Mayor Billy Kenoi, on trial for allegedly stealing public funds, waited as long as two years to reimburse Hawaii County for expenses that included large amounts of alcohol and a hotel stay for a nephew, prosecutors said Tuesday.
During opening arguments in Hilo Circuit Court, state Deputy Attorney General Michelle Puu presented 15 transactions totaling $4,129.31 Kenoi made on his county purchasing card that the state argues were personal expenses and violated the law.
Puu said Kenoi — who faces two counts of second-degree theft, two counts of third-degree theft, three counts of tampering with a government record and making a false statement under oath — reimbursed the county for all but one, a $200 bill at Volcano House restaurant.
Repayments took between four and 26 months to be made and usually occurred a few days after the media submitted requests for copies of Kenoi’s pCard records, Puu and Supervising Deputy Attorney General Kevin Takata said.
“What happened was the media got involved,” said Puu, regarding the timing of payments.
She described Kenoi as acting as if the rules didn’t apply to him. None of the 15 purchases came with receipts or affidavits as required by county policy.
But attorney Todd Eddins, who is defending Kenoi, had a different take.
He described the expenses as being within Kenoi’s authority as mayor and said violating county policy isn’t the same as committing a crime.
“Mayor Billy Kenoi is not a thief,” Eddins said. “The county is not out a single penny.”
Regarding the large liquor bills, Eddins, who referred to Kenoi more than once as a “force of nature,” said the mayor was helping promote the county and that alcohol helped build or cement relationships.
Nearly all of the 15 transactions predominately involved liquor or were alcohol-only purchases.
That includes a $479.88 bill at the Hilton Hotel bar in Baltimore and a $600 tab at Clyde’s restaurant in Washington, D.C.
While Kenoi didn’t submit receipts to the county for the expenses, the state presented several that they acquired during a yearlong investigation into Kenoi’s pCard spending.
“It doesn’t appear to be any food on this receipt,” Takata said of the Clyde’s bill, which included a tip of $153.34.
The receipt showed the purchase of eight fireballs, three Bacardi lights, six Stella Artois beers, five Jameson drinks and one Grey Goose drink, in addition to other liquor and beer purchases.
Eddins said Kenoi was treating congressional staff as part of his relationship-building efforts on behalf of the county.
He said the mayor did the same at the Hilton bar for people attending a U.S. Conference of Mayors gathering.
“(Kenoi) purchased rounds himself to nurture relationships, to build relationships and to strengthen relationships,” Eddins said, adding the mayor has an entertainment budget for that purpose.
He said the mayor purchased large amounts of alcohol at Longs Drugs on two occasions to treat guests or volunteers.
Upon questioning by prosecutors, former Finance Director Nancy Crawford said none of the 15 transactions was listed under a record of entertainment expenses.
Daniel Kailiawa, a nephew of Kenoi, said the mayor purchased a two-night stay at Hapuna Beach Prince Hotel for him and his wife after they got married in 2011. He said he didn’t know the county was covering the bill.
Eddins said the bill at Volcano House restaurant, which wasn’t paid back, was for hosting the family of the leader of the U.S. Conference of Mayors.
While the county has rules restricting the purchase of alcohol, those rules did not apply to the mayor, who reviewed and approved his own pCard charges, past and current county officials testified.
Crawford, while noting she thought it’s appropriate for the mayor to purchase alcohol if it’s related to county business, said she had told Kenoi to stop using his pCard for personal expenses. She said she also thought some of the expenses Kenoi paid back served a public purpose and the county didn’t need to be reimbursed.
Managing Director Randy Kurohara, who previously was deputy managing director, said Crawford’s warning regarding personal charges on the county credit card was relayed through him in 2013.
He said Kenoi responded that he would cease making those purchases but that he didn’t know if he did.
Kurohara said only the mayor had the authority to approve alcohol purchases.
The purchasing of liquor continued at least through December 2013 when Kenoi spent $892 at a Honolulu hostess bar.
West Hawaii Today reporter Nancy Cook Lauer revealed that expense in an article published in both Big Island newspapers in March 2015. She said she received a copy of the records from an anonymous source.
That prompted Kenoi to lose his pCard and triggered a state investigation, resulting in the criminal charges.
Cook Lauer, who was subpoenaed, took the stand as the trial’s first witness.
She said the county provided her only summaries of Kenoi’s pCard expenses, rather than the actual documents, in response to multiple records requests dating back several years.
“I was looking for actual records,” Cook Lauer said.
If Kenoi reimbursed the county for an expense, it was not provided to the media since that charge was then considered “private,” Crawford said.
The hostess bar charge and other questionable expenses noted by the media, including the purchase of a surfboard and bicycle, are not included in the criminal charges. Kenoi paid back those expenses.
Another journalist, Kevin Dayton of the Honolulu Star-Advertiser, also took the stand.
He was one of Kenoi’s executive assistants from 2008 to 2011 and an executive director from 2012 to 2015.
Dayton said he didn’t recall seeing alcohol served at a going away party for him at the Hilo Yacht Club in 2011.
The expense was one of the 15 transactions identified by prosecutors.
Witness testimony will continue today.
Honolulu Judge Dexter Del Rosario, who is hearing the case, said Monday that he expects closing arguments to be heard Oct. 31.
Email Tom Callis at tcallis@hawaiitribune-herald.com.
