Aloha Chair Batangan and Members of the Government Relations, Ethics, and Transparency Committee,
I strongly support this Committee's review of the Countywide Fraud Risk Assessment because it should not be viewed as simply another audit. It should be viewed as a warning.
For years, many Maui residents have raised concerns regarding transparency, conflicts of interest, campaign influence, ethics enforcement, recusal practices, procurement, land use decisions, and the increasing appearance that well-funded and politically connected interests have greater access to government than ordinary residents.
Too often those concerns have been dismissed as politics.
Now the County's own independently commissioned Fraud Risk Assessment tells us something very different.
The report concludes that Maui County has not developed a countywide internal control system despite state law requiring one. It found significant weaknesses in fraud-risk management, internal controls, ethics awareness, fraud prevention, and organizational commitment to preventing fraud before it occurs.
Perhaps the most troubling finding is not that fraud has occurred, but that many of the systems intended to prevent fraud, detect abuse, identify conflicts of interest, and strengthen accountability either do not exist or remain underdeveloped.
The report also revealed a significant disconnect within County government itself. While most department heads viewed the County's fraud risk as low, elected officials overwhelmingly viewed the County's fraud risk as medium or high. Even more concerning, nearly three-quarters of department heads reported they were not considering implementing specific fraud-risk management practices within their departments.
That should concern every taxpayer.
The report further identified deficiencies involving ethics guidance, conflict-of-interest awareness, fraud reporting, employee training, internal controls, fraud risk assessment, and management follow-up when fraud is detected. Large percentages of respondents indicated they either lacked sufficient guidance or simply did not know whether adequate guidance existed.
These findings should fundamentally change how this Council approaches governance.
For years, Maui residents have questioned major development decisions involving projects such as Hoʻonani Village, EC Pāʻia Town, Wailea 670, and numerous other significant land-use matters. Residents have questioned infrastructure planning, water availability, traffic, environmental impacts, transparency, and whether public participation meaningfully influences outcomes.
Likewise, Bill 9 demonstrated how quickly enormous financial resources can be mobilized when powerful economic interests believe their investments are at risk. Residents witnessed extensive television advertising, digital campaigns, direct mail, organized lobbying, and coordinated public relations efforts unlike almost any housing measure in recent County history.
None of these examples, standing alone, prove misconduct.
What they do demonstrate is why public confidence depends upon strong ethics systems, meaningful disclosure, independent oversight, and transparent decision-making.
Residents also observe campaign finance reports showing substantial financial support from unions, political action committees, developers, consultants, trade organizations, and other organized interests that frequently appear before the County on matters involving development, public funding, infrastructure, labor agreements, contracts, zoning, and housing.
Campaign contributions may be entirely lawful.
The question is whether the County's ethics framework has evolved to address the public's reasonable expectation that these relationships be transparent and, where appropriate, subject to meaningful recusal standards.
Public confidence requires more than legal compliance.
It requires independence.
It requires transparency.
It requires accountability.
The Fraud Risk Assessment repeatedly emphasizes internal controls, organizational culture, ethics, fraud awareness, governance, and conflict management. Those recommendations should not remain management concepts discussed only during presentations.
They should become County policy.
This brings me to the Board of Ethics.
The Board exists to protect public confidence, not simply administer paperwork.
Yet many residents have little understanding of how many complaints have been filed, how many have been investigated, how many have been dismissed, how long investigations take, what recurring issues have been identified, or whether the Board has recommended stronger ethics laws to this Council.
An ethics system cannot build public confidence if the public has no meaningful way to evaluate its effectiveness.
Accordingly, I respectfully request that this Committee undertake a comprehensive review of the Board of Ethics, including:
• Total complaints received over the past ten years.
• Complaints dismissed.
• Complaints investigated.
• Advisory opinions issued.
• Findings of violations.
• Average investigation timelines.
• Staffing and budget history.
• Recommendations previously made to strengthen the Ethics Code.
• Whether existing confidentiality rules appropriately balance investigative integrity with public accountability.
The purpose is not to criticize the Board.
The purpose is to determine whether it is accomplishing the mission for which it was created.
