This is just a small footnote on the unfolding story of the University of Hawaii’s ill-fated fundraising concert that was to feature Stevie Wonder.
I was looking through some recently filed documents at the State Ethics Commission and happened to see the gift disclosure form filed by UH Athletic Director Jim Donovan, currently on paid leave while the failed concert is investigated. As you can see, Donovan said he received no reportable gifts from any one source with an aggregate value of more than $200 during the prior year, where the source of the gifts had any interests that could have been impacted by any official action, or inaction, on Donovan’s part.
I hate to look like I’m picking on Donovan when he’s “down,” especially because in my experience, he is really a very nice guy. But other university officials have reported trips paid for by professional associations or other third parties, meals paid by potential vendors, etc. Donovan’s report says he received nothing of the kind, despite the wheeling & dealing in the world of Division 1 athletics. Forgive me for being dubious.
There’s another related area that deserves another look, and that is money received and/or spent by Donovan from accounts managed by the UH Foundation on behalf of the athletic department and under the control of the athletic director.
These funds were the subject of an ethics commission opinion back in 2004, which concluded that then-UH President Evan Dobelle had to disclose expenditures made from so-called “protocol accounts” lodged in the UH Foundation. I’ve previously referred to this situation several times (see, for example, 7/24/2010 entry, “Few UH officials disclose protocol spending“).
As far as I know, the Ethics Commission still takes the position that UH officials with discretionary control over these funds must report the spending as gifts from the Foundation. This stems, in part, from the foundation’s insistence that it is independent from the university, despite the fact that it exists to do UH business and is housed on the UH Manoa campus. The commission’s position has been that because the foundation is not a state agency, funds flowing to state officials must be considered as disclosable gifts. Anyway, you can read the commission’s reasoning in the 2004 opinion.
It’s probably time for another review of the athletic department’s finances with special attention to these affiliated funds run through the UH Foundation.
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If Donovan must report UHF spending as a gift, must UHF, as a tax exempt non profit, report that spending somewhere such that there can be a correlation, as with lobbyists and politicians?
Ian, the gifts disclosure law (HRS 84-11.5–not the same as the gifts law), which disclosure law I wrote in the late eighties and had introduced at the legislature at that time and then later in 1992 when it was passed, requires the disclosure of gifts singly or in the aggregate in excess of $200 received between June 1 of one year to June 1 of the next year. Gifts that meet the monetary threshold must be reported if the donor “may” be affected by official action by the recipient-state official or employee. I believe in the Dobelle case it was established that he took official action affecting the UH Foundation. It is not the case that the gifts had to be reported simply because the gifts are given–there must be official action involved. For gifts where there is no official action, there are a few other ethics laws that deal with these.
Donovan or other officials would have to report gifts if the same were true for them as was true for Dobelle.
The law that deals with the acceptance of gifts in the first place (HRS 84-11) prohibits gifts when the recipient takes official action affecting the donor and it “can reasonably be inferred” “under the circumstances” that a gift is “intended” to influence the state official. The gifts that went to, say, Dobelle from the UH Foundation, were acceptable because they were not personal gifts to him, but gifts given for him to carry out his state duties–that is the rationale the Commission uses in these gifts that are not strictly personal gifts. The Commission in the past has weighed whether the gift redounds more to the benefit of the State as opposed to the state official. (Note: the Commission sides for acceptance in these cases in lieu of anything to the contrary, but takes a hard look at these things, of course.)
A purely personal gift is problematic, if it is given because of a state official’s status as a state official, or otherwise violates 84-11.
It seems to me that gift recipients, other than those who are trying to get away with not reporting, may be too close to the situation to be able to determine when they are required to report gifts.
One test that I think just about everyone could understand is that if the gift were announced in the news, would people think it causes a conflict of interest? If the answer is yes, then it should be reported. What do you think, Dan?
