The Grand
(and Dirty)
Ko `Olina Resort
“Swimming with the Sharks”
Sightings from The Catbird Seat
~ o ~
October 4, 2007
Disney Confirms Hawaiian
Resort Plans
800-Unit Resort To Open In 2011
HONOLULU -- Walt Disney Parks and Resorts announced on Wednesday that it will open a resort in Hawaii.
Disney said the hotel should generate about 1,000 new jobs.
Disney officials said that its team of designers is working with cultural advisors and local architects to finalize what the resort will look like. They hope to break ground for the project next year.
"This resort hotel will give our guests another way to visit an exciting part of the world with a brand they trust," Walt Disney Parks and Resort Chairman Jay Rasulo said in a written statement. "We are looking forward to building a special family resort that honors the cultural diversity of Hawaii and reflects the spirit of aloha that makes this location so unique."
"To have a company of this quality and caliber choose us when they could have chosen anywhere in the world, means a lot to us," Gov. Linda Lingle said.
Disney bought the 21-acre property for $144 million from The Resort Group, Jeff Stone's company that oversees the development of the Ko Olina area.
"I think it's incredible. As many projects as we try and bring to Hawaii, I think bringing in the Walt Disney Co. to Hawaii is the perfect fit. I think it's the perfect fit for the community, I think they're sensitive, I think they know exactly what needs to be done," Stone said.
It is the only Disney resort that will not be attached to one of its theme parks.
Part of the project will also bring in 1,000 parking stalls, which will add to the number of available stalls for the public, Stone said.
http://www.kcra.com/money/14267992/detail.html
January 18, 2007
Ko Olina says it doesn't
need aquarium after all
By Andrew Gomes, Advertiser Staff Writer
Developer Jeff Stone has canceled a plan to build an aquarium financed by a state tax credit at Ko Olina Resort & Marina, and has agreed to return the controversial $75 million credit.
Stone said the credit's objective — to stimulate economic development at the resort and surrounding West O'ahu community — has been accomplished by market forces.
"You don't really need an attraction (at Ko Olina) anymore," he said. "Our feeling was, 'Give the money back.' "
Stone said he agreed to forgo the credit after being asked by newly installed Senate President Colleen Hanabusa, who sponsored a bill five years ago that led to the tax credit.
Hanabusa, in a speech during the Legislature's opening ceremony yesterday, suggested that the credit be redirected to educate recruits for Hawai'i's hotel industry, and support further development of a media and film industry.
"I would like to see the tax credit redirected and continue to support the West side," said Hanabusa, D-21st (Nanakuli, Makaha). "However, it is up to the Legislature, along with the governor, to make this decision."
Senate Tourism Committee Vice Chairwoman Donna Mercado Kim, D-14th (Halawa, Moanalua, Kamehameha Heights), will lead an effort to redefine and redirect the tax credit, according to Hanabusa....
The aquarium tax credit was established primarily to build a world-class aquarium to bring more visitors, jobs and development to Ko Olina, but also covered marine science and sports training projects at the resort, including the Dolphin Institute and NFL Pro Bowl facilities.
Stone's West Honolulu Attractions LLC to date has spent about $5 million on the aquarium and other qualified projects since the tax credit was authorized by Lingle in 2003.
Stone said he will not claim any credit for what has been spent. The developer also said he will continue funding a $2.5 million grant program to help train people to work in the tourism industry.
The training fund was a condition of Lingle's approval of the credit, and a Stone nonprofit has spent about $1.5 million in scholarship awards to roughly 1,000 people, including many Leeward O'ahu residents.
Stone had until 2009 to spend up to $75 million on the aquarium and other facilities to qualify for the tax credit, which could have been redeemed starting this year at up to $7.5 million a year.
The death of the publicly financed aquarium ends five years of debate over using state tax credit for the troubled project initially projected to open in 2005.
Legislation for the aquarium tax credit was introduced in 2002 by Hanabusa and Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai).
The Legislature passed the bill, but then-Gov. Ben Cayetano vetoed it on grounds that the tax credit would mainly benefit one interest group and could be spent on projects defined too broadly. Cayetano also argued at the time that hotel, condo and time-share developers would build at Ko Olina without the promise of a taxpayer-financed aquarium.
