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Senate Committee Questions Contract Favoritism

Business Director Denies Wrongdoing; Lingle Claims Investigation Is 'Political'

POSTED: 4:34 pm HST October 14, 2008
UPDATED: 9:04 pm HST October 14, 2008

A state Senate investigative committee is seeking possible criminal charges against state Business Director Ted Liu.

Committee Chairwoman Democratic Sen. Donna Kim said Liu intentionally and knowingly broke state procurement law to steer a nearly $9 million contract to a bidder he favored.

The contract was to manage a fund to attract investors to the islands to develop renewable hydrogen energy from sources such as wind and waves.

Senators said Liu wrongfully awarded the contract to H-2-Energy over top-ranked Kolohala Ventures.

"The evidence is more than adequate to a reasonable belief that Ted Liu and his management staff knowingly and intentionally violated the procurement law," Kim said.

"There was no intentional or knowing violation of the state's procurement code," Liu said.

Senators claimed Liu tried to conceal his relationship with Barry Weinman, a principal in one of the partners of H-2 Energy.

"It is very clear it was the directors intent to give this particular company the job," Democratic Sen. Gary Hooser said.

"There was no special relationship with any one of the bidders," Liu said.

Liu said that when the procurement office said he had to select Kolohala over H-2, he did.

"The committee was convened after the process had corrected itself," Liu said.

In 13 hearings, the committee listened to 56 hours of testimony to create this report.

Gov. Linda Lingle called the investigation "biased and political."

"If you take everything in total, you can't look at this as political," Republican Sen. Sam Slom said.

The Senate investigative committee has no enforcement powers, but it has asked the attorney general to appoint a special independent counsel to pursue possible criminal charges.

The state attorney general's office did not return KITV's calls to say if it would consider hiring special counsel.

Intentionally violating of the state's procurement law would be a misdemeanor.

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