Attorneys representing the former city managing director filed a motion this afternoon to dismiss federal charges that he conspired with two others to defraud the county and federal government in 2017 by arranging a $250,000 retirement settlement for former Honolulu police Chief Louis Kealoha.
The Dec. 16 indictment against Roy Amemiya, the city’s managing director during Kealoha’s departure, does not include allegations that Amemiya defrauded the federal government, the motion argues, in part because the city government is not the federal government.
“In this case, the Indictment contains no allegation that Amemiya conspired to commit an offense against the United States or to defraud the United States or any agency thereof,” reads the court filing, filed by Amemiya attorney Lyle S. Hosoda and his team of defense attorneys. “There are no allegations, for example, that federal funds were used for the Kealoha payout, or that the payout impaired, obstructed, or defeated a lawful function of the United States…”
There are “no allegations that any of the defendants received any money or other personal benefit from the alleged conspiracy. The defendants were not charged with the offenses they are alleged to have conspired to commit,” reads the motion.
The U.S. Department of Justice presents no evidence that Amemiya came to an agreement with anyone in relation to the handling of Kealoha’s payout, which followed standards for severance agreements at the time and was approved by city attorneys prior to its execution, according to the motion by Amemiya’s attorneys.
“What we want is transparency. Mr. Amemiya is facing criminal charges and has had his reputation tarnished by accusations that he conspired to defraud the government,” Hosoda told the Honolulu Star-Advertiser. “The fact is the government knew all about the severance payment — it was approved by the Honolulu Police Commission, and was vetted by multiple City lawyers. We believe the city has documents showing everything it knew about the severance, and we need those documents to clear Mr. Amemiya’s name.”
When Amemiya was notified in June that he was the target of the DOJ’s long-running investigation, he requested documents from the city, including legal memos about the Kealoha settlement authored by deputy corporation counsels, that he believed would disprove the government’s theory.
The city did not turn over the documents and Amemiya’s lawyer filed suit in state court Jan. 20 accusing the city of violating the Uniform Information Practices Act by withholding the records.
Amemiya’s legal counsel intends to subpoena at least seven city officials and departments in the federal case for records and correspondence they believe will show that Kealoha’s settlement followed accepted city practices at the time. Because Kealoha was convicted of a crime, he has to return the $250,000 to the city.
“There is no law here prohibiting severance payments, only laws about when City Council approval of expenditures is needed. The indictment needs to allege, with particulars, that Amemiya entered into an agreement to make a payout to Chief Kealoha and violate the law to do it,” reads the motion.
Legal memos, letters and correspondence from the deputy corporation counsel in 2017 and San Francisco-based law firm Farella Braun and Martel, contracted by the corporation counsel, show that the process used to pay Kealoha was similar to separation agreements executed with other former officials that did not require council reviewer approval.
Amemiya was indicted with former Corporation Counsel Donna Leong and former Honolulu Police Commission Chairman Max Sword. They are accused of conspiring to pay Kealoha with federal funds and money from the Honolulu Police Department’s salary pool and evading City Council scrutiny.
The three former city leaders were taken into custody at the FBI’s Kapolei headquarters Jan. 12, the latest arrests in an ongoing public corruption investigation by a special prosecutor with the DOJ that is focused on the interactions between politicians, businessmen and government operations in Honolulu.
Amemiya, Leong and Sword each entered a plea of not guilty and are free on $50,000 bonds. Their trial is scheduled for March 14 but their attorneys moved Monday to push back the start of their trial to Jun. 13, at 9:00 a.m. before Judge Leslie E. Kobayashi.
In state court Amemiya is seeking documents detailing the Honolulu Ethics Commission’s severance agreement with its former executive director, Charles Totto, and the Honolulu Authority for Rapid Transportation’s separation payment to its former director, Daniel Grabauskas.
Grabauskas resigned from the rail authority on Aug. 18, 2016, and received $282,250 that the HART board executed as a separation agreement. It was not reviewed or approved by the City Council. Totto received a separation of $18,000, or two months’ pay, plus pay for unused sick leave and vacation time, in a June 15, 2016, separation settlement.
Neither deal was reviewed or approved by the City Council before it was approved.
Amemiya requested the records from the city after he was notified June 11 that he was the target of an investigation by assistant U.S. attorney Michael Wheat, who is prosecuting the case for the government. The city did not turn over the records to Amemiya.
Wheat and Kelly Thornton, director of media relations for the U.S. Attorney’s Office of the Southern District of California, did not immediately respond to a Star-Advertiser request for comment.
Wheat has served as a special DOJ attorney prosecuting interdistrict conflict cases in Hawaii since 2012.
On Jan. 27, Leong’s attorney, Lynn E. Panagakos, filed a “motion to take deposition of a critical witness” to compel the testimony of the former director of the Department of Budget and Fiscal Services, Nelson Koyanagi, who is battling cancer.
Panagakos does not believe Koyanagi will testify at Leong’s trial.
The motion was filed after defense attorneys reviewed the first round of discovery documents turned over by Wheat’s team. The evidence includes memos, letters, emails, indications of the existence of a 47-minute recorded interview with Koyanagi and a 15-page report of a second interview of Koyanagi.
“If deposed, Mr. Koyanagi is expected to testify that the city ordinances provide ways to process transactions legally, without going to City Council for approval, and this is not unusual,” wrote Panagakos. “ … Mr. Koyanagi is expected to testify that severance payments are paid through salaries and payroll, and do not require City Council approval.”
