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

RUDY GIULIANI

From wikipedia:

Rudolph William Louis "Rudy" Giuliani (born May 28, 1944) is an American lawyer, businessman, and politician from the state of New York. Formerly Mayor of New York City, Giuliani is currently seeking the Republican nomination for President.

A Democrat and Independent in the 1970s, and a Republican from the 1980s onward, Giuliani served in the United States Attorney's Office for the Southern District of New York, eventually becoming U.S. Attorney. Giuliani later served two terms as Mayor of New York City (1994–2001). He was credited by some with initiating improvements in the city's quality of life and with a reduction in crime. Others, however, criticized him as divisive and authoritarian and disputed his role in reducing crime, which had declined for 36 months while his predecessor, David Dinkins, was in office. Giuliani gained international attention during and after the September 11, 2001 attacks on the World Trade Center. In 2001 Time magazine named him "Person of the Year" and he was knighted by Queen Elizabeth II. His high media profile in the days following the attacks led supporters to nickname him "America's Mayor."

After leaving office as mayor, Giuliani founded Giuliani Partners, a security consulting business, acquired Giuliani Capital Advisors (later sold), an investment banking firm, and joined the Bracewell & Giuliani law firm, which changed its name when he became a partner. In February 2007 Giuliani filed a statement of candidacy for the Republican nomination for the 2008 presidential campaign. If elected he would be the first former mayor to be elected president without serving in a higher office, the first Italian American president, the second Roman Catholic president, and the first Republican President who has not opposed Roe v. Wade.

http://en.wikipedia.org/wiki/Rudy_Giuliani

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NEW DISCOVERY (03-22-08) - Undisclosed financial relationships between Trustee David C. Farmer and witnesses Rudy Giuliani and Aloha Chief, David Banmiller.

November 11, 2006

The Company He Keeps

Nathan Vardi, Forbes

As a businessman, he's been mixing with a sketchier crowd.

Rudolph W. Giuliani sprinted through October as if he were running for national office. He was, of course, campaigning for other Republican candidates--popping up, over a period of ten days, in Detroit; Schaumburg, Ill.; Portland, Ore.; Seattle; New York City; Mystic, Conn.; Concord, N.H.; Providence, R.I.; and Stamford, Conn. Wherever he went, Giuliani was the main attraction. The crowds didn't want to hear much about election 2006; they wanted to know if Rudy was planning to run for president in 2008. "I'll make the decision sometime next year," he announced in New Hampshire. Is the outcome in doubt?...

Since leaving office in early 2002, Giuliani has been winning more than political capital. While battling prostate cancer (he won that war) and raising hell in a very public divorce (he is now married to Judith Nathan, his third wife), he has been banking millions of dollars a year. His Leadership (Talk Miramax Books, 2002) figured in an estimated $3 million in advances for two books. He earns as much as $8 million a year on the speaking circuit (FORBES hired him to speak at a conference last year). Giuliani Partners, a management consultancy that oversees Giuliani Security & Safety and Giuliani Capital, has nabbed tens of millions of dollars in contracts and deals.

Giuliani Capital, a magnet for many deals with niggling companies and Giuliani Partners' largest unit, hasn't exactly blown the braces off Wall Street. Acquired from Ernst & Young in November 2004 for $9.8 million, the investment bank was already a bit of a shambles, recording a loss of $28 million on $17 million in revenue in the five months before the sale. By the end of last year the bank had improved a dismal situation--losing $1.4 million on $48 million in revenue. Oesterle points out that absent transition expenses, the firm would have been profitable.

Some Giuliani alliances, announced with great fanfare, have fizzled to virtually nothing. Back in 2003 the firm announced that it would advise Bear Stearns (nyse: BSC - news - people ) Merchant Banking on $300 million in security-related investments. The goal, Giuliani said, was "helping companies as they seek to supply products and services that will make the U.S. and the world a safer place." But three years on, the results of the alliance are modest: a single investment, which is in trouble.

In November 2003 Bear Stearns Merchant put down $100 million in a $210 million leveraged buyout of CamelBak, a Petaluma, Calif. maker of a hands-free canteen, popular with Marines in Iraq and weekend warriors. In the fiscal year ended June 30, 2004 it recorded $31 million in operating profit (earnings before interest, taxes, depreciation and amortization).

