Blast 'em

This Blast 'em blog is going to shine a much needed bright light on legislative shanigans. We will provide details of the wrong doing, give names of the doer, and describe the ramifications to the public. Initially we will focus primarily on consumer issues.

Thursday, May 25, 2006


I have mentioned in prior postings that Representative Bev Harbin is one of the Good Guys in the State House of Representatives. Below you will find copies of letters of complaint she sent to the State Ethics Commission and the IRS< plus a response to House Leader Marcus Oshiro after he was quoted in the Honolulu Advertiser as saying she has a political agenda.

In my opinion these letters show why I say “she is one of the Good Guys”. First and foremost, she represents her constituents, all small business, and all consumers. Her letters speak for themselves.

May 20, 2006

Daniel Mollway
Executive Director and General Counsel
Hawaii State Ethics Commission
1001 Bishop Street, ASB Tower 970
Honolulu, Hawaii 96813

Re: Request for advisory opinion and definition of Legislative Intern
Request for advisory opinion and definition of “Embedded Lobbyist”

Dear Mr. Mollway:

Pursuant to your memorandum dated April 5, 2006, I would like to request clarity how the Ethics Commission would define “an intern” As you may be aware this 2006 session there were allegations that certain highly paid executives were being paid their salaries by their employers while being placed in key committees as “interns”.

I suggest that the public and elected officials would benefit from guidelines that defined an intern. Most of the descriptions I have seen define an intern as:

somebody who works as a low-level assistant or trainee in an occupation in order to gain practical experience

I am also enclosing a House Resolution 286 that was filed at the 2006 Legislature. This resolution attempts to set a procedure that House members would register any interns which would encourage transparency. Would the commission have any comments or suggestions regarding internal rule guidelines and definitions for the members of the Legislature when making a decision of what is an intern. I will be working with House Leadership during the Interim to develop rules for adoption for the 2007 Legislature.

I would also like clarification as to the requirement that interns of the 2006 legislature would be required to file an ethics disclosure with your office. If this is a requirement, would you advise me if Mark L. Forman as an intern or “embedded lobbyist” has filed the required forms.

Very truly yours,

House of Representatives

May 21, 2006

Steve T. Miller
Tax Exempt and Government Entities Division
Department of the Treasury
Internal Revenue Service
Washington, DC 20224

Re: Complaint against the HMSA Foundation
Political Activity Compliance Initiative (PACI)

Dear Commissioner Miller:

I am a member of the Hawaii State House of Representatives. I have concerns about the political and lobbying practices of the HMSA Foundation. Information on this organization may be found on their web site at

It has come to my attention that the HMSA Foundation placed a full time employee, who is the foundation’s Executive Administrator, into an “intern” or “embedded lobbyist” position with the Consumer Protection & Commerce Committee of the House of Representations in the 2006 legislature. This placement created public concern because of pending legislation that would have a direct impact on its parent and financial partner, the Hawaii Medical Service Association (HMSA). This organization insures more than 75% of our local market and is considered the predominant health plan provider in Hawaii.

HMSA is a member of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. Information on this organization can be found at I would specifically address your attention to the appearance of interlocking Executives of HMSA, HMSA Foundation and the boards of Directors of both boards.

As I review the IRS Code and excerpts from the IRS Publication 1828, September 2003, I am concerned that neither organization could pass the substantial part test as their employee was in a position to directly influence legislation. In fact, many of the outcomes of the Consumer Protection & Commerce Committee did, in fact, provide benefits to HMSA.

For your information, I have also filed a complaint with the Office of the Ethics Commission citing both Mr. Mark L. Forman and the HMSA Foundation for failing to comply with State of Hawaii Ethics and Lobbying requirements. I am enclosing copies of those complaints which contain the alleged violations and background information.

I would appreciate your review of my concerns and advise me if you need any further information. If possible, I would appreciate this complaint be placed on the fast track process to expedite the review of this referral and determine if it merits examination and also whether there was a “reasonable belief criterion” in which the organization may have engaged in political or lobbying activities as prohibited by section 501(c)(3) when considered fairly and in light of reliable information.

It is my understanding that, with the upcoming 2006 election, your office has developed a two-part effort that will include both education and enforcement. It is my experience that, while the HMSA Foundation and its parent association HMSA have been the most flagrantly visible, there may be other similar organizations that engage in similar prohibited activities in political campaigns and lobbying efforts. Your fast-tracking process could alleviate many potential other violations in upcoming Hawaii elections.

Thank you in advance for your consideration of my concerns. I can be reached at my direct phone line at 808-591-0000 if you have any immediate questions.

Very truly yours,

State House of Representatives
State of Hawaii
808-586- 6180

Cc: Calvin Say,
House of Representatives
Robert P. Hiam

TO: Marcus Oshiro
House of Representatives
Majority Leader

FROM: Bev Harbin
House of Representatives
Downtown, Chinatown, Keeaumoku/Kakaako

CC: All Reps

Date: May 25, 2006

Re: HMSA “embedded lobbyists” complaint and request for an advisory opinion of the Ethics Commission and the Internal Revenue Service


I take your comments in the Honolulu Advertiser today as an insult to my integrity and an embarrassment that you have failed to hear my message this session as to how important health care is to the people of Hawaii. That you would accuse me of a “political agenda” indicates to me that you have not been listening to my many floor speeches since the beginning of the 2006 Session. I have over and over again stated that the Health Care Rate Regulation is (was) one of the most important pieces of legislation enacted by the 2002 Legislature for the employees and workers of the Small Business Community. I have also over and over again stated that SB 2917, RELATING TO HEALTH INSURANCE RATE REGULATION was one of the most important pieces of legislation needing to be passed in the Senate language by the 2006 Legislature. If you had taken the time to review the testimony and attend the hearings on this measure as I did, you would have seen the overwhelming testimony in support of this measure. There were only TWO against the measure. That would be HMSA and KAISER PERMANENTE, the only two entities that would benefit from the outcome of the death of the measure.

In this specific instance regarding the intern placed by HMSA in the office of the Chair of the Consumer Protection & Commerce Committee, my position has consistently been that this practice was absolutely contradictory to the mission of the committee, “Consumer Protection.” The consumers of health care, the workers that we in the majority caucus hold dearly, have in fact been abandoned by the unfettered access of HMSA to the Chair of the CPC Committee.

Majority Leader Oshiro, your position as the leader of the Majority Caucus in the House of Representatives is not a position that should be taken lightly. Health Care to our people is of such importance that we are proud of our legislative history in the passing of the Prepaid Health Care Act. This is what leadership is supposed to be -- decisions for the good of the employees and citizens of Hawaii.

The issue of the HMSA intern has been a very visible issue of concern to many, both privately and publicly. That you, as the Majority Leader, did not step to the plate and remove the intern has tainted and embarrassed our 2006 session and I share in that embarrassment.

Yes, these are serious accusations and it is my place as a legislator to address these accusations for the protection of the people of my district and the employees and workers of the State of Hawaii. It is unfortunate that the only recourse that I as a Representative have to address your lack of leadership is with the Ethics Commission. My biggest disappointment is that you, as Majority Leader, in spite of the loud public outcry and media coverage, did not remove the intern to remove any cloud on the 2006 Legislature. Majority Leader, this is what leadership is about: taking risks and making the hard decisions for what is right, especially when it addresses public perception.

I hope you will join me in asking the Ethics Commission for the advisory opinion requested so that you as Majority Leader will have a clear view of what is right for our employees and health care consumers at the 2007 Session or in a Special Session this summer.


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