Keith Kaneshiro describes prosecution as a grudge

CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM Former Honolulu Prosecutor Keith Kaneshiro is working to restore his reputation after being acquitted of federal charges. “It has been pretty tough but I always felt that I didn’t do anything wrong so there is nothing to worry about,” Kaneshiro said.

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CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM

Former Honolulu Prosecutor Keith Kaneshiro is working to restore his reputation after being acquitted of federal charges. “It has been pretty tough but I always felt that I didn’t do anything wrong so there is nothing to worry about,” Kaneshiro said.

GEORGE F. LEE / GLEE@STARADVERTISER.COM Former Honolulu Prosecutor Keith Kaneshiro, left, and co-defendant Dennis Mitsunaga celebrated outside U.S. District Court in Honolulu on May 17 after being found not guilty in their corruption trial.

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GEORGE F. LEE / GLEE@STARADVERTISER.COM

Former Honolulu Prosecutor Keith Kaneshiro, left, and co-defendant Dennis Mitsunaga celebrated outside U.S. District Court in Honolulu on May 17 after being found not guilty in their corruption trial.

CRAIG T. KOJIMA / CKOJIMA@STARADVERTISER.COM Former Honolulu Prosecutor Keith Kaneshiro is working to restore his reputation after being acquitted of federal charges. “It has been pretty tough but I always felt that I didn’t do anything wrong so there is nothing to worry about,” Kaneshiro said.

GEORGE F. LEE / GLEE@STARADVERTISER.COM Former Honolulu Prosecutor Keith Kaneshiro, left, and co-defendant Dennis Mitsunaga celebrated outside U.S. District Court in Honolulu on May 17 after being found not guilty in their corruption trial.

Former prosecuting attorney Keith Kaneshiro said the federal investigation against him, prominent political donor Dennis Mitsunaga and four others began with a grudge and consumed eight years before a jury acquitted them in less

Kaneshiro, 74, told the Honolulu Star-Advertiser in an interview that he is still deciding whether to practice law again while his license is inactive.

His immediate focus, he said, is reconnecting with family and friends, restoring his reputation and paying off a costly legal defense that helped avert a conviction.

Kaneshiro, Mitsunaga and Mitsunaga & Associates, Inc. employees Terri Ann Otani, Aaron Shunichi Fujii, Chad Michael McDonald, and attorney Sheri Jean Tanaka were found not guilty on May 17 on all counts in their pay-to-prosecute corruption trial in U.S. District Court.

After a two-month trial, jurors deliberated just a day-and-a-half before informing the court that they had reached a verdict.

“It has been an ordeal. I lost … I had to maintain my distance from a lot of friends. I didn’t want to get them involved in what was going through, so, it has been pretty tough, but I always felt that I didn’t do anything wrong so there is nothing to worry about,” said Kaneshiro, reflecting on the eight-year federal investigation and prosecution from the conference room of his attorney Birney B. Bervar’s office. “I kept on asking my attorney, ‘Is there some secret evidence they have?’ because we went through discovery and I said, ‘I can see what they have in their case.’ And he said, ‘Nah, that’s their case.’ I said, ‘Nah, there gotta be some secret witness or somebody going come out and say something’ … all my life I’ve been involved in law enforcement … I would never do anything to jeopardize that career. The last two years of my term (as Honolulu prosecuting attorney) I could not be involved in law enforcement. I still haven’t generally gotten over this whole ordeal yet, there are still some things I need to resolve.”

Kaneshiro agreed that federal prosecutors used the case against him as a of the campaign finance system and how patrons interact with the elected officials they support.

“It’s all part of the system. Campaign finance …,” said Kaneshiro.

Donors can give a candidate seeking nomination or election to a four-year non-statewide office no more than $4,000 during an election period, according to the state Campaign Spending Commission.

One of the government’s exhibits in the case detailed $50,250 from employees of Mitsunaga & Associates, Inc., referred to as MAI, from Oct. 25, 2012, to Oct. 19, 2016.

It included the breakdown of donations to his campaign for prosecutor from Mitsunaga and his co-defendants — who all pleaded not guilty in the case.

Throughout Kaneshiro’s decade as Honolulu prosecuting attorney, he collected $325,897.19 from 993 donations.

The government accused Kaneshiro of prosecuting former MAI employee Laurel J. Mau for four counts of second-­degree theft at the firm’s request, after he had received MAI contributions in 2014.

