Editorial | Our View Ethics By Vicki Viotti Aug. 14, 2011 Mahalo for supporting Honolulu Star-Advertiser. Enjoy this free story! ILLUSTRATION BY KIP AOKI / KAOKI@STARADVERTISER.COM Read more Mahalo for reading the Honolulu Star-Advertiser! You're reading a premium story. Read the full story with our Print & Digital Subscription. Subscribe Now Read this story for free: Watch an ad or complete a survey Log In Already a subscriber? Log in now to continue reading this story. Activate Digital Account Print subscriber but without online access? Activate your Digital Account now. State Ethics Commission Executive Director Les Kondo didn’t start off his new post with the intent of going high-profile — he has avoided invites to lengthy media interviews — but he’s been less shy about the way he’s tackled some touchy issues. Most notably, in his first legislative session he took a tough stance with lawmakers on the gifts and invitations they should accept. Now he’s applying a similarly strict reading of the state Ethics Code to the people legislators name to their myriad task forces and work groups — the ad hoc panels frequently assembled to work out the knots in bills proposed on the most contentious matters. In May, Kondo raised an objection that a task force on mortgage foreclosure reform included members who were also actively involved in lobbying for the interests of the financial industry. Task force members, under the code (also known as Hawaii Revised Statutes Chapter 84), should be considered state employees and should be accountable as such to the conflict-of-interest provisions of the code. This task force was active for longer than usual, and this created much of the problem. Ordinarily groups like this would be authorized during one session, the members would be appointed and work through the interim months after adjournment, and make their recommendations before the next Legislature convened. Then they’d disband. However, the mortgage group kept working into the last session, which meant those task force members who happened to be lobbyists resumed working as lobbyists, too. It’s not that serious breaches of ethics are actually occurring, Kondo said, but appearances do count. If the public senses lobbyists are working both angles by working in groups to craft legislation while they’re still bending the ear of key lawmakers, he said, it doesn’t look too good. "The big picture for us," Kondo said, "is you can’t influence-peddle. "The ethics code is primarily based on perception. Once you start eroding the public trust, it crumbles very fast but it takes a long time to build up again." In addition, he said, the lobbyist can use his or her position on a panel as a means of marketing his value to potential clients. It’s better to keep the service on the task force separate from his income interests, he said. "He can tell them, ‘I’m on a task force and can really shape legislation," Kondo added. "It helps him market his lobbying business." State Sen. Rosalyn Baker of Maui, who chairs the Senate Commerce and Consumer Protection Committee, took the most umbrage. That’s not surprising, considering she was a sponsor of Senate Bill 651, the legislation that the mortgage task force helped produce. Among other things, the bill created a dispute-resolution program for mortgages and enabled homeowners under foreclosure to convert to a judicial process that allows more time for resolution. Baker didn’t appreciate the implication of Kondo’s legal interpretation: Lawmakers wouldn’t get the people they want to serve. "The point is, he’s basically telling the legislators who they can and can’t use on a task force," Baker said. She also disputes Kondo’s take on the definition of state employees. According to HRS Chapter 84, an employee means "any nominated, appointed or elected officer or employee of the State, including members of boards, commissions, and committees, and employees under contract to the state or of the constitutional convention, but excluding legislators, delegates to the constitutional convention, justices and judges." Baker believes task forces’ duties are too constrained and their functions too advisory to be lumped in with those of more permanent panels. "These task forces are simply there at the request of the Legislature to give us their expertise," she said. "The Legislature can choose to use that information or not use their information." Baker is backed up by the Senate Majority Research Office, which put out a memo concluding that task force members are not employees because they are not, in the language of the law, appointed. Generally appointments are made by the governor after nominees are submitted, Senate lawyers argued in the memo; the term used for assembling a task force is "selected" or "invited." The controversy extended beyond the matter of the mortgage panel, too. Sen. Donovan Dela Cruz, who chairs the Water, Land and Housing Committee, has postponed forming a working group on urban development until the issue is resolved. For his part, Kondo said his intent is not to control whom the Senate or House wants to tap for their working groups. They can do so, he said, but then the person would need to decide whether to give up lobbying for the duration of the task force’s work. The legislator "wants to put people he knows and who know him" on the task force, Kondo said: "We’re telling the person who wants to serve that