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Kauai Police Chief Will Appeal Ruling Allowing Mayor to Override Police Commission Authority

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Kauai Mayor Bernard Carvalho

BY MALIA ZIMMERMAN - Kauai’s mayor and police chief have been battling publicly since last February over whether the mayor or the police commission has the authority to discipline or fire the police chief.

In February, Kauai Mayor Bernard Carvalho ordered Police Chief Darryl Perry on leave so the county could look into a complaint filed by an employee alleging a hostile work environment at the Police Department.

Perry tried to return to work, but the mayor stopped him. Finally, in March, Carvalho allowed the police chief to go back to the police headquarters.

But the dispute did not end there. The 7-member Kauai Police Commission took Carvalho to court to ask the judge to determine the mayor’s authority.

On October 30, Fifth Circuit Court’s Chief Judge Randal Valenciano sided with the mayor, saying as chief executive officer of the County of Kauai, the mayor does have direct supervision over all departments including the police department.

“We are pleased that the court has confirmed our position and now look forward to moving beyond this to focus on the many important matters that face the County,” Carvalho said in a written statement.

Perry held off commenting on the Judge’s decision until Sunday when he told Hawaii Reporter he will likely appeal the decision.

“After review by some of the most respected legal minds in the State, the ruling by Judge Valenciano has a high probability of being appealed and overturned. It certainly is not unusual for decisions to be overturned by the Intermediate Court of Appeals or the Supreme Court, as it has happened to Circuit Court judges throughout the State of Hawaii, including rulings made by Judge Valenciano,” Perry said.

Perry said the appeal will be based on several errors by the Trier of Facts, which includes among other things, not taking into account provisions of the Hawaii Revised Statutes.

Kauai Chief of Police Darryl Perry

However, the main reason this ruling will not stand, he said, is the decision is “glaringly wrong.”

“Aside from the legal arguments, first and foremost it is wrong because this ruling injects politics where it does not belong.

“Citizens have stated to me that it now creates situations where the Mayor may now dictate who should be criminally investigated, who should be given a break, who should receive preferential treatment, while giving immunity to special interest groups or even the Mayor himself.

"And if the Chief of Police refuses to follow the Mayor’s order, as the Chief should, he or she may be suspended indefinitely,” Perry said.

Perry argues that in order for the system to work, “the Chief of Police must remain untainted by outside political influences to allow for criminal investigations to be conducted in a fair and impartial manner.”

If there are allegations of mismanagement or misconduct by the Chief of Police, the Police Commission should step in, he said.

“This process does not and never fell under the authority of the Mayor—the architects of the Kauai County Charter had no intentions of giving the Mayor that kind of power or latitude,” Perry said.


Hawaii's Powerful Senior Senator Shows He Still Has Control of Island Politics

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Congresswoman Colleen Hanabusa with U.S. Senator Inouye and Congresswoman Mazie Hirono, now a U.S. Senator. Both were elected with Inouye's endorsement

BY MALIA ZIMMERMAN - Hawaii’s powerful Senior Senator Daniel Inouye, D-Hawaii, showed he still has control of state politics.

 

All of the candidates the 88-year-old powerhouse personally lobbied for won their elections. That included:

 

  • President Barack Obama, a former Hawaii resident, winning over former Massachusetts Gov. Mitt Romney 306,545 votes (70.54 percent) to 120,975 (27.84 percent).

 

  • Congresswoman Mazie Hirono, D-Hawaii, who beat former Gov. Linda Lingle, a Republican, in the U.S. Senate election with 269,389 votes (62.60 percent) to 160,937 (37.40 percent).

 

  • Congresswoman Colleen Hanabusa, D-Hawaii, won re-election and defeated a challenge from former Congressman Charles Djou, R-Hawaii, in Congressional District 1, 116,450 votes (54.61 percent) to 97,774 votes (45.39 percent).

 

  • Former City Council Member Tulsi Gabbard beat Republican handyman Kawika Crowley, 168,466 votes (80.54 percent) to 40,697 votes (19.46 percent). Gabbard will replace the retiring U.S. Senator Daniel Akaka, D-Hawaii.

 

  • Former City Managing Director Kirk Caldwell beat former Gov. Ben Cayetano in the mayoral election, 157,650 votes (53.93 percent) to 134,690 votes (46.07 percent). Cayetano, a Democrat, opposed Inouye’s prized $5.2 billion elevated steel on steel rail project and pledged to cancel the project if elected. Inouye worked diligently to ensure Cayetano was defeated.

 

With Democrats also holding control of the U.S. Senate, Inouye will likely remain as the U.S. Senate Appropriations Chair.

 

In the state legislative races, Republicans took a hit.

 

Sen. Sam Slom, R-Hawaii Kai to Kaimuki, was the only Republican to win a state Senate seat. He remains the only Republican in that 25-member body. Slom beat challenger Kurt Lajala, a newcomer to politics, by 14,811 (60.18 percent) to 9,800 (39.82 percent), in a newly redistricted area.

 

Fred Hemmings hoped to return to the state Senate after a two-year break from politics, but former state Department of Land and Natural Resources Director Laura Thielen beat him 13,551 votes (59.45 percent) to 9,242 votes (40.55 percent).

 

There was a great deal of tension in that race because state Rep. Cynthia Thielen, R-Kailua, Laura Thielen’s mother, broke Republican Party rules and campaigned aggressively for her daughter, a Democrat. But the Republican Party did not step in.

 

In Ka’awa, former state Republican Representative Colleen Meyer was unable to unseat Democrat Clayton Hee, the chair of the Senate Judiciary and Labor Committee. Hee, who raised over $400,000 in his campaign war chest, brought in 6,885 votes or 53.36 percent versus Meyer’s 6,018 votes or 46.64 percent.

 

In the House, Republicans lost two incumbents: Corinne Ching of Nuuanu and George Fontaine of Maui. Two House Republicans opted not to run again, Rep. Barbara Marumoto retired and Rep. Kymberly Pine ran for city council. Richard Fale beat incumbent Rep. Gil Riviere during the Republican Primary, and won the General as well.

 

However, Republicans picked up three House seats with newcomers Beth Fukumoto and Lauren Cheape and former state Rep. Bob McDermott.

 

With all the shuffling, the House Republican Minority will go down from 8 to 7 in the 51-member body.

 

GOP members include House Minority Leader Gene Ward, R-Hawaii Kai; Rep. Cynthia Thielen, R-Kailua; Rep. Richard Fale, R-North Shore; Rep. Beth Fukumoto, R-Mililani; Rep. Lauren Cheape, R-Kunia; Aaron Ling Johanson, R-Aiea; and Rep. Bob McDermott, R-Ewa Beach.

 

The prosecutor races on Oahu and Kauai were hard fought.

 

On Oahu, City Prosecutor Keith Kaneshiro will keep his job after beating challenger Kevin Takata, 155,151 votes (58.93 percent) to 108,108 votes (41.07 percent)

 

On Kauai, incumbent Prosecuting attorney Shaylene Carvalho was defeated by challenger Justin Kollar, 14,289 votes (60.03 percent) to 9,514 (39.97 percent).

 

On Oahu, the Honolulu City Council will continue to be dominated by politicians devoted to the controversial rail project. Rep. Kymberly Pine beat incumbent Council Member Tom Berg and Senator Carol Fukunaga won the District 6 council race over former Rep. Sam Aiona. Both Pine and Fukunaga were backed by the Hawaii Carpenters Union because of their pro-rail stance. Council Budget Chair Ann Kobayashi is now the only council member of 9 that has been critical of the rail project.

 

Statewide, two constitutional amendments were defeated. The first, relating to dams and reservoirs, received support from 212,395 voters or 48.66 percent of the vote. Some 175,952 people voted no, and that combined with the 47,975 votes (10.99 percent), defeated the amendment that would have allowed private dam and reservoir owners to borrow state special purpose revenue bonds for maintenance.

 

A second constitutional amendment that would have allowed retired judges to return to the bench on a temporary basis also failed to pass with 216,655 people or 49.63 percent voting yes and 174,190 people or 39.90 percent voted no. But those no votes combined with the blank ballots totaling 45,513 votes or 10.43 percent, defeated the amendment.

 

Two city charter amendments on Oahu, relating to grants in aid and relating to the creation of special funds, did pass with more than 50 percent of the vote.

PRP Hawaii/Hawaii Carpenters Union Files Motion to Move Libel Case Filed by Cayetano to Federal Court

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Ben Cayetano

BY MALIA ZIMMERMAN - Pacific Resource Partnership, also known as the Hawaii Carpenters Union Market Recovery Fund, has filed a motion in U.S. District Court to transfer the libel and slander case filed against them by former Gov. Ben Cayetano from state to federal court. (see the PRP Hawaii motion transfer to the case to federal court )

The 11-page motion, filed November 19, argues the case is intertwined with labor contracts that are governed by the Labor Management Relations Act.

Cayetano filed the lawsuit against the Carpenters Union, PRP Hawaii, its director John White, its board members and advertising agency after PRP spent $3 million on attack ads and push polls trying to ensure Cayetano was not elected mayor.

Cayetano may oppose the motion to transfer the case from state to federal court. He said Tuesday that he was still reviewing the case.

Cayetano’s attorney Jim Bickerton, a partner with Bickerton Lee Dang & Sullivan, said the U.S. Supreme Court through its controversial decision known as Citizens United allows unlimited amounts of money to be used in campaigns to attack candidates, so the federal court may also be the best place to fight the issue and address some of the fall out.

After leading in the polls by nearly double in the August Primary Election, Cayetano lost the mayor’s election by about 20,000 votes to former city managing director Kirk Caldwell.

Construction unions targeted Cayetano because he opposes the city’s $5.2 billion elevated steel on steel rail project, while Caldwell supports it.

The ads made a wide variety of accusations against Cayetano, including that he knowingly took illegal campaign contributions when he was governor of Hawaii. Cayetano and the state's former Campaign Spending Commission Director Robert Watada said those allegations are false.

Pacific Resource Partnership made other accusations against Cayetano, including that he was soft on crime, and that he laid off state employees while cutting government services.

Attorneys Jim Bickerton and Michael Green

Cayetano's lawyers, including Bickerton and Michael Green, argue “Until defendants started this campaign of falsehoods, Gov. Cayetano enjoyed an excellent reputation. As a two-term governor who ended his term with a surplus and a wide range of achievements, he is respected as an administrator. More importantly, because he has always tried to do what he believes to be in the public interest and say ‘no’ to powerful special interests who seek more than their fair share of the pie, even those who disagree with him have always recognized that he is a person of independence and integrity.”

