A story in Wednesday’s Honolulu Star-Advertiser concerning a state senator’s call for an investigation into several actions of the Honolulu Authority for Rapid Transportation board and the Honolulu Ethics Commission stirred up a bit of a ruckus (“State senator Kurt Fevella seeks federal and state investigations into rail project“).

Favella is the sole Republican in the 25-member state senate, and I would normally discount such statements as simple political grandstanding for public consumption. But in reporting on Favella’s public comments, the Advertiser story quotes an earlier statement by the executive director of the city’s ethics commission.

On June 8, Jan K. Yamane, executive director and legal counsel for the Honolulu Ethics Commission, told the commission that a news report by Hawaii News Now headlined “Rail bond deal has financial ties to HART chair, but ethics body finds no wrongdoing” and a blog by Ian Lind headlined “Rail bond vote points to potential issue of broader problem in city ethics oversight” were “FACTUALLY INCORRECT.”

“HNN’s and iLind’s articles state that Honolulu Authority for Rapid Transportation (HART) board Chair Toby Martyn voted in January 2020 to approve more than $292 million in rail bonds to pay for construction,” Yamane wrote.

No details were provided of any of these allegedly “factually incorrect” statements.

Yamane’s comments were apparently made three weeks after the initial Hawaii News Now story in which I was quoted, which was broadcast on May 17, 2021.

The main focus of that HNN story was an apparent conflict of interest on the part of Toby Martyn, chair of the HART board and manager of the local office of a national investment firm that was part of the selling group for the bonds.

I am quoted very briefly:

“This is very specific, a board member voting on something involving his company is wrong,” said Ian Lind, Common Cause Hawaii board member and longtime investigative reporter.

Lind said city law bars any city official from voting on matters that they have a financial interest in.

I then wrote blog posts on each of the following two days digging a bit more into the issues raised.

The first post explains that there are at least two ethics provisions in play. The first requires disclosure of potential conflicts by any elected or appointed officer or employee of the city “at any time such conflict becomes apparent.” Disclosure and review by the ethics commission can, presumably, avoid any possible conflict.

The second provision prohibits any officer or employee of the city from participating in any official action “in any official action directly affecting a business or matter in which…such person has a substantial financial interest.”

That was the basis for my statement, quoted by HNN, that “a board member voting on something involving his company is wrong.” In this case, it referred to Martyn’s votes to request the issuance of several hundred million in city general obligation bonds, because of his employment by a company that was part of the bond deal.

Here’s that first blog post.

May 18, 2021. Rail bond vote points to potential issue of broader problem in city ethics oversight.

The next day, in reply by a commenter, I explained that the HART board was required by law to take “official action” by calling for the issuance of bonds, even though the actual bond issue would be processed by another city department.

Here’s that second post.

May 19, 2021. GO bond issue for financing the rail project required HART board approval.

There was some confusion initially about the sequence of votes on this particular series of general obligation bonds earmarked for funding the rail project, in part because HNN obtained an “after the fact” conflict of interest disclosure form filed by Martyn in June 2020, which reported he had not testified at the meeting of the Honolulu City Council which gave final approval to the series of bonds. The ethics commission found there was no conflict at this point.

However, as I noted, the real question should have been whether Martyn was prohibited from “participating” at any point in official action by the HART board or the council concerning a bond issue in which his company had an interest. He joined in two HART board votes on resolutions requesting issuance of the bond series by the city, and it is not known whether he took part in behind the scenes discussions, in person or electronically.

The failure of the ethics commission to flag this as a problem is, in my opinion, a “broader problem in city ethics oversight,” as I stated here on May 18, and which Yamane dismissed as being “factually incorrect.” Despite Yamane’s unsupported statement, I don’t see any reason to change my earlier opinion.

The subsequent public release of a large batch of internal HART emails concerning a proposed contract as board liaison offered graphic evidence of Martyn’s active and very “hands on” style, which creates many additional points where he “participates” in official actions (see “Emails Show HART Leaders Always Wanted To Hire Hanabusa As Consultant“). These emails show Martyn was deeply involved behind the scenes directing the shaping of the board liaison contract and making decisions in what would be eventually presented to the rest of the board for approval. As chair, he was a very active in directing behind the scenes decisions. The emails make clear how much the chairman can “participate” behind the scenes and outside of any actions taken in public board meetings. On issues where ethics rules bar such “participation,” this active behind-the-scenes style raises red flags that should not be dismissed.