WAILUKU - Incoming Maui County Council Member Wayne Nishiki took a $100,000 business loan from development firm Dowling Co. in 2005, he reported in a disclosure filed with the county.
Nishiki was required to file the report in August but did not do so until Oct. 16, after repeated requests by county officials. As a result, the information was not publicly available until after the Nov. 4 election.
After retiring from the council four years ago due to the county's five-term limit, Nishiki narrowly defeated challenger Don Couch this year to win election to the council's South Maui seat. In his campaign, he touted his independence and criticized Couch for accepting donations from developers.
Nishiki said Wednesday he received the loan while he was a private citizen, not a sitting member of the council. He said he approached businessman Everett Dowling for the money because his business, a Honokowai farmer's market, was in financial trouble, and he had already been turned down for a loan by several banks.
"It was when I was out of office," he said. "I wasn't expecting to run."
Nishiki said he would now look for another source of financing to pay off the debt.
"Now that I'm an elected official I have to repay it because it may create a conflict," he said.
If any issues relating to Dowling came before the council, Nishiki said he would disclose the loan and recuse himself from voting.
Dowling said Wednesday the loan was made in September 2005 in a formal contract that included terms for interest and repayment. He said the terms provided for a "balloon payment," meaning the loan is to be paid in a lump sum when it is due.
Dowling acknowledged that he'd had political differences with the famously anti-development council member, but said the two were longtime friends. He stressed the loan was made while Nishiki was a private citizen.
"He was out of office. No indication he was running again," Dowling said. "I wouldn't have done it if he'd been in office."
An elected official found to have violated the county ethics code - which includes the deadline to file financial disclosures - could face fines or impeachment by the county Board of Ethics.
All elected and appointed officials in the county are required to file financial interest disclosure forms, which include information about sources of income, investments, property ownership, gifts and debts. Candidates for office are required to file within 15 days of filing nomination papers.
The deadline for Nishiki to file his form was in August. But in October, a secretary for the county Department of Corporation Counsel told the county Board of Ethics that Nishiki had not yet filed, even though she had spoken with him on the phone three times and left three voice-mail messages asking for his form. The board sent Nishiki a letter asking for the report, and he filed it with Corporation Counsel on Oct. 16.
The report was not immediately available to the public because it first is required to be presented to the Board of Ethics. The board met Nov. 11 - a week after Nishiki won the election.
The board still has not formally accepted the report because it has unresolved questions about the loan, said Ethics Board Chairman Alan Kauffman. The board is also drafting a letter to Nishiki warning him the loan presents a potential conflict of interest, and that he should recuse himself from voting on issues where the conflict occurs.
Nishiki acknowledged that he did not file the report on time.
"I did file it late," he said. "I just completely didn't respond when they asked me about filing it. There's really no excuse."
In addition to the Dowling loan, Nishiki's financial disclosure listed a $355,387 mortgage with Countrywide Home Loan, reported 50 percent ownership of a home on South Kihei Road and reported $18,000 in annual personal income.
Nishiki defeated Couch in one of the closest of this year's local races, winning by 23,294 to 21,251 votes.
Couch said this week he was angered by Nishiki's revelation of the Dowling loan.
"It's kind of unconscionable that he went after me for a lousy $2,000 (campaign donation) from a developer and made it a theme of his campaign, when he apparently withheld his finance report until it was too late, knowing it would probably have swung the election," Couch said.
Couch, who previously served as chairman of the Board of Ethics, said the loan would hurt Nishiki's ability to do his job.
"It also means he has to recuse himself on anything related to Makena Resort," he said. "How effective is that for a South Maui council member?"
During his campaign, Nishiki frequently called attention to Couch's corporate contributions and pledged not to accept donations from developers. On election night, he credited his success to voters who believed he would represent the interests of the average citizen.
"I am the brave one who is willing to deliver on their behalf. These people have the faith in me that I'm not going to sell out to the large organizations," Nishiki said on Nov. 4.
On Wednesday, he said he did not believe his acceptance of the Dowling loan confuted his criticism of Couch, and repeated his argument that Couch's campaign was funded by corporate donations.
"The money that I borrowed was borrowed in a year that I was not running for office," he said. "As far as I'm concerned, you're talking about apples and oranges."
Nishiki's supporters initially reacted with shock upon learning of the loan. But after hearing Nishiki's explanation they stood by their man.
Environmentalist Lucienne de Naie said the situation simply reflected the difficulties of running a family business on Maui. She didn't think the loan affected Nishiki's credibility.
"I don't think there's any appearance Wayne would be influenced by Everett or anyone else," she said. "This was a business transaction made when he was a private citizen."
Nishiki is notoriously disorganized and known for missing deadlines, so filing the disclosure late isn't out of character and doesn't seem deliberate, she said.
De Naie said she did not believe disclosing the loan earlier would have made a difference in the election, saying voters were more likely to be concerned about Nishiki's well-publicized drunken-driving convictions.
"Stuff happens," she said. "Candidates are just people. They face the same financial pressures as the average person."
Activist Sean Lester echoed other supporters who said Nishiki's long track record of standing up to corporate interests made it easier for them to accept his deal with Dowling.
"Wayne has 20 years," Lester said. "I watched him time and time again defending this place, and I just don't think he would step out of line with this."
In contrast, Lester said if he learned of a political newcomer accepting a $2,000 campaign donation from a developer, he would question the person's ability to be independent.
Lester said Nishiki also had a good reason for accepting the loan during a time when he was a private citizen.
"I know Wayne well enough," Lester said. "He did it for his family."
But Lester said he wished Nishiki had disclosed the loan earlier.
The Ohana Coalition, of which Lester is a member, endorsed Nishiki, largely on the basis of his independence from corporate campaign donations.
"I'm just surprised we didn't know about it," Lester said. "It would have made it a lot easier if we had known."
At least one sitting County Council member raised an eyebrow over the disclosure.
"I'm surprised," said Council Member Gladys Baisa. "I remember him making comments about politicians accepting contributions from developers. Of course, I'm one of them, but I filed my financial disclosures on time."
Baisa wouldn't comment on whether she thought the issue would affect Nishiki's credibility.
"The public will decide," she said.
* Ilima Loomis can be reached at iloomis @mauinews.com.
