State Auditor Les Kondo faces ‘illegal’ act or prosecution

State Auditor Les Kondo told a House committee investigating his handling of two critical audits that a subpoena forces him to commit an illegal act or face a possible criminal contempt charge.

In a letter dated Tuesday, Kondo told the eight members of a special House Investigative Committee that he needs more time to respond to a committee subpoena issued to him on Sept. 29 and to obtain outside legal counsel because the state Attorney General would be “responsible for prosecuting any criminal contempt charge against me and other employees. The Attorney General and her office cannot serve as prosecutor while simultaneously defending us in any criminal contempt proceeding. The Attorney General and her office are legally conflicted from representing me and other employees.”

Kondo, a lawyer and former head of the state Ethics Commission, wrote that “The subpoena duces tecum presents me with an impossible choice — either comply with the subpoena, thereby committing an illegal and unethical act, or not comply and risk a criminal contempt charge.”

“As the Committee already knows, our audit working papers are confidential by law. 1) The State Ethics Code also prohibits me (and other employees of the office as well as former employees) from disclosing the information contained in those working papers. 2) Notwithstanding those unambiguous statutory provisions, the subpoena duces tecum orders the production of documents by October 13, 2021, which are unrelated to the Committee’s stated — and therefore legal — purpose and include confidential working papers. And, under the Committee’s rules, I am at risk for being charged with criminal contempt for complying with the State Ethics Code and other state law,” Kondo wrote.

“The Committee’s tactic — clearly meant to pressure me and others — is legally and ethically unacceptable, more so in light of the purpose and scope of the investigation stated in House Resolution No. 164. Given the Hobson’s choice we are presented by the Committee — and especially with the possibility of criminal prosecution — we are compelled to retain legal counsel to represent me and other employees, if subpoenaed to testify.”

The House Investigative Committee was formed to investigate Kondo and his office’s handling of two separate, critical audits of management of state lands by the the Agribusiness Development Corp. and the Department of Land and Natural Resources’ Special Land and Development Fund.

Unlike typical legislative committee hearings, the unusual “Chapter 21” investigative hearing involves witnesses who have been subpoenaed to testify under oath and — especially in Kondo’s three appearances — reminded that they have the right to legal counsel. All of the witnesses except Kondo have so far testified while accompanied by counsel.

Kondo concluded his two-page letter by writing:

“To be clear, we are not asking the Committee to stop or otherwise delay its legitimate work to follow up on the audits of the Department of Land and Natural Resources’ Special Land and Development Fund and the Agribusiness Development Corporation. Now that the Committee is demanding that we act in violation of state law or risk being charged with criminal contempt, we simply must exercise our right to be represented by legal counsel and are asking that the Committee allow us to do so. We intend to retain legal counsel as expeditiously as allowed under the State Procurement Code and expect to be able to do so within 30 days.”

During a hearing of the House Investigative Committee on Wednesday, Chairwoman and House Majority Leader Della Au Belatti — who is also a lawyer — said she will have to consider the issues raised in Kondo’s letter before responding.

She also issued additional subpoenas, added more days for hearings and said the number of documents that have been subpoenaed has doubled — from initially more than 12,000 pages to now more than 24,000. “Informal interviews” also have been conducted, she said.

The hearings began on Sept. 13 and are scheduled to conclude on Oct. 28, followed by a report in November before the upcoming legislative session.

Whether the House Investigative Committee finds any wrongdoing in the way that Kondo or his office handled the audits, the first four weeks of hearings have served to magnify the critical findings of the audits, which is likely to prompt legislation next session to address land management problems at the ADC and DLNR.

State Rep. David Tarnas (D, Kaupulehu-Waimea-­Halaula) — a member of the committee and chairman of the House Water and Land Committee — told the Honolulu Star-Advertiser on Tuesday that any bills aimed at the 2019 audit findings of DLNR’s Special Land and Development Fund likely would come before his committee, and he might possibly draft legislation himself.