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City offers HUD $1.88 million to settle ORI controversy

By Gordon Y.K. Pang

POSTED:
LAST UPDATED: 07:10 p.m. HST, Jul 19, 2013


City officials are asking the federal housing agency to back off its demand that the city return an $8 million grant given to controversial Wahiawa nonprofit ORI Anuenue Hale and instead accept a $1.88 million “reimbursement” for land the city intends to take over.

The request is detailed in a letter that city Managing Director Ember Shinn had hand-delivered late Thursday to Mark Chandler, Honolulu field office director for the U.S. Department of Housing and Urban Development.

Thursday was the deadline for the city to respond to Chandler’s June 3 demand that $8 million in Community Development Block Grant funds be returned to HUD because of a series of improprieties.

A HUD spokeswoman confirmed receipt of the city's response and said the agency would not comment until it had a chance to review it.

"At this point, HUD has made no decisions regarding the document," said Gene Gibson, HUD regional public affairs officer.

At the center of HUD’s concerns is the $7.9 million grant issued by the city to ORI in 2003 to develop the Aloha Gardens Wellness Center and Camp Pineapple 808 ostensibly to serve elderly and disabled persons on acreage next to Dole Plantation and ORI’s own Helemano Plantation.

Chandler said both the wellness center and camp have been used improperly and failed to comply with eligibility requirements tied to accepting the grant. He was also highly critical of the city’s failure to correct the improprieties despite HUD warnings.

Honolulu Mayor Kirk Caldwell's administration is proposing that the city be allowed to take over Camp Pineapple 808 and reimburse HUD $1.88 million for that facility while it works with ORI Anuenue Hale to get the wellness center into compliance.

Another concern raised by Chandler’s letter was the city’s decision, separately, to forgive nearly $1.2 million in CDBG loans in 2010. HUD said the decision to forgive the loans was made primarily by city employees running for office and suggested that the move may have been made in exchange for political contributions.

Shinn, in her letter Thursday to Chandler, acknowledged that city officials have received political contributions from ORI Anuenue Hale and its officers and that, while an internal investigation found no evidence of quid pro quo, the matter was referred to the city Ethics Commission.

Shinn also said that since HUD first raised questions about the loan being forgiven, the city has instituted policies to safeguard against political influence in such decisions.

Caldwell last month removed himself from the city’s internal investigation on the ORI Anuenue Hale issue, noting he himself received a $500 contribution for his unsuccessful 2010 mayoral campaign from ORI Anuenue Hale president Susanna Cheung. Other key city politicos receiving contributions were former Mayor Mufi Hannemann and now-City Council Chairman Ernie Martin, who headed special projects for the city’s Department of Community Services and was running for Council as the loan was being forgiven.

Chandler had also raised questions about a possible kickback that Cheung asked of a Pearl City contractor on the project. The contractor last month told the Star-Advertiser that while she never made such a payment, she did forgive the remaining $20,000 due to her company by ORI at the nonprofit’s request.

Shinn said that matter was referred by former Mayor Peter Carlisle to the U.S. Attorney’s Office in 2012.

Cheung and ORI Anuenue Hale officials have insisted that they have done what they can to abide by a gray set of rules.




