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3 SENATE/HOUSE OF REPRESENTATIVES
4 THE 21ST LEGISLATURE
5 INTERIM OF 2001
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7
8
9 JOINT SENATE-HOUSE INVESTIGATIVE COMMITTEE HEARING
10 OCTOBER 6, 2001
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14 Taken at the State Capitol, 415 South Beretania,
15 Conference Room 325, Honolulu, Hawaii commencing at
16 9:10 a.m. on Saturday, October 6, 2001.
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20 BEFORE: MYRLA R. SEGAWA, CSR No. 397
21 Notary Public, State of Hawaii
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1 APPEARANCES:
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3 Senate-House Investigative Committee:
4 Co-Chair Senator Colleen Hanabusa
5 Co-Chair Representative Scott Saiki
6 Vice-Chair Senator Russell Kokubun
7 Vice-Chair Representative Blake Oshiro
8 Senator Jan Yahi Buen
9 Representative Ken Ito
10 Representative Bertha Kawakami
11 Representative Bertha Leong
12 Representative Barbara Marumoto
13 Senator David Matsuura
14 Senator Norman Sakamoto
15 Senator Sam Slom
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17 Also Present:
18 Special Counsel James Kawashima
19 Clayton Ikei
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1 I N D E X
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3 WITNESS: DANFORD SAKAI
4 EXAMINATION BY: PAGE
5 SPECIAL COUNSEL KAWASHIMA.................6
6 SENATOR SLOM.............................43
7 SENATOR MATSUURA.........................49
8 REPRESENTATIVE LEONG.....................50
9 SENATOR BUEN.............................52
10 REPRESENTATIVE KAWAKAMI..................55
11 REPRESENTATIVE ITO.......................60
12 VICE-CHAIR SENATOR KOKUBUN...............65
13 VICE-CHAIR REPRESENTATIVE OSHIRO.........75
14 CO-CHAIR SENATOR HANABUSA................85
15 SPECIAL COUNSEL KAWASHIMA...............100
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17 WITNESS: ALBERT YOSHII
18 SPECIAL COUNSEL KAWASHIMA...............110
19 SENATOR SLOM............................183
20 REPRESENTATIVE MARUMOTO.................191
21 SENATOR BUEN............................194
22 REPRESENTATIVE LEONG....................199
23 VICE-CHAIR SENATOR KOKUBUN..............203
24 REPRESENTATIVE KAWAKAMI.................209
25 REPRESENTATIVE ITO......................217
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1 VICE-CHAIR OSHIRO.......................225
2 CO-CHAIR HANABUSA.......................231
3 CO-CHAIR REPRESENTATIVE SAIKI...........243
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1 P R O C E E D I N G S
2 CO-CHAIR REPRESENTATIVE SAIKI: Good
3 morning. We'd like to convene our joint Senate
4 investigative committee to investigate the State's
5 compliance with the Felix Consent Decree. We'll
6 begin with the roll call.
7 CO-CHAIR HANABUSA: Co-Chair Saiki?
8 CO-CHAIR REPRESENTATIVE SAIKI: Present.
9 CO-CHAIR HANABUSA: Vice-Chair Kokubun?
10 VICE-CHAIR SENATOR KOKUBUN: Here.
11 CO-CHAIR HANABUSA: Vice-Chair Oshiro?
12 VICE-CHAIR REPRESENTATIVE OSHIRO: Here.
13 CO-CHAIR HANABUSA: Buen is excused.
14 Representative Ito is excused. Representative
15 Kawakami?
16 REPRESENTATIVE KAWAKAMI: Present.
17 CO-CHAIR HANABUSA: Representative Leong?
18 REPRESENTATIVE LEONG: Present.
19 CO-CHAIR HANABUSA: Representative
20 Marumoto?
21 REPRESENTATIVE MARUMOTO: Here.
22 SPECIAL COUNSEL KAWASHIMA: Senator
23 Matsuura is here. Senator Sakamoto is excused.
24 Senator Slom?
25 SENATOR SLOM: Here.
6
1 CO-CHAIR HANABUSA: And Representative
2 Ito has just arrived present. Co-Chair Hanabusa
3 here. We have a quorum.
4 CO-CHAIR REPRESENTATIVE SAIKI: Thank
5 you, Members. Our first witness on our agenda this
6 morning is Mr. Danford Sakai. Mr. Sakai, please step
7 forward and we'll administer the oath at this time.
8 CO-CHAIR HANABUSA: Mr. Sakai, do you
9 solemnly swear or affirm that the testimony you're
10 about to give will be the truth, the whole truth and
11 nothing but the truth?
12 DANFORD SAKAI: I do.
13 CO-CHAIR HANABUSA: Thank you very much.
14 Members, we will be following our usual
15 procedures. We will begin questioning with
16 Mr. Kawashima.
17 SPECIAL COUNSEL KAWASHIMA: Thank you,
18 Madam Chair.
19 EXAMINATION
20 BY SPECIAL COUNSEL KAWASHIMA:
21 Q. Please state your name and address.
22 A. My name is Dan Sakai.
23 Q. And your current home address?
24 A. I'm former superintendent Hawaii School
25 District, retired.
7
1 Q. And your address, sir?
2 A. 32 Honi Street, Hilo, Hawaii.
3 Q. Will you, Mr. Sakai, give us your
4 educational background briefly?
5 A. I've just recently retired with service
6 with the Department of Education after 34 years
7 starting as a substitute teacher, teacher, counselor,
8 vice principal, principal, deputy district
9 superintendent and district superintendent for Hawaii
10 district. I've been in seven schools.
11 Q. Let me pursue that since you're on it.
12 For what period of time did you serve as district
13 superintendent?
14 A. For two years from 19 -- let me go back.
15 I served as a deputy district superintendent for two
16 years and a district superintendent for two years.
17 Q. And you were district superintendent for
18 the Big Island from 1999 to 2001?
19 A. Correct.
20 Q. And your formal education, higher
21 education, sir, was where?
22 A. At the University of Hawaii, at Brigham
23 University and University of Utah and courses
24 therein.
25 Q. And the highest degree that was conferred
8
1 upon you was what?
2 A. A graduate degree.
3 Q. In -- as a master's or doctorate?
4 A. Yes, master's, yeah.
5 Q. All right. Now, who appointed you
6 district superintendent, sir?
7 A. Superintendent LaMahieu.
8 Q. And that was in 1999?
9 A. Correct.
10 Q. And could you briefly describe for us
11 your duties as district superintendent?
12 A. As a district superintendent, I'm
13 responsible for the management and the everyday
14 operations of the Department of Education for Hawaii
15 district including budget, curriculum matters and
16 other assignments given by the superintendent.
17 Q. So you in essence oversaw -- had the
18 oversight responsibility for all the schools on the
19 Big Island?
20 A. Correct.
21 Q. And that would have been how many schools
22 roughly?
23 A. Right now with the addition of other
24 schools it's about 42 schools including the night
25 schools.
9
1 Q. All right. And you -- did you report
2 directly to the superintendent or to someone else?
3 A. Yes, I did also to the deputy
4 superintendent.
5 Q. And who would that have been?
6 A. That would have been Ms. Pat Hamamoto.
7 Q. All right. You are, sir, familiar with
8 the Felix consent decree of course?
9 A. Yes, I am.
10 Q. When you came on board as the district
11 superintendent for the Big Island in 1999, there were
12 a number of schools on the Big Island that were not
13 in compliance with the terms of that decree; is that
14 correct?
15 A. That's correct.
16 Q. And there was a concern about the Big
17 Island not being able to comply with those terms; is
18 that also correct?
19 A. Correct.
20 Q. And I understand that you instituted a
21 review and restructuring of the department in order
22 to improve the department's efforts to comply with
23 the Felix consent decree?
24 A. Correct.
25 Q. What kinds of things, sir, did you do to
10
1 restructure the department to be able to comply?
2 A. When I assumed the district
3 superintendent, I met with Ms. Hamamoto and the
4 superintendent and we discussed the formation of
5 restructuring the Hawaii district in terms of support
6 services in special education and special services.
7 And this included all the schools with their
8 respective administrations and especially the
9 district office for West Hawaii and East Hawaii based
10 on what we call the School U.S. specialist and the
11 special district education specialist, and we
12 restructured those people to be responsible for
13 different areas. And also at that time we appointed
14 a Felix compliance officer a special position created
15 in that fashion for the Felix compliance.
16 Q. Who was that person that was appointed
17 Felix compliance officer?
18 A. That would be Mrs. Maureen Duffy.
19 Q. Now, if I may ask, sir, what were the
20 results of your efforts in terms of restructuring the
21 Big Island?
22 A. Well, when we first -- when I first took
23 over the district superintendent for the
24 superintendent department, we were in a challenged
25 situation for the Hawaii district and we met with the
11
1 monitor Dr. Groves, Doug Houck, some of the other
2 leaders of the Felix decree and we discussed the
3 formation or the restructuring of Hawaii district and
4 there was talk of being in serious non-compliance
5 with benchmarks. And I also was in subpoena directed
6 to me as a district superintendent, and that did not
7 materialize. So I thought at that time we
8 accomplished our goal of restructuring in meeting the
9 needs at that time.
10 Q. You mean a subpoena from the federal
11 court?
12 A. Federal court.
13 Q. Did you, in fact -- strike that. That
14 restructuring that you did, Mr. Sakai, you were in
15 charge of, is it something that continued on after
16 that?
17 A. After that I was not called to testify or
18 to meet with any of the subpoena position so the
19 benchmarks although it was always discussed with me
20 by the superintendent especially at the Honolulu
21 office and Pat Hamamoto.
22 Q. All right. Now, your efforts, then,
23 apparently were successful, right?
24 A. Correct.
25 Q. Now, did the Big Island schools
12
1 subsequent to that still have problems coming into
2 compliance with the consent decree?
3 A. Well, meeting compliance has always been
4 the challenge and it still continues.
5 Q. It might be something that's difficult to
6 answer right now very briefly, sir, but do you have
7 an opinion as to why there has been difficulty with
8 the Big Island coming into compliance?
9 A. Well, it's pretty much known that we have
10 several areas that are of concern or challenged area
11 which is qualified teachers, special education
12 teachers, education officers, and also the
13 demographics of the Big Island, the distance, the
14 community and the private providers that we are
15 seeking to administer the school based mental health
16 services for the Department of Education.
17 Q. I understand what you're saying, sir.
18 Are you aware as to whether or not these concerns
19 have been brought before the federal court such that
20 the consent decree might be relooked at or revised as
21 far as the Big Island is concerned?
22 A. Well, the Big Island I speak for myself
23 has always been a communication to me from the
24 superintendent and the deputy.
25 Q. Do you know whether or not those concerns
13
1 have been brought to the attention of the federal
2 courts?
3 A. Yes, it has.
4 Q. Apparently it has not done any good in
5 terms of giving more relief to the Big Island because
6 of their definite areas of problems I would say?
7 A. I think as I speak for myself as the
8 leader of the district at that time I got all the
9 resources and support from the superintendent.
10 Q. All right.
11 A. As best as possible under the information
12 I just shared with you.
13 Q. All right. Now, let me move to another
14 area, Mr. Sakai. Are you aware of a company called
15 Na Laukoa?
16 A. Yes, I am.
17 Q. And are you familiar with the person who
18 is in charge of that group?
19 A. The director?
20 Q. Yes.
21 A. Yes, I am.
22 Q. Who is that person?
23 A. Ms. Kaniu Stocksdale.
24 Q. And when did you first come into contact
25 or hear about Na Laukoa the first time?
14
1 A. The first time that I've come in contact
2 with Ms. Stocksdale is when I was a principal at
3 Waikea High School about 12 years ago.
4 Q. And in what situation was it -- what
5 capacity was it that Ms. Stocksdale had contact with
6 you when you were principal of Waikea?
7 A. She worked with our challenged special
8 education students directly with her personnel.
9 Q. And she worked with them as a part of Na
10 Laukoa to your knowledge?
11 A. I'm not sure at that point it was known
12 as Na Laukoa, but she had an agency that served those
13 type of youngsters, identified youngsters in special
14 services. In this case in the East Hawaii area which
15 is the Hilo area.
16 Q. And what kind of services did
17 Ms. Stocksdale provide the students in East Hawaii?
18 A. She'd give work with our Special Ed.
19 department and the teachers, learning disabled, the
20 multihandicap in terms of living skills, basic living
21 skills.
22 Q. And more specifically, sir, what types of
23 areas are you talking about when you say basic living
24 skills?
25 A. Practical life skills.
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1 Q. Such as, for example, children grooming
2 themselves?
3 A. Grooming themselves, being able to handle
4 life skills such catching the bus and giving change,
5 getting prepared for the work force in the vocation
6 area.
7 Q. Doing things that -- the basic things
8 that would allow them to essentially feel better
9 about themselves?
10 A. Correct.
11 Q. These were not clinical services to your
12 knowledge, were they, sir?
13 A. No, they were not.
14 Q. And Ms. Stocksdale to your knowledge ran
15 a modeling agency?
16 A. Correct.
17 Q. In Hilo was it?
18 A. In Hilo when I was a principal at Waikea
19 High School.
20 Q. I see. At the same time she was
21 providing services through whatever group it was
22 whether it be Na Laukoa or another name she also ran
23 a modeling agency?
24 A. Correct.
25 Q. Are you aware of her educational
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1 background?
2 A. No, I'm not.
3 Q. Are you aware as to whether or not she
4 had any education or training in special education?
5 A. No, I'm not. I'm not privy to her
6 background education.
7 Q. Do you have any knowledge to believe that
8 she did have such training in education in the area
9 of special education?
10 A. I would believe so because this was
11 handled and coordinated by the superintendent's
12 office with his assistant superintendents.
13 Q. Well, when you say you believe so because
14 of it being handled by the superintendent and the
15 assistant superintendents, you're saying that you
16 would assume they would not retain someone without
17 special education skills to do a special education
18 job. Is that what you're saying?
19 A. There's different aspects of experience
20 in personnel services; so I just need to leave it at
21 that. I'm not privy to exactly what the specific
22 qualification is, in what this endeavorment is.
23 Q. Now, when you served as district
24 superintendent, sir, '99 to 2001, did Ms. Stocksdale
25 approach you to offer Felix related services?
17
1 A. Yes, she did.
2 Q. And when was it that she approached you?
3 A. When I first took over as the district
4 superintendent, she made a meeting with me and my
5 staff and offered her services in terms of the Hawaii
6 district.
7 Q. This was an unsolicited offer, wasn't it?
8 A. Yes, I did not make the appointment.
9 Q. Now, what kind of services did she offer
10 to provide, though, specifically?
11 A. Assistance in terms of meeting the Felix
12 compliance decree, technical assist. It was more in
13 a general aspect. I did not go into specifics. It
14 was like I received many of this type of request to
15 my office as the district superintendent, and I give
16 courtesy to these people who want to come in and talk
17 to us in terms of providing services.
18 Q. All right. Now, what did you -- what was
19 the result of that meeting, sir, what did you tell
20 her?
21 A. I listened and I thanked her for her
22 presentation, and I said at that point after a phone
23 call we just dropped. It was not taken up. I did
24 not use her services.
25 Q. You were not at that point -- you were
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1 not interested in her services for the Big Island,
2 were you?
3 A. Yes, because I was already in the
4 position of restructuring the district as you
5 mentioned earlier.
6 Q. And her services did not fit into this
7 plan for restructuring to achieve compliance with the
8 decree?
9 A. What I wanted for the district for the
10 superintendent, correct.
11 Q. You did have the authority, though, if
12 you wished and if it fit into your plans as you had
13 put them together, you had the authority to hire Na
14 Laukoa if you wished and Ms. Stocksdale if you
15 wished?
16 A. At that point the way the direction on
17 this is that I would make a recommendation to the
18 superintendent.
19 Q. All right.
20 A. The final authority and the supervision
21 of the decision will come from him.
22 Q. Essentially though, in the time that you
23 worked as district superintendent for about two
24 years, was there any time when you made such a
25 recommendation to the superintendent that he did not
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1 concur with your recommendation?
2 A. No.
3 Q. All right. Now, you were familiar, sir,
4 with the term technical assistance?
5 A. Correct.
6 Q. And what was your understanding of the
7 concept of technical assistance?
8 A. I think this is a very -- temporarily I
9 need to -- I guess the word is be cautious about what
10 is technical assist because automatically a layperson
11 the tech assist will be direct services to the
12 students in their respective schools, the Special Ed.
13 youngsters qualified under IDEA, et cetera. But tech
14 assist was geared -- was assisting the, in this case
15 Hawaii district and the rest of the other districts,
16 in assisting to meet compliance. And this is done
17 through the respective complexes, the schools, the
18 principal administrators and also the district staff,
19 school unit specialist, district education
20 specialist, Special Ed. teachers and the SSC.
21 Q. In other words, when we talk about
22 technical assistance, we're not talking as you say
23 about services to the students. We're talking about
24 services to the people who provide services to the
25 students?
20
1 A. Correct.
2 Q. You're talking about faculty, you're
3 talking about administrators, staff, people of that
4 nature?
5 A. Correct.
6 Q. So that what a person who had been
7 providing services directly to students in a general
8 way would not be qualified to provide this type of
9 technical assistance as we are talking about. Would
10 that be a fair statement generally?
11 A. It's hard to say because you have
12 different experiences. And with certain points of
13 position of service sometimes practical experience is
14 better than a formal position by what point who is
15 making that criteria, who is making the MQ's like
16 that.
17 Q. Well, certainly that has to be one of the
18 criteria what you suggest would be one of their
19 criteria in the technical assistance if, in fact, a
20 person's life experiences were to be involved in
21 providing services, right?
22 A. Sure, that comes into play.
23 Q. Now, when did you first become aware,
24 then, that this technical assistance was to be given
25 to selected schools? Well, let me back up, sir. Let
21
1 me restate that.
2 There was a matter of a phrase called
3 "targeted technical assistance." Do you recall that?
4 A. Correct, I remember that, sure.
5 Q. And that's what I'm going to be
6 talking -- asking questions about.
7 A. All right.
8 Q. So when did you first become aware that
9 this type of technical assistance was to be given to
10 selected schools including the schools on the Big
11 Island?
12 A. After meeting with the superintendent in
13 our eight cabinet meetings in terms of our
14 specialists at the Hawaii district, Special Ed.
15 people, personnel, we determined what complexes
16 needed the tech assist.
17 Q. And when would that have been, sir,
18 about?
19 A. About a year-and-a-half ago.
20 Q. In mid 2000?
21 A. Yeah, because at that time we were going
22 through service testing and on the Big Island, Waikea
23 complex is the only complex that passed service
24 testing at that point. And during the recent strike
25 and America's tragedy, everything was postponed, and
22
1 I think they're about to have service testing within
2 this month, in the next few months.
3 Q. When you use the term "service testing,"
4 sir, what -- there's actually two parts of it, are
5 there not?
6 A. Correct.
7 Q. The second part is an actual
8 presentation?
9 A. Presentation.
10 Q. And the first part is more paperwork?
11 A. Paperwork, accumulation of document, what
12 is being put on by the complexes in the schools. All
13 the schools must be in total unison for the complex.
14 Q. Okay. And when you say Waikea was in
15 compliance, was it both aspects or one of those?
16 A. Two aspects, both aspects.
17 Q. Now, in a meeting that year in mid 2000,
18 did the superintendent mention to you that he was
19 going to contract with Na Laukoa to provide targeted
20 technical assistance?
21 A. He made mention of that, yes.
22 Q. And did he ask for your comments about Na
23 Laukoa?
24 A. He did.
25 Q. And did he mention by the way any other
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1 service providers like Na Laukoa that he was
2 interested in?
3 A. At that time he mentioned that he was
4 looking at this particular agency and others but
5 would not go into any communication in terms of
6 specifics of other agencies by name.
7 Q. All right. Now, you then, because of his
8 inquiry to you, checked with people on the Big Island
9 about Na Laukoa?
10 A. Yes.
11 Q. You asked various people including
12 district specialists who would have had much closer
13 contact with that group than you would have?
14 A. Yes.
15 Q. And what did these district specialists
16 tell you?
17 A. The same question that you asked, what
18 was the background of this agency.
19 Q. And what did they tell you?
20 A. Pretty much that if they were going to
21 give tech assist what is the background of this
22 particular person and what kind of organizational
23 structure would that be comprised of.
24 Q. And did it appear that they were not in
25 favor of Na Laukoa being one of the organizations to
24
1 provide targeted technical assistance?
2 A. I would not say that. We just made
3 comments to that because we were looking at the full
4 circle of who is qualified and not qualified.
5 Q. And would it be a fair statement that in
6 essence these people told you that Na Laukoa was not
7 qualified to provide that type of service?
8 A. No. They mentioned that we need to look
9 deeper in terms of the qualification because at that
10 point they were not establishing what you're seeking
11 in terms of the Felix compliance decree tech assist.
12 Q. They certainly were not in favor of Na
13 Laukoa being given that type of a job, were they, at
14 that point?
15 A. They could, yeah, sure.
16 Q. Were they in favor at that point?
17 A. Their own opinion maybe they would have
18 been in favor or not in favor.
19 Q. No, sir. I'm not asking to guess what
20 their opinion might be. I'm asking you what they
21 told you and the objective manifestations of what
22 they said.
23 What they told you at that point in time
24 at least now and aside from what they were thinking
25 subjectively in their minds, from what they told you,
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1 you would have to conclude that they were not in
2 favor of Na Laukoa being given a job to provide
3 targeted technical assistance. Would that be a fair
4 statement, sir?
5 A. Correct.
6 Q. All right. And the reason was or one of
7 the reasons was because from what they told you now
8 again, sir, not what they were thinking, it appeared
9 that they did not feel that they had enough
10 information to say that Na Laukoa was qualified. Is
11 that also a true statement?
12 A. You mentioned that information what was
13 the purpose of their services in tech assist, what
14 their qualifications are and more specifically are
15 they going to be involved with this tech assist.
16 Q. Did you, in fact, provide them with
17 answers to their questions, these district
18 specialists?
19 A. We talked about it, but no.
20 Q. And was it because no one else gave you
21 that information to be able to give to the district
22 specialist? I'm wondering why they did not get that
23 information.
24 A. Well, we didn't go into great detail from
25 my position.
26
1 Q. Did you communicate these comments to
2 Dr. LaMahieu?
3 A. Yes, I did.
4 Q. What did he tell you?
5 A. In my position when he asked for comments
6 was to look at the full circle to give him additional
7 opinion and another viewpoint of considering this
8 particular agency Na Laukoa, and I took it upon
9 myself to follow his request and ask questions about
10 certain things to him and also the qualification what
11 I knew at that time. And at that point once he made
12 the decision I supported him.
13 Q. Now, you did not recommend to the
14 superintendent that he retain Na Laukoa for this job,
15 did you?
16 A. No, I just made a comment about, you
17 know, you need to look at other agencies that Na
18 Laukoa is considered and I just made some comments,
19 but it was not a formal type issue that was against
20 Na Laukoa or any other agency.
21 Q. But you did tell him that there were
22 concerns expressed by these district specialists or
23 there were questions raised by these district
24 specialists as to whether or not Na Laukoa was
25 qualified to do the job. You told him that, didn't
27
1 you?
2 A. We talked about that, but again like I
3 said previously depending on what was he looking for
4 and what is the intent of the in-service to tech
5 assist because of its specifics you can cut that up
6 in different aspects of qualification.
7 Q. Sure. And you expressed all of these
8 concerns to Dr. LaMahieu, didn't you?
9 A. We discussed that.
10 Q. And he didn't give you any answer to
11 those questions that you raised, did he?
12 A. I didn't expect at that point because he
13 asked for an opinion of my comments, and he did not
14 direct a conversation with me that I needed an answer
15 for him nor myself to him.
16 Q. Did you ever have an experience with
17 Dr. LaMahieu where he himself was so personally
18 involved in awarding a contract to anyone?
19 A. No.
20 Q. Well, were you concerned, Mr. Sakai, that
21 no answers were given to you for your district
22 specialists the questions that they had -- well,
23 strike that.
24 Did you intend to get the answers to the
25 questions that your district specialists had or were
28
1 you just going to communicate these questions to the
2 superintendent?
3 A. After discussion with the superintendent,
4 I got back with our district personnel and I was
5 satisfied with my answer for my position as a
6 superintendent of Hawaii district.
7 Q. Now, you had heard at some point in time
8 after that, then, that Na Laukoa was awarded a
9 statewide contract to provide technical -- targeted
10 technical services?
11 A. Correct.
12 Q. And they were awarded this contract
13 through an association with another group as you know
14 as PREL?
15 A. Correct.
16 Q. Now, you had a discussion, did you not,
17 with Dr. Golden at the department regarding this
18 matter of Na Laukoa being provided services?
19 A. Correct.
20 Q. Do you recall whether or not in your
21 discussion, initial discussion on this matter with
22 Mr. Golden was such that you called him or he called
23 you, if you recall?
24 A. I remember that Mr. Golden was in charge
25 as a director of the special session of the
29
1 department and his position appointed by the
2 superintendent was to make sure that he looks at
3 every -- full circle of the information of services
4 for tech assist or if they're complying with the
5 Felix decree, and I've known Mr. Golden on a personal
6 and professional note. I respect him, and subsequent
7 I think we talked about getting the best agency for
8 tech assist for Felix, and he mentioned that to me.
9 And when this information was being arised or coming
10 up, I talked to him about concerns about if you would
11 check this out, making sure that you give the proper
12 information to the superintendent.
13 Q. And I'm sorry, though, did you call him
14 or did he call you?
15 A. I think both. We discussed on both
16 sides.
17 Q. That would have been in mid 2000?
18 A. Correct.
19 Q. And by the way, you do have a lot of
20 respect for Dr. Golden's skills and abilities, do you
21 not?
22 A. I do.
23 Q. And also his integrity?
24 A. I do.
25 Q. Now, did you tell Dr. Golden that as far
30
1 as you knew Na Laukoa lacked the necessary skills to
2 provide targeted technical assistance?
3 A. You would have to rephrase that question
4 in what area, and you can lead on to other aspects of
5 one statement along that but specifically because of
6 my previous experience with that personnel, I asked
7 that question in a general position.
8 Q. Well, your experience with Na Laukoa
9 prior to that point in time, sir, were you pleased
10 with their performance?
11 A. In terms at what level, district, school
12 level?
13 Q. Well, with any level that you had
14 knowledge about -- let me rephrase it.
15 What I'm asking you, sir, based on your
16 knowledge of Na Laukoa whether it be direct knowledge
17 or through people who worked with you or for you,
18 people that you trusted in terms of their integrity
19 and honesty, were there problems with the job that Na
20 Laukoa did for the Big Island?
21 A. I wasn't aware of any serious problems to
22 not have them become the tech assist agent.
23 Q. Well, you were aware of problems, though,
24 were you not?
25 A. Common problems, sure.
31
1 Q. What kind?
2 A. Services and their so-called experiences
3 and qualifications as you described.
4 Q. So problems with qualifications, problems
5 with services performed also?
6 A. Again, you got to go back to what
7 services are you talking about.
8 Q. Well, I'm asking you what services did
9 you become aware of where Na Laukoa had problems
10 performing them or providing them?
11 A. Okay. Are you speaking before they got
12 that contract or --
13 Q. First of all before they got the
14 contract.
15 A. I'm not privy to that. I didn't know too
16 much about that position at that time until we got
17 the contract.
18 Q. You don't recall people below you
19 complaining about the services that Na Laukoa had
20 provided prior to getting that contract in mid 2000?
21 A. Not specifically to direct services.
22 Q. What kind of services, what kind of
23 problems?
24 A. Again, they talking about what we call
25 technical assist and that framework was just being
32
1 established.
2 Q. I'm sorry. In what area were problems
3 raised to you about Na Laukoa's performance prior to
4 the time they were given this contract?
5 A. Again, they talked about qualifications
6 and the amount of personnel that they have and would
7 they be able to provide this service for the Big
8 Island.
9 Q. Well, in the areas that they were
10 contracted for already, right? We're not talking
11 about targeted technical assistance at this point,
12 correct?
13 A. Correct.
14 Q. Now, in your discussion with Dr. Golden,
15 did he express to you concerns about Na Laukoa?
16 A. He made mention of that.
17 Q. And he had actually had very serious
18 concerns about Na Laukoa's ability to provide
19 targeted technical assistance, didn't he?
20 A. Correct.
21 Q. And he told you why he had those
22 concerns, didn't he?
23 A. He did.
24 Q. And he felt that they were not qualified
25 to do the job first of all; is that correct?
33
1 A. He made mention of that, and he was to
2 speak to the superintendent directly on this.
3 Q. You know that he did speak with the
4 superintendent directly on that?
5 A. Yes.
6 Q. Do you know that thereafter the
7 superintendent did not enter into any contract
8 directly with Na Laukoa?
9 A. No, I'm not. I don't know anything from
10 that point on.
11 Q. Do you know what the superintendent did
12 was to go around to circumvent the process by having
13 a contract entered into with PREL which contract as a
14 requirement that they subcontract to Na Laukoa and
15 that's how Na Laukoa got the job. Did you know that,
16 sir?
17 A. I'm not aware of that at that level.
18 Q. All right. Now, did you communicate your
19 concerns about Na Laukoa to any degree to the court
20 monitor?
21 A. No.
22 Q. Dr. LaMahieu was quoted in the Hawaii
23 Tribune Herald after there was testimony in this area
24 by Dr. Golden.
25 Have you seen that article of
34
1 September 18, 2001 that is entitled "Felix Related
2 Contract to Hilo Based Group Debated" and is written
3 by Bruce Dunford?
4 A. Yes, I did.
5 Q. Did you agree with what was stated by the
6 reporter in that article generally?
7 A. Can you quote the specific on that?
8 Q. Sure. Dr. LaMahieu suggests in a quote
9 and assuming this quote is properly reported "That
10 the concerns of those two people" -- one of which is
11 you.
12 A. Sure.
13 Q. "Were that they were perhaps
14 unresponsive, not that they weren't qualified,"
15 LaMahieu said, quotes "And they certainly didn't
16 speak to their qualifications for the work we were
17 intending for them to do."
18 Now, I'm going to ask you to respond to
19 that only for yourself of course because he's talking
20 about more than one person, but one of those persons
21 he was talking about was you. You understood that,
22 sir?
23 A. Uh-huh.
24 Q. So is that a correct statement as far as
25 you were concerned?
