Auditor Says The Fix Was In

by Purna Nemani, Courthouse News July 16, 2013

HONOLULU (CN) - Hawaii fired an auditor for pointing out that a Chevron Energy project bid would cost the state $284 million more than a competitor, and for objecting when her bosses told her to destroy the audit that showed it, the auditor claims in court.

Sarah McCann sued Hawaii Department of Education Superintendent Kathryn Matayoshi.

Hawaii hired McCann on Nov. 4, 2012, "as an emergency hire to be involved in the DOE's Energy Efficiency and Sustainability Master Program ('EESMP')," McCann says in the complaint.

It continues: "Plaintiff did not apply for this position, but was offered the position by the DOE. To accept the position, plaintiff put her own business, Clever EV Inc., on hold with the expectation that she would be paid a market-rate program manager salary after the EESMP program got underway.

"The EESMP is a capital investment project which, if it is ever undertaken properly, will reduce the annual operating expenses of the DOE by supplying electrical power to school campuses from solar and wind energy in accordance with the Board of Education's Sustainability Act 6710."

McCann says in the complaint that the entire procurement project will cost Hawaii taxpayers $1 billion. She was told to manage the project, from Request for Proposals to completion, for an estimated five to seven years. She reported directly to nonparties Duane Kashiwai and Gilbert Chun at the DOE, according to the complaint.

"The EESMP RFP was issued in two phases. Phase One assessed vendor qualifications, and Phase Two was a vendor selection process in which the DOE's stated intent throughout the RFP drafting process was to select the lowest priced pre-qualified vendor," the complaint states.

"Following Phase One of the EESMP RFP, the DOE narrowed the field of potential vendors to two companies: Prime Solutions Inc. ('Prime') and Chevron Energy Solutions ('Chevron')."

McCann says she audited the two proposals with a volunteer energy engineer "at the direct request of a superior at the DOE."

"The Audit concludes, inter alia, that Chevron's RFP response was legally nonresponsive and that the DOE's selection committee should disqualify the non-responsive proposal and award the RFP contract to the lowest priced responsible bidder, which is Prime," the complaint states.

"The Audit also concludes that the Chevron proposal will cost the State of Hawaii significantly more money than the Prime proposal, even though the Chevron proposal is non-responsive.

"In fact, the audit concludes that $284 million dollars 'is the conservative estimate of the potential lost additional savings for the State of Hawaii.'

"Plaintiff provided a copy of the Audit to Chun, who provided it to other persons within the DOE, including Christian Butt, the procurement officer.

"Chun was instructed by Christian Butt to instruct Plaintiff to destroy all copies of the Audit.

"Butt believed that the audit could be used as evidence that the DOE improperly conducted the EESMP RFP selection process.

"Plaintiff was aware that physically destroying evidence in anticipation of a legal proceeding is prohibited under Hawaii law. See HRS § 710-1076. [Tampering With Physical Evidence.]

"On or before June 5, 2013, Kashiwai expressed to Chun that he would like to terminate plaintiff because she had expressed concerns to Kashiwai's superior regarding the procurement process and Kashiwai's intent to select Chevron without any justification for its price differential."

McCann claims that Chun succumbed to pressure from Kashiwai, from defendant Matayoshi and from others, and she was fired by email two weeks later

She seeks damages for Whistleblower Protection Act violations, breach of implied contract and retaliation.

She also seeks five to seven years of lost wages and for the project.

McCann is represented by Bert Kobayashi of Kobayashi Sugita & Goda.

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LINK: FULL TEXT OF LAWSUIT

LINK: McCann vs Matayoshi Exhibits D, E, F

2008: Chevron Energy Solutions Expands into Hawaii (Follow the names and see how Chevron has bought into the local power structure.)