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
BENJAMIN CAYETANO
Address to be determined.
Governor of the State of Hawaii from 1994 to 2002. He was the first Filipino-American to serve as a state governor in the United States. In 1972, Governor John A. Burns appointed him to the Hawaii Housing Authority. Cayetano became Governor John D. Waihee’s Lieutenant Governor in 1986.
~ ~ ~
NEW DISCOVERY (08-25-08): More undisclosed conflicts of interests between David Farmer, Steven Guttman, Governor Ben Cayetano, Governor John Waihee, Governor Linda Lingle, Goldman Sachs, Kamehameha Schools, Hamilton McCubbin, Dee Jay Mailer, P&C Insurance Co., Wally Chin, Rodney Park, Nathan Aipa, Colleen Wong, Lyn Anzai, Earl Anzai, Hawaiian Airlines, Aloha Airlines, Judge Lloyd King, Judge Robert Faris, Judge Kevin Chang, Judge Barry Kurren, Judge David Ezra, Judge Rey Graulty, Robin Campaniano, AIG, Douglas Ing, Louise Ing, Colbert Matsumoto, Jeff Watanabe, Joshua Gotbaum, Linda Lingle, AIPAC, Louanne Kam, Allan Yee, Dennis Fern, James Ahloy, Aloha Petroleum/Harken Energy, McKenzie Methane, Arthur Andersen, PricewaterhouseCoopers, Dennis Tsuhako, Enron, Alan M.L. Yee, Constance Lau, Eric Yeaman, Hawaiian Electric, Robert Clarke, Edwina Clarke, Peter Hanashiro, University of Hawaii, etc:
February, 2007
How to Save Your Business,
Your People & Yourself
Ross Murakami and KMH rise out
of the ashes of Arthur Andersen
David K. Choo, Hawaii Business
Ross Murakami first heard about the Arthur Andersen accounting scandal in November 2001 from an unexpected but reliable source: his mom. Mrs. Margie Kanemitsu called her accountant son from her home in Hilo, after watching a CNN broadcast.
“Ross, did you hear what happened to one of your clients, Enron?” she asked.
The younger Murakami was a partner at Arthur Andersen’s thriving 42-person Honolulu office. The large international accounting firm served as the financial auditor of Enron, a giant energy trading company based in Houston. That morning, Arthur Andersen had announced a restatement of an earlier audit of its client.
“Don’t worry, Mom. We’ll be fine,” he said.
Mothers can be like that. Worry, worry, worry. But, then again, you know what they say about a mother knowing best.
Within days, through a seemingly never-ending series of news reports, Murakami, his staff and the rest of the country watched Enron implode, sucking its staff, subsidiaries and investors down an irresistible vortex. Curiously, one of the first down the financial and political black hole was the auditor, 88-year-old Arthur Andersen, not only its Houston office, but nearly everyone else, including the people in far-off Honolulu....
“It was emotional. It was exhausting,” says Murakami of his office’s sudden fall and eventual rise. “It was also extremely rewarding.”...
THE YOUNG PARTNER
The year 2001 was promising to be a good one for Murakami. Hawaii’s economy was continuing its steady recovery from a decade-long slowdown, which meant a busy year for service businesses like accounting firms. In addition, in the fall, the then-37-year-old accountant made partner at Arthur Andersen. Having joined the company 14 years before, straight out of the University of Hawaii at Manoa, Murakami was the first partner in the Honolulu office to have begun his career at the Honolulu office.
Murakami started his new position at Arthur Andersen on Sept. 1st.
“Here I am a new partner, and, 10 days later, we are hit by one of the most tragic events in U.S. history, which, among other things, had a big impact on business in general,” says Murakami. “Then, two months after that, Enron. Kaboom!”...
Even though his once promising year was beginning to look nightmarish, when Murakami put down the phone after speaking with his mother on that November morning, he was confident that the scandal would pass. After all, every one of the big five accounting firms had had a questionable audit at one time or another in their histories. Some of them had even been sanctioned by the Securities and Exchange Commission for their indiscretions. But they all had weathered their respective storms. It seemed highly unlikely to Murakami that the actions of a few people in his company’s Houston office could reverberate all the way to Honolulu.
