Posted on: Friday, September 19, 2003

Mixing private, public money may violate ethics code

By Jim Dooley
Advertiser Staff Writer

State Ethics Commission executive director Dan Mollway said that by combining money from private sources with public money to pay for the salaries of public employees, these contracts may not meet legal restrictions of the state Ethics Code.

"The commission has never dealt with this issue before," Mollway said yesterday.

"If it is a situation where money donated from private sources is specifically earmarked for the benefit of a state employee, then that could be a matter that falls within the jurisdiction of the state Ethics Commission," Mollway said.

The University of Hawai'i's contract with football coach June Jones, which UH made available to the news media yesterday, says he will be paid $400,008 annually by the university. Separately, the UH Foundation said in a press release that it will "partially fund" Jones' contract through private donations to the foundation.

However, Betsy Sloane, president of the UH Foundation, said last night that the donations received by the foundation cannot be earmarked for the benefit of a specific individual like Jones. Sloane said donations go into a football support program, which the athletic department administers.

UH Athletic Director Herman Frazier said in June that private donors would pay half of Jones' $800,016 contract.

In January, Ethics Commission director Mollway questioned Gov. Linda Lingle's plan to seek private financing to pay part of the salary of a tourism official in her office. Mollway said at the time that anyone in government seeking to solicit private money for a state position should ask for an advisory opinion from the commission.

Mollway declined to say yesterday if the university, Jones or the UH Foundation had checked with the commission on the propriety of the coach's salary arrangement before the paperwork was signed. Mollway was talking generally about the issue of private contributions to the salaries of public employees, and not specifically about Jones' contract.

Sloane said the UH Foundation is a private, nonprofit organization and was not obligated to check with the Ethics Commission. She said she didn't know whether the university had done so.

Sloane declined to identify any of the donors who gave money to the foundation for the football program. Nor were any details available about the donors — how many there are, if they are individuals or corporations, how they were contacted, or the size of individual contributions.

Frazier said in June that "10 to 12" donors — all local and all individuals — had agreed to provide between $25,000 and $100,000 per year for Jones' salary.

Sloane said the foundation was careful to handle the donations in accordance with IRS and NCAA regulations.

UH spokeswoman Carolyn Tanaka said late yesterday afternoon that she was unfamiliar with the details of the Jones contract.

Under federal tax law, nonprofit organizations like the UH Foundation can't disclose the names of donors unless the donors approve such disclosure.

Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.

Correction: State Ethics Commission executive director Dan Mollway was talking generally about the issue of private contributions to the salaries of public employees. A previous version of this story did not clarify that Mollway was not talking specifically about the employment contract of University of Hawai'i football coach June Jones.