PREDATORS IN PARADISE: Sightings from The Catbird Seat.

Predators
in
Paradise

~ o ~

February 12, 2006

Lingle aides bypass
procurement process

By Sean Hao, Honolulu Advertiser

Lingle administration officials may have violated state procurement laws last year when they selected a Honolulu nonprofit organization to handle finances for the governor's trade mission to China and Korea.

The state tapped the nonprofit Pacific and Asian Affairs Council to run Gov. Linda Lingle's China trip without asking other organizations if they would like to bid on the $268,637 project. The Pacific and Asian Affairs Council in turn hired several companies, such as Events International Inc., as subcontractors without following a bidding process.

The Pacific and Asian Affairs Council was paid nearly $7,000 for administering the trip and got a boost in prestige from its close association with a major state initiative. Events International and a related company got contracts worth $20,000.

While the payments don't appear to be excessive, the apparent failure of state officials to follow procurement laws raises questions. Procurement laws are meant to ensure the state gets the best value for its money and that potential state suppliers are treated fairly.

Ted Liu, director of the Department of Business, Economic Development and Tourism, said the state was not obligated to follow usual procurement policies because the trips were funded by corporate sponsors and not taxpayers. Using a nonprofit made the process of raising and spending money more efficient and allowed the agency to keep sensitive details about the mission private, Liu said.

"That doesn't pass the smell test," said Sen. Sam Slom, R-8th (Kahala, Hawai'i Kai). "If people are going to believe in the procurement process, then everybody has got to do the same thing and everything has to be above board."

The law requires competitive solicitations even if vendors aren't paid directly by the state, according to the State Procurement Office.

Aaron Fujioka, State Procurement Office administrator, said he couldn't comment specifically on the China trip. However, he said, "The procurement code applies to all contracts made by government bodies whether the considerations for the contract is cash or other realizations" such as enhanced reputation. "If there is a realization, is it subject to the code? I would say yes it is," Fujioka said.

The Lingle administration already has come under fire for seeking large corporate sponsors for the elaborate trips in exchange for promises of special benefits. Now it's the manner in which state officials spent money that is being questioned.

If DBEDT's actions don't violate procurement law, they seem to have been an attempt to sidestep the law, said state Sen. Shan Tsutsui, D-4th (Kahului), vice chairman of the Senate Ways and Means Committee.

"It was not the intent to allow a nonprofit to serve as a pass-through to get around the procurement law," Tsutsui said. "If that is happening, we may need to look at it."

The nonprofit that raised and oversaw the spending of $268,637 for Lingle's trip said all decisions concerning subcontractors and money were made by Liu's department.

"As we understood it per our agreement ... DBEDT was responsible for the planning and organizing of the mission and as such, the selection of and negotiation with vendors," said Lisa Maruyama, executive director of the Pacific and Asian Affairs Council, in an e-mail to The Advertiser.

"We paid vendors based on invoices sent to us from DBEDT — invoices that had first been received by DBEDT, reviewed and verified for accuracy by DBEDT and then subsequently signed by Ted Liu at DBEDT," Maruyama wrote.

While that may raise procurement issues, the head of one of the companies hired to work on Lingle's trip said it was not their intent to exclude other organizations.

"If there's a gray area here it's unfortunate because I don't think anybody had any malicious intentions," said Eric Schneider, chief executive for Events International. "It was a bunch of people getting together trying to do something good for the state of Hawai'i. All anybody could talk about when they got back was what a success this public-private partnership was."

Liu says Lingle's trip to China and South Korea in June produced millions of dollars in business for the state, and taxpayers saved money because most of the trip was paid for by private donors. Altogether 200 business leaders, state officials and entertainers accompanied Lingle on the 10-day trade mission.

Liu said he was advised that he would not need to follow the procurement process when selecting a nonprofit to organize the trade missions.

"Based on discussions with the Office of the Attorney General and the State's Chief Procurement Officer, no competitive selection process was required," Liu said in a written reply to The Advertiser.

The Attorney General's office declined to comment for this story.

However, an April 5 letter from Deputy Attorney General John Wang to Liu's department warned Liu's department about funneling money for the trip through a nonprofit. The letter says that if Liu or someone from his department helps make decisions about how money is spent at a nonprofit organizing a state trade mission, it may violate procurement law. The letter refers to "DEC," or the nonprofit Hawaii District Export Council, which was originally considered as the main organizer of the China trip. That job was ultimately given to the Pacific and Asian Affairs Council.

