Critics are taking aim at a bill moving through the Legislature that they say is an attempt to shield one member of the now-defunct Mortgage Foreclosure Task Force from state ethics laws.

Senate Bill 893 seeks to retroactively exempt task force members from a conflict-of-interest provision. Critics say the measure also potentially weakens the Ethics Commission‘s authority by creating a law that sidesteps an unpopular commission opinion.

“Accommodating such after-the-fact amendments would severely undermine the Commission’s ability to effectively administer the State Ethics Code and erode the public trust,” Ethics Executive Director Les Kondo said in his testimony.

But supporters say the bill is more about housekeeping. They say a law passed last year to exempt all task force members from the Ethics Code should have included a retroactive date to cover the entire existence of the Mortgage Foreclosure Task Force, which formed June 3, 2010 and disbanded after June 30, 2012.

In particular, the measure would affect Marvin Dang, who served as the task force’s vice president while also lobbying the Legislature for the mortgage industry.

The question of whether task force members — volunteers who share their expertise in certain industries to help legislators formulate new laws — should have to follow the Ethics Code is a hot issue on its own.

Some say it’s tough to get potential task force members to come forward if they have to follow the same ethics rules as state employees, boards and commissions. Others say there is no problem finding qualified people to serve and they should be held to the same high standard of conduct.

But lawmakers have added another layer of controversy to this bill by deciding to follow the advice of the Ethics Commission’s former executive director, Dan Mollway, instead of Kondo.

Kondo and Mollway interpret the law differently as it applies to task force members. Kondo, who took office in January 2011, interprets the statute more literally whereas Mollway allowed for more flexibility so the law could be applied to specific situations.

In May 2011, the Ethics Commission advised all 17 members of the Mortgage Foreclosure Task Force that a provision in the Ethics Code prohibited them from lobbying the Legislature, for pay, on behalf of private organizations relating to bills recommended by the task force.

Mollway, who headed the Ethics Commission for 24 years, told the Judiciary Committee in his written testimony that the law is being misapplied in this case.

He urged the committee to pass the bill because the commission has a six-year statute of limitations. This means even though the Mortgage Foreclosure Task Force no longer exists, the commission still has until 2018 to file charges against former members.

Kondo said he could not comment on whether the commission is considering charges against any member of the task force.

However, Kondo sent a letter last year to Dang, the task force’s vice president, that warned him again that his conduct appeared to be in violation of the Ethics Code. Dang is a paid lobbyist for the Hawaii Financial Services Association, a trade group representing the consumer credit industry.

Dang testified on behalf of HFSA on legislation that implemented the task force’s recommendations, which Kondo said is a clear violation of the Ethics Code.

Kondo said all the task force members except one conformed their conduct to be consistent with the commission’s opinion. In this case, that meant members who previously during the 2011 legislative session were paid to testify on task force-recommended bills on behalf of private organizations did not do so during the 2012 session.

Senator: Former Ethics Director ‘More Convincing’

The bill squeaked through the Senate Judiciary Committee in a 3-2 vote last week, with Sens. Clayton Hee, Maile Shimabukuo and Mike Gabbard voting in favor and Sens. Les Ihara and Sam Slom against it.

Based on the state attorney general’s advice, the committee amended the bill to delete a section tying it to the Mortgage Foreclosure Task Force so it more clearly applies to any task force. But the retroactive date remains the same date the task force was created.

Hee, who introduced the bill, said Tuesday that Mollway’s testimony was “much more convincing” than Kondo’s.

Gabbard also noted Mollway’s support. He said members of an advisory task force shouldn’t be treated the same as state employees when it comes to the Ethics Code. And he supports SB 893 because the retroactive date is needed.

Hee denied that the bill was designed to protect one member of the Mortgage Foreclosure Task Force. He said it would apply to all members, and that it is really just about encouraging people to serve on task forces without worrying about being subject to the Ethics Code.

Slom wasn’t buying it. He said he doesn’t like the idea of exempting task force members in general, particularly via a bill basically designed for one task force member.

“They’re volunteers but should be subject to the same rules,” Slom told Civil Beat. “I believe in transparency.”

Slom said he also doesn’t like the retroactive aspect of the bill, which was the reason Ihara voted against the legislation, too.

Kondo used as an analogy a person who got busted for smoking pot. He questioned if the Legislature would make a law today that included a retroactive date making it legal to smoke pot at the time of the crime.

But the bigger issue is the bill’s implication on what the commission does in general, Kondo said. The commission’s guidance on the Ethics Code is “much more watered down” if people know they can just act contrary to that guidance and then run to the Legislature for relief, he said.

Acknowledging the tough position and implications of taking Mollway’s advice on the bill instead of Kondo’s, Hee said he thought lawmakers didn’t have any recourse if they disagreed with the commission.

Janet Mason of the Hawaii League of Women Voters was concerned about the broader implications too.

“We don’t want to go down the slippery slope of permitting everybody who provides advice to the public from not having to follow the Ethics Code,” she said. “What is the big deal with transparency?”

Mason questioned why the measure was needed at all.

“We think task forces are increasingly important in state government because they provide a source of expertise on very technical measures,” she said. “But as far as we can tell, people are still willing to serve on a task force if subject to the Ethics Code.”

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