CITY AND COUNTY OF HONOLULU
Date and Place: August 8, 2007
Standard Financial Plaza
Conference Room, Suite 211
Present: Lex Smith, Chair
Raymond H. Fujii (Vice Chair)
Susan S. Heitzman
Matthew K. Kobayashi
Charles W. Totto, Executive Director and Legal Counsel (EDLC)
Matthew J. Viola (Outside Counsel)
Stenographer: Norm Fisher
Excused: Cynthia M. Bond
Wayne T. Hikida
I. CALL TO ORDER
The 407th meeting of the Ethics Commission (Commission or EC) was called to order at 11:47 p.m. by the Chair.
II. APPROVAL OF THE MINUTES OF THE OPEN SESSION OF THE
JULY 11, 2007 MEETING
The minutes of the open meeting of July 11, 2007 were unanimously approved.
III. OLD BUSINESS
A. Confirming the date and time for the September 6, 2007 meeting and setting the date and time for the October, 2007 meeting
The EC rescheduled the date for the September 6, 2007 meeting to September 13, 2007 at 11:30 a.m. and set the date and time for the October, 2007 meeting for October 9, 2007 at 11:30 a.m. in the Standard Financial Plaza Conference Room, Suite 211.
IV. NEW BUSINESS
A. Administrative news
The Executive Director and Legal Counsel (EDLC) referred to his memorandum dated August 3, 2007 outlining the number of cases pending and the ethics training conducted to date in fiscal year 2008.
B. Report and recommendation regarding guidelines on the use of city resources
After reviewing the proposed Guidelines on the Use of City Resources, the Commission moved, seconded, and unanimously carried to approve the proposed Guidelines, and directed staff to forward the proposed Guidelines to the Managing Director’s officer for approval and distribution.
C. Elections of officers
This matter was continued from the last meeting, and has been deferred until the next meeting.
V. EXECUTIVE SESSION SUMMARY
A. Approval of the minutes of the executive session of the July 11, 2007 meeting
The minutes of the executive session meeting of July 11, 2007 were unanimously approved.
B. Report and recommendation regarding the possible violation of RCH Section 11-102(c) (business transaction or financial interest conflicting with discharge of duties) by a city employee EC No. 03-002(w)
This was reported by the Commission’s outside counsel, Matt Viola.
Mr. Viola reported that this matter involves allegations that a city employee violated city ethics laws by allowing a subordinate to moonlight for his family-owned private business during city work hours.
Following staff’s investigation, in March 2005 the Commission issued a Notice of Potential Violation to the city employee.
Subsequently, staff commenced settlement discussions with the city employee and his attorneys. However, as a result of a lawsuit that was also filed against the city employee regarding this matter, settlement discussions were suspended.
After the lawsuit was settled, staff re-initiated settlement negotiations, but was unable to come to a mutual agreement with the city employee’s attorney on several issues. Therefore, the city employee’s attorney was informed that, because it appeared that further discussions would not be constructive, staff have decided to submit this matter to the Ethics Commission for a decision at its next scheduled meeting.
The city employee and his attorney were also informed that it was staff’s position that the city employee waived his right to a hearing before the Commission because he did not timely request a hearing pursuant to the Notice of Potential Violation.
Both the city employee and his attorney attended the August 8, 2007 meeting.
Before the city employee’s attorney addressed the Commission, Commissioner Fujii informed the attorney that he was a lobbyist for the Management of Unionized Contractors, and would recuse himself from the meeting if the attorney felt this to be a conflict. The city employee’s attorney stated that this would not be a conflict.
The city employee’s attorney addressed the Commission as follows:
1. The city employee’s attorney stated that he could not accept as a basis for the ethics violation a Commission finding that the subordinate had an indirect relationship with the city employee’s family-owned business by performing work for the employee’s family-owned business through an independent subcontractor.
2. The city employee’s attorney stated that the city employee did not have a conflict of interest because he received a letter from his supervisor permitting him to perform work for the family-owned business outside of Oahu.
3. The city employee’s attorney stated that he disagreed with the Commission’s requirement to provide a complete unredacted version of its advisory opinion to the complainant, as it is his position that the complainant filed a complaint, and did not request an advisory opinion.
4. The city employee’s attorney stated that he disagreed with staff’s position that city employee waived his right to a hearing and requested a ruling by the Commission on this issue.
The city employee’s attorney stated that he believes that the city employee did not violate the ethics laws and should the Commission determine that he did, he would seek to ultimately resolve this issue by filing a court action.
Mr. Viola stated that during his investigation:
1. Staff has consistently taken the position, starting with the NOPV, that the city employee engaged in a conflict of interest in violation of Revised Charter of Honolulu § 11-102(c) by knowingly allowing his city subordinate to work for his family’s company, whether that relationship was directly or indirectly with his family business.
2. This indirect relationship between the subordinate and the city employee’s family-owned business, of which the city employee was aware, does not negate the potential conflict of interest insofar as it may have tended to impair the city employee’s independent judgment when dealing with the subordinate in his official capacity as the subordinate’s supervisor.
3. Under Rule 4.9(c) of the Commission’s Rules of Procedure, the Commission is required to provide a copy of the full advisory opinion to the complainant. Also, the complainant obviously knows the city employee’s identity, so there appears to be no compelling reason for the Commission to redact the city employee’s name from the advisory opinion it provides to the complainant.
4. The city employee received the NOPV in March, 2005. The NOPV states that any request for a hearing must be made within 15 days of the date the NOPV is received, as required by Sections 3-6.7 of the Revised Ordinances of Honolulu. While the city employee did submit a request for a contested case hearing in January, 2006, this request was untimely.
Upon discussing the issue, taking into consideration the comments of the city employee’s attorney and the report by Mr. Viola, the Commission directed staff and the city employee’s attorney to exchange and submit to the Commission a brief by the close of business on September 6, 2007, regarding the issue of the city employee’s right to a hearing before the Commission.
C. Report and recommendation regarding possible violation of RCH Section 11-104 (misuse of city time for private purposes) by a city employee, EC No. 06-146(w)
This was reported by the Commission’s outside counsel, Matt Viola.
Mr. Viola reported that this case involves a fair and equal treatment violation against a city employee.
Mr. Viola stated that the basic allegation against the city employee is that during city work hours, the city employee had been spending a considerable amount of time at home and running personal errands.
Mr. Viola stated that during his investigation, he found that although there were unusual circumstances, including facts indicating that the city employee’s conduct was condoned or even authorized by his supervisors, his investigation has corroborated the basic allegations against the city employee.
Therefore, staff concluded that there is probable cause that the city employee violated RCH Section 11-104, by misusing city time for private purpose, and recommends that the Commission send the city employee a Notice of Potential Violation.
Upon discussing the matter, the Commission moved, seconded, and unanimously carried to accept staff recommendation and instructed staff to issue a Notice of Potential Violation of Standards of Conduct to the city employee to which he may respond.
D. Annual job performance review for Executive Director/Legal Counsel
The Commission moved this matter to the September 13, 2007 meeting.
E. Report regarding the Fiscal Year 2008 salary of the Executive Director/Legal Counsel
Chair Smith will take the lead on this issue and the EDLC will not be involved with discussions with COR or other agency staff.
The EC moved, seconded, and unanimously carried to adjourn the meeting. The meeting was adjourned at 1:15 p.m.