Narrowed-Down Affordable Housing Audit Recommended for Approval

A pared-down request by a West Hawai‘i council member to have the county auditor take a deeper look into the marred county Office of Housing and Community Development’s use of affordable housing credits was recommended for approval by the county’s finance committee.

The County Council’s Finance subcommittee on Tuesday, Aug. 16 recommended the full council approve of Resolution 467 with an amendment that narrows the audit down to look at an annual comprehensive list of affordable housing credits outstanding, issued, transferred, and redeemed.

The amendment removes broad language that previously asked the audit to look at the department’s fundamental and strategic plans, and specifies that anything to do with a federal investigation currently going on in light of the recently exposed affordable housing scheme within the department is off limits.

“Anything that’s a part of the investigation is hands off,” Councilman Holeka Inaba, who introduced the measure, said.

That change ensures the auditor’s office and county won’t put itself in a legally precarious position should it interfere, compromise or share any work being done by federal investigators.

“I’m more comfortable with the resolution we’re looking at today,” County Auditor Tyler Benner said.

The measure was postponed from Aug. 2 on grounds that the departments would fine-tune the scope of work as not to expose the county to liability.

While not in direct response to an ongoing corruption case involving a former employee of the housing agency, Alan Rudo, and his co-conspirators, Inaba has said that concerns about affordable housing development in the county have been expressed for decades.

Rudo, 55, a former housing specialist for the Hawai‘i County Office of Housing and Community Development, pleaded guilty and is awaiting sentencing for fraud for his role in the conspiracy where he took $2 million in kickbacks. He is the only former county employee of the four conspirators.

As a county employee in charge of regulating and approving affordable housing projects for the county, Rudo greenlighted affordable housing credit deals between the county and businesses operated by his co-conspirators whereby affordable housing credits were approved, but such housing was never developed. Those credits were sold to other businesses and the conspirators netted the proceeds.

Paul Joseph Sulla Jr., 76, and Gary Charles Zamber, 53, both attorneys residing on the island of Hawai‘i, were charged with six counts of honest services wire fraud and one count of conspiracy. Sulla is also charged with one count of money laundering.

Rajesh P. Budhabhatti, 62, a private businessman on the Big Island, was also charged in a separate information with conspiracy to commit honest services wire fraud.

County housing administrator Susan Kunz, whose office has reviewing internal policies and procedures in light of the corruption, said her office looks forward to working with the auditor to see where the affordable housing credit process can improve.

“I’m very comfortable with the amendment that has been made,” she said on Tuesday. “This opportunity to work with the county auditor will definitely bring some confidence back.”

The resolution will likely go before the full council in September.