This Committee should also review whether current recusal standards adequately address situations involving campaign contributors, nonprofit board affiliations, land trusts, employers, consultants, developers, unions, political action committees, and other significant organizational relationships.
The appearance of impartiality is one of government's most valuable assets.
Once lost, it is extraordinarily difficult to restore.
The Countywide Fraud Risk Assessment provides this Committee with a rare opportunity.
It should not become another report that is acknowledged, filed, and forgotten.
It should become the foundation for rebuilding public confidence in Maui County government.
The measure of success should not be how many ethics policies exist on paper.
The measure of success should be whether residents believe decisions are being made fairly, independently, transparently, and in the best interests of the people rather than the most organized, best funded, or politically connected interests.
The people of Maui deserve a government that welcomes scrutiny rather than fears it.
This Committee has the opportunity to begin that work.
I am submitting this testimony to request a serious and public review of Maui County’s ethics system, conflict-of-interest practices, recusal standards, campaign influence, and the records of the Board of Ethics.
This is not about one project, one councilmember, one developer, one union, one PAC, or one complaint. This is about a pattern that the public can see across multiple decisions involving land use, housing, infrastructure, nonprofit funding, campaign contributions, and ethics oversight.
Maui residents are repeatedly told to trust the process. But trust is not created by slogans, press releases, or closed-door explanations. Trust is created by records, disclosures, recusals where appropriate, independent review, and consequences when public confidence is damaged.
The Hoʻonani Village project is one example. This is not a small matter. It is a major proposed development involving approximately 166 acres, a proposed 1,608-unit workforce housing community, commercial uses, light industrial uses, open space, and major land-use changes. County departments have already raised infrastructure concerns. Members of the public have raised concerns about timing, environmental review, traffic, airport impacts, water, wastewater, roads, and whether the project is being moved faster than the public can reasonably evaluate.
The EC Pāʻia Town project is another example. That proposal involves approximately 40 acres of former sugarcane land near Pāʻia, up to 170 homes, commercial businesses, a medical clinic, public parking, relocation of the Pāʻia mini-bypass, and a years-long entitlement process. Again, the issue is not simply whether housing is needed. Everyone knows housing is needed. The issue is whether large projects are being reviewed with full transparency, whether infrastructure is honestly addressed before approvals move forward, and whether residents are being asked to accept the consequences after the political decisions have already been shaped.
The public is tired of being told that every development is “housing” and therefore beyond serious questioning. Housing does not erase conflicts. Housing does not erase campaign influence. Housing does not erase infrastructure failure. Housing does not erase the need for disclosure, ethics review, and independent judgment.
Maui has seen repeated situations where developers, unions, political action committees, large organized interests, nonprofit organizations, land trusts, consultants, and politically connected entities appear in overlapping roles. They appear in campaign finance reports. They appear in testimony. They appear in budget requests. They appear in land-use approvals. They appear in advisory spaces. They appear in relationships with elected officials.
Any one of these facts may be legal. But legal does not always mean clean, transparent, or worthy of public confidence.
When unions and PACs spend large amounts of money to support County candidates, the public has a right to ask whether those same interests later benefit from County decisions. When developer-connected interests support candidates, the public has a right to ask whether those candidates should participate in votes affecting those contributors. When nonprofit organizations or land trusts receive County money while people affiliated with those organizations participate in County decision-making, the public has a right to ask whether recusal was considered and whether the public received full disclosure.
This Committee should not wait for another scandal before acting.
The Board of Ethics is supposed to initiate, receive, hear, and investigate complaints. It has the authority to examine disclosures, advise corrective action, adopt rules, issue advisory opinions, and use subpoenas in investigations. On paper, that sounds meaningful. In practice, many residents do not see meaningful accountability.
The Board of Ethics has become, in the eyes of many members of the public, little more than a board. It exists, it meets, it receives paperwork, it issues opinions, and it operates under rules. But the larger question is whether it is producing public accountability or simply managing complaints into silence.
That question deserves review.
