Thursday, October 05, 2006


Fallout from ethics investigation into "embedded lobbyists" begins

As we inch closer to the start of the next legislative session in January 2007, legislators ought to think twice before agreeing to hire corporate executives as "interns" to work in their offices.

Following the release of today's Ethics Commission opinion on the subject of interns, it will be easier for clean government advocates to shine the spotlight on any legislator taking in corporate execs seeking influence or access in their offices.

The opinion mentions (on page 4) that
... a legislator might be in violation of the "Fair Treatment" section of the State Ethics Code (HRS section 84-13) if the legislator uses an intern, who is well versed in legislative matters, for the purpose of giving a company that employs the intern preferential access to legislative business. ...
The Honolulu Advertiser reported this morning on the release by Rep. Bev Harbin of a Hawaii State Ethics Commission opinion regarding the use of legislative "interns" who in reality are corporate executives. These are not students learning how laws are made, they are often senior people dispatched by companies to work in legislator's offices during session. You read about this first right here on Disappeared News in an article dated March, 2006 which also first applied the term "embedded lobbyists" to these so-called interns.

After initial reports by Disappeared News and Pacific Business News, the issue exploded briefly into the press and TV. See this Google search for a variety of articles on the subject.

The complete Ethics Commission opinion can be found here.

The Ethics Commission isn't done with this matter. There were specific complaints asking what role, if any, an HMSA Foundation "intern" might have had in the derailing of Hawaii's health insurance rate regulation law. Mark Forman was working in Rep. Bob Herkes' office while serving as Executive Administrator of HMSA Foundation (he was listed on their website as still holding that position). While he was there, a complex amendment was introduced by Rep. Bob Herkes, chair of the Consumer Protection & Commerce Committee, that appears to have been prepared in advance of public testimony and ultimately killed rate regulation.

(Under the original law, the Insurance Commissioner reviewed rate filings and determined whether they were reasonable. In his testimony, the Commissioner estimated that the law saved Hawaii $18 million in premiums. This is money that individuals and small businesses were able to spend on other things--for example, gasoline! Now that the law is gone, HMSA and Kaiser can set rates as they like. Not only can they raise rates, they can set them artificially low to drive out competition.)

If the Ethics Commission investigation continues to specifics, Rep. Herkes may be placed in the uncomfortable position of having to say where the language in his amendment came from. He does not have the special expertise to have worded that amendment himself. So I imagine that in his defense against the ethics complaint he may confirm that he let the industry write that language for him. In other words, he will have to effectively admit that we citizens (and small businesses) were sold out. This is speculation, since no details of an Ethics Commission investigation are revealed to the public while it is ongoing.

Ultimately the result will come out. There's a strong public interest, I suggest, in learning how that whole thing happened (the corruption of the bill to remove the sunset on rate regulation).

During the next session activists will continue to demand change. The petition asking for procedural reforms at is still active, although somewhat dormant between sessions (please sign the petition if you have not done so already). With all the publicity, legislators would be wise to refrain from employing corporate executives as "interns" from this point onwards.


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