Office of U.S. Trustee vs. Harmon - Witness Michael Seabright

David C. Farmer, Successor-Trustee vs. Harmon

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

CV05-00030 DAE KSC

U.S. District Court For the District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

—

DEFENDANT’S WITNESS

JUDGE MICHAEL SEABRIGHT

Address to be determined.

Former Assistant U.S. Attorney in the lawsuit against former Kamehameha Schools Trustee Lokelani Lindsey and in the Milton Holt case; nominated by President George W. Bush for District Court judge to replace Judge Alan Kay.

~ ~ ~

NEW DISCOVERY (10-29-08): New facts providing more evidence of undisclosed conflicts of interests between Judge Barry Kurren and his wife, Faye Kurren, Paul Alston, Rick Daysog, Eric Grant, John Goemans and other entities involved in this case:

October 29, 2008

Judge orders names be made
public in Hawaii school suit

BY RICK DAYSOG, Advertiser Staff Writer

The identities of four unnamed, non-Hawaiian students challenging Kamehameha Schools' admission policy must be made public in 10 days, a federal judge ruled yesterday.

In a 22-page order, U.S. Magistrate Judge Barry Kurren said the public, as in other civil rights cases, has "a strong interest in knowing who is using the courts to vindicate their rights."

"The severity of the threatened harm and the reasonableness of plaintiffs' fears do not weigh in favor of anonymity," Kurren wrote. "At most, plaintiffs are vulnerable children who have a reasonable fear of social ostracization."

Kamehameha Schools spokeswoman Ann Botticelli said the schools appreciated the ruling, saying, "Judge Kurren obviously deliberated carefully on the matter."

David Rosen, one of the attorneys representing the students, declined comment yesterday.

Rosen and California attorney Eric Grant previously argued that the disclosure of the students' identities would expose them to public humiliation and retaliation.

Parents of the students — who are simply known as Jacob, Janet, Karl and Lisa Doe — have said in court papers that they may drop the lawsuit if the children are not allowed to pursue their lawsuit anonymously.

The Does, who are not of Hawaiian ancestry, applied for admission to Kamehameha in the 2008-09 school year, but were rejected.

Kurren's ruling came after a 1 1/2-hour, closed-door hearing on Oct. 21.

By issuing a 10-day stay to his ruling, he allowed the students and their parents to consider whether to continue pursuing the action.

The stay also allows the Does' attorneys to appeal the ruling to U.S. District Judge Michael Seabright, who is assigned to the case.

Founded by the 1884 will of Princess Bernice Pauahi Bishop, Kamehameha Schools is a charitable trust that educates children of native Hawaiian ancestry. The estate is the state's largest private landowner and is one of the nation's wealthiest trusts, with assets of more than $9 billion.

lawyers cite threats

In their court filings, Rosen and Grant cited anonymous threats posted on the Internet and hostile remarks attached to the comments sections of local news stories about the admissions controversy.

Grant and Rosen have noted that the threats were serious enough to prompt U.S. Attorney Ed Kubo in 2003 to issue a warning against anyone looking to harm another non-Hawaiian student, Brayden Mohica-Cummings, who was admitted to the school under a settlement agreement.

Kurren, however, ruled that Grant and Rosen didn't provide evidence of "any threat of physical or economic harm" against the Does.

Botticelli, the Kamehameha Schools spokeswoman, added that the trust's leadership "would never take any action that puts a child in danger."

"We would never engage in or condone any racial threats or actions, and we know our community wouldn't either," she said.

Adrian Kamali'i, a 2000 Kamehameha Schools graduate and president of the student-parent group Na Pua a Ke Ali'i Pauahi, said Kurren's ruling "levels the playing field."

Allowing the students and parents to pursue the lawsuit anonymously takes away any accountability and hides from the public "who is doing what and why," added Jan Dill, a 1961 graduate.

"I think it's tremendous that the judge has demanded transparency in a process that affects thousand of native Hawaiian children," Dill said. "People who take actions like this should stand up and take responsibility rather than hide behind confidentiality."

School hails ruling

Attorneys for the trust — Paul Alston and former Stanford University Law School Dean Kathleen Sullivan — said anonymity has allowed the students' lawyers to portray their clients in a sympathetic light, but gave the trust no means to say whether that portrayal is accurate.

They also noted that in the previous lawsuit challenging the school's admission policy, Grant's co-counsel John Goemans abused his client's anonymity by leaking the details of a confidential settlement.

In that suit, a separate John Doe sought to overturn the trust's Hawaiian-preference admission policy. The policy was upheld by the full 9th U.S. Circuit Court of Appeals and was headed to U.S. Supreme Court before it was settled.