This Committee should request the Board of Ethics’ complete records and performance history, including the number of complaints received, complaints dismissed, complaints investigated, complaints resolved by advisory opinion, complaints resulting in findings of violation, complaints rejected as speculative or repetitive, complaints kept confidential, complaints appealed to the Board, average time for resolution, staffing levels, budget history, and any recommendations the Board has made for stronger ethics laws.
If the Board of Ethics is functioning properly, the records should prove it.
If the records do not prove it, then the Council has an obligation to reform it.
The public should not have to guess how many complaints have been filed. The public should not have to guess how many were dismissed. The public should not have to guess whether complaints against elected officials are meaningfully investigated. The public should not have to guess whether confidentiality rules are protecting legitimate investigations or shielding government from embarrassment.
Ethics oversight must serve the public, not the institution.
There should also be a review of recusal practices. Recusal should not depend only on whether an official personally feels conflicted. There should be clear standards when campaign contributors, employers, business associates, board affiliations, nonprofit relationships, land trust connections, family relationships, or other substantial interests are involved in matters before the Council.
The public has seen examples where councilmembers ask Corporation Counsel for advice before participating in matters involving potential conflicts. That should not be treated as a formality. It should be documented, public when legally allowed, and consistent. If one official seeks advice or recuses on one matter, the same standard should be applied across similar matters.
The County also needs stronger campaign-disclosure rules. When a union, PAC, developer, lobbyist, consultant, nonprofit, or organized political interest contributes to or spends money supporting a candidate, and that same interest later has business before the County, that relationship should be easy for the public to see before the vote occurs.
The question is not whether every contribution is corrupt. The question is whether the public has enough information to evaluate influence.
Right now, the public does not.
Maui County is making decisions involving billions of dollars in budgets, major land-use changes, affordable housing funds, infrastructure commitments, disaster recovery, redevelopment, nonprofit grants, and public-private partnerships. These are exactly the kinds of decisions where ethics oversight must be strongest.
Instead, residents are often told after the fact that everything was legal.
That is not enough.
The standard should not be, “Can we legally get away with it?”
The standard should be, “Does this decision withstand public scrutiny?”
I am asking this Committee to do the following:
First, review the complete operating history of the Board of Ethics.
Second, require public reporting of ethics complaint statistics.
Third, review whether confidentiality rules are being used too broadly.
Fourth, review recusal practices across the Council, boards, commissions, and departments.
Fifth, require stronger disclosure when campaign contributors, PACs, unions, developers, nonprofits, land trusts, or organized interests have matters before the County.
Sixth, require elected officials and board members to disclose relevant affiliations before discussion and voting.
Seventh, examine whether the Board of Ethics has sufficient independence from the political system it is supposed to oversee.
Eighth, recommend reforms that restore public trust.
Maui does not need another committee meeting where everyone agrees ethics is important and then nothing changes. The public needs records reviewed. The public needs patterns examined. The public needs measurable standards. The public needs elected officials willing to look directly at the system that protects them.
The people of Maui are not asking for perfection. They are asking for honesty.
They are asking for a government where housing projects are reviewed honestly, infrastructure is addressed honestly, campaign influence is disclosed honestly, conflicts are handled honestly, and ethics complaints are not treated as a nuisance.
**Re: GREAT-5(8) – County of Maui Fraud Risk Assessment**
Chair Batangan and Members of the Government Relations, Ethics, and Transparency Committee:
I support the findings and recommendations contained in the Countywide Fraud Risk Assessment and urge this Committee to expand upon them.
The report concludes that Maui County's existing fraud controls are not adequately designed to mitigate fraud risks, identifies significant gaps in internal controls, and finds there is no consistent countywide process for reporting, investigating, and responding to fraud. It further concludes that the County's fraud management program operates at an "ad hoc" level rather than under a mature system of internal controls. These findings should concern every taxpayer.
However, fraud prevention is about more than accounting procedures. It is also about preventing situations that erode public confidence in government.
The public has repeatedly witnessed circumstances that create legitimate concerns regarding transparency, conflicts of interest, and accountability. These concerns are documented in public meeting records, committee proceedings, budget deliberations, development applications, and other County records.