35
1 A. As far as I'm concerned, knowing
2 Dr. LaMahieu and my association with him, I'm not
3 clear as exactly what he was trying to say with that
4 quote.
5 Q. You certainly did not relate to
6 Dr. LaMahieu at any time that it was your opinion
7 that Na Laukoa was qualified to do the job of
8 providing targeted technical assistance, did you?
9 I'm not suggesting you did, but I'm just
10 making a statement, asking you a question. You did
11 not at any time suggest to Dr. LaMahieu that it was
12 your opinion that Na Laukoa was qualified to do the
13 job in providing targeted technical assistance. Is
14 that a correct statement, sir?
15 A. My whole communication with Dr. LaMahieu
16 was to give him an insight on both my comments about
17 Na Laukoa so that he could make the best decision
18 possible for the department, and I put a period to
19 that.
20 Q. I appreciate that. And in those
21 comments, sir, what you actually did, though, based
22 on what you learned from people who work for you, you
23 essentially posed a number of questions that you
24 believe needed to be answered?
25 A. Correct.
36
1 Q. Before he made a decision?
2 A. Sure. I was following his thoughts or
3 what he wants to do but to give him a full circle of
4 information and documents and communication that he
5 needs to do the best decision.
6 Q. And one of those areas that concerns were
7 raised or questions were raised about that were
8 related to you is that you in turn related to
9 Dr. LaMahieu was regarding the qualifications of Na
10 Laukoa to do that job, right?
11 A. Correct.
12 Q. Now, once this contract was let to
13 whomever it was, you did know that Na Laukoa started
14 to provide services allegedly in the area of targeted
15 technical assistance, did you not?
16 A. Yes.
17 Q. And then you came to hear or obtain
18 responses, complaints perhaps about how they were
19 doing their job?
20 A. Yes, I did.
21 Q. Tell us what you heard, sir?
22 A. When they first were assigned to the Big
23 Island technical assist to the complexes, the
24 particular services from that agency, particular
25 individuals had concern for my personnel the district
37
1 offices in terms of what they're there for and the
2 professional services that they were responsible for.
3 Q. I'm sorry. Can you break that down for
4 me? I didn't quite follow you.
5 A. We had concerns or our personnel had
6 concerns -- excuse me -- about their services
7 providing the necessary responsibilities.
8 Q. Okay. In what area were these complaints
9 about in terms of Na Laukoa being able to provide
10 services? Do you remember the specific areas, if you
11 do, sir?
12 A. Specific areas is direct services to the
13 complexes, getting correct information as to certain
14 complexes such as Waikea, Ka'u, Kohala, and more
15 communication with the respective principals and
16 their schools.
17 Q. So if I may go backwards, one of the
18 concerns was that Na Laukoa was not having direct
19 communication with the principals of the schools that
20 they were supposed to be servicing?
21 A. When they first started but that was
22 corrected remote communication with the parties of
23 both sides.
24 Q. Well, that was corrected because of
25 complaints made by your people, though, right?
38
1 That's what instituted the correction were complaints
2 from the complexes that there was no direct contact
3 with the principals something that's critical, right?
4 A. Basic concerns from the principals, yeah.
5 Q. So after the complaint I guess that was
6 corrected?
7 A. Correct. You must remember that this is
8 the first time we were doing this; so we're learning
9 at our process also; so the full circle of
10 communication is important so we worked the details
11 out and it became better.
12 Q. Sure. But wouldn't you expect, though,
13 Mr. Sakai, that if this was as it was the first time
14 that this type of thing was being done that the
15 Department of Education would retain a group or
16 persons that were very qualified and understood what
17 type of job they should be performing to complexes
18 such as on the Big Island. Wouldn't you expect that,
19 sir?
20 A. Sure.
21 Q. And there were problems about providing
22 direct services to the complex also, complexes?
23 A. That occurred, but we corrected it by
24 more communication with the people especially at the
25 complex and school levels by the leadership of the
39
1 principals and the SSC's, the Special Ed. department
2 as well as our school specialist and the district
3 education specialist.
4 Q. In other words, direct services to the
5 complex, complexes which was exactly what targeted
6 technical assistance was supposed to do initially was
7 not being done by Na Laukoa; is that correct?
8 A. Again, you need to kind of cut that up,
9 sir.
10 Q. Well, let me rephrase it, Mr. Sakai.
11 Again, as far as direct services to the
12 complexes which is exactly what targeted technical
13 assistance was designed to do, you received
14 complaints from the complexes that Na Laukoa was not,
15 in fact, providing those services, right, initially?
16 A. Initially, sure.
17 Q. And again that had to be corrected,
18 right?
19 A. Corrected by communication with those in
20 personnel.
21 Q. And it was clear to you, though, sir,
22 even before the contract was let to provide those
23 services that whoever got the contract to provide
24 those services would clearly be required to provide
25 direct services to the complex. That was quite clear
40
1 to you, wasn't it?
2 A. Direct services to students?
3 Q. No, no. I'm sorry to the complexes.
4 A. Complexes okay, sure.
5 Q. I think we established that it wasn't, in
6 fact, direct services to the students that we're
7 talking about.
8 A. Correct. Okay. Okay.
9 Q. Sir, you retired, I think, in August of
10 this year from the department?
11 A. Correct.
12 Q. If I may ask you and if it's a personal
13 matter, feel free not to answer this. But was it
14 your choice to retire and resign?
15 A. Yes, it was.
16 Q. Now, were you contacted by the
17 superintendent's office about your appearance here
18 before this committee?
19 A. No.
20 Q. Did anyone from the office contact you or
21 inform you that perhaps you had the right to have an
22 attorney representing you?
23 A. I had a call from Ms. Hamamoto on, I
24 believe, Thursday, and we talked briefly about my
25 appearance on the subpoena.
41
1 Q. That's what I meant.
2 A. Yeah.
3 Q. What I meant was anyone from the
4 superintendent's office. I don't necessarily mean
5 Ms. Hamamoto.
6 A. No, just Ms. Hamamoto.
7 Q. What did she discuss with you?
8 A. She said at that point which I already
9 knew that I was responsible for appearing in the
10 capacity of the district superintendent, and also I
11 was able to get legal advice from the Attorney
12 General's office which I did talk to someone
13 yesterday.
14 Q. And they told you to just come here and
15 tell the truth, right?
16 A. Basically what you just said.
17 Q. Did you discuss with Ms. Hamamoto
18 anything more related to your testifying here today?
19 A. No.
20 SPECIAL COUNSEL KAWASHIMA: Thank you. I
21 have no further questions, sir.
22 CO-CHAIR HANABUSA: Members, we will
23 begin your questioning at this time, and the rule
24 that we've always agreed to will be instituted again
25 which is that you're entitled to 10 minutes, and we
42
1 will in accordance with a request from one of our
2 esteemed colleagues we will be going backwards on
3 this. It's not a statement of fact that he's last on
4 the list that means anything.
5 But however, before he begins, we have a
6 special guest in the audience, and I notice that the
7 children went directly to him. And since he is
8 Representative Kawakami's constituent, I will ask her
9 to do the introduction. Representative Kawakami.
10 REPRESENTATIVE KAWAKAMI: Thank you.
11 It's a privilege and honor, Mr. Gary Tagawa lives on
12 Kauai. Of course he's far from me. I'm on the west
13 side, and he's way on the east side, and some of you
14 have seen him in a lot of movies already; so we have
15 a movie star here today and Mr. Tagawa, won't you
16 stand?
17 (Audience applauds.)
18 REPRESENTATIVE KAWAKAMI: And I get to
19 see him now and then when he's traveling either to do
20 a film or so forth. He has two wonderful children, a
21 boy and a girl. I can't remember what ages because I
22 haven't seen them lately and a beautiful wife. So we
23 welcome you here today, Mr. Tagawa.
24 Thank you, Chair.
25 CO-CHAIR HANABUSA: Thank you very much.
43
1 We will begin with Senator Slom first followed by
2 Representative Marumoto. Senator Slom.
3 SENATOR SLOM: Thank you, Madam Chair.
4 EXAMINATION
5 BY SENATOR SLOM:
6 Q. Good morning, Mr. Sakai.
7 A. Good morning.
8 Q. Just a couple of questions that I have.
9 You mentioned that your restructuring efforts were
10 basically or restructuring and compliance efforts
11 were basically hampered by challenges as you
12 described them in three primary areas --
13 qualifications, availability of Special Ed. teachers,
14 the demographics of the area and also the providers.
15 Did you share that information with other
16 district administrators, was it unique to the island
17 of Hawaii?
18 A. I don't think it's really unique to the
19 island of Hawaii, but this is a Department of
20 Education problem and this was already conversation
21 and communication with the superintendent and the
22 deputy and the assistant superintendents. These
23 three areas, these three problem areas for the Big
24 Island.
25 Q. And you testified that the superintendent
44
1 did provide you with resources and requests that you
2 made?
3 A. Yes.
4 Q. Were there any things that you felt that
5 you should have had that you did not get?
6 A. No. I thought I got the resources and
7 support from the superintendent at all levels when I
8 requested it. It's just that, for example, just
9 trying to get Special Ed. teachers that's a big
10 problem with the state.
11 Q. Sure.
12 A. And just the providers that -- it's not
13 Oahu; so I make a joke out of it. We don't have
14 sidewalks around our island schools, and people don't
15 just readily come into the community and become
16 professionals as providers and deal with problems.
17 Q. You had mentioned the possibility at one
18 point of a subpoena by the federal court.
19 Did you have any conversation with either
20 the federal court or the federal monitor?
21 A. No. I just had my name on the subpoena
22 in terms of a benchmark by the courts at that time,
23 but in discussion provided through the superintendent
24 and the deputy superintendent of what was happening
25 in Hawaii district I was never communicated with.
45
1 Q. Do you feel that the island has made good
2 progress in terms of compliance?
3 A. I do.
4 Q. Do you see any additional or new problems
5 that are facing the district at this point?
6 A. I think it's still continuing, or it has
7 to be maintained. And with the new district
8 administration, I think they'll carry forth some of
9 the issues I think with the superintendent's support.
10 Q. You mentioned that the first time that
11 you had met the coordinator of Na Laukoa was
12 approximately 12 years ago?
13 A. Approximately 12 years when I was a high
14 school principal at Waikea High School.
15 Q. And your direct observation of services
16 that she was providing at that time had to do with
17 life skills and life lessons?
18 A. With direct contact with the students,
19 she was very caring and very sincere in her services.
20 Q. Did you have any contact from that point
21 until the time when she made the unsolicited visit to
22 you to offer her services in, I guess, it was 1999?
23 A. Not in any type of relationship in terms
24 of my district position but in terms of the school
25 level, sure, yeah.
46
1 Q. You mentioned that there were criticisms
2 and concerns mainly as you described in the area of
3 communication with the principals. Were there other
4 concerns that you were aware of with firsthand
5 knowledge?
6 A. Basically district services, making sure
7 the communication through the tech assist personnel
8 was maintained at all times and making the meeting
9 times and making sure the schools and their complexes
10 were well served in this tech assist area.
11 Q. Okay. But was there anything else other
12 than communication problems relating to the services,
13 quality of service, delivery of the service, anything
14 of that nature?
15 A. That was part of it, yeah. In terms of
16 what I mean communication, these are the areas that
17 they discussed and it was corrected. On that point
18 it did not come back to my level in terms of my
19 direct involvement but handled by district personnel
20 through the complexes.
21 Q. So you mentioned that the communication
22 problems were satisfactorily resolved after these
23 concerns?
24 A. Correct.
25 Q. But what about the other problems, you
47
1 said you didn't have direct contact with those
2 problems?
3 A. Well, any type of problem that was
4 conducted through the encore of personnel in the
5 complexes was resolved because it did not come back
6 to my level. And again, this is at the most common
7 denominator level which is the school level and the
8 complexes.
9 Q. You did, however, hear some very serious
10 concerns about quality of delivery of service from
11 Mr. Golden and others, did you not?
12 A. He mentioned that. Again, it went back
13 to qualifications again.
14 Q. Yes.
15 A. Yes.
16 Q. And finally, Mr. Sakai, you have had a
17 long and distinguished and dedicated career with the
18 DOE spanning 34 years. I think that it's safe to say
19 that while you were aware of some of these problems
20 that you would not want to cast any unfavorable light
21 on either the DOE as a whole or any of those people
22 that are still working within the system. Is that a
23 fair statement?
24 A. Can you rephrase that question?
25 Q. Well, if you had some concerns that
48
1 you're aware of and possibly even concerns that
2 contributed to your decision to take retirement,
3 would you still be in a position to discuss those
4 concerns without jeopardizing any of the feelings for
5 the Department of Education or existing personnel?
6 A. Any personal comments in support of the
7 department for or against in terms of their honesty
8 would have been done at that time in my capacity, and
9 it didn't matter if I retired or not.
10 Q. And you mentioned that no one else has
11 talked to you about your testimony today other than
12 the legal instructions or legal information you
13 received?
14 A. I did meet with the auditors.
15 Q. With the?
16 A. Terry Kondo, but nobody else.
17 SENATOR SLOM: Thank you, Mr. Sakai.
18 Thank you, Madam Chair.
19 CO-CHAIR HANABUSA: Thank you. So it's
20 Representative Marumoto followed by Senator Matsuura.
21 REPRESENTATIVE MARUMOTO: I have no
22 questions, Madam Chair. I'm not used to going first.
23 I'm not prepared.
24 CO-CHAIR HANABUSA: We'll give everyone a
25 chance after that. Senator Matsuura followed by
49
1 Representative Leong.
2 EXAMINATION
3 BY SENATOR MATSUURA:
4 Q. Dan, I don't know how to begin this one.
5 The last three years we've been working pretty
6 heavily together basically on a lot of the
7 educational issues on the Big Island?
8 A. Correct.
9 Q. You know, I'm a little bit unsure right
10 now that when you said that you communicate your
11 comments, are you communicating to the superintendent
12 only your comments or like some of my concerns that I
13 was bringing up to you to him?
14 A. It depends on the specificity, but I
15 discussed with him all parameters of communication
16 from the Big Island.
17 Q. Did you communicate to him some of my
18 concerns that I brought to you?
19 A. Specifically like what?
20 Q. Specifically like I know we dealt with
21 anything from our concerns on school-based services
22 to the, you know, what's going on in, like, Waikea
23 Intermediate and that type of stuff?
24 A. Yeah, he's aware of that. We
25 communicated that, sure.
50
1 Q. Did you communicate with him on -- I know
2 I set up a meeting because I get a lot of concerns
3 from my constituents which is a lot of the providers
4 and a lot of the principals and the teachers. I
5 recall we had a meeting where actually I brought to
6 you some of the Na Laukoa staff that actually had
7 quit and left leaving Na Laukoa with having no
8 qualified people what you call the paper people, you
9 know, the people who had their credentials, their
10 master's and doctorate had actually left leaving no
11 credentialed people within that organization for a
12 time being?
13 A. I did not speak to any specific for
14 that -- for that type of qualifications, but I did
15 again go back as to the general statement again what
16 are the qualifications.
17 Q. Okay. I know this is a bit -- because I
18 know you so well and, you know, we're both from Hilo
19 and everything, maybe I'll just reserve my questions
20 for later.
21 CO-CHAIR HANABUSA: Thank you.
22 Representative Leong followed by Senator Buen.
23 REPRESENTATIVE LEONG: Thank you, Chair.
24 EXAMINATION
25 BY REPRESENTATIVE LEONG:
51
1 Q. Mr. Sakai, as you were studying the
2 situation with this director of this Na Laukoa and
3 you stated that she did the training on life living
4 skills, care giving skills to these students,
5 following that, do you know whether she had training
6 in any other area to qualify the agency for her
7 technical assistance?
8 A. No, I'm not.
9 Q. You're not. Also because we heard
10 Dr. Golden also and at that time and listening to you
11 to try to corroborate the fact that the feeling was
12 that this agency was not qualified as you stated to
13 go ahead and do all these activities.
14 Was there any other agency that could
15 have taken the place or would it have been better to
16 just have this agency instead of no other agency?
17 A. Well, I was not aware of other agencies
18 involved in trying to become the tech assist.
19 Q. Excuse me. Would you say that again?
20 A. I was not aware of other agencies
21 involving -- wanting to become tech assists for the
22 Felix compliance for the state or the Big Island, and
23 I'm not sure at this point not knowing the full
24 information as to would they have been the best
25 qualified to serve.
52
1 Q. So as you spoke to your other people
2 because you'd want to do some research on this
3 agency, I just want it clear that it's understood
4 that they didn't feel that there was enough
5 qualification to warrant this agency to go ahead and
6 have this position?
7 A. I need to speak to myself or myself
8 surely because I need to look at the full circle for
9 the superintendent in making sure that they'll be
10 qualified the best or get the best.
11 Q. Thank you. So when this position was
12 granted, were you aware that it was going to be
13 granted or did you get other information?
14 A. I was not informed of the final decision
15 in terms of being involved in a decision.
16 Q. I see.
17 A. Until after it was already done, and at
18 that point I told the superintendent that we will
19 support it.
20 REPRESENTATIVE LEONG: I see. Thank you,
21 Mr. Sakai. Thank you, Chair.
22 CO-CHAIR HANABUSA: Thank you. It's
23 Senator Buen followed by Representative Kawakami.
24 SENATOR BUEN: Thank you, Madam Chair.
25 EXAMINATION
53
1 BY SENATOR BUEN:
2 Q. Mr. Sakai, good morning.
3 A. Good morning.
4 Q. In what Senator Matsuura -- I'm trying to
5 follow-up in what he asked you about or what he said
6 about communicating with you in regards to the
7 credentialed people leaving Na Laukoa. Did the
8 principals have any concerns to you in regards to
9 that, did they talk to you about the --
10 A. No principal ever talked to me or
11 communicated with me about qualifications or their
12 credentials.
13 Q. So you had no communication from them
14 after these credentialed people left Na Laukoa?
15 A. Yes, I was not aware of that.
16 Q. Now, you're talking about full circle of
17 communication is important to you. Can you tell me
18 what were the concerns from principals in not having
19 the communications in regards to Na Laukoa?
20 A. The personnel on the Big Island they were
21 assigned from Na Laukoa principals were concerned
22 about tech assist being real for them meaning that
23 was it professionally done, was it worth the while so
24 that they can move forward to meet compliance. And
25 as we started -- again, I stated that we had some
54
1 problems with communication but this was handled by
2 the district specialist and the principals and their
3 respective schools through their complexes.
4 Any time that you have a tech assist
5 basically the means were comprised of all the complex
6 principals and personnel as well as individual
7 meetings with the respective schools, principals,
8 counselors, Special Ed. department chairs, personnel.
9 Q. Okay. So you felt that the communication
10 going full circle you were satisfied with that after
11 you felt it was --
12 A. It met the needs for it, sure.
13 Q. Okay.
14 A. And it was satisfactory.
15 Q. And on giving out the correct
16 information, can you tell me a little bit about that.
17 What was not correct information? Can you give me
18 some specifics on that?
19 A. Well, part of my concern was when the
20 personnel first got on board, the impression was they
21 were representing Dr. Groves directly in terms of
22 monitoring and that was perceptions, but that wasn't
23 their purpose. Their purpose was to give tech assist
24 to the department in their respective complexes and
25 schools.
55
1 Q. Okay. So you felt that that was correct,
2 that that information was given. They were now
3 understanding what was --
4 A. Their assignment and their role, sure.
5 Q. Okay.
6 A. And again this was based because it's
7 something very brand new and even though it's part of
8 the compliance and benchmarks, it dealt with people
9 with first time issues and I think this became a
10 communication issue that we corrected.
11 Q. So you were involved in the
12 communication?
13 A. With our district personnel and the
14 school personnel.
15 SENATOR BUEN: Okay. Thank you. I have
16 no further questions.
17 CO-CHAIR HANABUSA: Thank you.
18 Representative Kawakami followed by Representative
19 Ito.
20 REPRESENTATIVE KAWAKAMI: Thank you,
21 Co-Chair Hanabusa.
22 EXAMINATION
23 BY REPRESENTATIVE KAWAKAMI:
24 Q. I'd like to ask you, Mr. Sakai, you
25 instituted the restructured program, right, you said?
56
1 A. We restructured the district in terms of
2 services.
3 Q. Right. Your feeling was that the
4 services were not getting to the classroom or you
5 thought you could do a better job with this
6 restructured program. Am I correct?
7 A. I think at that time all of us were in
8 consideration; so when we restructured the situation,
9 I think we would have met the benchmarks that were
10 coming at us and also the services to the schools.
11 Q. Did you feel those benchmarks were coming
12 too soon, too slow, too many?
13 A. I think that's Felix.
14 Q. What was that?
15 A. You mentioned them all. It's happening
16 at the same time quick, fast and now.
17 Q. Because I've heard many complaints that
18 they were coming too fast, okay, and they just didn't
19 have enough time and that kind of thing.
20 A. But we deal with that as administrators
21 in terms of the deadlines.
22 Q. So you had to meet them because they
23 were --
24 A. Yeah, it was part of the issue for me.
25 Q. Okay. When you restructured, what kind
57
1 of progress did you get?
2 A. We had quick service. We started to
3 communicate directly with the schools and the
4 principals and whereas we had in the past only two
5 DES's, we had now three, we had another fourth, the
6 Felix compliance officer and also a person that's
7 called the school-based behavioral mental health
8 service coordinator. And as you understand, we have
9 a large island so you have the east side and the west
10 side.
11 Q. Right. Okay. You hired Mrs. Duffy you
12 said?
13 A. Maureen Duffy.
14 Q. Okay. And she was the compliance
15 officer. What was her background?
16 A. She's a Special Ed. teacher. She holds a
17 graduate degree and she just, at that time, recently
18 graduated from our administrative COHORT School.
19 Q. I see. So she was in the COHORT Program?
20 A. Yeah.
21 Q. And how long did she stay in that
22 position or is that position still going on?
23 A. The position has not been filled, and
24 presently I think at this point she serves as the
25 deputy district superintendent.
58
1 Q. She's the deputy now?
2 A. Yeah.
3 Q. But the position was put up and nobody
4 was taking it?
5 A. No, it was not put up.
6 Q. Oh, not put up. Okay. When you met with
7 the superintendent at various times, it sounded like
8 it was very positive. He gave you, you know, like,
9 for instance, the resources came that followed,
10 et cetera?
11 A. Correct.
12 Q. So you had no problem. There was good
13 feedback?
14 A. I've always asked what I thought was
15 needed for Hawaii district, and I was very much
16 supported by the superintendent and deputy, and we
17 were in pretty much -- especially the deputy. I'm
18 pretty much in constant communication with her, and
19 she's very supportive and understands the fight of
20 the Hawaii district.
21 Q. So the deputy you're talking about is
22 Mrs. -- which deputy are you talking about? You said
23 with the deputy?
24 A. Oh, that's Ms. Hamamoto.
25 Q. Ms. Hamamoto?
59
1 A. I'm sorry.
2 Q. Pat Hamamoto. Thank you. Okay. Once
3 the contract was let out, Na Laukoa worked with
4 various schools, right? Was that the Ka'u, Kohala,
5 et cetera?
6 A. All of those complexes, correct.
7 Q. All those complexes. Out of those
8 complexes, at that time what year or about when was
9 she working with those groups?
10 A. This is about two years ago.
11 Q. Okay.
12 A. And then only specific complexes were
13 assigned technical assists.
14 Q. Right.
15 A. Not the whole district, yeah.
16 Q. Okay. And so how prolonged was this?
17 She worked with them for the two years or half a
18 year, one year, the contract was for how long about?
19 A. The tech assist was the present last
20 school year including this school year, the whole
21 year.
22 Q. So she had it for the whole year?
23 A. Yes.
24 Q. Okay. And how many schools became
25 compliant?
60
1 A. The only complex that was in compliance
2 was Waikea complex.
3 Q. Okay. So Ka'u, Kohala and the others
4 were not?
5 A. Were not.
6 Q. Did they receive provisional --
7 A. Some did, yes.
8 Q. -- status?
9 A. Yes.
10 Q. So they were on their way?
11 A. Yeah.
12 Q. Okay. So would you say the work that was
13 done pretty much accomplished what you folks had in
14 mind?
15 A. I think we're on schedule to meet
16 compliance, yeah. That is definite.
17 REPRESENTATIVE KAWAKAMI: No other
18 questions. Thank you, Mr. Sakai. Thank you, Chair.
19 CO-CHAIR HANABUSA: Representative Ito
20 followed by Vice-Chair Kokubun.
21 REPRESENTATIVE ITO: Thank you, Madam
22 Co-Chair.
23 EXAMINATION
24 BY REPRESENTATIVE ITO:
25 Q. Good morning, Mr. Sakai.
61
1 A. Good morning.
2 Q. Sorry that you retired, but I guess now
3 you're going to find the good life. I have a few
4 questions, Mr. Sakai.
5 You know, did you meet with members of
6 PREL, the tech assist people or the EMT to go over
7 your restructuring?
8 A. No. That was strictly Department of
9 Education through my office. I did not need their
10 consideration or their communication.
11 Q. Well, PREL mentioned that they worked
12 with members of the --
13 A. PREL does, yeah. We work with PREL but
14 not Na Laukoa in this case.
15 Q. You know that PREL has that EMT,
16 executive management team.
17 A. Correct.
18 Q. And it consists of, you know, key
19 officials from the DOE and DOH. And so you had no
20 contact -- I mean, you know, a lot of contact with
21 those people as far as helping you with the
22 restructuring?
23 A. For me directly we met several times in
24 terms of the general all of the district
25 superintendents. I remember meeting at their offices
62
1 in downtown about a year ago, a year-and-a-half ago
2 and they provided a general framework of what they
3 can do, and that's a meeting that all of us got
4 together but specifically to me myself on the state,
5 no.
6 Q. You know like charter schools they
7 mention charter schools, and I saw this list over
8 here that, you know, the DOE school complexes, you
9 know, that required technical assistance and
10 Connections, Waters of Life, West Hawaii Explorations
11 and Kanu O Ka'aina?
12 A. Correct.
13 Q. What kind of services did it receive
14 because we already have a charter school specialist
15 in the DOE, and I noticed they hired us -- I mean, a
16 charter school coordinator.
17 A. My reference when I was the district
18 superintendent I worked closely with the deputy
19 superintendent and with Chuck Higgins in terms of
20 charter school. And as you know, we have the most
21 initiatives and the most charter schools on the Big
22 Island and this was the first time. So we were in
23 the lead in terms of making decisions, coordinating
24 with the superintendent, the Board of Education and
25 by the so-called legislative law.
63
1 And my capacity was in that direction
2 with all that you mentioned, and I did not work with
3 Na Laukoa in this regard or the district anyway at
4 that point. They may now, but not at that point.
5 Q. You know, when you were a principal of
6 Waikea High School and you met with Ms. Stocksdale
7 and talked about Special Ed., who was the district
8 superintendent at that time?
9 A. That was, I believe, Dr. Mizuno.
10 Q. And who was the superintendent at that
11 time?
12 A. That was Mr. Clark I believe, Charles
13 Clark.
14 Q. So that was about how many years ago?
15 A. Twelve years ago. It would be Charles
16 Clark and Mr. Toguchi. That's a long time ago.
17 Q. You know, Ms. Stocksdale, you know, when
18 she mentioned to you when you were the principal at
19 Waikea and she mentioned personnel to help you, did
20 she mention any -- what kind of people, I mean,
21 Ph.D.'s or school psychologists?
22 A. Mr. Ito, we never did -- when I was the
23 principal at Waikea, we never did talk about her
24 qualifications in terms of her agency or her service
25 because they were like an out service. And as long
64
1 as they were qualified in terms of the life skills
2 and the basic skills that they offered an alternative
3 to the respective IDEA or whatever, we did not talk
4 about any specific qualification because there was no
5 need for that because we still handled that from our
6 Special Ed. teachers and the IEP with the parents.
7 Q. You know, this technical assist these 19
8 schools statewide, you know, Ka'u and what school
9 it's not served by that Na Laukoa. It's served by,
10 what, PREL?
11 A. I believe that they do the servicing, but
12 they're contracted or coordinated by PREL. So I
13 don't deal with PREL. We didn't deal with PREL
14 directly, but we dealt with Na Laukoa but the
15 contract or the other approval was through PREL
16 through the superintendent's office.
17 Q. But what was PREL doing over there in
18 Ka'u and Kohala?
19 A. Well, they provided service to just not
20 talking Felix but just overall services and
21 curriculum instruction, and they do it statewide for
22 all school districts.
23 Q. Okay. Thank you very much, Mr. Sakai.
24 A. We have people that work with PREL
25 personnel in school as specialists. Many of our
65
1 retired DOE work for them now I believe.
2 Q. For PREL?
3 A. For PREL.
4 Q. No wonder the contract is so high. Thank
5 you, Madam Co-Chair.
6 CO-CHAIR HANABUSA: Before we continue,
7 we noticed we've been going for slightly over an hour
8 and the court reporter needs a break about every
9 hour. So Members, five minutes. Okay? And then
10 when we return, we will begin with Senator Kokubun
11 followed by Representative Oshiro. Thank you.
12 Recess five minutes.
13 (Recess from 10:15 a.m. to 10:26 a.m.)
14 CO-CHAIR HANABUSA: Members, we will
15 reconvene. Senator Kokubun followed by
16 Representative Oshiro.
17 VICE-CHAIR SENATOR KOKUBUN: Thank you,
18 Madam Co-Chair.
19 EXAMINATION
20 BY VICE-CHAIR SENATOR KOKUBUN:
21 Q. Mr. Sakai, you mentioned that, you know,
22 you first came into contact with Kaniu Stocksdale in
23 early or late 1989 or so something like that?
24 A. Correct.
25 Q. You hired her just individually or did
66
1 she have a company at that time?
2 A. I believe she had a company. Something
3 like a modeling school and a personality development
4 class school; so we work with our Special Ed.
5 youngsters and especially the multihandicap
6 youngsters in that area at Waikea High School when I
7 was a principal at that time.
8 Q. And how long did she provide or she and
9 her company provide services?
10 A. For several years. Like I said, I found
11 their agency and her to be very sincere and caring
12 for these identified students, and we welcomed the
13 opportunity to give them experience to be outside of
14 the community what we call community based services.
15 Q. And she was hired by contract?
16 A. By contract.
17 Q. Administered by who? You?
18 A. The department through the school, yes.
19 Q. And that was through your recommendation?
20 A. By the teachers, yeah. The department --
21 the Special Ed. department teachers in working in
22 correlation with that agency and her, her staff at
23 that time.
