Maui County is asking the court to dismiss a lawsuit filed by Mayor Richard Bissen’s former chief of staff Leo Caires, who alleges he was wrongfully terminated for sounding the alarm on fraudulent activity. 

In a response filed Thursday afternoon in Maui’s 2nd Circuit Court, the county denied much of Caires’ lawsuit and asked that it be dismissed with prejudice, which would prevent the claims from being filed again.

If the lawsuit isn’t settled or dismissed, the county and Caires could be headed to trial around the same time as Bissen prepares to defend his seat in the Aug. 8 primary election in less than two months. 

“I am confident that the evidence will completely refute these claims, and I welcome the opportunity to present the full record in court,” Bissen, a former judge, said in a statement to the Hawai‘i Journalism Initiative on Thursday.

Joseph Rosenbaum, Caires’ attorney, said that the county’s request to dismiss the lawsuit was “not unusual.”

“It’s nothing of concern to the plaintiff,” he told the Hawai‘i Journalism Initiative on Friday.

The county’s response to the claims came just days after a Maui County Council committee backed a resolution that would require all settlement offers in the lawsuit to be sent to the council for review and approval.

That’s already required under county law, but the council proposed the measure after learning through the Hawai‘i Journalism Initiative’s reporting that the county had rejected Caires’ earlier demands.

“We were never notified about anything,” Council Member Kauanoe Batangan said Monday. 

The county has been gearing up for a potential lawsuit from Caires over the past year. In June 2025, the council approved $350,000 to hire Marr Jones & Wang LLP to represent the county against allegations made by Caires, who served as Bissen’s chief of staff from January 2023 to January 2025 and was someone the mayor considered a friend.

On April 24, Caires filed a lawsuit claiming he was fired in retaliation for reporting questionable financial activities by other county employees in violation of the Hawaiʻi Whistleblowers’ Protection Act. Bissen has criticized the timing as politically motivated as he seeks reelection. 

Caires has alleged that in March 2024, he came across a suspicious Aug. 16, 2023 invoice for $45,532.32 from a company called RTFEX Depot. He said he couldn’t verify the existence of the company and believed that an executive assistant of Bissen’s known as “MA,” or “Pono,” and an Office of Economic Development grant recipient known as “AVS” had “likely submitted false cashiers’ checks made out to a fake company” to the Office of Economic Development for reimbursement.

Neither the county nor Rosenbaum has publicly confirmed the identity of MA or AVS in the lawsuit.

Caires said he told the Department of Corporation Counsel that he believed AVS and MA had committed fraud and gave Bissen notice that he planned to investigate MA. He alleged that as his investigation progressed, Bissen got upset and ordered him to stop. MA eventually resigned. 

The lawsuit also claims that Caires discovered that the Office of Economic Development director at the time, Luana Mahi, “appeared to be inappropriately using her position” to benefit family members with grant funding.

Mahi was placed on paid leave in August 2024 pending an investigation. She was later fired Jan. 6, 2025, and the case is now with the state Attorney General’s Office, according to county spokesperson Laksmi Abraham.

When asked for an update, Department of the Attorney General spokesperson Toni Schwartz said Wednesday that the agency “will not make statements on the existence or status of specific investigations or about possible pending cases.”

Caires says his duties as chief of staff were steadily reduced after he reported the investigation of MA and that he was demoted to energy commissioner around October 2024 before ultimately receiving a letter of termination from Bissen in December 2024. 

In its response, the county denied most of Caires’ allegations. It confirmed his communication with the Department of Corporation Counsel regarding the Office of Economic Development and with the mayor regarding MA in March 2024, but it provided no specific details of those conversations.

The county denied that Bissen ordered Caires to stop investigating MA. The county also denied Caires’ claims that he recommended MA be fired but that Bissen instead said to reassign MA. 

Many of Caires’ other allegations also were disputed by the county, including his claim that he suggested that the Office of Economic Development freeze all payments to grantees until investigations could confirm their legitimacy and that he refused to sign an invoice until he could determine if there was a conflict of interest.

As for Caires’ belief that MA and AVS had likely submitted false cashiers’ checks, the county said it didn’t have “sufficient information or knowledge to form a belief as to the truth of the allegations concerning what Plaintiff concluded or believed.”

It also said it didn’t have enough information about several other allegations and thus denies them, including Caires’ accounts of his discovery of the invoice and his attempts to verify that RTFEX Depot was a real company, his conversations with MA who claimed he’d received the equipment he purchased from RTFEX Depot from a third party in the parking lot of Target in Kahului, and his interactions with Mahi and other officials in the Bissen administration. 

The county did confirm some of Caires’ allegations, including his claim that on or about March 19, 2024, he drafted a notice of interview regarding internal workplace investigation for MA with the help of Corporation Counsel; that MA failed to show up to a scheduled meeting with Caires on or about April 26, 2024; and that the Board of Ethics found a conflict of interest between Mahi and at least one grant given by the Office of Economic Development.

Bissen issued a press release on Aug. 22, 2024 announcing the Finance Department would conduct an internal audit of Office of Economic Development grants. 

