David C. Farmer vs. Harmon - Witness Gerard Jervis

NEW DISCOVERY (02-25-09): More factual evidence of fraud, bad faith, and undisclosed professional and financial conflicts of interest of Trustee David C. Farmer and Ron Sakamoto, Gerard Jervis, Kamehameha Schools, Hung Wo Ching, Louise Ing, Aloha Airlines, David Banmiller, Ron Burkle, Yucaipa, Bill Clinton, Judge Robert Faris, etc.

Aloha CEO Banmiller's statement to Bankruptcy Court

Editor's note: Here is the statement that David Banmiller, president and chief executive officer of Aloha Airlines, read to the federal Bankruptcy Court on Tuesday after the company's reorganization plan was confirmed by Judge Robert Faris:

THANK YOU, Your Honor, for allowing me this opportunity to address the court. If you perceive a softness in my tone, and perhaps a slip of the tongue here and there, it relates in part to a lack of sleep -- due in part to Your Honor's challenging words of yesterday. I must say, though, that sleep is overrated.

I will not take up much of the court's time, Your Honor, but the significance of this moment in the evolution of Aloha Airlines deserves comment.

In the 60-year history of this fine company, Aloha and its employees have never faced greater challenges: an industry in chaos, 50 percent of U.S. airlines in bankruptcy, unbridled competition, and oil at unprecedented levels.

The employees and local ownership of Aloha have continuously stepped forward, making contribution after contribution for its very survival. Had it not been for such efforts, we would not be standing before you today.

AS YOU KNOW, I am a relative newcomer and have been through a few "economic Vietnams" in this industry, but none as challenging, certainly sometimes frustrating, but on the whole no more satisfying than this experience, and I have enormous respect for everyone involved.

It is always risky to highlight certain individuals and situations in such a case, but I have chosen to take the risk because this accomplishment is all about teamwork, sensitivity when needed, and most of all, focus on the end game with extraordinary people.

We have asked our employees and their union leaders three times in the last several years to step up to tough stuff. In every instance, they made the tough decisions. Their willingness to make sacrifices while maintaining top-quality service to our valued customers, says volumes about the Aloha spirit within the heart and soul of these fine people.

I particularly wish to thank:

» Dave Bird, chairman of (the master executive council for the Air Line Pilots Association);

» Peggy Gordon, president of (the Association of Flight Attendants/Communications Workers of America);

» Randy Kauhane, assistant general chairman of (the International Association of Machinists and Aerospace Workers 141);

» Ken Boon, assistant general chairman of IAM 142;

» David Durkin, president of (the Transport Workers Union).

» The shareholders, and in particular the Chings and Ings, have a long and cherished history with this company. When I joined, I asked to be given the latitude to make the tough decisions without undue influence or avoidance of the myriad of business decisions that had to be made.

The shareholders were true to their word, and allowed the management team to execute, and they put cash behind their words.

» Our management team, some new but with an outstanding support staff comprised of a team of veterans in this business, many who are residents of this state, hung in there, put up with my idiosyncrasies and saw the ranks of VPs dwindle, dynamically increasing their workload -- with never a complaint.

» Hawaii's federal-, state- and county-elected officials, and all of our vendors, who have reached out during this past year. ... Without their support, we also would not have succeeded in getting this far. To them we owe thanks.

» Our customers, for their loyalty bringing cash in the door with every ticket sale. They provided the hope for our company to get through each day.

» Our team of professionals, led by Paul Singerman of Berger Singerman; Char Sakamoto Ishii Lum & Ching led by Betty Ishii; the Giuliani Group led by Marc Bilbao; our lead banker First Hawaiian Bank led by Don Horner; our local counsels Don Gelber and David Farmer; the unsecured creditors' committee chaired by Capt. Michael Feeney and guided by lead counsel Brett Miller; and Sheldon Kline of Thelen Reid.

» And many, many more who made this happen, we thank you.

MY COMMENTS would be far from complete without recognizing the presence of both Richard d'Abo of Yucaipa and Willie Gault of Aloha Aviation Investment Group. Without their financial commitment and support, this company would not be here, especially considering the rejections we faced in the investment community. I personally thank them, as well as Ron Burkle, for their confidence in the employees of this fine company.

And finally, Your Honor, you, too, have made the tough calls, sprinkling wisdom and experience with at times a level of common sense, humor and sensitivity that does your profession honor. You should take great pride, Your Honor, if I am permitted to say, in what has gone on this past year. Hopefully, this will be your last airline case in the islands.

And now, I assume you can renew your AlohaPass membership and continue to be one of our most-valued customers.

God bless.

www.archives.starbulletin.com/2005/12/04/business/story03.html

* * * * *

GOOGLING FOR GERARD JERVIS

* * * * *

NEW DISCOVERY (07-13-08): More factual evidence regarding undisclosed professional and financial conflicts of interest of Trustee David C. Farmer and parties involved in the Aloha Airlines bankruptcy case:

July 13, 2008

Put it on Aloha's tab

By Rick Daysog, Advertiser Staff Writer

The shutdown of Aloha Airlines is benefiting one sector of the economy: bankruptcy lawyers and their consultants.

Since March, attorneys and experts hired by Aloha have billed the defunct airline nearly $3 million, federal bankruptcy court filings show.

The legal tab is well below the $11 million that Aloha wracked up during its previous bankruptcy, but the amount is expected to increase since the case is still pending.

Employees and retirees say the money would have been spent better if it were used to keep the airline afloat. It also could have been used to pay for health benefits or severance for the 1,900 Aloha employees who lost their jobs when the airline went out of business on March 31, they said.

"It's outrageous to charge such fees when you are just closing the door and turning off the lights," said Steve Brenessel, a retired Aloha pilot.

"All that money could have been better spent by keeping the airline going instead of going into the pockets of lawyers."

Bankruptcy experts say the fees in the Aloha liquidation aren't out of line.

Typically, attorney fees and other costs for small bankruptcies amount to about 10 percent of the assets, said Lynn LoPucki, a law professor at the University of California-Los Angeles.

Aloha has received about $20 million from the sale of its profitable cargo and contract services unit. It expects to receive another $10 million to $15 million from the sale of its aircraft frames, engines and other aircraft parts.

"This is probably an ordinary fee for this size of a case," said LoPucki.

Founded in 1946, Aloha was the state's second largest airline before shutting down its passenger service on March 31 as a result of soaring fuel prices and a costly interisland fare war.

The closure came 11 days after Aloha filed for Chapter 11 bankruptcy reorganization, two years after Aloha emerged from its first bankruptcy.

In Aloha's previous bankruptcy, six law firms or investment banking firms billed more than $1 million while a seventh billed just under that amount.

This time, just one firm — Imperial Capital LLC — submitted a bill for more than $1 million.

Imperial, whose fees have not yet been approved by the bankruptcy court, helped Aloha sell the cargo division for $17 million to Saltchuk Resources Inc., the Seattle-based owner of Young Brothers/Hawaiian Tug & Barge.

Here's what the other firms billed Aloha:

Miami-based Berger Singerman P.A., which was Aloha's main bankruptcy attorney, received $644,991.51 in fees and expenses. In Aloha's first bankruptcy, the firm earned more than $3 million for its work in helping the airline emerge from reorganization under new ownership;

Sheppard, Mullin, Richter & Hampton LLP of Los Angeles, which represented Aloha on labor related issues, billed $303,904.62;

Char Sakamoto Ishii Lum & Ching, Aloha's long-time law firm, was paid $297,473.48, or less than a third of what it billed during Aloha's first bankruptcy.