24 Q. But as a principal you were a key
25 decision maker?
67
1 A. Yes, I was involved too.
2 Q. But ultimately the contracts are the
3 responsibility of the DOE administration and
4 superintendent?
5 A. Yes, yes. At that time it would have
6 been the administration at that time.
7 Q. How is that done is that a yearly, would
8 that be an annual contract?
9 A. For us at that time it was sort of like
10 an annual contract, yeah.
11 Q. And so she obviously met or she and her
12 company met the requirements of all the requirements
13 of getting a contract tax clearances and all of that.
14 Are you aware of that?
15 A. At that time, yes, she should have met
16 all the requirements.
17 Q. Okay. Do you recall how much the
18 contract was for, say, on an annual basis?
19 A. No, I'm not. I don't recall that figure
20 at all.
21 Q. And it was actually prior to the whole
22 Felix Consent?
23 A. Yes, so before the Felix that we were on
24 our own type of community services and programs
25 provided at the school level.
68
1 Q. However, what IDEA was in effect at that
2 time, correct?
3 A. Yes, just a little before that it came
4 into play the IDEA but this was just the cutting type
5 of going into the IDEA and the other federal
6 responsibilities and laws.
7 Q. So it was more like your Special Ed.
8 teacher said we have a need in this area and
9 therefore that's why you looked at it?
10 A. Correct, yes, life skills.
11 Q. Several years. Can you give me an idea
12 how many what are we talking, five, six years?
13 A. I was at Waikea for 11 years; so at least
14 five years or more and not the whole year. Maybe
15 it's a certain part of the year like a quarter or
16 whatever or so, but reviews we use her particular
17 agency for some length of time in that capacity.
18 Q. And do you recall who her staff was or
19 what kind of qualifications they may have been?
20 A. No, not at that time. It was just a
21 service provision for the modeling and the etiquette
22 and their life skills. And we do that in terms of
23 the community just because we can work with the
24 non-profit agencies like Salvation Army, Hilo Medical
25 Hospital, Golden Towers, University of Hawaii Hilo,
69
1 laundry department having the kids have some related
2 life skills.
3 So the particular qualifications are not
4 looked at in terms of just making sure it's safe,
5 making sure that it's appropriateness in terms of
6 time and place and supervision. These are the type
7 of qualifications we relate to rather than quote, "a
8 formal degree."
9 Q. Are you aware by any chance of any other
10 contracts such that Ms. Stocksdale and her company
11 may have had with the DOE other than in that capacity
12 with Waikea?
13 A. I was not aware at that time.
14 Q. In terms of other schools or?
15 A. She could have but that was just on the
16 concern of Waikea High School. And as long as she
17 performed adequately for our students, it continued.
18 Q. So this concept of, like, teaching life
19 skills, that wasn't something that all the high
20 schools looked at?
21 A. No, not at that time. I think with our
22 staff we had a large population of our staff about
23 20. Some of the Felix benchmark or Felix initiatives
24 that is currently practiced we were practicing at
25 that Waikea prior to the Felix.
70
1 Q. And by any chance are these life skills
2 type courses taught to other than Special Ed.?
3 A. It depends in terms of we have guidance
4 classes and since sometimes they do outside in the
5 normal curriculum also, sure.
6 Q. So did she provide that service, it was
7 for other --
8 A. I was not aware of that. This is
9 strictly for the Special Ed. area.
10 Q. When she was --
11 A. When she was working at our school, sure.
12 Q. Okay. So are you aware of any other
13 contract? I asked about other contracts with DOE
14 schools but which you indicated you didn't?
15 A. I wasn't aware but it may be, yeah.
16 Q. How about other agencies, Department of
17 Health, Department of Human Services?
18 A. I'm not informed of that. I'm not privy
19 to that, but I'm sure because of the relationship of
20 the Hilo Community Services that I presume that she
21 may have been associated with Department of Health
22 and other agencies in this capacity.
23 Q. You know, when -- there was a -- the
24 first attempts were made to address the issues about
25 the Felix consent decree, there were like pilot
71
1 projects. I think there's a Mokahana project on
2 Kauai?
3 A. Correct.
4 Q. And there was a Kapiolani project on the
5 Big Island?
6 A. That was called demonstration project for
7 the Big Island.
8 Q. Right. Do you know if Ms. Stocksdale and
9 her company was involved in that demonstration
10 project?
11 A. I'm not aware of.
12 Q. By the way, who administered the
13 Kapiolani demonstration project? Was that a DOE
14 administered project or UH?
15 A. That was working -- mostly the level of
16 coordination was done by the Department of Health,
17 and this was a demonstration project similar to
18 Mokahana project on Kauai.
19 Q. And primarily what, mental health
20 services was that the idea?
21 A. Mental health services.
22 Q. For the Kapiolani demonstration project?
23 A. Kapiolani Health Services, correct.
24 Q. But you're not aware if Ms. Stocksdale
25 and her staff was involved?
72
1 A. Yeah, I'm not aware of the particulars to
2 that, Mr. Kokubun.
3 Q. Getting to the specific contract that Na
4 Laukoa has -- is currently involved in, are you aware
5 of the specifics of the contract in terms of like,
6 for instance, PREL being the contractor and Na Laukoa
7 being the subcontractor to the --
8 A. I know some of the general exposure of
9 that in terms of the contract but specifics, no.
10 Q. And that's nothing unusual, is it, I mean
11 in terms of having a --
12 A. Yes, because I'm more or less responsible
13 for operational matters and once those special
14 contracts and entities are done with or dealt with
15 from the superintendent's office assisted by the
16 assistant supe and these various sections of the
17 department and we were a very huge outlet, I find
18 that for me this is all in direct description and the
19 responsibility that's granted. So I just concentrate
20 on operational matters.
21 Q. But in terms of like, you know, when the
22 issue of the possibility of contracting Na Laukoa to
23 provide these services was initially raised, was it
24 raised within the context of PREL or was it raised as
25 here's a potential contractor that would like to
73
1 provide these services, do you recall?
2 A. I think my recall would be just specific
3 to that agency Na Laukoa, and PREL I know the
4 superintendent was a Board of Director for PREL. And
5 as I said, we deal with PREL in all capacities at the
6 school level as well, but other than that I'm not
7 privy to other related information.
8 Q. But specifically when the issue of Na
9 Laukoa providing these services came out was as a
10 sole contractor as opposed to a subcontractor?
11 A. From my recollection, correct.
12 Q. So when did that happen as they became a
13 subcontractor to the PREL contract, did that raise
14 any concerns for you or?
15 A. For me, no because again that's the
16 superintendent's call and he did mention information
17 at a cabinet meeting and he always does that; so for
18 me particularly I was satisfied.
19 Q. Are you aware of, like, the magnitude or
20 the scale of funding for the PREL contract and the Na
21 Laukoa subcontract?
22 A. I am. It's in the millions.
23 Q. Yesterday, you know, we had a woman from
24 PREL their chief financial officer Karen Erhorn here
25 as a witness, and she indicated that there have been
74
1 extensions, one extension granted to the Na Laukoa
2 contract to August. I believe it was to the --
3 A. This past August?
4 Q. Yes, right. To the end of September and
5 then there was also as she indicated there was
6 another extension being sought and supported, I
7 guess, to October through the end of October, and my
8 assumption is that that's being considered to allow
9 the completion of all the requirements of the
10 contract I would assume.
11 But she also mentioned that there was no
12 additional financial consideration for these
13 extensions. Are you aware by any chance when your
14 capacity as --
15 A. I was not aware of any financial
16 agreements although I was aware of the extension when
17 I was the superintendent this past school year
18 because we were looking into June and then August and
19 then now October as you stated.
20 Q. Oh, that's right you were principal. You
21 were still in your position when the first extension
22 was being considered --
23 A. Right.
24 Q. -- to the end of August. And at that
25 time were you privy to any information about
75
1 additional compensation?
2 A. No. At that point we do know because
3 service testing was not completed with the complexes
4 because of the calendar crisis that we incurred with
5 the strike this spring recently; so everything was
6 pretty much backed up in terms of preparation for
7 Hawaii district.
8 Q. So you were aware of that first request
9 for extension but not the second?
10 A. Yes.
11 VICE-CHAIR SENATOR KOKUBUN: Thank you.
12 Thank you, Madam Chair.
13 CO-CHAIR HANABUSA: Thank you.
14 Vice-Chair Oshiro.
15 VICE-CHAIR REPRESENTATIVE OSHIRO: Thank
16 you, Madam Co-Chair.
17 EXAMINATION
18 BY VICE-CHAIR REPRESENTATIVE OSHIRO:
19 Q. I just wanted to get into one area of
20 clarification specifically about some of the concerns
21 that you heard about the Na Laukoa Program.
22 When Mr. Kawashima was asking you
23 questions, I think you said that once you found out
24 that Na Laukoa's being considered for the
25 subcontract, you went and talked to various district
76
1 specialists; is that correct?
2 A. Correct.
3 Q. About how many of these district
4 specialists did you talk to?
5 A. We have five district education
6 specialists.
7 Q. And you talked to all five?
8 A. I talked to all in terms of this area of
9 concern, well, their comments.
10 Q. And at that time they more, as I
11 understand, more or less expressed concerns about the
12 background or the overall organic structure --
13 A. Yeah.
14 Q. -- of the Na Laukoa Program?
15 A. Yeah.
16 Q. Did any of them have any positive
17 experiences to express or any positive comments that
18 they gave to you at that time?
19 A. Some did too, sure. They talked about
20 services of again that life skills type of thing that
21 they were familiar with at the school level. These
22 district education specialists work with the
23 respective schools by complexes or by area of
24 assignment from east and west Hawaii and some of the
25 comments were positive. It's not all one sided I
77
1 guess.
2 Q. Okay. But at the same time these
3 district specialists they did know that the scope of
4 duty which was envisioned for Na Laukoa was actually
5 to do technical assistance or had to do more with
6 IDEA compliance and Chapter 56 compliance?
7 A. Right.
8 Q. Not necessarily just the life skills
9 aspects of it?
10 A. No. Yeah, that's a whole different area
11 of responsibility, very technical.
12 Q. Okay. So overall as I understand it, you
13 say you then relayed your communications and those
14 concerns onward to Mr. Golden; is that correct?
15 A. We discussed to Mr. Golden, sure.
16 Q. Okay. Okay. And you also stated that
17 you do have a lot of respect for Mr. Golden when it
18 comes to his professional capacity?
19 A. Right.
20 Q. Is that correct?
21 A. Correct.
22 Q. Okay. And I think I can say that he
23 probably has the same kind of respect for you in
24 looking at his deposition transcript. I'm not sure
25 if you're aware, but his deposition was taken in a
78
1 lawsuit and what this means is that his deposition
2 transcript becomes part of the public record.
3 So this is his testimony actually written
4 down, and when he does talk about you and some of the
5 discussions you had, and I wanted to get into that a
6 little bit.
7 But when he does talk about you, he says
8 he worked on the Big Island for quite sometime, he's
9 a highly regarded principal, his schools have won
10 awards, he and I served as deputy superintendents
11 together; so he does have a lot of -- you folks have
12 a lot of mutual --
13 A. Absolutely it's mutual, sure.
14 Q. I guess my confusion lies in the fact
15 that when -- in terms of what I hear you saying today
16 is that you more or less had some concerns but it
17 wasn't really specific criticisms or a
18 non-recommendation; is that correct?
19 A. Yes.
20 Q. Okay. Because when I read through
21 Mr. Golden's transcript, it appears that he has --
22 your conversations take on a lot more stronger tone.
23 If you don't mind me reading, I just want
24 to read a little bit from it. It just says, "The
25 other person who called me was the deputy or the
79
1 district superintendent from the Big Island.
2 "QUESTION: Who was he?
3 "ANSWER: Danford Sakai.
4 "QUESTION: What did he tell you?
5 "ANSWER: Basically, it was the same
6 nature of the call. He was inquiring
7 about what he had heard just like Ann
8 Kokubun had heard, that there were
9 rumors, word being floated that this
10 group was being secured, being hired."
11 And the group they're talking about is Na
12 Laukoa.
13 "Dan explained to me that he had
14 reservations about it, he had strong
15 reservations about it. That he had past
16 track record, past history with some of
17 the personnel; that there were a number
18 of things said by both of them. That
19 there was a certain arrogance on the part
20 of the personnel, non-respect for the
21 school procedures and school personnel.
22 And I guess even as a former principal at
23 Waikea High School he said that their
24 service record was not all that hot."
25 And later on he talks about you folks
80
1 having further conversations.
2 And he says that, "Have you had any
3 conversations with Mr. Sakai other than
4 the telephone conversation regarding Na
5 Laukoa?"
6 "ANSWER: Yes.
7 "QUESTION: How many?
8 "ANSWER: Numerous.
9 "QUESTION: And what was the nature of
10 his comments?
11 "ANSWER: Plainly critical. That it was
12 an insufficient resource; that in general
13 that these folks really did not have the
14 wherewithal background; that they were
15 slow to move.
16 "QUESTION: Did you have any
17 conversations with Mr. Sakai after Na
18 Laukoa had been hired by DOE to provide
19 targeted technical assistance?
20 "ANSWER: I believe so with the same
21 outcome.
22 "QUESTION: So his comments were still
23 negative?
24 "ANSWER: Yes."
25 So I think in reading through this
81
1 deposition transcript at that time when Mr. Golden is
2 talking about your discussions and your
3 conversations, he apparently had a very different
4 take on the tone of the conversations you two had.
5 He seems to feel that you were very critical or
6 "plainly critical" quote, unquote as he stated.
7 Given that you folks do have this sort of
8 mutual respect for each other, I'm a little confused.
9 Could you reconcile how Mr. Golden could
10 walk away from these discussions with one, I guess,
11 characterization and you on the other hand have more
12 of a different one?
13 A. Well, at that time also, number one, you
14 must remember I'm a line officer for the
15 superintendent and the deputy and I support them.
16 And when the superintendent asked me about comments,
17 I wanted to give him a different viewpoint of what I
18 picked up as the district superintendent of Hawaii
19 district and again back to the qualifications again
20 so he would be able to make -- the superintendent
21 would make the best decision for the department, and
22 that's what I'm there for.
23 Secondly, in my response with Bob again,
24 we go back to qualifications. And at that point yes,
25 those comments could have been very specific in terms
82
1 of what you just read on the deposition, and I agree.
2 But I don't know what Mr. Golden is thinking about
3 his intensity.
4 I do know he had direct contact --
5 communication with the superintendent as well as he
6 talked to Dr. Groves about the so-called
7 qualifications of these agencies. So I know how
8 intense he was in terms of his directorship at that
9 point trying to give the best advice to the
10 superintendent so that the superintendent would be
11 able to choose the best agency.
12 And I think that's where part of the
13 intensity in the deposition is in that, and I support
14 Bob in that reference. So in some respect I think
15 he's correct on that feeling there but different to
16 my kind of involvement.
17 Q. Okay. But in any event, the two of you
18 and as you stated the qualifications of this agency
19 Na Laukoa is a very, very crucial aspect in terms of
20 determining whether they should have been
21 subcontracted at all?
22 A. Correct.
23 Q. Okay. So just hypothetically speaking if
24 we had a previous testifier come in here, somebody
25 who was on the executive management team, and they
83
1 said that although Na Laukoa had a lot of prior
2 experience in the mental health aspect in terms of
3 actually providing technical assistance, the IDEA
4 compliance, Chapter 56 compliance, she said that all
5 of that -- that she essentially had to train them
6 because they didn't have that kind of knowledge,
7 substantive knowledge so she had to train them in
8 that regard.
9 Does that in any way surprise you that
10 they don't have these kind of qualifications?
11 A. If they're over education, psychology
12 field and counseling services, et cetera, of the tech
13 assist, sure.
14 Q. That would surprise you that they don't
15 have this kind of ability to perform the basic needs
16 of the contract?
17 A. Again, what was specific of that contract
18 and what was their benchmarks to be provided for.
19 Well, again, it's broad again. You know, like I
20 said, I'm not privy to the qualifications that were
21 intended by the superintendent. But again for me and
22 I'm a counselor myself in educational counseling
23 degree; so at that point I'm just asking in terms of
24 the tech assist all of this will be sort of related
25 as to qualifications.
84
1 Q. Okay. And you also stated that after Na
2 Laukoa had entered into their subcontract, there were
3 complaints about their lack of communication and
4 there was also some complaints about the services
5 that were directly provided to the complexes; is that
6 correct?
7 A. Uh-huh.
8 Q. But you also stated that once these
9 complaints and concerns were communicated higher up
10 the ladder that these -- they were in somebody's
11 reconcile to resolve; is that correct?
12 A. Yeah, my direct communication was with
13 Mr. Kimo Alameda, the coordinator at that time and he
14 and I worked closely together. I like working with
15 him. I think he's very open, and he's caring. So I
16 had respect for him.
17 Q. And about how long would it take
18 essentially from the time that you started hearing
19 all of these complaints you actually sat down with, I
20 think, Mr. Alameda and communicated with them?
21 A. We made some phone calls and E-mail,
22 phone calls and communication and then at that level
23 then it would be directly resolved with the district
24 specialist at the complex level.
25 Q. Okay.
85
1 A. Because it had to be dealt with solving
2 this at the school level.
3 Q. And thereafter once you did have this
4 communication or meeting, then the problem was
5 resolved such that you didn't hear any more
6 complaints?
7 A. It didn't come back to me in that
8 fashion, yeah.
9 Q. Okay. So essentially --
10 A. There were no more complaints to my
11 office let's put it that way.
12 Q. Okay. So you didn't hear anything else
13 about it so at that point you considered it sort of
14 resolved?
15 A. Resolved at that level, sure.
16 VICE-CHAIR REPRESENTATIVE OSHIRO: Thank
17 you, Mr. Sakai.
18 DANFORD SAKAI: Thank you.
19 EXAMINATION
20 BY CO-CHAIR SENATOR HANABUSA:
21 Q. Mr. Sakai, I would like to get some time
22 frames down pat here. First, you were
23 superintendent -- district superintendent from 1999
24 to 2001, correct?
25 A. Correct.
86
1 Q. Now, as district superintendent, would
2 you be aware of contracts that would be let fairly
3 large or substantial contract that would be let in
4 the Felix area in your jurisdiction?
5 A. In terms of specific sums and total of
6 the contract?
7 Q. No, in terms of who.
8 A. No.
9 Q. Who would be entering into your schools,
10 for example?
11 A. Well, yes, if it was granted then yeah, I
12 would be the responsible person knowing who, what
13 when and how it's coming in for the Hawaii district
14 office.
15 Q. With the exception of this technical
16 assistance coordinator or the targeted technical
17 assistance, during the 1999 to the 2001 period with
18 the exception of that, were there any other contracts
19 that you're aware of that the DOE gave to Na Laukoa?
20 A. No.
21 Q. Just that one contract?
22 A. Just Na Laukoa.
23 Q. You mentioned that before Felix even came
24 into existence as the principal of Waikea you did
25 contract with Kaniu Stocksdale Modeling School for
87
1 these I guess the way you called it modeling
2 etiquette and life skills?
3 A. Life skills.
4 Q. That's correct, right?
5 A. Correct.
6 Q. Now, that is contracts coming out of your
7 budget as the principal?
8 A. Correct, the school level, school level.
9 Q. My understanding is that there's a
10 limitation on the amounts of those kinds of
11 contracts?
12 A. Correct.
13 Q. And what's that limit?
14 A. I think at that time it was $10,000; so
15 it was under the sum of getting any other approval.
16 It's at the school level.
17 Q. So it would be no more than $10,000 per
18 year for the --
19 A. Five thousand, six thousand.
20 Q. That's about the area?
21 A. Yeah, and that's where the school budget
22 or in this case probably would be the Special Ed.
23 budget controlled by the administration.
24 Q. The 5,000, 6,000?
25 A. Five, six thousand, seven thousand range.
88
1 Q. But you had the discretion as the
2 principal to issue those contracts?
3 A. Correct.
4 Q. So if it was any larger than that, you
5 would have to go to --
6 A. The district and the state, yeah.
7 Q. Did you ever have any occasion to go to
8 the district or the state --
9 A. No.
10 Q. -- for any larger amount?
11 A. No.
12 Q. And do you know, for example, if under
13 the DOE policy -- and I'm asking you this as your
14 superintendent, as district superintendent -- that if
15 a contractor got $5,000 or $6,000 from Waikea and
16 then was to go to Kona or Ka'u and then had another
17 $5,000 or $6,000 and it would have exceeded that
18 threshold, would that be possible? Is one per school
19 or is it --
20 A. One per school. That's called tiering or
21 clumping. You don't do that.
22 Q. Right. You don't do that?
23 A. Yeah, we don't do that.
24 Q. So if anybody had a contract in excess of
25 that, it would have to probably go to the district
89
1 or --
2 A. Yeah, the district and the state, yeah.
3 Q. Now, what is your understanding of what
4 the technical assistance or the targeted technical
5 assistance program was supposed to do, these
6 technical assistance coordinators which was the
7 PREL/Na Laukoa contract, what was the purpose of that
8 contract?
9 A. To meet compliance basically.
10 Q. And is it your opinion that in order to
11 meet compliance whoever was hired would, of course,
12 have to have familiarity with the IDEA, all the
13 relevant chapters?
14 A. Fifty-six the whole process of Felix,
15 sure.
16 Q. And of course the Felix consent decree?
17 A. Consent decree in and out.
18 Q. From the time you dealt with Na Laukoa or
19 Ms. Stocksdale whatever her entity may have been
20 called from the time you knew her to the time you
21 retired with the exception of this technical
22 assistance contract that we're talking about, did you
23 ever become aware that her entity or she was putting
24 herself out or the entity out as being a specialist
25 or with special expertise in the IDEA or the Felix
90
1 area?
2 A. No. It's just that she was awarded the
3 contract and we supported that communication and the
4 efforts to meet compliance.
5 Q. That's the sense of your testimony that
6 I'm getting here today.
7 A. Yeah.
8 Q. Which is that you may have had
9 reservations which you evidenced to Dr. Golden that
10 you have a high regard for, but when the decision was
11 made by the superintendent you as a good line officer
12 supported the decision of the department, the
13 superintendent and the district deputy
14 superintendent. Is that a correct summary of how you
15 feel?
16 A. Correct.
17 Q. So people have been asking you a series
18 of questions and you have -- you say there were
19 concerns and you come back and you always end it or
20 preface it with this was the decision of the
21 superintendent and you were a good line officer from
22 the department.
23 So I hear you saying it doesn't reflect
24 your opinion but once the decision is made, it's the
25 DOE's position and you support it; is that correct?
91
1 A. No. I think that's part of my opinion
2 too and my judgment and my involvement for the
3 superintendent or as a superintendent for Hawaii
4 district, and I think I'd like to be independent of
5 that and not just follow the superintendent.
6 Q. So you're saying that even if you raised
7 all these questions to the superintendent, the people
8 that you consulted with had and even if you know that
9 Na Laukoa had no real expertise in the IDEA of the
10 Felix related area that you believed their selection
11 was a correct selection. Is that what you're saying?
12 A. Let me put it position-wise that I did
13 what I needed to do to give the information back to
14 the superintendent of his viewpoints or what he asked
15 to us as district superintendents for seven
16 districts, and I replied to him in terms of what my
17 feelings are and what I know and at that time when
18 the decision was made I followed his direct line in
19 terms of meeting compliance.
20 Q. And that's what I thought I said.
21 A. Yeah.
22 Q. My question to you was that did you,
23 other than supporting of his decision, did you feel
24 that they were a good choice to do the targeted
25 technical assistance, you personally? I'm not --
92
1 A. Personally I asked that question what
2 were their qualifications, and sure I'm going to have
3 other viewpoints in terms of the whole scope of
4 things, and that's not only for this area of Felix
5 and Na Laukoa but everything I do for the department
6 as a district officer in Hawaii district.
7 Q. So in other words, you still had those
8 concerns that you raised but once the decision was
9 made you supported the decision. That's correct,
10 right?
11 A. Correct.
12 Q. That's what I thought you were saying.
13 Now, do you recall when Na Laukoa started in the
14 school system when they started to go in and do their
15 technical assistance in your district, do you
16 remember when they started?
17 A. About two years, yeah, two years ago.
18 Q. Well, technical assist --
19 A. When the tech assist contract was given,
20 that's when they started. I don't know the specific
21 dates.
22 Q. If I were to tell you the technical
23 assistance contract was given in September of the
24 year 2000, last year.
25 A. Last year.
93
1 Q. Okay. So now when you say two years,
2 you're counting this year and last year. Is that
3 what you're saying?
4 A. Yeah, the past year and this year.
5 Q. So do you recall what month last year
6 that Na Laukoa started to appear in your schools?
7 A. Immediately after the contract was
8 awarded, yeah, that month.
9 Q. What Representative Oshiro read were some
10 concerns that Dr. Golden said you raised even after
11 the contract was awarded. Was that a correct
12 depiction of conversations you may or may not have
13 had with Dr. Golden after that?
14 A. I always do that in terms of the
15 substance and the maintenance of whatever the
16 concerns are, and we always ask these things in my
17 discussion with him. And I'm always taking the other
18 viewpoint in terms of is it working, not working and
19 we're not, from my position, personally I'm not going
20 to be satisfied with the answer just because it's the
21 thing -- because they can get better or they can get
22 worse.
23 Q. Okay. So I guess what you're saying is
24 that you -- it is very possible that you raise
25 continuing concerns as Dr. Golden testified?
94
1 A. Because there was no time line of what
2 they were doing correct. It was beneficial to the
3 Felix because it just started; so I'm going to ask
4 that question the time line and the maintenance of
5 evaluation and this is still continuing.
6 Q. Do you know a Debra Farmer?
7 A. Yes, I do.
8 Q. Do you have an opinion of Ms. Farmer?
9 A. She's the state officer in this area, and
10 I know she does the best she can in terms of her
11 capacity, and it's a very difficult job because she
12 does it for the whole state.
13 Q. Have you ever heard from Ms. Farmer that
14 she spent the first three to four months after the
15 contract was awarded training Na Laukoa. Have you
16 been told that?
17 A. No.
18 Q. Did Dr. Golden tell you that?
19 A. No, I have not discussed that with anyone
20 in that capacity.
21 Q. In your conversation with Ms. Hamamoto,
22 did she ever tell you that based upon her
23 recommendation Ms. Farmer finally ended up writing a
24 letter or a note to the superintendent saying it's
25 taking too much of her time to train Na Laukoa to in
95
1 essence assist all these difficult complexes to come
2 into compliance. Are you aware of that?
3 A. No, but at the same time it could be a
4 briefing versus a training. Those are two different
5 things. I think that if you're going to brief Na
6 Laukoa with the department structure, I know
7 Ms. Hamamoto would have done that or communicated
8 that. But in terms of the word you say "training"
9 them to work with the district schools, I'm not aware
10 of that.
11 Q. I'm using Ms. Farmer's words that she
12 felt she was training, she and her staff were
13 training them. You're not aware of that?
14 A. No, I'm not aware of that.
15 Q. Are you aware or know a lawyer by the
16 name of Eric Seitz?
17 A. Yes, I do.
18 Q. Have you had any conversations with
19 Mr. Seitz?
20 A. On occasion, yeah.
21 Q. And do you know Ms. Shelby Floyd?
22 A. Yes, I do.
23 Q. She's a resident of the Big Island, isn't
24 she?
25 A. Yes, she is.
96
1 Q. Has anyone ever told you that Mr. Seitz
2 has said that if there is any part of the state that
3 should be in receivership it should be the Big
4 Island. Have you ever heard that?
5 A. I've heard that.
6 Q. You've heard that?
7 A. When I first took over the district,
8 there were in receivership in terms of the talk.
9 Q. For the Big Island?
10 A. For the Big Island.
11 Q. Has anyone told you subsequent to that
12 time that Mr. Seitz has recently said that the part
13 of the problem of Big Island's compliance is you?
14 A. No.
15 Q. You've never been told?
16 A. I've never heard it to my face.
17 Q. Nobody's told you that to your face?
18 A. No.
19 Q. I will represent to you that Mr. Seitz
20 has told that to myself and Representative Saiki.
21 In your decision to retire from the
22 Department of Education, has anyone ever discussed
23 the whole issue of Big Island's compliance with you
24 and whether you are a detriment or somehow standing
25 in the way of compliance?
97
1 A. No, I've had that issue put forth when I
2 first took over the district.
3 Q. That that's the problem?
4 A. Well, that's the challenge that we have
5 on the district, in the district.
6 Q. When you took the job, were you under the
7 impression that you must bring the Big Island into
8 compliance within two years or three years?
9 A. No, just into compliance.
10 Q. And did you have an internal deadline for
11 yourself as to when you would accomplish that?
12 A. Well, because of the issues brought forth
13 early this morning, I had specific benchmarks that I
14 wanted to reach. The first one was to get off that
15 first few months for Hawaii district in terms of some
16 of the allegations that was pointed at Hawaii
17 district in terms of non-compliance issues.
18 Q. So are you saying that these benchmarks
19 that you set up for yourself you did not meet?
20 A. I did.
21 Q. You did meet?
22 A. Yeah. I pretty much discussed this in
23 what we need to do in this case the deputy
24 superintendent assisted with Doug Houck, Special Ed.
25 liaison for the superintendent.
98
1 Q. So were you basically on schedule as far
2 as your benchmarks were concerned, your personal
3 benchmarks?
4 A. As far as the correlation of meeting the
5 district at that time, yes.
6 Q. Then, Mr. Sakai, if you were basically on
7 schedule and you knew the challenges that you'd be
8 faced with as district superintendent, can I ask you
9 why you retired then if you're on schedule and --
10 A. It was time.
11 Q. It was time?
12 A. Thirty-four years is a long time, Senator
13 Hanabusa.
14 Q. I understand that, but I'm sure when you
15 took the job as district superintendent, Mr. Sakai,
16 for an area that people were saying would go into
17 receivership, did you really believe that you'd be
18 able to miraculously do it in two years?
19 A. Well, I had a goal, but I wanted to
20 retire at 55 really.
21 Q. So that was more of your goal to retire
22 at 55 even if it meant -- and I assume you're 55 now?
23 A. No, I'm 58.
24 Q. You're 58 now. So you gave three years
25 to the DOE more than what you intended to?
