Clifton M. Hasegawa President and CEO Clifton M. Hasegawa & Associates, LLC Chairman, President and CEO Kaimanu Maritime Corporation 1044 Kilani Avenue 12 Wahiawa, Hawaii 96786-2243 Telephone: (808) 498-8408 Email: [email protected]Via United States Postal Service – Express Mail June 19, 2015 The Honorable Barack Obama President of the United States of America The White House 1600 Pennsylvania Avenue NW Washington, DC 20500 Re: Senator Daniel K. Inouye - The Rail Transit Department of Transportation Inspector General Complaint Audit and Investigation of the Honolulu Authority for Rapid Transit (HART) Transit from Kapolei to Ala Moana Center and The University of Hawaii Dear President Obama: Your intervention to complete Senator Dan Inouye's Rail Transit is requested.
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President Barack Obama - Honolulu Authoirty for Rapid Transit (HART) - SOS - Code RED - Immediate Jeopardy
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Clifton M. Hasegawa
President and CEO Clifton M. Hasegawa & Associates, LLC
Chairman, President and CEO Kaimanu Maritime Corporation
The Honorable Barack Obama President of the United States of America
The White House 1600 Pennsylvania Avenue NW Washington, DC 20500
Re: Senator Daniel K. Inouye - The Rail Transit Department of Transportation Inspector General Complaint Audit and Investigation of the Honolulu Authority for Rapid Transit (HART) Transit from Kapolei to Ala Moana Center and The University of Hawaii
Dear President Obama:
Your intervention to complete Senator Dan Inouye's Rail Transit is requested.
Senator Inouye began the Rail Transit project with Mayor Mufi Hanneman and shepherded the project with Mayor Peter Carlisle and Mayor Kirk Caldwell.
Senator Inouye's leadership, wisdom, guidance and direction provided the cohesiveness to keep the transit organization and project focused and moving forward.
The Rail Transit is the largest construction project in the State of Hawaii.
Department of Transportation Inspector General Calvin L. Scovel III is in receipt of my Hot Line Complaint regarding the operation of the Rail Transit Program. My objective is to have a complete audit and thorough investigation of Honolulu Authority for Rapid Transit, to implement best management and financial procedures, and to establish oversight program to complete the Rail Transit.
Senator Inouye stated on more than one occasion that the disbursement of $1.5 billion from the Federal Transit Authority (FTA) was the last. Senator Inouye languished over the delays in the project, the unaccounted and lavish expenditure of tax dollars, gaps in the procurement practices and procedures, and the consistent and constant requests from Honolulu Authority for Rapid Transit for additional funding. Shuttering access to Federal funding was Senator Inouye's message to Honolulu Authority for Rapid Transit, “No grant and aide from Washington until and unless financial transparency, accountability and responsibility are restored and established, the Honolulu Authority for Rapid Transit budget is streamlined, all known and reasonably foreseeable cost contingencies are accounted and included in the budget, all financial information is accurate and current, and all revenue, expenses and expenditures are auditable without self-guided restrictions.”
Immediate action by Inspector General Scovel and his investigative and audit teams is imperative. The situation is Code Red. The Rail Transit is in crisis and immediate jeopardy.
Upon completion of action by the Department of Transportation Inspector General and the Federal Transit Authority, I respectfully recommend a collaborative and mutual financial plan between Department of Transportation, Federal Transit Authority and the Honolulu Authority for Rapid Transit be developed and implemented for a cost sharing to complete the Rail Transit.
The current end point for the Rail Transit from Kapolei is Ala Moana Center. The University of Hawaii was the intended destination.
Respectfully, I recommend the Department of Transportation, Federal Transit Authority and the Honolulu Authority for Rapid Transit develop, establish and implement operational plans and procedures to complete the Rail Transit to the University of Hawaii.
