 Back to ThinkTech. I'm Jay Fidel. We're doing Talking Tax with Tom Yamachika. And guess what? That's Tom. He's here. We're talking about a special follow-up show on the state auditor. That's quite an interesting news story. Welcome to the show, Tom. Thanks for having me back, Jay. So this is an interesting story. We talked about it last week and it is still unfolding. I guess the big news since we talked is that Les Condo, the state auditor, wrote a response to the 79-page letter generated by Scott Psyche of the legislature. That's right. He's got a 25-page rebuttal, which includes attachments and stuff. And that's all on the auditor's website. The auditor has his own website and he's using it. And he is definitely firing back. He's not pulling the punches. And that's kind of why you see there's fireworks, apparently. I mean, I think it takes a certain kind of personality to be in the state auditor's position. And you have to have, you know, thick enough skin not to get people, you know, not to be bothered if you get people mad. Because you're going to get people mad. Sure. So if you look at, you can look at the website for the state auditor, and it's got his reports. He was appointed in 2016 and has got a whole bunch of reports that he's made about all kinds of things in the government. You know, originally in 1950, when they started up the Constitution, the state auditor was going to look at financial matters for the various government agencies, departments. He was in 1978 of the Constitutional Convention. They changed it to include other things. So now the state auditor has greater discretion of the Constitution to cover not only strictly financial matters, but all kinds of questions. And as a matter of fact, the auditor is routinely requested by the legislative legislature to, you know, opine or write a report on specific other issues. A lot of which aren't really within an auditor's responsibilities. If you look at the, you know, the kind of financial auditor that you normally find, you know, in the big four. They want them to opine and all kinds of stuff. And like a grand jury, he can do whatever he wants. I mean, I suppose, this is a question for you. I suppose if the legislature asks somebody in, it's like the legislative reference bureau, you know, anybody in the legislature can ask. So if the legislature asks him to do a report on something, and he doesn't consider it a worthy topic, can he say no? That depends. If he is asked to do something by a concurrent resolution, then the law says he's got to do it. But if it's only a single house resolution, he doesn't have to. And that I think is kind of one reason that he's pushing back against the claim in the report that he failed to complete reports 15 times. I think is what the report says. All but one was the instance of a single house resolution is what is what they're claiming. And he didn't have to respond to a single house resolution. So the other question is whether he can wake up one morning and say, gee, I had to do an audit of the state Department of Transportation resolution or no, he can do that right. I think he can. He does have a normal program of work. There are the concurrent resolution phase that, you know, comply with. And he does a few things on his own. I mean, we saw during the summer that he put out some reports on, well, hey, we've got all these special funds, for example. Can we read some of these? You know, we have a pandemic going on. What is the price tag associated with the GT exemptions that were repealed in 2011 to 2013? I mean, that was part of, I don't know whether he was asked to do it or not, but it doesn't, I don't remember seeing a resolution asking him to do that. Yeah, anyway. Yeah, sure. I mean, and you would expect that kind of like a grand jury would expect that, you know, he can make his mind up that something is important and do it. It's this whole flavor of the state auditor is independent. He's unbiased. He's nonpartisan. And he's looking, he represents the public in many ways. He wants to ask the questions and make the investigations that he perceives the public would like him to make. And we want that. Yeah, I think we need it. And in some ways he does the kind of work that I do. You know, some investigation into, you know, governmental accountability. Yeah. So, you know, he's got the right personality for it. He's got the thick skin for it. He's been around the block. But he is going to intimidate him. And that, and that is clear in his rebuttal that he submitted and sent to every member of the legislature, which I thought was the right thing to do to make it clear where he was clarify his position to respond to a but so forth. Can you give us just a pricey about what he said in his rebuttal. Sure. First of all, he did explain about the, the 15 reports that he was accused of not producing. Again, most of these were due to them not being concurrent resolutions and he didn't have to respond to it according to law. The, the last one was that report on OHA. And his position was that he needed to see the executive section minutes of the board of trustees in order to come up with a, you know, a responsible report. And, you know, the, the working group supports, you know, slammed him for all kinds of stuff, including that. So, with regard to the accusations that his workplace was toxic and, and he's created a, you know, a dismal atmosphere. He kind of noted well look guys. You didn't interview anybody who's on my current staff. Okay, you just, you just interviewed people who were let go or who had left the office for whatever reason. And really you're going to find some people there who had some issues and they're going to, and they're going to air in which they did. That doesn't necessarily propagate to the entire, you know, the entire office that they left. I don't know who it means, a hill of beans difference anyway. You know, two of the Supreme Court justices who were United States Supreme Court justices who are now sitting where, you know, criticized in the, in the consent process for being tough on their secretaries. So what. Yeah, I mean, I think the ultimate