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The Honolulu Advertiser

Posted on: Friday, October 17, 2003

Tourism Authority selects evaluator

By Kelly Yamanouchi
Advertiser Staff Writer

MIKE McCARTNEY

The Hawai'i Tourism Authority has chosen Candon Consulting Group LLC as its special master to conduct an $80,000 review of the Hawai'i Visitors & Convention Bureau's operations.

The tourism authority hired the special master after the state auditor earlier this year sharply criticized HVCB's operations and questioned its use of state money.

The audit led visitors bureau president Tony Vericella to resign, and prompted an ongoing review of HVCB by the state attorney general.

The findings in the auditor's report also prompted a series of hearings at the Legislature. The House and Senate tourism committee chairs have since recommended a formal legislative investigation into use of state money by HVCB if legislators are unsatisfied with results of the tourism authority's own review.

A legislative investigative committee would have subpoena powers to conduct its probe.

The threat of an investigative committee is driving the tourism authority to act as quickly as possible on its special master review.

The Hawai'i Tourism Authority is spending as much as $500,000 to respond to the state audit, including up to $200,000 for the special master and $300,000 on a financial and contract compliance review by accounting firm Nishihama & Kishida.

The tourism authority planned to ask HVCB's auditing firm, KPMG LLP, why it did not flag the questionable accounting practices caught in the state audit.

Tourism authority chairman Mike McCartney said he hopes the authority's reviews "will bring closure to the past."

The authority also wants to determine if the visitors bureau owes it any money.

Vericella told the tourism authority earlier this year that the visitors bureau will repay the state the money it used to hire a law firm to oppose legislation which later caused the bureau to lose its state convention center marketing contract.

Honolulu-based Candon Consulting, led by John Candon, will review the visitors bureau's practices, including its business policies, oversight and accounting. The consultants will report on their findings and recommendations by Dec. 31, before the start of the next legislative session.

Les Enderton, interim president of the Hawai'i Visitors & Convention Bureau, said HVCB would work closely with Candon. "We knew it was coming," Enderton said.

Candon, a certified public accountant, was the court-appointed administrator who oversaw payment of professional fees submitted in the Liberty House bankruptcy case. He also worked as a director at KPMG Peat Marwick LLP in Hawai'i.

"There are a lot of opinions, a lot of them strongly felt, about how things ought to be," Candon said of HVCB's operations. "We're not marketing people or political science advisors. ... We'll just stick to the task at hand and try not to worry too much about the emotions."

Results of the tourism authority's annual evaluation of HVCB, meanwhile, were released yesterday.

The evaluation said HVCB made improvements in communicating with the authority but needs better performance and marketing measures, should be more flexible in responding to events such as the Iraq war, and needs to reduce costs.

The tourism authority also recommended more reporting on the visitor bureau's coordination with SMG, which replaced HVCB as the convention center's marketer this year.

Separately, Rex Johnson, executive director of the tourism authority, said attorney Vernon Char was named to the authority board, replacing Outrigger hotels executive David Carey, who resigned.

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