City wants funds to hire law firm for subpoenaed rail workers

Mayor Kirk Caldwell’s administration is seeking $300,000 to hire lawyers to represent the Honolulu rail authority and its current and former employees in connection with the federal investigation of the city’s $9.2 billion rail project.

The city corporation counsel is asking for City Council permission to hire the San Francisco law firm Rosen Bien Galvan &Grunfeld LLP to represent “a handful” of employees of the Honolulu Authority for Rapid Transportation who were served with federal grand jury subpoenas last month in connection with the project.

According to a resolution that will be heard by the Council’s Executive Matters and Legal Affairs Committee Tuesday, city lawyers do not have the expertise in federal criminal proceedings that is necessary to handle the case. Rosen Bien Galvan &Grunfeld has expertise in white-collar criminal defense and government enforcement, according to the firm’s website.

HART Executive Director Andrew Robbins last week declined to identify the current or former employees who received subpoenas, citing privacy concerns. He said the subpoenas were served directly to the employees, and he does not know what information is being sought.

“Our understanding (is) the employees have been subpoenaed for interviews,” Robbins said. “We have no reason to believe they are targets themselves, so in the course of doing their job as a city employee … they’re entitled to representation by the city in this case.”

When asked if former HART Executive Director Dan Grabauskas was among those who received a subpoena, Robbins replied that he has “no direct knowledge of that.”

A spokesman for Caldwell on Tuesday refused to comment on reports that Grabauskas has been served with a subpoena, and also refused to say whether the city has made arrangements to provide Grabauskas with legal representation.

Grabauskas was the chief executive officer of the Honolulu rail authority from 2012 until he resigned in 2016, which spanned a time when the cost of the city rail project ballooned. The city had pledged in 2012 to build the 20-mile rail line for about $5.2 billion.

If Grabauskas did or does receive a subpoena, the city will be required to provide legal representation for him under his 2016 severance agreement with HART. Under that agreement, if Grabauskas is ever the subject of “a complaint, charge or lawsuit because of any alleged acts or omissions that occurred during the course and scope of your employment with HART, HART shall cooperate in your defense including providing you reasonable access to legal representation …”

HART must also cover “costs and expenses” including transportation, lodging and lost compensation resulting from any time away from work, according to the severance agreement. Grabauskas, who now has a New York-based transportation consulting business, was unavailable for comment.

HART in February was served with three federal grand jury subpoenas seeking tens of thousands of records, but it is still unclear what the focus of the federal inquiry might be.

The City Council executive matters committee will consider Resolution 19-198 to provide the funding for lawyers at 1 p.m. Tuesday, and the full Council will consider the same resolution immediately following that meeting.

Council Chairman Ikaika Anderson said Tuesday he is willing to consider the resolution, but said the corporation counsel has warned there may be legal problems with using money raised through general obligation bonds to pay those legal expenses. But Anderson said he isn’t certain those legal costs should be paid from the city’s general treasury, either.

“I cannot tell you today that I’m comfortable with that. I’m willing to consider it,” he said. “I’m not convinced we should do that at this point. I’m just not convinced we should use city money to pay for defense attorneys.”

“I need more information on exactly what’s involved,” he said.