The Grand Ko Olina: How To Pluck a Taxpayer!

HONOLULU -- Walt Disney Parks and Resorts announced on Wednesday that it will open a resort in Hawaii.

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.

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....

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.

State tax credits will help fund the $1 billion project
of condos and a Hawaiian village

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....

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.

► Pacific Atelier International, an architectural design firm based in Honolulu that designed the Maui Ocean Center and Ko `Olina Resort’s master plan.

► Wilson Okamoto Corp, one of the largest multi-disciplinary planning and engineering firms in Hawaii and the Pacific.

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."

"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.

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.

The aquarium tax credit repeal bill is scheduled for its first hearing before the House tourism committee at 8:30 a.m. today.

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....

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.”...

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.

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.

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....

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:

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.

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.

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.

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....

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....

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.

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. . . .

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 as trustee.

Donald Spafford Jr., attorney for Nautilus Sub-Sea, said company officials will meet today with Woo to clarify the next steps and to determine the outcome of the Nautilus V.

The company that supplied a semi-submersible sightseeing boat to the now-bankrupt Nautilus Adventures partnership is set to get the vessel back for the amount it is owed.

Mary Lou Woo, trustee in the bankruptcy of the partnership, said today that the bankruptcy court has been asked to approve the sale of the Nautilus V to the boat's builder, California-based Sub Sea Systems Inc., for $342,206.

Sub Sea Systems won't actually pay that money, since it is the amount of its secured debt and the debt gets erased. However, Sub Sea also agreed to pay $5,000 to the trustee administrative expenses.

There is some other interest in buying the boat and there will be an opportunity to try to outbid Sub Sea at a Nov. 15 hearing in bankruptcy court in Honolulu, Woo said. Meanwhile, potential buyers may inspect the vessel at 1 p.m. Tuesday at Kewalo Basin.

Woo said another semi-submersible, Nautilus II, is for sale because the developers of the Ko `Olina resort, who had offered $300,000 for it, withdrew their offer.

The former operators of the vessels, Nautilus Adventures and its affiliate Nautilus Sub Sea Adventures Inc., are undergoing separate Chapter 7 bankruptcy liquidations after attempts to reorganize failed.

The vessels, designed to look like submarines, travel on the surface while their passengers ride below the waterline viewing reefs and sea life through large acrylic windows.

The businesses filed for Chapter 11 reorganization in May, while the court was preparing to enforce a foreclosure action. The cases were later converted to Chapter 7s, in which assets are liquidated to pay creditors without attempting to restart the business.

Work is scheduled to start by the end of this year on a new residential development on the Leeward Side of Oahu.

Kai Lani will be consist of 29 four-plexes housing 116 one- and two-bedroom units. They'll go up just past the entrance to Ko `Olina.

The project is a $45 million joint venture of A&B Properties and Armstrong Builders Ltd.

"This is another sign of the confidence people have in Ko `Olina Resort and the resort market," says Jeff Stone, president of the Ko `Olina Resort Association.

Builder Bob Armstrong says the units will be designed to look like the big homes built in the Manoa and Nuuanu areas in the 1940s.

The target clientele will be empty-nesters, telecommuters and the retired and semi-retired. Prices will range from $350,000 to $450,000. . . .

Finance the purchase of a substantial block of uniquely valuable but undercapitalized real estate assets by a sophisticated real estate development group.

The Ko `Olina Resort Properties financing is representative of the innovative real estate finance services Brown, Gibbons, Lang & Company now affords its clients.

When completed, Ko Olina Resort & Marina, situated just west of Honolulu, will be one of the most unique luxury resorts, marinas and residential communities in all of Hawaii. Construction of Phase I commences in the first half of 1999 and will revolve around a world class marina, sports club and Town Center.

The manager of the new owners will be Ko `Olina Partners L.L.C., with Jeff Stone and Kevin Showe serving as managing directors. Both have been actively involved Hawaii real estate for nearly two decades.

Brown, Gibbons, Lang & Company formed its Real Estate and Structured Finance Group in 1998. This special services team of eight professionals is headed by Gary A. Zdolshek, a partner of the firm.