City letter to HUD over ORI demand



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dlum003 wrote:
Looks like ol' Kirk wants this mess swept under the rug real quiet-like
on July 19,2013 | 10:50AM
HawaiiCheeseBall wrote:
Really? Heck if he wanted to do that he would just repay the $8 million and be done with that. Seems to me his plan means that this issue will continue, there will be an Ethics Commission probe, the City is going to take ownership a portion of the property, and continue to work with the group to get the wellness center in compliance. Does that sound like a man who wants this thing to go away?
on July 19,2013 | 10:56AM
toledo wrote:
no. Just looking for more contribution for the next election.
on July 19,2013 | 02:02PM
1local wrote:
take the money from the HPD raises...
on July 19,2013 | 02:57PM
HCSSC wrote:
Council Chair Ernie Martin is the one wanting this to go away. He's mired in this controversy.
on July 19,2013 | 11:44AM
droid wrote:
Again, all it would take for Martin to make it go away is a check for $8 million. City councilmen hand out that amount, from a budgetary standpoint, on a daily basis.
on July 19,2013 | 03:57PM
mitt_grund wrote:
This whole affair is a bunch of crock. It is taking advantage of so-called gray areas in federal funding, city/county grants, and contractor/client arrangements that allow for "gray area" kickbacks. Important thing is to not get caught doing so, and if so, claim "gray area" ambiguity. Hey, but they know that they are doing exactly that. What a bunch of self-serving rip-off artists.
on July 19,2013 | 12:57PM
allie wrote:
The sewage from dirty politics out here is just killing Hawaii's chance to be taken seriously as a place to do business. Why should tax payers forgive any of the misdeeds of the City administration. Find mufi and others who may have been responsible for this disaster and indict them if it makes sense to do so. Stop hiding your misdeeds Kirk.
on July 19,2013 | 10:50AM
false wrote:
Go to law school and become a prosecutor or inspector general. We need more equipped people to move it forward. I got your back.
on July 19,2013 | 10:58AM
allie wrote:
cool! Prosecutor allie returns from Bismarck to clean up Hawaii's politics!
on July 19,2013 | 01:09PM
palani wrote:
Yikes!
on July 19,2013 | 12:15PM
kennysmith wrote:
i just got this on my new cell phone, i just wonder why they did this to you people there on oahu?. didn't you do any search on them at all?.
on July 19,2013 | 11:00AM
gthx1138y wrote:
What a sweet deal! If HUD accepts this, every single one of us Hawaii citizens should write to our credit card companies and offer to pay 23.5% of our total balance and call it "EVEN STEVEN"! Thanks for the idea, Mr. Mayor!!!
on July 19,2013 | 11:02AM
Maneki_Neko wrote:
Sounds like we need that ethics probe. Long deep and continuously. I doubt many tax payers want their tax dollars used to buy off a mighty suspicious sounding situation.
on July 19,2013 | 11:16AM
nodaddynotthebelt wrote:
Sounds like the city and county offices need to be audited for their procedures. The fact that an arbitrator found the city and county liable to give the police officers a raise shows that either our city is being mismanaged and did not do a good job of representing our budget or the binding arbitration system is broken. How did this whole mess come about? Somebody either did not do a good job or the system of binding arbitration needs to be looked into and changed made to prevent future problems.
on July 19,2013 | 11:33AM
allie wrote:
true..and kirk is acting like a real rookie so far. What a bust!
on July 19,2013 | 01:10PM
droid wrote:
That is a good point. Arbitration is supposed to be fair to both sides. In this case, SHOPO ran away with the money and the city was left pickpocketed by Honolulu’s “finest.” Maybe HPD officers can pay some of that back, in return for parking their vehicles in the brand new $20 million parking structure sitting unused less than 200 feet away from HPD headquarters.
on July 19,2013 | 04:07PM
nodaddynotthebelt wrote:
Heads at the city and county where this oversight took place should roll. Warnings were made and no corrections taken. That just smells of incompetence.
on July 19,2013 | 11:28AM
palani wrote:
Good luck with that one, Kirk.
on July 19,2013 | 12:14PM
tiki886 wrote:
Isn't it ironic that this scandal involves a non profit that goes by the name, "Opportunities for the R e t a r d e d, Inc"?

