Bobby N. Harmon, CPCU, ARM

August 5, 2003

VIA fax only @ (559) 490-1919

Ms. Julie A. Schermerhorn, Supervisor, and

Mr. Justin W. Schuck, Case Manager

American Arbitration Association

6795 North Palm Avenue, 2^nd Floor

Fresno, California 93704

RE: Mary Lou Woo, Trustee v. Bobby N. Harmon

Case No. 74 166 00491 03 JUSC

Dear Ms. Schermerhorn and Mr. Schuck:

This acknowledges receipt of your letter dated August 4, 2003, in which you state:

“Inasmuch as Allen Van Etten, Esq. has declined to serve as Arbitrator in the above captioned case the Association has Appointed Judith Neustadter, Esq. to serve as Arbitrator. Ms. Neustadter has accepted the appointment and has no disclosures. Accordingly, any factual objections to the Arbitrator are to be received by the Association on or before August 8, 2003.”

In my letter of July 19, 2003, I presented what I felt were “factual objections” to Ms. Neustadter as the Arbitrator, and I will repeat these objections here:

Judith Neustader, Esq.

Ms. Neustadter’s biography shows her as “Secretary, Kumu Ao, Inc., a non-profit corporation promoting and perpetuating Hawaiian culture and education.” She holds a professional license as a certified “Ho’oponopono practitioner.” Both of these experiences would indicate a close connection with Kamehameha Schools – if not financially, at least philosophically.

Ms. Neustadter also indicates that she was involved in the AAA sponsored Training for Prudential Mass Claims ADR Project. Prudential is the company that handles Kamehameha’s Employees’ Retirement Plan which has been the subject of many of my “letter-writing campaign” letters. Much more about the class-action lawsuits and government fines levied against Prudential can be found at this website:

www.kycbs.net/Prudential.htm

Judith Neustadter also holds the position as Hearing Officer for the Maui Planning Commission. In 1998, it was disclosed during Attorney General Margery Bronster’s testimony that House Speaker Joseph Souki received a $132,000 commission for a Maui land deal involving Bishop Estate and developer Everett Dowling, who sold the Estate a 100-acre parcel in Pukalani, Maui, in December 1996.

In an article in the September 11, 1998 edition of the Honolulu Star-Bulletin, reporter Rick Daysog wrote:

Bronster: ‘Sweetheart deals’ with cronies

“I believe certain trustees received kickbacks worth hundreds of thousands of dollars.”

– Margery Bronster

Raising the possibility of criminal charges, Attorney General Margery Bronster says Bishop Estate trustees received kickbacks, participated in illegal political campaign contributions and mismanaged Kamehameha Schools....

Key Figures Named in the Attorney General’s Petition

>> Joseph M. Souki

66, of Wailuku is a Democrat, the current speaker of the state House. The owner of a real estate company, Souki this summer was questioned by the state attorney general over a Maui land deal involving Bishop Estate that earned him a $132,000 commission. Souki denied any wrongdoing and said it was a private real estate transaction....

Judith Neustadter was also a defendant in a controversial zoning case on Maui involving the denial of the use of agricultural property as a place of worship. According to a news release by The Becket Fund for Religious Liberty dated October 9, 2001:

“Members of the Maui Planning Commission today were served with copies of an amended complaint naming them as defendants in their individual, as well as official, capacities in a lawsuit filed by the Hale O Kaula church. The action came as they prepared to convene their regular meeting at the Maui County office building in Wailuku. The lawsuit was initially filed on September 19 in U.S. District Court in Honolulu.

“Named as individual defendants were Commission members Samuel Kalalau III, Jeremy F. Kozuki, Bernice Liu, Star Medeiros, Susan Moikeha, Herman Nascimento, Randy Piltz, Joseph Pontanilla and Mona Richardson. Other defendants in the lawsuit include Planning Director John E. Min, Maui Mayor James Apana, Jr., Commission Hearing Officer Judith Neustadter Fuqua, Hawaii Governor Benjamin Cayetano and State Land Use Commission Executive Director Anthony Ching. Mayor Apana, Gov. Cayetano and Mr. Ching are sued only in their official capacities. The suit also names the Maui Planning Commission, the County of Maui and the Land Use Commission of Hawaii as defendants....”

An article in the June 26, 2001 edition of the Star-Bulletin states:

“An elder in a Maui church says his members are willing to go to the nation’s highest court if the county does not grant them a permit to build a chapel on ... their farmland....

“In the last few years, Kamehameha Schools has been developed on the makai side of the church’s property. Across a gulch a commercial center is under construction.

