I had an brush with the secrecy of the judicial selection process a while back. It still makes for an interesting story.

What follows is a slightly modified version of an entry here on 3/22/1999, and refers back to a story I wrote while at the Star-Bulletin in January 1999.

It was one of those cases involving a blatant and disturbing conflict of interest that was politely ignored at the time, and illustrates the lack of public accountability built into the Judicial Selection Commission’s broad confidentiality requirement.

Long story short. At the time, Gary Rodrigues, then the politically powerful state director of the United Public Workers, the state’s second largest public employee union and sometimes referred to as the 26th Senator because of his political clout, was a member of the Judicial Selection Commission.

And, at the same time, Insurance Commissioner Rey Graulty, a former state senator, was directing court action to investigate the failure of Pacific Group Medical Association, a small health insurer which had been seized by state regulators in 1997. Rodrigues union had been one of PGMA’s largest customers.

While following up on the PGMA collapse, I came across subpoenas issued by the Insurance Commissioner for records of a small Kauai company, Four Winds RSK, which turned out to be owned by one of Rodrigues’ daughters. And a forensic accounting of PGMA had resulted in allegations of fraud.

As I wrote at the time:

Graulty has a pending lawsuit against the UPW seeking to recover $1.5 million in insurance premiums withheld by the union in the months preceding PGMA’s collapse.

The UPW had an agreement to offer a PGMA health plan to its members as an alternative to the plans offered through the state’s Public Employees’ Health Fund. The union promoted PGMA’s plan and accounted for nearly 25 percent of all PGMA members at the beginning of 1997.

Graulty is the named plaintiff, and Rodrigues is a central figure in the case, which so far has focused on the legal nature of the agreement between the union and PGMA.

Graulty also had an ongoing investigation of questionable payments made by PGMA to a company headed by Rodrigues’ daughter, court records show.

But sometime in the latter part of 1998, Graulty sidelined his investigation into payments to Four Winds RSK. These payments later become the basis of a federal case against both Rodrigues’ and his daughter, ending in convictions on multiple federal charges.

Meanwhile, Graulty had applied for an open judicial position. Graulty later said that when he arrived for his interview with the commission, Rodrigues was there with the other members. Graulty was surprised, and told me he had previously brought the apparently conflict to the attention of the commission. He didn’t expect Rodrigues to participate in the interview.

I tried to find out from the commission whether Rodrigues had disclosed the conflict and, if so, why the commission decided to let him take part in the interview anyway. But the constitutional requirement for confidentiality of their deliberations prevented any commissioner from responding. It left the nagging impression that Rodrigues could have enabled Graulty’s appointment in order to scuttle the insurance commissioner’s investigation.

“Graulty as insurance commissioner questioning a transaction that involves Gary’s daughter, while Gary votes on his judicial nomination, is as close as kissing cousins,” Rep. Cynthia Thielen said at the time. “It’s just too close.”

Luckily, taking Graulty out of the picture didn’t succeed in stopping the insurance investigation or deterring a subsequent federal investigation.

Rodrigues was later indicted and convicted, along with his daughter, on a long list of federal charges including mail fraud, embezzlement, health care fraud, acceptance of kickbacks to influence operation of an employee benefit plan, conspiracy, and money laundering. He is now serving a 64-month sentence in a mainland prison.

Graulty was probably correct in saying that he did everything right.

“Through my attorney, I had notified commissioners (David L.) Fairbanks and (James) Kawashima that there was ongoing litigation,” Graulty said.

“I took it there was a little discussion among them before I came in,” Graulty said. “If there is a problem, it is on their side. I attended the hearing on the date and time appointed. Mr. Rodrigues was there. They asked me all the hard questions that I presume they asked of others.”

But the fact remains that the circumstances of his appointment left a permanent question mark, perhaps through no fault of his own.

Such is the nature of politics, power, and secrecy in Hawaii.