In the opening months of this election year, Hawaii voters witnessed the outrageous spectacle of two influential state lawmakers pleading guilty in a corruption scandal that seemed to confirm everyone’s worst suspicions about “pay to play” in local politics.

The convictions of former Senate Democratic Majority Leader J. Kalani English and Rep. Ty Cullen centered on their relationship with a prolific campaign contributor named Milton Choy, who has showered local political leaders with legal donations for years. In this case, Choy also paid cash bribes to English and Cullen to influence legislation, according to court records.

Anger at that sort of misconduct by elected officials historically has triggered backlash and reform, such as the federal reforms that followed the Watergate scandal in 1972. At least two Democratic candidates for governor think Hawaii may be at that kind of political pivot point.

Civil Beat Elections Guide

U.S. Rep. Kai Kahele and businesswoman Vicky Cayetano are both offering up specific proposals for reforming the state campaign finance system.

Lt. Gov. Josh Green, who has raised the most money by far of any gubernatorial candidate this year, has not provided any specific proposals for campaign finance reform. However, he said in a written statement he has “always supported common sense campaign finance reform including public financing of campaigns.”

Kahele, who entered the race for governor last month proclaiming that “Hawaii is not for sale,” says he wants to expand public financing of campaigns, reduce the maximum amounts individuals can donate to candidates, and ban outright donations from corporations and unions.

Rep Kai Kahele walks into the gym with his family before he announces running for Hawaii Governor at the Hilo Boys and Girls Club gymnasium.
U.S. Rep. Kai Kahele walks into a Hilo gym with his family before announcing he is running for governor. He is making campaign finance central to his campaign, which is a gamble. Cory Lum/Civil Beat/2022

The Kahele campaign is only accepting donations of $100 or less, and longtime political observers say he is making campaign finance reform more central to his run for governor than any major candidate for that office in state history. Kahele says he is gambling his political future on the idea that Hawaii is ready for change.

“In my opinion, publicly funded elections is the reform that makes all other reforms possible,” Kahele said. He points out public campaign financing was once considered so important that it was written into the Hawaii State Constitution in 1978, but major candidates rarely rely on public financing today.

“I realized that if I was going to try and do something big and bold and take this state in a new direction, this had to be it,” he said.

Sandy Ma, executive director of Common Cause Hawaii, said the organization is not endorsing Kahele’s bid for governor.

“These are all great ideas, how to get there?” she said. “The proof is in the pudding, how is he going to get there?”

Some political insiders say the voters are far more worried this year about the price of rice and gasoline than obscure details of how politicians finance their campaigns. Some accuse him of pandering to win over voters.

Critics also point out Kahele raised plenty of money himself from big political donors in past election cycles, behaving exactly the way he now criticizes others for doing.

Vicky Cayetano wants a more level playing field for candidates who are unable to raise large sums of money — “who really have the heart and the attitude to want to serve the public.”

Kahele acknowledged that history, admitting “I was part of the problem.” He helped his father, the late state Sen. Gil Kahele raise money, and also solicited cash for his own campaigns. He barely knew anything about public financing, he said.

But when he arrived in Washington, D.C. as a congressman, Kahele said he saw “how money is such a toxic influencer of campaigns, and just D.C. in general.” He also watched the humiliating saga back home play out around Cullen and English, who were Kahele’s former colleagues and friends.

Kahele’s Ideas

Kahele has said his “first and foremost” proposal is to dramatically reduce how much money individual donors are allowed to contribute to candidates. He believes that change will steer more candidates into public funding, and give ordinary voters more of a voice.

For example, Kahele proposes to reduce the maximum donation that can be made to a candidate for Hawaii governor in each four-year cycle from $6,000 to $750 for candidates who decline public funding. Candidates who accept public funding would be eligible to receive contributions of up to $1,500 per donor for every four-year cycle.

Aaron McKean, legal counsel for state and local issues at the Campaign Legal Center, said various states impose various limits on campaign contributions, and the maximum contributions for candidates in Hawaii could certainly be reduced if the state chose to do so.

As for Kahele’s idea of banning direct contributions from corporations and unions to candidates, experts said such a ban is already in place at the federal level, and can also be adopted by the states. However, unions and corporations would still be free to donate money to political action committees to support their favored candidates.

As for public funding, Kahele also wants to “supercharge” the state’s existing public funding system. He is proposing the state offer an 8-to-1 match for each small donation of less than $100 that participating candidates receive. As an example, a $25 private donation would be matched by $200 in public funding, making small donations more significant.

Currently candidates who accept public funding receive only a 1-to-1 match for small donations of less than $100, up to a ceiling that is set for each race. The maximum public funding available to any candidate for governor is now $208,117 for the primary election, and the same amount for the general election.

Kahele says he has raised more than $100,000 in small donations for his run for governor in a matter of weeks. That money will be matched dollar for dollar with public funds, and it puts Kahele on track to qualify for up to $208,117 in total matching public funds for the primary election.

Vicky Cayetano speaks at a press conference held near Nuuanu Elementary School. Cayetano proposed her priorities of her campaign.
Vicky Cayetano wants tighter restrictions on campaign contributions from mainland donors, and also thinks donations from corporations and unions to candidates should be banned. Cory Lum/Civil Beat/2022

McKean said other jurisdictions including New York City already offer more generous matches for small contributions than Hawaii’s 1-to-1 match. The idea is to make sure small donations have impact, he said, and research shows New York’s matching program led to greater political participation from a more diverse array of neighborhoods.