Hanabusa, an attorney, sued Cayetano over the veto and reintroduced the bill in January 2003. The Legislature approved it that year and it was signed by Lingle....
PROGRESS ON PROJECT
Last year, many lawmakers questioning whether the aquarium would be built introduced a bill to repeal the tax credit. The bill was defeated after Ko Olina officials testified that the project was making significant progress. The officials said the project had run into delays caused by permitting difficulties and design changes, but was moving forward.
Yesterday, Stone said the planning for the project was solid and it could have been completed if he were to make use of the tax credit. He also defended the need for the tax credit when it was sought. "In 2001, the state was still in bad shape," he said. "When we got it, we were on our butts. We had bought a bankrupt resort."
Stone with partners purchased the stalled Ko Olina resort in 1999. That year, tax revenue generated by the resort was $3 million, Stone said. Since then, hundreds of homes, condominiums and time-share units have been built. A second hotel is also planned.
The resort now generates $25 million in annual taxes, Stone said, and six construction cranes are working on $500 million worth of condo and time-share projects.
< < < FLASHBACK < < <
January 8, 2005
Aquarium, Resort
To Crown Ko `Olina
State tax credits will help fund the $1 billion project
of condos and a Hawaiian village
by Allison Schaefers, Honolulu Star-Bulletin
Ko `Olina Resort & Marina unveiled plans yesterday for a $1 billion interactive aquarium and 25-acre, 1,000-room resort, a project partially underwritten by $75 million in state tax credits.
The Grand Ko `Olina Resort, Hotel & Spa will include an oceanfront hotel condominium, time shares and a Hawaiian village surrounding a swim-through lagoon and separate shark tank. The project is patterned after the lavish Atlantis Resort in the Bahamas and Discovery Cove in Orlando, Fla.
Visitors to the 5 million-gallon aquarium will be able to visit an underwater dome that provides 360-degree views of sharks, swim in an interactive reef and visit a beach lagoon sealed from the ocean.
“The Grand Ko `Olina will help re-brand Oahu as a unique resort destination, just as the Grand Wailea did for Maui,” said Ko `Olina developer Jeffrey Stone. “It will boost West Oahu’s prominence in the visitor industry and add a one-of-a-kind icon to Hawaii that is directly connected to Hawaii’s unique ocean environment and culture.”
The resort already includes the J.W. Marriott Ihilani Resort and Spa, time shares and a golf course....
It has also brought about the return of one of Ko Olina’s original developers, Takeshi Sekiguchi, who is best known for developing the Grand Wailea and the Four Seasons Wailea resort on Maui.
“My decision to re-enter Hawaii’s market was based on the economic recovery of the Japanese economy and the forecast of increased eastbound travel from Asia,” said Sekiguchi, who owns land for the development....
Project partners have not been announced, but Sekiguchi said Grand Ko `Olina will convince investors from Japan and other Asian countries to pump more money into Hawaii projects. The development is likely to break ground this year, with major hotel partners expected to be announced this summer, Stone said. No timetable has been set for completion....
Ko Olina’s recovery and expansion will create business opportunities, jobs and tourism, said Ted Liu, director of the state Department of Business, Economic Development and Tourism....
Developers said Grand Ko `Olina is expected to add 1,000 jobs, ranging from resort and aquarium operations to marine science research, and Hawaiian culture educational opportunities.
“This resort is exactly what the state needs in terms of diversifying the economy and creating good-quality jobs,” said Mayor Mufi Hanneman, who pledged that the expansion of the Waimanalo Gulch landfill would not interfere with development and that it would close in 2008.
The state [a.k.a. US Taxpayers] also assisted the development. Last summer, lawmakers approved a 10-year, $75 million tax credit for the aquarium. Lingle approved the bill but required the resort to spent $2.5 million for job training in the Leeward Coast.
Grand Ko `Olina will enlist the expertise of professors from the University of Hawaii’s Ocean Science Department and the Native Hawaiian Hospitality Association and will share some exhibits with the Waikiki Aquarium, Stone said....
January 7, 2005
Ko `Olina unveils billion-dollar plans
By Nina Wu, Pacific Business News
Ko `Olina Resort & Marina has unveiled its grand plans for a billion-dollar development that includes a world-class aquarium.
