Predators
in
Paradise
Part II
Sightings from The Catbird Seat
~ o ~
NOW, IF YOU’RE READY TO TAKE A GANDER AT SOME MORE
PREDATORS IN PARADISE ...
JUST SURF ON DOWN!
~~ ~~~ ~~~ ~ ~~ ~ ~
Apollo Advisors - Financial investment managers. 13th largest campaign contributor to Senator Joseph Lieberman (D-CT), Al Gore’s vice presidential running mate, and a client of lobbying firm Akin, Gump, Strauss, Hauer & Feld.
Another of Akin, Gump’s clients is Miller & Chavalier, a Washington, D.C.-based law firm which, together with PricewaterhouseCoopers, drafted the multi-million dollar IRS settlement agreement for Hawaii’s Kamehameha Schools.
Apollo Advisors has another connection with Kamehameha Schools: Along with National Housing Corp (which was involved in an alleged kick-back scheme with ousted Bishop Estate trustees Henry Peters and Richard Wong), Apollo has financial interests in several estate owned properties involving two alleged Yakuza-connected companies: Azabu Building Company and Mitsui Trust.
* * *
From Hoovers On-Line:
Apollo Advisors earned its reputation as a vulture investor by specializing in distressed assets (junk bonds, troubled companies, real estate).
Leon Black, the former Drexel Burnham Lambert mergers and acquisitions chief, and a dozen other Drexel refugees founded the group, which invested in former Drexel clients after that firm's collapse -- notably the $3 billion dollar junk bond portfolio of failed California insurer Executive Life.
Apollo has invested billions from four funds and has launched a fifth fund aimed at raising some $4 billion.
Apollo is linked with the Artemis group of investment holdings controlled by French billionaire François Pinault; the relationship dates back to the downfall of Executive Life....
For much, much more, GO TO > > > Apollo Advisors
Azabu Building Company - Azabu Building purchased a number of major hotel properties in Hawaii during the 1980's "big bubble" years, with Mitsui Trust providing much of the financing. Several of the properties were on land leased from Bishop Estate.
When the bubble burst, Azabu and Mitsui were forced to liquidate many of the properties at huge losses. Some of Azabu's and Mitsui Trust's distressed properties were purchased by entities in which Apollo Advisers, Goldman Sachs, National Housing, Trinity and other companies -- connected in some manner with Bishop Estate -- play a part.
* * *
April 13, 1998
YAKUZA, INC.
By David Kaplan, U.S. News & World Report
American investors are spending billions of dollars to snap up portfolios of bad loans from Japanese banks. That could put them on a collision course with notorious Japanese crime syndicates called "yakuza". . . .
The wiser U.S. firms ... are hiring high-powered investigators and law firms in Tokyo to go through the portfolios loan by loan ..."they all have the same questions ... who are we dealing with? Who's in the building?" One portfolio of 49 loans examined ... found that 40% of the borrowers had ties to organized crime. Fully 25% of them had criminal records ranging from disrupting auctions to assault, extortion, and rape.
U.S. News obtained a similar portfolio of 108 properties offered to Western investors by Mitsui Trust & Banking Co., one of Japan's largest banks. Thirteen of the properties -- including condos, undeveloped land, and parking lots in Tokyo -- are held by Azabu Building, a company that might not mean much to Americans but is quite familiar to Japanese police. In early March, Azabu's president, Kitaro Watanabe, received two years in prison for hiding some $18 million in assets from creditors.
Azabu properties, moreover, are protected by groups tied to Tokyo's largest crime syndicate, according to police. One investigator who ventured onto one of Watanabe's properties was held hostage for an hour by its "tenants," until the gang's boss telephoned the hapless fellow, according to the man's associates. "Next time you come out here, come with the proper introductions!" shouted the godfather.
"Go home, wash your face, and come visit us again."
* * *
June 25, 1997
Top Azabu Executives
Arrested in Japan
The troubled real estate firm owns several major hotels in Hawaii.
Honolulu Star-Bulletin
The president and two other executives of Azabu Building Company were arrested today on suspicion of illegally concealing the firm's assets to prevent creditors claiming them.
Arrested were Kitaro Watanabe, 63, the president, and Katsumi Naganuma, 62, and Shoichi Owaki, 60, board members of Azabu Building, one of the heaviest borrowers from failed housing loan companies.
In Hawaii, Watanabe was the early leader in Japanese "bubble" investing. In a buying spree that started in 1986, Azabu companies spent some $600 million on Hawaii hotels. They later shed two of them but they still own the Hyatt Regency Waikiki, the Ala Moana Hotel, the Maui Marriott and the Keauhou Beach Hotel. [Currently down to one - the Ala Moana Hotel.]
The three Azabu executives are suspected of having transferred some 1.3 billion yen ($11.3 million) in rents paid to the Azabu group to banks accounts of affiliated dummy companies, the Tokyo District Public Prosecutors Office said. Prosecutors said the transfer of rents earned by Azabu between Sept 1994 and Dec 1995 was intended to keep such assets away from creditors. If convicted the three could be jailed for up to two years.
At present, the group has some 600 billion yen ($5.2 billion) in outstanding debts, including more than 110 billion yen to four housing loan companies taken over by Housing Loan Administration Corp., a government-backed debt-recovering body . . . The group also owes some 160 billion yen ($1.4 billion) to Mitsui Trust and Banking Co....
Most of the loans have become nonperforming...
* * *
July 31, 1997
Keauhou Beach Hotel being sold
Honolulu Star-Bulletin
A Chicago-based partnership is buying the 318-room Keauhou Beach Hotel on the Kona Coast . . .
Trinity Investment Trust LLC, which is also purchasing the mortgage to the Aloha Tower Marketplace, has signed a letter of agreement to acquire the beachfront hotel from Azabu USA. The hotel, built in 1970, sits on land leased from the Bishop Estate....
Azabu, headed by maverick deal maker Kitaro Watanabe, acquired the Keauhou Beach Hotel in 1987 for $13 million. During the 1980s, Azabu invested about $600 million in Hawaii, acquiring the Hyatt Regency Waikiki, the Ala Moana Hotel, the Maui Marriott and the Kona Lagoon [also on land leased from Bishop Estate].
Since then, Azabu has run into a string of financial difficulties. In 1993, lender Mitsui Trust & Banking Co. filed a foreclosure suit on the 1,200-room Hyatt Regency. In 1994, Mitsui wrote off $1 billion in bad debts from loans to Azabu.
Last month, Tokyo officials arrested Watanabe and two other Azabu officials alleging that they illegally concealed company assets from creditors. Azabu's Hawaii subsidiary said then that the arrests had no effect on the company's local operations. [Yuk!...Yuk!]
Trinity, meanwhile, is part of a new wave of American buyers who are purchasing properties from financially troubled Japanese investors. . . .
The company -- whose investors include former VMS Realty executives George Ruff, local attorney Jon Miho [of McCorriston Miho Miller & Mukai fame - the defense attorneys for the ousted trustees, and the Miyo who recently attempted to post bail for Sukamto Sia] and hotel developer Charles Sweeney -- is trying to acquire the $60 million mortgage to the Aloha Tower Marketplace from Mitsui and take over the waterfront complex.
Last year, Trinity and Apollo Advisors L.P. bought the $130 million mortgage to the nearby Harbor Court luxury office and condominium complex for an undisclosed price from Mitsui.
Trinity has also joined up with Apollo, time-share operator Signature Resorts Inc. and Goldman Sachs' Whitehall Fund [another Bishop Estate investment] to buy the 413-room Embassy Suites Resort on Maui for $78 million....
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[Catbird Comment: Note that in the article is there is nary
a peep about Azabu's connection with the Yakuza.]
~ o ~
July 31, 2004
Azabu selling Ala Moana Hotel
by Allison Schaefers, - Star-Bulletin
Azabu USA Corp has signed a binding agreement to sell the Ala Moana Hotel to a Florida company for an undisclosed price.
The agreement, announced yesterday by Mac Yamaguchi, executive vice president of Azabu USA, is expected to close in mid-September.
Azabu did not disclose the identity of the buyer....
During a late-1980s buying spree, Azabu, which was once one of Hawaii’s largest hotel owners, purchased the Ala Moana Hotel along with five others for about $600 million.
However, the company was pushed into a corner when the “bubble economy” burst in the early 1990s, and it slowly lost control of most of its hotels, which once also included the Maui Marriott and the Keauhou Beach Hotel.
The Ala Moana Hotel is the Japanese real estate firm’s next-to-last hotel in Hawaii. The company purchased the 1,152-room Atkinson Drive hotel in 1986 for $70 million and later spent $31 million on renovations....
Azabu continues to own the Hyatt Regency Waikiki and King’s Village Shopping Center.
$ $ $
See also: Apollo Advisors; Chris Hemmeter; Mitzui Trust; Trinity Investment Trust; Yakuza
For more on Yakuza, GO TO > > > Yakuza Doodle Dandies
For more on Goldman Sachs, GO TO > > > Dirty Gold in Goldman Sachs
Bank of Hawaii - Hawaii’s second largest bank.
October 12, 1993
Bonds: All Insider's Game ...
Takemoto Names Bond Lawyers
with Waihee Ties
The Honolulu Star-Bulletin
Two attorneys with close ties to the Democratic Party and Gov. John Waihee are the only local lawyers selected as bond counsels to advise the state since Yukio Takemoto took over as budget director in 1987.
Attorneys Renton L.K. Nip and William Yuen, and their law firms, have garnered all of the legal work that isn't controlled by mainland bond specialists. . .
One of the main buyers of state bonds is the Hawaiian Tax-Free Trust, the largest mutual fund focusing on island bonds. Investments for the fund are controlled by Hawaiian Trust Co., a subsidiary of Bank of Hawaii, the state's biggest bank....
In late 1991, Takemoto named Hawaiian Capital Securities* for the first time to the coveted role of co-manager for $400 million of bonds for the state airport system....
* * *
August 22, 2000
Pacific Century Chief Quits
The Honolulu Advertiser
Lawrence Johnson, chairman and chief executive of one of Hawai'i's largest and most storied companies, announced yesterday he is stepping down amid mounting pressure from shareholders.
The announcement by Johnson, 60, the long-serving chief executive of Pacific Century Financial Corp, the parent of Bank of Hawai'i, comes in the wake of stunning losses from risky loans earlier this year and a stock price falling to five-year lows....
* * *
January 15, 2001
BANK OF HAWAII HAS ONE OF THE
WORST RATINGS IN THE NATION
Pacific Business News
Bank of Hawaii has one of the worst ratings in the nation for the proportion of nonperforming loans to total capital and reserves in the latest report by Weiss Ratings Inc., a bank rating agency.
