Woo vs. Harmon - Witness Tom Foley

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

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DEFENDANT’S WITNESS

TOM FOLEY

Address to be determined.

Tom Foley is a Hawaii attorney who served as the court-appointed Guardian for Campbell Estate between 1992-1993; sentenced to up to 10 years in prison in 1997 for killing a man and seriously injuring the man's wife in a car crash while driving drunk; pardoned by Governor Ben Cayetano in August, 2000.

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Excerpts from Buzzards of Paradise:

Thomas Foley - From Environment Hawai`i, Inc.:

Anatomy of a Speculation:
The Many Flips of Mahai'ula

On July 12, 1990, Richard A Stellmacher, an appraiser hired by the state, accompanied George A. Magoon II on a tour of a 40-acre shoreline parcel owned by members of the Magoon family at Mahai'ula, just north of the Keahole Airport on the west coast of the island of Hawai’i. The state had hired Stellmacher to prepare an appraisal of the land's value, in anticipation of acquiring the property for inclusion in a five-mile long coastal wilderness park.

Stellmacher submitted his report to the state on July 31, 1990. The “highest and best use” of the land, in the state Conservation District, was in accordance with the 'grandfathered' residential use,” Stellmacher wrote. And while there was no clear legal access to the parcel, Stellmacher added, he “assumed that the access granted under revocable permit the state to the lessee of a portion of the subject property for commercial luaus was its legal access.”

Stellmacher's conclusion was that a "fair and reasonable" value of the property was $17,110,000.

Background

At the time of Stellmacher's tour of the property, it was well known that the state was seeking to purchase the land. As early as March 28, 1990, William Paty, then the director of the Department of Land and Natural Resources, had written Thomas M. Foley, attorney for the Magoon estate, that the state would be “making an offer to purchase the property upon completion of the independent appraisal establishing its fair market value.”

Another client of Foley's was Robert Iwamoto, who, at about the same time, began negotiations with Foley to buy the property from Magoon. Iwamoto, owner of Roberts Hawai'i and a host of related tourist-service firms, also has had several business relationships with Larry Mehau, a former member of the Board of Land and Natural Resources. When Iwamoto heard that Larry Mehau was showing Big Island property to a Japanese investor in the spring of 1990, Iwamoto asked Mehau: "Well, why don't you show her mine?" - referring to the Magoon land.

By July 19, 1990, Iwamoto and the investor, Chiyoko Isayama, through her company, Tenzan Corporation, agreed on a purchase price of $23 million for the Mahai'ula property, even though Iwamoto did not himself own it at that time.

According to Iwamoto, "I believe when I was negotiating with Tom Foley, Tenzan was interested in that property. And I required them to put down a $2.3 million deposit, unconditional deposit. And then I used two million dollars of that money to put down the initial deposit to Tom Foley. "

At that time, however. Iwamoto had yet to seal the deal with Magoon. Probate court records show that in late June, Iwamoto had offered to purchase the land from Magoon for $17 million - an offer that George Magoon Jr., who was claiming a 70 percent interest in the property, and Nancy Magoon, George Jr.'s mother and George Sr.'s second ex-wife who held a 30 percent share, accepted on June 24. But the agreement was not completed until July 30, 1990, when Iwamoto himself finally signed the purchase contract.

Aborted Sale

A year earlier, in September 1989, the court had approved sale of the property to Haseko (Hawai'i), Inc. Haseko had offered $18 million, but for reasons that remain hidden from public view, the deal fell through.

In September 1990, notice of the second court confirmation hearing was posted, as required by law, on the courthouse bulletin board in Kona, but apparently no one from the state Department of Land and Natural Resources took heed. With no better offer presented at the hearing, the court confirmed sale of the land to Iwamoto.

On September 24, Land Board Chairman Paty wrote Foley, attorney for Magoon (and Iwamoto), making a formal offer to purchase the property for $17,110,000, which was the value assigned to the land by Stellmacher.

"However," Paty wrote, "we have now heard that the property may have been sold. We are very concerned and disappointed that the land owners would take such action knowing full well the intention of the state. If this is true, please provide us with the name of the new owner so that we can proceed with filing of a condemnation action.

