Monday, March 21, 2011


Hawaii Senate free-lunch scam moves to House for vote Tuesday

Government has lost enough of the public's trust over the years without straining what's left. Come to think of it, it might be wise to keep close tabs on SB 671, to make sure lawmakers don't pull a fast one.
--Star-Advertiser editorial,
Strengthen state ethics law, 3/4/2011

by Larry Geller

The editors must have known something was going on. In fact, the Senate did pull a fast one. And the bill is still alive, coming up for a hearing on Tuesday. It’s a scam, and should never have come this far. Since the scam has the support of the Senate president, it could, if not killed in the House, become law.

Senate Bill SB671 comes up for a hearing on Tuesday, 03/22/2011 at 2:00 p.m. in House conference room 325. The House proposes an amendment, posted here. The new version is worse in some ways than the Senate version—it allows for international junkets as long as somebody else pays. And not just for legislators, but for state employees as well. It’s an invitation for corruption on a massive scale.

Right now, legislators can’t accept expensive gifts or meals from lobbyists trying to get a law passed. SB671 would start a feeding frenzy. It could also encourage solicitation for invitations in exchange for favors.

This bill requires disclosure, but only by June 30, which is after the session is over.

Opportunities for corruption

Imagine—chambers of commerce, wealthy non-profits, and even labor unions could invite hoards of legislators to their events. Lobbyists could peddle influence over free drinks. State employees who regulate the vendors could be invited too!

The Hawaii legislature got into trouble once before for being too palsy with non-profits. In 2007 Rep. Michael Magaoay was reported to be soliciting campaign contributions from non-profits whose grants he was in a position to influence. He became a big money earner among legislators:

His meteoric rise came after he got the job of managing the House process that helps determine which nonprofits get millions of dollars in grants from the Legislature each year.

It also came as his campaign team began targeting people in the charitable community to raise money, hoping to capitalize on Magaoay's influential role in the grants process, two of his key election leaders said.

[Honolulu Advertiser, Hawaii House grants job a lucrative post, 12/24/2007]

SB671 would make Magaoay’s scheme look like very small potatoes.

The lobbying loophole

Lobbyists can apparently “launder” their influence-buying  by running these events on behalf of non-profits. Disappeared News reported on two events where the organizations appear to have paid their lobbyists to hold an event but the lobbyists reported zero on the required forms to the Ethics Commission. Those articles are here and here. The two organizations were selected only because they threw their shindigs at the posh Pacific Club. They reported their lobbying expenses. The lobbyist’s disclosure forms had only goose eggs.

Gut-and-replace, a game played against the state constitution

When the Senate Judiciary and Labor Committee scheduled a hearing on this bill, the scam had already been in play. As we wrote in The duplicity behind the SB671 ethics bill caper (3/2/2011), the original SB671 was a very fine bill, unusual only in that it was actually scheduled for a hearing. The Senate doesn’t hear ethics bills, yet this one somehow made it to a committee. How come?

The plan was that the original bill was never going to be heard. At the same time the hearing was announced, the committee chair, Senator Clayton Hee, was already working on the real bill. In other words, the original bill was merely a “Trojan horse” designed to work the system. It was a scam against the public.

It was the original bill that passed first reading on the Senate floor  January 24, but Hee had no intention of taking a vote on it.

Instead, totally unrelated language was proposed as a “draft amendment.” The original bill didn’t get any debate at all in Hee’s committee. The Star-Advertiser identified Sen. Brickwood Galuteria as the author of the substitute amendment, and he was forced to defend his participation in an op-ed.  Galuteria misstated that the Judiciary committee voted to move forward with the original bill. It didn’t, and it never intended to consider that bill.

The proposed language was so bad—it would have allowed for unlimited gifts and meals for legislators and public employees—that it never stood a chance of passage. It was a recipe for corruption that would have made Hawaii a laughing stock. Instead, it was in turn rapidly gutted to leave language allowing for 501 (c) companies to invite legislators to their lavish fundraisers.

The gut-and-replace language had only two hearings on the Senate floor, even though the state constitution requires three. The title of the bill remains the same, so legislators feel they can bypass the constitutional requirement. So far, this fairly routine abuse continues unchallenged.

Here is a video of the decisionmaking on March 1. Note that although Senator Hee says he will defer on the language to whatever the Ethics Commission decides, the Ethics Commission wasn’t to meet until March 16. At that meeting they voted to reject the bill.  See: Hawaii Ethics Commission Votes to Reject Gift Bill (Civil Beat, 3/16/2011). But the bill is still alive and festering.

Decisonmaking on SB671 SD1- Senate Judiciary Committee, Clayton Hee, Chair

Testimony can still be submitted, although it will be marked late, from the Capitol website. Or call your representative with your views on this bill.

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