But there would be a cost. Kristin Izumi-Nitao, executive director of the Hawaii Campaign Spending Commission, said her office has long supported increasing the amount of public funding available to candidates, but jumping to an 8-to-1 match for small contributions might exhaust the Hawaii Election Campaign Fund that supplies public campaign funding.

Izumi-Nitao said she needs to study such a plan to get a better handle on the cost, and to gauge how much money the community is willing to commit to the idea.

Another Kahele proposal would limit the amounts of unspent funds that elected officials can carry over from one campaign cycle to the next. In some cases lawmakers amass hundreds of thousands of dollars more than they need to win re-election, and carry that money over from one cycle to the next.

He wants to to limit carryover balances to 20% of the total amount a candidate raises, or no more than $50,000. This year, Kahele can tap $48,000 that was left over from his last state Senate campaign in 2020.

Kahele’s political rival, Josh Green, emerged from his last Senate race in 2014 with more than $503,000 in unspent campaign funds. The amount of cash in the bank would have been daunting to anyone who might have considered challenging him for his Senate seat. It also gave Green a running start on fundraising when he decided to run for lieutenant governor in 2018.

Cayetano’s Ideas

Cayetano, Hawaii’s former first lady and a longtime Hawaii businesswoman, also is making campaign finance reform a main element of her run for governor. She wants a more level playing field for candidates who are unable to raise large sums of money — those people “who really have the heart and the attitude to want to serve the public, but will never have the chance,” she said.

She proposes further restricting the amount of out-of-state money that candidates can raise to fuel their campaigns. State law now allows for up to 30% of a candidate’s donations to come from out of state, and Cayetano wants that amount reduced down to 10% or 15%.

Cayetano also wants to see a cap on the total amount of money that any candidate is allowed to raise, and wants a ban on campaign fundraising during the Legislative sessions, something Kahele also supports. “I am just appalled that is still going on, that should be stopped,” she said of the session fundraising.

Lawmakers this year passed a measure to prohibit fundraising events during both regular or special sessions but stopped short of banning donations during session. That bill is pending before Gov. David Ige, who has the option of signing it into law, vetoing it or allowing it to become law without his signature.

Cayetano said she is open to the idea of reducing the maximum allowable donations to candidates. For example, the maximum amounts individual donors could contribute to gubernatorial candidates might be reduced from the current $6,000 limit to perhaps $3,000 or $4,000, she said.

“It’s something to consider, but is it a game changer? I don’t think so,” Cayetano said.

She believes it is more important to reduce the amounts of money flowing into campaigns from the mainland, and to cap the total amounts candidates can raise. She said she also supports outright bans on both union and corporate contributions.

Cayetano said she would also support a proposal to limit the amounts of unspent funds elected officials can carry over from one campaign cycle to the next.

She said she is not opposed to strengthening the state’s public financing system, but observed that kind of change requires the cooperation of the Legislature. State lawmakers solicit large sums in private campaign donations each election cycle, and “the reality is, how likely is something like that able to get passed?” she said.

But Cayetano said the larger issue of campaign spending reform is important. If the voters aren’t excited about it, that’s “because they don’t see how it impacts the decisions that are made that impact their lives.” Elected officials “misrepresent” the importance of campaign contributions, which actually matter a great deal, she said.

As of the end of December, Cayetano had raised $825,274 for her run for governor, but that total included $350,000 she loaned to her campaign.

Lieutenant Gov Josh Green speaks during press conference on measles medical mission to Samoa.
Lt. Gov. Josh Green said he has “always supported common sense campaign finance reform.” Cory Lum/Civil Beat/2019

Green Is The Biggest Fundraiser

Green was unavailable for an interview on the campaign finance issue, but his campaign issued a written statement noting Kahele’s history of fundraising.

“Congressman Kahele’s promises to reform campaign finance lack credibility and ring hollow given that every one of his top 20 congressional donors is a special interest, including corporations, lobbyists, and PACs mainly representing the airline, defense, transportation, and casino/gambling industries,” it said.

The Green campaign statement pointed out that Kahele’s congressional leadership political action committee “received large contributions from two mainland corporate PACs, Microsoft and Nike, just 30 days before he announced his campaign for governor with a message that ‘Hawai‘i is not for sale,’ promising not to accept contributions from corporations, PACs, from the mainland, or any donation over $100.”

As of Dec. 31, Green had raised more than $1.8 million for his campaign for governor, and had more than $1.1 million in cash on hand.

Kahele’s critics also point out he was among about 60 state and federal candidates who received donations from Milton Choy, the same businessman who triggered such an uproar at the Legislature this year after he paid bribes to English and Cullen to steer legislation related to wastewater.

Kahele said in a written statement that he returned $2,500 to the Campaign Spending Commission after it was reported that Choy had given cash to Cullen and Kalani.

Kahele also directly criticized Green’s fundraising, saying Green should not have pitched the benefits of the Pfizer-BioNTech vaccine and made a public show of taking the vaccine in late 2020, and then accepted a $2,000 campaign donation from Pfizer last October. Pfizer has been a regular donor to Green since 2011.

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