Sunday, February 29, 2004

Isle liquor inspectors
blatantly corrupt,
informant says

Bar employees provided easy
money and sex, say documents
prepared for an upcoming trial

Corrupt investigators at the Honolulu Liquor Commission were so brazen about their bar shakedowns that they openly discussed which businesses to target on their shifts, divvied up payoffs at commission offices and even told bar owners about upcoming vacations so money would be paid to underwrite those off-island trips, according to a key figure in next month's federal trial of three former investigators.

City & County of Honolulu

In exchange for ignoring liquor law violations, some of the eight investigators originally indicted for allegedly taking bribes sometimes solicited sex from bar employees instead of cash, former investigator Charles Wiggins told the Star-Bulletin last week.

The rogue investigators were so focused on enriching themselves that they often started their night shift by discussing which bars to stay away from and which to visit, based on which owners were making payments, Wiggins said.

"The No. 1 objective each night was where we were going to get money from -- period," Wiggins said. "That was the main objective."

Wiggins, who said he never accepted payments until he took part in an undercover FBI operation, wore a wire for 88 days while on the job in late 2000 and 2001. He said he collected $1,000 to $1,500 on some nights, money he turned over to authorities.

Five of the eight indicted workers, including two retired supervisors, pleaded guilty and agreed to cooperate with prosecutors. The other three -- Arthur Andres, Harvey Hiranaka and Eduardo Mina -- go to trial March 30 in U.S. District Court. Their attorneys declined comment.

Interviews and court documents depicted the night shift as a hotbed of corruption during the period covered by the FBI's initial probe. The eight indicted in 2002 represented nearly three-fourths of the night shift investigative staff.

The court documents also indicated that the illicit behavior was widespread enough to potentially influence new workers who wanted to be accepted by colleagues.

Mina told FBI agents that when he began working as an investigator in 1997 or 1998, he didn't accept bribes for about two years, according to an FBI report.

"He realized that many of his partners were accepting money from many bar owners and in return were overlooking liquor violations in the bars," the report said.

But because he issued citations, including to bars whose owners were "friends" of other investigators, the other investigators disliked him, Mina told the FBI. The understanding, he added, was that an investigator wasn't supposed to cite clubs whose owners paid the regulators, the report said.

Mina told the agents that he began accepting money from bar owners to help finance trips to the Philippines, according to the report.

At one point, he was getting $100 regularly from one bar owner, then began having an affair with her, the report said.

He told the agents that money-taking among the investigators was rampant, according to the report.

Wiggins agreed.

"The money was just so easy," he told the Star-Bulletin. "These guys were put in an environment that made it so easy for corruption to thrive."

Since the corruption scandal erupted, the commission has replaced the night crew, added tougher screening procedures for new hires and increased direct supervision, according to Wallace Weatherwax, commission administrator. A task force also has been formed to look at other ways to prevent such problems from recurring.

Asked how the corruption could persist under his watch for an extended period, Weatherwax said he wasn't aware of a problem early on because reports of such behavior didn't initially come to his attention.

That probably was because the two shift supervisors were among the ones indicted and their immediate supervisor was a problem employee who didn't closely monitor the night shift, he said.

Once he became aware that there might be a corruption problem, Weatherwax said he began an internal investigation in the fall of 2001, but the FBI asked the agency to stop because of the federal probe.

Wiggins said he believes Weatherwax was aware of what was going on early on, but didn't do anything to stop it.

The agency is no stranger to scandal. It has been sued in recent years by several former employees for various charges, including retaliation and sexual harassment. The city has paid more than $400,000 to settle two of those cases, including a whistle-blower lawsuit in which Wiggins said he was harassed and retaliated against for cooperating with the FBI.

Another lawsuit, a sexual harassment case, is close to settlement and will likely cost taxpayers more money.

Another whistle-blower lawsuit was filed earlier this month by Kerry Shannon, a liquor investigator who took medical retirement last February.

Shannon alleged that he was retaliated against once his colleagues learned that he had cooperated in early 2002 with the FBI and police and had testified before a grand jury.

Commission officials denied the accusations.

The corruption case, the lawsuits, poor morale and other problems reflect a workplace out of control and with no accountability, former commission workers say.

"There was no fear of consequences (if you did something wrong) because there were no consequences," Higgins said.

The underlying problem, according to City Councilman Charles Djou and state Sen. Les Ihara Jr., is that the commission is a body created by the state but administered by the city, with neither having clear oversight responsibility. That means the commission doesn't have to respond to outside calls for reforms, they said.

"If you're a corrupter or a corrupting agent, this is a great system to be under," Djou said.

A bill that would give counties oversight responsibility for their respective liquor commissions will be heard by the House Judiciary Committee on Wednesday.

Commission officials say the bill is not needed because the agency gets plenty of oversight from the city, courts and others.


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