Taxpayers Shouldn鈥檛 Expect Louis Kealoha To Pay Them Back Anytime Soon
The Honolulu Police Commission gave the former chief a retirement payment of $250,000 after he was named as the target of a federal criminal investigation.聽
Now that former Honolulu Police Chief Louis Kealoha is a convicted felon, his former employer wants its money back.
In January 2017, the Honolulu Police Commission approved a deal to pay Kealoha $250,000 to retire as police chief of one of the nation鈥檚 largest departments after he was named a criminal suspect in a wide-ranging U.S. Justice Department corruption probe.
That deal, which was negotiated in secret, included a provision that if Kealoha was convicted of a felony within six years he would be forced to return the cash.
Last week, Kealoha and his wife, former city prosecutor Katherine Kealoha, were found guilty along with two Honolulu police officers of framing her uncle, Gerard Puana, for the theft of their mailbox in 2013.
That conviction now allows the city to claw back the $250,000, something Honolulu Mayor Kirk Caldwell’s spokesman Andrew Pereira says is already in the works.
The only problem is the agreement states Kealoha doesn鈥檛 have to actually pay back that money until he鈥檚 exhausted all his appeal options, a process that can take years.
He also faces another criminal trial in October for a series of financial crimes, including bank fraud.
鈥淣o one should be holding their breath,鈥 Honolulu Police Commission Chairwoman Loretta Sheehan said. 鈥淗owever, with perseverance, we should be able to get the money back.鈥
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Sheehan, a former federal prosecutor, was the only police commissioner to vote against paying Kealoha $250,000 to leave the Honolulu Police Department.
She felt that the commission instead should have begun termination proceedings based on Kealoha鈥檚 record as police chief.
Kealoha鈥檚 defense lawyer Rustam Barbee said he has yet to make a decision on whether his client, who鈥檚 scheduled for sentencing in October, will appeal his conviction.
鈥淚t鈥檚 premature at this point,鈥 Barbee said. 鈥淲e have these two bigger fires to deal with, and that鈥檚 the second trial and the sentencing. So the issue of an appeal is kind of in the third position right now.鈥
There鈥檚 a question of whether Kealoha will have the money to pay back HPD should his conviction stand.
A judge appointed Barbee as Kealoha’s publicly-funded defense lawyer in his criminal trial after Kealoha argued he was too broke to afford his own attorney.
Kevin Sumida, a private attorney who once represented Kealoha and his wife, told the court the couple owes him upwards of $500,000 in legal fees. Sumida has tried putting a lien on the Kealohas鈥 Hawaii Kai home in an attempt to recoup his costs.
Sumida did not respond to a Civil Beat request for comment.
If the city can鈥檛 get Kealoha to pay back the $250,000 he owes up front there鈥檚 a possibility it could garnish his pension. After 33 years with HPD, Kealoha receives an estimated $150,000 a year in pension payments plus other benefits.
Still, not everyone is confident HPD will ever collect on Kealoha, especially if he declares bankruptcy.
鈥淭he city and county taxpayers are never going to see that money come back,鈥 said Alexander Silvert, the federal defender who represented Puana when he was charged with stealing Kealoha鈥檚 mailbox.
鈥淯nfortunately, I think the people in the know here knew that the very moment the agreement was reached, and I think that is the question we really should be looking at. Why enter into an agreement if you think it鈥檚 never going to get paid back?鈥
He pointed out that the $250,000 deal 鈥 which was negotiated in secret by former Honolulu Police Commissioner Max Sword and Honolulu Mayor Kirk Caldwell鈥檚 top civil lawyer, Corporation Counsel Donna Leong 鈥 is now the subject of the DOJ鈥檚 criminal investigation.
Leong received a target letter in January indicating federal authorities have substantial evidence linking her to a crime. Leong is now on paid leave from the city.
There鈥檚 also a question about whether the Honolulu Police Commission violated the state鈥檚 open meetings law when it cut the deal with Kealoha.
Last week, the Hawaii Supreme Court ordered a judge to review the commission鈥檚 secret meetings. If there was a violation of the state鈥檚 sunshine law that could nullify the commission鈥檚 vote to pay Kealoha the $250,000.
Sheehan said if that happens it could allow the commission to force Kealoha to immediately pay back the money rather than wait for the appeals process to play out.
She added that she doesn鈥檛 have the sense the commission, as it鈥檚 made up today, would simply ratify its previous vote.
鈥淲e鈥檙e in a very different posture now,鈥 Sheehan said. 鈥淚 don鈥檛 think that there would be a payout again.鈥
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About the Author
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Nick Grube is a reporter for Civil Beat. You can reach him by email at nick@civilbeat.org or follow him on Twitter at . You can also reach him by phone at 808-377-0246.