Woo vs. Harmon - Witness Mark McConaghy

David C. Farmer, Successor-Trustee vs. Harmon

(Formerly Woo vs. Harmon & Nicholson vs. Harmon)

U.S. District Court For the District of Hawaii

—

DEFENDANT’S WITNESS

MARK McCONAGHY

Mark McConaghy
c/o Warren Price, III, Esq.
Price Okamoto Himeno & Lum
Suite 728, Ocean View Center
707 Richards Street
Honolulu, HI 96813

Fax: 808-533-0549

Partner in PricewaterhouseCoopers, LLP; Auditor/Tax Advisor for Kamehameha Schools/Bishop Estate; Co-investor with Bishop Estate trustees in the McKenzie Methane deal; named in Defendant’s RICO lawsuit. Mark McConaghy’s firm, PricewaterhouseCoopers, also provides accounting/auditing services to The Nature Conservancy, Goldman Sachs and other entities related to the subject Civil lawsuit.

~ ~ ~

NEW DISCOVERY (12-27-08): Undisclosed conflicts of interests between David Farmer, Steven Guttman, Jeffrey Portnoy, Matsuo Takabuki, Mark McConaghy, Dennis Tsuhako, PricewaterhouseCoopers, Sam Silverman, Chinn Ho, Stuart Ho, Aloha Airlines, HonFed, Bank of Honolulu, Sukamto Sia, Diane Plotts, Linda Lingle, Bob Awana, Nathan Aipa, Eric Martinson, Chubb Group, Marsh & McLennan, etc:

July 17, 1998

Hawaii
By Dave Donnelly

Portnoy on NBC
on Kimes case

IF you tune in NBC's "Dateline" tonight, you should see Honolulu attorney Jeffrey Portnoy. An NBC crew spent two hours with him Wednesday, interviewing him in reference to the case of Sante Kimes and her son, Kenneth, suspected in the disappearance and assumed death of New York socialite Irene Silverman.

Portnoy had represented an insurance company in an earlier case in which Kimes, already convicted of keeping an alien woman in slavery, was suspected of arson when her home went up in flames. He has videotape of Kimes, something all the networks would love to get their hands on, and he provided it to NBC for "Dateline."

Producers of "20/20" have been after him to give them a copy of the tape, even offering to have Barbara Walters call him personally, but he demurred that he'd given it exclusively to NBC. That network told him the Kimes' story is the biggest thing at the network since the death of Diana, Princess of Wales.

One unasked and unanswered question in the case is did the Kimes family know the missing socialite when she and her husband, Sam Silverman, were in Hawaii around the time they lived here? I knew Sam Silverman as early as 1970 when he was the financial advisor and longtime friend of local business tycoon Chinn Ho. I posed the question and Portnoy answered, "It wouldn't surprise me a bit." ...

www.archives.starbulletin.com/98/07/17/features/donnelly.html

An Unlikely Revolutionary: Matsuo Takabuki and the Making of ... - Google Books Result

by Matsuo Takabuki - 1998 - History - 237 pages -1998 University of Hawaii Press ... from the eyes of Matsy Takabuki working with Chinn Ho and Sam Silverman, ...

A FAMILY PORTRAIT: A special report.; A Twisted Tale of Deceit ...

Mrs. Silverman, an 82-year-old widow, was probably killed, officials say, ..... Mrs. Kimes filed suit against Chubb and began making threatening calls to Chubb ... were filed in the fire, which was never formally declared to be arson. ... Even before it could be bought, Mrs. Kimes was submitting an insurance claim ...

An Unlikely Revolutionary: Matsuo Takabuki and the Making of ... - Google Books Result

by Matsuo Takabuki - 1998 - History - 237 pages

Mitch Gilbert and Eric Martinson were the number-crunchers. They had computer printouts ... Nathan Aipa, our general counsel, headed our legal side....

