David C. Farmer, Successor-Trustee vs. Harmon
(Formerly Woo vs. Harmon & Nicholson vs. Harmon)
U.S. District Court For the District of Hawaii
Judges: David A. Ezra; Kevin S. Chang
—
DEFENDANT’S WITNESS
JAMES AHLOY
Address to be determined.
President, Ali’i Petroleum, a for-profit subsidiary of Bishop Estate; former President, Aloha Petroleum; former trustee candidate for Kamehameha Schools; Director for Waianae Coast Health Center; Trustee for Lunalilo Trust.; Treasurer, Waialae Country Club.
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WAIALAE COUNTRY CLUB
The Story of Waialae
The Golf Course was opened for play on February 1, 1927.
The Royal Hawaiian Hotel and Waialae Golf Course were built by the Territorial Hotel Co. as part of a promotional program to develop luxury travel trade to Hawaii. Matson Navigation Co. built the luxury passenger liner Malolo as part of this program. The hotel and golf course lands were leased from the Bernice P. Bishop Estate.
2007 OFFICERS
STUART HO, President
JOHN JUBINSKY, President-Elect
RICHARD INGERSOLL, Secretary
ALLAN LUM, Assistant Secretary
JAMES AHLOY, Treasurer
ALLAN LUM, Assistant Treasurer
DENNIS TSUHAKO, Internal Auditor
Four trustees receive
country club freebies
The free memberships, accepted by all
Bishop Estate trustees but Oswald Stender,
are called a conflict of interest
By Rick Daysog. Star-Bulletin
Four out of five Kamehameha Schools/Bishop Estate trustees receive free memberships from exclusive country clubs that sit on Bishop Estate land, in what critics called a clear conflict of interest.
Bishop Estate trustees Richard Wong, Henry Peters, Lokelani Lindsey and Gerard Jervis are honorary members of the posh Waialae Country Club, whose lease rents were renegotiated in 1995 with the estate.
The four trustees also are listed as honorary members at the Mid-Pacific Country Club in Lanikai, which also sits on Bishop Estate land.
The fifth trustee, Oswald Stender, turned down the free club memberships in 1995 to avoid the appearance of a conflict and for tax purposes.
"They don't get the idea that they are trustees of a charitable trust," said Senior U.S. District Judge Samuel King, one of the five authors of the critical "Broken Trust" article that helped launch the state's investigation of the $10 billion charitable trust.
"I doubt if they know how to spell the word fiduciary."
Golf club memberships and other trustee perks, such as airline VIP club memberships, have been a subject of inquiries from the Internal Revenue Service, which is conducting an audit of the estate, according to one source familiar with the audit.
King believes honorary memberships underscore the need to remove some of the trustees from the board. He said the memberships create "an appearance of impropriety" since the estate owns the land under the golf courses and negotiates their leases.
According to Waialae's membership directory, the four trustees were honorary members in 1995 when the estate and club members rewrote the lease. Those talks raised the 144.9-acre course's annual lease rent from $60,000 to about $1 million, according to club members familiar with the lease terms.
Trustees also were honorary members at Mid-Pacific when the club renegotiated its rent in 1991. The 163-acre Windward Oahu golf course now pays $469,000 a year in lease rent, up from $6,000 previously.
Jervis, Lindsey and Wong were not Bishop Estate trustees when Mid-Pacific's lease was last negotiated.
"This certainly raises questions about the independence of trustees," said Edward Halbach, one of the nation's top experts on trust law and the former dean of the Boalt School of Law at the University of California Berkeley.
Trustees respond
An estate spokeswoman referred questions regarding the club memberships to the individual trustees. Peters and Lindsey did not return calls.
Wong, who doesn't golf, said he's been an honorary Waialae member for 22 years but has never used it. Jervis, who became a trustee in late 1994, said he became a Waialae member in 1995 but has golfed there only once.
He said he had been a regular paying member at Mid-Pacific but later became an honorary member after he became a trustee.
Stender had been an honorary member at Waialae when he was appointed to the board in 1989 but declined the memberships two years ago, according to sources. He now is a regular, paying member of the Oahu Country Club, which is not on Bishop Estate land.
