ONCE UPON A TIME IN AN AUDITOR'S OFFICE NOT SO FAR, FAR AWAY

You don't have to wear a tin-foil hat to swallow the hook, line and sinker of conspiracy theories. Some otherwise normal, rational people seem to think that "they can't say it on the internet if it ain't true... can they?" Or the newspaper for that matter, especially on Kaua`i. Sometimes it feels like there's some national Confederacy of Dunces that's a strong enough alliance to make those of us who require more than speculation and innuendo to determine veracity, think that there actually is a conspiracy- one to designed to obliterate Americans' critical thinking and reading skills.

Kaua`i has it's own brand of conspiracy theorist who is more than happy to connect the disparate dots to form a picture of his or her own design.


The latest of these concerns "Fuel-gate"- the "scandal" surrounding the alleged misappropriation of county gasoline that came on the heels of County Auditor Ernie Pasion's report (still labeled "interim") which found irregularities and pointed fingers in the direction of Mayor Bernard Carvalho Jr.


Despite the efforts of former Prosecuting Attorney (PA) Shaylene Iseri- Carvalho (no relation) to indict the mayor- an effort that won her admonishment from the judge for not having enough votes on the grand jury but moving ahead as if she did- no one has been prosecuted in the case... yet.


The scuttlebutt-narrative around town and on social media has it that, for nefarious reasons, the County Council- which by county charter is responsible for hiring and firing the Auditor- has, instead of pinning a medal on his chest, met at least 20 times by some counts in closed-door executive session to discipline and possibly fire Pasion for some type of as yet unstated misconduct.


The claim is that the council is protecting the mayor and they're all just a bunch of corrupt bums- proof positive that they must be thrown out next November en masse when all are up for re-election.


Many seemingly intelligent self-appointed county government watchdogs and other supporters of Pasion have filed up to the council testimony desk to bemoan the corruption and praise Pasion as a pillar of honesty in the cesspool of misdeeds that is Kaua`i County government.


That is, if you'll pardon my French, Bullsh*t.


The more politically astute in the community- those that actually know the players and follow the action- know the whole affair to be yet another result of the infamous reign of terror of nefarious former PA Iseri-Carvalho (now just plain Iseri... you do the math) and her proxy war on everyone else, being waged by a handful of her still-loyal compatriots.


They include Councilmembers Mel Rapozo and his trusty manservant Ross Kagawa, former Councilmember Kipukai Kuali`i, regular council gadflies Glenn Mickens and Ken Taylor, newspaper columnist Walter Lewis and- no surprise to anyone who has paid attention over the years- Pasion. *


The whys and wherefores of this cabal of Iseri-ites is a subject for a particularly complicated series of flow charts, pie charts and Venn Diagrams to be complied by another reporter on another later day. But the genesis of the council's executive sessions and the fact that Pasion's job is hanging by a still unraveling thread may be more simply explained by examining a little noted actual "claim" submitted by a former Staff Internal Auditor in the Office of the County Auditor, Ron Rawls.


In it Rawls describes how first Pasion attempted to delete possibly exculpatory material from the report which had been compiled by an outside law firm regarding Carvalho's guilt or innocence. Then Rawls says Pasion sought to change key words to strengthen the charges against the Mayor.


But when Rawls insisted that ALL county employees who were found to be using county gasoline without paying for it- including then Prosecuting Attorney Iseri- be cited in the report, Passion refused and retaliated against Rawls, first by excluding him from meetings and anything else to do with the fuel audit and eventually banishing him to a windowless office in another building with no work to do.


The sections in italics below constitutes Rawls' entire statement. It is essential reading for anyone who thought they knew anything about "Fuel-gate."


According to Rawls' notarized declaration in support of his claim:


I was employed as a staff internal auditor in the Office of the County Auditor, County of Kauai.


On June 25,2012,1 filed a complaint alleging a hostile workplace and violations of State and County law involving corruption within the Office of the County Auditor. Since that time, I suffered illegal retaliation based on what and who I reported. I was forced to resign my employment, due to the actions taken against me, and the severe and pervasive hostile work environment that followed because I spoke out about illegal activity as well as ethics violations and misconduct in the Office.


