Scope of Harris City prosecutors have questioned City Councilman Duke Bainum and other local Democrats about $300,000 in mystery payments to Lisa-Katharine Otsuka, the former Maui beauty queen called as a witness in the investigation into Honolulu Mayor Jeremy Harris' campaign.
inquiry revealed
Several Democrats are asked about the
First criminal complaint filed in campaign probe
$300,000 paid to Lisa-Katharine Otsuka
By Rick Daysog
rdaysog@starbulletin.comBainum told the Star-Bulletin that prosecutors interviewed him several months ago about work conducted on his aborted mayoral campaign by Campaign Service Inc., a local polling company headed by Harry Mattson.
State Campaign Spending Commission records show that Bainum's mayoral campaign paid more than $34,000 to Campaign Service and related companies during the past two years.
The money was for polling, consulting and research work for the Bainum campaign, but prosecutors believe that some of it ended up with Otsuka, according to people contacted by the prosecutor's office.
Bainum's campaign came to a halt after Harris announced in May that he would not run for governor and would remain as mayor. Bainum said his interview with prosecutors was part of a broader discussion that included city budget issues.
He said he does not know Otsuka and that his campaign had no connection to her.
Prosecutors declined comment.
The Star-Bulletin previously reported that prosecutors are investigating payments totaling $75,000 by the Harris campaign to Mattson about two years ago. The Harris campaign paid the amount to Mattson's company for polling services, but Mattson later delivered much of the money to Otsuka.
Harris' attorney, William McCorriston, has denied that the campaign or city made payments to Otsuka. Harris has said that he does not know her.
Mattson, a longtime supporter of former Gov. John Waihee and a former spokesman for Harris' 2000 campaign, testified before an Oahu grand jury for several hours on Oct. 31. He declined to discuss payments to Otsuka, saying matters before a grand jury should be kept confidential.
Mattson said that he has a business relationship with Otsuka, but he declined to elaborate.
Previously, Mattson said he had invested money with Otsuka in what he thought was a legitimate venture that "turned out otherwise."
"I'm a big believer in the confidentiality of the grand jury proceedings. In order to do that, everyone concerned with the proceedings should keep their mouths shut, which is what I'm doing," Mattson said. "I have not a clue about what the prosecutors are up to."
Paul Cunney, Otsuka's attorney, said he does not know anything about payments to Mattson from local Democrats.
Otsuka had been called to testify before an Oahu grand jury on Sept. 5 but failed to appear and was arrested four days later on a contempt-of-court charge.
She later was indicted for allegedly stealing $3,000 from a Wahiawa nonprofit group and for allegedly forging checks from a Kakaako auto repair business. She has pleaded not guilty to those charges. In August, Honolulu police officers arrested her at a Waikiki hotel on suspicion of promoting prostitution, but she was not charged.
In addition to Bainum and Harris, prosecutors are looking at other Democrats whose payments to Mattson were later directed to Otsuka. They include:
>> Federal Maritime Commissioner Delmond Won, who sent Mattson more than $25,000 a year ago.
>> Mattson's business partner and former state official Norma Wong, who gave Mattson's company several thousand dollars.
>> Truth in Politics, a local committee that paid Mattson's company more than $10,000 for coordinating print and radio advertisements.
Federal Maritime Commissioner Won, a former member of the state Land Use Commission during the Waihee administration, said he does not know Otsuka and was puzzled that money he sent to Mattson may have ended up in her bank account.
Won, who served on the Land Use Commission with Mattson's wife, JoAnn, said he provided Mattson a loan more than a year ago when Mattson had tax problems.
The Internal Revenue Service filed a lien against Mattson in July 2001, saying he owed more than $25,000 in back taxes for 1995, 1998 and 1999.
The lien was lifted last December.
Wong, who appeared before the grand jury on the same day Mattson testified before the panel, could not be reached. Previously, she said that she does not know Otsuka.
Attorney Lloyd Asato, who heads Truth in Politics, said that he does not know Otsuka and barely knows Mattson.
Truth in Politics, which opposed Big Island Mayor Harry Kim during the 2000 elections, spent about $10,000 to coordinate radio and newspaper ads. The payments represented more than half of the organization's budget.
Asato said he is puzzled by prosecutors' interest in his organization, which ceased operations last year. He said he was surprised when he received a notice from the Bank of Hawaii in October that a Honolulu police officer had subpoenaed his organization's financial records.
"I don't know why they're connected," Asato said.
City & County of Honolulu