Sonneschein Nath & Rosenthal LLP, which represented Aloha's unsecured creditors, earned $242,896.18.

The fees do not include those for Aloha's court-appointed trustee Dane Field who, along with local attorney, James Wagner, have done much of the legal work surrounding the liquidation of Aloha's assets.

Field and Wagner's firm, Wagner Choi & Verbrugge, have not yet applied for their fees.

The total also does not include fees that will be paid to the Los Angeles litigation firm Latham & Watkins LLP and locally based Watanabe Ing Komeiji LLP.

The Latham and Watanabe firms are handling Aloha's anti-trust lawsuit against Mesa Air Group, the Phoenix-based parent of go! airlines.

Aloha recently sold its legal claims against Mesa to its main investor Yucaipa Co., which has agreed to retain the two firms and pay their legal bills.

The suit — which alleges Mesa misused confidential business information to drive Aloha out of business — will likely result in legal fees exceeding $1 million.

* * *

BANKRUPTCY FEES FROM AIRLINE’S CLOSURE

Law Firms and Consultants Fees Expenses Total

Imperial Capital LLC $1,288,517.$19,336. $1,305.835.

Berger Singerman P.A. $603,272. $41,719. $644,991.

Sheppard, Mullin, Richter... $203.835. $10,169. $303,004.

Char Sakamoto Ishii Lum & Ching $281,183. $13,249. $297,473.

Sonneschein Nath LLP $235,135. $7,760. $242,896.

David Farmer $87,648. $9,654. $97,303.

Bronster Crabtree & Hoshibata $38,307. $4,160. $42,468.

Source: Bankruptcy Court Filings

COST OF PREVIOUS BANKRUPTCIES

Company Years Cost

1. Hawaiian Airlines 2003-2005 $34 million

2. Liberty House 1996-2001 $16 million

3. Aloha Airlines 2004-2006 $11 million

* * *

Honolulu Advertiser: Put it on Aloha's tab

* * *

October 3, 1997

Bishop legal team
size exaggerated,
lawyer says

McCorriston says rumors
that the estate has hired
several law firms are false

By Mike Yuen, Star-Bulletin

Bishop Estate attorney William McCorriston says Gov. Ben Cayetano was wrong in asserting that the five trustees for the $10 billion charitable trust are improperly using trust funds for legal representation during a state investigation.

Cayetano was also incorrect when he repeated a rumor that the estate was bracing for the inquiry by bolstering its "legal armament" by hiring five to seven law firms, including several from the mainland, McCorriston said yesterday.

There are only two outside lawyers - himself and Malcolm Moore, 60, who is regarded as one of the nation's leading trust law experts, McCorriston said.

The Princeton-and Harvard-educated Moore, a former president of the American College of Trust and Estate Counsel, is with the Seattle law firm of Davis Wright Tremaine, whose 10 branch offices include Honolulu, San Francisco, Washington and Shanghai.

Responding to Cayetano

McCorriston's rebuttal came less than two hours after Cayetano, in response to reporters' questions, commented on the state's investigation into the estate.

"Unfortunately, the governor was not aware of all the facts before he made a judgment. The fact of the matter is that the trustees, on my advice, have retained individual counsel on matters pertaining to the investigation that could lead to personal liability," said McCorriston, who began representing the estate last month.

The trustees will be paying for their personal counsel - not the estate, said McCorriston.

Trustee Gerard Jervis said his attorney, Ronald Sakamoto, 46, a partner in the Honolulu law firm of Char Sakamoto Ishii Lum & Ching, will represent him.

Jervis said he was confident there will be no finding that he breached his fiduciary responsibilities. "I welcome the inquiries," he said, referring to the investigation headed by state Attorney General Margery Bronster and the fact-finding inquiry by retired state Circuit Judge Patrick Yim.

Trustee Oswald Stender is represented by attorney Crystal Rose, 39, a partner in the Honolulu law firm of Bays Deaver Hiatt Lung & Rose. Rose accompanied Stender when he met with Bronster last month.

Trustees Richard "Dickie" Wong, Henry Peters and Lokelani Lindsey could not be reached for comment yesterday.

Individuals investigated

McCorriston declined to reveal who are the personal attorneys for Wong, Peters and Lindsey. He also declined to say when trustees retained personal attorneys and when the estate hired Moore.

McCorriston said he and Moore are representing the institutional interests of the Bishop Estate, while the trustees have their own lawyers because "it's hard now to ascertain what the attorney general's investigation consists of."

It is when Bronster's investigation becomes more focused that he, Moore and the trustees' personal attorneys will know who has to respond, McCorriston said.

"Until there are specific allegations, it's like shadow boxing," he added.

Cynthia Quinn, Bronster's special assistant, said McCorriston should by now know where the state inquiry is headed. "It's abundantly clear" that Bronster is investigating individual trustees - not the estate, Quinn said.

And if it becomes clear that McCorriston's role, for example, is more in the interest of the trustees than the Bishop Estate, the state will ask the court that trust funds not be used to pay McCorriston, Quinn said.

'Resistance is a mistake'

Cayetano, who had urged reporters to ask estate representatives if they were amassing a large and formidable legal team, did at the same time say, "If I am wrong, I apologize."

But he also asserted that "resistance to us looking into (Bishop Estate) documents is a mistake."

Cayetano added: "If you want to just get this thing over with, it's not hard to separate the interest of the trustees from the estate. If what we want is information which may substantiate that trust money was used to repair someone's home, how is that hurting the estate by giving us that information? In fact, it helps protect the estate from further misuse of money - if, in fact, it was misused."

The "Broken Trust" opinion piece that appeared Aug. 9 in the Star-Bulletin, sparked the state's investigation. One of the questions it raised: Did trustee Lindsey use Bishop Estate workers "to survey her North Shore property, process her permits and supervise the rebuilding of her house"?

Cayetano said even with 1998 an election year, the investigation won't go away.

~ ~ ~

Reporters object to subpoenas

By Gordon Pang, Star-Bulletin

Kamehameha Schools Bishop Estate will have to go to court if it wants the notes and documents of three reporters who have written on the estate.

Attorneys for the reporters are objecting to subpoenas served by Bishop Estate two weeks ago.

Paul Alston, who is representing reporters Jim Dooley of KITV News4 and Sally Apgar of the Honolulu Advertiser, yesterday filed formal objections in Circuit Court.

Both he and Corey Park, attorney for Associated Press reporter Bruce Dunford, have sent letters to the estate refusing to release any documents.

Bishop Estate alleges that information obtained by the reporters came from Bobby Harmon, an executive who was fired by the estate.

Harmon, who served as president and chief executive for Bishop subsidiary P&C Insurance Co., was sued by the estate to stop him from releasing information he gathered or learned while still in its employment.

The estate says Harmon stole documents from its offices.

Harmon countersued, claiming wrongful termination.

Alston said the subpoenas served to his clients were improperly issued and violate the First Amendment.

He added that Harmon never claimed to have given reporters anything more than a synopsis of information which he wrote.

Park said it didn't matter even if Harmon had given his client documents that were stolen.

"The press in this case was not a party to any kind of alleged improper activity in obtaining the information."

The estate must now ask a judge to intercede if it wants the documents.

Estate spokeswoman Elisa Yadao would not say if the estate would go to court to seek the documents.

