Category Archives: Ethics

Honolulu Ethics Commission finds no conflicts in legal campaign support from special interests

Back in September 2015, I examined assertions being made by Kioni Dudley that ethics laws required Honolulu City Council members who received significant contributions from development interests, or who benefited from the independent activities of Super Pacs supporting the development of Hoopili, to recuse themselves from decisions regarding the development, which Dudley has strongly opposed. He suggested that the votes could be voided as a result of their failure to recuse themselves.

At the time, I described his view as an interesting theory, but one that was not supported by a clear reading of the law. Essentially, the city ethics provisions explicitly allows council members to solicit and accept legal campaign contributions. And as to the independent activities of Super Pacs, candidates could not be required to disclose those because, by definition, any such expenditures are independent of the candidates.

Yesterday the Honolulu Ethics Commission issued two opinions which generally agreed with my assessment of the two issues raised.

Advisory Opinion 2017-1 found that independent expenditures by Super Pacs do not create a conflict of interest for council members who benefit from their activities because “they are made without the coordination of a candidate or a candidate’s campaign and are therefore too attenuated.”

The opinion quotes from a federal court decision in the case of Yamada v. Kuramoto.

Although the government might still limit contributions made directly to candidates or parties, “the need for contribution limitations to combat corruption or the appearance thereof tends to decrease as the link between the candidate and the regulated entity becomes more attenuated.” If the organization receiving contributions truly engages in only independent expenditures, the link is not only attenuated—it is broken. An anti-corruption or appearance of corruption rationale is nonexistent.

Advisory Opinion 2017-2 addresses the issue whether a candidate who receives 40% or more of their campaign contributions from a special interest group has a conflict of interest as a result of those contributions.

The commission found that the matter is beyond their jurisdiction “because campaign contributions, regardless of amount, are specifically excluded from said section.” That’s the same thing I pointed out back in my 2015 post.

Furthermore, the opinion properly notes that the Campaign Spending Commission has “primary and exclusive jurisdiction over campaign issues,” and so the campaign laws preempt the kinds of issues Dudley has raised.

Making sense of what was spent lobbying the legislature last year

In my Civil Beat column last week, I tried to do an overview of lobbying expenditures reported to the State Ethics Commission during 2016 (“Ian Lind: Tightening The Rules For Lobbyists/Lobbyists spent millions trying to influence lawmakers last year“).

I reported more than $5.3 million had been spent on legislative lobbying during the year, which seems like a substantial number. In the end, though, that total dropped to a bit under $5.3 million as a result of errors in the reports that were filed.

The column also reviews proposals from the ethics commission for clarifying reporting requirements in an attempt to close several loopholes that have been exploited by some to sidestep the disclosure requirements.

I would suggest that you at least skim the column, then return here for an explanation of what went into writing it and the problems I ran into.

First, I downloaded the latest version of the database of reported expenditures by organizations that retain lobbyists or are otherwise required to disclose their costs for influencing legislation, and then selected a subset containing all the reports for each of three reporting periods during 2016. These reports cover the periods January 1-February 28, March 1-April 30, and May 1-December 31. The legislature is in session during most of the first two periods.

When these are put online, the commission includes the amount reported for fees paid to lobbyists, and for the total of all categories of spending, in addition to the organization name, date filed, and other details. Also included is a link to the available pdf of the form.

During an initial pass examining the data, I noticed that several organizations submitted amended reports during the year. I went through each of those, and tried to make sense of the “amendments.” In some cases, the amendments appeared to simply be duplicates of the originals. In a few other cases, they reported new and presumably updated figures.

In one case–Outrigger Hotels–there were several amended disclosure forms filed, each containing the same numbers. On its face, it appeared Outrigger ranked #2 of all the organizations in spending, but several things stood out as warning flags that this might have been the result of errors. While I was working on my column, I tried reaching Max Sword, Outrigger’s in-house lobbyist. But Sword is also the current chair of the Honolulu Police Commission, which was meeting that same day, and I wasn’t able to reach him until the following day.

It turned out, according to Sword, that errors were made in the online process of filing these reports, resulting in errors. But although I suspected there were errors, at least in the case of Outrigger, I wasn’t able to confirm them prior to publication.

In any case, my next step was to add up the amounts reported in each of the three periods for each organization, and produced a list of the total amount spent by each group during 2016. Then I sorted these in descending order to give a quick list of the top spending lobbying groups.

I’m pretty sure that this is still a relatively good assessment of the overall situation. However, my “final” numbers changed when I made the correction for Outrigger, dropping it from #2 to #8 in the ranking.

Here’s a link to the full list of organizations and what they reported spending on lobbying at the legislature last year.

If you spot instances that deserve more attention, please leave a comment below. Thanks.

Educational travel agreement was long overdue

An agreement made public this week between the State Ethics Commission and the Hawaii State Teachers Association (HSTA) settles the issue of teachers receiving free travel while serving as chaperones on official public school educational trips.