In March 2004 Giuliani Partners announced it was becoming a "strategic investor" in CamelBak; it now describes its investment as "de minimus." Bernie Kerik, then a Giuliani Partners vice president, hopped on CamelBak's board. It was the start of a steep decline. In 2005 Bear Stearns Merchant got CamelBak to pay owners a $24 million dividend, saddling the company with unsustainable debt; in fiscal 2006 operating profit dropped to $18 million. This year CamelBak replaced its chief executive and broke loan covenants; its second-lien bank debt fell in price to 80 cents on the dollar. Standard & Poor's recently pointed to CamelBak as an example of how lbos, combined with debt-funded dividends, put companies "in danger of going belly-up." Says Oesterle, "We have not shared in any of the dividends."

The most controversial deal ever made by Giuliani Partners was struck in mid-2004 with Applied DNA Sciences, then backed by Richard Langley Jr. Its main asset was a licensing deal with a Taiwanese outfit that could supposedly outsmart counterfeiters by inserting plant genes into products such as cosmetics and pills. In 2002 the company had done a reverse merger with ProHealth Medical, an o-t-c bulletin board stock, that resulted in Langley's RHL Management getting 5.5 million shares.

For a while Langley worked as Applied DNA's vice president in charge of p.r. He left that job but was still the company's largest shareholder when Giuliani Partners signed on to help develop and market the technology. The firm accepted $2 million and promises of stock; Applied DNA's shares traded for as much as $1.89. But in March 2005 USA Today reported on Langley's sordid past: In 1999 he had pleaded guilty to conspiracy to commit wire fraud and commercial bribery in connection with a penny stock called Pollution Controls International. Court documents show Langley had tried to bribe a law enforcement official posing as a broker willing to pump up Pollution's shares. It also turned out that Applied's investment bank, Vertical Capital, had twice been fined by the National Association of Securities Dealers.

Giuliani Partners quietly deep-sixed its contract but still collected $1.3 million through June 30, 2005. "It was more administrative problems that caused us to terminate with them," says Hess. Applied DNA's stock now trades for 10 cents.

Giuliani threw in his lot with a questionable chain, We the People USA, which sells do-it-yourself services for bankruptcy, divorce, wills and trusts. It all started with a walk-in visit to a store by Michael Hess, who was so impressed he eventually arranged for Ira Distenfield, the chain's owner at the time, to meet his boss. "Who in America would not want to sit down with Rudy Giuliani?" asks Distenfield. The tête-à-tête led to a 2003 consulting agreement and a press release. "We the People helps individuals navigate the complex and often daunting legal system," Giuliani said.

Those navigating skills caught the attention of Deirdre Martini, the U.S. Trustee--a Department of Justice affiliate that upholds the integrity of the bankruptcy process--in New York. In 2004 Martini sued We the People for engaging in deceptive conduct that put its clients' homes at risk. The company settled the case, agreeing to change its business practices. That didn't end it. U.S. bankruptcy trustees, affiliates of the Department of Justice, have filed at least 13 lawsuits across the nation against We the People and its franchises for the unauthorized practice of law. In addition, the chain paid a $286,000 penalty to settle charges, brought by the Federal Trade Commission, of selling franchises without disclosing the U.S. Trustee lawsuits.

Giuliani Partners severed its contract with the company last year, as Distenfield was selling out to Dollar Financial (nasdaq: DLLR - news - people ) for $14 million. "I think the concept and the theory of doing that kind of work is still a good one," says Hess.

Some of Giuliani Capital's most lucrative work has been providing financial advice to failing airlines. The firm deploys 11 employees at Delta Air Lines, which has been operating under bankruptcy protection since September 2005; for eight months of consulting, ending May 31, Giuliani Capital pocketed $3.2 million. It billed $2.3 million last year, when it worked on the US Airways bankruptcy.

But its contract with Aloha Airgroup, parent of the distressed airline, has brought angry charges of greed. Cutting a deal with Aloha Chief David Banmiller in December 2004, Giuliani Capital agreed to work for a flat fee of $125,000 a month and what amounted to a $1 million restructuring bonus if the company got out of bankruptcy court alive. Seven Giuliani advisers, led by Marc Bilbao, obtained a $65 million loan and helped negotiate the sale of the carrier to a group led by billionaire Ronald Burkle.

