THE UNITED STATES DEPARTMENT OF JUSTICE
OFFICE OF THE U.S. TRUSTEE
David C. Farmer, Successor Trustee
Bobby N. Harmon
(Formerly Mary Lou Woo vs. Harmon and James Nicholson vs. Harmon)
United States District Court, District of Hawaii
Judges: David A. Ezra; Kevin S. Chang
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DIANE J. PLOTTS
567 North King Street, Suite 310
Honolulu, HI 96813
Diane Plotts, is a Trustee for Kamehameha Schools. A general partner in the Mideast & China Trading Company – formerly Hemmeter Investment Company - Diane J. Plotts received her Bachelor of Science degree in accounting from San Jose State University in 1958, and served as a finance officer in the US Air Force. Moving to Hawaii in 1962, she began her long partnership with Hemmeter-related companies a year later. Her work included the development of subsidiary entities including Kings Alley (now Kings Village), Hyatt Regency Waikiki, Hyatt Regency Maui, Hyatt Regency Wailoloa (now Hilton), Westin Maui and Westin (now Marriott) Kauai.
A founding director of Bank of Honolulu; director, Hawaiian Electric Industries, Inc.; currently holds business directorships with Hawaiian Electric Industries, Inc. as past chair of HEI’s Audit Committee and current chair of its Compensation Committee. She currently chairs the audit committees for Hawaiian Electric Company, Inc and American Savings Bank.
Diane Plotts is active in community service and has served the National Symphony Orchestra-Kennedy Center, Washington, D.C.; Hawaii Health Systems Corp; Aloha United Way; University of Hawaii Board of Regents; University of Hawaii Foundation; Nature Conservancy of Hawaii; Hawaii Community Foundation; National Business Committee; Waikiki Improvement Association; and the Center for International Dispute Resolution *.
(Note: The Center for International Dispute Resolution was established by the American Arbitration Association to handle international disputes.)
Her current not-for-profit directorships include the Honolulu Country Club and the Plaza Club.
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THE CATBIRD’S NEST
TRACKING THE TRUSTEES!
* * * * *
May 9, 2009
Terms expiring; report cites program continuity
By Rick Daysog
Advertiser Staff Writer
A court-appointed master for the Kamehameha Schools is recommending a one-year extension for trustee Robert Kihune, whose term ends next month.
In a 117-page report filed with the state Probate Court last month, attorney David Fairbanks also recommended a one-year extension for trustee Diane Plotts and two-year extensions for board members Douglas Ing and Nainoa Thompson.
"The potential for loss of substantial institutional knowledge, wisdom, continuity, momentum and even stability is great, and the threats of an interruption in the present, established path of governance, a less-than-smooth transition ... and interruption of important, newly implemented programs are very real," Fairbanks wrote.
Kihune, a retired Navy vice admiral, will step down June 30 after having served on Kamehameha School's board since 2000.
A Probate Court-appointed trustee screening committee recently named three finalists to replace Kihune. They included state Department of Hawaiian Homes Lands Chairman Micah Kane, state Community Development Authority Executive Director Anthony Ching and former Kamehameha Schools executive and ex-DHHL Chairman Ray Soon.
Deputy Attorney General Hugh Jones, whose office serves as the legal guardian for the estate, had no comment, saying he has not yet completed his review of Fairbanks' recommendations.
A trust spokesman also had no comment but said the estate will file a response to Fairbanks' recommendations with the Probate Court shortly.
Kamehameha Schools, which was established by the 1883 will of Princess Bernice Pauahi Bishop, is a nonprofit charitable trust that educates Hawaiian children.
It is one of the nation's largest charities and is Hawai'i's largest private landowner, with more than 360,000 acres.
In addition to extending current trustees' terms, Fairbanks also recommended that future board members receive a 10-year term.
Currently, all five trustees serve five-year terms and are eligible for up to two terms. Thompson's term ends next year, Plotts' tenure ends in 2011 and Ing's term ends 2012.
Trustees earn about $90,000 a year.
Fairbanks said he was satisfied with the progress made by Kamehameha CEO Dee Jay Mailer and her management team but expressed concern about continuity within Kamehameha's boardroom in light of the recent financial challenges faced by the trust.
His report noted that the value of the trust's endowment dropped by 20.4 percent from $9.44 billion on June 30, 2008, to $7.36 billion on Dec. 31, 2008, as a result of the global financial downturn and the national economy.
(Catbird note: Not to mention the greed, corruption and mismanagement of the current Kamehameha Schools’ trustees and management who they now want to EXTEND a couple of years ... so they can lose another $2 or $3 billion???)
"The recent dramatic downturn in the economy, significant losses in investments, the decline in the real estate market with attendant reductions in revenues and lower values, and their potential adverse impact upon the trust's educational programs including outreach programs, make it critical that the transition to an essentially brand new board of trustees be as smooth as possible," he said.
http://www.honoluluadvertiser.com/article/20090509/NEWS01/905090325/1001 ~ ~ ~
NEW DISCOVERY (03/30/09): Undisclosed conflicts of interest between Attorney General Alberto Gonzales, the United States Department of Justice, Office of the U.S. Trustee, Curtis Ching, Carol Muranaka, Guido Giacometti, Susan Tius, Sukamto Sia, Bank of Honolulu, Diane Plotts, Bob Awana, Linda Lingle, Citigroup, Robert Rubin, Bill Clinton, John Waihee, Ben Cayetano, Goldman Sachs, Colbert Matsumoto, Henry Peters, Matsuo Takabuki, Richard Wong, Jeff Stone, Oswald Stender, Gerard Jervis, Lokelani Lindsey, Nathan Aipa, Colleen Wong, Louanne Kam, John Candon, Clifford Laughton, Timothy Johns, Bishop Museum, Nainoa Thompson, Mark Polivka, Judge Eden Elizabeth Hifo (fka Bambi Weil), Judge Lloyd King, Judge Robert Faris, Judge David A. Ezra, Judge Barry Kurren, Mary Lou Woo, James B. Nicholson, David C. Farmer, Steven Guttman, etc.:
August 24, 2000
for $4 mil
Ownership of the properties
could change during
another round of bids
By Peter Wagner, Star-Bulletin
A Nevada investor has outbid Citibank on 32 residential and two commercial units at Executive Centre, the downtown high rise that once belonged to Indonesian investor Sukamto Sia.
But with court confirmation and another round of bids possibly ahead, ownership of the property is yet to be determined.
Clifford Laughton, president of the Reno-based Nevada Holdings Ltd. and chief executive at Honolulu-based satellite company Columbia Communications Corp., yesterday made the winning bid of $4,000,100.
Laughton's bid topped a $4 million offer by Citibank N.A., the only other bidder at a foreclosure auction at the state courthouse yesterday.
The leasehold properties include 31 residential units, a penthouse, two commercial spaces occupied by Sprint Hawaii and Fujikami Florist and 65 parking stalls.
The heavily mortgaged 41-story building, at 1088 Bishop Street also includes a 120-room Aston hotel, retail outlets including Long's Drugs and Ross Dress For Less and nearly 300 residential units.
The entire property was appraised last year at $39.5 million.
Citibank, the major creditor in a foreclosure action against one of Sia's company's, MKS Executive Partners, took possession last month of most of the 41-story building in a complex bankruptcy deal in which Sia's estate will receive about $500,000.
Citibank affiliate EXCT L.P. took ownership of about 400 units on July 28.
Sia, currently in Chapter 7 bankruptcy liquidation, originally filed for Chapter 11 bankruptcy reorganization in November 1998.
While Citibank yesterday allowed itself to be outbid by $100, the sale is far from over. Under rules of the foreclosure, new bids may be entertained at confirmation but must be at least 5 percent above the auction price.
Foreclosure commissioner John Candon said at least three parties who were silent during yesterday's auction have asked when the confirmation hearing would be. No date has been set.
Laughton yesterday said he would likely honor existing leases at Executive Centre if he remains the high bidder. He said the units are a good investment because of depressed property values and a strong rental market in the downtown area.
While Executive Centre was once a key holding of Sia in Honolulu, the bankruptcy trustee was unable to liquidate the property for creditors because Sia held no equity in it.
His ownership in the building was through MKS Executive Partners, one of his numerous companies.
The 40-year-old businessman owes nearly $300 million to casinos, banks and creditors around the world.
