Latest tourism agency allegations draw varied responses
GEORGE F. LEE / GLEE @STARADVERTISER.COM Visitors took in the sights Wednesday aboard an E Noa Tours double-decker bus on Royal Hawaiian Avenue in Waikiki.
It is unclear how the Hawai 'i Tourism Authority board will deal with concerns over late payments to contractors and state probes to determine whether the agency committed procurement or ethics violations.
But some of those at the center of the allegations that surfaced Tuesday during an HTA Budget, Finance, and Convention Center Standing Committee say they were blindsided, and want the chance set the record straight before the full HTA board responds.
David Arakawa, BFCC chair, led discussions Tuesday during the BFCC committee meeting where it was revealed that the state Attorney Gen eral's Office is reviewing whether HTA must pay $780, 000 in interest for millions of dollars in late payments to the Hawai 'i Visitors and Convention Bureau.
During the meeting, James Kunane Tokioka, state Department of Business Economic Development and Tourism director and HTA board member, disclosed that another pending issue is a possible procurement violation for HTA in relation to a Los Angeles marketing activation executed by HVCB last fall as part of a Maui recovery plan.
Arakawa also brought up a potential ethics issue when he questioned why HVCB, the Council for Native Hawaiian Advancement's Kilohana and the Hawaii Lodging and Tourism Association were named as premier partners for the HTA's fall Hawai 'i Tourism Conference when they did not pay sponsorship fees.
Arakawa told the Honolulu Star-Advertiser that he anticipates that the next steps will include gathering more evidence. The BFCC committee will consider a full report before it votes on recommendations to bring to the full board, he said.
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Aaron J. Sala, HVCB president and CEO, said he was traveling to American Samoa during the Tuesday meeting and could not immediately respond to the Star-Advertiser's request for comment In an email Wednesday to the Star-Advertiser, Sala said HVCB is currently awaiting $9.5 million in payments from HTA for services rendered between October and March.
Sala said, 'The delayed payments have accumulated interest at the statutory rate of 9.75 % per annum as specified in the State Comptroller's Memorandum No. 2024-27 (2 December 2024 ) regarding late vendor payments.'
He also addressed the fall conference, saying, 'HVCB was a major contributor to this important industry event and was acknowledged as such, but at no point was HVCB asked to provide financial sponsorship for this event.'
Tom Mullen, HVCB chief operating officer, addressed the Los Angeles activation.
Mullen said HVCB carried out the $1.5 million promotional activation—targeting the critical Southern California market—at the request of HTA and with unanimous approval from the HTA board on July 25.
'HVCB updated our work plan to include this activation and increased our budget accordingly, with the understanding that reimbursement would come from our fiscal year 2026 allocation, ' Mullen said.
Mufi Hannemann, HLTA president and CEO, said he was unable to respond to the Star-Advertiser's request for comment Tuesday because he was traveling to American Samoa to meet Gov. Josh Green and others who are commemorating the 125th Flag Day celebration.
Hannemann, who is still on the HTA board, stepped down as board chair in March when earlier allegations of Hawai 'i Convention Center discounts surfaced in relation to HLTA and Pacific Century Fellows, which he founded.
Current HTA board Chair Todd Apo told the HTA Administrative and Audit Standing Committee on April 7 that he did not 'see an abuse of discretion ' regarding center discounts received by the two nonprofits, and recommended putting the matter 'to bed.'
On Wednesday, Hanne-mann addressed the new potential ethics concerns that Arakawa raised about HLTA's status as a premier conference partner in an email to the Star-Advertiser.
'To clarify, the official Hawai 'i Tourism Conference identified these three organizations as 'partners'—not sponsors, it is even listed as such on their website, ' Hannemann said. 'This designation reflected a collaborative effort to support and elevate the conference, not a financial sponsorship.'
Hannemann said HLTA played a pivotal role in securing the participation of federal speakers for the event, including Deputy Assistant Secretary for Travel and Tourism Alex Lasry and Bill Hornbuckle, MGM Resorts president and CEO, and chair of the national Travel and Tourism Advisory Board, which Hannemann sits on in his HLTA capacity.
'HLTA was an active member of the Hawai 'i Tourism Conference planning committee, attending weekly meetings and helping to organize several sessions such as the workforce development workshop, ' Hannemann said. 'We also assisted in marketing the conference and its sponsorship opportunities to our membership statewide.'
Hannemann noted that HTA's conference website refers to HVCB, Kilohana and HLTA as premier conference partners and the other groups as sponsors.
But Arakawa said the sponsorship solicitation sheet refers to paying sponsors, whose contributions ranged from $7, 500 to $2, 500, as partners. He said his inquiry started after the Hawai 'i Hotel Alliance asked how they could become premier conference partners.
Arakawa said HTA has not produced written criteria for how it chose its premier conference partners, whose logos were prominently displayed throughout the website and other conference materials.
'(The criteria ) is in writing for every other partner except for the three top guys, ' Arakawa said. 'You would think for the top people it would definitely be in writing unless they did not want any criteria that they could be held to or they didn't want anybody else to qualify for it.'
Caroline Anderson, interim HTA president and CEO, told the Star-Advertiser on Wednesday that her predecessor, Daniel Naho 'opi 'i, debuted the idea of asking HVCB, Kilohana and HLTA to serve as premier conference partners to expand HTA's reach and to assist with conference planning and programming.
'I know for sure there was no outside pressure to influence that decision, ' she said. 'I felt it was a benefit. We definitely saw our attendance grow from 2023, when it was about 500, to over 600 in 2024. I believe the (premier conference partner ) sessions were well attended. From the comments that I heard, those sessions were really well put together.'
Lee-Ann Choy, principal of Pacific Rim Concepts LLC, the HTA contractor that put on the conference, said the premier conference partners encouraged members to attend, and as a result increased exhibitors, who paid $150 to participate in the Tourism Expo.
'I saw many new businesses that I had not seen before, ' she said.
HTA board member Stephanie Iona opined that the BFCC meeting shared incorrect information based on her checks of the fall Hawai 'i Tourism Conference website, flyers, discussions with Anderson and her own past experience in event planning.
'As a member of the (BFCC ) committee, I was taken aback by this issue being discussed with no advance information, or I would have done my due diligence to help my colleagues on the committee to be responsible in reporting accurate information to the public, ' Iona said. 'To embarrass any of our valued partners in this manner is not pono, and I am heart broken that this behavior caused them any embarrassment, especially when they are so essential to our success in tourism.'
Apo, who was out of town Tuesday, told the Star-Advertiser on Wednesday that he needs a better understanding of the latest issues before determining his next steps as HTA board chair.
'I need to understand the allegations and the history more to determine how we best look at the issues that got raised at the committee meeting yesterday, ' Apo said. 'There is the potential of internal efforts, (state Attorney General's Office )
efforts, (state ) Ethics Commissions efforts, and I just don't know enough about where any of those are. I'm going to work to understand that and to put them in their right places to make sure that we take a really strong look at the situation and get to a resolution in a timely manner.'
The State Ethics Commission told the Star-Advertiser on Tuesday that investigations are confidential, and it cannot comment if an investigation has been opened.
Toni Schwartz, spokesperson for the state Department of the Attorney General, told the Star-Advertiser on Thursday that 'The Department of the Attorney General cannot share legal opinions or advice given to clients.'
Apo said that he has had discussions with board members about the need to bifurcate 'looking at and dealing with past issues ' and 'the focus on moving forward.'
'We need to make sure that cleaning up the past doesn't impact our ability to move forward in the way that we need to for the industry, ' he said.
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