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Friday, February 07, 2020
Free Golf, Methamphetamines, and Building Permits
By Andrew Walden @ 12:00 PM :: 4279 Views :: Honolulu County, Ethics, Development, Small Business, Cost of Living

by Andrew Walden

“The Honolulu Department of Planning and Permitting (DPP) should convert its inefficient plan-review operation to an inspection-driven model...." – Councilmember and Mayoral candidate Kym Pine, January 10, 2020

It’s such a simple solution—one implemented long ago by most other US cities.

At stake: Housing affordability and small business development—both of which are hindered by Honolulu’s slow and unpredictable permitting process.

But ‘Plan-Review’ is a money-spinner for insiders who have formed corporations which profit from the system.

Occasionally legislators or councilmembers attempt to force the change by mandating automatic approval of building permits not acted upon by DPP within a set time period.

Honolulu Council Resolution 18-208 adopted November 14, 2018, launched a council investigation of DPP’s failure to obey laws mandating a two-day review for single family home permit requests.

2019 HB1403--which also would have exempted some affordable rental housing projects from Environmental Impact requirements—was blocked last session in the Senate Ways and Means Committee after opposition testimony from environmental groups and from DPP itself. 

Technically still alive this session, HB1403 “Requires approval of a permit application submitted by a housing development project that uses moneys from the rental housing revolving fund if a county does not issue a decision on the application within sixty days….”

It doesn’t say one word about free golf or the “third party review” (TPR) middlemen who chaperone developers’ projects through the DPP swamp—for a fee.

DPP has long been a mess, but there is a method to the madness. 

The key elements of DPP’s Third Party Review system can be described with these quotes from a Defense Department Inspector General guide to “indicators related to bribery and kickbacks”:

  • Overly friendly interaction between Government employee and contractor.
  • Government official's acceptance of inappropriate gifts or entertainment.
  • Supplier has reputation in the industry for paying kickbacks.
  • Unnecessary middleman or broker involved in contracts or purchases.
  • Requests for sole source procurements when there is an available pool of vendors to compete the contract.
  • Questionable, undocumented or frequent requests for change orders awarded to particular contractor.
  • Industry or country has a reputation for corruption.
  • Unexplained or unjustified favorable treatment of a particular supplier.
  • Questionable, improper (noncompetitive) or repeated selection of a particular  supplier.

In 2013, local contractor and political operator Dennis Mitsunaga testified before the Senate Higher Education Committee alleging his company had been instructed by Brian Minaai, Director of the University of Hawaii Office of Capital Improvement, to hire “(TPR provider Palekana Permits, LLC) to do the permit/processing (on a UH project).  Palekana's fee for this service is $23,000.”  On a separate UH project, as a subcontractor engineering the UH Cancer Center, Mitsunaga says the architect called, ”to inform us that Palekana was charging him $120,000 to process the permit and that our portion was $32,000. He said not to worry about it because he would pay the $32,000 for us.”

These kind of fees buy “palekana”—a Hawaiian word which, according to the company website, means “safe, in a state of safety from danger”--for big developers islandwide.  In addition to several UH projects, clients listed on Palekana’s website include:

  • General Growth Properties, Ala Moana Center 
  • Ka Makana Alii Shopping Center in Kapolei
  • International Market Place Redevelopment Waikiki
  • Howard Hughes Corporation (IBM Building, Block C, O and K Ward Villages *three luxury hi-rise condominium projects in progress*)
  • One Ala Moana Condominium Ultra luxury Residential Development.
  • Park Lane Ultra Luxury Residential Development
  • Hyatt Place Waikiki Complete Renovation
  • IBEW Local 1186 Office Renovation
  • Kyoya Hotels & Resorts Master Plan Renovations (Sheraton Waikiki Renovation, Royal Hawaiian Hotel Renovation, over $180 million development) 
  • Kyoya Hotels & Resorts: Princess Kaiulani Redevelopment $500 million 
  • Hyatt Regency Waikiki Guestroom Renovation
  • Hawaiian Electric Co. (New 100 megawatt Generating Plant in Campbell Industrial Park) 
  • Carpenters Union (New Training Center) 
  • Operating Engineers (New Kapolei Office)
  • Stanford Carr Development, Halekauwila Place and Keauhou Place, high-rise residential tower

Akamai readers will remember that Minaai’s UH career begins with a 1982 attempt to steal the Manoa legislative seat with false voter registrations.  Minaai was convicted with 26 others, including several of his fellow students at the University of Hawaii.