Saying the state's prosecution represented a "serious threat to the integrity of the judicial process," the Hawaii Supreme Court upheld the dismissal of theft charges against former Kamehameha Schools trustees Henry Peters and Richard "Dickie" Wong.

In a strongly worded 39-page ruling yesterday, the high court said the Attorney General's Office denied Peters' and Wong's rights to due process by introducing tainted grand jury testimony.

The state also acted improperly by halting testimony from a local developer that would have exonerated Peters and Wong's former brother-in-law, local developer Jeffrey Stone, according to the ruling.

"The state's actions cannot but have improperly influenced the grand jury and prevented it from operating with fairness and impartiality," the court said. "The state's interest in prosecuting these cases is, at this point, clearly outweighed by the lack of fundamental fairness that would ensue were we to allow these prosecutions to continue."

Eric Seitz, Wong's attorney, called the ruling a "ringing denunciation" of the Attorney General's Office.

"I've won a number of prosecutorial misconduct cases in my day, but I haven't seen one as strong as this," Seitz said.

Senior Deputy Attorney General Lawrence Goya said he was disappointed by the ruling and did not agree with the court's reasoning. He declined to discuss specifics.

Both Peters and Wong were indicted in 1998 by Oahu grand juries over their alleged roles in the Kamehameha Schools' sale of its fee interest in the Kalele Kai condominium complex in Hawaii Kai to a Stone-led company.

The indictments alleged that Peters and Wong received kickbacks in exchange for favorable treatment on Kalele Kai. Stone was indicted by the same grand juries on commercial bribery charges.

All three have denied wrongdoing, saying the Kamehameha Schools, then known as Bishop Estate, earned millions when it sold the fee interest to Kalele Kai.

Yesterday's ruling upholds Circuit Judge Michael Town's dismissals of indictments against Peters, Wong and Stone.

Town found that the state violated Stone's right to attorney-client privilege when it allowed Stone's former attorney, Richard Frunzi, to speak to the grand jury about matters involving his former client.

At the time, Frunzi was serving time in a federal jail after pleading guilty to money laundering.

Town also dismissed the theft charges against Peters after the state introduced improper testimony from the estate's former general counsel, Nathan Aipa.

In 1999, Peters, Wong, Gerard Jervis, Oswald Stender and Lokelani Lindsey resigned from their $1 million-a-year jobs as Kamehameha Schools trustees after the Internal Revenue Service threatened to revoke the $6 billion charitable trust's tax-exempt status.

Yesterday's ruling was made by Circuit Judges George Masuoka, Ronald Ibarra, Dan Kochi, Shackley Raffetto and Gary Chang.

The judges were serving as substitutes for the five Supreme Court justices, who recused themselves from all cases involving the Kamehameha Schools. Until recently, the high court selected the trustees of the Kamehameha Schools.

Mainland investors who want to open two casinos on O'ahu spent more money touting their agenda before lawmakers at the start of this legislative session than any other group, state Ethics Commission records show.

Marketing Resource Group, of Lansing, Mich., reported spending $108,679 on lobbying through January and February, the period covered by lobbyist expenditure reports due at the commission yesterday.

The company is a public relations firm employed by investors in a Detroit casino called MotorCity, and last year set up an organization of supporters here called Holomua Hawai'i, named after the Hawaiian word for progress.

The casino investors include Marian Illitch, whose family owns the Detroit Tigers baseball team and Little Caesars pizza chain. They want to build casinos in Waikiki and Leeward O'ahu, and Holomua Hawai'i collected petition signatures from 25,000 Hawai'i residents who support gambling.

The group also produced a video in which economists and others argue that gambling would create jobs, provide more government revenue, and boost the state economy.

But others said they fear gambling could increase crime and corruption, and lawmakers roundly rejected a bill that would authorize the casinos, leaving it very unlikely that the state will legalize gambling this year.

Marketing Resource Group could also be fined for failing to disclose its lobbying activities to the Ethics Commission for the previous reporting period, from May to December.

