CV05-00030 - David C. Farmer 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

SEN. DAVID MATSUURA

Democratic Sen. David M. Matsuura represents Hawaii’s 2nd Senatorial District (South Hilo, Puna).

~ ~ ~

May 8, 1999

OTHER VIEWS

By David M. Matsuura

A senator’s vote
against Bronster

I have been asked why I voted against the confirmation of Margery Bronster as attorney general. Let me begin by saying that the purpose and function of the Attorney General's Office is to advise and defend the State of Hawaii and its departments.

As vice chairman of the Committee on Governmental Operations and Housing, one of my responsibilities is to evaluate state departments with respect to their productivity and efficiency in delivery of public service.

I and my committee members found a common problem that transcended many of the departments in terms of overall efficiency and, in many cases, increased overall cost to the public: inefficiency and inaction by the A.G.

Many state departments asked for legislation to hire their own legal counsel (starting from 1995).

This session, I voted to allow the Board of Education and the Hawaiian Homes Commission to hire their own legal counsel. I also introduced legislation to have an independent attorney general.

It would have been hypocritical for me to vote to allow a state department to hire its own legal counsel because of problems with the A.G.'s Office, and then to vote for confirmation of the attorney general herself.

There are 161 attorneys in the A.G.'s Office, but there are only two attorneys assigned to the Felix consent decree in the Department of Education.

I have listened to special education teachers and principals complain about their problems, and how they feel that they are not being represented by the A.G. This situation has cost the state millions of dollars and has hurt our overall educational system.

As for the tobacco settlement and gasoline lawsuit the attorney general hired -- on a contingency fee basis -- the same law firm for both cases. In the tobacco settlement, the firm was not hired to litigate the case but only to settle it. For that "service," the state lost millions of dollars.

All the messages that I received in support of Bronster were because of her investigation of Bishop Estate. I am aware of public sentiment about the estate's trustees, and share many of the same sentiments. But the job of the A.G. is to take care of the "state," not the "estate."

This is a very emotional, complex issue. So people should ask themselves these questions:

How and with what could the Bishop Estate trustees, imperiled as their positions were, have influenced the Senate to reap 14 no votes on Bronster?

What is the state's goal in spending over $7 million on this investigation? The destruction of the estate and Kamehameha Schools? The chances of that happening are almost nil. At best, the removal of the trustees is the only thing that can happen.

Who will have the ability to appoint the new trustees? Who will benefit? The political reappointment of the new trustees will probably not change anything regarding the estate.

Why didn't the A.G. exercise her right as "parens patria" of the Bishop Estate? This would have saved the state millions, the investigation would have been over months ago and the outcome would have been the same. The only difference: There would have been no publicity.

Was this investigation political in nature? The A.G. is supposed to be independent and do what is best for the state. Will there be any liability to taxpayers due to this investigation?

Why wasn't the criminal portion of the case turned over to the Prosecutor's Office for indictment?

On the floor of the Senate, I stated that it was a threat to all senators when the attorney general stated she would begin the criminal indictment of our colleague (Sen. Marshall Ige). Her implied threat to intimidate a senator on the morning of her contested confirmation is a threat to all.

This was a very difficult decision but I believe that I did the right thing. I stand by my vote and my colleagues who voted the same way.

I would like to thank the people who said I should be more like my father. It helped me stand firm in my decision, because I know that Dad would have also voted no, given all the facts.

What I have learned from this experience is that it is very difficult to stand up for what is right when public opinion, the media and the governor are against you.

Time will tell if my vote was correct. If not, I have only myself to blame and will take full responsibility for my actions.

Democratic Sen. David M. Matsuura represents
the 2nd Senatorial District (South Hilo, Puna). His father,
the late Richard Matsuura, was also a state senator.
senmatsuura@capitol.hawaii.gov

www.starbulletin.com/1999/05/08/editorial/otherviews.html

~ ~ ~

Bobby N. Harmon, CPCU, ARM

Honolulu, Hawaii

May 13, 1999

TO: 1) Federal Bureau of Investigation - Fax No. (808) 566-4470

2) Internal Revenue Service - Fax No. (808) 541-1109

3) Attorney General, State of Hawaii - Fax No. 586-1375

4) Colbert Matsumoto, Esq. - Fax No. 523-7885

RE: Senator David M. Matsuura and Bishop Estate

Gentlemen:

After reading Senator Matsuura’s article in the May 8, 1999 edition of the Star Bulletin explaining why he voted against the confirmation of Margery Bronster as attorney general, I felt that perhaps Senator Matsuura may not have fully disclosed his business connections with Bishop Estate to the legislature, as well as to your offices and the general public.

