HARMON’S ANSWERS TO TRUSTEES’ INTERROGATORIES
A Sighting from The Catbird Seat
~ o ~
CIVIL NO. 97-0512-02
P&C INSURANCE COMPANY, INC.
AND
RICHARD S.H. WONG, OSWALD K. STENDER, LOKELANI LINDSEY,
GERARD A. JERVIS AND HENRY H. PETERS, AS
TRUSTEES OF THE ESTATE OF BERNICE PAUAHI BISHOP,
Plaintiffs,
v.
BOBBY N. HARMON,
Defendant.
HARMON’S ANSWERS TO PLAINTIFFS’ INTERROGATORIES
1. With respect to Paragraph 3 of the Counterclaim, please state the specific citation to the federal and/or State of Hawaii laws, regulations and/or rules, you allege were violated by Plaintiffs.
ANSWER:
A. Tax fraud: Failure to disclose financial information in Federal Tax Returns regarding personal investments of Trustees and executives in companies controlled by KSBE. Breach of IRS rules regarding the maintaining of “arms-length” relationships between a tax-exempt charitable organization and its for-profit subsidiaries, including the improper allocation of insurance premiums and claims costs among the estate and its various for-profit subsidiaries (e.g., SoCal Holdings, Southern California Savings & Loan, AFCO, Paradise Petroleum, Unison Pacific and Sino Finance), and KSBE control of the operations of P&C Insurance Company, Inc. by the actions of Henry H. Peters, Nathan Aipa and Louanne Kam. Trustees, managers and independent contractors engaged in “excess benefit” transactions (e.g. payments to Marsh & McLennan, Inc., and Stay & Sons for non-bid or improperly bid contracts). Improper financial reporting in annual financial statements prepared by Coopers & Lybrand (e.g., failure to disclose large claims; improper reserves). Failure to report to the IRS, the state tax director, the court-appointed Master, the Probate Court and to the Attorney General conflicts of interest and financial transactions among KSBE, its trustees, employees, independent contractors, government officials, and officers and directors of P&C and other for-profit subsidiaries which resulted in unjust enrichment, private inurement, and private benefit to these individuals and entities.
B. Intentional non-compliance with State and Federal Regulations under the Americans with Disabilities Act; the Environmental Protection Act; the Occupational Safety and Health Act; and the Civil Rights Acts regarding equal employment opportunity.
C. Violation of State of Hawaii insurance regulations, Act 431: Article 13: Unfair Methods of Competition and Unfair and Deceptive Acts and Practices in the Business of Insurance. Fraudulent claims practices.
D. Coercion of employees by means of threats of discipline or termination to violate laws or to “look the other way” while superiors engaged in illegal or unethical acts; unlawful altering, falsifying and/or destruction of staff reports, board minutes, contracts and other legal documents; collusion with independent contractors to conceal and cover-up wrongful acts; and misuse of the “attorney-client privilege” to prevent the disclosure of wrongful acts.
2. With respect to Paragraph 3 of the Counterclaim, please list each act or practice which you allege was a violation by Plaintiffs of federal and/or State of Hawaii laws, regulations and/or rules, and in which you refused to participate.
a. Identify all persons having knowledge, information or belief of such facts or evidence; and
ANSWER:
A. Tax fraud: Breach of Arms-Length Principles between KSBE, P&C and other Subsidiaries; Failure to Report to the IRS and to the Hawaii State Tax Collector, Conflicts of Interest; Private Benefit and Private Inurement Transactions.
KSBE--
Henry Peters, Trustee
Richard S.H. Wong, Trustee
Oswald Stender, Trustee
Lokelani Lindsey, Trustee
Gerard Jervis, Trustee
Matsuo Takabuki, (former) Trustee and current consultant
William Richardson, (former) Trustee and current consultant
Myron Thompson, (former) Trustee
Rodney Park, Director of Administration Group
Wally Chin, Controller
Yukio Takemoto, Budget Director
Leeann Crabbe, Budget Mgr.
