Plagued by years of scandal, the Honolulu Liquor Commission is struggling to hire qualified and ethical investigators to issue citations for violations from underage drinking to illegal lap dances.

The Oahu agency tasked with regulating the island’s 1,500 liquor licensees is supposed to have 20 investigators, according to Chief Investigator Peter Nakagawa. Only 11 full-time positions are filled, he said. There are three additional investigators on temporary contracts.

It’s a problem that has existed for years, according to a recent city audit, and it’s only gotten worse since the last city audit in 2005. Earlier this year, 40% of the agency’s 52 positions were vacant, the report said – mostly positions for conducting physical inspections of liquor facilities.  

“Historically, it’s a low-paying job, and this place has had a pretty tough reputation of corruption back in the day,” Nakagawa said. “We’re trying to keep it from going back there.”

Honolulu City and County Liquor Commission meeting room.

The Honolulu Liquor Commission meets every Thursday. Chief Investigator Peter Nakagawa declined to be photographed because he said he sometimes conducts undercover inspections.

Cory Lum/Civil Beat

Over the last 20 years, commission employees have repeatedly abused their powers and some have even ended up in jail. The most recent case concluded in 2012. That’s why it’s so important to find job candidates with a strong moral compass, Nakagawa said. 

“We could fill positions with anybody,” he said. “But we want to make sure that they’re, No. 1, qualified, and No. 2, a good fit.” 

The agency’s reputation itself is also a hiring obstacle, the audit states. 

“While efforts have been made to overcome the negative image of working for the Commission, there continues to be challenges in filling vacant positions,” the audit states.

Employees Repeatedly Busted For Bribery

In the early 2000s, eight employees were convicted for accepting bribes from liquor licensees in exchange for inspectors looking the other way on violations. The bribery was rampant and brazen with employees soliciting cash and even sex from bar workers who wanted to avoid write-ups, according to a Honolulu Star-Bulletin story at the time. 

In 2007, former liquor commission supervisor James Rodenhurst, also a former Honolulu police officer, pleaded guilty to accepting bribes, Hawaii News Now reported at the time. A year earlier, Herb Naone, the former chief of security at Aloha Stadium pleaded guilty for conspiring with Rodenhurst to extort bar owners, the Star-Bulletin reported. 

In 2011, another employee, whose job it was to train investigators, pleaded guilty to felony charges. He had accepted a bribe in exchange for a “liquor card” that allows someone to work for an establishment that serves booze, Hawaii News Now reported. The recipient had not taken a necessary test. 

Chu Lan Shubert-Kwock, who served as a Honolulu liquor commissioner from 1997 to 2005, said it’s no wonder that few people want to work there. 

“It’s a corrupt, toxic environment,” she said, adding that her Chinatown community has been frustrated by a lack of enforcement at Maunakea Liquor

Nakagawa said the current staff at the commission is high quality and that the culture of bribery is in the past.

“When you hire ethical people, you don’t have that,” he said. 

Job Candidates Fail To Show Up

The agency’s reputation isn’t the only hiring obstacle, Nakagawa said. 

Honolulu requires two years of in-the-field investigative experience for its entry-level investigator jobs. That can’t be substituted by a degree in a related field, like criminal justice. 

That’s a lot to ask of someone when you’re paying them a starting salary of $41,364 and requiring them to work nights, Nakagawa said.

“Unfortunately, the people we do select sometimes decline the job or don’t show up for interviews,” he said. “We’re on a continuous recruitment.”

The pay rate can’t be easily changed, Nakagawa said. Salaries are negotiated through a collective bargaining process with the Hawaii Government Employees Association, the state’s largest public-sector labor union. HGEA did not respond to a request for comment. 

As for the experience requirement, Nakagawa said he wants the city to lower it. 

“We can teach the job,” he said. 

The 2005 audit noted that the commission had asked the Honolulu Department of Human Resources to adjust the job classifications, but HR didn’t pursue the matter after the commission “failed to respond to follow-up questions.”  

“I can’t go into detail but we are working with HR, who are being very responsive,” he said.

In an emailed statement, Carolee Kubo, director of the city’s Department of Human Resources, said the department “is committed to filling Civil Service positions in accordance with merit principles. Our requirements are carefully crafted to ensure qualified applicants are hired through a fair and impartial process. We have scheduled a meeting to analyze several potential solutions to issues surrounding the hiring of quality employees for the Honolulu Liquor Commission.”

Retaining workers is another issue, Nakagawa said. Some employees take their investigative training to the police department, law school or other higher-paying agencies. With an unemployment rate among the lowest in the nation, Hawaii workers have options, he said. 

“The hours tend to be tough on family life for people with children,” he added. 

Quality Over Quantity

Despite the understaffing, Nakagawa said commission investigators are doing good work. 

Over the past five years, the total number of inspections decreased by 27% as a result of staffing and retention issues, according to documents provided by the city auditor. 

But the number of inspections per worker has remained stable and public complaints were down in fiscal year 2018. 

The agency told the auditor that more detailed inspections are resulting in a higher number of violations. Investigators are taking “preemptive measures to mitigate complaints before they happen,” the audit report states. 

“Now they’re talking, engaging, introducing themselves, making contact with management, seeing if they can do anything to be of service to them,” he said. 

Liquor commission investigators initiated 50 criminal cases last year, according to Nakagawa, an increase of less than 10 from the previous year. The Corporation Counsel’s office has also cleared a backlog of cases and has increased the cases that are adjudicated 44% over the prior year, documents from the city auditor show. 

Still, more investigators are needed. They have a vital role in ensuring businesses don’t serve alcohol to minors – the most common offense – or over serve adults who are past their limit and becoming belligerent. They’re also on the front lines of identifying and reporting sex trafficking, Nakagawa said.  

“If we put more people out and issue more citations, people start to behave,” he said. 

Nakagawa said the commission is looking for people with a strong moral compass, strong ethics, honesty and hardworking.

“The last thing I want to do is have somebody in the news,” he said.

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