99
1 A. Well, because of the situation we're in
2 and I was fortunate to work for two superintendents,
3 Superintendent LaMahieu and Superintendent Aizawa and
4 with their communication and my experience, I was
5 able to support the department and give some
6 experience to the situation we're in. And when it
7 was time, it was time.
8 Q. Why not two more years?
9 A. Because it was time.
10 Q. Because it was time?
11 A. To retire.
12 Q. It was time to retire. How much longer
13 do you think it will take the Big Island to come into
14 compliance, Mr. Sakai?
15 A. I feel confident that they'll meet all
16 the compliance requests. Hopefully in the next --
17 this school year. With all that's happening in
18 America and other things, I'm sure and with this type
19 of situation, I think all parties will have to work
20 together so that we do meet compliance for Felix and
21 hopefully it will be sooner than later.
22 Q. When you say this kind of situation, what
23 are you referring to?
24 A. The teacher situation with the past
25 spring strike, America's terrorist attack.
100
1 Q. And with those events you believe that it
2 will be in compliance?
3 A. I think it will be in perspective of our
4 priorities and what is important and what this
5 country needs and what the state needs and what the
6 school system needs, and I feel confident that things
7 will fall in place.
8 CO-CHAIR HANABUSA: Thank you, Mr. Sakai.
9 DANFORD SAKAI: Thank you.
10 CO-CHAIR REPRESENTATIVE SAIKI: I don't
11 have any questions. At this point, we'd like to take
12 follow-up questions first with Mr. Kawashima.
13 SPECIAL COUNSEL KAWASHIMA: Thank you. I
14 do have some questions.
15 FURTHER EXAMINATION
16 BY SPECIAL COUNSEL KAWASHIMA:
17 Q. Mr. Sakai, when Senator Hanabusa was
18 questioning you a few minutes ago asking you about
19 these type of contracts that you as a principal at
20 Waikea High School, for example, could let to various
21 vendors to provide services, you had the discretion
22 to contract with whomever you wished, right?
23 A. Yeah, based on the procurement law
24 certain funds that we have that are not over $10,000
25 or certain amount like $25,000 with the new policy we
101
1 could make that assessment and then the so-called
2 approval at our level, but anything over assessed
3 number of $10,000 or more we'd have to have district
4 and state approval.
5 Q. And those types of contracts, were there
6 many during the time that you were at Waikea at any
7 given school year, were there many of those types of
8 contracts that were let to outsiders?
9 A. Not many but a few which is normal for a
10 major high school. Our high school consisted of
11 2,400 students. We had a staff of 150.
12 Q. That is a bigger high school.
13 A. At that point that was one of the larger
14 high schools in the state; so we had the school
15 budget allocated towards that area. So we had some
16 extra money that normal schools would not have.
17 Q. And of course you as the principal would
18 maintain knowledge about those contracts, how much
19 they cost, how they worked out those --
20 A. Through the account clerk and our side
21 and also the department chair that would be the
22 initiator of working these contracts out. In this
23 case it would be the Special Ed. teachers.
24 Q. Understanding how many there were as you
25 say a few per school year, if I asked you as
102
1 principal of Waikea High School while you were there
2 to gather contracts of that nature for a period of
3 three years just say -- we'll use three years as an
4 example -- would that information be readily
5 available to you as principal?
6 A. It's not a problem. If I ask for it,
7 sure.
8 Q. And if you did ask for it just roughly,
9 sir, outside, how long would it take for you to get
10 that information from whoever gathered it to
11 yourself?
12 A. Well, all you have to do is ask the
13 office SASA or the account clerk.
14 Q. Outside maybe a week?
15 A. Outside maybe one or two weeks.
16 Q. One or two weeks?
17 A. Because of the direct services of
18 communication with the school and the entity, we're
19 not dealing with a third-party or middle person at
20 all, not with that type of figure.
21 Q. Do you know that the superintendent of
22 education has told this committee under oath that it
23 would take three months to get that type of
24 information. Do you know that?
25 A. Well, he's talking maybe at a broader
103
1 level. I'm just talking at the school level here for
2 me.
3 Q. Well, school level -- every school would
4 be asked the same question at the same time, would
5 you expect that every other school would have the
6 same ability to get that information to the
7 superintendent if he really wanted it?
8 A. Well, you're making that position towards
9 me. In terms of the whole department, it may; but
10 I'm speaking specifically to the information you're
11 asking me as a high school principal.
12 Q. I understand.
13 A. And coordinate with you on that basis two
14 weeks at the most or three. But on a larger scale
15 with the whole system, that's another matter. I
16 don't know if you're making that parallel that the
17 superintendent has given you wrong information on
18 that basis.
19 Q. I don't mean to argue with you, sir, but
20 you were the principal of one of the largest high
21 schools in the state, you see. And if it took you
22 that long, all I'm saying is that I can't imagine it
23 would take any other school much longer than that
24 certainly not three months. That's all I'm saying.
25 A. Thank you.
104
1 Q. Now, since you retired, sir, are you in
2 any other way involved with the department?
3 A. No.
4 Q. Do you intend to be in any other way
5 involved with the department?
6 A. No.
7 Q. If you were asked to become involved, you
8 would turn it down?
9 A. I'd consider it.
10 Q. You'd consider it?
11 A. But during the antics position, you'd
12 have to sit out for a whole year although we have
13 incentive to come back on board in a part-time
14 capacity.
15 In fact, the superintendent discussed
16 with me some other positions when I had a meeting
17 with him and I just said at this point thank you, and
18 we just left it at that.
19 Q. When was that that you met with him?
20 A. That was Monday we talked about my
21 retirement, my pending retirement.
22 Q. I'm sorry. When was that? This Monday
23 you say?
24 A. Oh, no, this was the August hearing when
25 I turned in my papers.
105
1 Q. That was back in what July or August?
2 A. August, yeah.
3 Q. Of this year?
4 A. Of this year.
5 Q. All right. Now, one other area, sir, I'd
6 ask you whether or not anyone from the department --
7 superintendent or any representative -- had contacted
8 you about your testimony today and you truthfully
9 answered no, not in any substantive way in terms of
10 testimony, right?
11 A. Correct.
12 Q. Right. But when you came here today,
13 Mr. Sakai, before you took the stand you were sitting
14 out there in the audience, were you not?
15 A. Correct.
16 Q. And you were approached, were you not, by
17 Mr. LaMahieu and Ms. Hamamoto. They came to sit by
18 you?
19 A. No, I sat by Ms. Hamamoto first.
20 Q. Okay. And then Dr. LaMahieu came and
21 spoke some words to you, did he not?
22 A. Yes, he did.
23 Q. And you didn't solicit his advice or you
24 didn't solicit any information from him, did you?
25 A. No.
106
1 Q. But he came and gave you information, did
2 he not, he said things to you. Do you recall?
3 A. He mentioned about the subpoena.
4 Q. Okay. Well, let me ask you more
5 specifically, sir. Do you remember Dr. LaMahieu
6 who's sitting here today telling you that the
7 committee, this committee, was involved in what he
8 calls case building tactics.
9 Do you remember those words that he told
10 you today no more than an hour-and-a-half ago?
11 A. He mentioned that I'm here in a subpoena
12 and that they were looking for investigative
13 follow-up, and that's the comment that he made in
14 that reference.
15 Q. He did say the committee was involved in
16 case building tactics, though, didn't he?
17 A. (Witness nods head.)
18 Q. You're nodding your head saying yes. Do
19 you recall that, sir, an hour-and-a-half ago?
20 A. I didn't pay too much about it, sir.
21 Q. Do you recall --
22 A. These are talking that we talk all the
23 time. So at this point in time he did not solicit me
24 for any pending testimony.
25 Q. I understand.
107
1 A. In terms of what had happened about 35,
2 40 seconds he just gave me his hi.
3 Q. Well, I'm asking you some very specific
4 things.
5 A. Sure.
6 Q. And again, you did not solicit this.
7 This information was given to you by Dr. LaMahieu and
8 let me ask you another question.
9 Do you recall words to the effect that
10 Dr. Houck was on the stand for four hours but was
11 only asked certain types of questions.
12 Do you recall that also he mentioned that
13 to you today no more than an hour-and-a-half ago?
14 A. He mentioned Dr. Houck was here, yeah.
15 Q. And then did he also mention to you very
16 specifically, sir, that this committee doesn't follow
17 court rules, and they allow hearsay words to that
18 effect. Do you recall that also?
19 A. He mentioned that this is not in the
20 process of due process or what I'm familiar with
21 because this is a joint hearing.
22 Q. Now, you don't know this but Dr. LaMahieu
23 hasn't been here all week. Do you know that?
24 A. I'm not aware of that, yeah.
25 Q. But he shows up today on a Saturday and
108
1 he seeks you out and he speaks to you. He did that,
2 didn't he?
3 A. He said hi to me, yeah, when I first
4 walked in.
5 Q. Well, he said more than hi, Mr. Sakai.
6 A. Yes.
7 Q. And he told you all the things that
8 you've already testified about. From what you could
9 gather, sir, was he trying to influence your
10 testimony here before this committee?
11 A. For me personally, no.
12 Q. Was he trying to influence your testimony
13 before this committee?
14 A. I'm not aware of that. I'm talking about
15 myself. I say no.
16 Q. You certainly wouldn't allow anybody to
17 influence you, though?
18 A. Correct.
19 Q. I understand that. But the words he was
20 saying, the things he specifically said to you
21 unsolicited from you it appears that he was trying to
22 influence your testimony under oath before this
23 committee, wasn't he?
24 A. I would not say so.
25 Q. No further questions.
109
1 A. Because at that point in time that was
2 only a discussion. There was no agenda to that, sir.
3 Q. There was no discussion. He told you
4 these things and you said nothing in response?
5 A. That's what I said.
6 SPECIAL COUNSEL KAWASHIMA: Thank you.
7 CO-CHAIR REPRESENTATIVE SAIKI: Thank
8 you, Mr. Kawashima.
9 Members, any other follow-up questions?
10 If not, Mr. Sakai, thank you very much for your
11 testimony this morning.
12 DANFORD SAKAI: You're welcome. Thank
13 you.
14 CO-CHAIR REPRESENTATIVE SAIKI: Members,
15 let's take a short five-minute recess before we begin
16 with our second witness. Recess.
17 (Recess from 11:12 a.m. to 11:20 a.m.)
18 CO-CHAIR REPRESENTATIVE SAIKI: Members,
19 we'd like to reconvene our hearing. At this time
20 we'd like to call our second witness Albert Yoshii,
21 who is seated at our witness table.
22 We'd like to begin first with the oath.
23 Mr. Yoshii, do you solemnly swear or affirm that the
24 testimony you're about to give will be the truth, the
25 whole truth and nothing but the truth?
110
1 ALBERT YOSHII: I do.
2 CO-CHAIR REPRESENTATIVE SAIKI: Thank you
3 very much. Mr. Kawashima.
4 SPECIAL COUNSEL KAWASHIMA: Thank you,
5 Mr. Chair.
6 EXAMINATION
7 BY SPECIAL COUNSEL KAWASHIMA:
8 Q. State your name and address, please.
9 A. My name is Albert Yoshii, 98-1746 Ulu
10 Street, Aiea.
11 Q. All right. Mr. Yoshii, I notice that you
12 have our attorney Mr. Clayton Ikei with you here
13 today. You are exercising your right to have
14 counsel, right?
15 A. Yes.
16 Q. And in fact, we also understand that
17 there is a lawsuit that you are pending against the
18 Department of Education, Paul LaMahieu and others.
19 That is pending, is it not?
20 A. Yes, it is. I'm instructed by Mr. Ikei
21 to try to avoid the matters that affect the trial.
22 Q. That's right. And that's what I wanted
23 to tell you. The reason I raise that was that we are
24 not interested necessarily in what is involved in the
25 lawsuit. We just want your complete, accurate and
111
1 honest testimony today. Do you understand that?
2 A. Yes, sir.
3 Q. Thank you. Now, you also provided for us
4 exhibits that would accompany your testimony. They
5 appear to be six in number, and you have provided
6 that to us this morning, have you not?
7 A. Yes, I was hoping to go through that.
8 Q. Please feel free. As we go along if you
9 need to refer to any of these, merely tell us which
10 one you're referring to and then we can talk about
11 it. Okay?
12 A. Yes.
13 Q. Now, you have been with the department
14 of -- strike that. You are now with the Department
15 of Education, are you not?
16 A. Yes, I am.
17 Q. And for how long have you been with the
18 department?
19 A. I've been with the department for 32
20 years.
21 Q. And can you briefly tell us during those
22 32 years what your positions and responsibilities
23 have been with the department?
24 A. I'll start with where I am now, and I'll
25 work backwards from there.
112
1 Q. All right.
2 A. I usually have to look at my title that
3 I'm currently in. I think it's the Felix Contract
4 Administration Director or something like that. I'm
5 sorry. We'll start with that.
6 I've been in that position for a year,
7 and prior to that for 31 years I've been in the
8 office of personnel services. I've been a personnel
9 officer for my entire career.
10 I'll go backwards. For I'd say three
11 months or so prior to my moving in this position was
12 the personnel director. Prior to that I served a
13 year-and-a-half under Dr. LaMahieu as the assistant
14 superintendent, the acting superintendent for
15 personnel. I came from the personnel director
16 position and I'm still, you know, I was in that
17 position for about 15 years.
18 Prior to that I served as the
19 department's negotiation spokesperson for maybe three
20 years. Prior to that I've held various positions
21 within the office of personnel services primarily in
22 personnel.
23 Q. Now when you were the department
24 negotiations spokesperson, spokesperson for whom,
25 sir, or I should say about what, what area?
113
1 A. I've served in that capacity recently,
2 and I've served in that capacity in the past. The
3 recent capacity is that I've served as a spokesperson
4 for the Department of Education and perhaps the Board
5 of Education in conducting negotiations with HSTA.
6 Q. All right. That's what I was asking you,
7 sir. Now, sometime last year in the year 2000 you
8 became aware of Superintendent LaMahieu's desire to
9 retain an organization called Na Laukoa, am I
10 correct?
11 A. Yes.
12 Q. And am I correct that Dr. Robert Golden
13 who at that time was director of student support
14 services came to see you and informed you of his
15 concern that the superintendent was going to retain
16 this group which in his -- meaning Dr. Golden's
17 opinion -- was not qualified, do you recall that?
18 A. Yes.
19 Q. Now, will you please, beginning with that
20 conversation with Dr. Golden, describe for us what
21 you know about this Na Laukoa contract?
22 A. I recall that Dr. Golden came to see me
23 sometime in July, 2000 and at that time he related to
24 me that this Na Laukoa situation has been going on
25 for about two months prior to that. Dr. Golden came
114
1 to see me in confidence. Primarily I thought he came
2 to see me as a personnel officer. I've had a long
3 standing relationship with Mr. Golden, and we've
4 worked on many cases together whether it gets down to
5 grievances and employee complaints.
6 Mr. Golden came to me seeking some advice
7 about his own situation. He told me -- and I don't
8 want to go over the same material that he's already
9 testified -- but basically he told me the same things
10 that he told his committee on that day that
11 Superintendent LaMahieu was trying to contract -- at
12 that time I heard him say it was Mrs. Stocksdale. I
13 heard him say Na Laukoa.
14 I was not familiar at that time with
15 everything that happened and Mr. Golden came to me,
16 and he said that he had sent a letter to the
17 superintendent objecting to the contracting of this
18 agency, and I was not -- he told me verbally I was
19 not privy to the letter or did not leave any
20 documents with me.
21 Mr. Golden told me that he felt that he
22 was concerned about his job situation. Now, this is
23 in confidence. I think I feel free now after he's
24 testified because the same information has already
25 come out.
115
1 Q. He has testified under oath about that,
2 sir. Go ahead.
3 A. He said that he was concerned that he had
4 opposed the superintendent at that time, and he felt
5 threatened that his job situation seemed to be
6 deteriorating somewhat because he felt that he was
7 being isolated, you know, from performing his job and
8 many things were going around him.
9 He was concerned about the future
10 implications of this which you said was just
11 beginning then in July. He asked me specifically for
12 advice about what he should do. I couldn't advise
13 him directly. I'm not a lawyer. I did mention that
14 he had protection under the -- I'm looking for the
15 right word.
16 Q. Whistleblower?
17 A. Whistleblower, right, whistleblower law
18 and that he had raised a legitimate objection, and it
19 seems to be that he was being retaliated against.
20 You know, this is from our conversation. I don't
21 know specifically if it was happening or not, but I
22 trust Mr. Golden and I took his word that he was
23 telling me the truth and I shared his concern.
24 If we were in fact, hiring someone that
25 was not qualified, you know, as a contractor, I was
116
1 concerned about this being part of the Felix
2 compliance procedure and part of the Felix response
3 plan.
4 Mr. Golden -- I guess that wasn't a very
5 satisfactory meeting because I couldn't help him. As
6 a personnel officer, I could only talk about it and
7 be sympathetic about it, but I promised that I would
8 look into the situation and if the opportunity came
9 up when the contract does come for personnel review,
10 I would try to raise objections or ask questions
11 about it.
12 I went back -- after our conversation in
13 private, I went back and reflected on this about what
14 to do. I was in a quandary because an employee had
15 come to me and talked about his personal situation,
16 and I was trying to help him somehow, but I was not
17 in the position to do anything positive or directly
18 say whether the contractor being considered was
19 qualified or not because I personally didn't have the
20 knowledge base to make that judgment. I had to rely
21 on Mr. Golden and I believed him.
22 I also thought about it for a while after
23 that conversation because it seemed to me that this
24 has something to do with the superintendent's
25 recently acquired superpowers.
117
1 Again, I forget the right term on that,
2 but I call it superpowers which is his ability to --
3 there are two things in that. His ability to,
4 regardless of law, disregard laws in terms of
5 awarding contracts for one thing and it has something
6 to do with procurement.
7 The second part of it was that the
8 superintendent was awarded the superpowers to -- that
9 he could assign employees. And again, these were
10 conditional. I saw -- I read and I went back and
11 read the statement, I read the order and I concluded
12 that these were not universal. I mean, there were
13 conditions before you could use superpowers.
14 I was concerned if the superintendent was
15 really trying to hire someone that was not qualified
16 then I guess the best I could do, and I was already
17 doing this. I had, you know, read that provision
18 before a little before that, and I was concerned.
19 And I was already advising within the office of
20 personnel services that we have to be careful when we
21 break any laws when we disregard, you know, standard
22 procedure. I was especially concerned about
23 procurement.
24 I've had some history on that, and I've
25 been audited before about complying without
118
1 procurement laws. And I knew that this was, you
2 know, I was very concerned that, in fact, that we had
3 to be very careful whenever we deviate from the
4 standard procedures for procurement.
5 I chose at that point to help Mr. Golden
6 and myself because there were other issues in
7 personnel that was affected by those superpowers to
8 speak out on that issue, and I went to see various
9 people and advised them in various ways that, in
10 fact, the superintendent's powers was not -- it had
11 to be used carefully.
12 There were conditions on when it could be
13 used, and I think the conditions it says as needed to
14 implement the consent decree, as needed to serve
15 children with disabilities or words to that effect,
16 and that was the condition under which the
17 superpowers could apply.
18 And as I reflected on it, if the
19 superintendent, in fact, was trying to hire an
20 unqualified person for a large contract, it would be
21 questionable whether those superpowers apply because
22 it says as needed. And hiring someone unqualified
23 would not meet that criteria in my mind.
24 And again, I'm not a lawyer but I had
25 questions about it because I had to administer the
119
1 results of the superintendent's decisions, and I felt
2 I needed to be very careful again advising our staff.
3 Because in the past when superintendents -- and I've
4 served under many superintendents -- made decisions
5 and after they leave, you know, office when we're
6 audited, we need to be able to document it.
7 In fact, decisions were made according to
8 law, and we in the personnel office would have to
9 be -- we'd have to be stuck with explaining and
10 justifying actions that were taken, you know, over
11 time. So I asked our personnel people to be very
12 careful to ask for documentation whenever we do or
13 whenever we're asked to or told to disregard laws and
14 procedures.
15 I did not hear about Na Laukoa until I
16 was transferred. I did not see the contract. I did
17 not -- and this is when I did see it and it's in the
18 contract and I'll go over it and explain it. At that
19 time when I was transferred, you know, from my
20 position as personnel director, I was assigned to a
21 position. At that time it was called contract --
22 Felix Contract Monitor, and I believe a part of the
23 problem -- the duties of that position was to review
24 and implement contracts that are under the Felix
25 consent decree.
120
1 And I remember one instance when during
2 my removal process we had one hearing with the
3 superintendent explained that part of my duties, my
4 new duties would be to monitor Na Laukoa. I'm sorry,
5 I'm sorry. I have to take that back. To monitor
6 PREL because at that time I was not aware.
7 I haven't seen a contract, and haven't --
8 I wasn't aware that it was subcontracted to Na
9 Laukoa, but I was supposed to monitor the PREL
10 contract and I had no knowledge at that point what it
11 meant.
12 Subsequent to that in that position I
13 still didn't have a contract to look at, but I went
14 and asked our budget office for a copy of that, and
15 they produced one sometime about mid-September. And
16 when I did look at the contract, I noticed several
17 things that were, to me, irregular, and I think it's
18 a good time to go through the document on the
19 contract. That's attachment 1.
20 Q. Okay. Before you do, Mr. Yoshii, let me
21 go back because we may get by these areas and have
22 difficulty coming back to them, but let me ask you
23 some more foundational questions before you get to
24 the documents, sir.
25 You mentioned that when Dr. Golden came
121
1 to see you, you were not familiar with either
2 Ms. Stocksdale or Na Laukoa as an organization?
3 A. No.
4 Q. You had not had contact with them before?
5 A. That was the first time.
6 Q. All right. And though in this
7 conversation with Dr. Golden, he told you a number of
8 things about his opinions and the opinions of others
9 as to whether or not Na Laukoa was qualified to do
10 the job, right?
11 A. He made it clear to me that he felt they
12 were not qualified.
13 Q. He made it clear to you. "He" meaning
14 Dr. Golden?
15 A. Mr. Golden, yes.
16 Q. Mr. Golden was of the opinion that Na
17 Laukoa was not qualified to do the job; is that
18 correct?
19 A. Yes.
20 Q. And the job we're talking about, just so
21 we get it clear is providing targeted technical
22 assistance to school complexes to get into compliance
23 with the Felix consent decree, right?
24 A. I was not too sure at that time when he
25 talked to me. He talked about service testing and to
122
1 help schools with service testing.
2 Q. All right.
3 A. At that time.
4 Q. All right.
5 A. That he talked to me.
6 Q. You found out later, though, that's what
7 it was?
8 A. Right.
9 Q. And did you recall Mr. Golden telling you
10 that he had discussed this matter with others
11 especially people on the Big Island such as Danford
12 Sakai about Na Laukoa, do you recall that?
13 A. Not at that time, no.
14 Q. You learned later, though, that he did
15 discuss the matter with him?
16 A. Yes.
17 Q. When you say later -- when I say later,
18 when is that?
19 A. Mr. Golden came to see me several times
20 over the period, and I learned about it much later
21 when he actually came to see me again the second
22 time. This was in -- I can't recall exactly sometime
23 in October.
24 Q. What did he tell you about what anyone
25 else, anyone else said about Na Laukoa's
123
1 capabilities, qualifications to do this job of
2 providing targeted technical assistance?
3 A. Well, he told me -- at both times he told
4 me he sent a letter to the superintendent expressing
5 why he felt that Na Laukoa was not qualified to
6 perform the job. By then I knew what Na Laukoa was,
7 and I had reviewed many documents with the Felix
8 response plan so I knew about priority No. 4 which
9 was the technical assist -- assistance or targeted
10 technical assistance.
11 So at that time I knew what he was
12 talking about more specifically. And he came to me
13 not necessarily to talk about a contract although
14 that was the issue. He came to me again for advice
15 as the personnel officer.
16 At that time because the superintendent
17 had sent him a letter or called him and he wanted
18 some advice about what to do, I believe he said he
19 had talked to the Board of Education and was
20 preparing a letter or something of that nature but
21 the superintendent had sent him a letter or had
22 called him -- I don't recall the exact details --
23 demanding that Mr. Golden provide the same
24 information that he sent to the Board of Education.
25 I advised him to give it to the superintendent.
124
1 Q. In fact, Mr. Golden told you at that
2 point in time that he had already advised the
3 superintendent that he was going to talk to the Board
4 of Education, right?
5 A. Yes.
6 Q. And the superintendent at that point in
7 time did not suggest that he shouldn't, did he?
8 A. Going back in time to the first time that
9 Mr. Golden came to see me, he told me at that time
10 that he was going to see other people or he had
11 already seen them. I wasn't too clear what stage he
12 was in.
13 Q. I see. But then in the subsequent point
14 in time when you met with Mr. Golden he told you that
15 after he -- being Mr. Golden -- had in fact,
16 communicated with the Board of Education, then the
17 superintendent sent him a letter or some
18 communication ordering Mr. Golden to give the
19 superintendent any information that he gave to the
20 board?
21 A. Yes, that's right.
22 Q. Now, you mentioned the recently
23 acquired -- you refer to them as superpowers. Are
24 you referring to a stipulation and/or order from the
25 Federal District Court that gave the superintendent
125
1 of education and the director of the Department of
2 Health certain abilities with regard to state
3 procurement laws?
4 A. I remember that very well, yes.
5 Q. In other words, they could circumvent
6 what would be normally required, in other words, to
7 comply with state procurement laws because of the
8 consent decree they were given the right to do things
9 that in essence would circumvent the procurement
10 laws, right?
11 A. Yes.
12 Q. And then the laws as to hiring of people
13 also would be circumvented by these superpowers?
14 A. Yes.
15 Q. And you understood it, though, to be that
16 these powers were not to be used freely. They were
17 to be used only as needed as you say, right?
18 A. I advocated and held the position that
19 this was not a universal power. It had to be used
20 specifically for the Felix consent decree, and it had
21 to be justified. I thought it had to be justified.
22 Q. Certainly one of the justifications had
23 to be that whoever was retained under that decree
24 under those superpowers would have had to be somebody
25 who would have to be at least minimally qualified,
126
1 right?
2 A. Yes.
3 Q. Now, you mentioned your job as Felix
4 contract monitor. You -- and if this in any way
5 invades on the area of your lawsuit, please feel free
6 to tell me and I won't pursue it -- but you did not
7 voluntarily leave your position that you had
8 immediately before you got this position as Felix
9 contract monitor, did you?
10 A. No, I went involuntarily.
11 Q. And the person who made the decision to
12 move you involuntarily was the superintendent, wasn't
13 it, at least that person?
14 A. Yes.
15 Q. Now, by the way hearing you testify and
16 others testify about this Na Laukoa contract, what
17 I've heard from a number of witnesses under oath is
18 that the superintendent, not the assistant
19 superintendent, not a deputy, the superintendent
20 himself was attending to this matter of dealing with
21 a contract with a provider. Am I correct?
22 A. Yes.
23 Q. Has that ever happened to you in all of
24 the years that you were with the department in
25 whatever position you may have occupied, have you
127
1 ever seen a situation where a superintendent of
2 education would be so closely and intimately involved
3 with a specific contract?
4 A. I'm not familiar with what the
5 superintendent did specifically. I heard Mr. Golden
6 tell me, and he told me specifically he never saw a
7 superintendent come all the way down here to pursue a
8 matter of one single contract. Of course this is
9 Mr. Golden's statement to me, and that's how I
10 understand it.
11 Q. Did you also learn, though, that the
12 superintendent once the contract was let to PREL, not
13 Na Laukoa, to PREL but a contract in which a
14 requirement was that Na Laukoa be a subcontractor, do
15 you recall anyone telling you that Debra Farmer
16 another high administrator in the department was
17 instructed by the superintendent to train the Na
18 Laukoa people to do the job that they had been
19 contracted to do?
20 A. I'm not personally familiar with that
21 myself. I don't have firsthand knowledge.
22 Mr. Golden did talk to me about that, and he did
23 complain.
24 Q. All right. Thank you. Now, so I think
25 you wanted to show us, Mr. Yoshii, Exhibit 1 and
128
1 point out the areas that you had concerns about. And
2 just for the record, Exhibit 1 is a document entitled
3 "State of Hawaii Agreement for non-bid Purchase of
4 Goods and Services" and it has an effective date of
5 August 15, 2000 between the Department of Education
6 by superintendent and Pacific Resources for Education
7 and Learning, PREL that contract.
8 A. That's the contract.
9 Q. Go ahead, sir.
10 A. I wanted the committee to just be
11 familiar with the contract itself so that what I'm
12 saying, you know, has meaning; so I'm going to point
13 out the pertinent provisions in the contract that you
14 should be aware of.
15 I should preface this walk through of the
16 contract with the fact that -- I'm sorry. I'll come
17 back to that. I lost my train of thought. Let's
18 just go through the contract.
19 Q. All right.
20 A. Okay. The first thing you should look at
21 is the statement on the bottom of page 1 on the front
22 it says, "By order by the U.S. District Court and it
23 says June 28, authorized the Department of Education
24 to waive requirements of Chapter 103D and 103F, HRS
25 to obtain services to comply with the Felix and
129
1 Cayetano Consent Decree."
2 This is the use of the what I call
3 superpowers or extraordinary powers. This contract
4 is awarded using the powers, and it's awarded without
5 in this case it was awarded without bid. It was
6 awarded without competition.
7 Q. If I might stop you, sir, would the fact
8 that it was awarded in that fashion then circumvent
9 any oversight by the legislature, for example?
10 A. I believe, and I'll mention it in this
11 contract that there were further things that the
12 committee should be aware of. I believe -- and I
13 don't have firsthand knowledge about the intent of
14 it -- but I believe the intent was to disguise this
15 contract from both the Board of Education and
16 eventually to the legislature. It had to come -- to
17 be justified when forward funding under the Felix
18 consent decree had to come to the legislature for a
19 retroactive approval.
20 Q. All right. Go on, sir.
21 A. The second thing if you look at it right
22 below that statement it says impact aid, impact aid;
23 so the funding comes from impact aid.
24 Now, originally when I examined the
25 documents under the Felix response plan, there was
130
1 budgeted under forward funding, under the response
2 plan a specific amount for targeted technical
3 assistance. And I, you know, don't have the specific
4 figure, but it was about $1.7 million, $1.8 million
5 that was awarded, you know, for this purpose and
6 budgeted for this purpose.