While serving at the Risk/Insurance and Safety Manager for Kamehameha Schools/Bishop Estate (KSBE), I was involved in the handling of a wrongful termination insurance claim brought against the estate by William Rosehill sometime in 1994 or 1995. Mr. Rosehill was terminated for allegedly accepting kick-backs from a Bishop Estate lessee, Umikoa Ranch. During the investigation of the claim, it was reported that an “area of concern” had arisen with respect to a letter from David Matsuura to the Board of Directors of Umikoa Ranch. I have not seen this letter and have no knowledge of its contents. However, there were rumors that the senior Senator Matsuura, father of David and now deceased, had been inquiring of one or more of the trustees as to the settling of Rosehill’s case, and that the senior Matsuura seemed anxious that the case settle. I have no knowledge that these inquiries actually occurred, but the speculation at the time was that the letter to Umikoa Ranch might be viewed by the Senator as causing problems for his son. In any event, a staff report to trustees prepared on May 6, 1996, by Colleen Wong, Esq., of KSBE’s Legal Group, recommended that the case be settled. The trustees accepted this recommendation and the claim was quickly settled out-of-court.

As previously stated, I am not aware of the contents of the letter or Senator Matsuura’s connection with Umikoa Ranch, However, you may wish to question those persons with direct knowledge of the situation and circumstances. These individuals would be Nathan Aipa, Esq., Colleen Wong, Esq., William Rosehill, Robert Lindsey and Senator Matsuura himself.

It would seem that Milton Holt’s claim that the senior Senator Matsuura was one of the individuals he entertained at a “hostess bar” on a Bishop Estate credit card may be factual after all. Perhaps Mr. Holt could also provide additional information with regard to Senator Matsuura’s relationship with Umikoa Ranch, and thus Bishop Estate and the contents of his letter to Umikoa’s Board of Directors.

I hope this information is of some assistance in your ongoing investigations.

Very truly yours,

Bobby N. Harmon

http://www.kycbs.net/FBI-IRS-AG-Matsumoto-5-13-99.htm

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June 23, 2005

Koa Trees Seeing Comeback in Hawaii

By THE ASSOCIATED PRESS

HAKALAU FOREST NATIONAL WILDLIFE REFUGE, Hawaii (AP) -- Yellowed grasses cover the lower southern slopes of Mauna Kea where impenetrable koa forests once stood on the Big Island.

But Hawaii's largest endemic tree, with its sickle-shaped leaves, has reclaimed some of its former territory over the last two decades.

Conservationists and small timber harvesters have replanted koa on thousands of acres on the Big Island -- the local name for the island of Hawaii -- and Maui, increasingly fencing out the cattle, pigs and goats that forage on koa bark and seedlings.

They hope replanting the slow-growing trees can help restore the feeding and nesting grounds of endangered native forest birds and quench demand for valuable koa timber, with a scarcity and a lustrous grain that rank it among the world's most expensive woods. A tree can take 40 years to mature....

Koa trees are slowly recovering on the slopes of Mauna Kea at Hakalau Forest National Wildlife Refuge, which was set aside specifically for forest birds.

Since the refuge opened in 1985, volunteers and refuge officials have replanted more than 271,000 koa trees on about 5,000 acres, with survival rates averaging 70 percent, said Baron Horiuchi a horticulturist for the U.S. Fish and Wildlife Service.

More than half of Hawaii's 31 birds on the federal endangered species list are small forest varieties, according to the Fish and Wildlife Service, which oversees the refuge. Twenty-eight percent of Hawaii's 93 native bird species are already extinct, according to federal figures.

The birds need koa to shelter the smaller plants they feed on, such as the red splayed blossoms of the ohia lehua, giant Hawaiian raspberries and marble-sized red ohelo berries. A spreading koa canopy protects seedlings and smaller plants from cold upland temperatures, which can dip into the 20s during winter on Mauna Kea.

