Yesterday’s Honolulu Advertiser featured a front page story by Sean Hao that compared early economic projections of the Convention Center’s impact with its actual performance. The projections, which turned out to be wildly optimistic, were used to justify the high cost of building and operating the convention center. Most of the economic projects appear to have been off by a factor of 5, consistently predicting returns five times greater than what were achieved last year.

Hao quotes several people variously pointing fingers of blame at hotel executives and legislators.

Funny thing, though. The article fails to name the consultant paid to produce this section of the larger environmental impact statement, and in fact doesn’t even mention that it was produced by a consultant. The word “consultant” doesn’t appear in the story.

But if you’re assigning blame, isn’t the author of the inflated claims most culpable?

The convention center’s final environmental impact statement, cited as the source of the economic projections, can be found in the online library of the Office of Environmental Quality Control, in a folder containing Oahu projects from the 1990s (identified as “1995-07-OA-FEIS-CONVENTION-CENTER-I”).

The Final EIS contains a summary of the findings, and the full report is attached as Appendix H, “Economic and Fiscal Assessment” prepared by KPMG Peat Marwick LLC.

Individuals who worked on the report are not identified, and the transmittal letter is signed only with the name of the firm.

The KPMG transmittal letter, included in the appendix, contains a significant caveat.

Several of the key construction phase assumptions were provided by Nordic/PCL, the design/builder, and the Hawaii Convention Center authority (CCA), which is the State coordinating agency for the project. KPMB also obtained information from other State agencies, travel wholesalers, hotel operators, convention centers and experienced convention center planners and consultants….KPMG’s projects of the Center’s economic and fiscal impacts are generally based on the inputs provided by the above sources.

Are they saying, in essence, errors aren’t our fault? It’s not exactly clear.

Back in 2006, I suggested consultants should be held accountable and liable for these kinds of faulty projections. A reader responded with a lengthy comment, which is right on point:

I’m not sure that we, the people, are getting our money’s worth from consultant reports prepared under contract to the state.

Unfortunately, experts’ reports in Hawaii often reflect the views of the government agency contracting the report more than they should. If one could compare consultant’s preliminary reports with the final (which is usually impossible to do because the preliminary reports are not available for inspection), I suspect that there would be some surprises.

Why is that? Contracts contain (or used to contain) a clause to the effect that the last payment is withheld pending review of the product to make sure it is satisfactory. This makes sense if the contract is for some construction, but not if it is for information. It’s too easy to say, “your report doesn’t make our point, so it’s unsatisfactory.”

I have seen how the process works. The preliminary report doesn’t quite reflect the conclusions the agency would like it to, so it goes back to the consultants. The final report is different.

I’m convinced that Hawaii’s “high-tech boom,” for example, which keeps plenty of people employed in DBEDT and elsewhere, is a product in part of this ability to modify experts’ reports.

I don’t know if the same clauses are in the medical school contracts or were in contracts for the Convention Center or what influence may have been exerted on the supposedly neutral opinions because of those clauses, but if they are there, it could explain much.

And so it goes.