Tag Archives: Honolulu Ethics Commission

Got Schnitzer?

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I was browsing this morning, and ended up at the Honolulu Ethics Commission web site. This is the city agency, not connected to the State Ethics Commission.

Unlike the state, which makes lots of information readily available, from lobbyist registration forms, public financial disclosures, and gift disclosures, the city site is pretty bare. I clicked on “Lobbyist Information.” Not much there, but it did include annual lists of lobbyists registered to represent clients before the city. Mostly it’s the usual suspects.

Development consultant Keith Kurahashi seems to be the leading figure representing a variety of clients, from the Queen’s Medical Center to Kyo-Ya Hotels.

Then there’s Schnitzer Steel Hawaii with an unusual number of big guns, including “Red” Morris and John Radcliffe, PR exec Cindy McMillan, John Sabas (married to Jennifer Goto Sabas, Sen. Dan Inouye’s chief of staff), Travis Taylor (former communications advisor to Duke Aiona), and former city council member (remember her?) Rene Mansho.

A quick check on the city’s Docushare system found that Schnitzer is Hawaii’s largest metal recycler, and has been in the middle of the controversy over whether to continue a city subsidy that costs taxpayers a lot of money every year regardless of the profitability of the company.

With so much lobbying muscle at Schnifzer’s disposal, I wondered who was on the other side. They include Jim Banigan, former Schnifzer manager, and Keith Rollman (yes, the same Keith Rollman who became a household name with his Atomic Monkey web site that attacked then candidate Neil Abercrombie).

Rollman testified against the subsidy on behalf of “CleanGreen Advocacy for Hawaii.” Although sounding like an environmental group, CleanGreen lists its partners as Paragon Metals International, Inc., a scrap metal company, and Kokua Renewable Energy, which does not appear in the state’s business registration database.

Paragon is a competitor of Schnitzer and launched an unsuccessful federal lawsuit against Schnitzer back in 2008.

According to the CleanGreen Advocacy web site:

What We Do

We focus on legislative and government regulatory issues that affect the growth of sustainable industries in Hawaii. We can help with permitting processes, bill tracking, testimony preparation and one-on-one lobbying with key decision makers. We can work as an adjunct to your existing public policy consultants and PR teams.

That sounds a lot like lobbying, although neither Rollman nor CleanGreen appear on the city list of registered lobbyists.

For more on Rollman’s current activities, check his resume, and R Strategic Communications, a trade name Rollman registered in July 2008.

Disclosing conflicts, Part 2

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This is probably way more than you want to read about ethics, conflicts, and disclosure, especially on Easter. But…

Yesterday’s post concerning conflict of interest declarations by members of the city’s Zoning Board of Appeals has generated an interesting discussion.

I started by observing that the advice of a city attorney that the board members’ written statements describing their conflicts are confidential appears to conflict with a section of the City Charter providing for mandatory public disclosure.

But in a comment late yesterday, “Jane” said my position was incorrect. She argued the mandatory public disclosure provisions of the City Charter apply only after the City Ethics Commission reviews a case and determines that a conflict of interest exists. Absent a ruling by the commission, the entire matter remains confidential, she argues.

Jane points to Sections 3-6.2(j) and 3-6.5(c) of the Revised Ordinances of Honolulu, and Section 4.13 of the the Rules of Procedure of the Ethics Commission (ROPEC). In her view, these provide a general policy of confidentiality for all matters before the ethics commission, with the secrecy lifting (in part) only after a commission decision. It appears the first citation should be to Section 3-6.3(j), rather than 3-6.2(j), which doesn’t exist.

In a short reply, Doug pointed out that the City Charter is at the top of the legal food chain, and both ordinances and rules must comply with it.

Let’s take a closer look.

The two ordinances related generally to complaints or requests submitted to the ethics commission, and not specifically to conflict of interest. In addition, they require confidentiality except where otherwise provided.

And tucked down in Section 3-6.5(e) is this sentence: “The disclosures of conflicts of interests as provided in Revised Charter Section 11-103 shall be made matters of public record at any time that such conflict becomes apparent.”

Looking further, although there are general provisions in the rules of procedure requiring confidentiality of commission proceedings, there is a very specific rule regarding the declaration of conflict required by the city charter.