The unveiling came in Gov. Linda Lingle’s office Friday afternoon. Ko `Olina is the beneficiary of a $75 million tax credit that Lingle approved, to be disbursed over 10 years....
Ko `Olina, the 642-acre, master-planned resort, is already home to a golf course and marina, the JW Marriott Ihilani Resort & Spa, Mariott’s Beach Club time shares, a new Roy’s restaurant, the Paradise Cove Luau and seven man-made lagoons.
It is also home to several recent luxury residential developments, such as the Ko `Olina Golf Villas & Estates by Centex Destination Properties.
Legendary resort developer Takeshi Sekiguchi - whose projects include the Grand Wailea on Maui - will rejoin the team....
Developers are hoping to begin the first phase of construction by the end of the year.
Among those selected to work on the project are:
► Pacific Atelier International, an architectural design firm based in Honolulu that designed the Maui Ocean Center and Ko `Olina Resort’s master plan.
► Dolphin Quest.
► EDSA/OLIO, a planning and landscape architectural firm.
► Hill Glazier Architects.
► Windward Design, a firm with experience in aquatic parks.
► Wilson Okamoto Corp, one of the largest multi-disciplinary planning and engineering firms in Hawaii and the Pacific.
► PBR Hawaii, land management and planning.
~ ~ ~
(For more beneficiaries of your tax dollars, GO TO > > > The Weinberg Foundation )
February 7, 2006
Aquarium tax credits could be revoked
By Andrew Gomes, Honolulu Advertiser
Three years after a controversial law was passed giving Jeff Stone and other developers up to $75 million in state tax credits for building a world-class aquarium at Ko Olina Marina & Resort, lawmakers are asking if the rebate should be revoked.
Nearly two-thirds of state House lawmakers have signed onto a bill that would repeal the credits, the first $3 million of which can be claimed this year.
The bill reignites debate over the tax credit, which in 2002 was passed by the Legislature but vetoed by Democratic Gov. Ben Cayetano. It was passed again a year later and signed by Republican Gov. Linda Lingle.
"It is within our Legislative prerogative to revisit these kinds of things, especially when we're talking about a $75 million taxpayer subsidy," said Rep. K. Mark Takai, D-34th (Pearl City, Newtown, Royal Summit) and vice speaker of the House.
Takai introduced the bill co-sponsored by 32 of his colleagues to challenge whether the tax credit is delivering on its promise to stimulate economic development.
Of the 33 sponsors of the bill, 12 voted for the tax credit in 2003. They were joined by 12 lawmakers, including two Republicans, who opposed the legislation three years ago. Nine other bill supporters were elected since 2003.
Rep. Jerry Chang, D-2nd (Hilo), a co-sponsor who voted for the tax credit three years ago, said some lawmakers doubt whether Stone, Ko Olina's master developer, is going to deliver the aquarium and expected benefits.
"We just want to know what their progress is," Chang said. "If their intent is not to use it, let's repeal it and get our books in order."
The developers say they plan to finish the project and are making progress.
"We're moving along, doing all our (research and development) work, and progressing as methodically and effectively as we can," said Mike Nelson, a Ko Olina Resort vice president.
The bill, Nelson said, could scare away potential investors needed to advance the project if the legislation is perceived as having a real chance at passing and surviving a potential veto by Lingle, a strong advocate of the tax credit.
Nelson said the project has been slowed because of the difficulty of finding the right fit within the resort as well as zoning issues.
Under the aquarium tax credit law, developers have until 2009 to spend up to $75 million that could be reclaimed as a credit against state tax liabilities.
Stone initially projected that the aquarium might open in 2005. The developers revised the estimate several times and now expect to complete the project in late 2008.
The aquarium location also has been moved three times. First, it was to be built near the marina. Then it was moved farther inland, and later it was moved to an oceanfront location next to the JW Marriott Ihilani Resort & Spa. Now, it is back to a site closer to the marina.
"Stone jokingly called the project, the 'roving aquarium,' " according to minutes of a September neighborhood board meeting.
The concept for the aquarium also has changed. An earlier plan called for an adventure attraction in which visitors could swim with marine life in human-made lagoons.
