CV05-00030 - U.S. Dept of Justice vs Harmon

In a little-noticed May 16 ruling, the Federal Communications Commission (FCC) has granted a waiver necessary to allow Sandwich Isles Communications to complete construction of its $500 million project to link 69 Hawaiian Homelands properties with a fiber optic communications network.

Sandwich Isles, had completed about $160 million worth of construction bringing its network to all the islands except the Big Island, when in October, 2004 the FCC suddenly acted on a 6-year-old complaint from telecom rival Verizon. As a result of the October ruling, Sandwich Isles was forced to reapply for its FCC waiver which allowed SIC to receive $400 million in federal funds taken from the "Universal Service Fund" (USF) tax on consumers’ phone bills.

The Universal Service Fund tax is intended to subsidize telecommunications service to un-served rural areas. Verizon Hawaii, now re-named Hawaii Telecom after being purchased by the Carlyle Group, had argued the DHHL lots Sandwich Isles proposed to serve were not unserved because they were within Verizon territory. With the waiver granted, federal funds can once again flow into Sandwich Isles Communication’s coffers and construction can be completed on the Big Island.

Gilbert Tam, Sandwich Isles Communications Vice President for government and community relations, says, the company "is pleased with the FCC order" which "allows SIC to fulfill its commitment and efforts to provide modern and affordable telecommunications services to residents of Hawaiian Home lands."

At an estimated cost of $500 million, is Sandwich Isles Communications were to serve all 20,000 DHHL lots, the cost would be $25,000 per lot. But DHHL has only about 5,400 lots occupied by leaseholders.

At current build-out rates it would be about 40 years until all 20,000 lots are filled. $500 million to wire 5,400 lots averages out to about $93,000 per lot -- the construction cost of a house -- just for high speed internet and phone service. Further, there is no reason to believe that all 5,400 DHHL leaseholders would want to pay Sandwich Isles Communication’s monthly fees for high speed internet service.

Many DHHL homesteaders already have land lines from Verizon. In the United States, about 33 percent of households have high speed internet connections.

If DHHL leaseholders have the same level of interest in high speed internet connections, Sandwich Isles Communications would serve about 1,800 lots at an average cost to the taxpayers of about $278,000 per lot. Currently, Sandwich Isles Communications is reported to serve about 1300 customers.

These figures compare unfavorably to the $600 or less setup cost of many commercially available high-speed satellite internet connections. Internet satellite providers’ monthly charges are competitive with those of Sandwich Isles Communications. With inexpensive, commercially available "VOIP" technology, high quality internet based telephone service can be included.

Satellite technology requires no digging to lay cables, thus minimizing environmental damage and disruption of Hawaiian sites. Unsurprisingly, Sandwich Isles is led by many politically connected directors and corporate officers.

Robert Kihune, retired vice admiral and Vice-Chair of the Kamehameha Schools Board of Trustees, is Sandwich Isles Communications Chief Executive Officer. Kihune, who is also Chairman of the USS Missouri Memorial Association, was keynote speaker at the Hawaii County Council inauguration in December.

Al Hee, brother of former Office of Hawaiian Affairs Chairman (and current Democrat State Senator) Clayton Hee, is Sandwich Isles Communications President.

Sandwich Isles Vice president, Gilbert Tam is a former Director of P&C Insurance Company, Inc. and the former Administrative Group Director for Kamehameha Schools/Bishop Estate (KSBE). Tam was formerly an officer with Bank of Hawaii, which has substantial financial connections with KSBE.

As a Dec. 31, 2001, article in The Honolulu Advertiser explained:

Part of the reason Sandwich Isles Communications has attracted interest in Hawaii political circles is that the company has ties to a variety of politicians and current or former executives involved with Kamehameha Schools, another politically influential local institution.

Al Hee says his brother Clayton, then chairman of the board of trustees of the Office of Hawaiian Affairs, is not involved in the project. Sandwich Isles did hire Clayton Hee's wife, Lynne Waters, to produce videos for presentations to business leaders, homesteaders and others on the company's operations.

Among (Sandwich Isles’)... 22 employees are former Democratic House Majority Leader Tom Okamura and former state Rep. Devon Nekoba, who both carry the title of agency coordination officer. (Al) Hee says the two advise company executives on government policy matters.

