Housing chief erred, HUD says
By Jim Dooley
Advertiser Staff Writer
The U.S. Department of Housing and Urban Development has accused state public housing chief Sharyn Miyashiro of violating conflict-of-interest rules by awarding a $768,000 nonbid construction contract two years ago to a company partly owned by her ex-husband.
Michael Liu, HUD assistant secretary, made the accusation in an Aug. 19 letter to Wesley Segawa, chairman of the board of the Housing and Community Development Corp. of Hawai'i.
Liu cited "serious questions surrounding conflict-of-interest issues and procurement" regarding the construction contract that Miyashiro ordered her staff to award directly to Punaluu Builders, a company partly owned by Dennis Mitsunaga, her former husband. The job was awarded after other contractors who had shown interest in the work failed to submit bids.
Liu, a longtime Hawai'i Republican Party member who ran unsuccessfully for lieutenant governor here in 1998, said a HUD attorney reviewed information about the contract award and concluded that Miyashiro violated conflict-of-interest rules in awarding the contract to Mitsunaga "with whom she has a continuing financial interest."
In the letter, Liu said
"... we take such violations seriously and are exploring all avenues of appropriate administrative sanctions against the HCDCH and/or the executive director."
Those sanctions could range from a written reprimand to an order that the entire amount of the contract be repaid by the state.
The Advertiser reported details of the contract award in July.
Miyashiro and Mitsunaga were divorced 21 years ago but terms of the divorce required him to pay the mortgage, utility and repair bills on Miyashiro's Kailua residence until she remarried. Miyashiro and Mitsunaga still own a Makiki condominium together and the divorce agreement made him responsible for paying the mortgage bill. The same agreement also said he had to supply Miyashiro with a car until she remarried.
Miyashiro never remarried but neither she nor Mitsunaga would comment on whether the terms of the divorce agreement were still in force.
Repeated efforts by The Advertiser to obtain comment from Miyashiro about the HUD letter were unsuccessful. State agency spokesman Darrell Young said in a written statement Friday afternoon that the agency board of directors would respond to Liu in writing by Sept. 10.
Agency chairman Segawa did not respond to repeated requests for comment.
Board member Ronald Lim, Gov. Ben Cayetano's special assistant for housing, said the board will withhold public comment until its formal response but did discuss the Punaluu Builders contract award with Miyashiro at a recent executive session.
"We asked her to present her side of the story," he said. "At first blush, she was divorced 21 years ago and the financial relationship was part of the divorce settlement."
Lim said board members "all had different opinions about the situation" but took no action. Segawa was not present at the meeting.
Cayetano will withhold comment on Liu's letter until after the agency board responds, spokesman Cedric Yamanaka said Friday.
Mitsunaga has been a major political fund-raiser for the governor and other prominent Hawai'i Democrats, including Honolulu Mayor Jeremy Harris, Lt. Gov. Mazie Hirono and Maui Mayor Kimo Apana.
Liu's letter is the latest in a series of critical communications to the state housing agency.
In each of the past three years, HUD auditors have reported "serious deficiencies" in the state housing agency's operations. The local agency oversees more than 10,000 federal- and state-subsidized housing and rental units.
In May, Liu notified the agency that it runs the risk of "being declared troubled and/or in substantial default" of federal regulatory requirements. He ordered Miyashiro to spend $2 million to hire a private firm to help with "technical assistance in all areas of management."
Liu also notified the agency in May that federal housing officials would be taking a direct hand in running the Hawai'i agency, including final approval of contract awards.
He said required changes would be detailed in a "corrective action order" being prepared by HUD staff in San Francisco. That order has not been sent, HUD personnel said Friday.
Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.
