Thursday, June 18, 1998



Kihano sentence
‘sends message’

'Community leaders
should be especially careful
in following laws'

By Craig Gima
Star-Bulletin

Tapa

Former state House Speaker Daniel Kihano had nothing to say when a federal judge sentenced him to two years in prison for stealing money from his campaign fund and lying to cover up the theft.

But U.S. Attorney Steven Alm said the sentence already has sent a message to other elected officials and to the public.

"It says no one is above the law," Alm said after Kihano's sentencing hearing yesterday. "The sentence helps restore the public's trust, because I think people can be reassured that when wrongdoing is uncovered, there will be consequences."

Robert Watada, executive director of the state Campaign Spending Commission, said the sentence "sends a very clear message."

"In particular, those people who are leaders in our community should be especially careful in following the laws that we all have to live by," he said.

Since Kihano's indictment last year, Watada said, there has been an increase in the number of calls to the commission from candidates with questions about the proper use of campaign funds.

"I think in our democracy, people put a lot of trust in public government. People are expected to be accountable to themselves and accountable to the public," Watada said.

"To restore the trust is going to take time. I think, unfortunately, there's a negative attitude toward politicians, and this type of thing is going to hurt politicians."

Lawmakers who worked with Kihano in the House called the sentence sad.

Rep. Barbara Marumoto (R, Waialae Iki) described Kihano as "a very nice gentleman who did some unwise things."

House Speaker Joe Souki (D, Wailuku), who was Finance Committee chairman under Kihano, expressed sympathy for Kihano's family.

"I'm sorry to see this happen to Danny," Souki said. "He provided great service to the state of Hawaii."

Marumoto thinks Kihano's prison sentence means elected officials are under scrutiny and should watch how their campaign funds are spent.

"They (members of the public) really lose faith in elected officials when they see improper use of campaign funds," she said. "It really helps restore faith in government when somebody is brought to justice."

Kihano's case was the first federal violation of campaign law tried in this state. But Alm believes it will not be the last.

Former state Sen. Milton Holt is under investigation for taking money out of his campaign fund.

Honolulu Prosecutor Peter Carlisle said police, state and federal investigators are reviewing the case.

A Campaign Spending Commission investigation into Holt's campaign was turned over to police last month.

The commission charged that Holt since 1992 loaned himself $15,000 and also paid himself $9,800 in petty-cash disbursements from his campaign fund.

Under state law, a candidate cannot use campaign money for personal expenses.

Holt has not been arrested or charged with a crime.

The commission also is continuing its investigation into Kihano's campaign finances.

Watada said Kihano raised more than $118,000 in two fund-raisers prior to leaving office and then did not run for office again. He said it is not clear what happened to the money in Kihano's campaign fund.

Kihano's case stemmed from a federal investigation into drug-money laundering involving two business partners in a venture to build a private surgery center on Maui.

Kihano was never charged in the money-laundering case.

His business associates, Henry Blakley and Richard Frunzi, pleaded guilty to conspiracy charges and are scheduled to be sentenced later this summer.



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