An Unlikely Revolutionary: Matsuo Takabuki and the Making of ... - Google Books Result

by Matsuo Takabuki - 1998 - History - 237 pages

Matsuo Takabuki 1998 University of Hawaii Press ... Mark McConaghy of Price Waterhouse headed our tax team along with our staff tax ...

~ ~ ~

NEW UPDATE (09-07-08):

EARL I. ANZAI
Attorney General of Hawaii

DOROTHY D. SELLERS
HUGH R. JONES
Deputy Attorneys General
425 Queen Street
Honolulu, Hawaii 96813

Attorneys for the Beneficiaries

IN THE CIRCUIT COURT OF THE FIRST CIRCUIT

STATE OF HAWAII

In the Matter of the Estate

BERNICE P. BISHOP,

Deceased.

EQUITY NO. 2048 KSCC

~ ~ ~

REPORT OF ATTORNEY GENERAL CONCERNING MAY 7, 1999 ORDER

The May 7, 1999 order regarding orders to show cause requires the former trustees immediately to resign offices and directorships in the trust’s subsidiary and affiliated organizations... P&C Insurance Company, Inc., is a captive insurance company, the sole stock holder which is Pauahi Holdings Inc.

The Attorney General respectfully invites the court’s attention to the annual report publicly filed on March 28, 2000 by P&C (Ex. 1). The annual report lists Henry H. Peters as a director. The Attorney General is unable to determine whether the listing is incorrect; or whether Peters remains a director in violation of court order. The Attorney General’s several inquiries of the trust concerning this matter remain unanswered despite the passage of three months (Ex. 2).

DATED: Honolulu, Hawaii, May 5, 2000

Respectfully submitted,

<s> DOROTHY SELLERS
Deputy Attorney General

~ ~ ~

DECLARATION OF DOROTHY SELLERS

DOROTHY SELLERS hereby states:

1. I am a deputy attorney general, and I am familiar with the case records and files in Hawaii First Circuit Court Equity No. 2048 going back to approximately August 1997.

2. I have personal knowledge of the facts contained in this declaration and am competent to testify to them.

3. Exhibit 1 is a true and correct copy of the annual report of P&C Insurance Company for the year ending Dec. 31, 1999, filed in late March 2000.

4, Exhibit 2 is a true and correct letter of my February 15, 2000 letter to counsel for the trust asking for verification that Henry Peters had resigned from P&C and the effective date of the resignation. I have never received a response to that letter.

5. On March 13, 2000, deputy attorney general Hugh Jones wrote trustee Libkuman (with a copy to general counsel Colleen Wong) about a number of matters. The final two paragraphs of that letter are:

Finally, we also requested some time ago copies of Henry Peters’ letters of resignation from directorships and ex officio positions, and specifically from P&C Insurance Company. Although the resignation letters of the other trustees were filed with the Court, Peters’ were not.

Please respond to these requests before March 31, 2000. Thank you.

I DECLARE UNDER PENALTY OF PERJURY THAT THE FOREGOING IS TRUE AND CORRECT.

DATED: Honolulu, Hawaii, May 5, 2000

www.kycbs.net/Doc-EQ2048-PC-Peters-5-5-0.pdf

www.kycbs.net/PC-Arms-Length-Guide-10-1-94.pdf

www.kycbs.net/Doc-EQ2048-Mediation-Order-3-9-0.pdf

www.kycbs.net/KSBE-INTERROGATORIES.htm

www.kycbs.net/RICO-In-Paradise.htm

~ ~ ~

NEW DISCOVERY (06-24-08): Re: Undisclosed relationships between Maui County, Sandwich Isles Communications, Robert Kihune, Paul Allaire, Lucent Technologies, Judith Neustadter Fuqua, Paul Alston, Ron Rewald, etc.

www.kycbs.net/SandwichIsles.htm

www.kycbs.net/Lucent.htm

www.kycbs.net/Lucent-fined.mhtml

www.kycbs.net/Sandwich-Isles-Lucent-Maui-Co.pdf

www.kycbs.net/Rewald.htm

* * * * *

Disavow: A CIA Story of Betrayal

By Rodney Stich & T. Conan Russell

The Saga of
Ron Rewald and Bishop, Baldwin, Rewald & Wong

CAST OF CHARACTERS

http://www.namebase.org/sources/ZS.html

* * * * *

NEW DISCOVERY (06-06-08):

June 6, 2008

Prosecutors said
seeking AIG data
Associated Press

WASHINGTON - Federal prosecutors have asked the Securities and Exchange Commission for material from its probe of whether American International Group Inc. overstated the value of mortgage-linked contracts, according to a newspaper report Friday.