Managers at both golf clubs declined comment when asked about the potential conflicts.
Traditional perk
The honorary memberships are a traditional perk that the clubs have extended to trustees for many years, some members said. One said the memberships don't pose a direct conflict since the lease talks with the clubs were handled by Bishop Estate staffers, not by trustees.
He added that Waialae's new lease terms are favorable to the club. Waialae, the site of the Hawaiian Open golf tournament for decades, now has a 75-year lease, although it has had to raise monthly dues by $62 to adjust for the higher lease rent, he said.
"It was strictly by the numbers," he said.
Breached duties?
Randall Roth, a University of Hawaii law professor and one of the "Broken Trust" co-authors, believes some trustees may have breached their fiduciary duties in accepting the free memberships since they're personally benefiting from their position with the estate.
For instance, a regular membership at Waialae costs $44,000 -- roughly equivalent to the median household income in Hawaii -- in addition to monthly dues of about $310.
Mid-Pacific Country Club members pay a one-time initiation and certificate fee of $36,000 and monthly dues of $265, according to Hal Okita, general manager.
Honorary member at both clubs enjoy nearly the same privileges as regular members, although they are not allowed to vote on club policy.
According to Okita, Mid-Pacific extends honorary memberships to public figures such as Gov. Ben Cayetano and Mayor Jeremy Harris, as well as trustees. Okita said trustees haven't formally accepted Mid-Pacific's honorary memberships and noted that they seldom use the club's facilities.
Besides Bishop Estate trustees, Waialae's 1996 membership directory lists U.S. Sen. Daniel Inouye, U.S. Rep. Patsy Mink, Cayetano, Lt. Gov. Mazie Hirono, Senate President Norman Mizuguchi and House Speaker Joe Souki as honorary members.
Former Bishop Estate trustees William Richardson and Matsuo Takabuki are regular, paying members of Waialae.
"I don't see any problem in giving away honorary memberships to the governor," said King, whose father served as a Bishop Estate trustee during the late 1950s.
"But when they do that for the landlord, that is a conflict of interest."
Honorary members
Of Waialae Country Club in 1996, followed by the year they became members:
Trustee Richard Wong (1994)
Trustee Henry Peters (not available)
Trustee Lokelani Lindsey (1993)
Trustee Gerard Jervis (1995)
Sen. Daniel Inouye (n/a)
Rep. Patsy Mink (1993)
Gov. Ben Cayetano (1987)
Lt. Gov. Mazie Hirono (1995)
Supreme Court Chief Justice Ronald Moon (1993)
Honolulu Mayor Jeremy Harris (1994)
Senate President Norman Mizuguchi (1994)
House Speaker Joe Souki (1993)
Former House Speaker Daniel Kihano (1987)
City Council Chairman John DeSoto (1995)
Rev. David Coon (1989)
University of Hawaii President Kenneth Mortimer (1993)
Golfer Arnold Palmer (1981)
Sei Hoon Yang, Consulate General of the Republic of Korea (1993)
Ting-Yu Yu, director general CNNA, Representative of Taiwan, ROC, (1993)
Source: 1996 Waialae Country Club membership directory
http://starbulletin.com/97/11/19/news/index.html
Also see...
http://starbulletin.com/98/10/16/news/story2.html
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NEW DISCOVERY (08-20-08): Undisclosed professional and financial conflicts of interest of Trustee David C. Farmer and attorney Steven Guttman with Cerberus International; Kamehameha Schools; Goldman Sachs; Blackstone Group; David Banmiller, Judge Robert Faris, Judge David Ezra, Dane Field, James Ahloy, Dennis Tsuhako, Stuart Ho, etc., through his legal representation of Aloha Airlines:
September 21, 2007
Quiet, not silent, Stuart Ho
leads as he learns
by Janis L. Magin, Pacific Business News
Stuart T.K. Ho doesn't like to take a lot of credit for all he's done in 43 years as an attorney, a politician, a real estate developer, a trustee, a hospital CEO.
