March 25–A state Senate committee wants the state auditor to conduct a management audit of the Hawaii Tourism Authority, which has been under fire for lack of transparency this legislative session.
The Senate's Economic Development, Tourism and Technology Committee advanced two resolutions Friday asking the state auditor to conduct the audit and submit findings and recommendations, including proposed legislation, at least 20 days prior to the 2018 legislative session.
"We have a situation with a board with minimal amounts of tourism background and a staff with minimal amounts of tourism background making decisions for our No. 1 industry," Sen. Glenn Wakai (D, Kalihi- Salt Lake), committee chairman, said during a Friday hearing.
George Szigeti, HTA president and CEO since May 2015, said the agency is opposed to doing an audit now, when state law requires the agency to undergo a management audit every five years with the next one scheduled for 2018.
"Conducting a management audit a year before the next audit would be a waste of taxpayer funds and resources and would impose an unwarranted burden on HTA's staff," Szigeti said, adding that another audit would cost $100,000.
Prominent Honolulu attorney Rick Fried, who serves as HTA's board chairman, also noted that the state auditor's May 2016 financial report audit indicated that HTA had made "good progress" in fulfilling the recommendations of the 2013 management audit.
On Tuesday the House Committee on Tourism deferred companion measures seeking an audit. But state Sens. Brian Taniguchi (D, Moiliili-Manoa) and Laura Thielen (D, Hawaii Kai-Waimanalo-Kailua) joined Wakai in forwarding the audit request to the Senate Ways and Means Committee.
"We're aware of the management audit done in 2013, but a new management team has come in since that time, and it still baffles me after two years with this team that there's been little outreach to those impacted by this team," Wakai said.
Those affected "negatively deserve to have some answers," he said.
The hearing follows weeks of negative publicity about HTA's lack of transparency. State senators excoriated the agency, which gets $108.5 million in public funds to market state tourism and oversee the Hawai'i Convention Center, in early January for refusing to provide unredacted budgets. HTA took more heat after a Honolulu Star-Advertiser article highlighted the frequency of its closed-door executive sessions, and Sen. Donna Mercado Kim (D, Kalihi Valley-Moanalua-Halawa) asked the state attorney general to determine whether HTA had violated open-meeting requirements.
The newspaper battled since November to get HTA to release individual prices for sporting events, taking it all the way to the Office of Information Practices. The Star-Advertiser dropped its appeal this month when the agency finally released the information.
A transparency bill, Senate Bill 1084, introduced by Wakai, survived crossover and continues to move, albeit in a weakened form. Waters were muddied in February when critics accused Wakai of conflicts because his wife, Miki Wakai, had resigned from HTA. Still, the bill made it through the House Judiciary Committee on Wednesday. To continue moving, the bill must make it through another conflict. It must be scheduled by the House Committee on Finance, which is chaired by Rep. Sylvia Luke, who is employed as an attorney at Cronin, Fried, Sekiya, Fairbanks, the same law firm where Fried works.
Mufi Hannemann, president and CEO of the Hawai'i Lodging & Tourism Association, told the Star-Advertiser that the visitor industry group desires the audit, which "offers another means for taxpayers to be assured that public dollars are expended efficiently and wisely."
Hannemann, who was a finalist for Szigeti's position, said his concerns reflect the interests of HLTA, which includes more than 500 industry members.
"HTA's internal governance practices, which have come under fire by key legislators and industry stakeholders, point to a need for more openness and transparency in the administration of a public agency dispensing public money and greater accountability," Hannemann said.
He said HTA used to be a dues-paying member of HLTA, but Szigeti ended that relationship and declined to participate with HLTA in Tourism Day at the state Capitol.
"I've not been to the HLTA. It's been difficult; you probably understand why," Szigeti told Wakai during Friday's hearing.
David Uchiyama, president and CEO of Island Air, also sent testimony in support of the audit. Uchiyama formerly served as HTA's vice president of brand management, and at one time was being considered to lead the organization. He was fired by Szigeti as part of a reorganization; however, his name is among those that the Senate has sent to Gov. David Ige for consideration in filling a seat on the HTA board.
Uchiyama, an industry veteran whose resume includes Starwood Hotels & Resorts, questioned why HTA took the marketing responsibilities for Canada and the GoHawaii website away from the Hawaii Visitors and Convention Bureau yet spent more money on both. He said sporting events lack selection criteria and that taxpayer money is being wasted on pet projects. Uchiyama said convention center reserves are raided to pay for administrative costs and that HTA is converting state positions to contract positions to avoid an administrative cap.
"Instead of meeting with industry leaders, HTA staff has decided to make marketing decisions internally, often to the detriment of the industry," Uchiyama's testimony read.
