The state Senate and state ethics director are in an escalating dispute over whether members of state task forces are restricted from lobbying.

Leslie Kondo, executive director of the state Ethics Commission, has determined that members of task forces are state employees subject to ethics code restrictions on conflicts of interest. He has warned that task force members are prohibited from being paid by private interests to lobby the Legislature on task force-related matters.

Kondo first issued the guidance in a May memo to members of a mortgage foreclosure task force after some members had lobbied the Legislature last session. His advice has since been applied to working groups on urban development and a Hawaii-based stock exchange.

Kondo said Tuesday that the purpose of the ethics code is to prevent "influence peddling."

"You’re not supposed to be able to profit from the privilege of serving," he said.

Several senators, however, said Kondo may have overstepped his bounds and believe his warning will have a "chilling effect" on their ability to recruit industry experts for task forces and working groups.

"How dare he tell us we can’t do that," said state Sen. Rosalyn Baker (D, Honokohau-Makena), chairwoman of the Senate Commerce and Consumer Protection Committee, who was behind the mortgage foreclosure task force and the stock exchange working group.

Lawmakers often convene task forces to gather information from industry experts on complex issues, but task forces are advisory and do not have regulatory or policymaking authority.

Baker and other senators believe industry experts will be less likely to volunteer for task forces if their participation restricts them from lobbying.

"Until this director there’s never been an issue," she said. "The Legislature should not be impeded in its ability to conduct its functions."

State Sen. Donovan Dela Cruz (D, Kaena-Wahiawa-Pupukea), chairman of the Senate Water, Land and Housing Committee, has decided to defer establishing a working group on urban development — including mixed-use development near proposed Honolulu rail stations — out of concern about Kondo’s warning.

"How do we expect to move Hawaii forward if we can’t do something like this?" Dela Cruz asked.

The state Department of Commerce and Consumer Affairs has proceeded with the working group on a Hawaii-based stock exchange, but a department spokeswoman said the department had Kondo’s warning in mind when selecting members.

A legal memo from the Senate Majority Research Office, prepared for Baker, contends that task force members are not state employees and should not be subject to the ethics code. Kondo’s interpretations, the memo argues, "violate public policy and usurp the power of the Legislature to convene these types of task forces."

Senate Majority Attorney Richard Wada has met with Kondo to inform him about the Senate’s legal position. State Senate President Shan Tsutsui (D, Wailuku-Kahului) is scheduled to speak with Kondo on Wednesday afternoon.

Kondo has said that classifying members of task forces as state employees subject to the ethics code is a liberally construed interpretation of the law. The ethics code applies to all appointed and elected officials, state employees and members of boards, commissions and committees.

"From my perspective, just because they label the group something else doesn’t mean it’s not the same animal," he said of members of task forces and working groups. "If it walks like a duck, quacks like a duck, smells like a duck — or whatever the saying is — you call it a duck."

Kondo said private interests that allow an employee or lobbyist to serve on a task force could still lobby the Legislature on the issue the task force is studying, just not through the task force member as a paid lobbyist.

The state Ethics Commission appointed Kondo — a former director of the state Office of Information Practices and a former member of the state Public Utilities Commission — in December and he took over as executive director and chief legal counsel in January. Kondo replaced Daniel Mollway, who was fired by the commission last year after serving for more than two decades.

Kondo has taken an aggressive approach, issuing memos offering strict guidance on gifts, lobbying and the use of state facilities that several lawmakers view as a more expansive exercise of his role.

"One cannot just opine — or hot-dog — because that’s what they want to do," Baker said.

Kondo said he is trying to think ahead. "Whether it’s a different approach or not, we’re just trying to be proactive," he said. "It’s not my goal and the Ethics Commission’s goal to trap anybody, whether it’s a legislator, whether it’s a member who is on a task force or working group.

"We’re not here to trap anybody and charge them and fine them and hang them out to dry, so to speak. So we’re trying to be proactive and let people know where the lines are and make them as bright as possible for people to recognize."