Campaign finance bill off to Senate after House OK

By Johnny Brannon
Advertiser Staff Writer

Gov. Linda Lingle's proposals to restrict political contributions from some special interests and create tough new bribery laws are all but dead in the Legislature.

But a major campaign finance overhaul bill sponsored by House Democrats has passed that chamber and advanced to the Senate, and other campaign-related measures also remain alive.

House Bill 284 would create a range of new restrictions, including:

• prohibiting major government contractors from making campaign contributions;
• banning direct contributions from businesses and labor unions;
• making it a felony to falsify campaign finance reports to circumvent contribution limits;
• reducing the amount of money supporters can give candidates for some offices;
• barring poll watchers from using information gathered at polling places for partisan purposes.

Proponents say the changes are long overdue and would restore integrity to a system that many view as inherently corrupt.

"It's clear that the current system of campaign finance doesn't make the public confident that decisions are made on their merits," said House Majority Whip Brian Schatz, D-25th (Makiki, Tantalus).

The bill, which is awaiting hearings in two Senate committees, has drawn support from such groups as the League of Women Voters of Hawai'i and the Hawai'i Pro Democracy Initiative.

But others caution that the legislation has serious loopholes.

"It's been watered down a lot," said Robert Watada, state Campaign Spending Commission director. "Once you start making exceptions you run into trouble, and pretty soon it doesn't apply to anybody."

The ban on donations from contractors wouldn't apply to owners or officers who control less than 25 percent of the company's stock.

"That's leaving a huge loophole right there," Watada said. "It wouldn't apply to the vast majority."

The stock of few large companies is so concentrated, he said, and ownership structures and partnerships can change frequently.

"On a given day, who owned what? It's putting in language that is subject to so much interpretation," he said.

A better idea is a flat ban on donations from people who hold key positions in contracting firms, such as owners and directors, Watada said.

"If you're getting a benefit from a government contract and taxpayer money, you shouldn't be paying your way in to get that money," he said. "That's the evil we're trying to stop: pay to play."

Previous measure vetoed

The Legislature last year approved a ban on direct contributions from businesses and unions, and barred awarding of government contracts to people who donated to candidates for certain offices.

But former Gov. Ben Cayetano vetoed the measure, saying lawmakers had unfairly exempted themselves from the ban on money from contractors. The present bill does not allow that exception.

"We wanted to make sure we included ourselves, although the reality is that legislators don't give out contracts," Schatz said.

Lingle's stalled campaign finance proposals would also ban donations from contractors. Her other proposals would prohibit government officials from accepting most gifts, and require mandatory jail time for bribery convictions.

But the Republican governor's bills haven't moved in the Demo-crat-dominated Legislature since the first days of this year's lawmaking session and aren't likely to be revived.

Her senior adviser, Randy Roth, said the administration remains hopeful that the Legislature will at least outlaw campaign money from contractors.

"The governor doesn't care if it's formally her bill or someone else's bill as long as it accomplishes what needs to be accomplished," Roth said. "In order for a democracy to work, there has to be more trust and confidence in government than there currently is. She thinks what's critically important is that any concerns that the public might have about contributors having an inside track on nonbid contracts, that those doubts be eliminated by severing completely the existing tie between contributions and non-bid contracts."

Roth acknowledged that the bills related to gifts and bribery appear dead, however.

"It's a shame, because I think people understand that there's something very, very wrong with government employees, especially government officials, accepting large gifts," he said. "There's no good reason to allow it, there are compelling reasons to prohibit it, and the governor has proposed what I think anyone on the street would perceive as a common-sense way of dealing with the issue, and the Legislature killed it."

Some lawmakers said the measures went too far, and that certain gifts should be allowed as long as they are disclosed to the state Ethics Commission.

The House campaign finance bill is competing with another measure, sponsored by Sen. Cal Kawamoto, that has generated controversy and been amended considerably.

The bill would bar contributions from contractors, but would allow them to make unlimited donations to political action committees.

The legislation, which has passed the Senate, would also allow candidates to hold an unlimited number of fund-raising events. The law now allows two fund-raisers per election cycle.

Changes still possible

Another provision would allow candidates to grant more money from their campaigns to charities and community groups. Watada and other critics of the proposal say it would allow candidates to set up phony groups for campaign purposes or reward those whose members provide political support.

Some of those provisions have been stripped out of the version that House lawmakers are review-ing, but Kawamoto said it could still be changed further.

Kawamoto, D-18th (Waipahu, Crestview, Pearl City), blasted Watada's criticism, and said his main concern is that the bill should make the rules as clear as possible.

"Mr. Watada is not a policy-maker, he's a policy-interpreter, and he's been inconsistent in his interpretations," Kawamoto said. "We've got to be fair to everybody."

Kawamoto is under investigation by Watada's commission for allegedly exceeding limits on campaign donations to charities. Kawamoto denies wrongdoing.

Another provision in the House bill would limit donors to giving no more than $2,000 to any candidate for state or county office during a single election period.

Present law allows candidates for mayor to receive up to $4,000 from each donor, and lets gubernatorial hopefuls collect up to $6,000.

But the bill also defines election periods as "the two-year period between general election days." Since election periods for mayor and governor are considered to be the four years before an election for those offices, the change will double the $2,000 limit for those offices.

That means mayoral candidates could still collect $4,000 from each donor, and the top donation to candidates for governor would be reduced to $4,000.

One of the more partisan components of the bill is the restriction on poll watchers.

Republicans made a concentrated effort in the last election to review precinct voter rolls and telephone those who had yet to cast a ballot.

The efforts were legal because the calls were made away from polling places, but Democrats are still smarting from the tactic, which helped Lingle win the election.

The bill would make it a misdemeanor for any election official or watcher to use for partisan purposes "any information obtained in the course of performing their responsibilities" on Election Day. Republican lawmakers have argued against that provision.

"It's absolutely incredible sour grapes," said Sen. Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai). "Techniques the Democrats used for years were used effectively by their opposition, and suddenly it's unfair."

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