touchstone is, you know, has there been a benefit to the people of Hawaii. There has been. You know, it's worth having them on the job. You know, obviously, you know, if there are indeed personnel issues or other things. I mean, yeah, I mean, he can he can work on that but I'm not sure that that's a good justification to, you know, give somebody the axe. It's a good justification for making a public spectacular the way this happened. Going back to Ohaw for a minute, you know, we talked about it in the last show you and I did where we covered the, you know, the, the report that was initially made was a 79 page report. I'm still troubled with that. It's decisive because what he didn't finish their party said he didn't finish the report, because he couldn't finish it without the board minutes of their executive executive committee. And frankly, you know, as a member of the public. I don't understand why there should be any issue about that. He represents us. There's nothing secret about the board minutes. There's nothing secret about Ohio. It's a government agency. What about transparency? There's no, you know, they, they would seem to me they would have to come up with a very good reason to keep that secret from us and from him. And yeah, they did. I mean, they, they all has sued. And they got a judge through that it was a training client privileged. So, that was a mistake in my opinion. In my opinion, I think more should have been made of the argument that the state auditor is not an outsider with respect to OHA. You know, it's the OHA is part of state government, the state auditor is part of state government. They were birthed from the same Constitution. And, and I think there's a very good reason that the state auditor should be considered an insider. Like, if, if I were, you know, to operating a store. And, you know, you're my regional boss. I consult an attorney to run the business of my story. You can see that report. Even though I was the one who asked an attorney for legal advice. Because that really the client here is. You know, the entire company, not just one store. And, and you are, you know, an officer of the company and you have the right to see what's in that report. And we, the people need to know, especially if you have the information and, you know, news reports that have come out over the past few years about problems in OHA. There are problems in OHA we want to know. Don't, don't, you know, protect us in our order from knowing. And this all went the wrong direction as far as I'm concerned. Yeah, I mean, my, my take on it was, you know, that, that, that really the audit stopped where it shouldn't have. Why the heck are you concentrating on the executive session minutes you want to be, I think, looking at the other, you know, regular documents, there's plenty of stuff there. When Kili Iakina commissioned an audit accounting firm. Look see at the at the company, and they came out with the so-called red flags report. Yeah, God, there's plenty of stuff there to look at. You know, why wasn't that, you know, made the focus of the investigation as opposed to, you know. Running around and around for attorney client privilege minutes and the judge had had ruled that they are. Well, let me let me offer a thought on that. I think maybe he was trying less condo is trying to force them turn over the minutes, because they weren't getting their $3 million. And they would see that it was in their interest to turn over the minutes. What could be in the minutes my God how, how, what's the justification for that secrecy. But he was trying to get him to turn over the minutes by setting it up so they weren't getting a $3 million. And regrettably, I mean, as you say, he could have continued the audit on other issues, but I think it was a strategical move, don't you. I wonder about that, you know, and, and it's, if that's what it was, it's not going to pay off because I think the legislature is even, even as we speak, considering a resolution that basically says, okay, you know, we'll release the money to, to Ohio after all, even if we don't get the report. It all sounds very political. It sounds like Ohio has a foot in the door on all of this, and they're able to get the money and also preserve their claim of secrecy of these of these minutes. Did it go to the Supreme Court No, is it isn't an appeal, you know, no. I really wonder what would happen on an appeal. Yeah, I certainly wonder. Anyway, so I don't, I don't think that justifies the 79 page report. And you want to talk about any of the other points that were in there and points of his rebuttal. Well, you know, he has this very interesting section in his rebuttal that that talks about the working groups real work. And he kind of makes the accusation that that speaker psyche is behind it and really is a whack job. Not, although not an expressed and not expressed in as many words. But I mean, he does say, you know, instead, the working group appears to be part of speaker psyche's campaign to undermine our independence and exert influence in the office of the order. That's what it says, you know, in black and white. Well, he's no shrinking wallflower. I mean, this is a very strong rebuttal. And, you know, they criticized him perhaps stronger than you might expect, but he criticized them back stronger than you might expect. So this is a pitched battle. And less is not, you know, letting it happen. He's participating in the battle. Yeah, which which I think is unfortunate in a way because it really tends to burn bridges in a way that they shouldn't, you know, that that would undermine the the office of the orders effectiveness. I mean, you really have to work with some of the agencies sometimes in order to get the information that you need. Yeah, he claimed in his rebuttal that Scott psyche was preventing him from getting information from some state agencies, which I thought that's a very interesting claim because that that should not have happened. I don't know if it did. But that's what less condo claim that Scott was causing agencies to withhold information that that less wanted for his reports. Well, yeah, I mean, he