The Hawaii State Ethics Commission will be without its longest-serving member and chair for the last two years when it meets July 23 to tackle the implementation of a public financial disclosure law that has so far prompted the resignations of 18 board members.

Leolani Abdul was denied her request to serve another four-year term on the commission.

Instead, Gov. Neil Abercrombie has appointed Melinda Wood, an academic and grants development specialist at the East-West Center, according to sources familiar with the decision. The governor has not yet publicly announced the appointments.

But he did write a letter Tuesday to legislative leaders explaining his misgivings about the disclosure law.

Hawaii State Ethics Commission members, from right, Chair Leolani Abdul, Susan DeGusman and Ruth Tschumy listen to testimony during a meeting, May 21, 2014.

PF Bentley/Civil Beat

“Subjecting current members of boards and commissions to the public disclosure of their private business and financial information now, after they agreed to serve and were confirmed by the Senate, or alternatively, causing them to resign if they do not agree to the required public disclosure, is unfair,” Abercrombie said.

Abdul’s term, as well as Commissioner David O’Neal’s, expired June 30. Abercrombie reappointed O’Neal over Janice Kemp. The Judicial Council gives the governor two names for him to choose from for each vacancy; Senate confirmation is not necessary.

The five-member commission is expected to elect a new chair at its next meeting before taking up the disclosure law, which took effect Tuesday.

The law adds 15 key state boards to the list of those that have to file public financial disclosure statements, but it’s unclear how it should apply to the members of boards who submitted their annual reports under the expectation that they would remain confidential with the Ethics Commission.

Concern About Continuity

Abdul was unsure why Abercrombie didn’t appoint her again, but said it was “entirely possible” that it had something to do with her strong support of the disclosure law.

“The more public disclosure, the better it is because it’s the citizens that watch what’s going on in government and bring information to the Ethics Commission’s attention,” she said.

“It’s important for people to know when decisions are made by strong, powerful boards that oversee departments in state government that what they’re doing is above board and that they don’t have conflicts,” Abdul said. “Making these financial disclosures public would help.”

“The more public disclosure, the better it is because it’s the citizens that watch what’s going on in government and bring information to the Ethics Commission’s attention.” — Leolani Abdul, outgoing chair of Ethics Commission

Susan DeGusman, appointed in August 2012, is now the longest-serving member on the Ethics Commission. The next is Edward Broglio, who joined the commission in February 2013.

O’Neal was first appointed in August 2013, along with Commissioner Ruth Tschumy.

Abdul served on the commission for 12 years and was generally well respected for her reasoned views on various issues. In 2002, at the end of her second four-year term, she received a formal resolution from the Ethics Commission thanking her for her service.

She said she is concerned that the current commission lacks a member with similar experience.

“I was literally the institutional memory on the commission,” Abdul said, adding that the commissioners do have a knowledgable staff they can rely on for advice.

The Ethics Commission, which is one of the 15 boards, is tasked with administering the law. With a new member and change in leadership, the commission’s direction is far from certain.

In addition to Abdul, O’Neal and Wood said they were comfortable with making their own financial disclosure statements public.

Wood said it’s just not a big deal.

“Like most people, I don’t relish putting that information out for public scrutiny,” she said. “But I think the principle is a good one.”

It’s doubtful the commission will apply the law retroactively, meaning the financial disclosures of past board members that were filed confidentially will likely remain so.

In an effort to balance privacy concerns with the legal mandate, the commission could try to grandfather in current members, wait until their next reports are due and make those public. 

It’s more likely the commission will seek a middle ground of sorts.

One approach, favored by former Ethics Executive Director Dan Mollway, would be to go to the members of the affected boards, tell them their financial disclosures have to be made public and give them a window to either amend their reports if needed or step down if they are uncomfortable with the requirement.

“In this digital age, there needs to be a sensitivity to what data can be collected and sifted through Internet scavenging about private citizens in a volunteer role.” — Gov. Neil Abercrombie

Les Kondo, the current ethics director, has declined to speculate on which direction should be taken, but said he supports the law and the commission will review it and make sure it’s applied the way it was intended.

In his Tuesday letter to House Speaker Joe Souki and Senate President Donna Mercado Kim, Abercrombie said he decided to let the bill become law without his signature “with the object of reviewing the disclosure documents to determine what information serves the public interest, what limitations are relevant and most importantly, what constitutes conflict.”

Abercrombie told Souki and Kim that volunteering in government should not be like running a gauntlet that potentially involves exposing family members to political attacks.

“In this digital age, there needs to be a sensitivity to what data can be collected and sifted through internet scavenging about private citizens in a volunteer role,” he  said.

Abdul said people’s fears about what will happen with the public disclosure of their financial statements are mostly unfounded. She pointed at state lawmakers, for instance, and others who have been publicly disclosing their financial interests for decades without any trouble.

Abdul said there are many good, qualified people out there who will serve and who won’t have a problem with the disclosure requirement.

18 Resignations and Counting

As of Wednesday, 18 people serving on seven boards had quit since the Legislature unanimously passed Senate Bill 2682 in April.

More resignations are rumored to be forthcoming and one board, the Land Use Commission, is on pause because it no longer has enough members to legally meet.

“It’s a shame that people who are on the Board of Regents for the university or other certain commissions might be uncomfortable enough that they would give up their position,” Wood said.

“I’m sympathetic to it but my feeling is if you’re committed to something you put up with a little inconvenience.” 

Here is the latest list of board members who are resigning:

University of Hawaii Board of Regents

• Saedene Ota
• John Dean
• Carl Carlson, Jr.
• Tom Shigemoto

Land Use Commission

• Sheldon Biga
• Dennis Esaki
• Ernest Matsumura
• Carol Torigoe
• Lance Inouye

Agribusiness Development Corporation Board of Directors

• Derek Kurisu
• Patrick Kobayashi
• Joan Namkoong

Hawaii Housing Finance and Development Corporation Board of Directors

• Paul Kyno
• Ralph Mesick

Board of Land and Natural Resources

• Reed Kishinami

Commission on Water Resource Management

• Ted Yamamura

The governor’s spokesman, Justin Fujioka, said Wednesday that the office has received letters of one additional member of the Board of Directors of the Agribusiness Development Corporation and one member of the Board of Directors of the Natural Energy Laboratory of Hawaii Authority.

Until Abercrombie officially accepts those resignations, the governor’s office can’t release the names, he said.