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Ethics violations cast doubt over City Council’s integrity

After an investigation into alleged ethics violations, State Rep. and former City Councilmember Romy Cachola has been ordered to pay a $50,000 fine.

in Open Government

Honolulu’s Ethics Commission has approved a $50,000 fine against former City Councilmember and current State House Representative Romy Cachola for alleged ethics violations discovered after an investigation that began in 2012.

The only reason those violations still read “alleged,” is because the State Representative cut a deal with the Ethics Commission to pay the money in exchange for zero admission of guilt. But based on the commission’s findings, the public doesn’t need an admission from Mr. Cachola to see just how egregious his violations were.

The investigation, which began after the Ethics Commission received allegations of violations in 2012, found that Mr. Cachola misused his Council position to collect taxpayer money on a vehicle he was using for his political campaigning; that, for at least six years, he routinely accepted dozens of unlawful gifts worth thousands of dollars from lobbyists; and that he failed to disclose conflicts of interests that resulted from those prohibited gifts before voting on 100 different bills and resolutions related to rail transit, construction projects and rezoning during the 2008–12 period.

“This is the largest civil fine approved by the Commission,” said Chuck Totto, the Commission’s Executive Director and Legal Counsel. It’s size is based on several aggravating factors, including:

1. Persistent Violations. Councilmember Cachola’s misconduct occurred over several years and on a monthly recurring basis;

2. Prior Knowledge. Mr. Cachola was a councilmember for 12 years, during all of which he chaired or was a member of the Council committees responsible for developing ethics laws; he attended multiple ethics trainings; and he should have learned to avoid misusing City resources for political or personal benefit from the examples of former councilmembers Rene Mansho, Rod Tam and Nestor Garcia;

3. Ignoring Commission Directives. Councilmember Cachola repeatedly disregarded the Commission’s 2003 directive to him not to accept gifts in excess of $200 from lobbyists; and

4. Failure to Cooperate. Mr. Cachola ignored Commission subpoenas and discovery orders, and filed several meritless motions with the Commission and in circuit court.

“Public corruption is the use of public office for private gain, and this case is a perfect storm of public corruption.” said Totto.

The forked Pathfinder

In March of 2008, Mr. Cachola’s campaign fund, the Friends of Romy Cachola, purchased a 2008 Nissan Pathfinder. State law allows an elected official to use campaign funds to purchase and pay for the expenses of a vehicle, so long as 95 percent of its use is for campaign purposes. Mr. Cachola began receiving reimbursements from the political campaign fund for gas, insurance, registration, repairs, maintenance and parking. From March 2008 to October 2012, Mr. Cachola received $17,275 in reimbursements.

However, during that same four-and-a-half year period, Councilmember Cachola also collected monthly City Vehicle Allowance (CVA) payments from Honolulu tax payers totaling $13,717. It is unlawful to collect CVAs—which are meant to cover the expenses for councilmembers and city officials while conducting city business—for personal benefit. Under Revised Charter of Honolulu (RCH) Sec. 11-104, this includes political campaigning.

Similarly, Hawaiʻi Revised Statutes (HRS) Sec. 11-381(a) only allows campaign funds to be used for purposes directly related to the candidate’s own political campaign. Mr. Cachola was collecting money from two different sources, each prohibitive of the others’ purpose, on the same vehicle for over four years.

Corruption Christmas

In September of 2001, while Councilmember Cachola was the Council “Ethics Committee” Chair, the Council unanimously passed Gift Cap legislation that made accepting any gifts above $200 a strict liability violation. In other words, the usual requirement to prove that acceptance of a gift is an ethics violation—showing that a reasonable person could conclude that the gift was offered to influence or reward the recipient in the discharge of his official duties—does not need to be proven.

To be clear, any gift given with the expectation of influencing a public official in his or her duties is illegal, but with the Gift Cap law, a gift exceeding the $200 threshold is “conclusively presumed” to be intended to influence or reward the recipient (Ethics Commission Advisory Opinion No. 2002-3) and is automatically illegal. By 2003, Cachola and other councilmembers were already trying to repeal the law.

In this case, the Ethics Commission interviewed witnesses who lobbied Mr. Cachola on issues relating to rail transit, land use, rezoning and development, economic development, environmental issues, land use variances and construction—all big money, high-stakes issues.

According to the Commission’s report, “Each lobbyist stated that the meals, wine and other gifts provided to Councilmember Cachola were used to build and maintain a relationship with him … Each of the lobbyists noted that Councilmember Cachola preferred to meet for dinner meals at upscale restaurants such as Ruth’s Chris, Hiroshi Tapas, Duc’s Bistro, Michele’s, Roy’s and various country clubs. The meals were accompanied by wine, usually selected by Councilmember Cachola.”

The costs to the lobbyists were deducted as business expenses as at each dinner meeting or golf outing the client’s Council issues were part of the conversation with Cachola. Cachola had a similar defense as to why his accepting of these gifts was lawful:

“It was their intention to seek audience and exchange information with me regarding City issues. I often used these opportunities to share my concerns or disagreements with many issues that they were pursuing at the time.” Letter from Romy Cachola to Charles W. Totto in response to Notice of Alleged Violations, p. 4.

