The largest public works project in state history is now the target of a federal subpoena as both the Department of Justice and State investigators also dig into the project. County officials tell Always Investigating they’re worried this could tie up the last half of the federal money that’s been frozen in Washington while overspending soared.

The Honolulu Authority for Rapid Transportation said in a statement that the agency “this week received a federal subpoena to provide documents and files that largely duplicate those recently provided to the state auditor.”

The state auditor recently issued a series of its findings, and Always Investigating asked Auditor Les Kondo if there is a connection to the subpoena, asking “Did you or your office go to the feds?”

“No we didn’t go to the feds and we didn’t turn over any records to the feds,” Kondo said.

We asked if they are required to.

“We are not required to,” Kondo explained. “During the course of an audit our audit standards would require us to report things we felt were criminal. If we came across something criminal in nature, it was fraud, we would be required to report that to the authorities, but absent that, we would not disclose information about the audit until the report was issued. In fact by law our work papers are confidential, which means the records that we received from the audited agency, our notes, our mental impressions, by law those are protected, and absent court order we would not open those records up or turn those records over to anybody.”

Always Investigating asked the auditor, “To clarify, did you come across anything that appeared to be illegal or criminal during the course of your audits?”

“We did not,” Kondo said, “and we did not report anything or forward anything to any law enforcement organization.”

The county auditor has been digging in, too. Councilmember Heidi Tsuneyoshi has called for a forensic audit.

“We have continued concerns about the procurement process and how contracts were let out and premature contracts that have gone out. So look forward to seeing what information is uncovered and I think the bottom line is we need to know what has gone on so we know the best way to go moving forward and what  we need to do now,” Councilmember Heidi Tsuneyoshi said.

“And yet after all of that the feds still feel that there are more documents and they have to subpoena for those documents, that’s pretty serious, that’s very serious,” Interim Honolulu City Council Chairwoman Ann Kobayashi told KHON2.

We asked, “can you recall in your years here at city hall any time a federal project has risen to the level of subpoena?”

“I don’t recall any of that, and the rail is the largest project with the most federal money,” Kobayashi said.

The feds pledged $1.55 billion, but half of that is held back in limbo while HART has submitted recovery plans to try to get the rest released.

We asked, “what implication do you think the subpoena has on the other half of the federal money pledged?”

“Well unless those documents are provided,” Kobayashi said, “I would not be surprised if the feds said well OK you don’t want to show us we won’t show you the money.”

According to the mayor’s office, HART got the subpoena late Monday and told the county’s corporation counsel about it Tuesday. The mayor is traveling to Japan but his second-in-command Roy Amemiya said in a statement: “The city encourages and expects HART’s full cooperation and that the authority needs to continue building greater community trust.”

“I guess the feds are finally saying what happened to our money? We need the documents showing where did the money go,” Kobayashi said. “Before HART, they were receiving the tax money, they were spending that money on huge contracts and subcontracts.”

Indeed, the feds want it all, going way back. HART says, “The documents required include those going back to the project’s beginning.”

* All the consultant contracts;

* List of contractors;

* Change orders;

* Archaeological studies; and

* And correspondence with the Federal Transit Administration about federal money

KHON2 asked, does a subpoena as well imply that there could be legal or potential criminal implications rather than again an audit might be an accounting or a procedural look back?

“Yes,” Kobayashi said. “All of the auditors, the state auditor has gone in there, the city auditor has gone in there and yet the feds have to subpoena for documents, why is that?”

Newly appointed councilmember Mike Formby used to run the county Department of Transportation Services, was on the HART board, and served as an interim CEO. Formby told Always Investigating, “I am concerned that there is the need for a federal investigation. I trust HART and the City will cooperate fully and I sincerely hope, at the end of the day, there is no malfeasance or impropriety on this project.”

An FTA inspector general audit a few years back touched on Honolulu rail but only as part of a look at several western-region FTA projects.

No comment yet from the FTA on this federal subpoena and implications for the rail money.

No other county affiliated departments have received subpoenas according to the mayor’s office. The county Information Technology offices have been federally searched twice in two years but it’s not known what specifically they were looking for.