Indexbit Exchange:Hawaii contractors are still big contributors to political campaigns due to loopholes in state law

Executive officers and Indexbit Exchangeemployees of government contractors along with their family members donated more than $170,000 to local campaigns between January and the end of June, a Civil Beat review of campaign finance data found.

Mayor Rick Blangiardi’s campaign topped the list of recipients with about $62,000 coming in from people tied to contractors, including one that recently won a flood control contract from the city. That figure is about 13% of the $475,000 his campaign raised between Jan. 1 and June 30.

Blangiardi dismissed the notion that there would be any connection between campaign donations and contracts his administration awarded.

“I don’t think anybody over the last four years, thought ‘If I give Blangiardi some money, maybe we’ll get the contracts,’” the mayor said in an interview.

The top contributors to all campaigns include executives of Honolulu rail contractor Nan Inc., who along with their family members contributed $29,000 to various campaigns.

Big contributors also include officers of Alexander & Baldwin. A subsidiary recently sold the state land for $10.5 million, while A&B contributed to state lawmakers’ campaigns via the company’s political action committees.

Hawaii banned donations from contractors in 2005, but the Legislature wrote a loophole into the law that allowed officers, owners, employees and family members to continue donating. A New York Times and Civil Beat investigation earlier this year found that nearly one-fifth of all campaign donations made since 2006 came from people tied to contractors.

Efforts to close the loophole and ban donations from company executives and family members failed in the last two legislative sessions. However, citing the Times/Civil Beat investigation, lawmakers and government watchdog groups have said they will take up the issue again next year.

Donations Came Just Before Contract

People with ties to Royal Contracting Co. were among Blangiardi’s top donors.

In the last 6 months, employees and other people with ties to Royal Contracting donated $16,000 to the mayor’s campaign.

They include Tiara Hulihee, a Royal Construction manager, as well as three other individuals who donated from addresses associated with Royal Contracting officers Thomas Hulihee and Leonard Leong.

One of those people was Janelle Leong. She’s listed as an officer on the company’s business registration, but was instead reported as a homemaker with no employer in campaign spending records.

Those donations were among dozens deposited by Blangiardi’s campaign on June 28. That same day, the city sent a letter to Royal Contracting informing the company that it won a $1 million contract for flood control improvements in the Waialae Nui channel.

Employees and officers of the company have donated a total of $41,000 to Blangiardi’s campaign since 2020. They also contributed $13,000 to candidates for Honolulu City Council during the same time period.

Blangiardi said he knows Thomas Hulihee socially from the Waialae Country Club. But the mayor said he never talks to city employees involved with procurement and doesn’t know who competes for contracts.

“I’m just going to tell you straight and direct — I don’t operate that way, we don’t play that game, and candidly speaking, until I read what you wrote, I didn’t make any connection as to who donated what and who got awarded what,” Blangiardi said.

He said he dealt with advertising ethics and payola clauses as a broadcast executive for years, and carried those experiences into office.

“I take a lot of pride in my personal ethics,” he said.

Leong, president of Royal Contracting, didn’t respond to messages seeking comment for this story.

Royal Contracting has a history of political giving. In 2003, Leong was fined after pleading no contest to charges that he made illegal donations to former Mayor Jeremy Harris’ campaign.

Royal Contracting itself was also fined for elicit donations to several candidates.

Land Deals

Donations tied to real estate giant Alexander & Baldwin also poured into campaigns as the company got ready to close a land deal with the state.

Throughout January, May and June, A&B employees and the company’s PACs donated more than $16,000 to the campaigns of more than two dozen state lawmakers.

In February, the state Department of Hawaiian Home Lands bought land in Kihei from A&B Properties for $10.5 million. The state law banning contractor donations also applies to companies selling land to government agencies. The ban applies for the duration of the contract.

The company has two PACs. One is funded by contributions from A&B employees while the other, created in 2022, is funded entirely by the company itself.

That group, the Alexander & Baldwin Inc. PAC, contributed about $2,250 to state lawmakers during the duration of the land sale contract, which ended May 31, according to procurement records.

Donations from company officers are still allowed under state law. But PACs can’t be used as a passthrough to skirt the ban on contractors making donations, according to Gary Kam, general counsel for the state Campaign Spending Commission.

However, Kam said campaign spending commission would need to determine if the contractor and the company funding the PAC are indeed the same entity. Alexander & Baldwin and A&B Properties share the same officers even though they are registered as two different entities.

“It is our understanding that a parent company is treated as a distinct entity from a contractor subsidiary with respect to campaign contribution laws in Hawaii,” A&B spokesperson Andrea Galvin said in an email.

If A&B Properties is a subsidiary of Alexander & Baldwin, the commission would need to determine how much control, including financial control, the parent company has over the property company, Kam said.

He said this case is unique.

“Something like this case has never come before the commission,” Kam said.

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This story was originally published by Honolulu Civil Beat and distributed through a partnership with The Associated Press.