The trust was able to save its admissions policy but ended up paying the student $7 million.

Beadie Dawson, a native Hawaiian attorney and former lawyer for Na Pua, said that given the stakes involved, she expects the Does to appeal Kurren's decision.

"They are looking for another damages settlement, a free hand-out," she said. "Giving them anonymity encourages others to file what I consider to be frivolous lawsuits."

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NEW DISCOVERY (03/10/08):

March 10, 2008

Replacing top judge is Lingle’s jurisdiction

Gov. Lingle will pick the next chief justice unless
the people alter the Constitution

By Ken Kobayashi, Star-Bulletin

Gov. Linda Lingle says she wants the next chief justice of the Hawaii Supreme Court to be a hard-working legal scholar who will not legislate from the bench.

Candidates would not be favored if they were prosecutors, "but it wouldn't hurt their chances, either," the Republican governor said in a recent interview with the Star-Bulletin.

Although Attorney General Mark Bennett has been mentioned in legal circles as a top contender, the governor said it is too early to mention any names.

But in explaining the qualities she would like to see in judges, Lingle made clear that she believes they should interpret laws and leave legislation to elected officials.

Her remarks suggest that her appointment of the state's next chief justice could be monumental for the five-member high court. Known for a long tradition of rendering "activist" decisions, the court has been hailed by civil rights advocates but criticized by others as going beyond reviewing and applying the laws.

Lingle's appointment would be the first time that a Republican governor would name a chief justice in more than 40 years. Democratic Gov. John Burns appointed William Richardson in 1966, and Democratic governors appointed the next two: Herman Lum and the current chief justice, Ronald Moon.

The only way Lingle would be prevented from making the appointment is if state lawmakers place on this fall's ballot -- and voters approve -- a proposed constitutional amendment to lift the mandatory retirement for judges who turn 70.

Unless the state Constitution is amended, Moon must retire when he turns 70 on Sept. 4, 2010, about three months before Lingle's term expires.

The state Senate approved a controversial measure last week that raises the mandatory retirement age to 80, and sent the proposal to the state House. But key senators acknowledge that it will be difficult for the amendment to pass because voters rejected a similar proposal in 2006 that eliminated the mandatory retirement provision. Voters rejected the amendment by 80,000 votes, 58 percent to 35 percent.

"It's an uphill battle," said Sen. Brian Taniguchi, Senate judiciary chairman. "I'm not going to die if the bill dies."

Senate President Colleen Hanabusa agreed with the prognosis. "I'm not sure it will make it out of the Legislature because we just put it on the ballot," she said.

Taniguchi maintained that he views the proposal as a civil rights issue against age discrimination and a "compromise" by retaining the retirement age but raising it to 80.

Opponents, including Lingle, contend the measure is aimed at preventing her from naming the next chief justice.

Bennett and City Prosecutor Peter Carlisle, who opposed the 2006 proposal, submitted testimony in opposition to the current measure before Taniguchi's committee last month.

The proposal's supporters include the Hawaii Government Employees Association and the Japanese American Citizens League.

Republican Sen. Fred Hemmings, who voted against the measure last week, said in an interview that the proposal was "petty politics at its worst."

"I think they (Democrats) will try to do whatever they can to put it on the ballot," he said.

Taniguchi said he believes Moon is doing an "all-right job," but said the motivation behind the measure is not to keep him as chief justice. The senator noted that Moon was a Republican before he got to the bench.

BETS ARE ON BENNETT

The speculation that Bennett will be Lingle's choice has been fueled by his role as a trusted adviser to the governor. In addition, his was one of three names Lingle submitted to the White House for a lifetime tenure as a U.S. district judge here. In 2005, President Bush chose Michael Seabright, now a federal judge, from the list.

The speculation prompted Taniguchi to ask Bennett at last month's hearing about the chief justice's job.

In an interview, Bennett gave the same answer he gave to the senator: If the job somehow opened up now, he would not apply for it.

"My plans right now are, when I'm done as attorney general, to return to private practice and/or teach," he said. "But I would not even begin to speculate about what my feelings might be in two years."

Lingle's appointment would be subject to Senate approval. The Democratic-dominated Senate has rejected some of her appointments, including Ted Hong to the Circuit Court and Randal Lee to the Intermediate Court of Appeals.

But if Lingle gets the names for Moon's replacement early in 2010 and her appointment is rejected, she would be able to name another person from a list of four to six names submitted by the Judicial Selection Commission.