Examples include elected officials conducting meetings with developers outside publicly noticed governmental settings; councilmembers serving as directors, officers, or board members of nonprofit organizations while participating in discussions or funding decisions affecting those organizations or related interests; and recurring questions regarding when elected officials should participate or recuse themselves from matters involving organizations, applicants, or individuals with whom they have significant relationships.
One example repeatedly observed during Council meetings involves Chairman Tom Cook requesting advice from the Department of the Corporation Counsel regarding whether he should recuse himself from matters involving Maui Economic Opportunity, where his wife serves as a director. Regardless of the legal advice ultimately provided, the repeated need to seek guidance demonstrates that clearer, objective recusal standards are needed. Public confidence should not depend upon case-by-case legal opinions.
The Fraud Risk Assessment itself recognizes the absence of a countywide nepotism policy, identifies deficiencies in internal controls, and concludes there is no uniform process for reporting, investigating, and responding to fraud. These same governance principles should be applied to conflicts of interest and recusal standards.
I respectfully request that this Committee consider additional recommendations, including:
* Adoption of a comprehensive countywide conflict-of-interest and recusal policy that addresses both actual conflicts and the appearance of conflicts.
* Enhanced disclosure requirements for board memberships, fiduciary positions, financial interests, and significant personal or professional relationships.
* Written public explanations whenever an elected official participates in or recuses themselves from a matter involving a potential conflict.
* Independent review of appropriations, grants, contracts, or land use decisions involving organizations with leadership ties to elected officials.
* Greater transparency regarding meetings between elected officials and parties seeking discretionary County approvals or funding.
* Regular ethics and governance audits in addition to financial audits.
Government accountability is measured not only by whether fraud occurs, but by whether the public can have confidence that decisions are made impartially, transparently, and without undue influence.
The County's residents deserve ethics safeguards that are every bit as strong as its financial safeguards. I urge this Committee to strengthen the County's policies to protect both the public and those elected to serve them.
Aloha Chair Batangan and Members of the Government Relations, Ethics, and Transparency Committee,
I strongly support this Committee's review of the Countywide Fraud Risk Assessment because it should not be viewed as simply another audit. It should be viewed as a warning.
For years, many Maui residents have raised concerns regarding transparency, conflicts of interest, campaign influence, ethics enforcement, recusal practices, procurement, land use decisions, and the increasing appearance that well-funded and politically connected interests have greater access to government than ordinary residents.
Too often those concerns have been dismissed as politics.
Now the County's own independently commissioned Fraud Risk Assessment tells us something very different.
The report concludes that Maui County has not developed a countywide internal control system despite state law requiring one. It found significant weaknesses in fraud-risk management, internal controls, ethics awareness, fraud prevention, and organizational commitment to preventing fraud before it occurs.
Perhaps the most troubling finding is not that fraud has occurred, but that many of the systems intended to prevent fraud, detect abuse, identify conflicts of interest, and strengthen accountability either do not exist or remain underdeveloped.
The report also revealed a significant disconnect within County government itself. While most department heads viewed the County's fraud risk as low, elected officials overwhelmingly viewed the County's fraud risk as medium or high. Even more concerning, nearly three-quarters of department heads reported they were not considering implementing specific fraud-risk management practices within their departments.
That should concern every taxpayer.
The report further identified deficiencies involving ethics guidance, conflict-of-interest awareness, fraud reporting, employee training, internal controls, fraud risk assessment, and management follow-up when fraud is detected. Large percentages of respondents indicated they either lacked sufficient guidance or simply did not know whether adequate guidance existed.
These findings should fundamentally change how this Council approaches governance.
For years, Maui residents have questioned major development decisions involving projects such as Hoʻonani Village, EC Pāʻia Town, Wailea 670, and numerous other significant land-use matters. Residents have questioned infrastructure planning, water availability, traffic, environmental impacts, transparency, and whether public participation meaningfully influences outcomes.
Likewise, Bill 9 demonstrated how quickly enormous financial resources can be mobilized when powerful economic interests believe their investments are at risk. Residents witnessed extensive television advertising, digital campaigns, direct mail, organized lobbying, and coordinated public relations efforts unlike almost any housing measure in recent County history.