he has a choice." He also said that there are many people with substantive knowledge about the subject of the task force who could be named instead of the lobbyist. If it’s a subject area in which the field of experts is limited, lawmakers can create the task force with language specifically stating that members are not considered employees under the ethics code. Senate President Shan Tsutsui said no decisions have been made on actions the Senate might take and that he hopes a compromise with the ethics director is possible. Tsutsui added that the current system seems to produce legislation that’s in the public interest. "When you look at the mortgage working group, I don’t think any of the financial institutions were very happy with what came out," he said. "It was very pro-consumer. The banks were really upset." The National Conference of State Legislatures could offer no clear-cut comparisons with other states on how ethics applies to task forces. Every state takes a somewhat distinctive approach. For example, Utah deals with the issue of lobbyists on legislative working groups by simply exempting them while they were in that service. The term "lobbyist" excludes various people, such as "a person participating on or appearing before an advisory or study task force, commission, board, or committee, constituted by the Legislature or any agency or department of state government, except legislative standing, appropriation, or interim committees." Reactions to all this from recent task force members are mixed. Robert Harris is executive director of the Sierra Club’s Hawaii chapter, a registered lobbyist and among those eyed to serve on Dela Cruz’ urban-development panel. Harris said his primary concern is less with the lobbyist status of members but on the overall makeup of task forces: On most of them, corporate interests dominate, with less representation by advocates for the environment or the general public. Neal Okabayashi, an attorney and lobbyist for First Hawaiian Bank, served on the mortgage task force. He agreed with Baker’s assertion that the lobbyists often are tapped because they are informed on the issue but also have time to devote to the demands of a task force, which can take more time than a top executive might have. "It certainly will be more difficult to attract industry participants with the necessary knowledge and expertise to serve on task forces, which may ultimately decrease, their effectiveness," he said in an email response to the Star-Advertiser. Jeff Mikulina, executive director of Blue Planet Foundation, a nonprofit renewable-energy advocacy group, agrees that it can be tough to round up enough expertise for task forces without overlapping into the lobbyist sector. But if the whole task-force enterprise imploded, that could be "a refreshing outcome," he said. "In my experience of 13 years in the Legislature, the task force is pretty much the antidote to progress," Mikulina said. "We have done so much wheel-spinning in the task force realm." THE STATE’S CONFLICTS OF INTERESTS STATUTE (a) No employee shall take any official action directly affecting: (1) A business or other undertaking in which he has a substantial financial interest; or (2) A private undertaking in which he is engaged as legal counsel, advisor, consultant, representative, or other agency capacity. A department head who is unable to disqualify himself on any matter described in items (1) and (2) above will not be in violation of this subsection if he has complied with the disclosure requirements of section 84-17; and A person whose position on a board, commission, or committee is mandated by statute, resolution, or executive order to have particular qualifications shall only be prohibited from taking official action that directly and specifically affects a business or undertaking in which he has a substantial financial interest; provided that the substantial financial interest is related to the member’s particular qualifications. (b) No employee shall acquire financial interests in any business or other undertaking which he has reason to believe may be directly involved in official action to be taken by him. (c) No legislator or employee shall assist any person or business or act in a representative capacity before any state or county agency for a contingent compensation in any transaction involving the State. (d) No legislator or employee shall assist any person or business or act in a representative capacity for a fee or other compensation to secure passage of a bill or to obtain a contract, claim, or other transaction or proposal in which he has participated or will participate as a legislator or employee, nor shall he assist any person or business or act in a representative capacity for a fee or other compensation on such bill, contract, claim, or other transaction or proposal before the legislature or agency of which he is an employee or legislator. (e) No employee shall assist any person or business or act in a representative capacity before a state or county agency for a fee or other consideration on any bill, contract, claim, or other transaction or proposal involving official action by the agency if he has official authority over that state or county agency unless he has complied with the disclosure requirements of section 84-17. Previous Story 'Second city' should have a post office Next Story Hawaii should aim for goal of 'zero waste'