Housing official’s
firing outlined in letter

Michael Kahapea was dismissed
in the case of the Ewa Villages
Revitalization project

By Gordon Y.K. Pang
Star-Bulletin

The city dismissed housing official Michael Kahapea for "gross dereliction of duties, misappropriation of public funds" and violations of the City Charter and state law in the Ewa Villages Revitalization project, according to city documents.

Renee Yuen, Kahapea's attorney, said the city did not need to fire her client and did not give him a fair chance to fight his dismissal.

Kahapea was arrested Nov. 1 under suspicion of theft, bribery, money laundering, forgery and illegal ownership of a business.

Kahapea was released pending a grand jury investigation. No charges have been filed against him or 18 others arrested in the Ewa Villages case.

Police and prosecutors say Kahapea was at the center of a case that was the major cause for the Ewa Villages relocation fund ballooning from $1.2 million in 1991 to $6.3 million in 1997.

Kahapea's termination letter spells out the city's charges:

Approval of payments for work not performed

The city listed three examples where companies were paid for relocations not made.

In the case of Independent Blasting Co., companies R.J. Hauling and Titan Moving were paid $253,000 for seven "moves" between May 1994 and June 1997.

In the case of Transcend Inc., Titan Moving was paid $62,700 for two moves in March and June 1996.

In the case of CMZ Inc., Titan Moving and R.J. Hauling were paid $239,800 for seven moves between April 1996 and September 1996.

"Our records also indicate that amounts approved by you and paid for were not fair and reasonable," the letter said.

Receipt of money from companies/individuals awarded contracts

The city said that seven times in 1996, Kahapea or son Jonathan Kahapea received cashier's checks totaling $63,900 from Russell J. Williams, owner of R.J. Hauling.

Kahapea issued city warrants to Williams for relocations. In at least four of the cases, those warrants were used by Williams to issue the cashier's checks to the Kahapeas one to four days later.

The city also uncovered that twice, in 1994 and 1996, Williams took warrants and made out cashier's checks for $4,000 and $7,500, respectively, to the Stardust Hotel and Casino and the Rio Suite Hotel and Casino.

The city said the checks helped pay off Kahapea's casino accounts.

Violation of procurement process

Kahapea violated state laws by soliciting and awarding relocation contracts to friends, relatives and business partners and then failing to disclose his relationships with those vendors, the city said.

The city found that Kahapea awarded:

Williams, his brother-in-law, 38 contracts totaling $1.4 million. Williams is also a secretary in Wailani Corp., the Las Vegas-based water purifying company which lists Kahapea as president.

American Hauling Inc.'s David Kaahaaina, his high school classmate, 26 contracts totaling $775,200. Kaahaaina is also a director/partner in Wailani.

Donna Abelaye of Specialty Pacific Builders Inc. 16 contracts totaling $773,800. Abelaye's direct relationship to Kahapea is unknown, but the city said Specialty Pacific had the same address and telephone number as R.J. Hauling. The city also said Abelaye paid Williams, his son Michael Barnett or R.J. Hauling at least $36,500 in cashier's checks tied to city warrants.

Clyde Hebaru of Titan Moving and Hauling 49 contracts totaling $1.99 million. Hebaru's relationship with Kahapea is not known, but the city said he paid Williams, Abelaye, Kaahaaina or their companies at least $459,000 in cashier's checks tied to city warrants.

Further, "you knowingly obtained false bids and failed to obtain proper tax clearances prior to making payments to vendors," the city said.

Violations of relocation procedures

There were numerous improprieties in the handling of third-party claim forms, the city said.

"Our records show that you had relocatees sign blank forms which lacked any information," the letter said.

The city also charged that Kahapea "purposely defined the scope of work in the bid specifications in vague terms, failed to obtain inventories for relocation work performed and disregarded instructions to institute a procedure of using photographs to document relocation work performed."

Yuen, Kahapea's attorney, said neither she nor her client would discuss the termination letter. "He is not going to comment on matters that may be subject to litigation because Michael and I feel his case should not be tried in the press."

Yuen said the city should have placed Kahapea on unpaid leave rather than fire him.

"The timing of the announcement of the criminal investigation may have propelled the city to take an action prematurely," Yuen said.

City Corporation Counsel David Arakawa said it would have been unreasonable for the city to keep Kahapea as an employee, given the charges.

"No employer on the face of the earth would have continued to employ someone who took half a million," Arakawa said, adding that Yuen should have contested the firing if she or her client thought it unfair.

Kahapea did not contest his dismissal because the city refused to give assurances that information would be kept from prosecutors in the event criminal charges were brought, Yuen said.

The power to grant such immunity could only come from prosecutors, Arakawa said.

Charges against Kahapea

The city fired Michael Kahapea from his job as property management branch chief, effective Dec. 17. His termination letter states that:
Kahapea awarded relocation contracts and paid vendors at least $555,600 for work not done for the project.
Kahapea or members of his family received at least $63,900 in cashier's checks from vendors he awarded contracts.
Kahapea gave contracts to friends, relatives and business partners.
Kahapea had those slated for relocation sign blank forms which he later filled in with bogus claims.