Bickerton said earlier that the source of the money spent on the all out campaign against Cayetano is "mysterious", but they have traced the money to a group of wealthy general contractors "who expect a big piece of the billions of dollars that will be spent by taxpayers if rail is built."

Bickerton, who is seeking a jury trial, said the lawsuit will help uncover which contractors give funds to PRP Hawaii and paid "big money for big lies."

None of the defendants in the lawsuit have been willing to comment.

Cayetano said earlier he is not just filing this lawsuit for himself – it is for others who might want to run for office but don’t want to tolerate this kind of advertising war being waged against them - and he is willing to take the fight all the way to the U.S. Supreme Court.

MORE ON THE WEB

Ssee the 30-page Complaint against PRP here

And PRP Hawaii request transfer to federal court here

 

Elections Commission Moves Up Meeting After Public Complains About Management of 2012 Elections

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Voters wait in line at Holy Trinity after the precinct runs out of paper ballots

BY MALIA ZIMMERMAN - The Hawaii Elections Commission has moved up its meeting from December to the last week of November after voters across the Big Island and Oahu have complained about the management of the 2012 Primary and General Elections.

The meeting, which is open to the public, is scheduled for Tuesday, November 27 at 10 a.m. in the State Office Tower in Honolulu.

During the August 11 Primary election in Hawaii county, several polling locations experienced problems, opening late and without the proper equipment. Gov. Neil Abercrombie delayed the closing of the polls on Hawaii island. The state Office of Elections took over management of the General Election from the Hawaii County Clerk after numerous complaints were filed.

While elections rans smoothly on Hawaii Island during the General Election on November 6, on Oahu it was a very different matter.

State elections officials confirmed 24 out of 140 polling places on Oahu ran out of paper ballots during the General Election. The number was originally reported as 5 polling places, but by the day after the election, that number had increased by nearly five times.

With just one electronic voting machine at each location, only about 10 voters per hour could be accommodated. Others waited in line for sometimes as long as three hours for additional paper ballots to arrive.

League of Women Voters President Beppie Shapiro said problems spanned from ballot shortages and incorrect ballots, to excessive wait times for determination of eligibility to vote and long lines at polling places.

"These voter access problems undermine the most fundamental feature of a democracy, a citizen’s right to vote. With Hawaii’s dismal voter participation rate receiving national attention, the League is distressed to learn that many people who tried to vote in Tuesday’s election found the process so onerous that they gave up and did not complete ballots. This is unfair to candidates as well as to voters," Shapiro said.

State Elections Office spokesman Rex Quidilla said the elections staff realized too late that the ballot order was incorrect. As the election staff rushed to deliver more ballots at locations across the island, their progress was slowed by afternoon traffic.

Quidilla said the election administrators apologized for the error that left people across the island frustrated, and led some to leave the polls without voting.

The League of Women Voters of Hawaii called on the Hawaii State Legislature to take action.

"We ask the Legislature to respond to this review as necessary to ensure that in future elections voters are not faced with avoidable inconvenience and frustration as occurred in Hawaii County on August 11 and in Honolulu City and County on November 6, 2012," said League President Beppie Shapiro.

Shapiro said the League of Women Voters believes the public deserves to know why the problems occurred, and what needs to be done to improve the voting process and ensure that the state does not face similar problems in the 2014 elections.

On November 14, the Honolulu City Council passed a unanimous resolution requesting Gov. Abercrombie conduct an investigation into the November 6 General Election.

Councilman Tom Berg, who introduced the resolution, said “It is our duty and obligation to speak up and restore faith in the voting process. To sit back and do nothing is inexcusable. We must, as an elected body, take action.”

More on the web:

See the agenda here: http://hawaii.gov/elections/ec/

Hawaii Election Commission members:
Name Appointing Authority Island Representation Term Expiration Date
Daniel Young

House Speaker

Oahu

06/30/16

Warren Orikasa

House Speaker

Maui

06/30/14

Margaret Masunaga

Senate President

Hawaii

06/30/14

Zale Okazaki

Senate President

Oahu

06/30/16

Patricia Berg

Senate Minority Leader

Kauai

06/30/14

Carol Kitaoka

Senate Minority Leader

Hawaii

06/30/16

Xara T. Marshall

House Minority Leader

Maui

06/30/16

Charles King

House Minority Leader

Kauai

06/30/14

William Marston
(Chairperson)

After Problems at 24 Oahu Polling Sites, Governor Asks Attorney General to Investigate

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Gov. Neil Abercrombie (courtesy of his web site)

BY MALIA ZIMMERMAN - Gov. Neil Abercrombie has asked his appointed attorney general, David Louie, to investigate problems that arose during the November 6 General Election on Oahu, saying "the handling of election operations raises legitimate concerns."

In a statement issued Monday, Abercrombie announced he asked Louie "to investigate the State Office of Elections and the circumstances that resulted in a shortage of paper ballots at numerous Oahu polling places on Nov. 6."

Abercrombie maintained there was a "serious problem has tarnished the election process and eroded public confidence."

State elections officials confirmed 24 out of 140 polling places on Oahu ran out of paper ballots during the General Election. The number was originally reported as 5 polling places, but by the day after the election, that number had increased by nearly five times.

The State Elections Commission moved up its meeting from December to Tuesday, November 27 to address the issues.

"I do not plan to simply stand on the side and wait to see what the Office of Elections’ own review may bring. At a minimum, we must consider new technologies that can help bring our election process into the 21st Century," Abercrombie said.

The Honolulu City Council passed a unanimous resolution on November 14 calling for the Governor to look into several issues that left voters feeling as if the elections had not been run fairly. Many stood in long lines unable to vote for as long as three hours while others left without voting because they were unable to wait.

Abercrombie said the governor's office does not have that authority. However, he can propose new legislation this January to try to ensure problems that existed during the November 6 General Election don't happen again in future elections.

Attorney General David M. Louie

“The right to vote is one of our most cherished duties as U.S. citizens. Therefore, we must ensure that our voting process runs smoothly and efficiently," Abercrombie said.

One of Abercrombie's proposals has been endorsed by Democrat lawmakers in previous sessions.

“This January, I will be proposing as part of my legislative package a measure to move our state toward 100 percent mail-in voting, which has been effective in other parts of the country. Moreover, absentee ballots have seen a steady increase and use over the last several elections, and there has been no evidence to question the accuracy and security of these ballots relative to traditional methods."

State Elections Officer Scott Nago said the Office has no comment regarding the investigation and took no position on the governor's proposal for all mail in ballots.

Nago added: "As it relates to all mail voting, the office takes no position as this is a policy issue for the Legislature. When the matter comes up for hearing at the Legislature, the office will provide technical comments."

League of Women Voters President Beppie Shapiro said in an earlier statement that in addition to ballot shortages and long lines, voters encountered other problems ranging from incorrect ballots to excessive wait times for determination of eligibility to vote.

Just after the election, the League of Women Voters called on the Legislature to take action.

"These voter access problems undermine the most fundamental feature of a democracy, a citizen’s right to vote. With Hawaii’s dismal voter participation rate receiving national attention, the League is distressed to learn that many people who tried to vote in Tuesday’s election found the process so onerous that they gave up and did not complete ballots. This is unfair to candidates as well as to voters," Shapiro said on November 7.

Problems that occurred during the election will also be addressed Tuesday by the State Elections Commission beginning at 10 a.m. in the State Office Tower.

Senate Vice President, Former Attorney General, Critical of Millions of Dollars the University Spends on Legal Counsel

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Senate Vice President Donna Mercado Kim

BY MALIA ZIMMERMAN - University of Hawaii management has been under fire in recent months for wasting millions of dollars on outside law firms and public relations agencies while also having a plethora of attorneys and public relations personnel on staff.

Now a former attorney general and high-ranking state Senator are questioning the University’s practice, specifically related to legal counsel.

Senate Vice President Donna Mercado Kim said the budget for the University’s Office of General Counsel is $1.2 million a year. The University also spent over $2.2 million from March 2011 through May 2012 for outside legal counsel.

The issue was highlighted in a series of recent Senate investigative hearings, during which lawmakers looked into spending and management practices at the state University.

Kim organized the hearings at the request of Senate leadership, after University President MRC Greenwood admitted the institution was scammed out of a $200,000 deposit on what turned out to be a fake Stevie Wonder concert. The public – and senators – questioned why the many attorneys and administrators did not scrutinize the deal before wiring the money.

Michael Lilly, former Hawaii attorney general, said part of the reason the University has “lost its way” is it no longer has the benefit of independent oversight by the Attorney General’s office.

In the past, the attorney general’s office provided the University with independent legal advice, but now the institution relies on nine staff attorneys.

One problem with in-house counsel, Lilly argues, is “they tend to provide the advice the organization wants to hear - not necessarily the advice it needs to hear.”

In addition, he said it is “troubling” that the University’s 9-member law firm “is not enough” resulting in the University contracting with private law firms “to help with UH missteps.”

Lilly, who is now in private practice, said Hawaii taxpayers will save millions of dollars if the University goes back to relying on the Attorney General.

Kim noted the $3.4 million the University spent on legal expenses over the last year does not include additional legal contracts for the failed “Wonder Blunder” concert.

The University retained former Attorney General Mark Bennett at $75,000; Cades Shutte at $50,000 and Torkidson Katz at $25,000, to manage the Wonder Blunder fiasco, the subsequent suspension of two employees including Athletic Director Jim Donovan, and Donovan’s reassignment, as well as representation in subsequent Senate investigative hearings.

Kim notes it was in 1998, through Act 115, that the University was allowed – but not mandated – to retain its own counsel.

Like Lilly, Kim is critical of the practice. “It seems as though they have duplicated the state AG’s office with an office of their own with little oversight from the Board of Regents,” Kim said.

“Why would they prefer to spend more money on legal counsel instead of going to the AG? They could have used the AG for the Stevie Wonder Concert since their General Counsel was conflicted out,” Kim said.

“While I was not in the Senate when Act 115 passed, I don’t believe that the legislature at the time envisioned the University to have their own Office of General Counsel at a cost of $1.2M a year plus all the outside counsel,” Kim added.

The Senate Investigative committee questioned who the Office of General Counsel reports to – the Board of Regents or the University administration.

