Regents detail possible conflicts of interest
By Beverly Creamer
Advertiser Education Writer
New attention is being focused on conflicts of interest among members of the University of Hawai'i Board of Regents in the wake of two recent disclosures — one from a regent who had accused another of a conflict, causing him to resign.
Ted Hong's disclosure of a potential conflict of interest was filed just two months after he accused former regent Everett Dowling of being in conflict over an Institute for Astronomy development on Maui, though Dowling had been cleared by the state Ethics Commission.
Dowling had recused himself from discussions on the project as the Ethics Commission required, but Hong and regent Kitty Lagareta called on board members to have a "higher standard."
On the same day Dowling resigned — July 3 — Hong filed a confidential disclosure that his sister, Lea Hong, was the attorney for the Office of Hawaiian Affairs in its suit against NASA and the university's Institute for Astronomy over the W.M. Keck outrigger telescope project on the Big Island.
"Our concern was to avoid any appearance of impropriety," Hong stated in his disclosure statement, which he released to The Advertiser last week. "As attorneys, we are held to a higher standard in terms of how we conduct ourselves and conform our professional conduct and personal behavior. ..."
Also, regent chairwoman Patricia Lee — part of a voting alliance with Hong, Lagareta and others — filed a disclosure several months ago that four contracts, currently worth more than $610,000, are in effect between UH and the law firm where she works, Goodsill Anderson Quinn & Stifel.
In one of those contracts, signed in 2002 — a year after Lee joined the board — two Goodsill experts in environmental law represented the university in the Keck case.
During the May regent debate over Dowling's involvement in the Maui proposal, Lee noted publicly that "the standard in the fiduciary world of trusts and estates (that she's part of) is much higher."
Dowling had been in line for the chairmanship. With Dowling's resignation, Lee became board chairwoman, with Lagareta vice chairwoman.
After their declarations of potential conflict, both Lee and Hong were told by board attorney Walter Kirimitsu that they must recuse themselves if matters regarding the Mauna Kea issue were to come before the board. Kirimitsu told both that as long as they do that, he saw no problem.
That has long been standard practice on the board of regents, with many regents from past years having belonged to companies holding contracts with the university.
However, Kirimitsu said last week that, at some point, the board will decide to address this issue anew and perhaps adopt a new standard.
Currently, the standard simply requires disclosure of a potential conflict when the board is considering any matter that directly involves a regent or family member.
Hong's disclosure of his sister's involvement in the Keck case was filed shortly before Lea Hong won her case against NASA and UH in federal court.
Federal Judge Susan Mollway ruled the university had filed a "flawed" environmental assessment, but did not order a full environmental impact statement. Lea Hong's contract with OHA ended then, and OHA spokesman Clyde Namuo said she recommended the agency pursue no further legal action.
Four months later — Nov. 4 — NASA voluntarily offered to prepare a complete EIS on the project.
In his disclosure, Hong said he gave his sister no information and received none from her.
Hong said last week he has always been concerned about the "cultural integrity of the mountain" and has made several public statements expressing concern "about the accountability and responsibility" of the Institute for Astronomy. They were based, he said, on information in the newspapers.
Hong's disclosure said that when he was appointed as one of Gov. Linda Lingle's executive staff in December 2002 (Lingle named him chief state negotiator) he and his sister "understood" that any matters concerning the Mauna Kea lawsuit "should not be discussed."
However, in May 2003, as his sister's case against NASA and the Institute for Astronomy was pending, Hong publicly accused the institute of "sloppy work" and "lack of professionalism" in preparing a proposal for a solar observatory on Maui that could potentially bring an $80 million to $100 million investment to that island.
And he accused Dowling of a conflict in that case — an accusation that led to Dowling's resignation.
In the Dowling case, the former Maui regent had offered two parcels of land he owned in Kula, Maui, to the university at a discounted price to develop a ground station to help lure the solar observatory.
A Dowling company formed to handle the project, Kulamalu Science, was offering to put the project out to bid and turn it over to the university when complete.
Before making the offer, Dowling filed a potential conflict of interest disclosure with the regents, went to the Ethics Commission for an opinion, and was advised to recuse himself from all board discussions on the project, which he did.
Meanwhile, Lee said her relationship with the Goodsill firm is only part time. She said she never works with the attorneys involved in the four UH contracts, rarely sees them and does not profit from the firm's business other than to receive a paycheck.
In a strong statement at the May regents' meeting, Lagareta that said if her company, Communications Pacific, was asked to do business with the university, she would immediately "step off" the board.
She said last week that she had also stated that she would alternatively refuse to take the work. And she said that when she knew she was being appointed to the board, she divested her firm of a client, Career Pathways, partially financed by the university.
"My company doesn't need work that badly," she said.
After Dowling resigned she said: "We don't want even the appearance of a conflict."
This week Lagareta said there is a world of difference between the Dowling case and Lee's situation.
"Pat has declared what her firm works on so there's no conflict of interest," Lagareta said. "And she has no direct financial interest as an employee. I'm clear (that) she is very clear about the lines not to cross."
Lagareta said the new regents "are saying, 'Look, we want to be real clean.' "
Dowling declined to comment for this story.
Reach Beverly Creamer at bcreamer@honoluluadvertiser.com or 525-8013.