7 There is in my mind no justification to
8 move this. It's a legitimate service that needed to
9 be provided. I can see that it targeted the 15 of
10 the worst compliance schools and complexes, and the
11 monitor or whoever it is wanted to get those schools
12 in compliance with the consent decree and technical
13 assistance to support them in that process and help
14 them each school and complex come up to standard was
15 a necessary, I believe, a necessary service.
16 There was no reason to take it out of the
17 Felix response plan and to transfer funding now to
18 impact aid.
19 Q. Impact aid meaning what, sir?
20 A. Impact aid means Federal Impact Aid.
21 This is -- and you know, it's very complicated, but I
22 have documents enclosed later which I intend to go
23 through. The Federal Impact Aid is that the State of
24 Hawaii is reimbursed from the federal government
25 x-amount for servicing military bases and federal
131
1 workers and their children in schools.
2 Normally that's our responsibility, the
3 State of Hawaii's responsibility, but it would be
4 unfair for -- because we have so many federal
5 projects and workers within our state. So the
6 federal government somehow justifies giving or
7 reimbursing to the state those dollars, and I don't
8 know exactly how it works. But we get an amount
9 every year. Hopefully it will continue.
10 That's what impact aid is. It's already
11 budgeted within our, you know, we get our school
12 budget and this is a reimbursement from the federal
13 government to the State of Hawaii. And you notice
14 the contract is $2.3 million.
15 On page 4 of the contract, I want you to
16 take a look at that. Now this is -- when I received
17 this contract, I'm working at it as the Felix
18 contract monitor; so it's my responsibility
19 apparently to implement this contract and make sure
20 it's executed. I notice the first thing here was as
21 approval to form, and you see that on page 4. This
22 is Deputy Attorney General. There is no signature
23 there.
24 Q. Normally you would expect that to be
25 signed, right?
132
1 A. Well, when I used to handle the contract
2 administration at one time, the Deputy Attorney
3 General's signature was required. You know, I
4 subsequently found out that maybe that practice has
5 been changed a little, but it was -- it came to my
6 attention very strikingly that the Deputy Attorney
7 General's signature in this case was not there.
8 And for this contract which went through
9 the superintendent's superpowers, I thought that the
10 Attorney General should look at it. I've got the
11 other contracts that we're going to cover this is
12 very significant.
13 The only thing I wanted to show again --
14 and you pointed this out already and you already know
15 that -- but there is Exhibit B. When I first looked
16 at that contract, I didn't recognize that this was Na
17 Laukoa, you know, subcontract within it. But as I
18 read the contract because I had responsibility to
19 implement it, I saw that Na Laukoa was the
20 subcontractor and this page shows it very clearly.
21 It's within the budget, you know, the
22 contract budget award. This is Exhibit B. If you're
23 on the same page with me, there is an asterisk that
24 shows includes $612,307 for Na Laukoa Program.
25 Now, at that point I made the connection
133
1 between what Mr. Golden was telling me and the
2 contract awarded to PREL, and it became clear that
3 the contract was subcontracted to PREL and
4 practically at the same level of funding that was
5 originally intended when PREL was being considered
6 for this contract as a single entity.
7 Q. With Na Laukoa?
8 A. I'm sorry. Na Laukoa, Na Laukoa.
9 Q. For the same job, right?
10 A. Right.
11 Q. Go ahead.
12 A. But that's about all I have, you know,
13 with this contract. The two things that I thought
14 was designed to disguise the contract from scrutiny
15 or proper scrutiny would be that, number one, it was
16 subcontracted; number two, it was moved out of very
17 visible Felix compliance funding and moved over to
18 impact aid funds where it was less visible and
19 perhaps less accountable.
20 I think that's about all I have to
21 contribute on the Na Laukoa Program.
22 Q. Now, did you notice, though that -- well,
23 strike that. Had you seen the earlier Na Laukoa
24 contract that the state was going to enter into?
25 A. No, no, I did not.
134
1 Q. Now, but you know that there were two
2 contracts with this matter. One between the State of
3 Hawaii and PREL first of all. You know that?
4 A. I was here for the testimony yesterday so
5 I understand, yes. I didn't know that.
6 Q. Did you know that there was a subsequent
7 contract between PREL on the one hand and Na Laukoa
8 on the other hand?
9 A. I learned that yesterday.
10 Q. Okay. Did you know that the scope of
11 services section of both of those contracts I just
12 identified were exactly identical?
13 A. I heard that yesterday again.
14 Q. Is that a usual thing that you might see
15 in the contract/subcontract situation?
16 A. I'm not usually although I have the title
17 now of Felix contract monitor. I'm not usually privy
18 to reviewing all contracts. So I don't know if it's
19 unusual, but I would project out that it is very
20 unusual.
21 Q. All right. So let me ask you this, sir.
22 You talked about your belief based upon your years of
23 experience with the department, based upon what you
24 saw to occur, based upon what others whom you trusted
25 told you that it was your belief that what was being
135
1 attempted here was an attempt to disguise this
2 contract to keep it out of the purview of number one,
3 the Board of Education; and number two, the
4 legislature. Is that correct?
5 A. Yes.
6 Q. Now how was the contract we're talking
7 about kept out of the purview of the department --
8 Board of Education, what was used to affect that
9 purpose?
10 A. I'm not privy to the board meetings, and
11 I do have occasional conversations with Dr. Nakashima
12 who used to be the board chairperson. I know that
13 Mr. Golden talked to him and we subsequent to my
14 removal I became aware of Dr. Nakashima's effort to
15 bring this contract to light, and he had requested
16 from Mr. Golden certain information that was
17 previously discussed with Mr. Nakashima.
18 I -- and if I think this would take us
19 into the impact aid funds and how that is treated in
20 order to fully -- more fully explain how it would be
21 disguised. It would at least at that point it
22 doesn't show Na Laukoa, and it also doesn't show that
23 the Felix response plan funds are being used for this
24 contract.
25 Q. When you say it doesn't show Na Laukoa,
136
1 what you're saying is the contract appears to show --
2 well, it does show as the contractee, PREL?
3 A. Right.
4 Q. And if it went to the Board of Education,
5 at least superficially it would show a contract
6 between the Department of Education on the one hand
7 and PREL on the other. Is that a fair statement?
8 A. That's right.
9 Q. And then in terms of the purview by the
10 legislature because it was this contract was funded
11 with impact funds, federal funds, it would in all
12 likelihood because of that not come under the purview
13 or the review of the legislature because it was
14 federal money, right?
15 A. I think that's specifically more a reason
16 why it was changed. The funding was switched because
17 the forward funding had to come back to the
18 legislature and they had anticipated or someone
19 anticipated the fact that it had to be justified at
20 that time.
21 Q. And thereby what they did was use impact
22 aid, impact aid monies?
23 A. Yes.
24 Q. Now, where normally would this Federal
25 Impact Aid money be going in the department of
137
1 Education? How would it normally be used assuming it
2 was not used for targeted technical assistance to
3 comply with the Felix consent decree, how would it
4 normally be used?
5 A. I think we need to turn to Exhibit 3.
6 Q. Yes. That is a letter under the
7 Department of Education letterhead from Paul G.
8 LaMahieu, Ph.D. dated March 8, 2001 addressed to
9 Mr. Herbert Watanabe, chairperson Board of Education.
10 Is that the one we're talking about?
11 A. I think you're on Exhibit 4.
12 Q. Oh, I'm sorry.
13 A. Exhibit 3.
14 Q. Three, okay.
15 A. It says "Education Budget," report titled
16 "Education Budget and Description, authorizes the DOE
17 to retain and expend a portion of all indirect
18 overhead reimbursement for discretionary grants."
19 This is describing act -- it says 234
20 Session laws of 2000, and I know this is repeating
21 what the legislature already did, but for the purpose
22 of clarification, this is the act that changed
23 practices prior to this in which the complaint -- one
24 of the complaints was that the federal government
25 worked hard to get impact aid -- I'm sorry. Our
138
1 representatives in the federal government worked hard
2 to get impact aid to Hawaii. And when it came, if
3 more impact aid came than what was budgeted by the
4 legislature for that purpose, it used to go back to
5 the general fund in the state.
6 This was not too well received by our
7 representatives, and they wanted the money to come to
8 the DOE and certainly I think they were justified in
9 doing that. The legislature passed this act in order
10 to permit the -- when there are excess money over and
11 beyond what's budgeted, the money would come to the
12 Department of Education to be spent for educational
13 purposes.
14 And now we can come to the March 8, 2001.
15 This is Exhibit 4. There's a memorandum from
16 Dr. LaMahieu to Herbert Watanabe, chairperson and it
17 says March 8, 2001. Are we all on the same page?
18 Q. Yes.
19 A. The first page if you go down, it says
20 total amount received, it says impact aid,
21 $31,442,920. Do you see that?
22 Q. Yes.
23 A. Then what was budgeted was $19 million,
24 the legislature budgeted $19 million anticipating
25 impact aid at that rate, and then there is a
139
1 difference of $12 million.
2 Now, during that fiscal year 2000/2001,
3 the department used the 12 for the first time again
4 because this was excess impact aid had the right to
5 use that money, that it's more of a windfall, you
6 know. We cannot anticipate exactly what the impact
7 aid amount would be from the federal government, but
8 there was 12 million that came to the department.
9 Now the question is what happened to that
10 dollars, and how does Na Laukoa contract Na Laukoa
11 PREL apply to impact aid. And you can see this is
12 the budget breakdown of how it was projected that
13 those impact aid funds would be spent and used. It
14 was allocated for various purposes. You can see
15 instruction materials, reading project. Third item
16 court order activities for Felix.
17 Q. That's the single largest item in those
18 line items?
19 A. Three million dollars. If you noted Na
20 Laukoa was $2.3 so there is some excess that was used
21 for other purposes, but this is where Na Laukoa fell
22 in this amount $3,657,000.
23 What is more interesting is we can turn
24 now to Exhibit 6. This is the next fiscal year's
25 planning for impact aid.
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1 Q. For the record, we're talking about
2 another memo dated May 29, 2001 under the State of
3 Hawaii Department of Education letterhead of Paul G.
4 LaMahieu, Ph.D. addressed to various members of the
5 Board of Education, Mr. Watanabe and Mrs. Knudsen.
6 That's the one you're talking about?
7 A. That's right.
8 Q. Go ahead.
9 A. And I'm trying to make this real so you
10 can see the figure for yourself. In fact, if I
11 talked about it, no one would understand what I'm
12 doing. So I'm trying to walk you through this so you
13 would get a good understanding and a feel.
14 Q. Thank you.
15 A. Then in that document you would find a
16 spreadsheet that in this case it doesn't address only
17 impact aid funds. One of the items of columns on the
18 top of the top of that spreadsheet says impact aid
19 funds, $13,665,848. Are we all following?
20 Q. Yes.
21 A. It's the spreadsheet that looks this way
22 in Exhibit 6.
23 Q. This one?
24 A. That's the one, right.
25 Q. Go ahead, sir.
141
1 A. Now, the column that shows $13 million is
2 the amount of impact aid that came to the DOE.
3 Remember in excess of what was budgeted? And I'll go
4 through that figure in the next page. But also
5 included in here is a little confusing, but impact
6 aid also includes the DOD funds the next column right
7 next to it.
8 Q. DOD?
9 A. Department of Defense.
10 Q. Right.
11 A. I don't know exactly what it is, but I
12 think it has something to do with the federal card
13 surveys and depending on the number of students that
14 we serve that the federal government would reimburse
15 us that amount.
16 Q. Okay.
17 A. So there's $2 million and $13 million
18 together. That's the federal reimbursement to the
19 state. This used to go into the state treasury.
20 Now, it's available for the DOE to use.
21 Q. For whatever the DOE chooses?
22 A. Yes.
23 Q. Go ahead.
24 A. You should look also at the next column,
25 the last column says general funds percentage
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1 reduction. If you look at it all the way on the
2 bottom, it says $14,442,000. Now, this is
3 anticipated for. This was in May anticipated for
4 this fiscal year, this school year that's going on
5 right now. This is the plan or financial plan to
6 deal with shortages, either the budget that they felt
7 wasn't enough money, the budget you would see things
8 like bus shortfall. I saw electricity shortfall,
9 these type of things. And normally you would find
10 that sometimes you don't budget enough so there's a
11 shortfall, and it's nobody's fault. It's just that
12 you just can't predict the rate of electricity, you
13 know, what the electric company is going to charge at
14 that time.
15 You might look down about the middle of
16 the page there's a few things there that are marked
17 U. U means unbudgeted. The legislature did not
18 allot money for these, but they're considered to be
19 important to the DOE; so you have a whole list of
20 unbudgeted items there. Right about the middle
21 you'll find collective bargaining, Model O and Track
22 P.
23 Q. Yes.
24 A. And fringe calculated at 23 percent.
25 You'll notice it's $9 million and $2.1 million
143
1 combined for that purpose. There's also another
2 collective bargaining item, peer assistance program.
3 That's for $2.3 million. Those items combined
4 together. There's another line, a smaller amount for
5 National Board Certified Teachers. It says about
6 $87,000, but we're looking at that. There is a lot
7 of money budgeted here.
8 And if you remember this year's teacher
9 strike situation and we had a contract settlement
10 it's been, you know, general knowledge there was a
11 lot of controversy on, you know, what was negotiated,
12 et cetera, et cetera.
13 My understanding is that Superintendent
14 LaMahieu volunteered to fund a part of the contract
15 settlement and put it under impact aid, and it
16 appears here in the budget. He -- and I'm just --
17 this is what I heard -- the first item collective
18 bargaining Model O Track P. Everyone see that?
19 Q. Yes.
20 A. Now, while I was negotiating this, and I
21 was replaced as the DOE negotiator at that point.
22 Q. You actually did the negotiations
23 yourself at one time?
24 A. At one time, but I was replaced before it
25 was settled and before the strike happened. Model O
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1 Track P refers specifically to something that the
2 HSTA has been trying to get funded within the salary
3 schedule. Now this is about five, six, seven years
4 old.
5 There was a plan approved maybe that long
6 ago that was not funded, and the HSTA has been trying
7 for years and years to try to get that plan funded.
8 And it was a plan that eventually if it's fully
9 funded would give teachers something like $80,000 a
10 year, et cetera, et cetera.
11 So during my time any way we could never
12 find the money to fund any, you know, different parts
13 of that Model O. Model O Track P refers specifically
14 in the controversy that is or was going on anyway.
15 It's now being at the Labor Relations Board.
16 Q. Go ahead, sir. We're going to take a
17 break here shortly.
18 A. Right.
19 Q. But I'd like you to finish this train of
20 thought.
21 A. Model O is the -- and as I know it at
22 that time the concept is that teachers with
23 professional certificates. And we did not define
24 exactly what it was while I was negotiating but
25 teachers with professional certificates would get
145
1 some differential above those that not and that would
2 appear all over the contract -- I mean, all over the
3 salary schedule and every step you would divide it
4 into teachers who don't have a professional
5 certificate and those that do.
6 Now, this refers specifically to that
7 provision in Model O of the teachers' contract. It's
8 specifically -- and the governor and if I remember
9 the controversy it was a one-year bonus of some sort
10 and it was to be funded through impact aid. Now this
11 is specifically what it is. But in this
12 representation it says it funds Model O, not a bonus.
13 It says Model O.
14 Anyway, the point I'm trying to make is
15 that Superintendent LaMahieu volunteered to cover
16 some of the negotiated contract expenses through
17 impact aid, and the point I'm trying to make is that
18 it affected the total DOE budget. And in fact, there
19 was not enough money to cover some of the deficit
20 spending because we still have a deficit, a deficit
21 of $14 million that had to be restricted, and this is
22 the point.
23 If you change to the next -- go to the
24 next page, the last page, it says there's two blocks
25 there. One refers to fiscal year '01 which was
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1 completed last year, and this is where the Na Laukoa
2 contract PREL contract was. And remember it's
3 $2.3 million? If you look at right below subtotal,
4 it says 6.68 percent reduction.
5 Now, this is a strategy to bring the
6 budget -- the total DOE budget into balance because
7 we're always short. And part of the plan was to
8 restrict 6.8 percent off the refunds that go to
9 schools, to schools. Remember -- I don't know if you
10 know about this, but I've always heard teachers
11 complain that they don't have enough money for
12 supplies, for books and they have to pull out their
13 own money from their pocket to pay for these things.
14 Now, this is the money that the
15 legislature provides for that. And I'm sure, you
16 know, I've always -- when I was still the personnel
17 director, there were always complaints that somehow
18 the DOE was hiding the money and it never reached the
19 school.
20 Whether it's true or not, that was the
21 perception and the restriction of funds $2.3 million
22 from -- I'm showing the relationship $2.3 million
23 from impact aid could have gone to reduce this
24 reduction and gave more money to schools, say, for
25 books or for other purposes that are needed.
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1 Now in the next block this is for this
2 year fiscal year '02. If you look under subtotal,
3 that reduction says 11 percent.
4 Q. 11.9 percent.
5 A. 11.9 percent and that's $11 million that
6 mostly didn't reach schools, and that particular
7 category of funding which is again B funds. Each
8 school gets a share of this, and they had to
9 contribute their $11 million, a part of their
10 $11 million to this reduction because impact aid was
11 used for other purposes.
12 Q. Sir, I'm going to ask you in a bit as to
13 whether or not you have any knowledge as to why this
14 was done, but I think I'll save that for after the
15 lunch break. Mr. Chair.
16 CO-CHAIR REPRESENTATIVE SAIKI: Members,
17 at this time we'd like to make a motion to move into
18 executive session. The purpose of the executive
19 session generally will be to discuss the witness's
20 testimony from this morning, to receive an overview
21 of the investigation from counsel, and also to
22 discuss the further subpoenas.
23 Is there any discussion? If not, we'll
24 take a roll call vote.
25 VICE-CHAIR REPRESENTATIVE OSHIRO:
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1 Co-Chair Saiki?
2 CO-CHAIR REPRESENTATIVE SAIKI: Yes.
3 VICE-CHAIR REPRESENTATIVE OSHIRO:
4 Vice-Chair Kokubun?
5 VICE-CHAIR SENATOR KOKUBUN: I.
6 VICE-CHAIR REPRESENTATIVE OSHIRO:
7 Co-Chair Oshiro votes I.
8 VICE-CHAIR REPRESENTATIVE OSHIRO:
9 Senator Buen?
10 SENATOR BUEN: I.
11 VICE-CHAIR REPRESENTATIVE OSHIRO:
12 Representative Ito?
13 REPRESENTATIVE ITO: I.
14 VICE-CHAIR REPRESENTATIVE OSHIRO:
15 Representative Kawakami?
16 REPRESENTATIVE KAWAKAMI: I.
17 VICE-CHAIR REPRESENTATIVE OSHIRO:
18 Representative Leong?
19 REPRESENTATIVE LEONG: I.
20 VICE-CHAIR REPRESENTATIVE OSHIRO:
21 Representative Marumoto?
22 REPRESENTATIVE MARUMOTO: I.
23 VICE-CHAIR REPRESENTATIVE OSHIRO:
24 Senator Slom?
25 SENATOR SLOM: I.
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1 VICE-CHAIR REPRESENTATIVE OSHIRO: Motion
2 passed.
3 CO-CHAIR REPRESENTATIVE SAIKI: Thank
4 you, Members. We'll recess for one hour. And,
5 g154,5, please convene in Room 325 next door. Thank
6 you. Recess.
7 (Lunch from 12:17 p.m. to 1:20 p.m.)
8 CO-CHAIR REPRESENTATIVE SAIKI: Members,
9 we'd like to reconvene our hearing, and we will
10 continue with our testimony from Mr. Yoshii. Mr.
11 Kawashima.
12 SPECIAL COUNSEL KAWASHIMA: Thank you.
13 Q. (By Special Counsel Kawashima)
14 Mr. Yoshii, when we broke, I was asking you questions
15 about Federal Impact Aid money and how it impacted on
16 the school's budget if, in fact, it were diverted to
17 use in other than direct school areas and you
18 answered that question.
19 Let me ask you in the actual carrying out
20 of the contract that the department had with PREL,
21 PREL was required to hire a number of individuals to
22 go to the schools to provide the targeted technical
23 assistance. Am I correct?
24 A. Yes.
25 Q. And do you have knowledge as to whom --
150
1 what type of background these people had that were
2 actually hired to do the work?
3 A. No, I don't.
4 Q. Do you have any knowledge as to whether
5 retired DOE personnel and former staff of Mr. Golden
6 and others were retained to do some of that work?
7 A. I know of at least one instance, yes.
8 Q. It was a retired DOE person?
9 A. Yes.
10 Q. And when you say of one instance, is it
11 because you're not involved with that area or you are
12 aware that only one such person was retained or
13 hired?
14 A. It's because I'm not familiar with the
15 actual implementation; and I wasn't, you know, part
16 of that.
17 Q. All right.
18 A. I got my information from speaking to
19 others.
20 Q. At least one person, though, was a former
21 DOE person who had retired?
22 A. Yes.
23 Q. And as far as the department was
24 concerned, if it were implementing that contract
25 itself without the necessity of involving. For
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1 example, a PREL and/or Na Laukoa, the department
2 could have implemented that contract itself using
3 these individuals such as the one you mentioned?
4 A. This is my belief that that's so.
5 Q. All right. Let me move to another area,
6 sir.
7 In your capacity as personnel director
8 before you were involuntarily transferred, did you
9 have any knowledge in terms of a contract with
10 Columbus Educational Services?
11 A. As the personnel director, I was aware
12 that some discussion was going on with Columbus. It
13 was after my removal that I got to monitor the
14 contract on Columbus.
15 Q. All right. So you do have knowledge
16 about that contract with Columbus Educational
17 Services?
18 A. Yes.
19 Q. And do you know whether or not the
20 superintendent again exercised the superpowers as you
21 call them that were given to him by the federal form,
22 do you know if he exercised those powers in entering
23 into that contract with Columbus Educational
24 Services?
25 A. I reviewed the contract itself. It
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1 doesn't have the same wording on it that we saw last
2 time with PREL. I know that contract did not go out
3 to bid. It was not put out for price competition; so
4 the superintendent must have used that powers,
5 extraordinary powers to enter into that contract.
6 Q. We have seen some figures, and I won't
7 vouch for the accuracy of them, but we've seen
8 figures of the nature of $100 million to Columbus
9 Educational Services, not paid, but appropriated
10 perhaps and designated for Columbus Educational
11 Services over a period of three years. Have you seen
12 numbers of that magnitude?
13 A. When I was assigned as the contract
14 monitor, Felix contract monitor, this was one of the
15 contracts -- one of the first contracts that was
16 signed for me to follow-up and implement as part of
17 my duties, my new duties. When it came to my
18 attention, I got a copy of the contract. Now, I
19 think a month had past since it was or nearly a month
20 had past since it was originally signed at that time.
21 Q. Signed by whom, sir?
22 A. Superintendent LaMahieu.
23 Q. All right. Was that one approved by the
24 Deputy Attorney General?
25 A. Again, I was going to point that out.
153
1 No, that was one of my biggest concerns in this
2 contract that it apparently did not receive the
3 scrutiny of the General Attorney's office at least
4 that I know of.
5 Q. And what did you learn about then the --
6 well, strike that. You did later learn that this
7 contract, these contracts with Columbus Educational
8 Services were modified down as time went on, were
9 they not?
10 A. Yes.
11 Q. But you do know the details of that
12 contract with Columbus, do you not?
13 A. I sure do.
14 Q. Tell us what the details of that contract
15 or those contracts with Columbus were?
16 A. If I could lay some groundwork --
17 Q. Sure.
18 A. -- before I do my presentation and walk
19 you through that. If you look at Exhibit 2 and again
20 the best way to become familiar with this is to
21 actually look at the document.
22 Q. All right. Thank you.
23 A. And if everybody is following. The
24 amounts that you talked about earlier $100 million
25 this contract when I first received it just startled
154
1 me, you know, because of the size of the obligation
2 of dollars that went into it.
3 I had never seen anything as big as this
4 in my entire career, but this was -- remember now, I
5 was the Felix monitor new on that job, and I was
6 awarded or assigned this contract to monitor. This
7 was one of my first assignments. And I did not have
8 advanced preparation for it, but as soon as I could
9 look at it, you know, at the contract I had many,
10 many questions to ask especially the legitimacy of
11 the contract being that so much money is being
12 awarded over a three-year period without a specific
13 appropriation, and you can see it on the first page.
14 And I know it's been modified, and I'll address that
15 in a second but just looking at the surface of this
16 contract fiscal year '01 it says $36,500,000, and
17 that was supposed to be -- I'm sorry 2000/2001 at
18 that time.
19 Then the second fiscal year $41 million.
20 It went up by a few million and then the third fiscal
21 year $42 million. And if you add all that up, it
22 does come, you know, to what you say over
23 $100 million.
24 That's a huge, huge expenditure and it
25 caught my attention right away. I got -- because I
155
1 was assigned the duty to monitor and implement this
2 contract, I got scared. You know, it's just huge.
3 And I had to make sure that this was a legitimate
4 contract. I just couldn't believe it when I first
5 saw it.
6 The modifications come several pages
7 down, and it has No. 3 compensation. The $36 million
8 on the first year was modified down to $16 million,
9 and I understand why. There was some mistake in
10 which Columbus upon coming aboard would slowly fill
11 the positions. They would not be able to fill all
12 the jobs as of September 1 of the school year.
13 So if the projection was that they would
14 hire teachers as the school year progressed,
15 therefore they wouldn't have as an expensive, if you
16 hire a teacher for half a year than a full year. And
17 I think they corrected -- whoever prepared this
18 contract corrected that sum.
19 Further I found out later that, in fact,
20 the first year of the contract -- and I, you know,
21 searching my memory at this point -- that maybe 33
22 teachers total was hired, and it was projected out,
23 you know, that hundreds and hundreds would be
24 necessary. But this was as the contract was
25 implemented, they found that Columbus had difficulty
156
1 hiring the numbers that they were originally
2 projected to hire.
3 I took a temperature check in November,
4 and they had seven teachers on board. And then the
5 final report on the final for the year 200/2001 I
6 think there was 33. Far less than what was projected
7 and assigned to Columbus to produce.
8 Meanwhile, I think some negotiations
9 occurred with HSTA because this one directly affected
10 the contract. Columbus is used in this case as I
11 call it a lease agency. We're renting or leasing the
12 teachers. They're employees of Columbus and they
13 work in our schools on loan or on lease. They're not
14 DOE employees; therefore, they're not HSTA members.
15 This is a different way of looking --
16 imagine when I first heard about it, we were looking
17 for headhunter contracts. Actually, this is an
18 employment agency. You know, as it turned out the
19 contract itself makes an employment agency out of
20 Columbus.
21 Now, I'm going to say just a few more
22 statements about it before I go into the details. Up
23 front I'm going to tell you that this is a very
24 lucrative contract award. There was no bid, there
25 was no price negotiations, and there was a very short
157
1 time between the time when it became a requirement
2 that we enter into a contract with Columbus and when
3 it was finally signed.
4 And I think that was one of the problems
5 in which where the department was rushed into this
6 contract and we were forced to sign the contract
7 without fully looking at the implications, and I
8 say -- I use the word we did it in haste. And it's
9 not -- it's just not proper I think for a state
10 official to enter into a contract like this without
11 looking at it closely.
12 There's $100 million that's been
13 obligated by the state. And if you read the
14 contract, I don't have the full contract. I'm sorry.
15 I didn't do that. But if you read the contract
16 carefully, there was a provision that there was a
17 chance of extending the contract another six years.
18 That's a whole lot of dollars that we
19 committed. I call it the black hole, financial black
20 hole in which we're obligating money that the
21 legislature has not appropriated yet.
22 We rushed into this without going through
23 a careful examination of contractors, and where I
24 thought -- and again, I'm not a lawyer, but we made a
25 contract obligation for so much money. That was
158
1 highly irregular and it could only have been done
2 with the special authority.
3 Again, that was highly questionable
4 whether that special authority existed in this
5 situation because it was not necessary to obligate
6 ourselves for three years in this way. It was not
7 necessary, in my opinion at that time, to enter into
8 a contract like this at all. However, that was the
9 plan that was agreed to and we did.
10 Like you said, the contract was not
11 approved by the Attorney General's Office. Again, if
12 you look at it on that page, page 4 it's blank. That
13 was of great concern to me looking at the terms of
14 the contract and obligating so much money that we did
15 not get our Attorney General to look at it.
16 They may have done it informally, but at
17 least on this sheet here there is no signature, and
18 I, you know, I once again I'm responsible for this
19 contract because I was assigned the responsibilities
20 to implement it.
21 Somebody else negotiated the contract,
22 somebody else determined the terms, it was handed to
23 me and said go ahead and implement it. You know, I
24 was just afraid of taking this contract without
25 asking questions about its legitimacy.
159
1 Q. Well, Mr. Yoshii, this is a standard form
2 it appears contract that requires a Deputy Attorney
3 General to approve the contract at least as to form.
4 That's a standard requirement, is it not?
5 A. The form was designed that way. I
6 learned subsequently that the Attorney General has
7 instructions to the DOE that we're allowed to go and
8 enter into contracts without formally and as long as
9 we stay within guidelines.
10 Q. Certainly, but a $100 million contract
11 you would expect would be something that would need
12 to be approved as to form by a Deputy Attorney
13 General, wouldn't you?
14 A. I believe so.
15 Q. And if they had followed the proper -- I
16 should say the state procurement rules, they would
17 have had to have this contract reviewed by Deputy
18 Attorney General and signed off on at least as to
19 form?
20 A. Yes.
21 Q. All right. Go on, sir.
22 A. Well, this is the danger of providing
23 these kinds of superpowers or authority to ignore
24 contract rules, procurement rules and then even
25 contract standard procedure because it could end up
160
1 in a situation like that when we can obligate
2 ourselves to, you know, just millions of dollars to
3 be over several years.
4 Q. Well, let me ask you this, Mr. Yoshii.
5 In and of itself, the extension of superpowers to
6 someone in a very high position such as a
7 superintendent or director in a state agency in and
8 of itself may not necessarily be bad, right?
9 A. I think it would in this case they
10 thought it was necessary and that it was stipulated
11 by the parties that, in fact, the superintendent need
12 that such superpowers when it was appropriate and
13 when it was necessary.
14 Q. I guess that's what I was asking you. If
15 these powers are properly exercised and are used only
16 when needed as you say, then the superpowers in and
17 of themselves may not necessarily be something that's
18 bad, right?
