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The Honolulu Advertiser

Posted on: Friday, May 24, 2002

Liquor inspectors took bribes, indictment says

 •  Harris: Liquor panel should be under police

By Rod Ohira
Advertiser Staff Writer

U.S. Attorney Ed Kubo describes charges against liquor inspectors. With him are, from left, Maj. Kevin Lima of HPD, J. Michael Seabright and Daniel R. Dzwileski.

Eugene Tanner • The Honolulu Advertiser

A federal grand jury indictment charging eight current and retired Honolulu Liquor Commission inspectors with taking bribes from hostess bars indicates that the commission's enforcement system is "so corrupt it no longer maintains public trust," U.S. Attorney Ed Kubo said yesterday.

"Undeniably, these types of crimes would not have taken place if proper protocols and procedures were in place and utilized to monitor and maintain the operations of the enforcement section," Kubo said. "In this case, the foxes were left to guard the hen house."

The indictment charges represent one of Hawai'i's biggest cases ever alleging corruption in a government agency.

The indictment accuses the liquor inspectors with accepting cash bribes on 58 occasions from October 2000 to December 2001 from owners, managers or employees of 45 hostess and strip bars in return for not enforcing liquor laws. The payments ranged from $20 to more than $1,000 and totalled about $11,500, the charges said.

Charged in the 57-count corruption indictment were David K.H. Lee, 64; Harvey T. Hiranaka, 55; Arthur M. Andres, 59; Collin M. Oshiro, 32; William B. Richardson Jr., 48; Samuel K.Y. Ho, 43; Eduardo C. Mina, 71, and Kenneth L. Wright, 47.

Ho is charged with 23 counts; Richardson, 18; Lee, 13; Hiranaka, 12; Wright, 10; Oshiro, nine; Andres, six; and Mina, five. If convicted, each faces a maximum penalty of 20 years in prison per count and a fine of $250,000.

LEE: Supervised inspectors before retiring

Oshiro: Pleaded not guilty to charges

"We clearly need a better system to enforce the liquor laws in Honolulu," Kubo said. "I hope the issue will be addressed by those responsible for overseeing the operations of the Liquor Commission."

Liquor commissioners yesterday declined to comment. But in a written statement, Liquor Commission Chairman John Spierling said: "The Honolulu Liquor Commission has cooperated with various law enforcement authorities from the very beginning and continues to do so. It is our hope that any individual guilty of wrongdoing is brought swiftly to justice."

Evidence in the joint FBI and Honolulu police investigation was collected with the help of a Liquor Commission investigator working undercover, said FBI special agent in charge Daniel Dzwilewski.

U.S. Assistant Attorney Michael Seabright said the prosecution's evidence includes eight hours of tapes for an 80-day period.

Kubo would not comment on whether the people who allegedly paid bribes would be prosecuted, but he said the investigation is on-going.

Attorney Michael Green, who represents owners for three downtown bars which allegedly paid bribes to liquor inspectors, yesterday said his clients have not been arrested or charged with any crime.

Green said his clients understood they were wrong by paying the inspectors, but the clients told him it was either pay the inspectors or get shut down.

"These inspectors can come in every other night and stop their business cold," Green said. "They understood if you took care of the investigator, the inspectors wouldn't write you tickets, whether the tickets were deserved or not deserved."

Green said there were a couple of honest inspectors, "but for the most part these guys were running all over the place shaking down bar owners." Green said his clients have been cooperating and are "accepting responsibility for what they did."

Several bars named in the indictment declined to comment last night, but one owner denied that her establishment paid any bribes. Mina C. Pak, owner of Club New Casino, said she didn't know of any payments.

According to the indictment, inspector Ho received $100 and polo shirt from Club New Casino on Dec. 20, 2000. Pak said she was surprised that her business was mentioned.

"No, that's never," Pak said when asked if there were any bribery payments.

Five of the eight retired and current inspectors pleaded not guilty yesterday to the charges in federal court. The five included Lee and Hiranaka, both retired, who were supervising liquor control inspectors when the alleged offenses occurred. Andres, Oshiro and Richardson also pleaded not guilty before Magistrate Barry Kurren.

Ho, Wright and Mina, who reportedly is in the Philippines, have not been arrested.

All but Andres, who was fired as a commission enforcement investigator following a 1988-89 probe into misconduct but later reinstated by an arbitrator, were released on $20,000 signature bonds.

Andres was being held without bail until a hearing May 30 after he tested positive for crystal methamphetamine, Seabright said.

Andres' attorney, Jeffrey Arakaki, said it was too early to say what his client's defense would be.

Arakaki said he wanted further tests to be done to confirm the initial drug test results, but in the meantime he will see if his client can be released from prison.

The trial in the case was scheduled for July 23 before federal Judge David Ezra's court.

The eight who are charged were among 10 liquor inspectors assigned to the night shift and responsible for enforcing laws governing the sale and service of liquor.

The indictment listed bribery allegations. For example, Richardson was paid $1,080 by Club Rock-Za on March 28, 2001, and gave $540 to the undercover investigator, according to the indictment.

During the same period, Ho received payments of $500 and $300 from Club Tomorrow on March 2 and March 13, respectively, and $400 from Club Pink Carp on March 21, the charges said. Richardson, meanwhile, also collected $100 from Club Dream Girls on March 28, the indictment said.

On three successive days last year from Feb. 6 to 8, Club Mimi paid $300 each to Oshiro, Ho and Richardson, according to the indictment.

"When a law-enforcement officer accepts bribes or obtains money through extortion, it must be treated as extremely serious because it constitutes the most egregious violation of public trust," Kubo said. "Public corruption in any form is a disease which our law-enforcement community and the public can never tolerate."

Advertiser staff writers Brandon Masuoka and Curtis Lum contributed to this report.

Correction: Prosecution evidence in the corruption case against Honolulu liquor investigators includes eight hours per day of tapes covering an 80-day period. A previous verison of this story had incorrect information because of a reporter’s error.