RESOLUTION

WHEREAS, on January 4, 2006, Governor Lingle and a one hundred seventy-eight-member delegation that included many Hawaii business people arrived in the Republic of the Philippines on a week-long visit in celebration of the 100^th anniversary of Filipino immigration to Hawaii; and

WHEREAS, the Governor led a similar-sized two hundred-member group to the People's Republic of China and the Republic of Korea on an official trade mission during the summer of 2005; and

WHEREAS, it has come to light early this year that the Governor's administration has raised more than $827,000 in cash and in-kind contributions from Hawaii businesses and organizations since 2003 to defray the cost of state trade missions and that DFS Hawaii, Ko Olina Resort and Marina, and NCL America pitched in a combined $120,000 to underwrite the Governor's Asia trade missions in the past two years; and

WHEREAS, it has been revealed that money raised by sponsors paid for a variety of costs for the mission to the People's Republic of China and the Republic of Korea, including about $69,000 for entertainment expenses; and

WHEREAS, it was also reported that the Governor hosted a $9,500 reception at the Great Hall of the People in Beijing and a $13,600 reception for the governor of China's Guangdong province; and

WHEREAS, sponsors' contributions also paid for $31,860 in travel expenses and honorariums to local entertainers who accompanied the China and South Korea delegation; and

WHEREAS, sponsorship money for the 2005 China and South Korea mission was funneled through the nonprofit Pacific and Asian Affairs Council, which helped coordinate the mission and kept nearly $7,000 for its services; and

WHEREAS, according to the administration, funneling the money through the nonprofit Pacific and Asian Affairs Council simplified the process of raising and spending funds but that also meant that the Governor was not obligated to report details of the contributions; and

WHEREAS, the Honolulu Advertiser learned in late January 2006 that the Governor's administration had promised a special package of "title sponsor benefits" that included access to foreign government leaders and "VIP events (such as backstage or after-show parties)" to a company that was asked to contribute $50,000 for future trade missions; and

WHEREAS, with regard to the trip to the Republic of the Philippines, it has been reported that the Governor's office raised $122,000 to defray costs and the major sponsors of the trip include Dole Foods, Marriott Hotels, Hilton Hotels, Chaney Brooks, House of Finance, Kauai Lagoons LLC, Ironworkers Union, Fidelity National Title, Laborers Union, Mortgage Financing of Hawaii, Fortune Business Company, Somar Investments LLC, Philippine National Bank, KC Rainbow Development, and Steve Callo, CPA; and

WHEREAS, while concept of businesses sponsoring government trade missions is not objectionable in itself and saves taxpayer dollars, the method of soliciting funds, including promising special benefits in exchange for large contributions, is very troubling; and

WHEREAS, it is critical that no ethical bounds are crossed in government solicitations of private sponsorships of official government trade missions and measures need to be taken to ensure that government solicitations are public and aboveboard and that government decisions are not influenced by private contributions to support these missions; and

WHEREAS, the Governor's just-concluded mission to the Republic of the Philippines reinforces the urgency to audit the administration's methods and procedures in soliciting private contributions and sponsorships of official government functions such as trade missions; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2006, the Senate concurring, that the Auditor is requested to audit the appropriateness of the methods and procedures employed by the administration in soliciting private sector sponsorships and contributions, in cash or in-kind, to support or defray the costs of official government functions, including trade missions; and

BE IT FURTHER RESOLVED that the Auditor is requested to consult with the State Ethics Commission, as necessary; and

BE IT FURTHER RESOLVED that the Auditor is requested to include in its audit the methods used in identifying potential donors and the use of any quid pro quo procedures that promise official advantages or privileges either in absolute terms or scaled to the amount of contributions, in exchange for solicited sponsorships; and

BE IT FURTHER RESOLVED that the Auditor is requested to report findings and conclusions, including any necessary proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2007; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Auditor, the Executive Director of the State Ethics Commission, and the Governor.

Report Title:

Auditor; Audit Methods; Private Sponsorship Solicitations