Category Archives: Legislature

Legislator’s tie to NextEra consultant shows gaps in required financial disclosures

NextEra Energy recently disclosed the list of consultants it has retained as part of its bid to take over Hawaiian Electric Industries (Honolulu Star-Advertiser, “NextEra spends on firms to help it purchase HEI“).

The full list of consultants is contained in a document filed in the ongoing review of the proposed merger by the Public Utilities Commission. There are no details of the type of work performed, and the list is full of abbreviated names and corporate acronyms that make tracking relationships tedious.

The Star-Advertiser did note that one of the consultants is tied to State Senator Donovan Dela Cruz.

As of July 31, NextEra Energy has paid several local law firms, communications agencies and consulting agencies, one of which is tied to a state politician.

DTL HAWAII, a strategy studio where state Sen. Donovan Dela Cruz (D, Mililani Mauka-Waipio Acres-Wheeler) is the vice president for communications, received $84,000 from NextEra.

This is interesting because it demonstrates more gaps in the financial disclosure requirements of the state ethics law.

Dela Cruz filed his 2015 annual financial disclosure at the end of January. It reported no changes in employment from 2014, when he had reported earning $25,000 to $50,000 as “director of communications” for WCIT Architecture.

A check of state business registration records shows that DTL is a limited liability company, with a business purpose of “culturally based strategic planning, community outreach and branding.” WCIT Architecture, and a WCIT officer, Adam Wong, are listed as managers of DTL LLC. So it appears that DTL is essentially a subsidiary or sister company of WCIT.

There is no information as to whether any of the NextEra money for “community outreach” trickled down to Dela Cruz.

Nor is there an indication of whether the senator has advocated for NextEra within the legislature, or how Dela Cruz balances his role as the director of communications for this development-oriented firm and his legislative duties.

But those issues go beyond my original point here, which is that DTL doesn’t appear in the most recent financial disclosures filed by Dela Cruz, although he does list the company on his LinkedIn profile, and his legislative profile lists his current affiliation as “vice-president for communications” for DTL.

And even if his financial disclosure did list DTL, it would not indicate whether any clients he did work for had issues pending before the legislature or potentially influenced by legislative action.

These appear to be gaps in the financial disclosure provisions of the ethics law that should be addressed.

Souki’s reported investment in Hawaiian Electric a “mental error”

My column over at Civil Beat today describes House Speaker Joe Souki’s reaction to my earlier report, based on his official financial disclosures filed with the State Ethics Commission (“Ian Lind: House Speaker Joe Souki’s Financial Reports Are Full of Errors“).

Here’s an excerpt from the CB column:

But when asked this week about the boost in Hawaiian Electric shares, Souki said the official disclosures he filed were wrong, and the number of shares he owns has not changed since 2012.

“I didn’t buy a single share,” the 82-year old Souki said, noting that he inherited the stock from his parents back in the late 1980s. “I still have just 729 shares.”

“It was a mental error on my part,” he said.

It wasn’t the only “mental error” he made when filing the financial disclosures over the past couple of years.

As I noted in the earlier post here about these filings, Souki filed one report in January 2014 that answered “None” in response to questions about financial interests in ten different categories. Most of those answers were not correct, but he then certified the answers as valid.

When I asked about this essentially blank disclosure, Souki seemed confused, and finally simply attributed it to more “mental errors.”

So what’s really going on? That’s a very, very good question.

Speaker says reports of HEI stock purchases were simply wrong

For the record: I was able to speak briefly with House Speaker Joe Souki on Monday, and he says reports that he boosted his investment in Hawaiian Electric Industries prior to the public announcement of the NextEra merger offer are wrong.

A bit of explaining is necessary, and I’ll get to that soon.

Ethics Commission director holds on to job, at least for now

On Wednesday, my report on the State Ethics Commission’s evaluation of its executive director appeared in Civil Beat (“Ian Lind: Ethics Director Survives Political Challenge“).