RULE 9. DISCLOSURES OF INTEREST REQUIRED UNDER SECTION 11-103, RCH
9.1 Disclosures Required Of Any Elected Or Appointed Officer Or Employee

a. Any elected or appointed officer or employee who possesses or who acquires such interests as might reasonably tend to create a conflict with the public interest shall make full disclosure in writing at any time such conflict becomes apparent.
b. The written disclosure need not be in any particular form but shall contain:
(1) The name, address and telephone number of the officer or employee;
(2) A statement of the interest possessed or acquired by the officer or employee;
(3) Any other information relevant to the matter; and
(4) The signature of the officer or employee.
c. Such disclosure statements shall be submitted:
(1) To the officer’s or employee’s appointing authority or to the Council, in the case of a member of the Council; and
(2) To the Ethics Commission.
d. Such disclosure statements shall be made a matter of public record and be filed with the City Clerk.

There is no indication in here that general secrecy rules would apply.

Further, there’s the Plain Language Guide to the City Ethics Laws, also found on the commission’s web site.

There, in plain language:

What should I do if I have a conflict of interest?

If you have a conflict of interest, you must immediately disclose it in writing to your appointing authority (usually your department head) and to the Ethics Commission. RCH § 11-103. Forms are available from your personnel office or the Commission office or web site. Your department head and the Ethics Commission may discuss ways to resolve the conflict, such as removal from participating in any way in the decision making process and delegation of the issue to another qualified person.

Remember that Section 11-103 RCH requires public disclosure.

Let me suggest how these layers of apparently conflicting provisions can be reconciled.

First comes the charter provision, which mandates says the disclosure statement is a matter of public record. This is the process followed when members of the City Council declare conflicts.

Any elected or appointed officer or employee who possesses or who acquires such interests as might reasonably tend to create a conflict with the public interest shall make full disclosure in writing to such person’s appointing authority or to the council, in the case of a member of the council, and to the ethics commission, at any time such conflict becomes apparent.[1] Such disclosure statements shall be made a matter of public record and be filed with the city clerk.

After the ethics commission receives a statement disclosing a conflict, it may take further action, including conducting an investigation, gathering documents, interviewing witnesses, holding hearings, etc. City ordinances and rules require those additional proceedings to remain confidential until a decision or opinion is rendered. But the rules do not, and cannot, override the charter provision as to the original declaration of conflict.

The original statement of conflict is public. The investigation will only become public as provided by commission rules.

Understood in this way, each of the provisions has its own place and there is no conflict.

However, one significant point remains to be made. The ethics commission rules of procedure contain an extremely broad confidentiality provision, as follows:

c. Pursuant to Section 3-2.3(g), ROH:
(g) Any individual, except as hereinafter provided, including the individual making the allegation, who divulges information concerning the allegation prior to the issuance of an advisory opinion by the Commission, or if the investigation discloses that the advisory opinion should not be issued by the Commission, at any time divulges any information concerning the original allegation, or divulges the contents of disclosures except as permitted by this ordinance, shall, if found guilty, be punishable by a fine of not more than $1,000.00 or imprisonment of not more than one year, or both, except that an officer or employee shall be subject to the provisions of Section 11-106 of the Revised Charter.

However, the underlying ordinance was amended following my successful challenge to a similar Campaign Spending Commission rule (see Lind v. Grimmer). The attempt to impose such a broad gag rule was rejected as unconstitutional by Honolulu’s federal court and by the 9th Circuit Court, and the U.S. Supreme Court declined to hear an appeal.

Note that the city ordinance was later amended to apply the confidentiality requirement only to commission members and staff, and not to “any individual.”

To avoid confusion, the commission’s rules should be similarly amended.

And so it goes on this easter sunday.

Political ties of former ethics chair draws more scrutiny

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CityEthics.org, a blog associated with a nonprofit organization in Connecticut, picked up on the issue of political activities by former Honolulu Ethics Commission chair, Lex Smith.

In a blog post today, Robert Wechsler, director of research for City Ethics, comments after reviewing the political activities attributed to Smith and the relevant provisions of law:

I think it’s important to prohibit EC (“ethics commission”) members from being in relationships with candidates, or officials, that might compromise how fair and neutral they appear to the public. Without this fairness and neutrality, their opinions, enforcement actions, even their ethics training will not be seen as trustworthy. Without trust in an EC, an ethics program is worthless. Or worse.

