As the state auditor prepares to investigate the Lingle administration's handling of Hawaii Superferry, several state lawmakers are asking whether the administration will continue to assert attorney-client privilege in refusing to answer questions.

State Attorney General Mark Bennett and state Department of Transportation director Barry Fukunaga have cited the privilege several times in the past two months in declining to disclose what, if any, legal advice Fukunaga received before he made the February 2005 decision to exempt the Superferry project from an environmental assessment.

The state Supreme Court ruled in August that the decision was in error, which prompted legal challenges by environmentalists that have blocked the ferry from Kahului Harbor on Maui.

State lawmakers thought about asking Gov. Linda Lingle to waive attorney-client privilege in connection with the audit, which is required under a new law that allows Superferry to resume service while the state conducts an environmental review of the project.

But lawmakers removed the language after complaints from the administration and instead urged the governor and other officials to provide all relevant documents and otherwise fully cooperate.

"It's very provocative and unsettling," said state Rep. Marcus Oshiro, D-39th (Wahiawa), an attorney. "If there's nothing to hide, they should just answer the questions."

The American Bar Association describes the attorney-client privilege as a "bedrock principle" of the legal system that helps ensure clients enjoy their constitutional right to effective legal counsel. The privilege, the oldest in common law, shields confidential communications between clients and their attorneys and can only be waived by clients.

Bennett, in an interview, said Fukunaga and other administration officials could not selectively waive the privilege to answer certain legal questions about Superferry without jeopardizing all Superferry-related subject matter the administration considers confidential. The privilege, once breached, is generally lost.

"Those are privileged communications, and once the decision is made to make them public, you lose the protection of the attorney-client privilege," Bennett said.

The state Office of Information Practices has ruled that advice and counsel from the attorney general to state agencies is protected by attorney-client privilege. Formal opinions by the attorney general, however, have to be publicly disclosed.

But some lawmakers are frustrated that the Lingle administration has used the privilege to refuse to answer questions on Superferry, arguing that the Legislature and the public should know all the factors that led to the controversy.

'QUITE EXTRAORDINARY'

While the state is a defendant in the lawsuit by environmentalists challenging Superferry, the new law specifically prevents Superferry from suing the state over past actions related to whether an environmental review should have been required for the project.

According to House lawmakers, Bennett first asserted attorney-client privilege on Superferry during a private caucus with House Democrats in late September after state Rep. Tommy Waters, D-51st (Lanikai, Waimanalo), pressed him on what advice he gave the Department of Transportation.

Lingle, questioned by reporters, has said she is not aware of any legal advice from the attorney general in her Superferry file that has not been disclosed. Lingle also has said she had no role in Fukunaga's decision to exempt the ferry project from environmental review.

Fukunaga, who was deputy director of harbors at the time, said he consulted with his staff and then-director Rod Haraga about his decision. He told The Advertiser in writing that he did not consult with Lingle, Bennett or then-Lingle chief of staff Bob Awana.

At public hearings during a special session this month, Fukunaga disclosed for the first time that some on his staff had recommended an environmental review. But Fukunaga cited attorney-client privilege in refusing to discuss any legal advice he might have received.

"It's quite extraordinary to raise that shield in a public hearing because we're asking questions that the public needs to have answered," Oshiro said.

Was advice given?

Oshiro said he wants to know whether Fukunaga was warned that the exemption might be legally challenged if he failed to take into consideration the secondary impacts of ferry service on state harbors. He also wants to know whether Fukunaga received advice on the language of an exemption letter for Superferry that was sent to the state Office of Environmental Quality Control.

The Supreme Court found that the state did not consider secondary impacts of the project and ignored, purposely or not, the sample exemption language from OEQC.

Oshiro said he also wants to know what role, if any, Awana played in the decision. Soon after Haraga was not asked back last year by the Lingle administration for another term as director, the Maui News reported that Haraga had said in a deposition in an unrelated lawsuit that his deputies had been told since August 2005 to report directly to Awana. The timing was months after the department had issued the exemption for Superferry, but Oshiro and others were suspicious and questioned it.

John Garibaldi, Superferry president and chief executive officer, also had said at public hearings during special session that he had met with Awana and Fukunaga in late 2004 to discuss $40 million in state harbor improvements that were needed for the ferry. The harbor improvements were the trigger for the state to consider whether an environmental assessment was needed for the project.

"The privilege, if one exists, can be waived," Oshiro said. "The one who can waive it if you go up the chain of command is the governor. She would be able to waive the privilege so that Barry Fukunaga can answer our questions."

State Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha), an attorney, said Fukunaga may be able to assert the privilege to cover any legal advice he was given but that she believes it was improper for him not to disclose whether he received advice. "You can't just simply refuse to answer that question," she said. "If you sought advice, you have to say you sought advice."

Hanabusa also said she believes attorney-client privilege is different for government officials who are represented by government attorneys than clients in the private sector. Some legal scholars have also argued that the public's interest in open government and accountability makes the privilege less than absolute for government officials.

"The issue here is going to be what exactly was the communication? Was the communication one that directed the DOT to do a certain thing versus one that just advised them?" she asked.

COURT RULINGS

Federal appellate courts — in the 7th, 8th and District of Columbia circuits — have found that the privilege is not a shield for government attorneys and their clients from disclosing documents or conversations under subpoena before federal grand juries. The most notable case involved a deputy White House counsel who was ordered in 1998 to discuss President Clinton's relationship with former White House intern Monica Lewinsky before a grand jury.

But the 2nd U.S. Circuit Court of Appeals ruled in 2005 that the privilege protected the former counsel to then-Connecticut Gov. John Rowland from discussing conversations with the governor about a federal corruption probe before a grand jury.

David Greenwald, a partner in the Chicago office of the firm Jenner & Block, who has compiled an online database of court rulings on attorney-client privilege, points to another 2nd Circuit decision, from January. The court ruled that the privilege allowed Erie County, N.Y., to withhold e-mails by an assistant county attorney regarding a strip-search policy that the county sheriff's office used for people arrested and booked into county jails.

Greenwald wrote that the court held "that communications between a government attorney and public officials were privileged even though the communications assessed the legality of existing policies and proposed alternatives."

Marion Higa, the state's auditor, will conduct the audit of the Lingle administration's decision-making on Superferry. She has until March to present her preliminary findings to the Legislature and until late April to submit a final report.

Last week, Higa told a state House and Senate committee investigating the state Bureau of Conveyances that the state Department of Land and Natural Resources, which oversees the bureau, had been asserting attorney-client privilege in relation to documents she had requested on behalf of the committee. The department and the attorney general have said the privilege was cited for e-mails that involve ongoing litigation.

Some lawmakers question whether Higa's experience with the department is a prelude to what she might encounter from the administration on Superferry.

"I think the important thing, for us, is that it's not only being used when it's convenient," said state Sen. Jill Tokuda, D-24th (Kailua, Kane'ohe), the committee's co-chair. "I also think that the attorney general has to realize that he's not just the governor's attorney, he's the Legislature's attorney, too."

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.