Harris probe puts focus on rules, calls for openness

By Johnny Brannon
Advertiser Staff Writer

Questions that prosecutors have raised about how the city transferred public money to a private group for an environmental conference show that clearer rules and more openness are needed for handling such transactions, some City Council members and clean government activists say.

But Mayor Jeremy Harris' lawyer said $100,000 the council appropriated for the 1999 Mayors' Asia-Pacific Environmental Summit has been fully accounted for, and he questioned why investigators have singled the event out for scrutiny.

"Unless they're investigating the Honolulu Symphony and everyone else who accepts money from the city for noble services, the motivational question is, why are they picking on us if this is not a smear campaign?" attorney William McCorriston said.

City deputy prosecutor Randal Lee, who is heading a probe of Harris' campaign fund-raising activities and city contracting, would not say why investigators had also interviewed council members about the environmental conference. He also would not comment on McCorriston's allegation of a smear.

"I'm not going to get into a war of words with anyone," Lee said. "We're doing our job as thoroughly as possible."

Prosecutors have subpoenaed more than a dozen witnesses to testify next month before an investigative grand jury, including current and former members of Harris' cabinet and officials from companies that were awarded nonbid city contracts.

Councilman Jon Yoshimura said that when the council voted to allocate money for the conference, it was not explicitly clear that the $100,000 would go to the Friends of the City and County of Honolulu to host the event.

But such details are rarely discussed when the council appropriates money for celebrations and special events, and no one questioned exactly who would handle the money, he said.

"Those kinds of questions don't usually come up," Yoshimura said. "It's just assumed that the money would be given in grant form to the group putting on the event. As long as the money was used to pay for the event, then it served its purpose."

But he and others said the city should tighten its rules for handling events in which the city is an official sponsor, so that taxpayers have a clear understanding of where the money goes.

"If it's going to be a city-sponsored event, we should have some accepted procedure for who handles the money," he said.

The Friends group was incorporated in 1995 as a private nonprofit corporation, and is headed by Peter Char, the chief fund-raiser for Harris' 2000 re-election campaign and his aborted campaign for governor. Contributors to the group have included people and companies that do business with the city and who have donated to Harris' political campaigns.

Harris called in 1999 for the Friends' contributors and expenditures to be publicly disclosed after other officials questioned why a group formed "to lessen the burden of government through monetary support of governmental activities" should keep its dealings secret.

McCorriston released a full breakdown of what the city money paid for at the environmental summit, but said he would consult with the group's directors before deciding whether to release more recent details about money the Friends handled.

The mayor would not comment on the group Friday, and spokeswoman Carol Costa said she did not know whether Harris favored publicly disclosing its financial activities since 1999.

Larry Meacham, spokesman for the clean-government group Common Cause Hawai'i, said it was in the public's interest to know who gave money to a group so closely aligned with government.

"It's good that people are trying to do good for the city and they should be commended for the public service components," he said. "But let's just make sure it doesn't result in favors given or some unfairness in how the city's business is conducted."

Costa said Harris played no role in setting up the Friends, and that it was up to the group to decide whether to open its financial records to the public. She said the Friends does not routinely provide the city with that information.

"They have received no additional city money, so there would be no reason for them to do that," she said.

Acting city budget director Chris Diebling said the group had fully complied with a contract it signed with the city to accept the $100,000 for the environmental conference, and that he did not recall anyone questioning the arrangement in 1999.

A program from the event lists additional sponsors as the Center for Strategic and International Studies; the Asian Development Bank, the U.S. Agency for International Development and other agencies.

Michael Shea, a tax attorney and member of the Friends' board of directors, said other donors for the event included Honolulu companies who participated.

"A lot of the contributors were environmental firms and consulting firms who would like to have all these people come to the conference and would probably like to get some business out of it," he said.

He said he saw no reason why the Friends' contributors should be kept secret, but would review the group's files to see whether any grant agreements required anonymity. He said Harris had supported setting the group up but did not involve himself in its internal activities.

"He did not have a direct hand in establishing it, but the environmental summit is clearly one of his pet projects," Shea said.

He said the group had never engaged in campaign activities, despite Char's role in Harris' campaign and the Friends.

"If we spent a nickel on a campaign, I'd like to know about it because we'd go get that nickel back, because that's not what we do," he said. "We don't engage in political activities."

There are private groups in many cities that help raise money to host foreign dignitaries, pay for special events, or buy equipment that cities need but can't afford, he said.

Former Mayor Frank Fasi said a private group that raised money for civic groups and events during his tenure had never accepted taxpayer money from city government.

Council budget chairwoman Anne Kobayashi said she would call a hearing to examine city procedures for dispersing money for special events, so that improvements could be made if necessary.

"I think we need to clear this up," she said. "Anything connected to a government event certainly should be made public."

Kobayashi complained that the administration had been slow earlier this year in providing details about expenses for the popular "Sunset on the Beach" and "Brunch on the Beach" events, which are also hosted independently but rely partially on city money.

"Whenever I ask questions, the administration immediately thinks I'm against the event, but I just want to know how the money is spent and where it's coming from," she said. "I don't know why they're so reluctant to talk about the expenses."

Reach Johnny Brannon at 525-8070 or jbrannon@honoluluadvertiser.com.