Concerns over possible inappropriate use of Hawaiʻi Tourism Authority resources by two nonprofits led by HTA Chairman Mufi Hannemann have been turned over to the Attorney General’s Office and the Hawaiʻi State Ethics Commission for investigation.

HTA board members on Tuesday questioned Hannemann at length about the events hosted by HTA for Hannemann’s organizations.

Jimmy Tokioka, director of the state Department of Business, Economic Development and Tourism who’s also an HTA board member, said the ethics commission has already begun interviewing people as part of an inquiry into more than $14,000 in food and beverages provided for the two events.

State Auditor Les Kondo said the AG and the ethics commission were notified of the issues which surfaced in a recent audit.

The events are the Hawaiʻi Lodging and Tourism Association’s public safety conference at the Hawaiʻi Convention Center on Dec. 6, 2023, and a meeting of the Pacific Century Fellows in HTA’s offices at the convention center on May 15.

HTA documents show HLTA and Pacific Century were supposed to pay for breakfasts served at those events that cost more than $14,000, Tokioka said in an interview.

“Mufi said he paid it, but there’s no record that he paid it,” Tokioka said.

Hannemann was Honolulu mayor from 2005 to 2010, and is now president and CEO of the Hawaiʻi Lodging and Tourism Association, which advocates for the hotel and tourism industries. He is also founder of the Pacific Century Fellows program, which bills itself as “Hawai‘i’s landmark leadership training program.”

Hannemann told board members Tuesday that HTA was a co-sponsor of the 2023 public safety conference, “and we paid. We paid for the food that was served to us there.”

He also said he originally planned to hold the Pacific Century event in Waikīkī, but said former HTA interim President and CEO Daniel Nahoʻopiʻi suggested the group instead meet at the Hawaiʻi Convention Center because that would be easier.

“So, that’s what we did,” Hannemann told the board. The group spent several hours at the convention center listening to a briefing on tourism, and then left.

Nahoʻopiʻi confirmed the Pacific Century fellows came to the convention center at his invitation. He said in an interview after the meeting HTA frequently hosts those kinds of tourism-related meetings, including refreshments at no charge.

That includes gatherings of international dignitaries, supporters of cultural events and others, and Nahoʻopiʻi said HTA has hosted those meetings at the request of other board members. “This is not new, we do it often, and it’s budgeted,” he said.

The trigger for the HTA board discussion was an audit of HTA for fiscal year 2024, when Hannemann first became chairman of the state-funded tourism promotion agency.

Kondo said HTA’s vice president of finance, Isaac Choy, informed Kondo “of concerns he had of unlawful activity.” Those allegations involved “free complimentary use of the convention center facility,” which Choy believed violated the state ethics code, Kondo said.

Kondo then asked for documentation of those claims, and also requested a list of other organizations that used the convention center for free or at discounted rates from 2022 to the fall of 2024.

After reviewing that information and conducting interviews with HTA and convention center staff, “we determined there was no fraud,” Kondo said. However, “we determined that there were uses of the facility, including Mr. Hannemann’s organizations, that those organizations did not pay to use the facility.”

That was not consistent with HTA’s internal controls, and the list of those events in total amounted to “maybe a couple hundred thousand dollars of lost revenue,” he said. He noted that sum is a small fraction of HTA’s spending of $115 million last fiscal year, “but that doesn’t mean it’s not important.”

That issue resulted in a comment in the internal controls portion of the audit report, but Kondo also noted those issues were referred to the Hawaiʻi State Ethics Commission and the Attorney General’s Office.

“In terms of the financial audit, that is not our responsibility to assess whether or not there’s any violation of the state ethics code or any other laws,” Kondo said. “We’re looking at whether or not the financial statements of the organization, whether they’re presented fairly.”

The HTA board agreed to continue that discussion at its next meeting on Thursday morning.

Hawaiʻi State Ethics Commission Executive Director Robert Harris declined to comment on reports that the commission is investigating the issue, saying ethics investigations are confidential.