Posted on: Friday, October 11, 2002

Housing records missing

By Jim Dooley
Advertiser Staff Writer

Key public records that justify the recent award of millions of dollars worth of consultant contracts by the state's public housing agency are missing from official files, according to a review by The Advertiser.

State law requires that the records be available for public inspection and officials of the Housing and Community Development Corp. of Hawaii (HCDCH) can't explain why the documents are missing from contract files.

Since 1999, the federal government has been citing HCDCH for "serious violations" of procurement procedures in the awarding of federally-financed consultant contracts. Last month the U.S. Department of Housing and Urban Development clamped tight controls on the agency's ability to award consulting jobs in part because HCDCH couldn't demonstrate how and why it was picking consultants for non-bid jobs.

Now a team of federal auditors is in Honolulu examining the books of HCDCH and establishing additional new controls over how the agency spends millions of dollars of federal grant money annually.

Mark Pilakowski, acting deputy director of the Real Estate Assessment Center for the U.S. Department of Housing and Urban Development in Washington, D.C., is heading the five-member team of auditors. The auditors have been working out of HCDCH's offices on Queen Street since last week and are due to finish their work today.

Seven weeks ago, The Advertiser sought access to HCDCH files for all consultant contracts worth more than $300,000 awarded in the past 12 months. Five files were eventually produced. All were missing crucial public records that explain and support the contract awards.

Among the missing records, for example, were documents explaining HCDCH's decision last year to award a $687,054 contract to design the second phase of the Kalihi Valley Homes renovation project to a company called Pacific Architects, Inc. The contract price was later increased to more than $1 million.

The company that designed the award-winning first phase of the massive renovation project, Group 70 International, Inc., was found by HCDCH executive director Sharyn Miyashiro to be less qualified than Pacific Architects for the new work, even though the second phase must conform to the overall design themes and materials requirements established earlier by Group 70.

The Building Industry Association of Hawaii selected Group 70's Kalihi Valley Homes renovation design as the "overall and grand award winner" for best large remodeling project in the state last year.

Francis Oda, president of Group 70, said he doesn't know how any company could be better qualified for the Kalihi Valley Homes work, given Group 70's experience and track record on the first phase.

"No one has explained it to us," Oda said. "We've been basically kept out of the loop."

Detailed records explaining the contract award decision are required by state law to be kept in the contract file for public inspection. But the records, including score sheets compiled by a three-member HCDCH screening committee that rated the abilities of competing companies to perform the work, are not in the file.

The only record from the rating process in the file is a memo from Miyashiro which says, "based upon the summary of qualifications provided by the screening committee, I have ranked the firms in order of preference as follows..." Miyashiro then lists Pacific Architects, Inc. as her top choice, followed by Group 70 International, Inc. and Design Partners, Inc.

The "summary of qualifications" provided to Miyashiro by the screening committee is not in the file.

Also missing are written presentations from the companies detailing their qualifications for the work, including their training and experience in previous design projects, subcontractors for the job and references from satisfied customers.

State law requires that the company qualifications must be kept in consultant contract files for public review.

The law also states that records relating to fee negotiations with consulting firms must be available for public inspection in contract files. Those records are not in the Kalihi Valley Homes contract file.

The president of Pacific Architects is Dwight Mitsunaga, Sharyn Miyashiro's former brother-in-law. Miyashiro is under scrutiny by federal officials for awarding a non-bid, $787,000 construction contract two years ago to Punaluu Builders, a company founded and partly owned by her ex-husband, Dennis Mitsunaga, Dwight's brother.

Last month, Michael Liu, Assistant Secretary of the U.S. Department of Housing and Urban Development, told Miyashiro that the Punaluu Builders contract award violated federal conflict-of-interest regulations because she shares a continuing financial interest with Dennis Mitsunaga.

Miyashiro and the HCDCH board have denied Liu's charge of a conflict of interest in the Punaluu Builders contract award. The dispute is unresolved.

All five of the consulting contract files shown to The Advertiser by HCDCH information officer Darrell Young were missing key procurement records. Besides the Pacific Architects job, the other contracts were: a $1.01 million contract awarded January 25, 2001 to Ink Architects, Inc. for renovation design of the Lanakila Homes project on the Big Island; a $372,605 contract awarded March 19, 2002 to CDS International, Inc. to develop a master plan for the Mayor Wright Housing project; and a $327,155 contract awarded March 22, 2002 to TM Designers, Inc. for construction management services on the Big Island.

Young originally produced files September 9 that contained only the contracts themselves. None of the supporting documents, specifically requested by The Advertiser and required by law to be maintained in the files, were there.

Young said in a letter the following day that he had provided "all of the information contained in the records stored in our central filing system."

The Office of Information Practices, a state agency that enforces the state's open records law, notified Young that HCDCH's response was inadequate and did not meet the legal requirements of public access to government records.

Seven weeks after The Advertiser's original request, Young produced what he said were all the records.

None of the files contained all of the legally required records. Only one contained screening committee score sheets. One contained the qualifications of one consulting firm. One contained partial fee negotiation records.

Young said he did not know where the missing records were or why they were not included in the files.

Moya Davenport Gray, head of the state's Office of Information Practices, said she was "very concerned" by the missing records.

"Every government agency must have every official document properly accounted for," Gray said. "Government is not accountable to the people otherwise."

Gray said her office will investigate HCDCH's record keeping to determine if the loss of records was "inadvertant, negligent or purposeful."

Inadvertent losses are understandable but purposeful losses or destruction of records can lead to civil damages or criminal charges, she said.

Federal auditors have also had difficulty gaining access to HCDCH files, according to federal records. Last year, Joyce Lee, head of the HUD public housing regional office in San Francisco, cited HCDCH for a "serious violation" of federal regulations for failure "to maintain complete and accurate accounts and other records" concerning federal rent subsidies disbursed by HCDCH.

And lack of documentation in HCDCH consultant contract files has been a "serious violation" of federal regulations cited by HUD officials annually since 1999, according to federal records.

Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.