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The Honolulu Ethics Commission surprised most observers earlier this month by�� of ethics violations lodged against three current and former members of the Honolulu City Council.

The dismissal was announced several days after a closed-door hearing that excluded the public and the media. The council members were accused of accepting gifts from lobbyists in violation of city ordinances, and then failing to disclose the conflicts created by those gifts in advance of votes on matters important to the lobbyists.

Named in the ethics complaint were current council members Ann Kobayashi and Ikaika Anderson, and former council member Donovan Dela Cruz. Kobayashi chairs the council’s powerful Budget Committee, while Anderson chairs the Zoning and Planning Committee. Dela Cruz served on the council from 2000 to 2010, including over three years as chair. He was elected to the Hawaii State Senate in 2010.

The charges drew more than the usual public interest because of speculation the ethics violations, if upheld by the commission, could result in a series of rail-related council votes being declared legally null and void because required disclosures hadn’t been made, potentially throwing the rail project back into limbo.

The three were represented by attorney and former Congresswoman Colleen Hanabusa, recently named by Mayor Kirk Caldwell to a seat on the board of directors of the��, which oversees the city’s controversial rail project. Hanabusa is also representing the Hawaii State Teachers Association in two disputes with the State Ethics Commission over application of the ethics code.

After requesting a contested case hearing on the charges against the council members, Hanabusa filed a motion for summary judgment, asking the commission to find there was no basis for the charges as a matter of law, and to throw them out without going through a full hearing on the facts.��

Several of Hanabusa’s legal positions would, if they prevail, potentially open up gigantic loopholes in the ethics regime at both the city and state levels.

According to the commission’s brief order (just three pages long, plus signatures), all except one of the charges were dismissed by the commission’s executive director and chief legal counsel, Chuck Totto, “after considering the motion, the exhibits and hearing (Hanabusa’s) arguments,” and the single remaining charge was determined to be outside of the commission’s jurisdiction.

The case abruptly ended, but the reasons behind the commission’s about-face were not spelled out. And that’s a big problem.

Depending on exactly what was behind the commission’s dismissal of charges — which remains unspecified — it could be that instead of derailing the train project, government ethics in Honolulu have been knocked off track.

Totto had not responded to a request for further explanation of the dismissals as of Tuesday afternoon.

Previously confidential and still redacted legal documents released by the commission show Hanabusa used the time-tested “throw everything against the wall and see what sticks” strategy to defend her clients, raising a series of issues ranging from the narrow and technical to broad and sweeping attacks on the legal authority of the commission.

If the commission agreed with any of the broad challenges, it would at least temporarily render itself unable to pursue many, if not most, ethics violators.

The commission’s charges against Kobayashi, Anderson, and Dela Cruz were backed by more than��1,000 pages of documents, including receipts for food and beverages where the tabs were picked up by lobbyists, reimbursement requests filed by the lobbyists with their employers to cover the expenditures, sworn statements by witnesses, and other materials.

And, it seems, there really wasn’t much dispute over the basic elements of the case. All parties agreed that the council members were wined and dined by lobbyists representing special interests with important matters pending before the council. And the gifts were not disclosed before the council members cast votes on matters impacting the lobbyists.

The list of restaurants where lobbyists entertained the council members individually or in groups included spots like Alan Wong’s (described as a favorite of Kobayashi’s and one of the lobbyists), Roy’s Ko Olina, Mariposa, Pacific Club, St. Regis, Wolfgang’’s Steakhouse, Kincaid’s, Morton’s The Steakhouse,�� along with Michael Mina in San Francisco, Yardhouse in Denver, and Palm in Washington, D.C., among others.

But how the meals should be valued, whether they constituted ethical violations, and whether the commission has the legal authority to pursue them, was hotly contested.

Arguing Against Ethics

Hanabusa challenged the commission’s charges with several legal arguments.

She began by questioning the commission’s longstanding view that gifts from lobbyists are prohibited because, by definition, it can be reasonably inferred that their gifts are intended to influence or reward official action.

That’s exactly what lobbyists do, influence official action to their clients’ benefit. And accepting gifts under such circumstances violates the ethics laws.

However, Hanabusa argued, this link of lobbyists to prohibited gifts is not explicitly spelled out anywhere in the city charter, city ordinances or commission rules.

“This is simply Complainant’s interpretation of the laws,” her motion for summary judgment argued.

Then she questioned the way the commission valued the meals and drinks consumed by the council members at lobbyist expense.

In the absence of itemized receipts, the commission’s procedure has been to take the total cost of a meal and divide the cost by the number of people present, to get an approximate value attributed to each person.

If the total bill for a lunch with a lobbyist was $100, with tip, and there were four people at the table, including the council member, the commission began with the “rebuttable presumption” that the value of the gift was $25.�� The commission defended the practice as reasonable, and cited several legal cases that upheld the legality of similar calculations.

But Hanabusa called the procedure illegitimate, and argued the commission has the burden of proof to determine the value of what each person actually consumed, rather than arbitrarily assigning them a standard share of the total cost.

In sworn statements, for example, Kobayashi said she is generally limited by health concerns to salad, chicken or fish, and drinks only token amounts of alcohol. Anderson said he doesn’t drink, and counts calories, so would avoid something like lobster because it is served with calorie-laden butter.

As a result, both said they would typically not eat as much as others during for meals with lobbyists, and so their meals should have been assigned lesser values.

