The Honolulu Liquor Commission administrator is on the hot seat after misappropriating client money in his prior career as a lawyer, voluntarily surrendering his law license, and not disclosing any of it to the liquor board. The board he reports to never realized any of it was happening despite public record, and even garnishment of his city wages. KHON2 asked how could this happen, and what will be done about it. (Update: Within a half hour of KHON2′s story airing, liquor administrator Greg Nishioka was placed on paid leave. Anna Hirai has been appointed acting administrator.)
When we told the commissioners, which oversee the administrator, about Greg Nishioka’s recent bar resignation after 47 violations of conduct, they said they were shocked and had never been told such a case was even going on.
Nishioka, a longtime Honolulu attorney, took on the job of Honolulu Liquor Commission administrator in early 2011. That’s just as he was facing accusations and then a lawsuit from a former estate trust client who was awarded back more than $60,000 the court said Nishioka shouldn’t have taken.
"My client was financially abused by Mr. Nishioka in the course of his representation," Yuklin Aluli told KHON2. Aluli represented the client who accused Nishioka of misconduct in their estate trust case.
The Office of Disciplinary Council also investigated Nishioka, and he admitted to dozens of violations including deceitful conduct and misappropriating client funds. He gave up his law license this month in a "Resignation in Lieu of Discipline" to the Hawaii Supreme Court.
Commission Chairman Michael Yamaguchi said, "The commissioners will discuss this matter and consider what investigative and/or administrative actions are to be taken."
They’re not the only ones caught off guard — same at city hall, where the commissioners answer to the mayor and city council. Here’s the reaction when we told them:
"Well I think first of I can say I’m very surprised, and of course disappointed," said Honolulu City Council Chairman Ernie Martin. "If it was not disclosed, it does warrant some consideration as to whether he’s fit for service."
We found Nishioka did not disclose it, not when applying for the job, not when the voluntary disbarment happened this month.
"Given the fact that he had this ethical problem in the past and most importantly that he did not reveal it, I think raises questions for me on whether or not he should continue in that position," said Councilmember Ron Menor, chair of the Executive Matters and Legal Affairs committee. "My biggest concern about the current administrator is the fact that not only did he have this ethical issue or problem in his background but his failure to disclose these things raises questions about his credibility and his fitness to serve in that very important position."
We brought those concerns up to Nishioka who told us: "It’s two different situations. The way we run our agency, we are always working together, no one person can make a unilateral decision. Consultation is always done before any decision is made. There are many checks and balances."
As to his handling of commission finances, Nishioka said, "I have nothing to do with the fees or fines collected. We have people who take care of the money side. I get reports and work on the budgetary aspect."
The commission has seen a revolving door of administrators in recent years and no small share of past problems.
"The commission itself has taken a lot of hits," Martin said. "Tey already have two black eyes, so to speak, and there’s not third eye so, I’m sure for their part it’s very concerning, if not embarrassing for them. That level of integrity, the bar is much higher for them than any other agency within public service."
Nishioka said his conduct at Liquor has been unaffected, adding "I am trying to move the liquor agency in the right direction and I think the ship is on the right track."
"The day-to-day operations of the Honolulu Liquor Commission continue as the Commission effectively and fairly administers and enforces Hawaii’s liquor laws," Yamaguchi said.
But those reassurance won’t be enough.
"I’m hoping that the commission on its own will request some level supervisory audit or management audit to ensure that there are no violations," Martin said. "I’m sure there is some level of skepticism now because of these allegations. If this commission doesn’t do it on its own accord, which I presume they will, the council can also move forward with legislative resolution asking for an audit."
The commissioners didn’t even know Nishioka’s city wages have been being garnished to pay back the client victim, a debt still years away from being paid off. The client’s attorney says she’s baffled it wasn’t found in the course of commission due diligence.
"We filed suit and obtained a judgment two years ago," Aluli said. "This judgment was being paid through a garnishment on Mr. Nishioka’s paycheck from the City. The judgment was recorded and the case is on the Judiciary website."
But despite the trauma they say Nishioka put the law client through, they hope he is not fired.
"I hope that Mr. Nishioka does not lose his employment at the Liquor Commission because that would be the end of repayment of his debt to my client," Aluli said. "We do have the Hawaii Lawyers Fund for Client Protection as a last resort, but it would not necessarily make my client whole."
Liquor administrators are not required to have a legal background nor to hold a license to practice law. Nishioka told KHON2 that at this time he does not intend to seek reinstatement to the bar after the five-year ban period expires in 2018.
See the original article at: KHON2 Local News