A press release announcing the agreement, and the full text of the agreement, were posted on the commission’s website on Tuesday, January 3.

The agreement settles a long running dispute between the commission and HSTA which included a long set of guidelines approved by the commission severely restricting and, in practice, virtually eliminating educational trips by students and teachers. Those guidelines were challenged by HSTA, first in an appeal to the commission itself, and then to court, where the commission’s opinion was overturned. HSTA was represented by attorney Colleen Hanabusa, who was reelected to a seat in Congress in November and was just seated this week.

The joint press release mention the two years of legal wrangling. But the settlement agreement itself is quite specific. It references both the administrative appeal and lawsuit, and acknowledges the agreement reached “in order to avoid the further expense and risk of litigation, and to provide clarity for HSTA’s members in the immediate future regarding their ability to organize, promote, and chaperone student travel, the Undersigned Parties now desire to mutually and finally resolve and compromise all issues and claims….”

In the end, the agreement is substantively very simple.

It allows teachers to accept free air fare and hotel accommodations while serving as chaperones on educational trips that comply with current or future Department of Education rules.

It prohibits teachers from accepting additional gratuities from travel companies, such as stipends, iPads, or travel vouchers, although these can be accepted if DOE rules allow them to be accepted by the schools or the department.

And the commission retains jurisdiction over potential direct conflicts of interest.

Teachers who consider selecting a Tour Company in which they (or a family member) have a financial interest should contact the Ethics Commission for guidance so as to avoid any violations of conflict of interest / fair treatment laws; the Ethics Commission retains the authority to investigate and charge individuals with violations of these provisions as appropriate.

It looks like an agreement that could and should have been reached nearly two years ago.

One question arises: How and when was the agreement approved by the commission? The members of the ethics commission, and commission director Dan Gluck, along with a deputy attorney general representing the commission, all signed off on the agreement on December 22, 2016.

However, the commission’s scheduled meeting in December was cancelled, and there’s no indication on the official State Calendar of a meeting being held.

It’s possible that the agreement was approved in executive session in November. If so, though, would it require a publicly posted meeting for the commissioners to all gather in order to execute the agreement? At this point, I’m not sure, but it’s worth asking the question.

State Ethics Commission: Guards took $10,00 from Big Island inmate

Earlier this month, the State Ethics Commission disclosed the resolution of a complaint against an ACO (Adult Corrections officer) at the Hawaii Community Correctional Center.

It involves serious allegations of misconduct by these prison guards and leaves many unanswered questions.

The commission alleges Bernie Abella, and two other unnamed ACOs, arranged to take $10,000 from an inmate under their supervision. The inmate signed a power of attorney to one of the ACOs, who then used it to withdraw $10,000 from the inmate’s account in a Kona bank. After depositing the funds in his own account, he then wrote checks to each of the other ACOs involved.

Abella received $3,000, according to the commission.

The commission does not clarify the nature of this exchange. The ethics law prohibits any state official or employee “soliciting, accepting, or receiving a gift if it is reasonable to infer the gift is given to influence or reward the employee in the performance of his or her state duties.” The commission also viewed the case as involving violation of the “Fair Treatment” section of the law, which prohibits using one’s official position “to secure or grant unwarranted privileges, exemptions, advantages, contracts, or treatment, for oneself or others . . . .”

So from the point of view of the commission in enforcing the gift law, it apparently didn’t matter whether the inmate had offered the ACOs money, presumably in exchange for some kind of special favors, or whether the three were using their positions of authority to “shake down” the inmate. The commission resolution doesn’t disclose whether the exchange of funds was related to any exchange of favors or other actions. And, of course, there are other less incriminating possibilities, but in a correctional situation it isn’t unrealistic to suspect the motives of those involved.

We also don’t know why this complaint came to the Ethics Commission, as it would appear to involved potentially criminal actions outside of its jurisdiction. Was any action taken by the Department of Public Safety or any other law enforcement agency? I tried a quick online search but didn’t find anything.

The commission says the case involved a “former inmate.” My guess is that the inmate went to the commission after being released from custody, and perhaps the statute of limitations had already expired for any potential criminal charges. But that’s just guessing.

The commission settled a complaint after the Abella agreed to pay a $1,500 administrative penalty and an additional $3,000 in restitution.

There is no indication of the fate of the additional $7,000 taken from the inmate and whether the commission, or any other agency, is attempting to claw back the additional funds.

And we’re left with questions about what the Department of Public Safety knew, and when did they know it? Did they have knowledge of the situation anytime between the end of 2009 and the present? What action was taken, if any?

According to the commission, Abella’s employment at HCCC ended in January 2010, just a month or so after the money was withdrawn from the inmate’s account and split among the three ACOs, but whether or how that was related to this scheme remains unknown.