The Hawaii Tourism Authority (HTA) is at a crossroads, with its future in the hands of the state Legislature — a body that has progressively lost confidence in the agency’s execution of its mandate to manage tourism for the public’s benefit. This year, HTA has been spinning its wheels, with no permanent CEO, disagreements over spending with Gov. Josh Green’s administration, and troubling revelations about lax contracting and accounting procedures. These issues prompted lawmakers to introduce Senate Bill 1571, bringing HTA firmly under state control.
SB 1571 would empower the governor to appoint HTA’s president and CEO, with Senate confirmation, and designate the HTA board as advisory to the state Department of Business, Economic Development and Tourism (DBEDT), making DBEDT’s oversight powers explicit. It’s time for the Legislature to execute this step.
The necessity for reform in HTA’s governance has grown shamefully apparent. The agency’s travails came uncomfortably under the spotlight when Mufi Hannemann stepped down as HTA board chairman, amid questions that two organizations he leads were initially unbilled for two events at the Hawaii Convention Center. This week, it was revealed that the state Attorney General’s Office is reviewing whether HTA must pay $780,000 in interest for millions of dollars in late payments to the Hawaii Visitors and Convention Bureau (HVCB), a major contractor. Additionally, state probes to determine whether HTA has committed procurement or ethics violations in its dealings are underway.
HTA has been revealed to run a lax operation that doesn’t meet expected standards for fiscal or administrative responsibility. Further, continued low legislative confidence in the agency has eroded its autonomy and created confusing chains of command, hampering decisionmaking and operations.
At an HTA board committee meeting on Tuesday, DBEDT Director James Kunane Tokioka said HVCB, the Kilohana program of the Council for Native Hawaiian Advancement (CNHA), and Anthology Marketing Group Inc. had informed him that HTA’s payments were over 90 days past due, asking him to intervene. HVCB at one time was owed $11 million, Tokioka said, is still owed about $6 million and has claimed $780,000 in interest due for the late payments.
Isaac Choy, HTA’s vice president of finance, told the committee that HTA was unsure interest was due, stating, “It’s not contractually accounted for, therefore I do not believe that we have an obligation,” he said. The Attorney General’s Office, however, has opined that indeed it is, and Choy acknowledged state law would require it. Missing was any explanation for HTA’s mishandling of its obligations and being in such arrears; it’s a troubling omission that must be answered by HTA and Choy, who in addition to his finance duties has now been promoted to interim chief administrative officer.
Regardless of the Legislature’s action, the onus is on HTA to provide a clear accounting of these deficiencies and an action plan to assure this doesn’t repeat. Public attention now turns to Caroline Anderson, named HTA’s interim president and CEO following last month’s resignation of interim CEO Daniel Ho‘opii.
The need for reassessment of operations was clear when disagreement over the salary to be offered HTA’s next CEO went public in January. At that time, Tokioka asserted the state’s role in guiding HTA priorities and spending, relaying that the governor would not accept a $300,000 annual salary for the next HTA leader, instead limiting it to $188,000.
Green weighed in, stating, “The adjustment in salary reflects the changing role of the HTA, where a smaller, more efficient team is supported by expert board members and contractors,” with a CEO who concentrates on “contract management and organizational oversight.”
It’s time to resolve these issues of mission and performance, and bring HTA fully under the state’s umbrella.