Thank you very much
Aloha
Respectfully,
--- Signed---
Clifton M. Hasegawa
Copies provided to:
Governor David Ige
State of Hawaii
Lieutenant Governor Shan Tsutsui State of Hawaii
Members of the Hawaii State Senate
Members of the Hawaii State House of Representatives
Mayor Kirk Caldwell City & County of Honolulu
Members of the Honolulu City Council
Congresswoman Colleen Hanabusa
Honolulu Authority for Rapid Transit
Daniel Grabauskas
Executive Director & CEO
Honolulu Authority for Rapid Transit
Scott Ishikawa
Media Relations – Construction Honolulu Authority for Rapid Transit
June 6, 2015 VIA EMAIL - [email protected] The Honorable Calvin L. Scovel III Inspector General U.S. Department of Transportation 1200 New Jersey Ave. S.E. - 7th Floor Washington, DC 20590 RE: Request for Investigation Dear Mr. Scovel: This Complaint and request that the Office of the Inspector General (OIG) initiate an investigation into the Honolulu Authority for Rapid Transportation (HART) on the bases of fraud, waste and abuse in the expenditure of Federal funds violations of contracting and government procurement laws, and violations of laws and regulations on Standards of Conduct. This matter has been brought to the attention of government officials at the United States Department of Transportation; the Federal Highway Administration (FHWA); the Federal Transit Authority (FTA); David Y. Ige, Governor, State of Hawaii; Shan S. Tsutsui, Lieutenant Governor, State of Hawaii; the Hawaii State Legislature; the State of Hawaii Department of Transportation; Kirk Caldwell, Mayor City & County of Honolulu; the Council Members, City & County of Honolulu; Daniel Grabauskas, Executive Director & CEO, Honolulu Authority for Rapid Transportation and the Board of Directors, Honolulu Authority for Rapid Transportation. Financial mismanagement; instances of fraud, waste and abuse; violations of contracting and procurement laws, and standards of conduct laws and regulations continue.
Please refer to the attached Exhibit Request for Government Records – Ethics Violations to the City & County of Honolulu, Honolulu Authority of Rapid Transit (HART) June 4, 2015 and the following Slide Share presentations: 1. Request for Government Records – Ethics Violations – City & County of Honolulu, Honolulu Authority of Rapid Transit (HART) June 4, 2015. 2. http://www.slideshare.net/cliftonmhasegawa/the-rail-quality-assurance-safety-primary-and-priority 3. http://www.slideshare.net/cliftonmhasegawa/honolulu-authoirty-for-rapid-transit-unsafe-at-any-speed-part-ii 4. http://www.slideshare.net/cliftonmhasegawa/hart-hawaii-state-legislature-city-and-county-of-honolulu-hawaii-public-utilities-commission-may-5-2015 5. http://www.slideshare.net/cliftonmhasegawa/yesterday-47881430 6. http://www.slideshare.net/cliftonmhasegawa/honolulu-authoirty-for-rapid-transit-hart-a-template-for-doom-and-destruction The Federal dollars committed and to be released are significant. PROJECT REVENUE STATUS (As of May 1, 2015)
Projections to Date Collected/ Committed to Date % of projections
Source: Honolulu Authority for Rapid Transit (HART) Date Accessed June 6, 2015 http://www.honolulutransit.org/media/344687/201506-rail-update-hart-facts.pdf
Prevention and detection of fraud, waste, abuse of Federal funds are priority programs of the United States Department of Transportation. Prevention and Detection of Fraud in Transportation Programs
The prevention and detection of fraud is an objective we share throughout
all levels of government. In 1960, the predecessor of this subcommittee,
led by Congressman Blatnik, investigated the Federal-aid Program and
found it was fraught with waste, fraud, and corruption. They concluded
that essential controls were lacking at both the state and Federal levels.
Controls to prevent the types of problems that were occurring then were
put in place; our work does not suggest abuse on a scale such as was
experienced in the 1950s and 1960s. However, in the past 3 years, we have
seen increases in our fraud case work and judicial actions involving
highways and transit, including several of the biggest cases in the history
of the highway program.
At present, we have 113 pending investigations of contract and grant
fraud involving highway and transit projects in 37 states.
The types of fraud we are commonly seeing today include activities like
bid rigging, bribery and kickbacks, false claims, and product substitution.
The states are the first line of defense in preventing such fraud, and we
have been working closely with a number of state Inspectors General and
state auditors on our fraud investigations.