But unlike the lobbyists, whose job it is to obtain influence (one way or another) for their clients, a councilmember’s job is as a civil servant. Even if Mr. Cacholla could some how prove the gifts did not influence his decisions on key votes involving the above issues, the very Gift Cap law he helped pass automatically makes these gifts illegal, no matter what.

Examining the expense records of the lobbyists reveals, in Mr. Cachola, a pattern of accepting gifts from the earliest year the investigation probed. In Fiscal Year (FY) 2006–07 and FY 2007–08 Mr. Cachola received more than 60 of these unlawful gifts for a combined value of more than $5,000. Since those first two years investigated, in the fiscal years leading up to the portion of FY 2012–13 before Councilmember Cachola left the Council, he accepted an additional 44 gifts above the $200 threshold, totaling $3,800.

Mr. Cachola tried to argue that he did not violate the law because he did not know where all the gifts were coming from or their fair market values. But Ethics Commission Advisory Opinion No. 2013-3 essentially states that, for those who receive gifts, reasonable steps must be taken to determine the value and source of each gift.

100 conflicts of interest

Councilmembers are the only City officials permitted to vote on matters where they have a conflict of interest. RCH Sec. 3-107.1 states, “All councilmembers shall have the right to vote in council at all times.” That being said, RCH Sec. 11-103 mandates that the conflict must be fully disclosed in writing as soon as the councilmember becomes aware of it and before he or she votes on the conflicted measure.

In 2003, the Ethics Commission explained, in Advisory Opinion No. 2003-1, to Councilmember Cachola that each gift accepted over $200 is not only illegal, but also creates a conflict of interest for the councilmember on any matter in which the donor has an interest at Council (this opinion was sent in response to questions Cachola had regarding the Gift Cap law he was trying to repeal).

Twice, while Mr. Cachola was a councilmember, the Ethics Commission found a colleague of his to have violated that rule. In 2012, Councilmember Nestor Garcia failed to disclose a conflict of interest related to his employment by the Kapolei Chamber of Commerce when the Chamber was in support of a rail transit measure before the Council and in 2007, Councilmember Todd Apo also failed to disclose a conflict of interest.

The Ethics Commission investigation found 100 different measures on which Councilmember Cachola voted while failing to disclose a conflict of interest.

A vote by a councilmember is rendered null and void if the member had a conflict of interest that was not properly disclosed under RCH Sec. 11-103. The failure to disclose will invalidate the Council action if, after discounting the void vote, there are no longer sufficient votes for the measure to pass. Although removal of Cachola’s votes would not have changed the outcome of any of these measures (which says a lot in and of itself about the Honolulu City Council’s lock-step tendencies), a 5–4 vote on any of them could have easily resulted in the nullification of current City laws because of his misconduct.

In each of these types of violations, the Commission found that Mr. Cachola knew or should have known that what he was doing was wrong—a major factor in assessing the amount of the fine. During his 12 years at Council, Mr. Cachola was aware of the misconduct committed by then-Councilmembers Rene Mansho, Rod Tam, Todd Apo and Nestor Garcia through the Ethics Commission’s formal advisory opinions for each. On top of this, the Commission had already found Cachola responsible for misusing City web resources for his political campaign in 2008 and issued a formal opinion to him at that time.

Perhaps most egregious is that Councilmember Cachola not only participated in ethics training in 2001, 2007, 2010 and 2011, but sat on the Council committees with jurisdiction over ethics bills and policy for 12 years and was the Chair of these committees for 6 of those years.

“The recurring and self-enriching nature of [Mr. Cachola’s] transgressions will erode the public trust and confidence that the City Council makes its decisions based on the merits and without preferential treatment,” the report concludes.

While the financial loss to the City and its taxpayers that resulted from Mr. Cachola’s ethics violations may be relatively small, the loss of public trust suffered by the City in this case is much higher. The public has a reasonable expectation that an elected official will use his position to advance the integrity of the City government rather than “flout both the law and the Commission’s numerous advisory opinions in order to benefit himself,” as the report says.

“As with collecting funds for the Pathfinder from the taxpayers, the harm to the integrity of City government cannot be overstated,” continues the report’s conclusion. “The Council’s senior member for ethics law and policy repeatedly defied a fundamental safeguard to avoid unlawful gifts and maintain the public’s confidence in the Council decision making process.”

Mr. Cachola’s insistence that he is being unfairly “singled out” while other councilmembers were receiving similar gifts has absolutely no merit and should only inform the Commission that their work may not be over yet.

Episodes like this should remind the public that without government transparency and our own oversight of our elected officials, the direction in which Honolulu—and, now that Mr. Cachola sits in the Hawaiʻi State House, ostensibly the whole state—is being steered may not be the direction that is in the best interests of those of us who cannot afford to wine and dine corrupt officials like Romy Cachola.

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