Editorial: More fallout from Kealoha scandal

Honolulu’s former police chief and his then-wife Katherine Kealoha — the former deputy city prosecutor — are now in prison for corruption, and some of the horrid mess surrounding the scandal was swept to the side as time marched on.

But clearly, federal prosecutors had not forgotten.

Oahu residents got a refresher course on the case of Louis Kealoha on Wednesday, when three of the city’s former top officials were arrested in Kapolei on conspiracy charges stemming from their roles in the alleged diversion of federal funds toward a $250,000 severance payout to Louis Kealoha between July 1, 2016, and June 3, 2017.

The trio — Roy Amemiya, Donna Leong and Max Sword, respectively the former managing director, corporation counsel, and Honolulu Police Commission chairman — turned themselves in to the FBI in Kapolei. They then were arraigned in U.S. District Court, where all three pleaded not guilty. Federal Magistrate Judge Rom Trader allowed their release on unsecured $50,000 bonds.

After several years of investigation, whether the FBI has the evidence for convictions will come out at last, affording the public clarity on what went on behind closed doors. The unfolding of this case also should enlighten the current administration at City Hall so that any needed reforms can be put in place to keep this from happening ever again.

According to the indictment, unsealed on Wednesday, Amemiya, Leong and Sword had conspired to move money from a fund budgeted for vacant city positions, redirecting it to Kealoha’s severance payout. The diversion was split in three parts to fall below the $100,000 level that would require a Honolulu City Council approval, and then recombined into a single $250,000 check, according to the indictment.

Through their lawyers, the defendants have protested their innocence. Leong’s attorney, Lynn Panagakos, said the arrangements were legal and were made in the public interest, hastening Kealoha’s departure from his post.

However that legal argument plays out, there is much that’s loathsome about this sort of arrangement — a use of public money budgeted for other purposes and including federal funds. The police union called it “sickening.”

“These so-called leaders” are alleged to have misused public funds by redirecting money budgeted to hire more police officers “to pay off a failed former police chief,” Robert Cavaco, president of the State of Hawaii Organization of Police Officers, said in a written statement.

There’s no argument to justify that, especially since, as Cavaco also stressed, “our police department is incredibly understaffed and there are not enough patrol officers now to try and keep our neighborhoods safe.”

Further, the action was configured to avoid bringing the arrangement before Council review, and discussions were held in executive session of the Police Commission. Since then, there have been improvements in open-government practices at the commission, but the public has a right to expect further assurances.

The political reverberations of this indictment are themselves consequential. These three people were top appointees of former Mayor Kirk Caldwell, who has declared his candidacy for governor this year.

“It’s hard for me to imagine how Kirk Caldwell will still be able to run for governor, with this hanging over his campaign,” said Colin Moore, University of Hawaii associate professor of political science. Moore was speaking Wednesday on the Honolulu Star-Advertiser Spotlight Hawaii webcast. “It does upset the dynamics of the gubernatorial race, for sure.”

However, politics is a secondary concern. What matters most to the public is that this controversy is finally resolved, ideally to include a roadmap toward a more straightforward and open approach to city governance.