Natalie, I agree. On numerous occasions (I think starting in the early 2000’s), when I was with the Commission, upon my recommendation we introduced legislation to lower the reporting threshold for the year to, I think, $50–hoping that amount might be palatable to legislators. I think I considered a bill with $25, but not sure we went that far in introducing such a bill. At this point, I would recommend reporting all gifts over some really low value, such as $5 or $10, and whether the gift is a personal one, or for carrying out state business. Perhaps someday such a law will pass. What you refer to, as you probably know, is sort of known as the “newspaper front-page test”. In other words, don’t do anything you would not feel comfortable about reading on the front page. Legislators and maybe others have their staff keep logs of gifts they receive. If staffers keep such logs, it used to be the case that these logs become public records–there was a big flap about this I think during the 1993 legislative session, when a newspaper intern demanded to have such logs from legislators, and I think got them. To be clear, I think a dollar threshold should be set or even no threshold at all, except for de minimus things perhaps. In my experience, I don’t think everyone would be on the same page (no pun intended) with a newspaper test–most would, but it would allow for wiggle room, and for notions of what “others” would think– I think vague for a law. But in essence a law embodying basically what you say I think would be just fine. I tried to get the threshold down to $50 I think during four or five legislative sessions. I do think things go unreported or underestimated in value, and perhaps the gifts should be reported monthly–after all, they are worth the time to take. Many of course don’t take gifts allowed by the law–many people make voluntary decisions of what is ethical and I often recommended the newspaper test as a guide. Unfortunately, good laws are needed to eliminate conduct that diminishes public confidence in government officials, or worse. I was amazed in 1992 that $200 was passed as a threshold (that is less than $20 per month) and that the law passed, though I believe that some legislators thought they could eliminate the law during the 1993 session before the first reports were due in June of that year. 1992 was an election year, and the law got passed thanks to then-Senator Blair, who I believe thought it should be passed anyway, but I think there was a strong notion by others that it would be undone in 1993. The 1993 session was a battle royale to keep the law from being eliminated. It resulted in much bashing by certain legislators of yours truly. But, in the end we prevailed, thanks to some good newspaper editorials, then-Senator Bert Kobayashi, and others like Hugh Jones, who headed the OIP at the time and testified against the undoing the law along with me. The fact that the gifts disclosure law survived is close to a minor miracle. I agree it can be made better. Note that the Lobbyists law (Chapter 97) at the least requires companies who hire lobbyists who pay for gifts for legislators to disclose those on their lobbying forms if the gift amounts to $25 per day or $150 in the aggregate during any of the three reporting periods during the year. Unfortunately, it seems that some lobbyists have found a loophole, and I do not think are complying with neither the spirit or letter of the law. The gifts disclosure law was to work in tandem with the lobbying laws. Thus, there may similarly be a loophole being used regarding the gifts disclosure law. It is really not a loophole–just an argument if anyone is found out about a “technical” reading of the law that goes against the spirit and letter of the law. I think the loophole is that many people contribute to one gift or gifts–thus one can say one did not receive the threshold amount from one source. I think this is being done, but hard to find out who. Lots of work to be done through better legislation.
Wow. Thank you for all of that background information!
“I would recommend reporting all gifts over some really low value, such as $5 or $10. . . ” With the price of a plate lunch between those price ranges, I think that may be a little too low, but I don’t have a good feel for how much reporting would be required if that were the level. Some of our laws are so cumbersome, offices need one person dedicated just to compliance issues. The question is, where is that level that balances the public’s desire for information with the cost of complying?
“. . . the Lobbyists law (Chapter 97) at the least requires companies who hire lobbyists who pay for gifts for legislators to disclose those on their lobbying forms . . .” This is another area that needs work, because not everyone who is required to register actually has done so. I think part of the problem here is just plain ignorance of the law. (Does anyone check up on testifiers?)
“. . . many people contribute to one gift or gifts–thus one can say one did not receive the threshold amount from one source . . .” This is the reverse of what happens with tax reporting. If a gift is over $25 (the federal maximum limit for deducing a gift) but is for an office full of people, then the amount is likely fully deducted.
I am curious what you think about the acceptance of gifts from Hunt Development, Parsons Brinckerhoff and HDR Engineering for the Mayor’s Memorial Day ceremony. They contributed a total of $10,000 to the event, which cost $12,000. (The city’s policies regarding gifts basically state that if there’s an “appearance” of conflict of interest, the gift should not be accepted.)
Natalie, You are welcome for the background information–I think if we all knew what goes on, we would all have a collective coronary. Every day I was the director of the Commission would bring some astonishing information about how government is REALLY run–things you would not believe, and are rarely mentioned by anyone. I had a legislator tell me maybe around 2000 that there were still legislators who believed the state supreme court should run its opinions about cases by the legislature confidentially before making a decision on important cases, and the legislator conveyed this was standard procedure for a long time in the not so distant past. Was that the case? A number of years before, the CCommissioner at the time stated that this particular legislator “talked too much”. (A lot of high-ranking elected officials and their cohorts think the people of Hawaii–like us–have no business in how our government works.) And having an opinion is fireable offense.
At the time when people thought offices were bugged this legislator (not one now) came to my office and passed me written notes. Would be interesting to know. Convicted lobbyist Jack Abramoff has recently published a book entitled wittingly “Capitol Punishment”–exposing what lobbyists do to corrupt the system. It is 2012, and we are just finding this out? Truth is, it is amazing what they do. He has been on TV a lot, and I am sure his book will open many eyes. But that is another part of the problem. Those who do know are generally not going to tell. I find government interesting, and trying to foster ethics in government through ethics and lobbying laws for all three branches with tens of thousands subject to the Commission’s jurisdiction (including those that lobby) is an overwhelming task unless there is a reasonable budget and resources for it, which now is hardly the case.
