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

CORBETT KALAMA

Address to be determined.

Corbett Kalama is the newly appointed Kamehameha Schools’ Trustee, replacing Constance Lau.

Corbett Kalama is an executive vice president for First Hawaiian Bank; a lobbyist for the American Bankers Association; associated with the Office of Hawaiian Affairs Revolving Fund Program; on Board of Governors, Pacific and Asian Affairs Council; Board of Trustees, University of Hawaii Foundation.

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NEW DISCOVERY (09-08-08):

September 26, 2000

Untold Tales of the West

by Greg Wongham

There’s a story unfolding throughout the western part of America (Utah, Nevada, California, Nevada, Washington, Oregon, and Idaho) that is not being told and unlike the great sagas of pioneering men and women that founded of the country, this story of the West is being hushed up and here's the reason why.

This story is about the banking company, Bank of the West, and the bank holding company that controls it, BancWest. BancWest was created when Hawaii’s second largest bank, 1^st Hawaiian Bank merged with Bank of the West, which is controlled by the French banking firm BanqueWest.

This consolidation of capital between European, Hawaii and the California based Bank of the West has created the 2nd largest bank in Utah. They will have 118 branches in Northern and Central California, 30 branches in Oregon, 9 branches in Washington, 68 branches in Utah and Idaho and 23 branches in New Mexico and 7 in Las Vegas, Nevada.

The public should be concerned about these mega changes in the banking system because of the similarities they bare to the changes in the banking system that caused the failure of the thrift banks throughout the country in the ‘80s. The failure of the thrifts amounted to $ 328 billion of losses and in 1989, the closing of the Federal Savings and Loan Insurance Company (FSLIC). If the Federal Deposit Insurance Company (FDIC) falls victim to the myriad of unforeseen banking problems that arose in the ‘80s, then a crisis exist that threatens the principles of the FDIC and exposes the ordinary citizen to financial ruin.

The politically connected role of 1st Hawaiian Bank is integrally linked to Washington and Wall Street. It existed during the tenure of former Secretary of the Treasury, William Simon, who served during the Reagan Administration (1970-1979), and through the tenure of former Secretary of the Treasury Robert Rubin, who served during the Clinton Administration (1993-1999), until he resigned in May of 1999. 1st Hawaiian’s CEO, Walter Dodds and former Governor John Waihee, as well as, Hawaii’s present Governor Ben Cayetano were listed as guest who were slept overnight and met with President Clinton at the White house. The mere fact that these people are acquainted is no crime, so, what's the problem?

The problems are based on loan losses that may have been carried on the books of 1st Hawaiian Bank since 1975, when Hawaii’s first thrift bank failed. 1st Hawaiian took over the ailing thrift at the behest of then (D)Governor George Ariyoshi, who was also one of the bank’s directors. From 1975 to 1983, nine of Hawaii’s 20 thrift banks, as well as, Hawaii’s equivalent of the FSLIC, Thrift Guaranty, failed. Hawaii’s Thrift Guaranty was established by the State legislature and contained provisions that mandated that the monies contributed into Thrift Guaranty would come from the 20 State chartered banks.

The monies would be used to insure depositors accounts up to $10,000 per account. In 1985, 1st Hawaiian Bank’s CEO, Walter Dodds was reported to have come to the rescue of the State’s thrifts by loaning the State $32 million, which would eventually be repaid by the taxpayers of Hawaii.

A run on the Hawaii banks ensued, based on the outcry from the public surrounding rumors of insider deals and political corruption linking the Governor and his brother James Ariyoshi. Hawaii’s Democratic Party machine appointed Ms Donna Tanoue as the Hawaii Bank Examiner after he was made the scapegoat for stalling and not taking action sooner. Ms. Tanoue white-washed the situation; and, in the end; no one was held accountable and no one did time. Reports suggested that the Governor had intervened on behalf of his good friend and long time political supporter, developer Norman Inaba. This was similar to the classic question that arose across the country as one thrift after another failed, it ask, “what are the risks when a bank loans the majority of its money to one developer?”