1 was assigned to conduct an audit of county fuel costs, including controls designed to ensure that fuel usage is authorized and limited to valid county business purposes. During this audit, I discovered that the county's Mayor, Bernard Carvalho, may have inappropriately used county fuel in his private car for personal use purposes and I immediately reported this to Auditor Pasion. Auditor Pasion then contracted with the law firm of McCorriston Miller Mukai and MacKinnon LLP (hereinafter "McCorriston") who performed extended audit procedures in the form of investigations into the mayor's use of county fuel for personal use purposes and other . suspected instances of fuel misuse by county employees.


Generally speaking, the purpose of the investigations was supposed to be an independent assessment of the various facts and circumstances surrounding the appearance of fuel use/misuse, with the goal of determining whether illegal acts or fraud had likely occurred. The results of the McCorriston-led investigations were memorialized in two reports; one regarding the mayor's use of fuel and the other regarding a parks employee's alleged misappropriation of fuel. At the outset, I note that McCorriston's May 1, 2012 report regarding the mayor's use of fuel concludes that the mayor may or may not have possessed the mens rea required to support a criminal case against him. The McCorriston report also recommended referral to law enforcement (in this case, the state's Attorney General) if the County Council decided to seek further investigation into the lack of mens rea problem.


According to Wikipedia:


Mens rea is Latin for "guilty mind". In criminal law, it is viewed as one of the necessary elements of some crimes. The standard common law test of criminal liability is usually expressed in the Latin phrase, actus non facit reum nisi mens sit rea, which means "the act is not culpable unless the mind is guilty". Thus, in jurisdictions with due process, there must be an actus reus, or "guilty act," accompanied by some level of mens rea to constitute the crime with which the defendant is charged (see the technical requirement of concurrence). As a general rule, criminal liability does not attach to a person who merely acted with the absence of mental fault. The exception is strict liability crimes.


Anyway, that's when things really began to unravel. Rawls' claim continues saying:


Auditor Pasion submitted a summary report to the County Council based on McCorriston's May 1,2012 report. Prior to providing McCorriston report to the Council, however, Auditor Pasion and I met with the (then) Prosecuting Attorney, Shaylene Iseri- Carvalho. At the meeting, Auditor Pasion and Prosecuting Attorney Iseri-Carvalho decided to withhold from the County Council the portion of the investigators' report which indicated that the mayor may have lacked mens rea as to a potential criminal offense. Thus the report that was provided to the Council had important evidence of innocence removed, before the Council was briefed. I voiced my opposition to this decision to both Auditor Passion and (then) Prosecuting Attorney, Iseri-Carvalho.


Because I disagreed with the decision to withhold this information from the report I formally communicated my concerns to Auditor Pasion in an email message (which I sent to Auditor Pasion at 1:24 p.m. on June 5,2012). In particular, I communicated to Auditor Pasion that I felt that the councilmembers should be provided with all significant information pertaining to the investigation, including the investigators' findings regarding the mayor's possible (lawful) rationale for using county fuel in his private vehicle and the difficulty with lack of evidence regarding criminal intent. Nonetheless, Auditor Pasion removed references to the potential lack of criminal intent from the summary report that he submitted to the County Council. I also note that Auditor Pasion also declined to provide the councilmembers with full version copies of the McCorriston report, which delineates the lack of mens rea problem.

