Lawyers for a local explosives disposal company and its top manager told a federal jury Tuesday that government officials knew and approved of how the company was handling seized illegal fireworks but charged their clients with crimes to shift the blame for an explosion and fire at a Waikele storage bunker that killed five men.

Charles Donaldson and the now-defunct Donaldson Enterprises Inc. are on trial in U.S. District Court for storing hazardous waste without a permit, aiding and abetting the treatment of hazardous waste without a permit and conspiring to store and treat hazardous waste without a permit. Donaldson, who was DEI’s director of operations, and the company are also charged with lying when they reported to the government that they had destroyed a particular batch of seized fireworks even though a portion of the batch remained in the storage bunker. All of the charges are felonies.

The maximum penalty Donaldson faces is five years for each of the five counts against him and a $50,000 fine for each day of violation for each of three counts of improper storage and treatment. The company faces just the fines.

DEI project manager Carlton Finley was charged with the same crimes, but he pleaded guilty last month to a single misdemeanor charge of improperly storing explosive material in a deal with the prosecutor.

No one is charged with any crimes for the April 8, 2011, explosion and fire that killed DEI employees Bryan Cabalce, Robert Kevin Freeman, Justin Joseph Kelii, Robert Leahey and Neil Benjamin Sprankle.

DEI was a government subcontractor tasked with storing fireworks that were the subject of federal criminal prosecutions.

Donaldson’s lawyer, Thomas Otake, told jurors that the government knew how and where the fireworks were being stored and inventoried them at the bunker monthly.

“They told him it was OK. They paid him to store (the fireworks) there,” Otake said.

Otake said the fireworks became hazardous waste only after the government ordered them destroyed. At that point, Otake said, Donaldson obtained a permit to do that, and officials with the state Department of Health, the agency responsible for enforcing federal hazardous waste laws in Hawaii, told him how to dispose of the fireworks.

Assistant U.S. Attorney Marc Wallenstein told jurors Tuesday that Donaldson directed his workers to continue to store and dismantle the fireworks even after the company’s permit expired.

“It was Charles Donaldson’s responsibility to get a permit, and if he couldn’t, to stop what he was doing,” Wallenstein said.

DEI’s lawyer Randall Hironaka said, “This case is about the government assigning blame.”

Hironaka said multiple government agencies were aware and approved of how DEI was handling the seized fireworks. He said the government brought charges against Donaldson and the company only after the families of the dead men sued the government.