Gov. David Ige is ratcheting up his election-year criticism of U.S. Rep. Colleen Hanabusa by reviving the issue of her two-year push for a huge state tax credit for development of an aquarium at Ko Olina, alleging the deal demonstrates that she makes decisions “on behalf of self-interest and special interests.”
Hanabusa, who is running against Ige in the Democratic primary for governor, led the drive to get lawmakers to approve the Ko Olina tax credit in 2002 and sued former Gov. Ben Cayetano over the issue after he vetoed the bill. The Legislature approved the tax credit again in 2003 at the urging of Hanabusa, and the measure was signed into law by then-Gov. Linda Lingle.
Ige said he was one of the few lawmakers who did not support the Ko Olina tax credit, in large part because the bill Hanabusa advanced was written so that only developer Jeff Stone could benefit from it.
The Honolulu Advertiser later reported that less than a month after the $75 million tax credit was approved, Stone sold a luxury Ko Olina townhouse to Hanabusa’s then-fiance, John F. Souza III. One of Stone’s companies financed the sale by lending Souza $405,773 for the purchase, according to state records.
Souza, who is now Hanabusa’s husband and campaign chairman, bought the Kai Lani townhouse for $569,023 in mid-2003 and sold it for $990,000 in January 2004, according to city tax records.
Hanabusa also did business with Stone, and sued the city on behalf of the Ko Olina Community Association headed by Stone in 2003. She also worked as a lawyer for Stone in the years that followed.
Ige said in an interview that the long-ago political push by Hanabusa for the tax credit for Stone reveals “that she does make decisions on behalf of self-interest and special interests rather than the public interest, and I do think that that is a fundamental difference. I have always acted in the public interest.”
“I do believe that the actions that we take (are) a reflection of the core values that we have, and I have always taken action on behalf of the public interest,” he said.
Keith DeMello, director of communications for the Hanabusa campaign, replied that “Colleen Hanabusa is running on the issues, her record, and her proven success as an effective leader. The congresswoman’s principled, experienced leadership has been validated by voters time and again. Contrast that with David Ige.
“Deeply down in the polls, Ige’s strategy now appears to be one of distraction from his own weak record and his inability to accept responsibility for losing the trust of the people of Hawaii,” DeMello said.
“As our state faces important issues and challenges, David Ige is focusing his priority on worn-out 15-year-old conspiracy theories that have been repeatedly dismissed by the voters.”
Tax credit criticism
Hanabusa told The Advertiser in 2004 she did not benefit from Souza’s businesses, and therefore it never occurred to her to publicly report the indirect ties to Stone. The Ko Olina aquarium was never built, and Stone claimed only $3.45 million of the $75 million tax credit.
This is not the first time Hanabusa has been publicly taken to task for her role in the Ko Olina tax credit.
The National Republican Congressional Committee described Souza’s purchase of the townhouse after the tax credit was approved as a “sweetheart deal” in attack ads that ran during Hanabusa’s 2010 campaign for Congress.
Cayetano also questioned Hanabusa’s support for the credit — which he described as the largest in state history — in his 2009 autobiography, “Ben: A Memoir, From Street Kid to Governor.”
“During my 28 years in politics, the Ko Olina bill was the first I had seen that was intended to benefit a specifically named private developer,” Cayetano wrote.
The former governor said in his book that Hanabusa’s decision to sue him after he vetoed the Ko Olina bill was “inexplicable,” and he cited The Advertiser’s coverage of her relationship with Stone as an “undisclosed possible conflict of interest.”
Ige also questioned Hanabusa’s decision to sue Cayetano over the tax credit. The lawsuit was unsuccessful.
“Clearly, it was kind of more than just the typical thing that you would do for somebody, but it really gets back to taking action and the motivation, and whether you are guided by public interest or self-interest or special interest,” Ige said.
Cayetano now strongly supports Hanabusa’s campaign for governor, and stressed in an interview last week that he praised Hanabusa in other portions of his book for her quick intelligence and leadership. In particular, he lauded Hanabusa for her role in helping Cayetano in the drive to create the Employer-Union Health Benefits Trust Fund.
“That’s what it comes down to for me in this election,” Cayetano said last week. “Leadership ability. Colleen versus David — it’s not comparable.”
Lobbying questioned
DeMello said that “if Ige wants to dwell on the past and challenge others’ integrity, perhaps he should explain how he was a lobbyist and head of government affairs for his employer, GTE Hawaiian Tel, while simultaneously serving as the chair of the Senate committee responsible for regulating GTE and for overseeing consumer protection. This was a clear conflict of interest Ige has never taken responsibility for.”
When the Honolulu Star-Bulletin reported in 1998 that Ige had been promoted at GTE Hawaiian Tel from network design senior administrator to governmental affairs director, he told the newspaper he would be lobbying the city, counties and federal government on behalf of the utility, but not the state.
At the time, Ige said that since Hawaiian Tel was regulated by the Public Utilities Commission, most of its concerns would come before the commission, and his position as co-chairman of the Senate Consumer Protection Committee panel should not be a conflict of interest. He also said he would not vote on matters that presented a conflict.
Glenna Wong, communications director for the Ige campaign, said DeMello’s statement is an effort to distract from what she described as a “pay-to-play scheme” and a “sweetheart deal” at Kai Lani that Souza “flipped for a huge profit.”
“This is typical for Hanabusa to deflect the focus on actual benefits received versus some supposed benefit to being a declared lobbyist,” Wong said in a written statement. “David declared he was a lobbyist. If Hanabusa has evidence of bad dealings she should disclose the same. Innuendos should not cloud the facts of her personal benefit.”
Incumbent lags in poll
Ige’s criticism of the Ko Olina deal appears to be part of an attempt to take the offensive after a Honolulu Star-Advertiser poll last month showed Hanabusa with a 20-percentage-point lead over Ige less than five months from the Democratic primary on Aug. 11.
The poll found 47 percent of likely Democratic voters support Hanabusa if the election were held today, while only 27 percent said they would vote for Ige. Former state Sen. Clayton Hee trailed his two fellow Democrats at 11 percent.
Ige last week sharply criticized Hanabusa and leading state lawmakers for circulating a letter in March inviting donors to a fundraiser for Hanabusa. The letter was signed by House Speaker Scott Saiki, House Finance Committee Chairwoman Sylvia Luke, Senate Ways and Means Chairman Donovan Dela Cruz and Senate President Ron Kouchi.
Ige alleged the fundraising letter signed by the four most powerful lawmakers in the state sent a clear signal that anyone who wanted action by the Legislature this year must donate to Hanabusa, a charge all four lawmakers who signed the letter denied.
Correction: An earlier version of this story incorrectly said Hanabusa was Senate president when she led the push for the Ko Olina tax credit. She did not become Senate president until 2007.