Then last November, on the eve of Aloha's exit from Chapter 11, Giuliani Capital decided it deserved a bigger payday. It persuaded Banmiller to amend the original contract in order to give Giuliani a $1.5 million restructuring bonus and a total compensation of $2.9 million. Giuliani Capital argued that it all added up to a mere $369 an hour. No way, cried the flight attendants union, which was in the process of persuading 420 members to accept deep cuts in wages and benefits. The union petitioned the court to "soundly condemn" the request. Backing that position was Steven Katzman, a U.S. Trustee. Judge Faris awarded the flat fees and the $1 million bonus. But he deferred making a decision on the extra bonus. In February 2006 Aloha withdrew the request. Giuliani Capital says it acted appropriately.

Giuliani is still renting out his name. But these days it's with a political goal in mind. Last year he signed on as a senior partner at a Texas law firm known for its energy sector work and ties to the Republican Party. Bracewell & Patterson got something out of it, too, besides a name change (to Bracewell & Giuliani): a branded New York office. Giuliani joined the nation's 121st-largest law firm, in terms of revenue, and copped a fee that Lynn Mestel, a legal recruiter, estimates at $1 million a year.

And he gained something much more valuable. "The alliance with law groups in Texas gives him a network he didn't have," says Frederick Siegel, a former Giuliani campaign consultant and biographer. "It's the contacts he is making that are going to be the backbone of the presidential campaign."

Just as Giuliani contemplates that important decision comes a reminder, courtesy of the New York tabloids, that political and business relationships can sometimes collide. Nearly two years after leaving Giuliani Partners, Bernie Kerik is still embarrassing his old boss. The contretemps involves former Westchester County district attorney Jeanine Pirro, recorded by the police talking with Kerik last year about bugging her husband's boat to expose an affair. Kerik called an employee of Giuliani Security & Safety to get a recording device.

Pirro insists the boat was never bugged but reportedly had her husband followed by Giuliani Security employees. "It was, for lack of a better term, 'freelance' work," says Sunny Mindel, Rudy Giuliani's spokesperson. "Jeanine Pirro was not a client."

http://members.forbes.com/forbes/2006/1113/138_2.html

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March 17, 2002

Lingle campaign
funds flow from
out-of-state donors

Records show more than $422,000
came from outside sources

By Rick Daysog, Star-Bulletin

Tapping into the political networks of former New York Mayor Rudolph Giuliani and Dole Food Co.'s billionaire Chairman David Murdock, Republican gubernatorial candidate Linda Lingle raised more than one out of eight dollars outside Hawaii during the 1998 election.

Now she's setting a more ambitious goal for her mainland fund raising for this year's race.

Since 1996, the former Maui mayor collected more than $422,000 from about 400 out-of-state Republicans, according to a Star-Bulletin computer-assisted analysis.

The amount is more than double the offshore donations raised during the past six years by either Gov. Ben Cayetano, who defeated Lingle by about 5,000 votes in 1998, and Honolulu Mayor Jeremy Harris, who plans to run for governor as a Democrat this year.

The out-of-state money also highlights the national attention to this year's race for Washington Place, which has been occupied by a Democrat for more than four decades.

Lingle, who raised $3.1 million total from Hawaii and mainland interests for the 1998 race, hopes to collect $5 million this year, with about $1 million of that coming from the mainland.

With Harris' campaign mired in controversy over his political fund raising, high-profile GOP players are flocking to Lingle's aid. Connecticut Gov. John Rowland hosted a lunch on Lingle's behalf last week, while Arizona Gov. Jane Hull will hold a fund-raiser for Lingle later this week.

But Giuliani -- Time magazine's "Person of the Year" for his efforts after the Sept. 11 terrorist attacks -- will likely play a more prominent role than any other mainland politician.

Giuliani, a moderate Republican like Lingle, will host a fund-raiser for her in New York in April and may travel to Honolulu to host an event later this year.

In 1998, Giuliani held a $1,000-a-person fund-raiser for Lingle and helped raise $65,000 from dozens of prominent New York Republicans, state campaign spending records show. They included:

>> Leveraged buyout king Henry Kravis, who gave $5,000;

>> Richard Parsons, AOL Time Warner Inc.'s Chief Executive and a former University of Hawaii student, $1,000;

>> New York developer Tishman Speyer Properties, $5,000;

>> Republican fund-raiser Georgette Mosbacher, $2,500;

>> David Neeleman, chief executive of low fare carrier JetBlue Airways Corp., $2,500;

>> Jonathan Tisch, chairman of Loews Hotel Corp., $1,000. Parent company Loews Corp. also chipped in $1,000.

