Honolulu’s disgraced former prosecutor Katherine Kealoha may be behind bars, but taxpayers are only getting started paying the legal bills associated with the numerous scandals surrounding her and her husband, the former police chief.

One lawsuit the couple filed against the Honolulu Ethics Commission and its former employees cost taxpayers $659,566, the commission said last month. For other criminal and civil matters, the Honolulu City Council has approved tens of thousands of dollars at a time for private lawyers to defend the interests of city agencies and employees.

Adding up the total fiscal impact of the Kealohas’ scandals would be “impossible,” said Ali Silvert, a federal public defender who represented Katherine’s uncle, Gerard Puana. 

“Anybody will tell you it’s in the millions,” he said. “And we’re not done.” 

There’s little chance that the Kealohas will have to reimburse any of the costs – but Katherine Kealoha’s attorney says his client is simply exercising her rights, an essential part of the legal process.

Former HPD Chief Louis Kealoha and Katherine Kealoha arrive at District Court.
Former HPD Chief Louis Kealoha and former deputy prosecutor Katherine Kealoha were convicted in June of federal charges of conspiracy and obstruction of justice. Cory Lum/Civil Beat/2019

The Kealohas were convicted of conspiracy and obstruction of justice in June after they used city resources to frame Puana for the theft of their mailbox. The couple is facing additional charges for bank fraud and identity theft. Katherine Kealoha is also fighting drug charges after she was accused of running a prescription drug ring with her brother Rudolph Puana.

On Wednesday, council members approved $100,000 to pay for lawyers on opposite sides of the same dispute over Louis Kealoha’s publicly funded legal representation  – $50,000 for the city’s lawyers, and $50,000 for the police commission’s lawyers.

Councilwoman Kymberly Pine voted against the spending and called the arrangement “ridiculous.”

“These are two city departments and we’re paying outside lawyers with taxpayer money to fight each other,” she said. “Everyone should get into a room since we’re all city employees and settle this case internally.”

Earlier this year, the council OK’d spending $40,000 to hire Megan Kau, who is now running for prosecuting attorney, to defend Honolulu police officer Minh-Hung “Bobby” Nguyen in a civil lawsuit filed by Puana. Nguyen was found guilty in June of federal crimes alongside the Kealohas and another officer.

For that same lawsuit, the council approved $50,000 in 2017 to defend Dru Akagi, a Honolulu detective assigned to investigate the disappearance of the Kealohas’ mailbox.

Council resolutions approving funds for outside counsel reflect only a part of Kealoha-related legal costs. Andrew Pereira, Mayor Kirk Caldwell’s communications director, said council approval is only needed when the administration is going over budget for outside counsel.

Civil Beat asked Pereira about Caldwell’s opinion of the Kealoha costs on Tuesday.

On Wednesday, he replied in an email, “The mayor is enjoying today with his family since it’s his birthday.”

The fiscal impact of the Kealoha scandal includes costs incurred by the FBI, the U.S. Postal Inspection Service, U.S. Attorney’s offices in Hawaii and California and the court system, which screened hundreds of potential jurors at the Blaisdell Center in May, Silvert said.

He noted that government agencies don’t tend to track their billable hours by case. And now, he said citizens are paying to have Katherine Kealoha incarcerated.

“You’re never going to get a dollar figure,” he said of the total. “It’s endless.”

What’s “outrageous” is that the costs to taxpayers were unnecessary, Silvert said.

“Any criminal defendant can plead guilty at any time,” he said. “They’ve obstructed and fought everything that has happened. That all costs lots of money. They didn’t have to do that.” 

He continued: “These guys fought the ethics commission, the police commission, they filed civil suits, they were trying to get free lawyers. Think of everything they’ve done. In my case, they tried to fight every single subpoena I issued, which took a lot of litigation. They didn’t resign. They didn’t step down without pay. They took the $250,000 payment. They got retirement.” 

Earle Partington, an attorney representing Katherine Kealoha, said the couple was just exercising their constitutional rights.

“It’s easy to make this kind of criticism, but they’re overlooking the fact there are rights involved here,” he said. “This is what our legal system provides for. There is no way around this. This is not something where money was necessarily wasted. It’s just part of the process, and an important part of the process.” 

At the Honolulu Ethics Commission’s meeting last month, commissioners discussed the city’s costs from a single case. The Kealohas sued the commission – as well as then-director Chuck Totto and investigator Letha DeCaires – in 2016 while they were under federal investigation. The Kealohas alleged that they were unfairly targeted by ethics probes.

It cost $355,682 to defend the ethics commission, $198,195.59 to defend Totto and $105,689.20 to defend DeCaires. Commission Director Jan Yamane described the costs as “out of this world.” Ethics Commissioner and former judge Allene Suemori remarked on how the bills compared to Oahu’s population — about 70 cents per resident.

Federal Public Defender Alexander Silvert gestures towards reporter during interview in his office located at the Federal Building.
Alexander Silvert, a federal public defender, represented the man the Kealohas accused of taking their mailbox. Cory Lum/Civil Beat

The costs of the ethics case alone are “stunning,” said Sandy Ma, executive director of the government accountability nonprofit Common Cause Hawaii.

The taxpayers are the losers,” Ma said. “It just doesn’t seem appropriate for the taxpayers to pay for the defense of the Kealohas or any public servant for wrongful actions committed during work hours.” 

When funds are spent combatting corruption, it means less money for needed programs.

“We have so many necessary services that could be spent in the city, infrastructure repairs, human services,” Ma said. “We have this homeless population that could be taken care of.”

Silvert said from the perspective of his client, Puana, the expensive legal process led to justice.

“He’s an innocent man who was exonerated,” he said. “There’s no amount of money that’s not worth that.”

As for taxpayers, they likely won’t get their money back, Silvert said.

For the criminal cases, it’s highly unlikely the Kealohas will be ordered to retroactively pay for their attorneys, Silvert said, and for the civil cases, there’s no chance the city will get back the money it’s spent on lawyers.

“They could’ve taken ownership of what they did at any point,” he said. “They never have.”

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