Honolulu Auditor Edwin Young has decided not to audit the city’s Ethics Commission on the advice of an attorney defending the city against a lawsuit brought by its former police chief.

The City Council provided $100,000 to Young’s office in 2016 and requested a comprehensive management and performance audit of the commission, which was in disarray at the time.

Young gave that money back this year, following legal advice that he should wait until a suit filed by former Police Chief Louis Kealoha and his city prosecutor wife, Katherine Kealoha, against the ethics commission wraps up.

The Kealohas sued the city in 2015 in an attempt to stop the ethics commission from looking into their possible abuse of government power. The investigation was driven by Chuck Totto, who was then executive director of the commission.

Federal authorities later arrested the couple, who now face a slew of corruption charges.

Cory Lum/Civil Beat

Richard Nakamura, an attorney hired to represent the city against the Kealohas’ suit, told Civil Beat he advised Young not to conduct the audit as part of his legal strategy. He declined to elaborate.

“We were advised by legal counsel not to do the audit because our work (could) be discoverable,” Young said.

Related Cory Lum/Civil Beat Councilman Calls For Audit Amid Honolulu Ethics Commission Chaos July 1, 2016

Cory Lum/Civil Beat Cory Lum/Civil Beat How Caldwell Has Undermined The Honolulu Ethics Commission June 13, 2016

As the agency responsible for scrutinizing and often criticizing city operations, the auditor’s office follows ethical standards that require it to function independently of the city, a separation meant to shield the auditor from political pressures. For some, Young’s decision to drop the audit raises questions about his office’s ability to evaluate city agencies without influence.

Honolulu Hale infighting had crippled the ethics commission two years ago when the City Council requested the audit through a resolution. The turmoil began with an ethics commission probe of donations solicited for Mayor Kirk Caldwell’s 2013 inauguration party. Tensions escalated in subsequent years over the commission’s budget and complaints that top administration officials were stonewalling investigations.

“We had the mayor and the ethics director, everybody, was fighting,” Councilman Trevor Ozawa, who authored the resolution, told Civil Beat on Wednesday. “The point was we wanted to make sure they were functional.”

Keeping The Work Confidential

The auditor’s office keeps a list of agencies it plans to audit, but prioritizes audit requests it gets from the council. Young said his decision not to audit the ethics commission is “a matter of prudence and common sense” and does not compromise his independence.

It’s not unheard-of for an auditor to pull the plug on an audit over concerns the work might be used in court, said Keenan Konopaski, the legislative auditor for Washington state.

Many auditors around the country — including in Honolulu — have protections that keep their work confidential until the audit is complete.

But the confidentiality guarantee might not hold up “if a judge said, ‘Well, nope, you have to hand it over during the course of the audit,’” Keenan said. “If I had to hand it over, it might make me feel a little more uncomfortable that I can carry out my work in a confidential manner while I need to.”

Cory Lum/Civil Beat

Ethics Commission Executive Director Jan Yamane, who replaced Totto in 2016, said she was not aware of the legal advice Young received and that her office is ready to cooperate with Young should his office pursue an audit.

“We’re perfectly capable of helping with the audit but I’m awaiting instructions,” she said.

The commission’s monthly meeting agendas have included the item “Audit – None” every month since its Feb. 2017 meeting to indicate that the commission was aware of an impending audit.

A former state auditor, Yamane said pending litigation sometimes prevents audits because the agency being audited can’t turn over certain documents.

But Young isn’t concerned about his ability to access documents. Instead, he’s concerned the information he collects as a part of his audit will be used in court.

Why The Audit Was Sought

Back in 2016 when members of the City Council’s legal affairs committee discussed requesting an audit of the ethics commission, Young was in favor of it.

“It would do well to have a review of the ethics commission,” he told the council members. “There is room for improvement. I would recommend the City Council pass the resolution in order to serve as a benchmark for the new executive director from which she can make improvements going forward.”

Young’s decision not to do the audit raises concern for some.

“This doesn’t sound like responsible behavior,” said Peter Carlisle, a former Honolulu mayor and attorney who ran against Caldwell in 2016 and legally represented Totto when he was removed as ethics commission director. “If there was money that was set aside for an audit, are the reasons that it was set aside suddenly no longer valid?”

Cory Lum/Civil Beat

A restrictive media policy approved by the commission in 2015 effectively muzzled then-director Totto. That policy undermined the public’s trust in the commission, Ozawa’s resolution said.

The resolution also listed concerns about Totto’s suspension and subsequent resignation after nearly 16 years as its director. Totto said at the time that he quit over concerns he had about the direction the agency was headed. He faced difficulties with the Caldwell administration over issues of staffing and budgeting – something Totto said he had not experienced under previous mayors.

Totto declined to comment for this story, citing the pending lawsuit.

The resolution for an audit also cited a requirement that Totto and his staff track how they spend their time in tenth-of-an-hour intervals, or every six minutes, as a factor that undermined public trust.

The office is still subject to that requirement. Yamane said that while onerous, the meticulous recording is standard practice in law firms and actually helps her office increase efficiency.

Ozawa said Wednesday that public pressure to evaluate the commission has eased since Yamane replaced Totto as the ethics commission’s executive director two years ago. He said the commission seems to be functioning properly.

Ozawa said he had not heard about the legal advice that halted the audit.

Thoughts on this or any other story? Write a Letter to the Editor. Send to news@civilbeat.org and put Letter in the subject line. 200 words max. You need to use your name and city and include a contact phone for verification purposes. And you can still comment on stories on our Facebook page.