LeMahieu to end tie with firm after BOE scrutiny of contract

By Alice Keesing
Advertiser Education Writer

The Board of Education has asked superintendent Paul LeMahieu to step down from the board of a company to which he granted a $2.3 million contract.

"I think the system ... loses," Paul Lemahieu said. Advertiser library photo

The board's action follows months of scrutiny and rancor over the contract and is an example of the tension created by the extraordinary powers given to LeMahieu by a federal court judge to improve special education under the Felix consent decree.

The contract also is central to a lawsuit filed in federal court by a department employee against LeMahieu.

LeMahieu has served on the board of Pacific Resources for Education and Learning since being hired as superintendent in 1998. He said while the attorney general's office and the state ethics commission have indicated there is no impropriety in his position, he "will gladly abide by the board's wishes."

However, he did call the board's decision disappointing.

"I think the system ... loses as a result, but if the board's concerned because there are contracts taken out with PREL, that's been the case for 12 years," he said.

Previous superintendents also have served on the company's board, LeMahieu said. "This is a terrific avenue through which we get to contribute to and influence the biggest federally funded technical assistance consortium in the region."

LeMahieu awarded the PREL contract last year, directing the nonprofit, Honolulu-based company to provide technical support to 15 school complexes that were struggling to improve their special-education services as required by the Felix consent decree. The company subcontracted the fieldwork to Hilo-based Na Laukoa.

Although the Department of Education has granted many contracts to Pacific Resources for Education and Learning over the years, company President John Kofel said this one is by far the largest. The company receives most of its money from the federal government to improve education in the U.S. Pacific region.

What has made some question the contract is that LeMahieu granted it using the powers given to him by the federal judge in the Felix case. Those powers allow him to cut through certain procurement laws in order to speed up department efforts to improve special-education services.

LeMahieu is not required to submit such contracts to the Board of Education, a fact that has made some board members uncomfortable.

As for the question of whether it was a conflict of interest for LeMahieu to grant the contract to Pacific Resources for Education and Learning, Kofel said that LeMahieu had nothing to personally gain from it and that he has stayed "at more than arms length" from it.

Ten of the company's board members are the chief school officers of the education systems that PREL serves. Because those systems routinely grant contracts to PREL, Kofel said the question of conflicts has emerged from time to time. In those situations, the officers have recused themselves from making decisions about granting the contracts, he said.

LeMahieu said the possibility of a conflict had not occurred to him until he was questioned about it by The Advertiser.

At that point, he sought the advice of the state ethics commission.

Under state ethics law, state officials and employees cannot take action that affects either for-profit or not-for-profit businesses on which they sit as members of the board of directors, said state Ethics Commission Executive Director Daniel Mollway.

However, there can be mitigating circumstances, he said. That can include serving on a board as part of an official capacity and receiving no compensation.

While Mollway cannot comment on specific cases, it appears LeMahieu's situation fits those criteria.

But what LeMahieu did not have was written approval from the Board of Education. He sought that recently, and the board decided at its last meeting to turn him down.

Board chairman Watanabe said he does not believe LeMahieu has done anything improper, but the board wants to avoid any appearance of impropriety. The board also directed LeMahieu to disclose all other boards on which he sits.

In addition, Watanabe said he wants to look into the success of the contract and the performance of the subcontractor, Na Laukoa.

Board members and department staff have expressed concern that Na Laukoa ended up working on the contract even after department staff raised concerns about the company's ability to do the job.

In a letter to LeMahieu last year, DOE student support services director Robert Golden said he found the Na Laukoa program "unsatisfactory."

Among other things, Golden said Na Laukoa did not have the sense nor understanding of Hawai'i school-based services or nationally recognized models on school-based mental health.

Instead of granting the contract directly to Na Laukoa, as originally intended, LeMahieu gave it to Pacific Resources for Education and Learning, which in turn subcontracted to Na Laukoa. LeMahieu said he abandoned his plan to contract with Na Laukoa directly because he agreed in part with concerns that the company could not deal with such a large contract.

But Na Laukoa ended up getting the work anyway, which caused an uproar in the department. It also led some to question if the subcontract was creating unnecessary overhead charges.

A copy of the contract shows Pacific Resources for Education and Learning receiving $2.3 million. Na Laukoa's slice of that is $612,000. LeMahieu and Kofel said none of that is added overhead.

"People are passing about just plain wrong information," LeMa-hieu said.

And while LeMahieu did introduce PREL to Na Laukoa, he did not stipulate that they receive the work, Kofel said.

"We chose to engage Na Laukoa," Kofel said. "We didn't have to, we chose to."

In response to criticisms that Na Laukoa did not have the necessary experience, LeMahieu argues that new people have to be trained if Hawai'i is to break free of the Felix court order.

"They (Na Laukoa) have never done this before," LeMahieu said. "That's a true statement. But here's an important thing to realize: If you only give contracts to people who have done it before, then no one new will ever learn to do it and the Big Island will never have the capacity."

It was partly that lack of resources that led to the Felix consent decree in the first place, he said.

Na Laukoa works from a Hawaiian cultural approach, and founder Kaniu Kinimaka-Stocksdale believes that difference may be why the company faced opposition.

"Because I may not have the proper formal training like Dr. Golden has, that doesn't mean I'm ... lolo or stupid or slow," Kinimaka-Stocksdale said. "I have a lot of na'au, a lot of common sense and a strong back and good working hands and sometimes that rubs people the wrong way because I have no formal education."

The company is accredited and has held previous contracts with the school system and the Department of Health, she said.

And while even LeMahieu had concerns about the contract's slower-than-expected pace of implementation, the technical assistants appear to have had a positive impact, said Ivor Groves, the court appointed monitor who oversees the department's progress in the Felix case.

"The data show a number of those complexes have made significant improvement," he said.

But in a sign of just how bitter the situation has become, the department's former acting personnel director Albert Yoshii is suing LeMahieu and assistant superintendent Paula Yoshioka over the contract in federal court. Yoshii's attorney Clayton Ikei said Yoshii was removed from his position to prevent him from revealing that LeMahieu's plan to contract with Na Laukoa was a waste of money because the firm was unqualified.

The state is seeking to have the case dismissed. That motion will be heard by U.S. District Judge David Ezra on May 23. It is Ezra who issued the Felix consent decree and who granted LeMahieu the extraordinary powers that he used to grant the Pacific Resources for Education and Learning contract.

LeMahieu said the case is without merit. Yoshii never expressed his opposition to Na Laukoa, he said, so he couldn't have been dismissed for that reason.

"I know there are some deep-seated personal issues," LeMahieu said. "There are some individuals who have had a problem with me since before I arrived."

He also believes the strain is showing from the rapid pace of change in the school system, which involves not just Felix but a complete revamp of learning standards and assessment.

"I'm pushing," LeMahieu said. "I'm committed to getting something done, and no one is going to remain beloved forever if they do some things that shake some things up. There are a number of things that look different, there are a number of things that feel different from what people are accustomed to and that brought its own discomfort along with it."