The request to the SEC from prosecutors in the Justice Department and the U.S. Attorney's office in Brooklyn, N.Y., could lead to a criminal investigation of the matter, in addition to the SEC's civil inquiry into AIG. The development was reported in Friday's editions of The Wall Street Journal, which cited unnamed people familiar with the matter.

New York-based AIG, one of the world's largest insurance companies, paid a then-record $1.64 billion in February 2006 in a settlement with federal and New York state authorities over alleged deceptive accounting practices.

The current SEC investigation focuses on AIG's valuation of credit default swaps, which function as insurance policies against defaults, including those backed by subprime mortgages, The Journal reported.

The company in February told the SEC that its outside auditors had found significant weakness in how it reports the value of certain credit default swaps. AIG also said the auditors had concluded that the company "had a material weakness in its internal control over financial reporting and oversight" related to how it determines default probabilities and expected losses on the underlying securities.

Due largely to writedowns related to credit default swaps of more than $20 billion through March, the company posted the two biggest quarterly losses in its history: a $7.8 billion loss for the first quarter, following a loss of nearly $5.3 billion in the fourth quarter.

SEC spokesman John Nester in Washington and Bob Nardoza, spokesman for the U.S. Attorney's office in Brooklyn, on Friday both declined to confirm or deny investigations by the agencies.

AIG spokesman Chris Winans also would not confirm a federal probe. He said AIG has always cooperated with regulators and has "consistently and promptly" provided best estimates of its portfolio valuations and potential exposures of its financial products amid the recent uncertainty in the credit markets.

The finding of material weakness doesn't mean that the company has reported inaccurate financial results, Winans said. "We have clean audited financial statements with no qualifications from our auditors," he said.

~ ~ ~

NEW DISCOVERY (06-02-08):

WAIALAE COUNTRY CLUB

http://www.waialaecc.com/

MAIN NUMBER: (808) 734-2151

FAX NUMBER(808) 734-4791

2007 OFFICERS

STUART HO, President
JOHN JUBINSKY, President-Elect
RICHARD INGERSOLL, Secretary
ALLAN LUM, Assistant Secretary
JAMES AHLOY, Treasurer
ALLAN LUM, Assistant Treasurer
DENNIS TSUHAKO, Internal Auditor

~ ~ ~

November 19, 1997

Four trustees receive
country club freebies

The free memberships, accepted by all
Bishop Estate trustees but Oswald Stender,
are called a conflict of interest

By Rick Daysog. Star-Bulletin

Four out of five Kamehameha Schools/Bishop Estate trustees receive free memberships from exclusive country clubs that sit on Bishop Estate land, in what critics called a clear conflict of interest.

Bishop Estate trustees Richard Wong, Henry Peters, Lokelani Lindsey and Gerard Jervis are honorary members of the posh Waialae Country Club, whose lease rents were renegotiated in 1995 with the estate.

The four trustees also are listed as honorary members at the Mid-Pacific Country Club in Lanikai, which also sits on Bishop Estate land.

The fifth trustee, Oswald Stender, turned down the free club memberships in 1995 to avoid the appearance of a conflict and for tax purposes.

"They don't get the idea that they are trustees of a charitable trust," said Senior U.S. District Judge Samuel King, one of the five authors of the critical "Broken Trust" article that helped launch the state's investigation of the $10 billion charitable trust.

"I doubt if they know how to spell the word fiduciary."

