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Monday, July 22, 2019
Ethics: Wanna Buy Some State Land? -- Hire a Legislator, Its Legal!
By News Release @ 9:04 PM :: 3349 Views :: Ethics

ADVISORY OPINION NO. 2019-3

From Hawaii State Ethics Commission, June 20, 2019 (excerpts)

A legislator requested an Advisory Opinion from the State Ethics Commission (“Commission”) as to whether the State Ethics Code, Hawai‘i Revised Statutes (“HRS”) Chapter 84, permits the legislator to represent a private client in submitting an offer to purchase state property from a state agency (“Agency A”).

As discussed below, the State Ethics Code does not prohibit the legislator – in the legislator’s private capacity – from representing a private client in an attempted purchase of state property from Agency A. That said, the Commission offers additional guidance to ensure that the legislator continues to maintain the high (sic) standards of ethical conduct required of legislators.

I. FACTS

Agency A has owned the property at issue (“Property”) for several years and has been interested in selling the Property for some time.

Agency A recently hired a third-party private company to market the Property, solicit bids, and present offers (with a recommendation on which offer to accept) to Agency A. Although Agency A will make the final determination on which offer to accept, Agency A’s Director described the proposed transaction as “arms-length” because the third-party company is handling virtually all aspects of the sale – including recommending which offer to accept.

In the legislator’s private capacity, the legislator works on a sales commission basis for a company that represents clients in various transactions. Before Agency A or its third-party private company made a formal announcement about the sale of the Property, word that the Property might be offered for sale began to spread among the business community. The legislator heard about the potential offer of sale through the legislator’s professional network – not through the legislator’s work as a legislator – and the legislator contacted Agency A’s Director to get more information. In a brief telephone call, Agency A’s Director referred the legislator to the third-party private company, which in turn provided the legislator with information about the sale.

Agency A’s Director confirmed that the legislator was not given any confidential information about the sale, nor was the legislator given any special treatment because of the legislator’s state position. Instead, Agency A’s Director simply referred the legislator to the third-party private company for more information – the same action Agency A’s Director would have taken for anyone who inquired about the sale of the Property.

Legislators vote on bills to appropriate funds to state agencies, including Agency A. However, the legislator does not have any more specific dealings with Agency A as a legislator and does not have significant oversight authority over Agency A beyond the legislator’s ability to vote on the budget bill. Similarly, the legislator was not aware of having taken any legislative action affecting the Property or the sale thereof.

The legislator requested guidance from the Commission to ensure that there would be no concerns under the State Ethics Code if the legislator represented a private client in submitting an offer to purchase the Property and if Agency A decided to accept the legislator’s client’s offer.

II. ISSUE PRESENTED

The issue before the Commission is whether the State Ethics Code prohibits the legislator from representing a private client in a transaction to purchase state property. As discussed more fully below, the Commission concludes that, under the circumstances described herein, the Ethics Code does not prohibit this.

IV. CONCLUSION For the reasons discussed above, the Commission believes that the legislator is not prohibited from representing a private client seeking to purchase the Property from Agency A. The Commission thanked the legislator for seeking guidance on this issue. …

read … Full Report

2014: Kakaako: How to Buy Hawaii State Senators--Legally

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