Flying Along (and dodging whales) with The Hawaii Superferry

CV05-00030 - U.S. Dept of Justice vs. Bobby N. Harmon - Exhibit: "Hawaii Superferry Files for Bankruptcy"

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Hawaii Superferry filed for bankruptcy protection yesterday, telling a Delaware court that a Hawai'i Supreme Court ruling caused the Alakai to cease operations in March and has sapped the company's revenues.

Superferry and its parent company, HSF Holding Inc., filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware. Superferry listed between $1 million and $10 million in assets and $50 million to $100 million in debts.

Superferry has just $1 million in cash and was facing a $2.9 million principal and interest payment on one of the ferry construction loans yesterday. The company listed fewer than 50 creditors, including the state of Hawai'i, and maintained it should not have to make payments on $40 million worth of state harbor improvements because the operating agreement with the state was voided by a Maui court.

Superferry told the bankruptcy court that it plans to liquidate assets and "wind up their business." While sources close to Superferry say it is possible for a "white knight" investor to show interest in the Alakai and a sister catamaran, the Huakai, it would likely be for charter operations and not an immediate return to passenger, cargo and vehicle service in Hawai'i.

The two catamarans are docked in a Mobile, Ala., shipyard owned by J.F. Lehman & Co., the project's main investor.

"As a direct result of the Hawai'i Supreme Court decision last March, Hawaii Superferry had to shut down operations. There has been no relief from that decision," Superferry said in a statement. "With no ability to operate, the company has had no revenues, only ongoing expenses to maintain the vessels Alakai and Huakai, our second ship.

"Our recent objective was to charter the ships outside of Hawai'i, which would keep Hawaii Superferry operating at some capacity. Although there are potential charter opportunities around the world, they take time and haven't materialized in time for the company to meet its required financial obligations. Our efforts to refinance and restructure the company for this interim period with additional investment have not been successful, as yet. Accordingly, a filing of Chapter 11 was an unavoidable next step."

The bankruptcy filing could mark an end to Superferry's stormy history in Hawai'i.

While the state Supreme Court ruling in March was cited as the final blow, the company's court filing shows that several factors undermined the ambitious plans for high-speed catamarans to connect the Islands.

Just as Superferry was planning its debut in August 2007, the state Supreme Court ruled that the Lingle administration was in error when it exempted the state harbor improvements for the project from environmental review.

Environmentalists, who had challenged the exemption, moved to block ferry service through a Maui court while protesters halted the catamaran on Kaua'i.

The state Legislature in a special session passed a law, signed by Gov. Linda Lingle, that allowed Superferry to operate while an environmental review was completed. But barge problems on Maui delayed the ferry's immediate return to service.

Superferry argues that the court rulings and delay eroded public confidence in its reliability. Damage to the Alakai in dry dock in February 2008 led to another suspension of service.

Superferry maintains that it demonstrated "outstanding reliability," with service between Honolulu and Maui between April 2008 and the second Supreme Court ruling in March. The court found that the law which allowed Superferry to operate during the environmental review was an unconstitutional special law written for a single company.

"However, by then, the damage to the debtors' reputation had already been inflicted," according to the filing.

Superferry also cited challenging economic conditions last year and in the first quarter of this year that led to lower-than-expected revenues. The recession reduced demand for ferry service among both tourists and local residents.

In addition, Superferry cited an "unprecedented spike" in fuel prices last summer that significantly raised operating expenses. The company said it could not pass the higher fuel prices on to customers because it was competing with airlines for interisland fares.

Mike Formby, the deputy director of the state Department of Transportation's harbors' division, said he was disappointed to hear Superferry is liquidating assets and going out of business. The state is in the process of completing an environmental impact statement under Hawai'i's primary environmental review law, and officials had hoped Superferry would be leased for charter for a year or so and then return to Hawai'i.

Formby also said the state has taken the position that the operating agreement with Superferry is still in effect. Environmentalists did not move to restore the Maui court order voiding the operating agreement after the Supreme Court ruling in March because Superferry voluntarily ceased operations.

Formby also said the state believes that the operating agreement was only voided for Maui, not the other harbors Superferry planned to serve. He said the state will likely try to recoup the $40 million in harbor improvement costs from Superferry. Otherwise, he said, the costs of the unique vehicle ramps and barges will have to be shared over time by other harbor users.

"My position is that, at this time, the operating agreement is enforceable and it was never unenforceable statewide," he said.

Along with the state, Superferry's major creditors with unsecured claims include MTU, for engine maintenance; Monarch Insurance Services, for workers' compensation insurance; Sodexo Inc., for food, beverage and gift shop services; Laird Chistianson Advertising, for media; Entrix Inc., for consulting; and Hornblower Marine Services, for management. Superferry has also been sued for not paying rent on its leased headquarters at One Waterfront Plaza.

In its bankruptcy filing, Superferry lists the payments to the state and a litigation award to the Sierra Club, Maui Tomorrow and the Kahului Harbor Coalition — the environmental groups that blocked the project in court — as in dispute.

Far bigger financial stakes in Superferry are held by the federal Maritime Administration (a.k.a. US Taxpayers???) , which guaranteed construction loans for the two catamarans; and Austal USA, the Mobile, Ala., shipbuilder, which also provided two loans to help with construction.

The principal outstanding on the Maritime Administration-backed construction loans is $135.7 million, while the company has $22.9 million outstanding on the Austal USA loans.

The Maritime Administration and Austal USA have first and second mortgages on the Superferry vessels, while the state has a third mortgage.

Superferry is also in default to Guggenheim Funding LLC for $51.7 million related to a secured note in August 2007.

J.F. Lehman & Co., the largest private investor in the project, put up $85.2 million of the $92.9 million issued in preferred stock. The firm's founder, John F. Lehman, is a former Navy secretary who served on the commission that investigated the Sept. 11, 2001, terrorist attacks.

According to the filing, J.F. Lehman holds a 69 percent majority equity stake in Superferry, Guggenheim could control about 7 percent, and about 80 other investors hold 24 percent. J.F. Lehman also controls seven of 10 seats on the company's board of directors. Thomas Fargo, a retired Navy admiral and Superferry's president and chief executive officer, is a managing director of J.F. Lehman.

State Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai), called the Superferry bankruptcy a "tremendous tragedy for Hawai'i."

Slom said he believes opponents of the project were in the minority and that the Supreme Court's decisions were wrong. He said the ferry had the potential to unite the Islands economically and to create more business opportunities on the Neighbor Islands.

"I think we made a great mistake and I think it's going to be a long, long time before anybody wants to take a risk and invest in Hawai'i again," he said. "And that's a real loss to all of us."

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), who was among those who called for an environmental review of the project before the court rulings, described the Superferry bankruptcy as unfortunate.

"I think it's just another unfortunate chapter in the long saga of the Superferry," he said.

"It really is unfortunate that we've come to this point, and we have to figure out a way to move forward from here."

Mr. Farmer and Mr. Guttman, in spite of all this factual evidence (not just "political opinions" or "conspiracy theories" as you have previously alleged), I am again asking that we attempt to reach a global settlement of this matter through confidential negotiation or mediation rather than continuing these costly and seemingly-endless court proceedings.

However, if you, and your insurance carriers, are still not willing to attempt to negotiate or mediate a settlement, then I ask that you perform your mandated review of this new Exhibit in accordance with Judge Ezra's Order, and advise me if you find it contains any so-called "protected subject matter", and whether or not you intend to OBJECT to my filing a Motion to reopen this case.

I respectfully request your immediate reply. If I do not receive a response from you or your insurance carrier within 15 days, I will assume that you have found no "PSM" in these updated pages, and that you will NOT file any objections to my Motion.

The behemoth of transportation in Hawaii, the Superferry, is shutting its doors as of this week after the Supreme Court ruled that an act giving it permission to run without the proper environmental regulations was unconstitutional.

The ferry, a monster that could hold 866 people and 282 cars and that uses more fuel than a large plane, was kept running for a year even though it never had the Environmental Impact Statement (EIS) that’s required by the state of Hawaii.

Proponents of the ferry said that it provided needed transportation between Maui and Oahu Islands. Environmental activists, however, said it ran through the habitats of endangered humpback whales, dolphins and sea turtles and could transport invasive species to islands. It also brought more cars to already-clogged islands.

Said the president of the ex-ferry, Tom Fargo, in the company’s official statement, “This is a difficult time for all of us. Our employees have been nothing but stellar in their dedication to our company and in their service to our customers and our community. I have been impressed with the commitment of our team in executing with great detail and energy all of our procedures to properly address environmental concerns and provide our passengers with the best customer service… As I mentioned two days ago, we are hugely disappointed with the Supreme Court’s decision that Act 2 is unconstitutional.”

The ruling this week has a long and complex history that is barely encapsulated in the brief statement.

The idea began in 2001 and negotiations brought Fargo to the helm - the former commander of U.S. military operations in the Pacific Ocean. Although there were questions about the ferry’s role in the ocean and whether it was a step in building up the U.S.’s naval strength against China, the issue didn’t come to a head until summer of 2007, when protestors jumped into the ocean to stop the ferry.

Protests led to legal action, with environmental groups winning a Supreme Court ruling to force the ferry to submit to the EIS.

In a fell swoop she erased the Court’s decision with a new law called Act Two, which basically said that the Superferry could operate as planned, no matter what it does to the environment. She also told protestors that they would be charged under anti-terrorism laws if they tried any more stunts like the one in the summer of 2007.

Lingle, coincidentally, was the person who introduced Sarah Palin at the Republican National Convention. She’s also the first female governor of Hawaii, and she served as the interim Republican convention chairman in 2004. The Nation puts down Act Two a result of her ambitions to get closer to powerful Republican figures, including John Lehman, who was reported to have been Sen. John McCain’s choice for chief of staff.

Environmental groups were not happy with the new law by this Republican hopeful, and brought the case back to court. The ruling this week is the result of that.

All of the Superferry’s employees were laid off a day after the ruling, and the boat is on the lookout for new seas to sail.

We would like to extend our gratitude to the more than 250,000 customers who have voyaged and booked with us and to all who have supported our service. I am especially grateful to the businesses that have sailed with us and now have apparently lost an economical alternative - Love's Bakery, CFI, Expeditors, FedEx, to name a few, as well as a host of smaller companies.

This is a difficult time for all of us. Our employees have been nothing but stellar in their dedication to our company and in their service to our customers and our community. I have been impressed with the commitment of our team in executing with great detail and energy all of our procedures to properly address environmental concerns and provide our passengers with the best customer service.

As I mentioned two days ago, we are hugely disappointed with the Supreme Court's decision that Act 2 is unconstitutional.

After a year of operations, including a successful winter season, we looked forward to the upcoming spring break with great energy and enthusiasm.

The problem before us today is there appears to be no short-term solution to this ruling. To conduct another EIS, even with the work done to date, and move it through legal review might take a year or so. Other options don't provide the certainty necessary to sustain a business.

As a result, we are going to have to go out and find other employment for Alakai, for now.

Obviously, this is not even close to our preferred outcome. We have believed from the start and continue to believe that there is a clear and unmet need for an Inter-Island High Speed Ferry System for the state. My hope, our hope, is that the conditions will eventually be such that we can realize that vision in Hawaii.

We are manually processing refunds for all future bookings. Your refund is in queue to be processed shortly and may take up to 14-21 days. We appreciate your patience as we work to shorten the processing time. Once your refund has been processed, we will resend your booking confirmation to the email address in your reservation....

HONOLULU (KHNL) - Oahu students will be able to attend overnight residential environmental education programs on Maui thanks to transportation provided by the Hawaii Superferry.

The Hawaii Nature Center has partnered with the Superferry to give low-income and at-risk students a chance to learn about the watersheds through a series of Ahupuaa water camps.

Hawaii Nature Center Executive Director Gregory Dunn says the Superferry has saved the day.

"We have received generous funding from our supporters to created the water camps, but with the challenges we're seeing in the airline industry and cutbacks in the DOE, the schools couldn't afford to fly the kids to Maui for these camps," said Dunn. "When we contacted the Superferry for assistance, they gladly stepped forward to assist."...

Last year, more than 7,000 school children and families participated in programs at the Center's Iao Valley location.

The Director of Hawaiian Department of Transportation wrote an article in The Garden Island News about the Superferry and all the hurdles it has had to go through in order to come on line.

To the Editor of the Garden Island News,

Rodney Haraga, Director of Hawaii DOT, wrote an opinion piece, on 10/13/06, entitled “Superferry has run the gantlet”. He argues there is no need for an EIS (Environmental Impact Statement) or for that matter, an OEIS (Oceanic Environmental Impact Statement) before beginning operation of the Superferry.

What Mr. Haraga failed to mention anywhere in his article were the words “Military”, “Navy”, “Stryker” or “Westpac Express”. When the military dimensions of the Superferry operation comes into focus there is good reason for both an EIS and OEIS.

Some background: This month a Federal court in San Francisco has found the Army violated the National Environmental Policy Act when it did not consider all alternatives in its decision to install the Stryker brigade in the Hawaiian Islands. The court ordered the Army to prepare a supplemental environmental analysis to answer the question, "Why Hawaii?"

The Stryker is a eight wheeled assault platform that can carry a 105mm cannon or the 25mm Bushmaster machine gun. Both can fire Depleted Uranium (DU) rounds. So can the M113 Armored Personnel Carrier, the Apache Attack Helicopter and the Cobra Gunship Helicopter. The Superferry is designed to carry them all.

DU, in a projectile, does two things. It delivers a huge kinetic impact of white hot uranium to a target. This destroys the target. It also conveniently gets rid of a wad of “low level” radioactive waste from an atomic power plant or weapons program; they have no place to put the stuff. As such, DU munitions are an environmental impact that keeps on giving and giving.

