Tuesday, April 13, 1999

Hawaii State Seal

Bills allowing
extra pay not ethical?

Private sources should not
supplement the pay of state
officials, the ethics
chief says

Department of Education's
utility oversight questioned

By Mike Yuen


The House is on the verge of passing two bills that would violate state ethics standards, warns Dan Mollway, executive director of the state Ethics Commission.

The measures would allow state schools Superintendent Paul LeMahieu and Librarian Virginia Lowell to receive compensation from private sources to supplement their respective annual salaries of $90,041 and $85,302, which are capped by law.

1999 Hawaii State Legislature It was the House Finance Committee that last week amended Senate bills by authorizing the superintendent and librarian to receive pay boosts from the private sector. The House was scheduled to vote on the measures today.

"The Hawaii State Ethics Commission has consistently opposed augmenting the salary of a state official with funds from private sources if that state official has his or her salary established in state statute," Mollway said.

"The problem is that when there is a salary cap in the statutes, that means the salary is capped. If anyone believes that the salary is insufficient, the commission feels that they should work to remove the cap," Mollway added.

If, for instance, the superintendent's salary is supplemented by payments from a contractor who is seeking to profit by building state schools, the superintendent would be in an awkward position ethically, he said.

"Then there's the problem of where do you stop. If you do it for one official, how come we don't do it for other officials, like the attorney general?" Mollway asked.

House Finance Chairman Dwight Takamine (D, Hilo) said his panel's amendments were an attempt to put the salaries for key state educators in line with their responsibilities, given the constraints of the "fiscal reality" that the cash-strapped state faces.

"We want to be sensitive to ethical concerns," he added, when told of Mollway's remarks.

If the House passes the measures, the bills could be modified with safeguards during House-Senate negotiations, Takamine said.

Department of Education spokesman Greg Knudsen said he was more familiar with the superintendent's pay bill, which originally stemmed from the Board of Education's desire to be able to set the superintendent's salary so that it would be able to attract and retain high-quality educators to lead the statewide public schools system.

LeMahieu is a top-notch educational administrator heading the isle system, which has 190,000 students, Knudsen said. But LeMahieu's salary is less than half the annual pay for the superintendent of a 47,000-student Seattle school district, who receives $195,000 a year, Knudsen added.

Told of Mollway's ethics concerns, Knudsen said the bill "could be fine-tuned" to allow LeMahieu to receive payments for serving as a member of national boards and to receive honoraria for speaking at national conferences. Such supplemental pay sources should not pose any ethical problems, Knudsen said.

LeMahieu was hired on a four-year contract with no promises of outside funding to supplement his income. The school board, Knudsen said, wanted to explore supplemental outside pay if the superintendent's salary could not be raised.

Unlike LeMahieu, Lowell is not on a contract and serves at the pleasure of the board.

Mollway said there is already precedent to undermine what the House bills intend to do. The University of Hawaii in 1985 offered an additional compensation package from private sources to M. Cecil Mackey, who had been selected as the new president. Subsequently the Ethics Commission issued an opinion stating that state law barred Mackey "from accepting funding from private sources because his salary was set forth in state statute," Mollway said.

Following the uproar over the panel's opinion and Mackey's decision to leave the university, the Legislature in 1986 unsuccessfully attempted to amend state law to allow the university president to receive supplemental pay from private sources.

Department of Education’s
utility oversight questioned

Star-Bulletin staff


State auditor Marion Higa has questioned Department of Education accountability and documentation for utility expenditures.

A report released yesterday recommends that the department rethink having each school pay electricity and telephone bills.

The Department of Education failed to develop clear objectives when it shifted responsibility for paying these bills from state level to individual schools earlier this decade, the report says.

Consequently, it's unclear what the department wants to accomplish, according to the report.

Benefits that might have resulted have not been apparent and school accountability has been compromised, Higa said.

Schools say they were not given support for the increased workload of paying utility bills, and some say they weren't given enough money to pay them, Higa said.

Higa recommended the department give lawmakers "a complete and accurate forecast of the department's electricity needs."

She said because the department's reports do not show complete and accurate utilities expenditures by location, a clear picture of such costs cannot be given.

Without specifics on utility costs, the department will be hard-pressed to defend its budget requests, Higa added.

"Finally, in fiscal year 1996-97 and fiscal year 1997-98, some schools did not receive sufficient allocations to cover their electricity costs," the report determined.

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