Hawaii’s Shippers Aim to Manipulate the Federal Elections and Regulations to Keep Status Quo

by Malia Zimmerman 

When Ed Case was in Congress (2002-2007), he shook Hawaii’s political powers to the core when he challenged Hawaii’s three other congressional delegates over their support for the Jones Act – the federal law that mandates only American built, owned and manned ships transport goods between American ports. Case tried unsuccessfully to get Hawaii an exemption from the 90-year-old law.

Now Case and Charles Djou, both candidates in the May 22, 2010, special congressional district 1 election to replace Congressman Neil Abercrombie, D-Hawaii, after his February 1 retirement, are finding themselves political targets of Jones Act supporters. That includes Hawaii’s largest shipping company, which doesn’t hesitate to make its political motives clear in arecent letter to its employees asking for political donations for Colleen Hanabusa, the only congressional candidate in district 1 who says the Jones Act should stay.

Matson, it its solicitation, calls the Jones Act “The single most important piece of legislation to Matson” and adds “It is important that whoever is elected to take Neil Abercromie’s place in the House understands the importance of the Jones Act to Hawaii. Colleen Hanabusa is the only candidate who understands the importance of the Jones Act. The other two candidates, Ed Case and Charles Djou, want to exempt Hawaii from the Jones Act. When Case was in Congress before, he introduced three bills in Congress that would have amended or repealed the Jones Act. Matson was able to galvanize support from other Members of Congress to defeat the bills.”

Matson clearly spells out how Hawaii politics have always operated: “The members of congress now representing Hawaii have always been ardent supporters.  Daniel Inouye, the senior senator from Hawaii, and Rep. Mazie Hirono, are up for re-election this year. … Just as Matson needs the support of Congress on these vital issues, Members of Congress need our support to win elections.”

Employees are directed to donate to The Matson Federal Election Committee, with a goal of $30,300, saying “the generosity of those who have contributed to the MFED has given Matson a voice to shape industry positions on critical maritime issues.” Matson promises, “as always, MFED campaign contributions to members of congress are based on their support for the American maritime industry, their constituent relationship with Matson, and their degree on involvement on issues of importance to the company.”

Case, who believes that the federal law creates a shipping monopoly into the island state, raising Hawaii’s cost of living and putting a stranglehold on one of the island’s main “lifelines,” says this Matson bold solicitation is not surprising.

He maintains this is more proof that while those elected officials who support the federal legislation rake in big political contributions, Hawaii residents suffer from high shipping rates that further increase Hawaii’s already high cost of living. More proof, of course, is the campaign spending reports for these candidates.

Congressional Delegation Receives Substantial Contributions from Jones Act Supporters

While Hawaii’s current congressional delegates – U.S. Sens. Daniel Akaka and Daniel Inouye, U.S. Rep. Mazie Hirono and recently retired U.S. Rep Neil Abercrombie, staunchly defend the Jones Act, a look into the campaign contributions to Akaka, Inouye, Abercrombie and Hirono between 2006 and today, by researchers from government transparency group, MapLight.org, and Hawaii Reporter, shows thousands of dollars being directed to them from members of the cabotage groups that include transportation unions and transportation businesses.

For example, for individual contributions, Matson’s Alexander & Baldwin’s eight principles gave $33,450 to the congressional delegation from March 31, 2006 through May 2009.

*Matson Navigation Company’s 8 principles gave $18,550 between March 2006 through July 31, 2009;

*A related entity, Alexander & Baldwin Fed (PAC-Political Action Committee), gave $16,550 between January 2006 through May 2009;

*And Matson Navigation Company’s Federal Election Committee gave $25,750 from March 2006 to October 2009;

Other companies and individuals support Hawaii’s congressional delegation:

*BAE Systems Hawaii Shipyards’ 16 principles donated $34,690 between June 15, 2006 through August 14, 2009, while BAE Systems PAC gave $37,000 between March 2006 through September 2009;

*NCL America Inc. PAC gave $25,150 between April 2006 and June 2009;

*Pacific Marine’s 4 principles gave $16,660 between June 16, 2006, through July 24, 2009;

*The Airline Pilot Association PAC gave between March 2006 and June 2009 gave $40,500;

*General Electric Company GE PAC gave $19,000 between March 2006 through July 2009;

Other PACs gave big dollars to the Hawaii delegation, among them:

*American Maritime Officers Voluntary PAC gave $21,500 between November 2005 though February 2009;

*American Shipping Group Marine Resources Group gave $26,700 between March 2006 and September 2009;

*Horizon Lines LLC Associates Good Government Fund gave $15,500 between August 2006 through March 2009;

Union PACs also donated considerable sums to Hawaii candidates, including these:

*International Brotherhood of Electrical Workers PAC gave $50,000 between December 2006 through June 2009.

*International Longshore and Warehouse Union PAC gave $26,180 between March 2006 though September 2009. Their committee gave $17,000 between March 2006 and September 2008;

*Labors International Union of North America gave $37,500 between November 2005 through August of 2009.

*Sheet Metal Workers International Association Political Action League gave $52,550 between February 2006 and June 2009;

*International Brotherhood of Boilermakers Campaign Assistance Fund gave $25,500 between December 2005 through September 2009;

((For a more detailed breakdown on the candidates and what they receive, see this chart )):

In total, Abercrombie received $42,890 from individual corporate leaders between June 2006 and August 2008; and he received $209,980 from Cabotoge PACS February 2006 through June 2009. This is 21.2 percent of his overall PAC contributions.

