James B. Nicholson, Trustee vs. Harmon

David C. Farmer, Successor-Trustee vs. Harmon

(Formerly Woo vs. Harmon & Nicholson vs. Harmon)

CV05-00030 DAE KSC

U.S. District Court For the District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

—

DEFENDANT’S WITNESS

DUKE BAINUM

Former member Hawaii state House of Representatives; former Honolulu City Councilman.

~ ~ ~

June 24, 2005

Japanese Cultural Center Learns 7 Years After the Fact About Estate Bequeathed to
Non-Profit by Masumi Murasaki

Hawaii Reporter Broke the Story on the Estate;
Organization Plans Tribute to Thank Murasaki
for First Gift of Its Kind

By Malia Zimmerman, Hawaii Reporter

Hawaii Reporter has learned that the Honolulu-based Japanese Cultural Center of Hawaii, after a 7-year delay, will receive more than $250,000 from the sale of a Kahala estate bequeathed to the non-profit organization by Masumi Murasaki, who died at the age of 85 in January 1997.

The non-profit, which has overcome dire financial straits in the last three years thanks to private donations, in its monthly newsletter, acknowledges the organization did not know about the large contribution -- the first of its kind contributed to the Japanese Cultural Center of Hawaii -- until late 2004.

That is when Hawaii Reporter released a series of investigative reports on Masumi’s caretaker, Jennifer Alonso-Toma, who on Feb. 14, nine months prior to the 2004 election, married Honolulu Mayoral Candidate Duke Bainum, changing her name to Jennifer Toma-Bainum....

In the Summer of 1995, Jennifer was hired by Dennis Murasaki to be the caretaker for Masumi, his ailing 83-year-old father, in return for $350 a month and bed and board. At that time Masumi had more than $300,000 in fairly liquid assets. Masumi died on Jan. 28, 1997, just 18 months later, having assets of only $6,000 with the bulk of his funds having been drained by Jennifer during that time, according to documents provided in court.

The Murasaki family went to court before the father died to prevent his assets from being drained further by Jennifer and lost. Her case was made stronger for her by two attorneys and a psychologist. One attorney is currently being charged civilly by the state on more than 278 counts of defrauding consumers, including the elderly, of hundreds of thousands of dollars. The second has violated state ethics rules in more than a half dozen cases and has been disbarred permanently as an attorney in Hawaii, pending final approval from the Hawaii Supreme Court, which isn’t expected to challenge the ruling of the Office of Disciplinary Council. The psychologist is currently being sued for releasing Byran Uyesugi from mental treatment just before he killed seven co-workers at the Xerox building.

In his will, Masumi left his property to the Japanese Cultural Center, but the organization was never notified. Instead, Jennifer continued to rent out and collect checks from the Kahala property Masumi, according to neighbor and former association president Lee Manfredi and a former tenant of the Murasaki property who were interviewed for this story.

Without further explanation, the Japanese Cultural Center, whose chairman of the board Colbert Matsumoto has so far not returned calls to Hawaii Reporter, has reportedly helped to obtained possession of the Kahala property 7 years after the fact.

In the June 2005 issue of the Japanese Cultural Center of Hawaii's quarterly publication called Legacies, a statement by Matsumoto reads: In a wonderfully generous gesture and the first gift of its kind received by JCCH, the late Mr. Masumi Murasaki bequeathed his estate, comprised of his townhouse residence in Kahala, to JCCH. Murasaki died at the age of 85 in 1997, but JCCH did not learn of his gift until late 2004. As a result, we regrettably know little about him other than that he was a former cab driver for Charley’s Taxi in Honolulu. We have been told that his pride in his Japanese heritage motivated Murasaki to make provisions in his trust for this exceptional gift to help JCCH fulfill its mission. We hope that any reader who may have known him will contact JCCH to share any insights you may have about this very generous man. It is expected that JCCH will receive $250,000 in net proceeds for this gift. The board of directors has earmarked the funds for JCCH’s Endowment Fund. Plans for an appropriate tribute to honor Murasaki for his generosity are currently being developed. Our gratitude is extended to the late Masumi Murasaki whose generosity will go a long way in helping the JCCH continue fulfilling its mission of preserving and promoting the evolving Japanese American experience in Hawaii for present and future generations....

