- Special Projects
The stalemate this month between the House and Senate over how to continue funding Honolulu’s 20-mile rail project did more than rile Mayor Kirk Caldwell and others who have staked their political careers on the biggest public works undertaking in Hawaii history.
It also created an opportunity for an ambitious lawmaker, Sen. Donovan Dela Cruz, to seize one of the most powerful positions in the Legislature.
He officially took over last week as Ways and Means Committee chair after ousting Sen. Jill Tokuda in an end-of-session coup. She declined to comment for this article but one legislator said it felt like she was cut out of the post “with a blunt butterknife.”
Tokuda and her House counterpart, Finance Chair Sylvia Luke, were unable to reach an agreement on where the money should come from to finish the billions-over-budget rail project, ultimately causing the bill to stall.
Dela Cruz capitalized on the mounting criticism of the Legislature’s inability to get this critical piece of business done before adjourning May 4. With the backing of his faction of lawmakers and the blessing of Senate President Ron Kouchi, whom he helped install in 2015 by forming a now-broken alliance with Tokuda’s faction, Dela Cruz successfully maneuvered to grab the coveted chairmanship.
It’s the most important role the 43-year-old Dela Cruz has held since entering the political arena in 2002. He served two terms on the Honolulu City Council, which included four years as the council’s youngest chair, before joining the Senate in 2010.
Civil Beat interviewed numerous elected officials and staff for this story. Most would only talk if their names weren’t used because they don’t want to get crosswise with the new WAM chair who has considerable power over bills important to their constituents.
Some of his colleagues said his strong-willed nature and propensity to think outside of the box will lead to much-needed solutions to complicated problems facing the state, whether that’s growing more food locally through agricultural land swaps or creating more affordable housing via public-private partnerships.
But others questioned whether he is the right person for the job. They are concerned about his fiery temperament, bendable ethics and inclination to work more behind the scenes than in the public eye.
As chair of Ways and Means, Dela Cruz will face huge questions, the biggest being what the state should do about funding rail. The debate is now over using hotel-tax money to plug the huge shortfall or letting the county extend the 0.5 percent surcharge on the general excise tax.
Dela Cruz’s most recent annual financial disclosure statement shows he receives as much as $100,000 a year as an officer with a company that has a number of contracts with Hawaii businesses. One of those is for work on the Honolulu rail project.
Beyond rail, the Ways and Means Committee effectively determines the fate of any bill with a financial component. As chair, Dela Cruz will have signifiant sway in setting broad state priorities.
He can move agendas forward or single-handedly kill legislation by simply not giving the measure a hearing in his committee, the last hurdle for hundreds of bills each year before a final vote by the full Senate.
He’ll also serve as lead negotiator of the overall state budget. The Legislature approved a $28.4 billion two-year spending plan last session, so Dela Cruz enters his new role in the middle of the biennium. His untested relationship with Luke will be closely watched.
Dela Cruz is bringing his own staff to aid his work on the committee, replacing Tokuda’s crew. As he begins to settle into the position, he and his team will face an early trial in how to respond to the next quarterly fiscal forecast from the state Council on Revenues, due Tuesday.
Last session, Tokuda and Luke had to keep looking for ways to trim hundreds of millions of dollars from the budget after the council twice downgraded its general-fund revenue forecast. They were also hit with pay raises for public-worker unions, something Dela Cruz will have to handle too since some of the bargaining units are still negotiating their contracts with Gov. David Ige’s administration.
Dela Cruz declined to talk in any detail about his new position when asked last week. He insisted decisions are really not about him, but the chamber as a whole.
“It’s whatever the Senate’s agenda is in the collective sense,” he said. “We want to be fair, reasonable and provide as much assistance as we can to committee chairs and the membership.”
At age 30, Dela Cruz became the youngest chair of the Honolulu City Council in 2003. He relished the role but was unable to maintain the support of a majority of his colleagues on the nine-member council when his relationship with then-Mayor Mufi Hannemann soured over the rail project.
A 15-hour transportation committee meeting about the administration’s transit plan was framed as the tipping point in late 2006. Soon thereafter, then-Council members Charles Djou, Todd Apo, Nestor Garcia, Gary Okino and Rod Tam banded together to replace Dela Cruz as chair with Barbara Marshall.
“We were fed up because of the relationship between Donovan and the mayor. It had become so confrontational, it was really no relationship at all,” Okino said in a January 2007 Midweek story.
While Dela Cruz made strides to improve government transparency during his time as council chair, including making budget information and other council documents available online, he ran into trouble first with the Office of Information Practices and later with the Honolulu Ethics Commission.
In 2005, then-OIP Director Les Kondo took Dela Cruz to task over the repeated one-on-one communications he had with his fellow council members about how the council should be reorganized, including ever-important committee lineups.
Kondo wrote in a formal opinion that his private one-on-one talks rendered the Sunshine Law meaningless. The law requires discussions about council business to be conducted as openly as possible.
Dela Cruz ignored Kondo’s requests for more information about his communications and maintained that the practice was fine, legally and otherwise.
