Former Honolulu Prosecuting Attorney Keith Kaneshiro was arrested on Friday, accused of using the powers of his office to wrongfully prosecute the enemy of a major campaign donor who in turn directed tens of thousands of dollars to Kaneshiro’s reelection campaign. 

Kaneshiro, who had received a target letter notifying him he was being investigated by federal officials, is charged alongside local businessman Dennis Mitsunaga and employees of his architecture and engineering firm, Mitsunaga and Associates Inc., Terri Ann Otani, Aaron Shunichi Fujii, and Chad Michael McDonald. 

All defendants pleaded not guilty at an arraignment on Friday afternoon. Magistrate Judge Wes Porter ordered them all released on $50,000 unsecured bonds. A jury trial was scheduled for Aug. 16 before Chief Judge Michael Seabright.

Kaneshiro allegedly used his authority to target a former employee of Mitsunaga’s firm at the businessman’s behest. In turn, he received over $45,000 in campaign contributions between 2012 and 2016, according to the indictment.

Defendants engaged in “quid pro quo bribery” to corruptly influence and reward Kaneshiro, the feds say.

“The citizens of Hawaii deserve a government free of corruption,” FBI Special Agent in Charge Steven Merrill said in a statement. “Corruption erodes the public trust and the FBI is committed to ensuring that people cannot buy prosecutions in the State of Hawaii.”

The defendants were indicted by a grand jury for conspiracy to commit honest services fraud and federal program bribery and conspiracy against rights, the indictment states. An unnamed attorney for Mitsunaga’s firm was an unindicted co-conspirator, according to the indictment. 

The case represents one tentacle of a sprawling and yearslong corruption probe led by San Diego-based U.S. Attorney Michael Wheat. His inquiry into former deputy prosecutor Katherine Kealoha and Honolulu Police Chief Louis Kealoha resulted in multiple felony convictions for the couple and their accomplices in HPD. And three former city officials accused of arranging the disgraced police chief’s retirement settlement are currently fighting their own conspiracy charges in federal court.

The indictment follows years of suspicion around Kaneshiro, who received a federal target letter in 2018, and Mitsunaga, who has a long history in Hawaii politics.

Kaneshiro, 72, and Mitsunaga, 78, were arrested at their homes on Friday morning. Both men, along with Fujii, 64, and McDonald, 50, declined to comment while leaving the federal courthouse on Friday afternoon. An attorney for Otani, 66, who wore a prison jumpsuit during the arraignment, also declined to comment.

Feds: Mitsunaga Sought Prosecution Of Former Employee

The alleged conspiracy involving Kaneshiro and Mitsunaga centers on a person identified in the indictment as LJM, who was fired from Mitsunaga’s firm in 2011 after she voiced disagreement with “claims Mitsunaga made about her,” according to the indictment. The description of that person matches that of Laurel Mau. 

Here’s how the indictment describes what happened:

The firm, through Otani, Fujii and others, contested LJM’s request for unemployment benefits from the state, appealing it twice. 

On July 17, 2012, Fujii reported a case of theft to the Honolulu Police Department, accusing LJM and a local Honolulu attorney – identified in the indictment as SM – who had filed a lawsuit against the firm in 2012. 

Mitsunaga accused LJM of committing theft by billing time to the firm and using company resources, including email and phone, while working unauthorized “side jobs,” the indictment states. 

“The accusations against L.J.M. were baseless and motivated by a desire to intimidate L.J.M.,” the U.S. Attorney’s office said in a press release.

In August 2012, LJM sued Mitsunaga’s firm in federal court alleging a violation of her civil rights. 

In October 2012, Mitsunaga and the firm’s attorney – the alleged unindicted co-conspirator – met with Kaneshiro and the prosecutor’s executive assistant to try to persuade Kaneshiro to investigate and prosecute LJM. 

In the following weeks, Mitsunaga and other co-conspirators began contributing money to Kaneshiro’s reelection campaign, according to the indictment. 

From October 2012 to October 2016, the involved parties contributed approximately $45,000 to Kaneshiro’s campaign coffers, the indictment states. Previously, the donors had never contributed to Kaneshiro. 

