Honolulu Civil Beat (May 17, 2024) Tearful defendants and their attorneys embraced after the clerk read the verdict.

Honolulu’s former elected prosecutor, an island businessman and his company’s associates have been found not guilty in an alleged pay-for-prosecution scheme that the feds said threatened to put a woman in prison on bogus theft charges.

After a two-month trial, a jury found on Friday that longtime Honolulu prosecuting attorney Keith Kaneshiro did not conspire with Dennis Mitsunaga, the former CEO of a prominent engineering firm, Mitsunaga & Associates Inc., and several company employees to arrange for the prosecution of Laurel Mau, a former Mitsunaga employee.

Prosecutors said Mitsunaga’s company sought to use the criminal justice system to exact revenge on Mau for suing her former employer, and Kaneshiro benefitted from some $50,000 in campaign donations. 

The feds said this was accomplished with the assistance of then-Mitsunaga & Associates executive vice president and COO Aaron Fujii, senior vice president Chad McDonald and secretary Terri Ann Otani, as well as attorney Sheri Tanaka, all of whom were also acquitted on Friday. The defendants were facing possible fines and up to 15 years in prison on two separate conspiracy counts.

Throughout the trial, the defense maintained that the donations were a constitutionally protected form of political support and that their pursuit of Mau was based on a good faith belief that she had stolen from the company.

After the verdict was read, some defendants and their attorneys broke down in tears and the gallery, full of their loves ones, erupted in applause.

In remarks outside the courthouse, Kaneshiro criticized federal prosecutors for putting him and his co-defendants “under a cloud of suspicion” for years.

“The trial took two months. Two months. The jury came back in a day and a half,” he said. “What does it say about the government’s evidence and its investigation? I feel vindicated. But how am I going to get back my reputation?”

Asked if he will run for office again, Kaneshiro didn’t answer. But Mitsunaga, who was standing nearby, slapped him on the back and said he should.

“I’ll support you,” Mitsunaga said to laughter from co-defendants, their attorneys and families. “No campaign donations.”

Mitsunaga could still face charges of witness tampering and obstruction of justice for his alleged efforts to change the testimony of one of the trial witnesses. A grand jury has been convened on that matter, and Mitsunaga has been in custody for weeks, but charges have not been announced. His attorney, Nina Marino, declined to comment on the matter on Friday afternoon.

Mitsunaga was released from custody after the verdict was read.

“I’m glad to be out of that cold cell,” he said.

Mitsunaga, 82, has long been accused of using money to influence island politicians for his own benefit and has been investigated over the years. But the federal case was the first time he was charged with a crime.

The trial highlighted the largess of his political giving. The businessman and his associates donated more than $1 million to candidates between 2006 and 2021, evidence showed. At the same time, Mitsunaga’s firm has benefitted handsomely from government contracts, receiving work worth at least $49 million since 2011 alone.  

Documents and evidence showed at least some of the Mitsunaga group’s campaign contributions were illegal straw donations made in the names of people who didn’t actually provide the money.

And subcontractors who rely on Mitsunaga for work testified that they felt obligated to donate at Mitsunaga’s behest to, as one witness put it, stay on the firm’s “good side.” Prosecutors noted that Mitsunaga’s team “bundled” these kinds of checks to Kaneshiro so that the prosecutor would know who was behind it. 

In Mitsunaga’s defense, Marino noted that the money donated to Kaneshiro represented less than 5% of the Mitsunaga team’s political giving in recent years. On Friday afternoon, she said the case was an example of “government overreach.” Mitsunaga said the case has impacted his business.

The case is a noteworthy loss for the San Diego-based prosecution team led by Assistant U.S. Attorney Michael Wheat, who has been investigating corruption in Honolulu for more than a decade. 

In 2019, Wheat successfully prosecuted the largest corruption case in Hawaii history. Former deputy prosecutor Katherine Kealoha, her husband Honolulu Police Chief Louis Kelaoha and two Honolulu police officers were convicted and imprisoned for framing an innocent man — Katherine’s uncle. 

Federal prosecutor Michael Wheat has been investigating corruption in Honolulu for about a decade. (Cory Lum/Civil Beat/2019)

The Kealoha case spawned a separate indictment against three city officials who, the feds say, improperly circumvented the Honolulu City Council in granting Louis Kealoha a $250,000 retirement payout. 

The trial for those officials — former city attorney Donna Leong, former managing director Roy Amemiya and former police commission chair Max Sword — has been continuously delayed but is currently scheduled to begin in March 2025. 

Wheat declined to comment after the verdict on Friday.

Outside the courthouse, Kaneshiro criticized Wheat’s team and invited the media to investigate them.

“Why don’t you folks investigate how much money the federal government is paying by sending these special prosecutors from the mainland to come to Hawaii and to go after Hawaii citizens?” he said. “Not only this trial, but the whole years these guys have been investigating, coming here, flying here, staying at our hotels at the taxpayers’ expense.”