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March 17, 2009
Trustee Pay Revisited
by Rick Daysog
Trustees of the Kamehameha Schools received much deserved applause last month when they rejected a court-approved pay increase plan and instead took a 10 percent pay cut.
After all, it's the prudent thing to do in face of the trust’s weakened financial condition, members of the Kamehameha Schools ohana have said.
But others, including former Gov. Ben Cayetano believe the way trustee pay is set is still out of whack and opens the trust to the type of abuses that haunted the estate during the late 1990s.
Previously, trustee pay was based on a formula set by law which entitled them to up to 2 percent of the estate’s annual gross. That resulted in $1 million-a-year trustee pay checks that nearly got the trust's tax-exempt status revoked by the Internal Revenue Service.
Now, trustee pay is supposed to be set at reasonable levels. Every several years, a Probate Court-appointed panel is supposed to come up with recommendations on what those reasonable levels are.
In 2004, the panel approved raising trustees maximum pay by more than 69 percent, generating much criticism among the schools’ ohana and the state Attorney General.
Probate Judge Colleen Hirai approved that increase but trustees turned it down.
Last year, the panel approved a similar plan before trustees decided to take their pay cut. The increase was again opposed by some members of the Kamehameha ohana as well as by the Attorney General’s office.
According to Cayetano, the lack of a more permanent trustee compensation schedule exposes the trust to future controversies.
In the past, the lucrative trustee compensation served as the “root cause for the ethical and political problems” that plagued the estate during the 1980s and 1990s, Cayetano wrote in his recently published memoir “Ben.”
It not only led to corrupted trust but it also tarnished the state Legislature and the state judiciary.
No doubt, the ethical characters of current Trustees Nainoa Thompson, Douglas Ing, Robert Kihune, Diane Plotts and Corbett Kalama are unquestioned. All are dedicated to the trust’s mission of educating native Hawaiian children.
But in approving steep pay raises for the trustees, Cayetano see a potential for history repeating itself:
“One could only wonder whether the panel, the probate judge and the new trustees had learned any lessons from the Bishop Estate controversy,” he wrote.
“The failure of the new trustees to ‘clean house’ left me wondering whether the problems that vexed the old trustees and the Bishop Estate would emerge again one day when the passing of time had blurred the reasons the reforms were made in the first place.”
Tags: Ben Cayetano, Kamehameha Schools, Trustee pay
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NEW DISCOVERY (11-24-08): New Exhibit: “EQ 2048 - Deposition of Lokelani Lindsey taken on November 4 & 9, 1999". This document provides clear evidence that J. Douglas Ing had multiple conflicts-of-interest in this case and, since he was not a named Defendant in my RICO lawsuit against the former Trustees, he was not a legitimate signatory to the Settlement Agreement: Furthermore, since the Settlement Agreement was NOT SIGNED by any of the five Trustees actually named as Defendants, the Settlement Agreement was not legal or valid. (See Exhibit A)
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NEW DISCOVERIES (07-19-08):
December 25, 1995
THE GOOD, THE BAD, AND THE UNSPEAKABLE
In 1995, many ate caviar, some ate crow, and a few had to settle for humble pie
Up and up and up it goes; when it'll stop, nobody knows. In this kind of market, which was powered along by Internet and pharmaceuticals plays, it's hard to believe there even were losers in '95. The unhappiest investors were those who picked trendy retailers, riverboat gaming, and oil companies. Below, we sketch the extreme ends of the spectrum, all of which kicked off the year at a share price of $5 or better....
WORST AMEX STOCK: Resort Income Investors Inc. was designed as a 12-year self-liquidating real estate investment trust (REIT). Liquidate it did, and how.
The mortgage REIT invests in loans that are secured by property acquired to develop luxury resorts. Most of the stock is owned by the company's directors, Chris and Mark Hemmeter, a father-and-son team who made big bets on riverboat gaming in New Orleans only to see their grand plans run aground in the Mississippi mud (BW--Oct. 16, 1995).
Even worse, the Securities & Exchange Commission began an investigation and the Hemmeters, who resigned in August, were accused in court complaints of squandering company assets. The stock was recently trading at 1 1/8, down from its 52-week high of 10 1/2.
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gambling: the social milieu that tore the rivergate down
by c.b. forgotston
I. Gambling In Louisiana, It's A Tradition!
Louisiana has a long history of gambling.
In south Louisiana where most of the voters are located, gambling is no longer a big moral or religious issue. Louisiana is the first state after Nevada and New Jersey where the governor said he was interested in bringing Las Vegas-style casinos into the State. This excludes gambling casinos on Indian reservations which exist all over the United States. Gov. Edwin Edwards quietly talked about casino gambling during his first term, 1972-1976. On 6 January 1986, during his third term, Gov. Edwards launched a campaign to allow ten to fifteen Las Vegas-style casinos in New Orleans.
Politically it is easy to sell gambling in New Orleans because legislators outside of New Orleans have the attitude that New Orleans is "Sin City." There is nothing you can do to make New Orleans any worse. Dump on New Orleans; it can't hurt. Land-based casino gambling and riverboat casinos in New Orleans did not bother the people in the Bible Belt in northeast Louisiana just so long as it did not cost a lot of state money. This was the mind-set of the State on the eve of the proliferation of gambling in 1986.
To understand the demise of the Rivergate, one must know the players and the chronology of events.
The story hangs on a framework of two governors of Louisiana (Edwards and Roemer) and a mayor of New Orleans (Barthelemy)...
Prior to the 1991 fall elections, under then-Gov. Roemer (1988-1992), the legislature enacted three forms of gambling: lottery, video poker, and riverboat casinos. In 1990, the lottery passed for the first time since the 1890s; in 1991, video poker and riverboat casino gambling were legalized. These were the political tests for casino gambling that sent a message to the politicians; all of the legislators who voted for gambling made it through the 1991 elections without any serious political damage. The fear that the public would vote against the legislator who voted for gambling had kept the proliferation of gambling in check. (Before the 1990s gambling surge, pari-mutuel horse racing, off track betting, and charitable bingo were all legal.)
During then-Gov. Edwards' third term (1984-1988), conservative legislators in the metro New Orleans area -- Orleans and Jefferson Parishes -- could have comfortably voted for the lottery because the public opinion polls showed 75 percent in favor. However, they killed it under then-Gov. Edwards.
At the time there was a concern among some legislators that any such operations in an Edwards administration would be fraught with political problems.
Gov. Buddy Roemer, who came to office in 1988, had a reform image. He ran a campaign opposed to gambling and promised to be anti-gambling. But this promise, like a lot of promises Roemer made, was not fulfilled.
Roemer's efforts at fiscal reform did not succeed. Louisiana still had not pulled out of the oil and gas bust that began in the early 1980s. The lottery was again proposed as a solution to Louisiana's fiscal woes. Conservative legislators who had always opposed the lottery because of Edwin Edwards, not because of gambling, got on board. Roemer rationalized that he did not have to sign or veto the lottery since it was a constitutional amendment. He was merely letting the people decide. A typical political cop-out. By this time, because of his failed fiscal reform effort, Roemer was politically weakened and had lost some of his characteristic cockiness and arrogance. Further, he was plagued by the fact that he had not been elected by a majority of the people. In 1990, the lottery passed with an overwhelming 75 percent popular vote, and general happiness prevailed. The barrier to gambling was broken by the lottery. It appeared clear to the politicians that the public was not opposed to gambling.
Riverboat Casino Gambling (1991)
The people who had been pushing riverboat casino gambling for years and had not gotten anywhere took advantage of the softened attitude toward gambling and presented it as an adjunct tourist attraction. The big players were New Orleanians Warren Reuther, Pres Kabacoff, and Jim Smith. Riverboat casino gambling began as a New Orleans concept but soon became a statewide concept due to political wheeling and dealing.
By a small margin, riverboat casino gambling passed in the legislature, and the anti-gambling governor, Roemer, signed it!
Video Poker (1991)
Representative Peppi Bruneau (Republican, New Orleans) had for years been trying to pass legislation to outlaw "gray market" video poker machines. Bruneau concluded that if we cannot outlaw these machines, then we should regulate and tax them. This is an excellent argument for prostitution, too. Following the approval of the lottery and riverboat casino gambling, video poker squeezed through the legislature. Roemer allowed it to become law without his signature. In retrospect, Roemer has stated that he considers this one of the biggest mistakes of his career as governor.
