Hawaii executive indicted for illegal campaign donations
Ala Moana developer Timothy Lee was indicted Friday on nine felony counts of illegally funneling money to Honolulu mayoral candidates in 2020, a rare instance when alleged campaign finance violations could result in prison time.
Lee, CEO of JL Capital, the investment firm behind the development of the Sky Ala Moana high-rise, was arrested Monday and released after posting $250,000 bail. He is to be arraigned on Feb. 18.
The details of Lee’s case harken back to an earlier era of campaign spending cases when felony charges were more common. In the early 2000s, dozens of executives at design and engineering firms were accused of laundering money to the campaigns of Hawaiʻi’s most prominent politicians. Many avoided any jail time and paid hefty fines instead.
In the last decade, all of the cases forwarded to prosecutors by the state Campaign Spending Commission, which oversees election money in Hawaiʻi, have either resulted in fines or no criminal charges being filed.
Lee faces up to five years of prison on each felony count.
Lee and his company didn’t return messages seeking comment on Tuesday.
“Campaign contribution laws are critical safeguards of our electoral process,” Attorney General Anne Lopez said in a press release. She said her office, which is prosecuting the case, “will vigorously investigate and prosecute individuals that violate those laws.”
In 2022, the office declined to take up another case of allegedly illegal donations made by a lawyer to a candidate for Kauaʻi mayor, citing insufficient evidence.
The office declined Tuesday to comment on the rarity of campaign spending cases in the last decade, but credited deputy attorneys general in the Special Investigations and Prosecution Division, an anti-corruption unit created in 2022, as well as the Investigation Division for bringing the Lee case to an indictment by the grand jury.
The charges against Lee stem from campaign donations made in March and April 2020 by JL Capital employees to Keith Amemiya and Kym Pine, at the time candidates for mayor.
Amemiya’s campaign received $5,000; Pine’s received $8,000. Neither former candidate has been accused of wrongdoing by prosecutors and campaign finance regulators.
Lee later reimbursed employees for those donations in cash and checks, according to the indictment. Donations to mayoral campaigns are capped at $4,000 from any one source.
Lee maxed his donations to both Amemiya and Pine around the time he allegedly asked employees to donate to the campaigns, according to campaign spending data.
The case first came to the attention of the Campaign Spending Commission via a tip in October 2020 from an attorney representing a JL Capital employee involved in a labor dispute with the company. The employee claimed he was told by Lee to write checks to the Amemiya and Pine campaigns.
When the case went before the five-member commission in 2022, Lee’s lawyer challenged claims made in the state’s investigation that alleged Lee asked the employees to donate to the mayoral campaigns.
However, at a hearing in April 2022, the lawyer, David Minkin, seemed to acknowledge that Lee reimbursed employees for those donations, which is illegal in Hawaiʻi.
“Mr. Lee is fully aware of the consequences and fully understands he cannot reimburse people months later for contributions made on their own behest,” Minkin said at the time.
In the end, the commission voted unanimously to send the case to state prosecutors.
As a condition of his release, Lee was ordered not to contact Ka Wai Norman Chan and Tetsuaki Saihara, two of the employees. He was also ordered to turn over any firearms, ammunition and firearms licenses to police, and must surrender his passport at arraignment.
Lee is still listed as the manager and agent on JL Ala Moana LLC’s business file with the state, current as of Jan. 2.
The company’s website, which once displayed its executive team and portfolio of properties in the Ala Moana neighborhood, appears to have gone dark earlier this year. It now just displays a black screen with the company name.
The indictment comes at a time of renewed focus on campaign donations.
Randal Lee, a retired judge and former prosecutor, led investigations of straw donations in the early 2000s.
He said those cases, involving people who donated in the names of family members and employees, have become rarer after investigations exposed the techniques people used to conceal donations.
And campaign finance law at the time didn’t make it easy for prosecutors, who could not take up cases themselves and had to wait for a referral from the commission, which has historically been short-staffed, Lee said.
After two former legislators were caught taking bribes in 2022, the law changed, allowing prosecutors to independently pursue campaign spending cases. That year, lawmakers also created the new anti-corruption unit in the Attorney General’s Office.
Strong enforcement is necessary to keep the donors and campaigns in line, Lee said.
“The only way to keep people from violating campaign spending laws is to have some punitive action taken against them,” Lee said.
Gary Kam, general counsel of the Campaign Spending Commission, said commission staff are often occupied with just ensuring that spending reports come in on time and following up with campaigns that fail to file.
Having more staff and an investigator could help the commission find other instances of bundled donations.
“If we can get more staff, maybe we could have someone who looks at those kinds of circumstances,” Kam said.
State lawmakers in the current session are advancing measures to increase staffing at the commission. The agency currently has just five employees, no investigator, and was tasked with monitoring nearly $10 million in donations in 2024.
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This story was originally published by Honolulu Civil Beat and distributed through a partnership with The Associated Press.