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The Honolulu Advertiser
Posted on: Tuesday, February 5, 2002

Attorney General's wife lobbied for airline merger

By Johnny Brannon
Advertiser Staff Writer

The wife of state Attorney General Earl Anzai lobbied last year on behalf of Hawaiian Airlines, which is seeking state approval for a merger with rival Aloha Airlines and reported spending more money on lobbyists last year than any other company in the state, according to records filed with the state Ethics Commission.

Attorney General Earl Anzai decided that it isn't proper to take part in the review of the merger.

Advertiser library photo • Jan. 3, 2001

But Anzai, whose office is reviewing the merger plan, said he had recused himself completely from the review when he first learned of the proposal because his wife's involvement with the company would otherwise pose a clear conflict of interest.

"It's such an obvious conflict that it would be ridiculous for me to be involved," he said. "It's like being partially pregnant. It's one or the other. I'm either involved or I'm not involved."

Three reports that cover different periods of 2001 show that Hawaiian spent nearly $185,000 to lobby state lawmakers that year, and that Anzai's wife, Lyn Anzai, was paid $104,467 for lobbying work from March through December.

A Hawaiian Airlines spokesman said yesterday, however, that the company incorrectly calculated figures supplied in the lobbying expenditure report it filed with the commission on Friday. He said the correct figure for lobbying was less than $10,000 and that the company would be filing an amended report.

"There's no way Hawaiian should be at the top of the list," company spokesman Keoni Wagner said.

Hawaiian and Aloha announced in mid-December that they would seek to merge because the Sept. 11 attacks and the travel slump that followed had threatened their survival as competitors.

Lobbying a small part of job

Opponents fear a merger would leave a monopoly that produces high ticket prices, poorer service, and a loss of jobs. Gov. Ben Cayetano has announced tentative support for the plan, pending a review by Earl Anzai's deputies in the attorney general's office and by the U.S. Justice Department.

Lyn Anzai, Hawaiian Airlines' general counsel since 1997, said she also took on the role of lobbyist last year because the company and Aloha Airlines were seeking excise tax exemptions for leased aircraft, which the Legislature and governor approved. She said she has also helped lobby for the merger.

She said the $104,467 cited in the reports as payments to her reflect nearly her entire annual salary, but that she spent only a fraction of her time lobbying lawmakers on the excise tax or the merger.

"This is unbelievable for the amount of time I spend at the Legislature," she said. "I don't know how they came up with this number. This is greatly distorted, because I'm not spending that much of my time as a lobbyist."

Practice of stepping aside

Earl Anzai has had to refrain from other state legal work in the past because of his wife's occupation.

When Cayetano appointed him in 1999, Anzai briefly recused himself from matters related to the Bishop Estate because Lyn Anzai had worked there as an attorney and the couple's children worked as clerks at a law firm that represented the estate.

The Hawai'i Supreme Court's Office of Disciplinary Counsel and the Ethics Commission later found no conflict of interest in that situation.

In documents filed with the Ethics Commission, Aloha Airlines reported spending no money on lobbyists last year. But Hawaiian Airlines also donated $20,000 last year to a foundation that is restoring Washington Place, the official residence of the state's governors, records show.

Sen. Sam Slom, R-8th (Wai'alae Iki, Hawai'i Kai), said the attorney general's office should have clearly indicated during a Senate hearing on the merger last month that Earl Anzai had recused himself from the review.

"It makes it neater and cleaner, and then you don't have to worry about whether there's a problem," said Slom, who opposes the merger. "I think the most unfortunate part is if the attorney general recuses himself, he doesn't have the ability to look at the proposed merger in detail. But the issue fails on its merits regardless of how much they spend lobbying and who they've got on their payroll."

Impartial review anticipated

Earl Anzai said Deputy Attorney General Thomas Keller will supervise the review, and a spokeswoman said Cayetano is satisfied with that arrangement.

"The attorney general has recused himself from any matter regarding the Hawaiian and Aloha airlines merger and the governor is confident that state attorneys will conduct an impartial review of this merger," said Kim Murakawa, the governor's press secretary. "He does support the merger at this point, based on the information he's been provided about their economic situation."

On Thursday, when the lobbyist expenditure statements were due, more than 140 groups reported spending a total of $919,132 lobbying between May and December.

The biggest spender that filed on time was the Western States Petroleum Association, which spent more than $111,000 during that period and is fighting legislative attempts to regulate the price of gasoline.

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