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Vendor goes before ethics panel

<p>Ted Hong</p>


Tribune-Herald staff writer

The state Ethics Commission ruled in Hilo this week that Hawaii charter school employees are subject to the same ethics rules as any other state employee.

That ruling then cleared the way for the commission to follow through with a rare, two-day contested case hearing concerning ethics violations allegedly made by William Eric Boyd, the administrative assistant at Connections Public Charter School.

It marked the first hearing of its kind to be held by the commission since 1985, according to commission Executive Director Les Kondo.

Boyd is accused of a conflict of interest by authorizing payments from the school to companies owned by himself and his wife, Erika Boyd. About six years ago, their companies — Boyd Enterprises, Tropical Dreams, Tropical Dreams Ice Cream, and Just Fabulouso — began providing the school with thousands of dollars worth of supplies and food.

Eric Boyd faces fines of as much as $10,000 should the Ethics Commission fail to rule in his favor. A ruling is expected at the commission’s next meeting on Dec. 19.

Central to the case was the issue of whether Boyd, as an employee of a charter school, falls under the purview of state ethics rules. He and his Hilo-based attorney, Ted Hong, argued that charter employees, by definition, are not state employees, and therefore cannot run afoul of the same ethics guidelines as employees at Department of Education-run schools.

On Tuesday morning, Hong and Kondo presented their cases before commissioners Cassandra Leolani Abdul, Susan DeGuzman and Chairwoman Maria J. Sullivan in a meeting room at the University of Hawaii at Hilo.

Kondo told commissioners that Boyd was indeed a state employee, as evidenced by his receipt of a salary issued from state funds, and his participation in state-funded health care and retirement plans.

Hong disagreed.

“Mr. Kondo is trying to confuse the commission,” he said.” … Charter schools are fundamentally different because they’re given more autonomy than other schools. … Comparing them isn’t like comparing apples to oranges. It’s like comparing apples to orangutans.”

The commission did not buy into that argument, however.

“The commission finds that … Mr. Boyd is a state employee, and is therefore subject to state ethics code,” said Sullivan following a short recess for the commissioners to confer.

For the rest of the day Tuesday, and much of Wednesday, the two attorneys worked to state their cases. Kondo spent hours on Tuesday entering dozens of purchase orders, invoices and check stubs into evidence. The items purchased from the Boyds’ Amway and food businesses included high school lunches, ice cream, books, digital video cameras, cleaning and janitorial supplies, fax/copiers, ink cartridges and other classroom supplies.

Connections charter school paid the Boyds upward of $100,000 a year for food alone, Kondo said.

The two attorneys then took turns questioning a number of Boyd’s co-workers at the school, including business manager Sandra Kelley and Principal John Thatcher. Much of the questioning centered on the school’s procedure for authorizing purchase orders and the checks and balances in place to ascertain whether requested items were in the school’s inventory.

“I’ve never known him to do anything deceitful or outside the law,” Thatcher said in support of Boyd. Thatcher added that, as principal, he and the school’s Local School Board had the final responsibility in all matters involving purchasing.

When given his chance to defend himself, Boyd maintained that his wife made all decisions and dealings involving their private companies, and he was not involved in invoicing and pricing, calling himself a “silent partner.”

“I do know that when things went through my wife, she charged wholesale price,” he said.

He added that any Amway bonus points the couple earned as a result of sales to the school were used to purchase more supplies for the school.

He also told the commission that he and his wife only agreed to provide the school with lunches after vendor Hilo Intermediate, which had been delivering meals to the charter school, raised its prices, and there were very few other vendors to choose from in Hilo.

At the end of his examination of his client, Hong asked Boyd to describe how the ethics complaint against him had affected his life.

“I’ve been hospitalized five times since this investigation started,” Boyd said after a long pause in an attempt to collect his emotions. “Several of those times were over a week at a time. … I was told by doctors that a majority of the reason why was because of stress.”

He added that his family had also paid a price.

“It’s been extremely difficult to be a father,” he said, choking back tears.

In closing arguments, Kondo maintained that the decision before the commissioners was essentially a simple one.

At issue was not whether Boyd had taken advantage of the school, or whether he and his wife were enriched personally through their dealings with the school. All that needed to be proven was whether Boyd had participated in decisions to purchase products from his own company, and the documents presented in the hearing answered that question directly, he said.

“The law does not require that he be the final approver … only that he participated in offering input into a final decision,” Kondo said. “We’re not alleging that Mr. Boyd committed fraud. We’re not alleging that he and his wife became rich. … The statute exists … because the public wants confidence that we in government are doing the right thing.”

Hong, however, said that his client’s intentions were good, and that because others at the school, including the principal, OK’d the purchase decisions, Boyd should not be held accountable for violating ethics laws.

“This was a misunderstanding of gross proportions,” he argued.

Hong added that his client had never been told by the state that he was to follow the same ethics laws as other state employees, calling the saying that “ignorance of the law is no excuse” a “cliche.”

The attorneys have until Monday, Dec. 17, to submit their proposed findings of fact and conclusions to the commission before it rules on the case two days later.

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