The nonpublic discussion of a $2 million lawsuit recently filed against the Honolulu Authority for Rapid Transportation quickly veered into an emotional exchange involving one HART board member’s legal access to the agency’s most confidential, closed-door meetings.
At the HART board’s Government Affairs and Legal Matters Committee on Friday, the panel was preparing to enter an executive session item involving a new civil complaint.
Filed in January by plaintiffs Kim Nguyen and Vyna Nga Nguyen, the lawsuit alleges that actions taken by the city, by and through HART, ultimately forced a trio of the siblings’ jointly operated seafood businesses in Chinatown to go out of business in 2018.
But before the panel broke for the closed meeting, board member Natalie Iwasa questioned an ongoing legal dispute between the city and state over a policy that disallows her participation in HART’s privileged matters. Such matters can include labor negotiations, discussion of property acquisition along the city’s $10 billion rail line, or pending litigation filed by outside parties against HART, among others.
Iwasa — a nonvoting member of the panel who was appointed by former Speaker of the House Scott Saiki in 2021 — has solely been excluded from attending these executive sessions, because she’s not yet signed a “temporary confidentiality agreement.”
In 2022 the state Department of the Attorney General issued an opinion that the board overseeing the city’s rail project has no legal authority to treat board members differently and require legislative appointees to HART to sign new confidentiality agreements.
But the city’s Department of the Corporation Counsel disagreed, proposing Iwasa sign the confidentiality agreement.
A CPA and certified fraud examiner, Iwasa previously told the Honolulu Star-Advertiser that the terms of that agreement remain the same — especially the potential for criminal penalties — and that she won’t sign it.
In November 2021, rules signed by HART board Chair Colleen Hanabusa required the two members appointed by the Senate president and the two appointed by the House speaker to sign confidentiality agreements. The rules implemented by Hanabusa also gave the HART board more power and discretion over legislative appointees.
The HART board “may allow” the legislative appointees to attend both public board meetings and closed-door executive sessions as long as they sign confidentiality agreements “as a condition of such participation,” according to the 2021 resolution.
Further, “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,” it says.
In 2022, Hanabusa told the Star-Advertiser the corporation counsel’s office drafted both the confidentiality agreements and resolution reinforcing the different status of legislative appointees.
The matter remains unresolved to this day.
On Friday the board’s Government Affairs Committee Chair Anthony Aalto said the Nguyens’ lawsuit required the panel to hear “advice from our attorney, which we will have to take into executive session to preserve attorney-client privilege.”
Iwasa balked, however.
“So typically, what I would say at this point is I have not signed the confidentiality agreement, and that I understand that I won’t be allowed into the executive session,” she said. “However, yesterday I looked at that resolution again, which I believe was 2021-11; it expired one year after adoption, which was November 2022.”
Iwasa added that “since there is no policy against that (and) since I am bound by confidentiality in the (City) Charter, according to the attorney general, I respectfully ask to attend the executive session.”
“I will abide by all confidentiality rules that are required of me,” she said. “So I want to assure everyone that that is not an issue.”
In response, Aalto claimed no one on the board had “a personal issue” in this matter.
“It’s a question of what the law says,” he told Iwasa. “And I actually spoke with (Corporation) Counsel before this meeting, and they said that they’ve spoken to you. They said they see no reason at this point to change the procedure we’ve adopted.”
Recognizing Iwasa had raised a “new issue,” Aalto requested corporation counsel “take a look” at this disputed policy “and come back to the next meeting and tell us about it.”
“But for the time being, everybody else on the committee has signed the confidentiality agreement, and you haven’t,” he said. “And so I’m just going to stick with the practice that we’ve been using up until now.”
Iwasa shot back, “OK, so with respect, that resolution expired. It has not been renewed; although it could have been, it has not been.”
“And frankly, we should have a discussion of the confidentiality agreement, period,” she added, “because there are provisions in there that I know other board members disobeyed. I know that not all board members in the past have signed one.”
“And it is absolutely unfair to not allow me into this executive session,” Iwasa said.
In response, Aalto said, “So, obviously, I understand where you are coming from, Natalie, and this has been an issue for a very long time.”
“And every time we go into executive session, you draw attention to the fact that there appears to be a disagreement between Corporation Counsel and the state’s attorneys,” he said. “I’m not in a position to resolve that conversation … and I think if you want to have this discussed by the full board, you should agendize it so that it can be discussed.”
“But until I get different legal advice, I’m going to have to stick to the procedure that we’ve used until now,” he added.
Iwasa claimed that as chair of the committee, Aalto could allow her into the executive session. “I feel at a loss for resources here,” she added. “The person who appointed me is no longer in the Legislature, it is tax season and the current speaker of the House (Nadine Nakamura) is in session; it is very difficult to have a time to meet with her.”
“This current situation is unacceptable,” said Iwasa, who grew visibly emotional. “There is absolutely no reason to disallow me from that session.”
Although Aalto would later stress Iwasa’s “valuable expertise” to the board, he insisted he was not in the position to make a judgement on this matter. “I’m the wrong person. It’s got to be sorted out by the attorneys,” he added.
Others on the board acknowledged the situation.
Among them, board Vice Chair Kika Bukoski said, “Personally, I don’t see why we shouldn’t allow legislative appointees into executive meetings.”
“I think we should be more inclusive as a board, versus exclusive,” he added. “I think the more brains we can bring to this table, the better.”
However, Hanabusa said although she would agendize this matter at the next full board meeting, “all other state appointees had signed the confidentiality agreement.”
Hanabusa also noted Iwasa’s term on the board is scheduled to end June 30.
Ultimately, Aalto said the procedure involving Iwasa should continue until a time when lawyers on both sides resolve this legal dispute.
After Friday’s executive session meeting, Aalto publicly announced his committee heard from HART’s attorneys, who are expected to challenge the lawsuit.
In related matters, the board of directors welcomed its newest member to the panel.
Jared Kawashima, appointed Feb. 14 by state Senate President Ronald Kouchi, fills a vacancy on the board, HART confirmed.
A managing partner at local law firm, Kawashima has served as a Honolulu Charter Commission member and as a member of the Hawaii Campaign Spending Commission’s Blue Ribbon Advisory Committee, HART’s website states.
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Star-Advertiser staff writer Dan Nakaso contributed to this report.
