I haven’t written about ethics questions for a while, but here goes!
Civil Beat raised an ethics alarm about a company’s gift of a free trip to Poland for the director of the city’s Department of Customer Services in order to finalize design of the next updates to Hawaii’s REAL ID compliant driver’s licenses and identification cards. The donor, Thales DIS USA, Inc., produces the 100% polycarbonate material used for the cards at a factory in Gdansk.
In a pair of articles this past week, Civil Beat pounded on the ethics question, repeatedly arguing the trip violates city guidelines for the acceptance of gifts.
The impulse to question the ethics of any gift is appropriate.
But in this case, I think Civil Beat reached the wrong conclusion.
It appears CB made a mistake by applying the wrong ethics guidelines to this particular gift, which led to the mistaken conclusion that it violates city ethics laws. CB then rejected the city’s explanation, instead doubling down on the notion that it should have been rejected for violating ethics provisions.
Here’s how the issue was framed in an April 16 story (“Honolulu Director’s Free Trip To Poland Raises Ethics Questions“):
A company that just signed a no-bid contract with Honolulu’s motor vehicle office is hoping to send the agency’s director on an all-expenses-paid trip to Gdansk, Poland next month.
The contractor, Thales Group, has offered to cover the flight, hotel, meals and other related costs — a $5,000 value — for Department of Customer Services Director Kim Hashiro to visit their facility. Gdansk is an ancient port city and tourist destination on the Baltic Sea known for building ships and as the amber capital of the world.
Hashiro said the journey is necessary because she needs to sign off on the design of the state’s new licenses and ID cards, including aesthetic elements as well as counterfeit and fraud prevention features such as holographic images.
“It’s a color approval trip,” she said.
The city’s request to accept the gift of the trip will go before the Honolulu City Council on Wednesday, but the measure is already raising some eyebrows.
Honolulu Ethics Commission guidelines prohibit officials with authority over contracts from accepting gifts from contractors, and a City Council resolution forbids them from accepting any gift that could, in fact or appearance, impair their judgment.
Thales has been a city contractor for years but signed a no-bid extension in February that will earn the company $1.4 million in the next fiscal year, Honolulu customer services department spokesperson Harold Nedd said. Hashiro, who has administrative responsibility over the company’s contract, said Thales offered the trip after that extension was granted.
After the City Council voted to approve the gift and Hashiro’s travel, CB followed with a second story that doubled-down on the idea that the ethics guideline applicable to gifts is being violated.
“The Honolulu Ethics Commission’s guidelines on gifts say city officials with authority to award, oversee or evaluate a contract may not accept gifts from contractors that recently had a contract with the city, have a current contract or are likely to seek one in the future,” this second story repeated.
Indeed, a set of guidelines for gifts to city officers and employees provides exactly that: “Generally, an officer or employee who has discretionary authority in the process of awarding, supervising or evaluating the performance of a contract may not solicit or accept a gift from a contractor who recently had a contract with the city, has a current contract or is likely to seek one in the future.”
But here’s the problem. And it’s a biggie.
The city has two different guidelines for two different types of gifts.
One set of guidelines governs gifts to city employees or officials. These generally prohibit officials from accepting gifts from contractors, and appear to be the guidelines referenced in both Civil Beat stories.
But there is a second set of guidelines applicable to gifts given to city agencies rather than to an individual employee or official. It is similar in its intent to avoid ethical conflicts, but different in substance.
And, to be clear, the gift of travel to the factory in Poland was not a gift to Customer Services Director Kim Hashiro herself, but rather a gift to the city. It had to comply with the second set of guidelines, not the first one.
Gifts to city agencies
A memo spelling out Guidelines on Gifts to City Agencies was distributed by the Honolulu Ethics Commission in March 2006.
“Generally, gifts to an agency made to further the proper goals, functions or business of the agency may be accepted as long as a reasonable person would not conclude that the gift was intended to reward or influence an officer or employee in carrying out his or her duty.”
The guidelines then provide in part:
3. The gift must be for a legitimate government function. The donation must be made to help the agency carry out a legitimate government function, such as educating its staff about new services or products. A gift to an agency that supports an activity unrelated to the responsibilities of the agency may be a disguised gift for someone’s personal benefit and violate the gift or other ethics laws.
