A lessee group and its director violated state ethics law by lobbying from 2009-2011 without registering with the State Ethics Commission or filing required lobbyist reports, according to a statement recently posted on the commission’s web site.
The commission’s announcement does not name the organization due to confidentiality requirements in the lobbyist law. However, Michael Steiner, executive director of Citizens for Fair Valuation, confirmed they were the target of the commission’s action.
“Theoretically, this is all confidential,” Steiner told iLind.net, “but at the same time, we never intended to hide anything.”
Steiner and CFV agreed to pay a $500 fine and retroactively submit the required disclosures in order to settle the commission’s charges.
The settlement and fine were approved by the Ethics Commission at their meeting on Wednesday, August 17, and announced this week.
CFV is made up of more than 20 Mapunapuna-area businesses that joined together in 2008 to seek more favorable lease rents during renegotiations with the landowner, Massachusetts-based HRPT Properties Trust. Affiliations of CFV board members included Grace Pacific Corp., Servco, Plywood Hawaii, Office of Hawaiian Affairs, and Olelo Community Media. Companies paid membership fees ranging up to $15,000, depending on the size of their leased property and the type of membership.
Their lobbying pushed the legislature to pass a law in 2009 limiting the landowner to “fair and reasonable” rent increases, and they won an extension of the law the following session. The law was struck down as unconstitutional by Federal Judge Susan Oki Mollway in a 2010 decision which traces the history of the legislation.
The group’s efforts gained a degree of notoriety when it was reported that House Speaker Calvin Say, who introduced the bill to limit lease rents, was a board member of a company which subleases a building in the area and would have been impacted by higher lease rents. Say’s situation became public when it was cited by HRPT in its federal lawsuit. Say told Pacific Business News at the time that there was no conflict because “he wouldn’t benefit from any rent relief the company might realize because of the new law.”
Steiner attributed the lobbyist law violations to a lack of familiarity with the lobbyist rules.
“Our problem was inexperience and perhaps some ignorance,” he said. “There was no intent to hide. Nothing was willful.”
Steiner minimized their successful lobbying effort, saying “it was so borderline as to whether we passed the five-hour mark.”
State law requires anyone who is paid and spends more than 5 hours in any month on lobbying activities, or spends more than $750 in any reporting period, to register and file reports. According to the commission, this includes “testifying before the legislature, meeting with legislators on bills, drafting testimony, and soliciting others to testify or otherwise communicate with legislators.”
According to the commission’s statement:
After a review of its activities during the time in question, the organization agreed that it should have filed lobbying reports. Both the organization and its representative stated that they did not wilfully or intentionally fail to file the necessary reports. Neither the organization nor its representative had previously engaged in advocacy efforts before the legislature. They both stated any violations of the Lobbyist Law were the result of unfamiliarity with the law and a misunderstanding of its requirements.
Steiner said the group has now filed lobbyist statements going back to 2009.
“We have absolutely nothing that we have to hide,” Steiner said. “As a nonprofit, we would more than happily have complied.”
Citizens for Fair Valuation, Inc. was registered with the state on December 17, 2007, business registration records show. It is registered with the Internal Revenue Service as a 501c(6) organization or “business league,” a type of organization that has more leeway in lobbying that a traditional charity.
Legislative records show the group began lobbying during the 2008 legislative session, and succeeded in gaining passage of a House resolution, introduced by Say, “encouraging the development of good faith valuation standards and negotiating practices for long-term industrial and commercial real estate leases in Hawaii.” CFV and several of its members testified in support. A concurrent resolution also passed the House but stalled in the Senate.
Ethics Commission Executive Director Les Kondo said the law prevents the commission from disclosing the names of those charged with ethics or lobbying violations unless the matter proceeds to a formal hearing, something that has not happened since the 1980s.
However, Kondo said he expects the commission to be more active and more transparent going forward.
“I suspect the commission will issue more fines,” Kondo said. “Some will be routine, such as an automatic $50 fine for late filing of required personal financial disclosures, and a public notice of violations.”
In addition, Kondo said the commission is currently considering making public disclosure a condition of any settlements approved by the commission.
“This serves both as a teaching tool and a deterrent,” Kondo said. “There’s the sanction of shame. I think that’s where the commission is headed.”
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So why didn’t Mollway do this when he had the chance?
The confidentiality provision is apparently by law. It would prevent me from learning, for example, the outcome of my complaint against Senator Hee for allegedly filing multiple false disclosures.
Even if one concludes that the law needs fixing, the chances that the Legislature will even hear an ethics bill is pretty low.
We could sure use some activism on issues of ethics in our state legislature. You know what the absense of ethics is? Corruption.
The lease contracts that Damon/HRPT have with the lessee’s says “fair and reasonable rent”. The legislation attempted to force the lessor, and the appraisers, to abide by that language. The legislation went too far, allowing the issue of interference with contract law to come into affect. Also, the specificity of the bill led to a “class of one” issue, or special legislation considerations.
Fact remains, when you drive through the areas of leasehold lands you see the terrible consequences of “wasting assets”. Less than 12 years remaining on a large number of leases, and very high ground rents from bad appraisal/Arbitation results, leads to poorly maintained buildings and failing business’s.
The oligopoly of land owners is still as inefficient as ever. They’re hurting all of us. Time for a “new day” to finally end this “untenable” practice.
What Hawaii needs is more of Les Kondo. We have corruption to the Yin Yang. I hope Chuck Totto learns from Kondo.
For starters, the City’s Transportation Wayne Yoshida is so connected to Parsons Brinkerhoff (sp) and he said there is absolutely no conflict of interest. And that’s the end of the story.