The Weiss report says overall nonperforming loans for the US banking industry, which rose less than 3% in 1999, rose another 15% in just the first nine months of 2000. The national average as of Sept 30, 1999: bad loans accounted for 7.22% of banks’ capital and reserves.
Bank of Hawaii, however, had nonperforming loans equal to 17.53%.
Weiss therefore gives Bankoh a “B-minus” safety rating.
Just two large banks in the entire nation did worse according to Weiss: Capitol One Bank of Glen Allen, VA, and Providian NB of Tilton, NH, both of which had bad loans equal to more than 22% of capital and reserves....
For more, GO TO > > > Buzzards in the Bank of Hawaii
Bank of Honolulu - The bank that robbed YOU!
October 14, 2000
S.F. Bank Purchases Bank of Honolulu Assets
Some creditors and depositors may lose money,
says the FDIC
Honolulu Star-Bulletin
The troubled Bank of Honolulu became the Hawaii arm of the Bank of the Orient last night after the Federal Deposit Insurance Corp approved purchase and assumption of the insured deposits by the San Francisco-based financial institution....
Bank of Honolulu's former chairman, Sukamto Sia, who filed bankruptcy nearly two years ago, awaits trail accused of writing bad checks for gambling debts....
William McCorriston, attorney for Sia [and, coincidently, for the Bishop Estate ex-trustees], said his client is distressed by the bank closing. . . .
Arrested in August, Sia has been place in a halfway house to await trial next month....
~ o ~
Keeping it in the flock, or just another coincidence?
One of the five new trustees for Kamehameha Schools is none other than Diane J. Plotts, a former Director for the Bank of Honolulu.
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See also: Donna Tanoue
For much more, GO TO > > > The Indonesian Connection
Ben Cayetano - Former (D) Governor of Hawaii.
Honolulu Star-Bulletin: Defending the Democratic Party ... Cayetano Pushes for Another Term - Like Democrats before him, Ben Cayetano finds the roots of his party not in the concrete-paved suburbs or the condominium-choked urban core, but in the wide-open spaces of the neighbor islands. . . .
The Democratic unity theme continued last week. While campaigning at a successful rally in Hilo, Cayetano again sought out Democrats to rally around his campaign. . . .
One person who has come back to the Democrats is Big Island rancher Larry Mehau, who was a prominent figure at the Hilo rally.
In past campaigns, Mehau has been a Democratic gubernatorial campaign regular, but four years ago he supported Republican Pat Saiki in her unsuccessful campaign. At the time, Cayetano criticized Mehau, saying Mehau was involved in politics only for personal gain.
Cayetano said people like Mehau "have no party affiliation because power has no need for idealism. They are neither Democrat nor Republican. They are what I call 'Selfocrats.'"
In his 1993 speech to the Honolulu Rotary Club, Cayetano charged that Mehau and former Republican party leader and gubernatorial candidate D.G. "Andy" Anderson had helped themselves to the state's political spoils.
"Both Andy and Larry have much in common," Cayetano said. "They are close pals -- Larry helped Andy get his lease for John Dominis Restaurant -- and they both became millionaires because they have been part and parcel of the 'old boy' network."
He added: "The last thing on Earth that the 'old boy network' wants is Ben Cayetano as Hawaii's governor."
Now Cayetano says he welcomes Mehau's support.
Former Gov. George Ariyoshi, a political friend of Mehau's, set up a meeting between Cayetano and Mehau.
"I was critical of him (Mehau). ... We sat down and had a long talk. Gov. Ariyoshi introduced me to him and he wanted to support me and I said 'OK,'" Cayetano said last week.
"I was critical of him because of his relationship with Andy Anderson," Cayetano added.
"I talked with him, cleared up some of the ideas I had about him in the past and he is supporting me. I welcome his support."
DeMello said Mehau helped bring in the entertainers for the Big Island rally, including Don Ho and the Society of Seven.
That kind of political networking makes up the strength of the Democrats' unity campaign....
See also: Ko Olina; Larry Mehau; Sun International Hotels
Bert Kobayashi - Politically-connected developer in Hawaii; good buddy of former Governor Ben Cayetano; recipient of multi-million dollar non-bid contracts from the State of Hawaii; former University of Hawaii Regent; Chairman of the Board of Bishop Museum, etc.
See also: Danny Kaleikini; Gary Rodrigues; Sports Shinko; Sukamto Sia
For more, GO TO > > > Paving Paradise
Blackstone Group - New York based private investment bank.
January 26, 2001
Maui Hyatt sold for $200 million
By Andrew Gomes, Advertiser Staff Writer
New York based private investment bank The Blackstone Group has contracted to buy the Hyatt Regency Maui Resort for an estimated $200 million from KM Hawaii Inc., an affiliate of Japan-based transportation company Kokusai Jidosha, according to people familiar with the deal....
Founded in 1985 in part by the former chief executive of Lehman Brothers, Blackstone has been looking for upscale hotel investments in Hawai`i for several years. In 1998, the company unsuccessfully pursued one of Waikiki’s finest, the Halekulani.
People with knowledge of the Maui Hyatt deal said a purchase agreement for the 806-room Ka'anapali hotel —— Maui’s largest —— has been reached, and said Hyatt, which manages the property with about 1,000 employees, may be taking a small ownership interest in the hotel in exchange for a long-term management contract with Blackstone....
If completed, the Hyatt sale would follow sales of four other major properties in 1998: the Maui Marriott Resort for $152.5 million; the Westin Maui for $132 million; the Grand Wailea for $263.5 million; and the Kea Lani for an undisclosed amount.
The Hyatt Regency Maui, trophy of the Ka‘anapali resort, also has been attractive to buyers. It was developed for $80 million in 1980 by luxury resort developer Christopher Hemmeter and sold to KM Hawai‘i by Chicago real estate firm VMS Realty for $325 million in 1987.
KM Hawai‘i spent about $30 million on renovations in 1990 and 1996. Last year, the hotel opened a $3.5 million spa....
For more, GO TO > > > The Blackstone Group
C. Brewer and Co. Ltd. - Over 125 years old, was once one of Hawaii’s “Big Five” companies.
September 22, 2000
Buyers confident new directions
will take hold for C. Brewer
By Lyn Danninger, Pacific Business News
A recent lawsuit alleges corporate wrongdoing. A major subsidiary of the company is about to be sold and elderly shareholders controlling a majority of company stock are calling for liquidity.
These challenges constitute a typical day these days for J.W.A. "Doc" Buyers, chief executive officer and chairman of the board for Big Island-based Buyco Inc., parent company of C. Brewer and Co. Ltd.
But after 25 years as CEO, Buyers, now in his 70s, is nothing if not resilient, say those who know him best. Buyers is confident his company will emerge from this latest turmoil stronger than ever.
When he became chairman and president of C. Brewer in 1986 in a complex leveraged buyout, many said it couldn't be done.
Today, there are those who wonder if he's poised to do something similar again.
Buyers concedes that there have been more than a few bumps in the road lately for the company -- one of Hawaii's original "Big Five."
He won't comment on a recent lawsuit brought by two-time would-be suitors Strother Timberlands Ltd. and Henderson Timberlands Ltd.
The companies filed suit against Buyers and 51 entities, claiming they misrepresented information about earnings and losses, and cost the companies a chance to buy $160 million worth of C. Brewer stock.
The firms allege breaches of contract, interference with a purchase agreement, violations of state securities law, misrepresentation and fraud.
But Buyers says he is confident that a deal with The Shansby Group to buy C. Brewer subsidiary Mauna Loa Macadamia Nut Corp. -- a deal that includes his appointment as chairman of the board emeritus -- will come to fruition soon.
He is also optimistic that he can honor his shareholders' request for liquidity.
But he concedes that to do so, it will likely take further sales of company assets, such as real estate holdings, and in all likelihood, would also require outside financing....
Buyers is enthusiastic about recent economic activity on the Big Island -- from cruise ships and diversified agriculture to astronomy, health and wellness, and the University of Hawaii.
It's clear he plans a continuing role for himself and the company in that development.
BEI, the former Brewer Environmental Industries that was spun off from C. Brewer more than a year ago, is a likely candidate for expanded future activity, he says.
The company distributes products and services for agricultural, industrial, environmental and construction industries. But Buyers believes it can do more -- specifically in the area of environmental clean-up.
"To keep an island pristine, you have to deal with trash. We have the vision and expertise and the basics in place to do it," he says.
With Hilo's landfill under an Environmental Protection Agency order that will mean an eventual shut-down, Buyers may get his opportunity soon.
The cost of building a new landfill would be prohibitive because of the area's volcanic soils. A new approach to solving an old problem would make sense, says the economic development board's Helfrich.
Health and wellness is also on Buyers' mind these days. The company grows awa and other neutraceutical crops as part of its agribusiness activities. But more could be done in that area, too, he says, although he declines to give specific details about what he has in mind.
He'd also like to bring a new type of hotel to Hilo.
Noting the success of specialized operations like Kilauea Lodge, Buyers says there's room for a boutique hotel on vacant land adjacent to Brewer's corporate headquarters overlooking Hilo Bay. He believes it would draw more visitors to the area.
Finally, he's convinced more could be done to capitalize on one of Hilo's most noticeable assets -- rainfall.
"Look around -- everything grows quickly here," he says.
The development of an extensive botanical garden along the lines of Canada's famous Butchart Gardens in Vancouver, British Columbia, could become a world-class attraction for the Hilo area, he says.
* * *
May 11, 2001
The demise of C. Brewer ???
By Jason Armstrong/ Hawaii Tribune-Herald
The parent company of Hilo - based C. Brewer & Co. Ltd. is planning to sell off all its land and other assets, creating an uncertain future for Hawaii's oldest business, stockholders said.
Buyco Inc.'s stockholders voted overwhelmingly last week to approve a liquidation plan that will include selling Brewer's Wainaku headquarters, said stockholder Andy Ho, a former Brewer manager.
"They're going to be liquidating the whole company, basically, to pay off the shareholders," said Ho, who voted for liquidation. "It's taking place immediately."
Founded in 1826 by James Hunnewell, Brewer has operated on the Big Island for more than 125 years. It was once part of Hawaii's "Big Five" sugar and pineapple plantations that included Amfac, Alexander & Baldwin, Castle & Cooke and Theo H. Davies & Co.
Most of the Buyco stockholders, now in their 70's, soon plan to retire and want to cash out their privately held stock, said stockholder Jim Andrasick, a former Brewer president and chief operating officer who is 57.