"The fact that DBEDT has a member on the DEC subcommittee that will supervise and operate the bank account may be a violation of the state's procurement law," Wang's letter said. "Though the DBEDT member is in the minority on the sub-committee, the DBEDT member may be able to exert influence over the other members and direct expenditure of funds without complying with the procurement law. It is strongly suggested that there be no DBEDT member on the sub-committee."

Despite that warning, Liu played a lead role in deciding how the Pacific and Asian Affairs Council spent money related to Lingle's China trip. For example, Liu directed the nonprofit to hire Honolulu-based Events International in May to plan and provide entertainment for the China trip, according to the Pacific and Asian Affairs Council.

In addition to the warning from the Attorney General's office, Liu's department was told by the State Procurement Office that it could not hire Events International without going through a competitive solicitation.

Events International was offering to promote and produce the China trip for free. But the procurement office, in a March 8 letter, said DBEDT still needed to go through a bidding process.

"Since there is a potential for a contractor to derive benefits as a result of receiving this contract, a formal competitive solicitation should be issued to allow potential vendors the opportunity to receive this contract," according to the procurement office letter.

Events International was hired by the Pacific and Asian Affairs Council, which as a private nonprofit is not required to use a bidding process.

"When (DBEDT) didn't get the exemption, they found another solution and we didn't see anything wrong with it," said Events International CEO Schneider.

Other nonprofits with an interest in China should have been notified about the state's interest in lining up organizations to work on the trip, said Johnson Choi, president of the nonprofit Hong Kong-China-Hawai'i Chamber of Commerce.

"Generally I think everything should be on the up and up and it should be on a bidding process," Choi said. "DBEDT was just looking for a yes man. Somebody that wouldn't ask any questions...."

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MAJOR DONORS GIVE $359K TO LINGLE

The Lingle administration raised $359,445 from private and public organizations to fund two trade missions to China. After a request from The Advertiser first sent in June, the Lingle administration recently released the names of the donors and the amounts they gave. Here are the major donors:

SPONSORS FOR LINGLE CHINA MISSIONS

DFS Hawaii: $50,000
NCL-America: $35,000
Ko Olina: $35,000
Castle & Cooke: $32,500
Dole Foods: $32,500
Alexander & Baldwin: $30,000
Hawaii Modular Space: $20,000
Simple Green: $20,000
Deep Seawater International: $17,945
Hawaiian Natural Water Co.: $15,000
FedEx: $10,000
Hawaii’s Own: $10,000
State Dept. of Agriculture: $10,000
Solstar Corp: $10,000
China Warranty Corp: $7,000
Hawaiian Host: $5,000
Pacific Resources: $5,000
Marriott International: $5,000
Market City Ltd.: $4,500
Hawaii Tourism-Asia: $2,000
Outrigger Hotels: $1,500
Pacific Basin Airport Maintenance: $1,500...

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October, 2003

"Pay to Play" System Exposed: 40 Percent of
Consulting Companies Working on City's
$1 Billion BRT Under Investigation

By Malia Zimmerman, HawaiiReporter

Editor's Note: Hawaii Reporter has sought for more than 14 months public records from the City & County of Honolulu that document the city's more than $20 million in expenditures on the $1 billion proposed Bus Rapid Transit System (BRT), planned for various parts of Oahu beginning in Waikiki. Council Member John Henry Felix assisted Hawaii Reporter in submitting the original request for copies of the BRT contracts in March 2002, but his written request was never even acknowledged by the City administration before he left office in December 2002. Council Member Charles Djou continued where Felix left off, submitting another request when he took office in January 2003, and resubmitting follow up letters several times over the next four months. In May 2003, the city Department of Transportation Services released several file boxes of contracts that listed on each contract the primary contractors and subcontractors for more than $12 million of the $20 million reportedly expended on the BRT. Djou and Hawaii Reporter immediately resubmitted another request for the remainder of the contracts with no answer from the city Department of Transportation Services to date.