Ko Olina officials told neighborhood board members as late as September that Ko Olina Adventure Park would be a unique themed-attraction in the class of Discovery Cove in Orlando, Fla., Atlantis Paradise Island in Nassau, Bahamas, and Ocean World Marina in the Dominican Republic.
The plan now calls for more traditional aquarium exhibits.
Kioni Dudley, a retired teacher who is on the Makakilo/Kapolei /Honokai Hale Neighborhood Board, said he likes the aquarium plan but wants to make sure it is attractive for more than just resort guests and busloads of tourists from Waikiki.
"It seems it's geared (more) for the people in the hotels and time-shares at the resort than for the people outside," he said. "I think there should be more parking to invite more people in."
Meanwhile, as aquarium plans have shifted, residential and resort development at Ko Olina has continued. Since the tax credit was granted, Ko Olina has expanded with a second phase of a 750-unit time-share project and three luxury-home projects have been started.
Stone has projected that the aquarium, by attracting hotels and other investments at the resort, would help generate $700 million in construction work, 2,000 permanent jobs and an average of 1,000 annual construction jobs over 10 years.
As part of the tax-credit package, Stone pledged to distribute $2.5 million in scholarship awards over six years primarily to Leeward O'ahu residents. To date, about $1 million has been distributed to about 900 scholarship recipients.
The tax credit allows the developer to reduce his state taxes by the amount spent on the aquarium. Qualified costs include design, planning and construction work on the aquarium and marine mammal research facilities.
Credits can be redeemed over 10 years or more, and are limited to $7.5 million per year.
This year will be the first year that West Honolulu Attractions, the aquarium developer, can seek to redeem credits for spending through the end of last year that totaled about $3 million.
Senate Tourism Committee Chairwoman Donna Kim, D-14th (Halawa, Moanalua, Kamehameha Heights), said she doesn't believe support for the tax credit has wavered in the Senate over the past three years. As a former City Council zoning committee chairwoman, Kim said she's not surprised by the planning difficulties aquarium developers have reported.
"It's a long process," she said.
The aquarium tax credit repeal bill is scheduled for its first hearing before the House tourism committee at 8:30 a.m. today.
November 6, 2004
Amway family and Jeff Stone
are buying Honsador Lumber
Honsador Lumber, the largest wholesale building products distributor in Hawaii, is being sold to a consortium that includes Ko Olina developer Jeff Stone and one of the families behind Amway.
Honsador owner Jim Pappas is selling the company, and its affiliates Honolulu Wood Treating and Ariel Truss, but will remain in Hawaii as a member of the board of directors and an adviser to the incoming owners....
The consortium includes RDV Corp., owner by the family of Rich De Vos, who with Jay Van Andel founded the direct sales congolmerate Amway Corp. RDV has been a longtime partner with Jeff Stone. Also involved is Key Principal Partners, a private investment firm affiliated with the $84 billion financial services firm KeyCorp.
“We are very excited to be part of this acquisition,” said Stone. “RDV’s initial investment in Hawaii came during a lull in the state’s economy. They were instrumental in resurrecting Ko Olina Resort and the creation of thousands of jobs for local residents, ensuring the economic prosperity of the west Honolulu region. RDV’s continued long-term commitment to this marketplace shows a depth of loyalty that is unprecedented in this day and age.”
KPP and Honsador expect to retain all 213 of the company’s employees, they said in a statement this weekend.
Honsador was established in 1935 as Honolulu Sash & Door. It has operations on Hawaii’s four major islands, and a facility in Portland, Ore....
~ ~ ~
The Connections & The Corruptions ...
December 7, 2004
Bush + Republicans + Amway = Fraud
Former Amway insider, Eric Scheibeler, has written a must read new book called “Merchants Of Deception.” This one time member of the Amway motivational cult has turned whistleblower and FBI witness and boy does he have some tales to tell.
In the book, Scheibeler exposes an Enron sized fraud with Amway raking in billions of dollars annually, and the billionaire founding families being the largest soft money contributors to the GOP, with funds that have been generated from what may turn out to be one of the largest consumer fraud scandals in history, perpetrated by the world’s largest multi-level marketing company (MLM).