If true, that alone looks pretty bad for both Pasion and Iseri. But there was more manipulation of the report to be submitted to the council. Rawls continued:

I believe the intentional omission of potentially significant information from Auditor Pasion's report was an effort to manipulate the Council's decision regarding whether to refer this matter to law enforcement.. I further believe that this was only one of a number of instances in which Auditor Passion, along with Audit Manager Lani Nakazawa, violated government auditing standards (and hence violated legal requirements set forth in the county charter) relating to auditor independence, objectivity, impartiality, integrity and professional behavior in connection with the fuel costs audit investigations. During the course of the fuel costs audit investigations, I often spoke out about these types of instances. For example, when Ms. Nakazawa provided me with her proposed draft of a memorandum addressed to Council Chair Jay Furfaro, dated December 15, 2010, claiming that "fraud had likely occurred," I spoke out against the use of word "likely" because I felt that we did not have enough evidence to support that contention. Rather, I recommended softening the wording to "fraud may have occurred." However, Auditor Pasion and Ms. Nakazawa declined to change the wording (i.e., from "likely" to

"may"). It is important to note that the wording "fraud has likely occurred" was intentionally used by Auditor Pasion in the December 15,2010 memorandum in order to provide him with an avenue to directly report the mayor's possible misappropriation of county fuel to the Office of the Prosecuting Attorney.

From the early stages of the audit and investigations, it was clear to me that Auditor Pasion, Audit Manager Lani Nakazawa and Prosecuting Attorney Iseri-Carvalho wanted the mayor's fuel use matter referred for criminal prosecution. By contrast, I simply tried to ensure conformity with county charter-required government auditing standards and to be a "voice of reason" and impartiality throughout the fuel audit and investigation process. This often put me at odds with Auditor Pasion.

Lani Nakazawa is the former County Attorney who was appointed when Bryan Baptiste became mayor in 2002 and began the era when the county charter was reinterpreted to say that the office's functions and responsibilities had no public component but rather only represented the council, the mayor and administration personnel.

As we characterized her our introduction to Chapter 11 of our serialization of Anthony Sommer's book "KPD Blue"


With “A New Mayor” in 2002 came a new era of mind boggling and often illegal secrecy and legal deception initiated by Bryan Baptiste’s new County Attorney, Lani Nakazawa.

In Chapter 11 of KPD Blue by Anthony Sommer we meet Nakazawa, the Red Queen of the Smokescreen and initiator of a new era of secret meetings and padlocked records, who now represents Kaua`i as a state “legislative liaison”- a cushy, low-work, high-pay, unbudgeted, lobbying position created by Baptiste without council approval- or knowledge.

Despite months of requests from the county council to have Nakazawa appear before them to go over the agenda for the last and the coming legislative sessions, she’s refused to appear with a new excuse every two weeks.

Meet her and get to know the real Bryan Baptiste in this week’s serialization of KPD Blue.

Getting back to Rawls' claim, so far so bad. But that's when things really went through the looking glass and Pasion was "forced" to step in to protect his ally Iseri.

In November 2010, during the course of the same fuel costs audit, information came to my attention that a number of county employees were using county-owned vehicles on a take home basis. Since county-purchased fuel was likely used by these employees for commuting and other personal use purposes, investigating this possible misuse of fuel clearly fell within the scope of my fuel costs audit. State law required that I look into all people who may have been misappropriating fuel, as a part of such a fuel-use audit - not just they Mayor.


HRS, Division 1, Title 9, Chapter 105, Sections 105-1 through 105-5, provides that it is unlawful for any county employee to use a county-owned vehicle for personal use, including commuting. Penalties for violating section 105-1 include a fine (up to $50) and/or imprisonment (up to 10 days). In addition to the statutory restrictions, I found that the county has a policy prohibiting unauthorized use of county-owned vehicles dating back to November 2002. The policy was prepared in order to ensure compliance with the aforementioned state law.


On August 4,2011, before the McCorriston-led investigations commenced, the Office of the County Auditor received a written allegation from an anonymous person asserting that the (then) elected Prosecuting Attorney and her First Deputy Prosecuting Attorney were routinely using county-owned vehicles for personal use purposes, including commuting, daily errands and the like. The use of county-owned vehicles and fuel by the prosecuting attorney and her first deputy was substantiated and was quite analogous to the situation involving the mayor's alleged unauthorized use of county fuel. I reported my findings and the possibility that the Prosecuting Attorney had engaged in illegal fuel use to Auditor Pasion. I strongly advocated that the information that we had already gathered regarding the possible unauthorized use of county-owned vehicles and fuel by county employees (including the prosecuting attorney and her first deputy) should be provided to the McCorriston investigators for their review and consideration. Auditor Pasion objected.