Earlier this year, a similar strategy was employed to oust Tokuda. Sophomore Sen. Kai Kahele quietly took a resolution around to all the senators for them to sign instead of putting it to a vote on the Senate floor. All but three of the 25 senators — Sens. Roz Baker, Les Ihara and Tokuda — signed the resolution supporting Tokuda’s ouster, though some said they felt pressured to do so, worried that they would lose a leadership position or funding for their district.
Senators said the move was orchestrated by Dela Cruz but he denies this.
A couple years ago, Dela Cruz fended off an investigation by the Honolulu Ethics Commission into whether he and a few of his former colleagues wrongly accepted meals and gifts from lobbyists who had business before the city when he was council chair.
The commission, then led by Chuck Totto, abruptly dismissed all the charges in 2015 without a clear explanation as to why all the wining and dining — and failure to disclose it prior to voting on rail bills and other matters — did not violate the ethics code.
Term-limited after eight years on the council, Dela Cruz at first looked at running for mayor in 2010. He dropped his bid though, unable to raise enough campaign cash to compete against the other Democratic heavy-hitters in the race.
Instead, he launched a successful run to represent District 22 in the Senate. Bobby Bunda had vacated the Wahiawa-Mililani Mauka seat to run for lieutenant governor and Dela Cruz won the four-way primary to replace him. He coasted to victory in the general election that year, was easily re-elected in 2012 and ran unopposed in 2016.
Throughout his political career, Dela Cruz has also held various communications-related jobs. He graduated in 1995 from the University of Oregon with degrees in journalism and communications studies.
During his time on the council, he worked as an account supervisor for Stryker Weiner & Yokota, an influential public relations firm. He previously worked as an account executive with another big PR firm, McNeil Wilson Communications, and was public relations coordinator for Hilton Hawaiian Village.
As a state senator, Dela Cruz has been vice president of DTL Hawaii, described as “a Hawaiian strategy multidisciplinary studio that helps business, governments, organizations and communities navigate change.”
His financial disclosures show he was compensated between $50,000 and $100,000 for his DTL work last year. The company’s clients have included NextEra Energy, the Office of Hawaiian Affairs, Kamehameha Schools, Howard Hughes, the Chamber of Commerce Hawaii, Young Brothers, Alexander & Baldwin, the Hawaii Tourism Authority and the Royal Hawaiian Center.
In 2014, he was also the director of communications for WCIT Architecture, where his salary ranged between $25,000 and $50,000. DTL is part of a team that includes WCIT Architecture, Edith Kanaka‘ole Foundation and PBR Hawaii and is tasked with the master planning of OHA’s Kakaako Makai properties.
As a sub-consultant to WCIT Architecture, DTL was to provide “cultural research and narratives” that guided design of artwork adorning columns for the Honolulu rail guideway and its stations.
His disclosures with the Ethics Commission also show a lot of travel paid for by other groups.
He accepted more than $25,000 in paid airfare, hotel and meals for 15 trips in 2016 and the year before, more than his colleagues tend to travel.
Much of the travel was paid for by the National Association of State Legislatures, the National Association of Latino Elected Officials and the National Hispanic Caucus of State Legislators. They included trips to San Francisco and Long Beach, California; Vail and Denver, Colorado; Miami and Orlando, Florida; Washington, D.C.; and New York City.
In 2015 Dela Cruz also visited Japan at the behest of the Hawaii Asia Pacific Association, and the Kingdom of Morocco. The latter trip was for 10 days at a cost of nearly $4,000.
Without much competition in the elections, Dela Cruz has been able to stockpile almost $300,000 in campaign cash from a who’s who of sources.
The money has come from businesses representing tourism (including Outrigger Enterprises), agriculture (Monsanto, Syngenta), engineering (Mitsunaga & Associates), development (Alexander & Baldwin, The Kobayashi Group) and shipping (Young Brothers).
Well-known lobbyists have also contributed to Dela Cruz, such as Red Morris, John Radcliffe, Bruce Coppa and Bob Toyofuku.
Labor union donors have included the Ironworkers, the International Longshore and Warehouse Union, the International Brotherhood of Electrical Workers, the Carpenters Union and the painters union.
And prominent individuals have given him money, including Walter Dods, Stanley Kuriyama, Charles Toguchi, Jennifer Sabas, Robert Iopa, Warren Haruki and Duncan McNaughton.
As Ways and Means chair, campaign contributions will likely increase given the influence he will have over such a wide range of bills affecting a multitude of special interests. The fattened campaign coffers could eventually set up a run for a statewide seat, like governor or lieutenant governor, should he so desire.
Some of his colleagues expect Dela Cruz will try to become Senate president at some point, which would better position him for a run for higher office.
Dela Cruz spent the past two sessions as vice chair of Ways and Means, the post Kouchi held before he became president.
As vice chair, Dela Cruz oversaw the budget for capital improvement projects, which includes everything from new schools and harbors to highways and airports. It’s the “bacon” that each lawmaker wants to take home to their district. The CIP budget was $3.6 billion in 2016 and $2.9 billion this year.