Commission executive director Dan Mollway said organizations that employ lobbyists and refuse to file reports could be fined up to $500, but most comply voluntarily. [Catbird: Guess that’s the high cost of doing business in Hawaii!]

Marketing Resource Group could not be reached for comment yesterday. The firm's Hawai'i lobbyist, John Radcliffe, said he did not know why the report was missing, but that it had been lost in a Michigan snow storm when it was first mailed. The report was due at the commission by the end of January.

Another group that wants to legalize gambling, the Coalition for Economic Diversity, reported spending $9,832 lobbying during the previous period and said it spent less than $10,000 in January and February.

The group is backed by Sun International Hotels Ltd., which wants to build a $1 billion resort and casino at Ko `Olina in Leeward O'ahu.

Hawaiian Airlines reported spending $8,300 on lobbying during January and February. Hawaiian, which sought to merge with rival Aloha Airlines, had reported spending more than $140,000 on lobbying during the previous period.

But Hawaiian later said it had mistakenly inflated that figure by including payments for work other than lobbying. In an amended report, Hawaiian said it really spent only $8,250 on lobbying during the May-December period.

The company had initially reported paying more than $83,000 to lobbyist Lyn Anzai, wife of state Attorney General Earl Anzai, whose office was investigating whether the merger would be legal.

The amended report reflects no lobbyist payments between May and December to Lyn Anzai, who is also Hawaiian's general counsel. The report for January and February said Anzai was paid $2,043 for lobbying during that period....

Developer Jeff Stone will get a $75 million state tax credit for further construction at the Ko `Olina Resort and Marina on leeward Oahu.

A legislative conference committee Friday approved a measure that would give the resort a maximum tax credit of $7.5 million in any year for costs incurred between Dec. 31, 2002, and Dec. 31, 2008.

The measure says the developer proposes to set up a world-class aquarium, marine science and mammal research facilities, international sports training complex, a travel industry management campus, and education facilities in cooperation with the University of Hawaii.

Ko `Olina Marina is a 652-acre resort approved for hotel, timeshare, commercial, and recreational development. The addition of educational activities that take advantage of Hawaii's location and resources, such as an aquarium and marine science center, would add considerably to the attraction, said Sen. Donna Kim, D-Kalihi Valley-Aiea, chairwoman, Senate Tourism and Intergovernmental Affairs Committee.

The Ko Olina investment will generate 10,000 new jobs in construction, retail and other related sectors, according to estimates by the state Department of Business, Economic Development and Technology.

Lawmakers weighed the loss of anticipated tax revenue to the state vs. propelling the economy. Some also criticized tax credits as being unnecessary at a time when the state was cutting funds for education and human services.

Proponents, however, argued that this was one of the few business-friendly measures that would be passed this legislative session, despite the business community's requests for greater subsidies post-Sept. 11.

The unassailable $2 billion Weinberg Foundation now
wants $75 million of taxpayer money.

A group of high-powered investors and developers marched into the governor’s office Monday, May 13, to press their case for $75 million in special-interest tax breaks for the Ko Olina resort. Two of the men in the group went unidentified in news accounts of the meeting.

The two were representatives of the deal’s landowner: the Harry & Jeanette Weinberg Foundation, best known for its extensive program of charitable grants in Hawai‘i and across the Mainland. It might seem unusual for one of the nation’s largest charitable foundations to be pleading with the Aloha State’s governor for big tax breaks for resort development, but the Weinberg Foundation also happens to be a major Hawai‘i landowner with an increasingly active interest in development.

The foundation operates in a milieu of big money, few rules, insider dealings and little public information — a potentially dangerous mix of philanthropy and deal-making, all within the protective cover of its generous charitable program.

The tax-credit plan, which would finance an aquarium and science center and, in theory, deliver the investors for new hotel and time-share projects at the sprawling resort, is being attacked by critics (reportedly including the state Department of Taxation and the Tax Foundation of Hawai‘i) as a dangerously precedent-setting bailout for Ko Olina master developer Jeff Stone and his partners, who took control of the property in 1998.

