State lawmakers are trying to unravel another apparent misstep involving a new campaign finance law, this time to prevent corporate officers from funneling political contributions through partnerships and subsidiaries to avoid donation limits.

The state had tightened the law in the 1990s after more than a dozen corporations were caught moving contributions, including illegal foreign money, to political candidates through subsidiaries. But state lawmakers removed the provision when they changed campaign finance law last session.

This is the second instance in which lawmakers are trying to clarify the new law that took effect in January. Some lawmakers also want to undo a change that prevents corporations from using unlimited amounts of money from corporate treasuries for political action committees.

"We haven't quite decided what we're going to do yet. But things are moving," said state Rep. Blake Oshiro, D-33rd (Halawa, 'Aiea, Pearlridge), vice chairman of the House Judiciary Committee.

There are conflicting accounts about whether the changes last session were intentional or inadvertent mistakes made in the haste to reach a compromise.

Most of the focus on campaign finance last session was on limits on Mainland contributions and a prohibition on donations from contractors who have business with the state or counties. But lawmakers also discussed how much to control corporate money in politics.

Some lawmakers involved said that restricting corporations from using unlimited money for PACs made the corporate limits on subsidiaries unnecessary, so they were deleted. Other lawmakers, however, believe that both changes were inadvertent and should be repealed before the elections this year.

Campaign finance law is often complex because lawmakers have to balance the right of people to use money for political speech with the government's interest in limiting the role of money in elections. Lawmakers also have the inherent conflict of overseeing a law that could have an influence on how much money they can collect for their own campaigns.

Lawmakers are often cautioned, as they were by some last session, that any change can have unexpected results. For example, the limit on Mainland donations, which was an attempt to contain Gov. Linda Lingle's national fundraising, led the Republican governor to aggressively raise Mainland money before the law took effect.

The governor's Mainland fundraising events helped her build an even greater financial advantage over Democrats since the party had no candidate for governor at the time, and now, with the law in effect, is limited from turning to the Mainland for money to catch up.

Lawmakers may also face some opposition to quickly amending the law.

The state Campaign Spending Commission is fighting to keep the limit on corporate money for PACs to reduce corporate influence on politics despite claims from some lawmakers that the limit was inadvertent.

But the commission agrees with lawmakers that corporate officers should not be able to use subsidiaries to avoid donation limits.

Barbara Uphouse Wong, the commission's executive director, has testified in support of a bill that would restore that part of the law. The bill would make it clear that corporate officers would be subject to individual donor limits if they try to pass contributions through partnerships or subsidiaries. Without the limit, each corporation, partnership or subsidiary can donate the maximum amount allowed under the law even if the money is essentially controlled by one person or corporation.

Robert Watada, the commission's former executive director, had asked for many of the changes in the law last session and doubted he would have agreed to lift the limit on corporate subsidiaries.

"Left unchecked, it would be clearly favoring the large corporations and would be basically saying the smaller corporations have no voice," he said.

The clarification is contained in a larger bill, which has passed the House and is pending in the Senate, that would create new penalties for failing to file campaign-finance reports and prohibit anyone from making political donations of more than $25,000 during an election.

Watada also said he wanted lawmakers last session to bar corporations from using money from corporate treasuries for PACs but accepted a $1,000 limit for each primary and general election, which is the same amount individuals can give to PACs.

"We felt we got half of what we wanted," he said.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.