In that role, he secured tens of millions of dollars in projects to benefit his Wahiawa-Mililani Mauka district and the surrounding area, including $23 million last session to buy more than 600 acres of agricultural land in Central Oahu that he envisions being leased to local farmers to boost food production.
In the Senate shakeup, Sen. Gil Keith-Agaran gave up his post as head of the Judiciary and Labor Committee to take over as vice chair of Ways and Means. He and Dela Cruz are expected to work well together, pulling on their shared Filipino roots and ties to major unions and local businesses.
Dela Cruz introduces dozens of measures each year. Last session ranged from a resolution calling on Hollywood actress Jennifer Lawrence to apologize for not respecting sacred Hawaiian rocks while filming a movie in Hawaii to bills dealing with aquaculture, school libraries, renewable energy and public participation in the education system.
Only a handful of the measures passed, which is typical for many lawmakers. Most did not even receive a hearing, including the Lawrence apology resolution.
Always searching for ways to raise state revenues without raising taxes, Dela Cruz has routinely looked for partnerships with the private sector and a government authority to facilitate that process.
He introduced the bill in 2011 to create the Public Lands Development Corporation and, working with then-Sen. Malama Solomon and others, quietly got it passed. Sen. Les Ihara was the lone “no” vote in the Senate and nine House lawmakers opposed it, including Luke, now-House Speaker Scott Saiki and current Vice Speaker Della Au Belatti.
The PLDC initially set out to facilitate the development of public lands by exempting projects from regulatory oversight — a fast-track process to theoretically boost the economy in part by avoiding all the bureaucratic red tape.
But after the bill slid through the Legislature there was such a public outcry over the new agency’s broad powers to transform agricultural lands, shoreline areas, conservation property and other state acreage that the Legislature repealed the law in 2013.
“He kowtowed to the corporate interests,” said Choon James, a North Shore community activist. “And he and Malama Solomon sneaked the bill through, and then we did not find out until later. And even after the public was made aware of his shibai, he fought to the bitter end to try to stop the repeal.”
Kouchi acknowledged that criticism but pointed to Dela Cruz’s underlying motives.
“The PLDC, sure, but he has been a driving force in getting a lot more ag land under state control,” Kouchi said. “He is innovative in how he would like to see us drive the economy, to revitalize through ag diversification — and just issues like food security as well as an ag driver for renewable energy. He supports the rail and (transit-oriented development) with it.”
Not one to give up on an idea, Dela Cruz succeeded this past legislative session in passing a bill to establish the Office of Public-Private Partnership with $150,000 in funding for a coordinator position.
He had initially pushed for $500,000 for four positions, with support from the state Department of Business, Economic Development and Tourism, headed by Luis Salaveria.
Dela Cruz negotiated the final language in the bill with his colleagues, Kahele and Sen. Glenn Wakai. It cleared the full Senate 23-2 and the House in a 50-1 vote.
Even the Hawaii Government Employees Association, the state’s largest labor union, softened its tone in the end. The union went from “strongly oppose” to “strong concerns” by the time the bill passed. The 32-year-old Aloha Stadium is expected to be the first project.
Dela Cruz has also been a big proponent of the Agribusiness Development Corp., the development arm of the state Department of Agriculture.
Dela Cruz has also long fought to keep the ailing Wahiawa General Hospital afloat.
In 2016, he held up the overall state budget bill until he was able to secure funding for the hospital, which was in danger of going under.
Doctors, patients and residents wore “Save Our Hospital” shirts to legislative hearings and rallied to put pressure on lawmakers to help. Several hospital board members and employees have donated to Dela Cruz’s campaign.
Dela Cruz unveiled his “creative solution” to help save the hospital near the end of the 2016 session. The plan involved the state buying the hospital’s parking lots and leasing them back at a nominal charge.
In the end, lawmakers agreed to provide a cash infusion of $2.5 million to help the financially strapped hospital stay afloat and $700,000 for the Wahiawa Center for Community Health. The hospital had sought $3 million, which was on top of funding the state had provided in prior years and despite the feds in 2015 listing it as among the worst-performing 25 percent of all hospitals in the country when it comes to reducing hospital-acquired infections.
Dela Cruz introduced a bill last session that would have brought the hospital under control of the state’s beleaguered Hawaii Health Systems Corp., which is in the process of privatizing its Maui hospitals. The measure never got a hearing.
Some senators, who noted how the seemingly always-on-the-move Dela Cruz will sometimes show up at committee meetings and then dip out — as many committee members do — are eager to see how he does when he’s in the chair’s seat and has to conduct them from start to finish, not to mention run two weeks of informational budget briefings with each department that normally precede each legislative session.
“Personally, I think Donovan will do well, because he’s tough and he understands the budget very well,” said Big Island Sen. Lorraine Inouye, chair of the Transportation and Energy Committee.
She noted his experience handling the grants-in-aid process and the CIP budget.
“He’s actually done a very good job,” she said. “He’s tough on departments — we’ve seen that. He’s not afraid to ask questions and put them on the spot. So he’s going to do very well.”