Around the office, he reassured his staff: This, too, shall pass. Corporate was tight-lipped about the growing scandal, preferring to wait for the legal and political dust to settle. Murakami and Honolulu office managing partner Randy Karns met with their local public relations consultant, who advised that they do the same. People wouldn’t appreciate public protests or protestations of innocence, they were told. Especially if they were protesting their own innocence. It would be bad form, especially in Hawaii.
Corporate sent representatives to reassure the Honolulu staff that the accounting irregularities were part of an isolated situation in Houston. They pointed to the firm’s vast capital base. Again, there was nothing to be alarmed about.
However, in the first quarter of 2002, as news reports announced one legal development (and lost client) after another, tensions were running high in the office. To relieve the anxiety, Murakami and his staff scheduled visits to members of Hawaii’s congressional delegation and met with Gov. Ben Cayetano. The sessions were gut-wrenching and emotional. “How could this be happening to us?” “Why was Arthur Andersen being made a scapegoat?” they asked. “We haven’t done anything wrong,” they insisted.
The leaders listened patiently and offered their sympathies and support.
“We knew they [Hawaii’s congressional delegation and the governor] wouldn’t be able to do much for us. How could they? It would be like stepping in front of a speeding truck,” says Murakami. “But we needed an outlet for all the anxiety, anger and emotion. We needed to vent.”
In Arthur Andersen’s 29th-floor office in the Pacific Guardian Life Center, the staff continued to vent with management’s full support and participation. Someone began writing encouraging messages with a Magic Marker on a Plexiglas wall off the reception area. People began writing words of support, inspirational quotes from leaders like Gandhi, or words of anger and defiance. They even had lighthearted activities in which they took out their frustrations on certain Department of Justice officials.
“You had this pride about working for Arthur Andersen and then there was this outrage that all this was going down and no one could do anything about it,” says Harvey Rackmil, chief financial officer for HONBLUE, who was the senior member of Arthur Andersen’s tax department from 1998 to 2002. “We were outraged at the government. We made ‘I am Arthur Andersen’ T-shirts for ourselves, and we went downstairs and took photos of each other. Arthur Andersen for the longest time didn’t fight back. They thought that we would get through it. Then the indictment was handed down and that was that.”
THE OLD PARTNER
In the fall of 2001, Randy Karns was quietly planning a second career away from public accounting. The 50-something Karns, who had opened Arthur Andersen’s Honolulu office nearly 20 years before, had been offered an early retirement package from the corporate office—mandatory retirement, actually. That was fine, because he had recently been offered his dream job. Today, Karns won’t disclose what the dream position was, or with whom. He does say that it was with an organization for which he had a passion, and that the position was both prestigious and lucrative.
Karns, who had conducted audits of Hawaii companies since the late ’60s, had spent his entire career with Arthur Andersen, starting out in the firm’s Los Angeles office. He was extremely proud of his company and the quality of work it had done, so 2002, had promised to be not only a sweet beginning to a new career, but a sweet ending, as well. However, as the feeding frenzy around the accounting scandal grew, the senior partner knew that his work at Arthur Andersen wasn’t done. He asked his potential new employers if he could have a little more time to decide about the position. They agreed....
On March 14, 2002, a federal grand jury in Houston indicted Arthur Andersen on one count of obstructing a Department of Justice investigation by destroying documents. After the announcement, Karns and his management team kicked things into high gear, calling an office-wide meeting in which Karns laid all the options on the table, including his recent job offer. No one was going to abandon ship, he assured his staff.
Subsequent informational meetings, held in a common area, spilled out into the halls. The meetings were held every two weeks, then weekly. Sometimes there was an agenda, like when Karns outlined what had happened with Enron. Sometimes it was just to talk story.
“We had meetings whether we had something to say or not. You would be surprised. You always have something to talk about,” says Karns. “Our staff wanted to know if Ross and I had heard anything, and if we hadn’t, did that change our thinking, if that makes sense. Even knowing that there is nothing new can be comforting.”
“Randy was a great leader,” says Rackmil. “He was the guy delivering the message, fireside-chat style. You knew he was going to do everything in his power to help. He had been here a long time and had a lot of loyalty in the community. As long as the clients stayed, we would be OK.”
All along Karns offered his options analysis and assessment without interjecting a prejudgment one way or another. This was a decision for the employees, not him. He was still considering his dream job.
Then, one day, he accidentally walked in on a small group of staff who were working on a gift of gratitude to the senior partner. Karns realized that he already had his dream job.
