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A high-profile nonprofit organization that advocates for health and human services in Hawaii has agreed to pay a $2,000 penalty to settle charges it violated the state’s lobbying law by failing to disclose its lobbying-related expenditures over the past three years, according to a summary of the case made public last month by the .

In addition, the group’s executive director at the time agreed to pay a $500 penalty to settle related charges that he failed to register as a lobbyist representing the organization during the 2015 legislative session.

Neither the organization nor its director are named in the commission’s statement of the case, which describes the “apparent violations” of the lobbyist law and how the matter was resolved. The redacted “Resolution of Investigations 2015-2,” with all names removed, is dated Dec. 2 and was .

However, officials of PHOCUSED, a nonprofit group which describes itself as “,” confirmed to Civil Beat on Tuesday that the organization was the subject of the ethics investigation.

State business registration records show PHOCUSED was formed at the beginning of 2008. It’s name comes from the first letters of each word in the phrase, “Protecting Hawaii’s Ohana, Children, Under Served, Elderly, and Disabled.”

Both Susan Chandler, professor of public administration at the University of Hawaii Manoa Campus and currently co-chair of the PHOCUSED board of directors, and the group’s newly appointed executive director, Scott Fuji, confirmed that PHOCUSED was the group involved in the case.

They also said Scott Morishige, the group’s former executive director, was the person identified as its “Chief Executive Officer” in the commission’s summary of the case.

Both Chandler and Fuji said the organization moved quickly to resolve the matter as soon as they were contacted by the Ethics Commission.

“The board agreed it was best to pay the fine and go forward,” Chandler said.

“What it really comes down to is that we want to be as transparent as possible,” Fuji said. “We had to make sure this was taken care of, clarifying our error as quickly as possible, so that we make sure to avoid this in the future.”

In addition to paying administrative penalties, PHOCUSED and Morishige also agreed to retroactively file reports disclosing lobbying expenses.

Commission records show Morishige  on Aug. 23, 2015, although it was not submitted until Aug. 28 after being approved by a board member.

Morishige also prepared and filed eight expenditure reports on behalf of the organization, disclosing its lobbying-related spending during the 2013, 2014, and 2015 legislative sessions. These were also completed on Aug. 23, and then on the next day, Aug. 24, 2015.

A few hours later, Morishige was scheduled to begin his new job as Gov. David Ige’s coordinator on homelessness, where he is leading the Hawaii Interagency Council on Homelessness, and spearheading the governor’s homelessness initiatives.

The Investigation

Prior to 2012, PHOCUSED retained Alex Santiago, a former lawmaker, as its registered lobbyist, and all the appropriate paperwork was filed. After Morishige was named executive director in mid-2013, he apparently took over the lobbying duties.

However, Morishige told the commission, PHOCUSED shifted its efforts from pushing for funding for its member organizations to more general legislative initiatives.

According to the commission’s account, Morishige (identified only as the Chief Executive Officer) “believed that, given the shift in the organization’s advocacy efforts, the organization was not ‘lobbying.’”

Instead, he and the organization considered their advocacy with respect to bills as simply “education,” which would be exempt from the lobbyist laws.  But the commission said Morishige never consulted with or sought guidance from the commission when making this determination.

Morishige told the commission “he had reached the conclusion that his activities were not lobbying based on his observations of other nonprofit organizations that he believed were similarly involved with the legislature.”

This misunderstanding of the education exemption has been a factor in several other cases of lobbyist law violations, including a case the commission concluded in February 2015. In that case, the Land Use Research Foundation and its executive director were each fined $2,000 for failing to comply with the lobbyist law in similar fashion.

“The Commission construes this provision as providing an exemption for those who provide expert information to the legislature, at the request of the legislature, but who do not attempt to advocate for a position or otherwise influence legislative action,” the commission wrote in its . “Those who provide information to the legislature, or attempt to educate the legislature, while also advocating for a position are not exempt from the requirements of the Lobbyists Law.”

In short, if you’re actively pushing for or against a bill, you can’t claim the exemption intended to apply to neutral outside experts consulted by the Legislature or administrative agencies.

So the ethics commission staff then reviewed Morishige’s testimony for or  against “numerous bills” during the 2014 and 2015 legislative sessions, and concluded the “primary purpose”  of the testimony was advocacy and not “education.”

The PHOCUSED website lists in 2015. After reviewing Morishige’s testimonies, and other activities before and during the session, the commission concluded the legislative advocacy would have taken more than five hours a month, which is the threshold that triggers the lobbyist registration and disclosure requirements.

The commission noted that Morishige “fully cooperated with the Commission in its review of his activities relating to bills and other legislative initiatives.”

Remaining Questions

I’m left with lingering questions about the case, despite my support for the organization and its goals.

The eight expenditure reports filed by PHOCUSED disclosed a total of $7,750 spent during three legislative sessions from 2013 to 2015. The only reported expenditures were the amounts paid to their lobbyist, presumably Morishige. No expenditures were reported for printing of lobbying materials, or costs of organizing demonstrations at the State Capitol while the Legislature was in session.

Of course, it’s possible that this is accurate. However, the absence of any expenses for typical lobbying activities, whether for postage, printing, signs used at demonstrations, or similar items, should prompt additional scrutiny.

And the group’s federal tax return for the fiscal year ending June 30, 2014 (which would have included the 2014 legislative session) reported $10,000 in total lobbying expenditures. The commission resolution of the case does not indicate whether it was aware of this discrepancy.

If you know that your name will be made public if you’re found to have violated the law, I would expect that most organizations would be much more attentive to making sure things are done right the first time.

There’s a question whether the commission should be doing more to educate organizations, including nonprofit organizations, about the lobbying law.

“It’s kind of a murky area,” Chandler observed.

She said she believed that because PHOCUSED was advocating for public interest issues that are clearly nonpartisan, it wasn’t really lobbying.

And if Chandler, who served as director of the Department of Human Services from 1995 to 2002, is confused about the law, then it’s likely there are lots of other people and organizations in the same boat.

Then there’s the whole question of whether the ethics commission should be protecting the identities of organizations or individuals who have violated the ethics or lobbying laws.

In this case, Chandler said the organization expected that its identity would not be disclosed by the commission. And it wasn’t.

“But you figured it out,” she said.

And yes, I did. It wasn’t magic, it just took a little digging.

And that will probably cause discomfort for PHOCUSED and . These include some of Hawaii’s largest, most influential and most respected social service agencies and advocacy organizations, such as , Child and Family Services, Goodwill Industries, the Honolulu Community Action Program, Hawaii Youth Services Network, and PATCH.

That’s unfortunate, I agree. I admit that calling attention to the lobbyist law violations by PHOCUSED makes me uncomfortable.

But knowing that PHOCUSED was at the center of this case serves a public purpose, since is shows confusion about the law is snagging well-meaning groups — not only those trying to hide something or get away with something. That’s important to know.

It also also seems to me that full disclosure is a necessary part of a working system of ethics enforcement in which violations of the law, whether understandable or not, whether by those we support or those whose motives we question, all have consequences.

If you know that your name will be made public if you’re found to have violated the law, I would expect that most organizations would be much more attentive to making sure things are done right the first time.

And that’s what we all want when it comes to ethics, isn’t it?