Woo vs. Harmon - Witness Gayle Lau

THE UNITED STATES DEPARTMENT OF JUSTICE

OFFICE OF THE U.S. TRUSTEE

David C. Farmer, Successor Trustee
vs.
Bobby N. Harmon

(Formerly Mary Lou Woo vs. Harmon and James Nicholson vs. Harmon)

CV05-00030 DAE/KSC

United States District Court, District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

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GAYLE J. LAU

Assistant U.S. Trustee; Captain, JAGC, U.S. Navy Reserve; Chairperson for the Lawyers’ Fund for Client Protection; proposed Successor Trustee in this case.

Office of the U.S. Trustee
1132 Bishop St., Ste 602
Honolulu, HI 96813-2836

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GOOGLING FOR GAYLE LAU

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NEW DISCOVERY (05-22-08):

May 22, 2008

House subpoenas Karl Rove

By LARA JAKES JORDAN, Associated Press

WASHINGTON - The House Judiciary Committee on Thursday subpoenaed former White House top political adviser Karl Rove to testify about whether the White House improperly meddled with the Justice Department.

Accusations of politics influencing decisions at the department led to last year's resignation of former Attorney General Alberto Gonzales.

The subpoena issued Thursday orders Rove to testify before the House panel on July 10. He is expected to face questions about the White House's role in firing nine U.S. attorneys in 2006 and the prosecution of former Gov. Don Siegelman of Alabama, a Democrat.

House Judiciary Chairman John Conyers had negotiated with Rove's attorneys for more than a year over whether the former top aide to President Bush would testify voluntarily.

"It is unfortunate that Mr. Rove has failed to cooperate with our requests," Conyers, D-Mich., said in a statement. "Although he does not seem the least bit hesitant to discuss these very issues weekly on cable television and in the print news media, Mr. Rove and his attorney have apparently concluded that a public hearing room would not be appropriate."

"Unfortunately, I have no choice today but to compel his testimony on these very important matters," Conyers said.

Neither Rove nor his attorney, Robert Luskin, could be immediately reached for comment.

http://news.yahoo.com/s/ap/20080522/ap_on_go_co/rove_subpoena

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NEW DISCOVERY (04-11-08): Trustee James B. Nicholson failed to disclose that he was the court-appointed bankruptcy trustee for Defendant’s witness, Peter Savio, even though he was asked specifically if he had any business, professional, personal or political relationships with Mr. Savio:

August, 2003

Hawaii’s Top 250 Companies:

New To The List: Whoa, Savio!

Hawaiian Island Homes' debut is marked by acrimony

By Kelli Abe Trifonovitch, Hawaii Business Magazine

Any interview that focuses on Peter Savio's new company, Hawaiian Island Homes Ltd., will soon focus on another Top 250 company, Central Pacific Bank. Says Savio: "They're malicious. They're vicious. I am going to become a stockholder in Central Pacific Bank. I am going to reform that institution. Their mistake was they stomped me. They didn't kill me. I'm coming back. I'm going to have fun with them."

Go back to the year 2001. Savio Inc., a holding company for eight real estate sales and development companies, was No. 56 on the Top 250, with $134.6 million in 2000 gross sales. But in 2001, Savio Inc. filed for Chapter 7 liquidation, and Peter Savio and his wife filed for personal bankruptcy protection. Savio says he was forced into the bankruptcies because CPB gave him just five days to move from his second-floor offices at 931 University Ave. Savio says he had been in a workout plan with a number of lenders after he started experiencing cash-flow problems in the mid-1990s. But CPB forced his hand.

"The only way to stop them was, I had to file for personal bankruptcy. So to save my employees and everything else, I filed for personal bankruptcy - one of the most difficult decisions I've ever had to make. But I was really pissed at Central Pacific Bank for doing that," he says.

"It was tough," he adds. "Basically I lost everything. Lost my house. Lost everything. Had to basically come back from nothing."

Today, Savio is more than back. His real estate company, Hawaiian Island Homes Ltd., lists 2002 gross sales of $177 million. Its office is downstairs in the same building that Savio Inc.'s once was. And the company is No. 27, ahead of CPB Inc. (No. 49), something Savio will rejoice to read. Savio says, "I've decided that my goal is to beat them in the Top 250. … just so we can say, 'Nannynannybooboo!'"

That's not all. "My short-term and my long-term goal is to reform Central Pacific Bank," Savio says. "I think I'm going to buy the bank."

Ann Takiguchi, Central Pacific Financial's communications officer, says, "We made every effort to work with Mr. Savio, and it is unfortunate that he is blaming us for his situation. Out of respect for our customers' privacy, we have no further comment. As a matter of bank policy, we don't comment on the affairs of our customers."

Bankruptcy court filings show that Central Pacific Bank claimed that Savio Inc. owed it about $1.5 million when Savio filed for bankruptcy in 2001. The Internal Revenue Service and Pitney Bowes Credit Corp. also listed claims of about $2,000 each.

