Former Honolulu Prosecuting Attorney Keith Kaneshiro’s unwillingness to cooperate in a federal investigation of his former deputy, Katherine Kealoha, likely led authorities to turn their attention to allegations that he conspired with the executives of an engineering firm to frame a former employee for felony theft, according to an attorney familiar with the investigation.

Alexander Silvert, a retired federal public defender, represented Kealoha’s uncle, Gerard Puana, when he was set up and accused of stealing the mailbox at the home of Kealoha and her then-­husband, Honolulu Police Chief Louis Kealoha. In December 2013, Silvert turned over information about the mailbox theft case to the FBI, triggering a federal grand jury inquiry into alleged police misconduct that has mushroomed into one of the largest public corruption probes in Hawaii history.

In 2018, Kaneshiro received a target letter from the U.S. Department of Justice indicating he was under investigation in connection with a far-reaching case that has resulted in the convictions of the Kealohas, now serving federal prison terms, and the indictments of former city Managing Director Roy Amemiya, former city Corporation Counsel Donna Leong and former Honolulu Police Commission Chair Max Sword.

Amemiya, Leong and Sword have pleaded not guilty and are awaiting trial on charges of conspiring to defraud the government by setting up a $250,000 payment to Louis Kealoha to voluntarily leave HPD in January 2017.

Kaneshiro declined public calls to resign from his elected office, even after then-HPD Chief Susan Ballard and state Attorney General Clare Connors petitioned the Hawaii Supreme Court to suspend him from practicing law as the city’s top prosecutor.

A Justice Department special prosecutor, Assistant U.S. Attorney Michael Wheat, served search warrants on the prosecutor’s office when Katherine Kealoha was employed there and asked for Kaneshiro’s cooperation in the probe, Silvert said.

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He refused to cooperate, did not comply with federal subpoenas and filed motions in federal court to have Wheat removed as a prosecutor. In public statements to the news media, Kaneshiro called the federal investigation a “circus” and claimed the probe was not being conducted fairly or impartially, according to Silvert.

“Kaneshiro brought this on himself. I was fully convinced that Mr. Wheat had no interest in prosecuting Mr. Kaneshiro when he began his investigation,” Silvert said. “He attacks Mr. Wheat; he attacks the federal grand jury process. In my opinion, it was that conduct and that behavior … that basically drew their attention to him.

“You have to remember what he is doing is obstructing providing information about Katherine Kea­loha to a federal investigation. You have to ask yourself why? What is going on there? Why is the top county prosecutor trying to interfere with a federal investigation of an employee?”

Kaneshiro, 72, served as city prosecutor from 1988 to 1996 and again from 2010 to 2018 before he went on paid leave. He was indicted June 2 along with Dennis Mitsunaga, 78, president and CEO of the engineering and project management firm Mitsunaga & Associates and a longtime 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, MAI’s 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 have pleaded not guilty and are free on $50,000 bonds pending trial.

Kaneshiro’s rise from a former director of the state Department of Public Safety under Gov. Ben Ca­yetano to a city prosecutor with a reputation of being tough on crime is at odds with the man who allegedly accepted $45,000 in campaign contributions to file four counts of felony theft against a former MAI employee at the company’s request.

The charges against Laurel Mau were dismissed with prejudice in 2017 when two deputy prosecutors refused to proceed with the case after Honolulu police determined there was no probable cause to investigate Mau for working side jobs on MAI time, as the company had claimed.

Cloud cast over office

Kaneshiro won elections for city prosecutor in 1988 and 1992 before opting out of a campaign for a third term. He returned in 2004 to challenge incumbent Prosecutor Peter Carlisle but lost.

Carlisle, who served as city prosecutor from 1997 until he resigned in 2010 to run in and win a special election for mayor, said he is “angry” about the allegations against Kaneshiro and the pall it has cast over the majority of prosecutors and public servants who work for public transparency and honesty.

The case against Laurel Mau should never have been brought, he said.

“You have to figure out whether there is probable cause. If there is, then prosecute. In this case, a senior deputy attorney declined the case for lack of probable cause. Once there is a lack of probable cause, it ends. It’s very clear that this case should have ended,” Carlisle said.

“There is no point in having people (at the top) not doing the job correctly. If you’ve got somebody (running the prosecutor’s office) doing next to nothing useful, that somebody being Kaneshiro, … it should not have ever started or happened from the very get-go.”

Current Honolulu Prosecuting Attorney Steve Alm, who was elected in 2020, said he’s never seen allegations like those against Kaneshiro in his 37 years of practicing law in Hawaii. Deputy prosecutors who received subject letters from federal prosecutors for their potential involvement and anyone else in the office “implicated in this matter” left before he was sworn in, he said.

“Integrity is absolutely critical in this profession and these allegations eroded trust in the office. My goal in running for prosecuting attorney and the mandate I received from the voters is to restore trust in the office. We have spent the last 18 months doing just that,” Alm said.

