The Legislature has refused to close a loophole in state law that has allowed millions of dollars to flow to Hawaiʻi political campaigns from people who get big state contracts.

House Bill 371, arguably the biggest reform measure of the session, would have prohibited donations from the executives of state and county contractors and grantees as well as their immediate family members. The bill had cruised through session, winning a unanimous vote in both chambers just last month.

But earlier this week, legislative leaders injected last-minute amendments that sought to weaken the measure.

The changes would have done little to stop the flow of contractor donations to state legislators, restricting only contributions from people with legislative contracts, which only amount to a handful. All other state contractors would still be free to give to legislators.

But donations from the bulk of the state’s contractors would have been cut off for state office holders — the governor and lieutenant governor.

Even with those changes, which House Judiciary Chair David Tarnas said considerably weakened the effort to cut down on pay-to-play politics, members of the House and Senate conference committees agreed to it.

But – with the clock ticking down to the Legislature’s self-imposed 6 p.m. deadline Friday –  Tarnas and Sen. Karl Rhoads, the Senate’s lead negotiator, pronounced the bill dead because they never got sign off from the House Finance and Senate Ways and Means Committees.

Neither explained what issues the money committees had with the bill, which had little if any fiscal implications for the state budget.

“I thought we had enough to cross the finish line, but I have not received release from Finance,” Tarnas said. 

“How about you?” he asked Rhoads.

“Nope, same situation,” Rhoads said.

Tarnas said he would pledge to keep working on the measure ahead of the next legislative session.

“We can be relentless and keep on working on it, but I don’t think it’s going to happen this session,” Tarnas said before deferring the bill, effectively killing it.

About a half-dozen measures were introduced at the beginning of session to end the flow of contractor money to state and county candidates after a New York Times/Civil Beat investigation that found laws passed in the early 2000s to curtail political corruption had done little to stem the tide of campaign donations from people who win government work.

Similar measures have been introduced for years but have always failed to win approval at the Legislature. Government accountability advocates and reform-minded lawmakers, like Tarnas and Rhoads, had thought this was the year it would finally go through.

But the late changes proposed by top legislative leaders including House Speaker Nadine Nakamura and Senate President Ron Kouchi appeared to have scuttled the bill at the last minute.

The failure of HB 371 at the Legislature’s finish line was met with immediate criticism from good-government advocates.

“At a time when local Democrats are quick to criticize pay-to-play politics taking over Trump and Musks’ D.C., they seem unwilling to clean up their own mess at home,” Evan Weber of the Clean Elections Hawaiʻi Coalition said in a written statement. “And they wonder why they keep losing seats.”

Weber called passage of HB 371 the “bare minimum test” for House and Senate leadership this session.

“And they failed, with all of us watching.”