“I came home and told my wife that we were going forward. That [other] job would have been a lot of fun to do. But it [his decision] really wasn’t about money or prestige,” says Karns. “They felt so strongly about the firm, its mission, its clients and its people. They were doing all of this on top of dealing with all the stress of getting their jobs done. I felt privileged to be a part of them.”
THE NEW PLAN
Of course, Murakami’s mother wasn’t the only one outside the firm who called him about Enron and the future of Arthur Andersen. “I started fielding calls from clients, who would say: ‘Eh, Ross, how come you didn’t let me do all those things?’ I told them that I didn’t know why they did that,” says Murakami. “I told them we don’t do that. That’s not how business is done. We had a very solid client base. They knew us, and they knew we had always been very honest and open with them.”
Early in the crisis, Murakami and Karns hit Bishop Street hard, meeting with as many of their clients as they could. Sometimes, as at the gatherings with their staff, the two partners had little new information to impart to their anxious clients. There were a lot of uncomfortable discussions, some in front of boards of directors. But every client was contacted and spoken to face to face if possible. After Andersen’s indictment in March, the meetings got more urgent, going from heart-felt reassurances to the beginnings of a plan for a new firm.
“We kept them [our clients] informed and we told them that we were trying to pull something off that would be a stand-alone entity,” says Murakami. “We said we couldn’t tell them right now if it was going to be successful or not. We couldn’t wait till we were solid to let them know. It wasn’t about us. It was about them.”
At first glance, the partners’ plan, which they would appropriately name “Project Phoenix,” seemed simple. They, along with Peter Hanashiro, who was slated to be named partner at Arthur Andersen before the crisis, would buy the firm from corporate. They would continue to provide the same good service that they always had, except the new firm would no longer audit large publicly traded companies. But the new firm would be free from a rigid corporate fee structure and nimble enough to respond to changes in the local marketplace....
FLIGHT OF THE PHOENIX
Murakami made that August’s payroll, and has made every one since. But KMH has done more than just deliver paychecks on time. According to Murakami, the firm’s revenues have doubled since he switched off the lights on Arthur Andersen, with 20 percent growth for four years in a row. The staff has also doubled, growing from 42 to 85 in late 2006.
Throughout the ordeal, KMH lost only two or three tax clients and a handful of national and international clients, several of whom later rehired the firm in other capacities. KMH’s vision of a locally owned firm with a local focus along with national expertise has taken hold. Coincidently, it was also one that had been floating around in the heads of many experienced accountants in town.
“Even before Andersen imploded, we had discussed the possibility of creating a local firm with national ties. That is the way the market is moving,” says Wilcox Choy, partner at KMH and former partner at big four accounting firm, Grant Thornton. “But there just wasn’t enough critical mass to do that. Then Andersen went down and after talking with them, we realized we were on the same page.”
KMH started with three partners (Karns, Murakami and Hanashiro) and now has six. Alan Yee joined the firm from Grant Thornton’s Honolulu office in 2002 and Al Fernandez from Ernst and Young in 2003. Both run KMH’s tax practices. Alton Ohira, former head of KPMG Honolulu’s insurance and audit practice, came on board in 2003 and Wilcox Choy, once in charge of Thornton’s audit practice, also in 2003....
~ ~ ~
Timeline: The Fall of Arthur Andersen
Aug. 15, 2001
Enron vice president for corporate development Sherron Watkins writes a
seven-page letter to her boss, CEO Kenneth Lay, warning of accounting
irregularities at the oil and natural gas trader. “The business world will consider
the past successes as nothing but an elaborate accounting hoax,” she writes.
Nov. 8, 2001
Enron revises its financial statements for the previous five years. Instead of
showing huge profits, the company now says that it actually lost $586 million.
Jan. 10, 2002
Arthur Andersen acknowledges that it destroyed Enron documents.
Jan. 15, 2002
Arthur Andersen fires chief Enron auditor David B. Duncan.
March 15, 2002
Arthur Andersen is indicted by a federal grand jury in Houston on one count of
obstruction of justice for shredding documents and deleting computer files
regarding Enron.
March 26, 2002
Arthur Andersen CEO Joseph F. Berardino steps down amid an exodus of
clients and overseas partners.
June 15, 2002
After a six-week trial, Arthur Andersen is convicted of obstruction of justice for
destroying documents while on notice of a federal investigation.