The former Federal Auditor also has a website, www.merchantsofdeception.com, that reveals the close ties between Amway and Republicans.
As a life long conservative, Scheibeler was discouraged to both discover and document that “the GOP seems to have been hijacked by political payoffs from an industry that is rife with consumer deception, and bogus ‘business opportunity’ selling. He goes on to say that it’s “time this secret influence peddling and the harm it causes consumers and our democracy are revealed. I was on the inside for nine years. I saw it with my own eyes. I also have the internal documents, financials, and the audio and video tapes to prove it.”...
Scheibeler & Dateline Team Up In Sting Operation
In addition to writing a book and setting up a web site, Scheibeler provided key documentation for the May 7, 2004, NBC Dateline program that televised an expose of the secretive and illegal pyramid business run by Amway & Quixtar kingpins.
During its investigation, Dateline smuggled hidden cameras into recruitment meetings in order to document the company’s deceptive claims and promises, and to expose its multi-million dollar ‘secret’ business. The expose verified the common allegation made in numerous consumer lawsuits, that the company is merely a front for a hidden pyramid business based on selling books, tapes, and registrations to seminars and rallies to new recruits, with nearly all participants losing money.
According to Dateline, the FBI and the IRS are conducting investigations into the scheme.
Republicans Will Do Anything For A Buck
Amway’s billionaire founders, Rich DeVos and Jay VanAndel, have been the largest soft money contributors to the GOP on and off for the past 20 years. Together, DeVos and VanAndel gave $4,000,000 to a 527, just 45 days prior to the last election.
And you can bet that they demand (and get) a bang for every red cent.
Scheibeler’s book reveals how GOP donations and corporate promotion have resulted in a trade off for political protection and tax reduction benefits for the MLM. His web site provides a goldmine of documentation to back up his claims....
Scheibeler tells how some members of the GOP have been paid as much as $100,000 for a single promotional appearance at an Amway seminar. The list of high-paid Republican speakers who have appeared at rallies over the years, reads like a list of who’s who in the GOP.
It includes former Presidents George Bush, Ronald Reagan, Gerald Ford and former Vice Presidents Bob Dole and Dan Quayle, along with other GOP heavyweights like Gingrich, Oliver North, Senator Rick Santorum and even the latest SE Regional Chairman for the Bush-Cheney ‘04 campaign, Ralph Reed....
For more, GO TO > > > Nests On Wall Street - Part II
April 26, 2003
Royal Kunia Developer
Files for Bankruptcy
Horita’s Halekua Development Corp.
owes the city $220,335
By Tim Ruel, Honolulu Star-Bulletin
A Herbert Horita company that is developing Royal Kunia on Oahu sought Chapter 11 bankruptcy protection yesterday, owing between $50 million and $100 million in estimated debt.
One of Halekua Development Corp’s larger creditors is the city, which is owed $220,335.
“This action is needed to buy time for the company,” said company spokesman Jim Boersema. Halekua expects to emerge from bankruptcy within 120 days, clear off its debt and move forward with the development of Royal Kunia II, a 2,000-home subdivision in Waipahu, Boersema said....
Halekua’s assets are worth less than $50,000, according to the bankruptcy filing.
According to the bankruptcy petition, Halekua’s five biggest unsecured creditors are:
– Ayers Corp., owed $1.4 million.
– Park Engineering, $702,082.
– Larry Mehau’s Hawaii Protective Association, $415,126.
– AFW, $350,000.
– Stubenberg & Durrett, attorneys, $276,515.
Other creditors are a unit of the Harry & Jeanette Weinberg Foundation, the now-defunct Oahu Construction Co. and former City Councilman Jon Yoshimura.
Another Horita company, Royal Kunia Apartments Inc., declared bankruptcy in 1999 and sold off three townhome projects on 27 acres for $30 million.
Horita was the original developer of Ko Olina Resort and Marina in Leeward Oahu, envisioning a string of hotels, condominiums and golf courses, but plans fizzled when Japanese backers withdrew funding in the late 1980s.
Halekua owes a total of $5 million to its 20 largest unsecured creditors.
Steven Guttman, Halekua’s bankruptcy attorney, could not be reached for comment yesterday.