19 A. Yes, I believe so.
20 Q. Continue.
21 A. It's not in front of you. I'm sorry I
22 didn't give you the proper copy of the contract
23 itself, but there are details in here that you have
24 to understand to understand the contract, and I'm
25 going to walk you through them.
161
1 Q. Details of which you are personally
2 aware?
3 A. Yes, and I'm reading the contract and
4 this is what I see in front of me, and this is what I
5 saw on that at the time that it was assigned to me
6 for implementation.
7 Q. Sure. Go ahead.
8 A. The contract works like this. I said
9 that, you know, when you -- let's make a metaphor.
10 When you're looking for a car or an automobile for
11 your personal use, you have the option to buy, you
12 have the option to lease and you can go to a rental
13 agency and lease -- rent a car for a day or a week at
14 a time.
15 Now, these are what you need to look at
16 as a metaphor because we can apply the same thing for
17 employees which were like buying a car. They're our
18 employees. It could be like a lease in this case
19 which is Columbus contract, we're leasing employees
20 from another employer. And I guess you can go day by
21 day or by the week and also provide services in that
22 way.
23 To understand this contract, this is a
24 lease. They're not our employees. We hired a
25 company to hire people so that they can provide
162
1 services within our schools. Now, that has to be
2 firm in your mind as you think about this.
3 Now, the financial implications remember
4 I said $40 million or $36 million the first year.
5 That was modified by circumstances. But assuming
6 that $40 million was the figure for the first year.
7 There are three tracks on this contract, and you have
8 to follow closely because I did not provide the
9 figures for you.
10 The first track is that we paid -- we
11 paid money to Columbus for them to set up a business.
12 They were required by the contract to set up a team
13 of recruiters on the mainland, an office and people,
14 you know, staffing who do creating on the mainland
15 set up an office near the airport of some kind that's
16 close to, you know, the major lines and the team of
17 recruiters would go out.
18 They would have to hire the team. They
19 were not prepared prior to contract signing. We
20 subsidized the fact that they had to go out and form
21 a team and form employees and build that capacity.
22 Now, the responsibility for that team is
23 to go out and recruit people on the mainland,
24 interview, screen, and eventually convince to come to
25 Hawaii and be hired by Columbus. Now, look at
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1 that -- you don't have it in front of you, but I have
2 it. A part of that contract -- I mean, a part of
3 this first phase of it which was the recruitment
4 phase, the setting up a recruitment team we have
5 $4.5 million, you know, allotted for that purpose and
6 $2.5 million was something on travel money. It was
7 for travel money. And I'm sorry you're not following
8 it. You probably would have to listen to what I'm
9 saying.
10 Q. We have those contracts. That's fine.
11 A. Okay. Now the $2.5 million is something
12 like the University of Hawaii uses to recruit
13 basketball players. Remember, they come and visit
14 the campus and we pay for the trip and we wine and
15 dine them somehow and somehow we have to convince
16 them, you know, a star basketball player to stay and
17 accept a scholarship with us and play for us.
18 There is no guarantee at the time that
19 you offer the trip and a visitation that they will
20 stay by the contract. They may have different
21 purposes. They might just want to visit, but this is
22 the same principle.
23 Now, we're saying we're going to offer
24 these recruits on the mainland the chance to come to
25 Hawaii on a free trip, we will pay expenses and so
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1 forth, they will come and visit the state. And at
2 that point we're probably going to do things to them
3 to try to recruit them. I'm talking about Columbus,
4 wine and dine if that's necessary, put them up in
5 hotels but get them acclimated to Hawaii and visit
6 schools and so forth so that they can make up their
7 mind whether contracting or working for the
8 department would be a good thing.
9 Now, with that money, that's a part of
10 the recruitment function that's $4.5 million. Now we
11 move to the second phase of this contract. The
12 contract requires that we set up a team in Hawaii,
13 not on the mainland, but in Hawaii a separate team
14 under Columbus to receive these people who are flying
15 to Hawaii and to again attempt to recruit them.
16 These people in Hawaii would make
17 themselves familiar with schools and conditions and
18 so forth. And in addition to trying to recruit them,
19 hopefully while they are, you know, the recruits are
20 here visiting, that they would be able to convince
21 them to sign a contract and work. They may not.
22 The second purpose of that team is to do
23 orientation, training and anything necessary to
24 prepare if they hire someone, anything necessary to
25 prepare them to start working at X-school or Y-school
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1 and so forth. And this is special education teachers
2 we're dealing with.
3 There's a lot of things that might be
4 different from the mainland and once they come here
5 on their job, would have to require them to learn and
6 become acclimated with, say, IEP procedures that may
7 not be similar.
8 Q. Excuse me. The reference to a Hawaii
9 Oahu anyway telephone book will tell us that there is
10 an office for an organization called Columbus
11 Educational Services. Is that the one you're talking
12 about that's up here?
13 A. Most probably, yes.
14 Q. And all the funds for that office are
15 being paid for by the Department of Education?
16 A. By DOE as part of the contract. We're
17 subsidizing again them setting up a new business, a
18 lucrative business. We paid for their recruiters, we
19 paid for the retention or people in Hawaii, we pay
20 for the office here. We allowed them to go out and
21 find expertise, and none of that existed prior to us
22 entering into the contract. We're subsidizing all of
23 that for them to come in and start a business.
24 Q. Do you have any knowledge, Mr. Yoshii, as
25 to whether or not Columbus prior to this contract
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1 we're talking about ever recruited special education
2 teachers, if you know?
3 A. I'm going to give a qualified answer on
4 that. They had situations where they hired teachers
5 for the mentally retarded and it must have been at
6 the small scale, but Columbus prior to this had never
7 taken a contract of this size obviously.
8 They were mostly in institutions, and
9 they tried the same approach in those institutions on
10 a smaller scale. For instance, they were in
11 hospitals looking for hospital workers, they were in
12 prisons looking for prison workers. These are
13 difficult areas also as you know as well as teaching.
14 This is the first venture into teaching.
15 So it's an expansion of what business or
16 same arrangement they probably knew but moving now
17 into the teaching area where there is an insatiable
18 need. You know, I've done and been in charge of
19 recruiting for many years, and it's very difficult.
20 We have a national shortage, et cetera.
21 So Hawaii is the first place they're
22 doing it. Once they become good at this and can
23 properly service a contract, then there are consent
24 decrees elsewhere that they could probably get into
25 through their connections and they would be
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1 established and it's a lucrative, lucrative business.
2 This is only the first step, and I'm conjecturing
3 here. I don't know for sure, but I can see where
4 it's going.
5 Q. All right. Continue on, sir.
6 A. The third phase of the Columbus contract
7 is the phase where we rent or we lease the teacher
8 from Columbus, and the teacher is serving in our
9 schools. Probably indistinguishable in terms of
10 duties et cetera, but they're really employees of
11 Columbus. And what it says in the contract is that
12 we pay $112,000 per year to have that teacher service
13 us as employees of Columbus.
14 Columbus pays them their salary, Columbus
15 pays them their benefits, any kind of incentives that
16 they have. I'm talking about automobiles subsidies,
17 housing subsidies, perhaps interisland trips and they
18 have the money to do it within $112,000. If they can
19 do it for less, that's profit for the company. I
20 hope I've explained how that works, $112,000.
21 Now, I'll explain to you what a new
22 recruit from the DOE working for HSTA or for the DOE
23 as an employee gets. It's something just under at
24 that time just under $30,000 salary. Their benefits
25 of 23 percent might take you to $45,000 total
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1 package. That's it. There is a $112,000 that the
2 Columbus, you know, has to play with. The State has
3 to play with maybe $45,000 in salaries and benefits.
4 We are competing -- we created a monster,
5 a black hole where we're competing against these --
6 the Columbus Agency and we're competing on the
7 mainland for -- imagine if we went and tried to
8 recruit a teacher by ourselves now on the mainland,
9 and we don't tell them about Columbus, and when they
10 get here and they're working side by side and a
11 Columbus person comes in and drives up with a car and
12 has housing subsidy, our teacher that we recruited
13 doesn't get a housing subsidy, doesn't get an
14 automobile, doesn't get travel money.
15 When they're working side by side,
16 they're going to know right off the bat, you know,
17 who has an advantage, and I would feel very badly if
18 I was the recruiter that recruited the teacher from
19 the DOE because when they get down and actually our
20 credibility will go downhill.
21 I cannot imagine that we will be able to
22 recruit and compete against this agency that we
23 created ourselves and allotted the contract for it.
24 Q. Mr. Yoshii, why couldn't the department
25 itself have done what it appears Columbus is doing
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1 for a rather handsome profit?
2 A. I've been in recruiting, teacher
3 recruiting for, you know, x-number of years. We've
4 been going to the mainland now for maybe 12 years.
5 It's always been very difficult when we come to the
6 legislature and say hey, you know, help us, give us
7 more money, you know, to send more recruiters to the
8 mainland or at least increase the subsidy, the travel
9 subsidy so if they come from New York, at least we
10 pay for their plane fare and, you know, something so
11 they don't have to -- as college graduates, they
12 don't have to pay for themselves. And it makes it
13 very difficult for us to recruit based on the
14 handicap that we don't have this kind of fund
15 available to us, you know, to do our job.
16 Now, it might be our fault for not making
17 it clear to the legislature that we needed that kind
18 of funds, but it also reflected our own thinking in
19 the DOE which is that we need to be prudent, we need
20 to be very careful about spending funds and we would
21 not come to the legislature with that kind of request
22 unless we thought it was justified.
23 Under the Felix consent decree it went
24 like that. You know, it didn't have to come to the
25 legislature. They got funds for $100 million. Now,
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1 there is a clause in that contract that says it's
2 subject to funds, but once you're allotted like this,
3 I don't think you would refuse.
4 If we had the funds and we could draw
5 plans on how we would better use it and how we would
6 structure our recruiting program and retention
7 program, I'm sure we would have been doing a better
8 job than Columbus with less expense.
9 Q. You wouldn't need $100 million is what
10 you're saying?
11 A. No.
12 Q. Now, explain this to me, sir. What
13 you're saying, then, is that you could two teachers
14 working side by side in the DOE. One of them would
15 be a regular DOE employee; the other would be a
16 Columbus employee paid a salary, benefits and
17 whatever else it might be in terms of allowances by
18 Columbus. Is that a correct statement?
19 A. That's correct.
20 Q. And the DOE person would not -- well, the
21 DOE person would be under a collective bargaining
22 agreement, would they not?
23 A. Right.
24 Q. Now, did the union HSTA know about this,
25 and I'm going to ask you how they allowed that to
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1 happen?
2 A. I'm allowed to answer that question.
3 Q. Sure.
4 A. You remember I started off -- and maybe I
5 didn't -- one of the first things that was done in my
6 job as the personnel director that I was the official
7 representative of the DOE doing bargaining with HSTA.
8 Q. Yes.
9 A. One of the things that happened I think
10 right after the Felix response team and the
11 consent -- I'm sorry the contempt of court ruling was
12 done. I was removed from that role. I was yanked
13 out of that role, and the superintendent --
14 Superintendent LaMahieu took over bargaining for
15 Felix matters, and it had to do with, I guess, my
16 inability to recruit or whatever.
17 I was never given a clear answer to why
18 that happened that I was not able to continue in that
19 negotiation's role. I don't know specifically what
20 happened in the discussions with Dr. LaMahieu and the
21 HSTA.
22 I knew that it had to be negotiated, but
23 maybe the superpowers allowed him to bypass that
24 negotiations process because that was another, you
25 know, proviso that he could regardless of collective
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1 bargaining contracts impose certain restrictions or
2 curb that right from the teachers' union.
3 I think what happened, though, that they
4 reached some kind of accommodation or compromise
5 where they -- HSTA agreed to limit the areas where
6 they could recruit teachers for Columbus. I'm
7 talking about to areas that are far removed and
8 remote in the neighbor islands outside on Molokai and
9 away from the population centers where -- that's one
10 of the reasons why Columbus was not able to recruit
11 as many teachers as originally thought.
12 After a certain point in time when most
13 teachers got -- became aware of this Columbus
14 contract, it created to me a degree of unhappiness
15 that was unheard of that when they found out
16 eventually that some teachers were getting $100,000
17 and that's not true, you know. That $100,000 is what
18 is available to hire them and, you know, it's
19 probably not getting as much. But it created
20 dissension within the work force.
21 We're talking 12,000 teachers within our
22 work force. We're talking 300-something potential
23 under Columbus. And if those people are given the
24 privilege of being paid and hired under Columbus as
25 compared to our teachers, we could almost guarantee
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1 that it would create dissension and a problem. And
2 what is the solution in order to -- let's think about
3 next year and the year after. I'm talking about
4 black holes.
5 In order to comply with the consent
6 decree, we hire them and we fill the position and say
7 it worked the first year. We have to spend the same
8 amount to keep them there next year or more because
9 those employees may probably ask for a pay raise next
10 time because they think they could get more.
11 Then the teachers' union again looking at
12 their situation would then be blamed for allowing
13 this to happen, and they would have to be under
14 pressure to negotiate, you know, big raises and so
15 forth.
16 My opinion? I don't know. I was not
17 involved after I was removed. What happened with the
18 teachers' strike was caused again at least partially
19 by this move by raising expectations for salaries way
20 up there beyond what the state could afford.
21 Q. Yet, though, in those negotiations, the
22 Columbus contract didn't become public though, did
23 it?
24 A. No.
25 Q. Now, do you know if the superintendent of
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1 education informed the governor about this if, in
2 fact, it occurred?
3 A. I'm sorry. I don't know of that what
4 happened after I was removed from negotiations.
5 Q. Now, do you know what happens? Does a
6 contract we don't have it before us, but if you
7 recall having been responsible for monitoring and
8 implementing it, do you know what happens to a
9 Columbus type person if, in fact, a Columbus type
10 person got brought here, got wined and dined, decided
11 to come, was given travel allowances perhaps even
12 living allowances or even auto allowances after a
13 month or two decided Hawaii wasn't the place for that
14 person and left, what would happen?
15 A. Since I'm not in charge anymore about --
16 of the Columbus contract, I can only project from
17 what I read would happen. There was no provision in
18 here that guaranteed or obligated a teacher to work
19 for their full length of contract they hired for
20 under Columbus.
21 The DOE could not hold Columbus
22 responsible for that. All it means is that the
23 teacher left and we have another hole to fill, and
24 the DOE would have to proceed and hope that Columbus
25 would be able to fill that position with another
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1 replacement teacher.
2 Q. In other words, having spent all of those
3 funds to get that substitute teacher back?
4 A. Right.
5 Q. To that same position?
6 A. Yes.
7 Q. You say that there was a huge morale
8 problem among the existing DOE teachers. Is that
9 something you know for a fact, sir?
10 A. I've received several telephone calls I
11 would say about December.
12 Q. Last year?
13 A. Right, of 2000. When it became publicly
14 known that, in fact, Columbus was offering $100,000
15 plus to recruit teachers, yes. I received calls.
16 I'm sure a lot of other people received telephone
17 calls.
18 Q. And do you know if these people made
19 those concerns where I should say whether those
20 people had those concerns expressed to the
21 administration, high administration at the Department
22 of Education?
23 A. I don't know for sure. They must have
24 happened.
25 Q. Do you know what the high administration
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1 of the Department of Education did about it?
2 A. No.
3 Q. Thank you. Did you raise these problems
4 yourself, though, at the department?
5 A. I attempted to do so.
6 Q. With whom did you raise these problems?
7 A. My supervisor in my new position was
8 Ms. Hamamoto, deputy superintendent. I did not raise
9 the specific problems, but when I got the contract, I
10 asked for clarification. I asked that I be allowed
11 to talk to the Attorney General that actually
12 approved this contract.
13 I asked that I be allowed to talk to the
14 funding people and get the funding certificate from
15 the comptroller himself because I knew there was not
16 funds and to be a legitimate -- a contract that's
17 legitimate we need to address the funding
18 availability.
19 Now, I did not want to start taking
20 responsibility for this contract implementation
21 because if those things were not clarified, I would
22 be leading people on representing the Department of
23 Education and then not being able to deliver it at
24 some point.
25 Q. And what were you told?
177
1 A. I was told to refrain from implementing
2 or planning for implementation of the Columbus
3 contract.
4 Q. Were you told why?
5 A. No.
6 Q. And by whom were you told this?
7 A. I received an E-mail from Ms. Hamamoto.
8 Q. Do you still have that E-mail, sir?
9 A. Yes.
10 Q. Will you preserve it? We may want a copy
11 of it.
12 A. Yes.
13 Q. Now, you mentioned you wanted to talk to
14 the Attorney General that approved it. What you
15 meant was if, in fact, an Attorney General approved
16 the contract verbally, orally instead of in writing
17 because we have no signature on the agreement, do we?
18 A. It was very evident to me that the
19 Attorney General did not approve this contract, but I
20 asked the question to be sure maybe there was some
21 informal process where it was checked out.
22 Q. And you were not given the satisfactory
23 answer to that question, were you?
24 A. I, in fact, was removed from my role of
25 monitoring this contract.
178
1 Q. Were you removed from your role of
2 monitoring this contract immediately after those
3 questions were asked?
4 A. I was asked to refrain from implementing
5 further the day after or the same day that I asked
6 those questions I was removed from that role within a
7 week.
8 Q. How soon after you raised those questions
9 to Ms. Hamamoto did you receive that E-mail from her?
10 A. I think it was that night. I sent it in
11 the afternoon, right.
12 Q. Thank you. Now, what knowledge do you
13 have, sir, as to whether or not the court monitor
14 Ivor Groves had anything to do with this Columbus
15 contract?
16 A. I will share whatever knowledge I have.
17 Q. Please.
18 A. I don't know specifically. I believe
19 that Ms. Paula Yoshioka actually prepared the
20 contract for Dr. LaMahieu's signature. When it came
21 out that she was identified as the person who
22 prepared the contract, it became in the newspapers I
23 think the answer came back to Dr. Groves made me do
24 it.
25 Q. Who is Paula Yoshioka, sir?
179
1 A. Paula Yoshioka at that time came to the
2 Department of Education as assistant superintendent
3 for the division of administrative services. The
4 department was reorganized in between my removal, and
5 it combined the personnel function with the business
6 function and other functions and made a huge big
7 administrative services division.
8 Paula Yoshioka came in at that time as my
9 supervisor. I was just one branch in the personnel
10 office in this huge organization.
11 Q. I see. Sir, do you know if there is any
12 connection between the Columbus Educational Services
13 people and Dr. Judith Schrag, formerly a member of
14 the Felix technical assistance panel?
15 A. Again, I'm going to answer from what I
16 know. I don't know for sure whether there is a
17 connection. At some point we tried to, knowing that
18 Dr. Schrag came to talk to Paula Yoshioka initially
19 and introduced the discussion with Columbus -- this
20 is in July of 2000 prior to the signing -- I asked my
21 staff member to -- one of my staff members at that
22 time to go and try to research the connection between
23 Columbus and Dr. Judy Schrag.
24 I -- again, I must caution that I did not
25 find any kind of smoking gun so to speak, but what I
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1 did find was that there were two connections on the
2 board on Columbus. One was a Stevan Kukic.
3 Q. How do you spell that, sir?
4 A. S-T-E-V-A-N, I think, K-U-K-I-C.
5 Dr. Stevan Kukic who had coauthored five or six
6 publications with Dr. Judy Schrag. He was at one
7 time on that board during the time that Columbus was
8 referred to the Department of Education.
9 Another contact on that Board of
10 Directors for Columbus was Dr. Martha -- I think it's
11 Martha Fields, Dr. Martha Fields. If I remember
12 correctly and I vaguely don't, my memory fails me
13 here. Dr. Fields did come to Hawaii as a consultant
14 of some sort at some point in time along with
15 Dr. Schrag.
16 The connection with Dr. Schrag and
17 Dr. Fields is this organization, and I'm not going to
18 know the name of it but basically it was the
19 organization of state directors of special education
20 nationwide. Dr. Fields was at one point the
21 administrator of that organization.
22 She later moved on to Columbus to the
23 Columbus board to help in that new capacity after she
24 was relieved of her job. I'm not saying relieved.
25 I'm sorry. That's the wrong word. After she was --
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1 went away. She was --
2 Q. You're not suggesting it was involuntary.
3 Is what you're saying?
4 A. No, no, no.
5 Q. All right.
6 A. That's the extent of my knowledge. I
7 don't have any kind of proof that there was a
8 connection.
9 Q. All right. Do you know if this movement,
10 though, to Columbus by Dr. Fields was to the Board of
11 Directors of Columbus or to the actual staff?
12 A. The Board of Directors.
13 Q. I see. All right, now, one last area
14 sir, you have been involved in the course of your
15 30-plus years with the department with audits done by
16 the state auditor's office, have you not?
17 A. Yes.
18 Q. Now, based on your own observations,
19 then, of what you've seen and what you've
20 experienced, with regard to all of these matters
21 you've testified to today, sir, do you believe it
22 appropriate for this committee and/or the auditor's
23 office to further investigate the use of public funds
24 by the Department of Education or the use of such
25 funds by the superintendent based upon the
182
1 superpowers given to him by the federal court?
2 A. Well, I came to the understanding that I
3 need to talk about the wastage of money, the wastage
4 of money. And by talking about the Columbus
5 contract, you see that there are millions and
6 millions of dollars that's obligated to this, and
7 it's not done yet, you know, it's still evolving.
8 We're talking about $100 million plus
9 more in future years. That type of activity given
10 without bid, without competition and specifically
11 targeting one agency Columbus, I don't know for sure
12 if there are others that might potentially have bids
13 for a contract if it was put out for bid, but
14 certainly having one specific contract to come and be
15 awarded a contract so lucrative with so much
16 potential, I believe that there needs to be some -- I
17 wouldn't say investigation but at least some review
18 of that situation.
19 SPECIAL COUNSEL KAWASHIMA: Thank you,
20 sir. I have no further questions.
21 CO-CHAIR REPRESENTATIVE SAIKI: Members,
22 we'd like to take a five-minute recess. Recess.
23 (Recess from 2:13 p.m. to 2:23 p.m.)
24 CO-CHAIR REPRESENTATIVE SAIKI: Members,
25 we'd like to reconvene our investigative hearing and
183
1 we'll begin now with Members' questioning. We're
2 going to, I think, go in reverse order again; so
3 we'll start with Senator Slom followed by
4 Representative Marumoto.
5 SENATOR SLOM: Thank you, Co-Chair.
6 EXAMINATION
7 BY SENATOR SLOM:
8 Q. Good afternoon, Mr. Yoshii.
9 A. Good afternoon.
10 Q. It's been a long day for you. Thank you.
11 A couple of things. You said that when you were
12 removed from your position as negotiator you were not
13 given any explanation; is that correct?
14 A. I was given an explanation. I was
15 talking about a good explanation.
16 Q. A good explanation. What do you think
17 the real reason was that you were removed from that
18 position?
19 MR. IKEI: Can I respectfully -- I
20 understand your question but we have a pending
21 lawsuit.
22 SENATOR SLOM: Sure. Certainly.
23 MR. IKEI: We are not here to litigate
24 that lawsuit.
25 SENATOR SLOM: I understand.
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1 MR. IKEI: Thank you.
2 Q. (By Senator Slom) Looking at the
3 Columbus contract specifically, you've mentioned
4 several times about the financial black hole, and
5 certainly I think it's an incredible figure. It
6 started out as over $100 million. Is that contract
7 still in effect?
8 A. Yes.
9 Q. So there still is an obligation for the
10 state?
11 A. Yes.
12 Q. You testified that if one of the, as you
13 were referring to the lease employees or
14 rent-a-teacher, if they did not fulfill their
15 contractual obligations, then the state was still
16 obligated or Columbus was obligated to try to find
17 someone else.
18 Was there anything in the contract,
19 however, that said that there would be penalties or
20 non-payment if, in fact, Columbus did not perform
21 what it was supposed to perform?
22 A. I did not see any penalty specified in
23 the contract.
24 Q. Would you not think that any contract of
25 this type should contain such a provision. The whole
185
1 idea was to try to attract people. If you can't
2 attract people, then that defeats the purpose of the
3 contract?
4 A. I did testify that the contract was done
5 in haste. There was many oversights in it that, you
6 know, in hindsight looking at it I'm sure I agree
7 with you that that should have been part of the
8 contract, but it was not thought of at the time.
9 Q. I think one of the most troubling things
10 that you brought before us today is the lack of
11 attention, responsibility or just job performance of
12 the Attorney General's Office.
13 Did you at any time specifically talk to
14 the Attorney General directly about these matters?
15 A. No.
16 Q. Or any of the Deputy Attorney Generals?
17 A. I did not talk about the Columbus
18 contract.
19 Q. Any other contract or anything else that
20 you were involved with?
21 A. Again, I did not have much contact with
22 the Attorney General's Office. I remember one
23 instance that Mr. Russell Suzuki -- I use the word
24 summoned me to his office at a meeting, and we did
25 talk about the lack of special education teachers at
186
1 that time. He remembers the meeting differently than
2 I do. I remember the meeting. I did talk to him.
3 I remember this very specifically that it
4 would be very, very difficult for the Department of
5 Education to fill all the vacancies all at once for
6 special education teachers.
7 The department had adopted a plan of
8 which I was very involved in producing and preparing,
9 and the court adopted that plan which included a
10 multiyear effort or plan to fill all those vacancies.
11 The consent decree when it came down to
12 its last year, year 2000, June, 2000 and it was up
13 for review and when the contempt ruling was made, it
14 was made on the basis that somehow I as the personnel
15 officer did not fulfill my duties to fill all the
16 positions with special education teachers despite the
17 existence of a plan approved by the court system that
18 said that I was not required to fill all the
19 vacancies.
20 I had a plan that would go over several
21 years. It was a reasonable plan, a reasonable
22 expectation. This conversation with Mr. Russell
23 Suzuki I remember it as such that I did state -- I
24 did tell him very specifically I would not be able to
25 because of the huge shortage of special education
187
1 teachers and the growth demand in the number of
2 students that are being serviced under special
3 education. It was a moving target.
4 I believed at that time that I made a
5 projection that within three or four years from 1998
6 when this first started we would add 500 new special
7 education teacher positions to the department's
8 teacher work force. Now, this was projected. We
9 just weren't able to meet that kind of demand.
10 I tried my best, I had a plan worked out,
11 and I thought it was arranged such that the court
12 accepted the fact that we would not be able to go to
13 the mainland and attract lots of teachers to come to
14 work for Hawaii, the Hawaii state system. And the
15 plan that I developed focused more on internal,
16 in-state recruitment or development of teachers
17 through the University of Hawaii, through our own
18 project RISE within the Department of Education and
19 through exploring options with other teacher training
20 institutions to somehow bring up the supply of
21 teachers produced per year to something close to 400
22 a year.
23 That was a huge task, and you couldn't
24 just -- it takes two years to produce a teacher at
25 the minimum. And even if you started it right now,
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1 you would not finish within a year that I was given.
2 The consent decree -- I mean, the contempt of court
3 assumed that I was responsible now to fill all the
4 vacancies within that time period.
5 I discussed this with Mr. Suzuki, and I
6 think he still feels -- and he remembers the meeting
7 differently -- he still feels that I didn't do my
8 job. That's why I was blamed for not meeting or
9 recruiting enough teachers.
10 Q. So basically the discussion that you had
11 with Mr. Suzuki was more of a criticism of your
12 performance rather than the lack of oversight by
13 Mr. Suzuki and the Attorney General's Office?
14 A. That's an interesting question, and I'm
15 going to answer it in this way. I felt that
16 Mr. Suzuki was not on top of the situation and was
17 not in command of the enormity of the task. There
18 was a sign in complying with this huge requirement to
19 fill all of our special education teacher vacancies.
20 I tried at that meeting to inform him and
21 make him understand. He chose -- at this time he
22 chose to say that I did not say that, but I remember
23 very specifically at that meeting that discussion did
24 come up, and I took pains to make sure and clarify
25 for him the situation so that he would realize what
189
1 we were faced with.
2 Mr. Suzuki again at the contempt hearing
3 did not represent this problem properly, and Judge
4 Ezra ruled the DOE was in contempt at least partially
5 because of our lack of ability to hire special
6 education teachers.
7 Q. You obviously throughout the years had a
8 number of ideas and suggestions and alternatives as
9 to what to do. Did you ever share those with the
10 superintendent or the deputy superintendent?
11 A. I did not specifically talk to both the
12 deputy and the superintendent about the plan, and
13 this goes back to 1998 when it was developed. I
14 think Ms. Hamamoto, Pat Hamamoto came on board in
15 February of '99 after the plan was developed; so we
16 did not have a good discussion that you're referring
17 to that did we have a discussion.
18 I did discuss with the superintendent but
19 not specifically the exact plan. Although he signed
20 the plan, he approved it at that time knowing that
21 this was what we were planning to do to bring us into
22 compliance, a multiyear plan home grown. At the
23 present time he claims that this was not adequate.
24 Q. From an earlier witness today, we heard
25 discussions about problems with communication and so
190
1 forth. Was there any attempt to encourage you or
2 anyone else to share your ideas or to communicate
3 alternatives other than the Columbus contract?
4 MR. IKEI: I didn't understand. Can we
5 have it restated?
6 SENATOR SLOM: Yes, certainly.
7 Q. (By Senator Slom) Was there any attempt
8 to take advantage of the experience of individuals
9 such as yourself to seek out other possible
10 alternatives rather than this whole source Columbus
11 contract, were you asked for your opinions or asked
12 for your ideas?
13 A. I'm going to take some time to answer
14 your question. That's very relevant. During the
15 time when we were preparing to address the end of the
16 consent at least the former ending of the consent
17 decree which was five years after it started -- that
18 was June, 2000 -- I was not consulted, I was not
19 asked to contribute to that hearing, no one talked
20 about the plan that I was working on.
21 I believe that's why acting without
22 information that we were ruled in contempt because
23 the proper information did not get to the court.
24 Q. One final question, Mr. Yoshii, you were
25 asked earlier whether or not you knew of any
191
1 connection between the Columbus contract and other
2 individuals or entities.
3 Columbus is a Pennsylvania corporation,
4 but it's incorporated in the state of Delaware.
5 Where was the superintendent from before he came to
6 the state of Hawaii?
7 A. Everybody knows that he came from the
8 state of Delaware.