III. Stage Set For Las Vegas-style Casino Gambling
In 1991, Edwin Edwards defeated his opponent, David Duke, the one-time Ku Klux Klan Grand Wizard. The stage was set for Las Vegas-style casino gambling.
Then-Gov. Edwin Edwards had a well known, well deserved reputation as a gambler. He went to Las Vegas regularly, and he knew all the players there. Since the governor of Louisiana is such a strong force in state politics, when Edwards declared he wanted Las Vegas-style gambling, Louisiana became the focus of the expansion of gambling in the United States. Additionally, the mayor of New Orleans, Sidney Barthelemy, was the only mayor of a major city in the country who indicated a desire to have casino gambling. New Orleans was still in the doldrums, and Barthelemy did not know what else to do to create jobs, nor would he listen to other viable options, such as the Louisiana State University-Tulane University-Charity Hospital Medical Complex in downtown New Orleans, the Port expansion, and the proposed (now developing) research park at the University of New Orleans on the lakefront.
By 1991, the lottery was up and running. There were no major scandals, but it had only been in operation for a year. Not a single riverboat casino had been built. And video poker had not come on line. The state's economy was still down. Louisiana had a governor sympathetic to gambling (Edwards was elected to an unprecedented fourth term, 1992-1996), and New Orleans had a lame duck mayor who had nothing to lose (City Charter limits the mayor to two terms).
In February 1992, Steve Wynn, owner of the Mirage and other casinos in Nevada, came to New Orleans. Wynn, reputed to be the golden-boy of the casino gambling business, quickly pointed out that there had never been a successful "free-standing" (no hotel or restaurants included) casino. He hired people to study the New Orleans market as a gambling center, spent several million dollars, and walked away from it. Wynn said his preference, if he were going to move out of the traditional gambling venue of Nevada, would be a city like Atlanta rather than New Orleans. Atlanta has a much larger population, a stronger economic base, and is an airline hub, which is extremely important in bringing in gamblers from out-of-state. All of his sound reasons have proved why Las Vegas-style casinos won't work in New Orleans.
IV. Daniel Robinowitz, Father Of Land-based Casino Gambling In New Orleans
New Orleans native Daniel Robinowitz, a real estate developer who lives in Dallas, was the father of the casino at the Rivergate site. He had done projects in the New Orleans area (the Uptown Square and the Galleria), which were financial successes for him but disasters for the region. When Edwards started his fourth term (1992), Robinowitz, knowing Edwards' gambling background, had a vision that the time was right to bring Las Vegas-style casino gambling to New Orleans. He conceived the idea of a "free-standing" casino.
Robinowitz needed a big name developer and approached Steve Wynn. Probably because Wynn's appraisal did not fit with what Robinowitz knew he could sell in New Orleans, Robinowitz had only a brief flirtation with Wynn. Robinowitz did not want to get into a fight with the hotel and restaurant people. Within a matter of weeks Robinowitz aligned himself with Chris Hemmeter, an Hawaiian developer.
Chris Hemmeter was reputed to be a very wealthy man. The hotels that he developed in Hawaii received mixed reviews about their success. He was a developer much like Robinowitz -- he got his money off the top and left it to somebody else to manage. Like Robinowtiz, some of his deals went into bankruptcy.
Everything Hemmeter attempted in Hawaii was to be the biggest and the best. He had a reputation for rarely letting the financial consequences affect his development decisions. Robinowitz was probably more comfortable with Chris Hemmeter than Steve Wynn who was more bottom-line oriented. Prior to New Orleans, Hemmeter had never been involved in gambling developments, another Robinowitz mistake. Once Hemmeter got into the gambling business, he saw money everywhere! Hemmeter's escapades with riverboat casino gambling in New Orleans and in other states and land-based casino gambling in Colorado (all carried out during the time of the New Orleans casino operations) were all financially unsuccessful.
V. Snake Oil And Fairy Dust
A dapper, smooth talking promoter, Hemmeter painted a picture of revitalizing the riverfront and the decaying downtown New Orleans. A billion dollar development! No one in New Orleans had ever done a billion dollar construction project before. Hemmeter said if the legislature legalized gambling in the coming session, he "might" consider a casino in his plan. City Hall and some of the traditional business and civic leadership of the city, lured by revitalization and the number of jobs it was supposed to create, lost sight of the possibility that it could have been a scam. The super snake oil salesman sprinkling fairy dust fooled a lot of people, including some very bright, successful business people.
Two City Councils did not require a financial statement from Hemmeter (it was considered an invasion of privacy). Nor did they require a performance bond.
The Times-Picayune sent reporters to Hawaii to investigate Hemmeter, but they did not turn up anything of significance. Just by luck, I became acquainted with an Honolulu investment banker with some New Orleans connections who knew Hemmeter well. He speculated that Hemmeter did not have great wealth and might even have a negative net worth. He said unless Hemmeter went into bankruptcy, we would never see his financial statement.
VI. The Rivergate Gambled Away
The bill to authorize a land-based casino in New Orleans, HB-2010 (Act 384 of the 1992 Regular Session), may have been the most controversial vote ever taken in the Louisiana House of Representatives. John Alario, then speaker of the House and an ally of Gov. Edwards, demonstrated the power of his position as well as the power of Edwards when he maneuvered the casino bill through the House on Wednesday 10 June 1992. The previous Thursday a similar bill had fallen seven votes shy of the needed 53-vote majority to pass. It was returned to the calendar. On 10 July, HB-2010 did not appear on the regular order of the day (agenda); instead it was taken out of order and was ready for a vote sending a surprise wave over members of the House. Then-Speaker Alario ordered the electronic vote count to begin. At the electronic count of 53, he ordered the vote halted without the customary few seconds lag between the vote count and freezing the vote, which allows for a little gamesmanship (Maginnis 1995, 30).
The legislation specifically defined the location of the land-based casino -- the Rivergate site at the foot of Canal Street. The law did not require the Rivergate to be torn down, and it did not require a new casino to be built. Once the determination was made that Hemmeter's grandiose casino was going to be built, the destruction of the Rivergate was a fait accompli.
The passage of HB-2010 was the formal beginning of the casino and the end of the Rivergate. The City Council, apparently pressured by Mayor Barthelemy, awarded to Chris Hemmeter the lease of the city-owned Rivergate site. Subsequently, the Casino Board awarded Harrah's Jazz the casino operator's license. Harrah's Jazz was a partner of Harrah's and the Jazzville group (all local investors) who came together because they thought they had the best chance of getting the votes on the Casino Board to win the license over Hemmeter. They'd worry later whether they could get along.
From a practical standpoint the lease-holder (Hemmeter) and the license-holder (Harrah's Jazz) needed each other. There had been such fierce competition for the operator's license that to "marry" the two entities became a significant hurdle. A shotgun marriage was brokered in the governor's mansion! In typical Edwin Edwards fashion, the three factions -- Harrah's, Jazzville, and Hemmeter -- were ordered by Edwards to quickly work it out themselves. The logical thing to do was for Harrah's Jazz to buy out Hemmeter, but he wouldn't budge. All elements felt that each had the political clout to win the land-based casino operator's license. Gov. Edwards had friends representing both Harrah's and Hemmeter, and everyone of the Jazzville group was a friend and political supporter of his. As long as Edwards had friends in each camp, compromise was in his best interest. The gamblers were so hellbent on getting rich quick that they split the pot of gold three ways. Gov. Edwards performed the shotgun marriage and gave them his blessings. Now the three would worry later whether they could get along.
Point Of No Return For The Rivergate
The partnership of Harrah's and the Jazzville group was the point of no return for the Rivergate. It had been reported that Harrah's had an arrangement with the labor unions for exclusive union labor on their next casino that would be constructed. An adaptive reuse project such as the Jazzville group proposed to the Casino Board would not satisfy the unions. Peter Babin, local labor leader, publicly promoted tearing down the Rivergate for the sole purpose to create jobs. This gave further cover for the politicians.
The second fatal blow to the Rivergate came when Hemmeter "married" the Harrah's Jazz partnership. To put the entire Grand Deal together politically, it was necessary to make a lot of smaller deals. In reality, it was constructing a giant building on Louisiana political quicksand!