May 31, 2005
The U.S. Supreme Court overturns the Arthur Andersen conviction. The justices
unanimously agree that the Houston jury was given overly broad instructions by
the federal judge presiding over the case. At issue is a memo from an Arthur
Andersen in-house attorney detailing the company’s document retention policy.
Nov. 23, 2005
The Justice Department announces that it will not pursue the criminal case
against Arthur Andersen in wake of the Supreme Court decision handed down
earlier that year.
BALANCING THE BOOKS
On Monday, Oct. 16, 2006, the day after Hawaii’s statewide earthquake, accounting firm Accuity LLP opened for business. Just days before, the firm had served as the Honolulu office of accounting giant PricewaterhouseCoopers (PWC), which had decided earlier that year to pull out of the Hawaii market.
“I got a call from a friend that first day, who said: ‘PWC pulls out and the earth shakes,’” says Kent Tsukamoto, the former PWC managing partner and now Accuity’s managing partner. “You might say that we started off with a bang.”
While the circumstances surrounding Accuity’s transition from international juggernaut to locally owned big business weren’t as catastrophic as Arthur Andersen’s end and KMH’s beginning, Tsukamoto and his partners, Wendell Lee and Dennis Tsuhako, were essentially dealing with the same issue: How do you sustain a business while building another business?
However, a larger, more earth-shaking issue probably extends far beyond Accuity, KMH and the rest of the Islands’ accounting industry: How important is Hawaii to businesses with a global, or national reach? The answer is: maybe not much anymore.
According to Accuity’s tax partner, Wendell Lee, PWC’s decision to leave Hawaii and pursue larger markets on the Mainland was initially shocking, but not surprising in the end. “PWC has more than 15,000 clients in the U.S. Only about 200 of them account for 80 percent of the company’s revenue. On average, that’s about $54 million to $100 million per client, per year,” says Lee. “That leaves the Hawaii market off the scale, because, at the very bottom of the food chain, they were looking for at least $1.5 million in revenue per client. At PWC, our largest Hawaii client provided about $1 million.”
With PWC’s exit and Arthur Andersen’s demise in 2002, Hawaii is home to three of the big-four accounting firms. Tsukamoto believes that number may shrink over the next several years.
“The size of a public accounting firm is a function of the size of the services rendered. Accounting follows the organizations,” says Warren Wee, associate professor of accounting at Hawaii Pacific University. “Just look at the corporations that were based in Hawaii 10 or 20 years ago. It’s not rocket science to see what’s happening, really basic economics.”
“Ten or 15 years ago, you saw a lot of mergers of the large, national firms, going from the big eight to the big five. Now, of course, after Andersen’s implosion, it’s down to four,” adds Wilcox Choy, partner at KMH and former partner at big-four accounting firm Grant Thornton. “Everything’s bigger and bigger businesses need bigger profits.”
In other words, follow the money, and while the big money is on the Mainland, there is still more than enough business to be found in the Islands. Accuity has retained a vast majority of its staff and about 95 percent of its revenue since leaving PWC. Tsukamoto expects about 5 percent growth in 2007.
Local ownership has a plethora of benefits. Now, Accuity is no longer saddled with post-Enron, corporate office-imposed procedures, which had very little relevance to Hawaii’s small-scale businesses. (According to Tsukamoto, about 60 percent of Accuity’s clients are family-owned businesses.) Also gone is the constant pressure from the head office to increase fees by 20 percent to 30 percent, rates more in line with those charged in New York and Los Angeles. In addition, when Tsukamoto needs to make a decision, he just walks down the hall to talk with his partners.
Some of the advantages of local ownership can’t be accounted for on a balance sheet: “PWC offered us [the partners] positions on the Mainland, where we would have done well,” says Lee. “But that wouldn’t have been the right thing to do. We have 80 people who are our family, who in turn have families that they have to take care of. We couldn’t abandon them in the market like that. This is Hawaii. This is what you do. You take care.” — DKC
How to Save Your Business Your People & Yourself ...