At the time Paty wrote, the property was still owned by the Magoons. Not until September 27 were the documents signed that conveyed title to Iwamoto. When that occurred, Iwamoto immediately resold the land to Tenzan, raking in a clear profit of $6 million.

Too Late

On October 5, the state filed a lis pendens, which put anyone with an interest in the land on notice of the state's intent to acquire the land by condemnation. In the condemnation suit itself, filed the same day, Iwamoto was named as a defendant, although Tenzan's purchase of the land had been recorded at the Bureau of Conveyances on September 28, 1990.

The same day the lis pendens was filed in court, title to the Mahai'ula land flipped again, landing this time in the lap of Blue Point Land Development, Inc. The purchase price reported to the Bureau of Conveyances was $30 million.

The sale probably would not meet the criteria of an arm's-length transaction. As became clear in documents obtained by the state during pre-trial discovery and in records obtained by Environment Hawai`i from the Department of Commerce and Consumer Affairs, Tenzan and Blue Point shared many of the same owners and officers.

In addition, Tenzan never collected from Blue Point any part of the $30 million reported purchase price.

Interlocking Directors

In 1990, Isayama was president of both Tenzan and Blue Point, which was incorporated in September 1990. Ownership of Tenzan's stock is unclear, but Isayama was identified as owner of 60 percent of Blue Point's stock. In a deposition taken by the state of Hawai'i, Isayama said she owned stock in Tenzan, although her ownership interest was not disclosed.

Blue Point, according to Isayania, was established by Tenzan to develop the Mahai'ula property. Isayama said Tenzan obtained the money to purchase Mahai'ula through a loan from a Japanese bank; when asked to name the bank, she could not, saying the loan had been arranged by Ryozo Ito, a Tokyo resident who was vice president of both Tenzan and Blue Point and owner of 25 percent of Blue Point's stock.

Other shareholders in Blue Point were Kiyoshi Wakaume, a Tokyo resident and Blue Point's corporate secretary; Brian Sturdivant of Honolulu, who was Blue Point's treasurer; and Andy Hirama of Honolulu, a director of Blue Point. Each of these three men held a to percent interest in Blue Point. Hirama also identified himself as Tenzan's secretary in correspondence with the DCCA in 1989.

Chairman of Blue Point's board of directors was Larry Mehau. In a deposition, Mehau described his role in the Mahai'ula transactions as merely that of a go-between. Isayama, however, had promised to build him a house there, he said:

"Chiyoko was going to build me a home. There is a small, little sandy area on the Kawaihae side of the property. And she took a picture of it, brought it to my office. Mehau said, ‘‘here, I would built you a house over here.' Later on, it's, 'You and I will build a house.’’ That kind of deal.

"I said, 'Chiyoko, I just wanted to help you. If it happens, fine. If it doesn't happen, no problem. Don't make any commitments.' But that was her commitment, that I would have a home there."

Meanwhile, in Court

None of this was known to the state at the time the state sued to take possession of Mahai'ula. For the better part of the next three years, the state battled lawyers for Iwamoto, Tenzan and Blue Point in an effort to determine who had paid what for the land.

Iwamoto's lawyers asked that he be dropped from the lawsuit. The state's attorneys said they'd be willing to dismiss Iwamoto, if he would produce records related to the sale that verified he had no ongoing interest in the property. In lieu of that, Iwamoto filed an affidavit on August 16, 1991, in which he said he sold all his interest in the property to Tenzan on July 15, 1990.

In a brief filed with the court on September 12, 1991, the state disputed the claim, noting that the "Deposit Receipt Offer and Acceptance Agreement (DROA) covering the tentative sale of the subject property... is dated July 19, 1990." Had the state been aware of the records that were available in probate court, it would have had even greater evidence to dispute Iwamoto's affidavit. In any event, in September 1991, the court granted Iwamoto's request to be dismissed as a defendant, although it denied his request for attorney's fees.

Soon after filing the condemnation suit, the state asked to take possession of the property. The request was granted by the court, subject to the state's paying $10 million to Blue Point as a down payment.

