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Conversations secretly recorded by the former acting chief of the Honolulu Police Department are now key evidence in the case against three ex-city officials facing federal conspiracy charges.

The transcripts, unsealed in federal court this month, capture separate conversations in 2017 between former acting chief Cary Okimoto and the defendants: then-corporation counsel Donna Leong, former managing director Roy Amemiya and former police commission chairman Max Sword.

The trio are accused of conspiring to improperly arrange a $250,000 payout for former police chief Louis Kealoha, who was under federal investigation at the time and is now in prison. Federal prosecutors say the three defendants illegally bypassed the Honolulu City Council. The feds say City Council permission is required for expenditures of that size.

Okimoto is on record in the conversations expressing his disapproval of the arrangement.

“I don’t feel comfortable doing this at all,” he told Leong, Sword and the city budget director. “I just feel that we are violating the law and circumventing the system by doing this.”

Leong, Amemiya and Sword have pleaded not guilty and are scheduled to stand trial in October.

Okimoto’s conversations with the officials show the defendants’ desire to avoid a public City Council airing of the issue and instead quietly fund the payment with money budgeted for other purposes, according to the transcripts.

The transcripts are part of that were unsealed at the request of the Public First Law Center, formerly known as the Civil Beat Law Center for the Public Interest. The nonprofit group advocates for access to public records.

In a recorded phone conversation on Jan. 12, 2017, Okimoto and Leong discussed the payment, according to one transcript. Okimoto expressed concern that the HPD budget couldn’t cover it.

“We don’t have the money,” Okimoto told Leong.

Leong responded that according to then-budget director Nelson Koyanagi, city money is “fungible” and can be moved “from here to there.”

“Like let’s say you want to pay the recruits or whatever,” Leong said. “When you run out of money, you just re-tell him that you’ve run out of money, request the money. And he will fund it.”

Okimoto said any expenditure over $100,000 requires approval from the Honolulu City Council. Leong agreed and said the council would be notified, but not about a $250,000 settlement for the chief specifically. Payments can be processed as a “transfer” from a different budget line without council “permission” per se, she said.

Okimoto questioned why the money had to come from the HPD budget instead of Honolulu’s Department of Budget and Fiscal Services. Leong said that Koyanagi could explain that, the transcript shows.

“Go talk to him. Get comfort, and if you’re okay with it … he’s going to have to make sure his people are on board and he knows the confidentiality of it,” Leong said.

The following day, Okimoto spoke to Sword, who also discussed the possibility of a fund transfer, the transcript shows.

“What I was told was there is a way that we can do that,” Sword said. “Legally, legally.”

According to Sword, BFS had told the corporation counsel’s office this was allowed. Okimoto and HPD legal counsel Lynne Uyema expressed skepticism, with Uyema saying Koyanagi had not given his “whole stamp of approval.”

Koyanagi, who was terminally ill at the time of the indictment, was never charged in the case and died in 2022.

Okimoto told Sword that HPD didn’t have money lying around for unspecified purposes. Sword said if the payment wasn’t processed in the proposed manner, it could drag the process out for another three months. Okimoto said he was OK with that.

“I wouldn’t do it if it wasn’t legal,” Sword said.

Okimoto cautioned Sword that “maybe somebody is going to tell you it’s okay … saying it is legal when it is actually not.”

Uyema asked why the money had to come out of HPD funds.

“Oh, the reason it’s very simple,” Sword said. “So you don’t have to go to the seven bananas, I mean nine bananas up at the council.”

Uyema and Okimoto both said that was incorrect.

“No, we would have to,” Uyema said.

Later that day, Okimoto spoke to Leong, Sword and Koyanagi together. Leong explained the money for the payout would come out of HPD salary funds. When the department ran out of that money, Koyanagi would transfer funds from a “provisional account” and submit a notification – not a request for permission – to the City Council.

“So the timing is separated from the payments,” she said.

Okimoto said he was not ready to “fib” about what the money was really being used for.

“It wasn’t for … new recruits or contract hires or anything like that. It was for the severance package,” he said.

Leong said she would not ask anyone to do anything illegal. Sword said he hoped they could work something out, otherwise they’d be in for an “ugly session.”

In a May 2017 conversation, Amemiya told Okimoto not to bring up the matter of the payment at an upcoming City Council meeting, according to the transcript.

“I don’t think we want it to become a story or anything,” he said.

See some of the unsealed court records below. The transcripts begin on page 43.