Wednesday, June 18, 2008

Honolulu Advertiser today: Superferry lobbies for military upgrade

HONOLULU ADVERTISER   Wednesday, June 18, 2008

Superferry lobbies for military upgrade

Company spends $210K on lobbyists to obtain funds for vehicle ramp

Hawaii Superferry has spent $210,000 since last summer to lobby for federal money to install features on its second high-speed catamaran to make it more attractive for military use.

Lobbyists hired by Superferry approached the U.S. Congress and the U.S. Department of Defense to help pay for a vehicle ramp and other improvements. The ramp would allow the new catamaran to load and unload vehicles at most large piers instead of relying on shore-based ramps and barges.

Superferry paid Blank Rome LLC, a prominent law and lobbying firm, to try to obtain federal money through the National Defense Features program to cover the cost of improvements to its second catamaran under construction at the Austal USA shipyard in Mobile, Ala. The defense program covers the installation of militarily useful features on commercial ships if the owners agree to make the ships available to the military during emergencies.

Superferry also may eventually retrofit the Alakai, which is now in commercial passenger and cargo service between O'ahu and Maui, with a vehicle ramp and other improvements. The improvements to the catamarans, if completed, would make the vessels self-sustaining and better suited for military assignments here and abroad. The second ferry is scheduled for delivery next February.

"Our customers have found that the current barge loading system is easy to use, fast and convenient, and works well for both cars and large trucks," Superferry said yesterday in response to questions from The Advertiser. "Adding a ramp to the vessel, in addition to our barges, would provide additional flexibility.

"We are looking at several options for improvements to be made under this program and ramps is one of them."

   lobbying activities

The federal lobbying expenses, the most Superferry has spent with Blank Rome since it hired the firm in 2004, came during the time when Superferry was fighting for its survival in the Islands after court challenges and public protests. The state Supreme Court ruled in August that the state should not have exempted the project from environmental review. The state Legislature approved a bill, signed into law by Gov. Linda Lingle, that allowed the ferry to operate while an environmental impact statement is being prepared.

Superferry said yesterday that the lobbying activities at the federal level were unrelated to what was happening in the Islands and were about exploring available federal funding opportunities under the defense program.

Superferry's consideration of vehicle ramps on its catamarans validates the work of staff at the state Department of Transportation's harbors division. Staffers had argued in 2004 that Superferry should install a quarter stern ramp on the first catamaran because it would have saved the state on initial capital investments for shore-based ramps and barges, would have been less intrusive for other harbor users, and would have given the vessel more flexibility at Maui's congested Kahului Harbor.

Superferry countered that the ramp would add too much weight to the catamaran and hamper travel speed and load and unload time at harbors, which could reduce consumer convenience and the project's profitability.

The Department of Transportation's initial position was that the state would not pay for shore-based ramps and barges because other harbor users could request that the state buy or build their improvements. The state, however, ultimately agreed to $40 million in harbor improvements for the project that is supposed to be repaid by Superferry over time.

Harbors' staff made a pitch for Superferry to install a vehicle ramp in late 2004 but Superferry refused, according to documents released to The Advertiser under the state's open-records law. A Department of Transportation staffer, describing a meeting in the governor's offices with Bob Awana — then Lingle's chief of staff — and Superferry executives and department officials, wrote in an e-mail: "Decisions made: We need to pursue EXEMPTION; and HSF will not provide any ramps on vessel."

Mike Formby, the department's deputy director for harbors, said yesterday that there are pros and cons to adding vehicle ramps at this point. On-board ramps would give the catamarans more flexibility, but would likely not be as wide as the existing shore-based ramps that allow for easy loading and unloading. The ramp and barge configuration has caused problems at Kahului Harbor, where a tug has been necessary to keep the barge up against the pier during ocean swells, but has worked well at other harbors.

"While ramps will introduce flexibility into the system, they will also introduce some operational constraints," Formby said.

