City lawyers admit Council passed erroneous bill

A Honolulu City Council measure approving more money for a controversial and mysterious city contract with a California-based law firm contains erroneous information, a situation that could force Council members to redo their vote.

The Council voted 7-2 on Sept. 4 to pass Resolution 19-216 authorizing $75,000 in additional funding be paid to Farella Braun and Martel for what has only been described by the Department of Corporation Counsel as consulting services for “matters involving criminal law.” The resolution, which was drafted by Corporation Counsel, said the Council had previously voted to authorize $150,000 for the job, bumping the total amount to $225,000.

The problem is that when the Council passed Resolution 19-47, it was for $100,000 — not $150,000 as stated in the second measure.

Further complicating the situation is that Council members have voted twice now to hire lawyers to block the release of documents seized by federal authorities for an investigation — or investigations they know little about.

The city Department of Corporation Counsel on Friday confirmed in an email that the more recent resolution contained erroneous information. However, the department does have a total of $225,000 available for the Farella contract because it has $50,000 in funding that did not require authorization from the Council, the email said.

The department declined to say whether the $75,000 allotment, or the contract itself, is in jeopardy, whether there are other c onsequences caused by the mistake or whether a new resolution needs to be passed.

City attorneys “will be meeting with the City Council next week to decide on the best course of action,” the email said.

Councilman Ron Menor, who chairs the Executive Matters and Legal Affairs Committee, said he will place the issue on the agenda of its regularly scheduled meeting Tuesday. As is frequently the case with legal matters, the matter will be discussed with Corporation Counsel attorneys in executive session outside of the public’s view.

Menor, who like other Council members wasn’t aware of the error until it was pointed out by the Honolulu Star-Advertiser, said he will speak more freely about the situation after Tuesday’s discussion with Corporation Counsel.

Councilwoman Kymberly Pine, one of the two “no” votes on the $75,000 authorization, said she thinks the second resolution and possibly the contract itself might be invalid due to the error.

“Either the Council needs to add money (through a new resolution) or they have to redo the contract,” Pine said.

The lack of specific information about the contract was a key reason she voted against the resolution.

Council members said they’ve been told by Corporation Counsel that Farella is being hired to represent the city in its challenge of records seized by federal authorities in January, although it hasn’t been made clear what the investigation is about.

In mid-January Mayor Kirk Caldwell confirmed to reporters that federal investigators served a search warrant on the Department of Information Services at the Frank Fasi Municipal Building tied to the investigation into corruption that centered around former Police Chief Louis Kealoha and his wife, Deputy Prosecutor Katherine Kealoha. Caldwell made the statement during a news conference announcing that city Corporation Counsel Donna Leong was being placed on paid leave because she had received a target letter in connection with the Kealoha case.

But during roughly the same period, federal investigators subpoenaed records from the Honolulu Authority for Rapid Transportation involving alleged, unspecified instances of wrongdoing tied to the $9.2 billion rail project, which has nearly doubled in price in recent years. Prior to the creation of HART, the city Department of Transportation Services had oversight over the fledgling rail project.

Menor said previously that Council members have only been told by city attorneys that they think an independent party should have been on hand to review which documents should have been turned over and which to withhold. City attorneys went to court seeking to stop the release until a federal judge can conduct an “in camera” review and decide which should be released.

Those proceedings, however, and documents tied to them appear to be under seal and closed to the public.

“There wasn’t a lot of specifics as to what information they were going to fight to withhold,” Pine said. “It was not clear which investigation this was for, and we shouldn’t approve these types of things because it’s taxpayers’ money and Council members should know exactly what this money is being spent for.”

Councilwoman Heidi Tsuneyoshi, the other Council member who voted “no” on the second appropriation, said she’s hesitant to speak publicly about the subject because it would go against the advice of Corporation Counsel, the Council’s legal advisory team.

But like Pine, Tsuneyoshi said she’s frustrated by the lack of information about the situation. “Any resolution that brings forth the expenditure of city funds for legal fees or otherwise should have at least somewhat of a descriptor as to what it is for,” she said.

Menor said that as a lawyer himself, he understands the broader issue raised by Corporation Counsel regarding the need for someone at the city to review the documents seized.

He said he’s confident that a U.S. district judge will be able to fairly determine which documents seized are relevant to the case being investigated and whether certain documents should be precluded because they are deemed confidential under federal or state law.

But Menor said he’d like more information, too. He said that he will ask Tuesday for an update on the status of the judge’s review and how long it would take for a decision to be made.