A Hawaii County audit of government-issued purchasing cards wasn’t launched for nearly a year after Mayor Billy Kenoi used his in December 2013 to pay for an $892 tab at a hostess bar, and despite the fact that he had been warned repeatedly about using it for personal items.
The audit was ordered in November by County Legislative Auditor Bonnie Nims, who had been on the job since only May 1. Nims declined to reveal what the audit has found so far, but said she hopes to produce a report by June.
The county apparently never had conducted an audit of the government-issued purchasing cards — or pCards — during Kenoi’s tenure, so Nims said she began the review because they’re "an inherently risky item."
Kenoi’s expenditures from 2009, when he took office, to 2015 show lavish spending for drinks, dinners, luxury hotels and more than $100,000 on trips to Washington, Las Vegas, San Francisco, Texas, the Philippines and Japan. Other hostess bar expenses in Honolulu include $400 that Kenoi spent in 2009 at the Camelot Restaurant and Lounge on Sheridan Street.
Kenoi also has used his card to pay for his $565 Hawaii Bar Association dues, luxury stays at the Marriott Waikoloa Beach for $469 per night, $280 at the Lava Lava Beach Club and $120 at the Kamuela Big Island Brewhaus.
Although Kenoi has reimbursed the county thousands of dollars for his purchases, the Hawaii County prosecutor and state attorney general are discussing possible criminal charges.
Kenoi has retained the services of Honolulu criminal defense attorneys Howard Luke, Todd Eddins and Rick Sing.
Nims said Monday that as auditor she had two reasons to look at the county’s use of pCards: "I do not believe there ever had been an audit. And anytime you have credit cards, it’s just inherently risky that people will on purpose or accidentally use it for personal use."
The audit will include purchasing records on file with the county’s finance department, interviews with pCard holders and a review of "internal controls," Nims said.
About 240 county employees have pCards, Hawaii County spokesman Peter Boylan said.
Other government workers have also reimbursed the county for mistakenly using their pCards — or after being reimbursed by the state for attending meetings — but Boylan did not have details or specific amounts of the repayments to the county.
Kenoi’s pCard has been cut up, but he will still be allowed to use the account number to book travel arrangements, Boylan said.
For any other expenses, Boylan said in an email, "the mayor will have to front the money and ask for reimbursement from the county."
State Attorney General Doug Chin and Hawaii County Prosecutor Mitch Roth — an elected official who is part of Kenoi’s Cabinet — have been discussing having the attorney general’s office handle any potential review of Kenoi’s pCard expenses.
Roth on Monday planned to send a formal letter and email to Chin asking for the review.
"Prosecutor Roth has indicated that he will be sending a formal request to AG Chin to have the Department of the Attorney General pursue an investigation into Mayor Kenoi’s use of the pCard," Chin’s spokeswoman Anne Lopez said in an email. "AG Chin will review the formal request upon receipt and determine at that time whether he will grant the request."
Roth told the Honolulu Star-Advertiser that, after talking to Chin, both attorneys decided to "keep it clean and transparent as possible, rather than give the appearance of impropriety."
"If there’s a full-on investigation, it will be done by the attorney general’s office," Roth added.
Kenoi has not been questioned by either the county prosecutor’s office or the attorney general’s office, Boylan said.
Hawaii island resident Lanric Hyland wrote on his Facebook page Monday that he "filed an ethics board complaint against Mayor Kenoi and Finance Director Deanna Sako, calling for both to be removed from office per County Charter section 14-6."
Hyland did not respond to a request for comment.
But neither the County Clerk’s office nor the Corporation Counsel’s office — which handles complaints to the county’s ethics board — said they received an ethics complaint by late Monday.
Roth said he expects that his office will be part of the legislative auditor’s review of pCard use but that he has not yet been interviewed.
"They’ll be looking at all of the directors with their pCard spending," Roth said. "We’re expecting to be interviewed but I don’t expect any problems. I very rarely use mine. We feel pretty comfortable they’ve all been work charges."
A 1999 memorandum forbids the purchase of alcohol for consumption by county employees or for county functions since it is "an inappropriate use of public funds" and because of liability issues. The exception is the entertainment of dignitaries by the mayor, the County Council chairman or their authorized representative.
Kenoi said that on March 31 he paid back the county $7,500, which was part of a total of $26,000 in personal and county-related charges. He said about half of the charges were personal.