Ties to Kamehameha Schools, formerly known as the Bishop Estate, include Gil Tam, the company's vice president of government and community relations, formerly director of administration and interim chief executive officer for Bishop Estate; and Robert Kihune, chief executive officer, now a Kamehameha Schools trustee.

The Hawaiian Homes Commission chairwoman in 1994, when the commission approved Hee's license (to provide communications services), was Hoaliku Drake, the mother of former Bishop Estate trustee Henry Peters.

Clayton Hee is a friend of Peters and was hired as a cultural affairs researcher for the Royal Hawaiian Shopping Center, a subsidiary of the former Bishop Estate/Kamehameha Schools (KSBE).

See article and related materials posted at: http://www.the-catbird-seat.net/SandwichIsles.htm (Now at http://www.kycbs.net/SandwichIsles.htm)

Henry Peters was one of the Bishop Estates Trustees named in the infamous "Broken Trust" case. Gilbert Tam was also a co-investor in KSBE’s McKenzie Methane deal at the time he was a KSBE manager.

Articles reprinted at: http://www.the-catbird-seat.net/Methane.htm (Now at http://www.kycbs.net/Methane.htm)

In Harmon vs. Federal, et al, a lawsuit stemming from the Broken Trust expose, plaintiff Bobby Harmon, former P&C President, alleged "Tam's actions, through his complicity, deceptions, and breach of fiduciary duties, in collusion with some or all of trustees of KSBE, with other managers and employees of KSBE, with other officers and directors of P&C, and with outside contractors, attorneys, politicians and others, constituted a conspiracy to defraud P&C and the beneficiaries of the Estate of Bernice Pauahi Bishop; racketeering; mail fraud; wire fraud; extortion; and violation of IRS interim sanctions regulations...."

See Harmon vs. Federal reprinted at: http://www.the-catbird-seat.net/RICO-BH.htm (Now at http://www.kycbs.net/RICO-BH.htm)

In addition to "Broken Trust" connections, Sandwich Isles also benefits from a connection with former FCC Chairman Michael Powell, son of former Secretary of State Colin Powell, and a mid-1970s Annapolis Naval Academy classmate of SIC President Al Hee. The FCC’s sudden decision to rule on Verizon’s complaint corresponds in time closely to Michael Powell’s resignation as FCC chair.

There is also a correspondence in timing between the purchase of Verizon’s Hawaii assets by the Carlyle Group, with many well-known connections to both Democrat and Republican national political leaders and appointees, and the FCC’s subsequent ruling in SIC’s favor.

Sandwich Isles Communication’s cable-laying contractor is MasTec, named for its founder the late Jorge Mas Canoza, Cuban exile leader. On the MasTec board, is Joseph Kennedy II, whose family connections with Mas Canoza go back to the Bay of Pigs.

Amazingly for a $500 million fiber-optic communications company, Sandwich Isles does not have a Web site. Sandwich Isles Communications shares offices with Waimana, Inc, Richardson-Luke, and Ku`iwalu. As of today, June 2, 2005, Sandwich Isles Communications has not released to this writer a complete list of company officers and directors and their total remuneration.

Link to FCC ruling: www.hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-1355A1.txt

Andrew Walden is the publisher and editor of Hawaii Free Press, a Big Island Based newspaper. He can be reached via email at andrewwalden@email.com

HawaiiReporter.com reports the real news, and prints all editorials submitted, even if they do not represent the viewpoint of the editors, as long as they are written clearly. Send editorials to Malia@HawaiiReporter.com

Hawaii Reporter

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This reprint can be found at

