CPA money
flows to Cayetano

His re-election fund is bolstered by
contributions linked to seven CPA firms

By Richard Borreca
Star-Bulletin

Ten percent of the money raised toward Gov. Ben Cayetano's re-election has come from people linked to seven accounting firms, according to a computer-assisted study of the $1.36 million raised since January 1996.

The money -- $142,600 -- came not from the firms, but from top executives of the CPA corporations and partnerships, and their spouses.

The executives say the money didn't represent corporate contributions, but rather, contributions made by individuals. Twenty-six percent of the $142,600 donated came from spouses of the CPAs.

Since Cayetano was elected in 1994, those seven CPA firms have received more than $15 million total in nonbid state contracts, records show.

This month the state Campaign Spending Commission adopted new rules that would treat the members of a partnership and the partnership as a single contributor for any candidate.

The rule is aimed at stopping corporations or an industry from bundling their contributions to gain influence with politicians, said Robert Watada, commission executive director.

For example, if three partners in a firm gave $2,000 apiece to a gubernatorial candidate, they would have reached their limit for donations to that person -- $6,000 -- and according to the new rule, would not be allowed to contribute any more to that candidate.

Previously each partner could give up to $4,000 more apiece, and the company $6,000.

A partnership is defined as an association of two or more people who are co-owners of a business, while a corporation is a business entity with its own legal rights.

In the case of the CPA firms, most are corporations, not partnerships, so the new rules would not be applied retroactively.

While political donations by architects and engineers have come under scrutiny before, little has been said about nonbid contracts let to accountants, or about political contributions made by CPA firms.

One of the reasons for campaign spending laws, Watada explained, is to prevent a business or industry from donating large amounts to one public official.

The practice is called bundling, he said. If a firm or industry can hand over a large donation to a candidate, it is likely to be noticed more by the officeholder.

Gary Mijo, a businessman who handled the last major fund-raiser for Cayetano, said the campaign does not know who got contracts, so there is no relationship between government work and campaign donations.

Not unusual, says official

Reg Baker, president of the Hawaii Society of Certified Public Accountants, said it isn't unusual for CPAs to donate to politicians, especially if they are doing work for the government.

"I'm not shocked," he said. "Which architecture firms would contribute to a governor's campaign? The ones that get the most work. If I don't have any government work, what would make me want to contribute to a campaign?" he said.

Baker, who is also treasurer for the state Republican Party and Maui Mayor Linda Lingle's gubernatorial campaign, said he didn't think the problem of campaign donations being tied to government work was any different here than in other places.

"I've worked in Los Angeles, Arkansas and Oklahoma. Hawaii is not unique as far as political gamesmanship goes," Baker said.

Still, "I would say there are a good chunk of people who don't want to do it," he said.

"In a way it is like another cost of business, like paying taxes and paying for the lights."

A spokesman for Cayetano's campaign said the money was raised by fund-raising letters sent by the campaign. When asked why they contributed to Cayetano, several CPAs said because they were asked.

What the CPAs say

One is Edd New, a partner at Ernst & Young, who contributed $2,000 to Cayetano. New also said he did so because he likes the governor. New's wife contributed an additional $4,000.

New stressed that the contributions were not made with corporate funds: "Those are personal funds. The firm would not think of reimbursing me."

"I have known the governor since he was lieutenant governor. I was very active in education reform activities (with him)," New said.

Joseph Goldcamp, with Coopers & Lybrand, said he and his wife contributed as individuals.

"Coopers & Lybrand makes no political contributions," he said.

At KPMG Peat Marwick, managing partner Paul Yonamine said he contributed because "I like him. I personally agreed at the time to the re-engineering efforts of his government."

Yonamine added, "The firm as a whole never takes a concerted stance in making any political contributions. We don't get together and talk about these things. KPMG doesn't."