Just hours shy of a midnight deadline, Gov. Ben Cayetano yesterday vetoed a controversial $75 million tax break for an aquarium project at the Ko `Olina resort, a 4 percent tax credit for other commercial construction, a major campaign finance reform measure and a rent relief extension for concessionaires at state airports.

The Ko Olina bill would have helped private developers build an upscale aquarium and marine science and mammal facility on land owned by the nonprofit Harry and Jeanette Weinberg Foundation, in conjunction with a Hilton hotel, vacation club resort and other amenities.

Proponents of Senate Bill 2907 promoted the plan as an economic jump-start that would provide jobs in Leeward O'ahu and reinvigorate the island's sluggish tourism market with a new attraction, but said all of those projects would now be scuttled.

"It's a shame because it would have really been a tremendous boost to that part of the island," said Ko `Olina Resort Association vice president John Toner.

But Cayetano argued that it would be wrong to target tax credits specifically for one area or group of developers. The state already allows a 10 percent tax credit for hotel construction or renovation, the project could be eligible for city tax credits as well, and interest rates are at an all-time low, he pointed out.

"Under these circumstances, it makes little sense to provide what amounts to a 'super' tax credit for what will amount to another resort development," Cayetano wrote in a message that accompanied the veto.

Local 5 of the Hotel Employees and Restaurant Employees union, which is negotiating contracts with Hilton and other hotels, lobbied against the bill and characterized it as a giveaway to companies that did not need it.

Sen. Colleen Hanabusa, who sponsored the bill and lobbied Cayetano to approve it, said she was unhappy with the governor's decision....

State Sen. Colleen Hanabusa , backer of the controversial $75 million tax-credit program benefitting Ko Olina resort developer Jeffrey Stone, lives in a luxury Ko Olina townhouse purchased by her fiancé from Stone, and works in a downtown law office subleased from Stone, according to real estate and business records.

Hanabusa, Stone and state Sheriff John F. Souza III, who is engaged to Hanabusa, said their business relations have been above-board, conducted at market prices and unrelated to the Ko Olina tax-credit legislation signed into law by Gov. Linda Lingle in May. The measure, which provides massive state tax breaks to companies that build a “world-class aquarium” at Ko Olina, has helped spur a rapid rise of property values in the Leeward resort community.

Souza bought the townhouse in the recently complete Kai Lani development in June, less than a month after Lingle signed the tax-credit package into law. Hanabusa introduced the bill in early 2002, and it was passed by the Legislature but vetoed by then-Gov. Ben Cayetano. Hanabuse, an attorney, sued Cayetano over the veto and reintroduced the bill in January 2003. The Legislature approved it in May.

Hanabusa has been working out of downtown Honolulu law offices subleased by Souza from Stone since mid-2002, about the time she sued Cayetano. She lost the suit, but is appealing to the state Supreme Court. Last year, she filed another lawsuit on behalf of the Ko Olina Community Association opposing city plans to extend use of a landfill next to the resort.

Hanabusa said last week her financial connections to Stone are indirect - through her law firm or her fiance’s business enterprises - and that she has not benefited financially from them. She was not required by law to disclose those connections and doing so voluntarily “never occurred to me,” she said....

The unit Souza purchased is one of six that a Stone company, Hawaii Land Development, bought and made available for resale to Stone’s family, friends and business partners, Stone said.

Stone and Souza described each other as friends who met in 2001 when Souza’s trucking company began working on the Kai Lani construction-related contract.

The $569,000 price Souza paid for the three-bedroom, two-bath unit appears to be generally in line with prices that Stone’s company charged other buyers. One unit was sold to Stone’s father, one to another Stone company, and two to business associates. The last was sold to an independent buyer.

Souza said he and Hanabusa had been trying unsuccessfully to sell a condominium they own in Honolulu, and he was short of cash for a down payment. Stone granted a $405,773 mortgage loan as part of the sale, Souza said....

Souza originally said he had made a $50,000 cash down payment and financed the balance of the purchase price with the mortgage loan from Hawaii Land Development. But the difference between the purchase price and Souza’s mortgage is $163,227, not $50,000.

