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Dear Mayor Caldwell,

You now face a very important choice.

The city auditor has presented you with a report that points to mismanagement by the city and misspending within a partnership under which the company Covanta manages the city’s waste-to-energy system.

As Civil Beat’s Nick Grube reported, the original $318 million cost of the 1985 contract ballooned (through subsequent change orders, expansions and extensions) to more than $993 million as of two years ago.

The audit details how officials at the Department of Environmental Services readily signed off on contract terms that went way beyond the bounds of the city’s own rules, and that are far outside public-contracting norms.

That audit found that department officials essentially let the contractors write their own terms. Officials approved decades-long single-source contracts and extensions without going out to bid.

The “one-sided” contract (to use the auditor’s term) put the city at risk of swallowing any losses, but guaranteed Covanta’s profits, even requiring Honolulu to issue bonds to pay the company if other funds aren’t available.

The audit also detailed outrageous charges — from first-class and business-class airline tickets and other dubious travel expenses for Covanta and its sub-consultants, to a questionable $585,000 payment for Covanta’s legal fees in negotiating with the city. Other questionable payments were made to HDR Engineering and Mele Associates, two companies that were hired to help the Department of Environmental Services keep an eye on the Covanta contract.

Should we blame Covanta, HDR Engineering and Mele Associates for grabbing the most favorable terms they can get from the city? Maybe. But blaming them in this case is like blaming pigs for gobbling as much as they can from a trough full of slops.

The real issue is on the city’s end.

The most generous interpretation, the one the city auditor leans to in his report, is that understaffed, overworked and inexperienced city officials were duped and then failed to exercise adequate oversight.

But are we wrong to worry about another possibility? (I called to speak to you about this Thursday, without success.)

Historically, from New York’s Tammany Hall to the Teapot Dome scandal, when public officials in charge of contracts generously shovel money at contractors, they don’t do it out of the kindness of their hearts.

It’s hard to read the audit without imagining a whiff of potential corruption emanating from every page like the reek of week-old fish.

To be sure, almost all the actions described in this audit happened under earlier mayors, including Frank Fasi, Jeremy Harris, Mufi Hannemann (for whom you, Mayor Caldwell, served as managing director) and Peter Carlisle. But it’s up to you, Mr. Mayor, what to do about this now.

To be sure, almost all the actions described in this audit happened under earlier mayors, including Frank Fasi, Jeremy Harris, Mufi Haneman (for whom you, Mayor Caldwell, served as managing director) and Peter Carlisle.

But it’s up to you, Mr. Mayor, what to do about this now.

Roy Amemiya, Jr., Honolulu’s managing director, already has made his stance clear. He rejects nearly every contention in the audit, even as he agrees to some — though by no means all — of the auditor’s recommendations.

Amemiya argues that everything the city did was within the law and that the auditor is wrong in his findings. On the whole, his letter of response to the audit amounts to 30 pages of insisting there’s nothing to see here. But the overtones sound an awful lot like a kid denying he’s been in the cookie jar even as he wipes crumbs from his mouth.

Only we aren’t talking cookies here — we’re talking about hundreds of thousands or millions of our taxpayer dollars. And even if Amemiya is right and the generous terms and limited oversight were all permissible, there’s a big difference between something being legal and something being right.

So you have a choice:

You can mount an independent, transparent investigation to hold accountable those who made these incompetent (or corrupt?) decisions. You can re-examine the contract terms and bring them in line with national standards, de-porking the goodies that never should have been in there in the first place. (Amemiya did note that the city is negotiating “on a travel policy that is more in line with the City’s standard practices.”) You can have the city take additional steps — clear, well-explained, transparent steps — to make sure this sort of nonsense doesn’t continue. You can insist your administration follow the auditor’s recommendations, or explain specifically, instance by instance, why not.

Or you can do nothing, and make it crystal clear to every voter in Honolulu what you are willing to tolerate within your city administration. That will certainly help voters make their decision at the polls next fall.

What’s it to be, Mr. Mayor?