A spokeswoman for the Japanese Cultural Center, who referred legal-oriented calls to Matsumoto, who is an attorney, did confirm the money from the Murasaki property will be used to establish a cultural program at the center in honor of Masumi.

~ ~ ~

April 25, 2004

Questionable donors add to Bainum’s war chest

By Rick Daysog, Star-Bulletin

Honolulu mayoral candidate Duke Bainum, who has promised not to accept donations from anyone convicted of campaign spending violations, has received nearly $14,000 over the last six years from companies and individuals that made illegal contributions.

The former city councilman received another $10,000 from employees of companies found to have made contributions under false names to local political candidates, according to a Star-Bulletin analysis of Bainum's mayoral and city council campaign filings since 1998.

Bainum said the donors were not under investigation at the time they contributed to his campaign and that he has no plans to return the money.

Donors included former Honolulu Police Commissioner Leonard Leong, who pleaded no contest to making illegal political contributions to Mayor Jeremy Harris' campaign, and city Department of Community Services Director Mike Amii, who pleaded no contest to a third-degree theft charge for ordering a staffer to work on Harris' political campaign. Amii contributed $150 while Leong gave $2,000.

Bainum stressed that his campaign has never accepted or solicited an illegal contribution nor has it been fined for breaking campaign laws.

He said his pledge to refuse tainted campaign money applies to any contribution that his campaign receives after the donor is fined or convicted. The donors in question were not under investigation at the time they gave to his campaign, according to Bainum.

Bainum added that he recently returned a check to a recent donor, whom he declined to identify. Bainum's main competitor, former City Councilman Mufi Hannemann, returned more than $70,000 in campaign funds that were found to be illegal.

"I think voters will be glad to know that there's a candidate that didn't accept illegal campaign contributions," Bainum said.

The Star-Bulletin's analysis is based on a review of 780 contributions that the Bainum campaign has received since 1998. The givers include some of the biggest targets in the two-year, city hall campaign finance scandal, as well as a prominent member of the Bainum clan.

>> Bainum's cousin, former Maryland state Sen. Stewart Bainum Jr., and his wife Sandra contributed $4,000 to Duke Bainum's campaign on Nov. 9, 1998.

Stewart Bainum is the chairman of Choice Hotels International Inc., which owns the franchise for the Comfort, Clarion and Econo Lodge hotel brands. He also is a former chairman of Manor Care Inc., which is one of the nation's largest independent nursing home operators. Manor Care was founded by the Bainum family.

In 1997, the Federal Election Commission fined Stewart Bainum $4,000 for funneling $4,000 in the name of his infant son Bradford to the 1992 presidential campaign of Democrat Paul Tsongas and to the congressional campaigns of Democrats Chester Atkins of Massachusetts and Albert Wynn of Maryland.

Duke Bainum said he was unaware of the FEC fine when he accepted his cousin's donation six years ago. He said Stewart Bainum has not contributed to his fund since.

>> Former Honolulu Police Commissioner Leong gave the Bainum campaign $2,000 on Nov. 8, 2001. A month before that, Leong's sister, Lori-Ann Leong, contributed $250 to the Bainum campaign.

Last November, Leong, a vice president with Royal Contracting Co., resigned from the Police Commission after he pleaded no contest to charges of making illegal contributions to the Harris campaign. That same day, the state Campaign Spending Commission approved a $20,000 fine against Royal Contracting for making illegal political donations. That plea agreement came after city prosecutors found that Leonard Leong made a number of illegal contributions to the Harris campaign in the names of Lori-Ann Leong and other relatives.

>> Current and former executives of city contractor R.M. Towill Corp. contributed $1,950 to Bainum's campaign in 2001. Donors included Towill Chief Executive William Spencer, former company head Richard Towill and Russell Figueiroa, the engineering firm's president.

Figueiroa and former Towill Chairman Donald Kim have tentatively agreed to plead no contest to misdemeanor charges of making excessive political donations and false-name donations to the Harris campaign.

In return, city prosecutors agreed to drop criminal charges against nine Towill employees and associates who were indicted last year by an Oahu grand jury for making illegal political gifts to the Harris campaign.

Those donors are among the dozens of Towill executives, relatives and subcontractors linked to more than $300,000 in political donations to the Harris campaign.