Capt. Michael Lilly, USN (Ret.) is a former Hawaii State Attorney General

“It appears that it is to both,” Kim said, “so there is an inherent conflict.”

The Senate committee recommended in a report issued November 19 that Regents provide guidelines for reviewing all outside legal counsel and public relations contracts to determine whether the contracts were fulfilled.

Kim said lawmakers could consider a change next session.

“I believe the Legislature should take a close look at this and consider whether ACT 115 should be amended as it relates to allowing UH to retain its own counsel,” Kim said.

University of Hawaii spokespeople Lynne Waters and Jodi Leong did not respond to an email sent Monday morning seeking comment on this story.

MORE ON THIS STORY:

Specific Language in Act 115:

[§304A-1005] University general counsel. (a) The board of regents may appoint or retain by contract one or more attorneys who are independent of the attorney general, to provide legal services for the university, including:

(1) Representation of the university in civil actions to which the university is a party, either directly or through the acts or omissions of its officers or employees;
(2) Advice and assistance to ensure the lawful and efficient administration and operation of the university;
(3) Review and approval of documents relating to the acquisition of land or interest in land by the university; and
(4) Any other legal service specified by the board of regents.
The board of regents may fix the compensation of the attorneys appointed pursuant to this section. Attorneys appointed or retained by contract shall be exempt from chapters 76 and 89.

(b) Nothing in this section precludes the board of regents from requesting and securing legal services from the department of the attorney general, for the university, the board of regents or its members, or the university's officers and employees, upon mutual agreement. [L 2006, c 75, pt of §2]

Residents Alerted to Obamas' Hawaiian Holiday Plans

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BY MALIA ZIMMERMAN - KAILUA, OAHU - Residents living near the beachfront homes where President Barack Obama and First Family vacation with their friends every year since 2008 were alerted on Monday to some specifics of the Obamas' holiday vacation plans.

The report delivered to residents living along the ocean and canal that surrounds the multi-million dollar homes at Kailuana Place where the President stays, informed  them of restrictions that will be implemented for 20 days beginning December 17 and running through January 6.

In a matter of weeks, Kailua residents will see the familiar street barricades fronted by U.S. Secret Service agents and Navy Seals and the U.S. Coast Guard stationed in canal and ocean waters.

The President, who spent some of his childhood years in Hawaii, brings his wife, two daughters, Sasha and Malia, with dog Bo in tow, each holiday season. They settle into the small town community known for its spectacular sparkling beaches, warm turquoise ocean, rolling surf, country shops and restaurants and friendly people.

The homes where they stay are just a two-minute drive from Kaneohe Bay and the Marine Corps Base Hawaii, where the Obamas and friends can access private white sand beaches and military workout facilities.

Kailua Beach

While many residents welcome the First Family, others are disheartened by the restrictions put on air, water and road travel while the President and family are in town, especially because it is the holiday season and many families on vacation want to use their boats or surf and paddle in the welcoming ocean waves fronting the Kailua homes. In addition, the President's caravan of at least 22 vehicles including an ambulance can easily overwhelm the community that typically has single lane streets.

Adding to the controversy surrounding the President's visit is the cost of the trip.

With the staff, special forces, local police presence and equipment, the President's visit adds up annually to at least a $4 million vacation courtesy of the Hawaii and federal taxpayers.

While the President and his friends pay for their own rental homes, taxpayers pick up the cost of security and waterfront housing for the Secret Service, Navy Seals and Coast Guard as well as staff accommodations at a plush beachfront Waikiki hotel.

TRAVEL: $3,629,622

The biggest expense is President Barack Obama’s round trip flight to Hawaii via Air Force One.

A Congressional Research Service report released in May 2012 said the plane typically used by the President, a Boeing 747, costs $179,750 per hour to operate. The U.S. Air Force has listed the cost of travel as high as $181,757 per flight hour.

Travel time for Air Force One direct from Washington D.C. to Hawaii is about 9 hours or as high as $1,635,813 each way for a total of $3,271,622 for the round trip to Hawaii and back.

The cost for USAF C-17 cargo aircraft that transports the Presidential limos, helicopters and other support equipment to Hawaii has never been disclosed in the years the President has traveled to Hawaii. However, the flight time between Andrews Air Force Base and Hawaii is at about 21.5 hours roundtrip, with estimated operating cost of $12,000 per hour. (Source: GAO report, updated by C-17 crew member). The United States Marine Corps provides a presidential helicopter, along with pilots and support crews for the test flights, which travel on another C-17 flightThat is $258,000, not including costs for the 4 to 6 member crew's per diem and hotel.

Moana Surfrider Resort

The rentals are fronted by the ocean and backed by a canal. So, the taxpayers must cover the costs for housing U.S. Secret Service, U.S. Coast Guard and Navy Seals in beach front and canal front homes around where the President stays.

Last year, that added up to about $200 per bedroom per day, or $21,600 per average home for a nearly three week period, with special forces renting at least 7 homes. Security arrives ahead of the President costing taxpayers about $176,400 for the length of the visit.

The President’s staff and White House Press Corps typically stay at one of Hawaii’s oldest and most elegant hotels, the Moana Surfrider. Besides its stunningly beautiful view of Waikiki, and its traditional Hawaiian architecture and decor, it is one of the most pricey hotels in the state and government rates are not available during the holiday season. Rooms  start at around $270 but can cost as much as $370 a night for an ocean view before Christmas, and climb much higher around the new year.

A conservative estimate with rooms at $270 (excluding a 9.25 percent Transient Accommodation Tax and a 4.712 percent General Excise Tax on each bill, meals, internet charges and other charges) means the taxpayers are covering more than $129,600 in hotel bills for some two dozen staff.

LOCAL TAXPAYER COSTS: $260,000

Local police are paid over time for the President’s visit, which has historically cost Oahu taxpayers $250,000.

The city ambulance the accompanies the President 24 hours a day through his entire visit is about $10,000 to city taxpayers.

UNKNOWN COSTS

There are several costs the White House annually refuses to release, citing security.

    • For example, the President’s security usually rents an entire floor of an office building in Kailua on the canal during the president’s stay.
    • There are security upgrades and additional phone lines to several private homes where Obama and friends are staying. That includes bullet proof glass installed, home security systems disabled, new security measures put into place and additional phone lines added.
    • There is the cost for car rentals and fuel for White House staff staying at a Waikiki Hotel.
    • And there are additional travel costs Secret Service and White House staff traveling ahead of the President.

The total cost (based on what is known) for a 20-day round trip vacation to Hawaii for the President and his family and staff and security is more than $4 million.

Hawaii Reporter annually has requested details on the cost of the President’s trip, but the White House will not release any figures, citing security concerns. A spokesperson has maintained the costs are "in line" with other presidential vacations.

Hawaii Reporter has sought to determine the cost of vacations for the current president and last two presidents but the Government Accountability Office referred Hawaii Reporter back to the White House spokesperson.

Federal Lawsuit Claims Jones Act Violates the U.S. Constitution

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Matson ships in 67 percent of the goods to Hawaii from the Continental United States. Photo: Emily Metcalf

BY MALIA ZIMMERMAN - Most Hawaii residents haven’t heard of the Jones Act, but one Hawaii lawyer and several business owners say the 1920 federal shipping law has a major negative impact on virtually ever resident and business in the state, and they are challenging the law in U.S. District Court.

 

John Carroll, an attorney and former state lawmaker, has filed a class action suit against the federal government on behalf of his clients. They maintain the Jones Act violates the Commerce Clause by restricting shipping between states to American-owned and manned ships and thereby hurting businesses and residents by inflating the cost of goods.

 

The issue is hotly debated among Hawaii’s political elite, but largely ignored by the general public.

 

Carroll and his plaintiffs – who include Patrick Novak, CEO of The French Gourmet; Daniel Rocha, a farmer and rancher; Ken Schoolland, a professor at Hawaii Pacific University, as well as William Akina, Bjorn Arntzen and Philip Wilkerson - hope to educate the public about the detriments of the Jones Act, which some experts argue increases the cost of living in the islands by as much as one third.

 

“The most important issue for me is the violation of the Commerce Clause,” Carroll said. “The founding fathers fought the British and over threw them based on imposition, without representation, of a tax on tea.  This law’s enforcement taxes everyone who purchases anything in this state because of the excessive shipping costs, which seem to be out of control.”

 

John Carroll, attorney

Carroll maintains the class action lawsuit should be considered as Hawaii’s “revolution”… “to obtain economic freedom from monopolistic domination of shippers who face no competitors.”

 

But Carroll and other opponents of the Jones Act have met with powerful enemies who prefer to keep their control and profit.

 

Not surprisingly, the law has its advocates, including transportation companies, unions and lawmakers who benefit from political contributions.

 

Hawaii’s congressional delegation, with the exception of former Congressmen Ed Case and Charles Djou, have been beneficiaries of substantial donations from Jones Act supporters, including Hawaii’s duopoly shipping companies Matson and Horizon.

 

Carroll has spent a great deal of his career trying to kill the federal legislation or win Hawaii a special exemption, much like the exemptions granted by the President during natural disasters.

 

Three years ago, Carroll brought a lawsuit against the Jones Act, but U.S. District Judge David Ezra threw out the case saying Carroll’s clients did not have standing. Carroll said he’s learned from that experience, and believes the new lawsuit will address the issues that caused the first to fail.

 

Carroll said the impact of the Jones Act is so severe, that the state of Hawaii is denied access to about 90% of all available shipping in the world. He also blames the Jones Act for destroying Hawaii’s agricultural economy.

 

“Hawaii dairies, poultry farms, vegetable production, even banana plantations have declined or been eliminated because of the intolerable costs of farming and shipping in Hawaii,” Carroll said.

 

“The cost of agricultural production is prohibitive, not only because of the cost of fertilizers, herbicides, and farm implements, but also the cost of outbound shipping of locally grown fruits, livestock and ornamental plants to any destination other than the West Coast of the continental United States.”

 

The lawsuit not only maintains the Jones Act violates the U.S. Constitution but it also claims shippers that service the route from the continental United States, Hawaii and Guam have a monopoly.

 

Matson brings in 67 percent of the goods to Hawaii while Horizon Lines ships in 33 percent of the goods.

 


President's Decision to Return to Hawaii Will Cost Taxpayers Another $3 Million

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President Barack Obama arrives with first lady Michelle Obama, top, and daughters Malia, top left, and Sasha, bottom right, at Honolulu Joint Base Pearl Harbor-Hickam in Honolulu, for the start of their holiday vacation, Saturday, Dec. 22, 2012.

