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
BEN D. BENSON
Address to be determined.
Previous owner of Benson Forest (now Shelter Bay Forest) lands in Michigan which he sold to Kamehameha Schools/Bishop Estate; previous real estate developer and owner of oil drilling company; currently owner of Sea Hunt, Inc., a deep sea salvage company.
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October 11, 2006
The Real Deal Behind Granholm's "U. P. Big Deal"
By C. J. Williams, www.MichNews.com
On January 6, 2005 the Yooper grapevine was abuzz with news of another State of Michigan/Nature Conservancy land grab scheme involving 271,000 acres in eight counties, an amount equivalent to 502 square miles. The parcel had been carved from 390,000 forestland acres situated in ten of the Upper Peninsula’s fifteen counties.
Described by the Conservancy as an ecological treasure trove of nature’s precious jewels and pristine landscapes, the 390,000 acres, once owned by the Bishop Estate Trust (a.k.a. Kamehameha Schools Trust), includes more than 300 lakes and 526 miles of rivers and streams. However, as Paul Harvey would say, it’s time to tell the rest of the story about story about Governor Granholm’s “U. P. Big Deal”, also known as the Nature Conservancy’s “Northern Great Lakes Forest Project”.
Bernice Pauahi Bishop was the great-granddaughter and last direct descendent of Hawaiian King Kamehameha I. Born to high priests, Bernice was raised by a prime minister and educated by Protestant missionaries. While in her teens, she married Charles Bishop, a 28-year old New Yorker.
After her death in 1884, Charles helped establish the Kamehameha Schools and subsequent Bishop Trust according to Bernice’s last will and testament. To do so he used her substantial land holdings and his considerable wealth.
The Bishop Trust, Hawaii’s largest private landowner once estimated to be worth $10 billion or more, still operates schools and educational programs throughout the islands. Over the past several decades, the scandal-ridden Trust has been raided through convoluted schemes that almost defy unraveling.
So how did it come to pass that a Hawaiian trust fund once owned so much of Michigan’s beautiful Upper Peninsula? The answer lies in a purported friendship between Ben Benson and Mark McConaghy, a PricewaterhouseCoopers tax expert hired by the Bishop Estate trustees to keep the IRS off their greedy backs. But, I get ahead of myself.
Some of the 271,000 acres, now lauded as Granholm’s “U.P. Big Deal”, once belonged to the Calumet and Hecla Mining Company. By the late 1960’s, however, C & H could no longer afford to mine copper while meeting all the new environmental standards being put in place. Having to compete with China and other countries, which produce ore with cheap labor while ignoring environmental issues, and facing demands of better pay from its own striking miners in 1968, C & H closed its mines and sold its land holdings to Universal Oil Products.
A similar fate met miners who rode buses for up to an hour or more to the Copper Range mine near White Pine in Ontonagon County. An environmental lawsuit filed in 1995 by the National Wildlife Federation, the Michigan United Conservation Clubs, and others, plus a successful effort to agitate a band of Native Americans over environmental issues, helped end copper’s glory days there, too. But the world’s greatest source of native copper, uranium, gas, oil, and other valuable underground resources still lie waiting in the U.P. and the State of Michigan, the Conservancy, and global mining conglomerates know it.
Ben Benson, a very young New Englander, amassed some of the former C & H property in the late 1980’s, combined it with 292,000 acres purchased in 1990 from Cliff’s Forest Products (Cleveland-Cliffs), added a little bit more from here and there, and set about developing a high-tech, satellite-enhanced timbering operation, or so the tale is told.
According to Maura Singleton’s August 1999 article, “Sea Hawk”, published in the Virginia Business Magazine, 40-year-old Benson had been a dyslexic and indifferent student who dropped out of school in the ninth grade. At age 15, he stole the family car, drove from Cape Cod to Maine, and used a newly obtained credit card to buy 100 acres of rocky wilderness, which he subdivided and sold in 5-acre vacation plots.
Singleton wrote that, at age 17, Benson joined the Navy submarine corps and worked with sonar on a nuclear fast-attack sub, but his plan for a Navy career went by the wayside four years later due to allergies.
By the early 1980’s, Benson, who claimed never to have done anything for more than four years, had already run an oil company and a New Hampshire real estate development company.
He then focused attention on the state of Virginia, marrying the granddaughter of an East Shore developer, an area where the Nature Conservancy (TNC) controlled and mismanaged a great deal of land. It was here that Benson again took up work in real estate, developing exclusive coastline property.
In 1991, Benson, with title to about half-a-million U.P. acres, became involved in a partnership of sorts with the Bishop Estate Trustees through his pal, Mark McConoghy. But, in 1994 at age 35, after surviving two heart attacks within an 8-month period, he sold his U.P. land holdings to the Trust for a few million dollars and bought a 65-foot Hatteras, which he christened “Sea Hawk”.
