FBI raid of city records tied to Kealoha case, lawyers say

Members of a Honolulu City Council committee were told Tuesday that a raid of city computer servers earlier this year involved emails apparently tied to the federal corruption case that centered around former Police Chief Louis Kealoha and his wife, former Deputy Prosecuting Attorney Katherine Kealoha.

That’s according to Councilman Ron Menor, chairman of the Executive Matters and Legal Affairs Committee, which met behind closed doors with lawyers from the Department of Corporation Counsel for about an hour Tuesday.

Menor said Council members were also told that the Department of Information Technology turned over emails from various city agencies including the Department of Corporation Counsel, the Managing Director’s Office and the Department of Budget Fiscal Services.

The information disclosed Tuesday by Corporation Counsel was new to Council members and the public.

City attorneys believe some of the documents taken during the search may have been privileged and improperly seized by federal authorities, and the city sought in U.S. District Court to block release of all the documents pending a review through a court proceeding expected to conclude next month, Menor said.

San Francisco-based law firm Farella Braun and Martel was hired by Corporation Counsel to help determine where federal authorities overreached in their seizure of the records. The Council, in two separate votes in recent months, approved up to $175,00 in payments despite not being told for what investigation the documents were being sought. (An additional $50,000 in payments being paid to the law firm did not require Council approval.)

Amid questions raised by several Council members and the media about the lack of an explanation involving Farella’s hire, the EMLA Committee on Tuesday sought more information as well as clarification about what could be disclosed publicly, Menor said.

“The range of documents seized was very broad,” Menor said. “They included emails that virtually covered all aspects of city government including routine communications about the status of improvement projects in the Council districts, and legal opinions from the Corporation Counsel about bills and resolutions pending in the Council.”

Menor added, “Many of these documents are not relevant to the federal government’s investigation and are privileged. Federal and state constitutional law cases are well-established that law enforcement agencies are not entitled to go on ‘fishing expeditions.’”

That the raid was tied to the Kealohas’ case is not entirely surprising, although it’s the first time city attorneys acknowledged it to the Council. In January, Mayor Kirk Caldwell said at a news conference that top Corporation Counsel Donna Leong was going on paid leave after she received a target letter believed to be tied to the Kealoha case. Caldwell, at the news conference, confirmed that federal authorities had executed a search warrant with Department of Information Technology that same week.

Around the same time period, however, federal investigators subpoenaed records from the Honolulu Authority for Rapid Transportation involving alleged, unspecified instances of wrongdoing tied to the $9.2 billion rail project.

As for the target letter sent to Leong, Caldwell and Leong’s attorney said it centered on Leong’s role in advising the Honolulu Police Commission on its agreement with Louis Kea­loha in late 2016 that allowed him to retire with full benefits and a $250,000 severance check.

Paul Aoki, Leong’s top assistant, has served as acting corporation counsel in Leong’s absence.

The Council voted 7-2 on Sept. 4 to pass Resolution 19-216, authorizing a second allotment of $75,000 in additional funding to Farella on top of an earlier approval of $100,000. After an inquiry by the Honolulu Star-Advertiser, Corporation Counsel acknowledged that the resolution was inaccurate because it incorrectly stated the Council had approved a total of $225,000 when in fact it had approved only $175,000.

Menor said Tuesday that city attorneys determined the resolution was properly approved despite the error and that no further action is necessary.