“People here once said they lived in an isolated agriculture neighborhood,” Jenkins said. “Now, it’s not.”

“County hearings officer Judith Neustadter Fuqua has recommended the commission deny the permit because of ‘unacceptable levels of traffic and noise’ and the burden placed on public agencies for such needs as water and fire protection....”

An article in the June 28, 2001 edition of the Star-Bulletin states:

Maui commission turns down church’s plan for a new chapel

The Maui Planning Commission denied a church’s request to build a chapel on agricultural land yesterday, triggering the likelihood of a legal challenge to state and county land-use laws....

Church officials said they did not present arguments during a contested-case hearing because officer Judith Neustadter Fuque expressed an opinion in favor of neighborhood residents during a settlement conference....”

This situation raises the question in many persons’ minds as to why the Maui Planning Commission would reject the rezoning of agriculture land for church use, while previously approving the rezoning of residential land for the much larger projects of Kamehameha Schools and a shopping center in the same neighborhood.

< END OF QUOTE>

In a letter dated July 21, 2003, Steven Guttman responded critically to my objections to the appointment of Ms. Neustadler. I responded to this criticism in my letter of July 22, 2003:

“Regarding Julie Neustadier, Mr. Guttman states, ‘Clearly, there is nothing which Mr. Harmon has presented which disqualifies Ms. Neustadier as a potential arbitrator in this matter.’ He also states that I ‘ramble on’ for two pages about various matters having some affiliation with the Maui Planning Commission. I must object to this characterization, as this controversy regarding the sale of the land in Maui to Kamehameha Schools, the “finders fee” paid to Speaker of the House Joe Souki, and the re-zoning of this parcel, was one that received notable attention in the media and in the Attorney General’s investigation into the wrongdoing at Bishop Estate. I referred to the website at www.the-catbird-seat.net (now http://www.kycbs.net due to the fact there was too much material to cover in my letter. Another website with excellent archives regarding the Kamehameha Schools’ controversies is: www.starbulletin.com“

It was my belief that my objections at that point in time were material and sufficient to disqualify Ms. Nuestadier. Since this has proven not to be the case, I will provide further background information related to this situation, and further objections to her appointment.

The following is taken from www.the-catbird-seat.net/BuzzardsOfParadise (which has now been shut down by the U.S. Department of Justice, and is now located at www.kycbs.net/BuzzardsOfParadise.htm )

From PBS Frontline:

Interview with Charles Chidiac

Charles Chidiac is a financier-developer who knew Gene and Nora Lum in Hawaii. He was also involved in Asian Pacific Advisory Council-Vote, a Los Angeles Democratic fund-raising group once headed by Nora Lum. He has a checkered past. He was an unindicted co-conspirator in the BNL financial scandal. . . .

FRONTLINE: Give me an example of corruption in Hawaii in the 1980s.

CHIDIAC: Well, if you want to do business in Hawaii, you go and you apply for a zoning. You get a call from an attorney. And he says, "I want to see you."

"About what?"

"Oh, I want to talk about your application." . . .

"But I already have an attorney."

"It's necessary to see you anyway." So he comes over and he says, "Listen, you applied. This attorney of yours is no good. If you don't hire me, you'll never get your zoning. . . ."

So, that's how they do it. It's called in Hawaii, "law firming," instead of laundering.

FRONTLINE: In other words, bribery?

CHIDIAC: Pure, pure bribery ... under the cover of being legal work . . .

< END OF QUOTE>

The following is quoted from “Land and Power in Hawaii” by George Cooper and Gavan Daws:

“Maui, with the heaviest development of any of the outer islands, also may have had the heaviest involvement by the politically well-connected.

“A shorthand way of summing up the importance of real estate in political life on Maui is simply to look at how many people elected to the Board of Supervisors and Council had realtors’ licenses or interests in realty firms....

“Taking just those 31 members of the Board of Supervisors and later the County Council who lived on Maui and served between 1960-1984, 10, or 32%, simultaneously held a salesman’s or broker’s license or an interest in a real estate sales company....

“Of the Maui residents on the Council elected in 1982, 43% either had licenses then or held one previously. ... Moreover, given that by most accounts the weightiest job of supervisors and councilpersons in the period studied was regulating land use, this was a figure of some consequence....”

< END OF QUOTE >

According to Judith Neustadter’s biography, she is Vice President/Secretary, Hana & Kipahulu Land Company, Ltd., 1999-present. According to their website, Hana & Kapahulu Land Co., Ltd. is a real estate company which deals in upscale homes, condos and land. The owner, founder, and principal broker is Ray Fuqua.

