Ex-City Prosecutor Keith Kaneshiro pleads not guilty following arrest in sprawling corruption probe

His alleged co-conspirators include a high-powered businessman, Dennis Mitsunaga, and members of his firm.
Published: Jun. 17, 2022 at 7:53 AM HST|Updated: Jun. 17, 2022 at 7:26 PM HST
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HONOLULU (HawaiiNewsNow) - FBI agents arrested former city Prosecutor Keith Kaneshiro on Friday morning as part of the years-long public corruption probe that also resulted in the conviction of ex-Honolulu Police Chief Louis Kealoha and his wife, Katherine.

Kaneshiro along with high-profile businessman Dennis Mitsunaga, 78, were among five people indicted on charges of conspiracy to commit honest services fraud, bribery and conspiracy against rights. After they pleaded not guilty on Friday afternoon in federal court, they were released on $50,000 unsecured bonds. Their trial was scheduled for the week of Aug. 16.

The 72-year-old Kaneshiro self-surrendered to authorities just before 6 a.m. Friday at his condo in East Honolulu.

As he left the courthouse, wearing jeans and a sports coat, Kaneshiro said nothing to reporters.

In addition to Kaneshiro and Mitsunaga, the indictment names as defendants three others connected to engineering firm Mitsunaga & Associates: Aaron Fujii, Chad McDonald and firm Executive Director Terri Ann Otani.

Ex-city Prosecutor Keith Kaneshiro pleads not guilty

WATCH: Ex-city Prosecutor Keith Kaneshiro and four of his alleged co-conspirators walked out of the federal courthouse this afternoon without speaking to reporters after pleading not guilty to federal charges linked to a sprawling corruption probe. MORE: https://bit.ly/3mYoRVP #HINews #HNN

Posted by Hawaii News Now on Friday, June 17, 2022

Otani was arrested Thursday and held overnight at the Federal Detention Center.

According to court documents, Kaneshiro allegedly worked with his co-defendants ― campaign donors who work at engineering firm Mitsunaga & Associates ― to frame one of their former employees after she sued for discrimination.

The charges against the former employee were eventually thrown out in state court.

The employees of the firm and their families donated some $50,000 to Kaneshiro’s reelection campaign, prosecutors said.

‘Really a black eye’

The allegation against Kaneshiro, who once pledged to fight corruption, were yet another bombshell in the sprawling federal case.

“It really is a black eye on the Office of the Prosecuting Attorney,” white-collar crime expert and former Circuit Court Judge Randal Lee told HNN. “When you see something like this, where there’s bribery involved and using the position to injure another person by filing charges against them, that’s not acceptable conduct. I’m glad the feds are cleaning up the system.”

Kaneshiro received a target letter from the U.S. Department of Justice in 2018, when he too became the focus of the federal corruption investigation. He was on paid leave for two years before his term expired and Steve Alm was elected to replace him.

While federal authorities pursue the charges against Kaneshiro, they are also moving forward with another corruption case.

In January, three former high-ranking city officials were arrested and charged in January with conspiracy to defraud the U.S. in connection with a $250,000 payout to Louis Kealoha in 2017 despite the fact that he was already a target of a federal investigation.

Kealoha is serving a serving a seven-year prison term in Oregon for obstruction, conspiracy and bank fraud ― all crimes committed while he led HPD. Katherine Kealoha, a former high-ranking deputy city prosecutor, is also behind bars.

READ THE FULL INDICTMENT:
From ‘top prosecutor’ to suspect

Kaneshiro’s indictment is a spectacular fall from grace for the former political powerhouse.

When he was first elected more than three decades ago, he was seen as a young, hard-charging prosecutor. He ran on a platform on anti-corruption. “If you find it, attack it and eradicate it,” his campaign ads said. “That’s why we should re-elect Keith Kaneshiro.”

And voters did, giving him his first term in 1989 and a second in 1993.

“What people think of in their mind of as a tough prosecutor, I think he absolutely was, he had the track record to back that up,” said HNN Political Analyst Colin Moore.

Following his second term, he left office for the private sector only to return 14 years later ― in 2010 ― to win a special election after Peter Carlisle left the office to become mayor.

Kaneshiro was re-elected again in 2013.

It was during that term that a special prosecutor was appointed to investigate public corruption tied to leaders in Honolulu law enforcement. One of Kaneshiro’s top deputies, Katherine Kealoha, was the first target of that federal case.

In May 2016, Kaneshiro was called before the grand jury to testify as a witness. Later, he would return to try to block federal subpoenas for Katherine Kealoha’s personnel records. A judge ordered him to turn them over. In January 2016, Kaneshiro was re-elected for a fifth term as Honolulu prosecuting attorney despite the controversy surrounding his office.

Just days after his swearing in, he was summoned again by the special prosecutor. And less than a month later, the city corporation counsel joined him at the federal courthouse.

It was an appearance that followed an FBI raid of his office, seizing laptops and other devices.

November 2017 was the last time HNN saw Kaneshiro at the grand jury room.

It’s possible this is when the attention of federal authorities shifted ― when they believed he too may have committed crimes.

A year later, he was given a target letter from the Department of Justice.

“The Kealoha scandal just became this black hole that ended up sucking everybody in,” Moore said.

Several others who worked for Kaneshiro have also made appearances before the grand jury, including his former first deputies, Chasid Sapolu and Dwight Nadamoto; his special assistant Roger Lau; and his former executive assistant, Carol Nakamura.

It’s been about six years since Kaneshiro first walked the steps of the federal courthouse to appear before the grand jury. During that time there were breaks for COVID, the trials of the Kealohas, other police officers and Kealoha’s physician brother.

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