Administration hires private eyes to review misuse of grant cash

A private detective firm has been hired by Mayor Kirk Caldwell’s administration to help city officials with an internal review into an $8 million federal grant issued to a controversial nonprofit company.

The U.S. Department of Housing and Urban Development said Monday that it wants the money back, citing a laundry list of concerns it had with the use of the money by nonprofit Opportunities and Resources Inc. Anuenue Hale, as well as the city’s monitoring of the company’s compliance with Community Development Block Grant requirements.

Among the concerns was that some city officials were involved in decisions to forgive a separate $1.2 million in loans as they were receiving campaign donations from at least one ORI official. The report called the forgiving of the loans unusual.

"I do not think I signed any document approving any forgiveness of a loan," Caldwell said Wednesday.

The city’s internal review, headed by Managing Director Ember Shinn and Corporation Counsel Donna Leong, will "make sure we’re absolutely certain that if there were any wrongdoing or problems, we find out what they are," Caldwell told reporters Wednesday.

His administration has also approached city Ethics Commission Executive Director Chuck Totto about looking into the ORI matter.

Totto confirmed to the Star-Advertiser that his office is looking into the matter, which he said was brought to his attention by "a member of the public."

The mayor said he will not make any statements about refunding the money to HUD until the internal review is over.

Caldwell said he and Shinn met with HUD officials in Washington, D.C., about the matter months ago.

Goodenow Associates, which bills itself as "Hawaii’s oldest and largest private detective agency," has been retained "to make sure it’s done in a more expeditious manner and to make sure we get all the information that we need," the mayor said.

Caldwell was acting mayor in the summer of 2010 when one of two decisions was made to forgive loans given to ORI, but he left office days before the second decision was made, according to the dates given in the HUD report.

"I do not think I signed any document approving any forgiveness of a loan … but this review is going to find this all out and whatever we find out we’ll share with all of you," the mayor said.

The HUD report, released Monday, said that "ORI has maintained significant support over many years by the direct involvement of high-ranking city and state officials regarding ORI’s projects."

The report called into question the city’s ability to manage federal grant money.

Three people who were in decision-making capacities with the city and who were also running for office received political contributions from ORI founder Susanna Cheung in recent years. Council Chairman Ernie Martin, then the city’s deputy director of community services, received a total of $4,200. Former Mayor Mufi Hannemann, who left office July 20, 2010, received $6,000. Caldwell, who was Hannemann’s managing director and then was mayor from the time he left until Peter Carlisle became mayor on Oct. 10, received $500 from Cheung.