This report is published after dozens of hours reviewing several thousand pages of city documents naming contractors and subcontractors working on the BRT and what they were paid, as well as state Campaign Spending and Department of Commerce and Consumer Affairs records. Hawaii's powerful Democrat elected officials, in power for 40 consecutive years, have traditionally had their political campaigns funded by supporters who in return receive lucrative government contracts or zoning, permitting and other benefits for their businesses from those government officials.

This indisputable fact has been documented in thousands of pages of investigative reports at the state Campaign Spending Commission, the Honolulu Police Department and Honolulu City Prosecutor. These agencies are working to break this cycle by exposing the system and prosecuting the players. At stake are billions of dollars collected from taxpayers in Hawaii, which in turn are paid to these contractors and then passed on to the campaigns of prominent Democrats. Former Gov. Benjamin Cayetano fed this cycle by authorizing billions of dollars from taxpayers be directed to public construction projects, bid and non-bid, saying the infusion of cash would spur the local lagging economy.

The latest major construction project that Oahu's Democrat mayor is pushing for the BRT will cost taxpayers more than $1 billion just to construct and considerably more to operate and maintain.

The consulting projects implemented to launch the BRT are being awarded to many companies recently in the news for making excessive and illegal contributions to the mayor and other prominent Democrats such as former Gov. Cayetano, former Lieutenant Gov. Mazie Hirono and former Maui Mayor Kimo Apana.

The system is called "pay to play," deemed so last year by Bob Watada, director of the state Campaign Spending Commission, who has investigated and is in the process of fining more than 100 companies for violating state campaign spending laws in an effort to participate in the political pay to play game. Honolulu Mayor Jeremy Harris' campaign and administration have been under investigation by a multitude of law enforcement agencies for nearly two years for operating such a system that, according to those doing business with the city, encourages or demands contributions in exchange for city business, permitting and zoning.

No where is this more clear than when looking at the BRT and the more than $20 million in contracts awarded to date. More than 40 percent, or 16 of 36 of the consultants working on the BRT, are under investigation, indictment or have been convicted for illegal contributions, and in some cases, for money laundering contributions to these candidates. Those alphabetically include:

Char & Associates, a company owned by Peter Char, close friend of the mayor and treasurer of the mayor's campaign, who died while under investigation. His wife, Lynette, is a city employee with the Dept. of Enterprise Services. Char & Associates received up to an estimated $216,297 in BRT city contracts, though the city does not specify in the documents the exact amount this subcontractor was paid.

ECS Inc. was fined $49,300 by the state Campaign Spending Commission for making a total of $80,000 in contributions including $30,000 to Harris, some of which was deemed excess and illegal. This company received up to $521,065 in consulting contracts for the BRT, though the exact amount was not disclosed by the city on the copies of the contracts reviewed by Hawaii Reporter.

Geolabs Inc. was fined over $64,000 for laundering $120,000 with around $60,000 going to the campaign of Harris. In total, the people associated and employed with Geolabs Inc. gave close to $290,000 total to the campaigns of Harris, Apana, Cayetano and Hirono. The city BRT consulting contract received by Geolabs is up to $468,000, though the exact amount of the BRT contract was not disclosed by the city.

Hawaii Design Associates was fined $1,000 by the state Campaign Spending Commission for making excessive contributions to the campaign of Harris. This company received up to $550,100 in the contracts reviewed by Hawaii Reporter, however the exact amount received by this company was not disclosed on the copies of the contracts provided by the city.

Helber Hastert Fee was fined $500 by the state Campaign Spending Commission for excess contributions to Harris and is pending prosecution by the Honolulu City Prosecutor. This company received up to $150,000 from the city for the BRT consulting work, though the exact amount was not disclosed by the city on the BRT contracts.

KPMG Consulting is one of several accounting firms under investigation by the state Campaign Spending Commission for excessive contributions to the mayor, and is the former employer of Malcolm Tom, the third highest official in the city. This accounting firm received up to $161,438 from the city for the BRT, though the exact amount was not disclosed by the city.

Masa Fujioka and Associates, fined $1,000 for $2,000 in excess contributions to the campaign of Harris, received up to $324,438 for its city BRT consulting contract, though the exact amount was not disclosed on the city contract reviewed by Hawaii Reporter.