The court-appointed trustee for Savio Inc.'s bankruptcy case, attorney Jim Nicholson, says the only unencumbered asset of the estate, a unit in the Diamond Head Beach apartment building, was sold for $375,000 in June 2003.

Gross sales for Savio's other new company, Hawaiian Island Development, were not reported for this year's Top 250, so one thing is for sure: Next year, he'll be back. Says Savio: "We're going to set up a new holding company called, 'I Hate CPB.' No, my attorney said I couldn't do that. I have a warped sense of humor, OK? But anyway, the new holding company is going to be Ohia Holdings."

Knowing Savio, there is marked symbolism in that choice. After all, the Ohia tree can be found growing in the middle of old lava flows.

Hawaii Business, August, 2003

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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

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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

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July 11, 1997

Tough times give trustees heavy workload

by Heather Tang, Pacific Business News

Numbering more than 3,000 last year, bankruptcy filings have nearly tripled since 1990, a sign of economic instability and a test to the four Hawaii-based trustees who handle this growing industry.

Hawaii's bankruptcy trustees are appointed by the U.S. Trustee for the region, San Diego-based Harry A. Sherr. At the federal office of overseas administration, Sherr appoints the state's trustees after receiving recommendations by the local office of the U.S. Trustee.

According to assistant U.S. trustee, Gayle Lau, qualifications for Hawaii bankruptcy trustees include business and educational backgrounds, as well as experience in accounting, finance, and business administration. Common degrees among office holders are in accounting and law. Trustees are also subject to a Federal Bureau of Investigation background check and must possess high moral character, as determined by Lau's office.

With increasing financial difficulty in Hawaii's turbulent economic climate, the stigma of filing for bankruptcy has decreased, bringing more cases to the attention of trustees, possibly building a lucrative industry.

According to Lau, being a bankruptcy trustee is "a pretty comfortable but not lucrative position."

About 97 percent of all cases filed are no-asset cases, which are paid on a case-by-case basis. Trustees are paid on a percentage basis for asset cases, usually at a rate of 3 percent of total assets involved.

And growth has been mostly in no-asset cases, according to Chapter 7 trustee Mary Lou Woo.

Trustees are typically paid $60 for each no-asset case; last year each trustee handled about 600-700 no-asset cases.

The job of handling the bulk of the state's bankruptcy filings has fallen into the hands of three people: James B. Nicholson Jr., Paul Sakuda, and Mary Lou Woo. These three administer Chapter 7 filings, primarily the liquidation Chapter of the U.S. Bankruptcy code. They are appointed to set claim dates; liquidate assets; review filed claims; determine administrative costs; and distribute money to creditors.

"A successful case would be distributing 100 percent of the money to the creditors, however on lower cases, we can only make a 10 [percent] to 25 percent distribution to the dollar," said Woo. According to Woo, there is an extreme responsibility involved in administering assets. "We look into concealed assets, a lot of investigative and confidential work."

For Woo and most other trustees, the job is a full-time position and one that is becoming increasingly demanding. "I have 20 hour days, very, very long days, sometimes traveling back and forth to the outer islands," said Woo.

"It's difficult when you realize all the hardship that some people are going through," said Woo of her job. "It's nice to come across `good faith' debtors that are truly struggling, it's rewarding to be able to give them a fresh start."

Howard M.S. Hu, the standing Chapter 13 trustee since 1982, works part-time as a certified public accountant, handling about 200 bankruptcy cases a year. Despite being Hawaii's only Chapter 13 trustee, Hu still has a comparatively light load, handling 8 percent to 10 percent of total cases filed.

Although the position may not be financially rewarding, some trustees take pleasure in helping consumers. "It's rewarding when you administer a case and you're able to make a significant distribution to the creditors. It's our ultimate goal to make distributions," said Woo.

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Gayle Lau is expected to testify regarding his business, professional, political and personal relationships with Curtis Ching, Constance Lau, Hiram Fong, Sr., Hiram Fong, Jr., Finance Factors, Ltd., Bank of Hawaii, First Hawaiian Bank, American Security Bank, Mary Lou Woo, Warren K.K. Luke, Chinese Chamber of Commerce, Renton Nip, Colbert Matsumoto, Steven Guttman, Alan Ma, Summit Communications, Robert Kessner, James Duca, Al Hee, Clayton Hee, Harold Johnston, Grant Johnston, Lyn Anzai, Robert K.U. Kihune, Admiral Thomas Fargo, Admiral Richard Macke, Commander Scott Waddle, Guido Giacometti, Susan Tius, Sukamto Sia, Dan Inouye, Daniel Akaka, Linda Lingle, Hawaiian Air Lines, Aloha Air Lines, Judge Lloyd King, Judge Robert Faris, Bradley Tamm, Greg Dunn, and others to be determined upon discovery.