VII. $825 Million Casino Bankruptcy, Where Did All The Money Go?
A lot of money went to reimburse Hemmeter for pieces of land in the vicinity of the Rivergate that he optioned at exorbitant prices. He seemed to buy into his own snake oil and fairy dust and to believe that the casino was going to be so successful that everything for blocks around would become very valuable. Hemmeter operated on "other people's money." Some of his deals were very cash thin: he might put up $1000 cash for a piece of property that he optioned at $1 million. When the financial deal was closed, the options were exercised with the proceeds from the sale of junk bonds. The inflated land prices took a big chunk of the money. Some of the money was probably spent on "political overhead." It is my understanding that when the junk bonds were sold, all of the parties were made whole for their prior out-of-pocket expenses. The interest rate on the over $400 million in junk bonds was approximately the equivalent of 18 percent. This added substantially to the financial debacle.
Although the entire land-based casino project was estimated at $825 million, the unfinished building on the Rivergate site at the foot of Canal Street represents only approximately $200 million including parking garages. Thus, it appears that of the $825 million total project almost $600 million went to "political overhead." As of the filing of bankruptcy in November 1995, approximately $150 million more was needed to complete the facility.
Included in the "political overhead" was the renovation of the City's Municipal Auditorium (built 1930) for Harrah's temporary casino. It was to be used for only one year; the cost of renovation was $45 million. The temporary casino actually was in operation for less than seven months. Apparently, cost was no object.
In the gambling industry, gross win is determined by the amount of square footage in a casino's gambling area. In Nevada, the average is $2,000 per square foot. In Atlantic City, the win is approximately $3,200 per square foot. On the Mississippi Gulf Coast, it's around $1,270 per square foot. The Municipal Auditorium was renovated on the basis of an $8,000 per square foot win. The casino at the Rivergate site was projected to average $4,000-$5,000 per square foot win.
The latest projections for the bankrupt casino, should it ever be up and running at the Rivergate site, would require 15,500 patrons who lose an average of $70 each, 365 days a year to merely break even. The casino would have to draw annually more patrons than did the Aquarium of the Americas, the Louisiana Superdome, the Flamingo (riverboat casino near the Rivergate site), plus all of the convention delegates who went to the Ernest N. Morial Convention Center in 1996 combined! [On 1 October 1997, the Flamingo ceased operation in New Orleans.]
VIII. Harrah's Jazz Casino, The Chernobyl Of Casino Gambling!
What went wrong with the New Orleans land-based casino will likely go down as one of the all time great business disasters that will be analyzed by students at the great business schools in America. As with most business fiascos, there tends to be something simple that has been over looked. In this case the gambling promoters failed to do a market study. They appeared to have operated under the philosophy "build it and they will come!" Unfortunately for them that works only in the movies.
The demographics of the ten million annual convention and tourist visitors who come to New Orleans were never analyzed by the gambling promoters. The conventioneers (vast majority of these visitors) represent the cream of the crop of the hospitality market. They tend to be well educated and financially well off, the higher socio-economic level. Such individuals tend not to gamble. What draws them to New Orleans is the Vieux Carré, the food, the music, the architecture, and the general ambience of this historic city.
The white elephant building now on the Rivergate site was started in January 1995. The temporary casino at the Municipal Auditorium opened in May 1995, and the whole $825 million project went bust in November 1995. Unfinished and boarded up, Harrah's Jazz Casino is a monument to greed and corruption. The city was left with approximately a $23-million hole in its budget, the state with a $100 million in unrealized revenues, and unsecured creditors owed over $50 million; New Orleans has another political architectural folly!
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Edwin Washington Edwards (born August 7, 1927) served as the Democratic governor of Louisiana for four terms (1972–1980, 1984–1988, and 1992 –1996), twice as many terms as any other Louisiana governor has served. Edwards was also Louisiana's first Catholic governor in the twentieth century and perhaps with the exception of Huey P. Long, was Louisiana's most popular governor. A colorful, powerful and legendary figure in Louisiana politics, Edwards was long dogged by charges of corruption.
In 2001 he was sentenced to ten years in prison on racketeering charges. Edwards began serving his sentence in October 2002 in Ft. Worth Texas, and was later transferred to an Oakdale, Louisiana, facility.
Two men whom Edwards defeated in Louisiana elections, David C. Treen and J. Bennett Johnston, Jr., and a third who was Edwards' protege, John B. Breaux, confirmed in July 2007 that they intend to approach U.S. President George W. Bush about procuring a pardon or commutation for Edwards, who celebrated his 80th birthday in prison in August 2007.
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October 10, 2003
The one-time Hawaii resort
developer has come back
to town to see friends
and speak his piece
By Russ Lynch, Star-Bulletin
Former Hawaii developer Chris Hemmeter has battled prostate cancer and Parkinson's disease and is now dealing with a killer cancer affecting the bile duct. For Hemmeter, it's a liver transplant or death and his doctors told him he wouldn't make his 64th birthday.
But in a visit with friends in Honolulu this week, which included a party for that birthday, Hemmeter said his biggest trial was dealing with corrupt politicians in New Orleans.
Hemmeter -- who developed King's Alley and the twin-tower Hyatt Regency Waikiki, as well as luxury resorts such as the Hyatt Regency Waikoloa on the Big Island, now the Hilton Waikoloa Village, and the Westin Maui -- said in an interview that he was upset about the way Louisiana reporters picked on him over his grand plan for a $1 billion casino in New Orleans.
The bottom line to Hemmeter is that while the casino plan failed, it also put Louisiana Gov. Edwin Edwards in federal prison a year ago, to serve a 10-year term for extortion.
And Hemmeter said the luxury resorts he built in Hawaii made real money for him and his family and are now doing well again, despite setbacks under mostly Japanese owners following the burst of the late 1980s Japanese investment bubble.
Hemmeter sold those resorts at big profits, but when he stepped into the murky waters of Mississippi politics he ran aground, leading to the filing of personal bankruptcy by Hemmeter and his wife Patsy in 1997.
It began with the award to the Hemmeter group 10 years ago of a lease for a property designated to house the city's first land-based casino. The 60-year ground lease, worth hundreds of millions of dollars, was awarded because "we had the best plan," Hemmeter said.
Enter Edwards, a keen gambler and, according to Hemmeter and other critics, a corrupt politician. Edwards wanted a piece of the action for himself and his cronies and relatives, Hemmeter said. "He let me know in no uncertain terms that he expected his boys cut in on the deal. We said, no way we could do business like that," Hemmeter said. That's when the rot set in, ending with Edwards ignoring the law that said the land owner, in this case Hemmeter's company, would choose the gaming operator and simply telling Hemmeter that his choice of Caesar's as an operator was not going to be approved.
In the end, Edwards forced through a deal with three companies sharing the business, leaving Hemmeter with about a third of it.
"I ended up as a minority investor and watched my investment go down, down, down," Hemmeter said.
Hemmeter, who had kept his Hawaii developments as individual entities, ended up breaking that rule in New Orleans and consolidating several of his companies and pledging several multimillion-dollar homes as collateral for loans. The first casino, on a temporary location intended to get the business started while a new one was built, closed a few months after it opened in 1995, with Edwards' pick Harrah's going bankrupt and bond-holders unable to recover the $400 million they had invested.
That was about the end of the saga, except for the corruption and extortion federal case against Edwards.
During the selection process, Hemmeter paid for Edwards and other Louisiana officials to make luxury trips to Hawaii.
Hemmeter maintains that was all part of the shakedown and said he was vindicated when it was revealed that federal investigators had bugged his phones for 2 1/2 years and in "tens of hours" of tapes and they were unable to show one incident in which Hemmeter did anything wrong. The experience certainly soured him on the location. "I've never set foot in New Orleans, even to change planes, since 1995," he said.
For now, Hemmeter is looking after his health. He hopes for a liver transplant in the next month or so. He and his family have embarked on a new business, a Western-style restaurant called Saddle Ranch Chop House. The first unit is up and running next to the Universal Studios theme park in Los Angeles and is doing well, particularly late at night when the mechanical-bull rides, music and bands are in full swing, he said.
"We're doing just under $1 million a month in revenues" and that works out to about $250,000 in profits. Planning for four more restaurants in the next two years, Hemmeter said he hopes for eventual profits of more than $10 million a year and a number of potential buyers are paying attention.