Golf club memberships and other trustee perks, such as airline VIP club memberships, have been a subject of inquiries from the Internal Revenue Service, which is conducting an audit of the estate, according to one source familiar with the audit.

King believes honorary memberships underscore the need to remove some of the trustees from the board. He said the memberships create "an appearance of impropriety" since the estate owns the land under the golf courses and negotiates their leases.

According to Waialae's membership directory, the four trustees were honorary members in 1995 when the estate and club members rewrote the lease. Those talks raised the 144.9-acre course's annual lease rent from $60,000 to about $1 million, according to club members familiar with the lease terms.

Trustees also were honorary members at Mid-Pacific when the club renegotiated its rent in 1991. The 163-acre Windward Oahu golf course now pays $469,000 a year in lease rent, up from $6,000 previously.

Jervis, Lindsey and Wong were not Bishop Estate trustees when Mid-Pacific's lease was last negotiated.

"This certainly raises questions about the independence of trustees," said Edward Halbach, one of the nation's top experts on trust law and the former dean of the Boalt School of Law at the University of California Berkeley.

Trustees respond

An estate spokeswoman referred questions regarding the club memberships to the individual trustees. Peters and Lindsey did not return calls.

Wong, who doesn't golf, said he's been an honorary Waialae member for 22 years but has never used it. Jervis, who became a trustee in late 1994, said he became a Waialae member in 1995 but has golfed there only once.

He said he had been a regular paying member at Mid-Pacific but later became an honorary member after he became a trustee.

Stender had been an honorary member at Waialae when he was appointed to the board in 1989 but declined the memberships two years ago, according to sources. He now is a regular, paying member of the Oahu Country Club, which is not on Bishop Estate land.

Managers at both golf clubs declined comment when asked about the potential conflicts.

Traditional perk

The honorary memberships are a traditional perk that the clubs have extended to trustees for many years, some members said. One said the memberships don't pose a direct conflict since the lease talks with the clubs were handled by Bishop Estate staffers, not by trustees.

He added that Waialae's new lease terms are favorable to the club. Waialae, the site of the Hawaiian Open golf tournament for decades, now has a 75-year lease, although it has had to raise monthly dues by $62 to adjust for the higher lease rent, he said.

"It was strictly by the numbers," he said.

Breached duties?

Randall Roth, a University of Hawaii law professor and one of the "Broken Trust" co-authors, believes some trustees may have breached their fiduciary duties in accepting the free memberships since they're personally benefiting from their position with the estate.

For instance, a regular membership at Waialae costs $44,000 -- roughly equivalent to the median household income in Hawaii -- in addition to monthly dues of about $310.

Mid-Pacific Country Club members pay a one-time initiation and certificate fee of $36,000 and monthly dues of $265, according to Hal Okita, general manager.

Honorary member at both clubs enjoy nearly the same privileges as regular members, although they are not allowed to vote on club policy.

According to Okita, Mid-Pacific extends honorary memberships to public figures such as Gov. Ben Cayetano and Mayor Jeremy Harris, as well as trustees. Okita said trustees haven't formally accepted Mid-Pacific's honorary memberships and noted that they seldom use the club's facilities.

Besides Bishop Estate trustees, Waialae's 1996 membership directory lists U.S. Sen. Daniel Inouye, U.S. Rep. Patsy Mink, Cayetano, Lt. Gov. Mazie Hirono, Senate President Norman Mizuguchi and House Speaker Joe Souki as honorary members.

Former Bishop Estate trustees William Richardson and Matsuo Takabuki are regular, paying members of Waialae.

"I don't see any problem in giving away honorary memberships to the governor," said King, whose father served as a Bishop Estate trustee during the late 1950s.

"But when they do that for the landlord, that is a conflict of interest."