Dick Mayer, a retired economics professor who lives on Maui and has been active against the ferry, said the vehicle ramps and other improvements would make the catamarans more marketable elsewhere. "Those actions would place the investment made by the people and state of Hawai'i in jeopardy because the Superferry would be more easily able to leave," he said.

   military component

Superferry executives had touted the military utility of the catamarans when they were initially describing the project to the state. A September 2004 document from Superferry, obtained by The Advertiser under the open-records law, discussed the growing training needs of the military in the Islands and said the catamarans would have strengthened vehicle decks to handle heavy military vehicles, helicopters, ammunition and other equipment.

John Lehman, a Superferry investor and former secretary of the Navy, and a Superferry executive told Pacific Business News in March 2005 of the ferry's potential to move the Army's Stryker brigade and other military equipment between O'ahu and the Big Island.

Sean Connaughton, administrator of the federal Maritime Administration, which provided federal loan guarantees for ferry construction, told a Maui court last year of the military utility of the ferry as part of the Voluntary Intermodal Sealift Agreement program. The program is a partnership between the military and the maritime industry to provide the military with sealift capacity during war or national emergency.

But Superferry executives have downplayed the military use of the catamarans since the court challenges and protests. Thomas Fargo, Superferry's president and chief executive officer and a retired Navy admiral, said when he took over the company in April that the success of the project would be built on commercial passenger and cargo business.

Several activists who oppose the project have been fixated on Superferry's military connections and have raised suspicions about whether it can be commercially profitable.

The Superferry catamarans are similar in design to Austal's WestPac Express, which has been contracted by the military as a support vessel in the Pacific.

Blank Rome's federal lobbying reports on Superferry for last year and the first quarter of this year have undergone substantial revision. The initial report for the last six months of last year, filed in February, showed less than $10,000 in lobbying income from Superferry. A second report in February raised the figure to $40,000. A third report, filed in May, put the figure at $120,000.

Blank Rome's lobbying report for the first quarter of 2008, filed in April, initially reported $30,000 in lobbying income from Superferry. An amended report, filed in May, raised the figure to $90,000.

The firm explained that the changes were made after the discovery of additional lobbying work on behalf of Superferry and because of the expenses from a subcontractor working with the firm on Superferry.

Reach Derrick DePledge at

Wednesday, June 11, 2008

Lingle keeps lid on Superferry records: Administration cites both attorney-client and executive privilege

Corruption, Corruption~~

Lingle keeps lid on Superferry records

Administration cites both attorney-client and executive privilege

The Lingle administration, citing attorney-client privilege and executive privilege, has declined a request by The Advertiser to publicly release hundreds of e-mails and other documents related to its decision to exempt the Hawaii Superferry project from environmental review.


The documents include e-mails from late 2004 from a deputy attorney general assigned to the project that discuss an environmental review.

A December 2004 e-mail from a state Department of Transportation design engineer to a project consultant, previously released to the newspaper under the state's open-records law, suggests the deputy attorney general's legal analysis supported those within the department who were pressing for a review.

"Our attorney ... feels that one statewide comprehensive document is necessary that would cover the improvements as well as the cumulative operational impacts," the design engineer wrote.

State lawmakers had asked Lingle administration officials last year to disclose what, if any, legal advice they received before they exempted the project in February 2005. But the administration would not discuss the matter because of attorney-client privilege.

Lawmakers wanted the information to determine whether the Lingle administration considered the legal risks before issuing the exemption.

The state Supreme Court ruled unanimously last August that the exemption was an error, a decision that led to further court challenges and public protests that halted ferry service. Gov. Linda Lingle signed a bill passed in a special session of the state Legislature that allowed ferry service to resume while a statewide environmental review is completed.

In the weeks after the Supreme Court's decision, Lingle and Barry Fukunaga — the former harbors and Transportation Department director and now the governor's chief of staff — said Superferry was being singled out and treated unfairly and described the court's ruling as a dramatic change in the state's environmental review policy.

But documents released under the open-records law have shown there was significant debate within the administration about an environmental review and explicit warnings by staff of the legal and public-relations consequences of exempting the project.

executive privilege

State Attorney General Mark Bennett's office, in a written response to questions from The Advertiser, said the state routinely declines to release information requested through the open-records law because of attorney-client privilege.

Bennett's office could not recall the administration specifically citing executive privilege to decline an open-records request, but said the term can in some circumstances be used interchangeably with the deliberative process privilege, which is a well-defined exception to the open-records law. The deliberative process privilege protects documents to avoid the frustration of a legitimate government function.