"I'm not surprised," he said when asked about acceptance of a liquidation plan that 96 percent of the stockholders reportedly approved.
Andrasick, who also voted to liquidate Buyco, said it is time for the stockholders to receive their money.
He noted the Buyco investors have waited 15 years since they acquired Brewer and its subsidiaries in a leveraged buyout. The typical leveraged buyout life cycle is between three and five years, Andrasick added.
"I'm all for it," said stockholder Richard Cushnie, a 63 - year - old past president of Ka'u Agribusiness Co. Inc., a former Brewer subsidiary.
Buyco has about $51 million in cash, most of which came from last September's sale of Mauna Loa Macadamia Nut Corp., said Ho, who used to run the company's former Kauai sugar mill.
That money is enough to pay about $10 for each share of Buyco stock valued at $35, which means the company needs to raise more than $100 million to cover the full cost, he said.
"We can't access the money right now," Ho added.
Buyco's buyout of previous Brewer owner International Utilities Corp. cost a reported $200 million.
The company's main asset is land in Ka'u, Hamakua and on Maui. Before the sale of Mauna Loa and other holdings, Brewer owned 57,000 acres on the Big Island worth nearly one - half billion dollars.
The property includes Brewer's Wainaku Executive Center, a 14,000 - square - foot office building overlooking Hilo Bay.
The company in 1998 paid $3 million to turn the vacant sugar cane mill into its relocated headquarters that previously were in Honolulu.
Just days before the building's grand opening, Brewer Chairman and CEO J.W.A. "Doc" Buyers said the company was here to stay.
"Our first allegiance and love is to the Big Island," Buyers said at the time.
"I guarantee you we'll be here for another hundred years."
Buyers, one of Buyco's largest stockholders, and other Brewer executives did not respond to the Tribune - Herald's requests for comment on this article.
Brewer subsidiaries include Mauna Kea Agribusiness Co., Kilauea Agronomics Inc. on Kauai, Wailuku Agribusiness Co. Inc. on Maui and Washington - based juice company Hawaii's Own.
Not slated for liquidation is spin - off company Brewer Environmental Industries LLC and its subsidiaries, which include HT&T Co. and Hilo Coast Power Co., stockholders said.
Stockholders said they are unsure how the liquidation plan will be carried out, how long it will take or what the company's assets are worth.
Also unclear is how the sell - off will affect Brewer's employees. Before the sale and closure of some of its agricultural operations, the company in 1998 had 1,200 local workers, making it the Big Island's largest private employer.
Efforts to obtain accurate work force figures from Brewer employees were unsuccessful. Also unavailable at press time was a current inventory of all the company's land holdings.
Mauna Kea Agribusiness owns 23,500 acres stretching from Hilo's Wailuku River to the 20 - mile marker of Highway 11, which is near Ninole, company President John Cross said.
The company specializes in real estate development and land management, he said.
Cross added Thursday that he had not been informed of the stockholders' approval to liquidate Buyco
"Whatever happens in the corporate office, I will go along with," he said.
Buyco last year announced it had agreed to an unsolicited offer to sell the company and BEI to two Alabama firms.
Strother Timberlands Ltd. and Henderson Timberlands claimed in court documents that it offered to purchase Buyco's 5.1 million shares for $31 per share.
However, the deal fell through. Strother and Henderson then filed a lawsuit against Buyco, accusing the company's executives of fraud, breach of contract and other charges.
The lawsuit alleged Buyco executives tried to inflate the price of the stock by $3 a share, which would have cost the Alabama firms an extra $15 million.
* * *
October 15, 2001
Brewer Environmental sells some assets
By Ben DiPietro , Pacific Business News
Selected assets of Brewer Environmental Industries LLC are being sold to a local investor group that includes two current Brewer executives, the company says Monday.
Phoenix V Investors is buying the distribution and environmental services division and will operate them as BEI Hawaii, company spokesman Doug Carlson says. The new company projects annual revenues of $50 million a year, and plans to offer jobs to most of the more than 100 people presently working in the two divisions, Carlson says.
The purchase price was not disclosed for the deal, which is expected to close by Dec. 31.
Richard Hill is the CEO of the new company and Marc Tilker is chief financial officer. Both presently are executives of Brewer Environmental Services.
The other investors are Marvin Tilker, Marc Tilker's father; Richard Ing, owner of New City Nissan; and attorney Robert Katz, Carlson says.
Brewer Environmental Industries will continue to operate HT&T Co., Hilo Coast Power Co., Food Quality Labs and the company's construction services division. Stephen Knox will continue as the company's president.
* * *
January 1, 2002
BEI Hawaii deal completed
Honolulu Advertiser Staff
Investor group Phoenix V LLC yesterday completed its purchase of the Distribution and Environmental Services divisions from Brewer Environmental Industries LLC.
Under the new operating name of BEI Hawaii, the company will continue as Hawai'i's largest distributor of agricultural and industrial chemicals and fertilizer. Its Environmental Services Division is one of Hawai'i's largest environmental consulting companies.
Richard T. Hill becomes president and chief executive officer. Marc C. Tilker, another Phoenix V investor, becomes executive vice president and chief financial officer.
Other members of the group are Marvin Tilker, a former C. Brewer executive; Richard Ing, a director of Aloha Airlines parent Aloha Airgroup Inc., and local industrial relations attorney Robert Katz.
Former Brewer Environmental Industries LLC executives Fred Kubota and Kevin Kennedy were named vice presidents of BEI Hawaii and will be responsible for the operation of the Distribution and Environmental Services divisions, respectively.
See also: Torkildson, Katz
For more, GO TO > > > Paradise Paved
Chris Hemmeter - From Honolulu Star-Bulletin, 11/1/99, by Richard Borreca:
Hawaii Land: The Source of Power,
the Pot of Gold at Rainbow’s End
At the time of statehood, ownership was concentrated, with fewer than 100 owners holding half of all the land. - Hawaii’s dream and nightmare dovetailed into one: develop the land, make every parcel as valuable as possible.
“Ten years from now I envision Honolulu to be largely concrete and steel, with some coconut trees sprinkled throughout,” boasted Lowell Dillingham, developer of the Ala Moana Center, in 1961. . . .
While commercial real estate was valuable, it was the tourism boom that echoed through the new high-rise canyons of Waikiki. Jumbo hotels– built to match the lumbering jumbo jets which began coming regularly in 1970.
Between 1968 and 1971, 17,140 hotel rooms were created in Waikiki . . .
The Kalakaua Avenue view of Diamond Head was first blocked by the 1970 Holiday Inn, with its 650 rooms rising 25 stories high. Today, the hotel is called the Hawaiian Waikiki Beach Hotel.
But perhaps the building boom’s crescendo sounded in 1974, when young developer Chris Hemmeter blew up the Biltmore Hotel to build the first super-block, the Hemmeter Center and the adjacent King’s Alley.
The hotel was the Hyatt Regency . . .
* * *
October 9, 1999
Grand Developer Down But Not Out
By Peter Wagner, Honolulu Star-Bulletin
He blew into town, built an empire and lost it in New Orleans. Somewhere along the way, Chris Bagwell Hemmeter became an icon among Hawaii developers and set a new standard for lavish “fantasy” resorts.
His legacy in Hawaii, a mixed bag of opulence and elegance, includes the Hyatt Regency Waikiki, Hyatt Regency Waikoloa, Hyatt Regency Maui, Westin Maui, Westin Kauai, King’s Alley in Waikiki and Hemmeter Corporation Center in downtown Honolulu.
Hemmeter was 22 and just out of Cornell University when he arrived in Hawaii in 1962 to become assistant manager at the Royal Hawaiian Hotel (which sits on land leased from Bishop Estate). ... He parlayed a $10,000 loan from his parents first into retail stores, then restaurants, before turning his energy to resort developments.
Hemmeter’s high-flying fortunes began to plunge in 1995 with two Chapter 11 bankruptcies and a Chapter 7 personal bankruptcy filed in 1997, brought on by the failure of Mississippi gambling boats and an $800 million casino in New Orleans.
The personal bankruptcy, a liquidation now being closed in Los Angeles, showed $847,000 in assets and $87 million in debts.
“We bet the whole company on our project in New Orleans, based on the advice and counsel of the investment community and everybody else involved, and it didn’t work out,” he said Thursday from his Los Angeles home. “I guess that’s what risk-takers do.”
But Hemmeter, who turns 60 Monday, is hard to keep down. He and his son, Mark Hemmeter, are developing a $225 million hotel, lodge and casino in Black Hawk, Colo.
“Jackpot Springs” is due to open in two years.
See also: Azabu Building Co; Blackstone Group; VMS Realty; Mitsui Trust; Sun International Hotels; Yakuza
For more, GO TO > > > Paradise Paved
Coconut Island - Better known to millions of TV viewers as “Gilligan’s Isle”.
From sheep to science - Coconut Island
by Nathalie Parkvall, editor, HPU Student Newspaper
Before 1930, Bishop Estate-owned Coconut Island, or Moku O Lo ‘e, was a 12-acre island used as a base for local shepherds and fishermen. Little did anyone know that the island would gain national notoriety by being featured in the opening credits of the popular ‘60s TV show Gilligan’s Island, and few could foresee the many changes that would make the island a rather special place today.
Over the decades, the Kaneohe Bay-located island was transformed many times. It was as a location for a tuna-packing factory, it became a rich man’s private paradise with a bowling alley and a small zoo, and today it is the Hawai’i Institute of Marine Biology’s research center (HIMB) owned by University of Hawai‘i. . . .
See also: Edwin Pauley; Katsuhiro Kawaguchi
For more, GO TO > > > Vampires on Gilligan’s Isle
Dan Inouye - U.S. Senator (D) from Hawaii, called by some Hawaii’s “Political Godfather”.
From AllPolitics:
FISCAL 1997 PORK TOTALS: Per Capita, Per State, June 9, 1997:
Rank: #1 - Hawaii
Population: 1,183,723
Pork/per Capita: $131.01
Pork Dollars: $155,078,000
(For comparison: Michigan ranked at the bottom of the pork barrel with a Population of 9,594,350, with Pork/per Capita of $0.96, for total Pork Dollars of $9,594,350.)
* * *
ABC News, 2/2/97, by James Walker: The King of Pork . . . “Dan Inouye is the second largest industry in the state of Hawaii,” says Richard Borreca of the Honolulu Star-Bulletin.
That’s because in just the last five years, Inouye has brought home almost half a billion in federal tax dollars. The senator has mastered the recipe for pork: one part seniority, mixed with a choice assignment on a powerful spending committee....