Source: Statement of Kenneth M. Mead, Inspector General, U.S.
Department of Transportation. Before the Subcommittee on Highways
and Transit House Committee on Transportation and Infrastructure
United States House of Representatives. May 1, 2002.
Failings in HART’s self-guided contracting and procurement procedures
cited in Exhibit 2 – Yesteryear and the focus of Request for Government Records
and Ethics Complaint, Exhibit 1, HART’s apparent violations of Federal and State
Procurement Laws and directives issued by the Federal Transit Authority (FTA)
perpetuate a toxic environment conducive to fraud and further unrestrained
mismanagement of Federal and State funds. The situation is Code Red. The
gravity is severe as the continued forward progress of the HART transit project is
in immediate jeopardy.
Your immediate intervention is requested.
Thank you very much.
Respectfully
Clifton M. Hasegawa
Copies provided to:
Mayor Kirk Caldwell
Council Chair Ernest Y Martin
Council Member Kymberly Marcos Pine
Council Member Carol Fukunaga
Council Member Ann Kobayashi
Council Member Ikaika Anderson
Councilmember Joey Manahan
Council Member Trevor Ozawa
Council Member Brandon Elefante
Council Member Ron Menor
Donna Y.L. Leong, Corporation Counsel, City & County of Honolulu
Honolulu Authority for Rapid Transit (HART)
Mr. Daniel Grabauskas Executive Director and CEO
Board of Directors
Congresswoman Colleen Hanabusa
Mr. Ivan Lui-Kwan
Mr. Don Horner
Mr. George I. Atta
Mr. Robert Bunda
Mr. Michael Formby
Mr. Ford Fuchigami
Mr. William Hong
Mr. Keslie Hui
Mr. Damien Kim
State of Hawaii
Senate President Ronald Kouchi Members of the Hawaii State Senate House Speaker Joseph Souki Members of the Hawaii House of Representatives Mr. Les Kondo, Executive Director, Hawaii State Ethics Commission NOTE: Exhibits have been omitted for this Slide Share presentation
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Clifton M. Hasegawa President and CEO
Clifton M. Hasegawa & Associates, LLC 1044 Kilani Avenue 12
June 22, 2015 Ellen Richardson Administrative Assistant to Ann CalvaresiBarr, Deputy Inspector General U.S. Department of Transportation 1200 New Jersey Avenue S.E. – 7th Floor Washington, DC 20590 RE: Hot Line Complaint and Request for Investigation, June 6, 2015 City and County of Honolulu Recipient ID: 1703 Honolulu Authority for Rapid Transit (HART) US Department of Transportation, FTA Region IX Dear Ms. Richardson, Deputy Inspector General Ann CalvaresiBarr during her tenure with the US General Accountability Office as Director of Acquisition and Sourcing Management provided testimony before the United States Senate, Committee on Homeland Security and Governmental Affairs, Ad Hoc Subcommittee on State, Local, and Private Sector Preparedness and Integration, Federal Efforts Are Helping to Address Some Challenges Faced by State and Local Fusion Centers, GAO-08-695T, April 17, 2008. The major theme of Deputy Inspector General CalvaresBarr’s testimony is the proper provisioning to systematically collect current and accurate data and information, thorough analysis of the data and information, identification of strengths and weaknesses, and positive action to correct weaknesses in incumbent and mandated for State and local entities. These issues are presented in my Complaint and are exponentially compounded by the lack of oversight and the reluctance of the Honolulu Authority for Rapid Transit (HART) and the City & County of Honolulu to implement recommended corrective measures.
