Bobby N. Harmon, CPCU, ARM

Louisville, Kentucky 40229-1655

April 12, 2004

VIA fax only @ (559) 490-1919

Mr. Justin W. Schuck, Case Manager

Julie A. Schermerhorn, Supervisor

American Arbitration Association

6795 North Palm Avenue, 2^nd Ave.

Fresno, California 93704

RE: Mary Lou Woo, Trustee v. Bobby N. Harmon - Case No. 74 166 00491 03 JUSC

Dear Mr. Schuck and Ms. Schermerhorn:

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THIS DOCUMENT HAS BEEN REDACTED

BY ORDER OF

ARBITRATOR JUDITH NEUSTADTER FUQUA

AMERICAN ARBITRATION ASSOCIATION

JUNE 15, 2004

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This is a leaf from

The Harmon Arbitration

~ ~ ~

To fly to the top of the tree

The Catbird Seat

This is in further response to Steven Guttman’s letter dated April 5, 2004, in which he stated, in part:

“As in his previous correspondence, Mr. Harmon’s letters of March 18, 19 and 20, 2004, again offer nothing but an endless stream of information concerning activities which have no relationship to this case.”...

“The March 18 letter references the fact that this firm had been retained in a specific unrelated case by the County of Maui to serve as special counsel. At the time the County of Maui hired this firm, I was not a member of the law firm. Further, and more importantly, the relationship of this firm to the County of Maui has no nexus to Ms. Neustadter serving as an arbitrator in this case. Similarly, the campaign spending violations discussed in Mr. Harmon’s March 19 letter are unrelated to either this case or Ms. Neustadter. All of the letters contain the same fundamental flaw and Mr. Harmon’s voluminous correspondence centers on Ms. Neustadter serving as a hearing officer of a department of the County of Maui. AAA should advise Mr. Harmon that Ms. Neustadter’s position as a hearings officer does not create a conflict as to this case and that she will not be removed based upon this relationship.”

The following new information is provided to your office as it relates to Judith Neustadter’s employment as the hearing officer for the Maui Planning and Land Use Committee, and her position as Vice President/Secretary of the Maui real estate firm Hana & Kipahulu Land Company, Inc.

The following is from the April 11, 2004, issue of the Honolulu Star-Bulletin:

Resort’s expansion highlights Maui woes

Makena Resort seeks a zoning
change for its expansion plans

By Gary T. Kubota, gkubota@starbulletin.com

MAKENA, Maui - Deby Cammarata remembers the wilderness in Makena before resorts and private estates rose along the coastline.

“We used to camp here, but you can’t camp here anymore,” said Cammarata, a Maui Meadows resident.

As south Maui undergoes increasing urbanization of its coast, the Makena region, including Makena Resort Corp.’s proposed expansion, has become a public sounding board about the future direction of the Valley Isle.

The debate on the resort’s request for rezoning 603 acres of land is going into its sixth week – one of the longest continuous committee deliberations in the last 10 years.

The council’s Planning and Land Use Committee is scheduled to meet at 4:30 p.m. tomorrow in its chambers to resume the decision-making meeting.

Makena Resort Vice President Roy Figueiroa pointed out that its parent company, Seibu Hawaii, could develop more housing and vacation units under its existing zoning than its proposed request and that a substantial portion of the rezoning includes two existing golf courses.

However, the company needs the zoning change to accommodate its plans for a more upscale, lower-density development....

Changes during more than a quarter-century of development have presented Maui residents with new sets of problems – shortages of water, affordable housing, and access to once-remote sandy beaches for fishing and camping.

About 90 percent of the construction taking place on Maui is for off-island people, pushing residential housing prices to record levels.

Because resorts tend to generate mainly low-paying jobs, the county has asked large vacation developers to provide affordable dwelling units to lessen the adverse social impact on housing.

Under county ordinance, the ratio is one affordable unit for every four units built by a vacation developer.

