The Honolulu Ethics Commission last month concluded it lacks legal authority to apply the conflict of interest prohibitions and disclosure requirements of the ethics code to City Council members who receive significant campaign support from special interest groups.

The commission, in two advisory opinions approved at its Feb. 15 meeting, addressed several issues relating to whether big money flowing into political campaigns, held to be legal under federal and state campaign law, is subject to indirect regulation under the city’s ethics code.

The commission’s action came in response to complaints filed by Kioni Dudley, a vocal opponent of D.R. Horton’s Hoopili development, which is projected to add nearly 12,000 homes on 1500 acres of agricultural land in Ewa over the next several decades. Construction broke ground last year after the Hawaii Supreme Court rejected a long-running legal challenge.

Cory Lum/Civil Beat

Hoopili will be the largest project to get off the drawing boards in years, and is expected to have an impact similar to the development of Mililani in the 1950s and Hawaii Kai in the 1960s.

Dudley’s ethics complaints were a last-ditch “Hail Mary pass,” a final tactic trying to leverage the city’s code of ethics to block the Hoopili project after the legal challenges failed. To succeed, it would have required the commission to adopt a novel interpretation of the interaction between the state’s campaign spending law and Honolulu’s code of ethics, as spelled out in the city charter and ordinances.

Pay To Play?

Dudley, who filed the complaints as president and founder of The Friends of Makakilo, accused City Council members of making a tacit deal with developers and their backers to support Hoopili in exchange for campaign contributions. It was, in his telling, “pay to play” at work.

“Council members receive a huge amount of support from the construction community who would profit directly from a “yes” vote on Hoopili,” Dudley told ethics commissioners, according to minutes of their December meeting. “This support creates such a great obligation to those donors and such a great dependence for similar funding in upcoming elections, such that it actually prohibits objectivity, which is a prerequisite for fair, ethical and valid decision-making and voting.”

In support of his position, Dudley filed lists of campaign contributions to Honolulu City Council members from those who, according to Dudley, would directly benefit from approval of Hoopili. The data showed a majority of council members received from 43 percent to 91 percent of their total campaign funds from individuals and companies involved in Hoopili or the rail project, whether as contractors, consultants, architects, engineers, planners or project developers like Horton.

Anita Hofschneider/Civil Beat

Dudley argued the same development interests were backing both Hoopili and Honolulu’s rail project, and contributors tied to either were included in his listing.

In addition, Dudley argued, the council members benefited from independent spending by so-called super PACs, which are allowed to spend unlimited amounts campaigning for or against candidates as long as they remain independent of the candidates and do not coordinate their activities with their campaigns.

The U.S. Supreme Court’s 2010 Citizens United decision allowed organizations, including corporations and unions, to accept unlimited contributions and spend unlimited amounts of their own money campaigning independently for or against specific candidates. These independent expenditure committees have had a major impact on elections nationally and here in Hawaii.

Dudley pointed to contributions to five council members from Forward Progress and Aikea UNITE HERE, two super PACs active in the past few years.

Council members “understood and agreed to their part of the deal,” which Dudley called an “unspoken, but very real quid pro quo.”

“There was a, perhaps unspoken, but nevertheless fully understood, fully agreed to, and very real quid pro quo between the Council Members and a body of contributors,” Dudley testified. “This group put them in office and would keep them there and, in turn, Council Members would vote for the group’s projects.”

It’s easy to be outraged that big monied interests are able to play such a large role in our elections. It’s harder to build a persuasive case against specific aspects of the system. And the problems with Dudley’s approach were obvious from the beginning.

Dudley asked the commission to take three specific steps.

First, it was asked to rule that a City Council member who receives 40 percent or more of their campaign contributions from a special interest group has a conflict when taking official action affecting their interests.

Second, the commission was asked to find that independent expenditures by Super PACs to support a candidate or oppose their opponent create a conflict of interest, or at least the appearance of a conflict of interest under the city’s ethics laws.

Third, commissioners were asked to nullify the votes of five council members in favor of Hoopili because they failed to disclose these conflicts created by their campaign support from development interests prior to votes on the development.

Applying The Law

The commission rejected all three requests, one as a matter of law, and the others as beyond the commission’s authority or outside of their jurisdiction. By all appearances, these were not close calls.

In Advisory Opinion 2017-1, the commission ruled that support from a super PAC does not create a conflict of interest under the law.

Under state law, super PACs are required to act independently of any candidates they are supporting, and are not allowed to coordinate their activities.

The law provides that PAC’s independent expenditures cannot be “made in concert or cooperation with or at the request or suggestion of the candidate, the candidate committee, a party, or their agents.”

I have no problem with elected officials taking the the views of their campaign supporters into account when voting. In fact, I expect it.

Because the law does not allow coordination between a super Pac and the candidates it supports, the connection is too weak to support allegations of quid pro quo corruption. And under current rulings of the U.S. Supreme Court, preventing quid pro quo corruption is the only valid rationale for limiting campaign contributions. Independent expenditures are, according to these rulings, inherently non-corrupting.

In Advisory Opinion 2017-2, the commission found the conflict of interest provisions of the Honolulu City Charter do not apply to campaign contributions. This was an easy decision.

The charter prohibits elected officials from soliciting or accepting gifts in any form “under circumstances in which it can reasonably be inferred that the gift is intended to influence the officer … in the performance of such person’s official duties.”

However, the charter then explicitly provides: “Nothing herein shall preclude the solicitation or acceptance of lawful contributions for election campaigns.”

In the cases cited by Dudley, the contributions were all legal. So despite the fact that they were substantial, and certainly gave the donors influence they might not otherwise have, they are not subject to the ethics law and its conflict provisions.

Further, the Campaign Spending Commission has exclusive jurisdiction over matters related to the financing of campaigns, leaving the Ethics Commission no authority to determine whether receipt of a certain amount of contributions would give rise to a conflict of interest. The commission was preempted by state law.

And, finally, on the issue of nullifying council votes, the commission observed that it “can only wield powers expressly or implicitly granted to it by statute.” And while the commission has the power to impose administrative fines, and to recommend disciplinary action against an employee, it does not have authority to void council votes even if it did find that the ethics law had been violated.

Competing Interests

Count me among those who are appalled by the obscene amounts of money pumped into elections by super-rich individuals and large corporate interests spending their stockholders money. Finding some way to limit those monied interests is perhaps our most pressing bit of public business.

But I’m worried that the backlash against big money and secret money can quickly lead to an unrealistic view of real world politics in which, somehow, elected officials are expected to stay above the fray.

For example, back in September 2015, the Civil Beat editorial board reviewed Dudley’s ethics complaints and had this comment: “… is this any way to run a government — with elected officials free to vote on matters directly affecting campaign donors, without declaring a potential conflict of interest?”

Even before the Ethics Commission made its rulings, I would have answered with a simple “yes.”

Unless we’re talking about the pernicious impact of direct bribes and quid pro quo payoffs, I have no problem with elected officials taking the the views of their campaign supporters into account when voting. In fact, I expect it. Isn’t that very, very basic politics? As they say, you dance with the one that brought you. And elected officials worry about that all the time.

By some accounts, elected officials are supposed to represent those who elected them, especially on matters affecting those same campaign supporters. Isn’t that the essence of representative government?

I don’t have a fancy answer for how elected officials should properly manage that balancing act between the pushes and pulls of all their various constituencies. But a candidate who fails to take into account the views of their supporters, whether donors or voters, isn’t likely to last long.

Sometimes the views of donors diverge from the views of the supporters who count the most — voters — and candidates are at risk. Ask former Gov. Neil Abercrombie how that worked out for him.