Mitsunaga & Associates Inc. is owned by Dennis Mitsunaga, an individual under investigation by the federal government for more than a year and a half for a variety of illegalities including misusing federal construction funds provided to the state. Known as one of the most powerful political people in Hawaii, including a fundraiser for many high-profile Democrat candidates, Mitsunaga had to repay the U.S. Department of Housing and Urban Development more than $700,000 the agency considered was used inappropriately. Mitsunaga, still under investigation by the federal government, has a variety of companies. The one with his namesake received up to $399,995 so far on the BRT project, though the exact amount is not disclosed by the city.

MK Engineers is currently under investigation by state Campaign Spending Commission for making excessive political contributions to Hawaii Democrat politicians. They responded by saying that they discourage their employees and associates from making political donations.*

Parsons Brinkerhoff, which is under investigation by state Campaign Spending Commission for excessive political contributions, is one of the primary contractors on the BRT project and has overseen more than $5 million spent on the BRT, and has outsourced some of this work to many of the subcontractors listed in this story.

R.M. Towill is currently under investigation by the state Campaign Spending Commission, the Honolulu Police Department and the Honolulu City Prosecutor. At least four people employed with this company have been arrested in recent weeks on suspicion of money laundering and making illegal contributions to the campaign of Honolulu Mayor Jeremy Harris. This company, one of the primary contractors on the BRT, is overseeing the distribution of at least $1.5 million of city funds to subcontractors named in this report.

SEY Inc., has so far been fined $32,000 by the state Campaign Spending Commission for making "false name" contributions under names of employees to the campaign of Honolulu Mayor Jeremy Harris. This company has received as much as $89,000 from the city for its consulting work on the BRT, though exact figures were not disclosed by the city.

SSFM International, the first company whose executives were charged and arrested for their role in laundering over $400,000 in campaign funds to Democrat political candidates including $200,000 to Harris. Michael Matsumoto, president of SSFM Engineering in Hawaii, was recently convicted of the first $200,000 laundering offense involving the Harris campaign. The company also will face sizable fines from the state Campaign Spending Commission, though that fine has not yet been determined. SSFM, one of the primary contractors on the BRT, has overseen $1.8 million of expenditures for the BRT, though how much of this allocation the company has received is not disclosed in city contracts obtained by Hawaii Reporter.

The Limtiaco Group was under investigation by the state Campaign Spending Commission for its involvement in the "pay to play" system, but the principal of the company died, deterring further investigation at this time. The Limtiaco Group has so far received about $32,000 from city BRT contracts. The city did not specify on its contracts the exact amount received by the company.

Verner Liipfert, the powerful Washington D.C. law firm that once operated a branch in Hawaii where both former Gov. John Waihee and Norma Wong worked, also received contracts for the BRT, up to $97,000, though the exact amount was not disclosed by the city. This company is not under investigation per say, however it is included in the list because of its connection with Norma Wong.

Norma Wong, who in addition to her own company is partner to a research company, Mattson & Sunderland, under investigation for participating in a money laundering scheme involving the campaign of Honolulu Jeremy Harris, received up to $1,600,607 from the city for the BRT, though the city did not disclose the exact amount of compensation on its contract documents....

Those opposed to the BRT project and the pay to play system say the political pay offs already taking place need to stop and not allow the $1 billion BRT to move forward.

This report originally appeared in www.HawaiiReporter.com

http://www.smallbusinesshawaii.com/2003/Oct2003-2.html

March 28, 2004

Asia-Pacific forum puts us on map

By John Griffin, Honolulu Advertiser

It was an inspiring St. Patrick's Day sight — Gov. Linda Lingle and University of Hawai'i President Evan Dobelle seated side by side, sometimes chatting like friends.

Not only that, the liberal UH leader playfully introduced the Republican governor as "Linda O'Lingle" before her talk on "Hawai'i's Role in the Asia-Pacific Region."

Some might have viewed the occasion as a hopeful sign that the testy relations between two of Hawai'i's most important people have somehow evolved into a welcome detente. One can hope so.

But at the least, I saw that luncheon scene as a testimonial to the prestige of the co-sponsoring Pacific and Asian Affairs Council, which is observing its 50th anniversary as a vital Hawai'i organization.

The council is a nonpartisan educational institution for public- and private-school children, community-college students and adults interested in international affairs...

Today, Hawai'i has a variety of organizations dealing in foreign affairs, including the federally financed East-West Center, the Asia-Pacific Security Center and such private groups as Pacific Forum/CSIS and the Japan-America Society.