''Koa is a pioneering tree,'' Horiuchi said. ''It leads the way for the rest of the forest.''
In many parts of the refuge, koa trees are the only native plants growing among the introduced species of weeds and grass. The branches on many of the larger trees at Hakalau grow in a serpentine network, an illustration of the name for this area, which means ''many perches'' in Hawaiian.

''The point is not to grow them straight for timber or canoe logs. They are to grow as a canopy and a bird habitat,'' Horiuchi said. ''I always joke with people that this place is 'for the birds,' but it's true.''

Private koa farmers prefer the tall, straight-growing trees. They hope to harvest the semi-hard wood, which ranges in color from blond to red to dark brown, for furniture, bowls, musical instruments and traditional Hawaiian seafaring canoes.

Umikoa Ranch on the Big Island, in partnership with state land officials, reforested 800 acres with koa trees between 1980 and 2004.

David Matsuura, managing steward at the 2,000 acre ranch, said some of the trees planted about 15 years ago have already reached large diameters, although he isn't sure about the quality of the wood.

''That's the problem with koa. It's a very long-term crop,'' Matsuura said. ''I'm gonna be pretty old and gray before most of our koa is actually harvested.''

Ranch managers said the trees have already helped re-establish native plants and animals, including eight endangered Hawaiian ducks. The return of koa has also increased water sources at Umikoa, where the sickle-shaped koa stems draw fog and moisture into the watershed.

''Our main goal is the integration of conservation and agriculture,'' Matsuura said. ''It's not the same as clear-cutting.''

But profit is also a goal for koa farmers, who are gambling over the long term on a product that commands premium prices. At Hawaiian Koa Furniture in Honolulu, a 54-inch round koa table sells for $8,000.

The bulk of the koa market is driven by Hawaii residents, who are the world's biggest consumers of richly varnished koa products.

''Koa is king in Hawaii,'' Matsuura said. ''Only here in Hawaii will people literally pay 10 times the value of anything because it's koa.''

http://papgren.blogspot.com/2005_06_01_archive.html

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September 1, 2003

Safe Harbor Agreement for Endangered Hawaiian Waterfowl

Posted: 01-Sep-2003; Updated: 01-Oct-2003

A Safe Harbor agreement signed in December 2001 is intended to benefit two endangered waterfowl, the Hawaiian duck or "koloa" and the Hawaiian goose or "nene" ("NAY-nay"). Umikoa Ranch entered the agreement with Hawaii's Department of Land and Natural Resources and US Fish and Wildlife Service. Ducks Unlimited, a private conservation organization, is providing essential technical assistance. Following the addition of new ponds to the property, two pairs of koloa have mated and produced broods on Umikoa Ranch. At least four koloa now live on the property.

Umikoa Ranch has committed to continuing restoration of palustrine emergent marsh wetland areas, an effort it began in 1998 as a Wetlands Reserve Program project in partnership with Ducks Unlimited. Adjacent habitat is being protected through fencing. In addition, several hundred acres of koa forest are being restored, which is expected to improve hydrological conditions for the new wetlands. Control of exotic predator species, such as mongooses and rats, and feral animals will also be undertaken. The ranch, which is managed by State Senator David Matsuura, commits to carry out these activities for a period of 20 years, for which it receives incidental take authority for 99 years.

Only about 100 to 200 genetically pure koloa are believed to remain on the "Big Island" of Hawaii, where the Umikoa Ranch is located. In coastal areas the ducks are interbreeding with wild mallards, a closely related species. It is hoped that the Umikoa site will help protect koloa from interbreeding, since its high elevation - over 4,000 feet - is not desirable mallard habitat.

When the nene (Branta sandvicensis) became Hawaii's state bird in 1957, prospects for its survival were grim. It nearly vanished during the previous century due to overhunting, habitat loss, and predation by introduced species such as mongooses, feral cats and dogs, and wild pigs. Under a successful captive breeding effort, the bird's numbers increased, and about 400 nene now inhabit the islands of Hawaii, Maui, and Kauai. In December 2001, captive-bred nene were reintroduced to Molokai under another safe harbor agreement.