Why worry about Depleted Uranium? Just ask any Gulf War Veteran. The contamination of the modern battlefield with radioactive depleted uranium 238 is an intractable problem with a 4.5 billion year half-life. Dating back to 1991, tens of thousands of US veterans claim they have been permanently disabled by widespread use of these toxic munitions in Iraq.

The military denies that it has used DU munitions in Hawaii, but DU weapons debris has been discovered at Schofield Barracks and documented by the Associated Press. Will these weapons ever be fired on other islands?

The Superferry is not just a means for Oahu residents to have a day at the beach on Kauai It is also a cheap way to deliver military attack systems throughout the Pacific Theater. The Superferry is part of the Navy’s Westpac Express program.

The builder of the Hawaiian Superferry is Austal USA. They have constructed other Westpac Express ships that are virtually identical to the Hawaiian Superferry conforming to the same military specs. They are used to ferry US Marines, and their equipment, between Okinawa and other Japanese islands. Is any of that cargo ever contaminated with DU? Will the Superferry be?

Keep in mind that the board of the Superferry corporation is chaired by John Lehman (Reagan Secretary of the Navy 1981-87), a veteran of the neo-con Heritage Foundation and Project for the New American Century. He has been joined on the board by several associates from his investment consulting firm, Lehman Inc. Interestingly, one board member, John Shirley, has been a consultant to Lehman and has 34 years of experience in senior positions at the Navy Division of Naval Reactors.

Pacific Business News reported on March 26, 2005, that with Lehman’s expertise, the Superferry plans to operate a Westpac Express, essentially to carry military equipment and ferry vehicles from Oahu to the Big Island on a daily basis. Lehman told PBN that “This logistical plan will make it easier for soldiers to train when the Stryker Brigade comes to Hawaii. The brigade will be stationed on Oahu and conduct training exercises on the Big Island.”

The Superferry is intended to transport vehicles and equipment that could be contaminated with DU dust in the field. After battle simulations on the Big Island, will this cargo be inspected for traces of depleted uranium before it is loaded onto the Superferry? Will the Superferry itself be inspected for DU after carrying military shipments?

It seems prudent to examine the possibility of the spread of DU contamination throughout the Hawaiian islands by battlefield equipment transported on the Superferry.

Moreover, an OEIS should be conducted to see if a Superferry, operated by the Navy, under its protocol for Westpac Express and not civilian ferry operations, will be subject to US and international marine law. From what we have seen of the Navy’s RIMPAC war games off Kauai this summer and in 2004, it is unlikely that Navy plans on complying with such regulations. We worry that a Westpac Express use of the Superferry will not use civilian avoidance procedures and sonar limitations needed to assure the safety of sea mammals.

The cynical view is that the Superferry can become part of the Navy’s Westpac Express fleet on the cheap... at least cheap to the Pentagon. The people of Hawaii will be footing the bill for the harbor improvements. The investors (friends of Lehman Inc.) have federal and state guarantees on their money. Even if the civilian operation goes belly-up, the Navy can still lease the ships for a song and not have to deal with Matson or Young Brothers anymore.

Words do matter. The use of the word “gantlet” in the title of Mr.Haraga’s editorial is interesting. A “gantlet” is a track construction used allowing a train to remain on its own track at all times. Not likely the meaning of the word he had in mind. He probably meant a “gauntlet”. That is a form of punishment, in which the offender is made to run between two rows of men who strike at him as he passes.

We need an EIS and OEIS to assure the people of Hawaii that the Superferry will not be a vector for contaminating our islands with depleted uranium and destroying the lives of sea mammals with Navy operations protocol.

The Hawaii Superferry, which hasn't sailed to Kaua'i since harbor protesters blocked its arrival in August, intends to resume trips there only if the community signals it wants the service restored, the company's new chief executive said yesterday.

We're going to do what is right for each community," said retired Navy Adm. Thomas Fargo, who took over Superferry's top job last week.

The Superferry also will raise its $39 one-way fare between Honolulu and Maui to $49 on June 6. Fargo, in a telephone interview with The Advertiser, said the price is still "hugely competitive."

Starting Friday, the Superferry will add a second roundtrip to Maui, four days a week, but it has no timeline for returning to Kaua'i, Fargo said.

If the Superferry were to get some kind of signal from the community, especially from leadership, that service is desired, the carrier would respond to the request, Fargo said.

Asked what would constitute a signal from the community, Fargo said: "There'll be a momentum or view by the community that they would like Superferry service." He added that he wasn't sure how that view would be communicated.

At least one Kaua'i politician suggested that the company is still unwelcomed by many people on that island.

Sen. Gary Hooser, D-7th (Kaua'i, Ni'ihau), said the percentage of Kaua'i residents opposed to the Superferry probably hasn't changed much and likely won't change much until the company shows it is reliable and forthright with the community.

"The Hawaii Superferry needs to prove itself in terms of reliability, service and community commitment first, and they haven't done that on Maui," Hooser said. "It's proven to be unreliable."

Hooser also said he was unaware of the Superferry doing any significant outreach to community groups on Kaua'i over the past few months, something that will be key to repairing relations and gaining support.

Lori Abe, a spokeswoman for the Superferry, said the company is continuing to talk with community members on Kaua'i.

The company got off to a shaky start last year, dealing with legal challenges, protests, stormy seas, canceled voyages and problems with its $85 million catamaran and docking facilities. Its first voyage to Kaua'i last August was greeted by protesters on surfboards and in kayaks who blocked the entrance to Nawiliwili Harbor.

Fargo indicated that Superferry isn't profitable now, but he said he wasn't aware of any company that would be profitable at this early stage of its operations.

Asked if the recent change in management — Fargo replaced John Garibaldi as president and chief executive — was an indication that Superferry investors were unhappy with where the company was at this point, Fargo said the carrier had gone through an expected shakedown period and was now entering the operational phase, for which his expertise with complex maritime operations would be beneficial.

Fargo said he would like to see the company ultimately attract a balance of cargo, passenger and vehicle business so it will become profitable.

He said the current trends are positive, with growth in passenger and vehicle traffic.

On the first weekend of his tenure, Fargo said, Superferry had 2,000 passengers on its Friday, Saturday and Sunday O'ahu-Maui trips, roughly double the previous weekend's count. He also said the company has seen an increase in business since Aloha Airlines closed its passenger service March 31 and more recently halted interisland cargo operations, forcing customers to temporarily seek alternative ways to move their products. Aloha's cargo service resumed after another company reached agreement to buy the business.

"We're going to be a success by establishing a scheduled, reliable ferry service for residents, visitors and businesses in Hawai'i," Fargo said.

Hawaii Superferry substantially underreported its state lobbying expenses last year as it fought an environmental impact statement and then asked for special legislation that allowed it to resume interisland service.

Superferry executives at first reported $21,960 in lobbying expenses but, after being contacted by the state Ethics Commission, amended the reports to reflect $379,431 in lobbying expenses.

Dan Mollway, executive director of the commission, yesterday said Superferry would not be punished for the errors because the company cooperated and quickly filed the amended reports.

"They were totally willing to comply, and I didn't get any sense it was done intentionally or that they were trying to hide anything," he said.

Superferry last year hired some of the state's top lobbyists and public relations executives to help at the Legislature and with the media. According to Ethics Commission records, the company spent more than twice as much on lobbying in 2007 than any other organization.

The second-highest lobbying expenditures were by the Pharmaceutical Research & Manufacturers of America, which spent $133,500.

Willful violations of the lobbying disclosure law can bring fines of $500, but Mollway said that did not appear to be the case with Hawaii Superferry.

[ Catbird Note: But blowing the whistle on lawbreakers can get you a fine of $500,000 and the unconstitutional prior restraint censoring of your free speech and the closing down of your web-based business enterprise - see: Confessions of a Whistleblower ]

"Concerns have been raised whether we should take further enforcement action, but so far I don't think we're going to do that because they were very cooperative in talking to us and very quick in amending their reports, which they should get points for and is kind of rare," Mollway said.

In fact, he said, it appears the Superferry may have overreported its expenses in the amended reports to avoid quibbling with the commission over specific spending items.

"We do realize, of course, that reports should be complete when filed, but we feel it's better to spend our resources getting compliance and providing further understanding of the law. For some reason there appears to be confusion."

A statement from the company suggests Superferry officials were uncertain about which expenses should be reported.

"Last year there was a great deal of legislative activity related to Hawaii Superferry, which required continuous information updates and production of briefing materials for legislators," the statement said. "Our initial filing reflected fees paid to lobbyists. We, subsequently, reviewed our expenses and were advised by counsel that lobbying expenses should also include public opinion research and the production of materials that might be viewed by legislators."

Among Superferry lobbying costs was $191,894 for preparation and distribution of materials. Of that amount, $166,851 went for a direct-mail and online campaign and for a public opinion survey.

An additional $24,455 was spent on advertising and $37,678 in compensation to lobbyists.

The Ethics Commission first questioned Superferry's lobbying expenses in response to an April 10 letter from Ian Lind, a freelance writer and blogger who works for state Rep. Lyla Berg, D-18th (Kuli'ou'ou, Niu Valley, 'Aina Haina).

Lind expressed skepticism about the accuracy of the Superferry reports, and yesterday said Mollway's decision not to take action against the company "isn't very satisfying."

He said it's unlikely company officials or their agents were ignorant of lobbying disclosure rules, partly because he has written on numerous occasions about lobbying activities at the Legislature, including those of Superferry.

Lind also felt the reporting form, which includes categories for media advertising, preparation and distribution of lobbying materials, compensation paid to lobbyists, and other specific items, is neither vague nor ambiguous.

"Their public relations consultants and paid lobbyists, I'm sure, are very aware of what the rules are. If it wasn't intentional, it was certainly negligent. The negligence is the damage to the public's ability to be sure its rights were protected in this whole legislative decision-making," he said.

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), who pushed for an environmental review of the ferry, said the underreporting of lobbying expenses reflects poorly on Superferry.

"It reinforces the doubts that have existed for a long time about the Superferry management and their conduct in regard to the environmental impact statement and their community dealings," Hooser said.

Superferry also amended its lobbying expense report for the first two months of 2008, shifting $11,000 in lobbyist compensation to the previous year, after being told by the Ethics Commission that expenses had to be reported for the period in which they were incurred, and not when the bills were paid.

Mollway said the Superferry episode indicates there is confusion about the reporting requirements, and he is making arrangements to meet with various parties involved in lobbying activities to provide guidance.

State Sen. Shan Tsutsui, D-4th (Wailuku, Kahului), who also wanted an environmental review before the ferry's startup, said he did not want to speculate on whether the omissions were simply an oversight. More importantly, he said, "it's a credibility issue."

"That was the main issue with the Department of Transportation and the (environmental review) exemption. When things like this happen, the questions are still there in people's mind to what else is happening that we are unaware of," he said.

Tsutsui said he is not surprised at the tally of the Superferry's lobbying expenses because during the special session last fall, "it seemed like every lobbyist in town was working on some aspect of it."...

Honolulu -Two Hawaii business leaders have joined the board of directors of Trex Enterprises Corp., a San Diego defense contractor and technology innovator with significant operations in Hawaii.

"Jeff Watanabe and Larry Johnson are extraordinary business leaders," said Trex Chairman Ken Tang. "Their expertise will help guide the direction of Trex."

"We have two corporate powerhouses joining us to complement our team of visionaries," said Tom Fargo, who has chaired Trex's subsidiaries Loea Corp. and Sago Systems since retiring as head of the Pacific Command earlier this year. Watanabe has also been a director of Loea since 2002.

Trex has more than 60 people working on Oahu, Maui and Kauai through two subsidiaries:

Kihei-based Loea Corp. builds high-speed, high-bandwidth radios operating in millimeter-wave bandwdith free space, 71-76 GHz and 81-86 GHz range. It has installations in Hawaii, California, Arizona, New Mexico, Maryland and Washington, D.C.

Sago Systems creates camera systems to detect and locate objects on passengers at airports, on passersby, or individuals at a stand-off range.

Trex, like many high-tech defense contractors today including others in Hawaii, practices dual use technology. This means it builds something useful for the Defense Department, then finds civilian applications for the same idea.

Retired U.S. Navy Adm. Thomas Fargo has been named president and CEO of Hawaii Superferry.

The company announced Friday that Fargo would replace current CEO John Garibaldi as of Monday. Garibaldi will remain as vice chairman and a member of the board of directors.

Fargo is former commander of the U.S. Pacific Command and commander-in-chief of the U.S. Pacific Fleet. He retired in 2005 after 35 years of military service.

He has resigned as CEO of Honolulu-based Loea Corp., a high-bandwidth wireless communications company, and as president of Loea's parent company, San Diego-based high-tech company Trex Enterprises. He will remain on the Trex board of directors, according to Linda Jameson, a spokeswoman for Loea. He also will remain on the board of directors of Sago Systems, a defense and homeland security company.

Fargo also is managing director of J.F. Lehman & Co., a major investor in the Superferry headed by former U.S. Navy secretary John F. Lehman, who is also chairman of the Superferry's board of directors.

The state may have compromised its environmental policy because of pressure from Hawaii Superferry executives who were worried about financing for the interisland ferry project, the state auditor has concluded.

The auditor found that an internal June 2005 deadline imposed by Superferry executives "drove the process" and pushed the state Department of Transportation to bypass an environmental review. The deadline, according to the auditor, was tied to Superferry's agreement with Austal USA to secure financing to pay the Mobile, Ala.-based shipbuilder to construct two high-speed ferries.

The federal Maritime Administration, which approved a $140 million loan guarantee for ferry construction, wanted confirmation that no environmental assessment of harbor improvements would be required because of the risk that environmental concerns could jeopardize port access. But Maritime Administration officials told the auditor they did not set the June 2005 deadline as a condition of the loan guarantee.

"In the end, the state may have compromised its environmental policy in favor of a private company's internal deadline," state auditor Marion Higa concluded. "It remains to be seen whether these decisions will cost the state more than its environmental policy."