>> City Bank, which was fined $500 by the state Campaign Spending Commission for making $125 in excess contributions to the Harris campaign, gave $3,000 to the Bainum campaign between 2001 and 2003, while its subsidiary International Savings & Loan contributed $1,000 in 1998. City Bank executive and former city official Roy Amemiya, who also serves as honorary co-chairman of the Bainum campaign, gave another $1,500 in 2001.

>> Former Bainum campaign volunteer Jim Lyon gave the Bainum campaign $895 between 2001 and 2003. Last month, the Campaign Spending Commission fined Lyon's employer, Lyon and Associates Inc., and his father Frank Lyon $500 for making excessive campaign contributions to Harris and former Gov. Ben Cayetano.

Bainum said Lyon is no longer involved in his campaign and that his campaign has not accepted any money from Lyon or his company since the company was fined.

The donations represent a small portion of Bainum's $800,000 war chest, which is heavily financed by his own money and by contributions from wealthy relatives.

According to his campaign disclosures, Bainum loaned his campaign more than $1 million during the past six years. He also spent more than $400,000 of his own money to finance his mayoral and city council campaigns.

Since 1998, about a dozen of Bainum's mainland relatives -- whose family fortune was once estimated at more than $800 million -- contributed $63,000 to his campaign.

Bainum said his largely self-financed campaign indicates that he is independent of special interests.

"We have never taken illegal campaign donations and we have never been fined for taking an illegal campaign contributions," Bainum said.

Duke Bainum campaign

Campaign Spending Commission

http://starbulletin.com/2004/04/25/news/story2.html

~ ~ ~

November 20, 1997

Ewa costs boosted by moving expenses

Relocating businesses pumped the price tag up by $5.1 million

By Gordon Y.K. Pang, Star-Bulletin

The relocation fund for the city's Ewa Villages Revitalization project increased to $6.3 million from $1.2 million in less than six years because of unanticipated relocation expenses.

The additional $5.1 million was needed because the relocations of Oahu Sugar Co. and other commercial entities "were unanticipated in the original budget," according to documents recently given to the City Council by the city Department of Housing and Community Development.

"Why weren't checks in place? How did the Housing Department allow such a thing?" Councilman Duke Bainum asked.

"How do we know the same type of oversight isn't lacking in other parts of the city."

Twelve people, including two city officials, have been arrested in a police investigation into theft, bribery, money laundering and forgery involving Ewa Villages.

Among them were Michael Kahapea, Property Management Division chief for the Department of Housing and Community Development, and Norman Tam, the city's fair housing officer. Both were suspended from their jobs. The city has until the end of the month to find grounds to fire them.

City Managing Director Bob Fishman and city Budget Director Malcolm Tom said they will look into the $5.1 million increase in the relocation fund.

Bainum, who was budget chairman from 1994 until last month, said he and his colleagues were shown lump-sum relocation budgets that did not break down the costs. He said he asked for more exact figures earlier this year but didn't receive them until recently.

"The Council cannot go and check on every project to see if we're legal," he said. Bainum added, however, that it's up to the administration to inspect vouchers randomly for propriety.

Bainum's staff came up with its own breakdown, albeit $300,000 more than what the Housing Department gave them: $1.2 million allocated for Ewa relocations in fiscal year 1991; $1.2 million more in 1992; $1.2 million in 1994; $1 million in 1996, and $2 million in 1997. There were no allocations for 1993 and 1995.

The relocation controversy was mentioned briefly during a five-hour informational hearing yesterday in which auditors of the accounting firm KPMG Peat Marwick explained to Council members their recent study on the city's Housing Assistance Fund.

Peat Marwick said the housing fund stands to lose $26.6 million, $9.6 million of that because of Ewa Villages. Auditors said the city administration understated costs and overestimated revenues in five housing projects.

The administration said the audit does not take into account a revised plan which has upped Ewa Village sales.

http://starbulletin.com/97/11/20/news/story1.html

~ ~ ~

Duke Bainum is expected to testify regarding his business, professional, personal and political relationships with Linda Lingle, Colbert Matsumoto, Japanese Cultural Center of Hawaii, Japan-American Society of Hawaii, George Ariyoshi, Ben Cayetano, Henry Peters, Richard Wong, Jeremy Harris, David Farmer, Bob Fishman, Norman Tam, Michael Chun, Park Engineering, and others to be named upon discovery.