"We should be able to get 10-12 times earnings when we sell," he said. The restaurant business is headed by Hemmeter's oldest son, Mark.
Hemmeter is also working on a golf project on the mainland. He said his family businesses have lined up some 400 pay-for-play golf courses that are interested. The idea is to have a couple of holes at each golf course wired for video with half a dozen cameras at each hole. Golfers can turn it on by dropping a $2 token in a slot and later they can go to a Web site and watch the video along with an analysis of their swings.
There will also be a $10,000 prize for a hole in one and the cameras won't let anyone cheat, he said.
Meanwhile, Chris and Patsy Hemmeter are living in a gated community near Bel Air, outside Los Angeles. Second son Chris graduated from Harvard business school and went into a dot-com business. When that failed, he got into the food and beverage distribution business and started a credit card for restaurants, but he wants to get a doctorate and may end up teaching.
Daughter Katie is doing well as an actress and playwright and makes money buying and selling residential real estate, Hemmeter said.
The Hemmeters had a "reverse surprise birthday party" at the Kahala Avenue home of lingerie multilevel marketing moguls Walter and Tiffany James Wednesday night, with a short but elite list of guests invited for what they thought was going to be a video-conference with Hemmeter speaking from the mainland.
Present were three former governors -- George Ariyoshi, John Waihee and Ben Cayetano -- former Mayor Frank Fasi and an array of other Hemmeter friends representing much of the long-time business leadership in the islands.
Guests were delighted when Walter James, who runs UndercoverWear with his wife, confessed that Chris and Patsy Hemmeter were in the house. Hemmeter was welcomed warmly and he said doctors had told him and Patsy that they should not expect him to be around for a 64th birthday party.
One who was completely taken by surprise was Larry Johnson, former chief executive officer of Bank of Hawaii, who had arrived only half an hour earlier on a flight from New York. Johnson said he hadn't showered but his wife Claire told him not to worry because the video link would not detect any body odor.
Thos Rohr, who headed the group that developed the Waikoloa Resort, said the best thing about Hemmeter was that he started at the bottom, as a trainee with Sheraton Hotels here in the early 1960s, and rose to the top, handling deals with hundreds of millions of dollars in the same gracious way he always acted.
Tim Guard, a longtime Hemmeter friend and president of the stevedoring company McCabe, Hamilton & Renny, called the reunion "an evening of smiles."
~ ~ ~
November 28, 2003
Developer Christopher Hemmeter
dies at age 64
Pacific Business News (Honolulu)
Christopher B. Hemmeter, a prolific developer who built some of Hawaii's most notable hotels and resorts, died Thursday at his Los Angeles home. He was 64.
Eight months ago he was diagnosed with severe liver cancer. He also had been coping with Parkinson's disease. This was his second bout with cancer.
Sharing memories of his father, son Mark Hemmeter told PBN from Los Angeles, "Thanksgiving was his favorite holiday because it was all about just family. Our whole family was with him yesterday, and it was very peaceful."
Hemmeter came to Hawaii in the 1960s and became a noted developer while still in his 20s, along with partners Henry Shigekane and Diane Plotts. Many credit Hemmeter with creating the concept of a destination resort. He moved to the mainland in 1991 and became a casino developer in Colorado and New Orleans. His most recent venture was a successful restaurant near Universal Studios.
Former President Jimmy Carter, Hemmeter's close friend, told PBN for an October profile: "Chris has the uncanny ability to dream ... then put his concepts into practice for the enjoyment of countless others."
"We are extremely saddened by his passing, but we also rejoice as we reflect upon his life," the family said in a statement Friday. "He stood for all that was good in us and gave unselfishly of his time and energy. He will be greatly missed. His affection and caring for others, his charisma, and his professional accomplishments lead many people to pronounce that he was truly 'larger than life.'"
For his accomplishments, Hemmeter has received numerous awards including being named twice as the Businessman of the Year, Salesperson of the Year, Marketing Man of the Year and Islander of the Year in Hawaii. He was inducted into the American Academy of Achievement in 1979. In 1991 Hemmeter was selected the Independent Hotelier of the World.
Hemmeter's activities went beyond the hotel industry. He was the founder and chairman of the Bank of Honolulu, a director of the First Hawaiian Bank, a director of the National Symphony Orchestra in Washington D.C., a trustee of Punahou School in Honolulu, a member of the Young Presidents Organization, a director of the Carter Center, a director of Morrison Knudsen, a director of Resort Income Investors, and a Trustee Fellow of Cornell University where he received the prestigious Entrepreneur of the Year award granted to Cornell University graduates.
"Hawaii needs to appreciate his contributions to the visitor industry and the state," close Hemmeter friend and retired Bank of Hawaii CEO Larry Johnson told PBN previously. "His legacy will live here forever."
He is survived by his wife of 25 years, Patricia; children Mark and daughter-in-law Lisa, Chris and fiancée Debi, Katie and husband Cully; stepchildren Kelley, Shane, Brendan and wife Brook, and Holli; sister Sally Younge and husband Eric; brother Dr. Mead Hemmeter and wife Mari-Jo; sister-in-law Karen Cook; and six grandchildren, Taylor, Maddy, Annabelle, Austin, Ryan and Quinn.
Private services will be held Sunday in Los Angeles. In lieu of flowers, donations can be sent to the new Christopher B. and Patricia K. Hemmeter Kahaola Hospice Foundation at 1164 Bishop St., Suite 800, Honolulu, HI 96813.
NEW DISCOVERY (06-30-08):
June 30, 2008
Hawaii Health Systems Corporation sends out SOS
Hawaii Health Systems Corporation (HHSC) met with both House and Senate caucuses last week, but today announced officially that they face "fiscal challenges" of a $62 million deficit for fiscal year 2009, on top of a projected shortfall of over $40 million in the fiscal year 2008 which ends today. State lawmakers view the situation as a potential crisis which will impact community hospitals statewide; the neighbor islands are most vulnerable.
Early this session, the legislature appropriated a $14 million emergency appropriation to HHSC which was to apply to this fiscal year's shortfall.
HHSC is technically a public benefit corporation. It operates 12 hospitals on Oahu, Maui, Kauai and the Big Island, employs 4,200 staff and over 800 affiliated physicians, and provides acute, long-term, and rural health care.
HHSC indicated that they will immediately halt recruitment and hiring and implement layoffs at certain facilities.
The legislature responded today with a plan to send members of the House Finance and Senate Ways and Means committees to the neighbor islands for information gathering. According to state law, HHSC may not reduce major services without getting approval from the legislature. There are no immediate plans to go into special session for this purpose.
The legislature will also convene a Joint Legislative Health System Recovery Task Force, made up of public and private stakeholders, to assist the HHSC with short-term and long-term plans to ensure that health services remain viable and available for those who rely on community hospital services.
See also: The Puna Connection
~ ~ ~
NEW DISCOVERY (05-26-08):
The Global Economy's Investment
Want to know a few of the results of the move towards the so-called "Global Economy" which has become the nirvana Corporate America seeks? Be very careful, you might not like what you find.
According to U.N. documents, 4 million women a year are sold into sexual slavery around the world. Understand, these documents aren't discussing some Mid- Eastern potentate's harem. What we're talking about is 500,000 women "imported" into Western Europe and 90,000 into Italy, alone. These women are kidnapped and sold into prostitution for the gratification of men like the late Larry Hilblom, the founder of DHL courier service. Hilblom, it should be added, also participated in the kidnapping and sales of many young women, as well.
The majority of these women, who are mostly just young girls, come from the countries once known as client states of the old Soviet Union, such as Albania and the Ukraine. In fact, the selling of girls for the sexual gratification of wealthy men has become a major export for many of the supposedly free nations from the former Soviet bloc.
Amazingly, many of these women are moved through our ally Israel. The reason Israel is a major center for these atrocities is that Israel has absolutely no laws against the sale or ownership of other humans. Now there is wonderful reason to continue our hundreds of billions of dollars in foreign aid to this moral back water of a country.
The main reason that these crimes can so easily occur is the demand by the world's corporations that there be few or no inspections at national borders and that, with corporations buying up governments just like ours at bargain prices, they own the decisions to investigate crimes and, of course, see no reason to investigate the very crimes they, themselves, are committing.
Now, of course, America is immune from these charges, aren't we. I mean, this is the country where politicians spend their entire careers shouting about their fairy tale world of "family values", right? Our government would immediately spring into action should even a hint of this crime appear within our borders, right?