Souza was unable to explain the discrepancy, but then said later he had paid Stone’s company the full $163,227 down payment in cash.

Stone said his company made a $20,000 profit on the sale, and also profited from the unit sold to his father, Ralph Stone. Real estate records show the elder Stone paid $32,000 more than Souza for a townhouse identical in size, design and location. The transaction was financed by a $443,678 mortgage loan that Ralph Stone borrowed from another of his son’s companies, One Keahole Partners, records show.

Stone said he is careful to avoid even the appearance of favoritism in real estate transactions with friends, business partners or family members since 1998, when the state Attorney General’s office brought, then dropped, theft and bribery charges against him. The state had alleged that Stone overpaid then-Bishop Estate trustees Henry Peters and Richard “Dickie” Wong for real estate purchased from them in return for favorable treatment in a large land transaction with Bishop Estate.

Stone, Wong and Peters denied wrongdoing, and Circuit Judge Michael Town dismissed the case, ruling that prosecutors had obtained the indictments illegally. The Hawaii Supreme Court upheld Town’s ruling....

Last month, his Hawaii Land Development sold a two-bedroom unit in the building where Souza and Hanabusa live for $775,000, grossing $225,000 in less than a year. Stone is now listing the unit directly above Souza and Hanabusa for $850,000.

Hanabusa said she and Souza plan to marry at the end of the year, after which she is required to include his financial information on her public disclosure form. She said she and Souza had decided to keep their financial activities as separate as possible, so she will continue to pay him rent even after they are married....

Souza, a retired Honolulu police detective appointed by Lingle to head the state Sheriff’s Division in August, said his official financial disclosure form lists his business ties to Stone but is not open for public inspection.

The relationship between Souza and Stone goes back to 2001, when Souza’s Puco Trucking firm went to work for Armstrong Builders in 2001 on the Kai Lani development.

Puco Trucking began work last month on a “verbal contract” Souza said he holds with Royal Construction to do hauling at the new Centex Homes residential development at Ko Olina, single-family homes priced at $1 million or more. Souza said Stone introduced him to Centex personnel, but he won the job through competitive bidding.

Hanabusa represented Puco Trucking in its successful efforts to win a trucking license from the state Public Utilities Commission in 2002-2003. But the senator neglected to disclose that work on her 2002 financial disclosure form filed with the Ethics Commission....

Hanabusa said her failure to include the PUC work on her disclosure form was “an oversight,” and that she would file an amendment with the Ethics Commission disclosing her PUC work for Puco...

Top 150 Donors/Individual Financial Contributors to the
Political Campaign of Colleen Wakako Hanabusa