BY MALIA ZIMMERMAN - President Barack Obama's decision to rejoin his family on their Hawaii vacation will cost taxpayers another $3.2 million for an already pricey holiday stay.

After arriving in Hawaii on December 22, Obama left First Lady Michelle Obama and their daughters Sasha and Malia on December 26 to return to Washington DC to continue negotiations with Congress to avoid a "fiscal cliff."

After Congress reached an agreement this week, Obama opted to return to Hawaii, landing at Hickam Air Force Base in Honolulu  just before 5 a.m. January 2.

The First Family's Hawaii vacation, taken annually since Obama was elected to office 5 years ago, typically costs taxpayers more than $4 million.

The biggest expense is Obama’s round trip flight to Hawaii via Air Force One.

A Congressional Research Service report released in May 2012 said the plane typically used by the President, a Boeing 747, costs $179,750 per hour to operate. The U.S. Air Force has listed the cost of travel as high as $181,757 per flight hour.

Travel time for Air Force One direct from Washington D.C. to Hawaii is about 9 hours or as high as $1,635,813 each way for a total of $3,271,622 for the round trip to Hawaii and back.

The President will have made two round trips to Hawaii via Air Force One within a matter of days bringing the total for his air travel to more than $6.4 million, and the cost of the trip to more than $7.2 million.

After Sunset At Kailua Beach

Other expenses include the USAF C-17 cargo aircraft that transports the Presidential limos, helicopters and other support equipment to Hawaii; housing for U.S. Secret Service, U.S. Coast Guard and Navy Seals in beach front and canal front homes around where the President stays; and hotel accommodations at the Moana Surfrider in Waikiki for staff.

Oahu taxpayers pick up the tab for the Honolulu Police escorts, which usually totals around $250,000, and the city ambulance, which accompanies the President 24 hours a day through his entire visit, totaling about $10,000.

On Wednesday, U.S. Coast Guard patrol boats were back in the waterways surrounding the home where the President is staying. They also continue to guard other private homes in their Kailua neighborhood where the Obama's friends are vacationing.

Since arriving in Hawaii, the President and First Lady attended just one public event - a memorial service for U.S. Senator Daniel K. Inouye. They have no other public appearances planned.

While no date has been announced for the First Family's departure from the islands, the U.S. Coast Guard is enforcing a security zone around Kailua waterways until January 6.

Signs posted in Kailua on the street where the President is staying say there is "no parking" from December 21 to January 6 at 8 p.m.

Appeals Court Upholds State's $4 Million Fine Against Kauai Landowner James Pflueger

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James Pflueger

BY MALIA ZIMMERMAN - A Kauai landowner who caused a catastrophic mudslide on November 26, 2001, which destroyed a rare coral reef and polluted a pristine bay at Pilaa, Kauai, must pay a $4 million fine to the state, according to the Hawaii Intermediate Court of Appeals.

James Pflueger pled guilty in 2006 to criminal charges of illegally grading and grubbing his 387-acre property at Pilaa in 2001, which left 100 acres of red dirt exposed.

A heavy rainstorm that night in November 2001 pushed 1,000 tons of mud and debris into the once sparkling ocean, causing more than $100 million damage to the 20-acres of the reef that was awaiting the same federal protection that Oahu’s Hanauma Bay enjoys.

After a joint investigation by the Kauai County, state Department of Health and the U.S. Environmental Protection Agency, Pflueger was charged with 13 felony counts and pled guilty to 10 counts in 2006. He was fined $12 million in restitution and fees. The EPA portion of the fine - $7.5 million - was the largest penalty against an individual polluter in U.S. history.

The state Board of Land and Natural Resources also fined Pflueger’s company Pilaa 400 LLC, the listed property owner, $4 million for the impact Pflueger’s illegal grading had on conservation land.

Pflueger appealed the ruling to the Fifth Circuit Court on Kauai, and when he lost that case, appealed again to the Intermediate Court of Appeals. A panel of three judges recently affirmed the lower court ruling in the state's favor.

Pflueger’s attorney argued the federal consent decree wiped out the state's administrative case against him, but the Intermediate Court of Appeals dismissed those claims, noting two state departments – the state health department and the state Board of Land and Natural Resources – made distinctly different allegations.

Pflueger may file an appeal with the Hawaii Supreme Court, and the justices could either accept the case, or let the lower ruling stand.

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Amy Marvin owns property with her family at Pilaa.

Pflueger has not had much luck with the Hawaii Supreme Court in recent years.

Before the mud reached the ocean on that fateful day in 2001, homes and property owned by the Marvin family were also covered with mud and debris.  Kauai attorney Teresa Tico represented the Marvins in a civil suit against Pflueger, which was filed in 2002 and settled for an undisclosed amount nearly 6 years later. Pflueger at first refused to turn over his financials to Tico, appealing the court order to the Hawaii Supreme Court, but after losing that appeal, Pflueger was forced to send information.

Pflueger filed another appeal in the Marvin v. Pflueger civil case after Fifth Circuit Court Judge Kathleen Watanabe issued a 44-page precedent-setting decision, in which she upheld the Marvins’ land and water access for their kuleana property. She said Pflueger must provide the Marvins access via his land to the public roadway and to a water-well because his property encases theirs. Pflueger appealed the case to the Intermediate Court of Appeals and the Hawaii Supreme Court and lost in the Hawaii Supreme Court. He was ordered to sign a recorded easement over to the Marvins but so far has refused to sign the paperwork presented by Tico.

Marvin and Tico were responsible for initiating the local and federal investigation into the mudslide at Pilaa. Tico took underwater video that documented the catastrophic damage to the colorful coral reef and vibrant bay. Life in the bay either fled or died under suffocating brown slime. Left behind there was an eerie underwater ghost town.  While some believed the reef would recover, Marvin said the muddy banks on the beach fronting her home are still exposed. And Tico, who annually videos the condition of they bay, says that all these years later, the bay has deteriorated considerably.

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Aurora Fehring Dingwall, Alan Dingwall and their son Rowan were killed in the dam breach on March 14, 2006, along with four other people and an unborn child.

Ironically, the EPA announced the plea agreement with Pflueger on March 9, 2006, just 5 days before his dam at Ka Loko breached, allegedly because of illegal grading and grubbing violations he committed in 1998.

The dam, which reportedly overtopped after more than 40 days of rain, unleashed an estimated 400 million gallons of water on the community below. Seven people were killed including an expectant mother. The waves, which reached as high as 40 feet, also caused millions of dollars in property damage.

Pflueger settled the civil suits filed against him by those who lost loved ones, and property, in the breach. But he is months overdue on pay his portion of the damages, with the exception of interest on the settlement.

Pflueger was also charged criminally in November 2008 with 7 counts of manslaughter and one count of reckless endangerment for causing the deaths of 7 people. He is still fighting those charges. He has made multiple appeals to Hawaii’s higher courts to delay the criminal case, and he lost all of those appeals in both the and Intermediate Court of Appeals and Hawaii Supreme Court.

In an exclusive interview after the dam breach, Pflueger denied that he either covered the dam’s main safety feature, its spillway, before it breached, or ever saw a spillway.  He blames the breach on the state for its lack of dam inspections and his reservoir manager for poor maintenance of the dam.

This conflicts with testimony by Kauai realtor Mike Dyer, who told Hawaii Reporter that when he saw illegal grading at the dam and reservoir in the late 1990s, he warned Pflueger that covering the spillway was dangerous. Dyer also took photos and sent a letter to the Department of Land and Natural Resources to document his concerns. No action by either Pflueger or the state was taken.

In addition to fighting the state administrative fine for Pilaa as well as the criminal charges against him for the deaths caused by the dam breach, Pflueger faces federal tax evasion charges.

His son, accountant and staff from his Pflueger auto dealership have already pled guilty to related charges, but Pflueger continues to deny wrongdoing. He is set to go to trial in 2013 on both state manslaughter charges and the federal tax evasion charges.

 

New Hawaii Lt. Governor Sworn Into Office After Political Musical Chairs

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Shan Tsutsui sworn in as Lt. Governor of Hawaii on January 3, 2013 - Photo by Mel Ah Ching

BY MALIA ZIMMERMAN - With his wife and three daughters by his side, Shan Tsutsui was sworn in as Hawaii's 12th Lieutenant Governor on Thursday, January 3, during a 13-minute ceremony at the Governor's office in the Hawaii State Capitol.

Gov. Neil Abercrombie introduced Tsutsui, and spoke for nearly 8 minutes about the historic day for Hawaii, the actual swearing in was officiated by Hawaii Supreme Court Chief Justice Mark Recktenwald and took just a minute.

Tsutsui, who rarely speaks publicly, kept his remarks brief, thanking his family, friends, Senate colleagues and the governor for their support

A Maui native, Tsutsui replaces Hawaii's former Lt. Gov. Brian Schatz who was sworn in as the state's newest U.S. Senator on Thursday, December 27, 2012, in a ceremony in Washington D.C.

Abercrombie named Schatz as the replacement for U.S. Senator Daniel Inouye, Hawaii's senior senator who died on December 17. Under Hawaii law, the Senate President has the choice as to whether to become lieutenant governor, and after consulting with his wife, Lyndelle Lee Tsutsui, and three daughters, Mikayla, Kaylee and Kenna, and his Senate colleagues, Tsutsui accepted the position.

Tsutsui, 41, was Hawaii's youngest ever Senate president and the first from the island of Maui. The Democrat, who led the Senate judiciously, has served in the legislature for 10 years since 2002.

Abercrombie wooed Tsutsui by promising to establish a new branch of the Office of the Lt. Governor on Maui, while also continuing to operate the Lt. governor's office just across from his on the 5th floor of the State Capitol in Honolulu.

“In the past, Neighbor Island elected officials might have thought they had to move to Honolulu in order to serve,” Abercrombie said at the announcement. “In my view, this may no longer be necessary, especially as technology brings us closer together and the state’s IT transformation plan affords greater opportunities to conduct state business from all islands.”

Shan Tsutsui named Lt. Governor (photo by Mel Ah Ching)

Tsutsui brings a background in business and economics to the position. Tsutsui is a 1989 graduate of Maui High School and a 1994 graduate of the University of Hawaii where he earned a BA in economics.  He previously served as Vice Chair of Ways and Means and Majority Caucus Leader.

