Inside the late-night parties where Hawaii politicians raked in money

HONOLULU — For the better part of a decade, some of Hawaii’s most powerful people huddled together at late-night parties in a cramped second-floor office where lobbyists and executives seeking government contracts lined up to drop cash and checks into a metal lockbox.

That was the entry fee for these extraordinary political fundraisers. Inside the office, just a short walk from the state Capitol in downtown Honolulu, dozens of guests were served sushi prepared by professional chefs and unlimited beer and liquor.

At the end of the night, Wesley Yonamine, the host and a high-ranking airport official, would, together with the politicians, pop open the box and dole out campaign contributions according to a list of pledges obtained before each event.

As described by attendees, a typical party could bring in thousands of dollars in donations, giving some elected officials almost half their annual campaign haul in a single night.

It was not supposed to work this way. In 2005, in response to a series of scandals, Hawaii passed a law that barred government contractors from giving money to politicians. It was billed as one of the nation’s most ambitious efforts to end pay-to-play in contracting and designed to fundamentally change the political culture of a state steeped in corruption.

But legislators wrote a loophole into the law, effectively gutting it: The ban would apply only to donations from the actual corporate entities that got contracts, but not to their owners, employees or any related businesses.

Yonamine’s parties illustrated just how completely the reform effort failed.

Today, Hawaii is reeling from its latest government corruption scandal, with state officials accused of taking bribes from Milton Choy, a prominent business owner who wore a wire for at least a year as part of a deal with the federal government.

But that is just one glimpse of the role money plays in politics here.

An examination of Hawaii’s contracting system by The New York Times and Honolulu Civil Beat offers a detailed look at the workings of a state known for favoritism and patronage, a culture where big companies with ties to politicians have historically dominated.

“Pay-to-play is woven into the DNA of the statehood of Hawaii,” said Camron Hurt, director of Common Cause Hawaii, a watchdog group. He pointed to the 1893 overthrow of the Hawaiian Kingdom that led to an “oligarchy” of business owners, sugar barons and large landowners lasting decades. The industries involved had close ties to the ruling political parties well into the 1960s and 1970s, when Hawaii’s campaign finance regulations were written.

A Times and Civil Beat analysis of campaign donations and contracts found that since 2006 — the year the pay-to-play law went into place — people tied to government contractors have provided a remarkable percentage of the money fueling state and local politics. They have given state and local Hawaii politicians more than $24 million: about one-fifth of all donations made. Of that total, $6 million has come from people tied to just 15 companies.

Most donors rarely mentioned their employers in public records designed to bring transparency to political donations. But the Times and Civil Beat, reviewing hundreds of thousands of campaign records, linked more than 28,000 of the donations to contractors.

The analysis almost certainly captured only some contributions, in part because the state could not provide a full list of contractors. In fact, record keeping is so poor that some vendor information is collected only on paper, while electronic records are riddled with errors. Several of the state’s biggest agencies did not respond to repeated requests for financial records or said they could not find them.

The examination found more than a dozen examples over the past six years of people tied to contractors donating to political campaigns in the months before key decisions led to deals.

Some of the elected officials who could crack down on favoritism are themselves benefiting from the lack of oversight. At least a dozen legislators have worked for or co-owned companies that won state contracts, some profiting in ways that have not been previously reported.

The Times contacted every politician and campaign donor named in this article. Most of those who responded said there was no link between campaign donations and the contracts they won.

Yonamine acknowledged hosting the fundraisers but declined requests for a detailed interview. In a brief statement, he denied influencing any contract awards and said he was “raised to give back to the community.”

“It’s what drove me to work in public service for 36 years,” he said. “Helping those seeking elected office by supporting their fundraisers is an extension of these values and an important aspect of civic engagement afforded citizens under the law.”

Political donations are regulated by the Hawaii Campaign Spending Commission, which has a staff of just five people who are responsible for tracking tens of millions of dollars in campaign contributions.

Gary Kam, the commission’s general counsel, acknowledged that the law restricted only a small portion of donations. Executives can give freely, and if bundled together, in greater amounts than if their company donated on its own. Expanding the law to cover those people is the “key to it all,” he said.

Many people charged with campaign finance violations have been allowed to keep giving — and to keep getting contracts, the Times and Civil Beat found.

Michael Matsumoto, president of the engineering firm SSFM International, pleaded no contest to money laundering involving campaign funds in 2003. He has since contributed $130,000 to a range of politicians, and the company continues to win public work. He declined to comment.

People with ties to another major contributor are on trial for corruption. In 2022, federal prosecutors accused the chief executive of the engineering firm Mitsunaga &Associates and four of its employees of bribing Keith Kaneshiro, who was the top prosecutor in Honolulu, with campaign contributions to pursue a criminal case against a former employee. The defendants have pleaded not guilty.

