All in the Family

If you think running for office on the Big Island is expensive, try running on O'ahu. While $2,000 or so would be a high-end donation for a Hawai'i Island legislator or councilmember, O'ahu officeholders often get the legal max of $4,000 per person (especially if the donor is a lawyer or contractor). Or, in some cases, more.

According to state law, campaign donations are limited $4,000 per candidate for each “person” donating; a "person," is defined as "An individual or any general partnership in which the individual belongs." But there are some big loopholes. Apparently, for instance, there's an exception for family members.

Take the case of Ann Kobayashi, for instance, who resigned her Honolulu council position last year in order to run for mayor.

Having the last name of Kobayashi can be pretty expensive at election time. Kobayashi got $8,000 out of Honolulu housewife Dawn Kobayashi, and another $4,000 out of financial advisor Dale Kobayashi of the same address. Mellon Capital Management portfolio manager Susan Kobayashi of San Francisco gave $10,000 to the cause. Honolulu Real estate Developer Burt Kobayashi added another $1000--but then, real estate developers commonly drop that much money on officeholders, whether they share the same last name or not.

Of course, small family fortunes like this are only a few drops in the bucket for a full-fledged O'ahu campaign these days. But it’s also possible to tap other families for more than the maximum donation, if you divide the donations between family members. Honolulu Attorneys Patricia and Arthur Park of Park, Park, Yu and Remillard, for instance, anted up $4,000 each for Kobayashi. So did J Frances E. and Francis Y. Toyama, who both reside at the same Nu’uanu address, and John and Charlene Flynn, who share an address in Nevada, Missouri. Honolulu Accountant Betty Lou Stroup and retiree Edward Stroup, also both of the same address, chipped in another $4,000 apiece--and so did Betty Lou’s employer, Princess Abigail Kawanakoa. President Joseph Pickard of Community Planning and Engineering, Kaneohe, dropped in $4,000, and Melissa Pickard, who shares Joseph's address, added $3,000 on the same day. Wagdi A. Guirguis and Peter Melnyck, who are both listed as “President” of GMP Associates on Kobayashi’s campaign reporting forms, also put in $4,000 apiece.

Kobayashi donated $10,512 worth of postage stamps to her own campaign, but that apparently wasn’t enough, so Honolulu housewife Jane Kumabe to chipped in more stamps worth $3,825. Lawrence Kumabe, an attorney for the city’s Corporation Counsel office who shares Jane’s address, donated in another $800, boosting the Kumabe household’s contribution to $4,625. (Kobayashi also got $2,199 worth of postage stamps from City and County of Honolulu legislative aide Karen Yorimoto.)

One would think that, if the intent was not to skirt the $4,000 contribution limit, one also would also see members of the same households putting in smaller amounts. But in fact, I found only one couple on Kobayashi’s list who shared an address but whose dual contributions totaled less $7,000.

Kobayashi also hit up all the usual donors: labor unions, lawyers, developers, insurers, construction firms. Among other members of her “$4,000 club” were manager Teri Otani of the Honolulu structural engineering firm Mitsunaga & Associates; Hilo attorney Terence Yoshioka; Pueo Trucking Company owner John F. Souza III of Kapolei; Sheet Metal Worker's International Union Local 293; United Airlines manager Valerie Van Buren; Honolulu attorney James Wright, Island Title escrow officer Chin Davone Tan, and the Realtor's Political Action Committee,. The campaign committees of Scott Nishimoto, Scott Sakai and Romy Cachola gave $4,000 each from donations collected for their candidates. The Ironworkers Local added $3,775 to the kitty. All told, Kobayashi reported raising $637,490.84 during the 2006-2008 election period.

Philip Morris's Campaign Generosity; Mufi Hanneman Money Glitch?

I've been continuing my voyage into the wacky, wonderful world of campaign finance. I've got a green light from the Big Island Weekly to do a story about tobacco money in local politics. And yes, local politicians have been calling for Philip Morris quite a lot, but it ain't easy to trace. Unlike, say, Anheuser Busch, which funnels its money through its own non-candidate committee, Philip Morris's money comes in sometimes under its company name, sometimes through its parent company, Altria; sometimes via its wholly owned lobbying subsidiary, Altria Commercial Services, sometimes through local lobbyists that the company hired, and sometimes through company officials. As a result, I'm having to go through every individual candidate's campaign filings to look for all the names....

In the process of doing that, meanwhile, I'm making other interesting discoveries. It's no suprise Honolulu Mayor Mufi Hanneman's contributors include a long list of developers and lobbyists, both mainland and local, for instance--but one collection of entries particularly caught my eye. On June 19, 2007, three different partners in a Washington lobbying firm called The National Group dumped a total of $5,500 dollars into Hanneman's campaign spending fund.

State campaign spending laws limit contributions to $4000 per "person." A "person," for the law's purpose, is "An individual or any general partnership in which the individual belongs." The three lobbying partners' donation looks like a clear violation of the law. But if you're waiting for the Campaign Spending Commission to investigate, don't hold your breath. Last year, I brought a similar situation to their attention: Billy Kenoi's mayoral campaign got a huge influx of cash from various heirs of the Campbell Estate. Most of those contributions came in on the same day, and all of the heirs listed their profession as "entrepreneur" (a term used only by Campbell heirs among Kenoi's contributors--which strongly suggests that they planned their contributions together.

I asked the CSC if they were going to investigate.

"We don't go on fishing expeditions," I was told.

SB 884 passes, but campaign fund safe.