Council Planning Committee Chairman Wayne Nishiki has proposed raising the affordable-housing requirement for Makena Resort to a one-to-one ratio and requiring a portion of the affordable housing be within the resort.

Nishiki has also proposed that Makena Resort develop its own water sources for the expansion, since the county’s underground source in central Maui is near its sustainable yield.

Mayor Alan Arakawa is trying to negotiate the use of up to 25 million gallons a day of stream water from C. Brewer & Co. Ltd., but no agreement has been signed....

Council Chairman Dane Kane has suggested that the issue of beach access, including parking stalls, could be resolved by the Maui Planning Commission when Makena Resort seeks shoreline permits for the development....

< END OF QUOTATION >

In response to Mr. Guttman’s usual argument that the entities named in the above article have no relation to Ms. Neustadter, I submit that the following relationships are material in this case:

The parent company of Makena Resort Corporation is Seibu Hawaii, which has been a major lessee of Bishop Estate lands in Hawaii. The insurance broker for Seibu Hawaii has been, and may still be, Marsh & McLennan, Inc., one of the defendants in my RICO lawsuit. More about the financial and political connections between these entities can be found at www.the-catbird-seat.net/Bishop.htm. For more about Seibu’s alleged links to organized crime, see www.the-catbird-seat.net/YAKUZA.htm .

The following is from Earth Island Institute ... Earth Island Journal - Winter 1996-97:

Corruption, Cover-up in Hawaii

by Carroll Cox

In 1990, I began work as a special agent for the law enforcement division of the US Fish and Wildlife Service (FWS) in Hawaii and the Pacific Basin – home to nearly 40 percent of endangered species in the US.

I was encouraged by President Clinton’s request that employees report waste, fraud and abuse in government. As part of my daily work, I identified activities that could have negatively affected wildlife, as well as numerous agency misdeeds.

Because I blew the whistle on dubious operations and filed EEOC (Equal Employment Opportunity Commission) complaints against the FWS, I was subjected to harassment and retaliation by FWS administrators and Secretary of the Interior Bruce Babbit. Finally, on March 25, 1995, I was fired.

In the course of my work for the FWS, I reported misuse of funds by agency personnel. The FWS often rewarded wrongful behavior by promotion or, at the worst, simple transferral to another regional office....

In 1992, I reported that agency personnel possibly were attempting to acquire contaminated land on Maui for use as a wildlife refuge - to cast a favorable light on President Bush for his then-upcoming re-election bid.

I reported that individuals in the FWS who curried political favor were able to interfere and prevent necessary law enforcement activities concerning Bishop Estate land on the island of Hawaii, where clearcut logging of koa trees was destroying several endangered species’ habitat....

As a result of my work, I was harassed, subjected to racial discrimination and eventually fired....

Other employees in my office also have been harassed. Michael Hart, one co-worker acting as a witness in both my case and another employee’s case, was found dead in the agency’s office with a gunshot wound to the chest.

Though FBI agents responded to the initial report of a possible assault to t federal officer, they did not investigate further once police had ruled his death a suicide. The day before his death, Hart complained that he had been threatened by his supervisors and was afraid of losing his job.

After I was fired, the US Attorney’s office in Honolulu subpoenaed me as a credible witness on a then-pending case involving drugs, firearms and endangered species, which I had initiated as a special agent - even though that office was and still is representing the government against me on charges of “accepting a bribe.”...

The Office of Special Counsel investigating my case conducted its “formal” investigation during a beer-drinking session with the now deceased co-worker. My letters of appeal to President Clinton, Hawaii’s Congressman Neil Abercrombie and Congresswoman Patsy Mink, Georgia Congressman John Lewis and to other officials have gone unanswered.

It seems the FWS is willing to tolerate questionable acts of ethical and moral behavior but has little compassion for a person who dedicated his heart and soul to protect the public’s interest and ownership of precious resources....

< END OF QUOTATION >

Bishop Estate Logging Destroys Endangered Vetch

Volume 2 Number 9 (March 1992)

The following letter has been sent to Daniel Bent, the U.S. Attorney in Honolulu. Environment Hawaii was provided a copy by the author. It has been slightly edited for style and length.

