School worker to get hearing on conflict-of-interest charge

The state Ethics Commission will hold its first contested case hearing since 1985 on Tuesday in Hilo in a case involving a charter school employee accused of representing both the school and his family business in financial transactions.

William Eric Boyd, administrative assistant at Connections Public Charter School in Hilo, is charged with violating the conflict-of-interest provisions of the state Ethics Code. State employees are prohibited from taking official action that affects a business in which they, their spouses or dependent children have a substantial financial interest.

A company owned by Boyd and his wife, Erika, provided lunches to students at the charter school for years under contracts awarded without competition. Boyd’s duties at the school included ordering and buying school supplies and materials and approving payments by Connections.

Documentation filed in the case includes invoices or certificates signed by Boyd as "food service manager" for Boyd Enterprises that were submitted to the school for lunches. On campus, he signed to acknowledge receipt of lunches by the school and his signature appears on purchase orders from the school.

Boyd is also accused of ordering products, from digital camcorders to janitorial supplies, for the school from the Amway business owned by him and his wife, and then approving payments by the school to his wife. Another charge involves his family business using a booth rented by the school at the county fair.

"He is transacting business with his own company on behalf of the school, and he’s transacting business on behalf of his own company with the school," said Les Kondo, executive director of the Ethics Commission. "That’s a conflict of interest under the ethics code. The code does not allow him to take official action with respect to his own company."

There are no charges against the school itself. The hearing is set for Tuesday at the University of Hawaii at Hilo, Hooulu Terrace, at 9 a.m.

Boyd’s private attorney, Ted Hong, dismissed allegations of wrongdoing and called the numerous charges "an abuse of state power" and a "ridiculous expenditure of time and resources."

"This is just an individual who had a business with his wife who got a bid to supply the school with lunches," Hong said. "They nailed him for signing off on the invoices. … The CEO was on another campus. My client is the only person who was authorized to sign for it. There is no indication that the lunches weren’t delivered or that they overcharged."

As for the Amway purchases, Hong said Boyd explained that the school was short on supplies and needed them quickly.

"He wasn’t making a profit," Hong said. "He was giving it to them at cost. He was trying to fill a need. There is no indication this guy was profiteering from anything. The charge is that it’s the appearance of impropriety. It just looks bad."

Rather than hold contested-case hearings, the commission typically handles ethical problems by issuing advisory and formal opinions, and by working with the affected parties to reach mutually agreed resolutions of cases, including payment of fines. In this case, the commission tried to reach a settlement, but Hong wanted a full hearing, where he could air his objections publicly.

Hong argues that Boyd is not even subject to the state Ethics Code because he contends that Boyd is an employee of Connection’s local school board, rather than the state.

"Our position from Day One has been that employees of local school boards are not state employees subject to the state Ethics Commission," Hong said. "They are subject to their own standards."

That is an argument Hong had previously raised when he filed a lawsuit in August 2011 demanding that the commission drop its investigation of Boyd and asking the court to rule that he is not a state employee. The suit was dismissed without prejudice.

Charters are public schools that report to their own governing boards rather than the Board of Education. They are considered state agencies, and their employees are paid with public funds and receive state benefits, including health and retirement benefits.

In October 2011, the Intermediate Court of Appeals ruled in a separate case, Waters of Life Local School Board v. Charter School Review Panel, that a local school board is not a separate entity from the charter school, a state agency.

The transactions in Boyd’s case date back to 2007.

The Ethics Commission, whose commissioners are volunteers, can order fines of up to $500 for each violation.