A culture of dysfunction and favoritism permeates the state Bureau of Conveyances, according to documents turned over under subpoena to a special legislative investigative committee yesterday by the state Ethics Commission.

Bureau workers accused each other of mismanagement, impropriety and harassment, along with giving special favors and access to title companies that depend on the bureau to officially record real-estate transactions for the entire state, according to the documents.

Bureau workers describe a system where large title companies get preferential treatment by cultivating relationships with bureau supervisors while others wait for service.

Dan Mollway, the executive director of the Ethics Commission, had initially refused to provide the documents to a special state House and Senate committee investigating the bureau because he questioned the impartiality of the commission's investigator, Hilton Lui.

Mollway told the committee yesterday he considered Lui's work biased and untrustworthy and cautioned that the documents should not be construed as being endorsed by the commission. He said the commission will initiate a new investigation of the bureau.

Mollway determined Lui was biased after complaints that Lui had lobbied a state senator to oppose Peter Young as director of the state Department of Land and Natural Resources, which oversees the bureau, and cheered in the Senate gallery when it appeared Young would not be confirmed.

STANDING BY HIS WORK

Lui, who had been hired as lead investigator for the committee based in part on his work for the commission, resigned on Monday. Lui said he stood by his work on the bureau but did not want Mollway's accusations to taint the committee's probe.

Lui also said the committee would discover by reading the documents that his work was not biased.

The documents, reviewed by The Advertiser yesterday, do not contain any summaries or conclusions by Lui about his investigation. Instead, they involve witness statements, copies of e-mail, and financial and contractual records that Lui had gathered.

Backlogs in processing land records and management problems at the bureau have been detailed by the news media over the past few years and were cited by the Senate during the confirmation hearings on Young.

The state Attorney General's office is investigating possible criminal violations at the bureau, while the Ethics Commission is looking at whether bureau workers gave preferential treatment in exchange for gifts. The commission sent a letter to the bureau last year noting it is a violation of ethics law to receive gifts, such as gift baskets around the holidays, for doing bureau work.

The House and Senate committee is investigating management problems at the bureau.

The documents turned over yesterday illuminate some of the allegations that surfaced about the bureau during the Young confirmation hearings. The Senate ousted Young as head of the Department of Land and Natural Resources in April.

Among the most serious allegations, so far, is that Bureau of Conveyances records may have been accessed and altered by title companies using either bureau employee logons and passwords or private logons and passwords. One bureau worker who was suspicious that title companies were able to get access to bureau computers and alter files, tested his theory and found it to be true. The worker, who had previously worked at a title company, used his old title company logon and password to get into the bureau's computer system from outside. The worker informed bureau supervisors, who apparently tightened security.

Title companies pay the bureau a fee to view and print out certificates of title but are not supposed to have the ability to alter records. Bureau workers are supposed to make any corrections to documents. Such a breach in security, if true, could threaten the integrity of land records.

ALLEGED EXTRA ACCESS

Other claims involve a computer at the bureau donated by Title Guaranty of Hawaii that several bureau workers believe gives the company greater access to bureau documents than its competitors. Title Guaranty, in a statement in April, said it has the same access to bureau records as other title companies.

Favored title companies, according to the documents, also have apparently had access to the bureau's back office; were allowed to do work with the bureau after hours and on weekends; and had better connections to bureau supervisors and department directors.

In one e-mail last December by an Island Title Corp. executive to a bureau supervisor, the executive described how a developer Island Title was working with hired a Title Guaranty employee with close ties to the bureau as an outside consultant to "walk the recording through the bureau."

"It was her intervention and influence that probably made the task a lot easier, and probably possible," the Island Title executive wrote of his competitor.

The Island Title executive could not be reached for comment yesterday.

State Sen. Jill Tokuda, D-24th (Kailua, Kane'ohe), the co-chair of the special investigating committee, said audio tapes of the witness statements — which also were turned over yesterday — might be especially useful and could help sort out whether the information in the documents was biased or can help with the investigation.

STATE AUDITOR TO HELP

"The tapes provide a really great opportunity to kind of hear first-hand what was going on," Tokuda said.

The committee said yesterday the state auditor will help with the investigation now that Lui has resigned.

State Rep. Cynthia Thielen, R-50th (Kailua, Kane'ohe Bay), who serves on the committee, believes Lui's investigation has been tarnished and his documents should not be used by the committee. She also said that some of the bureau witnesses Lui relied on have had disputes with fellow bureau workers who believe that their motivation is to allege criminal wrongdoing and discredit the bureau, the department and the Lingle administration.

"I think this is a very dysfunctional and disgruntled group of employees," Thielen said.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.