The $78.9 Million award by HART to Hawaiian Dredging Construction Company, Inc. (HDCC) on June 10, 2015 for the Farrington Highway Station Group - West Loch, Waipahu Transit Center and Leeward Community College rail transit stations. This procurement was protested by Nan, Inc. and discussed in my Complaint. HART made the award after receipt of the decision May 28, 2015 from Senior Hearing Officer David H. Karlen. Hearing Officer Karlen granted HART’s and HDCC’s Motion to Dismiss/Summary Judgment, denied Nan’s Motion as Moot, denied Nan’s claim and request for Administrative Hearing as lacking jurisdiction. The Hearing Officer’s decision included discussion of unbalanced bids. The Hearing Officer determined HDCC’s bid was not mathematical unbalanced and on that basis determined inquiry and a determination as to whether HDCC’s bid was materially unbalanced was not necessary or required. Please refer to http://cca.hawaii.gov/oah/files/2015/05/PDH-
2015-004-Nani-Inc.-v.-Hawaii-Authority-for-Rapid-Transportation.pdf The forgoing inquiry as to whether HDCC’s bid was unbalanced taken by the Hearing Officer is a misinterpretation of guidance provided by the US Department of Transportation and compromises the integrity of the procurement. Specifically,
“In our review of bid information involving substantial differences between the low bid unit prices, we are required to consider first, whether there is an error in the estimated quantity and if there is no error, whether the bid is mathematically or materially unbalanced. A mathematically unbalanced bid is one containing a bid item(s) which do not reflect reasonable actual costs and a reasonable proportionate share of the bidder's profit and overhead. A materially unbalanced bid is one for which there is reasonable doubt that award to the bidder submitting the mathematically unbalanced bid will result in the lowest cost the Government. Identify any of these items considered to have the potential to significantly overrun or underrun. Indicate whether the unbalanced item is considered to be mathematically or materially unbalanced.
[C]onsiderable judgment is required in reaching a decision on whether a bid is mathematically or materially unbalanced.” [Emphasis Supplied] “Bid Analysis and Unbalanced Bids” FWHA Memo http://www.fhwa.dot.gov/programadmin/contracts/880516.pdf http://www.fhwa.dot.gov/construction/cqit/award.cfm
The independent review as to whether Hawaiian Dredging Construction Company’s bid is unbalanced, mathematical and/or materially, by the Office of the Inspector General and the Federal Transit Authority (FTA) is requested to restore transparency, responsibility and accountability to Honolulu Authority for Rapid Transit (HART), the City & County of Honolulu, their leadership and managers. Thank you very much. Respectfully, --- Signed --- Clifton M. Hasegawa
Caldwell Returns Budget Bills Unsigned in Protest of HART Oversight
June 23, 2014· By Sophie Cocke Honolulu Civil Beat
Honolulu Mayor Kirk Caldwell will allow the city’s 2015 fiscal year budget to take effect in July without his signature, a symbolic gesture meant to underscore his position that the City Council doesn’t have authority over the budget of the quasi-city agency overseeing the $5.2 billion Honolulu rail project.
Caldwell returned six bills unsigned to the City Council on Monday, three of which relate to the budget for the Honolulu Authority for Rapid
Transportation. Three others are the city’s legislative, operating and capital budgets.
Caldwell said during a press conference earlier this month that he was leaning toward signing the city’s operating and capital budgets this year, which he rejected last year, while making clear that he would likely not sign the separate HART budget bills.
“I believe under the charter amendment setting up HART, HART was designated the entity to build rail and it was to take the politics out of the system,” he said.
Honolulu Mayor Kirk Caldwell speaking to the press on June 4, 2014
However, he decided not to sign the city’s legislative, operating and capital budget bills as well because of clauses included in the measures related to HART, according to a press release issued by the mayor’s office on Monday.
The clauses relate to the City Council’s authority over HART’s budget.
The move by Caldwell signifies a long-standing disagreement between the mayor’s office and City Council over whether the council has authority over HART’s budget. Former Mayor Peter Carlisle also declined to sign bills related to the HART budget.
Council Chair Ann Kobayashi said that the City Council has always gone over the HART budget since the agency was established.
HART “always submits their budget, they come to our hearings, they don’t have a problem with it,” Kobayashi told Civil Beat.
“They have been transparent with us when asked questions or when asked for more information, they give it to us.”
She said it was odd [ ? ] for the mayor to take the position that the City
Council doesn’t have authority over HART’s budget when HART is asking the City Council to float bonds as bridge financing for the rail project.
“If they [sic]1 mayor thinks we don’t have any authority, does that mean that
he thinks we shouldn’t issue city bonds?” she said.