Gilbert Ishikawa, Tax Manager
Myron Mitsuyasu, Asst. Tax Manager
Dennis Fern, (former) Internal Auditor
Andrea Oshiro, (former) Internal Audit Dept.
Ramona Hinck, Accounting Mgr.
Doyal Davis, (former) Budget Mgr.
Bruce Nakaoka, Real Estate Investments Department Manager
Eric Martinson, Financial Assets Manager
Aaron Au, Financial Assets Division
Daniel Jones, Financial Assets Division
Nathan Aipa, General Counsel & Director, Legal Group
Louanne Kam, Director, Litigation and Risk Management Division
Gilbert Tam, (former) Director, Administration Group
Guido Giacommetti, (former) Director, Asset Management Group
Mitch Gilbert, (former) Financial Assets Manager
Sydney Keliipuleole, Asset Management Div.
Charles Maeda, Information Systems Div.
Neil Hannahs, Asset Management Group
Michael Chun, Pres., Kamehameha Schools
Ed Tabangay, (former) Engineering Dept.
Henry H. Peters, Chairman, Board of Directors
Gilbert Tam, Director
William S. Richardson, Director & Secretary/Treasurer
Peter J. Lowe, Vice-President
Rocco Sansone, Marsh & McLennan, Inc., Broker
Nathan T. K. Aipa, Asst. Sec./Asst. Treasurer
PAUAHI HOLDINGS CORPORATION:
Richard Wong, President
Glenn Hara, Treasurer
Henry Peters, Chairman, Board of Directors
ROYAL HAWAIIAN SHOPPING CENTER, INC:
Richard Wong, President
Glenn Hara, Treasurer/Controller (?)
COOPERS & LYBRAND
Cary M. Okawa, C.P.A.
Dennis Tsuhaka, C.P.A.
Carl Kobayashi, C.P.A.
MASTERS
Peter Trask, Esq.
James Duffy, Esq.
Benjamin Matsubara, Esq.
Colbert Matsumoto, Esq.
STATE OF HAWAII
Rey Graulty, Insurance Commissioner
Wayne Metcalf, (former) Insurance Commissioner
Margery Bronster, Attorney General
Kevin Wakayama, Deputy Attorney General
B. Intentional non-compliance with State and Federal Regulations under ADA; EPA; OSHA; Civil Rights Acts:
KSBE--
Henry Peters, Trustee
Richard S.H. Wong, Trustee
Oswald Stender, Trustee
Lokelani Lindsey, Trustee
Matsuo Takabuki, (former) Trustee and current consultant
William Richardson, (former) Trustee and current consultant
Myron Thompson, (former) Trustee
Rodney Park, Director of Administration Group
Nathan Aipa, General Counsel & Director, Legal Group
Louanne Kam, Director, Litigation and Risk Management Division
Colleen Wong, Esq.
Neil Hannahs, Asset Management Group
Michael Chun, Pres., Kamehameha Schools
Sam Hata, Director of Administration
Allen Young, Engineering Dept.
Ed Tabangay, (former) Engineering Dept.; current Consultant
Gil Tam, (former) Director, Administration Group
ROYAL HAWAIIAN SHOPPING CENTER, INC:
Richard S. H. Wong, President
Glenn Hara, Treasurer/Controller
Jonathan Kim, Property Manager
C. Insurance Fraud: Violation of State of Hawaii Insurance Regulations, Act 431: Article 13; Failure to disclose information to insurance carriers. Unfair Methods of Competition. Deceptive Claims Practices. Unfair Discrimination in the Settlement of Claims.
KSBE
Phillip Chang, Esq.
Lyn Anzai, Esq.
Colleen Wong, Esq.
Nathan Aipa, Esq.
Louanne Kam, Esq.
Kathie Reis
Kapu Smith
Patricia Onogi
Rocco Sansone
Christine Lee (former employee)
M&M INSURANCE MANAGEMENT SERVICES, INC.
Peter Lowe, Sr. Vice-Pres.