Arthur Anderson and The Phoenix Project
~ ~ ~
NEW DISCOVERY (08-15-08): Undisclosed conflicts of interests between Dan Inouye, Ted Stevens, VECO Corporation, George W. Bush, John McCain, Dick Cheney, Halliburton, Shell Oil, Barack Obama, Bill Clinton, Hillary Clinton, John Waihee, Ben Cayetano, Bishop Estate, 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
~ ~ ~
March 30, 1998
The following is an excerpt from a 10-K SEC Filing, filed by TESORO PETROLEUM CORP 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
~ ~ ~
NEW DISCOVERY (07-12-08):
~ ~ ~
NEW DISCOVERY (08/14/08): David Farmer’s undisclosed relationships with Marsh & McLennan; Mercer Consulting Services; Aloha Airlines; Hawaiian Airlines; Earl Anzai; Lyn Anzai; Joshua Gotbaum; AIPAC; Ben Cayetano; Linda Lingle; others:
March 17, 2002
Dead air deal rankles Aloha
By Susan Hooper, Honolulu Advertiser
The proposed merger between the state's two local airlines foundered because Hawaiian Airlines wanted to change the terms of the agreement, including eliminating the Houston consulting firm coordinating the deal, the chief executive of Aloha Airlines said in a statement today.
Hawaiian's proposal also would have given Hawaiian chairman John Adams the top spots in the merged airline, eliminating Greg Brenneman, the TurnWorks executive who had been orchestrating the merger, according to Glenn Zander, Aloha's president and chief executive officer.
"Aloha could not accept Hawaiian's new proposal because in our judgment, it was not in the best interest of the state, the traveling public or Aloha's shareholders and employees," Zander said.
The details emerged a day after Hawaiian said it was pulling out of the deal because it did not wish to extend what it called an April 18 "outside date for completing the merger." It said increasing costs and risks of the deal were factors.
The announcement surprised many in the state, including employees of both airlines and state legislators who as late as last Tuesday had held a hearing on the merger.
Today, Zander said Hawaiian's action was "regrettable" and said members of Aloha's board of directors voted unanimously to reject Hawaiian's proposal. He also praised Brenneman and TurnWorks for their work on the merger.
Hawaiian spokesman Keoni Wagner said tonight, "We don't necessarily agree with Aloha's characterization of the negotiations, but we also choose not to discuss publicly what would otherwise be private conversations."
The apparent power grab by Adams came even though he and his affiliated companies would have been the financial winners if the merger had gone through. Adams stood to receive assets valued at about $109 million. Adams, his companies and other Hawaiian shareholders also would have held a 52 percent stake in the new airline.
Under terms of the original merger, the shareholders of privately owned Aloha Airlines — many of them relatives of the company founders — would have gotten 28 percent of the merged airline, worth an estimated $56 million.
TurnWorks would have received a 20 percent stake in the company.
For more than a year, Aloha and its consultant have viewed TurnWorks and Brenneman as essential to the success of the merger, according to documents filed with the Securities and Exchange Commission last month that outlined how the merger came about.
Aloha's consultant, Mercer Management, initially approached Brenneman in February 2001 asking whether he wanted to invest in the airline. In July, Brenneman, a former top executive with Continental Airlines, met further with Mercer to discuss a possible investment and subsequent merger with Hawaiian.
Hawaiian officials, contacted in August, initially appeared cool to the idea but after the Sept. 11 terrorist attacks, and subsequent downturn in travel, they agreed to "discuss a possible merger involving the two airlines and TurnWorks," according to the documents.
On Sept. 22, according to the documents, Mercer and senior management officials of Aloha and Hawaiian met and Mercer proposed that both airlines should continue to include Brenneman and TurnWorks in the merger discussions as Brenneman "was likely to be an important factor in creating an agreement between the two airlines, leading the integration efforts, and running the combined carrier and in generating maximum value for shareholders of both companies."
On Sept. 25, the documents say, all parties agreed to proceed with merger talks. They also agreed "that the involvement of TurnWorks and Brenneman would be an important factor in consummating a deal, as past efforts to combine the two airlines were not successful."
TurnWorks officials said in a statement today, "We were surprised and disappointed (by Hawaiian's decision) ... The failure to extend the timetable essentially precludes completing this complex transaction....
The abrupt end to the merger, which was announced Dec. 19, leaves the future of the two airlines and of Hawai'i's interisland airline market uncertain. In announcing the deal three months ago, executives with both airlines said they needed to merge because conditions in the airline industry — and in the interisland market in particular — had made it impossible for them to survive separately.
After the Sept. 11 attacks, both airlines lost tens of thousands of dollars a day and furloughed hundreds of workers. In recent weeks, as the Mainland economy has recovered, there have been signs of improvement in the local airline market.
