Bobby N. Harmon, CPCU, ARM
June 1, 2006
VIA fax only: 808-529-7177
Curtis Ching and Gayle Lau, Office of the U.S. Trustee
c/o Steven Guttman, Esq. Kessner Duca Umebayashi, et al.
220 S. King Street, Floor 10
Honolulu, HI 96813
Re: CV 05-00030 - OUST vs. Bobby N. Harmon
Objection to the Appointment of James B. Nicholson as Successor Trustee
Dear Mr. Ching and Mr. Lau:
On May 25, 2006, I received your notice dated May 12, 2006, that you were appointing James B. Nicholson as successor trustee in this case. This notice was delayed in delivery as it was sent to my former address in Las Vegas, NV.
Your office made this appointment without any prior notice and did not provide to me any disclosures or biographical information regarding your appointee. It is well known to the Office of the U.S. Trustee that Defendant has challenged and objected to the appointment of previous trustees due to numerous undisclosed personal, professional, political and financial connections with various entities involved in this case, including former trustee Mary Lou Woo. Also, due to the direct involvement of a number of insurance entities in this case, Defendant has previously requested that he be provided the identities of all insurance companies and brokers providing professional liability insurance and trustee bonds to any appointed trustees. This information has not yet been provided by your office, James B. Nicholson, or by any other parties related to this case, including former trustee Mary Lou Woo and your attorney Steven Guttman.
Through my own independent research, I have discovered that James B. Nicholson has a number of apparent conflicts-of-interest in this case which would cause him to be biased against me. For example, reports state that James B. Nicholson played college football at Michigan State University and pro-football for the Kansas City Chiefs. A teammate of Mr. Nicholson is reported to be former Honolulu City Councilman, Arnold Morgado, who is, or was, the president of the Association of Parents and Teachers of Kamehameha Schools, and who has been in a position to affect legislation related to issues involving that entity. Mr. Morgado was also implicated in the political bribery scandals which contributed to the ouster of the former Kamehameha Schools/Bishop Estate trustees. I refer you to excerpts from the following article which appeared in the October 31, 2000, issue of the Star-Bulletin:
Former trustees funneled donations
to lawmakers
Thousands of documents indicate
a pattern of political intervention
The state Campaign Spending Commission will hold hearings on the political activities of the Kamehameha Schools and its former trustees
By Rick Daysog, Star-Bulletin
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 non-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....
The donations provide a rare glimpse into the ways of big-money politics in Hawaii and help to explain the immense clout of the state’s largest private landowner and one of the nation’s wealthiest charities.
The state Campaign Spending Commission is looking into whether the trust illegally laundered contributions through former trustees, employees, relatives and outside contractors.
“This ... is an example of how a large, wealthy and powerful organization can use its resources to assist public officials,” deputy Attorney General Kurt Spohn wrote in a confidential 20-page letter to the spending commission in April. “There is at least the appearance that the elected official is indebted to the organization that helped elect him or her.”...
The documents – which include more than 3,000 pages of sworn testimony from dozens of staffers and outside contractors, photocopies of political donation checks and internal logs listing scores of contributions to local politicians – indicate that the trust and its agents may have violated federal tax laws that bar charitable organizations from taking part in political activities, and state campaign finance laws.
In the 1994 elections alone, the internal trust logs show about $23,000 in contributions from trustees, vendors and staffers.
The list of recipients for that election year reads like a Who’s Who of island politics. They include:
> Congressman (Neil) Abercrombie: Former trustees Henry Peters and Richard “Dickie” Wong wrote $1,000 checks to the congressman’s campaign committee on Oct. 27, 1994, while ex-board member Myron “Pinkie” Thompson wrote a $1,000 check to the committee the next day. All three checks were delivered by a trust staffer on Nov. 1, 1994.
A separate $1,000 check dated Oct. 14, 1994, to the Abercrombie campaign from former trustee Oswald Stender was delivered by a staffer on Nov. 1 as well. The Stender check came a month after Stender and Wong separately sent the Abercrombie camp $2,000 checks that were later returned....
> Former City Councilman Arnold Morgado: Harris’ opponent in the 1994 mayoral race, Morgado received a $1,000 contribution from Thompson. The personal check, dated Sept. 7, 1994, was delivered by a staffer, and copies of the check were stored in a trust safe. Stender also contributed $1,000 to the Morgado campaign on Nov. 12. 1994....
> Former state Sen. Rey Graulty: On March 22, 1994, Wong bought $250 worth of tickets for a Graulty fund-raiser at the Disabled American Veterans’ Hall. The check was delivered by a staffer. Graulty, now a state Circuit judge, could not be reached for response.
