Monday, April 15, 2024
Hawai'i Free Press

Current Articles | Archives

Saturday, October 22, 2016
Ethics Complaint: Caldwell Hides Millions in Stock Options
By News Release @ 3:34 AM :: 6480 Views :: Ethics, Politicians



Ethics Complaint against Kirk Caldwell, Mayor, City and County of Honolulu

News Release from www.Djou.com

(October 21, 2016, Honolulu, Hawaii)-Today the Djou for Mayor campaign committee, filed the following complaint against Kirk Caldwell, Mayor, City and County of Honolulu (“Caldwell”) and request that the Ethics Commission of the City and County of Honolulu (the “Ethics Commission”) investigate Caldwell and take all appropriate actions.

On January 29, 2016, Caldwell filed his annual financial disclosure as required by City law. Under item 3, “Ownership or Interests in Businesses in the State,” Caldwell listed a “beneficial interest” in Territorial Bancorp Inc. (the “Bank”) as “O”- between $900,000-$999,999.[1]  The Bank’s 2016 Annual Report, however, noted that Caldwell “beneficially owned” 72,997 Bank shares worth approximately $1.9 million at the time of Caldwell’s 2016 financial disclosure.[2]  Today Caldwell’s holdings in the Bank’s stock are now worth at least $2.1 million.  This discrepancy by Caldwell is a violation of the City’s ethics disclosure law.

Caldwell may note that a portion of his Bank stock holdings were in the form of stock options.  It is important to note that under Internal Revenue Service Topic 427, stock options that are payment for services are recognized as taxable income, even if the stock options are not specifically exercised.[3]  It should be further noted, that the City ethics law requires public officials disclose items that include, “(1) any money; (2) thing of value; and (3) economic benefit conferred on or received by any person in return for services rendered.”[4]

Clearly, even if a portion of Caldwell’s “beneficial ownership” in the Bank may have been in the form of stock options, such options are a “thing of value” and should be disclosed under both Federal tax and City ethics rules.

Furthermore, the City’s ethics law clearly states that elected officials are required to disclose any personal or private interests that may cause a reasonable member of the public to question the independence or objectivity of the official.[5]  Stock holdings, whether in the form of direct ownership or as an option, worth millions of dollars should fall within this classification.  Caldwell’s failure to fully disclose the true nature of his stock holdings runs afoul of this ethics provision.

If the Ethics Commission were to allow public officials, such as Caldwell, to not disclose the ownership of stock options, the commission would effectively legalize bribery in the City.  A bad actor in the future, rather than offer an explicit bribe, could instead just grant an “option” to cash in at some unknown future date for a nefarious quid pro quo exchange to successfully avoid any public disclosure rules.

We also respectfully note, that Caldwell’s stock holdings in the Bank have dramatically increased under his term as mayor from roughly $300,000 to over $2 million via stock awards given by the Bank to Caldwell, while Caldwell served as mayor.  According to the Bank’s annual reports, Caldwell owned 15,396 shares in the Bank worth approximately $323,000 in 2012 - the year before Caldwell became the mayor.[6]  But today, due to stock awards given by the Bank to Caldwell while he served as mayor, his stock holdings in the Bank now reach at least $2.1 million.  Caldwell stated to earn this massive financial interest he “serves” at the Bank approximately 1 to 2 hours per month.[7]  The Bank disclosed that Caldwell was retained, not for any legal or banking expertise, but rather because he has “significant understanding of the communities in which we operate.”[8]  The Bank even noted that Caldwell is “uniquely positioned” to advise the Bank on community and economic developments affecting the City.[9]  In short, Caldwell was selected to serve on the Bank’s board of directors and receive his enormous multi-million dollar financial compensation and stock awards precisely because of his elected position and political connections.

Based on the foregoing, we respectfully request that the Ethics Commission promptly investigate Caldwell and take all necessary and appropriate action, including referral to the City Prosecutor for criminal action if warranted. 

Filed by Charles K. Djou,

October 21, 2016.

#  #  #

PDF: From Mayor to Millionaire

PDF: Caldwell Financial Disclosure

SA: Djou files complaint over mayor’s stock assets

CB: Djou Says Caldwell Lied About Bank Compensation

HNN: Djou files ethics complaint against mayor over reported income

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT