Posted on: Monday, April 15, 2002
COUNTERPOINT
Power of Outrigger Hotels
By Robert M. Rees
Founding Father James Madison, in Federalist No. 10, famously noted that the origin or basic cause of self-seeking interest groups, human greed, cannot be eliminated, but that representative government can control the harmful effects of such factions.
Madison evidently never imagined either the likes of Outrigger Hotels & Resorts or the sort of legislative docility and self-seeking to be found in Hawai'i. Outrigger's list of legislative accomplishments, ranging from the Convention Center to tax credits, is nearly legendary. Its clout extends from the state Legislature to the City Council, and even to the Waikikii Neighborhood Board.
Most recently, Outrigger actually convinced the City Council to brandish about, on behalf of Outrigger, its power to condemn private property. Outrigger's lobbyist and director of industrial relations, Max Sword, even persuaded newly elected council member Ann Kobayashi to support the idea in spite of her public campaign vow last September to oppose it. (Kobayashi now says her vote was based on a misunderstanding of the council process.)
One of Outrigger's greatest lobbying feats was to help persuade the Legislature, in 1998, to create the Hawaii Tourism Authority. The HTA concept, from a self-interested point of view, was brilliant. It was a way to deliver more taxpayer money under less scrutiny into the hands of private interests.
The industry, led by Outrigger, scrambled to make sure the right people got on the HTA board. In the end, 11 of the 13 members selected by the speaker of the House, the president of the Senate and the governor had connections to hotels and to the tourist industry.
Then-House Speaker Joe Souki had developed a special relationship with Outrigger — earlier he had put Sword on the Judicial Selection Commission — and at the top of his list of HTA nominees was W. David Carey III, Outrigger's president and CEO.
With Carey in charge of marketing expenditures for the board, there followed four years of unprecedented taxpayer largess. Over $61 million was doled out each year, and even the cash-rich "private island" of Lanai got $25,000 for a Pacific Open Clay Shoot.
Unhappy with what was happening, Gov. Ben Cayetano decided that the HTA board needed some independent members — people like former senator Mike McCartney — and determined to take advantage of the approaching term expirations for four board members in June of this year.
Making it clear that he did not want to reappoint Carey, Cayetano asked House Speaker Calvin Say for a list of nominees to Carey's position. Say, who acknowledges he grew close to Outrigger when it supplied his Finance Committee with what he calls "well-trained interns," sent only one name to the governor, that of Carey.
In March, Cayetano's office informed Say that the law requires three nominations. In response, Say sent over the names of Carey, Mel Kaneshige and Joy Uchida. All three have in common that they are employed by Outrigger. Say defends this and asks, "What's wrong with Outrigger?"
The irritated governor has instructed the attorney general's office to look into how the procedure is being used. It's unlikely that even our AG's office will be able to find what Cayetano seeks, grounds for claiming an unconstitutional abridgement of executive power.
The more likely alternative is that Cayetano will not appoint anyone, thereby leaving the incumbent, Carey, in place for one more year.
In the meantime, confident of the outcome, the HTA has formed a selection committee to hire a new executive director to work for the board. The HTA is resisting Sen. Donna Kim's idea that the state Senate get involved by confirming the next director.
Even though a few legislators are aware of what Say and Outrigger are doing, no one is saying much. These same solons, however, continue to express surprise that the governor doesn't seem to trust the Legislature.
Robert M. Rees is moderator of 'Olelo Television's "Counterpoint" and Hawai'i Public Radio's "Talk of the Islands."