Wrong, of course. Thai women were imported into the United States and forced into sexual slavery in New York, Houston and Toronto, according to stories in the LA Times, New York Times and Dallas Morning News.
How long will it take the corporate prostitutes in Washington, D.C., to even acknowledge these crimes? How many conservatives do you think are going to stand up in protest against these horrors against humanity? How many will demand hundreds of billions of dollars to fight these crimes against humanity? What is less than none?
Unless America wakes up to these violations against humanity and demands action from the blow hards in office, nothing, whatsoever, will ever happen. Why? Because the victims do not fall within the parameters these vile people respect. These are young girls from foreign countries that don't contribute to American political coffers, nor are they related to anyone who owns enough property to matter to American politicians. If they were all Republican, Christian, wealthy wives and daughters of campaign contributors then this would be a problem of cosmic proportion. They aren't, so the problem is ignored.
These crimes against women are only the most extreme examples of the damage that is being done to people all over the world in the name of corporate profits. Add in the disease ridden fruit coming into America from countries which have little in the way of health and safety laws and food covered with the pesticides that America banned so Corporate America sold its stock to the same Third World countries now supplying us with our daily fruits and vegetables and grains.
Consider the effects that corrupt rulers the world over have regarding the financial health of your retirement and investments and, if the idiots who hate government safety nets have their way, your Social Security. Consider the damage another episode like the Hunt brothers attempt to corner the silver market would have on America if it were done by a nation or groups of nations. Finally, consider the costs of a simple computer virus invading the systems which control what will be the world's financial institution.
You, as an individual, have absolutely nothing to gain in a global economy. In fact, you will be the loser if you continue to listen to the lies and do not begin fighting the mutation of your world into a world corporation where the wealthy would rule through unlimited economic power. As in all things, it is your choice but your inaction will affect billions of people for centuries to come.
~ ~ ~
* NEW DISCOVERY (05-11-08): TRUSTEES MARY LOU WOO, JAMES NICHOLSON AND DAVID C. FARMER; THE AMERICAN ARBITRATION ASSOCIATION AND THEIR APPOINTED ARBITRATOR JUDITH NEUSTADTER FUQUA; AND THE TRUSTEES’ ATTORNEY STEVEN GUTTMAN FAILED TO DISCLOSE DIANE PLOTTS’ RELATIONSHIP TO THE AMERICAN ARBITRATION ASSOCIATION, IN CLEAR VIOLATION OF THE AAA’S RULES OF ETHICS.
~ ~ ~
Diane Plotts is expected to testify as to the facts and circumstances of the Settlement of Harmon’s RICO lawsuit, and regarding the actions taken by Defendant subsequent to entering into the Settlement Agreement, including Defendant’s alleged breaches of the Agreement through his so-called “letter writing campaign”. Although she was not one of the three trustees who signed the Agreement, as a trustee at the time, she will be asked to provide evidence that she had the legal authority to agree to the signing the Settlement and Indemnity Agreement on behalf of the former trustees, and had the express written authorization of KSBE’s liability insurance carriers, Federal Insurance Co. (Chubb Group), and XL Insurance Co. to approve the Agreement.
Diane Plotts is also expected to testify regarding Kamehameha Schools’ racially-biased hiring and school admissions policy.
See: www.kycbs.net/Apartheid-Hawaii.htm; www.kycbs.net/Apartheid-Hawaii-Malkin-8-4-5.htm
~ ~ ~
NEW DISCOVERY (05/10/08) - FINANCIAL RELATIONSHIPS BETWEEN SUKAMTO SIA, DIANE PLOTTS, LINDA LINGLE, BOB AWANA, AIPAC, HENRY PETERS, MOCHTAR RIADY, LIPPO GROUP, ECHOSTAR, RUPERT MURDOCH, KARL ROVE, BILL CLINTON, CHINAGATE, ETC:
It was formerly known as EchoStar Communications Corporation and changed its ... It was founded by Mochtar Riady, an ethnic Chinese born in Indonesia...
* * *
~ ~ ~
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
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.
~ ~ ~
February 9, 2008
Amount of settlement
raises critical concern
By Robert Shikina, email@example.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."
* * *
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?
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NEW DISCOVERY (01/25/08) - Undisclosed relationships with Lyman House Museum and related entities (including Bishop Museum), resulting in addition of two new witnesses, Bob Olson and Jon Markell (with more to follow):
~ ~ ~
NEW DISCOVERY (01-25-08) - Undisclosed relationships between David Farmer and Corbett A. K. Kalama, First Hawaiian Bank officer and Kamehameha Schools Trustee; Diane Plotts; Mark Hemmeter, Ben Cayetano; Bob Olson, and other witnesses in this case:
From Hawaii ArtReach publication, “The Hawaii State Art Museum - Part of a Worldwide Museum Boom:
STATE FOUNDATION ON CULTURE AND THE ARTS
Vol 15, Nos. 3 & 4
THE HAWAII STATE ART MUSEUM -
PART OF A WORLDWIDE MUSEUM BOOM
By David C. Farmer
...Museums worldwide are building new structures or expanding their current facilities in a multi-billion dollar building boom...
Transparency, accessibility, audience building: many of these museum projects, like those of the Brooklyn Museum of Art, the Los Angeles County Museum of Art, and the Art Institute of Chicago are exploring new ways to attract hitherto marginalized societal groups...
Which brings us to the vision for our very own Hawaii State Art Museum, scheduled to open in fall 2002. The SFCA offices in July 2001 relocated to the Ewa Mauka end of the second floor of the No. 1 Capitol District Building (also previously known as the Hemmeter Building and Armed Forces YMCA Building)....
As Governor Cayetano has so well expressed, the long-range vision, who knows, maybe some day the entire building will become a total art center, filled with the bustling activities of artists working in their studios, performances of all kinds taking place, and students of all ages immersed in engaged arts experienced, for the benefit of our citizens and as an invaluable resource for our cultural tourism visitor industry...
During World War II, the building was renamed the USO Army and Navy Club. It offered servicemen a centrally located place where classes, activities, dances, silent movies, and auctions were alternatives to other activities available on Hotel Street and across the street at the infamous Black Cat Café. When the Pacific Fleet paid its occasional visits, the facility would buzz with activity as Honolulu - then a city of only 100,000 - entertained 45,000 sailors for about 50 days.
Renamed the Armed Services YMCA after World War II began, the “Y” played a major role in the lives of United States military personnel throughout the war years....
The building was added to the National Register of Historic Properties in December 1978. In 1987, developer Chris Hemmeter and Hemmeter Investment Co. purchased the property for $11,000,000 to serve as the headquarters for the Hemmeter Corporation....
The transformation of the Armed Services YMCA into the Hemmeter Corporation Offices involved functional changes that necessitated substantial modifications to the existing building and grounds...
The restoration was completed in 1989 at a cost reportedly in excess of $30,000,000 by the Honolulu architectural firm of Lawton & Unemura. Hemmeter renamed it the No. 1 Capitol District Building ...
Japan-owned BIGI Corp. purchased the property and furnishings for $80,500,000 in April 1990 and leased the property back to Hemmeter for five years. In June 1990, the State leased the property from Hemmeter Investment for a term of five years. In 1991, occupants of the State Capitol relocated to the No. 1 Capitol District Building, Leopapa A Kamehameha (State Office Tower) and the Capitol Center building due to asbestos remediation...
~ ~ ~
Native Hawaiian Culture and Arts Policy Being Developed
In response to Senate Concurrent Resolution No. 76, passed during the 21 Legislature 2001, SFCA Executive Director David C. Farmer and SFCA Commissioner Mona Abadir have convenied a planning committee of well-respected Hawaiian leaders to develop a process to maximize Hawaiian community input in developing a formal policy supporting native Hawaiian culture and arts.
The planning committee includes Maile Andrade, UH Art Department; Alani Apio, artist, playwright and community leader; Corbett A.K. Kalama, First Hawaiian Bank employee and Hawaiian arts community activist; and Vicky Holt Takamine, kuma hula and community leader. Additional resource people are Dr. Michael Schuster; SFCA Folk Arts Coordinator, and Jonathan Johnson, SFCA Commissons Project Manager...
