Kauai Mayor divests questioned donations after campaign finance scrutiny

Derek Kawakami has divested $15,000 in questioned campaign contributions tied to Milton Choy, Choy’s family members and employees of H2O Process Systems after public scrutiny over how the money was handled. The move puts fresh attention on Kauai’s campaign-finance rules and on whether Kawakami’s fundraising trail will face more review as he seeks higher office.

State campaign spending records showed the contributions to the Kauai mayor came from Choy, members of Choy’s family, or workers at his company, H2O Process Systems. Kawakami’s campaign acknowledged that he had not surrendered that money to the Hawaii Campaign Spending Commission the way many other candidates did, even though Hawaii sets a $4,000 per-person limit for a Kauai mayor candidate during the 2026 election period. That four-year period runs from November 9, 2022, through November 3, 2026.

The issue lands in the middle of a broader Hawaii campaign-finance crackdown already touching statewide politics. On July 9, 2026, the Campaign Spending Commission voted to refer alleged campaign-finance violations involving Lt. Gov. Sylvia Luke’s campaign to the Attorney General’s Office for possible prosecution. The commission’s action showed how aggressively state regulators are treating donation and disclosure problems this election cycle.

Kawakami is term-limited as Kauai mayor and cannot run for another term, which has pushed his political focus toward statewide office. He announced in March 2026 that he would challenge Luke for lieutenant governor, and his fundraising has drawn outside support. A political action committee backed by the Hawaii Regional Council of Carpenters has spent about $75,000 on television ads supporting him in that race.

His money operation has also been building for more than a year. In June 2025, his campaign had already assembled a war chest of more than a quarter-million dollars for a possible statewide run. Civil Beat reported that new campaign finance filings filed July 11 showed more than $3.7 million from more than 3,000 individual donors had flowed into Hawaii campaign coffers so far in 2026.

The controversy sits inside a crowded Kauai political landscape. County Council Chair Mel Rapozo and former councilmember Bernard Carvalho Jr. are both raising money for the next Kauai mayoral race, and February 2026 reporting showed Rapozo outpacing Carvalho in money raised and spent. For Kauai voters, the question now is not only who is raising money, but whether the money and the relationships behind it will face the same scrutiny as the campaigns themselves.