9 SENATOR SLOM: Thank you, Mr. Yoshii.
10 Thank you, Co-Chair.
11 CO-CHAIR REPRESENTATIVE SAIKI: Thank
12 you, Senator Slom. Representative Marumoto followed
13 by Senator Buen.
14 EXAMINATION
15 BY REPRESENTATIVE MARUMOTO:
16 Q. Mr. Yoshii, following up on Senator
17 Slom's question about whether the State is still
18 obligated to this contract of Columbus Educational
19 Services, you answered I think in the affirmative; is
20 that correct?
21 A. Yes, I did say yes.
22 Q. But you did say something about a
23 conversation with Deputy Superintendent Hamamoto
24 about not executing the contract or stopping it at
25 some point. Could you clarify that?
192
1 A. Yes. What I meant to say if it wasn't
2 clear that one of the responsibilities I was assigned
3 in my new role as Felix contract monitor was to
4 implement the Columbus contract. When I questioned
5 or after I asked questions about the contract,
6 apparently these were not welcomed. And I don't know
7 and I don't really know for sure why it was removed
8 and I still don't know. I was removed from that
9 duty. The contract continued, someone else took
10 responsibility for its implementation.
11 Q. I see. And so the first year we
12 appropriated $16 million and do you know how much of
13 that was spent on teachers and recruiting teachers?
14 A. I'm not certain. I'm going to -- I did
15 see a report that said very little of that was
16 actually spent. It was not $16 million obviously
17 because only 33 teachers were hired for the full year
18 and most of those teachers were hired for a partial
19 year. So there was no way that the whole contract
20 amount could have been spent.
21 Q. And the following two years would have
22 required a total of $84 million. Did the legislature
23 appropriate funds for that use for this contract?
24 A. No, not to my knowledge.
25 Q. Okay. Yet according to the terms of the
193
1 contract we probably do owe that amount of money,
2 right, you said it's a financial obligation, a black
3 hole?
4 A. Oh, I'm sorry. I must have mislead you.
5 The contract itself is a contingent contract, and if
6 no teachers are recruited, then you don't pay
7 anything.
8 Q. Okay.
9 A. Except the fixed expenses I described
10 before, the recruiting team on the mainland and the
11 travel money and so forth. That is paid regardless
12 of how many teachers they recruit.
13 Q. Okay. That makes me feel a lot better.
14 You're talking about the impropriety of a non-bid
15 contract, and actually doesn't the superintendent or
16 any department head have some latitude in giving out
17 non-bid contracts provided, you know, like there's no
18 other provider or there's some written reason?
19 A. There is a procedure to get to, as I
20 understand it. I'm not an expert in this area --
21 there is a procedure to get to a sole source contract
22 award. Yes, there are many steps by which you must
23 justify that there's no other contractor that's
24 qualified to provide this service or some other
25 reason, strong reason for it going out without bid.
194
1 Q. Probably in this case we probably could
2 have found another vendor who might be interested in
3 bidding on this, right, there probably were other
4 entities that could have recruited teachers?
5 A. This would be conjecture on my part, but
6 I would think that the likelihood of what you're
7 describing is high that we would have found
8 another -- given enough time to search, given enough
9 time to contact other people interested, we would
10 have found someone much more reasonable in price and
11 perhaps more qualified.
12 REPRESENTATIVE MARUMOTO: It's conjecture
13 on my part too. I think there would have been
14 somebody else. I would have done it for less. Thank
15 you. Thank you, Madam Chair.
16 CO-CHAIR REPRESENTATIVE SAIKI: Thank you
17 Representative Marumoto. Senator Buen followed by
18 Representative Leong.
19 SENATOR BUEN: Thank you, Co-Chair Saiki.
20 EXAMINATION
21 BY SENATOR BUEN:
22 Q. Mr. Yoshii, you talked about the third
23 phase in -- that is -- and you talked about $112,000
24 approximately that much per year and this would
25 include the salaries, the housing, maybe car
195
1 allowance, maybe automobile, travel.
2 Of that amount, about how much on the
3 average would the Columbus teacher receive as his
4 salary or her salary?
5 A. I had the contract implementation
6 responsibilities very briefly, but I had a chance to
7 talk to Dr. Rounder. I think he was the president of
8 that company. When they were here to visit with us,
9 their first visit, you know, since being awarded the
10 contract and they came with the intention of working
11 out implementation details.
12 At that time he mentioned that he did not
13 want the differential between existing teachers'
14 salaries and the Columbus teachers to be much --
15 very, very big. He was thinking about keeping it
16 reasonable within, say, something like $37,000,
17 $38,000 as a salary.
18 There are other -- the other incentives
19 are provided within obviously within the difference
20 between $37,000 and $112,000 that would be used to
21 attract the teacher and be used to recruit the
22 teacher.
23 Q. Okay. So are you saying that these
24 Columbus teachers have automobiles and as part of
25 this $112,000 they're given automobiles; is that
196
1 correct?
2 A. I don't know that for a fact. I
3 understand that it's possible to award an automobile
4 subsidy to help the teacher, say, in a remote area.
5 Q. That's included in the contract as part
6 of that language?
7 A. It's part of the -- no, it's not part of
8 the language. It's part of the strategy by which
9 they would recruit teachers within the $112,000 that
10 they have allotted for that purpose.
11 Q. I see. Okay. Going back you talked
12 about the second phase in setting up a team in a way
13 under Columbus to receive the potential recruits.
14 How much money was allotted for this phase?
15 A. I see here from my figure it's
16 $1.5 million.
17 Q. Was that money spent?
18 A. I'm sorry, ma'am. I don't know. I was
19 removed from monitoring of that contract.
20 Q. I see. Okay. According to the contract
21 with Columbus, were all these teachers hired by or --
22 let me rephrase this.
23 All these teachers hired by Columbus and
24 coming to Hawaii, were they all special education
25 teachers, were they qualified special education
197
1 teachers, would you know?
2 A. My understanding is that these teachers
3 have met certification requirements in the states
4 that they were hired from, and yes, I understand that
5 this is a requirement that we hire qualified special
6 education teachers. That's the whole point of the
7 contract.
8 Q. Now, when they come here to Hawaii, do
9 you know what the retention is -- what is the
10 retention, how long do they stay here, what is the
11 average retention of these teachers?
12 A. I'm going to answer your question by
13 comparing what I knew the retention rate was when we
14 used to do mainland recruitment outside of Columbus
15 now. Columbus is recently. This is going back
16 further.
17 We conducted a survey of special
18 education teachers of those we recruited from the
19 mainland. My recollection goes that the average stay
20 is one or two years off these recruits. You know
21 that we had a very big differential in cost of living
22 between the mainland and Hawaii.
23 My understanding is that teachers had to
24 pay rent and automobile cost and living expenses
25 which were -- they were not used to and their
198
1 salaries were not large enough to give them a good
2 enough cushion, you know, to live comfortably. So
3 that was one consideration, and I think that was a
4 big factor in the turnover of such teachers. They
5 tend to go back to the mainland within a short period
6 of time.
7 Q. So it was more for economic reasons?
8 A. I can't say more. There may be other
9 reasons such as the working conditions within the
10 state, within our schools and perhaps what we're used
11 to providing as special education teachers in some
12 other area. Coming to Hawaii might have found it a
13 little different and more difficult perhaps.
14 Q. So some of these reasons may be because
15 of cultural not being used to living in Hawaii
16 because of cultural differences. That could be
17 possible?
18 A. It's possible. I won't speculate on
19 that. I don't know for sure.
20 Q. Thank you. In the neighbor islands, do
21 you know if the vacancies have been filled by or have
22 these vacancies been filled and are they filled by
23 Columbus teachers?
24 A. This year, this year, this school year my
25 understanding that the number of vacancies that they
199
1 had to fill for the neighbor islands now it was a
2 restrictive approach because they did not move to
3 Hawaii -- I mean, Oahu but only on the neighbor
4 islands. There was about 137 that was needed this
5 year.
6 My understanding is they filled all
7 positions. I don't know how many actually came and
8 stayed. I don't have the recent information on that,
9 but they claimed to be very successful in that
10 regard.
11 SENATOR BUEN: Thank you. Thank you,
12 Mr. Yoshii.
13 CO-CHAIR REPRESENTATIVE SAIKI: Thank
14 you, Senator Buen. Representative Leong.
15 REPRESENTATIVE LEONG: Thank you.
16 EXAMINATION
17 BY REPRESENTATIVE LEONG:
18 Q. Mr. Yoshii, in following up with
19 senator's questions, in talking about certification
20 credentials about the Columbus contract teachers, how
21 do they compare with Hawaii, are they up to our
22 standards?
23 A. The term "certification."
24 Q. Yes.
25 A. In Hawaii is at least sort of antiquated.
200
1 This was preteacher standards board. We now refer to
2 them as licensure and perhaps the only difference
3 would be that if you're certified from any teacher
4 training institution that's accredited, you'd have to
5 take the Apraxis examination over and on top of that
6 to get a license within the state of Hawaii.
7 So practically speaking I would say
8 they're equivalent, they're comparable except for the
9 Apraxis examination.
10 Q. And so they all had to go through that in
11 order to be hired; is that correct?
12 A. The Apraxis examination is not required
13 from the Columbus teachers.
14 Q. I see. Also I had a concern about the
15 contract not having been signed by the Attorney
16 General. Is a superpower of the superintendent so
17 great that this can be overlooked or is it something
18 to look forward in the future as being an illegal
19 act?
20 A. I think we did not have much experience
21 in defining exactly what those superpowers were. So
22 it may or may not be possible that the superintendent
23 has the authority to bypass the Attorney General's
24 office. I would not advise, if I were him, not to
25 get legal advice in that regard.
201
1 Q. Thank you. I also had another question
2 for you. At one time you stated that you wanted to
3 have a chat or talk with the Attorney General and you
4 were dissuaded from doing it by Ms. Hamamoto. Would
5 you explain that a little bit more?
6 A. When I first got the contract and it was
7 given to me and I was assigned the responsibility to
8 monitor or administer the contract implementation, I
9 read the contract, and I noticed that there was no
10 Attorney General signature on that line that I showed
11 you.
12 I wanted, because of the nature of the
13 contract, the huge sums of money and then the terms
14 that were agreed to, I wanted to be sure that this
15 was a legal contract and it was entered into by the
16 superintendent using his superpowers legally. In
17 other words, the Attorney General should make a
18 ruling whether he had those superpowers before
19 requiring that I as the administrator of that
20 contract implement it.
21 I just want to have a good discussion,
22 and I was going to ask for it in writing, in fact,
23 that the Attorney General's office approved of that
24 contract and it was a legally entered into contract,
25 a valid contract.
202
1 Q. So were you completely satisfied with the
2 fact that you couldn't speak with him?
3 A. No.
4 Q. And could you have done anything about
5 it?
6 A. I was, for my trouble, removed from that
7 responsibility.
8 Q. I see.
9 A. And I'm not saying that that was the only
10 reason, but the conjecture on my part why I was
11 removed.
12 Q. I see. And my next question is in today
13 what's happened to the Columbus contract, how much of
14 it still affects us today?
15 A. I'm removed from the process, and I'm no
16 longer implementing it so that I don't get
17 information. I was instructed not to go to the
18 personnel office and mess with, you know, personnel
19 affairs because I was removed as the personnel
20 director. So I don't have enough information to
21 answer your question specifically.
22 I know that they're claiming that they
23 hired 137 special education teachers, and I hear that
24 we're now expanding to Oahu and I don't know for
25 sure. Nobody told me that, but I hear that this is
203
1 being done which means that we may need to hire more
2 Columbus teachers on Oahu which was never done up to
3 this point.
4 SENATOR BUEN: Thank you, Mr. Yoshii.
5 Thank you, Chair.
6 CO-CHAIR REPRESENTATIVE SAIKI: Thank
7 you, Representative Leong. Vice-Chair Kokubun
8 followed by Representative Kawakami.
9 VICE-CHAIR SENATOR KOKUBUN: Thank you,
10 Co-Chair Saiki.
11 EXAMINATION
12 BY VICE-CHAIR KOKUBUN:
13 Q. Mr. Yoshii, in the subpoena that the
14 committee issued to you, there is an Exhibit B and it
15 lists a number of different contracts actually that
16 the DOE was involved in, and we have focused
17 primarily on the Columbus contract and you also
18 commented on the contract with Na Laukoa as well as
19 PREL.
20 A. At the time that the assignment was given
21 to me to monitor contracts, I also understood that I
22 was to be given responsibility for the Sunbelt,
23 Sunbelt contract. I did not spend as much time
24 because that contract compared to the Columbus
25 contract it seems to be fairly reasonable in amount
204
1 and I thought, you know, it would be better for me to
2 focus on the Columbus.
3 Q. Actually, though, the contracts that we
4 have spoken about the Columbus, the PREL with
5 subcontract to Na Laukoa those all involve the use by
6 the superintendent of the superpowers, right?
7 A. That's correct.
8 Q. Okay. So with respect to the Sunbelt,
9 that was not utilized for that contract?
10 A. My understanding was those contracts were
11 also not floated for bid, and again these came either
12 through the monitor or some other way and we referred
13 to the department for contracting.
14 There was no attempt to go solicit in a
15 formal way to the bidding process any other
16 contractor. So again, it was like a sole source
17 contract award.
18 Q. So we have a Sunbelt Therapy Services of
19 America and we also have a Sunbelt Staffing
20 Solutions, Inc. Can you tell me is that the same
21 company or what, is there a relationship between
22 those two?
23 A. I cannot answer your question
24 specifically from personal knowledge. I would take a
25 guess that the therapy services would be like the
205
1 lease or rental of employee of Sunbelt.
2 The Sunbelt Staffing Solutions would be
3 like a headhunter contract. They would find someone
4 that would be willing to be hired by the DOE as an
5 employee; so we're back to the employee option.
6 Q. Okay. And you were indicating that
7 because of the reduction in scale or magnitude of
8 these contracts with Sunbelt you didn't think it was
9 worthy of as much scrutiny as you were giving to
10 Columbus?
11 A. I was given very little time. As a
12 matter of fact, when I was given this responsibility
13 before being relieved of them to actually focus my
14 attention on any other thing but the Columbus
15 contract, and I did look at the Na Laukoa contract.
16 Q. Okay. You mentioned just previously that
17 the contracts for Sunbelt might have come through the
18 monitor Dr. Ivor Groves. What did you mean by that?
19 A. I'm not too sure. I was removed from the
20 process on how to award the contract, and my
21 responsibility at that time as the monitor of the
22 contract was to implement and monitor the
23 implementation to see that the terms of the contract
24 are carried out.
25 So I don't know for sure necessarily, but
206
1 my understanding is that all of these contracts came
2 through some recommendation of the monitor's office.
3 Q. So the Columbus as well as the PREL
4 you're saying came through with a recommendation from
5 the court monitor?
6 A. The PREL contract is something else. It
7 was a little different. It was not the monitor. In
8 fact, this was a different kind of contract. It's
9 not an employment or employee headhunter contract.
10 PREL was to provide services internally to the DOE.
11 So I did not include that as a monitor
12 recommendation.
13 Q. I see. So the Sunbelt and the Columbus
14 then --
15 A. Yes.
16 Q. -- you think came through?
17 A. Yes.
18 Q. Thank you. And you feel that
19 similarly -- I'm sorry just for my own edification --
20 you said that the Sunbelt contracts were also
21 administered through the superpowers of the
22 superintendent?
23 A. Yes.
24 Q. Do you know if Sunbelt -- is there any
25 direct relationship between principals of the Sunbelt
207
1 organizations, Sunbelt contracts and, for instance,
2 the technical assistance team members of Dr. Behar,
3 Dr. Groves or Dr. Schrag?
4 A. I have no direct knowledge. The extent
5 to which we were able to research that Sunbelt is
6 from Florida and Dr. Groves comes from Florida, and
7 that's the closest connection we could find.
8 Q. That's an awfully big state. I don't
9 mean to draw those kind of connections, but you did
10 not look into that and you don't know?
11 A. I don't know.
12 Q. Okay. How about any connection to DOE
13 personnel or Sunbelt?
14 A. I don't believe that -- we may have had
15 previous experience. I remember a company that was,
16 say, renting employees, you know, to the department
17 prior to these things coming up. So it could be the
18 same connection, but I'm not sure.
19 Q. Okay. And can you just give me an idea,
20 of what the -- you know, you indicated that there's a
21 vast difference in the magnitude of the contracts for
22 Sunbelt, but can you give me a quantitative number
23 for that?
24 A. I remember something like $5 million.
25 I'm not, you know, my memory is not too -- I thought
208
1 I brought a copy of that contract with me. Oh, here
2 it is. Again, I did not study this, you know, to
3 that degree so. My figures show $3 million, $3.2
4 million.
5 Q. So one shot as opposed to like the
6 Columbus which carried over through?
7 A. No, I believe these are ongoing because
8 once you start the contract, you have to retain the
9 employees. We still have a shortage on speech
10 therapists and OPPT which this contract was supposed
11 to focus on.
12 Q. So then you think similarly like Columbus
13 it would carry over for three fiscal years?
14 A. I don't know for sure. I didn't spend
15 that much time.
16 VICE-CHAIR SENATOR KOKUBUN: Okay. If
17 the Co-Chairs would be so kind, maybe we could get a
18 copy of those contracts for the members of the
19 committee.
20 CO-CHAIR REPRESENTATIVE SAIKI: Thank
21 you, Senator Kokubun. Representative Kawakami
22 followed by Representative Ito.
23 REPRESENTATIVE KAWAKAMI: Thank you very
24 much.
25 EXAMINATION
209
1 BY REPRESENTATIVE KAWAKAMI:
2 Q. Mr. Yoshii, first of all I wanted to know
3 at what point were you relieved as personnel
4 director?
5 A. That process took about three weeks or
6 so. It started -- my first indication when it was
7 communicated to me was on August 21, 2000.
8 Q. And what did they say when they relieved
9 you?
10 A. At that time I was told -- this was on a
11 Monday -- that the superintendent and Paula Yoshioka
12 who was my supervisor at that time had gone to the
13 Board of Education informing the board that they
14 intended to remove me as personnel director.
15 I had access or I got access to the
16 transcript of that executive session meeting that was
17 conducted with the board, and Ms. Yoshioka had a list
18 of accusations about my failure to perform as the
19 personnel director. These were in my mind very
20 artificial and not justified. Since that time the
21 reasons have changed.
22 Q. Okay. Did you know who made up the
23 listing? Was it made up?
24 MR. IKEI: May I respectfully object and
25 ask that that question be withdrawn.
210
1 REPRESENTATIVE KAWAKAMI: Let me move on
2 then.
3 Q. (By Representative Kawakami) Under the
4 superpowers agreement, did that extend to the state
5 auditor also? And I say this because she mentioned
6 she had difficulty getting contracts and a lot of
7 information that she needed. And so I wondered if
8 that was under this superpowers thing?
9 A. I don't believe so.
10 Q. You don't think so.
11 A. The fact that other state agencies have a
12 hard time getting information, you know, from the
13 department, I don't think you could use the
14 superpowers to deny access to such information.
15 Q. Okay.
16 A. I'm not an expert. It's just my opinion.
17 Q. Okay. Yesterday when the C.F.O. of PREL
18 Ms. Erhorn I asked the question if you were on the
19 Felix consent management team. Were you on that
20 team?
21 A. I don't know for sure. I was very -- I
22 was assigned this responsibility for a very short
23 period of time, and Dr. LaMahieu did mention that a
24 part of my responsibilities for the monitoring of
25 PREL/Na Laukoa was that I would interact with that
211
1 management team. I don't know. He didn't specify
2 whether I was part of that team or not.
3 Q. I see. So you never went to any
4 meetings?
5 A. I did not go to any meetings.
6 Q. Okay. That's what I wanted to know. The
7 other question is they subsequently moved you into
8 and gave you the title of the Felix contractor --
9 contract directorship. Am I correct?
10 A. That's good enough.
11 Q. Well, what is the correct title? I'm
12 sorry if I didn't get it.
13 A. Hang on one second. I'm going to look it
14 up. The Felix Contract Compliance Director is my
15 current title.
16 Q. Okay. What does this job entail now?
17 A. Right now I've been assigned
18 responsibilities to pursue the implementation of the
19 Medicaid third-party, reimbursement. Third-party
20 reimbursements I should say.
21 Q. And this would be for all the Felix
22 children that are --
23 A. This would involve background; and you
24 know, I'm still learning in that process because this
25 is totally unfamiliar for me. I worked with it for a
212
1 year. The background to that assignment is that the
2 Department of Education currently does not collect
3 any reimbursements from Medicaid.
4 When the Department of Education took
5 some of the kids or responsibilities for the Felix
6 students from the Department of Health, the question
7 came up whether we would claim reimbursements just
8 like the Department of Health was doing had set up a
9 system to do so.
10 So my job was now to see or investigate
11 what was possible whether it was feasible to do so.
12 My impression at this time with all that I know, and
13 I've been able to find out that we do not have the
14 infrastructure set up to Medicaid claims, and a part
15 of my responsibility ongoing is to see that we could
16 get up to speed.
17 Q. Okay. Then I wanted to ask you if we
18 tried to do more with recruiting teachers or training
19 teachers I would say and you could work with, you
20 know -- if we were to work with the university and
21 Randy Hitz and therefore, do you think that we could
22 get a good number of people out to get into the
23 schools I'm talking about the locals and that's, you
24 know, if there was proper funding, et cetera?
25 A. This is touching a sore point with me.
213
1 There's a long history of our attempts to work
2 closely with the university and to work out an
3 arrangement with the university recognizes the
4 Department of Education. Here in this state we have
5 only one major university, and we have no other
6 options besides the university except for other
7 smaller institutions to take care of our teacher
8 needs.
9 At one time the university was very
10 active and produced a lot of teachers. As we went
11 through the cycle, there was not the need and now the
12 need is growing and growing.
13 We've been going to the university now
14 for over a decade and perhaps 15 years to try to get
15 attention given to preparing more teachers not only
16 in Special Ed. but in math, science and now I think
17 we would need all areas of teaching. This of course
18 takes cooperation from the university recognizing the
19 mission.
20 They have since changed their, as I
21 understand it, their mission from a service
22 organization or an undergraduate institution to a
23 research emphasis, and this has sort of clouded the
24 issue of whether they're still responsible as the
25 university to provide for our teacher needs.
214
1 It's an ongoing discussion that's been
2 very frustrating to me in my personnel director role.
3 To get this off, we have brought this problem to the
4 legislature. I remember over the last decade many,
5 many times to try to. But again, you know, revenues
6 were short and so forth. It was not the proper time.
7 We have -- we are paying right now for
8 that lack of attention in trying to produce more
9 teachers. Yes, I would think that we could start to
10 work very closely with our university again and with
11 other teacher training institutions and increase the
12 production locally and those institutions could pick
13 up a lot more of the responsibility instead of
14 relying only on the Department of Education to
15 recruit teachers.
16 Q. Okay. I had one more question. I'm
17 trying to find it. Oh, Columbus. I can't forget
18 Columbus's contract. On the Columbus contract, it
19 certainly sounds like you were trying to do what was
20 right. I mean, I've known you over the years, and
21 you've also been personnel director, always looking
22 out for doing, you know, what was right. And this
23 contract now and this is an experience.
24 I was sitting having my nails done one
25 day and there was this woman who walked in. She sat
215
1 down on another chair, and she started talking to the
2 gal and saying she has the Columbus contract.
3 She's the one who monitors it in Hawaii.
4 She'd come back from the Big Island, and she says
5 there are not too many people who were interested.
6 And I, you know, was eavesdropping and finally I said
7 hello, and I said, "Oh, are you the one who's, you
8 know, trying to contract teachers?" And she said,
9 "Yes."
10 And I said, "How many have you done, you
11 know, so far?" And she said, "I think we'll have
12 maybe seven hopefully by the end of the week," or
13 something like that. And it sounded like, you know,
14 not really sure how many she would get and so forth.
15 But she was really recruiting on the neighbor islands
16 she said. But was her salary paid by Columbus or us?
17 A. You're referring now?
18 Q. And I don't know her name. I didn't ask.
19 A. Columbus hired and the name escapes me
20 right at this time. The Special Ed. director from
21 the state I think it was Arkansas to come to the
22 Department of Education -- I mean, to come to
23 Columbus and serve as the local capacity in Hawaii
24 and open up an office, she brought her assistant at
25 that time, and the two of them, at least that I know
216
1 of, came as the initial effort to staff the Hawaii
2 office. I think you were talking to them. They're
3 Columbus employees. They're actually offices of the
4 organization.
5 Q. So we didn't have to pay their salary for
6 bringing them over or housing them?
7 A. We paid. Whatever Columbus is doing, we
8 paid for it.
9 Q. So we paid for it?
10 A. It's not the same arrangement as the
11 rental of the teachers. This is an employee of
12 Columbus doing the recruiting and serving to fulfill
13 their contract obligations.
14 Q. So that was part of the contract to bring
15 these recruiters of their own here --
16 A. Yes.
17 Q. -- to recruit. So we must have paid for
18 their --
19 A. We paid for their salary, we paid for
20 their travel. We paid for everything.
21 Q. What were their salaries like?
22 A. I'm not privy --
23 Q. You're not privy to that?
24 A. No.
25 REPRESENTATIVE KAWAKAMI: I mean, I was
217
1 kind of amazed. They sounded like they're having a
2 good time in Hawaii. But thank you very much. They
3 were from Arkansas, okay. I think that's all I have.
4 Thank you.
5 CO-CHAIR REPRESENTATIVE SAIKI: Thank
6 you. Thank you, Representative Kawakami.
7 Representative Ito followed by Vice-Chair Oshiro.
8 REPRESENTATIVE ITO: Thank you, Co-Chair.
9 EXAMINATION
10 BY REPRESENTATIVE ITO:
11 Q. Mr. Yoshii, I agree with you that
12 criticism and, you know, we've been feeling the
13 criticism ourselves. You know, we looking for monies
14 for textbooks, supplies, computers. And then we find
15 out, you know, here and today there's monies like
16 this just going down the black hole. And you know,
17 we're very concerned.
18 You know, when they removed you as
19 director of personnel, was the move a demotion or in
20 terms of pay?
21 MR. IKEI: Counsel, may I ask that that
22 question be withdrawn respectfully because I think
23 his case should be adjudicated in trial by an
24 impartial jury.
25 REPRESENTATIVE ITO: Okay.
218
1 MR. IKEI: I do apologize.
2 REPRESENTATIVE ITO: No problem.
3 Q. (By Representative Ito) You know, is
4 the $100 million that, you know, for this Columbus
5 contract is that, what, general funds or special
6 funds or federal funds?
7 A. What I did say was that this is at this
8 point it's supposed to be general funds and the
9 contract specifies it's from the general funds. It's
10 just that it has not been allotted by the
11 legislature. It's a future obligation. And if we do
12 spend all that money and we do need that money,
13 appropriations need to come from this legislature.
14 Q. It's the one you mentioned, what, forward
15 funding?
16 A. In this case the amounts were so large I
17 think the first year was planned or intended to be
18 through forward funding. I don't know. Without
19 enough experience, I think it's not possible at this
20 point to see how much funds would be necessary to
21 meet that obligation with Columbus.
22 Q. You know the real name for forward
23 funding is deficit funding basically. You know like
24 fiscal year '01, '02, you know, they have $41 million
25 let's say we spend $25 million, what happens to the
219
1 other balance of that monies? We get reimbursed or
2 they keep the balance?
3 A. No, the contract term specifies we pay as
4 we go, and if Columbus doesn't have any teachers, we
5 don't pay them anything. If they hire 100, then we
6 would have to pay the rate for 100; so it's a
7 contingent contract, and I think this second year
8 they have become, you know, they have gained enough
9 expertise to be able to tie down this recruitment
10 process and they have been able to conduct
11 recruitment fairs in Hawaii bringing dozens and
12 dozens of candidates here and they were somewhat
13 successful in filling the jobs I think.
14 We still intend, as I understand now, the
15 current effort would be to expand here on Oahu which
16 was off limits under the old process last year. But
17 because we have a benchmark under the consent decree,
18 that has to be filled. Remember by November we had
19 to have 85 percent of the teachers on board
20 qualified, and by March I think we need to have it up
21 to 90 percent.
22 So there's a rush now at least to comply
23 temporarily to get these people on board so we can
24 meet that benchmark.
25 Q. What if we recruit really heavy this year
220
1 and we get the personnel, can we cancel the contract
2 in the year '02, '03 and save $42,172,496?
3 A. You've touched on a very important point,
4 and I need to make this point so that everybody
5 understands. When I said black hole, I said we made
6 the wrong move by moving into high paying incentives,
7 salary incentives. Once you contract people like
8 this, you raise expectations for everybody else.
9 And in order for us -- this already
10 poisoned the well. You know like I said, we cannot
11 contract, we cannot compete with Columbus rates. And
12 if we were to try to recruit now faced with that kind
13 of situation, I don't think we'd be able to recruit
14 anybody, and I feel bad to recruit someone at lower
15 rates and they come here knowing that they could have
16 come here through Columbus.
17 By poisoning the well this is what I mean
18 by black hole from here on after just to retain those
19 employees that Columbus brought in we would have to
20 keep them or retain their services so they can keep
21 filling those jobs.
22 It creates other vacancies because as
23 people get disgusted with that relationship and
24 unhappy, it creates more vacancies within our regular
25 staffing which again increases a need for Columbus so
221
1 that we can keep, you know, constant our 85 percent
2 or 90 percent.
3 So that's what I mean by the black hole.
4 We started a process and to maintain it and sustain
5 it over the years, and it's going to get bigger and
6 bigger. And we're stuck with this benchmark.
7 In order to sustain it, we're going to
8 have to throw more money at it and more money at it
9 and we started the process which we've only seen the
10 tip of the iceberg. That's what I mean by black
11 hole. Black hole swallows money, and it's an ever
12 increasing demand for funding.
13 Q. You know, you mentioned the HSTA and can
14 you expand the role of the HSTA of the Columbus
15 contract?
16 A. I was removed from my negotiator's role
17 earlier, and I already testified to that. I've
18 talked to members of the HSTA, and I was able to
19 glean that the original understanding was that HSTA
20 agreed to allow Columbus to recruit only for neighbor
21 islands in isolated areas.
22 I don't know what discussions occurred
23 lately because now I see that we are attempting to do
24 Columbus recruitment for Oahu, and I don't know. I
25 can't explain what arrangement was made.
222
1 Q. You know, the negotiations who was on the
2 negotiating team from the DOE?