According to DCCA BREG, Palekana Permits, LLC “members” include former Chair of Honolulu’s notorious Liquor Commission, Dennis Enomoto, and former Andy Mirikitani staffer and methamphetamines dealer Jonn Serkiawa.

These are the kind of people who make Hawaii what it is today.

A 2009 Honolulu Advertiser article on the drunk driving arrest of one of Enomoto’s fellow liquor commissioners outlines some highlights of Enomoto’s 2001-2011 tenure as Chair:

In 2002, eight former inspectors were indicted by a federal grand jury on racketeering, bribery, extortion and related counts. At the time, the case was described as the state's largest corruption case involving a government agency.

All eight were found guilty in the case and received prison sentences.

In 2007, a former inspector pleaded guilty to extorting nightclub owners in exchange for providing information about Liquor Commission inspections and allowing them to operate in violation of liquor laws.

A subsequent Advertiser article reports that in February, 2011, a Liquor Commission worker was arrested “for investigation of illegally selling a liquor commission card.”  Enomoto ended his tenure with the ill-fated appointment of an insolvent attorney as Liquor Commission administrator after “Dewey Kim, the previous commission administrator, resigned in May after six months on administrative leave because of a personnel matter….” 

Reporting on the 2005 resignation of Kim’s predecessor, Wally Weatherwax, the Honolulu Star-Bulletin wrote

» Eight former investigators were convicted in federal court for accepting bribes to overlook violations. They are all serving prison sentences.
» The FBI executed search warrants at the commission office earlier this year, presumably to assist an additional investigation.
» Former employees filed lawsuits alleging they were retaliated against and harassed. One of those suits was filed by whistle-blower Charles Wiggins, a former liquor investigator whose cooperation with federal authorities led to indictments against his former colleagues.
» The city auditor released a report pointing out deficiencies in the way the commission staff was managed and said there were "concerns that the commission is unable to fulfill its responsibilities."
» Finally, earlier this month, Weatherwax drew criticism from police and the mayor when he suggested that commission investigators be armed with guns. The request was rejected by the commission.

Enomoto managed to ride that pony for a full 10-year term 2001-2011 as Liquor Commission Chair—leaving only when he termed out.  But has he read the Honolulu Advertiser, June 15, 2001, which reports Serikawa, wired by the feds, ratted out his then-boss in the pay-hike-kickback scheme which eventually sent Mirikitani to federal prison? 

Hmmmmm.

Mirikitani's kickback deal also involved Cynthia McMillan and her husband, now State Senator, Karl Rhoads. 

According to ECrim, Serikawa has eight convictions including two drug-related felonies, all racked up between 1992 and 1994, when his probation was revoked.  The Advertiser reports: “Serikawa acknowledged that he had been convicted of promotion of dangerous drugs, for selling crystal methamphetamine in 1994.  ‘I had a very bad drug problem,’ Serikawa said, but he said he stopped using the drug by 1997.”

In a 2010 column, Sharron Mirikitani explains what happened next: “…Jonn Serikawa, in 2006 is found working for Parsons Brinckerhoff Quade & Douglas Inc., the same favored consultant that hired Cindy McMillan shortly after our sentencing. In 2007, he was working as a staff position by Representative Karl Rhoads and was his clerk on the Human Services and Housing Committee.”

A 2014 Honolulu Ethics Commission report describes “annual golf tournaments” for DPP employees:

…The Commission staff commenced an investigation of the Golf Tournament in response to a complaint alleging that approximately 40 city employees accept prohibited gifts including green fees, food, drinks and prizes from annual golf tournaments held by Business. …

A city employee admitted to accepting a prohibited gift from a business he/she had discretionary authority over in his/her city job and also misusing sick leave in order to play in a golf tournament….