> Former Big Island Councilman Bob Rosehill: Each of the five former trustees contributed $400, or a total of $2,000, to a June 25, 1994, golf tournament and fund-raiser for Rosehill at the Kona Country Club....
Secret political polls
Throughout its 110-year history, the Kamehameha Schools has been entwined with state politics.
Prior to statehood, the estate was seen as an extension of the Republican party and the Big Five companies that dominated political and economic life in Hawaii. And with the rise of the Democratic party in the 1950s, the trust was closely associated with the administrations of former Govs. Jack Burns and George Ariyoshi.
The recently deposed board of trustees – which included former state House Speaker Peters and ex-state Senate President Wong – continued that relationship, internal trust documents indicate.
The Star-Bulletin previously reported that the trust spent nearly $200,000 during an eight-year period to conduct secret political polls in districts of certain state legislators.
The districts at the time were represented by former state senators Milton Holt (D, Palama), Marshall Ige (D, Kaneohe), Donna Ikeda (D, Hawaii Kai), Whitney Anderson (R, Waimanalo) and former state Reps. Robert Herkes (D, Puna), Terrance Tom (D., Kaneohe) and Joe Souki (D, Maalea), a former House Speaker.
And in the well-publicized criminal cases involving Ige and Holt, state and federal prosecutors alleged that the former trustees and their staff directed outside vendors to illegally pay more than $48,000 in campaign debts owed by the two. Holt pleaded guilty and served a one-year sentence on campaign-related charges, while Ige is awaiting trial for misdemeanor charges stemming from the alleged campaign finance abuses.
Testimony from staffers indicates the campaign contributions were part of an effort that involved senior trust officials, ex-board member and some of the trust’s outside law forms, accountants, architects and engineers.
That point is illustrated by the trust’s apparent efforts to bundle campaign contributions for Ige in 1994.
Nathan Aipa, who recently took a leave of absence from his post as the trust’s chief operating officer, told state investigators that he had been asked by Snow four or five times to sell campaign fund-raiser tickets to trust law firms.
Aipa said that in 1994 he contacted several trust attorneys on behalf of Snow and Peters, including Benjamin Kudo, William Yuen, Cynthia Nakamura and Mike Heihre, the former state Judicial Selection Commission chairman, to contribute to Ige’s 1994 campaign....
Symbiotic relationship
In many ways, the estate’s campaign practices highlight the symbiotic relationship between the trust and Hawaii politicians....
The Kamehameha Schools’ role as a deep-pocket contributor is underscored by a Feb. 3, 1997, telephone message taken by former trustee Wong’s secretary. The message is from Henry Giugni, former U.S. Senate Sergeant-at-arms, who was informing Wong about a fund-raiser for Sen. Daniel Inouye at the home of Walter Dods, First Hawaiian Bank’s chief executive officer.
Giugni is a longtime aide to Inouye, while Dods is a Democratic party power broker.
“Wanted to let you know that he’s (Giugni) sending Sen. Inouye’s fund-raiser tickets to you,” the notes of Giugini’s call said. “He doesn’t expect trustees to give because they already gave.”
< END OF QUOTATION >
As you well know, I was one of the senior staff members who reported these campaign finance abuses and criminal activities, and gave sworn testimony to the IRS, the FBI, the Attorney General’s office, and other regulatory and law enforcement officials. These issues were also described in my RICO lawsuit as well as in many of the letters in my so-called “letter-writing campaign” - documents for which your office is now demanding that I pay in excess of half a million dollars and remove from the internet.
Another apparent connection is a Michigan businessman and community leader named James B. Nicholson, whom I believe to be closely related to your trustee appointee of the same name. This individual is, or was, an officer for the Michigan chapter of The Nature Conservancy - a non-profit organization with substantial financial ties to Kamehameha Schools, Peter Savio, Faye Kurren (wife of Judge Barry Kurren), Guido Giacometti, Nathan Aipa, Colleen Wong, Henry Paulson, Goldman Sachs, PricewaterhouseCoopers, Ben Benson, Mark McConaghy, and other parties directly related to this case.
In light of the facts presented above, I respectfully request that James B. Nicholson be immediately disqualified as successor trustee due to bias arising from his obvious conflicts of interest in this case. Also, in the event you intend to appoint another successor trustee, I ask that you provide a biography of that individual, and that he, or she, provide a full disclosure of any conflict of interests with any other parties related to this case.
And, again, I ask you to consider attempting to resolve your lawsuit against me through confidential, out-of-court negotiations rather than indefinitely continuing these fraudulent and frivolous legal actions at such great expense and hardship to all involved - including Kamehameha Schools and the estate of former trustee, Mary Lou Woo.
Your immediate response to this letter is requested.
Sincerely yours,
Bobby N. Harmon, CPCU, ARM