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The Honolulu Advertiser
Posted on: Sunday, June 30, 2002

Bank ceases political donations

By Lynda Arakawa
Advertiser Capitol Bureau

First Hawaiian Bank will no longer make contributions to political candidates because the existing way of paying for political campaigns is "broken," chairman and chief executive officer Walter Dods said.

Dods' announcement follows Gov. Ben Cayetano's veto last week of a campaign finance reform bill that would have limited corporate and union contributions to Hawai'i politicians. Cayetano said he vetoed the measure because it exempted legislators from a ban on contributions from government contractors.

"That particular bill may have had its flaws," Dods said in a written statement released today. "However, its heart was in the right place — attempting to reduce contributions from unions and corporations, especially government contractors and vendors.

"The system is broken. It's an invitation to cynicism about the election process itself and the participants. The public always assumed the worst: that elected officials are in the pocket of special interests and contributors are getting preferential treatment."

The step by First Hawaiian is largely symbolic since its campaign contributions have averaged only about $25,000 a year to candidates of both major parties, although most of the money has gone to Democrats. The average candidate in the last election cycle received about $500, the bank said.

Most of the criticism about Hawai'i's campaign finance laws have focused on the businesses that are dependent on government contracts and make the most donations to public officials who decide where money is spent. In recent months, the state Campaign Spending Commission has fined contractors, engineers and consultants who bid on public contracts and who improperly gave money to candidates for state and local offices.

While some campaign spending reform advocates praised First Hawaiian Bank's new policy, they did not expect other companies to follow.

"I think the bank has taken a strong stand in favor of campaign finance reform, but we can't expect every company and corporation to regulate themselves in the area of campaign finance and that's why we need stricter laws," said House Majority Whip Brian Schatz, D-24th (Makiki, Tantalus), one of the House's strongest advocates for campaign finance reform. "What they did was great, but it's no substitute for campaign finance reform."

Nikki Love, president of the Hawai'i Elections Project, said: "I don't know if in terms of quantity it makes that much of a difference, but at least it's a statement. It sends a message."

Still, some said First Hawaiian's decision is an important first step.

The bank's contributions have gone to candidates running for offices ranging from the Honolulu City Council and the state Legislature to the Office of Hawaiian Affairs and the governor. In the last election period, the bank contributed to more than half of the 76 state lawmakers, usually in amounts totaling no more than $500.

Dods said the new policy will not prohibit employees from personally contributing to or working for a candidate. "In fact, I hope they'll continue to do so," Dods said.

Dods, who has played a large backstage role in Democratic political campaigns and was considered running for governor until he announced last week that he was not a candidate, said he will probably continue to offer personal and financial help to candidates he supports.

Gerry Keir, executive vice president for corporate communications at First Hawaiian, said the bank will continue making donations from its political action committee, which is funded by employee contributions. The political action committee will continue to limit its contributions to candidates for Congress and for national office and will not donate to candidates for county or state office.

Bank of Hawaii for decades has maintained a policy of not making corporate contributions to campaigns, said bank spokesman Stafford Kiguchi. He said employees may make voluntary donations to the bank's political action committee, which contributes to candidates.

According to filings with the state Campaign Spending Commission, Bank of Hawaii's political action committee contributed about $106,800 in the two years preceding the 2000 election. Like First Hawaiian, the political action committee has donated to a range of candidates in both the Democratic and Republican parties and contributed to more than half of the members of the Legislature.

Campaign spending reform advocates have said political action committees are a better alternative to contributions directly from companies and labor organizations because there is more transparency in the process.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 525-8070.