Advisory Opinion No. 2007-1
Section 11-103, Revised Charter of Honolulu, which requires a full written disclosure of interest before a councilmember may vote on a matter that raises a conflict of interest, is interpreted broadly to ensure that the public is informed of private interests that may tend to conflict with a councilmember’s public duties.
No conflict of interest occurred when Councilmember Todd K. Apo worked on matters for his private employer that did not come before the Council.
A conflict of interest arose for Councilmember Apo out of a series of bills before the Council relating to the Waimanalu Gulch Sanitary Landfill. Although Councilmember Apo filed his written disclosure, he should have done so at an earlier time, before the vote on the first bill that affected his employer’s interest. The bills affected his employer’s interest. Therefore, Councilmember Apo was obligated to disclose the conflict of interest before voting on the bills.
The Commission does not have jurisdiction over complaints alleging lobbying without registration where the alleged lobbying occurred before the Commission was authorized to regulate lobbying.
On February 16, 2006, the Honolulu Ethics Commission received a complaint from several people whose spokesperson is Carroll Cox of Envirowatch, Inc., a local environmental and government watchdog group.
Specifically, the complainants contend that Councilmember Todd K. Apo violated the standards of conduct by:
1. a. Stating that he would look into their concerns regarding the closure of the public boat ramp at Ko Olina Resort and Marina (“Resort”), but not doing so;
b. Using the information received from the complainants as to the boat ramp to bolster the Resort’s position before the state Land Use Commission (“LUC”);
c. Failing to disclose to the complainants that he was employed by Ko Olina Community Association (“Association”) as a vice president and attorney; and
d. Appearing before the LUC on behalf of the Resort concerning the boat ramp issue.
2. Complainants claim that Councilmember Apo failed to register in 2004 as a lobbyist for
Resort or Association.
3. Complainants allege that Councilmember Apo failed to make a full written disclosure of interest as required by law before voting on Bill 37 (2005) regarding the use of the Waimanalo Gulch Landfill (“Landfill”).
The Commission transmitted a Notice of Possible Violation of the Standards of Conduct to Councilmember Apo on May 2, 2007 regarding only the third allegation, above. Councilmember Apo responded on May 20, 2007, but did not request a hearing. Therefore, the Commission may render its opinion based on the information before it, pursuant to Section 3-6.7(c), Revised Ordinances of Honolulu (“ROH”).
A. Concerns arising from Councilmember Apo’s representation of the Resort regarding the boat ramp.
Complainants suggest that Councilmember Apo violated the ethics laws by not disclosing to complainants his employment with Association, failing to investigate complainants’ concerns about the boat ramp, misusing information received from the complainants about the boat ramp and appearing before the LUC on behalf of the Resort.
Before taking office on January 2, 2005, Councilmember Apo was a vice president and attorney for the Association. He also served as an attorney for Resort, an affiliate of Association. He remained in those positions during the times relevant to this matter.
Mr. Cox and Councilmember Apo discussed the boat ramp issue over the telephone on a few occasions. The boat ramp issue did not come before the Council. In addition, Mr. Cox states that, although he did not know exactly in what capacity Councilmember Apo worked for the Association, he knew he was employed by or represented the Association as an attorney prior to their telephone discussions. Councilmember Apo assumed that, in his discussions with Mr. Cox about the boat ramp, he was doing so in his private capacity as an Association officer, not in his position as a councilmember. Finally, neither complainant nor Councilmember Apo believes any of the information exchanged between them was confidential.
The key issues here are: (1) whether Councilmember Apo had a conflict of interest and (2) if a conflict existed, whether he was required by the ethics laws to disclose his employment with the Association or his representation of the Resort as a result of the conflict.
The position of councilmember is considered to be part-time and a councilmember is expected to have other sources of income besides his or her city salary. Advisory Opinion No. 197 (June 9, 1989) (noting that the Honolulu Salary Commission had reached this conclusion). Non-city employment sometimes results in a councilmember taking positions on public issues in his or her private employment. Under certain circumstances, a conflict of interest may be created between a councilmember’s private employment and his public duties.
Generally, if a city officer or employee has a conflict of interest, he or she may not participate in the decision making process affecting the matter creating the conflict. However, despite this general rule, councilmembers may vote on any issue, even where the councilmember has a conflict of interest, as long as a full written disclosure of the conflict has been made public before he or she votes on the matter raising the conflict. Sections 3-107.1 and 11-103, Revised Charter of Honolulu (“RCH”).
