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The Honolulu Advertiser
Posted on: Friday, February 5, 2010

Liu's actions indefensible; Lingle needs to fire him

By Sen. Donna Mercado Kim

Hawaii news photo - The Honolulu Advertiser

Ted Liu

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In her first inaugural address in December 2002, Gov. Linda Lingle said, "A 'New Beginning' means zero tolerance for political rewards and retribution." Now, seven years later, her promise rings hollow as we ask ourselves why she will not end the disgraced tenure of Ted Liu as the head of the state's Department of Business, Economic Development and Tourism.

The recently-released report of the legislative auditor on DBEDT's operations is a fresh, but not unprecedented, indictment of Liu's management. He and his department have manipulated federal grants, transferred funds to avoid compliance with regulations, and misled investigators. They have attempted to hide files to escape scrutiny and, in the final analysis, demonstrated an attitude that they should be allowed to do whatever they please.

If Liu were a new administrator, or if this was the first time he had engaged in such practices, we might chalk it up to unfamiliarity with proper procedures or a need for further training. However, given his track record, we can only conclude that we are witnessing an intentional disregard for our laws.

In February 2006, The Honolulu Advertiser reported "Lingle aides bypass procurement process," describing how DBEDT attempted to circumvent procurement laws by using a nonprofit organization to handle large donations solicited by DBEDT to fund the administration's trade missions to China and Korea.

In 2008, new examples surfaced surrounding DBEDT and its granting of a contract to manage the state's Hydrogen Investment Capital Fund. A committee ranked bidders according to established criteria but Liu, as director, selected a contractor that was not the highest-qualifying bidder. The State Procurement Office found that the procurement process did not comply with state law.

In reviewing the evidence surrounding Liu's actions as ascertained by a state Senate investigative committee, the Honolulu city prosecutor found that while the DBEDT director did not commit a criminal act when he awarded the contract to the third-ranked bidder, Liu's wrongdoing was attributable to incompetence, poor management oversight and lack of procurement knowledge. In the private sector, that alone would be enough to get him fired.

Now Liu and DBEDT have had their third strike. The auditor's report makes it clear that Liu and DBEDT cannot be trusted to operate within the parameters of the law, and, perhaps worse, are unwilling to acknowledge their transgressions. The danger under Liu's leadership is not simply that DBEDT cannot act appropriately; it is also the arrogant and shameless manner in which they assume that whatever they do is defensible. Ted Liu and his department have adopted their own version of the famous Nixonian claim: "When DBEDT does it, it is not illegal."

Given his arrogance and apparent lack of a reliable ethical compass, we cannot expect Liu to step down of his own accord. We should, however, be able to expect Lingle to share the public's outrage at Liu's continued course of behavior, and remove him from the position that he has abused. At the very least, the governor should assure the public she will look deeper into the auditor's findings.

Unfortunately, the governor's response has been to label the recent audit as political, just as she has questioned the motives behind other criticism of her administration. Her claim is absurd. The auditor's office has produced a thorough, well-documented review of DBEDT's actions, with more than enough hard facts and documentation to support their conclusions.

The governor herself, again as part of her promise of a "New Beginning," began her first term by praising auditor Marion Higa and meeting with her to review the state's operations. Now the governor seems too willing to turn on former friends when the glare of disclosure shines on her own administration.

Seven years after taking office amid stirring promises and grand intentions, Lingle is demonstrating cronyism at its worst. It is time for her to stop defending and start acting. She needs to put a quick, final end to the story of Liu, and get DBEDT and our state back on the right track.

Donna Mercado Kim chairs the state Senate Ways and Means Committee. She wrote this commentary for The Advertiser.