OUST v. Harmon - Letter to Office of the U.S. Trustee 8-4-6

Bobby N. Harmon, CPCU, ARM

August 4, 2006

VIA fax and e-mail: sguttman@kdubm.com

Curtis Ching, Gayle Lau and James Nicholson

Office of the United States Trustee

c/o Steven Guttman, Esq. Kessner Duca Umebayashi, et al.

220 S. King Street, Floor 10

Honolulu, HI 96813

Re: CV 05-00030 - Office of The United States Trustee vs. Harmon

Witnesses: Ed Case, Beadie Dawson, Samuel King, Randall Roth and Bob Watada

Gentlemen:

On July 5, 2006, Small Business Hawaii sponsored a forum in which panelists discussed issues regarding the fall of the Bishop Estate Trustees in the 1990s. The panelists included "Broken Trust" co-authors Randy Roth and Judge Samuel King plus Bob Watada and Dave Shaprio. The following is excerpted from an article published in the August, 2006, edition of Small Business News:

'Broken Trust' Forum Calls for
Release of Corruption Documents

By Malia Zimmerman
HawaiiReporter.com

The full story of the corruption that permeated Hawaii's $10 billion charitable trust, the Kamehameha Schools/Bishop Estate, to the highest levels of government in Hawaii, has never been told.

But the information that has become public is categorized by 60 Minutes as "The biggest story in Hawaii since Pearl Harbor;" by The New York Times as "A feudal empire so vast that it could never be assembled in the modern world;" and by Howard M. McCue III, the Chairman of the Charitable Planning Committee for the American College of Trust and Estate Counsel, as "The most significant legal dispute of our time ... a tale of unbridled ambition, infectious greed, and high drama ... ."

This saga, involving Bishop Estate trustees, state Supreme Court justices, a former governor and leaders in the Hawaii State Legislature, peaked in 1997.

However, nearly one decade later, critics say there has been no accountability for the many influential people who wrongfully took advantage of Princess Pauahi Bishop's charitable trust - a trust she established in 1884 to fund the education of Hawaiian children, not to fatten the pockets of politicians and trustees.

University of Hawaii Law Professor Randall Roth and U.S. Federal Judge Samuel King, co-authors of a newly published book, Broken Trust: Greed, Mismanagement and Political Manipulation at America's Largest Charitable Trust, documented the story of the trust from its inception 100 years ago through current times.

At a July 5 forum hosted by Small Business Hawaii, and moderated by Hawaii Reporter, Roth and King shared their thoughts on what led to the extensive problems at the Bishop Estate and what still needs to be done to ensure there is justice and accountability for past wrongdoings.

Joining them were four other prominent Hawaii citizens who played a major role in pushing for reforms including Hawaiian attorney Beadie Dawson, former Honolulu Star-Bulletin Managing Editor Dave Shapiro, former Campaign Spending Director Robert Watada and Congressman Ed Case....

A great deal of the information Roth and co-author Judge King used to write the Broken Trust was given to them by Watada, the director at the time of the state Campaign Spending Commission.

But Roth says there are still between 1 million and 2 million more documents sealed by the courts that he wants to review and catalogue and believes should be made public.

He hopes trustees will some day be held accountable for their mismanagement. But that is unlikely: they did not pay legal fees for the most part, they took millions of dollars for themselves, they paid off political cronies with trust funds, and held what Roth calls a "world record for breaches of trust."

Roth and King maintain the Broken Trust saga is not over, and neither are the problems for Kamehameha Schools if further safeguards and reforms are not implemented....

< END OF QUOTATION >

The complete article can be found at the following Internet address:

www.smallbusinesshawaii.com/2006/Aug2006-3.html

I urge each of you to read carefully the complete article and to reflect on what your long-running lawsuit against me is really all about. Are you claiming that l stole anything from the Office of the United States Trustee? No. Are you claiming that I defrauded the Office of the United States Trustee or any of the creditors of the estate? No.

What then are you claiming that I did that harmed the Office of the United States Trustee? You are claiming that I engaged in a “letter-writing campaign” notifying the IRS, the FBI, the Attorney General, Insurance Commissioners, the Kamehameha Schools’ Master, Trustees, CEO, auditors, etc., of the very same types of illegal activities and breaches of trust that the panel members at the “Broken Trust” forum claim are continuing to the present time. Why is it that these distinguished panel members can make these public statements, and I cannot?

When did Congress repeal the First Amendment? I must have missed it in the news.

Since your lawsuit against me still continues, I have updated the witness information for five of the participants in the “Broken Trust” forum, whom I believe to be credible witnesses. You will find these updates at the following Internet addresses:

www.the-catbird-seat.net/CV05-00030-Witness-Case-Ed.htm

www.the-catbird-seat.net/CV05-00030-Witness-Dawson-Beadie.htm

www.the-catbird-seat.net/CV05-00030-Witness-King-Samuel.htm

www.the-catbird-seat.net/CV05-00030-Witness-Roth-Randall.htm

www.the-catbird-seat.net/CV05-00030-Witness-Watada-Bob.htm

In order to avoid any further delays, costs, and hardships, however, I would urge you again to accept my previous proposals that we attempt to negotiate an out-of-court settlement in this case, so that the courts can get on to much more important matters and we can all get on with our lives.

Very truly yours,

Bobby N. Harmon, CPCU, ARM

cc’s: Steven Jay Katzman, Office of the U.S. Trustee (via fax: 619-557-5339)

Mark Bennett, Hugh Jones, Dorothy Sellers, and Lawrence Goya,

Office of the Attorney General, c/o Hugh Jones (hugh.r.jones@hawaii.gov)

Mark Recktenwald, Director, DCCA (Mark.E.Recktenwald@dcca.hawaii.gov)

J.P. Schmidt, Hawaii Insurance Commissioner (via fax @ 808-586-2806)

Hawaii Insurance Division, Captive Branch (captiveins@dcca.hawaii.gov)

Dee Jay Mailer, CEO, Kamehameha Schools (ksinfo@ksbe.edu)

Edwina Clarke, President, P&C Insurance Company
c/o Alison Quinlivan, Marsh & McLennan, Inc. (alison.quinlivan@marsh.com)

Marsh & McLennan Companies, Inc.; Marsh USA, Inc.

c/o Duane R. Miyashiro, Esq., Carlsmith Ball LLP (drm-1@carlsmith.com)