Ducks Unlimited is the fourth major conservation organization to assume a lead role in a safe harbor agreement (the others are The Nature Conservancy, The Peregrine Fund, and Environmental Defense). Funding for the project is from several sources, including Ducks Unlimited and the US Department of Agriculture's Natural Resource Conservation Service, through its Wetland Reserve Program.

Umikoa ranch web site

Full text of Hawaiian Waterfowl Safe Harbor Agreement

Hawaii's Nene Reintroduction Safe Harbor Agreement

Private Programs Offering Incentives to Landowners

http://www.edf.org/article.cfm?ContentID=136

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December 19, 1997

Abolish system of
‘lead trustees’ now,
Bronster says

Judge Patrick Yim's
Fact Finder's report now online.

Star-Bulletin Staff

State Attorney General Margery Bronster says she could seek a court order to abolish Kamehameha Schools/Bishop Estate's much-maligned "lead trustee" management system.

Bronster yesterday said she plans to study an agreement finalized yesterday by Circuit Judge Colleen Hirai which calls for a review of the lead trustee system only after a management and financial audit of the estate's operations is completed.

The pact -- reached between the estate, the trust's court-appointed master Colbert Matsumoto and the attorney general's office -- represents a step back from a previous agreement to eliminate the system outright, Bronster said.

She agreed with nearly all of the remaining recommendations, which seek to streamline the estate's accounting process and financial reporting requirements.

"The time is now to abolish the practice of the lead trustee," she said. "We think the law is clear."

Bronster and Matsumoto have argued that the system -- which gives individual trustees authority over specific administrative areas -- may violate the will of the estate's founder, Bernice Pauahi Bishop, and may breach the trustees' fiduciary responsibilities since it delegates too much responsibility to one trustee.

William McCorriston, one of the estate's attorneys, disagreed, saying the informal lead trustee system is not for decision-making purposes but largely exists for reporting or oversight purposes.

All policy decisions are made by the whole board and not by individual trustees, he said. McCorriston added that many trusts use a similar system to manage their affairs.

"I don't know if we will ever be able to satisfy the attorney general," McCorriston said. "She doesn't have a good understanding of how the system works."

Under the system, the estate's asset management is handled by trustee Henry Peters and its government affairs programs are headed by Chairman Richard Wong. Trustee Lokelani Lindsey headed estate's educational programs, while Gerard Jervis ran the estate's legal affairs. Oswald Stender was in charge of the trust's Kukui Inc. subsidiary, which represents the estate's interest in a mainland methane gas drilling operation.

For many critics, Lindsey's role as lead trustee for education played a big role in the ongoing controversy. Student and alumni groups say she usurped the duties of popular Kamehameha Schools President Michael Chun and hurt school morale. Court-appointed fact-finder Patrick Yim went further, saying Lindsey managed by intimidation and played favorites.

Lindsey was removed as lead trustee more than a week ago in anticipation of Yim's report. Jervis also has relinquished his duties as lead trustee for legal affairs, according to McCorriston.

Matsumoto initially recommended abolishing the lead trustee system but said he was willing to grant the estate additional time to make the transition.

He said the estate has agreed to have its finances audited by a national accounting firm and that the audit will likely take six months to complete.

Matsumoto said he's confident that the audit of the estate will find that the lead trustee system should be eliminated and that trustees eventually will agree.

Matsumoto also had recommended that the court not approve the estate's accounting for the 1993-1994 fiscal year until the Internal Revenue Service completed its audit of the estate.

But Matsumoto said he now feels that may not be practical since it may be some time before the IRS completes its audit.

Judge Patrick Yim's
Fact Finder's report now online.

Bishop Estate Archive

http://starbulletin.com/97/12/19/news/satnews.html

~ ~ ~

September 11, 1998

Bronster:

“Sweetheart Deals with Cronies”

"I believe certain trustees received
kickbacks worth hundreds of
thousands of dollars."

--Margery Bronster

The trustees deny the state's
allegations and blame the Cayetano
administration for exploiting
the controversy

~ ~ ~

COMPLETE TEXT:
Attorney General's Petition for Removal

~ ~ ~

By Rick Daysog, Star-Bulletin

Raising the possibility of criminal charges, Attorney General Margery Bronster says Bishop Estate trustees received kickbacks, participated in illegal political campaign contributions and mismanaged Kamehameha Schools.