Others grabbed the glory and the headlines and Ho was mostly content to let them.
"He's not a self-promoter," said friend and attorney Cuyler Shaw, who represented the family business, Capital Investment of Hawaii, started by Ho's late father, Chinn Ho. "He seems to draw people because of his competence and understanding of the situation."
Ho, 71, is one of Hawaii's most influential business leaders, one of the most dedicated stewards of community service, and, to quote his son, "somebody who truly understand the inner workings of Hawaii business."...
Ho cultivated his connections and business savvy during his long career in business, as a state representative and as a member of a dozen corporate and charitable boards of directors. He ran the Rehabilitation Hospital of the Pacific for five years after closing down Capital Investment and he is now the state president for AARP Hawaii and the president of Waialae Country Club.
His wife, Elizabeth, is the area field service director for AFSCME, the parent organization of the state workers union, the Hawaii Government Employees Association.
Ho served as a director on the Aloha Airlines, Bank of Hawaii, Gannett Co., and TIAA-CREF Mutual Funds boards from the mid-1970s until the early 2000s. He also served as a University of Hawaii regent.
“One of the benefits I had with being on these various boards was the information you acquired that wasn't exactly street talk, especially with the local boards," Ho said. "Although you had to maintain your secrecy about these things, there's no question that what you put in your head stayed there."
He currently serves as a trustee on the University of Hawaii Foundation board, and as a director on the boards of Nuuanu Memorial Park, the Mamoru and Aiko Takitani Foundation, the Law Library Microform Consortium and Aloha Festivals....
The first of Chinn and Betty Ho's six children, Stuart T.K. Ho grew up in Honolulu and graduated from Punahou School in 1953, then headed to Claremont McKenna College in Claremont, Calif.
After graduation in 1957, two years of service in the Army took him to France and Lebanon, sparking a lifelong love of travel.
He went to law school at the University of Michigan, earning his degree in 1963. He returned to Honolulu, where he briefly worked as a deputy corporation counsel for the city before moving with his first wife, Mary, to practice law in New York City.
Returning to the Islands, he ran for the state Legislature in 1966 as a Democrat after reapportionment opened up a number of new seats, and represented Manoa for four years, two as majority floor leader.
"One of the most interesting periods of my life was government and the measurement of power and how it's applied," Ho said.
Despite his fascination with politics, Ho knew he needed to focus his attention on the family business, as he was expected to do. His brother, Dean, a business consultant in Shanghai, also worked for Capital Investment.
As a father, Ho did not expect, nor encourage, any of his three children to follow him.
"Real estate's a tough business and frankly, I wanted to encourage them to be in more stable businesses," Ho said. "Basically they went their own way."
Two of them did follow careers in business, although on different paths. Peter Ho was recently promoted to second in command at Bank of Hawaii.
Daughter Cecily Sargent recently sold a restaurant near Sydney, Australia, her second, and is getting ready to start another restaurant-related business.
"We weren't spoiled," Sargent said. "We were taught that you have to work hard to get what you want, and that success doesn't come without hard work."
The youngest of Ho's children was Heather, who died in the Sept. 11, 2001, terrorist attack on the World Trade Center. She was executive pastry chef at Windows on the World....
Although Ho is as busy as ever with his jobs at AARP and Waialae Country Club, he is looking forward to settling into a slower pace of retirement next year when his term at the club is up....
http://pacific.bizjournals.com
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The Story of Waialae
The Golf Course was opened for play on February 1, 1927.
The Royal Hawaiian Hotel and Waialae Golf Course were built by the Territorial Hotel Co. as part of a promotional program to develop luxury travel trade to Hawaii. Matson Navigation Co. built the luxury passenger liner Malolo as part of this program. The hotel and golf course lands were leased from the Bernice P. Bishop Estate.