does say and it's kind of hearsay. But he says, even before the current legislative session, we were told by then department of human human services director that speaker psyche had instructed him to disregard requests for information necessary for us to report in the department's supplemental nutrition assistance program or snap. The director said his department was in the process of compiling the information when he was told to stop. And, you know, it goes on. I mean, these are very explosive accusations. And, you know, really kind of bear on. Is this really true? If if if so, I mean, why is is the speaker, you know, kind of, you know, putting both feet in an arm in there. When he really shouldn't be. Well, I mean, it stands, you know, you have, you have a couple of things working one is you have this very long reports this extraordinary. I mean, this is unprecedented this report by an organization that was created by Scott psyche as an unprecedented organization. You know, laid on, you know, a relationship that was already faulty. And then you have less condo writing back a rebuttal that was smoking at the edges and claiming that the whole thing was was inappropriate. I'm not sure he used that word he might use stronger language than that. Much stronger. But right now it would seem to me that the average citizen reading both the report and the rebuttal would say the ball is in speaker psyche's court because right now it looks like his, his commission was all was all wet. That was created only to do a witch hunt on less condo. That's what it looks like to the average person, I would say. And which means that, you know, if the ball is in Scott psyche's court, then the next move is up to Scott psyche, isn't it? Well, or on the house side, I mean, there was some, you know, language in the Honolulu star advertiser story on this, you know, quoting Representative Vellotti, who is I believe the majority leader or the vice speaker or something like that. I mean, something you weigh up in the house hierarchy and saying, well, you know, then please don't surprise me. Please don't be surprised with what's going to come next. So they're planning something. They're planning something big. And, and I'm wondering what it could be because Well, perhaps to get rid of them, they need two thirds of the house and Senate. That's hard. So his rebuttal was pretty strong. And I don't know if they could get two thirds when you have both of those documents sitting on the desk. Well, that that is, you know, if, if people are really allowed to vote their conscience. And we wonder how, or whether that's the case. I mean, at least on the house side, there may be, you know, lots of pressure put on legislators to You know, to kind of toe the line here on the Senate side. We have no idea what's going on. You know, if there is, you know, a like-minded sentiment, or, or what, you know, we just don't know what's going to happen on the Senate side. And obviously, you know, for the house to take a bold step like convening a joint session to get rid of the guy, they need to, they need to do their math. They need to count votes on the Senate side. Yes, of course. And I wonder if they're doing that. Maybe they are. So what other possibilities do you think that the, you know, the body was talking about. Well, they've already tried other stuff. They tried to cut his budget in half. That didn't work. I think they did one other thing and that's mentioned in the rebuttal as well. Yeah, they, they, they tried various things to, to, you know, be. They, they, they tried to combine his office with the LRB and I think the on Woodsman to basically merge it out of existence. To create an office of public accountability or something like that. But it would basically merge the office of the order out of existence and basically get rid of his possession. See, that would be, that would not be in the public interest. You know, you don't want to cut his wings off you need, as we have discussed in order. You know, there have been, and you would need a constitutional change to do that, because the office of the auditor is established in the Hawaii Constitution. Yes. Originally, at statehood. It's still there. So, you know, there have been emails running around one I can think of by a former legislator with a lot of carbon adversities visible carbon adversities he doesn't mind speaking of how he feels, and, and to every member of the press that he ever knew, I got a copy of that was was quite extraordinary and he goes into a tirade against the legislature, not just on this, but on their, their, their session, this session, which is interesting you know maybe we have to look at in the context of that. This is the session in the middle of a number of crises, fiscal, of course, as you and I have discussed, but other crises to the state social crises. And he criticizes them for not doing anything and for being dysfunctional. And you know it strikes me that, while that's happening, and all these people are criticizing the ledge for not getting any real work done. It's a controversy over the state order. It just strikes me as the wrong time the wrong place the wrong thing for a legislature that should be focused on getting the job done. Well, I mean it's, it's probably, you know, partly an emotional response to me. I don't know what less condo did to to tick off the speaker, but he must have done something to get him pretty ticked off. Yeah, we don't know that we don't know what happened. Yeah. And I can't imagine what it might have been. You know, to get somebody that upset. Now, you know, I don't think he measures really high in the tech department. And I don't think he ever has. So, you know, it's understandable that some people could get ticked off. But, you know, what you do when you get ticked off is kind of another thing. I mean, you know, how many grown ups do we have in the room. Well, bottom line is that, you know, he's supposed to be representing us and making sure that we know how state government is working and helping us make it work better and right and avoiding scandals and corruption whatever problems, you