Visitors bureau will repay state for misused money
By Kelly Yamanouchi
Advertiser Staff Writer
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At a seven-hour meeting of the Hawai'i Tourism Authority yesterday, HVCB officials admitted again that they misused state money in some instances brought to light by a critical state auditor's report.
The audit raised questions about whether HVCB was properly monitored by the authority. It also may jeopardize the bureau's chances of winning the state's major marketing contract for 2004.
The authority, which approves contract money for the marketing of the state as a visitor destination, is weighing a more extensive review of the bureau to answer questions left unsettled after the audit.
The authority may conduct its own financial review of HVCB or retain state auditor Marion Higa's accounting firm, Nishihama & Kishida, covering a longer period of time than scrutinized by Higa, said authority board chairman Mike McCartney.
Tourism authority executive director Rex Johnson said the authority could also:
- Require restitution of any money inappropriately spent;
- Commission a management audit;
- Appoint a special master to review HVCB operations.
"We're still in the investigative process," Johnson said.
HVCB repeated its admission that it committed errors, including using state money to pay for HVCB President Tony Vericella's personal expenses. Vericella has paid back the money.
"We realize we have to correct any deficiencies," Vericella said.
He also said HVCB will return money used for a law firm that lobbied against a measure that eventually led to HVCB losing its $4 million annual contract to market the Hawai'i Convention Center.
He said the bureau paid for legal research on a possible veto of the bill after former Gov. Ben Cayetano raised objections to the bill and asked for assistance.
Vericella could not immediately say how much in state money was used, but the amount is part of some $21,384 spent on services related to the Legislature.
Authority board member Lorrie Lee Stone suggested there may be even more state money owed to the authority if it is found that the HVCB inappropriately charged the state for fees related to its contract negotiations with the tourism authority.
The authority scheduled another board meeting for Monday afternoon to consider conducting more extensive reviews of HVCB.
The Legislature is also considering convening an investigative committee with subpoena powers, a subject that its two tourism committees will take up tomorrow.
Senate tourism committee chairwoman Donna Mercado Kim said she would like the Legislature to launch an investigation, but lawmakers may not need a panel of its own if reviews by the attorney general and the tourism authority sufficiently answer questions about HVCB's operations.
At yesterday's meeting, Marsha Wienert, who sits on the tourism authority as Gov. Linda Lingle's tourism liaison, asked HVCB to explain use of state money, including why the state was charged for services in one year when they were not performed until the following year.
HVCB officials said they had to bill the state so the money would be committed. They said its practices were deemed generally accepted by their auditing firm.
Higa criticized the accounting practice as an example of the nonstandard procedures used by HVCB.
Some of the toughest questions and criticisms yesterday came from members of the tourism authority's marketing committee, including Stone and tourism authority chair Sharon Weiner.
The marketing committee will recommend to the full authority who should get $25 million in tourism marketing contract money starting next year.
Lingle has said it is likely HVCB will not get the entire contract.
In an effort to shore up its image, the HVCB board said it will exert tighter controls over Vericella, who received the board's vote of confidence this week.
The HVCB board said it is forming a financial audit committee and a management review committee to determine its next steps.
HVCB officials also defended a contract that it granted to a former bureau employee, saying she was best-qualified for the job. They said a severance package for the employee, called unnecessary by Higa, was part of the worker's contract with the bureau.
In public testimony after the discussions, Maui resident John Dunbar called for the tourism authority to immediately end its contract with HVCB.
