The Hawaii Attorney General’s Office is firing back against one of its top officials, who said Thursday that a fraud unit tasked with investigating government crime and corruption has done little in the last three years.

In written testimony to lawmakers Thursday, Daniel Hanagami, the AG’s chief investigator, said that the Complex Litigation Fraud and Compliance Unit has not pursued criminal cases that investigators have sent to the unit.

Hanagami also contends that a measure to fund a new unit to investigate government fraud, Senate Bill 2930, is a maneuver aimed at weakening his ability to supervise state investigators.

On Friday, the AG’s office said Hanagami’s characterization of the fraud unit’s work and the legislative measure is inaccurate.

“The department believes that using the legislative process to air grievances is inappropriate and an improper use of the valuable and limited time to hear important legislative matters,” Gary Yamashiroya, a spokesman for the department, said in a written statement to Civil Beat responding to Hanagami’s allegations.

The state Attorney General’s Office decried testimony from one of its top officials who claimed an anti-fraud unit has sat on corruption cases. Cory Lum/Civil Beat/2016

In annual reports to the public, the unit highlights civil cases that it has taken on. However, Yamashiroya said the fraud unit has worked on criminal cases, but the department can’t discuss what those cases are since they are still ongoing.

The unit worked on a federal and state task force to investigate fraud related to Covid-19 programs and also assisted the state Department of Labor and Industrial Relations in investigating fraudulent unemployment claims, according to the unit’s 2021 report.

Hanagami said that the three-year-old unit was dissolving. But Yamashiroya explained in a statement that the unit’s “criminal fraud and corruption responsibilities” were moved over to a different section of the department called the Criminal Justice Division about six months ago.

SB 2930 would help fund that fraud team, which would then be called the Special Investigation and Prosecution Unit. Lawmakers want to allocate $834,000 to fund nine positions for that team. The measure would also create another unit to combat sex and human trafficking.

Meanwhile, the department contends that the Complex Litigation Unit is still doing work and is staffed with analysts who previously worked on the federal level to investigate white collar crime and fraud.

The unit is also staffed with a “full complement of some of our best deputy attorneys general,” Yamashiroya said. The litigation unit also gathered evidence for the contested case hearings over the Navy’s use of the Red Hill fuel facility.

In Hanagami’s written testimony to lawmakers, he says that he is being targeted because of a civil rights complaint he filed with an unnamed federal agency against department officials.

On Friday, Hanagami declined further comment on the details of his civil rights complaint.

Yamashiroya said in his statement that officials considered Hanagami’s concerns that some personnel would be removed from his supervision. But the office determined that moving forward with the two new units would be the best way to fight crimes of corruption and human trafficking.

“While Mr. Hanagami may view the decision to be motivated by a desire to strip him of supervisory authority, the bills instead are designed to serve the public,” Yamashiroya said. “We would suggest that it is inappropriate to debate Mr. Hanagami’s employment grievances during a legislative process designed to develop laws to advance the public interest.”

Sen. Donovan Dela Cruz said that structuring the new unit in a way that allows investigators to work with government attorneys and prosecutors could help ensure better outcomes for investigations.

Dela Cruz said he introduced SB 2930, not the AG’s office, and that Hanagami’s issues with the department weren’t on his radar.

He said he wanted to help expand the office’s investigative capabilities.

“It didn’t seem they had enough resources to even do that at the state level,” Dela Cruz said. “This allows them to look at all levels of government, including counties, and nonprofits or even private companies.”

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