The State Ethics Commission has taken an interest in the activities of Thomas B. Hayward. As an independent contractor to the Office of Space Industry, Hayward is exempt from state ethics rules that might restrict his outside employment (such as his consultancy with Lockheed). However, as chairman of the Hawai’i Space Development Authority which, OSI and the Department of Business, Economic Development and Tourism have argued, is a duly constituted agency of the state – Hayward is bound by provisions that require, at the least, disclosure of potential conflicts of interest.
The law governing standards of conduct of state employees and elected officials defines an employee to include “members of boards, commissions, and committees.” According to a source familiar with the areas being investigated by Ethics Commissioner Dan Mollway, the provisions of HRS Chapter 84, sections 13 and 14, are especially pertinent.
Section 13, titled “Fair treatment,” prohibits state employees using their official position “to secure or grant unwarranted privileges, exemptions, advantages, contracts, or treatment, for oneself or others…” Section 14 concerns “conflicts of interest.” That section bars employees from taking any official action directly affecting: “(1) A business or other undertaking in which he has a substantial financial interest; or (2) A private undertaking in which he is engaged as legal counsel, advisor, consultant, representative, or other agency capacity.”
While they’re looking at Hayward’s potential conflicts, ethics commissioners might consider as well the employment of another HSDA member, Willis Hawkins. The only institutional affiliation given for Hawkins in a list of HSDA members provided by the state is his standing as a “senior advisor” to Lockheed.
Meanwhile, in Court
In addition to coming under the Ethics Commission’s scrutiny, Hayward faces legal action as well. On August 19, the Sierra Club Legal Defense Fund brought suit against Hayward, in his capacity as chairman of the Hawai’i Space Development Authority. Other defendants include Ken Munechika, director of the Office of Space Industry, and Mufi Hannemann, director of the Department of Business, Economic Development and Tourism. The lawsuit alleges that meetings of the HSDA and three Space Advisory Committees established by DBEDT have been held in violation of the state’s sunshine law.
The suit seeks an order declaring that the HSDA and advisory committees are subject to the sunshine law and preventing the defendants from having any more meetings unless they comply with the law’s provisions.
New Hayward Contract Departs From the Old
As we reported last month, Hayward’s contract with DBEDT has been renewed, effective on the date his previous contract expired (April 1, 1993). Environment Hawai’i has had a chance to look over the new contract. Procedurally, its handling seems a departure from past practices.
In the first place, the contract is based on the “fill-in-the-blank” standard DBEDT consultant contract form. All prior contracts were custom-made for Hayward.
Also, this contract – unlike all previous ones – was routed through the Department of Accounting and General Services for approval as a contract exempt from the bidding process. (Approval was granted, though not without a scolding from DAGS Comptroller Robert Takushi for the contract being executed after services began. Takushi reminded DBEDT Director Mufi Hannemann that such requests should be submitted “on a timely basis to prevent the need to approve the requests on an after-the-fact basis. Because subject services have been approved as exempt from bidding does not necessarily mean that subsequent requests will also be approved.”)
Strangely, the contract has two first pages. One identifies the consultant as “Thomas B. Hayward Associates, Inc.,” a “corporation.” The other (marked “DAGS copy”) identifies Thomas B. Hayward Associates, Inc., as a sole proprietorship. Careful readers of our July issue may recall that Hayward’s first contracts with the state were in the name of his corporation. However, that corporation was dissolved by Hayward in February 1992. Since September 1990, and apparently up until the latest contract was signed, Hayward had a “personal services” contract with the state rather than a contract for consultant services.
The boilerplate contract language sets per diem limits on amounts that consultants may be reimbursed for their expenses while traveling on the state’s behalf (limits equal to what state employees receive while traveling.) But Attachment 6 to Hayward’s contract (“Special Conditions”) deletes all references to “per diem” reimbursements. Rather, Hayward is to be reimbursed his “subsistence” expenses.
The scope of work (Attachment I to the boilerplate contract) sets forth eleven tasks Hayward is to perform “in connection with providing advisory services to the governor of Hawai’i relating to space.” Number five calls for Hayward to “Provide guidance and objectives on the development of a commercial satellite launching facility in Hawai’i. Additionally, seek alternative satellite launch concepts from the sea or air.” The next task listed is for Hayward to “Act for and on behalf of the Governor and the DBEDT Director in representing the state of Hawai’i’s space policy matters in business dealings with national and international commercial space interests.”
The seventh duty provides for Hayward to “Co-chair the Japan-U.S. Cooperation in Space project representing the interests of the state in: 1) establishing an Asian Pacific Space Research Center in Hawai’i, and 2) researching small satellite technologies with the goal of bringing these technologies to Hawai’i’s commercial satellite launching facility.” Readers may recall that the Japan-U.S. Cooperation in Space Project has, under Hayward’s guidance, become a branch of the private Center for Strategic and International Studies, a conservative, Washington-based think tank.
As with his previous contracts, Hayward will be reimbursed by the state for his general excise tax payments, as well as for any entertainment costs he claims to have incurred on the state’s behalf. His base fee remains $5,208.33 per month ($62,500 per year).
Was Favoritism Shown In Consultants’ Contracts?
Two contracts totaling $130,000 were issued without bid by the Office of Space Industry for the services of “an East Coast Consultant for Space-Related Activities.” In both cases, the person whose services were desired was Frederick C. Spreyer, a former DBED employee now living in New York.
