A top executive with the Hawaiʻi Tourism Authority who was suspended for allegedly making derogatory remarks toward Native Hawaiians has filed a lawsuit against the agency, saying he’s being retaliated against after reporting procurement violations and other problems that are wasting millions of dollars.

Isaac Choy, a former longtime lawmaker who has been HTA’s vice president of finance and acting chief administrative officer, filed the whistleblower lawsuit Thursday in First Circuit Court on Oʻahu.

The complaint alleges he was wrongly suspended without pay in retaliation for reporting procurement violations committed by senior HTA officials, including acting chief executive Caroline Anderson.

Choy was removed from his posts in May after HTA officials said he’d made derogatory remarks toward Native Hawaiians and created a hostile work environment. Among the allegations was that he had used the term “dumb Hawaiian” during contract negotiations with the Council for Native Hawaiian Advancement. 

In a May 5 interview with Hawaiʻi News Now Choy acknowledged that he “could have said that.” Four days later, Choy received a letter from Anderson placing him on unpaid leave and barring him from HTA offices.

“Numerous times,” Anderson wrote, “you have made derogatory comments regarding the competency of Native Hawaiians to fulfill leadership and management positions within HTA because of their race.”

Choy denies the allegations in the lawsuit which says: “The reasons stated in Ms. Anderson’s May 9, 2025 letter were an obvious pretext, to silence Mr. Choy, and to retaliate against Mr. Choy for reporting numerous, serious violations of State laws, rules, regulations, and contracts, including the procurement violations by Ms. Anderson that Mr. Choy had reported.” 

Tourism Agency Is In Flux

The lawsuit is the latest turmoil at the state’s top tourism organization, which receives $63 million annually to market Hawaiʻi as a tourist destination and to manage popular “hot spots” for visitors and mitigate negative side effects of the industry on communities.

Over the last several years, HTA’s authority and funding have waned as what seemed like an unchecked growth of visitors to the islands had left residents increasingly dissatisfied. Lawmakers cut a direct pipeline of hotel tax money that once had gone to HTA without normal budget approvals. The Legislature also moved the once quasi-independent agency into the Department of Business, Economic Development and Tourism, reducing the HTA’s autonomy. 

HTA has sought to adapt by shifting its focus from primarily marketing to “destination management,” working to help mitigate the effects of tourism on the islands through a series of management plans for each island.

But a report by the Hawaiʻi State Auditor in April found that the changes hadn’t produced measurable results.

“We conclude that HTA’s destination management effort is largely a reshuffling of past and continuing programs, done without changes in policies and procedures, or proposed organizational adjustments,” the audit said. 

“What also didn’t change,” the audit added, “was HTA’s inability or disinterest in reporting on its own performance against its strategic plan goals.”

Lawsuit: Choy Reported Questionable Expenditures

Choy’s suit alleges numerous violations by HTA since he took over HTA’s finance post in April 2023.

That includes an accusation that surfaced at an HTA meeting in March involving then-HTA board chair Mufi Hannemann and his apparent use of the Hawaiʻi Convention Center to hold events for two nonprofit organizations he runs: the Hawaiʻi Lodging and Tourism Association and Pacific Century Fellows program.

State Auditor Les Kondo told HTA board members during the meeting that no fraud had been committed but he confirmed the organizations hadn’t paid to use the facility. Hannemann resigned as board chairman, although he remains on the board.

Choy’s lawsuit says it was his report to the HTA board that prompted Kondo’s investigation into Hannemann. The complaint cites Choy’s whistleblowing about Hannemann as one of the things that prompted Choy’s removal.

Hannemann declined to comment for this story. HTA also did not comment on the lawsuit.

Choy, a certified public accountant, outlines numerous additional HTA actions he alleges were improper – and which he says he reported to HTA management.

One issue involved Anderson and a contract with SMS Research & Marketing Service, a tourism research firm, the lawsuit said. 

According to the complaint, Choy’s staff reported to the state procurement office that Anderson, who was then an HTA program manager, “violated state procurement laws by failing to conduct a proper contract extension and then verbally extending the contract without going through the proper procurement process.” 

Hawaiʻi’s chief procurement officer, Bonnie Kahakui, could not be reached for comment.

Choy’s lawsuit says he uncovered that HTA was being charged $780,000 in interest expense for late payments made by HTA to the Hawaiʻi Visitors and Convention Bureau, which markets Hawaiʻi to North America. The HVCB is HTA’s largest single contractor.

Another alleged violation involved a marketing initiative targeting Los Angeles, a major market for Hawaiʻi tourism. According to the suit, “Choy investigated and reported to HTA senior management that was a procurement violation because the program activity spent approximately $1.5 million in state funds without a procurement or contract.” 

“The bottom line … they’re wasting $63 million a year.” 

HTA Vice President of Finance and Chief Administrative Officer Isaac Choy

In another instance, the suit says, Choy reported to HTA management questionable travel expenses that an HTA employee claimed when doing work for an HTA vendor. Yet another employee, the complaint says, was doing procurement work without training required by the procurement office, which “could have disqualified HTA from procuring State contracts.”

Hawaiʻi’s whistleblower protection law prohibits public employers from firing, threatening or discriminating against public employees who report violations of state laws, regulations or contracts. 

The suit alleges that Choy “was placed on administrative leave without pay, and faces subsequent unlawful adverse employment action, by HTA and its agents including Ms. Anderson in retaliation for investigating and reporting actual or suspected violations of State laws, rules, regulations, and contracts, including but not limited to those stated in this Complaint.”

In an interview, Choy said HTA is wasting taxpayer money through slipshod practices.

“The bottom line,” he said, “is, their spending, their procurement violations, their way of operating – they’re wasting $63 million a year.”