"We are going to do what is appropriate and prudent in our attempts to get the information back," she said.

http://www.starbulletin.com/97/10/03/news/story2.html

~ ~ ~

NEW DISCOVERY (04-04-08):

WILLIAM J. CLINTON FOUNDATION

Speech: William J. Clinton’s remarks at the Goldman Sachs & Company 2004 Global Conference

December 3, 2004

New York, NY

Thank you very much. Thank you. Thank you very much. Thank you. Thank you, Hank, for that wonderful introduction. I probably should quit while I’m ahead. [LAUGHTER] And thank you, ladies and gentlemen, for the warm welcome.

I admire Hank Paulson very much for many things. His interest in Asia and our long-term relationship with the Asian Pacific community and particularly his leadership of the Nature Conservancy, some of you may not be familiar with it, but it is the principal private organization facilitating the preservation of precious natural land in the United States, and increasingly, in other places on the globe. I don’t think I ever told Hank this. But when I was the Governor of Arkansas, we used the Nature Conservancy more than any other State in the country.

I also want thank the people at Goldman Sachs, many of whom have contributed to the work of my Foundation, and the work we do around the world to try to fight AIDS and extend economic opportunity, to promote education and citizen service and to try to bridge the racial and religious divides that still bedevil the world. And I want thank Goldman Sachs for hiring at least a dozen people, who worked in the White House and other places in the administration. I was worried about what all those young people were going to do when we left office. [LAUGHS] So I am deeply in your debt....

www.kycbs.net/Clinton-Speech-2004-Global-Conference.htm

See also:

www.kycbs.net/Confessions.htm

www.kycbs.net/GoldmanSachs.htm

www.kycbs.net/MaunawiliValley.htm

www.kycbs.net/NatureConservancy.htm

www.kycbs.net/Nature-Conservancy-Hawaii.htm

www.kycbs.net/Global-Fund.htm

www.kycbs.net/Peregrine-Fund.htm

www.kycbs.net/Peregrine-Gallery.htm

www.kycbs.net/CV05-00030-Witness-Paulson-Henry.htm

www.kycbs.net/CV05-00030-Witness-Rubin-Robert.htm

www.kycbs.net/CV05-00030-Witness-Peters-Henry.htm

www.kycbs.net/CV05-00030-Witness-Waihee-John.htm

www.kycbs.net/CV05-00030-Witness-Clinton-Bill.htm

www.kycbs.net/CV05-00030-Witness-Clinton-Hillary.htm

www.kycbs.net/CV05-00030-Witness-Chang-Kevin.htm

www.kycbs.net/CV05-00030-Witness-Mailer-Dee-Jay.htm

www.kycbs.net/CV05-00030-Witness-Kurren-Faye.htm

www.kycbs.net/CV05-00030-Witness-Alston-Paul.htm

www.kycbs.net/CV05-00030-Witness-Fuqua-Judith.htm

www.kycbs.net/CV05-00030-Witness-Apoliona-Haunani.htm

www.kycbs.net/CV05-00030-Witness-Dunn-Greg.htm

www.kycbs.net/CV05-00030-Witness-Arrigo-Sue.htm

www.kycbs.net/CV05-00030-Witness-Lingle-Linda.htm

www.kycbs.net/CV05-00030-Witness-Crowe-William.htm

www.kycbs.net/CV05-00030-Witness-Kissinger-Henry.htm

www.kycbs.net/CV05-00030-Witness-Farmer-David.htm

~ ~ ~

NEW DISCOVERY (03/13/08):

March 13, 2008

Jervis pleads not guilty in attack

The former official for Kamehameha Schools is accused of ramming his car into an SUV

By Gregg K. Kakesako, Star-Bulletin

Former Kamehameha Schools trustee Gerard Jervis pleaded not guilty yesterday to first-degree criminal property damage for allegedly using his car to ram a sport utility vehicle carrying teenagers who he said threw eggs at his house.

Jervis appeared in Honolulu District Court with two attorneys, his wife and about a half-dozen other people described as family. He did not speak to reporters as he left the courtroom.

Attorney Dan Oyasato said Jervis would have no comment on either the "public perception" or the "public discussion of this matter."

"Mr. Jervis is maintaining his innocence," Oyasato said.

District Judge Russel Nagata granted a motion by another Jervis attorney, Dean Hoe, that the SUV not be touched for the next two weeks so it can be inspected. Nagata scheduled a preliminary hearing for 1:30 p.m. April 3.

Jervis was arrested Friday night after a car chase in which the SUV ended up suspended on a utility pole guy wire. He was also arrested for investigation of driving under the influence of an intoxicant but has not been charged with that offense.

Lawyer Paul Cunney said earlier that Jervis had just returned to his Lanikai home from dinner when the egging occurred. Cunney said Jervis got into his BMW sedan, followed the SUV and flashed his lights to get it to stop. He said Jervis only hit the SUV after it lost control on a turn and crashed.

Four teenagers in the SUV were identified by Cunney as Saint Louis School students.

http://starbulletin.com/2008/03/13/news/story07.html

~ ~ ~

NEW DISCOVERY (03-09-08):

March 9, 2008

Former trustee arrested after
Lanikai car chase, crash

Teenagers egged home of former trustee Gerard Jervis,
who gave chase while drunk, say police

By Gene Park, Star-Bulletin

Former Bishop Estate trustee Gerard Jervis was drunk when he rammed his black BMW sedan into a sport utility vehicle carrying four teenagers late Friday night in Lanikai, Honolulu police said.

Jervis was arrested following a car chase through Lanikai that ended with the SUV hanging off of a telephone cable at the intersection of Aalapapa and Kaelepulu drives.

The SUV was propelled up a telephone pole, and stayed in a vertical position, "risking the lives" of the four 17-year-old boys, police said.

Neither Jervis nor the boys were injured in the incident.

Police said Jervis got into his car and drove after the boys after they allegedly threw eggs at his Onekea Street house and neighboring homes at about 11 p.m. Friday night.

Jervis was arrested on suspicion of first-degree criminal property damage and driving under the influence and remained in police custody last night at the main cellblock downtown. The driver of the SUV was also arrested on suspicion of driving under the influence. Police said they have also opened a harassment investigation against the boys in connection with the egg-throwing.

Neighbors described Jervis' behavior as being "out of control" after he rammed the SUV, and said he continued to yell and curse at the boys following the crash.

"Jervis was out of his mind," said Lanikai resident Marya Grambs, adding that he looked like he wanted to fight the boys.

Grambs pulled the boys away from Jervis. She said the boys appeared frightened and she offered them water and sodas, while Jervis continued to yell near the crash site.

"He was saying, 'You're acting innocent and you know you're not innocent and you keep doing this to my house,'" she said. "And just swearing expletives, expletives, expletives."

Police were at the intersection yesterday, taking photos and examining the skid marks left by the boys' vehicle.

Vandalism, car break-ins and house egging are common in Lanikai, residents said. Jervis' neighbor, Dan Jordan, said mailboxes get hit with baseball bats and houses are often egged. Egg shells could be seen around the neighborhood yesterday.

"I could imagine Gerry was just sick of it," Jordan said. "If it wasn't Gerry that went after them, I might've done the same because I think everybody's sick of it."

Grambs said she's glad the boys were OK, and that she believes the vandalism and break-ins may stop. However, she said she doesn't condone Jervis' behavior.

"The kids almost got killed," Grambs said. "They could've smashed into a wall. You understand that people get angry, but that's vigilante justice and that's never right."

Jervis, 59, an attorney, was among the five trustees of the Bishop Estate who resigned or were forced out after a scandal over mismanagement of the multibillion-dollar trust that funds the Kamehameha Schools.