None of these examples, standing alone, prove misconduct.
What they do demonstrate is why public confidence depends upon strong ethics systems, meaningful disclosure, independent oversight, and transparent decision-making.
Residents also observe campaign finance reports showing substantial financial support from unions, political action committees, developers, consultants, trade organizations, and other organized interests that frequently appear before the County on matters involving development, public funding, infrastructure, labor agreements, contracts, zoning, and housing.
Campaign contributions may be entirely lawful.
The question is whether the County's ethics framework has evolved to address the public's reasonable expectation that these relationships be transparent and, where appropriate, subject to meaningful recusal standards.
Public confidence requires more than legal compliance.
It requires independence.
It requires transparency.
It requires accountability.
The Fraud Risk Assessment repeatedly emphasizes internal controls, organizational culture, ethics, fraud awareness, governance, and conflict management. Those recommendations should not remain management concepts discussed only during presentations.
They should become County policy.
This brings me to the Board of Ethics.
The Board exists to protect public confidence, not simply administer paperwork.
Yet many residents have little understanding of how many complaints have been filed, how many have been investigated, how many have been dismissed, how long investigations take, what recurring issues have been identified, or whether the Board has recommended stronger ethics laws to this Council.
An ethics system cannot build public confidence if the public has no meaningful way to evaluate its effectiveness.
Accordingly, I respectfully request that this Committee undertake a comprehensive review of the Board of Ethics, including:
• Total complaints received over the past ten years.
• Complaints dismissed.
• Complaints investigated.
• Advisory opinions issued.
• Findings of violations.
• Average investigation timelines.
• Staffing and budget history.
• Recommendations previously made to strengthen the Ethics Code.
• Whether existing confidentiality rules appropriately balance investigative integrity with public accountability.
The purpose is not to criticize the Board.
The purpose is to determine whether it is accomplishing the mission for which it was created.
This Committee should also review whether current recusal standards adequately address situations involving campaign contributors, nonprofit board affiliations, land trusts, employers, consultants, developers, unions, political action committees, and other significant organizational relationships.
The appearance of impartiality is one of government's most valuable assets.
Once lost, it is extraordinarily difficult to restore.
The Countywide Fraud Risk Assessment provides this Committee with a rare opportunity.
It should not become another report that is acknowledged, filed, and forgotten.
It should become the foundation for rebuilding public confidence in Maui County government.
The measure of success should not be how many ethics policies exist on paper.
The measure of success should be whether residents believe decisions are being made fairly, independently, transparently, and in the best interests of the people rather than the most organized, best funded, or politically connected interests.
The people of Maui deserve a government that welcomes scrutiny rather than fears it.
This Committee has the opportunity to begin that work.
I respectfully urge you to do so.
Mahalo for the opportunity to testify.
Your Worst Nightmare
Aloha Chair and Members of the Committee,
I am submitting this testimony to request a serious and public review of Maui County’s ethics system, conflict-of-interest practices, recusal standards, campaign influence, and the records of the Board of Ethics.
This is not about one project, one councilmember, one developer, one union, one PAC, or one complaint. This is about a pattern that the public can see across multiple decisions involving land use, housing, infrastructure, nonprofit funding, campaign contributions, and ethics oversight.
Maui residents are repeatedly told to trust the process. But trust is not created by slogans, press releases, or closed-door explanations. Trust is created by records, disclosures, recusals where appropriate, independent review, and consequences when public confidence is damaged.
The Hoʻonani Village project is one example. This is not a small matter. It is a major proposed development involving approximately 166 acres, a proposed 1,608-unit workforce housing community, commercial uses, light industrial uses, open space, and major land-use changes. County departments have already raised infrastructure concerns. Members of the public have raised concerns about timing, environmental review, traffic, airport impacts, water, wastewater, roads, and whether the project is being moved faster than the public can reasonably evaluate.
