Friday, June 06, 2008


Ethics fines possible for little guys but not for white collar crime?

by Larry Geller

Is it ethical for the Ethics Commission to fine the little guy but let possible corporate white collar crime go uninvestigated? If the Commission fines those who  accepted UH money to fly to the Sugar Bowl but lets the ferry execs off the hook, that's exactly the question that should be asked.


You'll recall that the Hawaii Superferry Company grossly underreported its lobbying expenses in 2007. They originally reported only $21,960, but investigative reporter Ian Lind questioned that, and when caught, they corrected their report this year to $379,431.

Superferry last year hired some of the state's top lobbyists and public relations executives to help at the Legislature and with the media. According to Ethics Commission records, the company spent more than twice as much on lobbying in 2007 than any other organization.

Despite this, there has been no investigation of whether the earlier report was a violation of state law, and the Ethics Commission imposed no fine. Yet today's Advertiser article hints that UH staffers might face $500 fines plus restitution if their spouses and kids got free trips to the Super Bowl. I'm not saying they shouldn't be fined, only asking how come white collar executives aren't facing the same scrutiny focused on the little guys?

The state Ethics Commission's review of the University of Hawai'i's Sugar Bowl travel expenses focuses on one key issue: Did state employees use their positions to get unwarranted perks or special treatment?

Under Hawai'i ethics laws, the university has to demonstrate that there was a legitimate state purpose when paying for the travel of employees and their family members to attend the Jan. 1 bowl game in New Orleans, said Dan Mollway, the commission's executive director.

If any of the travel expenses do not fit that bill, the staffer or the UH manager who approved the travel could be forced to pay back the university for the travel costs.

In the worst case, a staffer could wind up paying a $500 fine for each violation, in addition to restitution, said Mollway. Those fines and restitution could add up to tens of thousands of dollars if there are multiple violations.

Is there a double standard in the Ethics Commission? Disappeared News is only a little blog, but when we (see how easy it is to slip into an "editorial we") asked about why there was no investigation and fine (the investigation and fine should be almost automatic, they've admitted the earlier report was erroneous), we received no answer.

A $500 fine is only a drop in the bilge pump for the huge ferry company. It would have been like striking them across the bow with a wet noodle. But still, we are entitled to some justice here. Fining families thousands of dollars, as the article mentions might happen, while letting a corporation off without even an investigation seems like an ethics issue to me.



I think there is another small difference that doesn't make it into the newspapers. My understanding is that the Superferry's "underreporting" which was correct before formal proceedings were commenced was their "first" fuck up with the Ethics Commission.

The University on the other hand routinely and systematically violates the Ethics Code. I have been working with the Ethics Commission for the last year on a variety of issues involving systematic violations that, I learned, have been going on since the 1960s.

The University has routinely held the position that it is exempt from much of the good governement/open government laws and systematically ignores or flagrantly violates these. I think the Ethics commission is going light on these people.

As for the HSF, which is clearly a baddy, I don't think the next time around they will get it so light. The Ethics Com usually gives people a chance but not two.

You are absolutely correct. The Ethics Commission tends to let the first infraction go, and maybe that's a good thing. Unless a company can take advantage of it. Basically, it's just a bit of bad luck for the Superferry that Ian Lind was so vigilant, or they would have gotten away with it. So they were caught, and they still got away with it.

Even if the is the practice of the Ethics Commission, it doesn't mean it is right. I obviously differ with their thinking.

Let's see if the UH families get off without paying a fine. It would be their first infraction. Will they have to pay, or will the UH have to pay? I'm not too clear on that, and wouldn't mind it so much if the UH had to pay.

I also appreciate your observation of the routine violations on the part of the UH. Maybe we need to change the ethics law so that they have real teeth. A $500 fine doesn't seem to daunt them at all.

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