The state had asked for a jury trial. Many of the pre-trial disputes concerned what appraisals or other evidence of land value could be presented to the jury. Soon after the state had received the Stellmacher appraisal, settling the land's value at $17,110,000, the state hired a second appraiser to review Stellmacher's figure. That appraiser, Mitsuo Shimizu, put the value at between $8 million and $10 million. On the other end of the spectrum, Peter Young, an appraiser hired by Blue Point after the condemnation suite was filed, found the property to be worth $25 million.

In January 1993, the matter was ready to go to trial and jury selection had been scheduled for the following month. With property values in the Kona area having begun a precipitous fall, Blue Point appears to have been motivated to settle with the state. The price Tenzan had paid for the land $23 million - was accepted as the price the state would pay.

On February 16, 1993, a check for $13 million, the balance owed to Blue Point under terms of the agreement, was given to a representative of Blue Point by the fiscal officer of the Third Circuit Court in Hilo.

Thus ended nearly two decades of efforts by the state to acquire the land....

For more, GO TO > > > Paradise Paved; The Puna Connection

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March 31, 1997

Probation sought in driving death

Honolulu Star-Bulletin

Honolulu attorney Thomas M. Foley, who was legally drunk and had prior drunken-driving convictions when he killed a man in 1995, was to ask for probation with conditions this morning when he is sentenced.

Michael Weight, Foley's attorney, said he would offer alternatives to prison for Foley, who pleaded no contest last year for his role in the death of Ho Pin Tsai, 33, and injury of his wife, Thianh Luu.

First-degree negligent homicide carries a 10-year term, and first-degree negligent injury carries a five-year term.

The state could ask the court to double the terms for the two felony offenses and run them consecutively for a 30-year total.

"He has to be punished," Deputy Prosecutor Chris Van Marter said after Foley's plea. "He took a life. The sentence has to reflect the seriousness of it."

Sentences in previous high-profile drunken-driving cases with fatalities in the last decade have ranged from 10 to 20 years.

Foley, 49, said he had no memory of the Jan. 4, 1995, accident in which he traveled at a high rate of speed in his BMW and plowed into the couple, who were waiting in a Buick at a stop light.

His blood/alcohol level was 0.28, almost three times the then-legal limit of 0.1. . . .

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August 16, 2000

Cayetano gave out
84 pardons

A former legislator and three
police officers are included on the list

By Debra Barayuga, Star-Bulletin

A former lawmaker convicted of voter fraud and three police officers are among 84 people pardoned by Gov. Ben Cayetano since he took office in 1994.

The list, released yesterday by the governor's office, includes former attorney Tom Foley, who was nearing the end of a four-year minimum term for driving drunk and causing a 1995 car crash that killed Ho Pin Tsai and injured his wife.

Foley's pardon prompted criticism from Republican lawmakers and Mothers Against Drunk Driving, who say he got special treatment and that sends the wrong message to the people of Hawaii.

But the Hawaii Paroling Authority defended the pardon process, saying it doesn't mean a person is no longer guilty or is acquitted of a crime for which they have been convicted.

"The state forgives, but not forgets," said Max Otani, acting division administrator of the Hawaii Paroling Authority.

In Hawaii, unlike some other states, the conviction remains on the defendant's criminal record and is never expunged.

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August 20, 2000

Readers react to governor's
pardon of Foley

Honolulu Advertiser

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He just lost a voter....

Gloria Gonzales

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Birds of a feather.

Richard N. Kiyabu

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A real shame! A slap in the face for anyone genuinely interested in justice against those driving while drunk. MADD isn't alone in their concern about injustice of those charged with negligent homicide, resulting from driving drunk.

Cayetano fits well in the Democratic Party; i.e., NO REAL CONCERN ABOUT RIGHT AND WRONG. Words like moral, ethical, virtuous, righteous, or noble mean little to nothing for those in power. Economic success is far more important than morality. Everyone knows that from Clinton's address at the Democratic Convention and from your newspaper, "President offers legacy, omits scandal."