The performance audit was required by state lawmakers as part of a law passed in special session last fall that allowed Superferry to resume operations while the state conducts an environmental impact statement. Legal challenges and public protests had halted ferry service after the state Supreme Court ruled in August that the state's decision to exempt $40 million in state harbor improvements from environmental review was in error.

The auditor's main finding was that the June 2005 deadline was not imposed by the federal government, but related to an agreement between Superferry and Austal. The audit questions whether the state did "sufficient due diligence to verify whether the deadline was valid for the reasons Hawaii Superferry Inc. claimed."

John Garibaldi, Superferry's chief executive officer, said yesterday that Superferry has consistently portrayed the June 2005 deadline as necessary for both federal and private equity financing. He described the agreements with the Maritime Administration, Austal USA and primary investors J.F. Lehman & Co. as interrelated.

"They were all dependent upon each other. No one stood on its own," Garibaldi said. "I think that's what we tried to express to people."

Garibaldi declined to comment on other findings in the audit because he had not yet seen a copy.

The auditor's descriptions of the chain of events that led the state to exempt the project from environmental review in February 2005 are similar to reports in The Advertiser in September and January.

The auditor and the newspaper received many of the same documents, which were screened by the Lingle administration for attorney-client privilege and executive privilege before being released. The administration is preparing a privilege log for the auditor and the newspaper to describe the documents that have been withheld. The Advertiser requested the documents under the state's open-records law.

Most significantly, the auditor — like The Advertiser — emphasized a late December 2004 meeting at the governor's office that included the governor's then-chief of staff Bob Awana, department officials, and Superferry executives.

Staff in the department's harbors division had wanted to require a statewide environmental assessment of the project and to get Superferry to install a stern ramp on the vessel to give it more flexibility at Kahului Harbor on Maui. But Superferry executives, according an account by a department staffer, told the state that anything but an exemption was a deal-breaker and that they would not install any ramps.

"Decisions made: We need to pursue EXEMPTION; and HSF will not provide any ramps on vessel," one department staffer told colleagues afterward in an e-mail.

The auditor concluded that department e-mails showed a decision was made at this meeting, although who made the decision is not revealed.

"Current and former department officials and employees who worked on the ferry project were either unable to recall who made the decision at that meeting or chose to invoke executive privilege when asked who directed the team," the auditor found.

The department, in its written response to the audit, rejected any inference that a decision was made at the governor's office directing the department to pursue an exemption. The auditor countered that the department's e-mails about the meeting "are self-explanatory."

"Ultimately, a decision involving the governor's office was made that directed the 'ferry project team' to pursue scenarios that would exempt the ferry harbor work from environmental review," the auditor found.

Awana, who resigned last year, told The Advertiser in January that he had no role in the decision. Barry Fukunaga, who was then the department's deputy director of harbors and is now Gov. Linda Lingle's chief of staff, has said he made the decision in consultation with his construction and engineering staff and then-department director Rod Haraga. The department also consulted with the state Office of Environmental Quality Control and county planning agencies.

Fukunaga told The Advertiser in writing last year that he did not discuss his deliberations or his eventual decision with Lingle, Awana or state Attorney General Mark Bennett.

The audit is also similar to The Advertiser's reporting last September on the Maritime Administration's loan guarantee for Superferry. Maritime Administration officials told the auditor that loan guarantees are typically exempt from environmental review because they just provide financing for ship construction. The vessels typically use port facilities already in place.

Maritime Administration officials told the auditor that harbor improvements for Superferry could have triggered an environmental assessment that could have limited ferry access to ports. So the Maritime Administration added a condition that Superferry provide confirmation that no environmental assessment was required.

"MARAD's position was that it was not willing to finance the construction of any vessel that might be unable to operate because it has no port," the auditor found.

The audit recommends that the Legislature empower a state agency to enforce environmental review laws and require agencies to update exemption lists every five years. The auditor found that the public has little involvement in the exemption process other than the right to file a lawsuit to challenge an exemption.

Higa had complained to lawmakers that she missed a March deadline for a preliminary draft of the audit because of significant delays in obtaining documents from the Lingle administration. Higa repeated those complaints in the audit and said her staff would be preparing a second phase of the audit for a later report.

Higa described the Lingle administration's cooperation as "slow and incomplete, at best." The department called that description "wholly untrue" and said any delays were based on requests by Higa that the attorney general found were "unreasonably broad in scope."

The department chose not to comment on many of Higa's conclusions. Mike Formby, the department's deputy director of harbors, said last night that the administration's wants the opportunity to review the second phase of the audit.

I think what we wanted to do was reserve the right to see the full report, because it's really risky to look at half the report and respond knowing that they're out there still doing field investigation, interviews, reviewing documents," Formby said. "And basically, they look at the response you gave, and they go out and look for a way to rebut your response."

Question: With the Hawaii Superferry in the news, I was wondering who owns the Superferry? They have a lot of pull.

"There are a lot of smaller investors, but J.F. Lehman and Co. is by far the major equity investor," said a spokes- woman for the company.

Timothy Dick, named as one of the Star-Bulletin's top 10 people to watch in 2006, was the founder of Hawaii Superferry.

He is still listed as a vice chairman in state business registration records, but left the company late last year, according to the spokeswoman.

He's described as a venture capitalist who focuses on Internet-related and technology businesses. He founded Grassroots.com, WorldPages.com, UseHalf.org and TRUSTe.org. Dick also is a founding member of Reef Check Hawaii.

Dick brought aboard John Garibaldi, the Superferry's president and chief executive officer.

Garibaldi, picked by the Star-Bulletin as one of 10 people who made a difference in 2007, previously was vice president/chief financial officer of both Aloha Airlines and Hawaiian Airlines; chief financial officer/vice president of Queen's Health Systems; and president/CEO of Zephyr Insurance Co.

Also, Warren H. Haruki, president/chief executive officer of Grove Farm and Lihue Land Co. and former president of GTE Hawaiian Tel and Verizon Hawaii; Louis N. Mintz, of J.F. Lehman and former member of the Private Equity Investment Group at Odyssey Partners L.P.; George A. Sawyer, founding partner of J.F. Lehman and former assistant secretary of the Navy, Shipbuilding & Logistics; and John W. "Bill" Shirley, former program manager of the U.S. Department of Energy, Naval Reactors Division.

A behind-the-scenes look at state government and politics from Capitol Bureau reporters Derrick DePledge and Treena Shapiro. Share insider tips or ideas with the bureau at 525-8070 or via e-mail.

The latest batch of documents on Hawaii Superferry, released by the Lingle administration under the state's open-records law, continues to provide interesting background information on how the decision was made to exempt the project from an environmental review.

The U.S. Department of Transportation's Maritime Administration approved $140 million in loan guarantees for Superferry in January 2005 on the condition that the state give all governmental and environmental clearances, including confirmation that there was no need for an environmental assessment of port facilities.

The state was aware of this condition when it ruled in February 2005 that $40 million in state harbor improvements for the Superferry project were minor and exempt from an environmental assessment.

"They pointed out that this was the condition that they were faced with," Barry Fukunaga, the director of the state Department of Transportation, said of Superferry executives. "But we didn't use that as the basis for our argument."...

Fukunaga, who was the department's deputy director of harbors at the time, said he knew of the conditions of the federal loan guarantees before the department's ruling but did not feel pressure to grant the Superferry exemption.

Fukunaga officially made the decision to exempt Superferry from environmental review on Feb. 23, 2005. The exemption letters -- one for each harbor -- made no mention of the need to meet federal loan guarantee or equity investment requirements.

That same day, however, Fukunaga sent out letters to other harbor users who had an interest in the project.

The Harbors Division continues to work with the Hawaii Superferry on the establishment of operating sites at each of the harbors identified for service by the new operation.

The Superferry financial arrangement with the U.S. Maritime Administration and their equity investors requires assurance of available facilities for their operation in time to meet their scheduled commencement date as well as confirmation by June 30, 2005 that facilities identified are available and not subject to conditions that would require environmental review.

This situation limits accommodation to the use of existing facilities and their use in a manner that is consistent with both the design and purpose that they were built....

You can bet that they knew about the financing but that didn't affect their outcome, because the fix was already in!

Whatever! Of course they'll have a ready answer. Big dreams with lots of fluff, ill-prepared, per usual in this administration. And this dude is now the Chief of Staff... awesome (sniff, sniff...can you smell that?)

Again, fukunaga caught in a lie. This guy is a compulsive liar like his good friend garibaldi. fukunaga must be really stupid, making false statements that could easily be found false. I believe his "promotion" to chief of staff, was really a demotion, as they wanted to keep him on as long as possible to reward him for being the fall guy.

What would be really interesting is what role did bennett play in this fiasco. He is hiding behind the attorney-client privilege to conceal his involvement. And lingle warned that the media maybe making false interpretations because they do not have all the facts. This is another moronic statement - if they can rebut the media's allegations, when don't they. If they have information, they can waive the attorney-client priviige, especially if the info will absolve any one in the administration.

Fukunaga was willing to use deception to help the SF. This amounts to a criminal act, using false "facts" to evade the provisions of HRS 243. fukunaga is attempting to paint the picture that he alone was responsible for the exemption. This is far from the truth, there were many others who assisted in the plan of deception, including Garibaldi and his attorneys.

Naturally, with all the politician-greasing SUPERPLAYERS involved (including Steve Case, John Garibaldi, et al), this will eventually turn out to be ONE BIG HAWAII SUPERFIASCO for Hawaii Taxpayers!

WAILUKU - State Auditor Marion Higa says her office cannot meet a March 2 deadline to complete an audit of the Hawaii Superferry as mandated by law because the Lingle administration has been uncooperative.

Higa said the state Public Utilities Commission has cooperated with her, but she has had difficulty getting documents from the Lingle administration.

State Attorney General Mark Bennett said his office has released thousands of pages to the auditor, but all the information the auditor wants must be reviewed before it can be released.

Bennett said his attorneys have to go through each page and e-mail to determine if they include legal advice requested by a state official exercising attorney-client privilege.

"It's a huge request," Bennett said. "We have made it a large priority. We have not been treating them as unimportant."

Higa said disagreements have also arisen about whether Lingle and department officials can claim "executive privilege" in restricting access to documents.

"They can make those claims. It depends on how they apply those claims," Higa said yesterday.

Higa, speaking this week during a Senate Ways and Means briefing, said since November she has received only one of 30 boxes of documents requested from the Lingle administration.

Higa said the Legislature passed Act 2 during a special session in late October, requiring the audit that included the task of determining who made the decision to exempt the Hawaii Superferry from an environmental study.

Environmentalists contested the use of the exemption, resulting in a two-year court battle that they won at the state Supreme Court.

State legislators passed Act 2 to exempt fast passenger ferries like the Hawaii Superferry from conducting an environmental study prior to operation, but required Higa's audit.

State Senate Republican Minority Leader Fred Hemmings said the Democrats have used the audit to thwart and harass the Lingle administration.

"Marion Higa is the legislative auditor and obviously doing the bidding of those who appointed her," Hemmings said yesterday.

Only a special exemption by the state Legislature upset Hall's challenge and allowed the start of the Superferry.

Hall, 63, has been recognized by the Sierra Club for arguing more cases on behalf of the environment than any other lawyer in the state.

He's provided legal representation to environmental groups who couldn't afford high attorneys' fees and he's won a number of cases.

In Maui Circuit Court in October, the scene seemed out of a movie -- three attorneys, sometimes four, representing the state and Superferry at one table, and Hall on behalf of citizens groups seated alone at the other.

Hall prevailed in his arguments to require the Superferry to do an environmental study before starting operation.

But the state Legislature in a special session in November intervened to exempt the Superferry and other similar vessels from the environmental requirement.

Hall, who practices law with the help of friends and family members including his wife Dana Naone Hall, occupies a modest office on the bottom of a two-story, hollow-tile and wooden building on Wells Street.

Hall worked for several years as an attorney for the Legal Aid Society of Hawaii on Maui and assisted a number of poor native Hawaiians in land and water disputes against major landowners on Molokai and East Maui.

He went into private practice after the Legal Aid Society narrowed its scope of services during the Reagan era, barring him and other attorneys in his office from being involved in environmental and native rights cases.

For more than 20 years, he has managed to run a private practice while continuing to do pro bono work.

Lucienne de Naie, vice chairperson of the Sierra Club in Hawaii, compared Hall to lawyer Atticus Finch in "To Kill A Mockingbird."

"He's a small-town attorney who has taken on some huge issues of our time," de Naie said.

De Naie said Hall's argument about the Superferry was important in trying to uphold constitutional rights.

Alan Murakami, the supervising attorney for the Native Hawaiian Legal Corp., said that while other private lawyers might represent a single public interest issue during their lifetime, Hall has been representing numerous groups on behalf of the environment for decades.

"It's also his longevity. Isaac has been doing it since the 1970s," Murakami said.

KAHULUI - The number of protesters against the Hawaii Superferry grew during the weekend on Maui to more than 250 people yesterday, as groups called for a halt in operation and planned a court appeal challenging a new law that allowed the vessel to resume operations....

The demonstration went without any arrests, prompting protesters to renew their call to reduce the expanded safety zone around the Superferry and to cancel the closing of the harbor jetty for small-boat launches.

"We want to get back to life as normal as can be with the Superferry," said Irene Bowie, executive director for the protesting group Maui Tomorrow.

Bowie said her group is planning to challenge the constitutionality of a new state law that allowed the Superferry to operate while the state prepares an environmental impact statement.

Prior to the passage of the law, a Maui Circuit judge ruled that the environmental impact statement needed to be completed before the vessel could begin operation.

