State Rep. Romy Cachola has agreed to pay $50,000 to settle an ethics case stemming from his time on the Honolulu City Council.
The Honolulu Ethics Commission announced the deal Saturday in a press release. Commission executive director Chuck Totto called it the largest civil fine ever approved by the commission.
“This case is a perfect storm of public corruption,” Totto said in the press release.
The commission said as part of the settlement Cachola denies any wrongdoing and the fine is based on an agreement reached with the former longtime city councilman.
Within hours, though, Cachola sent around his own press release, blasting the commission for releasing details of its investigation and accusing Totto of defaming him.
“While the Opinion states that there is no violation and no fact-finding or opinion as to any violation, it then wrongfully defames Representative Cachola and paints him as an intentional violator of the ethics laws for which he is not,” Cachola says in his press release.
“I am pleased that the investigation has come to a conclusion and no finding of fact or opinion as to any violation has been found,” he said. “I agreed to a settlement of $50,000 with the Ethics Commission in order to prevent any further defamation of my name and hardship to my family and legal fees and costs in excess of $125,000 to defend and clarify the circumstances.”
The commission laid out its case in a 22-page advisory opinion that details years of questionable ethical practices by Cachola, who, as the commission points out, chaired the City Council committee that wrote and oversaw ethics laws.
The commission’s investigation of Cachola began in June 2012, four months before he left the council due to term limits. By then, Cachola had been elected to the state House in a campaign that was overshadowed by allegations that he improperly intimidated voters into filling out ballots while he watched.
“This case is a perfect storm of public corruption.” — Ethics Commission Director Chuck Totto
In 2013, the Legislature considered but ultimately tabled as unenforceable a bill some called The Romy Cachola Bill aimed at preserving the integrity of absentee voting. It eventually put the language into a Senate bill that did pass.
The advisory opinion released Saturday centers on the commission’s inquiry into Cachola’s alleged acceptance of unlawful gifts and accusations that he used his city vehicle fund to cover thousands of dollars in expenses on his 2008 Nissan Pathfinder even though his political campaign fund had already paid for the same expenses. The commission said Cachola double-dipped for years on vehicle expenses.
Cachola said he used the Nissan for campaign purposes and his wife’s Lexus for council business but he couldn’t produce records to support either situation. In fact, tax records showed the Lexus was claimed as an expense by his wife’s medical business, the commission said.
The commission said Cachola misused his position on the council to wrongly collect $9,450 from the city vehicle fund.
The city action follows similar Hawaii Campaign Spending Commission penalties levied in July against Cachola for misspending campaign funds. The Nissan Pathfinder was also at the center of that case; the state commission didn’t buy his claim that he was using the vehicle for campaign purposes only, fined him and ordered him to reimburse his campaign account.
Cachola, in his press release, says there was a “misunderstanding” over use of the campaign vehicle and that it was resolved by the state Campaign Spending Commission.
The Honolulu Ethics Commission commission’s case also focused on what staff said was Cachola’s routine acceptance over more than six years of unlawful gifts from lobbyists who had business before the council. This went on despite the fact that Cachola had seen other council members in trouble with the commission for the same thing and, in 2003, the commission had specifically directed Cachola not to take gifts valued at more than $200.
The gift cap was passed in 2001 when Cachola was chair of the council’s ethics committee.
But, the commission said, Cachola continued to accept dozens of gifts including from lobbyists pushing the Honolulu rail project and seeking land use variances or other council approval on projects.
“I am pleased that the investigation has come to a conclusion and no finding of fact or opinion as to any violation has been found.” — Rep. Romy Cachola
The commission did not name the lobbyists involved.
Meals at high-end restaurants, fine wine and golf outings were provided to further relationships with Cachola, the lobbyists-turned-witnesses told commission investigators.
That bought them better access for their clients, they said.
“Each of the lobbyists noted that Councilmember Cachola preferred to meet for dinner at upscale restaurants such as Ruth’s Chris, Hiroshi Tapas, Duc’s Bistro, Michele’s, Roy’s and various country clubs,” the advisory opinion says. “The meals were accompanied by wine, usually selected by Councilmember Cachola.”
The lobbyists deducted the dinner expenses and golf outings because council business involving the lobbyists’ clients was the subject of conversation at each event, they said.
Cachola actually characterized the meetings similarly in a letter to the commission:
“It was their intention to seek audience and exchange information with me regarding City issues,” he wrote in response to commission inquiries. “I often used these opportunities to share my concerns or disagreements with many issues they were pursuing at the time.”
The commission said lobbyist expense reports showed more than 60 gifts of meals and golf outings valued at more than $5,000 from 2006 to 2008. Before he left the council in 2012, Cachola solicited and accepted another 44 such gifts above the $200 threshold valued at $3,800, the opinion says.
Cachola suggested to the commission he didn’t violate the law because he didn’t know what the dinners and golf games were costing or who paid for them.
But the commission said the law requires public officials to take reasonable steps to determine the value and source of a gift.
Beyond just accepting the expensive presents, Cachola also failed to disclose the potential conflicts when he voted on measures involving the lobbyists.
That was the case for Cachola’s votes on more than 100 bills and resolutions related to rail transit, construction projects and re-zoning that came before the council from 2008 through 2012, the commission said.
Cachola accused Totto and the commission of unfairly targeting him when other council members also accepted gifts over $200 and did not declare conflicts. Cachola said other council members attended some of the same dinners the commission is now singling him out for.
The Honolulu Ethics Commission wants the City Council to strengthen its rules on use of city vehicle funds and hold council members accountable.
The $50,000 settlement was based on a number of aggravating factors in the case, the commission said, including that the misconduct occurred over several years on a monthly basis, that Cachola knew the ethics laws and their penalties but “blatantly disregarded” them, and that he failed to cooperate with the commission during its investigation.
In addition to the fine against Cachola, the commission also wants the City Council to strengthen its rules on use of city vehicle funds and hold council members accountable.
The commission staff also plans to provide more training for lobbyists on ethics and intends to propose revisions to the city ethics laws aimed at regulating unlawful gifts.
But Cachola said the commission’s “interpretation of the law can result in dangerous consequences including invalidation of Council measures due to undeclared conflicts of interests.”
“Mr. Totto is well aware of this as well as the names of the other Council members (who likewise were not aware of lobbyists exceeding expense limits) but does not address any of this in his Advisory Opinion but only targets Cachola,” the press release said.
“I will support the passage of clarifying laws to further direct the Commission’s activities and prevent Mr. Totto from unfairly being selective in his interpretation and prosecution of the laws,” Cachola said.