Whatever rationale, if any, was used by Cayetano to pardon Foley will be unacceptable for those of us who support a court of law as a deterrent. So be it for a "court of law," as it's evident in this state that the parole authority and the governor can easily set the court in its place.

As usual, what the public feels or cares is inconsequential. Model inmate and "exemplary" re: the work furlough program are malarkey. McNamee is right on the mark per the article regarding the foregoing sentence, i.e., "Foley made the same mistake and had the same charges as other offenders who have not been pardoned."

I can see that Foley knows where to go for help, as he worked as a staff assistant to House Majority Leader Calvin Say - GO DEMOCRATS!!

Steve Good

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I am outraged by the pardon for Thomas Foley.

He has shown himself to be a serial drunk driver who has killed and maimed. Who knows how many additional close calls he has had, and will have.

What difference does it make what a nice guy he seemed while prison life kept him away from alcohol? He deserves the punishment the courts gave him, and the public deserves his absence from our roads.

This smacks of white-collar favoritism, and is unbecoming to the governor, who usually takes a higher road. I have lost a family member to a reckless driver, so take this very seriously.

John Thorvaldson, Waikiki

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Deals, deals and more deals. How much money do we think Tom Foley waved in front of the grieving widow to get her to "testify in favor of his early release." And it appears that some type of gag order for the widow was also part of the deal.

And to add further insult to injury, we've hired him to work as an assistant at the Capitol to Rep. Say?!

Welcome to Corrupt Hawaii Politics 101. Guess what? The people are fed up with it and we aren't going to take it anymore. Stay tuned...

Lane Woodall, Candidate, House of Representatives, 15th District

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Lawyers have got to stick together, protect one another...like the police.

James D. Cordeiro

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What is the message to DUI offenders?

Got drunk, killed an innocent person, and depending on your connections (such as the governor or the speaker of the House), you may walk out free.

S. H. Lee

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In reading this mornings' paper, Tuesday 8/15/2000, my eye first fell upon an article where Gov. Ben Cayetano has pardoned "Honolulu lawyer" Thomas Foley.

I must say I feel a sense of duty as a human being and a citizen of the United States to go on record as saying I am extremely appalled at the actions of our governor and his decision on the representation of "We the people."

This is a prime example of what is wrong with our government and judicial system today, and why it does not work effectively. This man was irresponsible not once, not twice, but three times for being arrested for alleged drunken driving. Only this time he killed someone and ruined the lives and family of others.

What ever happened to paying for our actions, being responsible for the choices we make good or bad, suffering the consequences?

Thomas Foley by choice consumed over three times the legal amount of alcohol and then made a choice to drive. He then because of this choice killed a man and seriously injured the man's wife.

This women lost her husband, and Thomas Foley changed her life forever. These people didn't have a choice as to whether or not they were going to die this day. No, but Thomas Foley had a choice, a choice of whether or not to get into his car and drive it straight to someone else's death! A choice that changed people's lives forever.

This isn't just an irresponsible act of negligence; it is also a breach of the oath he took when he became a lawyer and swore to uphold the laws of our government. He of all people should have known better than to get into a car drunk and drive!

Now our governor thinks that after only serving two years five months, because he has been "a model inmate and "exemplary" in participating in the work furlough program he should be pardoned. Released with no further consequence of his negligent choice in committing this homicide. Well, governor, let me ask you this! If it were your family that Thomas Foley had killed, would you still feel so generous?

Lynn Lozier

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Dear Ben Cayetano,

I am very disappointed in your decision on having attorney Foley released. That's the problem with today's society. Just because he's a prominent attorney and you're governor. This attorney killed someone and injured another person. This man should be locked up. And this is his second offense.

When he gets out, who knows he will not drive under the influence again?

If it was a regular person, I'm sure this wouldn't happen, being released.

That's the problem with politics now days. Just because you're governor and he's an attorney, he's being released . To me that's injustice. What about the family who is still mourning the death ?

That is very unfair justice and bullshit.

Bud Unagi

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This is wrong, wrong, wrong!!!!!

