Saturday, June 9, 2001

Hawaii State Seal

State questions
Waihee spending

A $15,000 donation to the
Democratic Party hasn't
been explained

By Richard Borreca

In 1999, former Gov. John Waihee spent the last $2,899 left in his campaign treasury and closed the account. Then in 2000 he donated $15,000 from his defunct committee to the Democratic Party.

The state Campaign Spending Commission has informally told Waihee's accountant to submit reports explaining the reports, but so far, no action has been taken to clear up the discrepancy. A Waihee campaign official suspects accounting errors.

Bob Watada, Campaign Spending Commission executive director, said the contribution and the failure to file a report appear to be an honest oversight by the committee.

"We told them, 'Hey, you better get your report in,' and they were very apologetic, but so far, nothing has come in," Watada said.

Glenn Sakuda, treasurer for Waihee's campaign organization, Citizens for Waihee, said he has been working with Watada to resolve the accounting differences.

Reports to the commission, however, show a discrepancy between Waihee's filings and those of the Democratic Party.

The Democratic Party in a report filed last December shows a $15,000 donation on Nov. 2, 2000, from Citizens for Waihee. The party took in $25,500 during that Oct. 24-Nov. 7, 2000, period.

But a year and a half earlier, on July 30, 1999, Waihee's campaign organization reported that it had spent the last $2,898.98 in its campaign. It reported that the money was all that remained from money left over from Waihee's previous campaigns for governor.

Waihee served as governor from 1986 to 1994. During that period his campaign reports show that he raised more than $5.4 million.

Waihee's December 1995 report shows that he had raised $5,373,841.21 and spent $5,254,910.34 with a remaining surplus of $118,930.87. The report noted that the Waihee campaign's cash balance was $53,199.41.

In the next report, filed in June of 1996, Waihee reported the same cash balance, but the new report did not make any mention of the nearly $120,000 surplus.

"I imagine there must have been various accounting errors from different sources," Sakuda said.

He explained that various software changes could have caused the committee to drop the surplus.

Waihee's committee, however, continued to exist, although there was no record of the former governor collecting any more money.

Then changes to the campaign spending law in 1999 forced politicians to get rid of their funds if they had not run for office in the previous four years.

Watada wrote to candidates including Waihee and explained that their funds either had to be returned to the contributors or given to any "community service, education, youth, recreational, charitable, scientific or literary organization."

If that was not done, the money would be turned over to the Hawaii Election Campaign Fund.

Waihee made contributions to several charities and submitted a report saying the balance was down to zero.

But Watada said he noticed around the same time that the state's Budget and Finance Department was reporting that several bank accounts for Citizens for Waihee were about to be closed because there had been no activity for several years. Watada questioned Waihee's committee about why there were still bank accounts from a committee that was supposed to have been closed.

Sakuda said the committee had other accounting problems with refunds given to foreign donors who had contributed to the campaign.

Foreigners and foreign corporations cannot contribute to any U.S. elections, according to federal law.

But Sakuda said, according to Watada, that the checks sent to the foreign donors were never cashed, so the money remained in the Waihee account.

The same thing happened with some firms that performed services for the Waihee campaign; the checks to pay for the services were not cashed.

So besides having several forgotten bank accounts, Sakuda explained, Waihee's campaign also actually had more real cash than the accounting books showed.

Last October, Watada demanded that Sakuda show the campaign bank books and checking accounts to him. They showed that the Waihee campaign actually had $63,000 in a First Hawaiian Bank checking account, $2,300 from an inactive account and almost $15,000 in a Bank of Hawaii checking account.

All totaled, the Waihee account, which was supposed to be been depleted in 1999, actually had $80,281.

Watada said the money could be dispersed according to law and said the campaign should give the state election fund $5,000, which was called an "administrative assessment."

"He (Watada) felt that some of the money should come to the elections fund, and that was the amount," Sakuda said.

He said he did not consider it to be a fine, and Watada said it was not being called a fine.

Watada said he was asked if some of the money could go to the Democratic Party, and he said yes, because it was a nonprofit organization.

The commission, however, has not yet received any report from Waihee or Sakuda noting the $15,000 was given to the Democratic Party.

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