Because of Halekua’s bankruptcy filing, the state Land Use Commission proposed a hearing in which Halekua was to argue why it should be allowed to keep 503 acres of undeveloped former agriculture land in Waikele classified as urban district.
As a condition of the rezoning, Halekua was to have developed infrastructure for an agricultural park and conveyed that park to the state by December of 1999. Since the developer had failed to comply with that requirement, the state Office of Planning had petitioned to have the land revert to an agriculture classification.
< < < FLASHBACK < < <
November 25, 1998
Peters Indicted
A grand jury hands down
the first indictment of a
Bishop Estate trustee
Bishop Estate trustee Henry H. Peters has been indicted by an Oahu grand jury on a charge of first-degree theft stemming from the sale of his Makiki condominium unit at an inflated price to a developer.
In January 1996, developer Jeffrey R. Stone paid $192,500 to Peters for the 1015 Wilder Ave. condominium, and the indictment charges that Peters “violated his fiduciary duty to the Bishop Estate by accepting a bonus or commission for himself from Jeffrey R. Stone for acts he had done as a trustee...”
Attorney General Margery Bronster has alleged that in return, Stone and partner National Housing Corp. received a “sweetheart deal” in 1995 when they acquired the fee interest to the 229-unit Hawaii condo project known as Kalele Kai.
The indictment charges that the project was sold for $21 million when the amount that the estate owed on the property was $23.9 million.
Stone is a brother in law of Bishop Estate trustee Richard S.H. Wong, who also sold his Makiki condominium to Stone allegedly at an inflated value, the attorney general has said.
Wong, Peters and Stone have denied the allegation.
Also indicted today with Peters were Stone and Leighton Mau, a business partner of Stone’s. Stone and Mau were charged with criminal conspiracy and accomplice to theft. Stone also was charged with commercial bribery and perjury.
Peters held a news conference to say the charge was false and that he would be vindicated in the courts....
For more, GO TO > > > The Harmon Chronology; Marsh & McLennan Complaint
November 25, 1998
Trustee Wong appears
before grand jury
He faces questions over
alleged kickbacks
By Rick Daysog, Star-Bulletin
Bishop Estate trustee Richard “Dickie” Wong today was questioned by an Oahu grand jury that is investigating allegations of financial wrongdoings involving the estate’s trustees.
Wong, accompanied by attorney Eric Seitz, appeared at Circuit Court this morning after the grand jury subpoenaed his testimony....
Seitz said that Wong is cooperating with the state attorney general’s office, which has identified Wong as a potential target in its year-long investigation of the multibillion-dollar trust. But Seitz said he hopes the state attorneys will back off once they receive the facts about the allegations raised against Wong....
The grand jury, which was convened at Attorney General Margery Bronster’s request in September, is investigating charges that Wong and fellow trustee Henry Peters received kickbacks worth “several hundreds of thousands of dollars” from Wong’s brother-in-law, Jeffrey Stone.
In her Sept. 10 trustee removal petition, Bronster said that Stone paid an inflated price in 1996 for Wong’s high-end condo. Wong in turn used the proceeds of the condo sale to buy a home in Kahala from Stone for about $1.1 million.
Wong’s transactions came after a company affiliated with Stone, One Keahole Partners, acquired the fee interest on a 229-unit Hawaii Kai condominium project, known as Kalele Kai, from the Bishop Estate under favorable terms, Bronster said.
Wong has denied the kickback charge, saying he has recused himself from decisions involving the Kalele Kai project. Peters also had denied the kickback allegation.
Stone, meanwhile, has denied receiving preferential treatment from the estate, saying that the Hawaii Kai complex was financially troubled when One Keahole Partners acquired the leasehold interest from California developer Peter Bedford in 1995.
Stone has said that the partnership paid Bishop estate $21.9 million for the fee interest, or nearly three times the $8.3 million appraisal offered by the property’s lender. (Mitsui Bank & Trust Company - see Yakuza Doodle Dandies)
Besides Wong, the grand jury has already heard testimony from Stone and Bishop Estate trustee Lokelani Lindsey during the past few months. Estate employees Paul Cathcart and Nathan Aipa also have provided information to the grand jury....
In a related matter, the grand jury is requesting additional records involving Bishop Estate trustee Henry Peters, sources said. Peters’ attorney Renee Yuen met with state investigators early this morning at the grand jury room but declined comment....
