2009-10-14 Board of Ethics Minutes

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the terms of the proposed amendment. All police officers are County employees. If you are a business and you want to hire a special -duty police officer, you call up the County of Hawai `i Police Department and ask for a special -duty police officer. The County then contracts with individual police officers to perform the special -duty service. You actually pay the County of Hawai `i. The County then cuts a check to the special -duty police officer. I don't believe that was the intended impact of this proposed amendment, but that's the reality of the impact. Recently in the newspaper, Chairman Yoshimoto indicated that was one of the reasons why they stopped hiring special -duty police officers at the council meetings, so I think that's something that was probably unintended but that's probably one of the results of the proposed amendments. Now the proposed amendment seeks to prohibit any County employee from having the existing Code specifically prohibits any officer and employee from seeking employment or contract for services for oneself by the use or attempted use of the officer or employee's office or position. This is the conduct that is prohibited, and it should be prohibited. No one is suggesting that they should be awarding any conflict of interest or any self - dealing. That is conduct that should be specifically prohibited and is presently prohibited under the existing County law. The proposed amendment seeks to prohibit any County employee from having any business relationship with the County unless that employee is less than a majority owner of a business. Such an exception I suggest would make the proposal meaningless, for private businesses would merely incorporate and provide the employee less than a majority interest in the corporation. So what I'm suggesting here is that say you're a sole proprietorship, or you're a corporation and your employee, the County employee, has say SI %. All you would need to do in order to comply with the proposed amendment is to incorporate and give yourself less than 50% ownership. It's a simple process to do. All it takes is a meeting of the board of directors, and it would be something that would comply with the proposed amendment. But in reality, it's really what conduct you're talking about is still yet the self - dealing conflict of interest, which is already illegal. Now proposal number 2 demonstrates why this proposal has little merit. Existing law requires that the only time that a contract may be awarded to a private business that is controlled by a County employee is through the competitive sealed bidding pursuant to State Public Procurement Code. Existing law presently prohibits any contract being awarded where the employee or officer had anything to do with the contract. Quite frankly, what should be done is to strengthen that provision, not to eliminate it. The proposal eliminates that provision. Now what do I mean by strengthening that provision? Look at the logic of what's occurring here. If you're a majority owned corporation or business okay, if the employee's in charge of the business by a majority controlling interest, we have to do it by sealed bid. Okay? So what they're doing is deleting that whole that whole section is being deleted. So if you are a 49% owner of that business, do you have to do it by sealed competitive bid? No. Not under the present proposal. You wouldn't have to. You wouldn't have to go through the sealed competitive bid. You'd still have to comply with the State Procurement Code, but the language of the proposed amendment would permit a 49% business to procure a contract without the sealed bidding process. I would suggest to you that strengthening of that provision would provide any business that has an employee interest, rather than being a majority or minority, should go through the sealed bidding process. So that would be the suggestion to strengthen it. But again, it goes right back to the fundamental issue. What is the conduct that you're trying to prohibit? You're trying to 2