2007 OFFICERS
STUART HO, President
JOHN JUBINSKY, President-Elect
RICHARD INGERSOLL, Secretary
ALLAN LUM, Assistant Secretary
JAMES AHLOY, Treasurer
ALLAN LUM, Assistant Treasurer
DENNIS TSUHAKO, Internal Auditor
~ ~ ~
Four trustees receive
country club freebies
The free memberships, accepted by all
Bishop Estate trustees but Oswald Stender,
are called a conflict of interest
By Rick Daysog. Star-Bulletin
Four out of five Kamehameha Schools/Bishop Estate trustees receive free memberships from exclusive country clubs that sit on Bishop Estate land, in what critics called a clear conflict of interest.
Bishop Estate trustees Richard Wong, Henry Peters, Lokelani Lindsey and Gerard Jervis are honorary members of the posh Waialae Country Club, whose lease rents were renegotiated in 1995 with the estate.
The four trustees also are listed as honorary members at the Mid-Pacific Country Club in Lanikai, which also sits on Bishop Estate land.
The fifth trustee, Oswald Stender, turned down the free club memberships in 1995 to avoid the appearance of a conflict and for tax purposes.
"They don't get the idea that they are trustees of a charitable trust," said Senior U.S. District Judge Samuel King, one of the five authors of the critical "Broken Trust" article that helped launch the state's investigation of the $10 billion charitable trust.
"I doubt if they know how to spell the word fiduciary."
Golf club memberships and other trustee perks, such as airline VIP club memberships, have been a subject of inquiries from the Internal Revenue Service, which is conducting an audit of the estate, according to one source familiar with the audit.
King believes honorary memberships underscore the need to remove some of the trustees from the board. He said the memberships create "an appearance of impropriety" since the estate owns the land under the golf courses and negotiates their leases.
According to Waialae's membership directory, the four trustees were honorary members in 1995 when the estate and club members rewrote the lease. Those talks raised the 144.9-acre course's annual lease rent from $60,000 to about $1 million, according to club members familiar with the lease terms.
Trustees also were honorary members at Mid-Pacific when the club renegotiated its rent in 1991. The 163-acre Windward Oahu golf course now pays $469,000 a year in lease rent, up from $6,000 previously.
Jervis, Lindsey and Wong were not Bishop Estate trustees when Mid-Pacific's lease was last negotiated.
"This certainly raises questions about the independence of trustees," said Edward Halbach, one of the nation's top experts on trust law and the former dean of the Boalt School of Law at the University of California Berkeley.
Trustees respond
An estate spokeswoman referred questions regarding the club memberships to the individual trustees. Peters and Lindsey did not return calls.
Wong, who doesn't golf, said he's been an honorary Waialae member for 22 years but has never used it. Jervis, who became a trustee in late 1994, said he became a Waialae member in 1995 but has golfed there only once.
He said he had been a regular paying member at Mid-Pacific but later became an honorary member after he became a trustee.
Stender had been an honorary member at Waialae when he was appointed to the board in 1989 but declined the memberships two years ago, according to sources. He now is a regular, paying member of the Oahu Country Club, which is not on Bishop Estate land.
Managers at both golf clubs declined comment when asked about the potential conflicts.
Traditional perk
The honorary memberships are a traditional perk that the clubs have extended to trustees for many years, some members said. One said the memberships don't pose a direct conflict since the lease talks with the clubs were handled by Bishop Estate staffers, not by trustees.
He added that Waialae's new lease terms are favorable to the club. Waialae, the site of the Hawaiian Open golf tournament for decades, now has a 75-year lease, although it has had to raise monthly dues by $62 to adjust for the higher lease rent, he said.
"It was strictly by the numbers," he said.
Breached duties?
Randall Roth, a University of Hawaii law professor and one of the "Broken Trust" co-authors, believes some trustees may have breached their fiduciary duties in accepting the free memberships since they're personally benefiting from their position with the estate.
For instance, a regular membership at Waialae costs $44,000 -- roughly equivalent to the median household income in Hawaii -- in addition to monthly dues of about $310.
Mid-Pacific Country Club members pay a one-time initiation and certificate fee of $36,000 and monthly dues of $265, according to Hal Okita, general manager.
Honorary member at both clubs enjoy nearly the same privileges as regular members, although they are not allowed to vote on club policy.