The theft complaints against Mau were made to the Honolulu Police Department in 2012. Mau was charged two years later in 2014.

Kaneshiro, Mitsunaga and the others were indicted in June 2022 for allegedly conspiring to charge Mau with felony theft for allegedly exposing the company to liability and keeping money from jobs done on company time with company resources.

They faced federal charges of conspiracy, honest serv­ices wire fraud and federal program bribery.

The government’s allegations are connected to MAI’s treatment of Mau, who sued the company after she was let go in November 2011 when she was accused of working more than 20 side jobs on company time.

In an August 2012 lawsuit, Mau accused MAI of violating the Civil Rights Act of 1964 and Age Discrimination in Employment Act of 1967.

In July 2014, a federal judge overseeing Mau’s lawsuit and several counterclaims by MAI found no liability other than a “breach of loyalty” claim against Mau. The company prevailed and the judge awarded MAI $1.

During that civil trial, details emerged of Mau allegedly using company time, resources and applying for permits for work from which all the money did not go to the company.

Federal prosecutors unsuccessfully tried to convict Kaneshiro of prosecuting Mau for four counts of second-degree theft at the firm’s request, having received campaign donations from MAI and its employees.

According to evidence presented at trial by the federal prosecutors, Kaneshiro’s campaign notified the state Campaign Spending Commission that Mitsunaga and his wife had exceeded the legal limit on Nov. 26, 2013.

Kaneshiro’s campaign returned $3,000; $2,000 to Dennis Mitsunaga and $1,000 to his wife. “If I was taking a bribe, we wouldn’t return the money. And our campaign organization contacted campaign spending to alert them … (we) returned the money. It came out in cross examination.”

Prosecutors subpoenaed 10 years of Kaneshiro’s phone records, from Jan. 1, 2012, to May 17, 2022. Prosecutors uncovered one phone call between Kaneshiro and Mitsunaga, on Oct. 29, 2012, that lasted one minute and eight seconds.

Bervar, Kaneshiro’s attorney, told the Star-Advertiser that he reminded the court that there was “no way to hatch a bribery conspiracy in one minute and eight seconds.”

The grudge

Kaneshiro served as city prosecutor from 1988 to 1996 and again from 2010 to 2018 before he went on paid leave.

He accused the U.S. Department of Justice of going after him because he challenged the relevance of their investigation to his office during the grand jury proceedings that led to the indictments of Katherine Kealoha, who was a deputy prosecutor in his office, and her then-husband, former Honolulu Police Chief Louis Kealoha.

In October 2019, Katherine Kealoha pleaded guilty to using her position as a deputy prosecutor to cover up the drug dealing of her brother, Rudolph B. Puana, a Hawaii island physician. As part of a plea agreement, Katherine Kealoha admitted her brother prescribed her pills that she would trade for cocaine.

During the Kealoha investigation, Kaneshiro testified before a federal grand jury four times.

He said the special prosecutor from San Diego, Assistant U.S. Attorney Michael Wheat, and his team of federal prosecutors that came to Hawaii and convicted Katherine and Louis Kealoha wanted to go after the Department of the Prosecuting Attorney, thinking there was more than one bad actor.

Wheat would “subpoena stuff from people who were not even connected to (Katherine) Kealoha,” he said.

“So I went to the grand jury to protect the office and apparently Mr. Wheat didn’t like me protecting the office,” said Kaneshiro. “So he got upset and then he started … subpoenaing their (deputy prosecutors not connected to Kealoha) cell phone numbers … and I felt that wasn’t really relevant. I did not give him the information at the grand jury. I said, ‘If you really want that information you have to have a judge order me, compel me to give that information over’ … and he did file a motion to compel …”

Wheat and Kaneshiro appeared in federal court and the judge denied some of Wheat’s motion and granted some of it, Kaneshiro said. Whatever the judge granted, the Department of the Prosecuting Attorney gave Wheat, he said.

“I went through the process, but he just didn’t like the fact that I put him through the process,” said Kaneshiro.

Tara K. McGrath, the U.S. Attorney for the Southern District of California, the jurisdiction managing the special prosecution of public corruption cases in Hawaii since 2016, refuted Kaneshiro’s assertion that the prosecution started with hard feelings between prosecutors.

McGrath told the Star-­Advertiser in a statement that U.S. Department of Justice “prosecution decisions are not made in a vacuum or by a single attorney.”