Garrett Liu
STATE OF HAWAII
Wayne Metcalf, (former) Insurance Commissioner
Rey Graulty, Insurance Commissioner
UNITED EDUCATORS INSURANCE GROUP
Milton T. Perkins
Michael Goolsby
M. Tony Rangel
ARKWRIGHT INSURANCE COMPANY/HOBBS GROUP
John McGrath
Tim McGrath
Mary Brieghner
D. Coercion of employees to violate laws or to “look the other way” while superiors engaged in illegal or unethical acts; unlawful tampering with, or destruction of, legal documents; collusion to conceal wrongful acts through threats of discipline or termination; and misuse of the “attorney-client privilege.”
KSBE--
Henry Peters, Trustee
Richard S.H. Wong, Trustee
Lokelani Lindsey, Trustee
Emalia Keohokalole, Secretary
Rodney Park, Director of Administration Group
Yukio Takemoto, Budget Director
Nathan Aipa, General Counsel & Director, Legal Group
Louanne Kam, Director, Litigation and Risk Management Division
Colleen Wong, Esq.
Phil Chang, Esq.
Lyn Anzai, Esq.
Allan Yee, Esq.
Neil Hannahs, Asset Management Group
Michael Chun, Pres., Kamehameha Schools
Sam Hata, Director of Administration
Allen Young, Engineering Dept.
Sandie Wicklein, Director of Personnel
Pat Chalfin, (former) Personnel Dept.
David Dunigan, Litigation & Risk Management Div.
Julie Kawakami, Litigation & Risk Management Div.
Kim Kanalaupuni, Litigation & Risk Management Div.
Daniel Pires, Documentary Dept.
Leslie Yamashita, Notary Public
Werylend Tomczyk, Notary Public
Luana Sala, Notary Public
Lori Loo, Notary Public
Linda Jacobs, Legal Assistant and Notary Public
Shevon Garnett, Legal Group Administrator
Marcia Diver, Information Services Division
Henry H. Peters, Chairman, Board of Directors
Gilbert Tam, Director
William S. Richardson, Director & Secretary/Treasurer
Nathan T. K. Aipa, Asst. Sec./Asst. Treasurer
Dennis Fern, Internal Auditor
Louanne Kam, Litigation Manager
Peter Lowe, M&M Insurance Management Services, Inc.
Garrett Liu, M&M Insurance Management Services, Inc.
Rocco Sansone, Marsh & McLennan, Inc.
b. Identify each and every document which refers to or relates to these allegations.
ANSWER :
A. Tax fraud: arm’s length issues/conflicts of interest/private benefit/private inurement:
Federal and State Tax Returns, Audited Financial Statements, and records of all invoices, credit memos, receipts and disbursements pertaining to insurance premium transactions, payments for insurance claims including legal expenses, and payments to independent contractors related to insurance brokerage, claims handling, safety and loss control services for Kamehameha Schools Bishop Estate (KSBE), Pauahi Holdings Corporation (PHC), and P&C Insurance Company, Inc. (P&C) for 1994, 1995, 1996.
Copy of my letter to Coopers & Lybrand dated 11/20/96, with all enclosures, and any written response or record of discussion between Coopers & Lybrand and Plaintiffs, or with M&M and/or M&MIMS, regarding this letter, including records of phone conversations, minutes of P&C Board of Director meetings, and staff reports to Trustees.
P&C’s application to the Insurance Commissioner, State of Hawaii, for a license to operate as a captive insurance company, including all supporting documents.
All minutes from P&C’s Board of Directors meetings.
P&C’s Operations Manual.
Plaintiff’s draft of P&C’s “Arms-Length Guidelines”.
All sections in KSBE’s Policy and Procedures Manual which relate to: risk, insurance and safety; compliance with the ADA, EPA, OSHA, DOSHA and Civil Rights Acts; conflicts of interest; maintaining arms-length relationships; bidding and contract procedures for third party contracts.