The bottom line is that a long and apparently contentious evaluation of Les Kondo resulted in no action being taken by the commission. In this case, “no action” means that the commission did not terminate Kondo, an action widely reported to have been urged by a faction of the commission members.

There are several additional things to note.

First, the process has been very secretive.

It isn’t just that the content of the evaluation has remained confidential. Even the criteria that were used have been closely held, discussed only behind closed doors and not publicly disclosed.

While personnel matters are allowed to remain confidential because of the privacy interests of those involved, the criteria used to evaluate an employee wouldn’t seem to implicate any matters of personal privacy. So the unnecessary secrecy here, especially in light of the public interest in robust ethical standards, is a problem.

Second, Kondo isn’t out of the woods yet. Commission chairman Ed Broglio’s term runs out at the end of the month. The commission’s regular meeting next week will be his last.

This likely means that the person appointed to fill the vacancy on the commission will be the swing vote who could determine Kondo’s future.

Unfortunately, the names of those nominees on the “short list” provided for Gov. Ige to select from have not been disclosed, although members of the commission appear to know who they are.

In addition, it will be important to watch whether the person selected to replace Broglio as chair is one of Kondo’s internal critics. A critical or hostile chair could create significant problems for the executive director.

And, third, the commission simply hasn’t done a very good job in publicly explaining the controversial positions it has taken. Comments on my Civil Beat column, as on other recent stories regarding the commission, reflect a deep split in public opinion. Some people reflect the view of legislators that the commission has been essentially making up new and more restrictive ethics laws that go beyond the language of the statutes, while others say raising the ethics bar is exactly what we’ve needed for some time.

Although I’ve had my differences with Kondo over certain interpretations, I do believe that the commission is simply doing its best to interpret the law as written. And that interpretation is informed by a broad presumption favoring high ethical standards, although some on the receiving end of the commission’s advice have not been happy campers.

And there’s also a lot of interest in whether the commission was under political pressure to “get rid of” Kondo. Hopefully there will be additional attempts to identify the political players who were applying behind the scenes pressure.

Don’t fault the Senate if Balfour’s nomination is approved

While Bill Balfour would not have been my choice to serve on the State Water Commission, I don’t think there are good grounds to block his nomination.

It seems to me that much of the testimony focused on what Balfour is not. He’s not a scientist. He’s not a lawyer. And, more specifically, he’s not Denise Antolini, a point made by several people who offered testimony.

But what is he? It seems to me that he came across as a straight shooter. He has a lot of management experience. Among those are a unique set of experiences that can, it seems to me, contribute to a commission dealing with statewide water issues. He has the confidence of a number of interest groups that need to have seats at the table.

He says he has walked or rafted the length of East Kauai Irrigation System and the Waiahole Ditch System. I’m guessing he’s walked much of the water systems on the plantations he managed, including Oahu Sugar. He was an irrigation manager before becoming a plantation manager, a position that requires dealing with lots of water resource issues.

He’s been the director of two city agencies, and knows the problems and limits, as well as the potential, of government agencies. His government experience is pretty diverse, and it seems like people who worked with him have spoken up on his behalf.

I also don’t think it’s fair to blame him for being part of prior water commission decisions that were later overturned by the courts. I haven’t heard anyone say that he was the driving force behind those decisions. It wasn’t that they were intending to make illegal decisions. To be fair, the law in this area has been evolving, changing course and resetting public priorities over the years, mostly in a positive direction when it comes to this area of law. He’s been part of that history, and understands that once the courts have ruled, you have to adjust to the new interpretations of the law.

And while he took lots of public criticism for being a “plantation luna,” those plantations are long gone. I see no evidence that he would, as the petition that has been making the rounds says, “favor the plantations instead of the rule of law.”

Would he have been my pick, had I been governor? No.

But is he unqualified to serve on the commission? No, I don’t believe there’s a case to be made that he’s unqualified, given his broad and diverse experience.

And, by the way, I do believe that Gov. Ige’s picks should be given some deference. So while I might not be happy with the choice, I won’t fault the Senate if they approve Balfour’s nomination.