Many Say a Rule Change Would Persuade More People to Volunteer

Members of key state boards must disclose their finances to the public. If a new law is passed, they would still need to disclose the sources of income and debts and what they own, but not the amounts and values.

A broad spectrum of companies, nonprofits, unions, associations and individuals support legislation that would change a rule that dissuades some people from serving on important state boards. A host of advocacy groups and individuals oppose the rule change.

Under a state law that took effect in 2014, volunteer members of state boards and commissions must file financial statements with the state Ethics Commission. These statements, which cover the volunteer and spouse, must list sources and amounts of income, debt amounts and who they are owed to, and the value of ownership in companies and property like real estate.

Most disclosures are kept confidential, but the Ethics Commissions publishes the disclosures online of the volunteer members of 17 important boards and commissions, including the Board of Land and Natural Resources, UH Board of Regents and state Board of Education. (See full list below.)

A bill in the state Senate and another in the House would change that law: Published information would still list the board members’ sources of income, who they owe money to and what they own but not the amounts or value. Supporters say that if the rule is changed, many more highly qualified people would be willing to volunteer, and at a time when Hawai‘i needs them.

“The amounts are what people are sensitive about,” says Brandon Kurisu, president of the UH Alumni Association. “Conflicts of interest are identified through the source of the compensation, which will continue to remain on the public disclosure.

“The public would continue to see the position, relationship, source of income, source of loans, properties, business interests, officer/director roles and other relevant information for all volunteer members of state boards and commissions,” he adds.

Kurisu is also president of aio Digital, a sister company of Hawaii Business Magazine.

Testimony For and Against

The House bill stalled, but the Senate version has passed second reading and was approved by the Government Operations Committee 5-0.

A host of people and organizations provided supporting testimony at state House virtual public hearings on Feb. 2 and 4, including such state agencies as UH and the Land Use and Civil Rights commissions; more than a dozen companies, including First Hawaiian Bank, Central Pacific Bank and Young Brothers; two unions: the Hawaii Government Employees Association and the UH Professional Assembly; and nonprofits like the Honolulu Museum of Art and Hawaii Venture Capital Association.

Those testifying against the legislation included the Ethics Commission itself, the League of Women Voters, Common Cause Hawaii, the Civil Beat Law Center for the Public Interest and about a half dozen individuals. They say the amount and value of income, debt and ownership are just as important for the public to know as the sources.

The UH Professional Assembly, which represents faculty throughout the UH System and works with the UH Board of Regents, testified in support of the legislation.

“Currently, the State Constitution (Article X, Section 6) directs the ‘candidate advisory council’ to provide the governor with a list of qualified candidates (for the Board of Regents) derived from ‘pools of qualified candidates.’ The unfortunate situation of late is that there is barely a pool let alone ‘pools’ of candidates,” the union testified.

UH President David Lassner made a similar point in his testimony.

“Four sitting regents resigned (in 2014) when the Legislature changed the conditions of their public service. They had provided their financial disclosures for Ethics Commission review but were not willing to have their privacy and that of their families compromised.

“In the years since, we have seen declining numbers of applications from individuals willing and interested to serve as regents. While there are multiple factors, we know that for some potential applicants the requirement of submitting financial disclosures for public review is enough to discourage them from considering service as a regent.”

“False Premise”

Brian Black, executive director of the Civil Beat Law Center for the Public Interest, pushed back on that assessment in his testimony.

“H.B. 1849 starts from the false premise that qualified individuals are not seeking appointment to 17 of the most influential boards and commissions in the State of Hawai‘i because their financial disclosure statements to the state Ethics Commission would be publicly posted. None of the 17 relevant boards have more than one vacancy currently,” he testified.

Black added, “If an individual is not willing to be transparent with the people of Hawai‘i concerning the extent to which they have a conflict of interest, that person may not be the best person to represent the people of Hawai‘i on a civilian oversight board.”

The 17 boards that would be affected by the legislation because they currently require disclosure of their members’ financial statements are:

• Board of Directors of the Agribusiness Development Corp.
• Board of Agriculture
• State Ethics Commission
• Hawaii Community Development Authority
• Hawaiian Homes Commission
• Board of Directors of the Hawaii Housing Finance & Development Corp.
• Board of Land and Natural Resources
• State Land Use Commission
• Legacy Land Conservation Commission
• Natural Area Reserves System Commission
• Board of Directors of the Natural Energy Laboratory of Hawaii Authority
• Board of Directors of the Hawaii Public Housing Authority
• Public Utilities Commission
• Commission on Water Resource Management
• Stadium Authority
• UH Board of Regents
• Board of Education

The Ethics Commission also publishes the financial disclosures of paid senior government leaders, such as the governor, legislators and directors of state agencies.