Senate Kills $10 Million SPRB for Rosette Steel

By Malia Zimmerman, HawaiiReporter.com

On the Web site of Rosette Steel Hawaii, the slogan posted is “Steel it All with Rosette.”

It wasn’t that slogan that concerned Hawaii State Senators necessarily, but rather the seven misdemeanor criminal convictions of company chairman, Kevin Andrews, and the fact that he has an alias, Kevin Jeffries, which led them to recommit a bill that would benefit his company.

HB 3077, which was introduced by Rep. Jon Riki Karamatsu, authorized the issuance of a $10 million Special Purpose Revenue Bond to fund Rosette Steel Hawaii. The proposed legislation stated the money would be used by Rosette Steel to assist “with technology-based manufacturing of steel products for the construction industry to assist in the development of affordable housing in Hawaii.”

The bill made its way quickly through the 60-day legislative session until two Republican Senators looked into Andrew’s background. HB 3077 was signed of by House Finance Chair Dwight Takamine, D-Hilo, and his committee members, and passed the entire House on third reading on March 7, 2006, with unanimous support from all 51 House members.

In the Senate, the bill made its way through the Senate Business and Economic Development Committee and the Senate Ways and Means Committee and two votes on First and Second Reading by the full Senate, with just Sen. Gordon Trimble, R-Waikiki, voting no.

Trimble says he became concerned about the proposed $10 million bond for Andrews when he spoke to Andrews about a project that he claimed to have constructed at Pier 1 State Harbor in Honolulu. But Trimble says there is no construction at the alleged location. An Oct. 21, 2005, article in Pacific Business News by Prabha Natarajan entitled “Steel Plant Rises in Kakaako” profiles Andrews and his plant but does not mention any of his criminal convictions or whether the reporter actually visited the site.

State Sen. Sam Slom, R-Hawaii Kai, followed up on Trimble’s concerns, completing a background check on Andrews in time for the Tuesday, April 11, crossover session.

Slom told fellow lawmakers on the Senate floor on Tuesday what his research bore out — Andrews has an alias and series of misdemeanor crimes began in 1977 and continued until 2005. In 1977 and 1979, Andrews was convicted of contempt of court; in 1982, 1986 and 1996, he was convicted of criminal contempt of court; in 1993 and 2005, he was convicted of operating a vehicle under the influence of an intoxicant.

“Please, someone tell me if I am wrong about this man,” Slom said to fellow lawmakers in a speech on the Senate floor, after he said he was planning to vote against the bill. Slom shared additional information he found on Andrews in the local print media including a July 2004 article in the Honolulu Star-Bulletin that documented Andrews’ arrest in the West African Nation of Ghana for alleged breach of contract. Andrews went to Ghana with two other Americans to install equipment in a factory, but the project fell behind, Andrews’ wife told the Honolulu Star-Bulletin reporter Leila Fujimori.

The 2004 Honolulu Star-Bulletin article also reports that the Department of Land and Natural Resources was investigating Andrews for improper use of agricultural land that he leases from the state. Sen. Clayton Hee called a brief recess, and Democrats flocked around the information Slom had compiled on the company and its president. Within 5 minutes, they reconvened and the Senate President Robert Bunda announced the bill was being recommitted.

Senators on both sides of the political isle agreed with Slom that the $10 million Special Purpose Revenue Bond for Rosette was a concern not only because of his criminal record, but because of unanswered questions about state liability. Special Purpose Revenue Bonds were first issued in rare circumstances for healthcare, education and non-profit related projects. But the question has arisen as to whether the state could be held financially liable if the projects failed since the bonds were issued under the auspices of the state in order to give the bond recipients a preferential and reduced interest rate. “It has generally been felt that the state would not be financially liable. However in this issue, the state might be liable for any wrongdoing by Andrews, especially since the Legislature has been put on notice about his past business and judicial history,” Slom says.

Kevin Andrews did not return calls to Hawaii Reporter to comment on the Senate’s justification to recommit the bill.

May 2006 SB News Front Page

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