Timothy Lee, a developer associated with Ala Moana, was indicted on Friday on nine felony counts for allegedly facilitating illegal campaign contributions to Honolulu mayoral candidates during the 2020 election. This situation marks an unusual instance where campaign finance violations could lead to prison penalties. Lee, who occupies the position of CEO at JL Capital—firm behind the Sky Ala Moana high-rise—was apprehended on Monday and subsequently released after paying a bail amount of $250,000. He is scheduled for arraignment on February 18.
The accusations against Lee evoke memories of previous campaign finance scandals, particularly from the early 2000s when it was not uncommon for executives from various firms to face felony charges related to money laundering for Hawaiian politicians. At that time, many individuals evaded jail sentences and instead paid substantial fines. Over the past decade, however, the cases handed over to prosecutors by the state’s Campaign Spending Commission, which regulates election finances in Hawai?i, have primarily resulted in fines or no criminal charges being charged at all.
Lee is confronting a potential sentence of up to five years in prison for each felony count. Attempts to reach Lee and his company for remarks were unsuccessful.
Attorney General Anne Lopez emphasized the importance of campaign contribution laws in maintaining the integrity of the electoral process in a press release. She assured that her office would conduct thorough investigations and pursue charges against those who infringe upon these laws.
In a previous case concerning unlawful donations made by a lawyer to a Kaua?i mayoral candidate, the Attorney General’s office opted not to proceed due to insufficient evidence. When questioned about the infrequency of campaign finance cases in recent years, the office remained tight-lipped but lauded the efforts of deputy attorneys general and the new anti-corruption unit formed in 2022 for their role in bringing the Lee case to a grand jury for indictment.
The charges against Lee originated from donations made by JL Capital employees to mayoral candidates Keith Amemiya and Kym Pine during March and April 2020. Amemiya received a total of $5,000, while Pine got $8,000. Importantly, neither candidate has been accused of misconduct by authorities managing campaign finance.
According to the indictment, Lee later compensated employees with cash and checks for these donations, an action considered unlawful in Hawai?i, where there is a maximum donation limit of $4,000 per individual. Records indicate that Lee had already reached the maximum allowable contribution amount to both Amemiya and Pine when he allegedly solicited employees for additional donations.
The Campaign Spending Commission first became aware of the activities in question through a tip-off in October 2020 provided by an attorney representing a JL Capital employee engaged in a dispute with the company. This employee claimed that Lee had directed them to make donations to Amemiya and Pine’s campaigns. During a 2022 hearing, Lee’s attorney countered allegations made during the state’s investigation, but later acknowledged that Lee had reimbursed employees for their donations, a practice that contravenes Hawai?i laws.
As part of his bail conditions, Lee has been prohibited from contacting two employees involved in the case and must surrender any firearms and his passport upon arraignment. As of January 2, he is still registered as the manager and agent of JL Ala Moana LLC. However, the company’s website, which previously showcased its executive team and property portfolio in the Ala Moana area, has become non-operational, showing only a black screen with the firm’s name.
The indictment comes amidst renewed scrutiny concerning campaign finance contributions. Randal Lee, a retired judge and former prosecutor, previously oversaw investigations into fraudulent donations in the early 2000s. He noted the decreasing prevalence of such cases, as investigative outcomes have revealed methods for hiding donations. Problems concerning campaign finance law further complicated matters for prosecutors, as they depended on the commission for referrals—an entity that historically has faced staffing shortages.
After two former legislators were implicated in bribery in 2022, legislative changes were implemented, empowering prosecutors to independently handle campaign finance cases. Moreover, a dedicated anti-corruption unit was established within the Attorney General’s Office the same year. Randal Lee commented that robust enforcement is vital to ensure compliance with campaign spending regulations, stressing that punitive measures are essential to deter violations.
Gary Kam, general counsel for the Campaign Spending Commission, acknowledged that their staff often focus primarily on ensuring timely submission of spending reports, which may hinder their ability to investigate potential bundled donations. He emphasized that more personnel could enhance the commission’s capabilities in monitoring these practices. Currently, the commission is advancing proposed measures to increase its staffing levels, as it presently operates with only five staff members and has no investigators, while being responsible for overseeing nearly $10 million in contributions set for 2024.