However, shortly before entering a meeting with the investigators at the McCorriston offices in Honolulu in mid-August 2011,1 was able to persuade Auditor Pasion to allow me to provide the anonymous allegation letter and other information regarding "take home vehicle" use to the investigators. At the meeting, the investigators immediately recognized that the possible unauthorized use of county vehicles and fuel by the Prosecuting Attorney, her first deputy, and multiple other county employees needed to be fully investigated in conjunction with the investigation of possible unauthorized use of fuel by the mayor. The investigators were unequivocal in their position and cited the likelihood of serious prosecutorial problems arising from the appearance of "selective prosecution" if different audit/investigation standards were applied to different individuals.


Nonetheless, in early-September 2011, Auditor Pasion contacted the McCorriston investigators and directed them to focus their efforts first on investigating the possible misuse of fuel by the mayor and, secondly, on a parks department employee who appeared to have misappropriated gasoline by way of county 5-gallon gas cans.


The same month, Auditor Pasion specifically directed the investigators to not investigate the use of fuel by any other employees, including the prosecuting attorney and her first deputy. It was clear to me that Auditor Pasion was trying to quash or postpone indefinitely any investigation into possible unauthorized use of county-purchased fuel (and a county owned vehicle) by the Prosecuting Attorney - in violation of the scope of the audit and in violation of State and County law.


I have also come to learn that Mr. Pasion is a close political ally of the former • Prosecuting Attorney. On the contrary, I have observed that Auditor Pasion openly disdains and disparages Mayor Carvalho.


Finally, when Rawls refused to shut up like a good little county employee he was retaliated against by Pasion by being shut out of all office activity and finally shut out of the office itself.


In late-April 2012, after receiving documents from the McCorriston investigations into the mayor's unauthorized use of fuel and the parks employee's possible misappropriation of fuel, I discussed the take home vehicles and fuel use/misuse matter with Auditor Pasion.


I believed that Auditor Pasion was knowingly failing to perform his duties, which are inherent in the nature of the Office of the Auditor, as defined in the county charter. In April 2012,1 spoke up about this misconduct and I openly recommended that Auditor Pasion recuse himself from further involvement in the take home vehicles investigation. I also confronted him at that time with a report that he had engaged in illegal quid pro quo dealings with the Prosecuting Attorney.


On May 10,2012,1 formally recommended that Auditor Pasion "self-assess" his ability to maintain auditor independence with respect to the take home vehicles audit/investigation .matter and that he consider recusing himself from further involvement. In response, Auditor Pasion lashed out at me.


Auditor Pasion then retaliated against me by excluding me from any further involvement in the take home vehicles matter. In particular, he re-assigned the take home vehicles audit/investigation to Ms. Iwasaki and he ordered me to turn over all of my papers relating to the take home vehicles matter to Ms. Iwasaki.


Auditor Pasion further subjected me to various forms of unlawful retaliation for my role in uncovering/revealing possible illegal activity by the prosecuting attorney and her first deputy, even though investigating and discovering this information was part of my job responsibilities.


Among other things, Auditor Passion encouraged the auditing staff to stop speaking to me about anything but the most essential work matters. He and/or the auditing staff began having daily, multiple and secretive closed door meetings at work, and all of these meetings specifically excluded me. He also hid my other fuel costs audit workpaper files in a locked file cabinet drawer (without telling me) and he directed Ms. Iwasaki to take control of the file cabinet key - so that I could not access the key or the contents of the office file cabinet.


On June 5,2012, Auditor Pasion called for an impromptu staff meeting in which Auditor Pasion and Ms. Nakazawa ridiculed me with false accusations about the quality and timeliness of my work. This was done in the presence of my co-worker, Ms. Iwasaki, At least three times during the meeting I told Auditor Pasion that I felt that his and Ms. Nakazawa's comments and attacking tone, as well as the subject matter (i.e., my work performance) were inappropriate for an open staff meeting and I asked him to stop it. He declined each of my requests to stop the verbal attacks.