The following is quoted from the Maui Free Press, Feature Archives - Sept 18 - Oct 1, 2002:

JoAnne Johnson - ethics charge was all just a mistake

Violations of secrecy rules and unethical behavior dismissed

By Rob Lafferty

For months, Maui residents have been hearing - and wondering - about a dozen ethics complaints filed confidentially against County Council member JoAnne Johnson. They were finally able to hear in public ten of those complaints, as well as who wrote them and who signed them, at a Board of Ethics hearing held on August 29.

They also heard the Ethics Board rule that there was no violation involved in ten of the twelve charges. The Board deferred discussion on the final two complaints until a later date.

Eight members of the Planning Commission and a hearings officer had each charged Johnson with violations of the executive session secrecy rules, which forbid a participant in a closed hearing from revealing any matters discussed in that session.

This story began when the commission denied a permit requested by Hale O Kaula Church, who then filed a lawsuit against all commissioners, the hearing officer and the county. The church is seeking to enlarge a structure and hold religious services on their five acres in Pukalani....

Complaints orchestrated by county attorneys?

Commissioners Susan Moikeha and Bernice Lu stated during testimony that they had been advised by Deputy Corporation Counsel Victoria Takayesu, whose husband is James Takayesu, to file complaints against Johnson.

Also filing were current and former commissioners Joseph Pontanilla (now a candidate for the Kahului council seat), Jeremy Kozuki, Randy Piltz, Herman Nascimento, Mona Richardson, Star Medeiros and hearings officer Judith Neustadter Fuqua....

Was there a hidden agenda behind complaints?

Minatoya, who Mayor Apana considers to be a good friend, and James Takayesu are the subjects of investigations initiated by Johnson over their roles in approving the Maui Golf and Water Park project. Johnson believes that the charges against her were a direct attack in retaliation for her complaints against those two individuals.

On February 2 of this year, Johnson requested a Council investigation into the MG&WP approvals. She then filed an ethics complaint with the State Office of Disciplinary Counsel against both Takeyesu and Minatoya on April 11. The ethics complaints against Johnson were filed two weeks later, on April 26.

Council members Alan Arakawa, Charmaine Tavares and Wayne Nishiki all testified on behalf of Johnson....

Arakawa said, “I have serious concerns that Corp Counsel advised the planning commission members to file a complaint without reviewing the minutes of the meeting.” He has since requested an investigation into the role of Corp Counsel employees in the matter....

False allegation admitted

Jenkins came forward to answer questions from Ranken, and stunned the room by admitting that he had been mistaken in filing the affidavit, and that Johnson had not told him any secret information. He claimed his mistake was based on an assumption, and “on my limited knowledge of the appropriate terms.”....

Is it unethical to tell the truth?

The other three complaints that have been filed against Johnson involve principals in the Maui Golf & Water Park venture. They claim that her appearance before the Planning Commission to testify against their request for a declaratory ruling on the project deprived them of their “legal right to due process of law.”

In her testimony, Johnson pointed out that she came before the commission to reinforce the Council’s request to defer any discussion on the project until the Council received some answers from the Corporation Counsel office. She was also there to point out procedural errors and possible violations of law in the permit approval process.

One of the problems Johnson pointed out to the commission was an improper e-mail message from Minatoya advising the developers to proceed with the project. That message was sent after Johnson was told by James Takeyesu that the project was on hold while his office reviewed the situation. Victoria Takayesu was also involved in the matter as counsel to the commission.

According to Johnson, she acted on behalf of members of the Ma`alaea Community Association. She was concerned “because there is a $2.8 million loan guarantee from the USDA to the bank which will bail out the developers in the event of a default. That is taxpayer money, and it is my duty and responsibility to look out for public monies when I believe there could be problems down the road.”...

While Johnson is relieved that the majority of the complaints have been dismissed, she is deeply concerned about the behavior of the attorneys for Maui County in both of these messy affairs. She believes all of this is part of a pattern that could have been avoided if the county had better leadership. “If the Mayor does not know what is going on in his own administration, then he should not be in office. These abuses are serious and he has done nothing about them.”

< END OF QUOTE >

On July 10, 2003, a Complaint was file by the UNITED STATES OF AMERICA, Plaintiff vs. MAUI PLANNING COMMISSION, Defendant, brought by the United States to enforce Religious Land Use and Institutionalized Persons Act of 2000 (“RLUIPA”). This is related to the Hale O Kaula Church case described above.