Since taking office, Alm and his leadership team, which includes former federal prosecutors and veteran city prosecutors, provided intensive trial advocacy and ethics trainings for all deputy prosecutors and instituted conflict-of-interest procedures for assigning cases to deputies.

Alm said they also implemented a salary schedule for deputies to increase transparency and put a new hiring process in place that uses a panel of interviewers to reduce bias and increase fairness.

“All of these changes have made this office a place where both new and experienced attorneys want to work,” he said. “These allegations in no way detract from the excellent work done on a daily basis by our deputy prosecutors, victim/witness counselors, investigators and staff. They have done incredible work under very trying circumstances and should be commended for their commitment to public safety even while a cloud hung over the office.”

The Department of the Prosecuting Attorney so far has not received any appeals from defense attorneys relating to the allegations against Kaneshiro or anyone else involved in Wheat’s ongoing investigation. If defense attorneys believe a specific case was improperly handled in a manner similar to the allegations against Kaneshiro, Alm encouraged them to contact his office.

“If wrongdoing is found, we will do the right thing and correct it,” he said. “It is highly unlikely that Keith Kaneshiro would have personally handled any criminal cases during his time as prosecuting attorney, and we do not have reason to believe that any other cases were affected. We are only aware of one former deputy prosecutor who received a subject letter from the DOJ (during Kaneshiro’s tenure), but we do not have reason to believe that any of their other cases were handled improperly.”

Different treatment

A window into the Department of the Prosecuting Attorney under Kaneshiro’s leadership came after the calls for his resignation mounted, resulting in a petition to the Hawaii Supreme Court filed by Ballard and Connors to suspend him.

The Feb. 19, 2019, petition highlighted motions filed by attorneys alleging Kaneshiro treated defendants differently based on whether they “might have information adverse to Kaneshiro’s personal interests in defending against the matters under federal investigation.”

In one instance, defense attorney William Harrison claimed the department prevented his client, who was awaiting trial on state drug charges, from cooperating because she had information relevant to the federal investigation, according to the petition.

Harrison alleged there was an agreement between Kaneshiro and his client, Tiffany Masunaga, that prevented her from sharing information. The defense attorney asked that the entire department be disqualified from prosecuting Masunaga, who was arrested and implicated in a drug case that Katherine Kealoha admitted to steering away from focusing on her brother, Rudolph B. Puana, a pain doctor on Hawaii island who was convicted by a federal jury in April of 38 counts related to a conspiracy to distribute oxycodone and fentanyl outside his professional practice.

The same month Ballard and Connors filed their petition, two employees at Kaneshiro’s department alleged he retaliated against them for testifying as witnesses before the federal grand jury looking into the city prosecutor.

Ballard concluded it was “not in the best interest of the HPD or the City and County of Honolulu to share sensitive information with Kaneshiro” while he was the target of a federal criminal investigation, according to the petition. The situation was hampering monthly public safety meetings among law enforcement agencies and the city administration, she said.

“Since hearing reports in December 2018 that Keith Kaneshiro received a target letter relating to the ongoing federal investigation concerning him and the Department of the Prosecuting Attorney, I have been uncomfortable with his continued attendance at the monthly public safety meetings when he, himself, is the target of a federal criminal investigation,” Ballard declared in the 2019 petition.

She also said she shared her concerns with Roy Amemiya, who at the time was the city’s managing director.

Silvert said of great concern during the investigation was Kaneshiro’s repeated declarations that he could not comment on secret grand jury proceedings after he testified as a witness, including on one occasion when he was driven to the federal courthouse by the U.S. marshal for Hawaii.

Witnesses who testify before grand juries are free to talk about whatever they want, Silvert said, and Kaneshiro knew that. Grand jury secrecy applies to the jurors and prosecutors, he said.

“Mr. Kaneshiro goes in front of state grand juries all the time. He knows how grand juries work … so his comments about the federal grand jury are even more ludicrous and outrageous because he understands how a grand jury operates. His comments were legally wrong and he knew it,” said Silvert, author of “The Mailbox Conspiracy: The Inside Story of the Greatest Corruption Case in Hawaii History,” about the Kealoha case.

“Why is he doing this? To me, it begs the question what did Katherine Kealoha know or have on him that he felt he had to put his job in jeopardy to defend her?”

‘Not above the law’

Randal Lee, a retired Circuit Court judge and former deputy city prosecutor who now works as an assistant professor of criminal justice at Hawaii Pacific University, said the investigation of Kaneshiro and his indictment is a “welcome step in the right direction” toward cleaning up public corruption and holding public officials accountable.

“Mr. Kaneshiro is not above the law, should be held accountable, and he has no one to blame but himself for putting himself in this situation. I also believe that everyone who knowingly was involved in this scheme should be held accountable,” Lee said.

“As an attorney and former judge, I was disappointed that Mr. Kaneshiro and others in his office used and manipulated the criminal justice system against an individual. As an elected official, Mr. Kaneshiro owed a duty to the community and criminal justice system to uphold the law. The Kealoha and now the Kaneshiro cases should serve as examples of what not to do as public servants and the need for independent oversight of government agencies in general.”