While Senate Vice President Donna Mercado Kim almost immediately took over Tsutsui position as president of the Senate, Abercrombie will take a bit longer to appoint Tsutsui's replacement.

Maui Democrats will provide the governor with their three top candidates to replace Tsutsui.  Should Abercrombie promote one of the two House members from Tsutsui's district to the Senate position, he will then appoint another member of the Democratic Party to fill the House position.

Oahu Firearms Owners Wait as Long as Nine Hours Over Three Visits to Obtain Registration, Permits

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Those trying to register their firearms and obtain a permit on December 23 wait hours in line at HPD headquarters

BY MALIA ZIMMERMAN - Oahu firearms owners are increasingly frustrated with long lines at the registration desk at the main Honolulu Police Department (HPD) station. Hawaii's firearms registration laws are among the strictest in the country, and mandate gun owners must register firearms within 72 hours of purchase.

Firearms owners can spend more than nine hours in line over three visits to obtain a permit for a firearm and register it, according to Dr. Max Cooper, a legislative liaison for the Hawaii Rifle Association, with rules differing for handguns and long guns.

Currently, to obtain a permit to acquire or to register a firearm, HPD requires the applicant to appear in person at the Honolulu Police Department's Firearms Section located at the police headquarters, between 7:45 am and 4:30 pm, Monday through Friday.

The HPD web site said since November, HPD has experienced a "high volume" in customers and warns those arriving after 3 p.m. to a long line "should anticipate not being serviced."

local online gun forum tracks what is happening in these lines at HPD on a daily basis. The web site reports people are at HPD headquarters as early as 2 a.m.

Many firearms owners on Oahu have similar stories, on site as early as 12:30 a.m.

Kailua resident Daniela Stolfi-Tow waited in line at HPD for 6 hours on December 23 to register her firearm, even though she got there at 5:30 a.m. to ensure she was one of the first. She was surprised to see several others had arrived before her beginning at 3:30 a.m.

Bill Richter, a certified firearms instructor with Lessons in Firearms Education and a member of the Hawaii Rifle Association, said he was planning a trip on December 23 to HPD headquarters to renew his long-gun permit as is required annually, but called first at 10 a.m.

“The officer that answered said the line was literally to the elevator to the parking garage and to not come in as I probably wouldn't be able to make it inside before 3 p.m. That is when HPD locks the doors, and anyone outside, no matter how long they waited, are turned away,” Richter said.

Firearms owners wait at the entrance to the HPD headquarters to register firearms or obtain permits. Some have been there since 3:30 a.m. that day.

Ryan Yee went to HPD headquarters to renew his permit on December 17, arriving a 7:30 a.m. to a line of 35 people. He waited 2-and-a-half hours that day. Two weeks later, on December 31, he went back to pick up the permit, arriving at 4:30 a.m. Thirteen people were already ahead of him.

“The first guy in line arrived at 12:30 a.m. I was out of there by 9 a.m. that day, but there were 70 people behind me by 8 a.m.,” Yee said.

While Yee said the staff members at the HPD firearms division were “courteous and professional throughout all the madness,” the experience was still frustrating.

Jason spent his Christmas Eve on line at HPD headquarters to register his new rifle. He arrived at 3:30 a.m. thinking he would be first on line, but there were already eight people in front of him, many sitting in their lawn chairs. He waited five hours. When he left, the line had grown to 100 people.

“It has been really frustrating because every time I wanted either to get my permit or register the line was at least 4-to 5 hours long,” Jason said, asking to keep his last name private.

“The lines were crazy and not to mention the time away from work,” Jason said. Parking and bathrooms can be major issues for those waiting in line, he added.

The line at HPD to register firearms extends as long as 100 people into the street

“The meter parking is only 1 to 2 hours long, but the wait is 5 plus hours, so you either have to get a parking ticket or get towed, or find parking very far away. I was even thinking about taking a taxi.” He also noted there are no bathrooms open anywhere nearby early in the morning, which can cause considerable grief for those eating or drinking anything.

“So crazy, but you have to do what you got to do,” Jason said. “I hope things change because it is really a hardship to us law abiding citizens that have to go through the struggle just to obtain a gun or rifle.”

Not everyone encountered HPD staff with a good attitude.

Daniela Stolfi-Tow, who waited in line 5 hours for her registration, said she was treated rudely. "I went to the window to ask a question she told me to get back in line. I said 'I just need to ask a question.' She said, 'You need to get back in line.' I get that they are busy, but there is no room for rudeness. These are good people patiently waiting to make sure they abide the law. Everyone here is all in good spirits trying to make the best of things. It just aggravates an already stressful process."

For background, Hawaii law differentiates between "long guns" - such as shotguns and rifles - and handguns, said Harvey Gerwig, president of Hawaii Rifle Association, and the rules to register them are not the same.

To acquire a long gun, the applicant needs to wait in line at the Honolulu Police Department for a generic permit.  Two weeks later, the applicant can return and pick up the permit if the applicant passes a background check. If not picked up within 6 days from HPD, the permit is void.  The permit is good for 12 months. After the applicant takes the generic permit to the dealer to purchase a long gun, the applicant has to return to HPD to register the long gun. Every long gun purchased with the generic permit has to be registered at HPD, Gerwig said.

To acquire a handgun, the applicant must purchase a handgun at the dealer, which the dealer then holds for the applicant pending permit approval. The applicant then must go to HPD to file an application for a permit to acquire a handgun, and then go back to HPD to pick up the permit two weeks later. If not picked up within 6 days from HPD, the permit is void.  Afterward the applicant must go back to the dealer and fill out more paperwork and pick up the handgun within 10 days, and then take the handgun back to HPD to register it. Only recently, HPD has begun requiring that each handgun is registered under a separate permit, which entails volumes of additional paperwork, Gerwig explained. Handgun permit applicants also must take a one-time 8-hour safety course.

Any firearms brought in from out of state must be brought to the police station's headquarters and registered within 72 hours of arrival, HRA's Dr. Cooper said.

Part of the problem, besides the amount of paperwork and number of visits required, is the main police headquarters on Beretania Street in Honolulu is the only location on the island to register firearms. With a population of over 1 million people, and an increasing demand for registration, the staff cannot accommodate traffic.

Another issue is HPD does not allow any of the forms for applications to be filled out prior to reaching the window, Gerwig said. "Those forms should be available on line in a format that could be filled in by the applicant and then printed.  Once at the window the applicant could simply hand the forms over the the officers along with their ID and they would be out of there is a very short time versus sitting down and filling out all the papers on site."

Robert Cray agrees: "The issue is that many people are just picking up permits. That takes two minutes, yet I was there since 6:25 a.m. and I will wait at least 3 hours. Why don't they give out the registration forms while people wait? It would speed things up if applicants were prepared at the window."

Others who have gone through the registration experience have ideas to make the process smoother and more efficient.

“I would suggest a port a pod at HPD, more staff, and other locations such as satellite city halls across the island,” Jason said.

HRA’s Dr. Cooper is taking action. He started an online petition at hawaiirifleassociation.org to ask the city to address these issues.

“In addition to allowing registrations at all police stations, we are asking for extended hours for those that cannot easily take off work several times during the week to register their firearms,” Cooper said. “The public can sign the petition on the HRA web site, hawaiirifleassociation.org.  Make sure to provide your email address so we can verify your identity.”

Michelle Yu, spokesperson for the police department, said HPD recent added additional staff to assist with the permitting and registration process.

Police are also working on other measures, she said, promising to keep the public updated.

 

MORE ON THE WEB:

Photos by Daniela Stolfi-Tow; chart provided by Hawaii Rifle Association

Keeping Angry Taxpayers at Bay

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Graphic illustration by Emily Metcalf

By Lowell L. Kalapa - The recently released report of the Tax Review Commission balks at the criticism that the repeal of the lesser one-half percent general excise tax rate on wholesale sales was uninformed and instead criticized the opposition to the repeal of the lesser rate as merely perpetuating an inefficiency in the name of gathering information about transaction activity.

What the Commission’s report failed to note is that the repeal of the lesser half percent rate was made as a parry to the recommendation of their consultant that the overall rate imposed on all retail activities be increased to generate more revenues for the state.

The cynical eye would call that suggestion the proverbial "sop to Cerberus" - a throw away, if you will, to keep the angry mob of taxpayers at bay. The push back by the Commission to the criticism also is a reflection of the lack of familiarity by both the Commission and its consultants with the importance of being able to monitor and enforce compliance with the tax.

In fact, anyone who has attempted to figure out just how much activity is occurring in the economy will tell you of the frustration of undertaking that evaluation when there are numerous exemptions from the general excise tax and other taxes which prevent one from truly evaluating the impact of the exempt transactions. Saying that the imposition of the half percent rate on transactions of goods and services perpetuates an inefficiency is indicative that the person has never had to enforce compliance with the law.

Continuing to impose the tax allows administrators to track how the goods or services will subsequently be handled. This is a major reason why years ago when lawmakers were entreated to exempt the purchases of capital goods from the 4% general excise tax as capital goods are essential to the production of income and the creation of jobs, they chose instead to grant an income tax credit of 4% as it allowed auditors to check and see if that purchase of capital goods was, in fact, placed into service for the purpose of producing income or if it was merely consumed with no intention that its use be for the production of income or the creation of a job. Critical to auditing the purchase of capital goods was that it had to be "placed in service" in order for the taxpayer to qualify for the refund of the 4% general excise tax amount through the capital goods excise tax credit.

If the Commission and their consultants truly wanted to alleviate the additional burden of a higher retail rate of the general excise tax as it affects businesses, then they should have suggested that purchases made by businesses for use in the production of income should be taxed at the lesser half percent rate or in the alternative to treat those purchases like the capital goods excise tax credit and allow businesses to claim a refund of the general excise tax imposed on purchases of goods and services used in the production of income. This treatment would help to alleviate the pyramiding of the general excise tax as it affects the cost of doing business by raising overhead costs by the cost of the tax.

That being said, the push back against the criticism that the wholesale rate be eliminated truly underestimates the understanding of the business community of how insidious the tax is when it comes to surviving in Hawaii, at least for most business people. Then again, there are those who think tax incentives, like those for the investment in high technology research and development, are more important. But then again, those businesses were probably making off like bandits with the windfall of tax credits to cover their losses created by the general excise tax.