The EC Pāʻia Town project is another example. That proposal involves approximately 40 acres of former sugarcane land near Pāʻia, up to 170 homes, commercial businesses, a medical clinic, public parking, relocation of the Pāʻia mini-bypass, and a years-long entitlement process. Again, the issue is not simply whether housing is needed. Everyone knows housing is needed. The issue is whether large projects are being reviewed with full transparency, whether infrastructure is honestly addressed before approvals move forward, and whether residents are being asked to accept the consequences after the political decisions have already been shaped.
The public is tired of being told that every development is “housing” and therefore beyond serious questioning. Housing does not erase conflicts. Housing does not erase campaign influence. Housing does not erase infrastructure failure. Housing does not erase the need for disclosure, ethics review, and independent judgment.
Maui has seen repeated situations where developers, unions, political action committees, large organized interests, nonprofit organizations, land trusts, consultants, and politically connected entities appear in overlapping roles. They appear in campaign finance reports. They appear in testimony. They appear in budget requests. They appear in land-use approvals. They appear in advisory spaces. They appear in relationships with elected officials.
Any one of these facts may be legal. But legal does not always mean clean, transparent, or worthy of public confidence.
When unions and PACs spend large amounts of money to support County candidates, the public has a right to ask whether those same interests later benefit from County decisions. When developer-connected interests support candidates, the public has a right to ask whether those candidates should participate in votes affecting those contributors. When nonprofit organizations or land trusts receive County money while people affiliated with those organizations participate in County decision-making, the public has a right to ask whether recusal was considered and whether the public received full disclosure.
This Committee should not wait for another scandal before acting.
The Board of Ethics is supposed to initiate, receive, hear, and investigate complaints. It has the authority to examine disclosures, advise corrective action, adopt rules, issue advisory opinions, and use subpoenas in investigations. On paper, that sounds meaningful. In practice, many residents do not see meaningful accountability.
The Board of Ethics has become, in the eyes of many members of the public, little more than a board. It exists, it meets, it receives paperwork, it issues opinions, and it operates under rules. But the larger question is whether it is producing public accountability or simply managing complaints into silence.
That question deserves review.
This Committee should request the Board of Ethics’ complete records and performance history, including the number of complaints received, complaints dismissed, complaints investigated, complaints resolved by advisory opinion, complaints resulting in findings of violation, complaints rejected as speculative or repetitive, complaints kept confidential, complaints appealed to the Board, average time for resolution, staffing levels, budget history, and any recommendations the Board has made for stronger ethics laws.
If the Board of Ethics is functioning properly, the records should prove it.
If the records do not prove it, then the Council has an obligation to reform it.
The public should not have to guess how many complaints have been filed. The public should not have to guess how many were dismissed. The public should not have to guess whether complaints against elected officials are meaningfully investigated. The public should not have to guess whether confidentiality rules are protecting legitimate investigations or shielding government from embarrassment.
Ethics oversight must serve the public, not the institution.
There should also be a review of recusal practices. Recusal should not depend only on whether an official personally feels conflicted. There should be clear standards when campaign contributors, employers, business associates, board affiliations, nonprofit relationships, land trust connections, family relationships, or other substantial interests are involved in matters before the Council.
The public has seen examples where councilmembers ask Corporation Counsel for advice before participating in matters involving potential conflicts. That should not be treated as a formality. It should be documented, public when legally allowed, and consistent. If one official seeks advice or recuses on one matter, the same standard should be applied across similar matters.
The County also needs stronger campaign-disclosure rules. When a union, PAC, developer, lobbyist, consultant, nonprofit, or organized political interest contributes to or spends money supporting a candidate, and that same interest later has business before the County, that relationship should be easy for the public to see before the vote occurs.
The question is not whether every contribution is corrupt. The question is whether the public has enough information to evaluate influence.
Right now, the public does not.
Maui County is making decisions involving billions of dollars in budgets, major land-use changes, affordable housing funds, infrastructure commitments, disaster recovery, redevelopment, nonprofit grants, and public-private partnerships. These are exactly the kinds of decisions where ethics oversight must be strongest.
Instead, residents are often told after the fact that everything was legal.
That is not enough.
The standard should not be, “Can we legally get away with it?”
The standard should be, “Does this decision withstand public scrutiny?”