Honorary members

Of Waialae Country Club in 1996, followed by the year they became members:

Trustee Richard Wong (1994)

Trustee Henry Peters (not available)

Trustee Lokelani Lindsey (1993)

Trustee Gerard Jervis (1995)

Sen. Daniel Inouye (n/a)

Rep. Patsy Mink (1993)

Gov. Ben Cayetano (1987)

Lt. Gov. Mazie Hirono (1995)

Supreme Court Chief Justice Ronald Moon (1993)

Honolulu Mayor Jeremy Harris (1994)

Senate President Norman Mizuguchi (1994)

House Speaker Joe Souki (1993)

Former House Speaker Daniel Kihano (1987)

City Council Chairman John DeSoto (1995)

Rev. David Coon (1989)

University of Hawaii President Kenneth Mortimer (1993)

Golfer Arnold Palmer (1981)

Sei Hoon Yang, Consulate General of the Republic of Korea (1993)

Ting-Yu Yu, director general CNNA, Representative of Taiwan, ROC, (1993)

Source: 1996 Waialae Country Club membership directory

http://starbulletin.com/97/11/19/news/index.html

Also see...

http://starbulletin.com/98/10/16/news/story2.html

~ ~ ~

October 24, 2007

Arthur Levitt and AIG - Gone Over To The Dark Side, Artie?

I waited to post this story about AIG's reappointment of PricewaterhouseCoopers as their external auditor. I am incredulous. I was slightly apoplectic too, but then I calmed down.

After all, greater minds than mine, like the famous Arthur Levitt, have made sure that, "AIG's selection process was designed and executed with integrity, and the Audit Committee's evaluation of the proposals was both fair and impartial. AIG did an exceptional job."

It seems Levitt was hired by AIG in 2005 to spruce up their image in the wake of Elliot Spitzer's investigation of AIG. Mr. Levitt's tenure at that time was expected to be less than a year as a special consultant to the Board, but it has obviously taken longer than that to address AIG's governance problems and will continue to take longer to fix them completely, if that's possible. Mr. Spitzer was the former Attorney General for the State of New York and is now their Governor.

The audit committee of AIG's board of directors spent 12 months on the RFP process, which is part of the company's 2006 settlement with the New York Attorney General's Office, said AIG spokesman Chris Winans.

The agreement, Winans said, required AIG to take actions above and beyond the normal annual review of its relationship with the company's independent auditor. This RFP is something we did as part of the settlement agreement, he said. It requires us to do the RFP process for the 2008 fiscal year.

In 2006, AIG agreed to pay a total of $1.64 billion to settle litigation stemming from New York state and federal investigations of its accounting, financial reporting and insurance brokerage practices, and claims related to workers' compensation premium taxes.

Mr. Levitt, therefore, is not a court appointed monitor based on a settlement with the SEC, a la Mr. Breeden and KPMG, but a shill for AIG.

Interestingly enough Mr. Levitt has a long and contentious history with PwC. It all goes back to reforms he wanted to make to how the audit firms did and didn't do business and how PwC was the big stubborn holdout. This was in spite of the fact that they had been nabbed big time with serious independence violations and the SEC could have disqualified the audited financial statements of all of their clients (and caused them to have to resign from those clients) if they had not cooperated with the regulators at the time. For a history of this sword fight, go here.

So it's all the more surprising that Arthur Levitt was willing to stand by and put his imprimatur on the charade which is the reappointment of PwC at AIG. After all, AIG's shareholders are suing PwC. And PwC has been AIG's auditor for as long as they have been in trouble.

I have seen some Google searches regarding this "RFP" process wherein other firms, in particular Deloitte, are searching for more details about why they weren't chosen. Let me give them all a clue... The fix was in.

I have requested via the Freedom of Information Act provisions for the State of New York Attorney Generals office, a copy of the RFP, the responses, the evaluation process and the grading of all proposal submissions. I have heard no response from them. Given that this was a public agency mandated process, I would assume that public disclosure would be mandated. Will make for interesting reading, if so. How can anyone for the Attorney General's Office be sure that it was a fair and competitive process if they also do not see and approve the process that AIG conducted?

