City’s top civil attorney identified as target in federal corruption probe

Corruption scandal spills over into city hall as top attorney gets federal target letter

HONOLULU (HawaiiNewsNow) - The U.S. Department of Justice has notified Honolulu’s top civil attorney that she’s a target in the federal corruption investigation that has already zeroed in on the city’s highest-ranking law enforcement officials.

Hawaii News Now broke the news Monday afternoon that attorney Donna Leong — who was appointed Honolulu’s corporation counsel by Mayor Kirk Caldwell in 2013 — received a federal “target letter” as part of the probe.

Several hours later, Mayor Kirk Caldwell confirmed the report in a news conference, saying that Leong got the target letter on Jan. 3 and informed him shortly afterward.

She was put on paid leave Monday.

Caldwell said Leong did not immediately take leave (and the public was not immediately informed) because he wanted to give her time to retain a lawyer.

“I believe that Donna is entitled to a presumption of innocence,” the mayor said, in the news conference. “My hope is that she can act vigorously to clear her name.”

He added that he was “saddened” and surprised to learn she’d received the letter informing her that she’s a target of the ongoing federal investigation.

Leong is the latest high-ranking city official to be ensnarled in a public corruption case that’s already led to indictments against the former chief of police, Louis Kealoha, several Honolulu police officers and Kealoha’s wife, Katherine, a former high-ranking deputy city prosecutor.

City Prosecutor Keith Kaneshiro has also received a target letter, and onlookers believe he will be indicted.

Caldwell said Leong is apparently being investigated for her role in a $250,000 payout and separation agreement for Kealoha when he left HPD. “I don’t know any more than that,” Caldwell said. “I don’t want to speculate.”

Leong’s attorney, Lynn Panagakos, said in a statement Monday that the payment to Kealoha was “properly authorized and processed.”

“Ms. Leong’s involvement in this matter was within the course and scope of her duties as corporation counsel, and she performed her duties, as she always does, lawfully, conscientiously, and to the best of her ability. I look forward to Ms. Leong being exonerated,” Panagakos said, in the statement.

[SPECIAL SECTION: THE CASE AGAINST THE KEALOHAS]

Meanwhile, the mayor also confirmed that federal authorities raided the Frank Fasi Municipal Building earlier this month in connection with the case. It’s the second time authorities investigating the case have raided the building.

Leong, who serves as chief legal adviser to the mayor, police department and City Council, has remained largely outside of the public spotlight in the Caldwell administration.

Lawyer's Statement by on Scribd

But she was heavily criticized for her role in the $250,000 payout to Kealoha after his departure from the Honolulu Police Department. Some called the payoff illegal because it was agreed to behind closed doors.

News that Leong received a target letter is an extraordinary development in a case that’s already taken a slew of twists and turns, including the revelation last week that federal investigators are now looking into Katherine Kealoha’s links to a prescription drug trafficking ring.

Louis Kealoha got a target letter in connection with the case in 2016, and quickly went out on leave. He was eventually forced to resign. And Katherine Kealoha also recently resigned from her post as a high-ranking deputy prosecutor.

The Kealohas are facing federal trials later this year.

Related coverage:

Scandal that’s ensnarled police, prosecutor’s office takes another turn

Police chief expresses concern about embattled prosecutor’s potential impact on cases

WATCH: Mayor discusses target letter issued to top attorney at city hall

This story will be updated.

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