But the county pushed back on Caires’ allegations that he was demoted and fired in retaliation. The county says he was reassigned to energy commissioner “due to his performance” and that he failed to oversee the negotiation and implementation of a contract between the county and Johnson Controls, a company that says it specializes in “thermal management, mission-critical building systems, energy efficiency, and decarbonization.” The county did not specify what the contract was for.

It confirmed that Caires received a termination letter on Dec. 18, 2024, and that the lawsuit quotes the letter correctly, but denied other allegations from Caires, who said he had just returned from approved medical leave on Dec. 23, 2024. 

A fraud risk assessment report that was released in February and raised concerns over the county’s existing anti-fraud measures was unrelated to Caires’ actions and termination, the county also said. 

“Mr. Caires’ complaint is built on false allegations and a distorted account of the facts,” Bissen said. “Mr. Caires has portrayed himself as a whistleblower, but there was no whistle to blow.”

Rosenbaum responded: “We disagree.”

“The facts in the lawsuit speak for themselves,” he said. “Clearly there’s whistleblowing. Clearly there was retaliation.”

Richard Rand, who was hired as special counsel for the county, told the council’s Government Relations, Ethics and Transparency Committee on Monday that there was an internal investigation of the Office of Economic Development, but “that got truncated because that person resigned.” He said the investigation had been conducted by the director of finance.

Abraham said the person who resigned was MA. She said an audit was initiated by the Department of Finance but could not comment on the timeline “due to pending investigation.”

The department has undergone a lot of turnover in recent years. Former Finance Director Scott Teruya was fired with no explanation in April 2024. Maria Zielinski took over as director for a few months before Marcy Martin eventually assumed the role in June 2024. Abraham said she couldn’t comment about why Teruya was fired.

Maui County Council Chair Alice Lee had concerns about the Department of Finance’s involvement.

“We need reports and investigations done by independent parties, not people who work for the mayor,” Lee said.

She also expressed frustration that the issues hadn’t been resolved sooner. 

“This has been languishing for a very long time,” Lee said. “It could have been resolved a couple of years ago. So we need to get to the root causes of all the issues and all the causes of this case not being resolved.”

Rand pointed out that the lawsuit hadn’t been filed until April of this year and then wasn’t served for two months, “so it’s been kind of a slow roll.”

“The complaint is very dramatic, is probably the best term I could use for it,” Rand said. “There’s a lot of characterization of things.”

Rosenbaum declined to respond to Rand’s comments.

In response to Lee’s question about whether the prosecuting attorney was involved in the case, Rand said, “there is a ongoing possible effort by his office, too.”

Prosecuting Attorney Andrew Martin told the Hawai‘i Journalism Initiative Thursday that he typically does not confirm or deny the existence of investigations or comment on them in an effort to “protect the integrity” of any investigations. He pointed out that there is a difference between the criminal investigations that his office handles and employment-related investigations or audits that are handled by other county departments.

“I cannot comment and have not been involved in any internal investigations related to anything involving OED with respect to any audits or anything else,” Martin said. “My job as the prosecutor and my charge under the charter is to investigate and prosecute criminal conduct, and that’s it.”

He added that he was not involved in Teruya’s termination and could not comment on it.

Some Maui County Council members felt they hadn’t been properly updated about the lawsuit and only learned through a May 2 Hawai‘i Journalism Initiative article that Bissen said the county had “firmly rejected” an “excessive monetary demand for settlement” in April 2025. The county declined to provide a dollar amount.

HJI also reported that Mahi had been fired and that the investigation had been sent to the attorney general.

The resolution proposed by Batangan cited the story and complained that the council “played no role in considering the settlement offer” and “had not been informed of the investigation.” 

The council committee voted 6-0 to pass the resolution that would require all settlement offers be sent to the council and all invoices be sent to Office of Council Services attorneys, rather than to Corporation Counsel. It now heads to the full council.

“We find ourselves in a situation where special counsel handling this matter reports to individuals who have conflicts of interest with this case,” Batangan said. “It is our duty … to scrutinize the setup and evaluate how we can best ensure transparency and accountability.”

Abraham said that because the lawsuit had not yet been filed in April 2025, Caires’ demands were not an official settlement offer.

“At the time Mayor Bissen received the settlement demand initially, no lawsuit had been filed, and his statement that the ‘demand was firmly rejected’ reflected his personal opinion regarding the demand,” Abraham said. “Mayor Bissen fully understands that once a lawsuit is filed, all settlement offers must be transmitted to the County Council for its consideration, and he fully supports and follows that established protocol.”

As for the next steps, Abraham said that several procedural meetings will follow, and that a trial date could be established in the next 60 to 90 days. 

“If they try to negotiate anything in the interim, all of that needs to be brought to the attention of the council,” Abraham said.

When asked if Caires was interested in settling, Rosenbaum responded, “I can’t speak to that.” He said the timeline would depend on when the court schedules the trial-setting status conference, which would “likely” happen before the primary election, but it was “hard for me to say” for sure.