Two weeks ago a committee in the state House of Representatives killed a bill that would have retroactively exempted task force members from a conflict-of-interest provision in state law.

As Civil Beat reported, critics said the measure was an attempt to shield one member of the now-defunct Mortgage Foreclosure Task Force from Hawaii’s ethics law.

That member, financial services attorney Marvin Dang, turned up Tuesday before another House committee to ask lawmakers to reinstate key sections of the dead measure — Senate Bill 893 — into Senate Bill 66.

Dang submitted eight pages of written testimony and a draft of SB 893.

He also included written testimony dated March 21 from the Hawaii Bankers Association, the Mortgage Bankers Association of Hawaii, the Hawaii Credit Union League and several former members of the Mortgage Foreclosure Task Force — even though those groups and individuals were specifically testifying on SB 893, not SB 66.

Dang labeled this testimony “exhibits” and, for good measure, included his own seven-page testimony on SB 893.

According to House Judiciary staff, the committee late Wednesday approved a House Draft 2 to SB 66, which calls for making financial disclosure statements of members of state boards and commissions available for public inspection. The staff member said only “technical amendments” were suggested.

In spite of Dang’s efforts, the proposed “HD2” does not include Dang’s recommendations.

At least, not yet.

The Background

Two years ago, the State Ethics Commission advised all 17 members of the Mortgage Foreclosure Task Force that the Ethics Code prohibited them from lobbying the Legislature on behalf of private organizations relating to bills recommended by the task force.

The commission advised that members of task forces are state employees and thus subject to the Ethics Code.

Dang is a paid lobbyist for the Hawaii Financial Services Association, a trade group representing the consumer credit industry. He testified on behalf of the HFSA regarding the task force’s recommendations — a big no-no, in the view of the Ethics Commission.

Upset by the commission’s opinion, in 2012 the Hawaii Legislature passed what became Act 208, which exempts task force members from some Ethics Code provisions. But it did not apply retroactively.

Enter SB 893, sponsored by Clayton Hee, chairman of Senate Judiciary and Labor.

Supporters referred to the measure as “housekeeping,” meaning that Act 208 should have applied retroactively to cover the Mortgage Foreclosure Task Force, which disbanded June 30, 2012.

Legislators argued that they need the advice of experts, but that qualified candidates for task forces might not step forward if they are required to follow the same ethics rules as state employees, boards and commissions.

Among those criticizing SB 893 was Les Kondo, executive director of the Ethics Commission, who warned that “such after-the-fact amendments would severely undermine the Commission’s ability to effectively administer the State Ethics Code and erode the public trust.”

Kondo happened to be in Conference Committee Room 325 Tuesday to testify on SB 66 when, to his surprise, he heard Dang testify in person before House Judiciary.

Asking them to take SB 893 and insert it into SB 66, Dang told lawmakers the 2011 Ethics Commission opinion that task force members are state employees was found “erroneous” — a direct dig at Kondo.

That prompted Kondo to remind the committee that SB 893 was killed by the House Legislative Management Committee on March 21. He urged Judiciary to focus instead on SB 66.

Reached after the hearing, Kondo told Civil Beat he was surprised that Dang was still pushing for a bill that had already been deferred.

“To me it’s a very odd suggestion of Marvin Dang and for the House Judiciary to rescue what another House committee killed,” he said.

A message to Dang’s office was not immediately returned.

SB 66 now awaits final votes before the full House. As with any bill, it can be still be amended and voted on before session’s end May 2.

It’s a pretty good bet that Kondo and Dang will be among those following the measure’s evolution.

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