In a telephone interview, Spreyer said he was for 10 years a vice president for public relations for Pacific Resources Inc. in Honolulu before he joined DBED’s Energy Department, where he worked for two years. About 1989, he moved to Washington, D.C. There, he said, he became a contractor to DBED for two years, running its Washington office in the hope of generating non-tourism related business for Hawai’i. At the end of April 1991, Spreyer’s contract with DBEDT expired. He then moved to New York, where he joined the staff of Ruder-Finn, Inc., a public relations company that also has a lobbying arm in Washington.
But Spreyer’s ties to DBEDT did not end. Effective May 1, 1991, the Office of Space Industry began engaging Ruder-Finns services as the OSI’s “East Coast Consultant,” with contract terms calling for Spreyer to devote up to 25 percent of his time to the OSI contract. For this, Ruder-Finn was to receive $75,000 over the course of the next 12 months.
(The effective date of the contract was May 1; however, the contract was not signed until October 2, 1991.)
By the time that contract ended (April 30, 1992), Spreyer and Ruder-Finn had parted ways. Effective May 1, 1992, Spreyer himself became the contractor, for $55,000 a year.
On August 10, 1992, DBEDT informed Spreyer that effective September 30, 1992, his contract would be terminated, due to “insufficient funds.” Spreyer told Environment Hawai’i that in fact, his contract was terminated because the state was no longer using “out-of-state contractors.”
Terms of both contracts called for Spreyer to perform activities that would seem to be lobbying Congress (among other things). Spreyer’s contract states that he shall “provide briefings and other information appropriate to congressional members and staff; for example, the Hawai’i Delegation, House Committee on Space, Science and Technology; and the Senate Commerce Committee and relevant subcommittees.” Ruder-Finn’s contract contains virtually identical language.
At no time, however, did either Ruder-Finn or Spreyer register with the House or Senate clerk as a lobbyist representing the state of Hawai’i. No one with knowledge of the contract could be reached for comment at Ruder-Finn. Spreyer said that he did not have to register because the only people he lobbied were members of Hawai’i’s congressional delegation.
Neither contract was put out to bid. Neither contract was routed through DAGS for bid-exemption approval.
DEIS Comment Period Ends November 22
In August, the state made public the Draft Environmental Impact Statement for the proposed space launch facility for the Ka’u district of the island of Hawai’i. The summary section (the first two volumes) has been reorganized, but repeats some of the same inaccurate comments contained in the version reviewed in the August 1993 edition of Environment Hawai’i.
One of the most worrisome misstatements concerns the extent to which members of the public could be exposed to hazardous chemical in the event of a spill en route to Palima Point. To depict the areas along the route that would be covered by plumes of the several chemicals of concerns, scientists drew what look like elongated disks or balloons on maps of the most likely accident sites. The shaded “balloons” represent the areas that would likely be engulfed by a plume of the toxic chemical, under daytime and nighttime conditions.
As was discussed in our August edition, outside the boundaries of the plumes, the short term public emergency guidance levels (SPEGLs) would be met. The draft Environmental Impact Statement seems to believe, however, that the SPEGLs represent the concentrations inside the plumes. “The contours – the balloons on the map – reflect areas where mild effects could occur to the most sensitive groups,” the EIS states (page 5-42 of Volume I). “Even the most sensitive individuals exposed to these toxic levels would not be subjected to severe effects.”
Elsewhere, though, the Draft EIS is more candid. Six pages later, for example, in discussing the risk associated with a spill of nitrogen tetroxide, the DEIS states: “the ‘Immediately Dangerous to Life and Health’ (TDLH) level of 50 ppm [parts per million] for nitrogen tetroxide would be exceeded at distances up to 100 to 120 meters (330 to 396 feet) from the spill site…. [P]ersons within 20 meters (66 feet) could suffer severe adverse health effects, even if the toxic hazard spill emergency response team following the transportation truck is able to cordon off the spill area, contain the spilled product, and either cover the spill with foam, plastic, etc., or remove it.”
The DEIS hauls out again the comparison with chlorine, implying that because the public makes no outcry against chlorine transport, it should accept the – far graver – threat posed by rocket fuel transport. Once more, the map depicting the area to be covered by a chlorine plume is drawn to a scale three times larger than the maps used to depict nitrogen tetroxide and hydrogen spill plumes. This time, at least, the DEIS is honest about the scale – although people merely looking at the relative size of plumes on the page in front of them may not notice the difference.
Document Doesn’t Satisfy Federal Requirements
In June, we asked OSI Director Ken Munechika whether the draft EIS would meet federal requirements under the National Environmental Policy Act. Munechika did not hesitate before answering, “Yes, it will.”
No, it won’t.
On the very first page of the draft EIS appears the statement: “Because state issues must be resolved before federal involvement is appropriate – the application for a site and/or operator’s license from the Office of Commercial Space Transportation (OCST) will be the responsibility of the private developer and/or operator and not the state – DBEDT has revised its joint lead agency agreement with OCST. A supplemental EIS (possibly a joint Federal/State document) that responds to both state regulatory and DOT [federal Transportation Department] requirements will be prepared at a later time when an actual project is imminent.”
The state did not inform the OCST of the decision to make the EIS solely a state document until July 1993. In a letter dated July 14, 1993, Takeshi Yoshihara, deputy director of DBEDT, informed OCST “of our decision to proceed at this time with a state Environmental Impact Statement (EIS) for the proposed commercial satellite launching facility. This decision is based on local considerations and issues that require timely release of a state EIS.”
Volume 4, Number 3 September 1993
Leave a Reply