Editor’s note: This is part of a Civil Beat series exploring conflicts of interest in the Hawaii Legislature.

A state legislator says his vote against a fee for all single-use checkout bags is unrelated to his side job as a lobbyist for plastic companies.

House leadership decided it wasn’t a conflict of interest. When two other lawmakers stood up and said their families owned retail stores, they too were told to vote.

So what does rise to the level of a conflict of interest in the Hawaii Legislature? To find the answer, Civil Beat is examining the dozens of times lawmakers asked for a ruling from the speaker of the House and Senate president this session.

Our research showed that the bag bill created particularly stark examples of the conflicts lawmakers might face.

Joe Souki

Rep. Joe Souki, a Wailuku Democrat and speaker of the Hawaii House from 1993 to 1998, has for at least the last 18 months worked for the American Chemistry Council, an industry association that speaks for chemical companies. He’s represented the organization before the Maui County Council, specifically regarding a bill that would have prohibited the use of disposable polystyrene food service containers by food providers in the County of Maui.

In October 2009, he told the council’s Infrastructure Management Committee that replacing styrofoam with a natural sugar-based material called polylactic acid would not solve solid waste problems and would add cost for Maui retailers, according to meeting minutes [pdf].

Souki made clear that he was testifying not as a lawmaker but as a citizen and as a lobbyist for the American Chemistry Council. Later in the same meeting, Councilmember Michael Molina asked a styrofoam manufacturer if council members might be able to visit the company’s Oahu production plant when they fly over “to network with our legislators like Mr. Souki.”

At the end of the meeting, the bill was deferred indefinitely, which means it’s essentially stalled.

Souki’s most recent financial disclosure [pdf], filed in 2010, shows Souki earned between $10,000 and $25,000 from the American Chemistry Council in 2009. He told Civil Beat he makes “around $24,000” per year.

On April 12, Souki stood up on the floor of the House to seek a ruling on whether his connection to the chemical companies created a conflict of interest as lawmakers considered Senate Bill 1363. If passed, it would have created a 10-cent fee for each single-use checkout bag provided to a customer. (The bill passed the House but stalled in conference committee and did not pass this session.)

“I’m a consultant with the American Chemistry Council. They produce plastics, and right now I’m hired as a consultant to work with Maui County on the styrofoam problem,” he said on the floor of the House, according to the verbatim transcript in the Day 47 House Journal [pdf].

He then spoke against the bill, using one of the same arguments he used to criticize Maui’s styrofoam ban: It won’t completely solve the solid waste problem.

“You buy fruits, and it’s usually wrapped in plastic. Meats wrapped in plastic. A lot of the items have plastic and yet none of those plastic items are being taken care of. All those plastic items is going into the waste stream and it’s going to be there forever. So you’re taking care of one little part of the problem,” he said. He advocated instead for a more comprehensive recycling program.

The American Chemistry Council’s testimony [pdf] in opposition to the bill, which would have applied to both paper and plastic bags, also recommended more recycling rather than implementing a fee. A wide range of environmentalists and retailers backed the fee proposal.

House Speaker Calvin Say defended the decision to allow Souki to vote on the measure, saying disclosing the connection on the House floor was an important step for transparency.

“Just because he represents that company does not mean he cannot vote up or down on the measure,” Say told Civil Beat when asked about Souki and the American Chemistry Council. He cited Sections 60.5 and 60.6 of the House Rules [pdf], which say conflicts of interest don’t include situations where lawmakers or their relatives are part of a class of people affected by legislation.

(Legislators are exempt from certain provisions of the Hawaii Ethics Code, enforced by the Hawaii Ethics Commission, that apply to state employees.)

Souki, unsurprisingly, agreed with Say’s rationale.

“If I was the speaker, I would have done the same thing,” the former speaker said.

“I just feel that plastic bags is an additional cost to the public and I always felt that. Whether I represented American Chemistry Council or not, I would vote against that,” he said. “So now it’s up to my constituents if they feel that I was correct or not correct in the way that I voted.”

Souki wasn’t the only member to vote against the bill. He was joined by Reps. Karen Awana, Ty Cullen, Sharon Har, Aaron Johanson and Ryan Yamane. He also wasn’t the only legislator to raise a potential conflict of interest.

Kyle Yamashita

Maui Democrat Kyle Yamashita said his family has retail outlets on Maui. Although the use of plastic bags had been discontinued there, the statewide bag fee bill may have superseded the county ban. Yamashita’s 2010 financial disclosure [pdf] showed that he earned between $25,000 and $50,000 as a general partner in Waiehu Beach Partners, a convenience store and gas station. His spouse, the manager, earned between $50,000 and $100,000, and his dependent child, the office clerk, earned between $1,000 and $10,000. Yamashita valued his ownership stake at between $150,000 and $250,000.

Yamashita voted in favor of SB1363, albeit with reservations that could leave it unclear if he was motivated by care for his constituents or his customers:

“Please note my reservations. And my reservations are just from the standpoint that we are like others who have concerns about just raising the cost to our consumers. So that is my concern. Thank you.”

Messages left for Yamashita were not returned.

Derek Kawakami

Kauai Democrat Derek Kawakami is part of a family that owns the island’s six Big Save grocery stores. His 2011 financial disclosure [pdf] shows he earned just over $52,000 last year from the company. (Big Save recently announced it is selling its stores to Times Supermarket.)

In the fall of 2009 — around the same time Souki was testifying before the Maui County Council — Kawakami was a member of the Kauai County Council as it wrestled with a islandwide ban on all plastic single-use checkout bags at retail stores.

Kawakami didn’t vote on that bill or participate in deliberations, recusing himself after advice from the county’s attorney.

“For Kauai, it became apparent that there was a conflict, so no problem, I’ll conflict out, even though I was ready to support the bill,” he told Civil Beat Friday. “I really wanted to participate on the plastic bag ban on Kauai … (but) it’s better to be safe and not tarnish something that would be potentially good.”

When he brought up the same potential conflict on the floor of the House last month, Kawakami was told there was “no conflict” and that he could participate in deliberations.

Asked why he was allowed to vote at the state Legislature and not allowed at the Kauai County Council, Kawakami said, “I cannot speak for the people that are ruling on the potential conflicts.”

“I took the advice that was given to me on both occasions,” he said. “For me, I felt comfortable.”

Kawakami voted aye with reservations, explaining that use of all single-use bags has declined in the wake of Kauai’s plastic ban and that while a statewide fee might work for Oahu and Hawaii Island, it would be unnecessary and unfair to retailers in the counties that have been proactive.

Karl Rhoads

Downtown Honolulu Democrat Karl Rhoads disclosed on the floor that one of his wife’s clients is Safeway. In his 2010 financial disclosure, Rhoads said his wife earned between $100,000 and $150,000 for public relations work at Communications Pacific, Inc. Safeway was among the retailers that voiced support for the bill. Rhoads was told there was no conflict and went on to vote in favor of the bill.

In all four of these cases, lawmakers were instructed to vote and told they had no conflict.

In coming days, in our “No Conflict” series, we’ll be a sharing a number of examples of the kinds of potential conflicts that arose this session and asking you to weigh in on whether the lawmaker should have been excused from voting. In those cases, we won’t name the lawmakers so you’ll be judging the situation solely based on the facts. After we’ve shared those examples, we’ll share our full findings of how the Legislature handled potential conflicts of interest, including what it did in the examples you voted on.

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