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TAXWatch: Standardless Spending

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W e are feverishly trying to spend federal dollars for the common good and busily preparing for a historic election.  There are, however, other huge projects in the wings where government agencies are setting up to spend record-setting amounts of money in public-private partnerships. 

One of them is the Aloha Stadium project, which we have previously written about.  Another is the Honolulu Rail project, which has often been the subject of press coverage

Assuming (with some foundation) that the procuring agencies for these projects want to keep their discussion under wraps, does the public have a right to make them disclose details before a deal is reached and papers are signed?

Sadly, the answer appears to be no. 

Remember, we aren’t even operating with a full deck of laws.  Our Governor has found fit to suspend a 20-page-long list of statutes in the name of coping with the COVID-19 pandemic.  That’s because one of the emergency powers statutes, HRS section 127A-13(a)(3), gives the Governor the power to suspend “any law that impedes or tends to impede or be detrimental to the expeditious and efficient execution of, or to conflict with, emergency functions.”  The suspension is supposed to expire in 60 days, but nothing prevents the Governor from making another proclamation on the 59th day saying that we are still in an emergency and the laws are suspended for another 60 days – we are on the 13th such proclamation so far.  

One of the casualties has been the State Procurement Code, HRS chapter 103D.  The Code was suspended in full.  Another is HRS chapter 92F, the law governing public access to government records. That one used to be suspended in full, but in May the Governor relented a little, and said that agencies only had to acknowledge receipt of a public records request; deadlines were ripped up so agencies didn’t have to respond to the requests, or produce documents, until they were good and ready. (Anyone want to take bets on when that will be?)

Technically, that means agencies don’t even have to go through any competitive bid process. They can just spend money and sign contracts. 

What if you are a taxpayer who wants to know how tens of millions of taxpayer dollars are being spent?  Pretty much out of luck there.  “We need to give agencies the maximum flexibility and resources to respond to emergency conditions,” they will probably say.  Which means they don’t have time to be bothered by pipsqueak members of the public.  So, after acknowledging your request for information, they can put it in a side drawer somewhere, where it may never see the light of day again.

What about if you bid on one of these projects and you are told that your bid wasn’t selected?  Can you contest the decision like many companies did in the past?  Well, no, the law authorizing bid contests (part VII of the Procurement Code) has been suspended too.  We need to give agencies the maximum flexibility and resources to respond to emergency conditions.

But what do Aloha Stadium and Honolulu Rail have to do with the pandemic?  We need to give agencies the maximum flexibility and resources to respond to emergency conditions.  Do the Aloha Stadium Authority and HART engage in emergency functions whatsoever?  We don’t care, we need to give agencies the maximum flexibility and resources to respond to emergency conditions.  

I am okay with allowing agencies to buy things for pandemic response.  If some government official were to certify that the purchase was related to the pandemic, I would look the other way if the agency wanted to cut some corners in the procurement process.  But ripping up the whole procurement law and allowing multi-billion dollar purchases to skate?  Please!  Doesn’t it sound like anarchy here?  Can we stop the insanity?

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About Tom Yamachika

Tom Yamachika
Tom Yamachika is the President of the Tax Foundation of Hawaii, a private, nonprofit educational organization dedicated to informing the taxpaying public about the finances of our state and local governments in Hawaii. Tom is also a tax attorney in solo practice and has been since early 2013. Prior to 2013, he was with the accounting firm Accuity LLP, which was formed in 2006 from the Honolulu office of Coopers & Lybrand (which later became PricewaterhouseCoopers). Before that, he served as an Administrative Rules Specialist in the State of Hawaii Department of Taxation from 1994 to 1996, where he drafted rules, interpretive releases, and legislation on several different state taxes. Prior to that, he practiced litigation and tax law with Cades Schutte Fleming & Wright in Honolulu.

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