The June 5,2012 impromptu staff meeting was held at approximately 2:30 p.m., which was approximately one hour after I submitted the aforementioned email to Auditor Pasion citing my disagreement with his decision to omit significant information from the proposed audit report to the council regarding the investigation into the mayor's use of fuel.


It should also be noted that, in the moments immediately prior to the June 5th staff meeting, Auditor Pasion held a closed door meeting with Ms. Nakazawa and Ms. Iwasaki.


Between June 5th and June 25th, Auditor Pasion subjected my cash management audit different standards than were applied to audits conducted by my coworkers. On June 25, 2012,1 filed a complaint alleging a hostile workplace and corruption within the Office of the County Auditor. Shortly thereafter, I was offered a workspace in a separate building.


Even though I was physically located in a separate workspace, I was ready, willing and able to conduct audits as required by my job description.. In July 2012, Auditor Pasion assigned me to work on an audit of parks maintenance and improvement activities, for which I promptly began performing background research (a normal audit planning phase activity).


However, beginning in early-August 2012, Ms. Pasion began taking my assignments away from me without any explanation or logical reason. More specifically: • On August 8, Auditor Pasion re-assigned the remaining portion of my responsibility for the fuel costs audit to Ms. Iwasaki. Auditor Pasion offered no explanation for this change.


• On August 10,2012, 1 submitted a detailed, seven page audit "scoping statement" to Auditor Pasion, which provided an overall framework for a proposed audit of the county parks department maintenance and improvement activities. However, instead of reviewing and approving the scoping statement as he normally does, Auditor Pasion inexplicably declined to allow me to proceed with any meaningful work on this audit. By late-September 2012, this audit completely "stalled out" when Auditor Pasion discontinued all contact with me regarding this assignment. As a result of these actions, I was no longer allowed to work on meaningful audit assignments. In short, I was denied virtually all opportunity to do my job.


Also in August 2012, Auditor Pasion sent Ms. Nakazawa and Ms. Iwasaki to a three day national governmental accounting and auditing training conference in San Diego, California. I was not told about this conference nor was I allowed to attend an alternative training conference, as normally would have been the case. I was denied this in retaliation for my insisting that the Council be provided with evidence of the Mayor's potential innocence as well as guilt, and for my suggestion that the audit also cover allegedly similar fuel misuse by the Prosecuting Attorney, the auditor's political ally.


On August 30,2012,1 formally reported the ongoing retaliation by my supervisor against ' me to the County Council, as well as the county's Human Resources department and the Office of the County Attorney. I reported that the retaliation was having an adverse impact on my ability to do my job and I requested that immediate action be taken to stop the retaliation. (Note: The council hired an investigator in September 2012, but this action did not stop the retaliation.)


Between September 2012 and November 2012, the retaliation continued and I reported it to the council's investigator. For example, I reported that my responsibility as the Office's liaison with the external. CP A firm that performed the annual financial statement audit of the county's comprehensive annual financial report (CAFR) was taken away from me without any notice. A representative from the audit engagement partner for the CPA firm told me that Auditor Pasion had informed the firm something to the effect that "Ron Rawls no longer works for the Office of the Auditor" and that all communications between the CPA firm and the Office of the Auditor should be directed to Auditor Pasion. To my knowledge, the council's investigator provided substantial documentation regarding the retaliation to the County Council in mid-November 2012. Again, however, no discernible action was taken to stop the retaliation.


Consequently, I was left sitting in a small windowless office with no audit work assignments from mid-August 2012 through my last day of work, on January 7,2013. These working conditions and the continuing retaliation and hostile work environment became so intolerable that I felt I had been constructively discharged from my employment.

Quite the tale of fear and loathing but hardly unique in the annuls of Kaua`i County.

The slew of EEOC (Equal Employment Opportunity Commission) complaints and resulting "right to sue" letters- a few of which sprang forth from the actions of Iseri herself- stand as testimony to the fact that the county "just doesn't get it."

