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The Honolulu Advertiser
Posted on: Wednesday, August 28, 2002

Inquiry coverage unfair, Harris says

By Johnny Brannon
Advertiser Staff Writer

Mayor Jeremy Harris said media attention to campaign contributors and city contractors who donated to a 1999 environmental conference the city helped pay for have unfairly maligned an important and successful event.

Mayor Jeremy Harris asked for fair reporting on the 1999 environment summit.

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"The stature it's given the city and its impact on economic development seems to be left out of the story, and I don't understand why we can't get some fair reporting on something as important as this," Harris said during a brief interview at City Hall yesterday.

Harris has repeatedly declined requests to be interviewed about the Mayors' Asia-Pacific Environmental Summit and a nonprofit group that received $100,000 in public money for the event. He said yesterday that he had been content to let others field questions, and he declined to comment further.

Prosecutors have interviewed City Council members about the money and the group, Friends of the City and County of Honolulu, which is headed by Harris' chief political campaign fund-raiser, Peter Char.

Contributors have included at least two companies with employees who have been subpoenaed to testify next week before an investigative grand jury that will review evidence about campaign contributions and city contracting.

Char also heads a second nonprofit, the Environmental Foundation, which raised money for the 1999 event and subsequent summits. The foundation had assets of $1,244,458 by June 2001, according to its most recent tax return, and its total expenses were $35,127 that year.

The group was formed to support conferences, forums, studies and educational programs concerning the environment in Hawai'i and the Pacific Rim, according to tax statements.

The Friends reported assets of $134,890 by November 2000, but has yet to file a more recent return. The group's accountant said information for the return is still being gathered, and that it had received a time extension from the Internal Revenue Service.

The Friends was formed "to lessen the burden of government through monetary support of governmental activities, according to its tax returns. State incorporation documents say that the group's purpose "to pay for nonpartisan events, receptions or functions of the City and County of Honolulu or to supplement city funds for such events with the approval of the mayor's office."

Harris had declined for several days through a spokeswoman to comment on whether he believed the Friends should make its contributions and expenditures public to clear the air. A Colorado tax attorney who is on the board of directors of both groups, Michael Shea, has begun releasing financial information about them, however.

The tax returns disclose limited details about the sources of the groups' income. But a breakdown of financing for the 1999 summit, provided by Shea, shows that donors to the event included several engineering firms from Hawai'i that contracted with the city and gave to Harris' past two campaigns. Companies and an environmental group from Japan also contributed.

The summit was widely praised for bringing together ranking public officials from throughout the Pacific Rim to share information about pressing environmental and economic concerns. Then-Vice President Al Gore delivered the keynote address via satellite video, and commended participants for seeking cooperative solutions.

Harris' attorney, William McCorriston, said the fact that companies donated to Harris' campaigns, were awarded city contracts, and gave money to the tax-exempt, nonprofit groups shows only that they engage in civic affairs and politics. He blasted prosecutors for "smearing" the mayor with the probe.

"If city folks want to raise money for a noble purpose, who are they going to go to?" said McCorriston, who is also representing the Friends and foundation. "Only in Hawai'i is there such an insular and vindictive mentality that we go after charities. It's turning out to be that everything good that Harris has done, they're taking a pot-shot at."

It is not unusual for Char to serve as president of the Friends and foundation as well as be active in Harris' campaigns, because Char is a proven fund-raiser and attorney with expertise in nonprofit tax matters, McCorriston said.

He said it is also not unusual for the foundation to have more than $1.2 million on hand because the events it produces are expensive are reoccurring.

"They have a summit every other year, and they cost over a half million dollars each," he said. "They're very expensive to put on. They bring in people from throughout the world."

But the tax returns show the foundation raised much more money than it spent.

The group reported spending just $23,000 on the 2001 summit, which was attended by more than 400 delegates from 28 countries, but raised $634,000 that year.

The foundation reported $68,248 in expenses for the year that ended in June 2000, but also received a $30,000 reimbursement from the city for expenses related to the 1999 summit. The group reported $140,551 in expenses for the year ending in June 1999, and $718,027 in revenue.

Shea said he is scheduled to be interviewed by prosecutors soon and will cooperate fully. He could not be reached late yesterday for further comment about the foundation's assets. Char has been receiving medical treatment and been unavailable to comment.

Char's wife, Lynette, the third member of each group's board and the deputy director of the city's Enterprise Services Department, could not be reached for comment. City deputy managing director Malcom Tom served on the Friends' board at one time but no longer does, Shea said.

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