"These are the kind of people who I want to talk to about investing in Hawaii, creating jobs here and seeing the islands as a bridge between the U.S. and Asia," said Lingle.

Bob Watada, state Campaign Spending Commission executive director, has a problem with so much campaign money coming from the mainland.

Voters and regulators, he said, have a hard time telling whether any of the donations are linked to corporations with a vested interest in an election.

Watada, who supports a complete ban of all corporate contributions for local elections, said he began an informal inquiry into Lingle's mainland contributions nearly three years ago. He also took a look at more than $400,000 in "soft money" donations that the Republican National Committee and various state Republican parties gave the Republican Party of Hawaii in 1998.

But Watada said he dropped the inquiry after he determined that Lingle and the local Republican Party did not violate any state laws.

Lingle defended her use of mainland money, saying it shows the importance that people there place on Hawaii's governor race.

Compared to local congressional leaders and mainland politicians, the proportion of out-of-state contributions is not that high, she added. Former U.S. Rep. Robert Dornan, for instance, raised about 70 percent of his campaign funds outside of his home state of California.

Lingle noted that a vast majority of her contributions come from local residents and since she has been out of office for four years, she did not receive that many contributions from government contractors.

What's more, nearly 75 percent of the 4,200 donations to her campaign during the 1998 campaign were for $200 or less, indicating widespread grassroots support, she said.

With the exception of Parsons, whose company AOL Time Warner owns Oceanic Cable, and Kravis, whose investment banking firm owns the 781-room Grand Wailea Resort & Spa, the mainland contributors do not have significant business interests in Hawaii. But many share Lingle's middle-of-the-road political views.

For instance, Kravis, a leading financer of GOP centrist causes, helped bankroll the Republican Leadership Council as a counterweight to the influence of the conservative movement.

But the donors' connections go beyond political philosophy. Several are part of Giuliani's inner network and sat on city boards during Giuliani's tenure.

Abraham Biderman, who gave $400 to Lingle on Sept. 15, 1998, was a member of the 1999 New York Charter Revision Committee, while developer Alan Friedberg, who gave $1,000 to Lingle on that same day, was a member of the Metropolitan Transit Authority's board in the Giuliani years.

Yeshoshua Balkany, a well-known Jewish activist in New York and dean of the Bais Yaakov Academy in Brooklyn, gave $3,000. Balkany was dubbed the "Brooklyn Bundler" by Common Cause magazine for his expertise in serving as an intermediary who rounds up political contributions from friends, family and associates.

Balkany told the Star-Bulletin he has never met Lingle. All he can recall is that he was asked to attend a fund-raiser by a Giuliani associate.

"I remember speaking to somebody who said that they needed to help somebody coming in who was running for office in Hawaii," Balkany said.

Charles Lewis, executive director of the Center for Public Integrity, a nonpartisan, Washington, D.C.-based political watchdog organization, likens such contributors to "accidental donors." While they may not know the candidate, they end up giving because of their loyalty to the fund-raiser.

"It gets somewhat intriguing when you have someone like (Giuliani) shaking the trees," Lewis said. "You don't know if they're giving money for the candidate or because of Giuliani."

Lingle also benefited from the largesse of Dole Food's Murdock. According to Campaign Spending Commission filings, people affiliated with Dole Food, Murdock's privately owned Castle & Cooke Inc., and Murdock himself made 21 contributions totaling $31,050. They included:

>> A $2,000 donation by Murdock on Aug. 5, 1998;

>> Another $2,000 from Dole Food on the same day;

>> And more than $17,000 in contributions by Dole director Ed Hogan, his immediate family and Hogan's company, Pleasant Hawaiian Holidays.

A Dole spokeswoman said contributions by Murdock and various Dole board members were made on a personal basis. Murdock could not be reached.

Lingle said that, compared to the millions he has raised for mainland Republicans, Murdock's donations to her are modest. She noted that Murdock often contributes to local candidates in both political parties.

