Tuesday, April 29, 2008

HI Superferry: Ian Lind gets results...

Reposting almost in its entirety. Ian Lind did a great job on this:

http://ilind.net/2008/04/29/superferry-disclosed-less-than-6-of-2007-lobbying-costs/
"Superferry disclosed less than 6% of 2007 lobbying costs"
April 29th, 2008

"Hawaii Superferry, Inc. spent more than 17 times the amount previously disclosed while lobbying for special legislation during 2007, according to amended disclosure forms filed today with the State Ethics Commission.

The company now reports having spent a total of $379,431.52 during calendar year 2007. It had previously filed reports claiming total expenditures of just $21,791.56.

According to the new reports, signed by former CEO John L. Garibaldi, now vice chairman, the company spent $272,251.53 during the two month period beginning March 1, 2007 through April 30, 2007.

This sum included $166,851.97 preparing and distributing lobbying materials, $11,404.45 for media advertising, $23,028.96 for postage, and $63,917.39 in fees, apparently for public relations.

In its original report for this same two-month period, filed in May 2007, the company claimed that it spent a total of just $6,788.54.

The Superferry’s latest amended filings are available here, while its original disclosure reports are available on the State Ethics Commission web site.

The new reports were submitted after I wrote to the Ethics Commission several weeks ago complaining about the obvious failure of the company to report significant expenses, including mailings of more than 110,000 letters and petitions that were later submitted to the Legislature, and related fees paid to public relations firm McNeil Wilson Communications.

This massive under-reporting underscores the weakness of Hawaii’s lobbying law, which is supposed to provide the public a clear idea of what is being spent to influence public policies.

The state lobbyist law (Section 97-7 HRS) provides for administrative fines for any person who “Willfully files a statement or report containing false information or material omission of any fact.” However, it further provides that no fines can be assessed unless the Ethic Commission convenes a formal hearing and issues a final decision. Such formal hearings are rarely held, and the commission instead concentrates on obtaining voluntary compliance, even if after the fact..."

Aloha, Brad

1 comment:

MauiBrad said...

"Open letter on HSF lobbying revelations"‏
From: Larry Geller
Sent: Tue 4/29/08 1:20 PM
To: Dan Mollway (dmollway@hawaiiethics.org)

Ian Lind has just posted an article, Superferry disclosed less than 6% of 2007 lobbying costs , which ends with this conclusion (boldface emphasis is mine):

The state lobbyist law (Section 97-7 HRS) provides for administrative fines for any person who "Willfully files a statement or report containing false information or material omission of any fact." However, it further provides that no fines can be assessed unless the Ethic Commission convenes a formal hearing and issues a final decision. Such formal hearings are rarely held, and the commission instead concentrates on obtaining voluntary compliance, even if after the fact. This means that there will likely be no consequences, apart from being mentioned here and on other blogs, even as a result of this glaring example of failing to report. They got their special legislation and six months later got caught for failing to make the legally required disclosure. The risk/reward ration is certainly quite favorable and no deterrent to future transgressions.

I would find it disturbing if the Ethics Commission is determined to prove Ian right on this point.

Ian has performed a great service in bringing this matter to your attention with his April 10 letter, but I hope that won't be the end of it. If it is, then the law is neutered. There's no point in the public bringing apparent violations to the Commission's attention.

It would seem that in this instance an investigation would not be complicated, since the crucial facts are filed on your website. It's like having a confession in your hand.

The result of the company's activity in Hawaii has been the expenditure of vast amounts of state money, not only in preparation of a barge, but in daily costs (for example) to operate a tugboat when the ferry is in port (something around $1,000 an hour). There are plans to put in massive harbor projects basically to accommodate this commercial operation. The company is reaping its reward. Had taxpayers or legislators themselves been aware of a large and expensive lobbying investment, the outcome might well have been different.

The risk part is up to the Ethics Commission. If you do nothing, then the risk multiplies as other businesses choose to emulate this example. A wrist slap would also encourage future lawbreaking by demonstrating the economy of breaking the law that Ian remarked upon.

Public education is useful as well, which might be provided by aggressively pursuing this violation. This is not a little company that just goofed, it is a high-profile company with experienced and aggressive management. Your action in this case would be highly educational to others. Inaction would be educational as well.

Ian is correct that this incident will be mentioned on other blogs, but the Ethics Commission's decision to follow up with what I believe is a slam-dunk case (or not) is sure to be a concern as well.

If there is good reason to let them off the hook on this, please advise.

Best regards,
--Larry Geller

cc: usual bloggers