Pork Barrels at Sea
When local historians wanted to build a replica of a Polynesian canoe, they went to Sen. Inouye and he delivered.
Two million dollars in federal funds and the Hawaii`iloa was built– all 57 feet, 17 thousand pounds of it. The goal was to show how the first Hawaiians sailed to their new home.
Donald Duckworth of Bishop Museum is an admirer of Inouye’s ways. “Certainly out here, we admire and respect Senator Inouye’s translation of our needs.”
But what some call need, others call waste.
How does a boondoggle like this get funded anyway?
Read Between the Lines
Sen. John McCain, R-Ariz, says it’s because some lawmakers slip requests for special projects into huge appropriations bills that no one is likely to scrutinize.
McCain claimed he knew nothing of the Polynesian canoe. “Many times we don’t know what’s in these bills until after they’re signed into law.”
Inouye also used a 203-page military-appropriations bill to get a company a 30-year monopoly on the cruise business in Hawaii.
“You give one company a monopoly to cruise the very beautiful islands of Hawaii, the consumers are going to pay, and clearly, far in excess of what they otherwise would if there was competition,” said Sen. McCain.
Senator Inouye declined ABC News’ request for an interview.
Meanwhile, the pork projects keep flowing into Hawaii.
And Senator Inouye keeps spending your money....
~ ~ ~
What the preceding article doesn’t tell you: Bishop Museum was endowed by Charles Reed Bishop, the husband of Princess Bernice Pauahi Bishop ... AND THE TRUSTEES FOR THE C.R. BISHOP ESTATE ARE THE SAME POLITICALLY-CONNECTED TRUSTEES AS FOR THE KAMEHAMEHA SCHOOLS / BISHOP ESTATE !
AND WHO WAS THE PROJECT DIRECTOR FOR THE $2 MILLION CANOE? Try guessing NAINOA THOMPSON - one of the five NEW TRUSTEES (and son of retired trustee, Myron Thompson, one of the co-investors in the infamous McKenzie Methane deal!)
Another coincidence?
See also: Bert Kobayashi
* * *
October 23, 1996
Isle Woman Part of Campaign Probe
Former resident Nora Lum figures in
congressional investigation into ‘92 finances.
by Ian Y. Lind, Honolulu Star-Bulletin
Congressional investigators have renewed a probe of former Hawaii resident Nora T. Lum, and a 1992 campaign project which she headed, because of their links to Democratic National Committee fund-raiser John Huang and former DNC official Melinda Yee.
David Bossie, staff investigator for Rep. Dan Burton, said last week that investigators are “extremely interested” in Lum’s association with Huang and Yee in the Asian Pacific Advisory Council (APAC-Vote), a DNC project that operated out of offices in Torrance, Calif, during the fall of 1992.
Bossie said APAC-Vote is drawing new scrutiny because its “cast of characters” included Huang, then an officer of the Indonesian-owned Lippo Bank in Los Angeles; the late Secretary of Commerce, Ron Brown, then chairman of the DNC; and Melinda Yee, an assistant to Brown at the DNC and national director of Asian Pacific American affairs for the 1992 Clinton-Gore campaign.
Following the 1992 elections, Brown was appointed secretary of commerce and named Huang and Yee to key positions in the department....
Huang and Yee have been ordered to testify in a lawsuit by the conservative organization, Judicial Watch, which wants to know whether Commerce Dept trade missions were used to raise funds for the Democratic Party....
APAC-Vote officially opened its office on Sept 9, 1992, the same day then-candidate BILL CLINTON announced the formation of the Asian Pacific American Committee for Clinton-Gore, whose roster included Sen. DAN INOUYE, Sen. DAN AKAKA, Rep. PATSY MINK, and then-Gov. JOHN WAIHEE....
* * *
January, 1997
New York Mob at Mena
By Ace R. Hayes, Portland Free Press
Yet another CIA-Mafia drug connection: Richard Brenneke puts mob boss John Gotti and CIA boss Donald Gregg in the middle of contra drug operations at Mena Airport.
In Dec 1996, the Portland Free Press secured a copy of Richard Brenneke’s 21 June 1991 sworn-deposition before Congressman William Alexander, Jr, and Chad Farris, chief deputy attorney general of Arkansas....
We secured former congressman William Alexander’s fax number and sent him a request for confirmation. We got more than we hope for – Jan 1997: “... the Brenneke transcript, along with other evidence of money laundering by Barry Seal at Mena, Arkansas, was delivered to Judge Walsh for action. Nothing followed. I agree that the American people deserve to know the truth about our government. Thank you for providing it. Good luck.” (signed Bill Alexander)
~ ~ ~
THE AMERICAN PEOPLE, since World War II, or World War I, or the Spanish American War– take your choice– have witnessed the tip of many criminal icebergs. The official investigations of the criminal icebergs almost always stopped at the waterline. The other 90 percent of the criminal icebergs were never hauled onto the beach for complete examination, prosecution and correction.
The criminal cases of 1980 to the present are in perfect harmony with this honored tradition. This is, of course, why Americans are the most profoundly ignorant people on planet earth. The illusion of knowledge is far worse than knowing you don’t know.
The Iran-Contra-cocaine criminal iceberg was subjected to a series of bogus investigations and damage control “exposes.”
The Tower Commission and Select Committee of the House and Senate on Secret Military Assistance to Iran and the Nicaraguan Opposition in 1987, began the damage control operation for the Imperial state.
But the Hall of Shame did not stop with John Tower, Ed Muskie and Brent Scowcroft or Dan Inouye and Lee Hamilton. It included Senator John Kerry and his Special Counsel Jack Blum and Staff Aid Dick McCall. It reached to the Special Counsel, Judge Lawrence E. Walsh...
* * *
From Shadow, by Bob Woodward: . . . THE REAL THREAT to the Reagan presidency, Harold Baker and Arthur Culvahouse knew, lived across town in the Watergate Hotel . . . In room 609 of the hotel, Lawrence E. Walsh, 75, had set up living quarters after being named by the three-judge panel as the independent counsel for Iran-contra....
One of Walsh’s first stops was the CIA, which gave his team space and filing cabinets in the basement of agency headquarters in Virginia so they could look at top-secret codeword documents. Early in the investigation, the IRS gave Walsh 11 agents who were experts in tracing hidden money so Walsh could attempt to understand the “Enterprise” that North had set up using Swiss bank accounts for the Iran arms sales, the secret contras resupply and other covert operations.
Iran-contra had dozens of tentacles, and Walsh chose to pursue nearly all of them. He was not sure if he was chasing rabbits or where they might take him. His authority from the three-judge panel called on him to prosecute any related crimes he uncovered, even by underlings. His preoccupation became (Oliver) North and (John) Poindexter, the operational officers....
Iran-contra would not go away for Bush.
Although on September 29 the judge in the (Caspar) Weinberger case dismissed a key obstruction charge, ruling the independent counsel had not shown that Weinberger corruptly worked with others, he demanded a proper reindictment within the next month....
On Wednesday, October 28, six days before the election, Barrett faxed a copy of the new indictment to Walsh in Oklahoma....
Walsh was determined to proceed with the Weinberger trial. He approved an expenditure of $32,600 for Brosnahan to conduct a mock trial before 36 citizens who were paid to act as jurors. After the presentation of the prosecution and defense cases, the 36 people were divided into three separate juries. Two of the mock juries found Weinberger guilty on all four counts, the other found him guilty on three of the counts.
The story leaked, unleashing a fresh attack on Walsh. Many Republicans were now publicly urging President Bush, who would be leaving office in January, to exercise his constitutional power to pardon Weinberger.
Bob Bennett, Weinberger’s attorney, told Gray his client’s trial could be embarrassing for Bush, who might be called as a witness.
Gray said he was exploring the pardon option.
“What can I do?” Bennett asked.
“Get some Democratic cover,” Gray said, “and I’ve got to be convinced it’s a one- or two-day story.”
Among others, Bennett recruited House Speaker Tom Foley, the Washington State Democrat, to phone Gray pledging his support for a Weinberger pardon.
Bennett also enlisted Senators Daniel Inouye, a Democrat from Hawaii, and Warren Rudman, who headed the Senate Iran-contra probe, to write a letter of support....
Bush had some reservations. On Tues, Dec 22, he dictated into his diary, “The pardon of Weinberger will put a tarnish, kind of a downer, on our legacy.”
Before going to Camp David that Christmas weekend, where he planned to make the final decision on pardons, Bush was in the Oval Office . . . “Okay, Marlin,” Bush asked Fitzwater. “What’s your final recommendation?”
“Pardon all of them.” ...
Gray was strongly in favor of pardons. It would end the Walsh investigation. He had his deputies call around to the lawyers for other convicted Iran-contra figures to see if they would accept pardons. Four did: two CIA officers, Elliott Abrams, and former national security adviser Bud McFarlane.
Gray helped draft a three-page executive order explaining the reasoning.
Bush signed it on Christmas Eve, December 24, 1992....
* * *Compiled by Associated Press from financial disclosure forms filed June 12, 1998:
1998 Financial Profile: Sen. Daniel K. Inouye, Indian Affairs Committee ranking Democrat
Earned Income: $135,340
Major Assets: Stock in CPB Inc. worth $100,001-$250,000. Over $100,000 in bank accounts....
Major Sources of Unearned Income: Dividends of $5,001-$50,000 from CPB stock, and bank interest in the same range.
Inouye’s major investment is in CPB, a holding company for Central Pacific Bank, one of Hawaii’s largest commercial banks.* * *
To view a shocking documentary on the Mena Airport drug-running operations, GO TO >>> www.thelawparty.org
Danny Kaleikalani - One of Hawaii’s top entertainers.
From Land and Power in Hawaii, by George Cooper and Gavan Daws:
ORGANIZED CRIME
Hawaii, even in boom years, even in the early 1980s ... always functioned as a small place.
This could lead to personal associations that might seem surprising to people not born in the Islands.
Take Roosevelt High School in Honolulu in 1952. The varsity and junior varsity football squads of that year included Wilford K. (“Nappy”) Pulawa, Roy R. Ryder, Sherwin K. “Sharkey” Fellezs, Dante K. Carpenter, Arthur Hoke, Spencer K. Schutte and Larry D. Price.
Other classmates of Pulawa, not on the football teams, included Danny Kaleikini and Matthew S.K. Pyun Jr.
Pulawa went on to head the Hawaii syndicate from about 1969 to 1975. He was in federal prison 1975-1984.
Ryder became a gunman and admitted killer, who eventually turned prosecution witness; his testimony on 1975 was instrumental in convicting Pulawa.