Yesterday, Bronster filed a 58-page petition in probate court targeting the removal of the estate's majority trustees Henry Peters, Richard Wong and Lokelani Lindsey, saying the three trustees enriched themselves at the expense of the trust's beneficiaries.

Bronster alleged that trustees Peters and Wong received kickbacks from a Hawaii Kai land deal involving Wong's brother-in-law, Jeff Stone.

Lindsey, meanwhile, mismanaged Kamehameha Schools and used trust employees to run personal errands and help renovate her Hauula home, the attorney general alleged.

"I believe certain trustees received kickbacks worth hundreds of thousands of dollars from relatives via elaborate real estate transactions," Bronster said in a letter to Gov. Ben Cayetano, who ordered the investigation more than a year ago.

"Trustees have hired friends, relatives and political allies who have given little or no service to the trust and trustees have also routinely made sweetheart deals with this same assortment of relatives, cronies and other hangers on."

Bishop Estate attorney William McCorriston denied that any breaches of trust have occurred, saying trustees and their individual attorneys look forward to answering the charges in a court of law.

"They are looking forward to having this resolved by judicial resolution in a court of law -- hopefully by a judge who won't be influenced by the electronic lynching by the media or be persuaded by anything except the evidence that will be presented," McCorriston said.

Yesterday's removal petitions also sought surcharges against Peters, Wong and Lindsey, saying the majority trustees offered jobs to friends and relatives. The jobs paid high salaries but offered little services to the estate.

Some of the hirings forced the estate to create unbudgeted positions to accommodate the new hires, the state said. They included:

> Local attorney and Peters' friend, Al Jeremiah Jr., was paid $35,000 to conduct menial and clerical labor in helping to inventory the Baker/Van Dyke collection of Hawaiiana, the state said.

> Office of Hawaiian Affairs trustee and Peters' associate, Clayton Hee, was hired by the estate's Royal Hawaiian Shopping Center Inc. subsidiary as a cultural affairs researcher, according to the state.

> State Rep. Terrance Tom, a former colleague of Peters' in the Legislature, has been paid a monthly retainer of $4,000 for negligible legal services, the state said. Tom has denied wrongdoing in the past.

> A company headed by Big Island businessman Larry Mehau is being paid $40,000 a month to provide security services at Kamehameha School's main gate. Mehau is a friend of Wong and Lindsey.

> Peters' former employer, Dura Constructors Inc., received more than $2.7 million in nonbid construction work from the Bishop Estate starting in 1995. Dura renovated Peters' home in Maili.

Renee Yuen, attorney for Peters, denied any wrongdoing by her client, saying the Cayetano administration is exploiting the controversy to boost the governor's "sagging popularity" and deflect attention from the weak economy.

"In the future, this dismantling of the Bishop Estate will be seen as the ultimate robbery of the native people directed by non-Hawaiians," she said.

Bronster, meanwhile, denied that politics is playing a role in her investigation, saying the timing of yesterday's petition is due in large part to delays caused by trustees.

A hearing on the permanent removal petition is scheduled for Oct. 23.

The removal requests come more than a year after the state launched its investigation into allegations of financial mismanagement, breaches of fiduciary duties and manipulations of the student admission process at the estate-run Kamehameha Schools.

Key Figures Named in
the Attorney General’s Petition

Joseph M. Souki

66, of Wailuku is a Democrat, the current speaker of the state House. The owner of a real estate company, Souki this summer was questioned by the state attorney general over a Maui land deal involving Bishop Estate that earned him a $132,000 commission. Souki denied any wrongdoing and said it a was a private real estate transaction. He is up for re-election this year, and has reported a $110,000 campaign war chest.

Robert N. Herkes

67, is a Democratic state representative from Kau-Puna, Big Island. The hotel industry executive first ran for public office as a Republican, winning a Hawaii County Council seat in 1983. Four years later, then-Gov. John Waihee appointed him to a Senate seat. The attorney general names Herkes as one of the politicians benefiting from trustees' actions aimed at "preserving excessive compensation”. In this Legislature, he opposed legislation to cap trustees' pay.