He resigned in 1999 after the Internal Revenue Service threatened to revoke the estate's tax-exempt status if the board was not removed.

Jervis was involved in a scandal with a trust lawyer who killed herself the day after they were found having sex in a restroom at the Hawaii Prince Hotel.

Jervis was later hospitalized after overdosing on sleeping pills.

http://starbulletin.com/2008/03/09/news/story03.html

~ ~ ~

March 12, 1999

Jervis recovering
after overdose

Bishop Estate trustee Gerard Jervis
is hospitalized after taking an
overdose of sleeping pills

Details were about to be revealed of
a sexual encounter in a hotel restroom
stall with an estate employee

Rick Daysog and Christine Donnelly
Star-Bulletin

Bishop Estate trustee Gerard Jervis remained hospitalized a day after overdosing on sleeping pills as his involvement with a woman who apparently committed suicide last week was about to become public.

The 50-year-old Jervis, who was rushed to Castle Medical Center from his Kailua home around noon yesterday, was expected to recover but intends to take a medical leave of absence from his $843,000-a-year post, according to his lawyer, Ronald Sakamoto. The lawyer said he did not know whether the overdose was intentional.

The overdose came about a week after the death of Bishop Estate lawyer Rene Ojiri Kitaoka, who died from apparent carbon monoxide poisoning in the garage of her Kaneohe home on March 3, police said. The night before, Jervis and Kitaoka had been thrown out of the Hawaii Prince Hotel after security guards found them in a compromising position in a stall in a men's restroom, according to a source familiar with the incident.

The two, who had dinner together at a hotel restaurant earlier that night, were identified, photographed and escorted off the premises by the guards, the source said.

Dean Dantsuka, assistant manager of the Hawaii Prince, refused to confirm the report, referring all queries to Kelly Conmey of MacNeil Wilson Communications. She also declined comment.

Sakamoto said yesterday that there was a basis "for the reported incident" but that some of the details had been inaccurately described. He declined to elaborate.

The lawyer said Jervis was "saddened and distraught" by Kitaoka's death.

Her husband, Scott Kitaoka, did not return phone messages last night. According to police reports, he found his wife in her car while it was running in their enclosed garage. She did not leave a note.

She was pronounced dead at the scene and police have classified the case a suicide pending toxicology results. Besides her husband, she is survived by parents Jerry and Laura Ojiri and sister Donna Ojiri.

Kekoa Paulsen, a spokesman for the Bishop Estate, said that co-workers regarded the 39-year-old Kitaoka, who was born on Maui, as a bright and hardworking employee.

A 1984 graduate of Georgetown Law School, she came to the Bishop Estate from the Cades Schutte Fleming & Wright law firm and later became general counsel for the estate's for-profit Kamehameha Investment Corp. subsidiary. At KIC, she worked with Jervis, who was chairman of the company.

Sakamoto said he would ask the trustees of the multibillion dollar estate for a medical leave for Jervis. Still at issue was whether the events would force Jervis to resign permanently. But even his temporary absence would add new pressures to a boardroom already fraught with tension.

Jervis and fellow trustee Oswald Stender are seeking the removal of fellow trustee Lokelani Lindsey for alleged breaches of trust. Jervis -- along with trustees Lindsey, Richard "Dickie" Wong and Henry Peters -- are also the target of a temporary removal petition by state Attorney General Margery Bronster, who has been investigating allegations of financial mismanagement by trustees.

The attorney general's office also reportedly had inquired into Jervis' alleged involvement with Kitaoka. And Jervis was aware reporters had been looking into it.

Jervis, a Bishop Estate trustee since 1994, is the youngest member of the five-member board. A trial attorney by training, Jervis is considered a political insider and is a longtime associate for former Gov. John Waihee.

A 1979 graduate of the University of Hawaii Law School, he served on the powerful Judicial Selection Commission. He also is a past member of the UH Board of Regents.

Jervis's wife, Avis, was with him at the hospital yesterday and did not return requests for comment.

But longtime friends and associates expressed total surprise at the events.

"He is a very dear friend and this is a complete shock. I have nothing more to say right now," said William Boyle, a Kailua Realtor and partner with Jervis in a Big Island housing venture.

Retired Circuit Judge Patrick Yim, who was the estate's fact-finder during the campus controversy, declined to speculate how the developments might impact the legal battle being fought at the Bishop Estate.

"I'm as surprised as you are and probably as surprised as everyone else in Honolulu," Yim said.

http://starbulletin.com/1999/03/12/news/story1.html

~ ~ ~

NEW DISCOVERY (02-09-08): Kamehameha Schools made a “confidential” settlement agreement with the plaintiff in the John Doe vs. Kamehameha Schools case, which my former attorney, John Goemans, Esq., says, according to what he has learned from the IRS, violates the rules for a non-profit charitable trust:

February 9, 2008

$7M

An attorney involved in a challenge to Kamehameha Schools' Hawaiians-only policy reveals the amount of a settlement

By Ken Kobayashi, Honolulu Star-Bulletin

Kamehameha Schools made the first move to settle a legal challenge to their admissions policy giving preference to native Hawaiians and later agreed to pay $7 million, a lawyer involved in the case said yesterday.

John Goemans, an attorney for an unnamed non-native Hawaiian student who filed a lawsuit contesting the policy, said the charitable trust offered for the first time to talk about an out-of-court settlement last May, just days before the U.S. Supreme Court was to decide whether to hear the case.

Goemans, a former Big Island attorney recuperating in Florida from heart surgery, and Sacramento, Calif., lawyer Eric Grant, the lead attorney, represented the unnamed student and his mother.

"They (the schools) approached Eric and said we wanted to settle and we have to settle by Friday morning," when it was believed the high court was to make a decision about accepting the case, Goemans said.

He said it appeared the high court would accept their appeal of an 8-7 decision by the 9th U.S. Circuit Court of Appeals that upheld the policy.

"They (the schools) were worried about losing in the Supreme Court," Goemans said.

Goemans said he did not know how Grant and the Kamehameha Schools arrived at the $7 million figure.

The hotly disputed federal civil rights lawsuit caused a firestorm of controversy among Kamehameha Schools supporters who believed the challenge struck at the more than century-old admissions policy and the heart of the charitable trust's mission to educate children of Hawaiian ancestry.

The confidential settlement was announced on May 14. Those connected with the case repeatedly refused to disclose the terms.

Goemans said he was disclosing the amount because he said he recently learned from Internal Revenue Service officials that Kamehameha Schools, a tax-exempt charitable trust, cannot keep the figure confidential.

"Because exempt organizations operate in the public good, you got to report all your expenses with particularity, and you cannot keep information relative to those expenses confidential," he said. "It's in the public interest to have full disclosure."

Ann Botticelli, Kamehameha Schools spokeswoman, said yesterday the settlement contained a confidentiality clause.

"We intend to honor the terms, and we will not be discussing the settlement or John Goemans' assertions," she said.

Grant said yesterday he had no comment.

Kamehameha Schools, a multibillion-dollar charitable trust and the state's largest private landowner, was established under the 1883 will of Princess Bernice Pauahi Bishop. It educates more than 6,700 students at its flagship campus at Kapalama Heights, two other campuses on Maui and the Big Island, and 31 preschools throughout the state.

Senior U.S. District Judge Alan Kay upheld the school's Hawaiians-first policy, but a panel of the appeals court in San Francisco ruled 2-1 that the practice violated federal civil rights laws. That decision triggered statewide protests and marches by school supporters.