Paragraph 17 of the complaint reads:

On April 30, 2001, Maui Planning Commission Hearing Officer, Judith Neustadter Fuqua recommended denial of the Hale O Kaula Church’s application for a Special Use Permit, finding that the use of the subject property as sought by the Church was not an “unusual and reasonable use” under the relevant codes and rules. She found that the use of the Subject Property sought by the Church would adversely affect the properties along Anuhea Place by creating unacceptable levels of traffic and noise in an isolated agricultural neighborhood. In addition, she found that the use of the Subject Property sought by the Church would burden public agencies to provide water, police, and fire protection....

Paragraph 19 reads:

Between 1976 and 1996, the Defendant has granted special use permits to other denominational churches in districts zoned for agricultural use in Maui County.

Paragraph 20 reads:

Other entities or activities that have greater than or equal impact on the levels of traffic and noise and/or burden on public agencies are either permitted as of right or regularly granted special use permits by the Department. [NOTE: I believe this references, in part, to the Kamehameha Schools land purchase and construction of their school.]

Paragraph 21 reads:

For purposes of RLUIPA, the Defendant’s denial of a special use permit to the Church constitutes “land use regulation[s].” 42 U.S.C. §2000cc-5(5).

Paragraph 23 reads:

The Defendant’s denial of the Church’s special use permit application constitutes the imposition or implementation of a land use regulation that discriminated, and continues to discriminate, against Hale O Kaula Church on the basis of religion or religious denomination in violation of Section 2(b)(2) of RLUIPA, 42 U.S.C §2000cc (b)(2)....

The complaint is signed by JOHN ASHCROFT, ATTORNEY GENERAL.

It is my personal opinion, as a layperson, that the above-described activities present substantial and factual conflicts-of-interest, which I believe flatly contradicts Mr. Guttman’s emphatic assertion: “Clearly, there is nothing which Mr. Harmon has presented which disqualifies Ms. Neustadier as a potential arbitrator in this matter.”

Even if you decide that the Attorney General’s Complaint does not necessarily constitute a conflict-of-interest, it would appear that this situation may require Ms. Neustadier’s attention in the courts and potentially have a negative impact upon her schedule and the fulfilling of her responsibilities as the arbitrator in this case.

In your letter of August 4, 2003, you state that Ms. Neustadter has accepted the appointment and has no disclosures. In light of the new information provided above, does Ms. Neustadter now wish to amend her disclosure form to include any relationships that she might have with any of the entities mentioned above or in my RICO lawsuit, the case statement of which can be found on the internet at www.the-catbird-seat.net/RICO-BH (now at http://www.kycbs.net/RICO-BH.htm ).

In addition to these entities mentioned in my RICO lawsuit, I would ask if she, or any of her employers, have had business relationships with any of these entities, or with Kamehameha Schools or any of its subsidiaries or related companies, with Joe Souki, Sports Shinko, Everett Dowling, Sukamto Sia, Bank of Honolulu, Bank of Hawaii, Central Pacific Bank, City Bank, Ronald Rewald, or John Waihee.

I would also ask that Ms. Neustadter disclose the names of the insurance companies that have provided her Lawyers’ Professional Liability Insurance, as well as the names of her current and prior insurance agent(s) or broker(s) since 1996. I would also request that Ms. Neustadter provide the name of the Errors & Omissions insurance carrier for the County of Maui, as well as the name of their agent or broker for this coverage.

I would also ask Ms. Neustadter to disclose if the non-profit organization, Kumu Ao, Inc., for which she is the Secretary, receives any financial support from Kamehameha Schools, the Office of Hawaiian Affairs (OHA), or any Federal, State or County agencies.

In Steven Guttman’s letter of July 21, 2003, he stated, “In consideration of the presentation and convoluted logic set forth by Mr. Harmon in opposition to Ms. Neustadier and Mr. Van Etten, we reiterate our prior comments as to Mr. Harmon simply not wanting any Hawaii based individual to be the arbitrator.”

Contrary to this statement, I have suggested that attorney Daniel Bent be considered as the Arbitrator, as he appears to be well-qualified and has no apparent conflicts-of-interest. He also has the advantage of having his offices in Honolulu, which would benefit the Trustee from having to pay the travel, lodging and other expenses that using an arbitrator from Maui would entail.

I would, therefore, again request that Daniel Bent be considered for this assignment, and would suggest that you contact Trustee Mary Lou Woo to determine if she would have any factual objections to Mr. Bent’s appointment.

Thank you for your assistance.

Sincerely,

Bobby N. Harmon

cc’s: Steven Guttman, Atty for Mary Lou Woo (via fax only @ 808-529-7177)

Trustees R. Kihune, J. Ing, C. Lau, D. Plotts, N. Thompson, Kamehameha Schools