Anyone who has had to comply with the general excise tax knows how the tax can decimate whatever kind of profit a business may have anticipated. It is paid regardless of whether or not a business makes a profit and is imposed even if the business sells the services or products below cost. It is imposed without any allowance for costs incurred in bringing the goods or services to the consumer. That goes for the cost of the rent of the space where the consumer purchases the product and also on the cost of transporting the goods or services to the storefront or to the consumer.

Unfortunately, this latest Tax Review Commission muddied the understanding of the general excise tax even more rather than bringing clarity to what is a simple, yet complex, tax in its drive to merely find ways to raise more tax revenue.

Online Travel Companies Will Appeal Multimillion Dollar Ruling Levied by Hawaii Tax Court

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Photo: Emily Metcalf

BY MALIA ZIMMERMAN - Travel Technology Association, a trade organization that represents the nation’s top online travel companies including Amadeus, Expedia, Hotels.com, Hotwire, Priceline, Orbitz Worldwide, Travelocity, Travelport and Vegas.com, will fight a court ruling that orders them to pay millions of dollars in back state taxes for $2.7 billion in Hawaii hotel room sales.

Tax Appeal Court Judge Gary W.B. Chang said Friday the companies owe $150 million in back General Excise Taxes (GET) for the years 2000 to 2011, and will likely be responsible for another $20 million in 2012. The online companies will be required to pay the GET on future sales of Hawaii hotel rooms.

Hawaii, which is among the overall highest taxed states in the nation, has no sales tax, and is the only state with a GET imposed at every level of transaction on goods and services, including medical services, food, prescription drugs – essentially almost all economic activity. The GET is 4.712 percent on Oahu and 4 percent in the state’s three other counties, including Maui, Hawaii Island and Kauai.

The Hawaii state attorney general argued the online travel companies “collected sufficient money to cover the GET and transient accommodation taxes from consumers purchasing Hawaii hotel rooms, but never filed any returns or paid any taxes to the State of Hawaii.”

Chang agreed with part of the argument, ruling the GET is a “privilege tax imposed on businesses for the privilege of doing business in the State of Hawaii.”

The judge disagreed that the online travel companies should be responsible for the state’s 9.7 percent Transient Accommodation Tax, charged on every hotel room.
The companies’ trade organization - Travel Technology Association, or Travel Tech - argued the ruling will hurt businesses and consumers.

“This ruling will significantly increase costs for all tour operators, travel agents, Online Travel Companies, and other travel intermediaries that facilitate travel to Hawaii. Because demand for travel to Hawaii is acutely sensitive to price changes, this change in tax treatment will harm consumers and significantly reduce demand for Hawaii vacations,” Travel Tech said. "Travel Tech members intend to challenge this ruling as well as work cooperatively with tourism leaders and lawmakers to minimize the ruling’s damage to the Hawaii tourism economy.”

However, Gov. Neil Abercrombie, who asked his attorney general to pursue the case as one of his “top priorities”, said the ruling is “significant” for Hawaii.

“I asked the Attorney General and the Tax Director to aggressively and relentlessly go after these taxes that were due and owing. The court’s ruling shows that we were right to pursue this,” Abercrombie said.

Abercrombie, a Democrat, has been critical of his predecessor, Gov. Linda Lingle, a Republican, who opted not to pursue the case against the online companies.

Attorney General David Louie said the ruling is fair to the state as well as local hotel owners.

“Hawaii hotels are good corporate citizens, paying their fair share of taxes to support the state’s infrastructure, such as roads, schools, personnel and other costs, and the Online Travel Companies need to also play by the rules and pay their fair share. We look forward to reaching a final resolution and collecting these monies for the people of Hawaii,” Louie said.

Lowell Kalapa, president of the Tax Foundation of Hawaii, agrees with the court’s ruling on the GET.

“The court – Hawaii’s GET is not a retail sales tax, it is a privilege tax, for the privilege of doing business in Hawaii."

Judge Chang, after a lot of thought and walking through the case, recognized what we have been saying all along (about the GET),” Kalapa said. “While these businesses are not located in the state, the product is consumed in the state.”

Kalapa said the ruling sets a precedent. “What Orbits and other online travel companies can get away with in other states, they cannot get away with it here.”

The attorney general said the state government may appeal the court’s adverse ruling on the transient accommodations tax.

The parties will meet in the Tax Appeal Court on March 8, 2013 to determine penalties. Any additional outstanding issues will be resolved in trial beginning on April 15, 2013.

Gilligan’s Island? University of Hawaii Finds $200,000 After It Went Missing for 7 Years

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Coconut Island (photo courtesy of UH)

BY MALIA ZIMMERMAN - State Senators were stunned on Thursday when University of Hawaii officials admitted during a Ways and Means hearing that some $200,000 went missing over a 7-year period, but was recovered from an "inactive account" when the University installed new software and discovered the funds.

The $200,000 was supposed to help pay for research on Coconut Island, an actual island off the windward coast of Oahu owned by the University of Hawaii Foundation and leased to the Hawaii Institute of Marine Biology's School of Ocean & Earth Science & Technology.

But a University employee allegedly deposited the money in an account that was no longer active, and the funds languished there unnoticed for 7 years until a new financial procedure was initiated.

Senate Ways and Means Vice Chair Michelle Kidani questioned the department dean and UH Manoa Chancellor as to why and how the money went missing for so long.

“Do you have that kind of money that you don’t miss it for 7 years?” Kidani asked.

When the administrators denied having too much money to track and admitted the problem occurred because the account was not reconciled in a “timely manner”, Kidani asked incredulously, “For seven years? ... This causes a red flag for me.”

“It causes a red flag for me, because it happened in my shop and I did not know it was occurring as a dean,” said School of Ocean & Earth Science & Technology Dean Brian Taylor.

The unionized employee who made the error is a member of the Hawaii Government Employee Association, so he could not easily be fired because of union rules. The employee was put on paid leave for 6 months while the university investigated the matter, and then put the employee into a “remedial training program.”

Senate President Donna Mercado Kim, former member of the Ways and Means Committee who has extensively investigated the public University's finances, commented on the fact that it took 6 months to investigate the employee and the missing money after an already 7-year delay.


Senate President: 'Bloated' Bureaucracy at University of Hawaii is Making Tuition Unaffordable

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Senate President Donna Mercado Kim and Senator Will Espero question UH officials about expenditures (photo by Mel Ah Ching)

By Malia Zimmerman - Michael Dahilig may be one of the state University’s most loyal sports fans.

Dahilig, who up until recently served on the University of Hawaii Board of Regents, took some $12,509 in athletic tickets, airfare, hotel and gifts during his 6-year stint, State Ethics Commission records show.

That included a trip to the Sugar Bowl in Louisiana in 2008 with the University covering his airfare, hotel, Sugar Bowl tickets and other gifts.

Senators questioned University administrators and regents about the athletic tickets that went to Dahilig in a Friday Senate Ways and Means hearing focused on weeding out “bloat” at the University.

"When you see four tickets, in one case 32 tickets, seven tickets, 50 tickets - then it really raises the red flag,” said Senate President Donna Mercado Kim about Dahilig’s actions.

Dahilig, who is the director of planning for the County of Kauai and an attorney with the Kauai county attorney’s office, is currently a candidate the Regent's executive administrator position, a job that reported pays $150,000 annually.

In an email to Hawaii Reporter, Dahilig said:  "When I was Student Regent and up until the Sugar Bowl in 2008, there was no board policy prescribing the distribution of tickets other than a requirement that they be disclosed through an ethics disclosure. Previous practice was the board office received a block of tickets from athletics for all sports then they were distributed ay the request of a regent. After the State Ethics Commission required a policy be put in place after Sugar Bowl by the board, I have complied with that board policy concerning tickets offered to regents.

UH Athletic Tickets obtained by Mike Dahilig between 2006 and 2012

"Athletics is part of the university just like theatre, lectures and symposiums. Regents should have an understanding of all facets of the university, and athletics, hence the regents policy on athletic tickets to seek that balance. I believe the university practice has been vetted and confirmed by the Ethics commission and I abide by their determination on what is ethical or not ethical practice. The aggregate amount reflects my long tenure on the board and if analyzed per annum, does not deviate from what regents have received if they have elected to use their tickets."

Dahilig has his supporters. UH Executive Vice President Linda Johnsrud defended Dahilig after the Senate hearing, maintaining $12,509 is not substantial, particularly over 6 years.

But Senators told Hawaii Reporter after the hearing that the athletic tickets, travel and hotel are just some of several expenditures that add up to waste and abuse of government resources at the state’s only University. Other concerns center around high salaries and lucrative contracts that have been outsourced.

"As far as I'm concerned based on a comparison of salaries, we do have bloat," Senate President Donna Mercado Kim said. "I'm very concerned about that because it raises the cost of tuition and college costs around the country, it's just getting out of hand and people can't afford to sent their kids to school.”

UH Executive Vice President Linda Johnsrud

The University has 13,000 employees, including 7,600 full time staff, including 72 people who make $200,000 a year and above.

As the total personnel budget has risen to $500 million, the tuition has more than doubled rising 141 percent in a decade.

The University, which reached a record enrollment Fall at 60,630 with students paying about $10,000 a year for undergraduate tuition.  The tuition will climb another 33 percent in the next five years.

The institution’s top-paid administrators are the highest paid employees on the state’s payroll.

UH President MRC Greenwood makes $475,000 a year plus a $60,000 annual housing allowance and other perks and travel; UH-Manoa Chancellor Tom Apple is paid $440,000 a year; and Athletic Director Ben Jay makes $293,000 a year and up to $127,000 in bonuses.

The University is home to the most well-compensated state employee – head football coach Norm Chow - whose contract has him making over $550,000 despite a dismal 3-9 record last year, with the possibility of up to another $500,000 in bonuses if the team gets better results.

The University employees 6 staff attorneys and several public relations personnel who make over $100,000 annually, which is in addition to contracting with private attorneys and public relations companies outside of the institution.

Some of the personnel have been awarded more than they are entitled in benefits and perks, Senators learned during the Friday hearing.

Michael A. Dahilig took $12,509 worth of UH athletic tickets, airfare and hotel in 6 years when he was a regent.

For example, when UH-Manoa Chancellor Virginia Henshaw stepped down last year, she requested and was granted a 10-month professional improvement paid leave, instead of the five months she was entitled to.

Her replacement, Tom Apple, was granted a 5-year contract, even though the standard contract is three years.

UH’s Johnsrud defended the University’s budget and maintained there is no waste or bloat.

