Summit secrecy charged
By Johnny Brannon
Advertiser Staff Writer
City Councilman John Henry Felix said he and other council members have long questioned Mayor Jeremy Harris' administration about how public and private money was used for a 1999 environmental conference that has become one focus of a wide-ranging criminal probe.
But the administration stubbornly refused to provide details of how $100,000 in taxpayer money was spent on the event by two tax-exempt groups headed by Peter Char, Harris' chief political fund-raiser, Felix said.
"We have no idea to this day how this money was spent specifically, and it may be all above board," he said. "But why would they transfer money without council approval to a nonprofit that for all intents and purposes is controlled by the administration?"
Administration spokeswoman Carol Costa said records of city expenditures for the event have long been on file at City Hall and can be reviewed by Felix or anyone else. The council appropriates money every year for special events held by private groups, she pointed out.
Once the council agrees to place money for an event in the city budget, council approval is not needed when the money is released to a nonprofit group that produces the event, Costa said.
Felix said the Mayors' Asia-Pacific Environmental Summit is different because it is packaged as a city event, and he questioned why private donations for the summit, including some from businesses that contract with the city or donated to Harris political campaigns, should not have been disclosed as gifts to the city.
"The administration's unwillingness to come forward, and the officers of the (nonprofits) to come forth is very distressing," Felix said. "They should make complete disclosure and agree to handling such transactions as specified in the city charter, and not through devious tactics that circumvent what was meant to ensure that all monies are spent appropriately."
Harris' attorney readily provided a breakdown of the public expenditures to reporters who inquired after learning of the investigation. The City Hall documents for the summit account only for the public money spent on the event, but not the source of private contributions to the nonprofits.
Of the $100,000 total, $35,000 went from one of the nonprofit groups, the Friends of the City and County of Honolulu, to the Hilton Hawaiian Village for an audio visual presentation. Another $30,000 went to the second nonprofit, the Environmental Foundation, and the rest went for smaller expenditures such as entertainers, lei, and printing.
Costa said it is "absurd" to suggest that people who wish to contribute to charities for the many events that are co-sponsored by the city must first receive council approval for their gifts.
Council budget chairwoman Ann Kobayashi said she hopes the city and nonprofit groups can find common ground so that donations for city-backed events are fully disclosed.
"It should be made public, because I think it's a gift to the city when they give to an event," she said. "If you're raising money to help the city, that's not really a private company. It's kind of a gray area, and we should keep it clean."
Harris' attorney, William McCorriston, said all public money spent on the summit had been fully accounted for, and city budget director Chris Diebling agreed.
But Harris has repeatedly declined to say whether he believed the financial transactions of the nonprofits involved in the summit should be made public. The groups have begun releasing such information because, they say, there is nothing to hide.
Michael Shea, a Colorado tax attorney and board member of each group, said he was not aware that City Council members had inquired about the groups or the city expenses for the summit.
He said major international agencies that helped produce the conference, such as the U.S. Agency for International Development and the Asian Development Bank, do not typically provide money directly to city governments for such events, to minimize the chance that it will be politicized or misused.
"They'd rather give it to an organization they trust," Shea said.
Karl Hausker, a Washington, D.C., environmental policy researcher and co-chairman of the environmental summits, also said there is no reason for secrecy, and that he was confident money for the summit had been handled properly.
Hausker, a consultant to the U.S. Agency for International Development for the summits, said he had discussed the situation with several other main organizers of the events, "and we all said there's nothing at all askance with what's been going on with this thing, so let's be as transparent as possible."
Prosecutors are investigating Harris' campaign fundraising practices and the awarding of city contracts, and are scheduled to convene a grand jury next week.
Several firms that contributed heavily to Harris' past two mayoral campaigns and were awarded lucrative city contracts were also contributors to the 1999 summit, and employees of two of the companies have been subpoenaed to testify before the grand jury.
Hausker said it is not unusual that Honolulu engineering and consulting companies would contribute to the summit because they perform services that foreign delegates to such events often need.
"We're always looking for all the help we can get, and there's never any strings attached to the money," he said.
Neither Shea, Costa or other city officials could immediately say how much taxpayer money helped finance a second summit, held in 2001, or what it had paid for. Costa said the council had appropriated $406,000 for the event.
Shea said neither of the nonprofit groups had a contract with the city in 2001 to receive any money, as the Friends had in 1999, but that he believed the city had reimbursed the foundation for some expenses. Costa said the city had instead paid directly for some of the event's expenses.
The city budget for the current fiscal year includes $100,000 for a 2003 summit, and Costa said the money will not be provided to a nonprofit, but will be spent directly by the city for the event.
