Editor’s Note: This article is the third in an occasional series on Hawaii ethics laws. The first was titled, Today’s Disclosure, Yesterday’s News, and the second was headlined, Loophole Limits Disclosure of Lawmakers’ Income. A related article, Lobbyist Violations in Hawaii? Who Knows, appears today.
Hawaii’s lobbying laws leave organizations guessing what expenditures they’re required to report with the state ethics commission.
A case in point is the Hawaii Hotel and Lodging Association. A Civil Beat review of lobbying records found that the industry group may have underreported its lobbying expenses, although the group says it’s complying.
The confusion in part stems from constitutional speech protections that make regulating lobbying touchy.
“It’s because there are a lot of First Amendment issues involved with this,” said Nancy Neuffer, a staff attorney with the state ethics commission. “So when you regulate it, you have to be extremely careful about what you’re regulating.”
Neuffer said free association, rights of petitioning the government and rights of free speech are all considered when dealing with lobbying laws. “So when you’re asking people to disclose certain things, you have to be careful about how far you go.”
In Hawaii, lobbyists and lobbying organizations are required to self report their lobbying expenses during three reporting periods. The periods cover the time between January 1 to the last day of February; from March 1 to April 30; and from May 1 to December 31.
Only total expenditures are required. Information on what lobbying money is being used for – and more important, who benefits – is not public.
Here’s an example of the problem based on the reports for 2008 from the Hawaii Hotel and Lodging Association.
In the first reporting period of 2008, from January 1 to the last day of February, the association claimed it spent $3,269.13 on lobbying. All of the expenses were listed as “Compensation paid to lobbyists:”
As of January 28, 2008, the three lobbyists were registered with the ethics commission and were the only lobbyists registered to represent the association.
Lobbyists, as well as the organizations they represent, are required to file expenditure statements. However, according to Neuffer, more often than not, individual lobbyist forms are returned indicating they had no lobbying expenses. The only time lobbyists must report spending on their expense forms is if they spent more money than they were paid.
The three lobbyists listed their expenses as $0.00. This indicates that the total lobbying expenditures for the association were what was shown on the organization’s January report, $3,269.
But what was reported may not have been complete.
On January 18, 2008, the association hosted its “18th Annual Na Poe Paahana Awards Luncheon” at the Hilton Hawaiian Village Beach Resort and Spa’s Coral Ballroom.
According to Tina Yamaki, the association’s executive assistant, the annual event is held to recognize outstanding lodging employees and is open to anyone willing to pay for a ticket.
Every lawmaker was invited to the event and those that attended went free of charge, she said.
Does that make it a lobbying event?
In 2007, former state ethics Executive Director and General Council Daniel Mollway released a memorandum on “goodwill lobbying”, which addresses the question. A screen shot of the memorandum is below:
Neuffer told Civil Beat the Hilton event would probably be included in the goodwill lobbying category.
“Something like this, their awards luncheon… it would probably be considered ‘goodwill lobbying’,” Neuffer said. “Looking at the timing of it and that sort of thing. So it’s an event that we would say should probably be reported as ‘goodwill lobbying’.”
However, when Civil Beat asked Yamaki if the association considered it a lobbying event, she replied: “No. It’s more informational… There’s no lobbying involved.”
When Civil Beat pressed the issue, informing Yamaki of “goodwill lobbying”, she replied: “To the best of my knowledge, it’s not a lobbying thing. These are just the best of our industry that we’re showcasing.”
An event manager with the Hilton told Civil Beat that the Coral Ballroom can seat up to 2,000 people. Food and beverages are required to be purchased from the hotel to use the room. The lowest price the Hilton offers is $33 per person. Tack on a mandatory 23 percent service charge and the GET, and payment rises to around $42 per person.
If the entire 76-member Legislature attended the event, using the lowest figure, it would have cost the association $3,192. If the cost of the meal was on par with what the association will spend at its 2011 function, $65 a head, it would have cost $4,940.
According to Mollway’s memorandum, even if a single lawmaker attended, the costs would have been more than $25 and should have been reported.
Yamaki couldn’t say how many legislators attended in 2008. She said there was no way to determine the number because the association has no check-in process for the event. Even if a politician were to RSVP, Yamaki says there’s no guarantee he made it.
In case the Hawaii Hotel and Lodging Association lagged in reporting its expenses (and did consider the event lobbying in 2008), Civil Beat also looked at the following reporting period, March 1 through April 30, 2008.
The association reported slightly more expenses, $3,574.13, but the exact same compensation for its three lobbyists. It also listed $305 in expenses for “Food and beverages”.
The lobbyists did not report additional spending.
If the association had considered the event lobbying, and the $305 listed for “Food and beverage” was intended to cover the expenses from the event, 4-7 lawmakers would have had a meal, depending on the cost.
Yamaki told Civil Beat 700 to 900 people are expected to attend the 2011 luncheon. Considering the stature of the Hawaii Hotel and Lodging Association and the size of the event – not to mention that every lawmaker in the state was invited – it seems unlikely so few would shown up to the 2008 event.
But then again, who knows?
And that’s the real crux of the issue.
Even with Mollway’s 2007 memorandum, the issue is still gray.
That’s something the public can expect new Ethics Director Les Kondo to address.
“The commission is aware of the concerns,” Kondo told Civil Beat. “I am intending to take a broad look at the issue as well as other issues, involving not only lobbyists but gift disclosure, financial disclosure requirements, and try to provide better definitions to help both filers and those looking for the information to better understand what’s required.”
DISCUSSION *Should lobbyists be required to report categorized expenses? Is there enough oversight to prevent violations of the law? Share your thoughts