Model inmate or not, a deadly crime was committed. Any other citizen would be put in jail on a consecutive sentence for life and no pardon will be even considered.

With Foley's previous drunken driving record, how can the Governor give this man leniency. An Eye for an Eye.

THE GOVERNOR IS WRONG, WRONG, WRONG!

Shiela Echevary

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The governor's act is a mockery of our judiciary system and an abuse of power. Just because the governor is not running for office again doesn't give him the right to exercise the power of his office recklessly.

Stephen Lin

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Something's not right with the pardon of Tom Foley by Gov. Cayetano. It seems that there may be many deserving felons in Hawaii's criminal justice system who could be pardoned.

Why a lawyer by another lawyer?

Kathy and Glenn Oshiro

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I am absolutely certain that if it were me or any other "ordinary citizen," I would not have received a pardon for repeat drunken offenses, which entailed even the most minor damages or injuries.

This is just another of the many examples that it is who you are much more than what you do. How many are serving out sentences for such actions?

It is a blatant mockery of justice!!!

Gov. Cayetano should be ashamed!!!

- Lyle R. Page, Panama City, FL

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September 3, 2001

Cayetano pardons 30 in
past year, 110 total

By Kevin Dayton, Advertiser Capitol Bureau Chief

A former politician convicted of voter fraud in 1984 and an attorney convicted of terroristic threatening a decade ago were among the 30 people pardoned by Gov. Ben Cayetano in the past year.

Cayetano also pardoned Gary E. Kaplan, who in 1971 confessed to police he had committed 500 burglaries over five years. Kaplan was convicted of robbery and theft, and sentenced to up to 20 years in prison in 1971.

In one of the most noteworthy cases, Cayetano pardoned Ross M. Segawa, who was convicted in 1984 in a voter fraud case. Segawa, who was a 1982 candidate for the state House, arranged to have University of Hawai'i law school students who lived outside his district register within his district so they could vote for him.

Segawa pleaded no contest to criminal conspiracy, criminal solicitation, evidence tampering and 10 counts of election fraud. Segawa and his mentor, former Sen. Clifford "Chip" Uwaine, served time.

Segawa could not be found for comment, and the governor's office declined to say where he is.

Kim Murakawa, Cayetano's press secretary, said Segawa was convicted 17 years ago, and "has made a positive social adjustment since then." She said the state attorney general's office, the Hawai'i Paroling Authority and the Department of Public Safety recommended that the pardon be granted.

Cayetano also pardoned former Honolulu attorney Leonard Appell, who made news in the '80s when he was accused in an alleged murder-for-hire scheme.

Appell was imprisoned Oct. 15, 1987 for allegedly attempting to hire a man to kill attorney Martin Wolff, who had sued Appell. Appell was acquitted, but later charged in a second case for allegedly threatening another man by hiring someone to run him down with a car. Appell was convicted in 1991 of terroristic threatening, reckless endangering and failure to return a rented motor vehicle.

Cayetano pardoned him in March, which was 10 years after the convictions. Appell also could not be found for comment, but Murakawa said Appell "has not been arrested for any criminal offenses since that case, and is considered a successful member of his community."

So far, Cayetano has pardoned about 110 people in his more than six years in office. Cayetano caused a stir last year when he pardoned Honolulu attorney Thomas Foley. Foley was sentenced to up to 10 years in prison in 1997 for killing a man and seriously injuring the man's wife in a car crash while driving drunk.

Honolulu Advertiser, Sept 3, 2001

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Tom Foley is expected to testify regarding his business, professional, and personal relationships with Peter Savio, Judith Flanders, Walter Flanders, James Campbell Estate, James Wriston, Ben Cayetano, Dan Foley, Oswald Stender, Prudential Insurance Co., Jeffrey Stone, Richard Wong, Ko Olina Resort, Pauline Sato, Faye Kurren, The Nature Conservancy, Jeffrey Watanabe, Dee Jay Mailer, Edwina Clarke; Fred Hemmings, Frank Fasi, Colbert Matsumoto, Larry Mehau, Paul Alston, Judith Neustadter Fuqua, and others to be determined upon discovery.