Fellezs became an entertainer. During Pulawa’s trials Fellezs testified that he served as a front for several of Pulawa’s real estate investments.
Carpenter became a successful politician on the Big Island, elected to the County Council and State Senate; in 1984 he was elected Big Island mayor.
Arthur Hoke became a police captain on the Big Island.
Schutte became a Honolulu policeman and later a Big Island rancher and councilman.
Price became a celebrity in various ways: as coach of the University of Hawaii football team, then a reporter for KITV television and an announcer on K-59 radio.
Kaleikini became an extremely successful entertainer, and
Pryne an accomplished lawyer and part-time state district court judge. . . .
The cases of Kalikini and Pyun appear to illustrate how school friendships might lead to later associations that some might find questionable.
In Kalikiki’s case, according to Sharkey Fellezs’ testimony in the Pulawa trials, it was a friendship formed at the University of Hawaii with Fellezs.
When Pulawa was putting together his Forbidden City real estate deal in 1972-1973, he approached Kaleikini through Fellezs to serve as a front. The project was to emphasize entertainment, and Kaleikini’s involvement would lend an appearance of substance and legitimacy.
During Pulawa’s second tax trial, Fellezs testified that, “Danny and I being fraternity brothers,” he was the best person to approach Kaleikini. Fellezs said that “Nappy said fine.” Fellezs then arranged for the three (and one or two others) to meet at the Waikiki Beachcomber Hotel.
Fellezs went on: “When Danny came up, I explained the whole project to Danny. We didn’t need his money, $35,000, because we had any amount of money that we needed already . . . All we wanted to do was laundry the money. Rinse our money out...
“All we needed was Danny to come in and be a front. We would give him back his money.
“On top of that we would give him stock in Pacific Monarch (the front corporation). In fact, I made him an officer.”...
~ ~ ~
The Forbidden City real estate deal included running a nightclub on the property that was to emphasize Hawaiian musical talent.
Henry Huihui told a reporter in 1978 that he first became acquainted with Pulawa about 1970 over concerns they shared about a land issue in Kalama Valley, Oahu, that had a good deal to do with Hawaiians.
Bishop Estate owned the valley, and about 40 mostly low-income Hawaii-born families, including a number of Hawaiians, were being evicted to make way for a moderately expensive residential subdivision and golf course.
A group of mostly young people of various ethnic backgrounds, joined to oppose the evictions and development in Kalama, raising issues similar to anti-war movements...
An organization came into being, named Kokua Kalama and then renamed Kokua Hawaii, to lead the resistance in the valley. Haoles were excluded. The leadership became Hawaiian.
Eventually all valley residents moved out except one, a pig farmer named George Santos. Santos and about 30 Kokua Hawaii members were then arrested. The valley was later developed as planned....
* * *
Honolulu Star-Bulletin, 9/6/00: Former isle banker Sia first ordered freed, then held pending appeal - A federal judge said today that Asian businessman Sukamto Sia should be released on bail pending an Oct. 31 trial, but agreed to keep him behind bars pending an appeal by the U.S. Attorney General’s office.
Asst U.S. Attorney Omer Poirier said he would appeal the bail ruling tomorrow.
While Federal Magistrate Barry Kurren [coincidently, the same judge for the RICO lawsuit, Harmon vs. Bishop Estate Trustees, et al.] called Sia a possible flight risk, Kurren did not think the U.S. government had showed enough evidence that he would leave the United States.
Kurren placed several conditions on Sia’s release, including $150,000 in cash and two Hawaii properties with equity worth a total of $760,000, all posted by friends.
Stockbroker Al Souza, friend of Sia for 15 years, offered his Waialeale home, worth $320,000 in remaining equity.
Eric Yanagihara, formerly Sia’s Hawaii asset manager and former senior vice president of Bank of Hawaii, offered remaining equity in his Waialae Ridge home, worth $440,000.
Also, attorney Jon Miho will post a cashier’s check worth $100,000 and Sia lawyer Renton Nip will post $50,000.
Entertainer Danny Keleikini offered testimony in support of Sia’s release.
Federal authorities downplayed the significance of the collateral, arguing that Sia could leave the country, then later make it up to his friends for what they would lose.
“This person is an extraordinary flight risk,” said Poirier during the hearing.
Sia, born in Indonesia, has family in Singapore and lives in Macao, which was recently taken back as part of mainland China. Neither China nor Singapore has extradition treaties with the United States, Poirier said.
A federal indictment alleges Sia knowingly hid more than $7 million in Dec, 1997 before filing for bankruptcy in Honolulu in Nov of 1998. He is also charged with spending nearly $800,000 in state tax returns that should have been paid into his bankruptcy estate.
See also: Bert Kobayashi; Sukamto Sia
For more GO TO > > > Dirty Money, Dirty Politics and Bishop Estate
Data House, Inc. - A politically-connected computer firm.
February 12, 2000
Dispute has cost estate millions
By Rick Daysog, Star-Bulletin
The three-year Kamehameha Schools controversy continues to take a heavy financial toll on the nonprofit charitable trust.
A Star-Bulletin review of the $6 billion estate's voluminous expenditures for its 1999 fiscal year found that the trust paid about $5 million to law firms and accounting firms that were involved in defending it from the Internal Revenue Services' massive audit and the state attorney general's criminal and civil investigations.
The financial records, which were filed in state probate court on Dec. 30, also indicate former trustees continued to reward their friends with lucrative outside contracts. . . .
Preferential treatment?
The estate's second-largest outside vendor, Data House Inc., also has personal ties to trust executives. Data House, which received about $1.4 million of work for Y2K and other technological issues last year, is headed by Daniel Arita, a golf partner of Yukio Takemoto, who heads the estate's budget and review department.
Takemoto is a former state budget director who resigned from his government post due to a state procurement scandal that partly involved Data House.
Data House, one of the state's largest computer consulting firms, has strongly denied that it received preferential treatment from the estate, saying they were selected on the merits of their work, which has won several private-industry awards....
* * *
September 15, 1998
It’s not the first time for Takemoto
Bishop Estate budget chief was
investigated for financial abuses in 1993
By Ian Lind, Star-Bulletin
Bishop Estate budget chief Yukio Takemoto is no stranger to charges of political favoritism and cronyism.
Last week, the state attorney general's office accused Takemoto of a scheme to improperly wipe out an $18,690 debt by then-Sen. Milton Holt, using payments from four nonbid contractors with the estate.
Takemoto, appointed state budget director by former Gov. John Waihee, spent months at the center of a 1993 legislative probe into state purchasing abuses and dealings of the state Employees Retirement System.
~ ~ ~
Yukio Takemoto: Accused of improperly paying off campaign debts with Estate funds.
The hearings, directed by the late Sen. Richard Matsuura, did not result in any formal charges against Takemoto. But they publicly aired details of several situations in which Takemoto appeared to direct nonbid contracts to friends, or improperly accepted gifts or favors from companies seeking business with the state.
Takemoto resigned under pressure at the end of 1993, and joined Bishop Estate months later.
According to information disclosed during the 1993 hearings, the Waihee administration awarded nearly $13 million in nonbid contracts to Data House, a computer firm headed by Takemoto's longtime friend and golfing buddy, Daniel Arita. Some of the contracts were considered exempt from bidding requirements, while others were awarded on a "sole source" basis.
Takemoto was accused of personally recommending that certain contracts be awarded to Data House even though he had no computer expertise, and either ignored or did not seek out the advice of computer experts on his staff. Throughout the hearings, Takemoto denied his 25-year friendship with Arita played any major role in the contract decisions.
Data House has done substantial amounts of work for Bishop Estate over the past several years.
The Star-Bulletin reported earlier that Data House was paid more than $900,000 by the estate during its 1995-96 fiscal year. According to the estate, Data House was just one of several companies working on a major overhaul of its computer system....
Matsuura's committee was also told that Takemoto improperly pushed a $9.56 million nonbid contract for a state telephone system upgrade to GTE Hawaiian Tel over the recommendations of key staff, a charge that Takemoto consistently denied.
Soon after his appointment as budget chief, Takemoto stopped putting multimillion-dollar state bond sales out for competitive bid and substituted a nonbid process. The new negotiated deals gave him total control over who would sell state bonds and what fees they would collect.
With Takemoto in charge of the process, two attorneys with close ties to the Democratic Party and Waihee were named as local bond counsel on dozens of bond issues. The two captured all legal work not handled by large mainland firms specializing in bond deals during Takemoto's tenure.
Honolulu attorney Renton L.K. Nip advised the state or bond underwriters on more than 30 bond series issued by the state between 1990 and 1993, state records show.
In 1989, Nip assisted Takemoto in soliciting funds for Waihee's re-election campaign. Nip, then-Land Use Commission chairman, sent letters to a number of companies seeking to do business with the state.
"Mr. Yukio Takemoto of the Department of Budget & Finance has asked our assistance in distributing tickets to you for the governor's fundraiser xxx ," the letter said.
Computab, a computer services firm, was about to sign a $700,000 contract to provide computer equipment to Takemoto's department when it received the letter and 20 fund-raiser tickets, according to a complaint filed later by Desmond Byrne, a former Computab officer.
Bryne called the letter "a very unsubtle attempt to lean on the company" and, because of the pending contract, "Computab had no option but to give."
Another major beneficiary of Takemoto's new bond system was a small island firm, Hawaiian Capital Securities, whose investors included several key Democratic fund-raisers and contributors.
One of those investors, according to business records, was Richard M. Sato, president of Sato & Associates Inc., a Honolulu engineering firm.
Sato is also president of Hui Kokua Kinipopo, the tight-knit booster club which supports the University of Hawaii baseball team. Both Takemoto and Arita serve on the group's board of directors, according to state business registration records.
Sato & Associates was one of the companies named by Bronster last week as taking part in the scheme to pay off a $12,344 campaign debt incurred by former Sen. and Bishop Estate employee Holt.
Sato & Associates paid one-third of Holt's unpaid campaign debt after receiving a false invoice "for goods and services that were never provided," according to the petition that Bronster filed in court.
All the companies have received lucrative nonbid contracts from Bishop Estate, Bronster charges.
See also: Yukio Takemoto
David Ige - From Honolulu Star-Bulletin, April 30, 1998
Holt entertained them at Bishop Estate expense,
IRS records show; several of them deny it
By Rick Daysog
Former state Sen. Milton Holt reported that he entertained state legislators at Bishop Estate's expense at local restaurants and hostess bars, according to records the estate submitted to the Internal Revenue Service.
But several lawmakers denied that the meetings took place....
