Amid a growing corruption scandal, North Kona Councilman Holeka Inaba believes the county’s use of affordable housing credits deserves a deeper look, and he’s sponsored a resolution asking the county auditor to do just that.
Developers who agree to construct new affordable housing units in excess of any requirements imposed under county law may earn affordable housing credits. The credits can be transferred to other developers, who can use them to satisfy existing or future affordable housing requirements.
The county’s use of the credits has recently come under greater scrutiny, following a guilty plea to accepting almost $2 million in bribes from former community development specialist Alan Scott Rudo in the county Department of Housing and Community Development and the federal indictment of two local attorneys and a third individual.
A federal grand jury returned an eight-count indictment Friday against attorneys Paul Joseph Sulla, Jr. and Gary Charles Zamber, charged with six counts of honest services wire fraud and one count of conspiracy. Sulla is also charged with one count of money laundering.
Rajesh P. Budhabhatti, a Big Island businessman, was charged in separate complaints with conspiracy to commit honest services wire fraud.
“Public trust in the county’s affordable housing credits processes has been broken. This audit of the Office of Housing and Community Development is an essential first step towards increased integrity and transparency in government,” Inaba said. “Our need for affordable housing continues and I believe this audit will guide us towards increased development of affordable units.”
The Housing Office provided Inaba a summary of affordable housing credits that have been awarded and use. The report shows 18 projects receiving the credits over the past 20 years, with 1,042 credits still unused.
“With even more concern of corruption with these credits, now is the time to audit what has happened,” Inaba said.
County Auditor Tyler Benner, who’s recently addressed questions about his audit plans for the housing agency from both the County Council and the Cost of Government Commission, said Monday he “can’t commit” to an audit until he determines whether there’s a consensus in the council. At that point, the next step would be a discussion with the agency, he said.
In addition, he’s told both the council and the commission that he may not be able to conduct an audit while any federal investigations are ongoing.
“We’re just going to have to take it day-by-day,” Benner said.
Resolution 467 is scheduled to be heard Aug. 2 by the council Finance Committee.
County Housing Administrator Susan Kunz previously said her office is cooperating with federal investigators. She’s planning to continue that cooperation on the county level, she said.
“I am aware of Resolution 467-22 and favor working transparently and collaboratively to ensure the lawful and efficient issuance and utilization of affordable housing credits islandwide,” Kunz said Monday in a statement. “I have already been in conversation with Mayor (Mitch) Roth and the County Auditor in regards to this issue, and look forward to working in partnership with the administration and the Council to continue building public trust throughout our county.”