According to Okita, Mid-Pacific extends honorary memberships to public figures such as Gov. Ben Cayetano and Mayor Jeremy Harris, as well as trustees. Okita said trustees haven't formally accepted Mid-Pacific's honorary memberships and noted that they seldom use the club's facilities.
Besides Bishop Estate trustees, Waialae's 1996 membership directory lists U.S. Sen. Daniel Inouye, U.S. Rep. Patsy Mink, Cayetano, Lt. Gov. Mazie Hirono, Senate President Norman Mizuguchi and House Speaker Joe Souki as honorary members.
Former Bishop Estate trustees William Richardson and Matsuo Takabuki are regular, paying members of Waialae.
"I don't see any problem in giving away honorary memberships to the governor," said King, whose father served as a Bishop Estate trustee during the late 1950s.
"But when they do that for the landlord, that is a conflict of interest."
Honorary members
Of Waialae Country Club in 1996, followed by the year they became members:
Trustee Richard Wong (1994)
Trustee Henry Peters (not available)
Trustee Lokelani Lindsey (1993)
Trustee Gerard Jervis (1995)
Sen. Daniel Inouye (n/a)
Rep. Patsy Mink (1993)
Gov. Ben Cayetano (1987)
Lt. Gov. Mazie Hirono (1995)
Supreme Court Chief Justice Ronald Moon (1993)
Honolulu Mayor Jeremy Harris (1994)
Senate President Norman Mizuguchi (1994)
House Speaker Joe Souki (1993)
Former House Speaker Daniel Kihano (1987)
City Council Chairman John DeSoto (1995)
Rev. David Coon (1989)
University of Hawaii President Kenneth Mortimer (1993)
Golfer Arnold Palmer (1981)
Sei Hoon Yang, Consulate General of the Republic of Korea (1993)
Ting-Yu Yu, director general CNNA, Representative of Taiwan, ROC, (1993)
Source: 1996 Waialae Country Club membership directory
http://starbulletin.com/97/11/19/news/index.html
Also see...
http://starbulletin.com/98/10/16/news/story2.html
~ ~ ~
NEW DISCOVERY (08-15-08): Undisclosed conflicts of interests between Senator Dan Inouye, Senator Ted Stevens, VECO Corporation, George W. Bush, John McCain, Dick Cheney, Halliburton, Shell Oil, Barack Obama, Aloha Petroleum, James Ahloy, Chevron-Texaco, Mark Bennett, Linda Lingle, Tesoro Petroleum, Faye Kurren, Judge Barry Kurren, Enron, Goldman Sachs, Robert Rubin, Henry Paulson, Henry Peters, Paul Alston, etc.:
December 6, 1996
ENRON and Shell Win Bid in
Capitalization of YPFB's
Transportation Segment
LA PAZ, BOLIVIA – Enron Development Corp. and Shell International Gas Ltd. announced today that the government of Bolivia has named the companies the successful capitalizing company for the transportation segment of the state oil and gas company, Yacimientos Petroliferos...
Business Wire
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March 30, 1998
The following is an excerpt from a 10-K SEC Filing, filed by TESORO PETROLEUM CORP /NEW/ on 3/30/1998:
ACCESS TO NEW MARKETS
A lack of market access has constrained natural gas production in Bolivia. With little internal gas demand, all of the Company's Bolivian natural gas production is sold under contract to the Bolivian government for export to Argentina.
Major developments in South America indicate that new markets will open for the Company's production. Construction of a new 1,900-mile pipeline that will link Bolivia's extensive gas reserves with markets in Brazil commenced in 1997 and is expected to be operational in early 1999.
The owners of the new pipeline include Petrobras (the Brazilian state oil company), other Brazilian investors, Enron Corp., Shell International Gas Ltd., British Gas PLC, El Paso Energy Corp., BHP, and Bolivian pension funds. When completed, the new pipeline will have a capacity of approximately 1 billion cubic feet ("Bcf") per day.
For more, see...