Sources familiar with the records sent to the IRS told the Star-Bulletin that Holt charged more than $2,500 on the estate's Visa cards at local restaurants, drinking establishments and nightclubs between 1992 and 1997, listing lawmakers as his guests.
Some $1,500 of the total was spent at two local hostess bars in 1992 and 1993.
These expenses are in addition to some $21,000 that Holt ran up in credit card charges and cash advances on estate Visa cards at Las Vegas casinos and local hostess bars and restaurants since 1992.
One critic of the Bishop Estate called the expenditures unsuitable for a tax-exempt trust that has a mission to educate native Hawaiian students.
"To me these are totally inappropriate expenses for the estate to be paying out," said longtime Bishop Estate watcher Desmond Byrne.
"You wonder if this is just the tip of the iceberg. You wonder what else is out there."
During a Feb. 10, 1993, outing, Holt ran up a $540.50 tab at the Crystal Palace hostess bar, naming as his guests Senate President Norman Mizuguchi and Sen. Robert Bunda then a state representative, sources said.
That came after Holt ran up a $751 bill on the estate's charge cards at the former Monte Carlo hostess bar in August 1992, listing Mizuguchi, Bunda and Sen. Joe Tanaka as his guests.
Holt charged $260 on an estate credit card at the Monte Carlo club in April 1993, listing Bunda, House Finance Chairman Calvin Say and House Judiciary Chairman Terrance Tom as guests....
Holt declined comment on credit card charges involving lawmakers other than Mizuguchi, saying the information was supposed to be confidential. An estate spokesman had no immediate comment.
Bishop Estate, the state's largest private landowner, has long enjoyed a close relationship with the state Legislature. The multibillion-dollar estate's five trustees include former Senate President Richard Wong, and former House Speaker Henry Peters.
In the past, the estate has said that it did not incur any lobbying expenses at the local level, according to Byrne. But Holt's expenditures raised significant questions as to whether it was trying to influence legislation, he said. "Unless they have hope to obtain some benefit, why should the estate being paying this kind of money for entertainment?" Byrne asked.
The restaurant and bar tabs were included in the estate's response to inquiries from the IRS in its audit of the trust. The IRS is looking at various estate expenditures and wants to know whether employees and trustees received benefits or perks at the expense of the trust.
The attorney general's office subpoenaed the estate for Holt's records along with volumes of other confidential IRS records, also known as information document requests, in its investigation into potential wrongdoing by trustees.
The Star-Bulletin obtained details of several other credit card transactions at traditional isle restaurants listing lawmakers as Holt's guests.
Here are some examples . . .
An October 30, 1995, charge for $115.32 at the Gordon Biersch Brewery Restaurant, naming Sen. Les Ihara and Sen. David Ige as Holt's guests. . . .
Under state law, legislators aren't required to list gifts less than $200 in their annual disclosure statements. But they are prohibited from accepting gifts intended to influence or reward lawmakers. . . .
* * *
From Honolulu Star-Bulletin, Feb 11, 1998:
Editorials
Legislator shouldn’t be utility lobbyist
CONFLICTS of interest are natural and expected in Hawaii's Legislature, where part-time lawmakers are obligated to make decisions that affect the companies they work for during the remainder of the year. Conflicts become more serious when legislators accept company positions devoted to influencing government decisions.
State Sen. David Ige, a Democrat who represents Pearl City, has accepted such a position.
Ige is an electrical engineer by training and, until recently, by profession. He held such a position at GTE Hawaiian Tel (now Verizon), when he was appointed in 1985 by then-Gov. John Waihee to fill a vacant seat in the state House of Representatives.
Eventually, Ige was promoted to the job of Hawaiian Tel's network design senior administrator. When the position of government affairs director became open, Ige applied. He was appointed to the post at the beginning of this year. In plain English, that means Ige's new job is chief lobbyist for the phone company, one of the most regulated companies in Hawaii.
Recognizing the anachronism of a legislator who is also a lobbyist, Ige has gone to great pains to gain acceptance of his dual role. He said that he will lobby only federal and county officials, not state officials or legislators, leaving that responsibility to Hawaiian Tel's vice president for external affairs.
Ige has registered with the city as a lobbyist but not with the state Ethics Commission. And, as co-chairman of the Senate Consumer Protection Committee, Ige has promised to allow co-chairman Wayne Metcalf to assume responsibility for matters relating to the Public Utilities Commission, which regulates Hawaiian Tel. Ige pledges not to vote on matters that present a conflict.
However, all the maneuvering in the world by Ige to avoid the appearance of impropriety will not erase the impression that he was assigned to his present job at the phone company because of his position as a state senator. The interweaving of city, state and federal functions makes the confined activities that Ige prescribes for himself impossible to perform.
Senator Ige's conflict is inescapable and unacceptable. His district would be better served by an engineer rather than a lobbyist.
* * *
Reported by Star-Bulletin staff & wire:
April 29, 2001
NEW JOBS
>> Michael Loo has been named controller for the Kamehameha Schools. He will oversee accounting, purchasing, financial and investment reporting and systems functions. Loo was previously controller and treasurer of Hawaiian Airlines.
>> David Ige has been named vice president of engineering for NetEnterprise. Ige comes to NetEnterprise from Pihana Pacific, where he was a project manager. Ige is a state Senator.
>> Alison Mortlock has been named branch manager for the captive insurance division of Marsh Hawaii. Mortlock, who also serves as vice president, will be responsible for tracking the captive insurance industry and for creating new programs for clients. Mortlock joins Marsh Hawaii from the company's Bermuda office.
David Murdock - From Honolulu Star-Bulletin, Letters to the Editor
Dec 7, 2000:
Hawaiians must unite against David Murdock
As a member of a kamaaina family with a history of more than 125 years in the islands, I am appalled at the self-annointed pomposity and outright greed displayed by David Murdock.
He describes his plan to rape Lanai as a desire to "improve things" and to make it "the most beautiful place in the world." What gall! Does Murdock truly think he can improve on what God has created? I hope Pele activates every "dormant" volcano, beginning with Diamond Head.
Murdock's bottom-line is greed at the destruction of an island, with high-rises erected to the glory of this vain demi-god.
There will be luxury homes plopped onto the fertile soil of once productive and beautiful pineapple fields, and needless golf courses for the rich and aimless.
I call for every Hawaiian who wants to stop any further destruction of the natural beauty of the islands to unite and write congressmen, senators, the secretary of the Interior and President Clinton to confiscate Lanai and protect it from the likes of Murdock.
– Tim Dahlberg, Phoenix, Ariz.
* * *
From Den of Thieves, by Pulitzer Prize Winner, James B. Stewart:
Above the Law . . . Then Robert Freeman crossed the line of inside information. He explained that a close friend of his, a sometime corporate raider named David Murdock, was being lined up by Goldman Sachs as a white knight for Continental Group. Freeman spelled out details of the Murdock plan, and said he was advising Murdock.
Now Martin Siegel was getting inside information from both the Continental side, to which Freeman was privy at Goldman, and the Murdock side. Siegel called Wigton and Tabor and urged them to buy more Continental stock. . . .
~ ~ ~
Thus, in ways large and small, legal and illegal, the ordinary discipline of a free market of arm’s-length buyers and sellers was undermined. The high-yield market’s growth was limited only by Milken’s ability to generate product – not by market discipline or independent decision-making on the part of buyers. In 1976, before Milken moved to Beverly Hills, junk-bond issues had totaled $15 billion. Now, in 1986, it was $125 billion....
That year’s guest list was practically a who’s-who of self-made multimillionaires of the 80s:
Merv Adelson, Norman Alexander, Henry Kravis, George Roberts, Boone Pickens, John Kluge, Fred Carr, Marvin Davis, Barry Diller, William Farley, Harold Geneen, Rupert Murdoch, Steve Ross, Ron Perelman, Peter Grace, Sam Heyman, Carl Icahn, Ralph Ingersoll, Irwin Jacobs, William McGowan, David Mahoney, Martin Davis, John Malone, Peter Ueberroth, David Murdock, Jay and Robert Pritzker, Samuel and Mark Belzberg, Carl Lindner, Nelson Peltz, Saul Steinberg, Craig McCaw, Frank Lorenzo, Peter May, Steve Wynn, James Wolfensohn, Oscar Wyatt, Gerald Tsai, Roger Stone, Harold Simmons, Sir James Goldsmith, Mel Simon, Henry Gluck, Ray Irani, Peter Magowan, Alan Bond, Ted Turner, Robert Maxwell, Kirk Kerkorian. . . .
Mingling with them were key Drexel corporate finance and bond salesmen, such as Siegel, Ackerman, and Dahl. . . .
Boesky arrived, accompanied by two bodyguards. Siegel hadn’t seen Boesky since March 1985, more than a year ago. He noticed Boesky was carrying his small purse, and then he noticed how tired and drawn Boesky seemed....
Boesky, his trademark black three-piece suit and watch chain concealed under cap and gown, looked out of sorts as he waited impatiently in the wings of Berkeley’s Greek theater, the outdoor amphitheater that serves as an open-air setting for the University of California’s commencement ceremonies....
After welcoming remarks by the dean, Boesky stepped to the podium, greeted by enthusiastic applause. He quickly demonstrated that he could be an excruciatingly dull speaker. He dwelled on platitudes about America as a land of opportunity and told of his own rise, a highly edited story of how the Detroit-raised son of immigrant parents had conquered Wall Street. Then, when it seemed as though he would lose his audience permanently, he galvanized the crowd with just a few sentences.
“Greed is all right, by the way,” he said, raising his eyes from his text and continuing with what seemed like genuinely extemporaneous remarks.
“I want you to know that I think greed is healthy. You can be greedy and still feel good about yourself.”
The crowd burst into spontaneous applause as students laughed and looked at each other knowingly....
Digital Island - DI Press Release:
June 29, 1999
DIGITAL ISLAND ANNOUNCES INITIAL PUBLIC OFFERING
OF 6,000,000 SHARES OF COMMON STOCK
SAN FRANCISCO - Digital Island, Inc. (Nasdaq NMS: ISLD) announced today that it commenced its initial public offering of 6,000,000 shares of its common stock at a price of $10.00 per share. All 6,000,000 shares are being offered by the company.
The common stock will trade on the Nasdaq National Market under the symbol “ISLD.”
Bear, Stearns & Co., Inc., Lehman Brothers Inc. and Thomas Weisel Partners LLC acted as the representatives of the several underwriters of the offering. The underwriters have been granted an option to purchase up to an additional 900,000 shares of common stock solely to cover over-allotments, if any.
