The state Ethics Commission said it cannot legally comply with a request by the Legislature to probe possible ethics violations by the Department of Business, Economic Development and Tourism related to funding of trade missions.

The Legislature had asked for the review following concerns generated by DBEDT's use of a nonprofit organization to handle $268,000 in private sponsorships raised for Gov. Linda Lingle's trade mission to China and Korea in the summer of 2005. Lawmakers had said they were concerned about the appropriateness of state officials soliciting large contributions from the private sector and whether sponsors were promised special treatment.

However, in a response dated Aug. 16, the commission said state law prevents the Legislature from directing the commission to launch such a review. The commission can only launch such an investigation on its on accord or in response to a formal complaint, said Ethics Commission Director Dan Mollway.

Mollway said he could not comment on whether the agency was conducting its own probe into DBEDT's actions. However, both the state attorney general and the state Procurement Office have said DBEDT's actions did not violate any laws.

DBEDT Director Ted Liu, responding to the Ethics Commission decision in a letter to The Advertiser, said contributions solicited by his agency were used to defray trade mission costs, which benefitted the state and not individual state employees. Liu also said that sponsors did not receive any special consideration.

House Majority Leader Marcus Oshiro, D-39th (Wahiawa), said he was disappointed by the commission's ruling.

"I still think there's unresolved questions and there's this lingering cloud over the China/Korea trade mission and the (later) Philippine trade mission, which was run in the same manner," he said.

Concerns about the financing of state business development trade missions first surfaced after DBEDT asked a local business to become a "Title Sponsor" of trade missions this year by donating $50,000. The money would go to a nonprofit organization that would help finance the trade mission and in return the sponsor would get access to foreign government leaders and "VIP events (such as backstage or after-show parties)," according to the letter dated Dec. 5, 2005.

Oshiro said lawmakers likely will seek to amend the state procurement law in the wake of the trade missions, which highlighted an apparent loophole that allows agencies to avoid compliance with the procurement code by not signing a contract. Procurement laws are meant to ensure the state gets the best value for its money and that potential state suppliers are treated fairly.

Reach Sean Hao at shao@honoluluadvertiser.com.