Later, a larger appeals court panel voted 8-7 to uphold the policy.

It was an appeal by Grant of that 8-7 ruling that was on the doorsteps of the U.S. Supreme Court when the settlement was announced.

At the time, school officials indicated that the settlement calling for the dismissal of the lawsuit leaves intact the appeals court's 8-7 decision upholding the admissions policy.

But the dismissal does not guarantee that another lawsuit might surface and make its way to the high court, although it would first have to go through the federal trial and appeals courts, where the 8-7 ruling would be considered to be binding on the issue. But even if those who file the new lawsuit lose on those two levels, they could still ask the high court to review the case.

Honolulu attorney David Rosen said he has plaintiffs for a lawsuit to challenge the admissions policy. He said the settlement does not affect his case. Rosen said he expects the suit will be filed this year.

Goemans said Grant received 40 percent, or $2.8 million of the $7 million. Goemans said he is preparing to file his own lawsuit seeking to recover a "reasonable percentage" of the $7 million for his work in the case.

Goemans said he found the unnamed student and arranged for Grant to be the attorney for the student and his mother.

"I put the whole thing together," Goemans said. "But for me there would not have been a $7 million payment."

The student never was admitted to Kamehameha Schools because his case was pending. He has since graduated from high school and had been attending college, Grant said last year.

http://starbulletin.com/2008/02/09/news/story02.html

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February 9, 2008

Amount of settlement
raises critical concern

By Robert Shikina, rshikina@starbulletin.com

Supporters and critics expressed surprise yesterday at the $7 million Kamehameha Schools paid a student to settle a lawsuit disputing its Hawaiians-first admission policy.

One Kamehameha Schools alumnus says disclosure of the settlement with the anonymous, non-Hawaiian student will prompt questions among Hawaiians.

"I'm not happy with $7 million," said Kamehameha Schools alumnus Jan E. Hanohano Dill. "Unfortunately, that's a lot of money, and it's going to create a lot of questions in the Hawaiian community whether it was right or wrong and to continue."

Dill, also a board member of Na Pua a Ke Ali'i Pauahi, a nonprofit group whose members include students, parents, and alumni of Kamehameha Schools, said he continues to support the school's decision.

"I don't know the details, and I think that's something that has to be cleared," he said. "You settle because you want to avoid costs that would be incurred as you go forward."

He added, "I have to believe that they understood that this was something good for the Hawaiian people. ... It will be clear as things unfold whether that was true."

Dill, who is also president of the nonprofit Partners in Development Foundation, said the admissions policy must eventually be addressed and that the settlement avoids this case but does not stop other cases.

Marion Joy, former vice president of Na Pua, called the settlement a "misuse of trust funds."

"The trust is continually going to be challenged," she said. "This is not going to be the last. ... As far as settling for the particular lawsuit, it's not in the best interests of the beneficiaries (of the 1883 will of Princess Bernice Pauahi Bishop)."

Kamehameha Schools declined comment.

Honolulu attorney David Rosen, who has sought potential clients to sue Kamehameha over its admissions policy after the settlement, sent out a statement yesterday that said the $7 million settlement was used to "buy off this case."

He added that the trustees should open a campus on the Leeward Coast of Oahu and possibly Molokai where increased educational opportunities are needed.

H. William Burgess, a retired attorney and founder of Aloha for All, a group opposed to Hawaiian sovereignty, said the settlement raises questions about the proper use of the trust funds.

"Normally, trustees, if they're doubtful about doing something, they ask the court to give them instructions," he said. "Yet in this case, the biggest charitable trust, probably in the nation, instead of welcoming the opportunity to get the highest court in the land to settle it, they pay $7 million to leave it open. And it is very much open."

http://starbulletin.com/2008/02/09/news/story03.html

* * *

From The Catbird Seat website:

The Wise Old Owl asks: How much of the settlement amount came from Kamehameha’s insurance companies, and how much came from the trust funds? How much did Kamehameha Schools (and/or their insurance company) spend for defense costs in this case before they decided to settle? Who is their insurance company? Their insurance broker? Who actually signed the Settlement Agreement?

http://www.kycbs.net/Bishop7.htm

~ ~ ~

NEW DISCOVERIES (02-04-08): Re: FURTHER EVIDENCE OF UNDISCLOSED, CONFLICTING PROFESSIONAL AND FINANCIAL RELATIONSHIPS BETWEEN TRUSTEE DAVID C. FARMER AND WITNESSES, FORMER GOVERNOR JOHN WAIHEE, GERARD JERVIS, NATHAN AIPA, AND BRUCE GRAHAM, ESQ, OF THE LAW FIRM OF ASHFORD & WRISTON:

http://www.kycbs.net/EQ2048-Adler-Aipa-3-15-95.pdf

http://www.kycbs.net/EQ-Adler-Cartwright-4-14-95.pdf

http://starbulletin.com/2007/08/09/editorial/special.html

http://www.actec.org/private/freeform/page.asp?PageID=614

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August 27, 2005

Reservation for a Broken Trust?
Special from Hawaii Free Press
By Andrew Walden

The Aug. 25, 2005, announcement of an agreement between Gov. Linda Lingle and the Bush administration’s Department of Justice on four amendments to the Akaka Bill (S147) increases the chances of the Bill’s passage in the U.S. Senate and the House. Since no court in the history of the United States has ever overturned Congressional approval of a tribal group, there is cause to look ahead at the possible forms a Hawaiian "tribal" government could take.

U.S. history has precedent for two types of native organizations: Indian reservations and Alaskan native corporations. Alaskan native corporations are for-profit corporations owned and operated by the members of native Alaskan tribes as stockholders. Each member is an equal shareholder. They are subject to most of U.S. corporate law, but are able to protect the tribal benefits from race-discrimination lawsuit claims by providing benefits on the basis of tribal membership rather than race -- even when the two are indistinguishable.

Alaskan natives have been able to enjoy the profits coming from their corporate assets, thus increasing their economic status. Indian Reservations, on the other hand, operate often as a power unto themselves without state oversight and with very limited federal oversight. For that reason, poverty and corruption are the norm on many U.S. Indian reservations.

Contrary to popular opinion, Indian reservations have a history in Hawaii. An Oct. 12, 1999, article in the Honolulu Star-Bulletin describes the efforts of Kamehameha Schools/Bishop Estate (KSBE) trustees in 1995 to evade oversight of their corrupt doings. The Trustees’ self-serving investments caused losses of $264,090,257 in 1994 alone. To avoid scrutiny, they considered moving KSBE corporate headquarters out of Hawaii to the windswept plains of the Cheyenne River Sioux Indian reservation in South Dakota (See http://www.kycbs.net/EQ2048-Adler-Aipa-3-15-95.pdf and http://www.kycbs.net/EQ2048-Adler-Cartwright-4-14-95.pdf )

In an apparent attempt to circumvent state and federal oversight, the Bishop Estate paid Washington D.C.-based (law firm) Verner Liipfert Bernhard McPherson and Hand more than $200,000 to look into moving the estate's legal domicile, or corporate address, to the mainland, sources said.

Verner Liipfert, whose local office is headed by former Gov. John Waihee, identified the Cheyenne River Sioux Reservation as the top relocation prospect after reviewing the legislative, tax and judicial environments of 48 mainland states and Alaska.

The study was part of a broader effort by the former board members to lobby against federal legislation limiting trustee compensation and to convert the tax-exempt Bishop Estate to a for-profit corporation.

