A new Kaua'i grand jury is looking into potential criminal charges against retired car dealer Jimmy Pflueger over the collapse of the Kaloko Reservoir dam, which killed seven people.

Led by state Attorney General Mark Bennett, the secret panel is meeting this week in Kaua'i Circuit Court to look into allegations that Pflueger altered the century-old earthen dam, causing the deadly March 2006 breach, people familiar with the proceedings said.

Yesterday, the grand jury heard testimony from several witnesses, including a former Kaua'i County engineer and a worker from the state Department of Land and Natural Resources.

The panel also questioned a trustee of the Mary N. Lucas Trust, which owns nearby land, and an employee of the local civil engineering and landscaping firm Belt Collins.

On Tuesday, the panel took testimony from the state's expert, University of Hawai'i engineering professor Horst Brandes.

The new grand jury is separate from an investigative grand jury that met this summer. That panel took testimony from a number of experts and witnesses but did not issue an indictment.

Legal experts not connected to the Kaloko case said prosecutors typically use a separate grand jury to seek an indictment in cases as complex as the Kaloko dam tragedy. The volumes of information that an investigative grand jury obtains can be unwieldy for a criminal case, they said.

The attorneys also said that prosecutors can seek a separate indicting grand jury in cases that involve civil lawsuits to keep the two types of legal proceedings separate.

Bennett declined comment yesterday.

WAS SPILLWAY FILLED?

For the past two years, the state has been investigating whether Pflueger or anyone else tampered with the earthen dam and contributed to its failure.

Investigators and their experts had focused on whether a key safety feature, the spillway, was filled in. The concrete spillway was designed to automatically let water flow over the dam to relieve pressure during heavy rains or flood conditions.

Yesterday, the grand jury asked witnesses about work conducted on Pflueger's land in 1997, a person familiar with the proceedings said.

The grand jury also interviewed a former Kaua'i engineer, who had investigated illegal grading work on Pflueger's property.

Pflueger has denied that he altered the dam.

Relatives of the seven victims and several Kaua'i residents, including entertainer Bette Midler, have sued Pflueger for damages they allege were caused by the Kaloko dam breach.

Pflueger, in turn, has sued the state and C. Brewer & Co., the former owner of Kaloko Reservoir, alleging they knew about possible problems with the dam.

On Tuesday, Pflueger attorney Bill McCorriston argued before Kaua'i Circuit Judge Randal Valenciano that the state attorney general's office should be disqualified from bringing a criminal action because of a conflict of interest.

DUAL ROLE

While the attorney general's office pursues a criminal investigation, it also is defending the state, which is the target of civil lawsuits stemming from the Kaloko tragedy.

McCorriston also said the state should provide the grand jury with evidence favorable to his client. For instance, the state previously classified the Kaloko structure as a "low hazard" dam that would cause no damage if it were to break, he said.

The attorney also cited a report by Lelio Mejia, of URS Corp. in Oakland, Calif., who is an engineering expert hired by independent investigator Roger Godbey.

Mejia said the dam probably failed because the emergency spillway was covered up, but he also conceded that other factors, such as internal erosion of the dam wall and deformation of the dam by water pressure, were possible contributors.

Bennett previously denied any conflict of interest, saying he has played no role in the civil lawsuits.

"Since the Kaloko dam tragedy occurred, I have led the state's criminal investigation into this matter with one and only one goal: to determine whether criminal charges are legally and factually warranted and appropriate," Bennett said in a Nov. 11 news release.

Valenciano, the supervising judge in the Kaloko grand jury proceedings, denied the motion without prejudice, allowing the grand jury proceedings to go on.