Former Council Chair Nestor Garcia Fined $6,500 – Largest Fine in City’s History – for Failure to Disclose Conflicts of Interest on Rail Project

“He (Honolulu Council Member Nestor Garcia) failed to file conflict of interest disclosures for 38 rail transit bills and resolutions and for 14 other matters such as rezoning from agriculture to commercial and residential uses around Kapolei.” – Honolulu Ethics Commission, July 2, 2012

BY MALIA ZIMMERMAN – Honolulu City Council Member Nestor Garcia at one time had considerable power and influence over the 9-member Honolulu City Council, a legislative body that makes key decisions impacting Oahu’s 1.2 million people.

He served as transportation chair when the most important debates took place on whether the city council would support a 20-mile, elevated steel on steel rail project at a cost of $5 billion or if other less costly alternative transportation methods would be selected, and for six months afterward from December 2010 to June 2011, he was the chair of the entire council.

But Garcia’s reputation and upward career track took a hit on March 24, 2011, when KITV News reported Garcia was serving as a board member and executive director of Board membership of the Kapolei Chamber of Commerce, an organization that was advocating for the rail and whose members were pro-rail companies that would benefit financially from the project he was pushing and approving while on the council. In addition, Garcia was being paid $60,000 a year for the Chamber job – more than the $58,596 he was paid annually for the city council position. In addition to his city council salary, and funding from the Kapolei chamber, Garcia receives $30,000 from Dura Construction for his work as a safety officer. That was a combined annual salary of nearly $150,000.

After considerable public criticism, Garcia stepped down as council chair in June 2011.

The Honolulu City Ethics Commission followed up after a complaint was filed against Garcia – and today issued a ruling that orders Garcia to pay a $6,500 fine – the largest ever of any city official – because he did not disclose his conflict when voting or when the Chamber members were testifying for the rail.

The commission said: “While he (Garcia) was involved with the Chamber, the Chamber’s Board members testified in support of rail transit, Kapolei rezoning and other measures before the Council and Councilmember Garcia.  He failed to file conflict of interest disclosures for 38 rail transit bills and resolutions and for 12 other matters such as rezoning from agriculture to commercial and residential uses around Kapolei. Councilmember Garcia was legally required to file conflict of interest disclosures for all 52 bills and resolutions.”

The commission ruled that although Garcia noted his Chamber employment in his annual filing, he also was required “to disclose his conflict of interest for each piece of legislation because the Chamber had testified in support of rail transit, rezoning in the Kapolei area and other significant public issues.”

“Councilmember Garcia’s duty to the public here is clear-cut,” said Chuck Totto, the Commission’s Executive Director and Legal Counsel.  “The test for a conflict of interest is simple – Would a reasonable person question the councilmember’s impartiality in voting if his employer took a position on the bill?  It’s hard to imagine a more obvious and basic financial conflict than your employer testifying on a bill that you’ll vote on.”

While the commission said Garcia made “excuses for not filing the disclosures”, they said those were “implausible”, including that since he and the Chamber are both proponents of rail transit, he could not have a conflict of interest because they are aligned on the issue.

“The disclosure law is essential to making the democratic process transparent, here requiring the Councilmember to reveal that his employer has taken a position on a bill. Without disclosure, the public would be unaware of his private interests that would cause a reasonable person to question whether his votes on the public issue were impartial,” the Honolulu Ethics Commission statement said.

Garcia apologized today and said he realizes “this was a totally preventable situation.”

Garcia, who said he already paid the $6,500 fine, will not challenge the Commission’s findings.

He said after undergoing the investigation, he now has a “much deeper understanding of our ethics disclosure laws” and in the future will “Continue to file disclosures as required, as well as refrain from utilizing City government resources for anything other than official purposes; and work with the Commission, and the City Council, to ensure that these violations are not repeated by members of the City Council.”

But rail critics say the damage by Garcia cannot be undone.

Honolulu Transportation Expert Cliff Slater, who runs HonoluluTraffic.com and is a plaintiff in a federal lawsuit to stop the construction of the rail, said when Garcia was first elected, he treated everyone fairly, but later in his council career, would often get angry with those who testified against the project and give them less time to speak and he was “overtly biased” for the project.

Former Gov. Benjamin Cayetano, also a plaintiff in the federal lawsuit to stop rail, said in March 2011 that many people who testified against the rail project at city hall said Garcia, who ran the meetings, had been unfair to them. He limited critical comments to 1 minute and did not allow many concerns about Oahu’s largest ever construction to be heard.

Cayetano said consciously or unconsciously, Garcia’s decisions to move the project forward had to be impacted by his receiving $5,000 a month from rail advocates.

Garcia said today that at no time did he intend to “deceive, mislead or in any way deliberately violate any of the applicable laws that pertain to this matter” or conceal his relationship with the Kapolei Chamber.

The Honolulu Ethics Commission said Hawaii’s law “nullifies a councilmember’s vote where he or she has not disclosed a conflict of interest,” but “if there are still enough votes to support the Council decision, the action stands.”

“After investigating, the Commission found that none of the outcomes on the 52 measures would have changed after Councilmember Garcia’s vote was subtracted from the total,” a commission statement said.

A copy of Advisory Opinion No. 2012-4 is available at: https://www1.honolulu.gov/ethics/0ebf70f2-b9cc-4227-8d45-4b40cc0f1d8f.htm#_ftn3.  

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