For more on the lawsuit, GO TO > > > www.state.hi.us/jud/22671.htm
For more Kamehameha Schools/Bishop Estate connections, GO TO > > > Alexander & Baldwin; Apollo Advisors; Claims By Harmon; The Consuelo Zobel Alger Foundation; Dirty Gold in Goldman Sachs; Dirty Money, Dirty Politics & Bishop Estate; The Harmon Chronology; Harmon’s Letter to the IRS; How to Pluck a Billionaire; How to Pluck a Non-Profit; Investigating Investcorp; Marsh & McLennan Complaint; Marsh & McLennan: The Marsh Birds; The Nests of CB Richard Ellis; Paradise Paved; RICO in Paradise; Sukamto Sia: The Indonesian Connection; Vultures In The Meadows; Yakuza Doodle Dandies; The Weinberg Foundation
November 3, 1999
MEHAU, WONG MET WITH LEGISLATORS
PRIOR TO BRONSTER VOTE, NOTES SHOW.
Critics believe the Bishop Estate played a role
in the ouster of A.G. Bronster
By Rick Daysog, Honolulu Star-Bulletin
Three freshmen state senators who played a role in derailing the confirmation of former Attorney General Margery Bronster met with then-trustee Richard "Dickie" Wong and longtime political insider Larry Mehau prior to the ouster of the state's highest law enforcement officer.
Sens. Colleen Hanabusa, Jan Yagi Buen and David Matsuura said they met with Wong and Mehau to discuss organization issues at least two months before Bronster's controversial confirmation defeat. But Wong, in a recent deposition, said they discussed Bronster's confirmation. Mehau, in a telephone message to Wong, said he thought they had the votes to stop Bronster's appointment, according to the deposition.
Critics said the meeting -- detailed in a series of telephone messages recorded by Wong's longtime secretary -- confirms that the Bishop Estate and its trustees were actively seeking to remove Bronster, whose two-year investigation of the multibillion-dollar trust had alleged criminal wrongdoing on the part of Wong and fellow trustee Henry Peters.
Gov. Ben Cayetano, who has strongly suggested that the Bishop Estate trustees lobbied senators against Bronster's confirmation, said he only recently learned of the January meeting.
"That message indicates those guys made up their minds long in advance right?" Cayetano said.
Wong's deposition and Mehau's phone message are among evidence presented in a suit to permanently remove Wong and Peters from the Bishop Estate board.
Wong and his attorney, Glenn Sato, could not be reached for immediate comment this morning. Wong -- who was temporarily removed from his $1 million-a-year post by Probate Judge Kevin Chang on May 7 -- previously denied that he lobbied for Bronster's removal. But in an Oct. 20 deposition, Wong confirmed that he met with the freshman legislators to explain the ins-and-outs of the legislative process, several sources said.
Wong said the issue of Bronster's confirmation came up during the meeting but was not discussed in detail. He said both sides expressed their concerns about the attorney general and Wong told them he believed that Bronster acted improperly, sources said. Mehau, a former state Land Use Commissioner and supporter of former Gov. Jack Burns, also confirmed the meeting but said they did not discuss Bronster's confirmation.
He also denied that he told Wong that he had enough votes to overturn Bronster's confirmation.
Matsuura and Hanabusa also confirmed that they met with Wong to discuss organizational issues but said they did not discuss Bronster's confirmation. Matsuura, who placed the meeting in February or early March and not in January as Wong had, said Mehau may have been present at the meeting.
Buen, who recalls that Mehau was present, said she could not remember whether Bronster was discussed.
In April the Senate, by a 14-11 margin, rejected Bronster's nomination. The controversial vote touched off a storm of protest, marked by demonstrations and hundreds of angry letters and e-mails to senators.
Critics believe the Senate's rejection of Bronster's confirmation underscores the 115-year-old trust's clout in the state Legislature. Wong is a former Senate president and Peters is a former House Speaker.
"This confirms the widespread suspicion that the Bishop Estate or the trustees played some role" in the Bronster controversy, said Walter Heen, chairman of the state Democratic Party and co-author of the 1997 "Broken Trust" article that prompted Cayetano to launch the state's investigation of the estate....
