The 9th U.S. Circuit Court of Appeals might have upheld Hawaii’s law banning government contractors from donating to political candidates. But in reality the prohibition doesn’t do much to curb the outsized influence that businesses have on politics in the Aloha State.

Hawaii can’t block individuals from donating their money to political campaigns, even if they own a company that has ongoing contracts with state and local governments.

The same rule applies to top executives, employees and family members of government contractors. They’re all allowed to give money to the political candidates of their choosing as long as they don’t give more than is legally allowed by state law.

This helps encourage the idea that businesses must donate to politicians to get government work. It’s called pay-to-play, and it has a long history in Hawaii and throughout the U.S.

But it also breeds mistrust in government, especially as more money is dumped into political campaigns.

Hawaii State Capitol Building

Pay-to-play politics have a long history in Hawaii, yet campaign spending laws have failed to put an end to public concern.

PF Bentley/Civil Beat

Hawaii Campaign Spending Commission Executive Director Kristin Izumi-Nitao says the ban on government contractor contributions can help to quell concerns that handsome political donations lead to lucrative contracts and favorable decision-making.

But she’s also keenly aware of the workaround that still allows contractors to donate money from their own personal bank accounts. She said the donation is lawful as long as it’s within legal limits and the money doesn’t come directly from the company’s treasury, such as through a reimbursement or end-of-year bonus.

Billions of dollars are at stake, and hundreds of local contractors are vying for their share.

“That’s why you see a lot of these business owners giving from their own pocket,” Izumi-Nitao said. “For now it’s just part of the landscape. I can’t say it’s abusive. I can’t say it’s wrong. There are constitutional protections for that.”

It’s notoriously difficult to find evidence of just how much campaign contributions influence a decision-maker’s actions, and whether there’s any corruption involved. Outright bribery can be hard to prove, although it’s not unprecedented.

Former Illinois Gov. Rod Blagojevich, for instance, is currently serving a 14-year federal prison term for soliciting bribes from those wanting Blagojevich to appoint them to fill Barack Obama’s U.S. Senate seat after he was elected president.

More often, it’s believed that campaign contributions buy access to politicians and can lead to consideration for government contracts. In fact, a recent study published in American Journal of Political Science found that political donors were much more likely to be granted a meeting with their congressional delegates and staff than non-donors.

Flooding Campaign Coffers

With so many high-profile construction projects underway in Hawaii, most notably Honolulu’s $6 billion commuter rail system, the Campaign Spending Commission is on high alert for people playing outside the rules.

Billions of dollars are at stake, and hundreds of local contractors are vying for their share.

For example, employees for the prime contractors working on the city’s rail project donated almost $1.5 million to local politicians between June 2007 and December 2014, according to Hawaii Campaign Spending Commission data.

The top beneficiaries were Honolulu Mayor Kirk Caldwell, former Gov. Neil Abercrombie and former Honolulu Mayor Mufi Hannemann, each of whom bolstered their campaign coffers by more than $250,000 as a result. Gov. David Ige and Lt. Gov. Shan Tsutsui were the next top recipients of rail contractor cash, although each received less than $80,000.

HART railway supports and guiderail near Kahi Mohala. 18 may 2015. photograph by Cory Lum/Civil Beat

Honolulu rail contractors have donated generously to local politicians over the past several years.

Cory Lum/Civil Beat

Several of the contractors, such as R.M. Towill, SSFM International and AECOM Technical Services, also have millions of dollars worth of contracts with local government for everything from managing sewer plan upgrades to developing a master plan for the Neil Blaisdell Center.

Employees of these companies donate regularly to political campaigns, as do the employees of many other companies doing business with government.

Neal Milner, a professor emeritus of political science at the University of Hawaii, said this can be problematic because large influxes of cash into campaigns can create the appearance of impropriety even if there isn’t any.

He blames much of this distrust on various interpretations by the courts that equated campaign cash to free speech and set the stage for outside groups to spend unlimited amounts of money on politics.

“There’s no law that exists in regard to campaign spending that people don’t have a work around for,” Milner said. “Everything is just such an open question now.”

The ‘Cruelest Tax’

Hawaii’s history doesn’t elicit much reason to trust the system. The state has a long history of corruption when it comes to contractors donating money to politicians, leading many to believe that a pay-to-play culture does in fact exist on the islands.

In the early 2000s, the Hawaii Campaign Spending Commission issued more than $1.8 million in fines to contractors who were caught giving illegally to local politicians by skirting campaign contribution limits.

Criminal charges were filed in dozens of cases, arrests were made, and at least one donor — the former head of the Hawaii State Bar Association — was sentenced to 10 days in jail.

Many of the culprits used false names to get around donation thresholds. Some even paid employees and family members to contribute to a preferred politician’s campaign fund.

“Corruption is the cruelest tax. It warps the decision-making process.” — Former Hawaii State Sen. Gordon Trimble

The scandal was far-reaching. Hundreds of thousands of dollars were funneled into the campaigns of some of the state’s highest ranking and most influential politicians at the time, including Honolulu Mayor Jeremy Harris, Gov. Ben Cayetano and Lt. Gov. Mazie Hirono, now a U.S. senator.

The Legislature enacted reform in 2005, which included the current pay-to-play provision that prohibits government contractors from giving money directly to politicians. Lawmakers said then that they wanted to prevent corruption. But they also wanted to eliminate the mere appearance of impropriety.

“Corruption is the cruelest tax,” then-Republican Sen. Gordon Trimble said during a 2005 floor session. “It warps the decision-making process. It demoralizes the public sector, and it reflects poorly on us as a society.”

But it’s clear the new the laws did little to quell concerns about Hawaii’s apparent pay-to-play culture.

Business executives and contractors — including those who were busted in the early 2000s dragnet — still donate generously to political campaigns.

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