Four Mitsunaga & Associates executives indicted for allegedly conspiring with former Prosecuting Attorney Keith Kaneshiro to charge a former employee with four counts of felony theft in exchange for campaign contributions donated more than $830,000 to candidates for key state and county offices over a 10-year period.
Mitsunaga & Associates Inc., or MAI, since 2015 bid on and received more than $12.72 million in state contracts, including three statewide consulting agreements to perform engineering and other construction services on an as-needed basis.
Federal prosecutors from San Diego secured a June 2 indictment against Kaneshiro, 72, and Dennis Mitsunaga, 78, president and CEO of Mitsunaga & Associates and a prolific Hawaii political donor. Also indicted on charges of conspiracy to commit honest services fraud, federal program bribery and conspiracy to violate rights were Terri Ann Otani, 66, corporate secretary and office manager; Aaron Shunichi Fujii, 64, executive vice president and chief operating officer; and Chad Michael McDonald, 50, senior vice president.
All were released on $50,000 bonds with their trial scheduled for Aug. 16. Mitsunaga, through his attorney, declined to comment for this Honolulu Star-Advertiser story.
Mitsunaga and the other defendants are accused of orchestrating a felony theft prosecution of a former employee, Laurel Mau, who had sued the company after she was let go in November 2011. The defendants allegedly contested Mau’s attempts to secure state unemployment benefits, but a year later a Circuit Court judge ruled Mau was eligible to receive the payments.
In an August 2012 lawsuit, Mau accused MAI of violating the Civil Rights Act of 1964 and Age Discrimination in Employment Act of 1967. In October 2012, Mitsunaga met with Kaneshiro, whom he supported politically, “to attempt to persuade Kaneshiro to investigate and prosecute” Mau for allegedly working “side jobs” while on company time, according to the indictment.
Following the meeting, Mitsunaga, Otani, Fujii, McDonald and other Mitsunaga family members and employees donated about $45,000 to Kaneshiro’s reelection campaign, according to the U.S. Department of Justice and state campaign finance reports.
“Prior to the first contributions in October 2012, the MAI donors had no known contributions to Kaneshiro,” according to the indictment.
On July 24, 2017, Judge Karen Nakasone dismissed all four criminal counts against Mau with prejudice, meaning they cannot be re-filed.
Honolulu Prosecuting Attorney Steve Alm, who was elected to office in 2020, told the Star-Advertiser the public should keep an eye on who contributes to political campaigns and judge candidates accordingly.
“Integrity is the name of the game and there can be no quid pro quo between donors and candidates,” said Alm. “I did not receive any money from the Mitsunaga firm or its employees during my campaign and certainly did not make promises to donors to take specific actions, or not take specific actions, as prosecuting attorney.”
Contracts awarded
In the past 10 years, Mitsunaga; his wife, Chan; son Bert; daughter Lois; and listed officers of Mitsunaga & Associates and Mitsunaga Construction Inc., including Otani, McDonald and Fujii, have given a total of $2.1 million to candidates for state and county office.
Dennis Mitsunaga alone made $195,690 in campaign contributions between 2010 and 2020, and Otani gave $460,000 during that same period, according to reports. McDonald donated $123,000 and Fujii gave $60,050.
Chan Mitsunaga donated $372,000 to various state and county candidates between 2009 and 2020, while Lois Mitsunaga gave $420,000 between 2008 and 2020, and Bert Mitsunaga contributed $78,000 between 2008 and 2014.
Arnold Koya, a MAI vice president, made $102,000 in campaign contributions between 2010 and 2020, and Glenn Okino, executive vice president of Mitsunaga Construction Inc., donated $234,000 to candidates in county and state races between 2010 and 2020.
Dennis Mitsunaga had been accused by county prosecutors and the state Campaign Spending Commission of “pay-to-play” schemes dating back to his firm’s work on state contracts during former Gov. Ben Cayetano’s administration. The June 2 federal indictment is the first time he has been charged with a crime in connection to his political giving.
Since 1980, MAI has operated as a “full service architecture and engineering firm that provides planning, project management, architectural, civil engineering, structural engineering, mechanical and electrical engineering, and construction management services,” according to the company’s website.
The website lists public-sector clients that include the four major county governments in Hawaii; the University of Hawaii; the U.S. Air Force; the Hawaii Public Housing Authority; the Hawaii Community Development Authority; and nine state departments, including the departments of Transportation, Education, Hawaiian Home Lands and Defense.
On March 18, 2011, Mitsunaga authored an opinion piece in the Star-Advertiser declaring that his company operated fairly and legally, and that his campaign donations had nothing to do with the contracts he received from the state.
“In 2003, an amendment to the state procurement law was passed by the state Legislature to take the selection process for non-bid contracts out of the hands of the governor’s politically appointed directors,” wrote Mitsunaga. “Hawaii Revised Statute §103D-304(d)(e)(f)(g)(h) requires that an impartial selection committee evaluate and rank a minimum of three persons or firms, and that the director then be required to negotiate a contract with the first-ranked person or firm. It was because of this amendment that MAI was able to secure more than $22 million in non-bid contracts from the (Gov. Linda) Lingle administration, far more than we ever received from the Cayetano and (Mayor Jeremy) Harris administrations combined, although we made no contributions to Linda Lingle.”
His company received government contracts as recently as just days before the federal indictment.
On May 27, MAI was awarded a two-year contract worth $1 million to provide construction management services statewide, according to the contract description listed in the Hawaii Awards and Notices Data System.