“They are subject to a thorough review by numerous prosecutors throughout the supervisory structure of a U.S. Attorney’s Office,” said McGrath. “This case, like all others, was subject to that comprehensive process. Ultimately, a federal grand jury makes the decision whether to charge a crime.”

Kaneshiro accused the justice department of foisting the blame onto grand jurors.

“The prosecutors are blaming the grand jury,” said Kaneshiro in a statement. “The prosecutors are responsible for the wrongful evaluation of the facts and evidence that harmed innocent people.”

During the eight years he was under federal investigation, prosecutors accused him of all manner of misdeeds, Kaneshiro said, but never corrected misinformation when it leaked out of the grand jury, including target letters to city workers that he said were never real.

Kaneshiro paid a team of former federal prosecutors from San Francisco to compile evidence refuting the special prosecutor’s claims, to no avail, he said.

Federal prosecutors did not respond to Star-­Advertiser questions about Kaneshiro’s accusations.

In addition to campaign-­spending allegations involving MAI, Kaneshiro’s relationship with donor and Realtor Donna J.Walden was among the issues prosecutors pursued.

The government believed Kaneshiro worked with Walden on the city’s 2015 purchase of a halfway house for domestic violence victims for $5.5 million, a $1 million profit for Walden.

Kaneshiro said investigators believed Walden funneled $20,000 into his campaign. In reality, she gave it to the National District Attorneys Association to help fund a conference in Hawaii.

“All this negative stuff was going out (to the media) and (prosecutors) never corrected it,” said Kaneshiro. Wheat “couldn’t get me on that, he tried to, but there was nothing wrong. No wrongdoing.”

Kaneshiro said he was not involved in the negotiations of the purchase of that property. The city used City Council-approved funds to buy the building from Walden.

“I wasn’t involved at all in the negotiation,” said Kaneshiro.

Local politics

His co-defendants echoed Kaneshiro’s belief that the government overreached.

Andrew Kennedy, who represented former MAI chief operating officer Aaron Fujii, told the Star-Advertiser that his client and his co-defendants were “vilified for participating in local politics.”

“These are good people. Aaron Fujii is a good person,” said Kennedy. “This November, we have an election coming up and people will be encouraged to get out and vote. But that enthusiasm for involvement in elections should not be limited to national elections. Local elections are, in many ways, more important than national elections. People should be encouraged to participate in local elections. They should be encouraged to spread awareness for candidates they support, and should be encouraged to become involved in campaigns. Whether that is by volunteering time or financial resources. That’s how the system works.”

Kennedy said it’s “not right” that Fujii and the others “came under attack” for their involvement in local politics.

“We can only hope that does not create a chilling effect on other citizens from supporting local candidates,” said Kennedy. “They had a good-faith belief that the crime they reported occurred. They did their diligence, they ran an investigation. It’s a scary day in this country when a crime victim needs to be afraid to report a crime. We are happy the jury saw the situation for what it was.”

Mitsunaga, through his attorney, declined a Star-­Advertiser request for an interview.

Tanaka’s attorney, Mark Mermelstein, told the Star-Advertiser that the unanimous verdict of not guilty on all counts for all six defendants was “a victory for justice.”

“From the day this case was charged, it was clear that the government had no credible evidence to support its allegations. Despite the government taking months to present to the jury the results of its multiyear investigation into these defendants, it took less than two full days for this jury to find each and every defendant not guilty,” said Mermelstein. “The jury saw quickly that the government’s case was based on pure speculation and lacked any credible evidence to support it.”

Tanaka is grateful “beyond words” to the 12 jurors who had the “courage to stand up for justice, and the repeated attempts by the prosecution to criminalize Ms. Tanaka’s actions when she was just doing her job as an attorney.”

McDonald’s attorney, Thomas Otake, told the Star-Advertiser that his client was “an innocent man being prosecuted by the awesome powers of the federal government.”

McDonald thanked the jurors and Senior U.S. District Judge Timothy M. Burgess from Alaska for treating the prosecution and defense with “respect, decency and fairness.”

“His only hope was that a jury of his peers would come together and serve with integrity, dedication, judgment and courage. These jurors did so, and we will forever be grateful,” said Otake. “Some may think that the system failed because there was an acquittal. This could not be further from the truth. The not-guilty verdicts in this case are a great reminder that our jury trial system of justice is the best that the world has to offer.”