RCH Section 11-102 and ROH Section 3-8.2 describe the types of personal interests that can create conflicts of interest prohibited under the ethics laws (e.g., financial interests,
business activities, gifts, confidential information, etc.). Specifically, RCH Section 11-102(c) prohibits a councilmember from having a business activity or financial interest that is incompatible with his or her city duties or may tend to impair the judgment of the councilmember in carrying out his or her duties.
The dispositive fact here is that no issues regarding the boat ramp have come before the Council while Councilmember Apo has been a member. Thus, he was never called upon to exercise his official judgment or discharge any official duties with respect to the boat ramp. As such, his private work for the Resort could not have affected the exercise of his duties or judgment as a councilmember with respect to the boat ramp. In other words, there was never a potential conflict of interest for Councilmember Apo to disclose. If the boat ramp issue had reached Councilmember Apo in his elected capacity, his representation of the Resort would have created a financial conflict of interest and, in turn, he would have had to fully disclose the conflict in writing before voting on the matter. Similarly, Councilmember Apo’s legal representation of the Resort before the LUC would not create a conflict of interest for which he would have to file a disclosure because the issue did not come before the Council.
RCH Section 11-102(b) restricts the use of confidential information by a city officer or employee for the benefit of anyone. Although complainants gave information to Councilmember Apo, neither complainants nor Councilmember Apo claim that the information was confidential. Therefore, a conflict could not have arisen and no disclosure was needed.
B. Failure to file lobbyist registration and annual report
Before Councilmember Apo took office on January 2, 2005, he lobbied on behalf of the Association. According to the Office of the City Clerk, he did not register as a lobbyist in 2004 as required by ROH Sec. 4-1.3(a) or file an annual report pursuant to ROH Sec. 4-1.3(c).
The Commission did not have jurisdiction over lobbying matters until the enactment of Ordinance No. 05-033 at the end of 2005. As a result, the Commission may not opine on Councilmember Apo’s failure to file the required information in 2004.
C. Duty to disclose the conflict of interest regarding the Waimanalo Gulch Landfill and his employment
As noted above, each city councilmember, officer and employee is required to file a full written disclosure whenever he or she has an interest that “might reasonably tend to create a conflict with the public interest . . ..” RCH Section 11-103. Councilmembers are permitted to vote on the matter that creates the conflict, but only once the written disclosure has been made a matter of public record. If a councilmember fails to follow this process, his or her vote is void on any legislation for which he or she has not filed the disclosure. See, RCH Sec. 11-103; Hui Malama Aina O Koolau v. Pacarro, 4 Haw. App. 304, 666 P2d 177 (1983).
The Commission must determine whether Councilmember Apo knew or should have known that his private employment might reasonably tend to create a conflict with his city duties to review and vote on bills affecting the Landfill. For the purpose of evaluating whether a conflict of interest existed, it is fair to attribute the Association’s public positions regarding the Landfill to Councilmember Apo because he was a vice president of and attorney for the Association.
In August 2002, the general manager of the Association and the president of the Resort submitted public comments to the state Department of Health opposing the expansion of the capacity or closing date of the Landfill. On March 23, 2003, the Association filed a complaint for an injunction against the city arguing that the city’s environmental impact statement supporting the expansion of the Landfill by 15 acres was unlawfully conducted and inadequate. It is evident that, as of the date when Councilmember Apo took office, he would have known of his employer’s positions against the expansion or continuing use.
Bill 37 (2005) and Bill 37 Committee Draft 1 (“CD1”) were intended to significantly restrict but not completely eliminate the type of solid waste that could be disposed of in the Landfill after July 1, 2008 (the expected closing date for the Landfill, unless the state Department of Health approves an extension requested by the city). Bill 37 Committee Draft 2 (“CD2”) would have closed the Landfill after July, 2008.
The first vote on Bill 37 was on May 11, 2005 and the first vote on Bill 37 CD1 was on September 28, 2005 and Councilmember Apo voted in favor of both bills. Councilmember Apo
did not file his written disclosure until February 16, 2006, after which he voted in favor of Bill 37 CD2. Bill 37 CD2 was later vetoed by the Mayor, without an override by the Council.
