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Date and Place:            June 28, 2005

                                    Standard Financial Plaza

                                    Conference Room, Suite 211


Present:                        Robin D. Liu, Chair

                                    Lex R. Smith, Vice Chair

                                    Susan S. Heitzman

                                    Matthew H. Kobayashi

                                    Charles W. Totto, Executive Director and Legal Counsel (EDLC)

                                    Matthew J. Viola, Outside Counsel

Stenographer:               Norm Fisher 


I.          CALL TO ORDER


The 385th meeting of the Ethics Commission (Commission or EC) was called to order at 11:35 a.m. by the Chair.



The minutes of the open meeting of April 19, 2005, were unanimously approved.




A.       Setting the date and time for the July 2005 and August 2005 meetings


The EC set the date and time for the July 25, 2005 at 11:30 a.m. and August 30, 2005 at 11:30 a.m. meetings, in the Standard Financial Plaza Conference Room, Suite 211.




A.        Administrative news


The Executive Director and Legal Counsel (EDLC) reported that Cynthia Bond was nominated as an Ethics Commission member.


B.         Report and recommendation regarding the transfer of regulation of lobbyists from the Council to the Ethics commission


The EDLC provided the Commission with a proposed bill to be submitted to the Council from the Commission, changing the regulation of lobbyists from the Council to the Commission.              The EDLC stated that the staff recommends that the EC approve the draft bill in order to effectuate a transfer of the powers and responsibilities of the Council regarding lobbyists to the Commission


            The EC moved, seconded, and unanimously carried to approve the draft bill proposed by the staff.


C.        Report regarding the appointment of Wayne Hikida to the Ethics


The EDLC reported that on June 6, 2005, the Council confirmed Wayne Hikida’s appointment to the Ethics Commission.


            The EC moved, seconded, and unanimously carried to go to the executive session.




A.        Approval of the minutes of the executive session of the April 19, 2005

The minutes of the executive session of April 19, 2005 were unanimously approved.


B.         Report and recommendation regarding possible violations of RCH Sec. 11-104 (use of city position to obtain unwarranted treatment) by certain city officers


            The EDLC stated that this report concludes the staff investigation into the contracting practices used by certain officers in recommending and selecting the persons who received contracts.


The EDLC reported that staff recommends that no Notice of Violation be transmitted to the city officers based on the following:


a.         No complaint or request for advice was submitted to the EC regarding the conduct of the city officers.  Therefore, no formal opinion need be rendered.


b.         There are several legal issues raised that may have far reaching implications for hiring city employees and contracting with private firms.  Also, some of the salient facts in these cases are unusual and not likely to be repeated.  These factors combined make it difficult to set forth broad rules in these cases.


c.         The city officers have modified their behavior to avoid future similar conduct.  

d.         The city agency replaced the non-bid selection process and now reviews all applications from qualified applicants, thereby minimizing the recurrence of contracts based on family relationship, political reward or personal friendship.


            The EDLC suggested that the Commission have the EDLC discuss the issues with the officers to ensure they understand the ethical implication of their conduct.   


            After discussion, the EC moved, seconded, and unanimously carried to accept the staff’s recommendation.


C.        Report and recommendation regarding the possible misuse of city funds by city officers in violation of RCH 11-104 (use of city position to obtain unwarranted treatment for any person)


The EDLC reported that this matter stems from the use of city funds to publish a book by a city agency.  The Commission received three written and one oral request for advice whether the expenditure for the publication of the book violated the ethics laws. 


The EDLC reported that the question presented is whether using city funds to produce the book resulted in an unwarranted advantage or special treatment for some person in violation of RCH Sec. 11-104.


The EDLC reported that although using public funds to create the book may have been a poor fiscal and management decision, the standard the EC must use to determine a violation of RCH Sec. 11-104 is whether the funds were used for a legitimate government function within the scope of the city agency’s authority.  The EDLC stated that given the topics discussed in the book, it is at least arguable that the book is a means by which to inform the public of the result of the city agency’s “policies, programs and operations” as to sustainability issues.


The EDLC reported that governing sometimes results in setting priorities and making expenditures that are unpopular or flawed.  However, not each use of public funds to implement a poor decision amounts to a misuse of public funds under the ethics laws.  Misuse of public funds under the city’s standards of conduct occurs if the conduct in question is outside of the official’s scope of authority or it is not reasonably related to a legitimate public purpose.  In this case, it is a bone of contention whether the money was well spent, but it was within the authority of the city agency to expend the funds because publishing the book was an attempt to inform the public about the city’s policies, programs and operations.


The EDLC stated that staff recommends that the Commission should render an opinion consistent with this analysis.


            The EC moved, seconded, and unanimously carried to accept the staff’s recommendation.


            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 12:10 p.m.


Last Reviewed: Friday, July 29, 2005