4. The gift must only be for reasonable and necessary expenses and not for the sole benefit of the affected officer or employee. The gift may only be for the reasonable and necessary expenses associated with the expressed purpose of the donation. If an officer or employee benefits from a gift to the city that exceeds the reasonable and necessary expenses required to discharge his or her city duties (for example, using first class instead of coach air travel), the gift may violate the gift laws and/or may require reimbursement to the donor for the value of an excessive gift.
The guidelines limit the solicitation of gifts, including gifts to a city agency, and provide that “an agency representative not request a donation under circumstances where the request may appear coercive to the person being solicited or create an expectation of special treatment in the mind of a donor.”
A city officer or employee shall not solicit, receive or accept any gift to the city under circumstances that in fact or in appearance:
(1) Rewards, influences or tends to impair the judgment of any city officer or employee in the performance of the officer’s or employee’s official duties; or
(2) Provides special consideration, treatment, advantage, privilege, or exemption for or coerces a potential donor.
Applying the guidelines
Is this trip legitimate city business? The answer is undoubtedly yes.
The donor, Thales DIS USA, Inc., is based in Austin, Texas. It holds contracts for producing driver’s licenses and state identification cards that comply with the federal government’ REAL ID requirements, and has done so for a number of years. Thales provides similar services to 10 other states, according to its website. It is a subsidiary of Thales Group, a global high-technology company with headquarters in France.
A March 20, 2025 letter to the City Council explained the importance of the trip, which will save substantial time and money.
As the Director with signing authority, her attendance is necessary to approve new driver licenses (DL) and State ID (SID) card design updates to implement a state-wide DL/SID card processing and production upgrade in 2025. A new DLISID card design will include updated security features to increase difficulty for counterfeiting, and enable REAL ID and American Association of Motor Vehicle Administrators (AAMVA) compliance.
Is it reasonable? Another strong “Yes” on this factor.
Civil Beat reported, but apparently discounted, why the trip makes good sense both for the city and the donor, saving significant time, which usually translates in cost savings.
The trip was planned at the urging of the contractor, who told the city that its sign-off by mail would take eight to 12 weeks, according to Hashiro.
“They’re saying that this is the most cost-effective and efficient way for them to get this color approval,” she said, “and it is part of their standard practice.”
In a statement, Thales media relations representative Jennifer Tumminio said it’s important to have the customer on-site during a production run to make sure the product meets expectations.
“A factory visit for approvals during initial production cuts down on the time needed for redesigns and approvals,” she said, “and gets identification documents into the hands of the people who need them quicker.”
Since the idea of sending a city representative to the Thales factory came from the company, the offer avoided the guidelines’ cautions about soliciting gifts from contractors.
A 2011 advisory opinion by the Honolulu Ethics Commission discussed the parameters of legitimate business, quoting the 2006 gift guidelines.
The Commission’s Guidelines on Gifts to City Agencies notes: “The gift [to the city] must only be for reasonable and necessary expenses and not for the sole benefit of the affected officer or employee. The gift may only be for the reasonable and necessary expenses associated with the expressed purpose of the donation. If an officer or employee benefits from a gift to the city that exceeds the reasonable and necessary expenses required to discharge his or her city duties (for example, using first class instead of coach air travel), the gift may violate the gift laws and/or may require reimbursement to the donor for the value of an excessive gift.” (Underscoring added.)
But what about the concern that the trip could be considered a reward for Hashiro, who had just exercised her discretion to approve a no-bid contract extension when the trip to Gdansk was suggested?
The facts of the situation, however, show that Hashiro really had no discretion in awarding the extension to Thales. She could not have gone to another vendor, because this is a small part of a larger system, and the state as a whole is locked in with Thales’ version of the enhanced security credentials.
Based on this review, the Department of Customer Services followed existing ethics guidelines by reporting the prospective gift and seeking approval for its acceptance from the City Council. It passed all of the tests laid out in city guidelines. There was no hidden deal, no back-door benefits, no conversion of public property into private benefits.