Recently, I learned that the U.S. Fish & Wildlife Service has obtained information concerning knowing and continuing violations of the Endangered Species Act on the Big Island of Hawaii. While your office should consult with FWS for details, I understand that by virtue of their commercial logging activities, the trustees of the Bishop Estate have taken and continue to take the endangered plant Hawaiian vetch (Vicia menziesii) at Keauhou Ranch, a 23,000-acre ranch near Hilo....

FWS lists Hawaiian vetch as endangered which, by operation of law, is endangered under the laws of the state of Hawaii.

Commercial logging activities at Keauhou Ranch that uproot, destroy or injure endangered plants are a violation of state and federal law. The trustees could apply for an incidental taking permit under §10 of the ESA that might allow them to continue to engage in commercial logging activities, but I understand that they have not done so....

The fact that logging uproots, destroys or injures endangered plants and therefore violates the ESA has not escaped the trustees’ notice. The trustees, among others, attempted but failed to persuade the Hawaii State Legislature to amend the state of Hawaii’s endangered species act during 1991 to exclude activities such as commercial logging.

The trustees have not been “blind-sided” by the ESA. To the contrary, the trustees know the requirements of the ESA and the state act, are aware of the potential civil and criminal penalties, and have elected to scoff at the law...

The trustees have friends among those who hold the highest state and federal offices in Hawaii. I hope that the U.S. Attorney’s office extends the enforcement of federal environmental laws such as the ESA beyond indigents to include even wealthy and politically powerful individuals....

I have been concerned for some time that FWS’ timid enforcement of the ESA in Hawaii runs counter to administration policy. My impression that the federal government pulls it punches in Hawaii is corroborated by an article that appeared in a publication by the American Bar Association’s Section on Natural Resources, Energy, and Environmental Law. It states that FWS recently wrote to city and county officials in California that they would violate the Endangered Species Act and be subject to its civil and criminal penalties if they were to allow development within the habitats of listed species.

FWS has sent no such letters to members of the State of Hawaii Land Use Commission or the State of Hawaii Board of Land and Natural Resources. This is curious, since both Hawaii and California are administered by the identical FWS regional office in Portland. Moreover, more than half of the privately held conservation land in Hawaii is owned by only ten landowners. A cost-effective means of helping to ensure compliance with the ESA in Hawaii would be to send advisory letters setting forth the civil and criminal penalties of the ESA to major landowners in Hawaii.

– Craig S. Harrison, Attorney, Washington, D.C.

Editor’s note: The Fish and Wildlife Service at one time had hoped to purchase at least portions of the Keauhou Ranch for wildlife conservation purposes. However, the trustees “have decided not to have further discussion regarding the acquisition or use” of the ranch or another area under consideration, the so-called Kilauea Forest, according to a letter January 16, 1992, from the regional director of the Fish and Wildlife Service to the International Council for Bird Preservation.

Quoting further from that letter: “While the Estate has hinted that sweeping land use reforms, including koa reforestation in large tracts of the Estate’s Hawaii lands, are forthcoming, we have seen no evidence that suggests the Estate intends to protect endangered species and essential habitats.

“The Service’s objective for these lands remains unchanged, that is, the establishment of a national wildlife refuge to conserve the genetic diversity of native Hawaiian forest birds and plants. In light of the lack of progress through open talks with the Estate, we have embarked upon a different course of action which we hope will ultimately lead to the same objective. A revised final environmental assessment which identifies acquisition of both Kilauea Forest and Keauhou Ranch as the preferred alternative is being prepared and will be published this spring. The Service has briefed the Chairperson of the State Board of Land Natural Resources of our intentions and of our concern for the continuing unauthorized incidental taking of endangered Vicia plants at Keauhou by commercial logging activities.”