The loan losses that have been carried on the books of 1st Hawaiian as “goodwill” assets came back to haunt the bank in 1998, as the bank attempted to expand and buy-out other banks. The Federal Deposit Insurance Company (FDIC) standards required banks to set aside cash reserves to cover both old and new loan losses. The bank realized that this might present problems for them and their future plans to expand. That’s when the Hawaii Democratic machine was able to influence President Clinton to appoint Ms. Donna Tanoue to the position of Chairman, of the FDIC. Since then, the FDIC has lessened their standards and a record number of banks have failed. The results of which is that the FDIC has lost money.

The greatest threat to the people of California, Utah, Nevada, Washington, Oregon, Idaho, New Mexico, Colorado and the other western states that the Bank of the West will call home, lies in the fact that the FDIC is the agency that decides whether or not, one bank has the financial capacity to buy out another bank. If Ms. Tanoue is allowed to cover-up for her politically connected banker friends as she did before; then the public should beware of the financial losses that may accrue if the bank’s losses rise.

Last week, the Japan Travel Bureau, warned Japanese travelers about going to Saipan because of the rising crime including murders, and increasing drug problems. BancWest has begun operations in Saipan. If tourism suffers because of the social unrest, then business suffers and banks lose money. The question that arose as the savings and loans failed was, what is the risk of banks loaning the majority of their money to one developer? The question that the public should ask is, what are the risk of a bank holding company that seeks to do business in countries that are experiencing social and political instability?

The Clinton / Gore link to the Hawaii bank scandal

Before the politically connected Hawaii banks could fulfill their plans to expand they needed support from the 1993, Democratic Party’s Presidential hopeful, William Jefferson Clinton. They used their connections to Asian financial banking sources and the vast fortune of the Hawaii Democratic Party controlled Hawaiian Trusts like a carrot to lure the cash strapped Clinton. It resulted in Clinton’s appointment of Goldman-Sachs, co-director Robert Rubin as Clinton’s Secretary of the Treasury. Goldman-Sachs was already involved with Hawaii banking deals that included former Secretary Treasurer, William Simon.

In his position as Secretary of the Treasury, Robert Rubin was successful in changing two laws that had been part of the Code of Federal Regulations (CFR) for more than 60-plus years. The first of the laws, the Glass-Steagall Act was implemented after the stock market crash of 1929. Like many of the banking and finance related laws that were passed during this time, the Glass-Steagall Act was meant to protect the public against risk that might jeopardize their money relative to the sales of securities. The law, forbid banks from engaging in the securities business. The government’s newly created securities regulatory agency, the Securities Exchange Commission (SEC) wanted to deny any chance for banks to co-mingle the monies of depositors with the minimum cash required to raise capital through the sale of stocks and bonds. Don’t be surprised if one day, ads appear in your local papers offering high-yield Chinese government bonds (for dams, bridges, highways, airports, and weapons of mass destruction).

The second law that was changed by Rubin in 1997, was the Bank Holding Company Act. He argued that the laws were archaic and were instituted in a time that didn’t reflect the changes that the American banking industry faced in today’s competitive financial world. The modifications to the Bank Holding Company Act would allow America’s banks to broaden the definition of banking services that would be allowed by the government’s financial regulatory agencies.

Thus, Rubin was successful in opening the door for bank holding companies and their affiliates to engage in stock brokerage activities like underwriting and dealing, as well as, other diversified banking and finance related services [including insurance]. The changes that were made by Rubin, and the lessening of the standards by Ms. Tanoue, made it possible for 1st Hawaiian’s holding company, BancWest to enhance their revenue generating potential despite the old loan losses they absorbed to keep their political insiders out of jail after the Hawaii thrifts failed.

One wonders how you’ll be factored into the equation, after all, its only money ... your money.