When informed about the senators' meetings with Wong, Bronster yesterday said it all shows how much clout the Bishop Estate retained in the state Legislature. She also faulted senators for making decisions behind closed doors.
"It shows for me how insincere all of the other issues were," Bronster said.
"I think the people in the state deserve better."
For more, GO TO > > > Claims By Harmon; The Harmon Chronology; Marsh & McLennan Complaint; Predators in Paradise
May 26, 2000
2 Nautilus firms file Chapter 11
Jacob Kamhis, Pacific Business News
On the same day a federal court judge approved a foreclosure on their semi-submersible touring craft, Nautilus Sub Sea Adventures Inc. and Nautilus Adventures LP filed for Chapter 11 bankruptcy reorganization....
Both entities, in filing for bankruptcy on May 22, are trying to block the 2-year-old foreclosure action of California-based Sub Sea Systems Inc., a creditor and maker of the craft berthed at Kewalo Basin.
Each petition lists assets of $100,001 to $500,000 and debts of $1 million to $10 million. Nautilus is trying to reorganize its operation and keeping the vessel operating, says Nautilus' attorney, Junsuke Otsuka of Honolulu law firm Shigemura & Harakal.
The bankruptcy filings are a major disappointment to Sub Sea Systems Inc. of Sacramento, which manufactures the 50-passenger semi-submersibles costing $600,000 each....
Nautilus began operations in 1991 and added an attraction called Dolphin Safari by 1997.
The company had a second submersible it operated out of Kona on the Big Island years ago, but the vessel was moved to Ko `Olina Marina. That submersible was not part of Sub Sea Systems' foreclosure complaint. . . .
* * *
September 26, 2000
Ko `Olina to give reef tours
By Glenn Scott, Advertiser Staff Writer
The Ko `Olina Co., seeking more activities at its resort marina, yesterday paid $300,000 to buy an underwater sightseeing boat.
Ko Olina officials negotiated with Nautilus Sub-Sea about moving a vessel from Kailua-Kona to Ko `Olina when Nautilus Sub-Sea filed for Chapter 11 bankruptcy protection in May, according to a Ko `Olina partner.
The company acquired the semi-submersible craft, the Nautilus II, from financially troubled Nautilus Sub-Sea Adventures Inc.
U.S. Bankruptcy Court Judge Lloyd King approved the sale yesterday as a first step in liquidating Nautilus Sub-Sea.
Jeff Stone, a partner in Ko `Olina Company LLC, said he hoped to have the sightseeing vessel refurbished and running by the winter holiday season to offer more ways for people, including the guests at Marriott Ihilani Resort & Spa, to enjoy the development’s new $40 million marina....
Stone said Ko `Olina officials had been negotiating with Nautilus Sub-Sea President Ted Bush about moving the vessel from Kailua-Kona to Ko `Olina when Nautilus Sub-Sea filed for Chapter 11 bankruptcy protection in May.
Later, the sightseeing company moved the vessel to drydock at the adjacent Marisco shipyard.
At yesterday’s bankruptcy hearing, King also approved the sale of a second company asset, the Moki Mary, a hardbottom boat, for $55,000 to Hawaiian Parasail of O‘ahu.
Nautilus Sub-Sea Adventures is one of two affiliates formed in 1991 using limited partnerships to finance two sightseeing vessels. The second affiliate, Nautilus Adventures LP, also filed a Chapter 11 bankruptcy petition in May but is continuing to operate the Nautilus V, moored in Kewalo Basin.
As of late last month, Nautilus Sub-Sea Adventures said in court filings that it had liabilities of $1.13 million and assets of $686,647 —— mostly in the value of the Nautilus II and the Moki Mary.
Despite that imbalance, the company had asked King to dismiss the bankruptcy case and allow the company to pay its creditors while continuing to do business.
But most major creditors, including Bank of Hawai‘i, First Hawaiian Bank and the state Taxation Department, opposed the plan, saying they needed the assurance of a trustee-led liquidation. The state said Nautilus Sub-Sea owed $96,200 in taxes.
King ruled in favor of the creditors, shifting the case to a Chapter 7 liquidation and naming Mary Lou Woo