STATEMENT OF GOVERNOR LINDA LINGLE REGARDING A DRAFT AUDIT OF THE DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM (DBEDT)

“The legislative auditor’s report of DBEDT offers erroneous findings and demonstrates a lack of understanding and appreciation of the critical role Hawai‘i’s overseas offices in Beijing and Taipei play in the economic future of our state.

“Hawai‘i is one of only two states in the United States that has been granted the opportunity to have an ongoing presence in China—the world’s fastest growing economy.  The Beijing office, under the leadership of Bo Wu and the Taiwan Office under Alex Lei have both been instrumental in developing solid working relationships with Chinese business, government, academic, and cultural leaders.

“I recently returned from a two-week mission from China.  This trip resulted in historic breakthroughs in three arenas:

1) improving the opportunity for increased Chinese tourism to our islands,

2) developing clean energy partnerships with Chinese officials and;

3) promoting commercial and business relations, that included a commitment by China to establish the Hawai‘i House, an outlet specifically intended to promote Hawai‘i products and services to a broader Chinese market. 

A delegation from China’s Ministry of Commerce will be coming to Hawai‘i early next year to identify local products that will be featured at the Hawai‘i House showroom.  China will also be holding the Shanghai World Mart as part of their 2010 World Expo and the Hawai‘i Tourism Authority is taking the opportunity to participate in this event to further introduce and promote Hawai‘i to China and an international audience that will be attending this major event. An estimated 73 million visitors will attend the Expo, 70 million from China alone.

“The success of our recent effort to enhance trade and commerce between China and Hawai‘i was the result of our ability to build on all of our earlier efforts. In China, governmental relations matter. It is especially important when high government officials participate with businesses to demonstrate both the importance and the earnest nature of discussions that are undertaken.  Success is dependent on establishing relationships that are the result of successful engagements and trust in the intention and commitment of the parties involved.

“To initiate our effort, DBEDT wisely applied federal funds made available through the U.S. Department of Commerce to leverage the opportunity to promote Hawai‘i-Chinese business relations. The Auditor’s findings incorrectly describe the situation involving the use of these funds and reached erroneous and factually inaccurate conclusions about the administration of these funds. Aside from being completely wrong, this faulty determination is used to undermine DBEDT’s accomplishments, the significance of their work and the importance of our overseas offices.   

“The China offices have provided Hawai‘i a tremendous advantage and to lose them now will result in the loss of significant gains and advances that have been realized from our presence in China.  Hawai‘i is now firmly recognized, appreciated and understood as a place not only for leisure travel, but as a place for doing business, where China can begin its effort to improve the balance of trade with the U.S.  As a destination and welcome business partner, Hawai‘i has been able to create a positive image in China and Taiwan, owing in large part to the work of our China Offices.

“Cultivating a viable business relationship with China is not easy and it will take continual work by our state government and our business sector.  We are building on the advances achieved from each and every China mission.  Each successive step has broadened our effort and we are now on the verge of establishing a direct air link through Hainan Air, energy partnerships that will aid in our effort to attain our goal of energy self sufficiency and independence, and the advancement of trade and small business opportunities.

“The draft audit glosses over the fact that much of the costs of the critical missions that took place in 2005 to China and Korea were paid for by donations and support from private sponsors that both recognized and approved the use of the money.  Much of the content of the audit is based on charges raised in State Senate hearings several years ago that found no wrong doing or malfeasance, including separate reviews by the Chief Procurement Office and the Office of the Attorney General.  Despite this outcome, the Legislative Auditor continues to infer impropriety that did not occur.

“Ted Liu is an exceptional leader and innovator in the fields of energy, the economy, and international relations.   The State of Hawai‘i is fortunate to have someone of his stature and talent leading DBEDT.  His ability to establish enhanced cross-cultural links to China have been invaluable in building and cementing the progress we have made to date.  I intend to continue working closely with Ted, our overseas office staff, and the entire DBEDT team to build on the successes we have achieved.”

A copy of Ted Liu's response to the legislative auditor's draft report is attached >>> HERE.

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SB: State auditor recommends firing of DBEDT director

ADV: Hawaii auditor calls for removal of DBEDT Director Ted Liu