Accounting firm
fined for making
illegal donationsCampaign gifts to island politicians
cost Grant Thornton $16,000 in penalties
The state Campaign Spending Commission approved a $16,000 fine against a national accounting firm yesterday, settling the first of several investigations into alleged illegal campaign donations by certified public accountants.
The penalty was one of four, including a record $74,000 fine, approved by the commission during its monthly meeting.
By a 4-0 vote, the commission finalized a $16,000 fine against Grant Thornton LLP, whose employees contributed $34,000 to former Gov. Ben Cayetano's campaign and $13,100 to ex-Lt. Gov. Mazie Hirono's campaign.
Bob Watada, the commission's executive director, said Grant Thornton's attorney Jeff Portnoy admitted that the firm reimbursed many of its employees and their friends for the political donations they made during the past eight years, in apparent violation of state campaign finance laws.
But Portnoy told the commission that the firm, whose staffers also contributed $2,125 to Gov. Linda Lingle's campaign and $4,250 to Honolulu Mayor Jeremy Harris' campaign, curtailed the reimbursement practice back in 1999 after he informed them that it was illegal, Watada said.
At the time, Portnoy was examining political contributions that the firm funneled through the Kamehameha Schools, Watada said.
Grant Thornton is one of seven national and local accounting firms being targeted by the commission, whose investigation previously had centered on political contributions by local engineering firms and architects.
A computer-assisted study of the 1994-2002 period by the commission found that the firms contributed nearly $400,000 to the campaigns of Cayetano, Hirono, Lingle, Harris, former Honolulu City Councilman Mufi Hannemann and ex-Big Island mayoral candidate Fred Holschuh.
The study found that donors linked to the firm of KPMG LLP gave more than $100,000 to the candidates, while workers at Ernst & Young LLP gave more than $57,000.
During the same period, the seven firms received more than $20 million in nonbid contracts to audit various state and city agencies.
"These are the watchdogs of the public's finances. You don't expect these people to be doing these things," Watada said.
Under state law a business or individual can give no more than $4,000 to a mayoral candidate and $6,000 to a candidate for governor or lieutenant governor during a four-year election cycle. They also are prohibited from making political donations under false names.
The commission also approved a record $74,000 fine against the local engineering firm of Edward K. Noda and Associates Inc. and a $48,000 penalty against local engineer Randolph Murayama.
The Noda firm -- whose president, Edward Noda, was arrested last month by Honolulu police on suspicion of money laundering and making false-name contributions -- laundered $131,000 in contributions, while Murayama is linked to more than $30,000 in false-name contributions.
The firms also failed to cooperate with the commission's investigation.
"There was a lack of candor," said Watada, referring to the firms' response to the commission's investigation. "We went back and forth, back and forth."
Since 2001 the commission has issued more than half a million dollars in fines against more than five dozen city and state contractors for making illegal campaign contributions.
Watada said his office is investigating another 20 firms for alleged illegal political donations.
He said he hopes to wrap up those investigations within a year.
Campaign Spending Commission
