Managers, supervisors among 14 state tax employees under investigation

Published: Mar. 8, 2012 at 10:39 PM HST|Updated: Mar. 8, 2012 at 11:37 PM HST
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Gov Neil Abercrombie
Gov Neil Abercrombie

HONOLULU (HawaiiNewsNow) – Several top managers at the State Tax Department are among 14 employees under investigation for possible criminal wrongdoing in a probe that has lasted nearly three months, sources said.

The department placed the employees on leave without pay Dec. 15, the department said.  After about one month, they were all put on leave with pay as called for in their contract, sources said, so state taxpayers are continuing to pay their salaries even though they're not on the job as the tax filing deadline is just five weeks away.

The employees under investigation work at the Oahu District Tax Office on Punchbowl Street in downtown Honolulu.

A source said the investigation centers on whether the 14 tax department employees got improper access to computerized tax records they were not authorized to see, something another source called "unauthorized browsing."

Among those under investigation are supervisors as well as branch and division chiefs in the collections branch, the taxpayer services division and the criminal investigations office, sources said.

The supervisory personnel under scrutiny have anywhere from eight to 28 years of experience in the department.

At least two of the 14 people under investigation have chosen to retire since they were put on leave in mid-December, including one management official with more than 23 years in the department who retired Dec. 31, 2011, according to public records.  A second supervisor, a 16-year veteran of the tax department, retired Jan. 31, 2012, according to department records.

"It's taking longer than I would have liked, but in the end, I think we'll be completely accurate.  And if something needs to be done, it will," said Gov. Neil Abercrombie, who answered questions about the investigation from Hawaii News Now during an interview in his office Thursday.

"The pressure, if you will, of events, particularly around tax season, makes it even more important that we bring this to as rapid a conclusion as we can," Abercrombie said.

It is a two-pronged investigation, with an administrative probe in the tax department and a potential criminal investigation being handled by the Attorney General's office, officials said.

"Although it may seem like the investigation is taking a long time, the investigation process is complex and involves numerous issues and individuals," said Fred Pablo, the state tax director, in a statement released Thursday.

"Above all, the department must balance the need to thoroughly investigate these cases with the employees' right to a fair review process," Pablo said.

Abercrombie, whose administration is asking lawmakers for millions of dollars to upgrade state information and computer systems, said, "It's apparently turned out to be a little more complicated, in no small measure, because of the inadequacy of our computer system."

"If it turns out that it was maybe some policy questions that weren't adequately dealt with as opposed to criminal activity, then the extra time will be well worth it," Abercrombie said.

The 14 employees not working because of the investigation are making the short-staffed situation at the tax department worse, since it already suffers from a 23-percent vacancy rate, with 91 unfilled jobs out of 403 positions.

In spite of that, the tax officials said they have seen a 95-percent increase in the number of state tax refunds that have gone out to taxpayers as of Thursday, compared with year-ago numbers.

"Although we've had significant staffing challenges, the remaining department staff are dedicated to their work and continue to find ways to do their jobs better," said Mallory Fujitani, a spokeswoman for the tax department.

Randy Perreira is executive director of Hawaii Government Employees Association, the union that represents some of the tax department employees under investigation.

"We are aware while it is taking a while, it is an ongoing investigation.  As result, we're not in the position to comment until the attorney general and the tax department determine which course to take with the investigation," Perreira said.

He said the HGEA contract allows for its members to be placed on leave without pay for not longer than 30 days if they are under investigation.  After that, the contract calls for management to return the employee to active duty pending the outcome of the probe, place the employee on leave with pay or reassign the employee to another work unit or area, Perreira said.

"Both sides agreed that 30 days would be ample time to conduct an investigation," said Perreira, who negotiated the policy with state officials years ago.

The tax department said security breaches were discovered during an audit of the department's security systems and internal controls, touching off the probe late last year.

A departmental news release said the internal security breaches in the computer tax database occurred "at least as far back as 2008," during the administration of former Gov. Linda Lingle. 

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