When news spread that businessman Milton Choy was entangled in a federal corruption investigation in 2022, more than two dozen Hawaiʻi politicians hurried to return political contributions they had received from Choy. But Kauaʻi Mayor Derek Kawakami, who is now a leading candidate for lieutenant governor, was not among them.

State campaign spending records show Kawakami received $15,000 in campaign contributions from Choy, Choy’s family members or employees of his company H2O Process Systems. The Kawakami campaign this week acknowledged Kawakami did not surrender that money to the state Campaign Spending Commission as many others did.

Eyebrow-raising campaign donations linked to the 2022 FBI case in which Choy and two lawmakers were convicted of bribery have already derailed Lt. Gov. Sylvia Luke’s hopes for reelection.

Now, the decision by Kawakami to keep the Choy donations has emerged as a potentially troubling issue for Kawakami. Opponents Rep. Della Au Belatti and Honolulu lawyer John Choi are using his failure to return the money as political fodder.

Political analysts suggested the campaign money could raise questions of integrity that other candidates could exploit.

“If I were Derek, I would be thinking real hard about how to explain it,” former longtime University of Hawaiʻi political science professor Neal Milner said.

Kawakami was traveling on county business last week and unavailable for an interview, but his campaign manager, Dan Giovanni, said in a written statement that “Mayor Kawakami did not return the campaign contributions. The contributions were legal, and at no time did Mr. Choy ever request or receive preferential treatment.”

Choy was at the center of bribery schemes at the Legislature and on Maui that resulted in the federal criminal convictions of former state Rep. Ty Cullen, former state Sen. J. Kalani English, and others. Choy and Cullen became informants for the FBI, and English, Cullen and Choy all served federal prison time. Choy died in custody in 2024.

Given that history, Belatti said it is “problematic” that Kawakami did not return the donations he received from Choy. Belatti received a $1,000 campaign contribution from Choy, but she forwarded the money to the Campaign Spending Commission on Feb. 18, 2022.

“The reality is that Mr. Choy was engaged in a system where he intended, and did in fact with some legislators buy conduct and official action,” she said, “and so it was really important to me … for my own set of values, that that money be returned to the Campaign Spending Commission. It was the right thing to do.”

“We shouldn’t benefit from legal bribes, because that’s what they are — legal bribes,” Belatti continued. “So for me it’s a reflection of common sense, decency, certain values, to restore the public trust.”

Choi, a former deputy attorney general, said Kawakami “didn’t do anything illegal, but then why would he keep the money? Why would Kawakami’s campaign keep the money, when everyone else has returned it?”

“It’s a reflection of the character of the campaign, I believe,” Choi said. “What is the reason? And we’re saying he should return it now or donate it to the Campaign Spending Commission.”

The Rush To Divest

Data provided by the state Campaign Spending Commission shows that at least 29 Hawai’i politicians rushed to return donations from Choy in early 2022 by forwarding money to the commission.

That included Senate President Ron Kouchi and a dozen other state senators; then-House Finance Committee Chair Sylvia Luke and 11 other members of the state House; former Maui Mayor Michael Victorino; former Honolulu Mayor Kirk Caldwell; and Honolulu Mayor Rick Blangiardi.

It is unclear how significant Kawakami’s handling of the Choy donations might be in the lieutenant governor’s campaign.

Milner, the former UH professor, noted that Kawakami is not well known across the state. He has never run a statewide campaign before, and Milner described the issue of the Choy donations as “a wild card.”

“He’s not defined as a politician statewide here in good sense or a bad sense, so that there is a vacuum here to fill,” Milner said. “That means that the view the public has of him, it’s still relatively a work in progress, and if it’s a work in progress, you’d better be ready to respond to something like this.”

One factor to consider is the weighty support Kawakami enjoys from Pacific Resource Partnership, which is a consortium made up of the 6,000-member Hawaiʻi carpenters union and more than 250 contractors statewide who employ them.

PRP is a major player in Hawaiʻi politics, and in the early weeks of this year’s campaign Kawakami has benefited from a deluge of feel-good television and other advertising financed by an independent expenditure committee — more commonly known as a super PAC — called For A Better Tomorrow. That super PAC is is backed by PRP.

That advertising goes far beyond anything fielded by the other two Democrats, and is focused largely on introducing Kawakami to voters who don’t know him from his years in the Legislature and as mayor of Kauaʻi. The ads attempt to craft a favorable image for him.

Still, John Hart, professor of communication at Hawaiʻi Pacific University, said Kawakami “will have to respond, and if he says the wrong thing, it will matter.”

“That’s a chunk of change,” Hart said of the $15,000. “This will have to be answered, and if it’s not answered properly, it could blow.”

A classic example of a poor response, Hart said, is the way Lt. Gov. Sylvia Luke addressed revelations earlier this year she had received $10,000 in two campaign donations from an associate of Ty Cullen, money she later returned to the Campaign Spending Commission. Luke did not report the donations to the commission until after Civil Beat asked about them, which she said was an error by her campaign staff.

Luke later ended her reelection campaign, and was notified in April that she is a target in an investigation by the state Attorney General’s Office. She later took an unpaid leave of absence from her position as lieutenant governor.

As for Kawakami, “his people will need to sit down, he will need to sit down and make a good explanation that doesn’t blow up like it did on her,” Hart said.

But Hart said “it’s early in the race, and unless you’re a political insider, you’re not paying attention to this.”

Kawakami’s name previously surfaced in connection with the 2022 bribery scandal when he wrote a letter to federal Judge Susan Oki Mollway before she sentenced Cullen for taking cash bribes of more than $25,000 and payments in casino casino poker chips worth $22,000.

Kawakami wrote to Mollway that he and Cullen were close friends who had worked together at the Legislature. “At his core I still believe he is a good man, with a loving and compassionate heart,” Kawakami wrote in the letter. In the end, Mollway sentenced Cullen to two years in prison.

Giovanni, Kawakani’s campaign manager, said in a statement last week that “Mayor Kawakami and Ty Cullen have known each other for many years and are friends. The letter reflected that personal relationship, while also recognizing the seriousness of the federal case and the need for accountability.”