If the Senate rejects all of her choices, the commission would chose the chief justice from its list, according to the state Constitution. The commission's selection would not be subject to Senate approval.

Hanabusa said "it's almost positive" that Bennett will be appointed by the governor. She said one of the criticisms is that he is sometimes almost "overzealous" in representing the administration over the legislative and judicial branches. Hanabusa cited his efforts against the mandatory retirement amendment that was placed before the voters by the Legislature in 2006.

"I think people are watching because they have concerns," she said.

Hemmings, however, said he is a "big fan" of Bennett and applauded him for his work with prosecutors and police in pushing for legislation. "It's hard to deny his success and record," Hemmings said.

Another name mentioned is Mark Recktenwald, a former assistant U.S. attorney who was Lingle's director of the Department of Commerce and Consumer Affairs before the governor named him chief judge of the Intermediate Court of Appeals last year.

Hanabusa said Recktenwald is considered a good administrator and would have support, but indicated senators might wait to see how he does as the chief appeals court judge.

Recktenwald said he has been chief judge for only about 10 months and is focused on doing a good job. "I haven't given consideration to anything else," he said.

SAME-SEX SHUTDOWN

Lingle's appointment would oversee a Hawaii Supreme Court whose history includes expanding the public's rights to beaches and surface waters; recognizing the rights of native Hawaiians go onto private property for traditional religious and food gathering practices; and striking down laws the court believed infringed on the rights of criminal defendants.

In its landmark and highly controversial case, the high court issued a 1993 decision that paved the way for same-sex marriages in Hawaii. That ruling prompted state lawmakers to complain that the court was creating new law, and it led to a constitutional amendment that essentially negated the ruling.

"I continue to try to reflect what the public would like to see in a judiciary, and that is a judiciary that really interprets the laws that elected people pass rather than try to make law as a judge from the bench," Lingle said.

Lingle notes that unlike the three previous Democratic governors, she is not a lawyer who might be familiar with judicial candidates. She suggests that helps bring a fresh prospective to her judicial appointments.

Because her appointments are for 10-year terms, the judges Lingle has selected -- and will select -- will remain on the bench for years after she leaves office.

Lingle said she wants her legacy to be that the courts will be a place where people "get a fair shake."

"I think the very highest achievement you can have for a judiciary is that the average citizen of a state or of a country will get fair treatment no matter who they are," she said.

http://starbulletin.com/2008/03/10/news/story03.html

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NEW DISCOVERY (03/12/08): Undisclosed conflicts of interests between Judge Robert Faris, David Farmer (Attorney for Aloha Airlines), Judge Michael Seabright, David Banmiller, and other witnesses, relating to the bankruptcies of Hawaiian Airlines and Aloha Airlines:

October 31, 2007

Hawaii air fares may rise
after $80M ruling

By Rick Daysog. Advertiser Staff Writer

Interisland airline go!, whose low prices started a fare war, has lost a court ruling that might prompt it to leave Hawai'i, industry analysts said.

If go! leaves, interisland airfares will likely rise, the analysts predicted.

A judge yesterday ruled that go!'s parent, Mesa Air Group, must pay $80 million to Hawaiian Airlines for misusing confidential business information.

But U.S. Bankruptcy Judge Robert Faris rejected Hawaiian's request to bar go! from selling interisland tickets for one year.

Mesa said it will likely appeal the decision and said it remained committed to the Hawai'i market. But analysts said that if the ruling stands, it will likely affect whether go! continues to offer $19, $29 and $39 one-way fares, or operate at all in Hawai'i.

"This definitely hurts Mesa," said Nick Capuano, managing director and head of equity research at Los Angeles-based Imperial Capital LLC, whose firm follows Hawaiian.

"It's now less likely that they will slug it out in a money-losing market."

The $80 million judgment is more than double the $34 million that Mesa earned for all of 2006 and is equivalent to about $2.78 for each outstanding share of Mesa's stock.

Since the June 2006 launch of go!, Mesa's cash holdings have fallen from about $345 million to about $198 million, according to a recent filing with the Securities and Exchange Commission.

Local airline industry historian Peter Forman said he believes the ruling will likely hasten Mesa's exodus from Hawai'i.

"I would think that this puts more pressure on Mesa to look at finding a settlement with Hawaiian for an exit strategy," Forman said.

The judge said Mesa used proprietary information it obtained from Hawaiian Airlines to "gain a competitive advantage ... to enter the market for Hawai'i interisland air transportation services."

"In this case, the award of money damages adequately redresses the harm suffered by (Hawaiian Airlines) as a result of Mesa's breach of the confidentiality agreement," Faris wrote in a 14-page finding accompanying his ruling.