Clayton Hee

45, is a trustee and former chairman of the Office of Hawaiian Affairs. A Hawaiian culture college instructor, Hee, of Molokai, entered the state House in 1983. He later became a state senator -- where he became good friends with then-Sen. Ben Cayetano -- and served as Senate Judiciary chairman until 1988, when he lost his re-election bid. The attorney general says Hee was among politicians benefiting from trustees' actions aimed at "preserving excessive compensation."

Joseph S. Tanaka

56, is a Democratic state representative from Wailuku. Along with Souki, Tanaka was subpoenaed by the attorney general as part of the inquiry into the Maui land deal involving Bishop Estate. Tanaka earned a $42,000 commission from developer Everett Dowling last year, but said his consulting work did not involve the estate. Instead, Tanaka said he introduced Dowling to Sports Shinko Inc., which originally owned the Maui property.

Terrance Tom

50, has been a state representative since 1982. He now is running for the state Senate seat for Kahuku-Kaneohe. Tom, who has been blind since birth, has come under fire as chairman of the House Judiciary Committee for his stand on several issues, including same-sex marriage. As a lawyer who gets a retainer of $4,000 a month from Bishop Estate, he was criticized this past session for voting on legislation to cap trustees' pay. He voted against the caps.

Yukio Takemoto

59, is a former state budget director who resigned in late 1993 to become Bishop Estate's chief executive for budget and review. He made $163,010 in 1997. As state budget director under Gov. John Waihee, he came under scrutiny from a state Senate special investigative committee for his government purchase practices and investment decisions of the state pension fund.

Marshall Ige

44, is a state senator representing the Kaneohe-Enchanted Lake district. Ige, a former elementary school teacher, first ran for the state House in 1978 and served until 1994, when he narrowly lost a bid for the state Senate. He was elected to the Senate two years later. The Damien High School graduate received his education degree from the University of Hawaii. He currently serves as co-chairman of the Senate Government Operations and Housing Committee.

Milton Holt

45, is a former state senator and current administrative officer for Bishop Estate. In a story earlier this year based on records the estate submitted to the Internal Revenue Service, Holt reported he entertained state legislators at the estate's expense at local restaurants and hostess bars, although several lawmakers denied the meetings took place. From 1992 to 1997, more than $23,000 was charged on the estate's credit cards from Las Vegas casinos and local hostess bars.

HIGHLIGHTS ...

from Bronster's petition

Here are some accusations lodged by the state attorney general's office against Bishop Estate trustees:

Enriching themselves

Trustees Henry Peters, Richard Wong, and Lokelani Lindsey have enriched themselves from the trust at the expense of the beneficiaries:

> Inflated prices (on apartments at 1015 Wilder Ave.) were paid to Peters and Wong as a quid pro quo for conferring financial benefits on Wong's brother-in-law Jeffrey Stone.

The trust wired $500,000 to KDP-Technologies on July 2, 1997.

This investment was made without adequate due diligence and in disregard of an internal staff report. KDP-Tech was managed by principals with no proven business track records, was a highly speculative start up company, and the soft-porn nature of the investment was not suitable for a charitable educational trust.

Within a week of the trust's initial investment of $500,000, KDP-Tech began negotiating a consulting agreement with Wong's brother-in-law Randy Stone.

> KDP-Trust (KDP Ltd., a subsidiary of Royal Hawaiian Shopping Center) continued to advance trust money to KDP-Tech until its treasurer, Lindsey's acquaintance, was indicted for federal mail fraud and money laundering crimes (for which he was subsequently convicted and sentenced).

> While a director of Mid Ocean, Peters received substantial director's fees and received options to acquire 6,000 shares of Mid Ocean stock.

> The Mid Ocean fees and stock options are assets that belong to the trust and not to Peters individually.

> Peters has enriched himself at the expense of the beneficiaries by retaining the fees and stock options for his personal benefit.

Helping friends

> Peters and Wong concealed from the other trustees Holt's personal charges on the trust credit card and rejected suggestions to confiscate the card.

> Peters was instrumental in the trust entering into a consulting services contract with (friend Al) Jeremiah Jr., initially at $5,000 per month and then at $7,000 per month, without regard to whether any work was performed, with an additional $125 for each hour worked in excess of 40 hours per month.

