A second end-of-the-year report by the State Auditor charges the Department of Taxation of taking “unprecedented” steps to block or delay the auditor’s access to information and hinder the overall audit process.
The report, Management and Financial Audit of Department of Taxation Contracts, followed a similarly critical audit of the Department of Public Safety.
The tax department audit accuses the Lingle administration of illegally blocking the auditor’s access to information:
“The administration’s withholding of records from our office during this audit is in contravention to the law and prevents the Auditor from carrying out her constitutional and statutory audit authority.”
An initial request for documents was made by the auditor on June 1, 2010, and not fully complied with until October 18, the audit reports. A request for emails between the tax department and the Department of Accounting and General Services was dated June 29, with the first document–“a single, two-page email”–wasn’t turned over to the auditor until September 10. The rest of the emails weren’t turned over until November 10, 2010.
According to the audit:
Requested documents and emails have been screened and released piecemeal to us over an extended period of time, from June 2010 through November 2010. We were also told by a deputy attorney general that several tax division attorneys had been screening the documents twice for subject matter relevance and attorney-client and executive privileged information, a unique and time-consuming process.
The auditor describes actions by the tax director to hinder the audit as “unique and unprecedented.”
It’s funny to compare this language with the boilerplate used in the audit’s Foreward:
We wish to express our appreciation for the assistance extended to us by the director and staff of the Department of Taxation and others whom we contacted during the course of our audit.
Right!
There really isn’t any question about the auditor’s legal authority to obtain the information it sought. The auditor’s powers, including subppoena power, are defined in Section 23-5 HRS:
§23-5 Auditor; powers. (a) The auditor may examine and inspect all accounts, books, records, files, papers, and documents and all financial affairs of every department, office, agency, and political subdivision.
(b) The auditor may cause search to be made and extracts to be taken from any account, book, file, paper, record, or document in the custody of any public officer without paying any fee for the same; and every officer having the custody of the accounts, books, records, files, papers, and documents shall make such search and furnish such extracts as thereto requested.
(c) The auditor may issue:
(1) Subpoenas compelling at a specified time and place the appearance and sworn testimony of any person whom the auditor reasonably believes may be able to provide information relating to any audit or other investigation undertaken pursuant to this chapter; and
(2) Subpoenas duces tecum compelling the production of accounts, books, records, files, papers, documents, or other evidence, which the auditor reasonably believes may relate to an audit or other investigation being conducted under this chapter.Upon application by the auditor, obedience to the subpoena may be enforced by the circuit court in the county in which the person subpoenaed resides or is found in the same manner as a subpoena issued by the clerk of the circuit court.
But issuing and then enforcing subpoenas is a time consuming and expensive process, even for state agencies.
The question now, it seems to me, is whether there are any consequences for those who went out of their way, perhaps even acting illegally, to block or delay these audits.
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This example of Republican obstructionism is as outrageous at the local level as its manifestation on the national scene.
I say Prosecute the perps to the full extent of the law. If that is not possible, let’s focus the best disinfectant, public sunshine, and investigative journalism on the Lingle boil.
This obstructionism must be stopped.
Shows no aloha spirit, no lokahi, no desire to work together to solve pressing problems!
In my experience there is rarely any remedy available to deal with state employees, appointed or no, who have willfully or through inaction obstructed a request for information, even from an agency with as strong a mandate as the Auditor. I disagree with the prior commented about this being a distinctly Republican tactic. Sure the Lingle administration is the subject of this particular incident, but frustration of auditing and oversight functions of the government is common to both parties if there are gains to be made or losses to be prevented by a little well timed foot-dragging or outright disobedience.
All bureaucrats (and legislators) act the same way. They know they are protected. They can’t be fired, the public is apathetic and the legislators are in cahoots. Perfect storm for corruption and more corruption.
Apart from the outrageous obstructionism that the two most recent audits recount, there’s the underlying fact of the dismaying incompetence of high-level administrators in Lingle’s cabinet. For more, see the March 2010 auditor’s report on Budget & Finance. Check out especially the photo of a calendar page of the financial officer charged with tracking the state’s investments. Shocking.