REACTIONS TO RULING

Mark Dunkerley, Hawaiian's president and CEO, welcomed the judge's decision.

"Today's ruling is a triumph for fair competition and ethics over dishonesty and illegal behavior," he said.

"Nobody benefits when a company like Mesa misuses confidential information to gain an unfair competitive advantage, then lies about it and destroys evidence."

Jonathan Ornstein, Mesa's chief executive officer, said the likelihood of an appeal "is very high."

Ornstein said his company remains "more committed" to the interisland market in light of yesterday's ruling.

But should Mesa decide to leave Hawai'i in the future, Faris' ruling could cost consumers "hundreds of millions of dollars," Ornstein said.

He said Faris "basically ruled that the actions of one person were enough to punish" Mesa, its 5,000 employees and Hawai'i's residents and visitors.

He was referring to Mesa Chief Financial Officer Peter Murnane, who downloaded thousands of pages of proprietary information about Hawaiian's business, then destroyed the records, saying he thought he was deleting pornography from his work computers.

Murnane has since been placed on a 90-day leave of absence by Mesa's board.

"We are extremely disappointed, and that judge has put the interest of Hawaiian above the interests of the people of Hawai'i," Ornstein said.

Hawaiian sued Phoenix-based Mesa last year for $173 million in damages, alleging that Mesa used confidential financial data from Hawaiian to set up go! airline.

POSSIBILITY OF APPEAL

The ruling came after yesterday's close of the stock market. Mesa's stock closed at $5.10 on the Nasdaq market yesterday, up 16 cents. Shares of Hawaiian rose 61 cents to $5 per share on the American Stock Exchange in after-hours trading yesterday.

Mesa has up to 10 days to appeal Faris' decision with the U.S. District Court or with the bankruptcy appellate panel of the 9th U.S. Circuit Court of Appeals in California.

Such an appeal would require Mesa to post a bond for the full $80 million, unless Faris were to grant Mesa a stay pending the outcome of such an appeal.

Besides Hawaiian's lawsuit, Aloha Airlines has filed an antitrust lawsuit in U.S District Court against Mesa, alleging that Mesa used confidential information to drive it out of business.

"Aloha believes it is important for all companies serving the people of Hawai'i to conduct their business affairs with the highest ethical and legal standards, and the court today found that Mesa did not meet that standard of conduct," said David Banmiller, Aloha's president and chief executive officer.

"Contrary to what Mesa has been saying, today the court confirmed what we have been saying all along, that Mesa's actions as a new entrant have been inconsistent with fair play."

In its February 2006 lawsuit, Hawaiian alleged that Mesa received more than 2,000 pages of confidential financial information when Mesa expressed an interest in acquiring Hawaiian in 2004 while Hawaiian was in bankruptcy.

Mesa, whose bid was rejected, was supposed to return the documents or destroy them but didn't, Hawaiian alleged. Hawaiian emerged from bankruptcy protection in June 2005 under the ownership of California-based Ranch Capital LLC.

Mesa previously has argued that losses suffered by Hawaiian after go!'s entry were largely self-inflicted because the local airline increased capacity in response to go!'s entry.

Mesa also has said that Hawaiian wants go! out of the market so it can increase fares.

Yesterday's ruling comes after two weeks of court hearings from Sept. 25 to Oct. 4.

A 'MISADVENTURE'

During a pretrial hearing, Faris found that Mesa kept confidential information it was supposed to return or destroy; Mesa misused information it kept, and that was a substantial factor in Mesa's decision to enter the Hawai'i market.

In his findings of facts and conclusion of law, Faris cited about a half dozen confidential documents that Mesa misappropriated to start go! They include:

> Internal projections on Hawaiian Airlines' future operations and financial performance;

> Lists of contracts with the local airline's third-party vendors;

> Details of Hawaiian's expansion plans;

> The company's strategy for marketing to wholesale tour operators;

> Documents spelling out Hawaiian's contracts with its codeshare partners like American Airlines, Continental Airlines, Northwest Airlines and US Airways;

> Pricing policies, frequent flier programs and credit card alliances.

"A skilled and experienced expert in the airline business might have been able to make an 'educated guess' about some of these topics by drawing inferences from publicly available information," Faris wrote.

"These inferences would not have been as accurate and reliable as the information, which Mesa obtained directly from HA."

Scott Hamilton, a Washington state-based aviation industry consultant, called go! a "misadventure from the beginning."

RISING FARES PREDICTED

Hamilton said the interisland market could not sustain more than two major players, especially when fares are as low as $29 or $19.

