Billy Kenoi gets a what??

[kalakoa]

potential to lead to some hefty fines for ethics violations

Only if Kenoi is investigated while in office -- the ethics committee will not sanction any "former" employee. (Brilliant system, you just have to stall the investigation until your term expires or you quit.)

wonder if his actions could become a disbarment issue?

Even if this does stick, Kenoi can always pass the bar elsewhere and remain a "consultant".

lifestyle of choice on his $130,000 salary

Note that the median income for this county is around $46K, and that many get by with less...

I would imagine that the IRS would be quite interested

IRS simply doesn't have the budget to actually investigate much. Call them if you don't believe this.