INDEX - TRUTH ID#0815-10



POSTED: 1 MAY 2008 - 10:00am HST

Ethics issue makes Honolulu Advertiser BLOG

image above: Modification by Juan WIlson of the poster fo the MGM film "The Bribe". Click to see original.

by Dick Mayer on 30 April 2008

NOTE: The actual amended lobbying reports are attached.

Regular Legislative Session  Jan+Feb 2007 $ 5,728
Regular Legislative Session  March+April 2007 $272,251
Special Legislative Session  May-Dec 2007 $101,452
The 2007 TOTAL = $379,431

Regular Session
Jan - Feb 2007
Regular Session
Mar - Apr 2007
Special Session
May - Dec 2007
Year 2007

Derrick DePledge, Honolulu Advertiser reporter has written on this subject. Now let's see if Advertiser puts it on Page ONE!


by Derrick DePledge on 30 April 2008 in Advertiser Reporter's Blog

Hawaii Superferry substantially underreported its state lobbying expenses last year as it fought an environmental impact statement and then asked for special legislation that allowed it to resume ferry service after an environmental review was ordered by the state Supreme Court.

Superferry executives at first reported $21,960 in lobbying expenses but, after being contacted by the state Ethics Commission, amended the reports to reflect $379,431 in lobbying expenses.

Ian Lind, a freelance writer and blogger who works for state Rep. Lyla Berg, D-18th (Kuliçouçou, Niu Valley, çAina Haina), had written the Ethics Commissions with his suspicions about the accuracy of Superferry’s reports and separate reports filed by the advocacy group National Popular Vote.

Lind reported the new Superferry lobbying figures in his blog on Tuesday and previously reported the amended reports for National Popular Vote.

Dan Mollway, the executive director of the Ethics Commission, said the commission usually asks for voluntary compliance with the lobbying disclosure law before seeking enforcement action. Willful violations of the law can bring $500 fines.

Mollway said the lobbying disclosure law can be confusing but he could not explain the large discrepancies in Superferry’s reports.

“I’m not sure how the requirements were missed,” Mollway said, adding that Superferry was eager to amend the reports after being contacted by a commission staff attorney.

The Advertiser reported last year that Superferry had hired some of the state’s top lobbyists and public relations executives to help the project at the state Legislature and with the media.

“Last year there was a great deal of legislative activity related to Hawaii Superferry which required continuous information updates and production of briefing materials for legislators,” the company said in a statement tonight. “Our initial filing reflected fees paid to lobbyists. We, subsequently, reviewed our expenses and were advised by counsel that lobbying expenses should also include public opinion research and the production of materials that might be viewed by legislators.”

National Popular Vote, a California-based group that wants states to elect the president by popular vote instead of the Electoral College, spent $74,979 on state lobbying between May and December last year, mostly on media advertising. The group had initially reported $7,778 in lobbying expenses for that period.




POSTED: 19 APRIL 2008 - 9:00am HST

Conspiracy between HSF and Lingle

image above: HSF Audit Report players from The Honolulu Advertiser

[Note from Dick Mayer: As you read this, keep in mind that the Hawaii Superferry Company prematurely placed its order (Jan. 2004) for the construction of the two
superferries about 14 months BEFORE they received any exemption from the EIS law. HSF consistently claimed that they had time deadlines, so they needed
quick approvals, first from the PUC (Dec. 31, 2004), then from the State's EIS law (Feb. 2005), and finally from the State Legislature (Spring 2005) for the $40 million barges. Special Session Act 2 asked ONLY for an audit of the EIS exemption decision, not all of the other decisions that were pressured (PUC +
Legislative $40 Million) to meet the needs resulting from the Hawaii Superferry's own premature order of the 2 superferries.]

Superferry drove State's actions

by Derrick DePledge 17 April 2008 in The Honolulu Advertiser

Read the full Superferry Audit Report as a PDF through Advertiser link above.

The state may have compromised its environmental policy because of pressure from Hawaii Superferry executives who were worried about financing for the interisland ferry project, the state auditor has concluded.

The auditor found that an internal June 2005 deadline imposed by Superferry executives "drove the process" and pushed the state Department of Transportation to bypass an environmental review. The deadline, according to the auditor, was tied to Superferry's agreement with Austal USA to secure financing to pay the Mobile, Ala.-based shipbuilder to construct two high-speed ferries.