Obviously SaltLakeSuz, Ketchup, and Pat never have been the subject of a hostile and incompetent audit.
Reasonable people can disagree about how to interpret information, especially if the context is complicated.
In my own experience, repeated efforts to point out errors of fact in draft audit reports to an auditor were ignored by the auditor and the errors were included in the final report.
Well, there’s something here for everyone:
1. Notwithstanding the Auditor’s broad general powers, the Hawaii Revised Statutes, Title 14 (Taxation) in particular, are replete with prohibitions on the disclosure of tax information. Generally speaking, specific statutes control over general ones, so the Auditor’s authority might not be as clear as Ian suggests, at least when it comes to taxpayer info. Nonetheless, I suspect that this was used as a dodge — as it has been used by prior administrations — to avoid giving the pesky Auditor what she wants (and what the Legislature told her to get).
2. Having defended two audits by the Auditor, I can say from personal eperience that there has NEVER been an audit that did not report bad news of some kind. I also have never seen one that commended an agency for doing the right thing unless it was in respinse to a prior recommendation by the Auditor. In that sense, audits are like self-fulfilling promises or original sin: “you’re being audited so you must have done something wrong” OR “you were born, you’re a sinner.” The Auditor can be officiously tiresome in refusing to even entertain evidence contrary to the conclusion from which the audit begins: you’re a screw-up!
3. Legislators and many public servants CAN be fired. Legislators at the ballot box and the many, many non-civil service appointees for any reason or no reason at all (as long as it’s not a constitutionally prohibited one, e.g., race, gender, etc.).
Just sayin’.
For those deputy attornies general that had been screening the documents twice for subject matter relevance and attorney-client and executive privileged information…. I would like to suggest that the Supreme Court’s Office of Disciplinary Counsel initiate an investigation into possible misconduct for disbarment proceedings to begin. Sorry – but I really dislike lawyers…
I seem to recall that Kurt Kawafuchi resigned as the Director of Taxation in June and was replaced by another Lingle appointee by October. Although Lingle publicly stated that Kawafuchi left on good terms the facts seem to suggest otherwise. The Honolulu Weekly reported that Kawafuchi said that Lingle’s Chief of Staff Barry Fukunaga had approved the cancellation of the CGI contract only to be countermanded by another Lingle Administration official Linda Smith the next day. Kawafuchi resigned soon after that incident. The timeline clearly reflects that former Tax Director Kawafuchi wanted the CGI contract canceled but that the Lingle Administration went to extraordinary lengths to save it.
It’s not at all unusual, at any level of government, for laws to be ignored. The Legislature enacts laws, which is a good beginning, but at least in Hawaii (and probably the state is not unique) those laws are ignored.
I remember being astounded that the lege passed a law mandating (I think monthly) meetings between DOE and DOH during Felix, but the two agencies basically ignored it. That came out in an audit, by the way. There are long-standing laws on the books that are never enforced to my knowledge–the mandatory reporting law, for example. And seniors were supposed to benefit from Hawaii joining with five other states to buy cheaper prescription drugs, that law was ignored. Also the one to chase after rebates from drug companies.
We have a “safe haven” law but the Lingle Administration, by not publicizing it, effectively nullfied it.
There are certainly many examples better than these. For some reason, our jails are filled with non-violent drug offenders instead of government criminals, though.
Oh, when you’re out driving next, or crossing the street as a pedestrian, let me know if you think traffic laws such as blink and stop before a right turn on red are enforced.
Passing a law is a good beginning, but that’s about it.
@ForwardObserver-
The incident in question occurred in 2008, so Kawafuchi stayed on for two more years before resigning. He left in mid-2010, which is normal for a long-term cabinet member in the last few months of an administration.
Kurt Kawafuchi is an extremely qualified individual that didn’t need to stay on as DoTAX director one minute longer than he wanted to. He is a CPA and attorney with a stellar track record that would have had his pick of private sector jobs.
The foot-dragging on the audit occurred after his departure. I’m with Ohia on all of the mentioned points. Additionally, of course there was political calculation involved. There was no way that the Lingle administration was going to allow a critical audit (redundant wording?) coming out while Aiona was in the throes of an election.