Fines may chill political gifts
By Kevin Dayton
Advertiser Capitol Bureau Chief
If there is a practical political lesson to be learned from the investigation into contributions to Honolulu Mayor Jeremy Harris' 2000 campaign, it may be this: In the campaign finance game, let the contributor beware.
In nine cases since November, the Campaign Spending Commission has fined companies that allegedly gave too much money to Harris, Gov. Ben Cayetano, Lt. Gov. Mazie Hirono and other candidates.
The fines ranged from a few hundred dollars to $64,000 in one case, but the public embarrassment to the companies, executives and lower-level employees who contributed may be even more telling.
Political observers said there has never been such a high-profile effort here to police campaign contributions, and it is scaring off potential contributors. A lawyer for the Harris campaign has said that the investigation is hurting Harris' ability to raise money.
"If I were a donor, if I were a construction company, I would be very careful. I don't want my name dragged through the mud," said Chad Blair, a Hawai'i Pacific University political science instructor and author of the book "Money, Color and Sex in Hawaii Politics." "I'm sure that's what's going to happen. You'll see people pulling their money out."
State law limits donations to $4,000 to a mayoral candidate and $6,000 to a candidate for governor in each four-year election cycle.
Since 1995, the state Campaign Spending Commission has had the authority to fine campaign contributors who gave more money than is legally allowed, but now the commission also has money to hire private investigators to trace links between corporations and individuals who contribute to campaigns.
Commission officials said that so far they have identified about 60 corporate and individual donors to Harris alone who appear to have given more than the legally allowed amounts.
Harris' response to the investigation isn't likely to reassure political donors. Harris contends that whatever went wrong, he didn't know about it, and that the contributors were responsible.
As Harris put it: "The whole campaign spending law is designed for the contributor. The law says the contributor is limited in how much he can contribute. It's against the law for the contributor to contribute too much. That's the reason they wrote the law that way, because there's no way for the campaign to know that you are somebody else's auntie and that somebody gave you a reimbursement for funds that you contributed."
All of this is unfolding in a political year when an extraordinary number of candidates are hungrily seeking contributions to fuel their campaigns, and businesses are hurting from the recession. In all, 127 people will be elected to office this year, with major campaigns waged for governor, lieutenant governor and mayors of Honolulu, Kaua'i and Maui.
Candidates traditionally are loath to admit they are having problems raising money for fear it will erode confidence in their campaigns, but some acknowledged that last year was an extremely difficult time to be fund-raising, and this year looks much the same.
Keith Kaneshiro, who is running for mayor of Honolulu, said he relies mostly on small contributors, but said he believes the investigation is also having an effect on fund-raising around Honolulu.
"Just recently because of the investigations and the publicity came out, I think people are getting nervous about contributing because they don't want to be subpoenaed, they don't want to be scrutinized."
Lt. Gov. Hirono, also a Honolulu mayoral candidate, said contributors will be cautious, making sure they understand the law and stay within it.
Hirono said she has always insisted her campaign "do things the hard way, it's the legal way."
"As long as they stay within the contribution limits, they have nothing to worry about, and it is their right to make political contributions and be involved in that way," she said. "So, I would hate for this whole thing to put a cloud over one's right to give legal contributions."
Phillip A. Li is a lawyer who represents several companies and executives being questioned by campaign spending officials, including the soil and foundation engineering firm Geolabs-Hawaii. Geolabs agreed this month to pay a record $64,000 fine to settle allegations that it violated campaign spending law.
Li said Geolabs executives believed they followed the law, but agreed as part of the settlement in the case that company officers and their spouses would refrain from making political contributions for four years.
Even without that agreement, Geolabs officials would probably be "very reluctant" to contribute to anyone, Li said. "They're afraid to give any money, and they're afraid to have their families give any money because they're not sure how it's going to be treated," he said.
Campaign spending officials alleged the company made more than $124,700 in illegal donations to Harris and other candidates, but Li said there are honest disagreements about interpretations of the campaign spending law.
"That's the problem, I think, from a contributor's standpoint, and right now I'm attributing totally innocent motive to the contributor because I think that's what you have to do," said Li, who was a member of the Campaign Spending Commission in the mid-1990s. "I mean, no one wants to really just hand out the money, right? They're doing it because they think they're allowed to do it, and because a request has been made for a contribution."
Campaign Spending Commission Executive Director Robert Watada said special interests, including the construction industry, are part of a long-standing system of campaign finance that involves "bundling" contributions. With bundling, large donors distribute money to company officials or their families so large sums can be directed to candidates as many smaller donations, allowing the companies to evade contribution limits.
"They know it's wrong, they don't like it, but it's the system and they're not about to buck it," Watada said. With the recent enforcement actions, "I suspect the bundlers are starting to understand. I think the word has gotten out very quickly."
In some cases, Watada said, the campaigns are a big part of the problem. "If I already went to you and you gave me (the legal limit of) $4,000, why do I go back to you again and ask you again?" Watada said.
He said he expects contributors to learn the law or ask his office when they aren't sure whether something is legal. "If you want to drive a car, you ought to be asking yourself: What are the rules of the road?"
Reach Kevin Dayton at firstname.lastname@example.org or 525-8070.