A bill to prohibit nepotism in state hiring crossed from the Senate to the House this week with only one senator publicly expressing reservations, but it has a long way to go.

Senate Bill 994 was introduced by Senate President Shan Tsutsui at the request of the state Ethics Commission to prohibit state employees from hiring or promoting their relatives. It is based largely on federal nepotism law, which prohibits the practice except in special cases. The commission told legislators it received complaints about nepotism and thought action was needed.

"The Hawaii State Ethics Commission believes that, absent extraordinary circumstances, state officials and employees should not be involved in appointing or hiring their relatives for government office," it said in written testimony. "This practice engenders charges of favoritism and preferential treatment, and erodes public confidence in government hiring practices."

Because of concern that a blanket ban was too sweeping and could exclude the best person for the job in some cases, the bill was amended by the Senate Committee on Judiciary and Labor to allow an exception when the relative is "highly qualified" for the position. The bill was approved by the full Senate on third reading, with 25 ayes, including Sen. Malama Solomon (D, Hilo-Honokaa), who voted "with reservations."

The commission had introduced a similar anti-nepotism bill in 2009 that was carried over to the 2010 legislative session, but the proposal never got a hearing.

This year’s legislative action comes after publicity about hiring practices at Myron B. Thompson Academy, a public charter school, where the principal has four relatives on the payroll. Critics have questioned their qualifications and/or job performance. The staffers include an athletic director for the online school, which has no sports teams, and a vice principal who oversees the elementary school while working full time as a flight attendant.

Sen. Michelle Kidani (D, Mililani-Waipio) also introduced an anti-nepotism bill, SB 1502, this session, and some of its provisions are included in the bill that advanced.

"My purpose for introducing a bill was to address the outcry over what happened at Myron Thompson school," Kidani said yesterday. "Our hands were tied because the charter school had complete authority to do it, and its local school board did not want to step in. I just felt that the lack of state laws dealing with nepotism should be brought to the limelight."

The Hawaii Charter School Network, which advocates for the state’s charter schools, also backed anti-nepotism legislation this session.

"We support building of public trust via responsible stewardship of public dollars," Curtis Muraoka, vice president of the charter network, testified. "We believe that SB 1502 will strengthen and clarify employment practices for state and county employees and help to build and maintain public trust."

Noel Ono, director of city Department of Human Resources, said the City Charter prohibits city employees from appointing or promoting their relatives, except when the relative is on an eligibility list based on civil service provisions. In testimony before the Legislature, he suggested a similar exception be made if the state passes a bill banning nepotism.

"While this prohibition may not be as significant if the relative is seeking employment in a field filled with diverse employers, it would be tantamount to a career change if the individual wanted to work in certain positions such as a metropolitan police officer," he said.

Close to half of the states have laws to specifically prohibit nepotism. While Hawaii law does not directly address nepotism, the laws on fair treatment and on conflict of interest can be applied in some cases.

The fair-treatment law prohibits state employees from giving themselves or anyone else unwarranted benefits or preferential treatment. The conflict-of-interest law says state employees cannot take discretionary state action that affects their own financial interests or those of their spouse or dependent child.

The proposed law would apply to a state employee’s parents, children, siblings, aunts, uncles, nephews, nieces, grandparents and in-laws.