He predicted that fares will return to where they were in 2005 when the local carriers were charging more than $79 each way if go! leaves the market.

"If indeed Mesa does decide to withdraw and shuts down go!, fares will go up the day go! shuts down, if not before," Hamilton said.

"There is no incentive to keep fares at present levels without go! in the market," he said.

Faris alluded to that prospect when he wrote:

"This situation cannot continue indefinitely; eventually fares must increase to a level that eliminates the market-wide losses. (It is highly unlikely that any of the three carriers could reduce its costs enough to eliminate its losses.)

"It is impossible to say with any decree of certainty, however, when this will occur or what the new fare level will be. It is also possible that another carrier could enter the market, holding fares down."

HOW EVENTS UNFOLDED

March 2003: Hawaiian Airlines files for bankruptcy protection.

April 2004: The federal bankruptcy court allows potential investors to study Hawaiian's books under a confidentiality agreement.

April to May 2004: Mesa downloads more than 60 documents, including more than 2,000 pages of proprietary information about Hawaiian's financial performance, projections and business strategy.

May 2004: Mesa is eliminated as a bidder for Hawaiian.

December 2004: Aloha Airlines files for bankruptcy protection.

April 2005: Mesa starts looking into acquiring or forming a business alliance with Aloha. Mesa retains GCW Consulting, an Arlington, Va.-based aviation consulting firm, to "look at a possible acquisition or some other structure for entry into the Hawai'i market."

June 2005: Hawaiian Airlines exits bankruptcy protection under the ownership of California-based Ranch Capital LLC.

January 2006: Mesa's Chief Executive Officer Jonathan Ornstein tells investors that Mesa's decision to enter the interisland market was based on its review of Hawaiian and Aloha Airlines during their bankruptcy cases.

February 2006: Hawaiian sues Mesa to bar the company from operating in the interisland market for two years. Hawaiian alleges Mesa improperly used confidential data it received when Hawaiian was in bankruptcy. Hawaiian later reduces the length of the ban it seeks to one year.

March 2006: Mesa begins selling tickets for its June 9 launch of interisland carrier go!

March 2006: Mesa files countersuit, accusing Hawaiian of trying to illegally block competition.

June 2006: Mesa launches go!

September 2006: Hawaiian alleges Mesa tried to drive Aloha out of business and cites e-mails by Mesa Chief Financial Officer Peter Murnane. One e-mail says: "If we assume Aloha stays in market and in business forever, this project makes no sense. We definitely don't want to wait for them to die, rather we should be the ones who give them the last push."

October 2006: U.S. Bankruptcy Judge Robert Faris rejects Hawaiian's request for a ban but says Mesa "probably breached the confidentiality agreement" by failing to return or destroy material it received. Faris also concludes that "at one time, Mesa hoped to drive Aloha out of business."

October 2006: Aloha sues Mesa, alleging that it misused confidential information in an attempt to drive Aloha out of business.

December 2006: Faris throws out Mesa's countersuit against Hawaiian.

August 2007: Hawaiian accuses Mesa CFO Murnane of destroying several computer files that included confidential Hawaiian material.

Yesterday: Faris orders Mesa to pay Hawaiian $80 million in damages for misusing confidential business information.

• • •

Postings at www.honoluluadvertiser.com

This is a representative sampling of comments posted at honoluluadvertiser.com after the go! airline ruling was announced:

go! just wanted to drive out Aloha or Hawaiian, then it would have raised prices for sure.

Dan, Honolulu

Please don't go, go! We need the "reasonable" fares to stay. Hawaiian and Aloha were gouging us for too long!

RCM, Honolulu

I think it is fair considering Mesa came in to put either Hawaiian or Aloha out of business using confidential information.

Nate

Mesa will go buh-bye,
Hawaii Superferry will go buh-bye,
Hawai'i consumers will suffer once again,
And the "ol' boy network" will live happily ever after.

Largo, Honolulu

http://the.honoluluadvertiser.com/article/2007/Oct/31/

~ ~ ~

June 16, 2005

Fourth federal judge
is sworn in

J. Michael Seabright fills a seat
left vacant by U.S. District
Judge Alan Kay in 2000

By Mary Vorsino, Star-Bulletin

Before more than 100 colleagues, friends and family members, former assistant U.S. attorney J. Michael Seabright was sworn in yesterday as Hawaii's fourth full-time federal judge.

I feel blessed now to be part of this judicial family," Seabright, 46, told those who gathered at the U.S. District Courthouse for the event. "I will listen to all who come before me, learn from all who come before me."