"If you want to be the first to reduce the salaries, you'll only hurt the university,” Johnsrud said. "We want to provide Hawaii with the very best service we can in all of these areas and we're going to have to pay to get it.”

Although the University is autonomous, it does come to the legislature for funding.

Senators have been more carefully examining management and fiscal decisions at the University since this summer, when UH President MRC Greenwood admitted the University lost $200,000 to scam artists who promised to throw a Stevie Wonder fundraising concert on the Manoa campus, but had no authority to do so.

FBI agents have arrested and charged two individuals with defrauding the University in what has become known as the “Wonder Blunder.”

The Senate President’s Committee on Accountability held three hearings in the Fall and subsequently issued a list of 18 recommendations for regents and administrators. But so far, the University leadership has just reviewed – and not implemented – the recommendations, further irking the Senators.

Senators told Hawaii Reporter they are concerned about the “cavalier attitude” and liberties some top UH administrators with taxpayer funds and student tuition.

Chancellor Apple’s comments made to students and faculty at an October meeting only heightened the Senators’ fears, because Apple dismissed the $200,000 lost to scammers and proclaimed “its time to get this behind us.”

Senate President Donna Mercado Kim speaks to reporters after a UH Hearing (photo by Mel Ah Ching)

Apple said: “I just want to give people a perspective. And by the way, $200,000 is not a trivial amount of money. But we are a $1 billion – Manoa, just Manoa, not the University – we are a $1 billion operation. I have people who report to me who handle $180 million a year. And they say, ‘You know what, if somebody looked you’d probably find just through the handling of that much money if you went and looked at every individual thing you could probably find that much in terms of just losses here and there through kinds of processes.’” He also compared the $200,000 defrauded from the University as “the equivalent of an academic bake sale” … that’s gone "awry.”

After the hearing, Kim said: “It bothered me when she (UH’s Linda Johnsrud) said we don’t have bloat at the University of Hawaii – that the salaries are not bloated – because I believe the salaries are bloated.”

Just 11 years ago, the UH president made $187,000 and he was both the president and the chancellor. Today, there is a president being paid $475,000 and a chancellor is being paid $425,000 – and that does not include the perks, Kim noted.

Hawaii Teachers Taking a Stand … for a Tax Hike

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BY MALIA ZIMMERMAN - Hawaii has among the overall highest tax burdens in the nation, and the Department of Education gets a good chunk of the revenue - nearly 50 percent of the state general fund budget or $2 billion per year in total expenditures from all sources.

However, some public school teachers and parents believe that is not enough. They have organized a campaign to increase teacher salaries with funding from a substantial boost in the state’s primary tax, the General Gross Income Tax.

On Tuesday, February 5, at a legislative hearing, teachers wearing white and red tee shirts that read “Teachers Taking a Stand: You cannot put students first if you put teachers last”, told House Economic Development Committee members they support a plan to raise the General Gross Income Tax by 1 percent with revenue set aside for their pay raises. Teachers maintain they need higher pay, better working conditions and access to new technology and a “penny” increase for education is not too much to invest. House Democrats on the committee agreed with the teachers and passed the measure - Rep. Gene Ward, the only Republican on the committee, was also the only vote in opposition.

But the GE Tax hike proposal is bringing strong criticism from Lowell Kalapa, president of the Tax Foundation of Hawaii, who said any GE Tax increase will raise the cost of living as well as the cost of doing business in the state.

“The General Excise Tax is perhaps the worse tax to increase as far as rates because of its broad-based application. Increases in the cost of living, as well as the cost of doing business in the state will drive more and more businesses out of operation and with them the jobs Hawaii’s people need,” Kalapa said.

The “penny” or 1 percent increase teachers aim to add to the GE tax will equal a 25 percent increase to the rate.

“For teachers who have requested this increase in the tax to fund their salaries, they should acknowledge that they are just making it worse for everyone as the cost of food, shelter, clothing, transportation and every other essential household item will increase making it harder for all families to survive,” Kalapa added.

Kalbert Young, the director of the state Department of Budget & Finance, said the administration is opposed to the plan.

While the tax increase would bring in an additional $400 million to $600 million, depending on the state’s economic activity, it would burden the general population, Young said, adding “we don’t see that imposing that level of tax burden for one purpose.”  The state administration is not backing any proposals to increase the General Excise Tax this year, Young said.

Gov. Neil Abercrombie with State Budget & Finance Director Kalbert Young (photo by Mel Ah Ching Productions)

Hawaii is the only state in the nation with a General Gross Income Tax, which is a tax charged on every transaction of goods and services in the state. On Oahu, the rate is 4.5 percent, while the neighbor island counties have a 4 percent rate.

Hawaii has no sales tax, but the GE Tax adds up to at least a 12 percent sales tax if it was converted, according to Kalapa said, because of a pyramiding effect.

Meanwhile, the state and the teachers’ union, the Hawaii State Teachers Association, continue contract negotiations. Negotiations have broken down on several occasions, with the union describing the process as “long and difficult.”

“It comes down to what type of education system do we want, and are we willing to make the necessary investment?  For the sake of our students we need to be honest on what the State is committed to,” said HSTA President Wil Okabe.

In late January, the state negotiations team told the Hawaii State Teachers Association “that it cannot responsibly accept its latest proposal, which would cost the State $1,050,445,815 over four years, mostly in additional compensation and benefit expenses.”

The HSTA countered that the state “inappropriately” included the cost to repay the 5 percent pay cut that teachers took when the state was facing financial difficulties, for a total of about $180 million, and returning that “is not a raise.”

House Economic Development Committee listens to testimony from parents and teachers about increasing the state's GE tax to fund teachers' salaries

“Simply put, teachers surely must be worth more than 2 percent,” Okabe said. “This contract is about fulfilling a promise to restore pay cuts, but also valuing and investing in teachers as being essential to the future of our students.”

Kalapa said teachers do have a legitimate complaint that should get attention from lawmakers and state Board of Education members, “because teachers are being asked to do more and more administrative paperwork and are spending less and less time in the classroom.”

“If nothing else, the funds that are being appropriated to the DOE are failing to reach the classroom because of the top-heavy administrative structure of the department that demands reports and schedules and evaluations to justify the role of administrators,” Kalapa said.

“The frustration of classroom teachers is that they spend too much time filling out forms and reports and not enough time in the actual classroom. Unfortunately, with more than 25% of the general fund budget, the Department of Education still cannot get it right. Until it does, there is little justification for an increase of financial resources let alone an increase in the General Excise Tax,” Kalapa added.

Unfunded Liabilities are Putting Hawaii Taxpayers in Dire Financial State

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Lt. Gov. Shan Tsutsui sits behind Gov. Neil Abercrombie at the 2013 state of the state address (photo by Mel Ah Ching)

BY MALIA ZIMMERMAN - Connecticut and Illinois are ranked worst in the nation when it comes to taxpayer burdens from unfunded liabilities, but Hawaii is close behind them, coming in as the third worst “sink hole” state.

An analysis by The Institute for Truth in Accounting shows Hawaii’s financial burden on taxpayers from unfunded liabilities is $38,300 in 2011, an increase from $32,700 in 2010.

The state’s portion of the $18.2 billion owed to Hawaii public employees for their pensions is more than $13.5 billion, according to the state’s latest financial report in the 2011 CAFR.

All combined the state owes public workers more than $20 billion, and state officials estimate that figure will climb to $37 billion in the next 12 years unless lawmakers put an aggressive plan into motion to pay down the debt.

During his 2013 State of the State Address, Gov. Neil Abercrombie admitted it would take an investment of $500 million a year, every year, for 30 years, to pay off what is owed to state workers.

Abercrombie said the $500 million figure was “impossible to meet all at once”, and instead asked lawmakers to start reducing the debt by allocated $100 million a year beginning in the next fiscal year, “with plans to continue to pursue payment in coming years."

"During the last few years of the recession while staring in the face of obligations to retirees, other states and cities nationwide have blinked and have either slashed retirement benefits that were previously earned or declared bankruptcy.  That is why I am asking the Legislature to start paying toward our Other Post-Employment Benefits. This is the “OPEB” debt,” Abercrombie said.

While some lawmakers don’t want to commit to the annual $100 million payment that the governor suggested, Sheila Weinberg, head of the Institute for Truth in Accounting, said $100 million a year is not nearly enough to tackle the debt.

In a report on the newly launched http://www.statedatalab.org that tracks state finances, Weinberg said unfunded employees' retirement benefits represent 86 percent of the state’s bills.

“This unfunded liability has accumulated because State employees have been promised $5.9 billion of pension benefits and $13.6 billion of retirees' health care benefits, but the State has not adequately funded them.

“Because pension and other retirement benefits are not immediately payable in cash, most of these compensation costs were ignored when calculating balanced budgets. Furthermore, the State has set aside only 31 cents to pay for each dollar of retirement benefits promised.”

“Unless these pension and retirees' health care benefits are renegotiated, future taxpayers will be burdened with paying for these benefits without receiving any corresponding government services or benefits,” Weinberg said.

Hawaii has a balanced budget requirement, but according to the Institute for Accounting’s new web site, http://www.statedatalab.org, Hawaii has accumulated $7.9 billion in bonds and $2.3 billion in other liabilities.

The state has $20.8 billion in assets, including $13.8 billion of capital assets (roads, buildings and land), and $3 billion in assets that are off limits, so just $4 billion is left to cover $22.6 billion in bills.

Courtesy of Institute for Truth in Accounting

Weinberg said the $18.6 billion shortfall is compensation and other costs incurred that should have been paid in years past, but instead is burdening today’s taxpayers. In addition, the debt jumps $4 billion every two years.

Lawmakers cannot claim to have balanced the state budget with such massive outstanding financial obligations, she said.

"That is like saying ‘aren’t I great because I owe $18,000 and the minimum payment is $500 and I am going to pay $100,” Weinberg said. “They are not balancing the budget if they are not paying into these funds adequately.”

Hawaii produces actuarial valuations for its retirees’ health care plans every two years, but reports should be published more frequently, Weinberg said.

“To knowledgeably interact with—and cast informed votes for—their leaders, citizens need transparency and accurate financial information. The antiquated ways the State budget and financial report are calculated do not provide citizens with the financial information needed to determine government accountability,” Weinberg said.

