A pilot program to publicly finance Big Island County Council elections could be in danger after the state Senate amended the proposal yesterday to also soften restrictions on corporate campaign contributions.

Linking the conflicting ideas in the same bill could poison negotiations if the bill moves to a state House and Senate conference committee. State Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha), and other Senate leaders said they are not trying to jeopardize the pilot program but want to give the House another chance to clarify the state's campaign-finance law on corporate contributions.

House and Senate leaders had tentatively agreed to clarify the campaign-finance law this session but the House backed out after criticism from activists who want to ban corporate contributions.

Many of the same activists also have worked toward the pilot program on public financing of elections and are disappointed and confused by the Senate's maneuver. The Big Island County Council in January became the first elected body in the state to volunteer to try publicly financed campaigns, with enough money for candidates to run competitive campaigns without relying on private donations.

"It's just disappointing that they are playing the kind of games legislators play," said Noelie Rodriguez, a professor of sociology at Hawai'i Community College. She said the Senate's amendment has nothing to do with public financing and is "just like a horse in the chicken coop."

"I'm very frustrated with the lack of integrity in dealing with this particular bill," she said.

Kory Payne, a community organizer with Voter Owned Hawai'i, said activists will meet today to discuss strategy. He said, speaking for himself only, that he would probably accept the amendment rather than see the pilot program die after all the progress on the Big Island.

"It's really been a sincere kind of grassroots, heartfelt effort from the Big Island to recognize that this is a valid idea and we want to try it," Payne said. "For those guys to put in an amendment like this is really just kind of, I think, a cynical move."

VARIED HISTORIES

The Big Island County Council volunteered to experiment with public financing of council elections starting in 2010, a breakthrough for activists who have been urging the Legislature to move toward public financing for several years.

The state has a partial-public financing law but activists say it is not widely used because it does not provide enough money for candidates to run competitive campaigns. On the Big Island, under the pilot, council candidates would qualify for public financing if they collect signatures and $5 donations from 200 registered voters.

The House passed a bill last session to allow public financing for all county council campaigns but the bill did not advance in the Senate until this session, when it was narrowed to the Big Island. The state Campaign Spending Commission has questioned the potential cost of the pilot program, but most lawmakers appeared interested in moving the bill.

The restriction on corporate campaign contributions, meanwhile, has a much more tortured history.

Corporations had been allowed between 1997 and 2006 to put unlimited amounts of money from corporate treasuries into corporate political action committees, which would then donate the money to candidates. Lawmakers made several amendments to campaign-finance law in 2005 and — according to most accounts — inadvertently restricted corporations to only giving $1,000 to corporate PACs for each election.

A Maui judge rejected the Campaign Spending Commission's interpretation of the law last year and ruled that corporations, like individuals, can make donations directly to candidates without going through corporate PACs. The commission is appealing the ruling to the state Intermediate Court of Appeals.

The commission has said that it would not enforce the law during this election year, pending the appeal, but has warned corporations to consult with attorneys before making donations directly to candidates because of the legal uncertainty.

$25,000 CAP DEBATED

House and Senate leaders were going to again allow corporations to make unlimited contributions to corporate PACs but the negotiations fell through in the House. As a compromise, key Senate and House leaders tentatively agreed to raise the limit from $1,000 to $25,000 each election, but that also fell through in the House.

Hanabusa and state Sen. Brian Taniguchi, D-10th (Manoa), the chairman of the Senate Judiciary and Labor Committee, were prepared to give up but other senators wanted to revive the issue one last time with the House before the end of session.

Senators, however, needed to add the amendment to a bill related to campaign-finance law, which, according to Senate sources, was why they chose the public-financing bill.

The amendment approved yesterday would cap corporate contributions to corporate PACs at $25,000 each election and prohibit direct corporate contributions to candidates. It also states that the change is not meant to affect the outcome of the legal case before the appeals court.

"My intention is not to kill the public-financing bill," Taniguchi said, cautioning that it would be up to House and Senate conferees. "Some senators just wanted one last shot."

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), said the $25,000 cap should be more preferable to activists than allowing unlimited corporate contributions but understands that it is not as restrictive as a $1,000 cap or a complete ban.

"This seems like a reasonable alternative," Hooser said.

But state Sen. Les Ihara, Jr., D-9th (Kapahulu, Kaimuki, Palolo), said raising the cap would be a step backward, a sentiment shared by many activists. He said the $1,000 cap, even if it was an error three years ago, is significant.

"It is the most significant campaign-finance reform since statehood and it was done by mistake," Ihara said.

Others, including several people versed in internal Capitol politics, said the Senate's move has a clever symmetry by putting pressure on both the House and the activists who want public financing to accept a clarification on corporate contributions.

"I'm still a big supporter of (public financing). I want to see that go. So we'll go into conference and we'll see how wedded the Senate is to their proposed language," said state Rep. Blake Oshiro, D-33rd ('Aiea, Halawa Valley, 'Aiea Heights), the vice chair of the House Judiciary Committee. "If it's an all or nothing deal then, at that point, I'll have to pose it to our caucus."

Some of the activists have used inflated rhetoric to depict lawmakers as greedy or corrupt for not banning corporate contributions. Many have also described public financing in the past as "clean" elections, implying that private donations from individuals and corporate and labor interests are "dirty" and corrosive to good government.

The Senate's amendment may test whether the activists are willing to compromise.

"They chose to muddy the waters," Jeff Mikulina, director of the Sierra Club Hawai'i chapter, said of the Senate.