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Honolulu Police Chief Louis Kealoha, who is under investigation for public corruption, will receive a $250,000 cash payment as part of a retirement deal he cut Wednesday with the Honolulu Police Commission.

Kealoha has agreed not to file any new lawsuits against the commission, the Honolulu Police Department or the city as it relates to his job. He has also agreed to pay back the $250,000 to the city should he be convicted of a felony. If he spends all the money before then, the commissioners said they would likely have to sue to get it back.

“He has said publicly that he has done nothing wrong,” Police Commission Chairman Max Sword said while reading from a prepared statement at a Wednesday meeting. “To back that up, we asked him to return the money if he is convicted of a felony, and he agreed to do so because he believes he has done nothing wrong.”

Kealoha’s official retirement date will be March 1. He has 33 years of service and is expected to receive about $150,000 a year from his pension in addition to other retirement benefits.

According to the settlement agreement, Kealoha will be allowed to resign in “good standing.”

The seven-member commission, which has come under fire for offering a payout to Kealoha, noted that the settlement amount is half of what the chief would have earned had he stayed on the job through the end of his full five-year term, which would have ended Nov. 27, 2019.

“The department has been under a dark cloud for the past two years with all this federal investigation. We believe that the police department needs to move on to get out from under that cloud.” — Max Sword

Sword said during a press conference after the decision was announced that it was important to end HPD’s relationship with Kealoha so that the community could be better protected by its officers. He said $250,000 was a “small price to pay” to protect the community, noting that the ongoing corruption probe has weighed heavy on the rank and file.

“Can you put a price tag on that the safety of the community? I don’t think so,” Sword said. “The department has been under a dark cloud for the past two years with all this federal investigation. We believe that the police department needs to move on to get out from under that cloud.”

The commission voted 5-1 in a closed-door session to approve the settlement agreement with Kealoha. Loretta Sheehan, a former federal prosecutor, was the only commissioner to vote against the deal. Commissioner Eddie Flores Jr. was absent from the meeting.

Sheehan told the press that while she understood her colleagues’ decision to give Kealoha the payout she preferred to begin termination proceedings against Kealoha, which would have given him a chance to respond to any allegations the commission might raise about his ability to run the department.

“I voted against the agreement because I believe it’s expensive, unnecessary and very likely undeserved,” Sheehan said. “My position is that we should send a letter that I’ve made available to the commissioners to the chief of police and conducted a for cause hearing to examine the issues that have been raised regarding his leadership abilities.”

Honolulu Mayor Kirk Caldwell issued a statement after the retirement deal was announced, saying that any delays caused by protracted legal fights or conducting a termination hearing would have likely cost taxpayers more money in the long run.

“Like many residents of Honolulu I’m concerned about the use of taxpayer funds as stated in this agreement, but allowing this situation to linger is not in the best interest of our men and women in blue, or the people of the City and County,” Caldwell said in the statement. “I appreciate the fact that, should Kealoha be indicted and found guilty of a felony within six years of the signed agreement, he has agreed to return those funds to the city.”

(The agreement actually says within seven years, not six.)

A Growing Scandal

Kealoha’s decision to retire comes amid a growing scandal involving several officers in his department as well as his wife, Katherine, who is a city prosecutor. The Kealohas have been accused of framing Katherine Kealoha’s uncle, Gerard Puana, for stealing their mailbox in 2013 in an attempt to gain an advantage in a legal dispute over money.

One HPD officer has already pleaded guilty to taking part in the alleged mailbox conspiracy and several others have been implicated in the wrongdoing. The chief’s wife is considered to be “Co-conspirator No. 1,” court records indicate.

“I shared my heart with him and let him know that for selfish reasons I really hate to see him leave. But I also respect his decision in doing the more honorable thing for himself, for his family and for the department as a whole.” — Tenari Maafala

The U.S. Justice Department, which had launched its investigation nearly two years ago, served the chief with a target letter in December notifying him that a grand jury had found evidence linking him to possible violations of federal criminal law. At least four other police officers received similar correspondence.

Kealoha placed himself on restricted duty on Dec. 19 as a result of getting the target letter, meaning he would give up his badge, gun and police powers. But even in the face of a criminal investigation, Kealoha remained defiant. He issued a statement through the department Dec. 20 professing his innocence.