Castle & Cooke owns 95,000 acres in Hawaii including most of Lanai, which is in Maui County. Publicly traded Dole Food owns another 28,500 acres in Hawaii.

Calling her relationship with Murdock cordial over the years, Lingle said: "We didn't always agree, but we always got along."

http://starbulletin.com/2002/03/17/news/story2.html

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October 4, 2007

Grilled Blackwater chairman
a major GOP donor

by Andrew Malcolm, Swamp Politics

You saw a lot of Erik Prince on TV the last couple of days, spending considerable time calmly fending off inquiries from agitated Democratic congressmen about his security company's suddenly controversial activities in Iraq. One explanation may be that Prince, the head of Blackwater, U.S.A., has a lengthy political pedigree as a Republican.

Members of the House Oversight Committee, which is chaired by Rep. Henry Waxman (D-Beverly Hills), accused Blackwater employees of being "cowboys" who acted recklessly during their contracted security duties for the State Department in Iraq. It also came out that Blackwater, which has lost some three dozen employees in Iraq hostilities, has a 100 percent success rate in protecting VIPs under its contract.

This may shock some, but it also turns out that the target of the committee's angry questions was a 38-year-old former Navy SEAL who has donated $230,000 to federal campaigns and causes in the last decade. Almost all of that money has gone to Republicans, according to a check of Federal Election Commission records by The Times' campaign finance expert, Dan Morain.

Prince's latest donation was in July, when he gave $20,000 to the National Republican Congressional Committee. California recipients of Prince’s $1,000 checks include Reps. Jerry Lewis and Duncan Hunter, a current GOP presidential candidate, and former Rep. Richard Pombo....

So far, Prince has stayed out of presidential campaign donations. However, his family members have given to former New York Mayor Rudolph Giuliani and former Massachusetts Gov. Mitt Romney.

Prince’s lineage includes his late father, Edgar, who owned a large auto parts company in Michigan and was a major donor and advisor to Christian conservative Gary Bauer, a past GOP presidential candidate.

Prince’s mother, Elsa Prince, has donated $140,000 to federal Republican causes and candidates in the last decade. His sister, Betsy, is a former chair of the Michigan Republican Party who has given at least $61,000 to Republican campaigns on the federal level since 1997.

Betsy’s husband is Richard DeVos, who hails from the family that founded Amway. He ran unsuccessfully for Michigan governor in 2006. The Republican stalwart has given more than $2 million to federal causes and candidates in the last 10 years, FEC records show....

Andrew Malcolm writes for Top of the Ticket, the Los Angeles Times' political blog.

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December 3, 1995

THE HOLY TERROR

BY JOHN TIERNEY, The New York Times

Like the impassioned zealots of Italian opera and like Fiorello La Guardia, his role model, Rudolph Giuliani pushes forward righteously- and with dramatic impact....

1:45 P.M. Back in his office, Giuliani poses for photos with six visiting teen-agers from Israel and makes small talk. ("Tel Aviv, that's a teeming city.") Joseph Verner Reed, an under secretary general at the United Nations, comes into lobby him to attend the world leaders' speeches at the United Nations on Sunday.

"I have the two best seats in the house for you," Reed says. "You can listen to President Clinton, and when Castro gets up to speak you can walk out."

"I can bang my shoe," Giuliani says. "I'll bring my spikes."

http://www.uhb.fr/faulkner/ny/terror.htm

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Rudy Giuliani is expected to testify regarding his business, professional, personal and political relationships with Judge Michael Mukasey, Alberto Gonzales, Jack Abramoff, Joshua Gotbaum, Judge Alan Kay, Governor Linda Lingle, Judge Barry Kurren, Judge David Ezra, Judge Kevin Chang, Mark Bennett, Carl Icahn, Henry Kravis, Conrad Black, Henry Kissinger, Norm Brownstein, Judge Michael Seabright, Judge Michael Town, Judge Colleen Hirai, Steve Case, Karl Rove, David C. Farmer, Judge Susan Oki Mollway, Marsh & McLennan, Maurice “Hank” Greenberg, Chubb Group, AIG, Eric Shine, Henry Paulson, Robert Rubin, Goldman Sachs, Larry Silverstein, Richard Grove, Ken Starr, Joseph Verner Reed, Hamilton McCubbin, and others to be named upon discovery.