This page posted on September 26, 2000

Last updated on October 01, 2004

Greater Things/Clinton Scandals/Riadi/First Hawaiian Bank Link

www.kycbs.net/First-Hawaiian-Bank.htm

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NEW DISCOVERY (01/25/08) - Undisclosed relationships with Lyman House Museum and related entities (including Bishop Museum), resulting in addition of two new witnesses, Bob Olson and Jon Markell (with more to follow):

www.signonsandiego.com/news/metro/20080124-1314-bn24raid3.html

http://hawaii.gov/sfca/annual_report_fy20002001.pdf

http://hawaii.gov/sfca/artreachsummer2001.pdf

http://gohawaii.about.com/library/weekly/blhd033098.htm

http://gohawaii.about.com/library/olson/aa02218h.htm

http://www.lymanmuseum.org/Museum_Exhibits.html

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

http://www.kycbs.net/Bishop-Museum.htm

www.kycbs.net/CV05-00030-Witness-Olson-Bob.htm

www.kycbs.net/CV05-00030-Witness-Markel-Jon.htm

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NEW DISCOVERY (01-25-08) - Undisclosed relationships between David Farmer and Corbett A. K. Kalama, First Hawaiian Bank officer and Kamehameha Schools Trustee; Diane Plotts; Mark Hemmeter, Ben Cayetano; Bob Olson, and other witnesses in this case:

From Hawaii ArtReach publication, “The Hawaii State Art Museum - Part of a Worldwide Museum Boom:

STATE FOUNDATION ON CULTURE AND THE ARTS
Vol 15, Nos. 3 & 4

Winter 2001

THE HAWAII STATE ART MUSEUM -

PART OF A WORLDWIDE MUSEUM BOOM

By David C. Farmer

...Museums worldwide are building new structures or expanding their current facilities in a multi-billion dollar building boom...

Transparency, accessibility, audience building: many of these museum projects, like those of the Brooklyn Museum of Art, the Los Angeles County Museum of Art, and the Art Institute of Chicago are exploring new ways to attract hitherto marginalized societal groups...

Which brings us to the vision for our very own Hawaii State Art Museum, scheduled to open in fall 2002. The SFCA offices in July 2001 relocated to the Ewa Mauka end of the second floor of the No. 1 Capitol District Building (also previously known as the Hemmeter Building and Armed Forces YMCA Building)....

As Governor Cayetano has so well expressed, the long-range vision, who knows, maybe some day the entire building will become a total art center, filled with the bustling activities of artists working in their studios, performances of all kinds taking place, and students of all ages immersed in engaged arts experienced, for the benefit of our citizens and as an invaluable resource for our cultural tourism visitor industry...

During World War II, the building was renamed the USO Army and Navy Club. It offered servicemen a centrally located place where classes, activities, dances, silent movies, and auctions were alternatives to other activities available on Hotel Street and across the street at the infamous Black Cat Café. When the Pacific Fleet paid its occasional visits, the facility would buzz with activity as Honolulu - then a city of only 100,000 - entertained 45,000 sailors for about 50 days.

Renamed the Armed Services YMCA after World War II began, the “Y” played a major role in the lives of United States military personnel throughout the war years....

The building was added to the National Register of Historic Properties in December 1978. In 1987, developer Chris Hemmeter and Hemmeter Investment Co. purchased the property for $11,000,000 to serve as the headquarters for the Hemmeter Corporation....

The transformation of the Armed Services YMCA into the Hemmeter Corporation Offices involved functional changes that necessitated substantial modifications to the existing building and grounds...

The restoration was completed in 1989 at a cost reportedly in excess of $30,000,000 by the Honolulu architectural firm of Lawton & Unemura. Hemmeter renamed it the No. 1 Capitol District Building ...

Japan-owned BIGI Corp. purchased the property and furnishings for $80,500,000 in April 1990 and leased the property back to Hemmeter for five years. In June 1990, the State leased the property from Hemmeter Investment for a term of five years. In 1991, occupants of the State Capitol relocated to the No. 1 Capitol District Building, Leopapa A Kamehameha (State Office Tower) and the Capitol Center building due to asbestos remediation...

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Native Hawaiian Culture and Arts Policy Being Developed

In response to Senate Concurrent Resolution No. 76, passed during the 21 Legislature 2001, SFCA Executive Director David C. Farmer and SFCA Commissioner Mona Abadir have convenied a planning committee of well-respected Hawaiian leaders to develop a process to maximize Hawaiian community input in developing a formal policy supporting native Hawaiian culture and arts.