The federal Maritime Administration, which approved a $140 million loan guarantee for ferry construction, wanted confirmation that no environmental assessment of harbor improvements would be required because of the risk that environmental concerns could jeopardize port access. But Maritime Administration officials told the auditor they did not set the June 2005 deadline as a condition of the loan guarantee.

"In the end, the state may have compromised its environmental policy in favor of a private company's internal deadline," state auditor Marion Higa concluded. "It remains to be seen whether these decisions will cost the state more than its environmental policy."

The performance audit was required by state lawmakers as part of a law passed in special session last fall that allowed Superferry to resume operations while the state conducts an environmental impact statement. Legal challenges and public protests had halted ferry service after the state Supreme Court ruled in August that the state's decision to exempt $40 million in state harbor improvements from environmental review was in error.

The auditor's main finding was that the June 2005 deadline was not imposed by the federal government, but related to an agreement between Superferry and Austal. The audit questions whether the state did "sufficient due diligence to verify whether the deadline was valid for the reasons Hawaii Superferry Inc. claimed."

John Garibaldi, Superferry's chief executive officer, said yesterday that Superferry has consistently portrayed the June 2005 deadline as necessary for both federal and private equity financing. He described the agreements with the Maritime Administration, Austal USA and primary investors J.F. Lehman & Co. as interrelated.

"They were all dependent upon each other. No one stood on its own," Garibaldi said. "I think that's what we tried to express to people."

Garibaldi declined to comment on other findings in the audit because he had not yet seen a copy.

Similar Accounts
The auditor's descriptions of the chain of events that led the state to exempt the project from environmental review in February 2005 are similar to reports in The Advertiser in September and January.

The auditor and the newspaper received many of the same documents, which were screened by the Lingle administration for attorney-client privilege and executive privilege before being released. The administration is preparing a privilege log for the auditor and the newspaper to describe the documents that have been withheld. The Advertiser requested the documents under the state's open-records law.

Most significantly, the auditor — like The Advertiser — emphasized a late December 2004 meeting at the governor's office that included the governor's then-chief of staff Bob Awana, department officials, and Superferry executives.

Staff in the department's harbors division had wanted to require a statewide environmental assessment of the project and to get Superferry to install a stern ramp on the vessel to give it more flexibility at Kahului Harbor on Maui. But Superferry executives, according an account by a department staffer, told the state that anything but an exemption was a deal-breaker and that they would not install any ramps.

"Decisions made: We need to pursue EXEMPTION; and HSF will not provide any ramps on vessel," one department staffer told colleagues afterward in an e-mail.
The auditor concluded that department e-mails showed a decision was made at this meeting, although who made the decision is not revealed.

"Current and former department officials and employees who worked on the ferry project were either unable to recall who made the decision at that meeting or chose to invoke executive privilege when asked who directed the team," the auditor found.

The department, in its written response to the audit, rejected any inference that a decision was made at the governor's office directing the department to pursue an exemption. The auditor countered that the department's e-mails about the meeting "are self-explanatory."

"Ultimately, a decision involving the governor's office was made that directed the 'ferry project team' to pursue scenarios that would exempt the ferry harbor work from environmental review," the auditor found.

Fukunaga's decision
Awana, who resigned last year, told The Advertiser in January that he had no role in the decision. Barry Fukunaga, who was then the department's deputy director of harbors and is now Gov. Linda Lingle's chief of staff, has said he made the decision in consultation with his construction and engineering staff and then-department director Rod Haraga. The department also consulted with the state Office of Environmental Quality Control and county planning agencies.

Fukunaga told The Advertiser in writing last year that he did not discuss his deliberations or his eventual decision with Lingle, Awana or state Attorney General Mark Bennett.

The audit is also similar to The Advertiser's reporting last September on the Maritime Administration's loan guarantee for Superferry. Maritime Administration officials told the auditor that loan guarantees are typically exempt from environmental review because they just provide financing for ship construction. The vessels typically use port facilities already in place.

Maritime Administration officials told the auditor that harbor improvements for Superferry could have triggered an environmental assessment that could have limited ferry access to ports. So the Maritime Administration added a condition that Superferry provide confirmation that no environmental assessment was required.