But for a number of crucial years, the council was virtually the only game in town on Asia-Pacific matters, aside from the underrated role of the University of Hawai'i.

Alumni of its high-school programs include such notables as state Sen. Les Ihara, state Rep. Galen Fox, former Lt. Gov. Mazie Hirono, AIG Hawai'i president Robin Campaniano, Roosevelt High School principal Dennis Hokama, Tax Foundation of Hawai'i head Lowell Kalapa, attorney Colbert Matsumoto and international lawyer Gerald Sumida, a former council board chairman who will receive this year's distinguished alumnus award. Roland Lagareta, now chairman of the East-West Center's board of governors, ran the council's high-school program from 1969 to 1977 and is one of its vice presidents....

Today, the council, which operates with a staff of five under executive director Lisa Maruyama, is said to be in its best financial shape ever.

It gets money from state government for its educational programs, the State Department for helping distinguished international visitors, foundations, corporations and its 400 individual and family members.

It has what some call a symbiotic relationship with UH and its School of Hawaiian, Asian and Pacific Studies (SHAPS) and the East-West Center, from which it rents office space in Burns Hall....

The council will hold a big 50th anniversary dinner Friday night, and soon the organization will be changing presidents. Veteran international attorney Frank Boas, who has served for six years, is stepping aside in favor of Kenji Sumida, who twice served with honor as interim president of the East-West Center. Banker Warren Luke is board chairman....

John Griffin is former editor of The Advertiser's editorial pages and a frequent contributor.

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September 18, 2005

Hitman Ching dies in prison

The notorious killer succumbs
to hepatitis from past drug use

By Rod Antone, Star-Bulletin

One of Hawaii’s most notorious and cold-blooded killers, underworld hitman Ronald K. Ching, died in Halawa Community Correctional Center of complications from liver disease yesterday morning, prison officials said.

Ching, 56, was serving a life sentence for killing a state senator and the son of a former city prosecutor as well as for two other murders. One of his victims was buried alive...

In 1985 Ching was sentenced to life in prison for four organized crime murders - state Sen. Larry Kuriyama in 1970; the 1975 shooting of the 19-year-old Charles Marsland III, son of then-Deputy City Corporation Counsel Charles Marsland Jr.; felon-turned-government-agent Arthur Baker, buried alive in 1978; and the shooting of gambling figure Robert Fukumoto in 1989.

Following the killing of his son, Marsland ran successfully for prosecutor.

Honolulu City Prosecutor Peter Carlisle, who helped convicted Ching as a deputy prosecutor under Marsland, remembered talking to Ching about the murder of Arthur Baker.

“The description of the air and sand going in his mouth when he inhaled while he was under the ground has never left me,” Carlisle said. “There’s not many people who can describe to you in explicit detail burying someone alive.

“He could be very cordial and charming when he was cooperating with you, and there were other times he could be reptilian as to how cold he was.”...

In a 1985 interview with Star-Bulletin reporter Charles Memminger, Ching said he felt remorse and pled guilty to the four murders because he was upset with the way he had been treated by organized crime.

“I could see that the whole organized crime movement had been very greedy - there’s been no loyalty toward me,” Ching said. “I don’t feel I owe none of these people anything.”...

www.starbulletin.com/2005/09/18/news/story4.html

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February 9, 2005

Alleged shooter has roots in
old isle underworld

One Pali Golf Course murder suspect comes
from a legendary Waianae crime family

By Sally Apgar, Star-Bulletin

Rodney V. Joseph, allegedly one of the shooters in the Pali Golf Course murders last month, came of age in Waianae during a legendary era when crime bosses ordered the execution of competitors by a bullet to the head and informants were buried alive in the sands of Maili Beach.

Joseph, 35, a professional kickboxer, is charged with first- and second-degree murder in the killing of Lepo Utu Taliese, 44, and Lawrence “Romelius” Corpuz, 39, at the Pali Golf Course Jan. 7....

The Joseph family of Waianae is part of the storied past of Hawaii’s underworld of the 1960s through the mid-1990s, which was vividly described in scores of news accounts.