* * *
September 4, 2001
Stull, Stull & Brody Brings Class Actions
Targeting IPO Underwriters
NEW YORK, NY--(INTERNET WIRE)--Sep 04, 2001-- Stull, Stull & Brody announces that allegations in cases filed by it are supported by recent articles that have appeared in The New York Times and The Wall Street Journal about investigations by the United States Justice Department and the Securities Exchange Commission into the manipulation of IPOs.
Among the underwriters named as defendants are: Credit Suisse First Boston Corp., The Goldman Sachs Group, Inc., Lehman Brothers, Inc., Merrill Lynch, Pierce, Fenner & Smith, Inc., Morgan Stanley Dean Witter & Co., BancBoston Robertson, Stephens, Inc., and Salomon Smith Barney, Inc.
The lawsuits allege that defendants violated the federal securities laws by issuing and selling common stock pursuant to the IPOs without disclosing to investors that some of the underwriters in the offering, including the lead underwriters, had solicited and received excessive and undisclosed commissions from certain investors.
Specifically, the complaints allege that in exchange for the excessive commissions, defendants allocated shares to customers at the IPO price. To receive the allocations (i.e., the ability to purchase shares) at the IPO price, the underwriters' brokerage customers had to agree to purchase additional shares in the aftermarket at progressively higher prices.
The requirement that customers make additional purchases at progressively higher prices as the price of IPO stock rocketed upward (a practice known on Wall Street as "laddering") was intended to (and did) drive the share price up to artificially high levels.
This artificial price inflation enabled both the underwriters and their customers to reap enormous profits by buying stock at the IPO price and then selling it later for a profit at inflated aftermarket prices.
Among the stocks alleged to have been manipulated were the shares of the following:
Eloquent, Inc. (NASDAQ: ELOQ) for the class period between February 17, 2000 and December 6, 2000, inclusive;
Digital Island Corporation (NASDAQ: ISLD) for the class period between June 29, 1999 and December 6, 2000, inclusive;
Viant Corporation (NASDAQ: VIAN) for the class period between June 17, 1999 and July 13, 2001, inclusive; and
Niku Corporation (NASDAQ: NIKU) for the class period between February 28, 2000 and December 6, 2000, inclusive....
Don Ho - The “Tiny Bubbles” guy.
From Land and Power in Hawaii, by George Cooper and Gavan Daws: Organized Crime . . .
During Wilfred “Nappy” Pulawa’s tax trials there was testimony that some noted local entertainers were friends of Pulawa’s and others implicated in organized crime. Roy Ryder, for example, testified that on at least one occasion a syndicate meeting was held in the Waikiki apartment of Donald T. L. Ho – entertainer Don Ho.
Ho told reporters, though, that he had “nothing to do with the underworld.” He said the association went no further than the fact that the reputed syndicate leaders “are friends of mine from before,” and that therefore his “doors are always open” to them.
However, the man who at the time was vice-president of Ho’s theatrical productions company, Ho-Brown Productions Inc., was reputed to have had long-standing ties to mainland organized crime:
Marcus Lipsky was born in Kiev, Russia, in 1905 and raised in Chicago. While he was an officer in Ho’s firm he lived in Beverly Hills, California. According to US Senate testimony in 1958, Lipsky had been an associate of Al Capone’s in Chicago in the 1930s....
Lipsky was also said to have associated from the 1930s on with known Cosa Nostra members in various businesses that dealt in dairy products. From 1947 to 1969 he was board chairman and then president of Reddi-Wip Inc. One of the company’s employees for at least part of that time was reputed Los Angeles mob lieutenant Angelo Polizzi....
In 1970 Lipsky appeared in publicly filed business records in Hawaii as an officer of Donho Inc., which in 1971 changed its name to Ho-Brown Productions. Lipsky remained an officer through 1975.
Donho Inc. took over the lease of the Forbidden City (a Honolulu strip-club) in 1967. Whether the company had any interest in the property at the time of the Pulawa/Pacific Monarch approach there, or at the time Lipsky became an officer of Donho, is not shown on the public record.
Reportedly it was Larry Mehau who ended Lipsky’s participation in Ho’s company. A Los Angeles Times reporter ... wrote in 1979 that “Mehau helped extricate Ho from ‘financial problems’ with Lipsky and a Los Angeles attorney, and that Lipsky and Ho no longer have any business relationship.”
He also wrote that Ho said that about this time, Mehau was becoming a business advisor to him:
“He helps me in making deals. He’s like a big brother to me.”
A company was incorporated in 1976 as a successor to Ho-Brown Productions. Lipsky was no longer listed as an officer. Mehau was, as a vice-president....
See also: Larry Mehau
Donna Tanoue - Appointed by President Clinton to head the Federal Deposit Insurance Corp (FDIC), which oversees the federal banking agency that monitors nearly 5,700 banks and insures $3 trillion in deposits. During her term from May 1998 to July 2001, she oversaw the transfer of Sukamto Sia’s insolvent Bank of Honolulu to Bank of the Orient.
November 7, 1997
Press Release
PRESIDENT CLINTON NOMINATES DONNA TANOUE AS CHAIR OF FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. -- United States Senator Daniel K. Inouye is pleased that President Clinton has announced his intention to nominate Donna A. Tanoue as the Chairperson of the Federal Deposit Insurance Corporation (FDIC).
"I applaud and commend President Clinton on his nomination of Ms. Tanoue as the next Chair of the FDIC. I am most confident that Ms. Tanoue will provide excellent leadership, business and legal expertise to the FDIC. She will serve the people of this nation with integrity, diligence and distinction. This is indeed a proud day for Hawaii," said Senator Inouye.
The FDIC is an independent agency which insures deposits in federally insured banks and thrift institutions, and resolves and liquidates failed banking institutions.
Ms. Tanoue is currently a partner with the law firm of Goodsill Anderson Quinn & Stifel, and over the last ten years, she has concentrated her law practice in the area of banking with an emphasis on bank regulatory matters. From 1983 to 1987, Ms. Tanoue was the Commissioner of Financial Institutions for the State of Hawaii. She was the chief regulator of State-chartered financial institutions during one of the most difficult periods in the history of the State's financial services industry....
She is married to Kirk W. Caldwell, a real estate attorney with the law firm of Ashford & Wriston....
~ ~ ~
From The Honolulu Advertiser, 10/16/01:
Ex-FDIC Chief Joins Bankoh Trustees
Donna Tanoue, former chairwoman of the Federal Deposit Insurance Corp., has been elected to the Bank of Hawaii board of directors.
Tanoue is working as a financial services consultant. She was appointed by President Clinton to head the FDIC from May 1998 to July 2001, overseeing the federal banking agency that monitors nearly 5,700 banks and insures $3 trillion in deposits. . . .
It was under Tanoue’s leadership at the FDIC that the Bank of Hawaii signed a Memorandum of Understanding with banking regulators that increased federal oversight of the bank’s operations because of asset quality problems.
Tanoue said federal rules prohibit her from representing the bank before the agency she once headed.
“Now that I have left the agency, I operate under certain constraints. I am going to be very mindful of the ethical limitations which govern post-employment after you have left the FDIC,” Tanoue said yesterday.
During Tanoue’s tenure at the FDIC, she also instituted efforts to reduce the agency’s work force and budget, as well as create a diversity program within the FDIC.
During her tenure the agency’s staffing has declined 16.6 percent, to 6,500, and its budget is 6 percent smaller this year than it was last year.
Before joining the FDIC, Tanoue was a partner in the Hawaii law firm Goodsill Anderson Quinn & Stifel, where she specialized in banking, real estate finance and governmental affairs.
President Bush nominated Texas bank executive Donald E. Powell to succeed Tanoue....
See also: Mitsui Trust
* * *
March 18, 2002
Tanoue joins Bankoh
By Steve Jefferson, Pacific Business News
Bank of Hawaii announced Monday that Walter Laskey, vice chairman of financial services, will retire on March 31 and will be replaced by Donna Tanoue, who will oversee the financial services group as vice chairwoman, effective April 8.
Tanoue will be in charge of the bank's trust, private-client asset management and brokerage businesses. In addition, she will become a member of the bank's 12-member managing committee, and will continue to serve on Bankoh's board of directors, which she won election to in October.
Tanoue is the immediate-past chairwoman of the Federal Deposit Insurance Corp. As chairwoman she was responsible for the agency that insures $3 trillion in bank and savings and loan deposits of more than 5,770 banks.
Appointed by President Clinton, she served from May 1998 to July....
She also was the former commissioner of financial institutions for the state of Hawaii....
See also: Bank of Hawaii; Bank of Honolulu; Dan Inouye; Gil Tam; Mitsui Trust
For more, GO TO > > > Donna Tanoue’s Bank of Hawaii Compensation; Sukamto Sia: The Indonesian Connection; Woo vs. Harmon: Witness Donna Tanoue
Edwin Pauley - Wealthy oil man who purchased Coconut Island in Hawaii. Pauley died in 1981, but his tax-exempt foundation lives on.
See also: Coconut Island
For more on the Sultan of Brunei, the CIA, and Ronald Rewald, GO TO > > > Flying High in Hawaii
Gary Rodriques - Director of Hawaii’s United Public Workers union.
November 30, 1998
PGMA’s Wong accused of siphoning millions
An investigator says an investment network
stretched to the Caymans
By Ian Lind, Honolulu Star-Bulletin
Pacific Group Medical Association founder Peter P. Wong allegedly constructed an intricate network that enable insiders to siphon off millions of dollars from the failed health insurer, according to financial investigator Thomas E. Hayes.
The network had more than 60 separate bank, brokerage, and investment accounts stretching from Kakaako to the Cayman Islands, said Hayes, a special assistant to state Insurance Commissioner Rey Graulty....
Despite the fraud allegations repeatedly raised by Graulty and Hayes in court proceedings, the state has not taken action directly against Wong or any other individuals who may have been responsible for the insurer’s collapse.
PGMA was declared insolvent and seized by the state regulators in March 1997, leaving its members and medical providers with more than $18 million in unpaid bills.
The company provided health insurance coverage for 28,000 people before its collapse, with nearly half drawn from the memberships of the United Public Workers and Hawaii Government Employees Association, the state’s two largest public employee unions....
Graulty has said he has at least temporarily dropped his probe of payments made to Four Winds RSK, a Kauai company headed by Robin Rodrigues, daughter of UPW State Director Gary Rodrigues. The firm provided unspecified services related to PGMA’s coverage of UPW members....
“We have not determined whether the payments were appropriate or not,” Graulty said. “We have our suspicions, but suspicions are not something you can take to a judge.”