In fact the line of former employees that are trying to submit their cases to the EEOC to obtain the required determination to file suit is so long that finding local attorneys to take the cases is at best difficult and sometimes impossible because so many have conflicts-of-interest, having sued many of the same supervisors and department heads before on behalf of various other clients.

For completeness we've included the rest of the claim which discusses the damages Rawls was/is seeking.

Thus, I have lost, at a minimum, the following money and income due directly to Mr. Pasion's unlawful retaliation:


Increase in monthly expenses:
Expense Category Kaua'i Oahu
Net Increase in Monthly Expenses
Rent $ 850 $ 1,850 $ 1,000
Utilities: Electricity, and Cable TV 0 150 150
Parking at state parking garage 0 50 50
Groceries, household items 160 260 100
Meals out 200 280 80
Inter-island flights 0 220 220
Cab fares to/from HNL or parking at HNL 0 80 80
Golf 60 180 120
Total $ 1,800


On average, my general living costs in Honolulu are approximately $1,800 per month more than my cost of living on Kauai. This equates to $21,600 per year. I have nine working years remaining before my planned retirement age of 65, and therefore the projected additional cost for me to live and work in Honolulu until I reach retirement age is $194,400.


In addition, I believe my future earnings potential has been significantly damaged. As an auditor for the Office of the Auditor on Kaua'i, I was the likely candidate to advance into the audit manager position after Lani Nakazawa retired. And I was a likely candidate to be selected for the county auditor position upon Mr. Pasion's retirement. The annual salary for the county's audit manager position is currently $103,000 per year and the annual salary for the county auditor position is nearly $115,000 per year, whereas my current annual salary as an audit manager for the Office of the State Auditor in Honolulu is $91,000. Therefore, I have lost additional future earnings potential in the amount of $12,000 to $24,000 per year. Using $18,000 per year as an average, this equates to an additional $162,000.


Together, my lost earnings potential and the additional cost of living and working in Honolulu until retirement age can be reasonably projected to be $356,400.


I am hereby making a claim against the County in this amount ($356,400). As I incur attorney's fees to protect my right to work in a place that is free from illegal activity and retaliation for reporting the same, my demand my substantially increase. I am requesting that the County engage in dialogue with my attorney, Daniel Hempey, within 30 days of receiving this claim.


April 8,2013


The story about Rawls' claim was originally reported and his statement posted by Joan Conrow last May 31 but seemingly none of Iseri's minions- nor the conspiracy theorists- have bothered to read the claim... unless of course they simply chose to ignore it. We haven't heard of any even attempting to refute it.


We don't know what the council has found in the many executive sessions over the past year. We don't even know if Rawls' statement is true or made up out of whole cloth. Certainly some of it is verifiable and if sworn depositions are taken one would have to wonder how far Iseri, Pasion and their backers would go to protect them. Perjury is after all a serious crime.


But the notion that the council is protecting the mayor is patently ludicrous. The council is made up of seven individuals who, to varying degrees, support and oppose the mayor many times depending on the issue although permanent grudges and feuds are commonplace.


And there's certainly no love lost between Iseri and Mayor Carvalho or certain other councilmembers. Rapozo has been a proxy for Iseri in almost all matters before the council which may go a long way to explaining what the hold-up in dismissing Pasion is all about.


But to think that councilmembers would all agree to coverup crimes during official (and tape recorded) meetings is nonsensical, especially when one considers how well the narrative of Iseri's political alliances and her past alleged crimes- which include multiple alleged abuses of her prosecutorial powers and retaliation against those who tried to expose them- mesh with Rawls' allegations.


But the "don't confuse me with the facts" crowd will no doubt ignore and try to defame Rawls even though his account is the one thing that makes sense through it all.


(Note: the text of Rawls' sworn statement was derived by using optical character recognition software on the PDF linked above. Although we reviewed it for accuracy OCR can contain "typos.")

 
*(Correction: Shaylene Iseri was no longer on the council when Ernie Passion was appointed to the position of County Auditor. We apologize for the error which has been corrected.)