3 A. You'd have to split that question into
4 two parts. While I was doing the negotiating, we had
5 a team set up. It was myself as the spokesperson.
6 We had a team from our personnel office that staffed
7 the negotiation's team and we conducted negotiations.
8 Subsequent to my removal, all of that
9 original team members were left out and my
10 understanding is there is no team necessarily.
11 Currently it consists of Senator
12 McFarland who replaced me in my position as personnel
13 director. I suppose other members higher than her
14 sit on that team.
15 Q. What about the Board of Education, the
16 chair?
17 A. I'm sorry, I'm sorry. Yes, we have two
18 members of the Board of Education sitting on the
19 negotiation's team. That's required by law.
20 Q. You know, we talk about accountability
21 and, you know, what is the board doing to, you know,
22 you know, this contracts like this they need board
23 approval, right? I mean, you cannot just go
24 implement a contract without their okay?
25 A. The superpowers were designed such that
223
1 the superintendent would have the authority to enter
2 into the contract regardless of what laws and
3 procedures that currently exist. If the
4 superpowers -- and again, you know, this gets a
5 little murky about the federal statutes versus local
6 state rule and so forth.
7 So I don't know exactly how it works, and
8 there's a lot of questions on how exactly what the
9 board of -- Board of Education's responsibilities
10 are, what the legislatures, you know, responsibility
11 is under the superpowers.
12 Q. But normally the Board of Education is
13 supposed to be the one that -- after all the Board of
14 Education hired the superintendent?
15 A. Normally, yes. The supervision of the
16 superintendent comes from the Board of Education.
17 Q. You know you mentioned, Mr. Yoshii, you
18 know PREL, you know, is there a relationship between
19 PREL and the DOE because, you know, a few years I
20 noticed there is a lot of personnel going back and
21 forth on loan and whatever. Is that normal practice
22 or?
23 A. PREL has interacted with DOE in several
24 ways. It's a retirement, you know, job after
25 retiring, you know. They provide retirement
224
1 opportunities, and certainly our employees or our
2 people are very highly valued and, you know, if they
3 have a chance to work for PREL, they can retire as
4 well as keep on working.
5 There was a practice when I was still
6 personnel director that we would try to support PREL
7 and there were several employees who were sent to
8 PREL on loan. On loan means that the employees are
9 continuing to be Department of Education employees.
10 We pay their salaries, we pay their benefits,
11 et cetera, and we have them on loan to PREL.
12 And it's legitimate because there's some
13 neutral benefits to have them in that role, and PREL
14 reimburses us for the expenses of that employee; so
15 we have a level of understanding and allow us to do
16 that.
17 Now, I don't remember dozens and dozens.
18 I remember maybe one, two or three, you know,
19 situations like that.
20 REPRESENTATIVE ITO: Almost like the
21 university then. Okay. Thank you very much,
22 Mr. Yoshii.
23 CO-CHAIR REPRESENTATIVE SAIKI: Thank
24 you, Representative Ito. Vice-Chair Oshiro.
25 VICE-CHAIR REPRESENTATIVE OSHIRO: Thank
225
1 you, Co-Chair.
2 EXAMINATION
3 BY VICE-CHAIR OSHIRO:
4 Q. I just wanted to get some additional
5 clarification on the contract with Columbus. I think
6 you made a lot of -- you summarized a lot about the
7 contract, and I just wanted to make sure that we can
8 substantiate that it is part of the contract.
9 I don't know if you were provided, but we
10 were actually provided with a copy of the contract.
11 Do you have it in front of you?
12 A. I have it.
13 Q. Is that the full contract?
14 A. Yes.
15 Q. It's a little bit hard to follow because
16 there are so many attachments and things like that,
17 but I did want to try and go through it to try and
18 substantiate some of the things you're talking about
19 in case somebody else tries to come back and refute
20 it.
21 The first thing I wanted to talk about
22 was on I think if you look on the upper right-hand
23 corner there's a page 11. It's a facsimile kind of
24 page numbering, and there is a little chart on the
25 bottom. I think it's called scope of services. Do
226
1 you have that page?
2 A. Yes.
3 Q. Okay. So under paragraph E what it talks
4 about is the referral schedule that Columbus was
5 supposed to provide to us and in looking at
6 December 31, 2000 by that time according to this
7 contract they were supposed to have provided us 105
8 referrals; is that correct?
9 A. Yes.
10 Q. But is that getting back to the point
11 where you had earlier stated I think that by the end
12 of 2000 they only had 33?
13 A. Thirty-three.
14 Q. Okay. Further in the contract if you can
15 turn to -- let's see. I think it's marked as
16 facsimile page 33.
17 A. I'm there.
18 Q. Okay. Here they have sort of a table on
19 the lower part of the page that kind of goes through
20 the travel expenses. And when you had talked about
21 the contract, you had said that there was basically a
22 $2.5 or $2.6 million to be used for just purely
23 recruiting purposes.
24 So in this table I see that there is an
25 allocation under table 2 of $257,400 for category A,
227
1 $2,369,000 for category B and that approximately puts
2 you about $2.5 or $2.6 million. Is that the startup
3 cost that you're kind of talking about?
4 A. That's where I got the information.
5 Q. Okay. So these are basically the amount
6 of monies that we were giving to Columbus so they
7 could do all of the recruiting and the travel
8 expenses and all of that stuff; is that correct?
9 A. Their basketball strategy.
10 Q. Right. What you were talking about?
11 A. Right.
12 Q. Okay. But interestingly enough if you
13 look at category B which is the mainland to Hawaii
14 travel therein what it does is it breaks down cost
15 per trip. So there's so many trips in one month, two
16 and the rest of the year, and each cost -- the cost
17 of each trip is $4,505.00. That seems a little
18 excessive to me.
19 You know, you had earlier stated that
20 previously you used to do some recruitment efforts on
21 the mainland. Do you have any estimate on how much
22 an actual mainland trip cost would be if we were to
23 try and recruit somebody down here on this basketball
24 strategy, I mean?
25 A. You know, this would be on an average
228
1 because you could come from California or you could
2 come from New York, et cetera; so this is a budget
3 document and they prepared it with the -- just to try
4 to get the cost, you know, in a fair way so it might
5 be an average somewhere midpoint.
6 You have to remember that airfare is only
7 one part of the cost. You have hotels when you reach
8 here, transportation cost, per diem. I'm sure
9 there's other factors involved in that cost. I
10 believe it's what it cost.
11 Q. So you don't think $4,500 is excessive?
12 A. It could be excessive in some cases if
13 you fly from California. Depending, you could stay
14 in a cheaper hotel or it depends.
15 Q. Okay. Okay. Going further down into the
16 document, I think this one doesn't have a page
17 number, but it's the page after No. 36. Okay. So
18 it's basically a table it says III professional
19 services. Are you on that page?
20 A. Yes.
21 Q. Okay. I think this is sort of what you
22 were getting at when you were talking to the
23 $112,000. It shows anyway that we paid $112,000 per
24 Special Ed. teacher to Columbus. Is that sort of
25 correct?
229
1 A. That's correct.
2 Q. Okay. But therein underneath that
3 $112,000 it does have $10,000 as a one-time
4 relocation sign on. What do you think that $10,000
5 is?
6 A. Wow. That escaped my attention, but I
7 don't know. I guess when you come here you have
8 additional benefits and you get a signing bonus.
9 Q. Kind of like your basketball strategy
10 you're talking about?
11 A. Yeah.
12 Q. The last part of the contract I did want
13 to walk through was it's listed as pages 27 on the
14 facsimile. It goes back. You have to go back a
15 little bit. Are you on page 27?
16 A. Yes.
17 Q. You know, I tried to go through this
18 entire contract and find other areas where Columbus
19 had tried to show how they were qualified to get a
20 contract such as this, and I recall you saying in
21 your testimony that the only experience you believe
22 they had was more an institutional kind of
23 experience; is that correct?
24 A. Yes.
25 Q. Okay. So in looking at these pages what
230
1 I think it's exactly as you were stating the examples
2 that they show in terms of their national experience
3 and why they're qualified to perform this contract
4 basically has to do with three institutions, and it
5 is purely institutional.
6 But more interestingly enough when I look
7 through it I see that for their first example on page
8 28 they had to place no more than 35 professionals.
9 And then when you go down further into it on page 31
10 for their example No. 3 which is a South Berry
11 Training School they only had to place 25 candidates.
12 So really are you aware of any other
13 experience or any other basis for Columbus in terms
14 of why they would be awarded such a huge contract
15 since to me anyway the experience that's listed in
16 this presentation doesn't really correlate to the
17 actual scope of services we were contracting them
18 for.
19 Are you aware of any other reasons why we
20 might want to contract with Columbus?
21 A. This is the only documentation that was
22 attached to the contract that I was given regarding
23 their qualifications. That's how I got my
24 information that they were primarily institutional
25 type of work.
231
1 They might have, but I doubt it very
2 strongly because if they were in this business of
3 special education or teacher education recruitment,
4 they would not have to put in $4 million to set up a
5 recruitment team.
6 So I think you're right with that
7 conclusion that they did not have any additional type
8 of information or experience in administering a
9 contract of this nature.
10 VICE-CHAIR REPRESENTATIVE OSHIRO: Thank
11 you very much.
12 CO-CHAIR REPRESENTATIVE SAIKI: Thank
13 you, Vice-Chair Oshiro. We'd like to take a
14 five-minute recess, Members. Recess.
15 (Recess from 3:31 p.m. to 3:40 p.m.)
16 CO-CHAIR REPRESENTATIVE SAIKI: Members,
17 I'd like to reconvene our hearing and we'll continue
18 questioning by Members; so Co-Chair Hanabusa.
19 CO-CHAIR HANABUSA: Thank you.
20 EXAMINATION
21 BY CO-CHAIR HANABUSA:
22 Q. Mr. Yoshii, these documents that were
23 presented to us document No. 2 is basically part of
24 the Columbus contract, correct?
25 A. That's correct.
232
1 Q. And I notice that on the bottom it
2 identifies for fiscal year '01 the sum of
3 $36,537,000?
4 A. That's correct.
5 Q. I also have a copy of a document called
6 "State of Hawaii Agreement for Non-Bid Purchase of
7 Goods and Services" almost exactly the same. And by
8 the way, both of these documents are executed and
9 both appear to be executed on the same day,
10 September 1, '00. But on this other version the
11 amounts on the bottom on the front page is fiscal
12 year '01 is $16,401,025. Do you see that?
13 A. Yes.
14 Q. How many contracts does the DOE have for
15 one contract? I mean, this is I believe the same
16 thing but it's different terms.
17 A. I'm led to believe that initially a
18 mistake was made, and I got the old copy and a
19 revised copy was since processed. It corrected the
20 first year because it had to reflect that not all of
21 the teachers would be recruited at the beginning of
22 the year so that maybe part of the cost would have to
23 be reduced.
24 Q. From what I can gather, the signature
25 pages are the same; so is it your understanding maybe
233
1 they just redid the front, the first page?
2 A. I don't know for sure, but it could be.
3 Q. Because they're both executed on the same
4 day. Let me ask you some questions about the
5 contract itself.
6 First of all, the general statement if
7 you look at this one meaning the thicker one that had
8 the $16 million on page 54 -- this is on the general
9 conditions. I think that's what they're called.
10 They look like general, yeah, they are called general
11 conditions. These are standard general conditions to
12 any DOE or state contract as far as you know?
13 A. That's my understanding.
14 Q. I notice that on general conditions page
15 17 it's page 54 if you look at the transmission
16 number. Publicity is X'd out. Is your copy X'd out
17 as well?
18 A. Yes, I have the same copy as you.
19 Q. Do you know why where this provision says
20 the contractor shall not refer to the state any
21 office, agency or officer in any, I guess, of their
22 PR material why that was X'd out?
23 A. This is new to me. I didn't go this far
24 into the contract. I don't know.
25 Q. Have you ever seen any brochures of
234
1 Columbus Group that now says that it has the ability
2 to recruit Special Ed. teachers and using Hawaii as
3 an example?
4 A. I didn't see any brochures, but I've been
5 to their web site which provides the same
6 information, right.
7 Q. So are we now their sterling example of
8 the ability to recruit Special Ed. teachers because
9 of this contract?
10 A. At the beginning I was speculating about
11 where this would lead and, yes, it's a very lucrative
12 business with unlimited potential and they used
13 Hawaii to start it up.
14 Q. Do they have any other sites listed?
15 A. No, not my latest visit to the web site.
16 Q. Okay.
17 A. I might add they weren't very successful
18 up to this point; so it may be that they haven't
19 reached their potential yet.
20 Q. Okay. We also have a document that's
21 been provided to us as supplemental agreement No. 1.
22 Do you have a copy of that, have you received that?
23 A. No, I don't.
24 Q. You don't have a copy like that?
25 MR. IKEI: I think we do.
235
1 ALBERT YOSHII: No, I don't have a copy.
2 Q. (By Co-Chair Hanabusa) You don't have
3 one. With your counsel's permission, we're going to
4 give you a copy of that.
5 This is dated January 28, 2001, and it is
6 a supplemental, as I can read it, to the contract
7 that we've been discussing and it's executed with
8 the -- Dr. LaMahieu's signature on January 28 of this
9 year. You've never seen this contract before, have
10 you?
11 A. I have not.
12 Q. Okay. Well, let me just call your
13 attention to if you would look at attachment S-1
14 which is I guess ID'd as page 9 out of 13. Do you
15 see that? The scope of services.
16 A. I see it.
17 Q. Okay. You testified that on December 31,
18 2000 they were supposed to have 100-some odd teachers
19 but in actuality they only had 33. Do you remember
20 that?
21 A. No. It was not December 31, 2000. It
22 was the school year I was talking about.
23 Q. Okay. And that would have been?
24 A. Somewhat about -- and I see there's 50
25 here. I wasn't familiar with that figure. I think
236
1 my figure was closer to the 32 that's identified in
2 February 28.
3 Q. Okay. In any event, if we look at
4 attachment 1 to the first contract and this is the
5 one that Representative Oshiro took you to at the
6 March 31, 2000 time frame there should have been 200
7 total referrals, correct?
8 A. What page are you on?
9 Q. I'm on page 11 of the bigger contract.
10 A. Yes, I'm there.
11 Q. Okay. So there were supposed to be 200
12 where there is only 50?
13 A. Yes.
14 Q. And at the end of the year December 31 of
15 the year 2000, there was supposed to be 105 total
16 referrals?
17 A. Right.
18 Q. And in actuality there was only one?
19 A. Yes.
20 Q. And at the end August 31, 2001 from the
21 original contract there was supposed to be 380 and
22 there's actually 138?
23 A. Yes.
24 Q. Do you know if they have made the 138
25 because this is January 28, 2001, so do you know if
237
1 that figure has actually been made by the Columbus
2 Group?
3 A. The 138?
4 Q. Yes.
5 A. I don't know for sure. August 31 is
6 still the school -- some schools might be in session.
7 No, I don't know. I heard there was something like
8 137, maybe a little more than that.
9 Q. Because your figure of 33 may be correct
10 but this is a document of January. So in actuality
11 it's dated before the March 31 date, and it's
12 reflecting total expected referrals of 50; so maybe
13 you are correct with your 33.
14 Can you now turn to the second page of
15 this supplemental agreement, and this is attachment
16 S-3. I'm of course interested in the compensation
17 amount. We've already established that it went from
18 the first fiscal year $36 million to $16 million in
19 the amended one first page and under this supplement
20 it's actually $7 million, isn't it?
21 A. Yes.
22 Q. And for fiscal year '02 it's supposed to
23 be $41,537,000 and now all of a sudden it's
24 $16,341,000. Do you see that?
25 A. Yes, I see that.
238
1 Q. And in the third year it was supposed to
2 be $42 million and all of a sudden it's $16,538,000.
3 A. Yes.
4 Q. Do you have any idea what's happening
5 with all these contracts?
6 A. My educated guess on it is that the
7 negotiations was conducted with HSTA to come up with
8 some mutually agreeable objectives, and I already
9 learned from HSTA that they had agreed to limit their
10 recruiting to the neighbor islands and in order to
11 fill areas of the neighbor islands.
12 So the number of recruits required was
13 reduced, and I think the request to the legislature
14 for that first year was reduced also which called to
15 question whether the FRP requirements was
16 legitimately requested at the beginning; so it was
17 maybe a combination of both. They were not able to
18 perform; and secondly, they were restricted in areas
19 that they could recruit for.
20 Q. The reason I was asking you those
21 questions is because throughout the legislative
22 session we were told -- we the legislature was told
23 we were not giving DOE all the money they wanted and
24 my recollection of the figures for the Columbus Group
25 contract was always $100 million and in January of
239
1 this year the total has already been substantially
2 reduced.
3 A. Yes.
4 Q. And I don't know were you following the
5 legislative session this year?
6 A. Not that closely, but I remember the fact
7 that it was drastically reduced at one point, and
8 that it became a controversy because the validity of
9 the original request came under question.
10 CO-CHAIR HANABUSA: Co-Chair Saiki, am I
11 out of time?
12 CO-CHAIR REPRESENTATIVE SAIKI: We'll be
13 gracious and give you a couple more minutes.
14 CO-CHAIR HANABUSA: Thank you very much.
15 CO-CHAIR REPRESENTATIVE SAIKI: Just a
16 couple of minutes.
17 CO-CHAIR HANABUSA: All right, all right,
18 all right.
19 Q. (By Co-Chair Hanabusa) Let me ask you a
20 question regarding HSTA. We have -- well, I have had
21 calls as well as E-mails from teachers regular DOE
22 teachers who are upset about the Columbus contract,
23 and I understand that the way it's going is Columbus
24 is supposed to be loaning us or leasing us teachers,
25 correct?
240
1 A. Yes.
2 Q. Let me ask you is there or have you heard
3 of any reference to another company doing the same
4 thing as the Columbus Group in terms of hiring and
5 leasing teachers to us?
6 A. Under contract with us?
7 Q. Right.
8 A. I heard rumors something to the effect of
9 a group from Chicago or thereabouts, and I'm not
10 privy to that information.
11 Q. Does the name Altres sound familiar to
12 you?
13 A. No, it doesn't.
14 Q. The other thing, the other question I
15 have is that you are familiar with contracts and how
16 they work with the state, correct?
17 A. Not entirely. I don't consider myself an
18 expert.
19 Q. Let me ask you this: The state operates
20 on a biennial budget; so normally our contracts are
21 only good for two years. You're aware of that?
22 A. Yes.
23 Q. This Columbus Group contract is for three
24 years?
25 A. That's correct.
241
1 Q. Usually when a contract exceeds what we
2 the legislature can do in terms of appropriation,
3 it's conditioned upon further appropriation by the
4 legislative body. Have you seen language like that
5 in contracts?
6 A. Yes.
7 Q. That's not in any of these contracts,
8 correct?
9 A. My understanding is that the contract
10 was -- had a provision which stated it was subject to
11 availability of funds.
12 Q. Did you see it in this?
13 A. I remember seeing it, but I'm not at this
14 point ready to point it out. I don't know where it
15 was.
16 Q. I haven't seen it in the supplemental or
17 anything. So I was curious about that. But your
18 understanding is it is subject to the availability of
19 our funds?
20 A. Yes.
21 Q. Now, my issue regarding the HSTA and the
22 Columbus contract is are you aware of any kind of
23 representation that may be made to these Columbus
24 teachers that they can transfer and become employees
25 of the state, and I think more critically than that
242
1 and somehow get seniority rights above the teachers
2 who are hired by the DOE?
3 A. I have no reason to doubt that that kind
4 of discussion is taking or has taken place. One of
5 the objectives although unrealistic is to make it
6 easier to retain these employees once they're
7 attracted to Hawaii.
8 Q. That would cause us a great morale
9 problem with our already, I guess, tenured DOE
10 teachers, wouldn't it?
11 A. I've always been concerned about that and
12 contracts like this affects the tenured work force.
13 Q. And you believe that the amounts that
14 they are getting paid is already entry level about
15 $4,000 or $5,000 more than what we are able to pay
16 the entry level teachers under the DOE contract,
17 correct?
18 A. Yes, under the old contract they recently
19 negotiated a new contract.
20 Q. But even under the new contract aren't
21 these teachers --
22 A. It would still be a little bit more.
23 CO-CHAIR HANABUSA: Thank you very much.
24 I'll yield to my Co-Chair.
25 CO-CHAIR REPRESENTATIVE SAIKI: Thank
243
1 you, Co-Chair Hanabusa.
2 EXAMINATION
3 BY CO-CHAIR REPRESENTATIVE SAIKI:
4 Q. I just have a few questions, Mr. Yoshii.
5 You stated earlier that you're familiar with the
6 Felix response plan. Was that your testimony?
7 A. Not completely, but I am aware of such a
8 plan.
9 Q. I know that the response plan contains a
10 number of personal related type issues. Are you
11 familiar with those?
12 A. Priority 7 of the Felix response plan
13 deals with the recruitment of teachers and other
14 types of employees.
15 Q. Does that priority No. 7 include a
16 provision for the retention of an entity like
17 Columbus to help with recruitment?
18 A. When the plan was, as I understand it, I
19 was completely left out of the planning. So I don't
20 know. I was completely surprised when it did come up
21 that we had such a plan. I did not see that in the
22 plan initially when it first came out that Columbus
23 was required and held on to contracts required
24 although I heard discussions or talk about it. It
25 was not in any document that I know of, and it did
244
1 not appear until about July.
2 Q. I guess to back up the response plan is a
3 document that was drafted by the Department of
4 Education. I assume it went through the court
5 monitor's office, it was approved by the court
6 itself, correct?
7 A. I'm not really sure.
8 Q. You had stated earlier that Paula
9 Yoshioka had told you that quote, "Groves made me
10 retain or made us retain Columbus."
11 A. No, I did not state that. She did not
12 tell me. She was not speaking to me. I read that in
13 a paper as a quote sometime about December, early
14 December.
15 Q. Did you talk to her personally about
16 Dr. Groves and about this contract?
17 A. No.
18 Q. Do you know whether or not Dr. Groves was
19 actually involved with this contract or identifying
20 Columbus or involved in any way with the Columbus
21 contract?
22 A. My understanding -- and this is
23 secondhand -- is that Dr. Groves insisted that the
24 Department of Education enter into this contract at
25 the terms that are specified and the selection of the
245
1 contractor.
2 Q. When you say secondhand, do you mean are
3 you referring to information other than
4 Ms. Yoshioka's statements in the newspaper?
5 A. Yes.
6 Q. Do you have other sources of information?
7 A. Their meetings that used to be held there
8 FRP implementation meetings. F-R-P is FRP in which
9 other members of the personnel department attended
10 which required coordination and implementation of
11 that planning. I've spoken to members that attended
12 that meeting, and they told me that these statements
13 were made.
14 Q. Did Dr. Groves attend those meetings?
15 A. No, I don't believe so.
16 Q. Did Dr. Groves -- I guess, did
17 Dr. Groves -- how did Dr. Groves make it clear that
18 he wanted Columbus to be retained?
19 A. The relationship as I understand it was
20 that Paula Yoshioka was the go-between that was
21 actually working on the Columbus contract. She was
22 responsible for drafting it and reviewing it and
23 having the superintendent sign it and getting the
24 necessary approvals to do that.
25 I think she was the contact person. I
246
1 don't know if anybody else was involved. I heard
2 John Hawkins from our office was also assigned that
3 responsibility, but I'm not too sure if he had any
4 involvement.
5 Q. To your knowledge, do you know whether
6 the DOE had a choice of providers or was Columbus
7 basically the only choice?
8 A. For this contract which is for looking at
9 Special Ed. teachers and recruiting Special Ed.
10 teachers this was the only company that was
11 considered.
12 Q. Do you know why Dr. Groves is insistent
13 that Columbus be retained?
14 A. I can only speculate on that. I'm sorry.
15 Q. Well, what is your speculation.
16 MR. IKEI: I would prefer that he not
17 answer that question.
18 Q. (By Co-Chair Representative Saiki)
19 Well, what is your understanding then?
20 A. I think this gets too close to my trial
21 in case. So I respectfully decline to answer that.
22 Q. Okay. I understand. Thank you. Do you
23 know whether or not -- and this is a follow-up to
24 Vice-Chair Kokubun's question -- do you know whether
25 or not other members of the advisory panel were
247
1 involved with the Columbus contract, Dr. Judith
2 Schrag, Dr. Lenore Behar?
3 A. My understanding is that Dr. Judith
4 Schrag at that time -- the panel is now disbanded --
5 but that she was the person that represented the
6 educational side of that panel, technical assist
7 panel and she had the expertise to advise the
8 Department of Education side.
9 Q. Do you know whether Dr. Lenore Behar was
10 also involved with the selection of Columbus?
11 A. I don't know Dr. Behar. I've heard
12 things about her, but I don't have personal knowledge
13 of her.
14 Q. Okay. As a follow-up to Vice-Chair
15 Oshiro's questions about basically the qualifications
16 of Columbus, I guess the question I wanted to ask
17 directly was do you believe just based on your
18 knowledge, based on your experience was Columbus
19 qualified to provide these services?
20 A. Not at the point and this is my personal
21 belief upon reviewing the documents and the history
22 not at the point in which the contract was awarded.
23 They had to build capacity in order to execute the
24 contract. My opinion is that this is the reason why
25 they had such a hard time meeting some of the target
248
1 goals.
2 Q. I think this is my last question. You
3 had referred to the use of the consent decree as an
4 opportunity to build a national network for some of
5 these entities. Is that what you said earlier?
6 A. I'm aware that many of the people who are
7 serving as monitors and consultants to consent
8 decrees of similar nature know each other and somehow
9 referred back and forth there's a network involved
10 with this. I don't know for sure exactly. I'm, you
11 know, but I know that they're connected and they know
12 each other.
13 So I would project from there that if
14 Columbus is very successful, that they would be able
15 to become part of other consent decrees who have the
16 same problem in recruiting teachers because they
17 would have the capacity then to solve or be a
18 solution to the shortage problem in those districts
19 which they have consent decrees.
20 Their business could even be expanded
21 further because even if you're not on the consent
22 decree, there are many districts who have shortages
23 in special education teachers being that nationwide
24 this is a huge problem, and it's very difficult for
25 one district to solve the problem by himself.
249
1 Q. Are you aware of areas outside of the
2 Columbus contract where there is an effort being made
3 to develop this kind of national network?
4 A. The -- you know, I'm not an expert in
5 this area. Obviously I'm not part of that network.
6 We've been doing some research on the state directors
7 this organization. It's the state directors of
8 special education or something like that, national
9 organization of state directors of special education.
10 My understanding is that network past
11 members, present members and so forth have a lot to
12 do with coordinating workshops and consultant
13 opportunities, et cetera, and serves as a clearing
14 house. Maybe a contact point by which collaboration
15 can occur.
16 Q. Well, I guess I'll just ask my last
17 question bluntly. Do you think that just based on
18 your experience, based on your observations, do you
19 believe that so-called experts who have been retained
20 as a part of the federal monitoring team in Hawaii
21 have basically come to Hawaii and use the consent
22 decree to advance their own professional interest?
23 A. I'm going to decline and respectfully to
24 answer that question.
25 CO-CHAIR REPRESENTATIVE SAIKI: Okay.
250
1 Thank you very much. We'll take follow-up questions
2 at this point. Mr. Kawashima?
3 SPECIAL COUNSEL KAWASHIMA: I have none.
4 MR. IKEI: Representative Saiki, we
5 apologize for our position, but I think it's
6 necessary that he not answer your last question.
7 CO-CHAIR REPRESENTATIVE SAIKI: I
8 understand. Thank you.
9 Members, any follow-up questions?
10 Members, we'd like to make a recommendation that we
11 issue a -- thank you very much, Mr. Yoshii. We'll
12 conclude this portion.
13 (Witness excused.)
14 CO-CHAIR REPRESENTATIVE SAIKI: The last
15 item on our agenda is the issuance of further
16 subpoenas. We'd like to make a recommendation that
17 we authorize the subpoena to be issued to Paula
18 Yoshioka of the Department of Education. Is there
19 any discussion? If not, we'll take a roll call vote.
20 CO-CHAIR HANABUSA: The issuance of
21 subpoena. Co-Chair Saiki?
22 CO-CHAIR REPRESENTATIVE SAIKI: I.
23 CO-CHAIR HANABUSA: Vice-Chair Kokubun?
24 VICE-CHAIR SENATOR KOKUBUN: I.
25 CO-CHAIR HANABUSA: Vice-Chair Oshiro?
251
1 VICE-CHAIR REPRESENTATIVE OSHIRO: I.
2 CO-CHAIR HANABUSA: Senator Buen?
3 SENATOR BUEN: I.
4 CO-CHAIR HANABUSA: Representative Ito?
5 REPRESENTATIVE ITO: I.
6 CO-CHAIR HANABUSA: Representative
7 Kawakami?
8 REPRESENTATIVE KAWAKAMI: I.
9 CO-CHAIR HANABUSA: Representative Leong?
10 REPRESENTATIVE LEONG: I.
11 CO-CHAIR HANABUSA: Representative
12 Marumoto is excused. Senator Matsuura is excused.
13 Senator Sakamoto is excused. Senator Slom?
14 SENATOR SLOM: I.
15 CO-CHAIR HANABUSA: Co-Chair Hanabusa, I.
16 CO-CHAIR REPRESENTATIVE SAIKI: Okay.
17 Members, thank you very much. We will adjourn our
18 hearing.
19 (Hearing adjourned at 4:06 p.m.)
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252
1 C E R T I F I C A T E
2 STATE OF HAWAII )
) SS:
3 CITY AND COUNTY OF HONOLULU )
4 I, MYRLA R. SEGAWA, Notary Public, State of
5 Hawaii, do hereby certify:
6 That on Saturday, October 6, 2001, at
7 9:10 a.m., the hearing was taken down by me in
8 machine shorthand and was thereafter reduced to
9 typewriting under my supervision; that the foregoing
10 represents, to the best of my ability, a true and
11 correct transcript of the proceedings had in the
12 foregoing matter.
13 I further certify that I am not an attorney
14 for any of the parties hereto, nor in any way
15 concerned with the cause.
16 DATED this 22nd day of OCTOBER 2001, in
17 Honolulu, Hawaii.
18
19
20
21
______________________________
22 MYRLA R. SEGAWA, CSR No. 397
Notary Public, State of Hawaii
23 My Commission Exp: 1-27-2005
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