Federal informants called Charles “Charlie” Stevens, who is Joseph’s uncle on his mother’s side, a drug lord and “the man” on the Waianae Coast for more than 20 years. Stevens, also known as “Uncle Charlie” or “Old Man,” regularly cruised his domain with his lieutenants in a black Lincoln Continental with dark-tinted windows.

Stevens, who was married to Joseph’s aunt Aletha “None” Stevens, had a taste for one of his own products, heroin, and died in 1999 of cardiac arrest in a federal prison in Pennsylvania at age 56.

In the early 1990s, Stevens was the target of a state and federal investigation that ultimately sent him to federal prison as part of a plea agreement.

He pleaded guilty to racketeering and confessed to drug trafficking, murder and bribing a state judge to reverse a guilty verdict in a double murder....

One FBI affidavit described an incident involving Rodney Joseph when he was barely 20. The 1990 affidavit supporting an FBI wiretap of Stevens recounted how Joseph allegedly helped his uncle retrieve two pounds of crystal methamphetamine, or “ice,” from a hotel room.

The affidavit said that Mervin “Charlie” Chan “froze up and died while mainlining crystal methamphetamine in the Plaza Hotel near the airport on Dec. 31, 1988.”...

In 1984, Charles Marsland was an outspoken and controversial city prosecutor who was out to nail organized crime. but Marsland’s mission had a personal edge: He wanted to find out who had murdered his 19-year-old son, Charles “Chuckers” Marsland III, early one morning in Waimanalo with a police service revolver....

In 1984 the intensive work of Marsland’s organized-crime strike force and federal investigators pinned two major underworld figures: Ronald Kainalu “Ronnie” Ching and Henry Huihui.

Ching, who turned witness for Marsland and the state, was considered a ruthless hit man and the state’s foremost contract killer who bore no allegiance to any crime boss. They said he killed for money, favor and sport....

On Aug. 23, 1985, Ching was sentenced to four life terms for the four murders....

Huihui and Ching were both used unsuccessfully to go after former Honolulu police officer Larry Mehau, who lived on the Big Island and was publicly labeled by one of Marsland’s staff in the late 1970s as the “godfather” of organized crime in Hawaii.

Mehau, who was close to former Gov. George Ariyoshi, was the target of a federal and state investigation code named “Firebird.”

Mehau was never convicted....

The jury convicted Stevens of the murder on March 26, 1981. But in a stunning decision that stirred angry accusations, Judge Harold Shintaku overturned the verdict on September 28, 1981, claiming the evidence was not there to convict.

Shintaku was harshly criticized. On Oct. 6, 1981, he made public his written argument for acquittal. That night, police arrested him for drunken driving, and the next morning his relatives found him in a family-owned beach cottage at Mokuleia with multiple skull fractures and a broken collarbone. Shintaku said he believed he had been beaten after he passed out. Police said he hurt himself in a fall during a botched attempt to hang himself.

In 1983, Shintaku retired from the bench. The judge was arrested in a 1987 raid on an Alewa Heights teahouse in the company of Earl K.H. Kim, who controlled gambling during that era.

Shintaku pleaded guilty to gambling charges in 1988. A year later he was found dead after apparently slitting both wrists and jumping from the third floor of the Stardust Hotel on the Las Vegas Strip. It was never clear whether he committed suicide or was murdered.

Stevens confessed in 1992 that his brother, Richard “Dickie” Stevens, who had since died, bribed Shintaku. Stevens said Shintaku had gambling debts and that the bribe was made and accepted before the double murder trial ever began.

On May 12, 1993, federal Judge David Ezra sentenced Stevens to 20 years without parole.

He told the court that Stevens’ prosecution ended “a criminal organization that operated almost unchecked on the Waianae Coast for over 20 years.”

www.starbulletin.com/2004/02/09/news/story2.html

For more Racketeering in Paradise, GO TO > > > APCOA: Vultures in The Parking Lot; Broken Trust; The Puna Connection; Investigating Investcorp; The Indonesian Connection; RICO in Paradise; Flying High in Hawaii: Ron Rewald and the CIA; The Vampires on Gilligan’s Island; Who’s Guarding the Henhut?; Yakuza Doodle Dandies.