Environment Hawaii at http://www.environment-hawaii.org/392bish.htm

< END OF QUOTATION >

Despite the fact that I was the Risk, Insurance & Safety Manager for Kamehameha Schools/Bishop Estate during the period that the alleged environmental claims described in the above two articles were taking place, I was NEVER NOTIFIED of these problems. In fact, I only became aware of them a few days ago as I was doing further research in order to respond to Mr. Guttman’s contention that I am merely repeating previous allegations that have no bearing with Ms. Neustadter’s serving as arbitrator in this case.

The simple truth of the matter is that these alleged environmental claims were never reported to me, or to Bishop Estate’s insurance company. This non-reporting of major claims, and the intentional violation of Environmental Protection Agency laws, were major issues described in my RICO lawsuit, and in my documents provided to Kamehameha School’s Master, the Trustees, Dr. Hamilton McCubbin, the IRS, the Attorney General’s Office; Hawaii’s Insurance Commissioners, the FBI, and others. To document this, a few excerpts from some of my letters follow.

From my letter dated November 24, 1997, hand-delivered to Colbert M. Matsumoto, Esq., Bishop Estate Master:

“This is to provide information regarding what may be conflicts of interests, breach of fiduciary duties and other wrongful acts by trustees, officers, directors, managers and other employees of the referenced entities....

“When I was hired by KSBE, I reported to Gil Tam, who was at that time the Director of Personnel, and later became the Administration Group Director. While in this department, I was interviewed by the masters who requested information on the insurance programs including summaries of insurance policies, claims, etc. After I was transferred to the Legal Group, I no longer was given the opportunity to meet personally with the masters. Instead, Nathan Aipa would ask a paralegal or a legal secretary to obtain insurance summaries or other documents requested by the master. Likewise, I never had the opportunity to talk with the IRS auditors that were in the KSBE offices for several months in 1996. I considered this to be the result of Mr. Aipa’ desire to control the disclosures of information that might raise questions of improprieties on the part of the trustees and others....

“There were intentional violations of the Environmental Protection Act (EPA) and other environmental regulations, with various attorneys in the Legal Group actively participating in discussions in order the keep the actions of trustees confidential under the “attorney-client privilege” doctrine. The refusal to act promptly to remediate known environmental problems endangered public safety. ... Over 200 known sites on KSBE properties were identified in a ‘confidential’ survey about two years ago. I was not privileged to see the results of the survey. To my knowledge, little or nothing was done to remediate any of these sites....”

< END OF QUOTATION >

From my letter dated April 13, 1998, to the Federal Bureau of Investigation:

“This is to provide information relating to your investigation into the possible misappropriation of campaign funds by Milton Holt....

“In a letter to KSBE’s trustees dated 12/29/96, I described various political activities by Henry Peters, Milton Holt and others, which appeared to be highly questionable, if not illegal. One concern I expressed was the use of KSBE personnel and Bishop Museum facilities to campaign for the elections of Peters, Holt and Robert Herkes. (The trustees for KSBE and the Charles P. Bishop Estate, which endowed the Bishop Museum, are the same.) In my letter, I also described an occasion when Gil Tam asked me to help campaign for Henry Peters’ reelection.

“Another issue in my letter touched on the extensive, secretive ‘lobbying’ activities going on at the estate. The Government Affairs Department, headed by Nam Snow, reviews every bill introduced each year in the legislature. ... In my letter, I described a situation involving Rocco Sansone, Vice-President, Marsh & McLennan, Inc. ... Sansone advised me later that he had met privately with Peters for assistance in supporting the [‘wrap-up’ insurance] bill, and he indicated that KSBE would help push it through....”

< END OF QUOTATION >

From my letter dated September 17, 1998, to the Federal Bureau of Investigation:

“This is to provide information regarding the referenced organizations and related companies, relating to possible illegal activities under the Racketeer Influenced and Corrupt Organizations Act of 1970 (RICO)....

