Former judge tells lawmakers he was removed from audit after questioning rail spending

HONOLULU (HawaiiNewsNow) - A former state judge judge told legislators Thursday that he was removed from an audit of the Honolulu rail system after he questioned wasteful spending.

Randal Lee, a retired Circuit Court Judge and white-collar crime expert, said when he began looking into the rail authority’s books back in 2018, he quickly spotted 76 questionable change orders.

Those orders were worth more than $100 million.

“The 76 ... were the ones that were in my opinion were clear. Anything close I gave it to them,” said Lee.

Contractors for the financially-troubled Honolulu rail project have been paid hundreds of millions of dollars for change orders ― times when they claimed they were forced to do things that weren’t in their contracts.

But Lee said the city approved dozens of change orders even though the contracts stated that contractors are responsible for the costs.

Lee said that included $13 million in change orders to building and leasing a concrete casting yard in Kapolei. Lee said city taxpayers paid for the change orders even when the contractor was supposed to pay for it.

Lee said after he raised these questions, State Auditor Les Kondo told him to stop interviewing witnesses. He said Kondo then terminated his contract ― telling him the Legislature wouldn’t release the money for his work.

The Auditor’s Office did issue its audits on the project, blaming the cost overruns on the rush to get construction underway.

But in the hearing before a House investigative committee Thursday, Lee said the audits were incomplete.

“I don’t know if you got your money’s worth. We can do audits until you’re blue in your face but do we know ― as you read the audit ― do you know what caused this,” said Lee.

“Who was the cause of this debacle? Because the rail project was contracted prior to it being ready ... who gave the marching orders to start?”

Kondo said he didn’t order Lee to stop asking questions.

He said Lee’s findings about change orders and rushed contracts were incorporated in his reports. Kondo added that House Speaker Scott Saiki was responsible for canceling Lee’s contract.

“Speaker Saiki … demanded that we obtain his approval to spend additional moneys on our HART work. We formally requested his approval, and Speaker Saiki denied the request,” Kondo said, in an email.

But lawmakers said lack of funding wasn’t the reason the contracts were canceled.

The Legislature appropriated $1 million for the audit. That money included the $200,000 for Lee, who was paid $33,000 before his contract was terminated.

Saiki denied he held up the funds and the chair of the investigative committee said the money was released.

“The monies that were encumbered for your contract actually could have gone through 2019 ― a year after your contract was terminated by the Office of the Auditor,” said state Rep. Della Au Belatti, chair of the House Investigative Committee.

The committee’s hearings will continue next week.

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