"MARAD's position was that it was not willing to finance the construction of any vessel that might be unable to operate because it has no port," the auditor found.
The audit recommends that the Legislature empower a state agency to enforce environmental review laws and require agencies to update exemption lists every five years. The auditor found that the public has little involvement in the exemption process other than the right to file a lawsuit to challenge an exemption.

Higa had complained to lawmakers that she missed a March deadline for a preliminary draft of the audit because of significant delays in obtaining documents from the Lingle administration. Higa repeated those complaints in the audit and said her staff would be preparing a second phase of the audit for a later report.

Higa described the Lingle administration's cooperation as "slow and incomplete, at best." The department called that description "wholly untrue" and said any delays were based on requests by Higa that the attorney general found were "unreasonably broad in scope."

The department chose not to comment on many of Higa's conclusions. Mike Formby, the department's deputy director of harbors, said last night that the administration's wants the opportunity to review the second phase of the audit.

"I think what we wanted to do was reserve the right to see the full report, because it's really risky to look at half the report and respond knowing that they're out there still doing field investigation, interviews, reviewing documents," Formby said. "And basically, they look at the response you gave, and they go out and look for a way to rebut your response."

Superferry exemption was forced
by Mark Niesse on 17 April 2008 in The Star Bulletin

Hawaii's government caved in to pressure from the Hawaii Superferry, allowing it to bypass an environmental review by the state, according to an audit to be released today.

The report finds that the Department of Transportation exempted the Superferry from an environmental study after the interisland ship threatened not to come to Hawaii unless it was given the go-ahead by June 30, 2005.

"In the end, the state may have compromised its environmental policy in favor of a private company's internal deadline," according to the audit, ordered by the Legislature and prepared by Auditor Marion Higa.

The Transportation Department's exemption set in motion a series of events including ocean protests off Kauai, court rulings that stopped the ferry and emergency legislation overriding the courts.

Since then the Superferry has been carrying small loads of passengers and cars from Honolulu to Maui when it has not needed repairs, as it did from Feb. 13 to April 7. The ferry still has not resumed voyages to Kauai.

Hawaii Superferry President John Garibaldi said he never misrepresented his business needs, and the deadline was something he had to live with, too, to satisfy shipbuilding contracts, investors and a $140 million loan guarantee from the U.S. Maritime Administration.

"People had imposed time deadlines on us to meet," Garibaldi said yesterday. "We were just trying to work with it, and we were upfront in disclosing that to people."

The state invested $40 million for harbor improvements and barges for the ferry to offload vehicles, which the Hawaii Supreme Court ruled last August should have triggered an environmental review.

Because the U.S. Maritime Administration's loan guarantee was valid until January 2006, the audit concludes it was the Superferry that forced the state's hand by setting a June 30, 2005, deadline. The guarantee was contingent on there being no further environmental reviews.

The Department of Transportation acknowledges that the auditor is correct in saying that the U.S. Maritime Administration did not technically set the June deadline, said Mike Formby, deputy director for harbors. But the reality was that the Superferry needed an environmental exemption by then or else it could not come to Hawaii, he said.

"There was pressure on them (the Department of Transportation) to make a decision, and they made the best decision they could make at that time under the circumstances," Formby said. "It would be inaccurate to say the date didn't matter. It did matter. But at the same time, it would be inaccurate to say the harbors division didn't do their homework, because I think they had."

In its review, the audit found strong disagreements among Department of Transportation staff regarding whether to allow the Superferry to skip the state's environmental laws.
"In a department e-mail, the chief planning officer wrote, 'We would be crazy to go exemption,'" the audit says.

The state has said the exemption was made by Barry Fukunaga, who was then deputy director for harbors but was later promoted to state transportation director and currently serves as Gov. Linda Lingle's chief of staff.

The audit recommends that an entity should be given authority to enforce environmental laws, state agencies should document findings that lead them to make an exemption, and guidelines should ensure that all steps required to protect the environment have been followed.

Here is a searchable version with a table of contents of the State Auditor's report on the Superferry exemption provided by Carl J. Berg, Ph.D. (808 639-2968):

see also:
Island Breath: Hawaii Superferry EIS Myths