Big Isle cops
Hawaii County agrees
to pay $2 million to officers
who claimed promotion tests
were rigged for 10 years
HILO >> Hawaii County will pay $2 million to 19 current and former Big Island police officers in settling allegations of cheating on Police Department promotions going back two decades.
The amount is the largest paid as a settlement of a lawsuit against the county, said county Managing Director Dixie Kaetsu.
The settlement ends all claims against the county for alleged cheating on police promotions from 1984-1994, said attorney David Minkin, who was appointed by the court to represent the county.
The $2 million, to be made in five payments through June 1, 2005, will come out of taxpayer pockets.
Mayor Harry Kim said money was his main concern. "We've got to stop the bleeding to the public," he said.
In 1999, a Circuit Court jury found the county, former police Chief Wayne Carvalho and former Deputy Chief Francis DeMorales liable for fraud, racketeering, and other wrongs linked to promotions in a suit brought by 19 officers.
The jury ordered the defendants to pay $4.2 million, of which the county portion was $2.6 million.
The case is on appeal to the state Supreme Court. (The appeal will be dropped as part of the settlement). During the appeal, the amount defendants owe was accumulating at the rate of 10 percent a year, Minkin said.
The county portion alone is now $4.2 million, he said. In addition, the county has paid $3.5 million in attorneys' fees to date, Minkin said.
The settlement is not an admission that anything improper took place, Minkin said.
Kim said he felt the settlement was necessary, but he wasn't happy about it. "I feel like I want to say I'm sorry to the public for the whole thing," he said.
But the events have led to changes in the way police promotions are made, said Police Chief Lawrence Mahuna. Current procedures require much greater documentation, and Mahuna accepts whatever recommendations are made to him, he said.
The circumstances leading to the lawsuit started in the mid-1980s when then-Chief Guy A. Paul set up a procedure in which "promotion boards" of ranking officers posed verbal questions to promotion candidates, according to trial testimony.
Before that, Paul picked a person for a given promotion from a list of five candidates provided by the civil service system. After starting the promotion boards, Paul still had the legal right to pick anyone he wanted, according to testimony.
But Paul started telling Deputy (later Chief) Wayne Carvalho whom he preferred for promotion, and Carvalho passed the information to Inspector (later Deputy Chief) Francis DeMorales, who allegedly rigged interviews by giving preferred candidates questions and answers.
Paul testified that he never ordered his subordinates to rig exams. But DeMorales' wife, Paula, testified that her husband felt he was under orders. "He did things he didn't think were right because he had to," she testified.
University of Hawaii at Hilo political science Professor Rick Castberg, commenting yesterday, recalled that the promotions boards only made recommendations to Chief Paul.
"I never understood why it was necessary to more or less rig the exams when the chief had absolute discretion," Castberg said.
In 1988, Paul came under pressure for unrelated problems and retired. Carvalho left in 1989; DeMorales, in 1994.
In 1997, plaintiffs filed suit in Big Island Circuit Court.
During the trial, Judge Riki May Amano refused to let jurors know that the plaintiffs agreed to not to sue Paul. When he was brought into the case anyway, jurors found him liable for about $433,000, but the prior agreement meant he didn't have to pay it.
Amano gave the plaintiffs a month to present their case, but gave only a few days to defendants.
After the trial she fined two defense attorneys $175,000, payable to the plaintiffs, for allegedly frivolous counterclaims -- the highest such fines ever levied against attorneys in the state.
The defendants thought they had ample grounds for appeal. But attorney Minkin said yesterday that an appeal will take "a good couple of more years" and the best that would probably come of it would be another trial with still more expenses.
The settlement announced yesterday, signed by all 19 plaintiffs, includes an agreement not to seek the fines from the two attorneys. It also says if any new suits are filed against the county, the 19 plaintiffs must pay to defend the county.
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The scandal at a glance
The Big Island "police cheating case" spans two decades.
>> 1984: Chief Guy Paul sets up "promotions boards" to give him advice on picking candidates for promotions. He also tells his underlings whom he wants promoted. Inspector Francis DeMorales allegedly interprets Paul's comments as orders to rig promotions.
>> 1988: Paul retires under pressure due to issues not related to the promotions.
>> 1989: DeMorales, promoted to deputy chief, stays until 1994.
>>1996: Officers filed suit in federal court saying they were the victims of cheating. Suit is dismissed.
>> 1997: Officers filed suit in state court.
>> 1999: Nineteen officers win $4.2 million judgment.
>> 2000: Judge Riki May Amano orders two attorneys defending DeMorales and former Chief Wayne Carvalho to pay an unprecedented total of $175,000 in fines for allegedly frivolous counterclaims against the plaintiffs.
>> April 2003: In her last week before being removed as a judge, after delaying four years, Amano signs the order for $175,000 in fines.
>> October 2003: Hawaii County makes first $500,000 payment of a $2 million settlement of the case.