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July 21, 2005

Former Republican Congressional Candidate
Pleads Guilty to Felony Charges Stemming from
His Campaigns for Lt. Governor, Congress

Out-of-Court Settlement Allows
Dalton Tanonaka to Avoid a Trial

By Malia Zimmerman, Hawaii Reporter

Dalton Tanonaka, 51, who ran for lieutenant governor in 2002 and U.S. House in 2004 as a Republican, plead guilty in federal court July 21, 2005, to three felony charges, admitting he violated federal law during his campaigns.

The State Campaign Spending Commission initiate the investigation into Tanonaka, who is a former print and broadcast journalist, eventually turning over the case to the city prosecutor’s office. But the federal government took over the case almost immediately.

Law enforcement sources say Tanonaka attempted to stop the investigation almost from the get-go by contacting powerful Republican supporters in Washington D.C. and asking them to come to his aid. That only further irritated investigators, who say Tanonaka was less than honest about the seriousness of the charges pending against him....

Before U.S. Magistrate Judge Kevin Chang in U.S. District Court, Tanonaka admitted to:

> Two counts of making false statements in a bank loan application related to illegal campaign donations received during the lieutenant governor race in 2002;

> One count of making false statements on a financial disclosure from in 2004, required for his congressional campaign; and

> One misdemeanor count related to accepting an illegal contribution in the congressional race of $11,000.

Though he will not likely serve jail time, Tanonaka could face a maximum penalty of 30 years in prison and a $1 million fine for the first two felony charges and a $2,000 fine for the misdemeanor. His sentencing is scheduled for Nov. 3, 2005....

Tanonaka continues to maintain he is innocent of all charges, but plead guilty to avoid a trial....

For more regarding Malia Zimmerman, GO TO > > > Who’s Guarding the Hen House

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November, 2002

Tanonaka picked to head PBEC

Hawaiian Hard Drive

Dalton Tanonaka has been named as the new president of the Pacific Basin Economic Council (PBEC). PBEC represents more than 1000 international companies across 20 nations who have a total work force of 10-million people and revenues exceeding $4 trillion.

“Dalton’s experience and skills are exactly what we need to move PBEC’s agenda forward,” said PBEC Chairman S.R. Cho. “His credibility and ideas will help us reemphasize our role as the business voice of the region.”

Tanonaka worked at CNN International where he served as a main news anchor and recently left that position to run unsuccessfully for Lieutenant Governor. He has also worked as the City and County of Honolulu’s Economic Director.

Some Tanonaka’s goals include generating more interest from Far East Countries to do business here in the state, positioning Hawaii as the Pacific’s economic hub and convincing local business and government leaders of the importance of keeping PBEC based in Honolulu....

For an update, GO TO > > > www.ilind.net/2005/november/oct30-nov05.html

For more on PBEC, GO TO > > > Act 221; Broken Trust; The Indonesian Connection; Paradise Paved; Vultures of the Sandwich Isles; Yakuza Doodle Dandies ... and www.keithpr.com/pacificall

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June 2, 2005

Governor's Top Campaign Promise Still Not Kept

Two and Half Years Into Her 4-Year Term, A Hawaii Reporter Investigation Reveals Governor's Top Administrators Have Done Virtually Nothing to Clean Up Political Corruption in the State, Or Stop the Pay to Play System

By Malia Zimmerman, Hawaii Reporter

The first in a series

When Linda Lingle ran for governor of Hawaii on the Republican ticket in 1998 and 2002, one of her top three campaign promises, in addition to reforming the state’s public school system and boosting the economy, was to "clean up political corruption."

That priority was welcomed by a tired public that had watched for more than a decade as numerous Democrat politicians entrusted with the taxpayers’ wellbeing went to prison for corruption, fraud, campaign violations, abuse of taxpayer funds, tax evasion and a host of other crimes. A weary public that had seen the House Speaker, prominent city officials and then campaign spending director Jack Gonsalves go to prison. An increasingly cynical public that had seen then Gov. Benjamin Cayetano invoke what some called "a reign of terror" on people he deemed his political "enemies," using his tremendous gubernatorial powers and vast taxpayer funded resources to target critics.

However, two-and-a-half years into her 4-year term, an investigation by Hawaii Reporter shows Lingle’s administration –- mainly the state attorney general and the Department of Accounting and General Services -- have done virtually nothing to clean up political corruption, especially in the areas of government procurement.

