Honolulu executive charged with paying $240,000 bribe to state official to gain big contract

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The owner of a local civil engineering company who is also a member of the Honolulu Zoning Board of Appeals is scheduled to admit in U.S. District Court next week that he bribed government officials of the Federated States of Micronesia and a state of Hawaii agency to secure contracts worth millions for his company.

Federal government lawyers from Washington, D.C., filed court papers Wednesday charging Frank James Lyon of Lyon Associates Inc. with conspiring to bribe an agent of an organization that receives federal money. U.S. Department of Justice Criminal Division lawyers are handling the case because U.S. Attorney for the District of Hawaii Kenji Price recused his office.

Lyon is expected to admit that he paid approximately $200,000 in bribes between 2006 and 2016 to obtain FSM contracts worth $7.8 million. The bribes included cash, travel expenses to Las Vegas for an FSM official and the official’s wife, a car and truck for the official, sending the truck to Pohnpei and paying the University of Hawaii tuition for the official’s relative. Lyon also allegedly paid for the apartment of another FSM official.

The papers do not name the FSM officials. They say one administered FSM’s aviation programs, including the management of its airports, at the FSM Department of Transportation, Communications and Infrastructure. The papers describe the other as a member of the FSM Congress who served on the congressional committee that oversaw Lyon Associates’ FSM contracts.

Lyon is also expected to admit that he paid cash bribes of at least $240,000 to a co-conspirator, who was a state agency employee, to secure a $2.5 million contract. The money was supposed to be shared with certain state agency officials who, in 2012, awarded the contract to Lyon Associates.

The papers say Lyon had three unnamed co-conspirators: the state agency employee, another who is a U.S. citizen but lived in FSM and a third, who along with Lyon, controlled Lyon Associates. The papers did not identify the $2.5 million contract.

Lyon did not respond to a request for comment. He is scheduled to plead guilty Tuesday.

Mayor Kirk Caldwell appointed Lyon to the Zoning Board of Appeals in 2014. Board Chairman Lyle Ishida said he doesn’t know whether Lyon will serve until the end of his term in June. The board’s next meeting is scheduled for Thursday.