Hirono benefitted from $27,350 from individual corporate leaders between March 2006 and May 2009; and she received $205,550 from Cabotage PACS between August 2006 through October 2009; This is 20.0 percent of her overall PAC contributions.

Akaka received $31,550 between March 2006 through August 2007 from corporate individuals and he received $84,925 from related Cabotage PACs between November 2005 through September 2007. This is 11.4 percent of his overall PAC contributions.

Inouye accepted $56,300 from individual corporate leaders from August 2007 through August 2009 and from Cabotage PACs $115,450 between March 2007 to September 2009. This is 10.7 percent of his overall PAC contributions.

Dave Helfert, spokesperson for Abercombie, says that the accusation that Abercrombie supports the Jones Act because it benefits his campaign financially isn’t true: “None of us in Rep. Abercrombie’s Congressional office would have the first clue who contributes to his campaign. It has nothing to do with our work. I do know the record shows that Neil has supported the Jones Act for many years, and it has always been a matter of sustaining American jobs.  Let me ask you: is it possible that some people make contributions to elected officials because they agree with their positions on issues? Or, is everyone who contributes expecting something in return?”

But Case says the contribution pattern from cabotage supporters to Hawaii’s congressional team is just the tip of the iceberg when it comes to the lengths to which Jones Act special interests have gone and will go to retain their stranglehold on Hawaii’s consumers.

Hawaii Congressional Delegation Explains Support for Jones Act

Inouye says he supports the Jones Act because Hawaii enjoys high quality, regularly scheduled service. In addition, “more than 85 percent of our goods are shipped by sea into Hawaii’s ports.  It is imperative that we ensure an equitable cost structure in the flow of commerce for all of our residents regardless of whether they live in Hanapepe, Hamakua, Hoolehua or Honolulu.  … The enduring justification for this rule ensures that in time of national need or emergency, we control our critical infrastructure and assets.  It helps to balance against foreign subsidies, maintains national security and makes certain that companies comply with U.S. tax, labor, health and safety requirements.”

Inouye says he questions whether foreign shipping interests would be interested in providing dedicated Hawaiian service or whether they would be more interested in the occasional stop over to satisfy high end customers.

“With our nation at war in two theaters, we are reminded that a strong merchant marine fleet is vital to the security of this nation and a critical supply link for our troops fighting overseas.  The U.S. merchant marine fleet has supplied more than 90 percent of the needed equipment for troops fighting in Iraq and Afghanistan.  At anytime, Jones Act vessels are called up to provide this transport.  This would not be possible if it were a foreign-owned fleet. “

Akaka says he endorses the Jones Act because it provides a strong framework for domestic marine transportation: “National control of maritime assets is absolutely essential in time of war or emergency, so our nation must maintain a dependable cargo fleet and the capacity to develop a viable passenger transportation fleet. Hawaii cannot rely on foreign interests to secure our shipping routes nor to supply our needs.  For economic reasons, foreign shipping interests might be inclined to service only high volume areas such as Honolulu or Kahului while leaving smaller ports like Hilo, Nawiliwili, and Kaunakakai without adequate service.”

Abercrombie outlines the reasons he believes the Jones Act is good for America, including that the act “guarantees that cargo between U.S. ports is carried aboard vessels subject to U.S. labor, security, tax, environmental and safety laws and U.S. flag ships are crewed by U.S. citizens (or legal residents) who undergo extensive background checks and rigorous professional training.”

He adds: “Overall estimates are that cargo shipping companies subject to the Jones Act provide nearly 125,000 American jobs; 80,000 merchant seamen and officers and 44,000 jobs in longshore, terminals, shipyards and other supply and support facilities. In Hawaii most of the imported goods, upon which our survival depends, arrive from the U.S. mainland as ocean freight. The Jones Act is the lifeline that ties us to the rest of the nation, and I continue to support it.”

Hirono says she supports the Jones Act “because it ensures that our nation has an adequate marine and shipbuilding and repair base, which is essential for national security and for our economic well being.”

She says she “highly values the tens of thousands of American jobs the Jones Act safeguards in the U.S. economy – including the fact that Jones Act ships must comply with all U.S. labor, tax, and environmental laws.”

Special Congressional Election May Drive Cabotage Donations to Only Jones Act Supporter

Honolulu City Council Member Charles Djou, a Republican, and Case, a Blue Dog Democrat, have expressed their opposition to the Jones Act and their support of an exemption in the law for Hawaii.

Djou says he “generally feels the marketplace usually works best with limited government intervention and the Jones Act simply runs counter to this basic principal.”

Case says: “It has nothing to do with what’s best for the people and businesses of Hawaii and everything to do with preservation of a government-created monopoly for a select few at the expense of the rest of us. It’s also a perfect example of the need for independence and fresh thinking among our elected officials,” Case says.

Senate President Colleen Hanabusa, who is the third contender in the special Congressional District 1 election, says she supports the Jones Act and believes it should remain in place. Both Djou and Case, who are campaigning to raise funds for the May 22, winner-take-all election, say they expect campaign records to show in future reports that Hanabusa benefits financially from her position on the Jones Act as do other politicians who take that position.