The partnership may have dissolved, but it later caused Benson’s name to come up in Bobby Harmon’s RICO lawsuit - Civil No. 99-00304 DAE: Harmon v Federal Insurance Company, P & C Insurance Co., Inc., Marsh & McLennan, Inc., Trustees of Kamehameha Schools/Bishop Estate, PricewaterhouseCoopers, et al, filed in the U.S. District Court for the District of Hawaii.
Harmon is still immersed in litigation regarding his claims of fraud, tax evasion, racketeering and other wrongful acts involving the Bishop Land Trust. His lengthy witness list, which he adds to almost daily, includes newly appointed U.S. Treasury Secretary Henry Paulson who is a former Goldman Sachs CEO. Paulson was also a Board member of the Nature Conservancy and served as co-chairman of its Asia Pacific Council. At one time, the scandal-ridden Bishop Trust owned a great deal of Goldman Sachs stock.
When Benson was featured in the “Sea Hawk” article, he was searching for millions of dollars worth of lost treasure off Virginia’s coast and dueling with Spain for the right to do so. He’s since sold that venture, Sea Hawk, Inc., to wheeler and dealer Peter Knollenberg.
Considering that Benson had been a dyslexic, fifteen-year-old credit card-owning high school dropout and run-away, his estimated fortune, said to be around $110 million several years ago, isn’t too shabby.
After Benson sold his U.P. holdings to the Bishop Trust, Benson Forest Products became known as Munising based Shelter Bay Forests, which managed the trust’s U.P. land holdings with “gentle timbering” technology until the forestland was put up for bids in the fall of 2002.
Although Governor Engler, the Conservancy, and an “undisclosed timber company” formed a “private-public” partnership to bid on the Bishop Trust land, they lost out to Forestland Group LLC, which closed on their deal during the summer of 2003.
Founded in 1995, Forestland Group is a North Carolina based forest investment management organization (TIMO) that purchases property through its various Heartwood Forestland Funds. As of April 2005, Forestland Group owned 560,000 Upper Peninsula acres; 78,110 acres in Houghton and Keweenaw Counties bought from Mead in 1998, 91,117 acres in Iron, Ontonagon, Houghton and Baraga Counties bought from Ned Lake Timber and Land Company in 2001, and the remainder being the former Bishop Trust holdings of 389,202 acres bought in the summer of 2003.
Within a few months of closing on the Bishop Trust deal, Forestland Group offered its prize to the State of Michigan, and by January 2004 the Michigan Chapter of the Nature Conservancy had already secured at least one grant toward the purchase. That’s not surprising, however, considering that a January ‘05 news article written by George Gallagher for the Council of Michigan Foundations lauds several foundations that had taken an active role to help TNC’s Michigan chapter in their then four-year public/private partnership initiative to get their biscuit hooks on the Upper Peninsula Bishop Trust timberland.
Upon learning in 2002 that the public/private partnership lost the bid, Phil Powers, then chairman of the MI-Nature Conservancy, said Forestland Group could fit in with the Conservancy’s goals. “Our sense is they’ve got a first-class track record of putting in place solutions like the ones we’re working on. We in the Nature Conservancy are looking forward to working out a partnership with them,” said Powers.
Tina Hall, the U.P. director of the MI-Nature Conservancy, said the idea of securing recreational access easements to portions of the property was not dead. “…We know the Forestland Group so well, we feel we can work with them,” said Hall.
As the story behind the “U.P. Big Deal” unfolded, it was claimed that key players met at Governor Granholm’s office in November 2003. And, though she had to put the parties in separate rooms when negotiations broke down and shuffle back and forth with offers and counter-offers until she got them to make a deal, an agreement was finally made between the two who’ve been bed partners for years - the State of Michigan and the Nature Conservancy - in tandem with Forestland Group LLC, whose President and CEO is none other than Thomas Massengale, a former Nature Conservancy senior executive and founder of it’s North Carolina Chapter.
Of the 390,000 Bishop Trust acres for which Forestland Group outbid the State, the Nature Conservancy, and their “unnamed” timber company partner, the Conservancy, with multi-billion dollars in tax-exempt assets, will own fee interest (includes mineral rights) in 23,338 acres in the Big Two Hearted River watershed and will manage the State’s conservation easement on 248,000 acres still owned by Forestland Group.
A campaign to fund Granholm’s “U.P. Big Deal” land grab for the Conservancy’s $57.9 million “Northern Great Lakes Forest Project” got underway without anyone asking state citizens if they approved of her Big Deal or not.
Pretty slick, eh!
Copyright by C. J. Williams
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NEW DISCOVERY (04-11-08): Trustee James B. Nicholson failed to disclose that he was the court-appointed bankruptcy trustee for Defendant’s witness, Peter Savio, even though he was asked specifically if he had any business, professional, personal or political relationships with Mr. Savio:
Hawaii’s Top 250 Companies:
New To The List: Whoa, Savio!
