Don’t Back Down on Financial Disclosure Requirement for State Boards


There’s an old adage that it’s best not to discuss certain things at the dinner table. They include sex, religion and politics.

Money is also often on this list, but money is something that really needs to be talked about, especially in politics and government.

This year, bills before the Hawaii Legislative Assembly would prohibit the public from learning about compensation paid to members of major boards and commissions from a variety of sources. The main argument is that sharing financial information on financial disclosure forms discourages many people who might otherwise be willing to volunteer for government service.

Two bills propose that the Hawaii State Ethics Commission remove financial amount ranges. As the legislation explains – both in House Bill 1849 and in Senate Bill 2123, introduced by the Speaker of the House and the President of the Senate on behalf of unidentified parties – “ community members who are most qualified to serve are often unwilling to seek a seat on state boards. or fees due to the requirement that financial information be made public. These individuals and their companies often value confidentiality when it comes to compensation. »

According to the legislation, removing this requirement would “increase the size and quality of the applicant pool,” which would benefit Hawaii.

In fact, blacking out the dollar ranges – for example, $50,000 but less than $100,000 – would only raise doubts about the sincerity and interests of candidates to serve on more than a dozen boards, commissions and agencies. of state.

Capitol building.
The Hawaii State Capitol, where some lawmakers want to hide financial information about boards and commissions from the public. Cory Lum/Civil Beat/2022

They include the University of Hawaii Board of Regents, the Land and Natural Resources Board, the Land Use Commission, the Board of Agriculture, the Hawaii Community Development Authority, the Commission Hawaiian Houses and a dozen other boards, commissions, and agencies as well as the State Ethics Commission itself, the entity responsible for documenting disclosures and posting them online.

These councils make important decisions that profoundly influence the direction of state policy and impact nearly everyone in Hawaii. They also involve a lot of public money.

Testimony opposing HB 1849, which emerged last week, made it clear why the proposed status change is a step “in the wrong direction”, as Ethics Commission executive director Robert Harris:

“Reducing public transparency in this way weakens public confidence in the actions of these individuals and their respective boards and commissions, which defeats the purpose of state ethics laws. Moreover, without knowing the amount of the financial interest of a member of the Council or of the Commission, a public intervener could not reasonably assess the potential for a conflict of interest.

Sandy Ma, executive director of Common Cause Hawaii, testified, “Suppressing financial information serves no government purpose, especially when many unpaid volunteer councils wield enormous power.

Douglas Meller of the League of Women Voters of Hawaii’s Legislative Committee pointed out that these same council members “may authorize the private use of public property or expend public funds for private purposes.”

One down, one to go

On Friday, HB 1849 was postponed indefinitely in the House, but that does not end the chances of the legislation passing. Rep. Angus McKelvey, chairman of the House Government Reform Committee, noted that the Senate companion “has fewer committees” – suggesting it might be easier to move forward.

SB 2123 now awaits a hearing in this chamber, and it may well receive one, as the proposal has many influential supporters.

Testimony in support of the House version included Land Use Commission Executive Director Daniel Orodenker; Christian Fern, executive director of the University of Hawaii Executive Assembly; Tim Dolan, UH Vice President and CEO of the UH Foundation; and Department of Transportation Director Jade Butay.

“We need to take steps to increase the pool of qualified candidates willing to voluntarily serve on boards and commissions and modifying – but not eliminating – financial disclosure is an important step that could help,” wrote Randy Perreira, executive director of employees at the Hawaii government. Association.

The desire to change financial disclosure requirements did not arise in a vacuum. David Lassner, the president of UH, noted in his supporting testimony that UH strongly opposed 2014 legislation that made the financial information of members of the Board of Regents public.

“Four serving regents resigned when the legislature changed the terms of their public service,” he wrote. “They had provided their financial information to the Ethics Commission, but were unwilling to have their privacy and that of their families compromised. In the years that followed, we saw a decline in the number of applications from people willing and interested in serving as Regents.

In addition to the four regents, members of the LUC, ADC, BLNR, and Hawaii Housing Finance and Development Corporation board of directors also walked off the job.

Then Governor Neil Abercrombie, who had his own bizarre reasons for opposing the 2014 bill — he claimed it would harm women and discourage their government service — let it become law without his signature.

Nor is it the first time that the Legislative Assembly has had fun tinkering with the law. In 2018, there was a trend to water down financial information, and for the same silly reasons. The Senate version made it all the way to the conference committee before it died.

The Senate should act

Today, based on testimonials submitted for HB 1849, a large number of private sector executives also want to keep the financial figures private.

Among them, Michael Pietsch, president of Title Guaranty of Hawaii; Ed Schultz, president and CEO of Hawaiian Host Group; Josh Feldman, President and CEO of Tori Richard; Emily Porter, Chief Operating Officer at MacNaughton; Paul Yonamine, Executive Chairman of Central Pacific Bank; John Morgan, president of Kualoa Ranch; Kris Nakagawa, vice president of Young Brothers; Sean M. Nakamura, controller and treasurer at Island Holdings; Meli James, president of the Hawaii Venture Capital Association; and Chuck Bergson, President and CEO of Pacific Media Group.

“By removing irrelevant personal information from public disclosure – information that is not relevant to assessing any board member conflict – we believe the state will attract the right people who are ready to serve our State on a board or commission by giving their time, skills and wisdom,” testified Brandon Kurisu, president of the University of Hawaii Alumni Association.

It is heartening to see leaders from such a broad and distinguished range of Hawaiian businesses and organizations eager to improve government services. But their many rationalizations are weak and sometimes just plain wrong.

Brian Black, executive director of the Civil Beat Law Center for the Public, blew a big hole in one of HB 1849’s main arguments: “None of the 17 councils involved currently has more than one vacancy. By contrast, other state boards and commissions — whose members’ financial disclosure statements are not published — have several long-standing vacancies.

In fact, Black says, there are “many” qualified people in the state who are not deterred from publicly identifying their conflicts of interest. If someone isn’t willing to be transparent, he adds, “that person may not be the best person to represent the people of Hawaii on a civilian board of oversight.”

The legislature shouldn’t try to fix something that isn’t broken.

Click on the links to contact the following Senate Speakers to ask them to remove SB 2123: Sharon Moriwaki on Government Operations, Karl Rhoads on the Judiciary, and Donovan Dela Cruz on Ways and Means.


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