For decades, when Hawaii governors, mayors and legislators needed to fill a seat on a powerful board or commission, they called Max Sword.
A longtime Outrigger hotel executive and lobbyist, Sword was a member of the political class’s inner circle and had the resume to prove it.
At various times, Sword, 70, had a hand in vetting the job applications of state judges, deciding how much money state legislators should make and drawing the maps of Honolulu’s voting districts. And currently, he’s on the board of the Honolulu Board of Water Supply.
It goes to show how much Hawaii politicians trusted Sword, said Colin Moore, director of the University of Hawaii Public Policy Center.
“The reason to have someone like Max Sword is to have a representative who understands the political context these commissions are operating in,” Moore said. “Any politician wants someone who thinks about that. Probably someone they can call and ask, ‘What’s going on?’”
It was Sword’s role as chairman of the Honolulu Police Commission that would lead to his indictment last month on a federal conspiracy charge.
Sword is accused of conspiring with former city attorney Donna Leong and former managing director Roy Amemiya to misuse city funds to give former police chief Louis Kealoha a $250,000 retirement package. Sword, Leong and Amemiya have all pleaded not guilty.
The payment has attracted criticism for years because Kealoha was under federal investigation for corruption when it was made. The chief would ultimately face charges – alongside his wife, former prosecutor Katherine Kealoha – for framing Katherine’s uncle for a crime he didn’t commit. The couple was convicted in 2019 of conspiracy and obstruction of justice and pleaded guilty to other crimes, and both are now serving federal prison sentences on the mainland.
Sword and the other two defendants, the highest-ranking city officials yet to be ensnared in the federal corruption investigation, were arrested last month and released on $50,000 bonds. To pay Kealoha, prosecutors say Sword participated in a scheme to circumvent the city council, which typically approves legal settlements. The indictment quotes Sword saying he wanted to use Honolulu Police Department funds for the transaction to avoid “the nine bananas up at the Council.”
TV footage of the longtime political insider surrendering to the FBI — along with the two former senior city officials — bolstered the suspicions of legal observers who said for years that Kealoha’s retirement deal was improper.
A review of Sword’s background and work in the community over decades shows he has maintained a reputation as a charismatic and incredibly well-connected tourism industry executive who, until now, has not been associated with scandal.
When he was first nominated to the police commission by then-Mayor Mufi Hannemann in 2009, the Honolulu City Council received letters of support from some of the biggest names in Honolulu.
They included Bank of Hawaii President Peter Ho; then-Punahou School President James Scott; then-KHNL manager John Fink, who now heads Aloha United Way; former city councilman John Henry Felix, T. George Paris, the union boss at the Iron Workers Stabilization Fund; and Chamber of Commerce Hawaii’s Sherry Menor-McNamara, who is now running for lieutenant governor.
“Max Sword is a terrific guy with a big heart,” wrote Scott, who said he’d known Sword, his former Punahou classmate, for 40 years.
“As a family man and as an exemplary professional, Max has energetically served our Honolulu community with distinction.”
Many of his one-time supporters have gone silent. Hannemann, Ho, Paris and Menor-McNamara did not respond to requests for comment. Felix could not be reached. Others had little to say.
“I am not available to discuss Mr. Max Sword,” Scott said in an email.
Fink – who had written that he knew Sword for 25 years and found him to be an “intelligent, fair, honest, responsible, hard-working, and a proven community minded person” – described Sword this week as actually more of an acquaintance.
“As it relates to this, I have nothing to give to you,” he said.
One person who endorsed Sword back then and has stood by him is Gary Pacarro, a longtime friend and Punahou classmate.
Pacarro said he was stunned by the indictment. He said Sword was “always looking to do what’s right.”
“That’s why people look to him for either consultation or he’s always brought in to help negotiate stuff,” he said. “At the same time, looking out for the people he’s helping out first and foremost, even before himself.”
He also believes his friend was just following the guidance of the city attorney, Leong.
“How do you not follow the advice of people who do this as a profession?” Pacarro said.
Whether Sword’s social capital will survive the criminal case is an open question. But former Mayor Kirk Caldwell, who reappointed Sword to the police commission in 2016, is sticking by him and his co-defendants.
“I have great confidence in the integrity of Ms. Leong, Mr. Amemiya and Mr. Sword,” Caldwell said in a statement on Friday. “I am confident they did not commit a crime and they will be acquitted when they get their day in court.”
‘As Politically Active As Gary Rodrigues’
Sword was born and raised in American Samoa. He moved to Honolulu to attend Punahou and later attended Peru State College in Nebraska.
In 1987, he started working for Outrigger Enterprises Group where he would stay for three decades. As a major employer in the state, Outrigger has exerted incredible influence and its legislative accomplishments were “nearly legendary,” the Honolulu Advertiser reported in 2002. Sword played a major role in that, and it landed him in important positions.
For instance, former Hawaii House Speaker Joe Souki developed a “special relationship” with Outrigger, the Advertiser reported, and put Sword on the Judicial Selection Commission.
