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The Honolulu Advertiser
Posted on: Monday, May 17, 2010

Lawmakers interfering in private business

By David Shapiro

Last year, ethics concerns arose about House Speaker Calvin Say after Pacific Business News reported that he sponsored the House version of a bill forcing Massachusetts-based HRPT Properties Trust to provide more favorable leases to tenants of a Māpunapuna building.

Among the 180 tenants benefiting was Warabeya U.S.A. Inc., which uses the property for its musubi-manufacturing subsidiary Tokyo Bento Nichiyo. Say is an officer of Warabeya and is paid $1,000 a month.

He didn't disclose his conflict when he introduced the House bill or voted for a similar Senate version that eventually became law. He told PBN it wasn't a conflict because "I'm just an officer in title. I'm not there for any daily operations."

To argue his hands were clean because he wasn't actually on the production line rolling musubi was certainly one of the more novel ethics defenses we've heard.

Businesses with HRPT leases in Māpunapuna and Kalihi sought the Legislature's help when HRPT increased rents after acquiring the properties in 2003 from the Damon Estate.

HRPT sued in federal court to strike down the law, arguing that "a small group of influential businesses" went to the Legislature to seek special protection from an out-of-state property owner, impairing the company's legal right to conduct business.

"We're asking for a declaration that the act is unconstitutional," the company's attorney said.

The state argued that the law was sufficiently broad to pass constitutional muster, but the court doesn't appear to be buying it.

At a hearing last week, chief U.S. District Judge Susan Oki Mollway said she's inclined to rule that the Legislature's interference in this private business affair is a violation of the Contract Clause of the U.S. Constitution, which bars state laws that grant private relief from contractual obligations.

The lawsuit didn't deter the Legislature from passing a new bill this session extending the original law, which was set to expire this year, until 2013.

That's currently on Gov. Linda Lingle's desk awaiting her decision on whether to sign or veto, and is presumably also subject to whatever Mollway rules.

It'll be interesting to see when the judge issues her formal ruling this month whether she'll address Say's conflict of interest, which was raised by HRPT in a footnote to its lawsuit.

Either way, it should be a lesson to legislators that they can't narrowly intervene in private business matters on behalf of their friends and benefactors.

A bill that is both unethical and unconstitutional is a rare double-double even for our Legislature.