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The Honolulu Advertiser
Posted on: Friday, July 22, 2005

Tanonaka admits breaking the law

By Ken Kobayashi
Advertiser Courts Writer

Dalton Tanonaka leaves federal court after pleading guilty to campaign fund irregularities.

Jeff Widener | The Honolulu Advertiser

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A former journalist, once considered a promising new face in Hawai'i's political landscape, now faces sentencing in November for his guilty pleas related to what authorities say was funneling $73,000 in illegal and unreported loans into his campaigns for lieutenant governor in 2002 and Congress in 2004.

Dalton Tanonaka, 51, pleaded guilty yesterday in federal court to three felonies and a misdemeanor of making false statements on loan applications and on his disclosure form to the U.S. House of Representatives when he ran for Congress. He also pleaded guilty to a misdemeanor of accepting a contribution that exceeded the $2,000 limit in his congressional bid.

The charges carry prison terms totaling 66 years, although a presentence recommendation that U.S. District Judge Helen Gillmor will receive from federal officials is likely to be for far less prison time.

Assistant U.S. Attorney Michael Purpura declined to speculate on the recommendation, but Tanonaka's lawyer Michael Green said the crimes do not exclude probation and said the recommendation could be about a year.

Green, who said no one lost any money, called the offenses "technical" violations."

"I don't think he was trying to hide anything, but that doesn't make it OK," Green said, calling his client a "class act."

"This is breaking his heart and breaking his family's heart, but he's taking responsibility," Green said.

Charles Goodwin, the special agent in charge of the FBI offices here, said political candidates, like public officials, are held to a higher standard.

"It is essential that persons seeking and occupying these position of trust be scrupulous in their observance of the laws," he said. "The people should expect and demand no less."

Tanonaka, a former newspaper reporter and television anchor for CNN International and CNBC Asia, ran as a Republican. He lost to Lt. Gov. James Aiona in the 2002 primary, and to U.S. Rep. Neil Abercrombie in the 2004 general election.

He pleaded guilty as part of a plea agreement before U.S. Magistrate Kevin Chang.

"I failed to provide the required information," he told the magistrate.

He also admitted he received a campaign contribution above the $2,000 legal limit in his congressional race, a reference to the misdemeanor charge that he gave his campaign $11,000 from a loan he obtained from another person.

Tanonaka was allowed to remain free pending his sentencing on a $25,000 bond.

He declined to comment yesterday.

During the court hearing Green said Tanonaka is selling his home and has not worked for about a year. Green asked that his client be able to seek a job in Japan. "He needs to work to support his family," Green said.

Chang allowed Tanonaka to travel to that country if he notifies the federal probation office and secures the bond with assets.

According to prosecutors, Tanonaka received three personal loans of $73,000 in 2002 from three individuals, identified only by their initials, and deposited the money in his personal bank account. Without disclosing the loan sources, Tanonaka deposited $69,000 to his campaign, including $24,000 two days before the primary election, Purpura said.

The state campaign spending law prohibits candidates from accepting personal loans over $10,000 from donors.

Tanonaka later obtained four mortgage and credit-line loans from Central Pacific Bank in 2003 without disclosing he owed money from the earlier loans, the basis of the false statement charges, according to prosecutors.

In his bid for Congress, Tanonaka obtained a $25,000 loan from his brother-in-law in October 2004, saying it was "crunch time" in the race. That same day, he gave $11,000 — $9,000 over the limit — to his campaign, federal authorities said.

He also failed to disclose on his financial statement when he ran for Congress debts from two of his 2002 loans and a $3,000 payment he received for consulting work, prosecutors said.

Goodwin said the FBI and U.S. attorney general's office began the investigation in November 2004 after getting the case from the state Campaign Spending Commission.

Bob Watada, the Campaign Spending Commission's executive director, said the commission received information from people in Tanonaka's campaign and realized through its investigation there may have been violations.

He said the message here is that candidates must know the law.

"You're asking to represent the people in Congress," Watada said. "I think people expect you to go out of the way to understand what the law is."

Federal prosecutors said they can't recall the last time a Republican candidate here was prosecuted by federal authorities for campaign violations, but Goodwin said party affiliation didn't matter.

"Regardless of party affiliation, if there's a violation of the law, we're going to pursue it vigorously," Goodwin said.