As for responding to your questions, yes, the time it takes for record-keeping for compliance is not something to be ignored, though on the flip side people who want government reimbursements have no trouble with record-keeping and keeping receipts for small amounts–a dollar or two or three. Perhaps $5 or $10 is too low, but I can tell you that recipients of gifts where there is no clear dollar value, or attendance at a party for officials and even their families can be grossly underestimated. It is very important to know what someone got as well as the cost, but for, say, something akin to recreational events, a lot of things can be paid for that are minimized to tremendous degrees or conveniently ignored. I think some of the gifts disclosure forms in the past have shown that legislators report the same gift as to value in wide-ranging amounts, so now I think the donor takes the effort to inform everyone what the cost is a lot of the time. I don’t think a plate lunch is really all that cheap when you consider the incomes of most families, and of course nobody (almost nobody maybe) is going to be actually influenced by small gifts, so it is sort of a question of what is really important, but a law opens up often so much room to roam from a statutory interpretation point of view in many cases. That is why some states bar gifts from lobbyists all together (too hard and cumbersome to keep track, etc.) You mention a new issue about folks not knowing when to register as a lobbyist. I agree this can be due to a lack of knowledge–but as a true problem it is very minor, and at times the Commission would ask legislators to stock information sheets in their offices to let folks know. There are usually lobbyists on the other side, so they are going to be the first to complain about non-compliance by their opposition.
Your last paragraph deals with gifts given by people or companies for government events, government buildings and other property, or other government functions. The problem with gifts (I have said repeatedly that this is a very difficult area and really, really broad and difficult) is that it is hard to legislate against the bad ones without stopping the good ones. I would not doubt for a minute that some companies give to curry favor, etc., along with the notion of pay to play, and intentionally trying to increase the prestige of an elected official indirectly. At the same time, these are hard to distinguish from being a good corporate citizen, or responding to some disaster, similar to Katrina or hurricane Iniki, or the Toohoku tsunami in Japan, which has affected, and will affect, Hawaii. As for the companies you mention, I would not offer an opinion unless it was my job to investigate first, and following due process procedures, etc. It is amazing how a close look at facts can change the complexion of a case one way or the other. I am not a newspaper or part of the media. The questions you ask here are in the domain of the Honolulu Ethics Commission. I should note that there are those of us who had or have the privilege to head a Commission not only look for violations of ethics laws in doing our work, but also keep an eye out for federal or state crimes as well. There are just some people who do not belong in government. I don’t know if this comment will go through–all of a sudden technical problems somewhere. Excuse typos, etc.
Agreed about the things we don’t know — ignorance is often bliss.
I also understand the point about under-valuations. When I mentioned balance, I was also thinking about the cost incurred to monitor all of these reports.
I understand your position regarding the county gifts. To me, however, it is clear that there is at least an appearance of conflict. First, we have a rail project that according to various polls at least 50% of the people do not support. Add to that millions of dollars spent on PR that many, even rail supporters, have questioned the need for. On top of that, there are already known relationships with various city employees, HART staff/board members and contractors and a “pay to play” culture. These gifts were not presented to the council in a timely manner either.
When I consider all of that, there’s no question in my mind that the gifts should not have been accepted. It should also be noted that a gift of $1,500 from a credit union was also used for the Memorial Day ceremony. Council introduced a bill earlier this year to reduce the real property tax exemption for credit unions.
There are certainly many times when gifts are made simply for the benefit of the county and its residents. These gifts, however, have too many other ties to the donors to appear to be given out of the goodness of the donors’ hearts.
Natalie, I hope you run for office. I know what you mean about the cost of compliance, but I am a firm believer in the fact that the kind of bad ethics we have (not to mention crimes involving corruption in government–kickbacks, etc.) now costs us a ton of more money now, and I am not kidding. A budget to curtail that for an ethics Commission would be a big savings for local and state government, not to mention fairness, and not doing things just because of who roots up gold for you.
As to the gifts you mention, we have the Honolulu Ethics Commission to make a call, too. The problem, though, may be that it is hard to write a good law, which is–without a culture of shame or similar standards–the only answer we have. A law would have to say something clear for due process purposes: “A government official shall not solicit nor accept a gift from an individual or corporation [or its subcontractors, etc.] if the government official knows the individual or corporation has or knows it will have a contract [or whatever] with the city, and this shall apply to personal gifts as well as to gifts that have a government purpose; the only exceptions shall be….” (Excuse the grammar.) I am not sure that such a law is in existence anywhere. Well, we shall keep at it! The role of the Fourth Estate is to discuss the appearances of corruption and bad ethics as well as actual known corruption, etc. The Fourth Estate has stronger legal protections and maybe resources in terms of avoiding defamation lawsuits, etc., from the powerful.
That’s a very good point about the hidden costs of unethical and illegal behavior. I think the Honolulu Ethics Commission is busy with other cases at the moment, e.g., the EMS merger contract.
“Well, we shall keep at it!” Roger that. Over and out.
Hi Ian,
I was curious to check out the gift disclosure filings for 2012, which was due at the begining of the month. When I went to the ethics website, I didn’t see it listed. They only have 2011 and before listed. Does it take more than 2 weeks to put up a pdf to their website?
Jared
Staff at the ethics commission have been working hard to process the thousands of disclosures they receive from employees and officials, only a fraction of which are considered public (set by statute). I was told they expect to be able to post the public disclosures soon, likely this next week. But they have quite a big job–receiving, sorting, reviewing all the filings and then scanning and organizing the ones to be posted to the website. Unlike the Campaign Spending Commission, the Ethics Commission has never gotten funding to implement an online filing system where disclosures become available to the public as soon as they are filed.