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The Honolulu Advertiser
Posted on: Friday, February 24, 2006

FBI looking into city transit subcontract

By Peter Boylan
Advertiser Staff Writer

The FBI's Honolulu division has interviewed at least one person and sought records in connection with a subcontract that was part of a larger, $9.7 million design deal for mass transit on O'ahu, said a local businesswoman who was interviewed by the federal investigators.

Separately, the inspector general's office of the U.S. Department of Transportation has opened a review into how the subcontract was awarded, according to a DOT spokesman in Washington, D.C.

Ruth Limtiaco, CEO of Limtiaco Co., a Honolulu public relations firm that was originally listed as one of the subcontractors in the initial proposal but was later dropped, said she met with an FBI agent Nov. 1, and turned over "records" including a timeline of the contract award process.

Limtiaco said she had considered the matter closed after her firm was dropped from the final design contract.

"At the time it occurred, I was disappointed by the outcome of the selection of the subcontractors on the transit project," she said yesterday in an e-mail. "Since then, however, our firm has simply decided to move on and pursue other business. If contacted, I am, of course, obliged to cooperate with authorities."

Charles Goodwin, special agent in charge of the FBI's Ho-nolulu division, said he could neither confirm nor deny FBI involvement.

In December, City Councilman Charles Djou asked the federal Department of Transportation to investigate the contract award, saying the city may have abused its authority by requiring the contractor to divert nearly $900,000 in work to a subcontractor that wasn't part of the original team. The work went to an engineering firm headed by Joe Pickard, a friend and political supporter of Mayor Mufi Hannemann. Pickard did not return a phone message left at his office yesterday.

The subcontract originally was to be awarded to Communications Pacific. Kitty Lagareta, Communication Pacific's CEO, has a civil suit pending against the city, and declined comment yesterday.

More than $7 million in federal transportation money will be used to pay for the overall contract work.

The DOT spokesman, David Barnes, said "I wouldn't call (DOT's review) an 'investigation,' " meaning that criminal charges probably are not in play.

"We were asked by Councilman Djou to look at issues related to the contract, and we're in the process of doing that. We're sorting through all the stuff and trying to see if there is anything to it," said Barnes from his Washington, D.C., office.

Hannemann did not return messages seeking comment left with his press secretary, Bill Brennan, yesterday.

Djou said he was "happy" that the DOT is looking into the matter.

"I would like an independent third-party review of this, and if nothing untoward happened, I hope that's what the federal government reports, and the public can go forward with this project," he said yesterday. "But if something nefarious did occur, let's bring it out into the open."

Djou's request prompted Hannemann and U.S. Rep. Neil Abercrombie, D-Hawai'i, to accuse the councilman, who voted against increasing the general excise tax to pay for a transit system, of trying to delay the project.

Hannemann and Abercrombie sent letters to the Transportation Department, suggesting an investigation was not warranted.

Reach Peter Boylan at pboylan@honoluluadvertiser.com.