Two members of the board that oversees the city’s troubled rail project have declined to sign a new confidentiality agreement that calls for “criminal penalties” for violating the agreement.

The confidentiality agreement is part of new directives that appear aimed at the four board members who were appointed by the state Legislature, said board member Natalie Iwasa.

She was appointed by House Speaker Scott Saiki and has not signed the confidentiality agreement, along with Jeoffrey S. Cudiamat, who was appointed by Sen. President Ron Kouchi.

“This became an issue on Friday,” Iwasa told the Honolulu Star-Advertiser.

The board was preparing to go into executive session to discuss a performance evaluation of Lori Kahikina, the new executive director and CEO of the Honolulu Authority for Rapid Transportation, when Iwasa was told she could not attend because she had not signed the confidentiality agreement. Cudiamat, who did not respond to a request for comment, did not attend the meeting.

Asked why she had not signed the agreement, Iwasa told the Star-Advertiser: “I have some significant concerns about it.”

“One of them is that it’s a crime to release confidential information according to this agreement,” Iwasa said.

Iwasa is a certified public accountant and certified fraud examiner and has become one of the most vocal board members in asking questions about the project, which is currently estimated to cost $11.395 billion with a deficit of $1.96 billion.

The system is planned to consist of 20 trains running along a 20.2-mile, 21-station route from East Kapolei to Ala Moana Center, Hawaii’s largest transit hub and is not scheduled for completion until March 2031.

“I agree that confidential information should remain confidential,” Iwasa said. “I follow that regardless of whether I sign anything or not. I’m a CPA and I’m a certified fraud examiner. I can’t take the chance of being charged with a crime. So if I unknowingly release confidential information (perhaps by mistakenly forwarding a confidential HART email string), it would be a crime.”

The confidentiality agreement for HART board members follows an effort in November to impose a new code of conduct for members of the Hawaii Tourism Authority’s board of directors.

One requirement that drew pushback from some HTA board members would require a board member to “resign his/her position as a board member if she/he intends to publicly oppose a board action before doing so.”

The HTA board failed to adopt the policy.

Whether she signs it or not, Iwasa said that HART’s confidentiality agreement either way has the potential for creating “a chilling effect.”

“Given the environment of today, people are going to see this as a way to attempt to shut people up,” she said.

Iwasa said it would be a potential crime, under the agreement, if she downloads confidential HART emails off of the cloud, moves them to another device or even just prints them out to read. The agreement, she said, also prohibits board members from taking notes during executive sessions, which are intended to discuss potential litigation, personnel matters or contract bids.

The new confidentiality agreement follows statements made last summer by now-former vice chairman Hoyt Zia when he temporarily filled in for former HART board Chairman Tobias Martyn, who abruptly resigned in July amid calls for state and federal investigations on whether his company benefited from the sale of rail-­related city general obligation bonds and whether he should have disclosed potential conflicts of interest.

During his time as interim chairman, Iwasa said, “Hoyt basically said appointees don’t count for a quorum. And all four (legislative) appointees don’t have voting power.”

The HART board has been plagued with the issue of who can vote and what number constitutes a quorum so the board can even vote on issues.

The confusion first arose in 2017 when the number of board members expanded to 14 from the original 10 when the Legislature required adding two nonvoting members selected by the House speaker and two more nonvoting members picked by the Senate president as part of a $2.4 billion rail bailout.

The nine voting members include three appointed by the City Council; three picked by the Hono­lulu mayor; one selected by the HART board; one representing the state Department of Transportation; and one who represents the city Department of Transportation Services.

The five nonvoting members include two each selected by the House speaker and the Senate president, and one representing the city Department of Planning and Permitting.

The Legislature last session failed to pass either of two bills intended to bring clarity to the issues over who can vote and what constitutes a quorum.

>> Senate Bill 998 specified that the members appointed by the Senate president and House speaker would be voting members, meaning that 13 of the 14 HART board members would have voting power.

>> House Bill 1288 and its companion bill, SB 1324, would have kept the board members appointed by the House speaker and Senate president as nonvoting members but make it clear their positions “shall not be counted towards a quorum,” making it easier for the board to at least hold meetings.

Asked about the reason for the new confidentiality agreements and when they went into effect, HART sent the Star-Advertiser copies of the agreements and a resolution signed by board Chairwoman Colleen Hana­busa dated Nov. 26 that gives the HART board more power and discretion over the legislative appointees.

The HART board “may allow” the legislative appointees to attend both public board meetings and private executive sessions as long as they sign confidentiality agreements “as a condition of such participation,” according to the resolution.

Further, it states, “The HART Board of Directors reserves the discretion to exclude the Legislative Appointees, or any of them, from such participation at any time if it does not further the interests of the Board.”

Ultimately, Iwasa said, the issue of which HART board members can attend a meeting and, under what conditions, needs to be resolved between the Legislature, city and HART board.