The planning committee includes Maile Andrade, UH Art Department; Alani Apio, artist, playwright and community leader; Corbett A.K. Kalama, First Hawaiian Bank employee and Hawaiian arts community activist; and Vicky Holt Takamine, kuma hula and community leader. Additional resource people are Dr. Michael Schuster; SFCA Folk Arts Coordinator, and Jonathan Johnson, SFCA Commissons Project Manager...

http://hawaii.gov/sfca/artreachwinter2001.pdf

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April 5, 2000

State eyes
Hemmeter Building

$22.3 million would buy the
structure, land and pay for
upgrades and repairs

By Richard Borreca, Star-Bulletin

The state wants to buy the Hemmeter Building in downtown Honolulu for $22.3 million and put a $3 million art gallery in it.

The building, once known as the Armed Services YMCA, is already largely leased out to the state. It has been on the market for a year.

The historic building was built in 1872 and underwent a $30 million upgrade in 1987 when former Hawaii hotel developer Chris Hemmeter bought it for $11 million. Three years later, he sold it to BIGI Corp. of Japan for $82 million.

Yesterday, the state asked the Legislature for the extra money to be included in the state's construction budget.

"The state has negotiated a purchase price of $22 million for the land, building and furnishing, based on the state's recently completed appraisal," Ray Sato, state comptroller, wrote in testimony given to the Senate Ways and Means Committee yesterday.

The state calculates that it would save $14.3 million over 20 years by buying instead of renting....

The state also wants $3,057,000 for the design and construction of a state art gallery with staff support areas for the State Foundation on Culture and the Arts.

The state had been approached by BIGI in December to buy the building for $27 million, but the state's own appraisal pegged the value of the building and two acres at $18 million to $22 million.

The building is connected to the state office tower on Beretania Street.

Sen. Andy Levin, Ways and Means co-chairman, yesterday initially dismissed the proposal, saying it was not in the Senate's version of the state budget.

But the Cayetano administration sent a letter to both the House and Senate leadership yesterday asking that the lawmakers act this year to buy the building.

http://starbulletin.com/2000/04/05/news/story9.html

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Corbett Kalama is expected to testify regarding his business, professional, political and personal relationships with Kamehameha Schools/Bishop Estate, Kamehameha Schools Employee Pension Benefit Plan, Prudential, Maryanne Inouye, Nathan Aipa, Colleen Wong, Yukio Takemoto, Hamilton McCubbin, Douglas Ing, Robert Kihune, Gilbert Tam, Sandwich Isles Communications, Summit Communications, Dee Jay Mailer, Edwina Clarke, Faye Kurren (wife of Judge Barry Kurren), Henry Paulson, Goldman Sachs, Donald Hodel, Gale Norton, Haunani Apoliona, The Nature Conservancy, Polynesian Voyaging Society, Nainoa Thompson, Linda Lingle, Constance Lau, Diane Plotts, Warren Luke, Jean Rolles, Robin Campaniano, AIG, Arthur Tokin, PricewaterhouseCoopers, Jonathan Kim, Dan Inouye, Daniel Akaka, Linda Lingle, Robert Awana, Office of Hawaiian Affairs (OHA), Patricia Zell, Everett Dowling, Oswald Stender, John Waihee, Ben Cayetano, Jack Abramoff, Gary Rodrigues, John Goemans, Guido Giacometti, Susan Tius, Peter Savio, Walter Dods, Dee Jay Mailer, Colbert Matsumoto, Island Insurance Company, Hawaiian Insurance Companies, First Insurance Company, AIG, Aon, Rocco Sansone, Bishop Museum, Mark Polivka, Marsh & McLennan, Curtis Ching, James B. Nicholson, Mary Lou Woo, Steven Guttman, Judith Neustadter Fuqua, Donna Tanoue, Carol Muranaka, University of Hawaii, William Simon, Robert Rubin, Judge Colleen Hirai, Larry Price, Bert Kobayashi, Benjamin Matsubara, David C. Farmer, Claire Asam, David Fairbanks, Bob Olson, Ivan Lui-Kwan, Margery Bronster, and other entities to be named upon discovery.