CITY AND COUNTY OF HONOLULU
Date and Place: December 14, 2004
Standard Financial Plaza
Conference Room, Suite 211
Present: Robin D. Liu, Chair
Lex R. Smith, Vice Chair
Susan S. Heitzman
Raymond H. Fujii
Lolinda D. Ramos
Charles W. Totto, Executive Director and Legal Counsel (EDLC)
Matthew J. Viola, Outside Counsel
Stenographer: Norm Fisher
I. CALL TO ORDER
The 380th meeting of the Ethics Commission (Commission or EC) was called to order at 11:45 a.m. by the Chair.
II. APPROVAL OF THE MINUTES OF THE OPEN SESSION OF THE
NOVEMBER 23, 2004 OPEN MEETING
The minutes of the open meeting of November 23, 2004, were unanimously approved.
III. OLD BUSINESS
A. Setting the date(s) and time(s) of the January 2005 and February 2005
The EC scheduled meetings for January 18th, 2005, at 11:30 a.m., and February 22nd, 2005 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) reported that Matthew Kobayashi has been approved by the City Council to serve as a member of the Ethics Commission, and will attend the January 18, 2005 meeting.
B. Preliminary report on amendments to propose to the Charter Commission
The EDLC reported that the Charter Commission is mandated to study and review the operations of city government every 10 years. It may propose amendments to the existing city Charter based on its review. The EDLC stated that the Charter Commission members have been selected and will begin meeting soon. Therefore, the EDLC suggested the following 4 issues that the Ethics Commission may want to request that the Charter Commission place on the ballot for the voters to decide upon:
1. Whether the EC should have the power to impose civil fines on those who violate the ethics laws.
2. Whether the impeachment process for city elected officials should be amended.
3. Whether members of the Charter Commission and Reapportionment Commission should be considered city officers for purposes of the ethics laws only.
4. Clarification that the Department of Corporation Counsel does not have the authority to withhold or transfer money from the EC's budget or control personnel actions.
After discussion, the EC instructed the staff to do more research on the issues.
V. EXECUTIVE SESSION SUMMARY
A. Approval of the minutes of the executive session of the November 23, 2004 meeting
The minutes of the executive session meeting of November 23, 2004 were unanimously approved.
B. Report and recommendation regarding possible violations of RCH Sec. 11-104 (use of city position or resource for special treatment) by a city employee, EC No. 04-118 (o)
The EDLC reported that in May 2004, a city employee informed staff of specific instances where certain department employees received unearned overtime pay as directed by their supervisor. Staff conducted an informal investigation to determine whether the employee's allegations could be substantiated.
The EDLC reported that the informal investigation discovered that the supervisor's actions constituted use of his official position to secure special treatment in the form of an incentive plan that allowed unauthorized overtime pay for certain employees. The EDLC reported that a department representative stated that the supervisor did not have the authority to offer the overtime incentive plan, and the incentive plan had not been approved or ratified by the department.
Therefore, as a result of the supervisor's actions, the staff recommends that the Commission approve submitting a Notice of Possible Violation of the Standards of Conduct to the employee.
After discussion, the EC moved, seconded, and unanimously carried to adopt the staff's recommendation to forward a Notice of Possible Violation of the Standards of Conduct to the employee.
The EDLC turned over the discussion for this topic to outside counsel, Matt Viola.
Mr. Viola reported that an employee for the Honolulu Liquor Commission also holds an active real estate license. The Ethics Commission has issued a number of advisory opinions over the years maintaining that Honolulu Police Department (HPD) officers and Liquor Commission investigators should not hold active real estate sales or broker licenses under any circumstances. In addition, in 1995, the Commission issued Guidelines on Real Estate Licenses. The guidelines, like the advisory opinions, take the position that HPD officers and Liquor Commission investigators (and other city employees/officers with the authority to enforce the law) should not hold active real estate licenses.
Mr. Viola stated that the advisory opinions and the guidelines apply a bright-line rule: Any city personnel who have law enforcement authority should not be permitted to hold active real estate licenses. However, while bright-line rules have the virtues of simplicity and clarity, they are often over-inclusive.
Mr. Viola noted that the likelihood of actual conflicts occurring is probably very slight, and, in fact, some of the advisory opinions acknowledge that no complaints involving actual conflicts have ever been filed. Further, some of the hypothetical conflicts posed in the various advisory opinions appear to be more theoretical than real. Thus, it is likely that most city law enforcement personnel who hold (or would hold) active real estate licenses would not encounter actual or potential conflicts of interest. The complete ban against all city law enforcement personnel holding active real estate licenses might therefore be seen as unfair and deprive city employees from legitimately supplementing their city incomes. That is the argument that Mr. Smith essentially makes in this matter.
Staff suggested that to avoid the risks of actual or potential conflicts of interest and self-dealing, the Commission may adopt a "rebuttable presumption" approach. Alternatively, the officer or employee seeking a real estate license should sign a statement that he/she has read and will follow RCH Sections 11-102, 103 and 104 to avoid conflicts of interest.
After discussion, the EC moved, seconded, and unanimously carried to adopt the approach recommended by the staff.
The EC also instructed staff to revise the guidelines to include language requiring the employee to sign an affidavit stating that they will not deal with individuals that the employee regulates.
The EC moved, seconded, and unanimously carried to return to the open session.
The EC moved, seconded, and unanimously carried to adjourn the meeting. The meeting was adjourned at 12:25 p.m.