The KSBE trustees’ efforts are also described in "The Cheating of America" by Charles Lewis and Bill Allison of The Center for Public Integrity. They quote former Hawaii Attorney General Margery Bronster explaining KSBE’s actions: "Their main motivation was to avoid oversight from the State Attorney General and the IRS."

The Honolulu Star-Bulletin further points out:

Gregg Bourland, chairman of the Cheyenne River Sioux tribal council … said there is good reason for an entity like the Bishop Estate to make inquiries about changing its domicile to the South Dakota reservation ...

Since the 1800s, the Cheyenne River Sioux have had a government-to-government relationship with the United States which allows them to operate their own police force, court system and legislative functions.

Such a system may shield the trust from Hawaii Probate Court jurisdiction, although Bourland was unsure if the IRS would continue to oversee the trust.

Such a move would have also shielded Bishop Estate from the investigations that state Attorney General Margery Bronster was forced to launch as "Broken Trust" revelations emerged in the press. According to Lewis and Allison the activities Bishop Estate trustees were attempting to shield included:

Giving themselves significant pay raises, even while programs at the school were being cut;

Moving profits from the estate’s taxable subsidiaries back into the (non-profit) estate to lessen the subsidiaries’ tax burdens;

Investing in questionable ventures recommended by a trustee’s personal acquaintances, including an Internet directory of would-be-adult-film actors and casting agents;

Frequenting adult entertainment clubs and casinos using money from the charitable trust’s coffers, reportedly inviting state legislators on such trips; and

Lobbying Congress to defeat or alter legislation designed to give the IRS more authority to penalize their multi-million dollar compensation packages.

As U.S. District Judge Samuel King told the Honolulu Star-Bulletin:

"It's another indication of how arrogant, greedy and insensitive this whole bunch is ... Their claim that they are supporting Princess Pauahi's will is laughable."

While looking into a move to the Cheyenne River Reservation, KSBE trustees paid $900,000 for Verner, Liipfert to lobby Washington against the 1996 "Intermediate Sanctions Act" which, as Lewis and Allison explain:

...(would impose) an excise tax on "insiders" at non-profit organizations who partake in "excessive benefit transactions" --exactly the sort of transactions that the Bishop Estate trustees were involved in for years.

Among those enlisted by the Bishop Estate was former Hawaii governor John Waihee, who after leaving the gubernatorial mansion joined Verner, Liipfert. Waihee met with Clinton’s then deputy chief of staff, Erskine Bowles, in late 1995 to discuss the bill; he and his wife have also spent the night at the White House as a guest of the President (Clinton). Waihee’s partner at Verner Liipfert, former Senate majority leader George Mitchell, also contacted Clinton’s then chief of staff, Leon Panetta, about the bill.

The Akaka Bill is justified by its supporters as necessary for the defense of public and private native Hawaiian entitlement programs set up beginning with the 1884 founding of the Bishop Estate, continuing with the 1920 Hawaiian Homelands Act and the 1978 creation of the Office of Hawaiian Affairs.

These programs are thrown into question by what Hawaiian leaders refer to as "the lawsuits" -- starting with Rice v. Cayetano. The Feb. 23, 2000, U.S. Supreme Court decision in the Rice v Cayetano case ended Hawaiian-only elections for the Office of Hawaiian Affairs (OHA). Rice’s attorney at the time of filing in 1996 was John Goemans, a former Hawaii Democratic state legislator who describes himself as a "left wing liberal" in an Oct. 27, 2003, interview with The Honolulu Advertiser. Representing the state of Hawaii before the U.S. Supreme Court was John Roberts. Roberts is now President Bush’s nominee for the U.S. Supreme Court.

But these were not the only attacks on Hawaiian entitlements in the 1990s. In fact what Hawaiian leaders refer to as "the lawsuits" began almost exactly at the same time as the Broken Trust scandal revelations emerged. Lokelani Lindsey, the last of the five "Broken Trust" Bishop Estate trustees, was forced to resign Dec. 16, 1999. A few months later, in 2000, the first version of the bill that bears his name was introduced by Sen. Daniel Akaka.

Passage of the Akaka Bill would open up debate and negotiations on the form and scope of a new Hawaiian government. This could bring lobbying for an Indian Reservation by those political forces wishing to restart their looting of Princess Bernice Pauahi’s legacy.

The corrupt forces who believe in moderation to avoid detection may favor the Alaskan Native Corporation model. To understand the danger posed by adoption of the Indian Reservation model, consider this: over 100 Hawaii Democrat politicians (and one Republican) have been charged, convicted and sentenced for campaign spending violations and other illegal political schemes since 1997.

Current OHA trustees include OHA Vice President, John Waihee IV, son of former governor John Waihee III.

Another current OHA trustee is Oswald Stender who resigned as a Bishop Estate trustee in 1999. Singled out for praise by the five authors of the key "Broken Trust" Honolulu Star-Bulletin article, Stender nonetheless was one of the five trustees whose high pay forced the IRS to threaten to revoke non-profit status for KSBE.

OHA Chief Counsel, Robert Klein was an associate justice of the Hawaii Supreme Court until he resigned on Feb. 1, 2000. He authored the PASH decision in 1995 which includes the statement, "western understandings of property law … are not universally applicable in Hawaii." An editorial in the Jan. 19, 2000, Honolulu Star-Bulletin explains:

Klein’s most notable act as a Supreme Court justice may have been his authorship of a decision allowing native Hawaiians to go onto private property to engage in traditional religious, cultural and gathering practices ...

Klein disagreed with the decision by the other four justices in December 1997 to withdraw from the role of appointing trustees for the Bishop Estate, calling it an "uncharted leap of blind faith."

Klein admits giving "recommendations" for Kamehameha School admission while serving on the Supreme Court bench. As an April 3, 2001, Honolulu Star-Bulletin article explains:

'''In sworn testimony, the (Bishop) estate's admissions director, Wayne Chang, said that former (Bishop Estate) trustee Lokelani Lindsey ordered him to admit the child only after she received a request from then-state Supreme Court Associate Justice Robert Klein ..."

Chang -- in a Aug. 11, 1998, deposition taken in preparation for the trial to oust Lindsey -- said ex-board members Lindsey, Gerard Jervis and Henry Peters and senior school officials pulled strings for friends and relatives of several politically connected isle families, including:

A distant relative of ex-Gov. John Waihee.

A relative of Big Island rancher Larry Mehau.

Former state Sen. Milton Holt's sons.

The former trustees denied that they influenced the admission process. However, investigations by the Internal Revenue Service, the Attorney General's Office and the estate's internal auditors concluded that trust officials improperly influenced the Kamehameha Schools' admissions and financial aid awards.

Lindsey declined comment, but Klein confirmed that he spoke with the former trustee after the child's mother, a longtime friend, asked him to put in a good word. Klein said he saw no conflict in the request and added that school administrators were welcome to ignore his recommendation.

'''"The fact of the matter is, judges recommend children and people for jobs (and schools) all the time, whether it's Punahou Schools or Kamehameha Schools," said Klein, who is now in private practice. "That's what judges do. That's what people do in this community ..."