Holding signs saying "Give Back Our Harbor" and "EIS first ..." and "Solidarity, Don't Ride," hundreds of people lined the sidewalk on North Puunene Avenue near First Hawaiian Bank. Others held protest signs along the shoreline and about a dozen people on surfboards and a canoe held signs in the harbor....

Jasmine Graham, a protester, said she felt the way the state Legislature had given an exemption to the Superferry was an abuse of power....

(San Francisco) The 350 ft long military spec transport ship is not welcome on Kauai, Hawaii, local residents made clear to the military / civilian transport officials with Superferry Corporation.

The catamaran, twin hulled vessel is a dual use civilian / Troop transport. The 40,000 HP ship is capable of high speed transport at 42 mph on the open ocean, about twice the speed of other transport ships. It gets very poor gas mileage, about 5 gallons per mile, due to military speed requirements.

Andy Parx, veteran reporter on Kauai stated "The people of Kauai object to the high handed way Gov Lingle bent over backwards for such a bad idea for Hawaii. Governor Lingle then had the clueless State Lege re-write some state environmental laws for one special corporation, which, of course, is illegal and unconstitutional."

"Now the Governor wants Kauai to make nice and swallow her illegal behavior. We, the citizens of Kauai, are not going to cover up for the Governor's silly promises she can't keep. It is that simple," said Parx on Monday, November 26, 2007, in an interview with Bob Nichols, correspondent for the San Francisco Bay View newspaper.

"So, the people of Kauai are just gonna say No!" Parx added.
______________________________________________________
Free Hawaii TV newscast Action Alert - "Superferry Returns."

The Superferry is capable of discharging a flood of up to 800 civilians on little Kauai, one of the most beautiful islands in the world. Feelings are running so high that 65 Kauai surfers earlier this summer prevented the military spec ship from docking, sending it back to Honolulu.

Vowing that would not happen again, Governor Linda Lingle, a friend of President George Bush, purchased armored vests for Kauai police and machine guns. Legislative rumors have it that Lingle has a "special relationship" with wealthy Superferry financier John Lehmann. She is said to want to run for US Senator Akaka's seat.

Parx added "The people of Kauai want none of it. The whole Superferry deal smells to high heaven already. If Superferry President Mr. Garibaldi thinks he can sweet talk Hawaii he will have to do the Environmental Impact Statement first."

"We will not meet with those who would willfully violate our rights just because they can and ask us to forgive the self-same trespasses they continue to promulgate. Superferry disrespected Kauai and that is unforgivable. Garibaldi can earn his way to talk to us with a completed Environmental Impact Statement - nothing less."...

Kauai supporters: You may email andyparx@yahoo.com to add your name to the signatory list.

Bob Nichols is a Project Censored Award Winning writer. Nichols is following the Superferry controversy in Hawaii that has generated talk of impeaching Republican Governor Linda Lingle.

A Maui judge upholds the Legislature's new statute permitting
ferries to operate during environmental studies

WAILUKU » "It's a new beginning," says Hawaii Superferry Chief Executive Officer John Garibaldi.

The Superferry could resume operations in a couple of weeks, Garibaldi said yesterday after a Maui judge dissolved his order blocking the high-speed ferry from using Kahului Harbor pending an environmental review.

Garibaldi said his firm has lost about a dozen employees since originally hiring some 300 people in August and that losses during the halt in operation amounted to millions of dollars.

Circuit Judge Joseph Cardoza declined to overturn a new state law enabling large-capacity vessels such as the Hawaii Superferry to skip a previous process of environmental review.

"The obligation of the court is to follow the law enacted by the Legislature," Cardoza said. "This court is not a super-legislature. This court is not a super-executive branch of government." ...

Attorney Isaac Hall, representing citizen groups Maui Tomorrow, the Sierra Club and the Kahului Harbor Coalition, said his groups might appeal Cardoza's decision to the Hawaii Supreme Court.

Hall argued the new law failed to protect the environment as well as customary and traditional native rights, as guaranteed under the state Constitution. He also argued that the new law is unconstitutional because it provided special legislation designed to help the Superferry.

Bennett said the state Legislature also balanced competing policy interests about the environment and use of resources, and the governor established conditions to protect the environment.

Hall warned that if people did not receive justice in the courtroom, they might seek justice in the water blocking the Superferry.

"This has been done ... so wrong that if this court dissolves this injunction, there will probably be those who feel the only way they can secure justice is in the water," Hall told Cardoza.

Hall, interviewed later, said his comments were not a threat, but a social comment on the dissatisfaction of many people on Maui and the formation of a large coalition among residents on Hawaii, Maui and Kauai because of the Superferry.

Bennett said he felt Hall's comments were inappropriate, and he hopes people will conduct themselves in a law-abiding manner.

The Hawaii Supreme Court ruled on Aug. 23 that the state should be required to prepare an environmental assessment about improvements at Kahului Harbor for the Superferry.

Cardoza, responding to the Supreme Court decision, ruled on Oct. 9 that the Superferry had to prepare an environmental assessment prior to operating at Kahului.

The issue has drawn protests on Kauai, where hundreds of demonstrators blocked the Nawiliwili Harbor entrance with surfboards and vessels, and on Maui.

Environmentalists fear the Superferry will be a new entryway for invasive species, while native Hawaiians in rural areas worry visitors in their vehicles will deplete ocean and mountain resources.

Cardoza let stand yesterday his Oct. 9 decision to allow Maui Tomorrow and other citizen groups to receive attorneys fees from Hawaii Superferry, based on them prevailing in their former injunction.

Hawaii's Republican governor and Democratic legislative leaders agreed yesterday that a Maui judge's ruling validates their work in passing a law to keep the Hawaii Superferry operating while an environmental impact statement is pending.

"Judge (Joseph) Cardoza recognized that the Legislature and our administration worked cooperatively, within the boundaries of our state Constitution, to pass a law that preserves an important interisland transportation alternative for the people of Hawaii," Gov. Linda Lingle said.

"I am glad that the law withstood the constitutional challenges, because the Legislature was careful in how it fashioned this remedy," said Hanabusa (D, Nanakuli-Makua). "The fact that Judge Cardoza agrees validates what the Legislature did."

House Speaker Calvin Say said, "It is great news for the people of the state. We are giving the Superferry the chance to show what it can do. I would ask that all parties try and let the Superferry sail and do its best."

"As the interisland ferry service resumes, we will continue to work closely with environmental, cultural and agricultural organizations, the counties, the community and Hawaii Superferry officials to ensure specific conditions are followed to minimize the impact on Hawaii's natural and cultural resources," Lingle said in a written statement.

Rep. Hermina Morita, who had voted against the bill allowing the ferry to operate while the assessment is done, said she believes the judge's decision should be appealed.

"I don't think the constitutional issues were adequately addressed," said Morita (D, Hanalei-Kapaa).

Rep. Joe Souki, one of the ferry's strongest supporters in the House, was pleased with the outcome.

"I'm very happy with the judge's decision, and let's get this moving on," said Souki (D, Waihee-Wailuku). "Hopefully, the ferry can commence soon so that the public and the businesses can enjoy the ferry."

"I'm hoping that they won't do it," he said. "If they appeal it and if there's an injunction because of the appeal, that would just kill the whole project."

Members of the Kauai organization suing the Hawaii Superferry for violation of environmental laws vowed yesterday to keep fighting.

David Dinner, president of the Thousand Friends of Kauai and co-chairman of the People for the Preservation of Kauai, said the groups will continue to fight the Superferry in court.

Dinner said people who want an EIS before the Superferry travels should not lose hope. "I know that they've tried really, really hard, and they may feel discouraged," he said. "We want to give them hope that it's not over."

An Advertiser computer-assisted study of state and federal campaign records shows that the Superferry, its executives and several of its board members contributed more than $39,000 since 2004 to local lawmakers and members of Hawai'i's Congressional delegation.

A review of state and federal ethics filings also found that the Superferry spent more than $136,000 since 2004 to lobby state officials and the federal government.

"You're talking about an extremely large sum of money even by national standards," said Craig Holman, a campaign finance expert with Public Citizen, a Washington, D.C.-based consumer advocacy group. "At the very least, they are trying to buy access, and at the worst they are trying to buy influence."

Superferry officials said there's no connection between the political donations and any legislative efforts pursued by the company.

The Lingle administration decided in February 2005 to exempt the Superferry project from an environmental assessment, which would take months to complete. That decision was reversed by the Hawai'i Supreme Court in August and now the ferry has been banned from operating until the assessment is finished.

Lingle and state legislators may convene a special session to rewrite the law and allow the ferry to operate while the assessment is conducted.

The 350-foot ferry was to carry passengers and vehicles between O'ahu, Maui and Kaua'i and began service in August before being shut down.

The Advertiser's computer-assisted study examined contributions made to Lingle, Hawai'i's Congressional delegation and all 76 state legislators from 2004. The study found that Superferry executives and its board members made more than 30 political contributions between 2004 and 2007.

Lingle's campaign received the most money from the Superferry and its officials, even though Lingle had directed campaign officials not to accept money from Superferry executives, said Miriam Hellreich, who served as the Lingle campaign's finance director from 2002 to 2006.

State campaign spending records show that Lingle's campaign received six donations totaling $12,000, including $6,000 in donations in October 2006 from Superferry Chairman and former Secretary of the U.S. Navy John Lehman and company Director Tig Krekel.

Hellreich said the Lingle campaign's policy was to refuse contributions from companies that were negotiating with the state for contracts. Lingle also told campaign staffers not to accept contributions from Superferry executives, Hellreich said.

Hellreich said staffers made "an error" by accepting the $6,000 in 2006 because negotiations between the state and Superferry were ongoing. Some campaign staffers were not aware of the internal policy against accepting money from Superferry officials, she said.

Hellreich also noted that the Lingle campaign returned about $10,000 in donations to Superferry officials in 2005 because the state and the company were still in negotiations. Hellreich said the campaign has no plans to return the 2006 donations.

"All the donations associated with people with the (Superferry) were within the law," Hellreich said.

Superferry executives and directors also contributed $9,200 to Abercrombie's campaign, including a cluster of June 2007 donations from Lehman, Krekel and Superferry President and CEO John Garibaldi.

Abercrombie said he receives support from a broad group of interests including environmental groups.

Federal Election Commission records show that the Sierra Club's political committee contributed more than $6,000 to Abercrombie's campaigns since 1998 and that the League of Conservation Voters Action Fund has donated nearly $1,000 to his campaigns since 1998....

Superferry executives made several contributions totaling $8,800 on Aug.25, 2006, and Sept. 11, 2006, to Akaka's campaign. Akaka spokesman Jesse Van Dyke said Akaka has taken no position on the issue since it doesn't involve Congressional action and is largely a state issue.

State House Speaker Calvin Say, a Superferry supporter, received $2,000 from the company on Jan. 24, 2006. That same day State. Rep. Joseph Souki received $1,000 from the Superferry. Say, D-20th (St. Louis Heights, Palolo Valley, Wilhelmina Rise), and Souki, D-8th (Wailuku, Waihe'e, Waiehu), were not available for comment.

The company also contributed to one of its critics. State Sen. Shan Tsutsui, who pushed for an environmental review of the impact of the ferry service, received $500 on Jan. 6, 2006. Tsutsui, D-4th (Kahului), could not be reached for comment.

Jeff Mikulina, executive director of the Sierra Club's Hawai'i chapter, said it's unfortunate that the Superferry is using its vast resources to try to change Hawai'i's environmental laws.

The Sierra Club was one of three groups whose lawsuit against the ferry service led to the suspension of the company's operations in August.

Had Superferry officials conducted an environmental assessment in 2004, the company would be operating right now, Mikulina said. Mikulina added that environmental groups like the Hawaii Sierra Club, whose annual budget is about $150,000, aren't on the same playing field as the Superferry when it comes to political clout in the Legislature.

"It's unfortunate that they can use their muscle ... to harness public sentiment and to steer the debate in their direction," Mikulina said.

Wilson said the company earlier hired a "dream team" of lobbyists — including longtime political strategist George "Red" Morris, former University of Hawaii Professional Assembly executive John Radcliffe and prominent local attorneys Robert Toyofuku and Gary Slovin — when it looked like the state Legislature was going to pass a bill during the last session to require the state to conduct a full environmental impact statement on the Superferry.

The bill — which wasn't passed — would have delayed the Superferry's launch by a year if not more.

"There was a need to turn up the volume with the lawmakers with our side of the discussion," Wilson said. "It is an absolute fight for survival."

Superferry officials are now hoping state legislators convene a special session to consider a bill that would allow the company to operate while the state is conducting an environmental assessment on the impacts of the ferry service.

The request came after Maui Circuit Judge Joseph Cardoza issued an injunction on Tuesday that barred the Superferry from operating until the state completes an environmental assessment.

The Superferry says the suspension of service has cost it about $650,000 a week and forced the company on Thursday to place 249 of its workers, or about 80 percent of its workforce, on furlough.

Lost in all the discussion over what will happen with the state Senate’s compromise bill that requires a full Environmental Impact Statement on the proposed Superferry (at taxpayer expense) but allows Hawaii Superferry, Inc. (HSF) to start operations this July is what will happen if the bill manages to make it all the way to Governor Linda Lingle’s desk. Don’t expect it to be pretty. In addition to Garibaldi’s contribution cited above, here’s what HSF principals and investors gave to Lingle during the 2006 campaign:

• David Cole (HSF Director/Maui Land & Pineapple President, Chairman and CEO): $4,000

When all that’s added to Garibaldi’s $2,800 contribution, HSF, its directors and investors gave Lingle $24,300 in total during her 2006 reelection campaign.

Where I come from, that translates into the bill being Dead On Arrival when Lingle gets it.

A politically akamai reader wonders whether the Lingle administration’s key decisions on the Superferry were made by former chief of staff Bob Awana.

Why isn’t anyone asking what role Bob Awana played on all this? He was running the DOT when Haraga was iced out of any decision making. I assume that all the Superferry decisions were going through him, just like the decision to impose the Honolulu GET.