Seabright filled a seat left vacant in 2000 after U.S. District Judge Alan Kay went on semiretired status. Seabright is expected to ease a heavy caseload for the state's federal judges, who now preside over about 400 trials a year.

"We've been waiting a long time for my replacement," Kay said.

Chief U.S. District Judge David Ezra said it has been "far too long for Hawaii to go without an active federal judge."

Ezra praised Seabright for his community service and strong family ties. "It is a great pleasure for all of us to have Judge Seabright on this bench," he said. "He is a dedicated and loving family man."

In April the U.S. Senate voted 98-0 to confirm Seabright, two months after he was nominated by President Bush. He was one of three candidates Gov. Linda Lingle recommended for the lifetime post.

The other two were state Attorney General Mark Bennett and former state chief labor negotiator Ted Hong.

Ezra and fellow U.S. District Judges Helen Gillmor and Susan Oki Mollway commended Seabright for his trial history.

"We're delighted that he is the one," Mollway said.

Ezra swore Seabright in while the new judge was flanked by his wife and two children. Seabright received a standing ovation as his family helped him put on his black judge's robe.

Seabright joined the U.S attorney's office in 1990 and was named head of the white-collar crime section in 2002.

He prosecuted a number of high-profile white-collar crime cases, including those involving former Honolulu City Councilman Andy Mirikitani, former state Sen. Milton Holt, former state House Speaker Daniel Kihano and eight former Honolulu liquor inspectors.

"This is a great day for the people of Hawaii," said Hawaii Intermediate Court of Appeals Judge Craig Nakamura, who was an assistant U.S. attorney alongside Seabright until 2004. "He cares deeply about the community. ... He always took the high road. I know he's got a good heart."

Seabright got his law degree from George Washington University in 1984 and moved to Honolulu, where he worked at the law firm Carlsmith Ball. In 1987 he started working with the U.S. attorney's office in Washington, D.C., before returning to Hawaii.

http://starbulletin.com/2005/06/16/news/story4.html

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December 7, 1999

Ex-Sen. Holt
gets one year in
mail fraud case

The once-prominent lawmaker
used campaign money
for personal use

By Debra Barayuga, Star-Bulletin

A federal judge has advised former state Sen. Milton Holt to get help, saying an addiction to drugs led to the politician's downfall.

"Your drug addiction cost you your freedom, your wife and a promising career in government," U.S. District Judge Alan Kay said yesterday. "The only way to turn your life around is participate in drug treatment."

Minutes earlier, Kay had sentenced Holt -- once one of Hawaii's most promising politicians -- to 12 months in federal prison for one count of mail fraud involving the use of campaign contributions for personal purposes.

With credit for time already served, Holt, 46, could be released in eight months. He also was required to pay $2,051 in restitution to the state Campaign Spending Commission, and to be on supervised release for three years after serving his prison term.

Holt admitted to writing a $2,051 check to an executive at Ryan's Graphics, a Honolulu printing company, and receiving cash back in return. Holt's campaign committee received no services for the cash payment, but got a backdated invoice saying the money was spent on "Thank You" cards.

In exchange for Holt's guilty plea, the federal government dropped five other counts of mail fraud.

His voice choked with emotion, Holt thanked his supporters and apologized for his use of drugs and for the "irresponsible actions" that brought him to court.

He said he will rely on a higher power to help him "resume a clean and sober life" and to care for his family. Holt has custody of his three boys, ages 11 to 14.

He will remain at Oahu Community Correctional Center until the U.S. Bureau of Prisons decides where he will serve his term.

Holt has spent most of the last four months in a detention facility in Oakland, Calif., after his bail was revoked for testing positive for crystal methamphetamine.

Holt's attorney, Reginald Minn, declined comment after the sentencing.

Minn had asked that Holt be sentenced at the lower end of federal sentencing guidelines and spend half his term in home detention.

The attorney cited Holt's past public service and outstanding achievements in several areas, and said he has the support of his family.

But Holt suffered a breakdown in his marriage and the loss of a close family member, causing him to "drift" from that source of support and strength, Minn said.

Assistant U.S. Attorney Michael Seabright said Holt, although knowing it was illegal, engaged in a long-standing practice of giving checks to friends and having them give cash back and bogus invoices in return, Seabright said. He also provided false information to the Campaign Spending Commission regarding the nature of the expenditures.

"Mr. Holt knew very well the nature of campaign spending laws, what do do and did it anyway," Seabright said.

Prosecutors say Holt used campaign money to pay for a relative's birthday party, drinks at a relative's wedding reception and auto insurance for a car not used by his campaign committee.