Dennis Mitsunaga, the chief executive, encouraged others, including family members and people with ties to his company, to donate to candidates, his lawyers said in court. People linked to the firm have donated heavily to a range of politicians, and the firm has won at least $49 million in state contracts since 2011.

All contracts awarded to the firm “were based on merit,” said Nina Marino, a lawyer for Mitsunaga.

Kaneshiro’s lawyer argued that campaign contributions made to gain access to politicians were “perfectly legal.”

Other states have been more successful in curbing big campaign contributions from companies seeking government work. In Connecticut, for example, a ban on donations from corporate officers with contracts has wiped out a large swath of campaign funds, according to Joshua Foley, a lawyer for the state Elections Enforcement Commission.

While contractors in Hawaii account for about 20% of campaign donations, in Connecticut “the percentage is zero,” Foley said.

Following recent corruption scandals, the Hawaii Legislature convened a watchdog panel to recommend new laws to improve government transparency. But lawmakers have so far refused to adopt some of the panel’s most meaningful corrective measures.

Notably, bills that would have closed the loophole in the law by prohibiting campaign contributions from company owners, officers and their immediate family members have failed year after year, including in the current legislative session.

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TIMELY DONATIONS

People tied to big contractors gave more than $1,000 on average — nearly twice as much as political donors who had no obvious government connections, the analysis found. They were also twice as likely to give the maximum for some offices.

Often, their campaign contributions seemed to go to the right people at the right time.

Take R.M. Towill Corp., a large engineering firm where employees in 2003 were fined for illegal campaign contributions. In the months leading up to the 2022 legislative session, R.M. Towill executives donated to the campaigns of only two state senators — Stanley Chang and Donovan Dela Cruz. Later that year, the two senators were among the co-sponsors of a law that ultimately led to R.M. Towill getting a $500,000 surveying contract.

Chang said in a recent interview that, besides general discussions of policy, he never talked about legislation or contracts with employees of R.M. Towill. Dela Cruz did not respond to repeated requests for comment.

In a statement, R.M. Towill’s president, Greg Hiyakumoto, said that company employees supported candidates who pushed for new infrastructure and sustainable development, both of which were part of its mission.

A handful of powerful lawmakers who control vast sums of government money have been among the largest recipients of campaign donations from executives tied to big contractors and their families. Leaders of the influential House Finance and Senate Ways and Means committees, who direct billions of dollars in public works projects every year, have received more than $482,000 in such donations since 2018.

Rep. Kyle Yamashita, the current finance chair, who spent years overseeing the House’s capital improvements budget, has received more than $44,000 in political contributions from people tied to big contractors. Lt. Gov. Sylvia Luke, who previously led the House Finance Committee, received more than $107,000, while former Rep. Ty Cullen, the vice chair until 2022, got $22,100.

Dela Cruz has received more than $239,000 in campaign donations from people tied to big contractors since he became Ways and Means chair in 2018. Former Sen. Gil Keith-Agaran, vice chair until October, got $70,000 during the same time period.

In April 2023, the Senate Ways and Means Committee, led by Dela Cruz, budgeted for the purchase of a Maui hotel to convert into affordable housing and a school. That created a windfall for the law firm Starn O’Toole Marcus &Fisher, which got a $450,000 contract to do legal work on the deal. Two of the firm’s directors had recently donated a combined $3,000 to Dela Cruz and Gov. Josh Green’s campaigns.

One of the directors, Ivan M. Lui-Kwan, contributed another $2,000 to the governor’s campaign as the bill awaited his signature, and another $1,000 after he approved the budget. Lui-Kwan and Duane Fisher, a partner at the firm, each donated $1,000 to his campaign about two weeks before the contract was awarded.

Lui-Kwan said donations made by him and his colleagues had no bearing on state contracts. He said they made it a point to never bring up such work at political fundraisers.

The governor said staff members involved with procurement didn’t communicate with him. “We adopted this approach to avoid any potential conflicts or concerns,” Green said in a statement.

People tied to big contractors have targeted local races, too.

In December 2021, Goodfellow Bros., one of Maui’s largest building firms, won a $4.6 million contract to expand a local landfill. It was the lowest bidder. The project was approved for funding in 2020 by the mayor at the time, Michael Victorino, and the County Council.

Afterward, executives and their family members gave around $34,000 in campaign contributions to the mayor and to council members, making them among the biggest donors in Maui County.

Goodfellow Bros. said in a statement that its employees could donate to campaigns so long as they did not give in the company’s name.

Alice Lee, chair of the County Council, said that Maui-based companies like Goodfellow Bros. “generally support candidates who support a stable economy, public health and safety and affordable housing.”

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DOING DOUBLE DUTY

In Hawaii, legislators serve part time and can hold outside jobs, which can increase the risk that they will face conflicts of interest. Nevertheless, they are among the highest-paid part-time lawmakers in the country, earning an annual state salary of about $72,000.