In February, MAI received a three-year contract worth approximately $1.62 million from the Department of Hawaiian Home Lands to provide “home inspection services — construction.”
In December, MAI was awarded a five-year contract worth $5 million from the state Department of Transportation to provide “civil, environmental, structural, electrical, surveying, geotechnical, landscaping and traffic engineering services” as required statewide.
Political bundling
Mitsunaga and his family, friends, employees and subcontractors have been longtime “political bundlers” in Hawaii for candidates running for City Council, mayor, the state Legislature, lieutenant governor and governor over the past 16 years, according to state campaign contribution records.
In political bundling, small individual contributions, often from employees or associates, are funneled to a particular candidate to avoid exceeding individual campaign donation limits.
According to the state Campaign Spending Commission, a maximum total of $6,000 per person may be donated to candidates running for governor or lieutenant governor during an election cycle.
The contribution limit to candidates for Honolulu prosecuting attorney, mayor or county councils is $4,000 per person per election. In state legislative races, the limit is $4,000 per person to Senate candidates and $2,000 to candidates for seats in the House of Representatives.
Across the country, businesses seeking government contracts, developers needing permit approvals and other entitlements, and private entities seeking to influence lawmakers to aid their professional pursuits regularly bundle donations to influential politicians who could be helpful to their bottom line.
Mitsunaga’s hui of donors has been a significant fundraiser for state and county leaders, including Gov. David Ige and former Govs. Neil Abercrombie and Cayetano, and Mayor Rick Blangiardi and former mayors Kirk Caldwell and Harris.
Otani, one of the defendants named in the federal indictment, helped coordinate Abercrombie’s inauguration, and MAI gave $30,000 to fund the activities in addition to bundling $54,000 for Abercrombie’s campaign.
MAI donors also funneled money to county council chairs, zoning committee chairs and lawmakers who sit on the Legislature’s money committees.
A previous probe
In 2003, Randal Lee, a retired Circuit Court judge who now works as an assistant professor of criminal justice at Hawaii Pacific University, was a deputy prosecuting attorney when he began working with then-Honolulu Police Department Maj. Daniel Hanagami to look into alleged campaign spending violations.
The investigation focused on dozens of firms and individuals who allegedly bundled contributions or donated to the campaigns of Harris, Cayetano and former Lt. Gov. Mazie Hirono under false names in order to circumvent contribution limits.
During a state District Court hearing in September 2004, Lee said local engineer George Nishimura, who pleaded no contest to making an illegal contribution to Harris’ campaign, had told investigators that Dennis Mitsunaga “was instrumental in securing state and city jobs” for him.
“It became obvious that pay-to-play schemes were part of the political culture in Hawaii,” Lee told the Star-Advertiser. “The indictment is a sad reflection that corruption is still alive and prevalent in Hawaii. We see elected officials being bought out, and now the indictment shows us that the criminal justice system can be bought out and used to go after our enemies.
“The investigation and indictment in this case is a welcome step in the right direction, namely cleaning up public corruption and holding public officials accountable. Unfortunately, the indictment unfairly cast a black eye on the prosecutor’s office and deputies who are fairly and ethically prosecuting cases.”
Lee and Hanagami’s investigation resulted in misdemeanor charges filed in 2004 against Mitsunaga’s brother, local architect Dwight Mitsunaga, for allegedly making more than $16,000 in illegal political contributions to the Harris campaign.
The Honolulu Star-Bulletin reported at the time that Dwight Mitsunaga’s company, Pacific Architects, had received more than 20 city contracts totaling $2.5 million since 1990, as well as a number of state contracts.
District Judge Lono Lee ordered the architect to pay $2,000 after he pleaded no contest and granted him a plea deferral, which allowed the case to be dismissed if he avoided legal trouble for one year.
Lee and Hanagami were able to obtain no-contest or guilty pleas from more than a dozen local residents. A parallel probe by the Campaign Spending Commission resulted in more than 60 engineering and construction firms paying a total of about $1 million in fines.
Building a case
Hanagami, who retired after more than 27 years with HPD, is now the chief special agent for the state Department of the Attorney General.
He told the Star-Advertiser that proving cases involving illegal campaign contributions and developing the evidence necessary to prosecute pay-to-play schemes is difficult. It requires resources and time to carefully comb through bank statements, records of financial transactions, campaign solicitations and other documents, he said.
Hanagami said the 2003 investigation started by identifying donors who gave money from a third party seeking to skirt donation limits. Many times the listed donor had been told it was perfectly legal to donate in their name on behalf of someone else supplying the funds, he said.
Investigators would then check the bank records and financial transactions of the companies and donors suspected of wrongdoing.
“If you see monies coming in (from a business to an employee), like $1,000 or two $500 checks, and then it goes out, and a check is paid to the campaign … in two days … , those are the kind that show the methodology of how the process works, how they get these campaign monies to the campaign,” Hanagami said.
Other indicators that grabbed investigators’ interest were maximum campaign contributions made by restaurant workers, homemakers and others with no record of income that would allow them to casually max out donations to candidates in county or state races.
To make criminal cases involving illegal campaign donations and deter future behavior requires dedicated police and county prosecutors focused on holding candidates and donors accountable, Hanagami said. He lauded former Honolulu Prosecuting Attorney Peter Carlisle for requesting that he team up with Lee and lead HPD’s campaign finance investigation, while also balancing his responsibilities as head of the department’s information technology division.
Then-Police Chief Lee Donohue was committed to making public corruption cases, according to Hanagami, who called the allegations outlined in the federal indictment against Kaneshiro and Dennis Mitsunaga “disheartening.”