As for Mr. Levitt, I am disappointed. I guess everyone has to make a buck. But I had hoped he would do it by being on the side of the investor and the other stakeholders of AIG, and not on the side of perpetuating the myth of a job well done by PwC as AIG's auditor.

Update: One of my favorite writers on these subjects reminded me:
"If you really want to have some fun with this, remember also that Levitt can't let go of his affiliations inside the Beltway -- now acting as co-chair of the so-called Paulson committee, along with Don Nicholaisen. Looking at the list of members, it's almost sure to be MOTS..."

Re: The Auditors

~ ~ ~

NEW DISCOVERY (02-25-08):

October 4, 2007

Disney Confirms Hawaiian
Resort Plans

800-Unit Resort To Open In 2011

HONOLULU -- Walt Disney Parks and Resorts announced on Wednesday that it will open a resort in Hawaii.

Disney said the hotel should generate about 1,000 new jobs.

Disney officials said that its team of designers is working with cultural advisors and local architects to finalize what the resort will look like. They hope to break ground for the project next year.

"This resort hotel will give our guests another way to visit an exciting part of the world with a brand they trust," Walt Disney Parks and Resort Chairman Jay Rasulo said in a written statement. "We are looking forward to building a special family resort that honors the cultural diversity of Hawaii and reflects the spirit of aloha that makes this location so unique."

"To have a company of this quality and caliber choose us when they could have chosen anywhere in the world, means a lot to us," Gov. Linda Lingle said.

Disney bought the 21-acre property for $144 million from The Resort Group, Jeff Stone's company that oversees the development of the Ko Olina area.

"I think it's incredible. As many projects as we try and bring to Hawaii, I think bringing in the Walt Disney Co. to Hawaii is the perfect fit. I think it's the perfect fit for the community, I think they're sensitive, I think they know exactly what needs to be done," Stone said.

It is the only Disney resort that will not be attached to one of its theme parks.

Part of the project will also bring in 1,000 parking stalls, which will add to the number of available stalls for the public, Stone said.

http://www.kcra.com/money/14267992/detail.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

~ ~ ~

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

~ ~ ~

October 11, 2006

The Real Deal Behind Granholm's "U. P. Big Deal"

By C. J. Williams, www.MichNews.com

On January 6, 2005 the Yooper grapevine was abuzz with news of another State of Michigan/Nature Conservancy land grab scheme involving 271,000 acres in eight counties, an amount equivalent to 502 square miles. The parcel had been carved from 390,000 forestland acres situated in ten of the Upper Peninsula’s fifteen counties.

Described by the Conservancy as an ecological treasure trove of nature’s precious jewels and pristine landscapes, the 390,000 acres, once owned by the Bishop Estate Trust (a.k.a. Kamehameha Schools Trust), includes more than 300 lakes and 526 miles of rivers and streams. However, as Paul Harvey would say, it’s time to tell the rest of the story about Governor Granholm’s “U. P. Big Deal”, also known as the Nature Conservancy’s “Northern Great Lakes Forest Project”.

Bernice Pauahi Bishop was the great-granddaughter and last direct descendent of Hawaiian King Kamehameha I. Born to high priests, Bernice was raised by a prime minister and educated by Protestant missionaries. While in her teens, she married Charles Bishop, a 28-year old New Yorker.

After her death in 1884, Charles helped establish the Kamehameha Schools and subsequent Bishop Trust according to Bernice’s last will and testament. To do so he used her substantial land holdings and his considerable wealth.

The Bishop Trust, Hawaii’s largest private landowner once estimated to be worth $10 billion or more, still operates schools and educational programs throughout the islands. Over the past several decades, the scandal-ridden Trust has been raided through convoluted schemes that almost defy unraveling.

So how did it come to pass that a Hawaiian trust fund once owned so much of Michigan’s beautiful Upper Peninsula? The answer lies in a purported friendship between Ben Benson and Mark McConaghy, a PricewaterhouseCoopers tax expert hired by the Bishop Estate trustees to keep the IRS off their greedy backs. But, I get ahead of myself.