I am asking this Committee to do the following:
First, review the complete operating history of the Board of Ethics.
Second, require public reporting of ethics complaint statistics.
Third, review whether confidentiality rules are being used too broadly.
Fourth, review recusal practices across the Council, boards, commissions, and departments.
Fifth, require stronger disclosure when campaign contributors, PACs, unions, developers, nonprofits, land trusts, or organized interests have matters before the County.
Sixth, require elected officials and board members to disclose relevant affiliations before discussion and voting.
Seventh, examine whether the Board of Ethics has sufficient independence from the political system it is supposed to oversee.
Eighth, recommend reforms that restore public trust.
Maui does not need another committee meeting where everyone agrees ethics is important and then nothing changes. The public needs records reviewed. The public needs patterns examined. The public needs measurable standards. The public needs elected officials willing to look directly at the system that protects them.
The people of Maui are not asking for perfection. They are asking for honesty.
They are asking for a government where housing projects are reviewed honestly, infrastructure is addressed honestly, campaign influence is disclosed honestly, conflicts are handled honestly, and ethics complaints are not treated as a nuisance.
This Committee should begin that review now.
Mahalo for the opportunity to testify.
Jolee Bindo
Waikapu Resident
**Re: GREAT-5(8) – County of Maui Fraud Risk Assessment**
Chair Batangan and Members of the Government Relations, Ethics, and Transparency Committee:
I support the findings and recommendations contained in the Countywide Fraud Risk Assessment and urge this Committee to expand upon them.
The report concludes that Maui County's existing fraud controls are not adequately designed to mitigate fraud risks, identifies significant gaps in internal controls, and finds there is no consistent countywide process for reporting, investigating, and responding to fraud. It further concludes that the County's fraud management program operates at an "ad hoc" level rather than under a mature system of internal controls. These findings should concern every taxpayer.
However, fraud prevention is about more than accounting procedures. It is also about preventing situations that erode public confidence in government.
The public has repeatedly witnessed circumstances that create legitimate concerns regarding transparency, conflicts of interest, and accountability. These concerns are documented in public meeting records, committee proceedings, budget deliberations, development applications, and other County records.
Examples include elected officials conducting meetings with developers outside publicly noticed governmental settings; councilmembers serving as directors, officers, or board members of nonprofit organizations while participating in discussions or funding decisions affecting those organizations or related interests; and recurring questions regarding when elected officials should participate or recuse themselves from matters involving organizations, applicants, or individuals with whom they have significant relationships.
One example repeatedly observed during Council meetings involves Chairman Tom Cook requesting advice from the Department of the Corporation Counsel regarding whether he should recuse himself from matters involving Maui Economic Opportunity, where his wife serves as a director. Regardless of the legal advice ultimately provided, the repeated need to seek guidance demonstrates that clearer, objective recusal standards are needed. Public confidence should not depend upon case-by-case legal opinions.
The Fraud Risk Assessment itself recognizes the absence of a countywide nepotism policy, identifies deficiencies in internal controls, and concludes there is no uniform process for reporting, investigating, and responding to fraud. These same governance principles should be applied to conflicts of interest and recusal standards.
I respectfully request that this Committee consider additional recommendations, including:
* Adoption of a comprehensive countywide conflict-of-interest and recusal policy that addresses both actual conflicts and the appearance of conflicts.
* Enhanced disclosure requirements for board memberships, fiduciary positions, financial interests, and significant personal or professional relationships.
* Written public explanations whenever an elected official participates in or recuses themselves from a matter involving a potential conflict.
* Independent review of appropriations, grants, contracts, or land use decisions involving organizations with leadership ties to elected officials.
* Greater transparency regarding meetings between elected officials and parties seeking discretionary County approvals or funding.
* Regular ethics and governance audits in addition to financial audits.
Government accountability is measured not only by whether fraud occurs, but by whether the public can have confidence that decisions are made impartially, transparently, and without undue influence.
The County's residents deserve ethics safeguards that are every bit as strong as its financial safeguards. I urge this Committee to strengthen the County's policies to protect both the public and those elected to serve them.
Thank you for your consideration.
Edward Codelia