The following documents relating to the Waterpark Tower Environmental Remediation project: Bid Specifications; List of Bidders; Bid Bonds; Contracts; Performance Bonds; Staff Reports; Certificates of Insurance from all independent contractors; Evidence of Environmental Impairment Liability (Pollution) insurance carried by all independent contractors; invoices; copy of Ed Tabangay’s contract for services.
All sections of KSBE’s Employee Manual which relate to: risk, insurance and safety; conflicts of interest; and the ADA, EPA, OSHA, DOSHA and Civil Rights Acts.
All KSBE Staff Reports; IRS correspondence, internal and external letters, memorandum, and written opinions relating to “arms-length” and conflicts of interest issues.
All information, correspondence and staff reports relating to the “Taxpayers Bill of Rights II”, including KSBE’s lobbying activities and funds expended in its unsuccessful efforts to defeat the bill.
All information, correspondence and staff reports relating to compliance with the ADA, EPA, OSHA and Civil Rights Acts.
The following Bate-stamped documents which were returned to KSBE under court injunction:
Document numbers:
6-50; 139-141; 142-151; 152-153; 154-155; 156-157; 158-159; 160-162; 165; 167; 176; 177-180; 182; 183-184; 185-188; 225-226; 227; 228; 229; 230; 242; 243; 258-259; 260; 261-262; 263; 264; 265; 266; 267; 268; 269-270; 271; 272; 274-275; 276-279; 281-282; 283-344; 391; 393-394; 397; 407-408; 409; 410-421; 440-441; 442-453; 454; 459; 461; 462-472; 473-474; 475-476; 477-478; 479-498; 543; 544-545; 546-547; 548; 549; 550-552; 553; 554; 562-564; 565-569; 621; 622-624; 733-734; 840-925; 976-977; 978-979; 980-991; 1008-1009; 1019-1023; 1076-1077; 1078-1079; 1080; 1081-1082; 1089; 1133-1150; 1151-1212; 1260-1261; 1270-1272; 1273; 1422-1427; 1428-1429; 1430-1433; 1434; 1435-1444; 1445; 1446; 1447; 1451-1458; 3073-3129; 3130.
B. Insurance Fraud: Deceptive Business Practices /Misrepresentations /Unfair Methods of Competition /Deceptive Claims Practices
Copy of my letter to Coopers & Lybrand dated 11/20/96, with all enclosures, and any written response or record of discussion between Coopers & Lybrand and KSBE/PHC/P&C, and between these entities and M&M or M&MIMS, regarding this letter, including records of phone conversations, computer records, minutes of P&C Board of Directors and staff reports to Trustees.
P&C’s application to the Insurance Commissioner, State of Hawaii, for a license to operate as a captive insurance company, including all supporting documents.
All minutes from P&C’s Board of Directors meetings.
P&C’s Operations Manual.
My draft of P&C’s “Arms-Length Guidelines”.
All sections of KSBE’s Policy and Procedures Manual which relate to risk, insurance, claims and safety.
All KSBE Staff Reports; internal and external letters, memorandum, and written opinions relating to the formation of a captive insurance company.
The following Bate-stamped documents which were returned to KSBE under court injunction:
Document Numbers:
61-63; 64-121; 160-188; 198; 232-235; 236-239; 240; 241; 242; 243; 274-275; 276-279; 281-282; 283-344; 391; 398-399; 410-421; 422-423; 424-432; 434-436; 442-453; 459; 461; 462-472; 473-474; 479-498; 546-547; 548; 549; 550-552; 553; 554; 562-564; 565-569; 570-571; 572; 573-620; 621; 622-624; 639-675; 688-689; 690; 691; 692; 693; 694; 695; 696; 698; 699-703; 704; 706-710; 711; 713-717; 719-720; 721; 722; 723; 724; 725-726; 727; 728-729; 730; 731-732; 733-734; 735-737; 738-739; 740-741; 742; 743-747; 748-753; 754; 755; 756; 757-760; 761-762; 768; 773; 773-786; 787-792; 793-794; 795-798; 799-801; 802; 804-805; 835.