Lingle made it clear to her cabinet that all major decisions were hers and hers alone. Cabinet members were instructed that a particularly important or sensitive issue under their areas would be sent to Bob Awana to handle and the Gov to make the decision on them. Talk about micromanagement! Seven dead on Kauai!

This shows that when the boss is an idiot and doesn’t hire independent, strong willed individuals, the yes men/women cabinet is a receipe for disaster. She has said to insiders that she doesn’t want to run for any congressional seat and wants to be a CEO or Trustee in town. She is the same as Cayetano in her inability to effectively govern due to her poor management ability. Lack of trust and paranoria have really hurt the State since the days of Waihee.

Bennett just saw his chances of becoming the Chief Justice of the Supreme Court just get flushed down the toilet. Kirk Caldwell is correct to ask what legal reasoning or justification (in the form of an opinion or memo) did Lingle have in “waiving” the eviromental assessment for the Superferry. Before Lingle wants to get the Legislature to bail her ass out of the sling, she ought to be more open and forthcoming about what the hell she has been doing these last five years.

You remember Awana. He’s the guy who reportedly tripped over his own you-know-what while trying to arrange after-hours entertainment for delegates on a state trip to the Philippines and then fell victim to an extortion attempt by another suitor of the young woman involved.

The Maui News reported earlier this year that Awana had sidelined the director and taken control of the Department of Transportation by mid-2005, and its likely he was micromanaging hot-button issues before that. That appears to make it likely that his fingerprints will be found on the administration’s handling of the Superferry issue....

A judge prohibits service to Maui, prompting Gov. Lingle and lawmakers to seek a special session

Political leaders are huddling to see whether they have the support to change environmental laws to let the Superferry operate after a Circuit Court judge blocked the service to Maui.

Maui Judge Joseph Cardoza yesterday blocked the Superferry from using Kahului Harbor facilities without an environmental assessment.

Superferry officials said they were disappointed for the employees and for Hawaii. Their attorney said they planned to appeal the decision.

Sierra Club attorney Isaac Hall said he is sorry the Superferry is losing money but said the company and the state were warned several years ago that they had to perform an environmental assessment.

Cardoza's decision was applauded by residents opposing Superferry stops on Kauai until an environmental study is done. The decision doesn't affect Kauai's Nawiliwili Harbor. But Superferry officials have said the company wouldn't make enough money by going only between Oahu and Kauai.

Kauai residents pushing for an environmental review of the Hawaii Superferry for the Garden Island are thrilled with Maui Circuit Judge Joseph Cardoza's decision.

"This is a victory for all people who believe an environmental assessment should be done before the Superferry can operate," said Jimmy Trujillo, spokesman for Hui-R, the group that organized the protest of the Superferry's maiden voyage to Kauai in August.

But Superferry officials were disappointed yesterday, and Superferry attorney Lisa Munger said her client planned to appeal Cardoza's decision.

Superferry President and Chief Executive Officer John Garibaldi said: "Obviously, we are disappointed. While the ruling is a loss for Hawaii Superferry and our employees, it is a greater loss for the state of Hawaii."

Cardoza's ruling affects Superferry travel to Kahului Harbor and does not affect Nawiliwili Harbor on Kauai.

Superferry managers have chosen not to operate on Kauai even though there is no legal obstacle. Circuit Judge Randal Valenciano ruled on Kauai last month that opponents failed to file a timely challenge after the state exempted the Superferry from having to do an environmental assessment.

"We're proceeding with our appeal," said Greg Meyers, an attorney for Thousand Friends of Kauai. "We expect the state and the Superferry to appeal Judge Cardoza's ruling. We don't know what they're going to do. We aim to be prepared."

Besides blocking Superferry operations at Kahului Harbor, Cardoza also declared that an operating agreement between the Superferry and state transportation officials was void.

State law requires an environmental assessment before the operation can start and he was compelled to apply Hawaii law as it is written, the judge said.

Cardoza said the Hawaii Supreme Court had already ruled on the merits of the case by ordering that an environmental assessment be done and that he was following the system of environmental review as required by state law.

Cardoza said the decision should not be looked at as a moment of joy but a time for all to bridge divisions. "If we don't work out these issues, things will not get better," he said.

Garibaldi has said the company would have to transfer the Alakai out of Hawaii if it is allowed to operate only to Kauai.

Superferry officials also have mentioned the possibility of laying off 90 percent of the employees during the environmental review process.

Isaac Hall, representing the Sierra Club and other citizens' groups in the Maui case, said he hoped the Superferry does not leave Hawaii and lay off its employees.

Hall said he was sorry that there will be economic harm to the Superferry but that the interisland service and the state were warned years ago about preparing an environmental assessment.

He said state transportation officials should do a broader study that requires an environmental impact statement and might take one to two years, compared with an assessment that takes about eight months.

Keone Kealoha of Malama Kauai does not expect the Superferry to return to Nawiliwili Harbor until after state lawmakers meet in special session -- if they decide to do so.

WAILUKU » The Hawaii Superferry would transfer its vessel "elsewhere to generate revenue" if it cannot operate while an environmental study is prepared, President and Chief Executive Officer John Garibaldi testified in court yesterday.

"I can't guarantee the vessel will return if it leaves the state," said Garibaldi, adding that the Superferry is losing about $650,000 a week because its vessel, the Alakai, sits idle.

Garibaldi was called to testify yesterday in a Circuit Court hearing on an injunction to stop the company from operating at Kahului Harbor while an environmental assessment is conducted.

In August the Hawaii Supreme Court ruled that the state should have done an environmental assessment for Kahului Harbor improvements.

"Permitting the vessel to operate solely to Kauai and not to Maui would not produce enough revenue to sustain the Superferry's business model," Garibaldi said.

If the company were to impose conditions to sustain revenue, he said, "we would have to look at reducing the labor force by up to 90 percent of the staff."

The Hawaii Superferry staff has gown to slightly less than 300 employees, including 35 on Maui, about 25 on Kauai and the balance working on Oahu as operational and support staff.

Garibaldi broke down the losses the company has incurred: The weekly operational loss is $500,000, the weekly loan payment is $125,000 and there is an additional $20,000 in other costs, without including the legal and consulting fees in legal battles.

Garibaldi said the events of Sept. 11, 2001, "brought home the fact that we were relying on one mode of transportation."

He said that transportation in Hawaii was down for four days, and critical transport was impaired.

"The driving force" behind the operation, Garibaldi said, was a belief that there was a lack of transportation alternatives in Hawaii.

Garibaldi pointed to his experience as an executive with Aloha Airlines in 1985 and later with Hawaiian Air in concluding that "the establishment of the Hawaii Superferry meets the needs of providing a public purpose."

When asked about previous testimony from other witnesses on invasive species, Garibaldi agreed that occasional random high-intensity inspections of vehicles utilizing the ferry service would not be objectionable.

Hawaii Superferry attorney Lisa Munger asked Garibaldi to explain a measure passed in the 2006 legislative session that required the company to hold informational briefings.

Garibaldi said 12 meetings were called for, but they conducted 22 statewide, with seven of them on Maui.

Isaac Hall, the attorney for environmental groups seeking the injunction, objected to the line of inquiry, saying, "Any public involvement is irrelevant to the argument because the Hawaii Supreme Court has already ruled that the public was deprived of their participation rights by the failure to prepare an EA (environmental assessment)."

Judge Joseph Cardoza overruled the objection because the two sides will later argue the information's relevance.

WAILUKU » A retired superintendent of Haleakala National Park testified he sent a letter more than two years ago to the federal Maritime Administration warning of potential environmental problems from the Hawaii Superferry.

Donald Reeser said that in the March 29, 2005, letter, he warned of the potential risks of transporting alien species to Maui and felt an environmental impact statement was required for the project.

The Hawaii Supreme Court ruled last month that the Superferry needed to complete an environmental assessment for Kahului Harbor -- a requirement that has now raised questions about whether the interisland service can operate in the near future on Maui.

The decision has also placed at increased risk a $140 million loan guarantee made to the Superferry by the Maritime Administration.

Reeser testified yesterday on the fourth day of a hearing before Circuit Judge Joseph Cardoza to determine whether the Superferry can operate while the state prepares the environmental assessment.

Groups critical of the Superferry, including Maui Tomorrow, want the operation at Kahului Harbor halted pending completion of the environmental assessment.

The Maritime Administration, which issued the loan guarantee in January 2005, required as a condition that the state give all governmental and environmental clearances.

Superferry attorney Lisa Munger said McKeever will testify as to why the Superferry is in Hawaii's best interests.

In court, Reeser testified he had a meeting with Superferry officials, including President John Garibaldi, in 2005 and told him Haleakala National Park wanted an environmental assessment so it could have an opportunity to comment on the project.

"As far as I understand, we were ignored," Reeser said. "We're very much concerned about what might be brought in."

Reeser said a similar request was made to the state Public Utilities Commission.

The state's reluctance to do an environmental study for the Superferry is similar to the state Transportation Department's resistance to preparing an environmental impact statement for the extension of Kahului Airport's runway for international flights, he said.

Kema Kanakaole, a native Hawaiian critical of the Superferry, testified he was worried that passengers disembarking with their vehicles on Maui would destroy subsistence living in Hana by taking too much of the ocean and land resources, such as fish, limu and opihi.

Kanakaole, a leader of the Eastside Hui, said families take care to preserve the resources of the area through customary practices.

"Those practices are very important to us," he said. "I think there's going to be a lot of conflict."

Kanakaole said his group educates visitors about the traditional uses of the area by families, and he expects more visitors if the Superferry operates on Maui.

WAILUKU, Maui — A Maui judge today agreed to extend the ban on the Hawaii Superferry's use of Kahului Harbor.

Judge Joseph Cardoza issued a temporary restraining order to that effect on Aug. 27, but such orders cannot be extended beyond 20 days.

At a hearing this morning in Maui Circuit Court, Cardoza agreed to grant a preliminary injunction to keep the ferry out of Kahului Harbor at least until he issues a decision on whether the ferry can resume operations while the state conducts an environmental review of ferry-related harbor projects.

The hearing was convened in the wake of an Aug. 23 Hawaii Supreme Court ruling ordering the state Department of Transportation to conduct the environmental assessment.

On one side is Maui Tomorrow, the Sierra Club and the Kahului Harbor Coaltion, and on the other side is DOT and the Hawaii Superferry.

Cardoza began hearing testimony Monday on whether the potential risks of allowing the ferry to operate during the assessment outweighs harm to the company and the state in keeping it confined to port.

The three Maui groups claim the potential risks include the spread of invasive species and collisions with humpback whales.

Cardoza said he was satisfied that parties were not attempting to use lengthy testimony as a "filibuster" to keep the injunction in effect for an extended period.

The judge also said he is aware of the urgency in issuing an order that ultimately could decide the Superferry's fate. It could takes months for an environmental assessment to be done, and the company may not be able to financially absorb being idle for that long.

"I am giving this hearing top priority so we are clearing our calendar as we go and other matters are being rescheduled, including all trials and hearings, with the intent to give this matter the highest priority," Cardoza said.

Gov. Linda Lingle and the Hawaii Superferry are going to Kauai, drawing vows from protesters that they will again try to block the vessel.

Lingle yesterday announced that extensive security preparations have been completed so that the 350-foot, high-speed ferry can travel to Kauai on Sept. 26.

Protesters expressed frustration and worry yesterday at a rally held by groups opposed to the Superferry. Some said they would be back in the water to protest its arrival.

Lingle will hold one or two community meetings on Kauai sometime before the return.

A human chain of protesters blocked the Nawiliwili Harbor channels Aug. 26 and 27. The ferry has been the subject of community protests since 2004, as opponents demanded the ferry be subject to an environmental assessment.

Critics fear the ferry will hit whales and bring invasive species to Maui and Kauai and that the added cars from Oahu visitors will clog and despoil the island's rural lifestyle.

More than 1,000 protested on Kauai. Three were arrested on misdemeanor charges, and the U.S. Coast Guard cleared 20 swimmers from the channel.

State and federal officials are promising strict enforcement of a security zone in Nawiliwili Harbor. Lingle and state Attorney General Mark Bennett passed out a list of 13 state laws and six federal laws that could bring felony jail terms if violated by protesters.

The U.S. Maritime Administration says it did not demand environmental exemption in order to back the Hawaii Superferry’s loan.

In a recent letter, Gov. Linda Lingle told state Sen. Gary Hooser that the Maritime Adminsitration placed such a condition on the loan.

But the head of the administration, Sean Connaughton, says that was not the case.

Connaughton says the maritime agency only wanted proof of the state and Superferry's prior claims that the harbor improvements could be exempted from review.

"Obviously the vessel has to meet every environmental requirement," Connaughton said. “The vessel and the operations do have to meet whatever applicable standards that may exist."

In the 2005 loan guaranty, the Maritime Administration stated “all the governmental and environmental clearances” had to be met, including “confirmation that there is no need for an environmental assessment of the port facilities.” The agency says that does not constitute a demand to avoid environmental review.

The U.S. Department of Transportation's Maritime Administration wanted assurances from the state that no environmental assessment be required for harbor improvements for Hawai'i Superferry because delays to harbor access could put its loan guarantees at risk.

The federal government added the condition to $140 million in loan guarantees in January 2005 because Superferry was a new operation that depended on $40 million in state harbor improvements. The federal government, which had suffered heavy financial losses when other shipbuilding projects failed, wanted confirmation that the harbor work would be completed and that no environmental issues were outstanding.

But far from smoothing the way for Superferry, the state's exemption of an environmental assessment led to a state Supreme Court challenge that has thrown the project's future into doubt.

Several environmentalists said the Maritime Administration, the state and Superferry executives should have anticipated there might be legal challenges. Environmentalists claim it was an unnecessary risk not to conduct an environmental assessment at the outset.