A councilmember has a duty to evaluate and vote on bills that come before the Council. Councilmember Apo suggests that he did not need to disclose a conflict of interest before voting on Bill 37 or Bill 37 CD1 because no conflict existed between his position as vice president and attorney for the Association and his duty to review and vote on these bills. He states that Bills 37 and 37 CD1 did not concern the closure of the Landfill, although they contained language describing waste management practices and allowed for certain processed waste to be dumped at the Landfill after its intended July 2008 closing date. Therefore, he did not file a disclosure interest before voting on Bill 37 or its CD1. In contrast, according to Councilmember Apo, Bill 37 CD2 specifically called for closure of the Landfill and that triggered a conflict. Therefore, he filed his disclosure before voting on Bill 37 CD2. Finally, he notes that all solid waste management issues could arguably affect the Landfill and that he has not taken such an extensive approach to filing disclosures.
RCH Section 11-103 is worded broadly: disclosure is required whenever a city officer or employee has an interest that “might reasonably tend to conflict with the public interest.” (Emphasis added.) In addition, the Commission has expansively interpreted the conflict of interest laws in the past. A “'conflict of interest' may be defined as any circumstance in which the personal interest of a public official in a matter before him in his official capacity may prevent or appear to prevent him from making an unbiased decision with respect to the matter.” (Emphasis in original.) Advisory Opinion No. 131 (February 14, 1984). See also, Advisory Opinion No. 2001-2 (June 22, 2001) ("The appearance of a conflict arises when one may reasonably perceive that the officer's public duty may be interfered with or compromised by a personal or financial interest.") Furthermore, to narrowly read RCH Section 11-103 would undermine the policy of informing the public when a councilmembers’ private interests could affect legislation.
In this case, each of the bills had a fundamental issue in common – how the Landfill would be used after its intended closing date. The key to determining if a conflict of interest existed here is not whether the Association’s position was directly aligned with the bills; it is whether the Association had an interest that may have been affected by each of the bills. The Association’s interest, that is, its concern over the nuisance factor of the Landfill, had been publicly stated before the introduction of the bills. A reasonable person could have viewed Councilmember Apo’s employment with the Association as potentially affecting his decision making on the bill. Therefore, Councilmember Apo was required to fully disclose his private employment in writing before he voted on any of the versions of Bill 37.
We note that Councilmember Apo filed his disclosure when he thought it was required. His misconstruing the trigger for the conflict appears to be an honest mistake as to how broadly RCH Section 11-103 is interpreted. It was not the result of any attempt to hide his employment relationship with the Association, which was disclosed in his public Disclosure of Financial Interest statement and appears to have been common knowledge. Moreover, Councilmember Apo had filed full disclosures of his employment for other matters before the Council, such as the lawsuit against the city regarding the environmental impact statement for the increased size of the Landfill.
Therefore, the Commission recommends that no disciplinary action be taken in this matter.
The Commission believes that this opinion should act as a reminder to all councilmembers, board and commission members, officers and employees to file a full disclosure in writing whenever they have an interest that may tend to conflict with their duties to the public. Except for councilmembers who may vote after fully disclosing the conflict in writing, all city personnel with conflicts of interest must remove themselves from taking any part in the decision making process regarding the matter raising the conflict. The Commission and its staff stand ready to advise city personnel whether they have a conflict of interest.
Dated: July 18, 2007.
LEX R. SMITH, Chair
Honolulu Ethics Commission
Sec. 3‑6.7 Requests by third parties.
(c) Where no hearing is requested by the officer or employee involved, the commission shall render its opinion on the basis of the information available; provided, that the commission may request for additional information when deemed necessary.
Section 3-107.1 states in relevant part:
All councilmembers shall have the right to vote in the council at all times.
Section 11-103. Disclosure of Interest --
Any elected or appointed officer or employee who possesses or who acquires such interests as might reasonably tend to create a conflict with the public interest shall make full disclosure in writing to such person's appointing authority or to the council, in the case of a member of the council, and to the ethics commission, at any time such conflict becomes apparent. Such disclosure statements shall be made a matter of public record and be filed with the city clerk. Any member of the council who knows he or she has a personal or private interest, direct or indirect, in any proposal before the council, shall disclose such interest in writing to the council. Such disclosure shall be made a matter of public record prior to the taking of any vote on such proposal.
Section 11-102. Conflicts of Interest --
No elected or appointed officer or employee shall:
(c) Engage in any business transaction or activity or have a financial interest, direct or indirect, which is incompatible with the proper discharge of such person's official duties or which may tend to impair the independence of judgment in the performance of such person's official duties.
Section 11-102. Conflicts of Interest --
No elected or appointed officer or employee shall:
(b) Disclose confidential information gained by reason of such person's office or position or use such information for the personal gain or benefit of anyone.