Bobby N. Harmon, CPCU, ARM
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Honolulu, Hawaii 96818
October 31, 2000
VIA Fax @ (202) 514-7021
Mr. Cliff Rones, Esq.
Criminal Division, Fraud Section
P. O. Box 28188, McPherson Station
Washington, DC 20038
RE: Report of Fraud and Racketeering:
— Federal Insurance Company (Chubb Group)
— State of Hawaii, Insurance Division
Dear Mr. Rones:
I realize this is a quick follow-up to my letter of October 27, 2000, but an article in today’s Honolulu Star-Bulletin may help explain why the State of Hawaii, and especially the insurance commissioner, took no action on my complaints of fraud and racketeering regarding the subject insurance companies.
Under the front page headline of “Former trustees funneled donations to lawmakers,” reporter Rick Daysog writes:
Former trustees of the Kamehameha Schools operated an underground political network that funneled money to the campaigns of dozens of key Hawaii lawmakers, according to trust documents obtained by the Honolulu Star-Bulletin.
Between 1992 and 1997, the $6-billion estate’s now-defunct government relations department orchestrated contributions to incumbent Democrats friendly to the trust’s interests or to high-ranking politicians with regulatory control over the trust’s massive land and business holdings.
Those on the receiving end of estate contributions included U.S. Rep. Neil Abercrombie, Honolulu Mayor Jeremy Harris and former Mayor Frank Fasi’s Best Party. . . .
The state Campaign Spending Commission is looking into whether the trust illegally laundered contributions through former trustees, employees, relatives and outside contractors....
The list of recipients for that election year reads like a Who’s Who of island politics. They include:
. . . Former state Sen. Rey Graulty: On March 22, 1994, Wong bought $250 worth of tickets for a Graulty fund-raiser ... The check was delivered by a staffer. Graulty, now a state Circuit judge, could not be reached for response.
What the article does not say is that after Senator Graulty was defeated in his bid for re-election, he was appointed by Governor Ben Cayetano (D) as Hawaii’s Insurance Commissioner to replace Wayne Metcalf who was appointed to complete the term of another senator who passed away. Graulty was later appointed as a state judge, and Metcalf was re-appointed as the state insurance commissioner.
My complaint letters to both of these regulators received little or no response. To my knowledge, no disciplinary action was taken against any of these companies, and they have been allowed to continue the fraud and theft activities under the current interim-trustees and several top executives who served under the ex-trustees.
The Star-Bulletin article goes on to state:
. . . The ex-trustees deny that they took part in an organized effort to finance the campaigns of isle politicians. They say their political contributions and those of staffers and outside vendors were personal in nature and have nothing to do with trust business. . . .
However, in sworn testimony, some staffers say they not only helped organize the campaign contributions but also used trust facilities to direct the money to local politicians. . . .
I am one of the former staffers who testified under oath during the Attorney General’s investigation of the estate, about how staff were encouraged to assist certain politicians, including ex-trustee Henry Peters, Milton Holt and Robert Herkes.
The full Star-Bulletin articles can be retrieved from the internet at the following addresses:
http://starbulletin.com/2000/10/31/news/story1.html
and http://starbulletin.com/2000/10/31/news/story2.html
More details regarding my RICO lawsuit, and copies of my letters to the Hawaii and California insurance departments can be found at the following address:
www.the-catbird-seat.net/InsuranceCommissioners.htm
My mailing address and telephone number appear above if I can provide further information, or I can be reached by e-mail at:
In our initial conversation, you indicated that you would probably be contacting the Federal Bureau of Investigation for further action. If this is still the case, then I would appreciate your relaying this information to the proper party.
Again, thank you very much for your assistance.
Very truly yours,
Bobby N. Harmon
This is a leaf from
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