Ted Liu, director of the Department of Business, Economic Development and Tourism, took responsibility for errors in giving management of a $10 million investment fund to a company that was rated third-best.

But he denied showing any favoritism or taking inappropriate actions.

The hydrogen energy investment fund was created by lawmakers in 2006 to finance companies developing clean-burning hydrogen fuel from renewable sources in Hawaii.

"We're all human beings. We all make mistakes," Liu told a Senate investigative committee under oath. "None of the mistakes made were the result of malfeasance."

Liu overruled his own committee's evaluation that Kolohala Holdings LLP was the most qualified company to receive the contract, worth up to $385,000, which was instead given to H2 Energy LLC in August.

That decision was later reversed after the State Procurement Office determined that the contract should have been won by the most qualified company, which was Kolohala.

Liu said the companies were closely rated, and he used his authority to break the tie by giving the contract to H2 Energy because it more closely fit with the state's strategic goals.

Senators said in the hearing they weren't convinced Liu's errors were accidental.

"A lot of the information we're getting seems to be inconsistent," said committee chairwoman Sen. Donna Mercado Kim, D-Kalihi Valley-Halawa. "The point is it might have been a calculated error on somebody's part."

Liu acknowledged two mistakes: claiming authority to award the contract to a lower-ranked bidder, and failing to properly file his justification memo that revealed his reasons for choosing H2 Energy over Kolohala.

The Senate investigative committee has been reviewing the case since September.

Senators point to e-mails sent to and from Liu in 2006 that indicate he intended from the start to award the contract to the company that eventually became H2 Energy.

The five-member committee _ made up of four Democrats and one Republican _ wants to discover why the contract wasn't given to the best bidder and whether Liu engaged in a sweetheart deal with H2 Energy.

Liu was appointed by Republican Gov. Linda Lingle, and his attorney said the combative hearings were unfair.

The Senate committee doesn't have the authority to sanction Liu directly, but its findings could lead to further investigations and legislative reforms.