Still, documents filed with the Securities and Exchange Commission show that Aloha is financially more vulnerable than Hawaiian. The privately held airline has more debt on its books and reported a $1.25 million loss at the end of the third quarter Sept. 30. The airline also has smaller and older aircraft and fewer flights to the Mainland.
Today Zander said Aloha has its own business plan to move ahead "on a stand-alone basis." Aloha spokesman Stu Glauberman said Zander will be meeting with Aloha's employees' union executives tomorrow.
Before the announcements over the weekend, the two airlines had been working on a joint application to take advantage of a special antitrust exemption granted by Congress last November to cooperate on some operations, such as routes, scheduling and pricing....
Gov. Ben Cayetano had been a supporter of the merger and said today, "The failure of the merger had nothing to do with the U.S. Department of Justice, the state Legislature or public opposition. This was a business decision that we will have to accept. The state administration will do its best to try to assure that Hawai'i will continue to have two viable interisland carriers."
State Sen. Ron Menor, D-18th (Mililani, Waipahu, Crestview), chairman of the Senate Commerce, Consumer Protection and Housing Committee, had opposed the merger and his committee took part in statewide hearings....
The mood among workers at Honolulu's interisland terminal was split between the two airlines today, with Aloha employees grim-faced and in no mood to talk about the failed merger, and Hawaiian employees buoyant.
Baggage handlers outside the Hawaiian half of the terminal this afternoon burst into ebullient giggles when asked how they and their co-workers felt about the merger being called off.
"We still have our jobs!" said Thad Estrada, one of the Hawaiian handlers. "Everybody is pretty happy right now. There had been a lot of stress lately, and then today, even though all the schedules and everything are still the same, everybody is smiling. It sure makes the day go better."...
Outside the terminal, Tammy Castro of Mililani and Diane Halemano of Makakilo grew tired of driving around the airport while waiting to pick up relatives, and parked in a lot to talk until their cell phones rang.
"Did you see about the merger?" Castro said. "Oh, I am so happy."
Castro said she'd signed a petition earlier, asking that the merger be stopped.
"They'd have a monopoly on the fares, and we'd have no one else to go to," she said. "We need a choice. People would lose their jobs and we already have enough unemployment. Besides," she added. "No offense, but I just love Aloha."
~ ~ ~
NEW DISCOVERY (07-21-08):
October 10, 2003
Hemmeter
still fighting
The one-time Hawaii resort
developer has come back
to town to see friends
and speak his piece
By Russ Lynch, Star-Bulletin
Former Hawaii developer Chris Hemmeter has battled prostate cancer and Parkinson's disease and is now dealing with a killer cancer affecting the bile duct. For Hemmeter, it's a liver transplant or death and his doctors told him he wouldn't make his 64th birthday.
But in a visit with friends in Honolulu this week, which included a party for that birthday, Hemmeter said his biggest trial was dealing with corrupt politicians in New Orleans.
Hemmeter -- who developed King's Alley and the twin-tower Hyatt Regency Waikiki, as well as luxury resorts such as the Hyatt Regency Waikoloa on the Big Island, now the Hilton Waikoloa Village, and the Westin Maui -- said in an interview that he was upset about the way Louisiana reporters picked on him over his grand plan for a $1 billion casino in New Orleans.
The bottom line to Hemmeter is that while the casino plan failed, it also put Louisiana Gov. Edwin Edwards in federal prison a year ago, to serve a 10-year term for extortion.
And Hemmeter said the luxury resorts he built in Hawaii made real money for him and his family and are now doing well again, despite setbacks under mostly Japanese owners following the burst of the late 1980s Japanese investment bubble.
Hemmeter sold those resorts at big profits, but when he stepped into the murky waters of Mississippi politics he ran aground, leading to the filing of personal bankruptcy by Hemmeter and his wife Patsy in 1997.
It began with the award to the Hemmeter group 10 years ago of a lease for a property designated to house the city's first land-based casino. The 60-year ground lease, worth hundreds of millions of dollars, was awarded because "we had the best plan," Hemmeter said.
Enter Edwards, a keen gambler and, according to Hemmeter and other critics, a corrupt politician. Edwards wanted a piece of the action for himself and his cronies and relatives, Hemmeter said. "He let me know in no uncertain terms that