Two Honolulu City Council members are pushing to reform the Honolulu Liquor Commission amid a recent rash of complaints against the agency and its investigators, including criticisms that the commission abused its power when enforcing emergency Covid-19 restrictions during the pandemic.

Council members Esther Kiaaina and Tommy Waters, who serves as the influential City Council chair, sponsored the measure. It calls on Mayor Rick Blangiardi’s administration to impose numerous changes at the commission in order to create greater transparency and accountability.

Included in the recommended changes is one to establish an ombudsman or an internal affairs unit to investigate complaints by bar and restaurant owners against commission personnel. The resolution also asks the mayor and liquor commission to report within 60 days of the resolution’s passage what they’re doing to implement the request for the ombudsman or internal affairs unit.

Establishments with a liquor license in Hawaii started selling alcohol to go for the first time in April 2020 when the COVID-19 pandemic forced these businesses to shut down their dining rooms and bars. nickster 2000/flickr.com

Another item requests that the mayor disapprove any rule that could allow the commission to shut down a bar or restaurant for 24 hours based merely on an allegation of wrongdoing without a hearing.

The measure also asks the commission to implement numerous recommendations made years ago by the Honolulu City Auditor, which the resolution says the commission has failed to adopt.

Kiaaina noted that the latest complaints against the commission come after a decades-long history of documented malfeasance and alleged abuses by the commission.

“Over the last two decades the Honolulu Liquor Commission has faced allegations and experienced convictions for corruption and other inappropriate behavior,” she said in a written statement. “I introduced Resolution 22-207 after the most recent complaints, which not only alleged staff threats to shut down businesses without sufficient cause, but also concerns about unlawful discrimination and retaliation against LGBTQ+ businesses.”

She described the current members of the commission as “hardworking and committed” and said she looked forward to rebuilding the public’s trust in the commission.

Honolulu City Council member Esther Kiaaina speaks during a press conference fronting Yakitori Hachibei on outside dining.
Honolulu City Council member Esther Kiaaina said she introduced the bill to reform the Honolulu Liquor Commission amidst a flurry of complaints. Cory Lum/Civil Beat/2022

“A trusted Liquor Commission is critical to protect the public’s health and safety, and the fair regulation of an industry that plays an important role in the City’s economic well-being and recovery,” she said.

In a statement, the commission’s acting administrator, Anna Hirai, said commission administrators haven’t discussed the resolution with the board of commissioners who oversee the agency. She said administrators plan to do so as soon as possible.

“That said, we note that some of the proposed changes have been evaluated in the past and not adopted for a variety of reasons, and also some of the proposed changes appear to be taken from the 2005 audit and have been pursued to the extent we were able,” she said.

Robbie Baldwin is one of the most prominent and persistent bar owners alleging recent abuse by the commission.

The co-owner of Scarlet Honolulu, an LGBTQ+ bar located downtown, Baldwin has sued the liquor commission in federal court in Honolulu, alleging, among other things, that the commission targeted Scarlet, harassing and assaulting employees because of the bar’s status as an LGBTQ+ establishment.

Baldwin called the resolution a good first step.

“I’m happy to hear that the City Council is taking this seriously and is taking steps to correct these actions by the liquor commission,” he said.

But Baldwin is seeking more change.

In a proposed settlement document submitted this month as part of the litigation, Baldwin asked the city to take even more aggressive steps than the council is calling for. He has asked Honolulu Hale to transfer the commission’s investigatory and enforcement functions to the Honolulu Police Department, for example, and to remove any commission administrative rules not related to regulating alcohol.

City officials declined to comment on the lawsuit.

While the resolution focuses on solutions, the measure also explains why such change is necessary. In a three-page preamble, the document first lays out the commission’s “exceptionally broad” powers and its importance as a regulator of a major economic engine on an island that relies on tourism.

Scarlet Honolulu owner Robbie Baldwin.
Robbie Baldwin, co-owner of Scarlet Honolulu, has been the bar industry’s most vocal critic of the liquor commission. Cory Lum/Civil Beat/2022

“Given the significant revenue that Honolulu’s restaurants, bars, and other establishments serving liquors for Honolulu’s economy and the number of employees that Honolulu’s restaurants employ, a properly functioning Commission is essential for public health and safety, as well as the fair regulation of an industry that is critical to the City’s economy,” the resolution states.

It then goes on to describe a 20-year-long series of abuses, including negative media coverage and allegations of corrupt and unethical behavior.

“From 2002 through 2021, a number of Commission employees were indicted and prosecuted for bribery, extortion, and other serious crimes, and the Commission has been the subject of civil lawsuits alleging federal civil rights violations and discrimination, among other things,” the resolution notes.

And when the City Council has stepped in to audit the commission, the commission often has failed to implement audit recommendations, the resolution says.

Meanwhile, the resolution says, council members have continued to receive calls from bar owners “alleging that employees and Commissioners have abused their authority by investigating, limiting, or shutting down licensed businesses without sufficient cause.”

Commission Sought To Maintain Power As Pandemic Ended

Hirai declined an interview request for this article. But in a previous interview with Civil Beat, she acknowledged the pandemic was hard for bar and restaurant owners, as well as the commission’s inspectors in charge of enforcing a series of directives issued by Gov. David Ige, Blangiardi and his predecessor, former Honolulu Mayor Kirk Caldwell.

Rules governing drinking spots were frequently changing during the pandemic and were new and complicated, concerning social distancing, masks, vaccines and testing. Adding further confusion, bars without kitchens were treated differently under the rules than bars with kitchens.

Liquor Commission inspectors were allowed to shut down establishments for 24 hours upon finding a violation of a Covid-19 restriction.

The resolution notes that against the backdrop of corruption and audit recommendations that were not implemented, the commission sought to extend powers even after the pandemic ebbed.

In February, the commission proposed to expand the authority of its investigators in several ways. This included extending the commission’s power to shut down bars for 24 hours without a notice or hearing, the resolution says, even though Blangiardi had revoked the emergency orders for Honolulu months before, in November 2021.

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