Hawaiian Island Homes' debut is marked by acrimony
By Kelli Abe Trifonovitch, Hawaii Business Magazine
Any interview that focuses on Peter Savio's new company, Hawaiian Island Homes Ltd., will soon focus on another Top 250 company, Central Pacific Bank. Says Savio: "They're malicious. They're vicious. I am going to become a stockholder in Central Pacific Bank. I am going to reform that institution. Their mistake was they stomped me. They didn't kill me. I'm coming back. I'm going to have fun with them."
Go back to the year 2001. Savio Inc., a holding company for eight real estate sales and development companies, was No. 56 on the Top 250, with $134.6 million in 2000 gross sales. But in 2001, Savio Inc. filed for Chapter 7 liquidation, and Peter Savio and his wife filed for personal bankruptcy protection. Savio says he was forced into the bankruptcies because CPB gave him just five days to move from his second-floor offices at 931 University Ave. Savio says he had been in a workout plan with a number of lenders after he started experiencing cash-flow problems in the mid-1990s. But CPB forced his hand.
"The only way to stop them was, I had to file for personal bankruptcy. So to save my employees and everything else, I filed for personal bankruptcy - one of the most difficult decisions I've ever had to make. But I was really pissed at Central Pacific Bank for doing that," he says.
"It was tough," he adds. "Basically I lost everything. Lost my house. Lost everything. Had to basically come back from nothing."
Today, Savio is more than back. His real estate company, Hawaiian Island Homes Ltd., lists 2002 gross sales of $177 million. Its office is downstairs in the same building that Savio Inc.'s once was. And the company is No. 27, ahead of CPB Inc. (No. 49), something Savio will rejoice to read. Savio says, "I've decided that my goal is to beat them in the Top 250. … just so we can say, 'Nannynannybooboo!'"
That's not all. "My short-term and my long-term goal is to reform Central Pacific Bank," Savio says. "I think I'm going to buy the bank."
Ann Takiguchi, Central Pacific Financial's communications officer, says, "We made every effort to work with Mr. Savio, and it is unfortunate that he is blaming us for his situation. Out of respect for our customers' privacy, we have no further comment. As a matter of bank policy, we don't comment on the affairs of our customers."
Bankruptcy court filings show that Central Pacific Bank claimed that Savio Inc. owed it about $1.5 million when Savio filed for bankruptcy in 2001. The Internal Revenue Service and Pitney Bowes Credit Corp. also listed claims of about $2,000 each.
The court-appointed trustee for Savio Inc.'s bankruptcy case, attorney Jim Nicholson, says the only unencumbered asset of the estate, a unit in the Diamond Head Beach apartment building, was sold for $375,000 in June 2003.
Gross sales for Savio's other new company, Hawaiian Island Development, were not reported for this year's Top 250, so one thing is for sure: Next year, he'll be back. Says Savio: "We're going to set up a new holding company called, 'I Hate CPB.' No, my attorney said I couldn't do that. I have a warped sense of humor, OK? But anyway, the new holding company is going to be Ohia Holdings."
Knowing Savio, there is marked symbolism in that choice. After all, the Ohia tree can be found growing in the middle of old lava flows.
Hawaii Business, August, 2003
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Ben Benson is expected to testify regarding his relationships with Mark McConaghy; Pricewaterhouse LLP; The Nature Conservancy; Elizabeth Hall; Rocco Sansone; Marsh & McLennan; Henry Paulson; Goldman Sachs; Kamehameha Schools/Bishop Estate; Henry Peters; Matsuo Takabuki; Nathan Aipa; Colleen Wong; Hamilton McCubbin; Dee Jay Mailer; Lyn Anzai; Guido Giacometti; Peter Savio; Faye Kurren, Linda Lingle, Elizabeth Dole, Robert Dole, Dan Case, Steve Case, Suzanne Case, John Garibaldi, James B. “Jim” Nicholson, James B. Nicholson, David Farmer, and others to be named upon discovery.
THE PEREGRINE GALLERY
To View More Birds of Prey!
JACK ABRAMOFF - HENRY PAULSON - GALE NORTON
FAYE KURREN - NANCY JOHNSON - PETER SAVIO
BRUCE BABBITT - BEN BENSON - DAVID COLE
HAUNANI APOLIONA - JEFF WATANABE
COLBERT MATSUMOTO - JAMES WATT
LINDA LINGLE - JAMES NICHOLSON
(...with more to come!)
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Documents, News Articles and Related Links
Equity 2048 -The Richards Report
Pages 1-26; Pages 26-49; Pages 50-75; Exhibit 2; Exhibit 2b
XL Reinsurance Policy No. XLRKS-01796
Equity 2048 - Related Correspondence and Documents
IRS Closing Agreement for Kamehameha Schools
Broken Trust - The Book
TO GO TO THE WOO VS. HARMON WITNESS INDEX