Liquor law extortion plot charged

Federal takeover of the liquor board is threatened with this latest indictment

A Honolulu Liquor Commission night supervisor and the chief of security at Aloha Stadium have been indicted on extortion charges after they allegedly took $1,000 a week from a nightclub owner in exchange for allowing him to break liquor laws.

Liquor Commission Troubles The Honolulu Liquor Commission has been in trouble before: May 2002: Eight former liquor inspectors were indicted and later convicted for taking bribes in exchange for overlooking violations. August 2002: Carla Chu filed suit in U.S. District Court, alleging she was sexually harassed during a decade as an inspector at the commission. In 2004 the city agreed to pay her $250,000. July 2003: In a whistle-blower lawsuit, the city paid $387,500 in damages to a former liquor inspector who reported the bribery scheme to federal authorities and later alleged he suffered retaliation in the workplace. April 2005: A city audit slammed the commission, saying it had "inadequate" management of its operations. July 2005: Commissioners stripped former Administrator Wallace Weatherwax of his duties after City Council members called for him to resign. He later stepped down.

They also tipped him off to upcoming liquor inspections while threatening to dispatch investigators if the owner did not pay up, according to the indictment, which was unsealed yesterday.

The charges against James Rodenhurst, who joined the commission in 2002, come just four years after eight former liquor inspectors were charged and later convicted for accepting bribes in exchange for overlooking violations.

The latest charges stem from a wiretapping investigation into an alleged drug trafficking and cockfighting ring, which has led to the arrests of an FBI worker, five police officers and 29 others.

In a news conference yesterday, U.S. Attorney Ed Kubo said the latest charges suggest the agency has not reformed since 2002. He also threatened to pursue a federal takeover if problems persist.

"We clearly need a better system in place to enforce the liquor laws of Honolulu," he said. "We have the right to intervene."

If the commission is placed under federal oversight, it would be a first for a law enforcement agency in the islands.

Rodenhurst, a 57-year-old retired police officer, pleaded not guilty in federal court yesterday to the charges.

Herbert Naone, 57, security chief at Aloha Stadium for 18 years, also pleaded not guilty.

Both declined comment yesterday as they left the U.S. District Courthouse.

Myles Breiner, Rodenhurst's attorney, said the indictment is "a reflection on the Liquor Commission" and illustrates how the culture at the agency has become one of corruption.

"He's done the best job possible under the circumstances," Breiner said. "He's a solid person and a good individual."

But Dewey Kim Jr., who was named the commission's administrator two weeks ago, said he has already started working on a plan to overhaul the agency, which includes hiring former federal investigators to do an internal review.

"I don't think there's a need for a civil lawsuit" for the agency to be put under federal oversight, Kim said.

He also said the commission knew about the investigation into Rodenhurst for about a year but was not told that an indictment would be filed. He plans to review investigators' evidence to see whether there were other commission employees involved in the alleged scheme.

On Monday he expects to place Rodenhurst on administrative leave without pay, he said.

Aloha Stadium officials will also meet Monday to discuss Naone's case, spokesman Patrick Leonard said, adding the case came as a "shock" to stadium officials.

He declined further comment.

The indictment, filed Thursday, alleges that Rodenhurst and Naone worked together to extort thousands of dollars from Corey Kaowili Jr., who owns Club Sin City (also known as Club Pearl Ridge) in Pearl City and Volcanoes Night Club on Nimitz Highway. It also says the extortion started as early as May 2004 and continued through January 2005.

Kubo said Naone and Rodenhurst were friends. Sometime before May 2004, Kaowili contacted Naone, an apparent acquaintance, and asked whether there was any way to skirt liquor laws, the indictment alleges.

Kubo said that at one point Kaowili did not have a permit to sell liquor at one of his clubs. At other times he allegedly served alcohol past when his permit allowed, the indictment said.

Naone and Rodenhurst allegedly devised the extortion scheme, allowing the clubs to break laws in exchange for getting $500 each a week. They also allegedly warned the clubs of scheduled inspections and threatened to shut them down if they did not pay up.

In an Oct. 21 telephone conversation, according to the indictment, Naone told Rodenhurst that Club Pearl Ridge would "go renegade this weekend," which apparently meant they were planning to break liquor laws.

Rodenhurst responded with, "Tell him to send the money down."

Both Rodenhurst and Naone face up to 20 years in jail and a $250,000 fine if convicted. Rodenhurst was released on a $25,000 bond yesterday, while Naone paid a $20,000 bond.

Kubo said the investigation into Rodenhurst and Naone started when FBI agents were wiretapping Kaowili, who was also indicted Thursday as part of the alleged drug-trafficking ring. Kaowili pleaded not guilty to the drug charges yesterday.

An indictment said he sold about two pounds of crystal methamphetamine between December 2004 and January 2005. He is being held in the federal detention center.

"Over the course of the wiretapping investigation, spinoffs happened," said Kubo.

Kaowili was one of 12 additional people indicted yesterday in the alleged drug trafficking ring.

The investigation has already led to charges against 23 individuals, including FBI worker Charmaine Moniz.

One of those indicted yesterday, Robert Watson Jr., allegedly had more than three pounds of crystal methamphetamine that he was going to sell in December 2004. In a search of his home, agents found $119,000.