Around June 2014, an unnamed senior deputy prosecuting attorney recommended against filing charges against LJM, according to the indictment.

But Kaneshiro would keep the case alive regardless after Mitsunaga was unable to beat his former employee in civil court, according to the indictment.

In July 2014, a civil lawsuit between LJM and Mitsunaga’s firm proceeded to trial in federal court. In the course of the case, Mitsunaga filed counterclaims against LJM, but a jury found no liability on any claim or counterclaim in the case with one exception. It found LJM had engaged in a “breach of loyalty” for which Mitsunaga’s firm was awarded $1. 

In October 2014, Otani and McDonald submitted declarations, under penalty of perjury, to the court that included omissions of fact and in McDonald’s case, “material misstatements,” according to the indictment. 

And that fall, Kaneshiro reassigned LJM’s case from the prosecutor who had declined to charge it to a newly hired prosecutor, identified only as JD. His description matches that of attorney Jake Delaplane, who confirmed as much on Friday afternoon.

In November 2014, Delaplane attempted to file a felony information against LJM in state court. Filing an information is a way for prosecutors to charge cases without going through a grand jury or a judge at a preliminary hearing. In Delaplane’s case, the judge rejected it because it lacked an affidavit from law enforcement. 

Soon after, Kaneshiro assigned Vernon Branco, a prosecutor’s office investigator, to sign an affidavit in support of the felony information against LJM. 

Delaplane subsequently filed a felony information against LJM, alleging four counts of second-degree theft. LJM was arraigned in December 2014. 

In an email on Friday, Delaplane reiterated a previously-released statement in which he said he was unaware of the relationship between Kaneshiro and Mitsunaga at the time he filed the information. 

On Sept. 15, 2017, over the objection of a deputy prosecutor, First Circuit Judge Karan Nakasone dismissed the felony information against LJM with prejudice – meaning it could not be refiled. The judge found a lack of probable cause for the charges and “significant irregularities” in the prosecutor’s investigation and prosecution, according to the indictment. 

Civil Beat reported at the time that Nakasone described the case as “highly unusual,” “irregular” and a “threat to the judicial process.”

“Other than the complainant Mitsunaga & Associates’ own in-house investigation, no independent, outside investigatory body appears to have been consulted in this case,” Nakasone said in 2017.

Afterward, Kaneshiro directed a deputy prosecutor, identified only as CS to draft an appeal, according to the indictment, but it was never filed and the deadline for submitting an appeal lapsed. 

Delaplane said in his email that he left the prosecutor’s office in December 2015 and the case was assigned to former first deputy prosecutor Chasid Sapolu. Sapolu later received a subject letter from the feds and took paid leave from work but has not been charged with a crime. He did not respond to a request for comment on Friday evening.

“To be clear, if Mr. Kaneshiro maintained this case in the office for an improper or illegal purpose, he should be held accountable,” Delaplane said. “If witnesses or anyone associated with this case knowingly lied about Ms. Mau’s conduct, they should be held accountable as well.”

Delaplane added that he believed the information provided by Mitsunaga & Associates established probable cause in Mau’s case, and that Mau’s arrest warrant was approved by a judge, in this case District Court Judge Hilary Benson Gangnes.

“Prosecutors rely on the information presented to them in order to do their job,” he said. “That’s what I did in this case.”

Throughout the alleged conspiracy, Mitsunaga and his associates contributed thousands of dollars to Kaneshiro’s campaign fund, according to the indictment. And other donations were submitted in the names of people who were not the true owner of the funds, the indictment states.

Mitsunaga circumvented campaign contribution limits by asking for donations from family members, business partners, employees and subcontractors, federal prosecutors said in a press release.

Ali Silvert, a former federal public defender whose work on the Kealoha case resulted in the San Diego prosecutors’ investigation, said Kaneshiro’s indictment demonstrates a need for campaign finance reform.

“It’s time we took a serious look at the laws because it just can’t continue to go on the way it is,” he said. “It shouldn’t take a federal probe to come into Hawaii to do this. We need state action and state accountability on this.”