Tag Archives: Lex Smith

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.

Lobbyists are the winners in Honolulu Ethics Commission ruling

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Well, it looks like lobbyists won another one.

At least that’s my reaction to a ruling last month by the City Ethics Commission.

In Advisory Opinion 2010-3, the commission began with what looked like a simple question: When a lobbyist gives a city official a gift, what is that gift worth?

The question can be significant because Honolulu’s ethics laws prohibit any city official or employee from taking a gift worth more than $200 “as long as the gift-giver has an interest that the city official may affect in the course of fulfilling his or her job duties.”

It seems simple. Our public officials should not put themselves in a position where their official actions could be seen as influenced by gifts from lobbyists and other interested parties.

It seems to me that the ordinary way of answering the value question would be that a gift is worth what the giver had to pay for it, unless there are unusual circumstances. If you buy something for $100 and give it as a gift to a city official, the official has received a gift worth $100.

That’s how it would work in ordinary, everyday situations. If someone asks how much your car cost, you would tell them what you paid. Few people would assume that it would be necessary to tear the car apart and make a list of its individual components, then price each of those, in order to come up with the car’s value.

In this particular case, a member of the city council wanted to know how a gift of a ticket to a political fundraiser should be valued for purposes of the gift law.

The commission decided that this kind of gift involves two discrete transactions.

First, the gift-giver, in this case a lobbyist, buys the gift from a seller, in this case apparently a campaign. That involves an exchange of a certain amount of money.

Then, according to the commission, there’s a second transaction when the lobbyist gives the fundraiser ticket to a city official, in this case a council member. The commission decided that the value of the gift changed dramatically between transaction #1 and transaction #2.

Let’s say the ticket was to a $500 per person fundraiser. The lobbyist pays $500 and gets the ticket, then turns around and gives it to the council member. What’s its value then? According to the commission, suddenly it’s only worth the actual price of the direct benefit received, in this case the price of the food served, which would likely be something on the order of 10 percent of the amount paid.

Although the council member would have been prohibited from accepting the ticket if valued at its original cost to the gift-giver, the commission would allow the gift because, in their view, it’s worth dramatically less to the recipient.

Because this opinion was issued in response to a verbal inquiry from the council member, there was no complainant to present a different viewpoint than the one eventually adopted by the commission. The public had no voice in this interpretation of the ethics laws.

It seems to me that this is one of the situations in which the commission failed in its obligation to interpret the city charter and the ethics ordinances strictly, rather than finding ways to cut officials a lot of slack (which ends up being to the benefit of the lobbyists and other gift-givers rather than to the public).

The City Charter’s declaration of policy regarding ethics begins:

Elected and appointed officers and employees shall demonstrate by their example the highest standards of ethical conduct, to the end that the public may justifiably have trust and confidence in the integrity of government.

This mirrors the State Constitution, which provides:

The people of Hawaii believe that public officers and employees must exhibit the highest standards of ethical conduct and that these standards come from the personal integrity of each individual in government.

You can’t assure “the highest standards” by essentially removing an important prohibition on gifts through an interpretation that runs contrary to common understanding of language, as the commission did in this case.

Oh–the published opinion is signed by the ethics commission chair, Lex Smith, an attorney with the firm of Kobayashi, Sugita & Goda.

I don’t know Lex Smith, but I know he telephoned me back in January on behalf of Honolulu Managing Director Kirk Caldwell’s campaign. He’s also appeared before the Campaign Spending Commission representing Mayor Mufi Hannemann’s campaign, and earlier represented Mayor Jeremy Harris’ campaign in a federal lawsuit. He has also been paid to represent the city in certain legal cases involving leasehold conversion.

Smith was reappointed to the commission by Mayor Hannemann in 2007, and at that time described himself as a political independent who is not a member of either political party. In an “appointee personal information form,” Smith said that he saw no “possible conflict” between any of his personal or business interests or “any other activity” and his duties with the commission.

Personally, I don’t see how someone so actively involved in the campaigns of the managing director and the mayor could have answered the question in that manner, or why it didn’t raise any questions during the appointment process.