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The Honolulu Advertiser
Posted on: Thursday, October 18, 2001

Legislators probe propriety of special-education contract

By Alice Keesing
Advertiser Education Writer

Legislators yesterday continued their scrutiny of the relationship between state Schools Superintendent Paul LeMahieu and a woman who owns a company to which he granted a special-education contract.

State Schools Superintendent Paul LeMahieu said his friendship with Kaniu Kinimaka-Stocksdale developed after a contract was awarded to her company.

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The House-Senate Felix investigative committee wants to know why the contract was granted to Hilo-based Na Laukoa after Department of Education staff members raised concerns about the company's ability to do the job.

Na Laukoa last year became part of a $2.3 million-contract granted to Pacific Resources for Education and Learning. Na Laukoa's share of the contract was $612,000. Its role was to provide "technical assistance coordinators" for the 15 school complexes facing the toughest struggle to improve special education services as required by a federal judge under the Felix consent decree.

Yesterday, a witness told the committee the owner of Na Laukoa, Kaniu Kinimaka-Stocksdale, told her in June she had a close relationship with LeMahieu. The committee's special counsel suggested the contract was granted because of that.

LeMahieu, who was not at the hearing, told The Advertiser he and Kinimaka-Stocksdale were friends, but the friendship developed after the contract was awarded.

"There was no personal relationship that interfered with the judgement, the decision-making," he said.

The Na Laukoa contract has become one of the focal points of the Legislature's investigation into the state's efforts to comply with the Felix consent decree.

The committee is looking into alleged conflicts of interest and inflated charges to the state.

The contract has been a thorn for LeMahieu. It is central to a lawsuit filed in federal court by a department employee against him. And the Board of Education in May asked him to step down from his unpaid position on the board of Pacific Resources for Education and Learning because of a possible conflict of interest.

The committee co-chairs are Sen. Colleen Hanabusa and Rep. Scott Saiki.

"Definitely the most critical aspect to it is that it's something other than a professional relationship that exists," said Hanabusa, D-21st (Kalaeloa, Makaha).

What especially troubles legislators is that LeMahieu granted the contract using the powers given to him by the federal court, meaning the contract was not subject to the usual oversight.

Tina McLaughlin, part-owner of private service provider CARE Hawaii, yesterday told the committee under oath that Kinimaka-Stocksdale had talked to her about her relationship with LeMahieu.

"She talked a lot about Dr. LeMahieu," McLaughlin said. McLaughlin said she asked Kinimaka-Stocksdale if LeMahieu was "very special" to her, to which Kinimaka-Stocksdale "acknowledged that he was and talked extensively about their relationship."

James Kawashima, the committee's special counsel, asked:

"What she had told you was there was a plan to set up a situation in which Dr. LeMahieu and perhaps others would be given superpowers and these superpowers would be used to benefit Miss Stockdale's company and herself and you were aware at that time that Miss Stocksdale had a personal relationship with Dr. LeMahieu. ... An intimate personal relationship?" he said.

McLaughlin replied, "yes."

Kinimaka-Stocksdale did not respond to phone messages left by The Advertiser. The committee has subpoenaed her to testify Saturday.

LeMahieu stressed there was no wrongdoing."Even though (the contract) was handled outside the normal means, we took care to involve people, to critically review what was going on ... to make sure that the judgements were reasonable judgements," he said.

The contract also has had "remarkable" successes, he said. Of the 15 school complexes receiving technical assistance, eight have gone through the intensive testing of their services to special-needs students. Six of those complexes passed the test; the other two got halfway there.

The committee heard other positive testimony about Na Laukoa last week. Don Berger, who is Pacific Resources' program manager for the contract, said he believed Na Laukoa had the background needed for the job and that the company's performance, specifically on Moloka'i, was "very satisfactory."