Extent of rail’s influence a mystery

Hundreds — possibly thousands — of subcontractors are profiting from work on Oahu’s rail transit project and many donate significant campaign dollars to leaders championing the project, but rail officials aren’t required to track most of those firms or how much they’re spending.

A Honolulu Star-Advertiser analysis of the rail project’s 145 known subcontractors, using a list compiled mostly through voluntary reporting, found that employees or principals from that group donated nearly a quarter of a million dollars in the past five years to Mayor Kirk Caldwell, arguably rail’s strongest and most outspoken political advocate.

Their $242,617 in donations between 2010 and 2014 represented more than 6 percent of Caldwell’s total donations for that period.

Those subcontractors represent a fraction of the total "subs" working on the rail project. The total number isn’t known.

The local agency overseeing rail, like other public agencies that oversee large construction projects, is required by law to track only a limited set of subcontractors. They include those who qualify under a disadvantaged business program and those who require special licenses to work on the project.

Some open-government advocates say the void in subcontractor information raises concerns of how much the public can really know about the most expensive public works project in Hawaii’s history, especially at a crucial moment for rail when local advocates such as Caldwell have called for as much transparency as possible.

"When contractors or subcontractors have been donors to political campaigns, that should serve as an exclamation point to those civic leaders to go above and beyond what is just ‘legally required’ to what any good, conservative businessman or woman would do: Document bottom-line spending," said Edwin Bender, executive director of the Helena, Mont.-based National Institute on Money in State Politics. "And let the public know they’re doing all they can to hold contractors accountable."

Caldwell declined requests for an interview last week. However, a statement from Caldwell’s spokesman stressed that the mayor cannot influence the procurement process, which is set by Congress and the state Legislature.

Caldwell has spent much of his time in the past several months visiting with state legislators and testifying at their committee hearings. He’s called on law­­makers to extend Oahu’s rail tax surcharge and help steer the project past a budget shortfall of up to $910 million.

Many of those same lawmakers in the House, meanwhile, passed a resolution earlier this month calling for a rail audit that included "at a minimum" subcontractor awards and expenditures, among other data.

The Honolulu Authority for Rapid Transportation, which oversees rail, has reported spending about $1.4 billion overall on the project to date.

Of that amount, about $82 million in subcontractor spending has been made known to the public through a partial list of subcontractors that HART gave to the City Council, as well as through details on subcontractors in the federal Disadvantaged Business Enterprise program.

Subcontractors typically are the firms hired by "prime" contractors that sign the broader design, engineering and construction deals with the city to complete the island’s 20-mile elevated rail project. HART tracks and provides information on its primes, but most of the subcontractor spending disappears from public view.

For example, several of rail’s prime contractors, including URS Corp. and Kiewit Infrastructure West, volunteered the names of their local subs for that list to the City Council, but they did not provide the dollar values for their contracts.

"Even the subs have subs," HART spokeswoman Jeanne Mariani-Belding said. Because of their limited subcontractor tracking, HART officials say they don’t have a solid number or even a working estimate of how many subcontractors have been hired for rail work.

"Hundreds, maybe thousands" was the closest estimate that HART CEO Dan Grabauskas could offer Thursday.

The rail agency does track all of the 40 prime contractors used on the project so far. Employees and principals at those primes gave $323,579 to Caldwell between 2010 and 2014, representing more than 8 percent of his total contributions for that period.

Companies that were both prime and subcontractors were counted only as prime contractors for the purpose of this analysis.

HART, a semiautonomous government agency, is following the law on subcontractors as outlined last week by federal transit officials. HART’s approach to subcontractor tracking also closely resembles the one described by another local agency that oversees large infrastructure projects: the state’s Department of Transportation.

When DOT monitors a project, it "verifies the subcontractors used are the same ones listed in the proposal" made by the prime contractor that received the award, department spokesman Tim Sakahara said.

For Oahu’s rail project, HART verifies certain subcontractors that need "specialty" licenses for certain work are being used but it doesn’t track all the subs, Grabauskas said. The number of subs that HART needs to check on depends on the contract, rail officials added.

"We know on a project of this size that there are hundreds (of subs). … It’s just that in some instances we’re required to know who they are, and in others it’s not material," Grabauskas said.

He has previously said that the public gets its assurances that officials are spending their taxpayer dollars fairly and competitively during the procurement process for the prime contracts, in which the work goes to the lowest qualified bid.

"It does not promote in any way that I’ve seen the public interest to do more than that," Grabauskas said. "If it did, then that’s a question for the Legislature and the Congress, because they would have to change federal and state laws."