The other 39 employees used vacation time.  If not for the sick-time abuser, this would have been swept under the rug. 

Employee … assisted [other city employee positions] with the review and approval of building permit applications. Since 2008, Employee had reviewed and approved at least 100 building permit applications that had been routed through the Department by [Business] and/or which Business was the third party reviewer for the project.

Palekana Permits, LLC was incorporated in 2008

Business is a certified third-party reviewer that examines and certifies building plans for building, electrical and mechanical code compliance. Clients pay Business to review and certify building plans instead of routing plans through the city’s plans examiners. In addition to reviewing plans, Business also expedites building permit applications by routing them through other required agencies for approval such as the Department.

Business was founded by [individuals A and B]. [Individuals B, C, and D] are currently registered as members of Business with the Department of Commerce and Consumer Affairs, Business Registration.

A, B?  B, C, D?  That’s the kind of sweet little nugget which makes redacted ethics reports so much fun.

On August 25, 2008, Palekana Permits, LLC was organized by A) Daniel K Ide and B) Jonn Serikawa.  On October 13, 2008, DCCA received ‘articles of correction’ dated August 25, 2008, adding C) Dennis Enomoto.  As of 2014 Palekana ‘members’ were B) Serikawa, C) Enomoto, and D) Darren Y Lee.  No other current or former TPR company listed on the DPP website comes anywhere near fitting this A,B plus B,C,D combination lock.

Palekana did not respond to a request for comment.

Is Palekana alone?  Hawaii Business, September, 2015, reports:

“Heidi Levora, whose family owns Anchor Systems Hawaii, a foundation contractor, says she’s been successfully running permits for several years and has developed a rapport with the people at the department.

“‘It’s nice to be on a first-name basis with these folks. Sometimes they’ll engage in creative problem solving with me, which saves a trip back and streamlines the process greatly. I have not witnessed any favoritism at all, ever. They really try to make the system as fair as possible.’”

Levora then immediately contradicts herself, telling Honolulu Business: “I do see staff responding more warmly toward calm, pleasant individuals. That’s human nature.”

The Honolulu City Auditor, in a January, 2020, report, explains:

“(DPP’s) lax controls allowed private companies to monopolize permit review appointments and restricted access to the general public….

“…an authorized third party reviewer was one of the private for-profit companies that monopolized DPP’s online appointment system. We also found that some third party reviewers advertise their ability to expedite client’s permits ‘through exclusive in-house experienced permit routing and expediting services or with contacts made at the City and County of Honolulu….’

“These claims made by third party reviewers suggest instances of noncompliance with city regulations, and may warrant a more thorough examination for potential fraud, waste, and abuse….” 

How does DPP make this monopolization possible?  The audit report explains:

The department does not properly administer the Department of Planning and Permitting rules relating to the timely issuance of building permits…. As a result, permit applications are subject to extended review times and excessive review cycles, which contribute to processing backlogs and excessive delays….

The agency did not consistently implement internal controls … requiring plans that have more than one review cycle be limited to revisions and any plans not approved after the second review cycle either self-certify or request a permit by appointment….

The departments One-Time Review 60 Day (OTR-60) Program for processing One and Two- Family Dwellings did not result in expedited permit issuance as intended. The department's practice to accept incomplete OTR-60 applications and allow applications to be processed that did not meet initial program requirements contributed to the programs ineffectiveness….

The department lacks a quality assurance system to monitor application processes, identify bottlenecks or challenges, and collect important data so that it can take corrective action….

In a November, 2019, City Auditor’s report on DPP’s management of the ‘Monster House’ issue, auditors note:

“Inconsistent application of residential covenants and allowing permits to remain active after the three-year validity period compromised enforcement.”

Councilmember Pine points out: “The length of time needed to obtain building permits has been a dreaded reality for decades. Because of widespread problems in the department, it only met its two-day goal for residential plan reviews 26 percent of the time in the past five years. The audit says taxpayers submitting residential permit applications have to wait an average of three-and-a-half months to receive approvals.”

---30---

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