JUDGEMENT CLOUDS FEDERAL GRANTS

After Ruling, Chief May Not Be Able To Accept Drug Funds

HILO - Federal grants to train Big Island police officers to fight illegal
drugs and purchase equipment were approved Tuesday by the County Council
Finance Committee, despite concerns over Police Chief Wayne Carvalho's
ability to secure the funding.

Ka"u Councilwoman Julie Jacobson raised concerns May 2 about the chief's
role in the police promotion fixing civil case, when the council was
considering accepting a $265,000 marijuana eradication grant.

Carvalho, as well as the county and former deputy chief Francis DeMorales,
was found liable for committing commercial bribery and civil racketeering
for fixing department promotions from 1984 to 1994. The verdict is expected
to be appealed to the Hawaii Supreme Court.

Federal government rules state anyone applying for grants must certify they
have not had a civil judgment against them for commission of fraud,
embezzlement, theft, forgery, bribery or making false claims.

In a written opinion to the Finance Committee, Richard Wurdeman, Corporation
Counsel, said Carvalho may be precluded from participating, although
exclusion is at the discretion of the federal government. He said it does
not appear Carvalho can sign the certification form.

However, Carvalho does not have to sign certification and instead can send a
letter explaining why he can't sign the form. Not signing the form does not
prevent participation in federal programs, Wurdeman said.

Finance Committee members approved accepting a $65,193 grant to train
officers to detect and neutralize drug manufacturing laboratories and a
$97,045 grant to purchase equipment such as radar and portable radios.

Jacobson voted against both bills, citing concerns about Carvalho's
involvement. Hilo Councilwoman Bobby Jean Leithead-Todd said the federal
regulations appear to target mismanagement of funds, not actions for which
the jury found Carvalho liable.

"It's trying to protect the federal government from getting ripped off. It's
trying to protect the federal government from having funds mismanaged," she
said.

However, Finance Committee members said the quick fix to that problem would
be letting another high-ranking police official, such as Deputy Chief James
Correa, sign the documents.

Aaron Chung, Finance Committee chairman, said the chief should just send the
letter explaining why he can't sign the certification and in the meantime,
the county attorney can get more clarification on the matter from the Office
of Justice Programs.

The committee also approved a four-year contract for county employees in the
Hawaii Government Employees Association. The union was awarded raises in the
final two years of the contract through binding arbitration.

The raises don't take affect until the 2001-02 fiscal budget, and could cost
an additional $7.4 million in the final two years of the contract.

Kona Councilmembers Curtis Tyler and Nancy Pisicchio voted against the
raises.

Meanwhile, the council's Public Works and Parks Committee approved a measure
to allow a four-way stop sign at the intersection of Kuakini Highway and
Kaiwi Street.

The intersection, in the Old Industrial Area, currently has stop signs on
both sides of Kaiwi Street, but none on Kuakini Highway. Stop signs would be
added in both south-bound and north-bound directions.

All measures approved by the committees Tuesday still must be approved
before the full council.