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The Honolulu Advertiser
Posted on: Saturday, January 28, 2006

Criticism hurt trade missions, Lingle aide says

By Sean Hao
Advertiser Staff Writer

Gov. Linda Lingle has defended promising trip sponsors rewards.


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The Lingle administration’s past and future business-development trips:


May: Palo Alto, Calif.

July: Tokyo

August: San Diego


May: Israel

June: San Francisco

July: Shanghai, Tianjin and Beijing

September: Tokyo


June: Philadelphia

June: Shanghai, Beijing and Guangzhou

September: Yokohama, Japan


January: Philippines

April: Taipei, Taiwan

May: Fukuoka, Japan

September: Tokyo; South Korea

November: China

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Gov. Linda Lingle — who took 200 delegates, hula dancers and musicians on a trip to China last year — may be forced to travel more economically in the future.

Most of the costs of Lingle's overseas missions were covered by business donors, but recent criticism of Lingle's fundraising methods could make it difficult to find willing business sponsors, said Ted Liu, director for the Department of Business, Economic Development and Tourism. Lingle or her aides still plan to make several overseas trips this year, but they might have to forgo the large entourage.

"They're over and done because nobody is going to have an appetite for that," Liu said yesterday. The publicity surrounding the sponsorship arrangements will make it difficult to continue the fundraising, he said.

Liu's comments came after two Democrat lawmakers questioned the Republican governor's practice of promising benefits to private companies that donate up to $50,000 to help finance trade missions.

Last week, Senate Vice President Donna Mercado Kim, D-14th (Halawa, Moanalua, Kamehameha Heights), released a Dec. 5 letter from Liu to a local business in which Liu sought $50,000 in sponsorship money to defray costs for several trips this year. The letter promised "title sponsor benefits," including invitations to certain meetings with foreign government officials.

The state will go ahead as planned with a trip to Taiwan in April, but future missions likely will be conducted on the same scale as prior trips, Liu said.

The Lingle administration has raised more than $827,000 in cash and in-kind contributions for trade missions since 2003. The money is donated to a nonprofit organization that uses it to pay for the governor's trips. The donations are in addition to actual travel expenses, which business participants pay separately.

Lingle has not released a list of donors and how much they each contributed, but Liu said he was prepared to make that information public next week.

Lingle isn't the only governor to rely on business deals to subsidize state trade missions. She also isn't the only governor to came under fire for it.

Gov. Arnold Schwarzenegger of California faced criticism late last year for relying on a nonprofit organization to solicit business sponsorships of as much as $50,000 to defray costs of a state-led trade mission to China. Both governors kept secret a complete list of sponsors along with how much money each sponsor paid.

Minnesota officials also solicit corporate sponsors for trade missions, including one to China last year. Nevada officials go to China frequently, but do not seek sponsors.

By promising in writing that big-money sponsors would get special treatment, Lingle administration officials appear to have crossed a line other states did not.

Providing special benefits for big-money sponsors may not be new, but advertising the fact is, said Steve Levin, political reform project manager for the Center for Governmental Studies in Los Angeles.

"These things are sometimes understood with a wink and a nudge, but to actually articulate it is a lot less common," he said. "It sounds fairly careless to spell it out. It's just bad form and it's very dangerous for the official and company involved.

"We think fact-finding and trade missions abroad are good things, but these trips should be paid for by the government so there's no problem with a conflict or the appearance of a conflict of interest," Levin said.

Lingle raised more than $377,000 in cash, in-kind contributions and other fees for her China trip, which was used to help defray the cost of taking Hawai'i entertainers such as the Ka'ala Boys, Amy Hanaiali'i Gilliom and hula dancers, and for other show and activity costs.

Putting on such large, publi-city-generating events would be impossible without outside support, said DBEDT's Liu.

Liu said sponsors' benefits were minimal and most activities on the trips were open to all participants, regardless of whether they donated money.

Sponsors who donated a lot of money received larger ads, bigger logos and sometimes gained access to meetings when attendance was limited, Liu said. However, "I don't think we ever gave them the impression that this was going to be exclusive," he said.

Critics of Lingle's sponsorship strategy contend Liu's letter does offer specific benefits.

The letter "says sponsor benefits, it doesn't say nonsponsor benefits," Kim said. "How else are you going to justify that kind of contribution?"

The issue of business-sponsored trade missions surfaced in California last year after a tax-exempt organization paid for some costs associated with Schwarzenegger's mission to China. Because the money passed through a nonprofit, details concerning donor names and amounts were not publically available.

Lingle officials have refused to disclose the individual dollar amounts that local businesses contributed to sponsor Hawai'i's trade missions along with other details. The Advertiser requested that information last summer but was turned down.

Liu said he did not want to disclose the information earlier because it might scare off future sponsors.

"Sharing that information now is moot because they're all scared off," he said.

Minnesota, which also collects donations for trade missions, made the information public and said the donations did not buy companies special access.

"We did have corporate sponsors who paid for or contributed to certain types of events, but it didn't buy them access to people or places that others didn't have," said Christopher Sprung, a spokesman for the Minnesota Department of Employment and Economic Development.

Minnesota Gov. Tim Pawlenty led about 100 people on a trade mission to China in November. Businesses such as Best Buy provided sponsorships used to pay the travel costs of students that traveled with the delegation, Sprung said.

"It's a way for them basically to be a good (corporate) citizen," he said. "What would they get for it? They might get their logo on something, but it didn't buy them access that others didn't have."

Though not widely advertised, those sponsorship amounts are a matter of public record, Sprung said.

"We've done this for several years," he said. "We understand that we must be accountable to the people."

Among the other states traveling to China recently is Nevada, which sends tourism and business officials there at least once a year. During those trips, businesses pay their own costs while the state of Nevada pays the costs of state officials along with any costs associated with putting on a luncheon or other event, said Chris Chrystal, a spokeswoman for the Nevada Commission on Tourism.

All businesses get treated equally, she added.

"We pay for that and there are no promises made for anybody to have access to anyone," Chrystal said.

Nevada's mission to China included about 15 people, she said.

In 2004, Nevada became the first state to receive Chinese approval to open a tourism office in Beijing. Hawai'i became the second state soon after.

Reach Sean Hao at shao@honoluluadvertiser.com.