~ ~ ~
April 5, 2000
$22.3 million would buy the
structure, land and pay for
upgrades and repairs
By Richard Borreca, Star-Bulletin
The state wants to buy the Hemmeter Building in downtown Honolulu for $22.3 million and put a $3 million art gallery in it.
The building, once known as the Armed Services YMCA, is already largely leased out to the state. It has been on the market for a year.
The historic building was built in 1872 and underwent a $30 million upgrade in 1987 when former Hawaii hotel developer Chris Hemmeter bought it for $11 million. Three years later, he sold it to BIGI Corp. of Japan for $82 million.
Yesterday, the state asked the Legislature for the extra money to be included in the state's construction budget.
"The state has negotiated a purchase price of $22 million for the land, building and furnishing, based on the state's recently completed appraisal," Ray Sato, state comptroller, wrote in testimony given to the Senate Ways and Means Committee yesterday.
The state calculates that it would save $14.3 million over 20 years by buying instead of renting....
The state also wants $3,057,000 for the design and construction of a state art gallery with staff support areas for the State Foundation on Culture and the Arts.
The state had been approached by BIGI in December to buy the building for $27 million, but the state's own appraisal pegged the value of the building and two acres at $18 million to $22 million.
The building is connected to the state office tower on Beretania Street.
Sen. Andy Levin, Ways and Means co-chairman, yesterday initially dismissed the proposal, saying it was not in the Senate's version of the state budget.
But the Cayetano administration sent a letter to both the House and Senate leadership yesterday asking that the lawmakers act this year to buy the building.
~ ~ ~
October 10, 2003
Hemmeter projects and
persona larger than life
Pacific Business News (Honolulu) - by Gina Mangieri
Chris Hemmeter is not one to tinker. In projects from the 1970s through the 1990s, he preferred to start with a gigantic clean slate -- which meant a lot of razing, digging and grading -- before turning his visions into grand developments.
The Hyatt Waikoloa Village, now Hilton, is like Disneyland without the rides -- except for a 175-foot water slide and both boats and trams to shuttle guests through the property. More than $7 million was invested in artwork for an open-air gallery, which includes statues of mainland mountain animals. The project used enough pink flagstone from Arizona to stretch 75 miles if laid end to end.
Hemmeter's Kauai project, too, got over-the-top treatment. The 356-room resort includes a 26,000-square-foot pool -- the largest in Hawaii. Its champion-designed links would be followed by a golf-course boom that would leave 30 new courses in the islands in 10 years. The original hotel grounds included many larger-than-life sculptures, which the new owners removed.
"I remember looking at his hotel in Kauai after it was built, and to me it was kind of weird," former Hawaiian Electric CEO Dudley Pratt recalls. "It was all for show."
Others in Hawaii agreed some projects were over the top. Environmental groups criticized the operating requirements of his hotels in everything from water and electricity consumption to waterfront development approaches.
Hemmeter filled in 1.8 acres of submerged lands to develop Waikoloa. It's a point of contention today as a land dispute that still has the landowners at odds with state Department of Land and Natural Resources after U.S. District Judge David Ezra ordered the hotel compensate the state for use of public lands. Besides resource consumption, some saw his projects as forgoing Hawaiiana for fantasy.
Hemmeter's response is that a resort must keep the customer's fantasy escape in mind.
"You have to serve customers the wine they want, not the wine you think they should have," Hemmeter said. If developing here today, however, Hemmeter says he would work in a way "more compatible with Hawaii's environment and culture."
President Jimmy Carter agrees Hemmeter has the capacity to develop with nature in mind and says he has flexibility in style.
"Chris' creative mind and love of the natural world ... are evident in the design of the Carter Center," Carter told PBN. "He is constantly probing for excellence, searching always for the cutting edge of exciting achievements and daring experiments in architectural design."
A development that appealed more to the classical senses came in his renovation of the former Armed Forces YMCA on Hotel Street, on the site of the first Royal Hawaiian Hotel built in 1872 and demolished in 1926. He sold it to a Japanese investor, who later sold it to the state to serve as offices and an art museum.
Right place, right time
From 1968 to '71, more than 17,000 hotel rooms came to Waikiki. Money was flowing from investors. Hemmeter was positioned to join the building boom.
And his projects earned a wide visitor following. Hemmeter said Hyatt reaped significant revenue on Oahu and Maui, and even today the Hilton Waikoloa Village is a hit.
"Barron Hilton [hotel chain chairman] told me Waikoloa is their No. 1 resort in performance and popularity," Hemmeter said.
Hemmeter had a knack for seeing possibility where others did not. But he was also in the right place at the right time for his style and taste for design and risk, many say. He built during the bubble, and in a way that some say he probably couldn't have once it burst.
"Later, it could not have been done," Pratt said. "People have come back down to earth."
His major developments in Hawaii rode the 1980s all the way to the top, and few failed to be sold for more than they cost to develop. The Kauai hotel was struck by Hurricane Iniki and sold for a fraction of the $135 million development cost, but the two golf courses -- included in the original development price -- had previously been sold for $250 million.
Hemmeter's only Hawaii project to lose value upon sale was Waikoloa, which sold for about 25 cents on the dollar. Hemmeter and former business partner Diane Plotts said no local lenders were hit with a loss.
"Waikoloa sold for less than we built it for, but it was the kind of project that was needed to activate all the other thousands of acres in Waikoloa," Plotts said.
Bankers familiar with Hemmeter's projects say their operating expenses exceeded revenue, but Hemmeter counters that they must have been successful because "they all sold for extensive profits, except Waikoloa."
Admirers and critics
Plotts and former partner Henry Shigekane both credit Hemmeter as the wizard of Hemmeter Investment Co. But Hemmeter and others say his partners were also essential to his success.
"One of Hemmeter's big strengths is that he surrounded himself with good people," said Stuart Ho, son of Chinn Ho, adding he recalls his father had a favorable impression of Hemmeter back to days together at the Ilikai.
"It was amazing growing up with him as a father," said son Mark Hemmeter, developer in Colorado. "The best lesson I learned was that taking risks is a very good thing."
In an industry where smooth talking, favors and connections can be just as important as a good idea and solid capital, many who know Hemmeter say he and his team instead had unquestioned integrity.
Francis Oda, Group 70 architect, first met Hemmeter when he was developing King's Alley. The development would mean a car-rental agency had to move, and Oda was involved in helping with the agency's new site. Oda recalls Hemmeter made it his personal mission to ensure the agency ended up with lucrative Kalakaua Avenue frontage despite his development.
"He was all over solving their problems for them, and that impressed me," Oda said.
Many others also praise his integrity. Though they also concede his bold endeavors left some people uncomfortable.
"He was so extreme in carrying out his vision," said Beadie Dawson, an attorney, entrepreneur and community leader who recalls meeting Hemmeter in the 1960s when she worked in hotel public relations. "I think there's an element of jealousy out there about what he was able to get done."
"He went into so many projects, some were bound to be controversial," former Honolulu Mayor Frank Fasi said. "But hey, he made things happen."
A sting after 30 years developing
When the state didn't choose Hemmeter's Aloha Tower development proposal in 1989, many recall a bitter reaction. Hemmeter acknowledges it was a tremendous letdown.
"When I lost it, my comment was, 'I didn't know you wanted two palm trees and chewing gum,'" he said, still critical today of the winning bidder. Today, his bitterness is softened by hindsight. The young man made old before his time by cancer sounds more wounded than angry about the lost deal.
"I was enormously hurt," he said, adding that he had $1.38 billion in financing lined up for the venture.
He said he believes he had the best ideas for the project -- which involved a floating market, a sports arena and an aquarium. He even hung on to his Aloha Tower portfolio, today a timeworn set of renderings yet to be rendered neutral in Hemmeter's imagination. He turns the pages, orchestrating his ideas, and the music he said was his best sales tool still comes through in tones weakened by the slurs of Parkinson's.
"When we lost Chris to the mainland, we lost one of our greatest assets," retired Bank of Hawaii CEO Larry Johnson said of Hemmeter's move to the mainland in 1991.
"There is no one that can fill his shoes," son Mark said.
There is broad consensus that he has set a standard for creativity and productivity. Many compare him with Henry Kaiser who brought so many changes to Hawaii in the decades before Hemmeter's arrival in the 1960s.
Though Hemmeter has lived off-island for more than 10 years, he brought with him upon his return this week a new economic development plan (see page 46) for the islands, one he says would "maximize our assets -- the land and the people."