"All the way through, it was clear that this was a concern and that we believed that an environmental review was the minimum," said Jeff Mikulina, the director of the Sierra Club's Hawai'i chapter. "It's really unfortunate that here we are, years later, right on the verge of operations, and now they are forced to do it."

Others said it is understandable the federal government might want assurances from the state but that it was Superferry that agreed to the conditions of the loan guarantees.

"At the end of the day, there are very few entities in this whole sorry mess that end up looking good, with the exception of the people who ultimately challenged it when they raised these issues way back," said John Harrison, the former coordinator of the University of Hawai'i-Manoa Environmental Center. "There was not a question that these were issues."

The Maritime Administration, in a written reply to Advertiser questions yesterday, outlined the reasons for its loan-guarantee condition.

"It was determined that because this was a new ferry operation, and significant infrastructure work had to be performed in order for the ferries to operate, the Maritime Administration needed to be assured that prior to issuing any loan guarantee, that the ports would be available for ferry operations," the Maritime Administration said.

The Advertiser reported on Sunday that the state Department of Transportation was aware of this condition when it ruled in February 2005 that the harbor improvements were exempt from an environmental assessment.

The decision whether to require an environmental assessment was entirely up to the state, but Superferry executives had told the state that an environmental assessment would jeopardize the loan guarantees for the construction of the Alakai and a second ferry.

The state Supreme Court's ruling that an environmental assessment is necessary has put the Superferry project on hold, prompting warnings from Superferry chief executive officer John Garibaldi and the Maritime Administration's Sean Connaughton about the risks of default and the exposure to federal taxpayers.

The loan guarantees helped the Superferry finance ferry construction and are backed by the federal government, so the government would be responsible for paying $140 million of debt in the event of a default.

Connaughton, the administrator of the Maritime Administration, told the Maui Circuit Court in a declaration last week that the delay in ferry service "greatly increases the likelihood of a default whereby the United States government would be called upon to make good on its guarantee of the vessel financing."

U.S. Sen. Daniel K. Inouye, D-Hawai'i, who has been supportive of the loan-guarantee program in the past, did not take a position on the loan guarantees for Superferry and urged the Maritime Administration to follow its criteria, according to his staff.

Jennifer Goto-Sabas, Inouye's chief of staff in Honolulu, said the senator was influenced some by his experience with the failed "Project America," the largest loan guarantee ever approved by the Maritime Administration.

The guarantee involved American Classic Voyages, which had been operating interisland cruises in Hawai'i and had a contract to build two new cruise ships at a Mississippi shipyard as part of "Project America."

But American Classic went bankrupt after the Sept. 11, 2001, terrorist attacks, defaulting on the loans and costing the federal government (a.k.a. US Taxpayers) $187 million.

The Maritime Administration had paid out $490 million to cover defaults over the previous several years, including $330 million linked to various American Classic projects. The Government Accountability Office and the inspector general for the U.S. Department of Transportation found that the Maritime Administration had failed to protect taxpayers from the losses.

The GAO, the investigative arm of Congress, found that the Maritime Administration had waived its financial criteria on several of the loan guarantees and did not insist on safeguards.

At the time, U.S. Sen. John McCain, R-Ariz., described the American Classic loan guarantees as "one of the most incredible boondoggles in recent history."

Norwegian Cruise Line bought a hull and other leftover material from "Project America" and took it to a shipyard in Germany for use in its plans for interisland cruises in Hawai'i. Inouye and U.S. Rep. Neil Abercrombie, D-Hawai'i, obtained a federal exemption in 2003 that allowed Norwegian to use up to three foreign-built ships for cruises between the Islands instead of stopping first at a foreign port, as required for foreign ships under federal law.

Connaughton, of the Maritime Administration, told Congress in testimony in March that the administration has notably improved the management of the loan-guarantee program since the critical audits. He said the government has an outstanding portfolio of $2.9 billion in loan guarantees for vessels and shipyard modernization.

The loan guarantees are intended to help private companies obtain long-term financing.

Connaughton said the Maritime Administration has not asked for federal money for new loan guarantees since 2001, but Congress has provided money to help finance projects, including the Superferry.

Connaughton said the Maritime Administration no longer asks for federal money "because it believes this program is a form of corporate subsidy, and that shipowners and shipyards should rely on their own creditworthiness to obtain financing in the private sector.

"Further, the taxpayers should not bear the risk of default by private companies."

Protesters and legal issues force the interisland vessel
to scuttle voyages for the time being

A trip on the Hawaii Superferry to Kauai was supposed to be a surprise birthday present for 7-year-old Isaac Yamashita of Waipahu.

His mother, Melissa Antonio, said Isaac was excited when she told him, "We're going to ride the ferry for your birthday. He was like, 'Oh, thank you, mom.'"

But Yamashita and the other passengers never left the dock yesterday. The Superferry canceled the trip when the Coast Guard could not guarantee safe passage for the 350-foot ferry in and out of Nawiliwili Harbor.

Antonio let Yamashita skip school yesterday, but he still got an unintended lesson in politics, protests and dealing with change.

About a dozen protesters greeted some passengers arriving at Pier 19 for yesterday's trip.

Police monitored the protest, but it was peaceful and went without incident, unlike Monday night's protest on Kauai, where a flotilla of about 65 surfers and canoe paddlers forced the Superferry to turn back to Honolulu.

Kauai police said 10 people -- seven adults and two juveniles -- were arrested over two nights of protests Sunday and Monday.

They face misdemeanor charges ranging from disorderly conduct, obstruction of government operations and criminal trespass. All were released on bail pending hearings on Oct. 2 and Oct. 9.

Kyle Kajioka, one of the protest organizers in Honolulu, said the state should drop charges against the protesters.

It's been anything but smooth sailing for the Hawaii Superferry, now idle and stuck at Pier 19 in Honolulu because of protests and legal challenges.

The interisland ferry canceled scheduled service indefinitely yesterday, pending a court decision on Maui this afternoon and the resolution of safety concerns caused by a blockade of Nawiliwili Harbor by protesters on surfboards and canoes.

Stranded passengers are being reimbursed for hotel costs, cab fare and airfare back to their home island.

Protesters are concerned about the impact of the Superferry on the neighbor island traffic and the environment. They also object to the possible use of the Superferry by the military.

John Garibaldi, Superferry's president and chief executive, said operations will not resume until safety is assured by the Coast Guard.

A Coast Guard officials said "the risk level was too high" for the protesters, Superferry and its passengers.

Gov. Linda Lingle yesterday asked the Superferry not to sail to Kauai because of safety concerns and defended her administration's decision not to require an environmental assessment.

"It hurts our reputation as a place to do business and to be treated fairly," Lingle said. "In my opinion, the Superferry is not being treated fairly at this point because they followed all the rules."

Gov. Linda Lingle yesterday defended the state's handling of Hawaii Superferry, contending the state Department of Transportation properly used its discretion to exempt the ferry from an environmental review.

"We've never required an environmental assessment on one vessel in our state's history," she told reporters yesterday after speaking at a tourism conference at the Hawai'i Convention Center. "We have never done that. And we didn't think it was required."

Lingle said Superferry executives, who had invested money in the project with the expectation it would go forward, were being treated unfairly because airlines, barges and cruise ships have not had to go through similar environmental scrutiny.

Lingle also said a lengthy delay could undercut Superferry's ability to meet its financial obligations and the state's financing of $40 million in harbor improvements to make ferry service possible.

"So there's a lot of harm that could occur if we're not allowed to continue to move forward and let them use our harbors and if they're not allowed to continue to operate," she said.

Lingle's comments were her most extensive since the state Supreme Court ruled Thursday that the state needed to conduct an environmental assessment on the impact of ferry service on state harbors.

Most of the reaction so far has been over the legal and practical consequences of halting ferry service, but some are also beginning to question whether the Lingle administration and the state Legislature acted wisely.

The Republican governor noted that the Democratic-controlled Legislature agreed to the $40 million in harbor improvements and defeated a bill last session that would have required the state to do an environmental impact statement on the ferry's interaction with state harbors.

But several Neighbor Island state senators had threatened to block the harbor improvement money in 2006 and had tried to force an environmental review this year, claiming Superferry had failed to adequately address the potential for traffic congestion, the spread of invasive species and the threat to humpback whales.

The Neighbor Island senators, as a compromise to get Senate passage and potentially influence the state House, also suggested that an environmental review could be done by the state while Superferry launched its operations. The Superferry, the Department of Transportation and state House leaders all rejected the compromise, arguing it could cause delays or that it made little sense since the harbor improvement money had already been approved.

"It was not given the time of day," said state Senate President Colleen Hanabusa, D-21st (Nanakuli, Makaha).

The state now is arguing in court that it be allowed to do an environmental assessment while Superferry operates.

Some lawmakers had accused Neighbor Island senators of grandstanding to impress their constituents, especially after it became obvious that the House would not agree.

State Senate Majority Leader Gary Hooser, D-7th (Kaua'i, Ni'ihau), said Lingle and the DOT should have thought about what might happen if the courts ruled an environmental assessment for Superferry was necessary.

He also said the administration should have listened to the Maui, Kaua'i and Big Island county councils, the state's Environmental Council, and the dozens of environmentalists who were asking for a review.

But other lawmakers agree with Lingle that the state was correct and that the events of the past week could give the Islands a reputation as anti-business.

"This does hurt the visitor industry," the governor said. "It also hurts our reputation as a place to do business and to be treated fairly.

"And, in my opinion, Superferry is not being treated fairly at this point, because they followed all the rules, the state made a determination that an environmental assessment was not necessary, and yet they've invested all this money and are now being told to stop, at least until tomorrow."

State Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai), said the Supreme Court's decision contradicts the law and insults the Legislature. He also blamed what he called "extreme liberals" in the environmental community.

State House Speaker Calvin Say, D-20th (St. Louis Heights, Palolo Valley, Wilhelmina Rise), said he does not regret the House's decision not to force an environmental review.

Say also said he was disappointed the court's decision came so close to the Superferry's launch. The speaker, like Lingle, said he was interested in reading the court's full opinion — if one is issued — to help determine whether the state will have to conduct environmental reviews if airlines, barges or cruise lines expand services.

Say said he understood some Democrats are blaming the Lingle administration for the Superferry standstill. "I would say it's all of our problem," he said.

Nahalia Faurot, age 7, of Makakilo, described the arrival of the Hawai'i Superferry in Honolulu in two words:

"It's spantacular!" she yelled with a broad smile as she threw her arms wide open....

Nahalia was among the thousands who jockeyed for position from Diamond Head to Waikiki to Downtown Honolulu to lay eyes on the leviathan catamaran Alakai as it passed by en route to Pier 19 at Honolulu Harbor. One day soon, the specially designed vessel will begin to ferry folks to and from O'ahu, Maui and Kaua'i.

The Superferry was the talk of the town even among those who didn't watch it come in....

Along with more than six dozen other spectators, Ed Moad, 60, a transportation maintenance specialist with Aloha Petroleum, found one of the more desirable viewing positions on the breezy, shady, open-air observation deck between Tower Grill and Bikini Cantina at the Aloha Tower Market Place — complete with coin-operated high-power telescopes....

“Oh yeah, I'll ride it," Moad said. "People I've talked to are really looking forward to it. And I think it's going to be very beneficial for a lot of folks here in the Islands."...

However, Sasaki was one of the few people who offered what could be considered a discouraging word.

"I've been working on Maui for the last few weeks, and a lot of people there are not looking forward to this," he said. "Because the traffic problem there is already a mess there as it is, and they're afraid that this Superferry will come in and make things even worse."

The company has faced various obstacles, including some in obtaining more than $200 million in private financing and government loan guarantees, and $53 million in state-funded ferry improvements to Hawai'i harbors.

The company also has had to answer to widespread concern about the ferry's potential environmental impact, including the possibilities of interisland transport of invasive species and of collisions with migratory humpback whales.

Despite all that, John Garibaldi, president and CEO of Hawaii Superferry, is convinced the time is finally right for the ferry service.

Madge Schaefer, a Maui resident, can't wait for the Hawaii Superferry (www.hawaiisuperferry.com) to sail into her future.

"No one from Maui wants to live in Honolulu because it's so crowded. But we want to be able to go there to shop or see a show," said Schaefer, a former Ventura County supervisor. "I can't think of a better way to do it than by ferry — and get a relaxing mini-cruise out of the trip."

The Superferry, a football field-sized catamaran, is scheduled to begin daily runs between Honolulu on Oahu, Kahului on Maui and Lihue on Kauai in July, carrying passengers and vehicles. It will be the only service of its kind in the islands.

With about 100 days remaining before the anticipated launch, the buzz about the inter-island service is growing. There are plenty like Schaefer who are looking forward to it. But there are others like Kauai lawmaker Gary Hooser, majority leader of the Hawaii Senate, who aren't as sure.

"With up to 300 cars and 900 people getting off the ferry daily, the impacts on these small islands would be significant," said Hooser, who is among several state legislators advocating a bill that would require environmental review of the project.

If the legislation passes — and Hooser is "cautiously optimistic" it will — "the bottom line is that it will not delay the start of the Superferry," he said. "The environmental impact process will run concurrently with the businesses' operation." However, others dispute this, saying the legislation could delay the rollout.

The first of two Superferry catamarans was launched in late January from a Mobile, Ala., shipyard.

The 349-foot double-hulled ship — white-and-blue with frolicking manta rays decorating its hull — will undergo sea trials and make its way to the islands in May. A second ferry is under construction; it is scheduled to begin service between Honolulu and Kawaihae on the Big Island in 2009.

The project has been six years in the making and will cost nearly $200 million by the time the second ship is launched. Passengers will pay $42 to $60 one way; passenger vehicles will cost $55 to $65 extra...

The new service will present more competition for inter-island airlines, which are currently slugging it out in a price war, with fares as low as $19 one way.