U.S. Attorney Steve Alm said Kay did what was appropriate for someone who betrayed the trust of his constituents and the public. "It's so important in white-collar and public corruption cases that there is a real punishment."

Robert Watada, current executive director of the Campaign Spending Commission, said he is satisfied with Holt's sentence and believes it will serve as a deterrent to other elected officials.

But Watada said he wants to see state laws strengthened to ensure candidates comply with campaign spending laws and be punished more severely if they don't.

http://starbulletin.com/1999/12/07/news/story3.html

~ ~ ~

October 18, 2002

Lindsey is given
6 months in prison

The judge says she has a
"misguided sense of greed"

From staff and news reports

A federal judge sentenced former Kamehameha Schools trustee Lokelani Lindsey yesterday to six months in federal prison, saying she was driven by a "misguided sense of greed and arrogance."

U.S. District Court Judge David Ezra also ordered the former trustee to undergo three years of supervised release and pay $35,000 in restitution for a 1995 bankruptcy fraud scheme. Lindsey's sister, Marlene, was also sentenced to six months earlier in the day by Ezra.

Lokelani Lindsey, who appeared in court separately from her sister, apologized to the judge through tears.

"I just want to say how sorry I am," she said, her voice breaking. "All I want to do is to stay home and take care of my husband."

Ezra granted Lindsey six months to care for her disabled husband, Stephen, who is scheduled to have surgery next month. She is to report June 2 to a federal women's prison camp in Dublin, Calif.

Prosecutors said that in 1995 the former trustee helped her sister hide stock earnings in a local freight forwarding company and took $35,000 for her efforts. At one time, Lindsey and her fellow trustees were each paid $1 million a year by Kamehameha Schools.

Marlene Lindsey filed for bankruptcy in January 1995 but failed to disclose that she owned 100 shares of stock in the freight-forwarding company, Atlantic Pacific International Inc.

"The crime reflected a certain amount of arrogance on their part," said Assistant U.S. Attorney Michael Seabright.

Marlene Lindsey pleaded guilty in February to filing a false income tax return and was to testify against her sister. Lokelani Lindsey pleaded guilty to two felony money laundering charges on the day her trial was to begin in June.

Ezra said that without the plea agreements, he would have issued longer prison sentences.

Marlene Lindsey also was ordered to a year of probation and to pay a $1,000 fine. She must report by Jan. 6 to the same prison camp.

Marlene Lindsey failed to report $136,908 on her 1995 tax return. She filed for bankruptcy that year when her hairstyling business failed, and prosecutors say she and her sister concealed $100,000 by transferring stock in Lokelani Lindsey's name to a third party.

"We're disappointed with the sentence, but we understand the significance of the case," said Marlene Lindsey's lawyer, William Domingo, of Honolulu.

The case was moved from Honolulu to Las Vegas after a federal judge found Lokelani Lindsey could not get a fair trial in Hawaii.

Lindsey, who became a Kamehameha Schools trustee in 1993, was the first female appointed to the board of the 118-year-old charitable trust, which educates children of native Hawaiian ancestry.

Criticism that she was micromanaging the $6 billion trust's Kapalama Heights campus set in motion the three-year legal and political controversy that culminated in the 1999 removal of former trustees Henry Peters, Richard "Dickie" Wong, Oswald Stender and Gerard Jervis.

Circuit Judge Eden Elizabeth Hifo removed Lokelani Lindsay as a trustee three years ago after finding she had misused and mismanaged trust property, and micromanaged the trust's educational programs.

Ezra emphasized in court yesterday that Lindsey's position as former trustee had no bearing on the fraud case or her sentencing....

"Rightly or wrongly, she became the poster lady of the complaints and abuses that were being visited on the children," Dill said.

Michael J. Green, Lindsey's former attorney, said that Lindsey went from being the first woman selected to the prestigious board of the Kamehameha Schools to the first former trustee convicted of a criminal offense.

Green said that Lindsey was never driven by personal motives but always had Kamehameha Schools' children at heart.

"She's been through more than most people have been through," Green said. "It's a very sad, sad day."

http://starbulletin.com/2002/10/18/news/index3.html

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November 26, 2003

Accountant charged with
federal tax violations

3 charged in Harris campaign probe

By Rick Daysog, Star-Bulletin

An accountant for a company under investigation for alleged illegal political donations to Honolulu Mayor Jeremy Harris' campaign has been charged with violating federal tax laws.

In a criminal complaint filed in U.S. District Court Monday, federal prosecutors alleged that Yiu Wing Wong helped prepare false tax returns for his employer, C.W. Associates Inc., and its affiliated company, Geolabs Inc.

