In scathing report, city auditor rips Honolulu Department of Prosecuting Attorney for its lack of controls

Few steps have been made to improve policies, procedures and controls at the Honolulu Department of Prosecuting Attorney despite the recent, high-profile controversy that led to the conviction of one of its top lawyers.

That’s the conclusion of a scathing 50-page report issued by the Office of the City Auditor over the weekend.

The report noted that former Deputy Prosecuting Attorney Katherine Kealoha was convicted and sentenced in U.S. District Court for spearheading a criminal scheme that is also sending to prison her husband, former Police Chief Louis Kea- loha, as well as four former Honolulu Police Department officers under his supervision.

“We found that management did not initiate a review or evaluation of its policies and procedures that allowed one of its high-ranking deputy prosecutors to use the office for criminal activity,” the report issued by acting city Auditor Troy Shimasaki said.

The turmoil in the department also led to Prosecuting Attorney Keith Kaneshiro’s decision nearly two years ago to step away from his office and take paid leave from his $170,000-a-year job, pending the outcome of a federal investigation for which he received a target letter from federal investigators.

Under acting Prosecuting Attorney Dwight Nadamoto, the department continues to follow older rules established by former administrators, the report said.

“The department’s priority is on processing its heavy workload, rather than managing its staff to ensure that cases are performed correctly and in accordance with departmental and other professional standards,” the report said. “The department needs to be motivated to make changes necessary to identify and prevent misconduct.”

Specifically, auditors said:

>> Current rules and policies are not designed to monitor regularly for potential misconduct or workplace errors. “Improvements in the conflict case policy is warranted to help staff avoid, minimize or prevent conflict of interest and to maintain independence,” the report said.

>> Effective supervision of staff attorneys is limited, and inconsistent policies for state Circuit Court plea bargains were identified as one area of concern. “This would ensure consistency in the supervisory process and assure that tasks have been thoroughly reviewed and completed.”

>> Internal staff complaints are not handled consistently, nor do they lead to effectively identifying or addressing instances of misconduct. “We found that there are no written guidelines to help management assess whether complaints should be reviewed internally or be referred externally, and complainants have no guidance or expectation for how their complaints will be addressed.” Instead, “the department relies on informal processes or an information box to identify and receive workplace complaints.”

Kaneshiro’s four-year term expires and Nadamoto and the Kaneshiro administration will depart at noon Jan. 2. That’s when former Circuit Judge and onetime U.S. Attorney Steve Alm, who was elected last month, will be sworn in.

Nadamoto could not be reached for comment. A spokesman at the agency referred the Honolulu Star- Advertiser to the department’s formal five-page response.

The response, which was not signed by Nadamoto, but is attached to a cover letter that he signed, said the department is not in complete agreement with the audit’s findings, but “does recognize the Kealoha matter has affected the public’s confidence and trust (in the agency) and restoring public trust is paramount in moving forward.”

Katherine Kealoha was chief of the department’s Career Criminal Division when she was indicted. The department said the audit, however, “does not cite to specific instances of misconduct that Ms. Kealoha was convicted for in the federal trial that directly relate to the course and scope of her employment as a deputy prosecuting attorney.”

The department’s response said Kealoha’s failure to disclose a conflict of interest when she allegedly assigned a case “that purportedly involves her brother” is not the result of a lack of clear criteria on the agency’s part. “Ms. Kealoha had a duty and responsibility as a licensed attorney to disclose her conflict and to refrain from interjecting, influencing or otherwise being involved in the case.”

The response conceded that its administrative policy lacked detail on what constituted a conflict, or what procedures were to be taken when a conflict is identified.

The policy was amended in September and “now outlines what cases are deemed to be conflicts, and includes those cases where there is an appearance of impropriety.”

The department said it does take actions against employees for, among other things, attorney misconduct. However, the response said, the department “agrees that a formal complaint process may be beneficial to provide complainants and respondents with clear guidelines on what to expect” and “may also increase transparency and public trust of the complaint handling process.”

Alm, through a spokesman, said he is still learning the details of the prosecutors’ department and that it would be more appropriate for him to be on the job before determining the appropriate response to the audit.

Besides its nine recommendations to the department, the audit recommended that the City Council establish a commission on prosecutorial conduct to evaluate the prosecutor annually.