If someone wants to represent candidates and officials, that’s fine. But they should not accept a seat on an EC.

City Ethics Chair resigns to avoid violation of ban on political activities

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The chairman of the Honolulu Ethics Commission has resigned from the commission in order to avoid potential legal questions stemming from his participation in political campaigns.

Ethics commission members are permitted to vote and to make campaign contributions, but any further political activity or support for or against any candidate is strictly prohibited. The mayor is required to immediately remove any member of the commission who violates this prohibition.

Honolulu attorney Lex Smith said today he resigned as commission chair last month after being asked to assist Managing Director Kirk Caldwell’s mayoral campaign. Smith said he resigned “when the situation was reaching a point where I was likely to be in violation.”

Smith’s letter of resignation is dated April 22, 2010. The last advisory opinion posted at the commission’s web site that Smith signed as chair is dated April 8, 2010.

Smith said he does not believe his previous involvement in Caldwell’s campaign, as well as those of Mayor Mufi Hannemann and former mayor Jeremy Harris, have put him in violation.

Smith’s political activities appear to extend back to his initial appointment to the commission nearly a decade ago. Smith was first appointed to the ethics commission by then-Mayor Jeremy Harris in 2001. He was reappointed by Mayor Hannemann in 2007.

Records show Smith has been actively involved in the campaigns of both Mayor Mufi Hannemann and Managing Director Kirk Caldwell while serving as a member of the commission. He earlier took actions as a supporter of Harris.

• Smith personally represented Hannemann’s campaign before the State Campaign Spending Commission in proceedings last year seeking to block Neil Abercrombie from transferring money from his federal campaign fund to his campaign for governor, commission minutes show. Hannemann campaign records show Smith’s law firm (Kobayashi, Sugita & Goda) was paid $21,000 following the Campaign Spending Commission’s decision.

“In my mind, at least, although I acted as the lawyer for various politicians over the years, I did not participate in their campaigns,” Smith said. “I have represented them as their counsel. In my view, I don’t think that violates the ethics rules.”

• Records show Smith was reimbursed by the Hannemann campaign in June 2009 for two expenditures, $78.55 for “fundraiser food” and $750 for “fundraiser entertainment”.

A “Notice of intent to hold a fundraiser” filed by Hannemann’s campaign for a $1,000 per person fundraiser on June 27, 2009, lists the person in charge of the fundraiser as Bert T. Kobayashi, Jr., senior partner in Smith’s law firm.

Smith insists his involvement was proper.

“If I recall correctly, I think I bought a cake,” Smith said, “and I paid for the band at the same fundraiser.”

“I view that the same as making a campaign contribution,” Smith said.

• Earlier this year, Smith telephoned this writer on behalf of Managing Director Kirk Caldwell’s campaign to clarify something he had been told was reported here.

• In 2008, Smith, described in news reports as a supporter of then-City Council candidate Kirk Caldwell, filed a challenge with the City Clerk seeking to clarify the legality of Caldwell’s nomination papers.

• In 2002, Smith successfully sued the campaign spending commission seeking to reverse a ruling that limited fundraising by Harris.

“I was on the ethics commission when I sued Bob Watada,” Smith said. “In my view, although I was personally the plaintiff, that involved my right to give money, which the charter said was exempted.”

The relevant city ordinance provides:

Sec. 3-6.9 Prohibiting political management or activity or candidacy to an elective political office.

(a) Except for exercising the right to vote or making a campaign contribution to a candidate for elective public office, no member of the ethics commission shall support, advocate or aid in, or manage, the election or defeat of any candidate for public office. No member of the ethics commission shall be a candidate for any elective public office nor engage in campaigning for such office.

(b) Any member of the ethics commission who violates the provisions of this section shall be removed by the mayor forthwith since such person serves at the pleasure of the mayor. (Sec. 3-2.9, R.O. 1978 (1987 Supp. to 1983 Ed.); Am. Ord. 01-51)

Charles “Chuck” Totto, ethics commission executive director, declined to discuss the resignation, referring questions to Smith.

Totto said the restrictions on political activities are discussed with new commission appointees as part of their orientation, but rarely come up at other times.