C. Unjust Enrichment/ Private Inurement/ Private Benefit/ Conflicts of Interest between KSBE, its trustees, employees, independent contractors, government officials, and officers and directors of P&C and other for-profit subsidiaries/Breach of fiduciary duties to the Estate of Bernice Pauahi Bishop/Breach of fiduciary duties to P&C Insurance Company, Inc.
Copy of my letter to Coopers & Lybrand dated 11/20/96, with all enclosures, and any written response or record of discussion between Coopers & Lybrand and KSBE/PHC/P&C, or between these entities and M&M and M&MIMS, regarding this letter, including records of phone conversations, computer records; minutes of P&C Board of Director meetings, and staff reports to Trustees.
P&C’s application to the Insurance Commissioner, State of Hawaii, for a license to operate as a captive insurance company, including all supporting documents.
All minutes from P&C’s Board of Directors meetings.
P&C’s Operations Manual.
My draft of P&C’s “Arms-Length Guidelines”.
All sections in KSBE’s Policy and Procedures Manual which relate to: conflicts of interest; maintaining arms-length relationships; bidding and contract procedures for third party contracts.
The following documents relating to the Waterpark Tower Environmental Remediation project: Bid Specifications; List of Bidders; Bid Bonds; Contracts; Performance Bonds; Staff Reports; Certificates of Insurance from all independent contractors; Evidence of Environmental Impairment Liability (Pollution) insurance carried by all independent contractors; invoices; copy of Ed Tabangay’s contract for services.
All sections of KSBE’s Employee Manual which relate to conflicts of interest.
All KSBE Staff Reports; IRS correspondence, internal and external letters, memorandum, computer records and written opinions relating to “arms-length” and conflicts of interest issues..
All information, correspondence and staff reports relating to the “Taxpayers Bill of Rights II”, including KSBE’s lobbying activities and funds expended in its unsuccessful efforts to defeat the bill.
All information, correspondence and staff reports relating to compliance with the ADA, EPA, OSHA and Civil Rights Acts.
The following Bate-stamped documents which were returned to KSBE under court injunction:
Document Numbers:
6-50; 61-63; 64; 65-66; 67-80; 81; 82; 83; 84; 85; 86; 87; 88; 89-90; 91; 92-93; 94; 103-105; 106; 107; 108; 109; 110-111; 112-114; 115-116; 117; 118-119; 120-121; 139-141; 142-151; 152-153; 154-155; 156-157; 158-159; 160-162; 163-164; 165; 166; 167; 168; 169; 170; 172-173; 174; 175; 176; 177-180; 181; 182; 183-184; 185-188; 190-192; 193-197; 199-201; 202; 203-205; 225-226; 227; 228; 229; 230; 232-235; 236-239; 253-254; 255; 258-259; 260; 263; 264; 265; 266; 267; 268; 269-270; 271; 272; 274-275; 276-279; 281-282; 283-344; 391; 393-394; 397; 398-399; 407-408; 410-421; 424-432; 434-436; 440-441; 442-453; 454; 459; 461; 462-472; 473-474; 475-476; 477-478; 479-498; 546-547; 548; 549; 550-552; 562-564; 565-569; 570-571; 572; 621; 622-624; 688-689; 691; 719-720; 733-734; 740-741; 761-762; 835; 840-925; 976-977; 978-979; 980-991; 1008-1009; 1010-1012; 1013; 1014-1018; 1019-1023; 1061-1067; 1081-1082; 1083-1086; 1104-1106; 1107-1111; 1112; 1113-1114; 1115-1118; 1208-1212; 1260-1261; 1270-1272; 1273.
D. Coercion of employees to violate laws or to “look the other way” while superiors engaged in illegal or unethical acts; collusion to conceal wrongful acts through threats of discipline or termination and misuse of the “attorney-client privilege”.
Document Numbers:
1-3; 4-5; 6-50; 61-63; 65-66; 67-80; 89-90; 183-184; 185-188; 274-275; 276-279; 454; 546-547; 549; 550-552; 565-569; 621; 688-689; 1428-1429; 1434; 1435-1444.
3