HONOLULU -- Hawaii's newest legislator told KITV she should not be disqualified from state office just because her failed business still owes the state tens of thousands of dollars in unpaid taxes. However, the governor's office said it would not have chosen her had they known about Rep. Beverly Harbin's financial troubles.

Republican Gov. Linda Lingle appointed Harbin to fill the last year of Democratic Rep. Ken Hiraki's term after he resigned to take a private sector job. Lingle ignored four candidates suggested by the Democratic Party and chose Harbin without fully looking into her background.

(Watch News Report)

Harbin and her husband ran a Honda auto repair shop in Kakaako that closed in 2000. The state filed tax liens against them, because the company failed to pay $125,000 in state taxes.

"My company folded," Harbin said.

In her first day on the job at the Capitol, she explained how the company got behind.

"All of our personal assets were mortgaged and we sold everything to try to get out from debt. I didn't file bankruptcy. My company didn't file bankruptcy. We're trying to deal with it like thousands of other small businesses," Harbin said.

She said when Lingle's chief of staff, Bob Awana, and the governor herself interviewed her separately, they both asked if there was anything in her personal background that would be embarrassing.

"No, I did not approach that. Because, to me, it was something that was dead and gone," Harbin said.

Awana said the governor's office did not check her financial records. He released a written statement.

"The governor's office does background checks of all potential appointees, but such checks do not include financial records. Had this information been disclosed during the interview process, Ms. Harbin would not have been appointed," Awana said in a written statement.

The chairman of Hawaii's Democratic Party said, if true, the allegations should disqualify Harbin from holding office.

"If these charges are true, they are not the conduct of someone who should be trusted with public office," Hawaii Democratic Party Chairman Brickwood Galuteria said.

"It shouldn't disqualify me because, if anything, I bring a lot of experience. I bring a lot of pain, suffering, that thousands of others have gone through," Harbin said.

She said she and her husband are paying the back taxes. KITV asked when their taxes would be paid in full.

"Right now, I can't answer that question because I don't have a business anymore and I'm totally without assets," Harbin said.

While House Democrats greeted her with a lei, some of them consider her to be a Republican spy since she joined the Democratic Party three days after Hiraki announced his plans to resign.

"I'm not a Republican in any kind of clothing. I'm Beverly Harbin, small business advocate. And we've got a lot of work to do in the year that I'm going to be here," Harbin said.

The Democrats accused Lingle of "blatant political maneuvering" and ignoring four well-qualified Democrats they suggested with a long history of service to the Downtown-Iwilei-Makiki House district.

Harbin told KITV reporter Keoki Kerr that she's not resigning and the governor's spokesman said the governor will not ask her to step down.