Former Gov. Cayetano Accuses Rail Authority Board of ‘Malfeasance’

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HONOLULU, HAWAII – Hawaii law is liberal when it comes to protecting various members of state boards and commissioners from liability for their decisions – especially since they are volunteers and not compensated.


But former Gov. Benjamin Cayetano said Thursday the city’s Honolulu Authority for Rapid Transportation Board of Directors, who were appointed to oversee the construction and maintenance of the city’s $5.3 billion planned 20-mile elevated steel on steel rail system, “had better get a lawyer if he is elected mayor” this fall, “because he will go after them for malfeasance.”

HART’s 10-member volunteer board is approving contract awards for more money than they’ve collected from city taxpayers, Cayetano said, and before they know whether the city will be issued a Full Funding Grant Agreement by the federal government for $1.55 billion.

“The way the rail project is structured, HART should have the whole thing (amount of money) before they start construction on the rail project,” Cayetano said. “They acted irresponsibly – they should be held accountable.”

If Cayetano beats former city managing director Kirk Caldwell and Honolulu Mayor Peter Carlisle in the upcoming 2012 mayoral election – both Carlisle and Caldwell support the rail – Cayetano said he will find a way to impose sanctions on the HART board members.

The way the HART Board is set up now as a semi autonomous agency, there is no way to hold the members accountable for their financial and contracting decisions, Cayetano said.

In total, HART and the city have awarded some $2 billion in contracts related to the rail project.

  • In November 2011, HART awarded Ansaldo Honolulu a $1.4 billion contract to build rail cars and operate and maintain the rail.
  • The city awarded this January a $33.4 million contract to Infraconsult LLC, the company that has already received nearly $50 million in contracts to oversee the rapid transit project.
  • A $483 million contract awarded to Kiewit Infrastructure West Co. in 2009 to construct the first segment of Honolulu’s rail transit project rose to to $502 million because of a $4 million change order and $15 million in fines associated with construction delays.

HART Chairman Don Horner and HART Interim Director Toru Hamayasu told the Honolulu City Council Budget Committee that HART will not give permission to proceed on contracts already awarded unless the city has collected the money to cover that work. There is some $450 million in the bank.

Reached by phone today, Horner did not want to comment directly on Cayetano’s pledge, but he said: “We should not commit to anything we do not have capacity for and it is my understanding that we have not done that.”

Honolulu City Council Budget Chair Ann Kobayashi said she is concerned HART asked council members to siphon $244 million from the Handivan and TheBus fund and provide HART with a $450 million line of credit to satisfy the Federal Transit Administration’s financial plan requirements. Without the $450 million, Hamayasu told the City Council Budget Committee that the FTA may not approve the Final Funding Grant Agreement and that would put federal funding for the project in jeopardy.

Kobayashi said: “Why do we have to borrow money and use the Handivan and TheBus funds to fill in the financial plan if it is fiscally sound?”





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