Ethics Board’s ‘out of office’ reply


HILO — County Council members who leave office are no longer under the jurisdiction of the Board of Ethics, even if their actions took place during their tenure with the county.

That’s the premise Ethics Board members adopted Wednesday in dismissing a complaint that former Puna Councilman Fred Blas lied while questioning the county clerk during a council meeting. Blas, in an Aug. 20 session where the clerk was explaining problems with the primary election, maintained he witnessed people leaving a Puna polling place without voting that morning because the precinct didn’t open on time. A state report on election problems indicated it did.

“It’s kind of a dead issue with Fred, but it’s an important issue for future politicians,” said Sativa Sultan, testifying before the decision. “It will send a message to every other politician, ‘OK, you’re going to lie, but don’t do it from your council seat and don’t do it on video.’”

“Ethics in politics is seen as an oxymoron,” added R.J. Hampton, one of two Puna residents who filed the complaint. “It’s up to you, and I don’t want you to pass on it because Fred’s not here. … It calls into question the very credibility of the process. … I’m really looking to you to set the standard.”

Ethics Board members appeared sympathetic to the issue, but said, under the law, they had no recourse.

“I must say I do agree as an individual that to come out and lie and to manufacture words, especially in a high position, is wrong,” said Vice Chairman Bernard Balsis Jr. “(But) we no longer have jurisdiction over Mr. Blas.”

Blas, a one-term councilman, lost his seat by a 1,400-vote margin in the General Election to community college student Greggor Ilagan. Citing a family emergency, Blas immediately left for the mainland and missed his final month of council meetings. He didn’t attend the Ethics Board meeting.

In other business, the board delayed action on a complaint about the county’s use of bond financing until it could get more information from Mayor Billy Kenoi’s administration.

Dan Cole, who filed the complaint, provided documents showing the county borrowed $10 million in bond anticipation notes on March 2, 2011, at 1.22 percent interest from Bank of Hawaii. The money was then transferred into a certificate of deposit at First Hawaiian Bank, where it earned 0.125 percent interest. That cost taxpayers $66,000, Cole said.

The county’s $56 million bond authorization, however, wasn’t finalized and signed by Kenoi until May 4, 2011, after months of council delays.

“There were no bonds to which you could sell an anticipation note to,” Cole said. “Bond anticipation notes could not be sold legally.”

Balsis noted the Ethics Board doesn’t involve itself with legal matters, only ethical ones. But he said he would like to give the administration time to answer the question of who benefits from the transaction, which is a question under the Ethics Board’s jurisdiction.

The administration, in response to public records requests from Cole, points to a Master Issuance Certificate dated Sept. 28, 2009, that authorizes the sale of the notes. But Cole maintains the county code requires the Council to approve bond resolutions before the administration can borrow money.

Finance Director Nancy Crawford told West Hawaii Today the use of the bond anticipation notes saves taxpayers money, because smaller amounts can be borrowed for the short-term at lower interest rates than the 20-year general obligation bonds. The county selected Bank of Hawaii in 2008 after hiring an independent consultant and conducting a competitive process that showed it offered the best deal, Crawford said.