Honolulu - First it was the Department of Justice demanding documents be turned over through a state Attorney General special agent. Now another federal investigator is taking a closer look at Honolulu's rail authority, zeroing on overpayments that HART says were caught internally last year.
HART has received a second subpoena, this time from the federal Department of Transportation OIG, collecting documents for a grand jury looking into relocation payments and real estate acquisition management, for people and companies that had to move out of rail's right of way.
"If they move their business to another location,” explained HART CEO Andrew Robbins, “there's a process in place that we must follow in terms of determining you have to move equipment, you have to move resources, you have to build new offices whatever it may be."
The subpoena also demands files where HART itself discovered and reported noncompliance with federal payback rules last February.
"We took care of this issue last year so there are no more overpayments since we discovered this issue on our own,” Robbins said.
Always Investigating looked into what HART wrote to the FTA and U.S. DOT Inspector General last February, and we found that HART suspected overpayments in 15 out 18 relocation files examined internally. Those 18 were just a sliver of the 103 relocations HART had paid for so far as of that point, but they were some of the most “complex” and “high-dollar” moves. HART found miscalculations, payments for covering ineligible costs, even cases of new or better equipment buying, rather than just taking something from point A to B, Robbins said, all things HART thought ran afoul of federal Uniform Relocation Act guidelines.
“All I can tell you is from what I've seen I didn't see anything that I would consider rises to the level of illegal activity,” Robbins said. “Personally, I haven't seen anything I would consider rises to a level of criminal activity.”
“The spirit of what HART was trying to do in the past was to be fair to everyone,” Robbins said. “You can imagine when someone has to relocate that's a disruption to their lives, to their business. We didn't want to go through the emminent domain process if we didn't need to. We’d rather negotiate, acquisitions and then as well as relocation. If somebody has to pick up their business, all their equipment and relocate, there was always a sense of fairness in dealing with these folks. At the same time there was a requirement on us to make sure we follow the federal guidelines.”
HART had spent more than $13 million at the time of their February 2018 heads-up letter to the feds, and they had gotten $3.8 million reimbursed by the FTA. HART told the FTA last year they'd forgo that much in federal paybacks elsewhere to make up for it. HART is not asking businesses to pay anything back.
“So far we have not asked, we've not contacted anyone,” Robbins said. “We're not asking anyone for any kind of reimbursement at this time."
Since last year HART has done a handful more relocations – they are up to 114 now -- but there's a long way still to go.
Always Investigating found budget documentation that shows HART plans to spend more than $88 million on relocation expenses -- plus more than another quarter billion on real estate acquisition. They've only spent $23 million dollars of the $88 million relocation budget so far as of January 2019.
“Essentially we're just using local money now for relocation purposes," Robbins said.
Always Investigating asked, are any consultants or staff who were tied to the flawed cases still on staff or still on contract? “Yes,” Robbins responded. “We have some admin staff and so forth that are still here.”
Always Investigating asked, did they get any disciplinary action?
“No,” Robbins said, “but we have done some training and we've really taken the responsibility for the oversight of the relocation program."
The FTA appears to be on high alert over this latest OIG investigation action.
“Right before -- essentially a day or two before the second subpoena -- we did receive correspondence that they (the Federal Transit Administration) were going to be sending an expert to review the relocation files,” Robbins said. “I guess I was surprised because I thought it was being dealt with by the FTA, but then again we self-reported there were some irregularities. Maybe it's not a surprise that they would want to look into it.”
Authorities can't say whether this second subpoena means there are multiple separate actions being taken, but the U.S. Attorney's Office in Honolulu did say it's not uncommon for investigations in general to involve multiple different agencies.
The subpoena revealed today is dated Feb. 2., 2019. The subpoena unveiled last week Thursday is dated Feb. 8, 2019. Robbins said he was notified about the OIG subpoena late last Friday, but had to consult with lawyers before calling today’s press conference.