“There is no economic advantage to my staying on as chief, but if I leave the department now, I give credence to the baseless attacks,” Kealoha said. “I will continue to stand up for my police officers even if it means continued criticism from those who either do not care to understand, or who are pursuing their own political agenda.”

Later that same day, Sword announced that the chief would instead take an indefinite leave of absence from the department, albeit with pay, and that police commissioners would begin deliberations about his future.

Those talks, however, have taken place behind closed doors, despite concerns that the commissioners have been violating the state’s Sunshine Law, which requires government meetings to be open to the public except in the rarest of circumstances.

The police union president, Tenari Maafala, was the only person to offer public testimony during Wednesday’s meeting. He used his time before the commissioners to offer his moral support to Kealoha, a person he described as “more than just a chief” and a “brother in blue.”

“I obviously don’t know the decision and the fate of Chief Kealoha other than what’s been reported in the news that he has decided to retire,” Maafala said. “I shared my heart with him and let him know that for selfish reasons I really hate to see him leave. But I also respect his decision in doing the more honorable thing for himself, for his family and for the department as a whole.”

Maafala added that no police officer’s interests should be greater than HPD as an institution that values integrity, respect and fairness.

He also praised the ongoing actions of police officers who continue to do their jobs despite the corruption probe. Maafala specifically addressed two incidents in the past week — one at Malaekahana Beach Campground and the other in Kahaluu — in which officers said their lives were in danger.

The incident at Malaekahana resulted in the , who HPD officials said tried to run over an officer in a stolen truck.

“It’s evident that our officers continue to do what they do best despite and in spite of what’s been going on with the unknown outcome of the federal investigation,” Maafala said.

Written Testimony From Citizens

A handful of citizens submitted written testimony to the commission, including state Sen. Will Espero, who told the commissioners that they should not approve any settlement with Kealoha beyond what he will earn through his guaranteed retirement as a city employee.

Espero said the chief should instead remain on paid or unpaid leave while the federal investigation proceeds.

“One police officer has already pled guilty of federal conspiracy charges,” Espero said. “This increases the odds that others will be indicted and face prosecution. Since the chief appears to be a target of this federal investigation, one would think it is not in the best interest of taxpayers to give the chief a bonus for the situation he is in.”

Marjorie Morgan, a former HPD personnel assistant with 17 years of experience who worked under Kealoha, also submitted testimony that was critical of both the chief’s leadership style — one that she said rewarded “‘Yes’ men” over “smart efficient people” — and the commission’s intent to give him a cash settlement in addition to his regular retirement benefits.

“I worked under Chief Kealoha as a civilian employee in the Human Resources Division (HRD) before retiring in 2011 with a pittance of a retirement,” Morgan wrote. “When he became Chief he talked about Aloha and Pono … what a joke! He is a Big Black mark for the HPD and he should not have been given another five years!”

‘Mr. Joe Aloha’

The Police Commission appointed Kealoha as HPD’s 10th chief in 2009 while he was a captain in the Juvenile Services Division. Before that assignment, he was a captain in charge of property crimes in the Criminal Investigation Division.

Kealoha’s rise to power came amid unrest within the department. Many officers in the rank and file were upset with then-Chief Boisse Correa, who had a fractious relationship with the state’s police union, the State of Hawaii Organization of Police Officers.

Correa had taken a hard-line approach to disciplining officers who had been accused of misconduct. He had also modified officers’ work schedules so that they could not get as many special duty assignments, such as those directing traffic in construction zones, to help pad their salaries.

Kealoha, on the other hand, was a darling of the union and the rank-and-file. Maafala once described Kealoha as “Mr. Joe Aloha.”

The commission must now begin the process of finding a new police chief. Sword said the commission has yet to decide how it will move forward on that front, but he noted that it could involve creating a subcommittee to search for candidates both in and out of the department.

In the meantime, Sword said he felt that Deputy Police Chief Cary Okimoto, who was named as the interim chief in December after Kealoha first went on paid leave, has been doing a “great job” running the department.

Okimoto, however, has his own issues to contend with as he was the commander of the patrol district that had a heavy hand in the surveillance and arrest of Puana in 2013 for the theft of the Kealohas’ mailbox.

You can read Kealoha’s retirement deal here: