Posted on: Friday, July 4, 2003

HVCB's president apologizes

By Kelly Yamanouchi
Advertiser Staff Writer

Hawai'i Visitors & Conventions Bureau chairman Tony Guerrero, left, says the agency will review Tony Vericella's expenses dating back three years. Future expenses incurred by Vericella, right, will also undergo closer scrutiny. Richard Ambo • The Honolulu Advertiser

Hawai'i Visitors & Convention Bureau president Tony Vericella apologized to Hawai'i residents yesterday for spending $670 in taxpayer dollars on speeding tickets, in-room hotel movies and other personal expenses.

In his public statement, Vericella said he wanted to "apologize to everyone, and especially the people of Hawai'i, for the $670 of personal expenses," which he said he has paid back to HVCB after the improper use of state money was revealed in a government audit released Tuesday.

"It was just improper for me to do that," Vericella said of the personal spending. "It was an oversight and it will not occur ever again."

Vericella's use of state money to pay for $137 in parking and speeding tickets, $174 for family travel and $359 for in-room movies at hotels was part of the revelations that came out in the report by State Auditor Marion Higa.

HVCB chairman Tony Guerrero said the bureau's chief financial officer will review Vericella's expenses of the last three years to determine if there was any other inappropriate use of state money. In addition, Vericella must submit all of his future expense reports to the chairman of HVCB's board or to its finance committee for approval.

HVCB leaders defended themselves against some of the audit's allegations of misuse of money and accepted some of the criticism as valid.

"We think the results of the audit are going to make us better and more controlled. But I think we need to know the whole story," Guerrero said.

He said he plans no management changes.

"I think our management is in pretty good shape," Guerrero said. "I don't see any dishonesty. I don't see anyone taking any funds or benefiting from any of the contracts."

While one criticism in the audit dealt with "exorbitant bonuses and unnecessary severance packages," including $141,000 in severance pay to Sandra Moreno, a former HVCB employee who marketed the convention center, Guerrero said the given amount is "not out of the ordinary."

Although Higa said HVCB should be held to higher standards because it spends state money, Guerrero said, "We're a marketing organization. We do have bonuses. ... That's the way it is. We're not a state agency."

HVCB leaders defended themselves against what Higa's office called the "most serious finding" that the bureau violated accounting principles by committing money in one year to pay for expenses in a future year, including marketing costs associated with animated film Lilo & Stitch.

Vericella said HVCB was following generally accepted accounting principles. "In the advertising and marketing area there are some gray areas in there," he said.

Guerrero admitted to HVCB's wrongdoing in "questionable expenditures" involving, according to the audit, HVCB entering into high-tech development agreements with former state technology adviser Joseph Blanco under the direction of the former Gov. Ben Cayetano's office. Those agreements raised questions about whether the governor's office used HVCB to circumvent the state procurement code, the audit said.

Such agreements were "wrong, wrong, wrong," Guerrero said, adding that HVCB's board ordered the bureau staff to end the arrangements a year ago. "I think the question needs to be addressed by the attorney general."

"We should have never done it," Guerrero said. "Mr. Vericella has been told — and all respect to the governor's office — the governor ain't his boss."

Guerrero also defended the bureau's decision to award a subcontract to former HVCB vice president Wei-Wei Ojiri's Taiwan public relations firm on the day she resigned from HVCB.

The audit also said allowing Japan Airlines to supplement the salary of the HVCB's vice president could be a conflict of interest.

Guerrero said HVCB will immediately begin paying the entire salary and benefits of all of its employees in Japan.

Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.