U.S. Rep. Kai Kahele told supporters Saturday Hawaii is not for sale.

Kahele delivered the populist, anti-corruption message in formally announcing his decision to leave the Hawaii congressional seat he’s held for less than two years and run for governor.

The 48-year-old promised he would not accept donations from corporations, unions or political action committees. Instead, he said he would only accept contributions of $100 or less and rely on public funding through the Hawaii Campaign Spending Commission.

“This is going to be a grassroots campaign by and for the people of Hawaii,” Kahele said.

In reality, Kahele, a Democrat, might not have much of a choice.

Rep Kai Kahele announces running for Hawaii Governor at the Hilo Boys and Girls Club gymnasium.
Hawaii Congressman Kai Kahele has a long history of accepting political contributions from the lobbyists, PACs and labor unions that he now says control state politics. Cory Lum/Civil Beat/2022

Kahele entered the governor’s race somewhat unexpectedly after telling voters he was a politician they could count on to represent them in Washington for the long term — unlike his predecessor Tulsi Gabbard, who all but abandoned Hawaii’s 2nd Congressional District while mounting a longshot campaign for president.

Lt. Gov. Josh Green, who many consider the frontrunner in the Democratic gubernatorial primary, already has a large fundraising advantage. Between July 1 and Dec. 31 Green raised more than $775,000, according to the Hawaii Campaign Spending Commission, and had more than $1.1 million in cash on hand.

Businesswoman and former Hawaii first lady Vicky Cayetano, who’s been openly campaigning for the governor’s post for months, reported total receipts of $825,000, much of it coming from a $350,000 loan she gave herself.

Former Honolulu Mayor Kirk Caldwell, another top candidate, has already dropped out of the contest, saying he’s struggled to raise money.

Lt Governor Josh Green speaks during Coronavirus COVID19 press conference. April 8, 2020
Lt. Gov. Josh Green appears to the frontrunner in the race to replace Gov. David Ige. Cory Lum/Civil Beat/2020

“It takes a lot of money to run a statewide race in a short period of time,” said Colin Moore, director of the Public Policy Center at the University of Hawaii. “The biggest question right now is how is Kahele going to get any money. The answer is he’ll need to use public financing because unless he has a tremendous list of donors who are waiting in the wings to write checks I don’t see any other options for him.”

Kahele had $456,000 in cash on hand in his congressional campaign account, according to his latest Federal Election Commission filings that run through March 31, but state law prohibits him from transferring those funds to his gubernatorial campaign account.

While he could reimburse his congressional backers and ask them to donate to his state campaign, many of those donors likely would not do so because their interests are rooted in federal policy.

Much of Kahele’s money came from the very special interests he now decries.

Federal records show Kahele has raised nearly $300,000 in the 2022 election cycle from political action committees representing a diverse range of interests, from big name defense contractors, such as General Dynamics and Lockheed Martin, to the Air Line Pilots Association union that he’s a part of and Hawaiian Airlines, who he still works for as a part time pilot.

Between Jan. 1 and March 31 alone, Kahele pulled in thousands of dollars in contributions from donors representing corporations and other large businesses, including the Pasha Group and Carnival Cruise Line. He also took money from lobbyists.

While in the state Senate he accepted donations from a major tobacco company, Outrigger Enterprises and some of the largest labor unions in the state, including the Hawaii carpenters union that has a reputation for flexing its political muscle in local campaigns, particularly through its associated super PACs.

Kahele counted lobbyists and business owners among his donors while in state office, including Dennis Mitsunaga, a well-known engineering consultant now caught up in a federal corruption investigation into former prosecutor Keith Kaneshiro, and Milton Choy, the head of a wastewater company at the center of a major bribery scandal that resulted in federal convictions this year for two Hawaii lawmakers.

As of Dec. 31, Kahele still had about $46,000 in his state campaign account.

The state’s public funding program that Kahele now wants to rely on is run through the Hawaii Campaign Spending Commission.

