Tuesday, April 15, 2003

State of Hawaii

State tourism
agency may have to
detail subcontracts

A bill at the Legislature would
require additional financial disclosures

By Tim Ruel

A bill making its way through the Legislature would require the state Hawaii Tourism Authority to disclose details of subcontracts that are paid with state funds, a requirement not imposed on other state agencies.

The measure would hold subcontracts to the same state rules that govern the disclosure of state contracts.

By law, the public has the right to know the amount of a state contract, as well as its length and purpose, although there are certain exemptions. But the law does not specifically govern subcontracts that are paid for by state contractors.

The bill is headed to a conference committee and must be ready by April 24 for final action by both houses of the state Legislature. A version of the bill that was passed by the state House has the support of Gov. Linda Lingle and the tourism authority.

But Les Kondo, director of the state Office of Information Practices, said he was concerned that the House version gave too much discretion to the authority to avoid disclosing its discussions of the subcontracts.

"I have concerns about the language," Kondo said.

The Hawaii Visitors & Convention Bureau, which last year received $35 million in state funds to encourage tourists to come to Hawaii, entered a confidential subcontract with Walt Disney Co. to promote the islands using the release of the "Lilo and Stitch" animated film. The movie is the story of a Kauai girl who befriends a runaway alien creature.

The contract cost $1.7 million of state funds in its first year, and was to cost a total of $3.9 million over three years, but the Hawaii Tourism Authority cut funding off after the first year.

At the time, an authority official said the board did not want to commit to a long-term contract. The authority wants to attract higher-spending visitors than families that fit the "Lilo" demographic.

The board of the tourism authority had sought a copy of the Disney contract from the visitors bureau, but the board was told it would have to sign a confidentiality agreement to see it.

The board declined to sign such an agreement.

Ken Goldstein, executive vice president and managing director of Disney Online, recently told the Star-Bulletin that the agreement was a "spectacular deal for Hawaii."

"The amount of value that Disney is providing to Hawaii compared to the amount of capital Hawaii has (paid Disney) is unprecedented for this company," Goldstein said. "Disney has so overdelivered."

Tony Vericella, president and chief executive of the Hawaii visitors bureau, declined to comment for this story.

The state Senate passed a version of the measure earlier this year would make the law apply to all state agencies. State Comptroller Russ Saito testified against the version, saying it "cannot be fulfilled."

A House committee narrowed the bill to cover only the tourism authority. Lingle said she would sign that version into law.

State of Hawaii
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