As to whether the legislature will fund the Governor's proposal, Kalbert Young, director of the Department of Budget and Finance, said: The vast majority of legislators have indicated that they agree that the EUTF OPEB liability is a significant concern and problem.  However, I would also say that legislators generally disagree as to the extent of commitment to fund or begin paying-down the liability this coming fiscal year.  Some cite that the $100 million is not enough to make a difference (especially, when our annual actuarial liability is closer to $520 million/year), others feel that there is a lot of other funding needs that are more immediate, and some don't believe that pre-funding is the correct strategy.

"I think that both the House Finance Chair Rep. Luke and the Senate Ways and Means Chair Sen. Ige are both familiar enough with the unfunded liability issue that they would want to continue to discuss the options to address OPEB and that pre-funding at least $100 million per year is still in the discussion.  To that extent, I think it is a positive that the Legislature as a whole is more acutely aware of the issue of unfunded liability and the members are thinking about the issue in terms of how to deal with it relative to affording other programs in government."

Aerosmith's Steven Tyler Bares All on 'American Idol' But Wants the 'Steven Tyler Act' to Guarantee His Privacy in Hawaii

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Steven Tyler

BY MALIA ZIMMERMAN - Steven Tyler, the outrageous rock star of Aerosmith fame, exposed his bare bottom on not just one, but two episodes of American Idol.

On February 24, 2012, when Tyler was a judge on the popular talent show, he shocked fellow judges Jennifer Lopez and Randy Jackson when he performed a spontaneous striptease, taking off his shirt and pants and pulling down his underwear to “moon” the camera. An ABC News commentator said Tyler must have thought it was a “clothing optional night” on American Idol.

Just last week, Tyler, who is no longer a judge on American Idol, dressed in drag and pretended to be one of the contestants. After Judges Mariah Carey, Nicki Minaj, Randy Jackson and Keith Urban booted him, Tyler tore off his blonde wig and tossed his fake breast implants at Jackson before pulling up his skirt and mooning them.

While he’s on stage, Tyler isn’t concerned about being captured on camera in compromising positions.

However, here in Hawaii where Tyler owns a $4.8 million beachfront home on the island of Maui, he is leading the push for more privacy, lobbying for the passage of a measure that would give celebrities, politicians and other public figures special protection against violation of their privacy from photographers, journalists and members of the public.

Steven Tyler in dressed in drag on American Idol in 2013

Senator Kalani English, D-Maui, introduced the “Steven Tyler Act” in conjunction with Tyler, which would make it a civil tort to “capture or intend to capture, in a manner that is offensive to a reasonable person, through any means a visual image, sound recording, or other physical impression of another person while that person is engaging in a personal or familial activity with a reasonable expectation of privacy.”

The proposed legislation, which will receive its first hearing in the Senate Judiciary and Labor Committee on Friday, February 7, has already caught the attention of both local and national media groups as well as constitutional and media attorneys who maintain the law is a violation of the First Amendment.

The Motion Picture Association of America, a Washington DC-based trade association representing the leading California-based producers and distributors of theatrical and television motion pictures in the United States, submitted testimony to the Senate, saying the legislation violates the U.S. and Hawaii Constitutions.

“The bill attempts to protect privacy, but it does so at the right of free speech,” the organization writes, also maintaining the bill is “vague and ambiguous” and could be used against a member of the public who snapped and posted a photo of a celebrity taken on the street or in a restaurant.

Besides hurting legitimate news gathering efforts, the “overreaching” legislation, could jeopardize government investigations and law enforcement activities related to theft of motion picture copyrighted materials because it does not exempt them, the Motion Picture Association of America said.

Steven Tyler Striptease on American Idol in 2012

The legislation won’t stop its intended target - paparazzi - from taking photographs, the Association asserts.

But the author of the Steven Tyler Act, Senator English, maintains the bill is needed because the paparazzi “go to far to disturb the peace and tranquility afforded celebrities who escape to Hawaii for a quiet life.” He said the bill is not unconstitutional and will help attract more celebrities and government dignitaries to the islands.

Several celebrities already have homes in Hawaii including Oprah Winfrey, Helen Hunt, Willy Nelson, Carlos Santana, Randy Travis, Woody Harrelson, Roseanne Barr and Kelsey Grammar, Ben Stiller, Bette Midler, Pierce Brosnan, Michael Crichton, Drew Barrymore, Julia Roberts and Natalie Merchant, and dozens of other celebrities regularly visit the islands.

But English said many more celebrities and government dignitaries are deterred from buying property or vacationing in Hawaii because “existing Hawaii statutes are silent on a civil cause of action for constructive invasion of privacy.” He said the bill won't impact those who photograph celebrities in public places such as beaches and parks, but it will prevent them from photographing celebrities in their homes, hotels and restaurants among other locations.

While several of the 25 state Senators signed on to the bill, and Judiciary Chair Clayton Hee has scheduled a hearing, many others in the journalism, entertainment and legal professions are concerned about its impact.

Sen. J. Kalani English

Gerald Kato, a journalism professor at the University of Hawaii, said at best it is “constitutionally questionable” whether the state can create restrictions on the public’s right to take someone’s photograph.

“There are substantial First Amendment problems with what is being done and how it is being done,” Kato said, noting the legislation does not just raise serious questions and concerns for the news media, but it also impacts members of the public who might take photographs with their cameras and cell phones.

Kato called the legislation “ridiculous” and said the plan to draw celebrities to Hawaii by enacting a questionable kind of law, has left him “aghast.”

“The goal of the bill seems to be to attract more celebrities but if that comes with the surrender of fundamental rights, that is a great big cost and not a cost worth paying,” Kato said.

The Society of Professional Journalists - Hawaii Chapter also opposes the bill because "it is vague and overly broad and redoes the whole notion of invasion of privacy" and because "people could sue for photos of actions done in public under ill-defined circumstances."

Chapter President Stirling Morita said "It would strip away First Amendment rights not only of news photographers but anyone with a camera. This is not an anti-paparazzi bill, it is an anti 'anyone with a camera' bill."

Media attorney Jeff Portnoy, who represents several media organizations in Hawaii including Hawaii Reporter, said the legislation should be killed because it is poorly constructed and unnecessary because there are already laws in place to address violations of privacy and harassment. Portnoy predicts the legislation would spur extensive litigation if it becomes law.

Steven Tyler’s agent originally said Tyler would comment on the legislation named for him, but Tyler has not returned emails seeking specific comments on why he believes the legislation is needed and if it is a violation of the First Amendment.  Hee's office was not able to comment on whether Tyler would be testifying in person or submitting testimony on the bill for Friday's hearing.

Proposal to Tax Marijuana at 15 Percent is Opposed by Some Legalization Advocates

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Photo courtesy of Reason

BY MALIA ZIMMERMAN - "Kona Gold" ... "Maui Wowie" - these are just some of the nicknames for locally-grown Marijuana that island residents grew up with. Hawaii, like most states, bans Marijuana use unless the consumer has a medical Marijuana permit. But at the Hawaii legislature, there is a major push in the ongoing 2013 legislative session for the 50th state to join Colorado and Washington State in revoking the prohibition.

While law enforcement opposes legalization, calling Marijuana a "gateway drug" that can cause users to become violent, the proposal has energized many who believe the substance is no more dangerous that alcohol or cigarettes.

However, within advocacy circles, there is controversy over whether the drug should be taxed and regulated or simply legalized.

The Libertarian Party of Hawaii, which has long advocated for decriminalization of Marijuana, is calling for an "intelligent approach" to reforming Marijuana laws.

Unlike other advocates that have suggested Marijuana be taxed and regulated like cigarettes, Libertarians do not support many of the rules, Ryan said.

"We are particularly troubled by a special 15 percent tax included in HB699, and a ban on public consumption, in both House bills. No logic is presented for the ban on public consumption. Nor is it clear why the 21 year old legal age was chosen. It is 18 for tobacco," said Tracy Ryan, president of the Libertarian Party of Hawaii.

SB467, HB699 and HB150 would create a legal marijuana licensing system, but none of the proposals would repeal the current criminal statutes, Ryan said, and instead refer to “affirmative defense” if a person is following all of the regulations.

"Bills that aim to 'legalize' marijuana are worthy of support, but should not be written so poorly, as to lead to problems and confusion when passed into law," Ryan said.

"This is sloppy," Ryan said. "A better way to repeal a law is to include all the text to be repealed in the legislative bill, with the language to be removed struck through. Marijuana advocates must insist on this step as a minimum to accomplishing the goals set by the legislators. Please remember that our legislation will only create new statutory material, and will not have the weight that a constitutional amendment, such as that passed in Colorado, would."

The Drug Policy Action Group is a major force behind the legalization effort. At a January 2013 press conference, the group share the results of a poll conducted by QMark Research on the public's attitudes toward marijuana and marijuana laws. Out of 600 people polled between November 19 and December 4, 2012,  78% supported a dispensary system for medical marijuana; 69% believed jail time for marijuana offenses is inappropriate; and 57% favored legalizing, taxing and regulating Marijuana. That was a 20% jump in the number of people who favored Marijuana legalization in a 2005 poll, the group said.

At the press conference, attorney Pamela Lichty, President of the Drug Policy Action Group, also unveiled a new report on economic impacts of Marijuana legalization.

Authored by David Nixon, an Associate Professor at the University of Hawaii College of Social Sciences Public Policy Center, the report documented  a "surge" in Marijuana use in Hawaii since 2004 documented by possession arrests that have increased almost 50% and distribution arrests that have almost doubled.

Decriminalizing Marijuana could save taxpayers $9 million a year in law enforcement costs, and if it was taxed, bring in another $11 million a year in revenues, Nixon said.

Nixon also maintains in his report that current laws "overly impact males under the age of 25 and people of native Hawaiian descent - groups that were arrested in numbers disproportionate to their share of the population."

The American Civil Liberties Union has joined the push for legalization. Vanessa Chong, Executive Director of the ACLU of Hawaii, said: “In Hawaii as across the nation, arrests for Marijuana possession are one of the most common ways that individuals get caught up in the criminal justice system, at great social and economic cost. These studies provide important, updated facts for the Hawaii community as we consider new directions.”

Lichty said from the survey findings, it’s clear that Hawaii voters are open to reconsidering local Marijuana laws. "The data in both of these reports will help our communities craft more effective, less costly approaches for the future.  The Drug Policy Action Group, the American Civil Liberties Union of Hawaii and our allies will advocate for the policy reforms that people in Hawaii want," Lichty said.

MORE ON THE WEB

http://acluhi.org/stats_marijuana_hawaii/ ‎

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