A lobbyist who sits on the Mortgage Foreclosure Task Force says the Hawaii State Ethics Commission interpreted ethics laws too broadly when it warned task force members about possible ethics violations.

On May 26, ethics commission Executive Director Les Kondo sent a memorandum to all 17 task force members, claiming that they may have violated ethics laws by testifying or lobbying the Legislature on mortgage foreclosure issues as paid representatives of non-government entities. The task force, formed in 2010, was charged with studying the current foreclosure process and making recommendations to legislators.

But Marvin S.C. Dang, a member on the task force who is a registered lobbyist, disagrees with Kondo’s interpretation of chapter 84 — the Standards of Conduct statute.

“I think this is overreaching by the ethics commission,” Dang told Civil Beat. He says he wasn’t aware that as a task force member, he was considered a state employee and subject to state ethics laws.

Dang says while the task force helped make recommendations regarding foreclosures and offered up what he called “sample bills,” it did not have a hand in formally introducing any legislation.

Dang lobbies on behalf of Hawaii Financial Services Association (HFSA) and Visa, Inc. This year he testified as a representative of HFSA in opposition to SB 651, a major mortgage bill. Gov. Neil Abercrombie ultimately signed the bill into law. Two other members of the task force also testified on that bill, representing non-governmental organizations.

Registered lobbyists who served or currently serve on the task force include:

  • Dang, representing Hawaii Financial Services Association
  • Ryker Wada, representing Legal Aid Society of Hawaii
  • Neal Okabayashi, representing First Hawaiian Bank
  • Stefanie Sakamoto representing Hawaii Credit Union League

(Note: Sakamoto was on the task force in 2010 but left before the beginning of the 2011 legislative session. Her colleague, Francis Hogan, took her place. Hogan is not a registered lobbyist.)

Sakamoto also testified in opposition to SB 651, but was not a member of the task force at the time. She told Civil Beat that she has sat on legislative task forces in the past and has never had problems lobbying on issues relevant to the respective task forces. She wouldn’t say whether she agreed with Kondo’s ethics interpretations, but called his memorandum “perplexing.”

In the memo, Kondo cited the ethics statute, writing that “the state ethics code prohibits, among other things, a (state) ’employee’ from being paid to assist or represent another person or business on a matter in which the employee has participated or in which he will participate.”

The language in the statute, section 84-14 (d), reads:

“(d) No legislator or employee shall assist any person or business or act in a representative capacity for a fee or other compensation to secure passage of a bill or to obtain a contract, claim, or other transaction or proposal in which he has participated or will participate as a legislator or employee, nor shall he assist any person or business or act in a representative capacity for a fee or other compensation on such bill, contract, claim, or other transaction or proposal before the legislature or agency of which he is an employee or legislator.”

Dang disagrees specifically with Kondo’s interpretation of the phrase: “secure passage of a bill… in which he has participated or will participate…”

“My position is that it doesn’t become a bill until it’s introduced in the Legislature,” Dang said. “We can talk on the task force about concepts, and we can make recommendations, but really, if you read this literally, it’s not a bill until it gets introduced. At that point, then you’ve got issues. So how could I as a task force member secure passage of a bill in which I participated in as an employee? Because on the task force, we didn’t participate on any bill.”

Dang says the task force helped hone ideas, made recommendations regarding foreclosures, even offered sample bill wording to the Legislative Reference Bureau, which helps write bills.

He acknowledged that he might be parsing words, but says he doesn’t see his actions as a conflict of interest. Like Sakamoto, Dang said the ethics commission has never told him he couldn’t lobby on identity theft issues when he served on an identity theft task force in the past.

“I guess I read (the statute) a little differently from how the ethics commission is,” Dang said.

Kondo told Civil Beat that Dang is entitled to his opinion. He said there are avenues for Dang to raise concerns with the commission if he feels its interpretation went too far.

Kondo pointed out that HFSA wouldn’t be barred from testifying on mortgage bills, providing it used a lobbyist other than Dang. He also said there would be no issue with Dang lobbying so long as he wasn’t compensated for the work.

Dang said he would consider lobbying pro bono on certain issues if the commission sticks with its interpretation of the mortgage situation.