> Peters was instrumental in the trust, by its subsidiary Royal Hawaiian Shopping Center (RHSC), hiring (friend) Clayton Hee as a cultural affairs researcher with negligible duties.

> Terrance Tom served with Peters in the Hawaii Legislature, and was hired by the trust at a monthly legal retainer of approximately $4,000 for providing negligible, if any, legal services to the trust.

> Peters directed RHSC to hire his cousin, Mona Ryan, as a property manager. Peters directed RHSC to hire a number of his other friends or relatives. "The trust created unbudgeted positions to accommodate these hirings."

> Lindsey directed RHSC to hire her grandson, Hoku Haiku.

> Larry Mehau, a principal shareholder of Hawaii Protective Association (HPA), is a friend of Wong and Lindsey.

In July 1996, the trustees hired the Hawaii Protective Association to provide additional security personnel at the Kamehameha Schools. There was no operational necessity to hire any outside security contractor.

It is more expensive for the trust to use HPA than to use Kamehameha Schools personnel to provide the same security services. It is more expensive for the trust to use HPA than other outside security services, because HPA charges above market rates.

The trustees did not solicit competitive bids for HPA's security services. There is no written contract with HPA.

> Peters is a former employee of Dura Constructors Inc. ("Dura"). Dura renovated Peters' Maile residence.

Beginning in 1995, the trust awarded construction contracts to Dura without competitive bidding and in amounts totaling more than $2.7 million.

Dura received $465,000 for work on the athletic locker room at the Kamehameha Schools. The work was so deficient that the building was unsafe for student use. The trust corrected Dura's work itself rather than pursue Dura for the deficiencies.

> Rhino Roofing also worked on Peters' Maili home renovation. Peters' nephew is the owner of Rhino Roofing.

Beginning in 1995, the trust awarded construction contracts under which Rhino Roofing received more than $1.3 million, customarily without competitive bidding or as the hand-picked roofing subcontractor.

> In 1993, the Lindseys obtained a permit from the Building Department of the City and County of Honolulu ("Building Department") to renovate the house on the property (53-823 Kamehameha Highway). The renovations uncovered structural damage that necessitated additional work beyond the scope of the existing building permit.

Lindsey went forward with the expanded renovation and was cited by the Building Department for violating the existing building permit.

Lindsey obtained a private proposal for $12,000 to obtain the necessary governmental approvals for the expanded renovation to proceed.

Rather than spend $12,000 of her own money, Lindsey used trust employees to obtain a shoreline certification from the State of Hawaii Department of Land and Natural Resources, and to obtain a zoning variance from the City and County of Honolulu.

Personal benefit

The trustees have used trust employees, equipment, supplies and resources for their personal benefit. For example:

> Lindsey has used trust employees to run personal errands for herself and her family members and to install a computer in her Maui and Oahu residences;

> During his 1986, 1988, 1990, and 1992 political campaigns while a trustee, Peters used trust employees to photograph him and his supporters for his campaign materials, in violation of trust restrictions on political activity by the trust and its employees.

http://starbulletin.com/98/09/11/news/story2.html

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May 2, 1997

Ex-state Sen. Matsuura
dies of cancer at 64

He lead a special investigation
into state procurement practices

By Mike Yuen, Star-Bulletin

Former Democratic state Sen. Richard Matsuura, who led a controversial special investigation into state procurement practices that was tantamount to challenging his own party's establishment, died of cancer early today in Hilo. He was 64....

A native of Waialua, Matsuura represented Hilo in the state House for four years and the state Senate for 12 before inoperable pancreatic and liver cancer forced him to resign Jan. 31.

"The state has lost a visionary statesman," said Senate Judiciary Committee Co-Chairman Matt Matsunaga (D, Palolo) this morning. "He was a role model for kids and a champion for good government. His family has lost a loving father and husband. And I have lost a friend, mentor and hero."

Big Island Senator Wayne Metcalf (D, South Hilo) called Matsuura "a man of great vision and dedication."

"He was a man who dared to dream," Metcalf said.

Matsuura frequently compared himself to a samurai warrior, particularly when he headed the Senate's special investigative panel in 1993.