“I understand that various state and federal crimes are included under RICO’s definition of ‘predicate acts’, among them mail fraud, wire fraud, financial institution fraud, fraud in the sale of securities, and bribery. A ‘pattern of racketeering activity’ requires at least two acts of ‘racketeering activity’ within 10 years. I believe that evidence exists that the referenced organizations have collectively engaged in all of these criminal activities during the past decade, and will continue to do so until such time as appropriate regulatory and law enforcement agencies act to investigate and prosecute those individuals engaging in such activities....

“Various IRS regulations regarding the maintaining of ‘arms-length’ relationships between a tax-exempt charitable organization and its for-profit subsidiaries were also being breached. At the direction of Henry Peters, Nathan Aipa, Louanne Kam, Eric Martinson, and others, KSBE paid various insurance premium charges, legal fees and claims costs that should have been paid by its for-profit subsidiaries (e.g., Kukui, Inc., Sino Finance, Unison Pacific, SoCal, AFCO, Paradise Petroleum, etc.), or by individual investors, trustees, officers, directors or employees of these entities....

“Services were being provided by KSBE employees, including Aipa, Louanne Kam, Colleen Wong, Allan Yee, Lyn Anzai and me, to P&C and other for-profit entities at no cost to the subsidiaries. In effect, KSBE was wrongfully subsidizing these for-profit entities....

“Intentional Violations of the Environmental Protection Act (EPA).

Allen Yee, Colleen Wong and Louanne Kam were involved in environmental issues in order to keep the estate’s activities confidential and under the ‘attorney-client privilege’ doctrine. Their refusal to act promptly to remediate known environmental problems endangered public safety, and financially benefitted the Trustees by reducing expenses of these for-profit entities, thus increasing profits of the companies and commissions to the Trustees....

“Insurance claims were not being reported by the Legal Group (e.g. Kona Enterprises, McKenzie Methane), or were being controlled by Aipa, Kam and others when they were reported. This resulted in hundreds of thousands of dollars in legal costs and settlements lost by the estate for failure to comply with the terms of the insurance contracts.

“Contracts were not being put out for bid proposals in accordance with the trustees’ written policies and procedures. The Waterpark Towers environmental remediation contract, for example, was supposedly put out for bid. In actuality, there were no bid specifications and the normally required bid bonds were waived [by Ed Tabangay, a former KSBE employee who was acting as an independent contractor] for this project....

< END OF QUOTATION >

Complete copies of the above-quoted letters can be found on the internet at the following addresses: www.the-catbird-seat.net/KSBEMaster.htm, and www.the-catbird-seat.net/FBI.htm.

I received no response from the FBI to either of my letters to them. Even worse, they returned my letters, and hundreds of pages of ‘evidence’ that I had enclosed with them, without even an acknowledgment of receipt or an explanation of why they were being returned.

Additional information related to illegal political donations by contractors and real estate developers in connection with the rezoning of land in Hawaii can be found at:

www.the-catbird-seat.net/Developers.htm

Based upon the NEW information provided above, I continue to maintain that Judith Neustadter Fuqua is conflicted in this particular case and again ask that she be disqualified as the arbitrator.

Sincerely yours,

Bobby N. Harmon

cc: Mary Lou Woo, Trustee, c/o Steven Guttman, Esq. (via fax @ 808-529-7177)

Dee Jay Mailer, CEO, Kamehameha Schools (via fax @ 808-523-6313)

Casimer Fidele, Island Insurance Co. (via fax @ 808-275-8726)

Governor Linda Lingle, State of Hawaii (via fax @ 808-586-0006)

J.P. Schmidt, Hawaii Insurance Commissioner (via fax @ 808-586-2806)

Hugh Jones, Deputy Attorney General (via fax @ 808-586-1477)

Janet S. Hughes, Manager, IRS (via fax @ 303-844-3596)

Peter B. Clark, U.S. Dept of Justice, Criminal Div. (via fax @ 202-514-7021)

Tai K. Lee, Special Agent, U.S. Dept of the Treasury (via fax @ 808-539-2810)

Hawaii State Ethics Commission (via fax @ 808-587-0470)