Engineer’s bribery scandal involves awarding of lucrative DHHL contract

HONOLULU (HawaiiNewsNow) - A federal bribery investigation involving a local engineer revolves around the awarding of a lucrative state Department of Hawaiian Home Lands contract, Hawaii News Now has learned.

Jim Lyon, owner of the Honolulu-based company Lyon Associates, pleaded guilty last week to conspiracy charges in the alleged bribery scheme. Multiple sources say the bribe helped land a $2.5 million DHHL engineering contract on Kauai.

“It’s a system-wide problem, and it’s government graft and corruption," said Mililani Trask, a native Hawaiian attorney and cultural activist. “It’s $240,000 for this incident, but how much was paid for other incidents?”

Sources say that Lyon’s firm was hired in 2010 to assess the safety of four dams that the DHHL owned in the Anahola area of Kauai. After the 2006 collapses of the Ka Loko Dam, reservoir owners were required to assess the safety of their dams.

In his guilty plea, Lyon admitted that he paid a total of $240,000 to the state workers to land the assessment deal.

Federal investigators did not identify the alleged recipients of the bribe, saying only that it happened between 2008 and 2012 and that one of the state workers was on the committee that awarded the contract.

Hawaii News Now requested a copy of the contract file and list of the members on the selection committee, but the DHHL did not make those records immediately available.

Randal Lee, who has prosecuted public corruption and financial crimes in the past, says the state agency didn’t do a good job of minding the store.

“The bottom line is, someone from above that person should be checking. There should be some checks and balances," said Lee, an assistant professor of criminal justice at Hawaii Pacific University. “The public loses out because it’s public funds that’s being stolen.”

The federal investigation is ongoing.