Hawaii Superferry substantially underreported its state lobbying expenses last year as it fought an environmental impact statement and then asked for special legislation that allowed it to resume interisland service.

Superferry executives at first reported $21,960 in lobbying expenses but, after being contacted by the state Ethics Commission, amended the reports to reflect $379,431 in lobbying expenses.

Dan Mollway, executive director of the commission, yesterday said Superferry would not be punished for the errors because the company cooperated and quickly filed the amended reports.

"They were totally willing to comply, and I didn't get any sense it was done intentionally or that they were trying to hide anything," he said.

Superferry last year hired some of the state's top lobbyists and public relations executives to help at the Legislature and with the media. According to Ethics Commission records, the company spent more than twice as much on lobbying in 2007 than any other organization.

The second-highest lobbying expenditures were by the Pharmaceutical Research & Manufacturers of America, which spent $133,500.

Willful violations of the lobbying disclosure law can bring fines of $500, but Mollway said that did not appear to be the case with Hawaii Superferry.

"Concerns have been raised whether we should take further enforcement action, but so far I don't think we're going to do that because they were very cooperative in talking to us and very quick in amending their reports, which they should get points for and is kind of rare," Mollway said.

In fact, he said, it appears the Superferry may have overreported its expenses in the amended reports to avoid quibbling with the commission over specific spending items.

"We do realize, of course, that reports should be complete when filed, but we feel it's better to spend our resources getting compliance and providing further understanding of the law. For some reason there appears to be confusion."

A statement from the company suggests Superferry officials were uncertain about which expenses should be reported.

"Last year there was a great deal of legislative activity related to Hawaii Superferry, which required continuous information updates and production of briefing materials for legislators," the statement said. "Our initial filing reflected fees paid to lobbyists. We, subsequently, reviewed our expenses and were advised by counsel that lobbying expenses should also include public opinion research and the production of materials that might be viewed by legislators."

Among Superferry lobbying costs was $191,894 for preparation and distribution of materials. Of that amount, $166,851 went for a direct-mail and online campaign and for a public opinion survey.

An additional $24,455 was spent on advertising and $37,678 in compensation to lobbyists.

QUESTIONS RAISED

The Ethics Commission first questioned Superferry's lobbying expenses in response to an April 10 letter from Ian Lind, a freelance writer and blogger who works for state Rep. Lyla Berg, D-18th (Kuli'ou'ou, Niu Valley, 'Aina Haina).

Lind expressed skepticism about the accuracy of the Superferry reports, and yesterday said Mollway's decision not to take action against the company "isn't very satisfying."

He said it's unlikely company officials or their agents were ignorant of lobbying disclosure rules, partly because he has written on numerous occasions about lobbying activities at the Legislature, including those of Superferry.

Lind also felt the reporting form, which includes categories for media advertising, preparation and distribution of lobbying materials, compensation paid to lobbyists, and other specific items, is neither vague nor ambiguous.

"Their public relations consultants and paid lobbyists, I'm sure, are very aware of what the rules are. If it wasn't intentional, it was certainly negligent. The negligence is the damage to the public's ability to be sure its rights were protected in this whole legislative decision-making," he said.

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), who pushed for an environmental review of the ferry, said the underreporting of lobbying expenses reflects poorly on Superferry.

"It reinforces the doubts that have existed for a long time about the Superferry management and their conduct in regard to the environmental impact statement and their community dealings," Hooser said.

Superferry also amended its lobbying expense report for the first two months of 2008, shifting $11,000 in lobbyist compensation to the previous year, after being told by the Ethics Commission that expenses had to be reported for the period in which they were incurred, and not when the bills were paid.

Mollway said the Superferry episode indicates there is confusion about the reporting requirements, and he is making arrangements to meet with various parties involved in lobbying activities to provide guidance.

State Sen. Shan Tsutsui, D-4th (Wailuku, Kahului), who also wanted an environmental review before the ferry's startup, said he did not want to speculate on whether the omissions were simply an oversight. More importantly, he said, "it's a credibility issue."

"That was the main issue with the Department of Transportation and the (environmental review) exemption. When things like this happen, the questions are still there in people's mind to what else is happening that we are unaware of," he said.

EXPECTED TALLY

Tsutsui said he is not surprised at the tally of the Superferry's lobbying expenses because during the special session last fall, "it seemed like every lobbyist in town was working on some aspect of it."

In his April 10 letter to the Ethics Commission, Lind also questioned separate reports filed by the advocacy group National Popular Vote.

National Popular Vote, a California-based group that wants states to elect the president by popular vote instead of the Electoral College, spent $74,979 on state lobbying between May and December last year, mostly on media advertising. The group had initially reported $7,778 in lobbying expenses for that period.

Mollway said the commission will not seek enforcement against that group either, because of its quick reaction to the concerns raised.