Some of the 271,000 acres, now lauded as Granholm’s “U.P. Big Deal”, once belonged to the Calumet and Hecla Mining Company. By the late 1960’s, however, C & H could no longer afford to mine copper while meeting all the new environmental standards being put in place. Having to compete with China and other countries, which produce ore with cheap labor while ignoring environmental issues, and facing demands of better pay from its own striking miners in 1968, C & H closed its mines and sold its land holdings to Universal Oil Products.

A similar fate met miners who rode buses for up to an hour or more to the Copper Range mine near White Pine in Ontonagon County. An environmental lawsuit filed in 1995 by the National Wildlife Federation, the Michigan United Conservation Clubs, and others, plus a successful effort to agitate a band of Native Americans over environmental issues, helped end copper’s glory days there, too. But the world’s greatest source of native copper, uranium, gas, oil, and other valuable underground resources still lie waiting in the U.P. and the State of Michigan, the Conservancy, and global mining conglomerates know it.

Ben Benson, a very young New Englander, amassed some of the former C & H property in the late 1980’s, combined it with 292,000 acres purchased in 1990 from Cliff’s Forest Products (Cleveland-Cliffs), added a little bit more from here and there, and set about developing a high-tech, satellite-enhanced timbering operation, or so the tale is told.

According to Maura Singleton’s August 1999 article, “Sea Hawk”, published in the Virginia Business Magazine, 40-year-old Benson had been a dyslexic and indifferent student who dropped out of school in the ninth grade. At age 15, he stole the family car, drove from Cape Cod to Maine, and used a newly obtained credit card to buy 100 acres of rocky wilderness, which he subdivided and sold in 5-acre vacation plots.

Singleton wrote that, at age 17, Benson joined the Navy submarine corps and worked with sonar on a nuclear fast-attack sub, but his plan for a Navy career went by the wayside four years later due to allergies.

By the early 1980’s, Benson, who claimed never to have done anything for more than four years, had already run an oil company and a New Hampshire real estate development company.

He then focused attention on the state of Virginia, marrying the granddaughter of an East Shore developer, an area where the Nature Conservancy (TNC) controlled and mismanaged a great deal of land. It was here that Benson again took up work in real estate, developing exclusive coastline property.

In 1991, Benson, with title to about half-a-million U.P. acres, became involved in a partnership of sorts with the Bishop Estate Trustees through his pal, Mark McConoghy. But, in 1994 at age 35, after surviving two heart attacks within an 8-month period, he sold his U.P. land holdings to the Trust for a few million dollars and bought a 65-foot Hatteras, which he christened “Sea Hawk”.

The partnership may have dissolved, but it later caused Benson’s name to come up in Bobby Harmon’s RICO lawsuit - Civil No. 99-00304 DAE: Harmon v Federal Insurance Company, P & C Insurance Co., Inc., Marsh & McLennan, Inc., Trustees of Kamehameha Schools/Bishop Estate, PricewaterhouseCoopers, et al, filed in the U.S. District Court for the District of Hawaii.

Harmon is still immersed in litigation regarding his claims of fraud, tax evasion, racketeering and other wrongful acts involving the Bishop Land Trust. His lengthy witness list, which he adds to almost daily, includes newly appointed U.S. Treasury Secretary Henry Paulson who is a former Goldman Sachs CEO. Paulson was also a Board member of the Nature Conservancy and served as co-chairman of its Asia Pacific Council. At one time, the scandal-ridden Bishop Trust owned a great deal of Goldman Sachs stock.

When Benson was featured in the “Sea Hawk” article, he was searching for millions of dollars worth of lost treasure off Virginia’s coast and dueling with Spain for the right to do so. He’s since sold that venture, Sea Hawk, Inc., to wheeler and dealer Peter Knollenberg.

Considering that Benson had been a dyslexic, fifteen-year-old credit card-owning high school dropout and run-away, his estimated fortune, said to be around $110 million several years ago, isn’t too shabby.