Citigroup: Vampires in the City
Vultures Up to their Necks in Tesoro Petroleum
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NEW DISCOVERY (07-12-08):
~ ~ ~
NEW DISCOVERY (06-02-08):
WAIALAE COUNTRY CLUB
MAIN NUMBER: (808) 734-2151
FAX NUMBER(808) 734-4791
2007 OFFICERS
STUART HO, President
JOHN JUBINSKY, President-Elect
RICHARD INGERSOLL, Secretary
ALLAN LUM, Assistant Secretary
JAMES AHLOY, Treasurer
ALLAN LUM, Assistant Treasurer
DENNIS TSUHAKO, Internal Auditor
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From AMERICAN DYNASTY - Aristocracy, Fortune, and the Deceit in the House of Bush, by Kevin Phillips:
INDIANA BUSH AND THE AXIS OF EVIL
... As president, Bush senior gloried in the Gulf War and the 1989 invasion of Panama, both cast as strikes for democracy–even if the dictators attacked were former friends. Over a decade...his web of covert international relationships prompted charges of his participating in and covering up in three actual or alleged illegalities: the Republican Party’s “October Surprise” negotiations with Iran in 1980, supposedly undertaken to ensure that no hostages taken in Iran would be released before the election; the Iran-Contra scandal; and “Iraqgate,” secretly arming Iraq from 1984 to 1990 before hurriedly changing course after Saddam Hussein took Kuwait. Two catchphrases recur in the family resume: “arms deals” and “clandestine operations.” A third recurring association would be “cover-up.”
George W. Bush was a willing recipient of the inheritance–witness the CIA and BCCI ties of some who finance him, from Arbusto to Harken Energy a decade later. For example, James Bath, who invested fifty thousand dollars in the 1979 and 1989 Arbusto partnerships, probably do so as U.S. business representative for rich Saudi investors Salem bin Laden and Khalid bin Mahfouz (Osama bin Laden’s brother-in-law). Both men were involved with the Bank of Credit and Commerce International, the rogue bank and occasional CIA front known for financing arms deals – indeed, bin Mahfouz owned 20 percent of its stock.
Bath, who made his fortune investing for the two Saudis, was a colorful Texan – and then some. According to former Houston Post reporter Pete Brewton, Bath was “an asset of the CIA, reportedly recruited by George Bush himself” in 1976 to keep the Agency up to date on Saudi activities.
A decade later, Harken Energy, the company willing to handsomely buy out George W.’s crumbling oil and gas business, had its own CIA connections. Chairman Alan Quasha was the son of a Philippine lawyer connected to the Nugan Hand Bank, a notorious Australian bank closely linked to the CIA.
Equally to the point, 17.6 percent of Harken’s stock was owned by Abdullah Bakhsh, another Saudi magnate reported by some to be representing Khalid bin Mahfouz.
A U.S. Senate subcommittee investigating BCCI in 1992 reported on how the bank bought friendship and favors from politicians around the world; details of the investigation were published in two books: False Profits: The Inside Story of BCCI, the World’s Most Corrupt Financial Empire, by Peter Truell, and The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI, by Jonathan Beaty and S.C. Gwynne. According to the latter, the story of the Bush involvement in the BCCI scandal involved the “trails that branched, crossed one another or came to unexpected dead ends.”...
As we have seen, Jeb Bush began his business career in Miami collaborating with Cubans tied to the CIA or to kindred intelligence agencies in pre-Castro Cuba. He socialized with Adbur Sakhia, BCCI’s Miami branch manager and later its top U.S. Official. Jeb Bush’s partners and early associates included a number of Cuban emigres with CIA, Nicaraguan ‘contra, or Batista-era Cuban intelligence connections.
To say that armaments, clandestine operations, and money-laundering banks recur in the history of the Walker-Bush family is no exaggeration at all. No other presidents have been so caught up in this kind of foreign policy. And the Bushes’ preoccupations are not clear until you consider the whole dynasty. It is the dynastic aspect that truly reveals the pattern – the clandestine behavior over multiple generations...
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James Ahloy is expected to testify regarding his business, professional and personal relationships with President George W. Bush; George H.W. Bush; James Baker; Jack Abramoff; Leonard Millman; Kamehameha Schools/Bishop Estate;