After several delays, Senate Bill 884, which raids several special funds to help with the state's billion-dollar-plus projected deficit, has passed. Among the hardest-hit funds: the Hawaii Tobacco Settlement Fund, which loses $20 million to the general fund; the Housing Finance Revolving fund, also $20 million, and the Wireless Enhanced 911 Fund, out $16 million. A bit of good news: the legislature backed off a proposal to raid the Campaign Elections Fund after getting a letter from the the State Attorney General that said such a raid would probably be unconstitutional. So it looks as if the pilot project for publicly funded council elections on this island will probably move forward as scheduled.

The current version of the bill on display at the legislature's Web site, which I assume is the final version, apparently does not find that there is a specific amount of "excess funds" that can be be taken from the HI 5 beverage container deposit fund. But it does give the legislature the authority to make that determination in the future, and takes that authority away from the State Auditor. So we may see another attempt to raid the HI 5 fund in the next legislative session.

The Gravy Train Article is Online

To see who's bankrolling some of your local legislators, click the following link to the Big Island Weekly.

Bill 884 Moved to Wednesday

The title says it all. I assume that, since they haven't heard the bill yet, they're still accepting testimony.

Bill 884 Set for hearing.

Senate Bill 884 has been set for a hearing on Monday, April 27 at 3 p.m. in Room 229 at the Capitol. This bill would raid various special funds, transferring moneys to the General Fund, where they could be used for anything from road repairs to education to legislators' pay raises. The ostensible purpose of this is to make up for a projected $1.76 billion shortfall in tax revenues due to the recession. But it could be used to gut such programs as the Campaign Elections Fund and the HI 5 beverage container deposit funds.

The latest version of the bill at the Legislature's Web site authorizes the state to raid at least two dozen special funds for “excess” money, including $33 million from the Hawaii Tobacco Settlement Special Fund, $20 million from the HI 5 fund, $12 million from the Emergency Medical Services Special Fund, $10 million from the Rental Assistance Revolving Fund, $9 million from the Wireless Enhanced 911 fund, $8 million from the Clean Air Special Fund, $6 million from the Special Fund for Disability Benefits, $5 million from State Risk Management Revolving Fund, $4 million Environmental Management Special Fund, $1 million from the Agricultural Loan Revolving Fund, 3.3 million from the Compliance Resolution Fund, $2 each from million from the Special Land and Development Fund, Hydrogen Investment Capital Special Fund and the Housing Finance Revolving Fund, $1.5 million each from the Stadium Special Fund, the Neurotrauma Special Fund, the Judiciary Computer System Special Fund and the Medicaid Investigations Recovery Fund, $600,000 from the State Identification Revolving Fund, $1 million from the Drug Demand Reduction Assessments Special Fund. The bill also would trancfer 5 percent of the receipts of several other funds to the general fund for "central service expenses," and woul require other funds to turn any interest earned on their accounts over to the general fund.The Campaign Elections Fund isn't mentioned in this draft of the bill, but its house companion bill, HB 39, contains a clause stating that the fund "$1 in excess of the requirements of the fund" and authorizes the transfer of that "excess" to the general fund. The "$1" a placeholder for an amount to be filled in later. If that paragraph is moved into the Senate draft on Monday and that $1 is replaced by more than $5 million, it could jeopardize the pilot program, currently scheduled to start in 2010, that would provide full public funding for county council elections on this island.

If the various funds really do have such excesses, then the bill could provide for more efficient use of state revenues. But many of those funds come from specific revenue streams that were authorized only for specific purposes. The Hawaii Tobacco Settlement Special Fund, for instance, was the result of a legal settlement with the tobacco companies, and was intended to finance efforts to mitigate the damage caused to those companies' victims. The Special Elections Fund contains the voluntary donations of taxpayers who checked a box on their tax forms thinking that their donation would go toward publicly funded elections. If that money becomes part of the general fund, ironically, it could be used to pay for various projects espoused by the very special interests that donors thought they were helping to thwart.

In some cases, the bill transfers the authority to determine "excessive funding" from the Auditor's office to the legislature itself. In the case of HI 5, it deletes a clause that authorized the "adjustment" of deposit rates in the case of excess funds, and instead transfers consumers' extra nickels to general revenue. And it explicitly claims a nearly unfettered government power to raid special funds in the future:

The legislature finds that section 37-53,
Hawaii Revised Statutes, provides the governor nearly unlimited
authority to transfer non-general funds to the general fund.

Apparently, the legislature is taking that authority for itself as well. If this bill passes, our beverage deposit nickels and our donations for publicly funded elections might end up paying bureaucrats' salaries or financing legislators' pet projects.

SB 884 goes to Conference Committee at 3:00 PM on Monday, April 27. Key legislators to contact on the issue include Sen. Donna Mercado Kim and Sen. Colleen Hanabusa.

Coming to Big Island Weekly: Riding the O'ahu Gravy Train.

A few days ago, I mentioned that an article about campaign finance would soon be appearing at www.thehawaiiindependent.com. There's been a change of plan. I'll continue to write other articles for the Indpendent, but the article I'd mentioned will be appearing, instead, in next week's hard copy in the Big Island Weekly.

I have very mixed feelings about writing for a Stephens Media publication, but with the demise of the Hawaii Island Journal, there are limited outlets for important news on this island, and I think Jed Stockton, BIW's editor, really does want to give this island the information it needs--and this particular article is, at least in my opinion, very important. It traces the campaign contributions that flowed into the coffers of five Hawaii Island state representatives who supported a delay in implementing the publicly funded elections project on this island. All five, as it turns out, get a lot of money from vested interests, which gives them a huge advantage against potential opponents. Three of them were funded entirely or almost entirely by special interest moneys from outside their districts. And all could be voting on issues where their constituents' interests and their donors' may be at odds.

I hope you read it.

--Alan