But there are a handful of hurdles and caveats candidates must abide by before they can accept the money, the first being that the candidate must pledge not to spend more than $2,081,165 during either the primary or general election.

While that allows for significant spending, the real challenge faced by gubernatorial candidates is the minimum requirement involving small-dollar donors.

In order to receive public funds, a candidate must raise a minimum of $100,000 from individual donors giving $100 or less. The Campaign Spending Commission will match those donations dollar for dollar up to $208,117 per election for a total of $416,234.

Tony Baldomero, who is the associate director of the Hawaii Campaign Spending Commission, said this threshold can be difficult for many candidates to attain.

“It takes a lot to collect that first $100,000,” Baldomero said. “The public funding program wants a candidate to show viability through the ability to raise small, grassroots donations.”

Vicky Cayetano speaks at a press conference held near Nuuanu Elementary School. Cayetano proposed her priorities of her campaign.
Former Hawaii First Lady Vicky Cayetano has loaned her campaign hundreds of thousands of dollars. Cory Lum/Civil Beat/2022

The last gubernatorial candidate to rely on public funding was Hawaii Gov. David Ige in 2014. At the time, Ige was a state senator mounting an underdog primary challenge against then-Gov. Neil Abercrombie, a former congressman with a war chest in the millions of dollars.

After Ige upset Abercrombie in the primary, he received just over $105,000 in public funding to help him in his race against Republican Duke Aiona, who he beat handily.

Baldomero pointed out that candidates relying on public funding aren’t precluded from taking money from other donors, including those tied to the business and political establishment.

“The program does have some limitations,” Baldomero said. “It does not eliminate special interest money. Candidates are still allowed to accept PAC money, corporate money and maximum contributions up to $6,000.”

Kahele announced he was running for governor at the Boys & Girls Club of the Big Island in Hilo, an organization he recently secured $1 million for via a congressional earmark. During a speech lasting more than 15 minutes Kahele did not explain his sudden decision to give up on Congress or take questions from the media.

In a text message to a Civil Beat reporter, Kahele said he will not resign from Congress while campaigning for governor. That allows him to continue to collect his $174,000 annual salary through the end of his term as well as use his federal office money for expenses.

For much of the year, Kahele has avoided Washington and instead been traveling the islands meeting with constituents and community groups while at the same time gauging interest in his gubernatorial campaign.

Moore said Kahele will have to be “extremely careful” if he continues to use his congressional funds to bounce around the state on official business so that he doesn’t run afoul of House ethics rules that prohibit using those dollars for campaign purposes.

Holding on to his seat will also likely open him up to attacks from his opponents, Moore said, not only about abandoning his work in Washington, but also for using his position as a U.S. representative to bolster his campaign under the guise of working for his district.

Resigning from Congress to run for a state office is not without precedent. In 2010, then-U.S. Rep. Neil Abercrombie gave up his seat in Congress to run for governor, which resulted in a special election that sent Republican Charles Djou to Washington.

A similar scenario would only further complicate matters for House Speaker Nancy Pelosi, who holds a slim Democratic majority and at times has struggled to maintain a united front with divisions within her own party.

Kahele has come under scrutiny for his near exclusive use of Covid-19 proxy voting procedures that allowed his colleagues to cast floor votes on his behalf while he remained in Hawaii. He returned to Washington for the first time since January last month in the wake of the fallout, and now faces an ethics complaint for his alleged abuse of the procedure.

“I’d be curious to hear what advice he’s getting from Washington because from what I understand he’s not in the Speaker’s good graces right now,” Moore said. “I’m sure he’s being cross pressured here.”

Although resignation might be the cleanest option, Moore said, he understands why Kahele might not want to give up his seat, especially if it can keep him in the headlines.

His predecessor, Tulsi Gabbard, did the same when running for president.

Civil Beat reporter Chad Blair contributed to this report.

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