Until they made a name change to, "Opportunities and Resources, Inc."


on July 19,2013 | 12:28PM
tiki886 wrote:
Just plug in: 'contains' and "opportunities for the r e t a r d e d " (without the spaces) http://hbe.ehawaii.gov/documents/search.html;jsessionid=854574B1D5DE64DD6D49ED5F84F9B7F5.liona
on July 19,2013 | 12:50PM
redneckMT wrote:
Go gett'em HUD. Treat these criminals like they should be treated. Jail.
on July 19,2013 | 12:36PM
false wrote:
No HUD, please let the City off the hook. We're going to need the money for roads, union contracts, sewers, rail. LOL
on July 19,2013 | 01:18PM
tiki886 wrote:
Just plug in: 'contains' and "opportunities for the r e t a r d e d " (without the spaces) http://hbe.ehawaii.gov/documents/search.html;jsessionid=854574B1D5DE64DD6D49ED5F84F9B7F5.liona
on July 19,2013 | 12:44PM
bikemom wrote:
That is a separate, but related, entity.
on July 19,2013 | 05:24PM
localguy wrote:
If HUD takes the offer, every taxpayer should do the same on their income tax, offer to pay just a percentage, pennies on the dollar to the state. What is good for the Goose is good for the Gander.
on July 19,2013 | 12:45PM
bikemom wrote:
Except that income tax is a state tax. If you want county, that would be real property taxes.
on July 19,2013 | 04:23PM
Papakolea wrote:
Feds: "You owe me $8 million". City: "OK. How's about we pay you back $1.88 and we get to keep the land your money was used to buy?"
on July 19,2013 | 01:00PM
Rickyboy wrote:
The smell worsens from city hall from top on down. CYOA make it go away no matter what.
on July 19,2013 | 01:01PM
allie wrote:
yup
on July 19,2013 | 01:11PM
false wrote:
Uh , KIrk, I think they want the whole banana. 1.8 is probably wouldn't even pay for the time spent to untangle this mess. I think you better up the ante. 1.8 is laughable.
on July 19,2013 | 01:13PM
dontbelieveinmyths wrote:
"Honolulu Mayor Kirk Caldwell's administration is proposing that the city be allowed to take over Camp Pineapple 808 and reimburse HUD $1.88 million for that facility while it works with ORI Anuenue Hale to get the wellness center into compliance." Hahahahahahahahahahahahahaha. The City will fix things. Hahahahahahahahahahahaha.
on July 19,2013 | 01:20PM
Wazdat wrote:
INCOMPETENCE runs DEEP in the islands
on July 19,2013 | 01:45PM
allie wrote:
When i said this 2 years ago I was blasted for it. Glad others now agree with me.
on July 19,2013 | 03:39PM
Wazdat wrote:
that has been said for decades. Nothing new here
on July 19,2013 | 04:57PM
Ronin006 wrote:
Shinn said that while an internal investigation found no evidence of quid pro quo, the matter was referred to the city Ethics Commission. That is utter nonsense and is what you get when the city investigates itself. What’s needed is a special independent prosecutor to investigate what most reasonable people see as bribes, kickbacks, political corruption and malfeasance.
on July 19,2013 | 01:51PM
bikemom wrote:
"Cheung and ORI Anuenue Hale officials have insisted that they have done what they can to abide by a gray set of rules." Cheung and all of her related nonprofit organizations should not even be applying for government grants if she thinks the rules are gray.

In addition, I'm still wondering what kind of "consulting services" ORI purchased with hundreds of thousands of dollars of money that went to at least one for-profit entity that she managed and/or owned. There are still lots and lots of unanswered questions related to this issue.


on July 19,2013 | 04:29PM
Kalaheo1 wrote:
I assume this money will be coming directly out of the pockets of the corrupt and incompetent at the City and ORI and not the blameless taxpayer who keeps seeing their taxes squandered on things like this. Right?
on July 19,2013 | 04:57PM
HD36 wrote:
If a private citizen did this we'd be locked away for bribery.
on July 19,2013 | 06:28PM
NDN wrote:
WHERE IS THE ACCOUNTABILITY??? HAWAII TAXPAYERS AND VOTERS SHOULD DEMAND ACCOUNTABILITY? WHY DOES THIS KIND OF STUFF MAKE HEADLINES AND THEN GET SWEPT UNDER THE RUG? WHERE IS THE ACCOUTABILITY???
on July 19,2013 | 10:08PM
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