Judge issues protective order for evidence in Kealoha payout case

A federal judge Monday granted a protective order sought by the U.S. Department of Justice to prevent the public release of evidence gathered by investigators probing a $250,000 retirement settlement to former Police Chief Louis Kealoha.

In order to get copies of the evidence gathered by the government during the discovery process, defense attorneys must agree not to make it public or share it with anyone not involved with the defense, according to the order issued by U.S. District Judge Leslie E. Kobayashi.

The practice of defense attorneys agreeing to sealed discovery exchanges is often used in public corruption, national security and organized crime cases prosecuted by the federal government.

Former city Managing Director Roy Amemiya, Corporation Counsel Donna Leong and Honolulu Police Commission Chairman Max Sword are scheduled to stand trial June 13 after entering pleas of not guilty to charges of conspiracy and defrauding the government. They are free on $50,000 bonds.

The trio are accused by the Justice Department of structuring the 2017 payout to Kealoha with money from the Honolulu Police Department’s salary fund, which included federal funds, and keeping it from City Council review.

Their defense attorneys have maintained that the settlement was legal, supported by official opinions and similar to other separation agreements.

Kelly Thornton, director of media relations for the U.S. Attorney’s Office of the Southern District of California, declined comment. Also declining to comment were attorneys representing Leong, Sword and Amemiya.

On Friday, Kobayashi instructed defense attorneys to establish a process with Department of Justice to share evidence and ask questions of the former director of the city Department of Budget and Fiscal Services, Nelson Koyanagi.

According to defense attorneys, Koyanagi has knowledge that the 2017 Kealoha settlement did not require City Council approval and was almost identical in structure to settlements with other city department heads.

Koyanagi is fighting cancer, and Kobayashi will consider information, including input from Koyanagi’s doctors, to determine whether allowing him to take questions is humane and in the interest of justice. Koba­yashi’s order makes clear that the defense may show discovery materials to witnesses.