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Hawaiʻi County Council considers affordable housing credit audit

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The discussion on how to audit affordable housing credits on Hawaiʻi Island continues next week.

Earlier this month, Hawaiʻi County Council member Holeka Goro Inaba introduced a resolution for an audit into the county’s affordable housing credits after state and federal investigators indicted four people in an affordable housing scheme.

“This resolution is not to investigate criminal or any type of alleged misconduct, but really for us to get a handle on the process, and how we go about issuing these credits and making sure that everything that's on the books right now is fair and are legitimate credits,” Inaba said earlier this month at the council’s Finance Committee.

Inaba said it would allow the county and developers to know who has the affordable housing credits.

County Auditor Tyler Benner and fellow committee members expressed concern that an audit might interfere with the federal investigation stemming from an $11 million affordable housing credit scheme that recently came to light.

“The central issue that we anticipate are the outcomes and timing,” Benner said. “So right now, I see an entanglement of the alleged activities and the credits. The question then that we have to ask is, can we separate and focus exclusively on the credits mapping the workflow and testing controls surrounding the process steps while taking a position of non-interference with regards to the legal proceedings? If we can, there might be a pathway forward. If we can't, then we'd have to withdraw or defer.”

A third-party consultant is separately reviewing the county's Office of Housing and Community Development, which was already in progress before it came out that Alan Scott Rudo had allegedly used his position with the department to mislead officials. Rudo accepted bribes and kickbacks from businessman Rajesh Budhabhatti and attorneys Paul Joseph Sulla and Gary Charles Zamber.

Committee members wanted to shy away from overlapping efforts.

“We're not getting affordable housing because the initial developer of the original affordable housing didn't actually develop units, so we're continuing to prolong this problem,” Inaba said, noting there are two parts to consider.

“There's the policy component, which we've been holding off on, and then there's the accounting of the credits that yeah, there potentially could be an intersection with what investigations might have been diving into,” Inaba said. “But I don't think we should see it as a direct conflict or intermingling of what the consultant is doing. It's specific to the credits, and going back to the credit history.”

Discussion on the resolution and audit will be brought up at the Finance Committee's meeting on Aug. 16.

According to an Aug. 9 communication from Inaba, he will introduce an amendment to narrow down the scope of the resolution and audit.

Sabrina Bodon is a general assignment reporter at Hawaiʻi Public Radio. Contact her at sbodon@hawaiipublicradio.org or 808-792-8252.
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