http://www.kycbs.net/Sandwich-Isles-by-Walden-6-4-5.htm

on THE NEW CATBIRD SEAT at

http://www.kycbs.net/

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Steve Goodfellow is expected to testify regarding his business, professional, political and personal relationships, with Kamehameha Schools/Bishop Estate, Charmaine Tavares, Ray Fuqua, Paul Alston, Chris Hemmeter, Mark Hemmeter, Diane Plotts, Robert Godbey, William Chee, Larry Mehau, George Ariyoshi, John Waihee, Louise Ing, Steve Guttman, Kessner Duca Umebayashi Bain & Matsunaga; Mary Lou Woo; Mark Bennett; Linda Lingle; William Crockett; Montana Beach Condominium Project; Jeffrey Sia, Sidney Ayabe, Ayabe Chong Nishimoto Sia & Nakamura, LLP; David M. Louie, Roeca Louie & Hiraoka, LLP; St. Paul Travelers Insurance Company; Seabury & Smith; University of Hawaii; James J.C. Haynes II; Rick Robinson; Noshir S. Gowadia*; WK 3 LLC; J.P. Schmidt; Maui Planning Commission; Gilbert Coloma-Agaran; Makena Resort; Seibu Hawaii; Ulupalakua Ranch; C. Brewer, Inc.; Outrigger Hotels; A&B Properties; Sanford Murata; Office of Hawaiian Affairs (OHA); Charles Ota, Diane Plotts; Hawaii Land Use Commission; Colbert Matsumoto; Kirk Caldwell; Donna Tanoue; Rockne Freitas; Michael Chun; James “Kimo” Apana, Jr.; Calvin Say; Robin Matsunaga; Benjamin Cayetano; Anthony Ching; Robert Kessner; James Duca, John Mullen & Co.; Kamehameha Schools/Bishop Estate; Hamilton McCubbin; Lyn Anzai; Nathan Aipa; Colleen Wong; Susan Tius; Guido Giacometti; Aon Risk Managers; Jeffrey Case; Steve Case; Exclusive Resorts; AOL Time Warner; Daniel Case; Case Bigelow & Lombardi; Ed Case; Grand Wailea Resort on Maui; Jeff Stone; Richard Wong; James Paul; Cades Schutte Fleming & Wright; Carol Asai-Sato; Gensiro Kawamoto**; CB Richard Ellis; Gene & Nora Lum; George Ariyoshi; John Waihee; Alexander & Baldwin; Marsh & McLennan; Mark Polivka; Puna Chillingworth; John Mullen & Co.; Prudential; Royal SunAlliance Insurance; Gil Tam; Robert Kihune; Sandwich Isles Communications; Summit Communications; Lokelani Lindsey; Robert Fishman, Charmaine Tavares; Hana Ranch; Maui Coastal Land Trust; Oprah Winfrey; Land Use Research Foundation of Hawaii; Pacific Primate Sanctuary; Lance Weisel; Sterling Development Services (SDS); Azabu Buildings Co.; Blackstone Group; Kapalua Land Co.; Haunani Apoliona; Chris Yuen; Anders Lyons; The Nature Conservancy; Michael Nauyokas; The Hawaii Nature Center; Kenneth Kupchak; Mark Hastert; Peter Young; Judge Robert Faris; Faye Watanabe Kurren; * Dee Jay Mailer *; Robert Clarke; Eric Yeaman; Hawaiian Electric Company *; Edwina Clarke; Waste Management, Inc.; Bert Kobayashi; Glenn Taguchi; Department of Land & Natural Resources; Bishop Museum; Mark Polivka; Department of Hawaiian Homelands; Cecil Santos; Division of Forestry and Wildlife; Greg Marshall, Stanley Hong; Neil Hannahs, Kamehameha Schools; Ko Olina Community Association; Martin Luna; Duncan MacNaughton; Maui Land & Pineapple Co., Inc.; Everett Dowling, Joseph Souki; Calvin Say; Stanford Carr, Warren Luke, Embassy Suites Resort; Trinity Investment Trust LLC; Mitsui Trust & Banking; Curtis Ching; Gayle Lau; James Nicholson; Carol Muranaka; Benjamin Matsubara; Judge Samuel King; Judge Kevin Chang; Judge David Ezra; Judge Barry Kurren *; Judge Patrick Yim, Judge Alan Kay, Judge Robert Faris, John Marshall, Charles Lindberg, Sam Pryor, Pan American Airlines, George G.W. Bush, CIA, Hugh Grundy, Ron Rewald, Lester Coleman, Aloha Airlines, David Banmiller, Janet Reno, Ken Starr, Alberto Gonzales, David Carey,Joseph Verner Reed, Jr, Ted Hong, David Cole, Maui Land & Pine, Allan Smith, Ed Kubo, Louise Ing, Constance Lau, James Nicholson, David Farmer, Jon Miho, Duke Cunningham, Dusty Foggo, Randall Wulff, Joshua Gotbaum, Larry Silverstein, Warren Price III, Roy Hughes, Steve Goodfellow; and others to be named upon discovery.