An examination of their financial interests found that a dozen of them were employees, directors or co-owners of companies that had won contracts. Since 2006, those companies have gotten at least $56 million in state deals, according to Hawaii’s contract database.

Disclosure records show that Senate President Ron Kouchi earns between $50,000 and $100,000 annually working for his brother’s disposal company on Kauai, which is the only provider of trash services to agencies on that island.

Rep. David Alcos III works as a subcontractor on state projects. Rep. Micah Aiu is a lawyer at Nan Inc., one of the state’s biggest contractors, which won at least $39 million in projects last year. They have said they are not directly involved in their companies’ contracts.

Dela Cruz, the Ways and Means chair, seems to have actually done hands-on work for a state contract: He was the project manager for a $224,000 state Health Department contract with DTL, a communications firm where he was co-owner and vice president.

The state Health Department, which awarded the contract in 2018 for work on a vaccine campaign, said it did not know Dela Cruz was an owner.

Jason Antonio, a principal at DTL, said in an email that Dela Cruz was not a project manager and was not involved in the immunization project. But in its proposal, which was submitted to the Health Department in 2017, DTL listed Dela Cruz as the project manager who would oversee the work on behalf of the firm.

Ronald Balajadia, the department’s immunization chief, said he mostly worked with two other DTL employees and did not recall interacting with Dela Cruz.

DTL was the only firm to bid on the contract. After selling his ownership interest in the company in late 2020, Dela Cruz continued receiving money from the firm for consulting services, according to his 2022 financial disclosure.

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A BOX FULL OF CAMPAIGN DONATIONS

The clearest example of how contractors and politicians regularly circumvented the reforms were the parties hosted by Yonamine, the former head of visitor information for Hawaii’s airports.

Yonamine wasn’t directly involved in awarding contracts, but his gatherings provided a casual setting where executives could be introduced to lawmakers and state employees who selected winners, according to attendees.

The parties started as early as 2014 at Yonamine’s private office in Honolulu, according to campaign finance records, which lists dates and locations where political fundraisers are held. They moved to the Pagoda Hotel there in 2019 and continued until at least 2020.

Lawmakers who benefited from the parties said Yonamine provided the venues while campaigns sometimes invited guests.

Attendees would stand chatting along the walls of the office, or later, on a spacious rooftop balcony at the hotel. The guests, sometimes more than 100 at the hotel, said they would discuss legislation, as well as contracts at the airports. Businesses seeking airport work frequently donated to a range of politicians around the time of those fundraisers. They described the parties on the condition of anonymity because they work for the state or have business relationships with contractors they don’t want to jeopardize. No one, including Yonamine, denies they took place.

One of the most prominent guests was Choy, a major political donor and government contractor who would later be sentenced to more than three years in prison for bribing officials. He and his associates donated more than $28,000 to political campaigns around the time of the parties.

By 2020, Choy was wearing a wire and actively recording meetings to aid federal investigators.

No evidence has emerged that Choy’s contributions at the parties were illegal or connected to his bribery scheme.

Many guests did work at the airports, a constant source of multimillion-dollar contracts.

At least 59 companies competed for airport contracts between 2014 and 2020. But nearly half the airports’ 153 professional services contracts went to just 14 companies. Executives from those firms all donated around the time of Yonamine’s parties.

Current and former heads of the division overseeing most of the airport design and engineering contracts did not respond to requests for comment.

The contracts were worth a combined total of more than $131 million, according to the state’s Department of Transportation.

These professional services contracts are for design or consulting jobs, and winners are selected based on their qualifications or proposals rather than just their price. The rules tend to give public officials more leeway to choose a company based on favoritism.

Executives at firms that won airport contracts donated a combined $101,000 around the time of the parties, according to campaign finance records, which show when checks were cashed and not when they were given. Candidates raised a total of more than $470,000.

When presented with the Times and Civil Beat’s findings, Ford Fuchigami, then transportation director and now head of the Airports Division, said he could not comment on the awarding of contracts because he was not in charge of selecting the winners. Fuchigami said he did not recall attending the parties, though records show he donated around the time of a party in 2019. He said he did not know what the state’s rules were for employees like Yonamine who were politically active or for officials who attended political gatherings.

“What you do on your personal time is what you do on your personal time,” he said.

The fundraising parties do not appear to have violated the state’s ethics laws.

Robert Harris, director of the Hawaii State Ethics Commission, said there were generally no prohibitions on political activity during off-hours as long as state employees did not use any state resources.

Other lawmakers who received campaign money around the time of Yonamine’s parties were Luke, the lieutenant governor; former Gov. David Ige; Kouchi, the Hawaii Senate president; and former Mayor Kirk Caldwell of Honolulu, according to fundraising documents.

Caldwell and Kouchi did not respond to repeated requests for comment.

Ige said he mostly remembered seeing Transportation Department employees at Yonamine’s office but did not recall recognizing contractors.

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