"We anticipate that the ferry will be costly, slow, bumpy and not much use to our customers," said David A. Banmiller, president and chief executive of Aloha Airlines. Flights between Honolulu and Maui or Kauai take less than 30 minutes, excluding airport and security line waiting time.

Environmental groups have also attacked the plan, saying the ferry will endanger the humpback whales that migrate into the area in winter and will spread invasive species from island to island. Ferry developers say they have worked with community and environmental groups to create a whale avoidance plan and will screen vehicles to avoid spreading invasive species....

In an effort to delay this summer's planned launch of the interisland Hawaii Superferry, senators are calling for an extensive environmental review of the ship.

A Senate committee approved a bill yesterday that would require a study of traffic, invasive species, harbor space and humpback whale preservation before service could begin. But a similar bill was killed in a House committee that declined to hold a hearing on it.

"There are big concerns," said Sen. Gary Hooser (D, Kauai-Niihau), vice chairman of the Environment Committee.

He cited a petition signed by 6,000 people who oppose the Superferry, as well as overwhelming testimony against it from hundreds of residents at meetings held on Kauai and Maui.

The $235 million Superferry, a four-story catamaran, is scheduled to start daily service between Honolulu and the islands of Kauai and Maui on July 1. It will carry up to 900 people and 250 cars with one-way fares of $42 per person and $55 per vehicle.

The Superferry has withstood both state and federal lawsuits that attempted to force it to conduct an environmental impact statement, but the Senate bill would require an environmental study by law.

"This company is committed to helping protect our environment in Hawaii. We want to be here a long time," said Terry O'Halloran, director for business development for the Superferry....

Critics of the Superferry claim that little has been done to prevent major traffic jams on at neighbor island harbors, and shipping companies have said there is not enough room for both them and the ferry.

"What we need is disclosure. We need a common understanding of the project. We need to identify areas of concern ... and hold the Superferry responsible," said Rep. Hermina Morita (D, Hanalei-Kapaa).

The Superferry was exempted from a requirement that it do environmental studies because the state did not see a need to single out the ship, said Barry Fukunaga, interim director for the state Department of Transportation.

"They're a vessel that's using the harbor just like any other vessel," he said. "To come in after the fact and attempt to impose a special requirement on an operator is incorrect."

Senators argue that the environmental study is justified because the Superferry will be using public harbors that are undergoing $40 million in improvements, but Fukunaga said the improvements were paid for with fees imposed on harbor users -- not taxpayer dollars.

HONOLULU – Gov. Linda Lingle’s chief of staff, Bob Awana, confirmed Friday that Rod Haraga, when he was state transportation director, was frozen out of operational decisions.

Awana portrayed the situation as normal, for a department director to be shut out of normal responsibilities more than two years into the four years he was Lingle’s transportation director. Haraga was not reappointed in December after Lingle had won re-election.

The freeze on the transportation director did not continue now that Haraga has been replaced, according to Barry Fukunaga, the new director, who is awaiting confirmation by the state Senate. He said this week that he gets reports from his deputies.

In an e-mail response to questions, Awana wrote, “During his tenure (Haraga) oversaw the department’s administrative functions, which included approving and signing contracts. The deputies oversaw the daily line-functions of their divisions.”

In sworn testimony offered in a deposition taken as part of a lawsuit by Pacific Wings against the Department of Transportation, Haraga said, “Well, what happened, I could not get enough information from Brian (Sekiguchi, the deputy director for airports). So consequently, I had a discussion with (Lingle and Awana) and had thought that perhaps I could threaten (Sekiguchi) by resignation.

“And I was told by the chief of staff and the governor that was not my call, that the deputies do not report to me, that they report directly to the governor.

“I’m not aware that other departments have similar requirements,” he added.

It was not made public at the time that Haraga was not functioning as the director, responsible for all functions of the department, and he continued to collect a salary of $102,000 a year and even got a raise in July.

In public meetings on Maui, Haraga spoke about DOT policies, although his deposition indicated he did not know what airport policies were and was not taking part in deciding them. The deposition did not reveal what, if anything, he knew about harbor and highways policies during the past 18 months.

For example, on Aug. 12, 2005, he spoke about the Lahaina bypass in West Maui; and on Oct. 20, 2005, and Feb. 4, 2006, he spoke about the Superferry and Kahului Harbor on Maui.

Haraga, who has taken a job as staff engineer in the Design and Construction branch of the Honolulu city government, has not returned calls from The Maui News.

From August 2005 to December 2006, DOT policy direction was coming directly from the governor’s office.

“As appointees, all directors/deputies from the various departments report to the governor’s office, and as chief of staff, I meet on a regular basis with the directors and deputy directors,” Awana wrote.

“We also meet monthly with all deputies as a group. For departments requiring more support, I meet with directors and deputies more frequently.”

Greg Kahlstorf, president of Pacific Wings, whose lawsuit uncovered the odd situation in the Transportation Department, wants the Legislature to hold off on confirming Fukunaga until what he calls the illegal direction of the department is exposed.

Kahlstorf also contends that all decisions coming out of DOT for the past year and a half may be invalid. He bases this on state law, which says the department “shall be headed by a single executive.”

When asked who the single executive was after August 2005, Russell Pang, the chief of media relations in the governor’s office, said, “Rod Haraga remained director with all statutory authority and oversight of the administrative duties of the department, including planning, budgeting and administration. The deputies were responsible for line operations and for making day-to-day decisions within their divisions.”

“Imagine how incredulous (2nd Circuit) Judge (Joel) August will be when he learns all the decisions and rationale he has been given by the administration for its actions related to the Superferry were invalid, because the governor and her chief of staff circumvented the DOT director, law and Constitution to advance their own agenda,” he said.

Pacific Wings wants to join the lawsuit by the county, Maui Tomorrow and the Kahului Harbor Coalition that is challenging the Harbors Division’s environmental assessment for the expansion of Kahului Harbor.

Pacific Wings is an airline with no dealings at the harbor, but Kahlstorf sees a link between his lawsuit contesting the Airports Division’s decision to put go! Airlines in the Honolulu International Airport commuter terminal and the other lawsuit about the harbor.

The link is that evidence uncovered in research for his lawsuit shows that Haraga was cut out of operational decisions throughout his department.

On Wednesday, Kahlstorf also asked state Rep. Mina Morita of Kauai to look into the operations of the Transportation Department and the confirmation of Fukunaga.

He addressed Morita because, as chairwoman of the Energy and Environmental Protection Committee, she is pushing for a law to require DOT to do a full EIS for the Superferry.

Kahlstorf suggested to Morita that “the Democratic majority . . should demand immediate hearings into the apparently illegal activities . . and delay confirmation of any DOT director Lingle nominates until it is addressed. We will certainly be at any confirmation hearings with the facts in hand.”

Morita said Thursday that if Kahlstorf provides more background to support his charges, “I’ll consider it.”

She did not make any commitment to introduce a resolution on Fukunaga’s nomination, but she said she had already been aware that state employees have been “cut out of the loop because they disagreed on policy matters.”

She said that this has happened in several departments, but at Transportation in particular she had heard complaints about preferential treatment at the airport in Kauai.

The Senate Judiciary Committee has not yet scheduled hearings on Fukunaga’s confirmation.

During the last two years, the Transportation Department has had its usual share of controversies and sensitive issues. On Maui, these included the Superferry EIS, unhappiness about the time it has taken to build a Lahaina bypass and extensive changes at Kahului Airport.

But there was nothing unusually contentious going on – at least in public – in the months before Lingle told Haraga in August 2005 that his deputies would no longer report to him.

“Awana and Lingle sidelined the DOT director so they could run things themselves,” Kahlstorf contends.

“This could invalidate decisions made by Hawaii DOT during the time the department was being illegally run,” Kahlstorf told Morita, including the decision that an EIS was not required for Hawaii Superferry.

Although it was not publicly known that Lingle had removed Haraga from operational decisions in 2005, House Transportation Committee Chairman Souki knew.

He said Wednesday that “of course” it bothered him, but he did not see what the Legislature could do about it.

“I was aware last year that (Haraga’s) responsibilities were taken away from him. I didn’t know why.”

Souki said he knew that “the power was going to (Haraga’s) respective deputies, he was left only with public relations.”

“She’s the executive branch and we are the legislative branch and never the twain shall meet,” he said. “I’m not privy to any of what happened. I can’t make any comment.”

The lawsuit in which Pacific Wings wants to intervene is not directly connected to any Superferry EIS. Instead, it is about an environmental assessment the Harbors Division did in order to expand Kahului Harbor by purchasing the Old Kahului Store and Kahului Railroad Building.

The airline would have to apply to August for permission to be added as an intervening party to the harbor lawsuit.

I was rebuffed when I reiterated suggestions that the US military, specifically the Stryker Brigade, might be one of the clients of the Hawaiian Superferry.

The criticism of comments that the Superferry could be connected to military operations is, I believe, merely an attempt to divert attention from a hidden agenda on the program of uses of the Superferry. A real threat to the environment of Kauai might well the transport of military equipment, that would include the possible inclusion of Depleted Uranium (DU) in munitions that might be carried to Kauai by the military by units like the Stryker Brigade.

For anyone not familiar with DU, it is one of the sources for the Gulf War Syndrome that has disabled or killed untold numbers of Iraqis and many thousands in US military who served in the the Gulf War. DU is uranium 238, which is a "low" level radiation hazard that is used as the business end of anti-tank and armor piercing munitions. Depleted Uranium vaporizes on impact and leaves a radioactive dust with a half life of 4.5 billion years. Several hundred of tons of DU have been used munitions exploded in Iraq since 1991. The Styker Brigade, based in Hawaii, uses such munitions.

The board of the corporation that will operate the Hawaiian Superferry is a Who's Who list of Nixon and Reagan era military/industrial warhorses that will be chaired by conservative John F. Lehman, founder of JF Lehman and Company.

Lehman is an ex Kissinger wunderkind who was Secretary of the Navy under Reagan, from 1981-87. Lehman's resume includes participation in the neocon Heritage Foundation and Project for the New American Century.

Four of the other board members are hacks that have worked with Lehman & Company for decades. Thrown into this mix are a few local businessmen, like the CEO of Grove Farms, Warren H. Haruki and David C. Cole, president, chairman and chief executive officer of Maui Land & Pineapple Co.

The really weird board addition is John W. Shirley. Shirley is the former program manager of the U.S. Department of Energy, Naval Reactors Division, Seawolf and Virginia Class Submarines. He has 34 years of experience in senior positions at the Navy Division of Naval Nuclear Reactors and has been a special consultant to JF Lehman and Company. Why would his expertise be needed on the board of an inter-island passenger ferry service?

Pacific Business News reported on March 26, 2005, that “With Lehman’s expertise, the Superferry plans to operate a Westpac Express, essentially to carry military equipment and ferry vehicles from O‘ahu to the Big Island on a daily basis.” Lehman told PBN that “This logistical plan will make it easier for soldiers to train when the Stryker Brigade comes to Hawai‘i. The brigade will be stationed on O‘ahu and conduct training exercises on the Big Island.” He pointed out that the Superferry is able to transport Stryker vehicles. HSF states on Page 9 of its PUC application that, “In Hawai‘i, it is anticipated that an entire battalion will be able to be transported from O‘ahu to the Big Island on four trips at lower cost.”

The primary armament on Stryker vehicles is the Stryker Mobile Gun System. The primary ammunition for this gun system is fancifully called kinetic energy penetrators, and is made of depleted uranium (DU), a toxic and possibly cancer-causing substance. HSF has been eerily silent about whether or not DU munitions for the Stryker vehicles will be transported on the Superferry.

The builder of the H-4 Hawaiian Superferry is Austal USA. Another builder of similar ships is Hornblower Marine. They both manufacture ships that are interoperable for civilian or military use. The military side of the program is WestPac Express. Westpac Express is used for high-speed transport for U.S. Marines based in Okinawa, Japan. The Hawaiian Superferry is built to Westpac Express specifications, with a cargo carrying capacity on its passenger deck.... Check out these website for some PR from the boat builders.

What all this means to me is that the state and federal government have obscured the military strategies behind what has been sold as a civilian ferry for weekend party animals.

There are many reasons to oppose the present plan for an inter-island ferry. I ask that the state and federal government assure the people of Hawaii that the Superferry not be used to transport depleted uranium rounds between islands.

Gov. Linda Lingle and officials of Hawaii Superferry would probably breathe a sigh of relief if Neighbor Island residents who have been demanding Environmental Impact Statements would just go away.

A week ago today, a public meeting arranged by state Sen. Gary Hooser and Superferry watchdog group People for the Preservation of Kaua‘i was held at the Capitol building in Honolulu. Presentations were made by nine representatives from islands to be impacted by the Superferry.

Among the presenters were Hooser, former Kaua‘i police chief and County Council candidate K.C. Lum, Maui orchid farmer Jeff Parker, and Dick Mayer, a retired economics professor, also from Maui.

“There is an up-side to having a ferry service and a down-side,” said Ted Kawahinehelelani Blake, who has first-hand familiarity with the impacts of a rol-on, roll-off ferry service. The Kauai-born Blake resides on Mo‘orea in French Polynesia, where four “fast ferries” transport passengers and vehicles between Tahiti and Mo‘orea.

Blake said that weekends bring an influx of Tahiti residents to Mo‘orea. Though the economic importance of the ferries is obvious, Blake says that Mo‘orea residents have paid a high price.

“Criminals rob homes and businesses then catch the last ferry out,” said Blake. “Invasive species are reported weeks after they have shown up. Surf spots and roadways are jammed. Campgrounds are trashed. No more spur of the moment with Dad coming home and saying ‘Let’s go camping tomorrow.’ Camping permits will need to be applied for a year in advance.”

Hooser feels that DOT’s and the Lingle administration’s refusal to acknowledge the need for an EIS is unacceptable.