David Kimo Frankel wrote a letter to the Advertiser that same year saying Sword was “as politically active as Gary Rodrigues” – the one-time powerful former head of United Public Workers.
Like Sword, Rodrigues was also appointed to the Judicial Selection Commission. He later served time in federal prison for conspiracy and embezzlement, among other crimes.
In his letter, Frankel took issue with Sword’s appointment to the city reapportionment commission, which draws political maps. He saw it as an effort to make it “easier for Outrigger-friendly politicians to get elected,” he wrote.
Throughout the years, Sword also had his hands in a long list of community projects and nonprofits including March of Dimes, the Samoan Service Providers Association, the Waikiki Health Center and the American Youth Soccer Organization, according to his resume. In 2008, he teamed up with Hannemann to deliver soccer balls to Iraqi children, according to a city press release from the time.
Sword was prominent enough that his presence at local events would be photographed and published in MidWeek, whether it was a photo opp with Rep. Tom Brower or a shot with his wife at Dog the Bounty Hunter’s wedding.
Throughout the years, Sword worked on maintaining close relationships with lawmakers, and he prioritized face time. That included taking Caldwell out for dinner at Wolfgang’s Steakhouse in 2015 and many lunches with lawmakers.
In 2013, Sword reported spending more than $1,300 on meals in the first half of the legislative session, The Associated Press reported. Sword told the AP that he takes lawmakers out for lunch almost every day of the session to chat about business and tourism – all while staying under a $25 per meal reporting threshold.
“It’s very valuable,” he told the news outlet.
Sword retired from Outrigger in the fall of 2017, but he continued to work for the company as a consultant.
More recently, Sword spent two years lobbying for Expedia, including advocating for the company’s interests in the face of city efforts to regulate short-term rentals. And today, he is the president of Max J. Sword and Associates, a government and community affairs consulting firm. Sword is married to Mona Wood-Sword, a local publicist, and has two children and four grandchildren.
For now, Sword remains a member of the Board of Water Supply’s board, according to BWS.
“While there is no legal provision or requirement for a board member to be removed in the event of an indictment or conviction, we are discussing the situation with Mr. Sword,” BWS said in a statement.
An Unpopular Decision
While Sword’s presence in public life had for years centered on his lobbying and sometimes his soccer coaching, his image took a hit a few years into his tenure as a member of the Honolulu Police Commission.
City officials knew Kealoha was under investigation for nearly two years before the chief received a target letter in December 2016, and yet it was Kealoha who put himself on paid administrative leave in December 2016.
The commission hadn’t taken action earlier and instead issued him a glowing performance review.
“The police commission is doing a bum job,” former Police Chief Boisse Correa said in April 2016. “I don’t know what they’re doing.”
By the time Kealoha went on leave, Sword had become the commission’s chairman and offered to help broker a retirement deal with Kealoha, according to the commission’s executive session minutes.
To that end, Sword had meetings with the chief, his attorney and others, the minutes show. Despite Commissioner Loretta Sheehan’s suggestion to fire Kealoha, in January 2017, Leong presented the commission with a retirement contract that would give Kealoha $250,000.
The commission granted Sword and Leong two more weeks to finalize the arrangement before they’d take a vote, according to the minutes. The justification was to avoid a possible wrongful termination suit from Kealoha, Sheehan has said. All members of the Honolulu Police Commission except Sheehan eventually voted to approve the Kealoha payout.
According to the indictment, Sword conspired with Leong and Amemiya to use Honolulu Police Department funds in such a way that the proposal wouldn’t have to go before the city council for approval. It’s widely believed the council would have rejected it.
Sword’s attorney Bill McCorriston has said Sword was just following the advice of the city’s attorney and budget director, Nelson Koyanagi.
“The suggestion that Sword or other members of the Police Commission should ignore the advice of the city’s legal and budget departments, which are tasked to give advice to the Police Commission, is utterly ludicrous,” he wrote in the Honolulu Star-Advertiser.
Nevertheless, Sword caught heat for trying to make the deal.
At a Jan. 10, 2017, city council committee meeting, members grilled him on it, to no avail. He declined to answer questions about whether he’d be asking the council for approval and wouldn’t say what city fund the money for the payout was coming from.
“Since the chief appears to be a target of this federal investigation, one would think it is not in the best interest of taxpayers to give the chief a bonus for the situation he is in,” then state Sen. Will Espero said in testimony at the time.
But Sword stood by it.
“The department has been under a dark cloud for the past two years with all this federal investigation,” he said after the deal was finalized. “We believe that the police department needs to move on to get out from under that cloud.”
Sword resigned from the commission in the summer of 2018, citing a desire to give more attention to his own business ventures.
Waikiki Improvement Association President Rick Egged, who worked with Sword for years at Outrigger, said he believed Sword to be an honest person.
“I firmly believe that Max would never intentionally do anything that was illegal,” Egged said. “He was just trying to do what was best for the community.”
To be clear, Egged said he disagreed with the decision to grant Kealoha a severance package. But was it illegal? Egged said he doesn’t know.
“You can’t really blame Max because he’s not the one who’s going to know whether that’s technically illegal or not,” Egged said.
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