Name	Occupation	$Amount	Date	City	State	Zip Cd
Kaneshiro, Clyde T Mr.	Honolulu Disposal Services	2,000	01/08/2004	Honolulu	HI	96820
Pflueger, James H Mr.	Retired	2,000	12/17/2003	Honolulu	HI	96814
Simons, Carl L Mr.	Hawaiian Cement	2,000	12/04/2003	Kamuela	HI	96743
Wilderman, Larry Mr.	Pacific Aggregate	2,000	12/11/2003	Waianae	HI	96792
Park, Moon S Mr.	Moon Soo Park M.D.	1,900	12/15/2003	Honolulu	HI	96815
Anawati, Fred Mr.	Marisco Limited	1,000	12/03/2003	Kapolei	HI	96707
Apo, Todd Mr.	Dynamic Connections LLC/Real estate	1,000	05/06/2003	Honolulu	HI	96817
Blaisdell, William Ms	Concepts Hawaii Inc./Development Co	1,000	12/11/2003	Aiea	HI	96701
Carr, Stanford S Mr.	SCD International	1,000	12/11/2003	Honolulu	HI	96813
Churchill, Clinton R Mr.	Estate of James Campbell	1,000	12/22/2003	Kapolei	HI	96707
Cowen, James Mr.	Oahu Transit Services Inc./Presiden	1,000	12/05/2003	Honolulu	HI	96819
Dods, Walter A Mr. Jr.	First Hawaiian Bank	1,000	12/11/2003	Honolulu	HI	96821
Donnelly, Sheila Ms	Sheila Donnelly & Associates/Public	1,000	12/04/2003	Honolulu	HI	96822
Dornbush, William J Mr.	Dornbush & Co.	1,000	12/08/2003	Honolulu	HI	96821
Fernandes, Alfred Mr.	Ernst & Young/Accountant	1,000	12/01/2003	Waipahu	HI	96797
Gamble, Gary Mr.	Centex Destination Properties	1,000	12/09/2003	Lake Mary	FL	32746
Guerrero, Anthony R Mr. Jr.	First Hawaiian Bank	1,000	12/05/2003	Honolulu	HI	96822
Gushman, Richard W Mr. II	Estate of James Campbell	1,000	12/09/2003	Honolulu	HI	96813
Hale, William Mr.	Five Star Roofing/Roofing Contracto	1,000	12/11/2003	Honolulu	HI	96825
Heenan, David Mr.	Estate of James Campbell/Trustee	1,000	01/08/2004	Honolulu	HI	96813
Hospodar, Paul J Mr.	Ko Olina Community Association/Secu	1,000	05/06/2003	Kapolei	HI	96707
Hui, Ernest Mr.	Intco	1,000	12/11/2003	Kaneohe	HI	96744
Hui, Kane Mr.	Investments of Texas Inc./Real esta	1,000	12/11/2003	Kaneohe	HI	96744
Imanaka, Mitchell A Mr.	Imanaka Kudo & Fujimoto LLLC	1,000	12/03/2003	Honolulu	HI	96813
Kamikawa, Ray Mr.	Chun Kerr Dodd Beaman & Wong/Attorn	1,000	12/11/2003	Honolulu	HI	96822
Kim, Kendall Mr.	Altres/Ko Olina Realty LLC/Accounta	1,000	05/06/2003	Mililani	HI	96789
Kobayashi, Bert Mr.	Kobayashi Development Group LLC/Dev	1,000	01/15/2004	Honolulu	HI	96813
Kosmin, Michael Mr.	KOO Consultants/President	1,000	05/06/2003	Honolulu	HI	96821
Kurahashi, Keith H Mr.	Retired	1,000	12/08/2003	Honolulu	HI	96822
Marcus, Kenneth Mr.	Starn O'Toole Marcus & Fisher/Attor	1,000	12/02/2003	Kailua	HI	96734
Mau, Leighton Mr.	Waikiki Business Plaza/Business Man	1,000	02/05/2003	Honolulu	HI	96815
Mau, Peggy S Ms	Homemaker	1,000	02/05/2003	Honolulu	HI	96821
Mau, Peggy S Ms	Homemaker	1,000	12/18/2003	Honolulu	HI	96821
Meyer, Christina S Ms	Marisco Limited	1,000	12/03/2003	Kapolei	HI	96709
Miller, David A Mr.	Architects Hawaii Limited	1,000	12/04/2003	Honolulu	HI	96821
Murata, Jeanne Ms	Altres/Ko Olina Realty LLC/Real Est	1,000	05/06/2003	Honolulu	HI	96816
Murphy, David F Mr.	Brookfield Homes	1,000	12/11/2003	Kapolei	HI	96707
Nauyokas, Michael Mr.	Michael F. Nauyokas Attorney & Arb/	1,000	01/06/2003	Honolulu	HI	96813
Nelson, Michael A Mr.	Retired	1,000	05/08/2003	Kailua	HI	96734
Saunders, Harry A Mr. III	Castle & Cooke Hawaii	1,000	12/11/2003	Mililani	HI	96789
Shigemura, Albert Mr.	PVT Land Company Ltd./Developer	1,000	01/07/2003	Honolulu	HI	96825
Stone, Jeffrey Mr.	Ko Olina Resort & Marina/Real estat	1,000	02/05/2003	Honolulu	HI	96813
Tokujo, Roy Mr.	Cove Entertainment Inc./President &	1,000	02/20/2003	Honolulu	HI	96814
Toner, John Mr.	Ko Olina Resort Association/Propert	1,000	05/07/2003	Honolulu	HI	96813
Wakayama, Wade H Mr.	Ameron Hawaii	1,000	12/08/2003	Honolulu	HI	96825
Weiner, Sharon Ms	Duty Free Shoppers/Management	1,000	12/03/2003	Honolulu	HI	96825
West, George N Mr.	Ameron Hawaii	1,000	12/08/2003	Honolulu	HI	96815
Williams, Kenneth M Mr. Jr.	Retired	1,000	05/06/2003	Kailua	HI	96734
Zlatoper, Ronald Mr.	Estate of James Campbell/Trustee	1,000	12/12/2003	Kapolei	HI	96707
Nakashima, Nancy Ms	Unemployed/Retired	999	01/06/2003	Gardena	CA	90247
Iwanaga, Michiro Mr.	Burke Sakai McPheeters Bordner Iwan	700	01/10/2003	Honolulu	HI	96819
Nakashima, Teresa Ms	Retired	501	01/06/2003	Gardena	CA	90247
Hiatt, Jerry Mr.	Law Offices of Jerry M. Hiatt/Attor	500	01/07/2003	Kamuela	HI	96743
Johns, Timothy Mr.	Estate of Samuel Mills Damon/Attorn	500	12/31/2003	Kaneohe	HI	96744
Jones, Michael T Mr.	Schuler Homes Inc.	500	12/03/2003	Kailua	HI	96734
Nakashima, Steven Mr.	Marr Hipp Jones & Pepper/Attorney	300	01/06/2003	Honolulu	HI	96815
Schaumburg, John P Mr.	Retired	250	02/05/2003	Lanai City	HI	96763