know, may exist and it's important for us, especially, you know, in these times where there are so many issues and so many trouble points of state operation. So, what I get out of this honestly is it's all very regrettable, because it means that whether they get the two thirds to remove him or not. He's going to be effectively in the woodshed here. And he's not going to have the same access is defect don't matter. He's not going to be able to do his job as well. And everybody going to be walking around who and, you know, I'm thinking this is not good for the for the citizens of the state. The Constitution wants. This is not what the founders said state founders intended. And so the bottom line is, this isn't good. You agree. Well, yeah, it's not good. Part of having an office of the auditor or, you know, or any one of these commissions that get created from time to time is, you know, that hidden information or, or less than readily available information needs to be available to the public so they can consider it. I think he's done a good job of doing that. You know, because, and, and, and, you know, when you think of whether. You know, he's actually motivated action. You know, the good kind of action as opposed to the wrong kind of action. There's all and I've been on boards and commissions too. And the main complaint that I've had about them is look, you know, we've done a lot of work we've produced a report. Is anybody going to do a darn thing about it. And that's always the worry that I had and that's always the observation that I had that, you know, we'll do this, we'll do that and we won't do this for, for, you know, not, not very good reasons. You know, that's, that's another regrettable bottom line here is that if you look at the auditor's website you see all these reports they're all there. It's very transparent. You can read them all to like, and quite a few of them, even over the duration of his tenure, which is only about four years going on. Yeah, I mean, I really would like to see more people act on, you know, what's in those reports that the incident that comes to my mind is the, you know, the high five deposit beverage container program. The, and it wasn't necessarily just him, but he had an accounting firm. You know, author part of that report they went and tested some transactions and basically found, you know, hard evidence of fraud. And, and I always wondered, you know, why aren't they prosecuting somebody when they have this smoking gun that they basically dropped on on the public's lap. And I guess the answer is that there is, you know, something within the swamp that is protecting, you know, any real change in the system, you know, for the sake of the swamp dollars. There's a problem in the whole auditing system itself. So the state auditor less condo or anyone else does a report gets down to the, you know, the bedrock of it finds what's under the rock. He writes a report. You know, it's a it's a stunning report. It's an important report. It's got all these recommendations and you know he's he's found the goods. And that's what happens. It's up to other parts of government, not him other parts of government to act on that, whether it's the legislature to make a build and, you know, deal with his recommendations, or the governor or some other agency within the or the executive branch, like the Attorney General, for example, before the lawsuit will go get an indictment where the case may be. And let's can't do that. He can just write a report. That's all he can do. And then it's up to someone else. And I think this is something perhaps that should be looked at. In fact, we're almost out of time. I want to ask you, you know, what have we learned here that we could improve about how to deal with the auditor's office and to deal with the situation with the auditor isn't getting what he wants, how to deal with the situation with the auditor believes that members of the legislature are advising, you know, government agencies not to cooperate with him. How do we fix this because we need it to be functional. Well, the ultimate authority here as as it is all the time is with the people. And the pretty much the one thing that the people can do is go to the ballot box. It's it's not a quick solution. It's a very long term solution. The people really should be looking at, you know, who is behind this, you know, this coup, who is behind, you know, these attempts to engage the work that the auditor is doing to restore trust in government. And they ought to be given the walking papers. What about the governor himself could could he or in the future should he be getting involved in this. I think it's the governor's responsibility to make sure that government's functioning. If there's something he's trying to hide. Then I can kind of understand that his non involvement. If he if he really wants. You know, positive good positive change to happen. He's got to look at, you know, things like this incident here and and and be taking positive steps. You know, to make sure the positive change happens now. The governor doesn't have a magic wand. The governor does have a bully pulpit. And he can he can call a press conference and and get people riled up. And, you know, make lawmakers aware that there's an issue here and and and the public better be protected. I think really ultimately it's it's a manifestation that people of people power that's going to really create a difference here. And that really can't happen unless. Either people get the right information and to the extent that people, you know, that there was impediments to that. We got to really look at how how we can either get around that or do something else to to make sure that the information flows freely to to the people who actually can do something about it. So in large part, this is really a question of the media and the press. Well, Tom around at where time. Tom Yamachika today on talking tax with Tom in our special follow up show and the situation of the state order less condo will be back. I'll see you next week with more. Thank you so much. Great to talk to you a lot. Thanks for having me on the show.