City Councilwoman Ann Kobayashi has agreed to pay a $500 fine for not disclosing her role as a director for six credit union subsidiaries when she introduced and voted for a bill that would have affected credit unions, the city Ethics Commission said Friday.

But Kobayashi said she is unhappy with the commission’s handling of the case because she had made public her interest with the Aloha Pacific Federal Credit Union subsidiaries in an annual financial disclosure filed several months before the vote in question. In addition, she said, the bill for which she is being penalized would not have benefited credit unions but actually would have allowed them fewer exemptions and possibly increase their taxes.

The credit union subsidiaries with which Kobayashi is affiliated were established by Aloha Pacific to provide services to its members. For example, she said, one of the subsidiaries was set up for Aloha Pacific vending machines.

At issue is Bill 41 (2012), a measure that would have allowed credit unions an unspecified percentage exemption from property taxes owed to the city. Kobayashi introduced the bill and voted for it on first reading on April 25, 2012. Kobayashi was an unpaid director of the Credit Union Service Organization of Hawaii, an umbrella group of six wholly owned subsidiaries of Aloha Pacific.

"As a director of the subsidiaries, Councilmember Kobayashi had a duty to support the best interests of Aloha Pacific," the commission said in a news release on Friday. "But as a councilmember, her primary duty is to the public — to objectively and independently evaluate all legislation. Her public and private duties conflicted, and the ethics laws required her to promptly disclose the conflict to the public."

The bill did not get another hearing after the April 2012 vote. Earlier this summer, however, Mayor Kirk Caldwell introduced Bill 36 (2013), which has similar language, as part of a property-tax reform package. Kobayashi has voted for the bill, but not before disclosing a possible conflict.

The commission’s release said there was no evidence Kobayashi intended in 2012 to circumvent the disclosure process. However, the commission pointed out that former Councilman Todd Apo was fined for a similar violation in April 2011, at which time the commission instructed Council members to disclose when they have a conflict of interest in a bill they introduce.

The commission also noted that Council members are not required to recuse themselves when they have a conflict but that "without the protection of recusal, there is a heightened public need for disclosure of personal and private interests by councilmembers … at the earliest opportunity."

Kobayashi said she did forget to verbally disclose her interest with the credit union organizations when the bill was introduced at the April 2012 Council meeting, and willingly paid the $500. She has also since resigned her position with the organizations, she said.

However, she said, she had listed her interest with the credit unions when filing an annual financial disclosure on Jan. 12, 2012, only months earlier, and had not tried to conceal the relationship.

Kobayashi also pointed out that the credit union service organizations now pay a minimum tax of $300 and that the bill could not have benefited them, and likely would have cost them more in taxes by allowing them only a percentage exemption.

Kobayashi, who heads the Council’s Budget Committee, said she wants the commission to explain why the panel continued to investigate the matter even after she agreed to pay the fine, including asking the credit union groups to supply the commission with months of board meeting minutes.

"I believe this continued investigation was a waste of resources and taxpayers’ money," Kobayashi wrote in a written response to commission executive director Chuck Totto.

Kobayashi said she also asked for a hearing before the commission to respond directly to the charges and was never given the opportunity.