Those kind of "doings" would be facilitated by lack of state and federal legal oversight -- such as on an Indian reservation. Recent debate over the support for ANWR drilling by Hawaii Senators Daniel Akaka and Daniel Inouye is a further reflection of opposition to the Alaskan Native Corporations (ANCs). In an April 20, 2005, article published in Honolulu Weekly and later in the Hawaii Island Journal, Lance Holter, the Maui Group Chairman and Conservation Chair for the Hawaii Sierra Club, condemns as "corporate" those ANCs which dare to support oil drilling on their own lands:

[Inouye] speaks about these 229 tribes, which are really corporate entities. They are not tribal governments; they are not representative of the tribe.

Robin and Jade Danner are leaders of the Council for Native Hawaiian Advancement (CANH). Native Hawaiians who lived for many years in Barrow, Alaska before their return to Kauai, the Danner sisters have extensive experience with ANCs. They might reasonably be expected to champion the formation of one or more Hawaiian Native Corporations modeled on the Alaskan natives’ experience. Opposing the Danners publicly, are the secessionists calling for reestablishment of an independent Hawaii. A key series of 2003 articles attacking the Danners are authored by Anne Keala Kelly and reproduced on several secessionist Web sites. They are attacked for working with "corporate" ANCs and oil lobbyists in support of ANWR drilling. Kelly, a supporter of independence, spoke in Honolulu at an Aug. 23, 2005, Akaka Bill forum held in the Japanese Cultural Center.

Some Indian reservations (including Cheyenne River) have their own judiciary, legislature, and executive branches of government. The secessionists’ rhetoric could lead them to prefer these "sovereign" trappings. They claim the Akaka process represents a surrender of sovereignty on the part of the Hawaiian people. This sly choice of argument against Akaka will create a justification for participation in the Akaka process once that sovereignty has been "surrendered."

The "Nation of Hawaii" group led by convicted felon Dennis "Bumpy" Kanahele (who was pardoned by former Gov. Benjamin Cayetano) seems to be preparing for integration into the "official" Hawaiian institutions. One sign of this are the December 2004 speeches given by Kanahele’s attorney Francis Boyle in a series of "Nation of Hawaii" meetings across the state. The events were funded by the Office of Hawaiian Affairs. Boyle is a University of Illinois law professor who also works for the Palestine Liberation Organization, the Bosnian Government, and Chechen forces led by the recently departed Aslan Maskhadov. Notably, Boyle has also represented the Lakota Nation of the Cheyenne River Sioux Indian Reservation. At a 1998 UH Hilo meeting, Boyle spoke alongside a Lakota representative to Hawaiian sovereignty activists discussing "human rights, land titles and the Hawaiian Kingdom."

In his December 2004 speeches, Boyle advised the assembled crowds: "what we really need now is a government of national unity for the Kingdom of Hawaii. We need all the disparate groups and factions to come together and settle ... this was the situation that confronted the Palestinians 35 years ago. There were many different groups, and organizations, and factions. And yet eventually the late president Arafat and his organization Fatah were able to pull them all together, and by the process of consensus and debate and argument and set up a government."

The demented idea that the West Bank and Gaza show a way forward for the Hawaiian people is so distracting that it may prevent readers from noting what underlies: an implied appeal for independence activists to involve themselves in OHA and other official Hawaiian bodies. The array of social programs administered by OHA, Department of Hawaiian Home Lands and the private trusts such a KSBE are certainly the closest thing to an Hawaiian "government of national unity" existing today.

With its own judiciary, legislature and executive branch and government-to-government relations with the U.S. government, the Indian reservation model provided by the Cheyenne River Sioux creates enough of an illusion of independence that they could justify it to their supporters. If the Akaka Bill passes, Hawaii can look forward to an effort on the part of the "sovereignty" activists and the corrupt to push this model.

Anyone following the stories of Enron, WorldCom, Martha Stewart, and other corporate disasters in the recent news knows that organizing as a corporation does not guarantee clean operations. But the corporate model does allow oversight by the state Attorney General, the IRS and other public agencies. This type of oversight brought these scandals to light and brought some malefactors to justice. This same oversight brought the Broken Trust trustees of KSBE and some of their cronies to heel, if only for them to then scatter and form new schemes. The Alaskan Native Corporation model maximizes the protection given Hawaiian beneficiaries and the body politic of Hawaii by increasing the enforcement power necessary to expose and prosecute corrupt activities.

Hnolulu Star-Bulletin on Akaka Amendments:

http://starbulletin.com/2005/08/24/news/index5.html

Recognition of Tribes:

http://www.tribalnation.com/RescindStatus.html

PASH Decision: PASH decision KSBE activities:

http://www.the-catbird-seat.net/Bishop.htm

(Note: This website was closed down by Order of Judge David Ezra at the request of the United States Department of Justice. It can now be found at http://www.kycbs.net/Bishop.htm. See http://www.kycbs.net/Confessions.htm for more information.)

Honolulu Star-Bulletin "Broken Trust" archive:

http://starbulletin.com/specials/bishop.html

Articles attacking the Danners:

http://www.angelfire.com/hi2/hawaiiansovereignty/AkakaAlaskaKelly.html

Boyle’s PLO Speech:

http://hawaii-nation.org/boyle-transcript-2004.html

Andrew Walden is the publisher and editor of Hawaii Free Press, a Big Island-based newspaper. He can be reached via email at mailto: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 mailto:Malia@HawaiiReporter.com

www.kycbs.net/Reservation-Broken-Trust-Walden-8-27-5.mht

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September 30, 1997

Trouble dogs project
by Bishop trustee

Lawsuits and delays plague
the 50-home Kona subdivision

By Rick Daysog, Star-Bulletin

When Bishop Estate Trustee Gerard Jervis and Kailua Realtor William Boyle formed White Hat Development Corp. in 1992, they envisioned themselves as good guys riding to the rescue of the affordable housing problem.

But these days, the partners have been busy rescuing their company from creditors.

Bank of Hawaii sued White Hat in August, alleging then that the company -- which is developing a 50-unit, affordable housing project in North Kona called University Heights West -- didn't make interest or principal payments on a 90-day, $50,000 loan that was due in February.

That suit came after R.M. Towill Corp. sued White Hat in June, saying it made "repeated demands" of the developers to pay $81,160.83 plus interest for engineering services that Towill conducted in 1994 and 1995.

The complaints recently were dismissed without prejudice, meaning that they could be brought back if payments aren't made. White Hat said the suits shouldn't have been filed in the first place and were the result of miscommunication between the creditors and their outside attorneys. White Hat said they're in the process of paying back the debts.

Jervis, White Hat's president and director, said that he has played a limited role in the development company since becoming a Bishop Estate trustee in 1994. He said he has been winding down his outside interest during the past 21/2 years but found it difficult to step away from White Hat since its development was already under way.

"This is a private matter," Jervis said. "There's no connection (to Bishop Estate)."

But one longtime Bishop Estate observer said the suits against Jervis's private company raises questions about how the trustee manages Bishop Estate's affairs -- a point that Jervis dismissed as an "offensive leap of logic."

"It's surprising that a trustee would be involving in that much litigation involving his own private interests," said Desmond Byrne. "If a trustee is involved in a bunch of lawsuits on their own deals, it raises a red flag."

The litigation is the latest obstacle faced by the project, which is years delayed.

About four years ago, the developers began marketing the project -- which is located on a 19-acre hillside strip near Keahole Airport -- and took reservations from about 350 prospective home buyers for 109 homes that they then planned to build, according to William Boyle, White Hat's vice president and director.

The company -- which paid $1.06 million in 1995 for the project's land after holding it under options for several years -- also sought a joint venture partner to help finance construction.

But when the Big Island real estate market went south in the early 1990s, the developers put the initial sales effort on hold. The downturn also made it difficult to attract partners, Boyle said.