“The burden is not upon the (council members) to show that they did not eat an equal amount, it is upon the (commission’s director) to show that they did and did consume the identical amount of beverages,” Hanabusa argued.

But in most cases, those present told commission investigators they could not recall exactly who ate what, and receipts gathered during the investigation were generally not itemized to separate what each person ordered.

This means, Hanabusa argued, that the commission could not prove its case and all the charges should be dismissed.

Dangerous Territory

Those arguments are dangerous enough to the public interest, but Hanabusa went further.

Several of her legal positions would, if they prevail, potentially open up gigantic loopholes in the ethics regime at both the city and state levels.

First, Hanabusa argues that none of the Ethics Commission’s policies and precedents are valid unless they are based in administrative rules adopted pursuant to Hawaii’s Administrative Procedures Act (). She called the commission’s enforcement of the gift laws in the absence of rules “arbitrary and capricious,” and said��it violates the rights of those accused of violations because they have no clear way of knowing what actions will violate the law.

Totto and Laurie Wong, the commission’s associate legal counsel, called that argument “meritless.” They argued that the commission can legally rely on the precedents set by its library of past advisory opinions as an alternative to rulemaking.

The issue was apparently left unresolved by the commission.

Hanabusa also argued that any meals where campaign matters or elections were discussed are within the exclusive jurisdiction of the State Campaign Spending Commission and, therefore, any gifts to council members by lobbyists during those meetings are exempt from the ethics code.

“What is relevant,” Hanabusa argued, “is that the Ethics Code exempts campaign related matters from its jurisdiction.”

She pointed to a number of meetings that Anderson had with lobbyists which were described in various ways — “Dinner campaign,” or “politics” — and argued that these are exempt from the ethics code, and the food and drinks provided can’t be considered as gifts regulated by the Ethics Commission.

For example, Anderson went to dinner with a lobbyist in December 2012 at Morton’s, a meeting that��was described as “Dinner-thank you for successful campaign.”��Hanabusa argues that the meal, which cost several hundred dollars, can’t be considered a “gift” to Anderson because it was campaign-related.

In response, Totto and Wong cited the city charter, which appears to provide a far narrower exemption.

If all it takes for a public official or employee to circumvent the gift laws is to add the label�� “politics” or “campaign” to a get-together where they are wined and dined, that’s not a loophole. That’s virtually a repeal of the restrictions on gifts and conflicts.

“In relating to prohibited gifts, RCH Sec.. 11-102..1((a)) provides:: ‘Nothing herein shall preclude the solicitation or acceptance of lawful contributions for election campaigns,’” they argued.

And food and drinks consumed by a City Council member and paid for by a lobbyist, such as Anderson’s tab at Morton’s,�� are not “lawful contributions for election campaigns,” and therefore are not exempt from ethics, they said.

They note, for example, that the cost of Anderson’s evening at Morton’s wasn’t reported to the state Campaign Spending Commission as a campaign contribution or expense, and therefore shouldn’t be considered exempt as campaign-related.

In this case, it appears that the jurisdictional argument was accepted by the commission. The dismissal order agreed that Anderson accepted lobbyist gifts in excess of the $200 limit in the 2011-2012 fiscal year, but that a March 31, 2012, meal was claimed as campaign-related and therefore outside of the commission’s jurisdiction.

If all it takes for a public official or employee to circumvent the gift laws is to add the label�� “politics” or “campaign” to a get-together where they are wined and dined by one or more lobbyists, that’s not a loophole. That’s virtually a repeal of the restrictions on gifts and conflicts.

And Hanabusa made a related argument. In many cases, she argued, these City Council members considered certain lobbyists to be their “personal friends,” and, for that reason, the gift restrictions should not apply.

But the city’s ethics provisions in the charter and in ordinances do not allow an exception for gifts from “personal friends,” although an exemption from gift disclosure requirement is made for gifts from “a spouse, fiancé, fiancée, any relative within four degrees of consanguinity of the council member or the spouse, fiancé, or fiancée of such a relative.”

Hanabusa’s proposed “friends” exemption ignores the fact that the goal of any lobbyist is to be close to and trusted by the public officials you lobby, to ingratiate yourself with a public official to the point that you’re considered a friend first, and a lobbyist second. That’s when you potentially have the most interest. It’s part and parcel of what you do as a lobbyist to advance the interests of your clients.

Are friendships developed in this way faux friendships? Not necessarily, but as long as the public official is in a position to take official action that impacts the lobbyist’s interests, then an exemption is not in order.

Ethics Adrift

The collapse of the case against the three council members appears to be another significant setback for Totto and the commission staff, who had worked on the case since September 2014.

It comes while Totto is still facing stiff push-back from the administration of Mayor Kirk Caldwell, which has been resisting attempts to gather information as part of preliminary investigations of city employees and officials.

And back in June, the commission passed a new media policy that effectively muzzled Totto. Although it was quickly rolled back, the move was a clear signal that recent Caldwell appointees to the commission are not comfortable with the series of high profile ethics cases Totto and his staff have pursued.

Without further clarification by the Honolulu Ethics Commission, it’s impossible for the public to know the extent to which the the dismissal signals that the powers of the commission to enforce the ethics code — and the right of the public to expect high ethical standards on the part of our public officials and employees — have been diminished.

The commission does a disservice if it fails to provide additional details on its decision as soon as possible.

Here’s the order granting Hanabusa’s motion for summary judgment:

Here is Colleen Hanabusa’s redacted motion for summary judgment:

Charles Totto’s redacted memorandum in opposition to motion for summary judgment: