Waste of the Day: Hawaii’s Police Corruption Scandal Continues

by Jeremy Portnoy, RealClearInvestigations, July 07, 2025

Topline: Something is off about the math in Honolulu’s police department corruption scandal, and taxpayers will be left shortchanged. 

Former city officials admitting their involvement in a conspiracy to give former Police Chief Louis Kealoha a secret $250,000 payout were ordered to repay the full amount to the city. However, taxpayers will reimburse the three officials $308,000 for their legal fees, according to KHON2.

Meanwhile, Kealoha still has his $250,000 payout and is still earning a pension, despite acknowledging that he is required to give back the money.

Waste of the Day 7.7.25

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Key facts: Federal authorities investigated Kealoha for corruption in 2017. To avoid the negative publicity, three city officials arranged to pay him $250,000 to retire and “concealed the details of the Kealoha payout from the City Council and the public,” according to an unsealed indictment reviewed by Spectrum News.

Former City Attorney Donna Leong and former Police Commission Chair Max Sword pleaded guilty to conspiracy for their role. Former Honolulu City Manager Roy Amemiya had his charges dropped by signing a deferred prosecution agreement.

A federal court ordered Leong to pay $100,000 to the city, but in June the Honolulu City Council agreed to reimburse her $102,000 for her legal bills. Sword must repay $100,000 but will be reimbursed $106,000 for his legal bills. Amemiya must pay $50,000 but will be reimbursed an estimated $100,000, KHON2 reported. In the end, the court case will cost taxpayers $58,000 plus years of prosecution costs.

Background: Kealoha received the payout in 2017. When the City Council found out, they allowed him to keep the money with one condition. He had to repay it if he was convicted of a crime. Kealoha agreed because, as he told the Honolulu Civil Beat, “I felt that we never did anything wrong and that we would be exonerated, and then everybody would move on.” 

The city did not move on. Instead, Kealoha and his wife, former city prosecutor Katherine Keoloha, were sentenced to prison in 2020 following what the Department of Justice called “one of the largest public corruption cases in Hawaii history” that was “staggering in its breadth, its scope, and its audacity.” 

A federal jury found that the couple stole $148,000 from Katherine Keoloha’s grandmother and spent it on Elton John concert tickets, a trip to Disneyland, a $24,000 brunch bill and more. The couple then used the resources of the Honolulu Police Department to try and frame Katherine’s uncle for the crime, the jury found.

Louis Kealoha still has not returned his $250,000 payout. He earns a $150,000 annual pension, but the city can’t touch it, according to the Civil Beat. A recent Hawaii law allows cities to take pension funds away from a public official for restitution if they are convicted of a crime, but only if the crime was committed after 2021. 

Summary: What is the point of prosecuting lawbreaking public employees if taxpayers will lose money either way? 

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