Bob Watada, well-respected former executive director of the Hawaii Campaign Spending Commission, flew in from Oregon to set the record straight about the illegal contributions Ben Cayetano received during his 1998 re-election campaign for governor.

Watada, in from Oregon, was the guest of honor at a press conference held Tuesday morning at Cayetano’s call center at Ward Shopping Center downtown. He said it would be hard to find a more honest politician, and criticized the Pacific Resource Partnership for what he said is a “fraudulent, bogus” ad containing claims about some of the darker elements of Cayetano’s past.

Also contributing defenses of Cayetano and criticisms of PRP were Rep. Della Au Balatti, a former member of the Campaign Spending Commission appointed by Cayetano; Paul Kuramoto, former chair of the Campaign Spending Commission; and Hilton Lui, a former FBI agent and a former investigator for the CSC.

“A blatant lie and mistruth being spread by PRP’s commercials is that Gov. Cayetano somehow kept the money his campaign committee received,” Au Belatti said.

Lui said it’s “very unfair” to focus on Cayetano when he was only one of many politicians who were found to have received illegal campaign contributions.

Here’s the PRP ad in question:

Here’s the back story:

During his 1998 re-election campaign, Cayetano received about $540,000 in contributions that were later determined to be illegal, either because the names were false or because they exceeded the maximum donation for an individual, $6,000. But by the time the illegalities were uncovered, the campaign was long over and nearly all the money had been spent.

Cayetano was instructed to turn over that $540,000 or everything he had left in his campaign account. He wrote a check for about $9,000 and closed the books. The balance is not considered a penalty, a debt or a fine, and Cayetano was not accused of any wrongdoing.

After the defenses of Cayetano, the denunciations of PRP and some brief editorializing about the exorbitant costs of the controversial rail project front and center in the mayoral campaign — “Who’s going to pay for it?” — Watada unwittingly provided some new ammunition to those who say Cayetano fostered a “pay-to-play” culture as governor.

“Yes, there was definitely a culture you could call it in terms of, if you want to get contracts with the city or state, then you had to make contributions,” Watada said, sitting next to a bristling Cayetano. “In general, this was happening. I started with the commission in 1996-7. Until I left in 2006, it was ongoing. This is exactly what we investigated.”

Was Ben Cayetano part of the pay-to-play culture?

“Mr. Cayetano received contributions, his campaign received contributions which were over the limit. If that’s what you’re asking, yes.”

Were contracts awarded to those companies after the fact?

“Well, yes. That was part of the system at the time. Maybe it’s still ongoing. I don’t think it’s as much as it was. But at the time, as I said, you had to make contributions in order to get contracts. If you didn’t make contributions, illegal or otherwise, you didn’t get contracts.”

Eventually, Cayetano jumped in and cut off his own star witness to clarify that decisions on who gets which contracts are “down at a level that we are not aware of.”

“First of all, you’ve got to remember that this is a small town, a small big town,” Cayetano said. “I think it’s important that people understand that when the words ‘no-bid’ are tossed around, if people are ignorant about the process, then it can have insinuations and implications that are not correct.”

PRP Executive Director John White rejected Au Belatti’s request that the commercials be pulled off the air and defended the spot’s prominent use of the word “loophole” to describe how Cayetano avoided turning over more than $500,000 in illegal contributions to the Campaign Spending Commission by closing his campaign committee and then reopening a new one this year for his mayoral run.

“Cayetano participated in a system that was corrupt,” White told Civil Beat, referring to the pay-to-play allegations.

Earlier, Cayetano said PRP was targeting him with the commercial because it’s “scared stiff” that when he wins the race, he’ll kill the rail project.

“We are scared stiff that Ben Cayetano will return Honolulu to pay-to-play and return to the culture that we believe should not return,” White shot back.

He said Cayetano stood in the way of campaign finance reform when he vetoed a key piece of legislation in his last year in office.

In 2002, during Cayetano’s last legislative session as governor, the Legislature approved a measure that would have made it illegal for the state or county governments to award contracts to any person or entity who contributed to a candidate two years before the contract negotiations, during the contract or up to two years after the completion of the contract.

In a 2002 KGMB investigative report, Watada said the bill would send an important message to influence-buyers:

Cayetano eventually vetoed that bill, citing the fact that lawmakers had exempted themselves from the legislation.

At the press conference Tuesday, Watada said he didn’t recall any Cayetano vetoes of campaign finance reform legislation. Cayetano, asked if he signed the law when it reached his desk, said, “I think I signed thousands of (pieces of) legislation. I don’t know, maybe it came under Gov. Lingle. I don’t know. I don’t remember.”

Contacted later Tuesday and told about the bill that was vetoed, Watada said it sounded “vaguely familiar.”

Cayetano also revealed that he pulled in almost $900,000 in campaign contributions the first half of 2012. That’s significantly more than the $198,000 Peter Carlisle raised in the same period. Kirk Caldwell has not yet filed his report.