His probe into how then-Gov. John Waihee's administration purchased goods and services did not lead to any criminal indictments. But it did cause the resignation of then-Budget Director Yukio Takemoto, who insisted he did nothing wrong.

The investigation also tightened the state procurement procedure. But legislators and even the state's current governor, Ben Cayetano, have concluded that the changes also made the procurement process more cumbersome and less efficient.

However, the political impact of the probe was significant. Although Waihee's then-attorney general, Robert Marks, declined to follow through on the panel's recommendations, which included a call for a criminal investigation, Waihee ended his final term in office with his image tarnished by a fellow Democrat.

Matsuura was able to persuade his Senate colleagues to give him the reins to a special investigative committee because he suspected that politically connected people were benefiting from government nonbid contracts and investments made by the state pension fund.

"He had very well-defined ideas about right and wrong," said former Senate Republican leader Mary George, who served on Matsuura's investigative committee.

"He wasn't an old boy. You couldn't define him as belonging to a network. He was his own person. It was his own standard that governed his conduct—not a particular network."

Sen. Randy Iwase (D, Mililani), who was also a member of Matsuura's investigative panel, added: "If he believed in something, he was very tenacious. When he took a stand, he took it with great conviction. He never wavered, no matter what was out there."

Matsuura referred to himself as a samurai because of the qualities he saw the feudal Japanese warrior embodying, said Iwase and other lawmakers. Like a samurai, Matsuura believed that loyality, honor and commitment meant more than death, Iwase said.

Matsuura had been part of the power elite under previous Senate regimes. In recent years, with Norman Mizuguchi (D, Aiea) the Senate president, Matsuura was on the outs. He refused to reach an accommodation with Mizuguchi because he felt their differences were too deep.

Matsuura's refusal at times to compromise has led him to be described as hard-headed.

"He has never changed whether in power or out," said Iwase, who joined the Senate in 1990, when Matsuura was still an insider.

Waihee said he and Matsuura were able to maintain a personal relationship even when Matsuura's panel was raising ethical questions about the Waihee administration.

Matsuura saw how technology and telecommunications were changing the world, and he wanted Hawaii to be a part of that. He also sought to find ways to divert water from the wet part of the Big Island to its dry region. He dreamt of finding a way to raise enough mahimahi to feed the world. He also wrote children's books.

Matsuura was a Renaissance man, said Matsunaga....

In addition to his wife, Matsuura leaves two daughters, Caroline "Kui" Wong and Marlene Kai, both of Hilo; four sons, Peter Matsuura, Stephen Matsuura, David Matsuura and Andrew Matsuura, all of Hilo; 14 grandchildren, ages 5 months to 11 years; five sisters, Tsurue Masaki, Ruth Tomita, Sue Burrell, Margie Yokoyama and Alice Furuya, all of Oahu; and two brothers, Larry Matsuura of Oahu and Harold Matsuura of Hilo.

Star-Bulletin reporter Jim Witty contributed to this report.

http://starbulletin.com/97/05/02/news/story5.html

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Senator David Matsuura is expected to testify regarding his business, professional and personal relationships with former Hawaii Attorney General Margery Bronster; William Rosehill; Kamehameha Schools/Bishop Estate; Nathan Aipa; Colleen Wong; Louanne Kam; Guido Giacometti; Henry Peters; Richard Wong; Yukio Takemoto; Jeffrey Stone; Randy Stone; Rocco Sansone; Marsh & McLennan; Federal Insurance Co.; XL Insurance Co.; Hugh Jones; Dorothy Sellars; Steve Goodenow; Robert Richards; Milton Holt; Calvin Say; Marshall Ige; Norman Mizuguchi; Bruce Graham; Walter Dods, Jr.; Island Insurance Co.; Judge Eden Hifo; Judge Kevin Chang; Judge Barry Kurren; Faye Kurren; Henry Paulson; The Nature Conservancy; The Peregrine Fund; Colbert Matsumoto; Earl Anzai; Lyn Anzai; John Waihee; Ben Cayetano; Linda Lingle; Patrick Yim, Judge Lloyd King, Judge Robert Faris, Benjamin Matsubara, Ron Libkuman, Curtis Ching, Carol Muranaka; James Nicholson, David Farmer, Ivan Lui-Kwan, and others to be named upon discovery.