Executive privilege, which is rooted in the separation of powers between the executive, legislative and judicial branches of government found in the U.S. Constitution, protects material compiled to advise chief executives such as the president or governors.

According to Bennett's office, executive privilege is "justified on the ground that the quality of advice and the candor of policy discussions would be greatly impaired if the private discussions and reports of advisers were given a public airing."

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), who wanted an environmental review of Superferry, said the administration's decision not to release all of the documents is disappointing.

"It seems clear that there was a legal analysis and the Lingle administration needs to provide that," he said. "And, I would think, that if the legal analysis supported their position, they would have provided it already."

appeal also denied

The Advertiser requested the documents to help reconstruct the state's decision to exempt the Superferry project from environmental review after the project became the subject of statewide debate last year.

The Lingle administration would not release records from Bennett and his deputies, citing attorney-client privilege. The state Office of Information Practices denied an appeal by the newspaper to revisit a 1991 ruling that found that advice and counsel from the attorney general to state agencies is protected by the privilege and excepted from the open-records law.

The administration agreed to release thousands of documents from other administration officials — 21 boxes in all — in increments over the past six months. On Thursday, the administration provided a log that briefly describes additional documents being withheld because of attorney-client privilege and executive privilege. The newspaper has appealed to the Office of Information Practices for the release of some of these documents.

The newspaper has asked the OIP to review the content of several of the documents to determine whether attorney-client privilege and executive privilege are being properly claimed. The newspaper has argued that it is in the public interest of government transparency for the administration to release these select documents.

The Lingle administration also has provided thousands of Superferry-related documents to Marion Higa, the state auditor, for a performance audit of the administration's handling of the Superferry project that was required under the law that allowed ferry service to resume.

Higa has complained about the administration's use of attorney-client privilege and executive privilege to restrict her access to additional material.

Lawmakers had considered asking the Lingle administration to voluntarily waive attorney-client privilege as part of Higa's audit but removed the language from the bill after objections from the governor's office.

Several lawmakers, however, worried that the administration would liberally assert the privilege and prevent a full accounting of what happened.

"In hindsight, maybe giving them the benefit of the doubt was not the best thing to do," said state Rep. Marcus Oshiro, D-39th (Wahiawa), who aggressively questioned administration officials about Superferry last year. "I had hoped for and expected them to be more forthcoming and fess up to what most of us believe anyone would do, and that would be to request a legal opinion from their legal counsel."

Oshiro, an attorney, said he does not see any justification for the administration to withhold a legal analysis of whether an exemption was warranted, or discussions about strategy related to an environmental review, because of attorney-client privilege. He said, since the decision itself has been ruled an error by the Supreme Court and is no longer the subject of any Superferry lawsuits, the only reason for the administration to withhold the documents is to avoid embarrassment.

'they really messed up'

Oshiro described the administration's use of executive privilege as even more extraordinary. He said executive privilege is rarely invoked nationally and he can recall no previous time it has been used in Hawai'i to deny lawmakers or the public records linked to a public-policy decision.

"Either way, they really messed up on this one," he said. "If they did not ask for a legal opinion, they were negligent. If they did ask for a legal opinion and they did not follow that, they were grossly negligent."

Bennett's office, in the written response to the newspaper, said executive privilege is a necessary part of state executive power and has been applied to governors by the courts. The office said the courts focus less on the nature of the records sought and more on the effect of the records' release in discouraging candid discussions within government agencies.

Bennett's office cited a 1991 opinion in Times Mirror Co. vs. Superior Court in California that protected a governor's appointment calendars from public disclosure to the Los Angeles Times.

"The deliberative process privilege is grounded in the unromantic reality of politics; it rests on the understanding that if the public and the governor were entitled to precisely the same information, neither would likely receive it," the court found. "Politics is an ecumenical affair; it embraces persons and groups of every conceivable interest: public and private; popular and unpopular; Republican and Democratic and every partisan stripe in between; left, right and center.

"To disclose every private meeting or association of the governor and expect the decision-making process to function effectively, is to deny human nature and contrary to common sense and experience."

Reach Derrick DePledge at

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