For more on Gov. Linda Lingle, Colleen Hanabusa, and Robert Awana, GO TO > > > Predators In Paradise

The only sitting member of the state Legislature who is running for lieutenant governor was taken to task by two of his Democratic opponents for an exemption state lawmakers gave themselves in a campaign spending reform measure passed this session.

"If you're going to exempt the Legislature, then why even have the law?" asked Donna Ikeda, a former member of both the Legislature and Board of Education. "If you're going to pass something, it should apply evenly across the board."

Ikeda's comments followed state Sen. Matt Matsunaga's assessment of a bill that would have prohibited companies or people who do business with the city or state from donating to candidates for mayor or governor. Gov. Ben Cayetano vetoed the bill because of an exemption for the Legislature.

One of the more lively verbal exchanges came when moderator Bob Rees asked all four candidates whether campaign finance reform is needed.

"Yes, absolutely," Matsunaga said. "We had a wonderful opportunity this past legislative session. We passed a very good bill. It may have had a few flaws, but it was a good bill to try and break the connection between campaign contributions and state contracts. And, unfortunately, the governor vetoed it, but perhaps we can pick that up later."

"Well, there's a reason why the bill was vetoed: The Legislature exempted itself from the coverage," she said.

"Well, it should apply," Matsunaga said, "but the reason why the Legislature was exempted is 'cause the Legislature doesn't award the contracts. It's the executive branch that actually awards the nonbid contracts, and I have no problem with putting the Legislature ..."

But before Matsunaga finished, Ikeda interrupted, "Let's be honest ... legislators have a way of picking up the phone, calling up and putting pressure on people to do things. That happens all the time."

She also said lawmakers should not be exempt "because by being exempt, they can profit from the very kinds of contributions that everybody else is supposed to be prohibited from receiving."

Matsunaga continued, "I guess I'm not familiar with the legislators that pick up the phone and twist arms."

Hee then weighed in, saying that the Legislature should not be let off the hook "because if Matt is right, what's the harm with the exemption falling to the legislators? But in fact Matt is not right."

As an example, Hee pointed to a $75 million tax credit the Legislature gave to the Ko `Olina developers for construction of a world-class aquarium.

"That's a way of packaging a project that has great financial implications to certain developers, and to me that must stop," Hee said.

Hee said certain lawmakers have said that they like the way the situation is now.

In the meantime, you can browse through the following as you’re having your breakfast birdseed in a paved parking lot or under a bridge somewhere...

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