Campaign Spending Commission for excessive political contributions, is one of the primary contractors on the BRT project and has overseen more than $5 million spent on the BRT, and has outsourced some of this work to many of the subcontractors listed in this story.
*”R.M. Towill” is currently under investigation by the state Campaign Spending Commission, the Honolulu Police Department and the Honolulu City Prosecutor. At least four people employed with this company have been arrested in recent weeks on suspicion of money laundering and making illegal contributions to the campaign of Honolulu Mayor Jeremy Harris. This company, one of the primary contractors on the BRT, is overseeing the distribution of at least $1.5 million of city funds to subcontractors named in this report.
*”SEY Inc.”, has so far been fined $32,000 by the state Campaign Spending Commission for making “false name” contributions under names of employees to the campaign of Honolulu Mayor Jeremy Harris. This company has received as much as $89,000 from the city for its consulting work on the BRT, though exact figures were not disclosed by the city.
*”SSFM International,” the first company whose executives were charged and arrested for their role in laundering over $400,000 in campaign funds to Democrat political candidates including $200,000 to Harris. Michael Matsumoto, president of SSFM Engineering in Hawaii, was recently convicted of the first $200,000 laundering offense involving the Harris campaign. The company also will face sizable fines from the state Campaign Spending Commission, though that fine has not yet been determined. SSFM, one of the primary contractors on the BRT, has overseen $1.8 million of expenditures for the BRT, though how much of this allocation the company has received is not disclosed in city contracts obtained by Hawaii Reporter.
*”The Limtiaco Group” was under investigation by the state Campaign Spending Commission for its involvement in the “pay to play” system, but the principal of the company died, deterring further investigation at this time. The Limtiaco Group has so far received more than $32,000 from city BRT contracts, though the city did not specify on its contracts the exact amount received by the company.
*”Verner Liipfert,” the powerful Washington D.C. law firm that once operated a branch in Hawaii where both former Gov. John Waihee and Norma Wong worked, also received contracts for the BRT, up to $97,000, though the exact amount was not disclosed by the city. This company is not under investigation per say, however it is included in the list because of its connection with Norma Wong.
*”Norma Wong”, who in addition to her own company is partner to a research company, Mattson & Sunderland, under investigation for participating in a money laundering scheme involving the campaign of Honolulu Jeremy Harris, received up to $1,600,607 from the city for the BRT, though the city did not disclose the exact amount of compensation on its contract documents.
”Consultants, Contractors that received contracts for the BRT, but to the knowledge of Hawaii Reporter are not currently under investigation”
*Air Flight Service
*Harrison Rue
*John Child & Company
*John Hara & Associates
*Julian Ng Inc.
*Kaku Associates
*Lea & Elliot
*Lester Inouye & Associates Inc.
*Maliu Communications LLC
*Mason Architects
*McNeil Wilson Technology Group
*Nicole Love
*Pat Lee & Associates
*PB Consulting
*Rider Hunt Levett & Bailey
*Scientific Consultants
*Sharon Greene & Associates
*Tam Plan
*TGN Enterprises
*The Tree People
*Urban Works
Those opposed to the BRT project and the pay to play system say the political pay offs already taking place need to stop and the only way to do so is not to allow the $1 billion BRT to move forward.
”’This article was originally published on Aug. 15, 2003.”’