Sunday, April 11, 2004

Lingle’s group
may be breaking
ethics laws

The education reform group
uses state funds and state workers

A private nonprofit corporation that has raised $80,000 in donations to promote Gov. Linda Lingle's education initiatives has operated from state offices using state workers, an apparent violation of Hawaii's ethics laws.

State of Hawaii Citizens Achieving Reform in Education, originally formed by Lingle in October as an advisory group, became a private nonprofit corporation on New Year's Eve as part of the administration's strategy to solicit donations and use some funds to lobby legislators during the current session, according to state records and officials involved with the corporation.

But in making the change, the group's many links to the Republican administration were maintained, meaning CARE, as a private entity, continued operating from the governor's office.

About five or six administration employees work on CARE matters along with their other duties, and all are involved to a limited degree in fund-raising efforts, according to Bob Awana, Lingle's chief of staff. Awana is one of the five or six. He said he mentions the fund-raising whenever he talks to groups or individuals about Lingle's education initiatives.

Critics maintain that the fund-raising arrangement not only appears to violate state ethics laws banning the use of state resources for private organizations, but also enables the administration to maneuver around a prohibition against soliciting donations for lobbying.

"It strongly appears that the governor has circumvented state law by raising and spending funds through this private entity," said Rep. Scott Saiki, the Democratic House majority leader.

Awana disagreed.

"The governor has been transparent in everything she does and would never knowingly do anything that's not within the boundaries of the law," he said.

Awana acknowledged that the administration created the nonprofit corporation to solicit outside funding, but he said he was told by someone within the administration -- he didn't remember whom -- that the arrangement was OK. The corporation was seen as a mechanism to augment what everyone knows has been Lingle's top priority, Awana said.

"I don't think there's any question in anyone's mind that public education reform is the governor's No. 1 initiative," he said.

But the use of state resources to support a private lobbying group closely linked to the governor raises serious legal and ethics questions, experts say.

Among the chief ones: If the state provides support to one lobbying group, how can it deny comparable support to other lobbying groups, even if they're pushing such controversial issues as banning abortions, legalizing gambling or authorizing same-sex marriages?

"That's the nut of the problem," said Terry Cooper, a University of Southern California professor with expertise in government ethics.

When Lingle announced the creation of CARE in October, she described it as a volunteer advisory committee that would "assist her administration in moving forward on true education reform in Hawaii."

The committee held meetings throughout the state to gather public feedback and attempt to build momentum for the governor's reforms, the most controversial of which was replacing the statewide Board of Education with locally elected ones.

By the time the legislative session opened in January, CARE already was a private organization -- though the advisory network still was intact -- and began focusing on lobbying.

On Dec. 31, it filed documents with the state to incorporate as a nonprofit domestic corporation. About a week later, it applied to the Internal Revenue Service for a tax-exempt status as a 501(c)4 or social welfare organization. That status allows for unlimited lobbying under IRS rules.

With both documents in hand, the group was able to begin raising money to push Lingle's reform proposals, some of which have met stiff resistance from the Democrat-controlled Legislature.

In early February, CARE also registered with the state Campaign Spending Commission as a political action committee, a type of organization designed to support political causes or candidates.

CARE thus far has raised $80,000 in private donations from three donors -- builder Castle & Cooke, $50,000; the labor organization Unity House, $25,000; and a couple, $5,000 -- and has pledges from additional people, according to Awana. Lingle also has earmarked a maximum of $65,000 from her office budget to spend on the CARE initiative.

About $70,000 of the combined total of $145,000 has been spent to date, though Awana didn't have a breakdown on how much of that money went toward lobbying expenses.

Some was spent on CARE T-shirts and caps that reform supporters, sometimes several dozen strong, have worn as they've attended legislative hearings or walked the Capitol trying to drum up support. One day dozens of elderly hotel retirees wearing CARE garb were bused by Unity House to the Capitol to lobby.

The most prominent form of lobbying has come in radio commercials that began airing in late March, urging residents to call legislators to support Lingle's reforms, which she modified last week in hopes of reaching a compromise this session. The radio spots, which stopped running Wednesday, aired on Oahu, Maui, Kauai and the Big Island at a cost of more than $13,000.

Even though CARE is registered with the federal and state governments as a private organization, it still retains its direct ties to Lingle and the state, blurring the distinction between what is private and what is public.

The administrator listed on CARE's Web site is a member of the governor's staff. Her desk is in the governor's policy office. The phone number listed for CARE is a government number. The group's mailing address and "initial principal office" listed on the Dec. 31 incorporation papers are the Office of the Governor. Its Web site ( is maintained by Lingle's staff and is hosted on the state's main Web site. And CARE's e-mail contact is a government employee.

Those kind of ties disturb ethics experts.

"It really does seem like the connection is way too close," said Jonathan Allen, a University of Illinois political science professor.

"What's really kind of questionable about this is that they're doing it within government facilities," added Cooper, the USC professor.

Dan Mollway, head of the state Ethics Commission, said he couldn't comment on the CARE case but said generally the state's ethics laws prohibit state resources from being used for private organizations.

"If the question is, under the ethics code, can a state official provide state resources to a private organization that lobbies or is engaged in political activities, the answer is no," Mollway said.

He also said the ethics code prohibits allowing the use of state addresses or phone numbers by private organizations.

Awana said he didn't consult the Ethics Commission about establishing the nonprofit corporation, but he planned to check with that agency tomorrow.

CARE's move to become an active lobbying organization has at least one concerned member of the initial advisory group wanting to know more.

"It's something clearly worthy of discussion," said David Heenan, a Campbell Estate trustee.

Saiki, the House majority leader, said the Ethics and Campaign Spending commissions should investigate the matter, and if laws have been broken, the administration should be required to refund the donations.

If violations are found, Lingle would quickly make changes to be in compliance, Awana said. "You bet."


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