Many already see him as an important contributor to Hawaii's economic development after statehood. Hemmeter estimates his Hawaii projects have employed as many as 30,000 people.
"Chris Hemmeter is an extraordinary businessman, developer, community leader... and friend," President Carter said.
"Hawaii needs to appreciate his contributions to the visitor industry and the state," Johnson said. "His legacy will live here forever.
Reach Gina Mangieri, PBN editor, at 955-8030 or firstname.lastname@example.org
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U.S. Department of Justice
Executive Office for United States Trustees
Office of Research and Planning
For Immediate Release
October 30, 2001
U.S. TRUSTEE PROGRAM LAUNCHES
BANKRUPTCY CIVIL ENFORCEMENT INITIATIVE
WASHINGTON, D.C.--The United States Trustee Program has launched an initiative to more aggressively use existing civil enforcement methods to curb abuse of the bankruptcy system, Martha Davis, Acting Director of the Executive Office for United States Trustees, announced today.
"Effective case administration is vital to ensure the American public that the bankruptcy system provides relief for honest but unfortunate debtors overcome by serious financial difficulties," Davis stated. "The Civil Enforcement Initiative emanates from the U.S. Trustee Program's long-standing commitment to enforce the Nation's bankruptcy laws and explore other meaningful strategies to bolster public confidence in the integrity and effectiveness of the bankruptcy system."
"The priorities of the initiative will require a concerted effort nationwide to use existing tools in a way that best accomplishes tangible results and improvements for case administration," Davis continued. "Many of our offices use such strategies today and we hope to build upon their experience. By focusing our resources on these priorities, we also seek to address some of the concerns that have been at the forefront of debate in recent years both before Congress and in other public venues. In the end, this is very much a community effort that will require communication and cooperation with private bankruptcy trustees and with the bankruptcy bench and bar."
These are the priorities of the Civil Enforcement Initiative:
Ensuring that Chapter 7 is not abused and that Chapter 7 debtors are held accountable.
Chapter 7 debtors who do not comply with the law will have their cases converted or dismissed, or their bankruptcy discharges denied or revoked. Enforcement measures include motions to dismiss Chapter 7 cases under 11 U.S.C. §§ 707(a) and 707(b), and complaints to bar or defer discharge under 11 U.S.C. § 727.
Protecting consumer debtors, creditors, and others who are victimized by those who mislead or misinform debtors, make false representations in connection with a bankruptcy case, or otherwise abuse the bankruptcy process.
Attorneys and bankruptcy petition preparers (non-attorneys who prepare bankruptcy documents for a fee) must engage in full disclosure, be free of conflicts of interest, and engage in ethical practices. Enforcement measures include motions for sanctions, contempt of court, and disgorgement under 11 U.S.C. § 329 for misconduct by attorneys, and complaints and motions under 11 U.S.C. § 110 for misconduct by bankruptcy petition preparers....
Fighting fraud and abuse by making criminal referrals and assisting United States Attorneys in criminal prosecutions.
The U.S. Trustee Program is a component of the Justice Department that oversees the administration of bankruptcy cases and intervenes in court to enforce the bankruptcy laws. There are 21 regions in the Program, each headed by a U.S. Trustee appointed by the Attorney General.
The Civil Enforcement Initiative took effect Oct. 1, 2001, with the start of the federal government's 2002 fiscal year. Previous U.S. Trustee Program initiatives have focused on issues such as enhancing the supervision of private trustees who administer Chapter 7 bankruptcy cases, increasing the efficiency and speed of Chapter 7 case administration....
Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
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November 17, 2003
Trustees Celebrate Ruling Upholding
The Board of Trustees of Kamehameha Schools today celebrated federal Judge Alan Kay's ruling upholding the Schools' 116-year old policy of offering admissions preference to applicants of Hawaiian ancestry.
"This is an incredible day for Kamehameha Schools," said board chair Constance Lau. "We are ecstatic that what Hawaiians have always felt was right, what we have always felt was pono, has been upheld today in a court of law."
In upholding the preference policy, Judge Kay noted Princess Pauahi's intent as expressed in 1887 by her husband, Charles Reed Bishop, that her schools educate Hawaiian children first. He also agreed that Hawaiians continue to suffer educational and societal imbalances as a result of historical wrongs.
Kay stressed that Kamehameha Schools is a private institution, and said that in its 1993 Apology Resolution, the U.S. Congress determined that the imbalances resulted in part from the overthrow of the Hawaiian monarchy in 1893.
Trustee Douglas Ing noted, "Judge Kay's ruling is important because it recognizes Kamehameha Schools' role in improving the capability and well-being of Hawaiians through education. We understand today's ruling will be appealed and that we face another legal battle in Judge Ezra's courtroom tomorrow, however, we are hopeful that the U.S. judicial system will recognize the importance of Kamehameha to the Hawaiian community and the entire state."
"Kamehameha Schools is a symbol of hope for the Hawaiian community and this ruling is a restoration of that hope," said Trustee Nainoa Thompson. "Today's judgement is one that will further unite the Hawaiian people and all those who care about Hawai`i."
Trustee Diane Plotts expressed gratitude for the overwhelming public support shown over the last few months. "The displays of support from the entire community -- from emails to petition signatures to participation in unity marches and celebrations of Hawaiian culture -- have encouraged us tremendously."
Kamehameha Schools supporters celebrated Judge Kay's ruling with KS trustees by chanting and singing the school song.
Along with his fellow trustees, Admiral Robert Kihune thanked those gathered at court for their unwavering and dedicated support. "I can imagine our beloved Pauahi smiling down on all of us today."
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Diane Plotts is also expected to furnish evidence of the appointment of her attorney in Case No. 99-04339, and that this attorney was approved by Kamehameha School’s insurance carrier. She is expected to testify regarding her personal, business, professional, financial and social relationships with Jack Abramoff, The Nature Conservancy, Henry Paulson, Nancy Johnson, Constance Lau, American Savings Bank, Chris Hemmeter, HonFed, Mark Hemmeter, Francis Oda, Group 70, Louisiana Governor Edwin Edwards, George Ariyoshi, John Waihee, Ben Cayetano, Frank Fasi, Hamilton McCubbin, Dee Jay Mailer, Edwina Clarke, Michael May, Hawaiian Electric Co, Elizabeth K. Lindsey Buyers, Gensiro Kawamoto, Stanley Hong; Linda Lingle; Bob Awana; Maui County Council, Maui Planning Commission, Charles Ota, Jon Van Dyke, Hawaii Land Use Commission, Peter Savio, Bill Mills, Calvin Say, Stanford Carr, Renton Nip, Judith Neustadter Fuqua, Gilbert Tam, Sandwich Isles Communications, Al Hee, Clayton Hee, Summit Communications, Nathan Aipa, Randall Chang, Judge Kevin S. Chang, Judge David A. Ezra, Steven Guttman, Susan Tius, Colbert Matsumoto, Island Insurance, Michael Tanoue, Rocco Sansone, Marsh & McLennan, Aon, Jeffrey Case, Oswald Stender, Haunani Apoliona, Office of Hawaiian Affairs (OHA), Bank of Honolulu, Sukamto Sia, Donna Tanoue, Guido Giacometti, Jeremy Harris, James B. Nicholson, Arnold Morgado, Rockne Freitas, Michael Chun, Ron Rewald, Barron Hilton, Lamar Hunt, Hawaiian Airlines, Gensiro Kawamoto, Judge Alan Kay, Judge David Ezra, Judge Michael Seabright, David Farmer, Bob Olson, Jon Markell, Kai Markell, Susan Ichinose Ron Sakamoto, and others to be named upon discovery.
THE PEREGRINE GALLERY
To View More Birds of Prey!
JACK ABRAMOFF - HENRY PAULSON - GALE NORTON
FAYE KURREN - NANCY JOHNSON - PETER SAVIO
BRUCE BABBITT - BEN BENSON - DAVID COLE
HAUNANI APOLIONA - JEFF WATANABE
COLBERT MATSUMOTO - JAMES WATT
LINDA LINGLE - DIANE PLOTTS
JAMES B. NICHOLSON
(...with more to come!)
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Documents, Letters, News Articles and Related Links
Originally posted: July 1, 2005
Last updated: January 13, 2010
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