Wong, who serves as a secretary and director at Geolabs and C.W. Associates, is in charge of preparing the Kalihi-based companies' tax forms.

On Aug. 4, 1998, Wong helped arrange C.W. Associates' 1997 corporate tax returns, which underreported its tax liabilities by $4,000, federal prosecutors said.

Wong could not be reached for comment. Assistant U.S. Attorney Michael Seabright declined to discuss the case.

According to the state Campaign Spending Commission, Wong played a significant role in Geolabs' political fund-raising efforts.

Commission records show that Wong and his family contributed $22,500 to the campaigns of Harris, former Gov. Ben Cayetano and ex-Maui Mayor James "Kimo" Apana.

The donations included a December 1999 contribution to Harris for $2,000 from Wong's daughter, who was a high school student at Maryknoll School at the time.

Wong later told a commission investigator that his daughter was not aware that a contribution was made in her name until it was reported in a Star-Bulletin article.

The Wong's contributions were among a maze of Geolabs-linked contributions totaling more than $124,000 to Harris, Cayetano, Apana, former Lt. Gov. Mazie Hirono and ex-Big Island mayoral candidate Fred Holschuh.

In January 2002, the state Campaign Spending Commission fined Geolabs a then-record $64,000 and referred its investigation into Geolabs and the Harris campaign to the city Prosecutor Peter Carlisle for criminal prosecution.

http://starbulletin.com/2003/11/26/news/story6.html

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December 5, 2003

Feds snare accountant
involved in donations

By Rick Daysog, rdaysog@starbulletin.com

Federal prosecutors have secured their first guilty plea in their tax investigation into political donors.

Yiu Wing Wong, chief accountant for the engineering firm Geolabs Inc., reached a plea agreement Wednesday on a charge he falsely booked $13,000 in political donations on Geolabs' federal tax returns for 1997.

Assistant U.S. Attorney Mike Seabright said the case is the result of an investigation by the Internal Revenue Service's criminal investigation division. He said the IRS investigation is ongoing.

Wong, who will be sentenced before U.S. District Judge Helen Gillmor in March, faces up to three years in jail and a fine of up to $250,000.

According to federal prosecutors, Wong created false entries in the company's financial statements, which listed political contributions as deductible business expenses. Such donations are not deductible as business expenses.

The contributions were made by various Geolabs employees who were reimbursed by the company for the political donations, prosecutors said.

Wong is in charge of preparing the Kalihi-based company's tax returns. He also played a significant role in Geolabs' political fund raising.

Records with the state Campaign Spending Commission show that Wong and his family contributed $22,500 to the campaigns of Honolulu Mayor Jeremy Harris, former Gov. Ben Cayetano and ex-Maui Mayor James "Kimo" Apana.

The Wongs' contributions were among a maze of Geolabs-linked contributions totaling more than $124,000 to Harris, Cayetano, Apana, former Lt. Gov. Mazie Hirono and ex-Big Island mayoral candidate Fred Holschuh.

In January 2002 the state Campaign Spending Commission fined Geolabs a then-record $64,000 and referred its investigation of the company and the Harris campaign to city Prosecutor Peter Carlisle for criminal prosecution.

http://starbulletin.com/2003/12/05/news/index7.html

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Michael Seabright is expected to testify regarding his business, professional, political and personal relationships with Lokelani Lindsey, Leslie Osborne, Jack Borja, Maryanne Inouye, Nathan Aipa, Colleen Wong, Milton Holt, Judge David Ezra, Judge Kevin Chang, Judge Lloyd King, Judge Robert Faris, Judge Eden Elizabeth Hifo (fka Bambi Weil), Susan Tius, Guido Giacometti, Mary Lou Woo, Steven Guttman, Curtis Ching, Gayle Lau, James B. Nicholson, Carol Muranaka, Steven Jay Katzman, Henry Paulson, Janet Hughes, Margery Bronster, Hugh Jones, Mark Bennett, Earl Anzai, Lyn Anzai, Susan Tius, First Hawaiian Bank, Bank of Hawaii, Steven Alm, Sidney Ayabe, Jeffrey Sia, Lokelani Lindsey, Judge Colleen Hirai, Judge Alan Kay, Judge Michael Town, Judge James Duffy, Judge Alan Kay, Linda Lingle, George W. Bush, Judge Susan Oki Mollway, David C. Farmer, Dan Inouye, Daniel Akaka, Dan Case, James Cribley, Leslie Osborne, Rebecca McKenzie-Young, Edward Kubo, and others to be named upon discovery.