"Everybody expressed disappointment that the project didn't work (then) but there haven't been a lot of (affordable) projects that have worked in west Hawaii," said Suzanne Patterson, Realtor and co-owner of the Prudential West Hawaii Realty, the listing agent for the project. "But this is going ahead."

Boyle said the developers have made the project more attractive by doubling lot sizes and reducing the number of homes to 50.

Prices for fee-simple, two-bedroom and three-bedroom homes at University Heights West start at $139,900 and top at $175,500. The lots ranging from 10,000 square feet to 20,000 square feet, according to a sales brochure.

Boyle said that there is strong demand for affordable housing in Kona and said about 80 percent of the project's 50 units already have been reserved by prospective buyers, who have submitted downpayments of about $1,000.

A recent study by The Prudential Locations Inc. shows that there are only six months of housing inventory for three-bedroom homes under $175,000 in the greater Kailua-Kona area.

"This is an exceptional, meritorious project," Boyle said. "We've made this an attractive project."

According to Boyle, the company hopes to get its construction loan by next month and plans to break ground soon after.

Boyle and Jervis both said that building will be financed by sales and the construction loan.

They both stressed that Bishop Estate has not invested any money in University Heights West nor have estate staffers worked on behalf of the project.

Bishop Estate declined comment, saying it has no involvement with White Hat. The estate referred all questions about White Hat to Jervis.

Boyle noted that the University Heights West project is unrelated to the 500-acre University of Hawaii Kona campus that was planned by the Waihee administration in the early 1990s. The campus, which lies next door to the White Hat project, has been put on the back burner by the Cayetano administration due to cost concerns.

Jervis is a long-time ally of former Gov. John Waihee and served on the state Judicial Selection Commission in the Waihee years.

Boyle said that the two suits against White Hat were due to a miscommunication between the creditors and their outside attorneys who filed the suits. He noted that White Hat is working to resolve the debts with Towill and Bank of Hawaii....

http://starbulletin.com/97/09/30/business/index.html

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January 10, 2003

Charitable trust settles
political investigation

Kamehameha Schools agrees
to pay a $10,000 fine

By Rick Daysog, Star-Bulletin

The Kamehameha Schools has agreed to pay a $10,000 fine to settle the state Campaign Spending Commission's 2 1/2-year-old investigation into the estate's political activities.

Without admitting or denying wrongdoing, the $6 billion charitable trust agreed to settle with the commission, ending the only remaining investigation of the Kamehameha Schools' former trustees Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, Oswald Stender and Gerard Jervis. The fine, which will be paid to the Hawaii Election Campaign Trust Fund, requires the approval of the commission's five-member board, which will meet on Thursday.

Kamehameha Schools' Chief Executive Hamilton McCubbin said the agreement avoids a costly, protracted legal battle and will allow the trust to focus resources on its educational mission.

"It resolves one of the last remaining issues relating to the former management of the trust," McCubbin said.

Bob Watada, the commission's executive director, said he did not seek a larger fine against Kamehameha Schools since the former trustees who took part in the political activities have resigned and the estate's current managers and board of trustees have implemented significant reforms.

Watada also noted that former staffers such as the late Namlyn Snow, who headed the government relations division, have either died or have left the trust, while recipients of the estate's political support such as former state Sens. Milton Holt and Marshall Ige have been convicted of criminal charges.

"I think it's clear the Kamehameha Schools has taken steps to make sure that they don't get involved in political campaigns," Watada said.

The commission began its investigation in April 2000, looking into more than $200,000 in polling that the trust conducted on behalf of several prominent state lawmakers during the 1990s.

The commission also was looking into tens of thousands of dollars in political fund-raising tickets that the trust funneled to its employees and outside contractors.

Watada said evidence included in more than 40,000 pages of internal trust documents and witness interviews indicated that the trust operated an in-house network that distributed fund-raiser tickets to trustees and their relatives, staffers and to the estate's engineering, architecture and law firms.

Recipients included Honolulu Mayor Jeremy Harris, former Mayor Frank Fasi, U.S. Rep. Neil Abercrombie and former Honolulu City Councilman Arnold Morgado.

Under federal tax law, charities like the Kamehameha Schools can lose their tax-exempt status for making political contributions.

In the early 1990s the trust also hired a pollster, QMark Research & Polling, to conduct political research in the districts of their biggest legislative supporters, including former state House Speaker Joe Souki and former state Sens. Holt, Ige, Robert Herkes, Donna Ikeda and Whitney Anderson.

The estate's former trustees had argued that the polls were conducted to gauge public sentiment on controversial issues such as land use and leasehold reform in those districts.

But Watada noted that the polls also asked specific questions about candidates the trustees supported.

The polls were delivered to the legislators in unmarked envelopes in an apparent attempt to conceal their source, he added.

Neither the trust nor the candidates declared the polls as campaign contributions as required by law. A poll is considered a campaign contribution if its findings are shared with a limited number of candidates and if its value exceeds $1,000.

http://starbulletin.com/2003/01/10/news/story5.html

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ASBESTOS CAUSES CANCER

Akalize for Health

The body of nearly every American contains asbestos. Tiny asbestos fibers floating in the air come from vehicle break pads, building insulation, building fireproofing, aprons, ceiling & floor tiles, stove linings, and thousands of other products. In the United States at least 25 million tons of asbestos have been incorporated into buildings, vehicles, and other products.

Most people have asbestos in their lungs. Asbestos also finds its way into the digestive tract. 30% of the nation's water supplies contain asbestos fibers. Diseases caused by asbestos include: lung cancer, cancer of the pharynx, cancer of the esophagus, pleural mesothelioma (cancer in the pleural lining of the lungs), peritoneal mesothelioma (cancer in the peritoneal lining of the abdomen), stomach cancer, colon cancer, cancer of the rectum, and asbestosis.

Asbestos is virtually indestructible. Every piece of asbestos that was ever mined and put to use is in the environment somewhere. "The World Trade Center was one of the last buildings filled with asbestos," says environmental consultant Wayne Tusa. "The entire downtown of Manhattan may be contaminated for some time." (Business Week, September 24, 2001) The US government has misled the population of lower Manhattan regarding the extent of contamination.

Asbestos is a fibrous mineral. Each fiber can break into smaller fibers until the individual fibers are so small that a million of them side by side would measure only an inch. They can be so small that you need an electron microscope to see them. They are so light weight that they float in the air and take a long time to settle, then forming a fine white film of dust over everything. Billions of microscopic fibers can fill air we breathe and get into our food and water without us being aware of their presence.

Once in the body they stay there. Millions and even billions of tiny indestructible mineral fibers constantly irritating the tissue where they are lodged. The area around the fibers becomes inflamed, a situation called asbestosis. And then after about 20 years, cancer appears. This is known as "the twenty-year rule."

Asbestosis was first identified as a disease in 1900 by a physician in London. By 1931 the British government had responded by compensating asbestos workers under the workmen's compensation act and providing safety rules to minimize exposure to asbestos dust.

To avoid the cost of workmen's compensation, American companies then began a decades-long disinformation campaign involving suppression of information and conducting fraudulent research. Industry-funded research in Canada and the United States showed that asbestos was harmless, and based on this research the U.S. Public Health Service solidly backed the industry position. This denied millions of workers proper compensation for their disease, prevented safety measures from being implemented, and allowed millions of tons of asbestos products to be sold in North America until the mid 1970's when the industry's behavior was exposed in a court battle.