Members serving on the board governing the University of Hawaii system are uneasy about pending legislation that would require them to file financial disclosure statements as public record, with at least one regent promising to resign if the bill becomes law.
The current 15-member Board of Regents is made up of volunteer gubernatorial appointees who mostly are attorneys, business executives and consultants for the local real estate, financial, retail, technology and nonprofit industries.
As members of a state board with multiyear terms, regents do submit annual financial disclosure forms to the state Ethics Commission, which are kept confidential.
The forms ask public executives and officers to disclose such financial information as income, investments, ownership or interests in businesses, and real estate holdings for themselves, their spouses and dependent children.
Senate Bill 2682 adds members of the Board of Regents and 14 other state boards and commissions to the list of public officials whose financial disclosure forms would be public records and available on the Ethics Commission’s website for inspection and duplication.
The final version of the bill passed unanimously in both chambers, with a 25-0 vote in the state Senate and a 50-0 vote in the state House, and has been sent to Gov. Neil Abercrombie for final approval.
Sen. Maile Shimabukuro (D, Kalaeloa-Waianae-Makaha), who introduced the bill, said the legislation aims to increase transparency and public confidence in government operations.
"It came out of consumers who wanted to have more transparency in government operations and being able to find out whether people in important decision-making positions have potential conflicts of interests," Shimabukuro said.
As the governing board of the 10-campus UH system, the Board of Regents "formulates policy and exercises control over the university … (and) has exclusive jurisdiction over the internal structure, management and operation of the university," according to UH’s website. That includes approving large construction and consulting contracts and executive hires.
Nearly 1,800 state employees and members of boards and commissions are required to file the annual disclosures, but only approximately 180 of those are deemed to be public records, including those of the president, vice presidents, assistant vice presidents, chancellors and provosts of the UH system.
The Ethics Commission, which supported the bill, said its ability to identify potential conflicts of interests in those forms is hampered by the high volume of statements filed and its limited staffing.
"The commission’s ability to identify potential conflicts of interest is very limited and, frankly, except in rare circumstances, unlikely," the Ethics Commission said in supporting written testimony. "The public, especially those who are involved with and may be impacted by the board/commission member’s action, is best able to identify and raise concerns about possible conflicts of interest."
UH regents Chairman John Holzman said the board is drafting a letter asking the governor to veto the measure. The draft letter says some regents have indicated they might resign if it becomes law.
"I hope it can reflect the unanimous view of the board," Holzman told fellow regents at their monthly meeting Thursday. "It is, I think, a very important statement that we have to make."
Regent John Dean, president and CEO of Central Pacific Financial Corp. and Central Pacific Bank, said he’ll "for sure" resign.
"Just for the record, and for everyone, obviously, I would resign. I’m willing to share my personal information with the Ethics Commission, but I have no interest in sharing it with the entire state of Hawaii," Dean, whose term on the board runs through 2017, said at the meeting.
The bill also would make public the financial interests of members of the state Ethics Commission, Public Utilities Commission, Hawaii Community Development Authority, Board of Land and Natural Resources, Land Use Commission and Hawaiian Homes Commission, among others.
Opponents testified that the changes would make it harder to recruit volunteer members to serve on these boards and commissions.
But the Ethics Commission countered "that there are certain responsibilities and obligations to the public that members must accept in exchange for the privilege and honor of serving."
"In light of the State Ethics Code’s fundamental purpose — to foster public confidence in state government — the commission believes that those individuals responsible for department policy and other state policies about which there is a significant public interest should be required to publicly disclose financial information from which the public can consider whether the member has a conflict of interest," the commission testified.
Carmille Lim, executive director of Common Cause Hawaii, said the concept behind SB 2682 was a top priority for the good-government group this year.
"The president and chancellors file these notices; it’s common sense to have their supervisors, the Board of Regents, also file public disclosures," Lim said. "It gives the public greater knowledge of the decisions that potentially are conflicts of interest for these board members."
It’s unclear whether the bill will appear on Abercrombie’s potential veto list.
"The governor, along with his staff, relevant departments and the attorney general, will thoroughly review the final language of SB 2682 in the coming weeks in order to make a decision based on its content and merit," Abercrombie spokesman Justin Fujioka said in an email.
The governor needs to provide the Legislature with his potential veto list by June 23. He then has until July 8 to sign or veto bills, or allow them to become law without his signature.
Link to blank disclosure form: ethics.hawaii.gov/wp-content/uploads/2013/10/FinancialDisclosureLong.pdf.