This despite the fact that the Honolulu City Prosecutor, Honolulu Police Department, state Campaign Spending Commission, FBI, IRS and U.S. Attorney have aggressively pursued company officers and owners who, in an effort to obtain favoritism in government contracts, concessions, zoning and permitting, violated state campaign spending law.

These agencies undertook independent investigations into whether then Honolulu Mayor Jeremy Harris’ top advisors were extorting money from businesses seeking permits, contracts, concessions or zoning from his city administration. They also looked into whether the businesses were paying up, getting around campaign spending limits by using family members, friends, vendors and business associates to funnel illegal contributions through.

Four years later, these investigations into Harris and his supporters resulted in nearly 100 companies and their top officers being fined a collective $1.5 million by the state Campaign Spending Commission. Bob Watada, executive director of the state Campaign Spending Commission, estimates more than $1.5 million of Harris’ campaign war chest –- half of what Harris raised from 1996 to 2001 –- was illegally contributed, though Harris and his top officials deny any knowledge of the violations or the pay to play scheme.

The Honolulu police and city prosecutor followed up on several of these violations, criminally pursuing corporate officers for money laundering and making "false name" contributions. Unfortunately, law enforcement officers say, the vast majority of the judges who have heard the corruption cases, have let the corporate officers off with fines and deferred acceptance pleas, allowing them to wipe their record clean with time and good behavior.

The U.S. Attorney filed charges against two companies for tax evasion including Thermal Engineering and GEO Labs, with plans to continue prosecuting other companies that violated federal tax laws in an effort to launder money to politicians. Federal judges have so far taken the campaign violations much more seriously than their counterparts in the state.

But law enforcement officers say the only punishment these corporate officers will understand –- a punishment that will stop them from participating in the pay to play scheme –- is having their right to bid on contracts and thus their ability to make a profit from government work removed all together.

Fines -- even substantial ones imposed by the court or the state Campaign Spending Commission -- are easily absorbed by the company, which can then turn around and get more government work.

Liberal state judges who in one case compared money laundering to politicians as a crime equivalent to a traffic ticket, are letting the corporate offenders go free with no jail time and typically a deferred acceptance, allowing them to wipe their record clean within a designated time period.

Lingle administrators do not say much about their reasons for not pursuing debarment against the more serious offenders, but did tell Hawaii Reporter they are dealing with a complicated new procurement law that makes it more difficult to successfully debar companies that commit campaign violations.

Wielding the Heavy Hammer on Political Corruption

The state Department of Accounting and General Services, which oversees procurement in the state, has traditionally had the authority to "debar" companies fined more than $5,000 by the state Campaign Spending Commission or whose officers have been prosecuted criminally for campaign spending violations. That "right" was reinforced by a 2003 procurement bill signed into law by Gov. Linda Lingle that same year.

Those trying to implement the legislation say it has numerous flaws. The law puts more mandates and a higher requirement for burden of proof before debarment on the state. However, the law can still be used as a deterrent against businesses that egregiously violated the state campaign spending laws, law enforcement and industry sources say.

But since taking office, Lingle has not wielded this heavy hammer handed to her by lawmakers. Her administrators have not initiated any debarment proceedings against any company whose officers have violated campaign spending laws, according to interviews Hawaii Reporter has conducted with Russ Saito, the director of the Department of Accounting and General Services, procurement personnel within the department and Hawaii’s law enforcement.

This despite the fact that more than 30 companies, according to public record, could be debarred, according to state law, for their campaign spending violations.

Lingle’s administration continues to allow such companies as SSFM, whose president Michael Matsumoto laundered $400,000 to local Democrat politicians including $200,000 to the campaign of Honolulu Mayor Jeremy Harris, continue to get millions of dollars in work from the state.

Thermal Engineering, whose officers conspired to launder money through workers and relatives to local Democrats including Honolulu Mayor Jeremy Harris, and whose officers are being criminally prosecuted by the federal government, is still able to qualify for state and county contracts.

R.M. Towill, whose president Donald Kim pled no contest to violation of campaign spending laws after laundering along with his vice president Russ Figueroa, even more money than SSFM to Harris and others, can bid on and win state and county jobs.

Wesley Segawa, son of former Big Island Representative Herbert Segawa, and cousin of Dennis Mitsunaga, who also is under investigation by the city prosecutor, can procure state work, even after he laundered money through friends and relatives for Harris.