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When David Tarnas was reelected to the state House in 2018, he was told he had to give up environmental consulting subcontracts he had with the state Department of Transportation.

“At the time, the ethics folks said that was a clear conflict,” Tarnas said. “I have not been able to get outside work because most of my work was for DOT harbors and highways. It’s been a challenge.”

Yet, there were other lawmakers working for contractors in 2018 and 2019. And the companies they had ties to won more than $228,000 in government work. 

An examination of current state legislators’ business interests found that at least a dozen sitting lawmakers are paid by or even own entities that have won more than $56 million in government contracts since 2006.

The findings, first reported in April in a New York Times/Civil Beat story, have prompted the Hawaii State Ethics Commission to begin exploring proposals that could rein in lawmakers pulling double duty. This story reveals more details of those findings and background on the lawmakers and their ties to state contractors.

Bills to require more transparency around procurement decisions and how those decisions might be intertwined with legislators’ private business interests died during this year’s legislative session as well as in previous years. Proposals for a full-time Legislature, which would include a ban on outside employment for lawmakers, have also stalled. 

It’s not illegal for legislators to work for contractors, nor is it necessarily unethical: Lawmakers are allowed to hold outside jobs under the state constitution.

The idea of a “citizen legislature” like Hawaii’s is to elect politicians whose backgrounds reflect the communities they serve. But that can cause tension between a lawmakers’ private business interests and their duties as a public servant.

“One can understand that even if that is perfectly ethical, it raises the appearance of impropriety that is alarming and concerning,” Hawaii State Ethics Commission Executive Director Robert Harris said at a recent commission meeting.

Hawaii Lawmakers Who Work For State Contractors

Topping the list of contractors that employ legislators is Nan Inc., which won at least $39.2 million in state contracts last year. Rep. Micah Aiu, a member of the House Finance Committee, works as Nan’s in-house lawyer where he earns between $100,000 and $150,000 a year, according to his state financial disclosure statement.

Nan Inc. is one of Honolulu rail’s major contractors. In the last year, it won millions of dollars in school improvement projects, including a contract to build a new gymnasium at Roosevelt High School.

Aiu has said that he is not involved in any procurement decisions involving his employer. 

Nan Inc. and its owner Patrick Shin are also major political donors. Company executives have contributed more than $350,000 to local campaigns since 2006, the Times and Civil Beat analysis found.

Scott Kouchi, brother of Senate President Ron Kouchi, is the president of Garden Isle Disposal, which has won an estimated $10.6 million in state contracts since 2006. Kauai County has paid the company $16.3 million since 2000.

Ron Kouchi has reported earning between $50,000 and $100,000 for Garden Isle doing community relations work, according to his financial disclosure statements.

Most of Garden Isle’s state contracts, about $6.7 million, were for handling fees and reimbursements from the Hi-5 recycling program. Garden Isle participated in the program between 2006 and 2016, according to state data.

The company’s primary work is in commercial disposal services, where on Kauai it has a virtual monopoly. Garden Isle is often the only company to bid on state disposal contracts for government buildings on Kauai, according to procurement documents.

The state issued violation notices against Kauai airport officials at least twice between 2010 and 2018 over services performed by Garden Isle past its contract date. Even after putting the contract out to a formal bid, Garden Isle was still the only business to submit an offer.

Sen. Donovan Dela Cruz, chair of the Ways and Means Committee, had ties to two businesses that won state contracts in recent years: Aina Archeology and DTL Inc. He has chaired WAM, which plays a major role in directing how the state spends its money, since 2017.

“There’s been a recognition that they are part time employees, and they are allowed to have second jobs, outside employment.”

State Ethics Commission Director Robert Harris

Aina Archeology has won $392,000 in contracts since 2018. DTL, a communications firm where he was co-owner and vice president, has been awarded more than $870,000 worth of contracts since 2016.

DTL’s contracts included consulting work for the Office of Hawaiian Affairs, the Department of Health and the State Energy Office. It has also run the social media accounts of the State Foundation on Culture and the Arts.

Dela Cruz was listed as the project manager on DTL’s proposal for a $224,000 contract with the state health department for a vaccine campaign. DTL officials have said he was not involved with the immunization project.

Dela Cruz reported selling his ownership interest in DTL in 2020 but his 2022 financial disclosure statement shows he continued receiving money from the firm for consulting services.

Kouchi and Dela Cruz have never responded to inquiries regarding their business interests.

Rep. Mark Hashem earns between $1,000 and $10,000 as a director for Koga Engineering since 2019, financial disclosure records show. The company’s largest state contract, according to state data, came in 2021. The DOT issued a $1.3 million contract for drainage improvements near Kuakini Highway on Hawaii island. 

Before being elected to office, Rep. Mahina Poepoe worked on grants and contracts for nonprofit , a nonprofit founded by activist Walter Ritte with a focus on environmental restoration. It won its only contract listed in state data in July 2023. The Department of Health contracted the nonprofit for an indigenous food systems project.

Poepoe said she wasn’t involved in any work on that contract.

Rep. David Alcos III is a subcontractor for companies working on state and federal contracts. He has reported earning between $10,000 and $25,000 from his company, D.A. Builders. He said he doesn’t interact much with government agencies, that’s the prime contractor’s responsibility.

Ironically, Alcos, despite being the state lawmaker who works most directly on state contracts and has the most ties to prime contractors, receives almost no donations from contractors, according to state data.

“I just didn’t reach out to them,” Alcos said. “I was doing a local, homegrown campaign.” 

Tarnas, who was told to give up his state subcontracts, said he doesn’t plan on pursuing any local contracts since he is the chairman of the House Judiciary Committee, which often hears ethics bills. If he does pursue those contracts in the future, he said he would look to companies working in the private sector “just to keep it clean.”

Harris, the state Ethics Commission director, takes a more nuanced approach to determining when a conflict exists.

As long as a lawmaker never represents their business before the Legislature, their employment is generally allowed, even if that means their private business puts them before agencies they might regulate. 

“There’s been a recognition that they are part time employees, and they are allowed to have second jobs, outside employment. There hasn’t been per se a prohibition to entering into contracts or representing their companies before other agencies,” Harris said in a recent interview.

A bill this session would have expanded the definition of lobbying to include communications on procurement decisions. If a lawmaker is in fact working on a contract or involved in contract negotiations with their private companies, those interactions would be revealed. But the measure died in early March.