Many believe that this will change the way of life on the Neighbor Islands, and it may very well do that,” Hooser said. “I think it outrageous and irresponsible that the governor and the transportation board came to this conclusion. I think the governor and DOT need to step up to the plate and do what is right.”

Kaua‘i residents Rich Hoeppner and his wife, Judie Hilke-Lundborg, have collected over 6,000 signatures urging Lingle to postpone HSF’s operations until EISs are conducted. The majority of signatures were obtained on Kaua‘i and reflect approximately 20 percent of the island’s adult population.

Democratic gubernatorial candidate Randy Iwase has also jumped aboard the EIS bandwagon, and has signed the petition.

The morning following the meeting at the capitol, six representatives from Maui and Kaua‘i — including Hoeppner and Hilke-Lundborg — went to the governor’s office to present the 3-inch-thick stack of signed petitions directly to Lingle. Though the governor was there, the group was denied.

“There is a procedure on how to meet with the governor,” Kau‘i Alapa, the receptionist in the governor’s office, informed Hoeppner.

Hoeppner had met Lingle at a Kaua‘i farm rally in July. At Lingle’s request, Hoeppner and Hilke-Lundborg sent a letter on Aug. 1 to the governor stating their concerns about the Superferry.

After receiving no response, the couple twice formally requested an audience with Lingle through the governor’s Web site. Both requests were made with an obligatory 45-day advance notice. Both requests were denied.

“I don’t make those decisions, the governor does,” Alapa said to Hoeppner. “She reviews it and decides what she wants to do. It’s her schedule.”

When the group requested five minutes of time with a senior staffer, Alapa informed them that the senior staffers were unavailable.

“If you came into my house unexpected, would you expect me to give you the time of day?” Alapa said.

“(Some) 6,000 people have concerns and she can’t meet with us for five minutes,” Hoeppner said. “To me, that’s one of two things — irresponsible or untruthful.”

Shortly after being turned away from the governor’s office, the couple sought help at Iwase’s office. According to Hoeppner, Iwase was appalled and immediately issued a press release.

“A governor is a governor of all the people,” Iwase states in his release. “Whether you agree with a person’s position or not, it is unacceptable to refuse to allow citizens with a grievance to be shunned at the door and sent packing. To not even allow them to hand the petition to a staff member is the epitome of governmental arrogance.”

“Despite the media image of a governor welcoming the citizens with open arms, she is in fact not open to those who share views which differ from hers. It is time for those who will not tolerate such actions to stand up and themselves take action. I could not stand by and let the voices of these individuals go unheard,” Iwase’s statement continued.

“We have done everything we know of to talk with her,” said Hilke-Lundborg. “Is she the governor of Hawai‘i or the governor of O‘ahu?”

WAILUKU » More than 20 people held a demonstration yesterday in Central Maui to protest a plan to operate a Hawaii Superferry at Kahului Harbor.

The "Freight First" rally was to bring attention to a series of public meetings this week allowing people to testify before the state about the proposed Superferry.

The meetings were required by the state Legislature prior to Gov. Linda Lingle's administration releasing some of the $40 million for harbor improvements for the Superferry.

Environmentalists, including members of the Sierra Club, want Lingle to delay the ferry operation until its environmental impact can be assessed, including the potential for invasive species entering the Valley Isle....

Some small businesses on Maui and Molokai are also worried about the impact of freight rates and services for shipping their products.

The interisland barge carrier Young Brothers says it will not be accepting less than a container-load of freight from businesses, in light of dock space being taken away from it due to the Superferry....

MAALAEA – There were plenty of questions for Hawaii Superferry at a panel discussion Thursday night, but no answers.

That’s because the developers of the high-speed interisland ferry that’s scheduled to launch in about a year turned down an invitation to attend and the company apparently had no representation at the event before a standing-room-only crowd at the Pacific Whale Foundation’s Ocean Science Discovery Center.

Even two members of Superferry’s newly appointed Maui advisory board wished officials had chosen to be on hand.

“It’s unfortunate that Hawaii Superferry is not here to participate – or just to listen or to learn,” said Teya Penniman, manager of the Maui Invasive Species Committee.

“I share with the frustration of those who brought the lawsuit and of those who put together this forum,” said Martin. “The window is short, but the questions are large.”

Martin and Penniman revealed that they had agreed to serve as members on the advisory board that Superferry officials have refused to identify. Although the panel has already held two meetings, more members are being added, according to John Garibaldi, chief executive officer for the Superferry. When the group is complete, an announcement will be made, he said Friday.

Penniman was one of six panelists assembled by the Pacific Whale Foundation after three of the leading players in the controversy declined. Along with Superferry officials, representatives of the state Department of Transportation and Maui Land & Pineapple Co., said they would not attend. Superferry and transportation officials said they wouldn’t participate because some of those involved in organizing the forum were involved in legal actions against them while ML&P said it had a scheduling conflict....

Despite the circumstances, Superferry critics – or even those who just want more information – used the opportunity to complain that the developers were continuing to stonewall the public.

They’ve found a supporter in state Sen. Shan Tsutsui, who couldn’t attend either because of business at the state Legislature, but he sent a two-page letter of questions and misgivings.

“All in all, my message is simple. Talk to us!” wrote Tsutsui. “Address the traffic, environmental, illegal drugs, invasive species and whale concerns that Maui has. Take your company to the public and listen to their concerns, frustrations and ideas. In dealing with Maui’s ohana, you can never go wrong when choosing collaboration over isolation.”...

The panelists were said to be chosen because of their expertise: Greg Kaufman, president and founder of the Pacific Whale Foundation, talked about the potentially lethal mix of a high-speed ferry and whales; Penniman spoke about the fears of easy movement of invasive species the Superferry would provide; and farmer Jeff Parker explained the possible impacts of new or more invasive species on agriculture.

Rob Parsons, the county’s environmental coordinator, talked about the environmental review process and the county’s concerns; attorney Dennis Niles offered a legal perspective; and paddler and engineer Karen Chun spoke about operations and looming problems at Kahului Harbor.

Besides an overall call for Superferry to meet with the public, everyone urged for the company to complete an environmental impact statement. Mayor Alan Arakawa and the county councils of all the Neighbor Islands head a long list of leaders who have already called for an EIS that would provide public review and force the Superferry to answer questions....

Although Superferry leaders have said they have plans to control the spread of invasive species (only clean vehicles will be allowed; inspections will take place) and avoid hitting whales, panelists weren’t convinced.

Penniman described the “sand-grain” size of miconia seeds and how easy it is for them to spread between the islands. Coqui frogs, fire ants, fountain grass and other destructive species can move just as fast.

Kaufman, whose company with slower-moving tour boats struck a whale recently, said the high-speed ferry would not be able to maneuver quickly if whales were in the way and the sharp hulls could kill.

Niles said his home overlooks Kahului Harbor, and he has a hard time imagining how the Superferry will fit into a facility that’s already overcrowded. Regarding whales, Niles suggested that the public urge advisory committee members to the Hawaiian Islands Humpback Whale National Marine Sanctuary to amend their rules to require that all boats and vessels document all whale strikes to develop a database....

Parker described the state-of-the-art alien species inspection facility that’s being constructed at Kahului Airport, a result of a grass-roots movement that stopped the extension of the runway because no controls were in place to inspect incoming baggage and cargo. He said the harbor was the other entry point for alien species.

WAILUKU - Three Maui organizations sought an injunction Monday to require that the Hawaii Superferry "at least" prepare an environmental assessment before it enters into an operating agreement with the state to use Kahului Harbor.

"Before they get the right to use the harbor, an environmental review should be conducted," said attorney Isaac Hall, who filed papers in 2nd Circuit Court late in the afternoon.

The suit against the state Department of Transportation (DOT) and the Hawaii Superferry also names DOT Director Rodney Haraga and Barry Fukunaga, deputy director for the Harbors Division. DOT spokesman Scott Ishikawa said no comment could be made until officials had seen the document.

Hall said he was representing the Sierra Club, Maui Tomorrow and the Kahului Harbor Coalition, which is made up of canoe clubs that use the harbor facilities. The request was filed because DOT is expected to enter into an operating agreement with the Superferry on or before April 1, but be exempted from environmental review. Hall noted that although Superferry officials have said they will conduct their own environmental studies before service commences, that won't happen until after the pact has been signed.

"They're doing it exactly backwards," he said. "They're supposed to do an environmental analysis and study prior to entering into an agreement. This is totally the opposite of what's required by Chapter 343," which outlines requirements for environmental reviews in the state statutes.

The Superferry, which bills itself as "H-4" by linking the islands much like the freeways that crisscross Oahu, has caused considerable debate throughout the state with those hoping for cheaper travel pitted against others who fear disastrous environmental and social ramifications.

Even elected officials find themselves at odds. The state Legislature said an EIS wasn't necessary, but Maui Mayor Alan Arakawa, the Maui County Council and the Kauai County Council all have urged that one be completed.

Hall said there's a big difference why the Superferry should be forced to undergo environmental review as opposed to cruise ships and other individual harbor users or even airlines arriving at Kahului Airport.

"The difference is that cruise ships don't need $40 million worth of state funds to build infrastructure before they can operate," he said. "They (Superferry officials) keep saying it's like an airline, but we haven't had an airline say it can't land here until the taxpayers of Hawaii pay $40 million in infrastructure improvements."

Garibaldi said the money has been incorrectly portrayed. He said the $40 million will be funded through reimbursable bonds issued by the Legislature. The company has every intention of paying that back, he said....

Hall said before the Superferry gets the OK to use the harbors, it must address the alien species issue, how it will avoid collisions with whales and mitigate traffic impacts. He pointed out in the lawsuit that DOT had "kept secret" the planned use of the harbors in conjunction with the Superferry by putting in place a protective order in its application to the Public Utilities Commission. Because of that, said Hall, too much is unknown about the project.

"We felt it was important to file this before the operating agreement was executed," said Hall. "We wanted to put them on notice that the operating agreement is illegal without an EA first being prepared."

Garibaldi questioned "what special interests" were motivating the groups that took the action. He said Arakawa and the councils from Maui and Kauai "were reacting without the right information in hand. Our great desire was that the counties would have waited until they got more information instead of speculating" without the facts.

"With all the support we've received, we're just taken aback that people have resorted to filing a lawsuit," said Garibaldi....

Hawaii prodigy Steve Case says isle firms benefit from investing locally and
raising the quality of life

FOR Hawaii to lure back young professionals leaving for opportunities elsewhere, it must provide well-paying jobs while allowing quality family life, America Online co-founder Steve Case told local business leaders yesterday.

Case, a Honolulu native, spoke at a Hawaii Business magazine luncheon at Hilton Hawaiian Village. Case, who helped make "you've got mail" part of America's vocabulary, has also made significant investments in the islands. Case, with a net worth of about $825 million, is listed at No. 363 on the Forbes magazine's list of the 400 richest Americans.

"Hawaii gave me a great start in life. Now it's my turn to give back -- not just for nostalgia or sentiment's sake, but because Hawaii represents a great opportunity to invest in businesses that I'm convinced can do well by doing good," Case said.

Case, a 1976 Punahou graduate, is one of four children of prominent local attorney Daniel Case and his wife, Carol....

Case's dreams took him to the mainland where after marketing positions that included a stint at PepsiCo Inc., he joined the company that was to become America Online. After the merger of America Online and Time Warner in 2001, Case served as chairman of the board, and is now a member of Time Warner's board.

Case, who lives in Washington, D.C., has made recent investments on Maui and Kauai. He is a major investor in Kauai's Grove Farm, where his grandfather was once chief executive officer, and in Maui Land & Pineapple. Case is also the chairman of the Case Foundation, a leading supporter for Hawaii Habitat for Humanity, and an investor in the Hawaii Superferry....

Case said he's looking for other investment opportunities that will improve the lives of Hawaii residents, and encouraged business leaders to do the same.

If businesses help improve Hawaii's quality of life, they will become more successful at attracting talent and resources in an increasingly competitive environment, he said....

Business decisions that promote Hawaii's niche tourism markets, help grow local agriculture and improve shipping and transportation while still remaining true to the state's diverse culture and protect the environment are rooted in success, Case said....

Walter Dods, chairman and chief executive of First Hawaiian Bank and parent BancWest Corp., said Hawaii's business community will likely respond to Case's challenge.

"We haven't heard a speech like that in a long time," Dods said. "I personally loved it. Businesses that derive their incomes from the community need to give back to the community."

The U.S. transportation secretary said he has seen few undertakings that are as ambitious

"I see a lot of transportation projects but few as ambitious or forward-looking as this," he said.

Mineta, who was in town to address the Japanese American Citizens' League's national convention, took a 30-minute tour of Honolulu Harbor with Gov. Linda Lingle and state Transportation Director Rodney Haraga.

Lingle and Haraga "appreciate the importance of our maritime industry and the importance it has in moving our economy," Mineta said.

Mineta spoke in front of the state's 3-year-old ferry terminal building, which he noted was built with federal transportation funds (aka US Taypayer’s dollars).

Hawaii Superferry plans to begin interisland ferry service in 2006. The company has filed a rate plan with the state Public Utilities Commission.

The company hopes to have two high-speed ferries serving the islands by 2008. Each of the 340-foot catamarans currently being built in Mobile, Ala., at a cost of $75 million each will each be able to carry 866 people and 282 cars.

Tim Dick, chairman of Hawaii Superferry, said that what was just a vision three years ago is rapidly becoming reality....

The $200 million cost of the project is one of the largest non-land investments in Hawaii, he said.

Mineta also announced that Hawaii has received a $7.46 million federal grant (aka US taxpayer’s money) for development of ferry landing projects on Maui, Lanai and Molokai.

Meanwhile, back in The Catbird Seat, you can check out more birds that eat your tax dollars in the following nests...

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