After Benson sold his U.P. holdings to the Bishop Trust, Benson Forest Products became known as Munising based Shelter Bay Forests, which managed the trust’s U.P. land holdings with “gentle timbering” technology until the forestland was put up for bids in the fall of 2002.

Although Governor Engler, the Conservancy, and an “undisclosed timber company” formed a “private-public” partnership to bid on the Bishop Trust land, they lost out to Forestland Group LLC, which closed on their deal during the summer of 2003.

Founded in 1995, Forestland Group is a North Carolina based forest investment management organization (TIMO) that purchases property through its various Heartwood Forestland Funds. As of April 2005, Forestland Group owned 560,000 Upper Peninsula acres; 78,110 acres in Houghton and Keweenaw Counties bought from Mead in 1998, 91,117 acres in Iron, Ontonagon, Houghton and Baraga Counties bought from Ned Lake Timber and Land Company in 2001, and the remainder being the former Bishop Trust holdings of 389,202 acres bought in the summer of 2003.

Within a few months of closing on the Bishop Trust deal, Forestland Group offered its prize to the State of Michigan, and by January 2004 the Michigan Chapter of the Nature Conservancy had already secured at least one grant toward the purchase. That’s not surprising, however, considering that a January ‘05 news article written by George Gallagher for the Council of Michigan Foundations lauds several foundations that had taken an active role to help TNC’s Michigan chapter in their then four-year public/private partnership initiative to get their biscuit hooks on the Upper Peninsula Bishop Trust timberland.

Upon learning in 2002 that the public/private partnership lost the bid, Phil Powers, then chairman of the MI-Nature Conservancy, said Forestland Group could fit in with the Conservancy’s goals. “Our sense is they’ve got a first-class track record of putting in place solutions like the ones we’re working on. We in the Nature Conservancy are looking forward to working out a partnership with them,” said Powers.

Tina Hall, the U.P. director of the MI-Nature Conservancy, said the idea of securing recreational access easements to portions of the property was not dead. “…We know the Forestland Group so well, we feel we can work with them,” said Hall.

As the story behind the “U.P. Big Deal” unfolded, it was claimed that key players met at Governor Granholm’s office in November 2003. And, though she had to put the parties in separate rooms when negotiations broke down and shuffle back and forth with offers and counter-offers until she got them to make a deal, an agreement was finally made between the two who’ve been bed partners for years - the State of Michigan and the Nature Conservancy - in tandem with Forestland Group LLC, whose President and CEO is none other than Thomas Massengale, a former Nature Conservancy senior executive and founder of it’s North Carolina Chapter.

Of the 390,000 Bishop Trust acres for which Forestland Group outbid the State, the Nature Conservancy, and their “unnamed” timber company partner, the Conservancy, with multi-billion dollars in tax-exempt assets, will own fee interest (includes mineral rights) in 23,338 acres in the Big Two Hearted River watershed and will manage the State’s conservation easement on 248,000 acres still owned by Forestland Group.

A campaign to fund Granholm’s “U.P. Big Deal” land grab for the Conservancy’s $57.9 million “Northern Great Lakes Forest Project” got underway without anyone asking state citizens if they approved of her Big Deal or not.

Pretty slick, eh!

http://www.michigan.gov/gov/0,1607,7-168-23442
_21974-107788--M_2005_1,00.html

http://www.kycbs.net/GUIDE

http://lists.asu.edu/cgi-bin/wa?A2=
ind9807&L=sub-arch&T=0&P=1381

http://www.washingtonpost.com/wp-dyn/nation/specials/natureconservancy/

http://www.virginiabusiness.com/magazine/yr1999
/aug99/itsup/cover.html

http://www.nature.org/wherewework/northamerica/
states/michigan/preserves/art17158.html

http://www.nature.org/wherewework/northamerica
/states/michigan/misc/art14792.html

http://www.mass.gov/obcbbo/bd93-042-2.htm

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www.michnews.com/cgi-bin/artman/exec/view.cgi/318/14384/printer

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