Graulty said his efforts are focused on areas that promise a significant return, and that the payments to Four Winds are not a priority.
“It might be major to you, but to us, in the scheme of things, it is not as significant. We’re after the $2 million, not the amount his daughter was paid for a management contract,” Graulty said....
* * *
March 8, 2001
Indictment: Rodrigues Skimmed $200,000
The UPW director is charged with
fraud, embezzlement and money laundering
By Ian Lind, Honolulu Star-Bulletin
United Public Workers Director Gary Rodrigues skimmed more than $200,000 from two union health benefit plans by arranging secret payments to companies owned by his daughter, Robin Haunani Rodrigues Sabatini, according to a 43-count indictment handed down by a federal grand jury in Honolulu.
The payments were made at Rodrigues’ direction by two insurers, Hawaii Dental Service and Pacific Group Medical Association, the indictment alleges.
Rodrigues and Sabatini face multiple counts of mail fraud, defrauding a health care benefit program, embezzlement, money laundering and conspiracy to commit money laundering....
Doron Weinberg, a San Francisco attorney representing Rodrigues in the criminal case, said last night that it is “a little premature” to comment on the possibility he will step down from his union post. . . .
Weinberg said he was retained by Rodrigues in late 1998 after a series of Star-Bulletin stories on alleged misuse of union resources by the UPW leader.
Honolulu attorney Robert F. Miller, who has represented the UPW in this matter, declined comment pending a meeting with the unions’ executive board.
[A Catbird Note: Coincidently, Robert F. Miller also represented Marsh & McLennan in the RICO lawsuit, Harmon vs. Marsh & McLennan, et al.]
The indictment alleges that UPW members unknowingly paid inflated fees for health care benefits under contracts negotiated by Rodrigues, who then directed the insurers to use the excess funds for payments to Sabatini’s companies.
Although described as consulting fees, Sabatini did little or no work, according to the indictment....
The indictment lists 14 payments totaling more than $150,000 to Sabatini’s companies between March 1996 and December 1998 involving funds originating with the UPW-HDS contract.
Sabatini also received more than $147,000 in a series of payments from PGMA and a sister company, Pacific Equity Growth and Management during 1996.
Sabatini later distributed funds to Rodrigues and other family members, the indictment alleges, including $14,213 for purchase of a 1997 Ford Ranger truck registered in Rodrigues’ name.
The payments to Sabatini began in early 1996 and continued through December 1998 but were never disclosed to the union’s executive board or membership, according to the indictment.
U.S. Attorney Steven S. Alm said union members were defrauded of money paid for health benefits which instead went to benefit Rodrigues and his family.
“UPW members were also defrauded of their right to the honest services of their union director,” Alm said....
The maximum penalty for mail-fraud and embezzlement is five years of imprisonment and a $250,000 fine for each count. Defrauding a health benefit program has a maximum of 10 years in prison and a $250,000 fine. The two money-laundering conspiracy charges and related charges each carry maximum penalties of 20 years in prison and a fine of up to $500,000....
HDS premiums inflated?
The indictment is the first to result from a continuing 3-year investigation conducted by the Office of the Inspector General of the U.S. Department of Labor, the Criminal Investigation Division of the Internal Review Service, the FBI, the U.S. attorney’s office and the Honolulu Police Dept.
According to the indictment, Rodrigues’ theft of union funds began in June 1992 when he negotiated a contract with HDS to provide dental benefits for union members and their families.
Rodrigues also negotiated an addendum to the contract calling for a consulting fee to be paid to a designated consultant, with the cost of the consulting fee added to the premium charged to the UPW and its members.
The HDS contract was disclosed to the UPW executive board, but Rodrigues “did not disclose the fact that the premiums charged by HDS were inflated to include the consulting fee,” the indictment alleges.
[Another Catbird Note: Does this scheme sound familiar to you who have read the RICO lawsuit Harmon vs. Marsh & McLennan, et al.?]
The consulting fee was paid to an unidentified individual to pay off a personal loan made earlier to Rodrigues, according to the indictment....
* * *
December 20, 2001
Isle UPW director faces more charges
His daughter also is charged with
money laundering and fraud
By Debra Barayuga, Star-Bulletin
The state director of the United Public Workers, who faces trial in January on charges of diverting $200,000 from union health plans to companies owned by his daughter, now faces charges he received $117,000 in kickbacks.
A federal grand jury indicted Gary Rodrigues yesterday with soliciting and receiving kickbacks from 1993 to 1998 for selecting the insurance company that would provide policies for the union's life insurance plan.
Acceptance of kickbacks is punishable by three years in prison.
Rodrigues and his lawyer could not be reached for comment.
A federal grand jury initially charged Rodrigues in March with defrauding UPW members by negotiating contracts in which members paid inflated fees for dental and health care benefits to Hawaii Dental Service and Pacific Group Medical Association.
Part of the member fees included a consulting fee that was paid to companies owned by his daughter, Robin Haunani Rodrigues Sabatini, when she in fact did not do any consulting work, the indictment alleged.
The payments were never disclosed to the membership or the executive board, the indictment said.
Sabatini was charged along with Rodrigues for receiving payments between March 1996 to December 1998 and laundering the money.
Under the new indictment, both face 59 additional counts of mail fraud, embezzlement and money laundering involving fees paid to Sabatini during 1999 and 2000.
Payments were made to one of her companies, Four Winds RSK Inc., before it even existed, the indictment said.
After the Honolulu Star-Bulletin published a story in January 1998 that PGMA had paid consultant fees to Sabatini's company, she allegedly transferred all its assets to a company she incorporated under her married name called Alulii Inc.
HDS also paid consulting fees to a now-deceased individual to whom Rodrigues owed money.
(Catbird: Still unidentified??? My Catbird curiosity is bursting!)
Rodrigues and Sabatini pleaded not guilty to the first indictment. Their trial is scheduled to begin Jan. 23, 2002.
* * *
November 20, 2002
RODRIGUES GUILTY
The powerful leader of the UPW is convicted of
defrauding his union in several ways
By Debra Barayuga, Honolulu Star-Bulletin
The federal jury that convicted Gary Rodrigues of 101 federal charges of mail fraud, money laundering and embezzlement yesterday will reconvene Wednesday to decide whether the powerful union leader will have to forfeit $308,080 in connection with his crimes.
U.S. District Judge Samuel King ordered the jury this morning to return Wednesday to decide on the forfeiture. The five-man, seven-woman jury found Rodrigues, state director for United Public Workers, guilty yesterday on the charges stemming from union dental and medical contracts.
His daughter Robin Haunani Rodrigues Sabatini, 38, an accountant, also was found guilty, of 95 counts, including mail fraud and money laundering.
Rodrigues and Sabatini face maximum penalties of five years imprisonment for each of the mail-fraud charges and as much as 20 years for each of the money-laundering counts....
Referring to news reports of the pair's behavior after the guilty verdicts, King handed out a stern warning this morning.
As Rodrigues left the courtroom yesterday, he directed his young granddaughter's attention to the government prosecutors, saying "remember their faces, remember their faces."
King characterized it as threatening behavior and said it would result in immediate arrest if it occurred in his courtroom during a court session.
King referred to a "fracas" in which Rodrigues grabbed a television reporter's microphone and threw it to the ground....
Doron Weinberg, Rodrigues' San Francisco-based attorney, said news report of the incidents were exaggerated.
Weinberg said yesterday that they will appeal....
Richard Hoke, Sabatini's attorney, declined comment....
The government alleged that because of his power and influence as a union leader, Rodrigues negotiated consulting fees into the union's dental and medical contracts without the knowledge of the executive board, then caused the fees to be sent to two companies owned by Sabatini.
Witnesses testified that $14,000 in consulting fees also went to Allan Loughrin, the stepfather of Rodrigues' former longtime girlfriend and secretary, as payment for a loan.
The government also showed that payments made to Sabatini's business accounts later went to her sister Shelly, their grandmother Gertrude Rodrigues, and for the purchase of a truck for Gary Rodrigues.
Rodrigues was also convicted of accepting kickbacks in connection with a welfare-benefit plan that was covered under the Employee Retirement Income Security Act. The federal act prohibits the acceptance or solicitation of gifts or gratuities.
Herbert Nishida, an agent for Transamerica, which provided life insurance to UPW members, testified that he had given Rodrigues cash payments averaging $25,000 a year over a five-year period in appreciation for UPW's business and the help Rodrigues had given him over the years.
Robert Miller, UPW attorney, declined comment except to say that everything at the 13,000-member union "remains status quo."
Breakdown of charges
Here's a breakdown of the charges against UPW State Director Gary Rodrigues and his daughter Robin Haunani Rodrigues Sabatini. The jury brought guilty verdicts yesterday for all charges except Count 101.
Counts 1-50. Rodrigues/Sabatini: Mail fraud.
Counts 51-55. Rodrigues only: Embezzlement of union funds.
Count 56. Rodrigues/Sabatini: Defrauding a health care benefit program.
Count 57: Rodrigues/Sabatini: Money-laundering conspiracy.
Counts 58-62. Rodrigues/Sabatini: Money laundering.
Counts 63-94. Rodrigues/Sabatini: Money laundering.
Count 95. Rodrigues/Sabatini: Money laundering conspiracy.
Counts 96-100. Rodrigues/Sabatini: Money laundering.
Count 102. Rodrigues only: Accepting kickbacks in connection with an employee welfare-benefit plan.
Count 101. Rodrigues/Sabatini: Forfeiture of $308,080. The jury will continue deliberations on this count today.
$ $ $
August 4, 2003
Faye Kurren named president
of Hawaii Dental Service
From Pacific Business News
Faye Kurren, former president of Tesoro Hawaii Corp., will be the new president and CEO of Hawaii Dental Service beginning Sept. 3, the company announced.
Kurren replaces Jonathan Won, who has been HDS president and CEO since 2000....
[Catbird comment: What the Pacific Business News article fails to mention is that Faye Kurren is the wife of Judge Barry Kurren, who just happens to be the magistrate judge in the RICO lawsuit of Bobby N. Harmon vs. Federal Insurance Co., P&C Insurance Co., Marsh & McLennan, PricewaterhouseCoopers, et al.]
For more, GO TO > > > Claims By Harmon; Marsh & McLennan: The Marsh Birds; RICO in Paradise; The Nature Conservancy
Gene and Nora Lum - Clinton-Gore foreign-money fundraisers.
From PBS Frontline: . . .
Interview with Donna Wong. Donna Wong is a Kailua, Hawaii, neighborhood board member who happened to be on an organized hike with Gene Lum when a group of horsemen stole nearby rancher Leonard Wong's cattle and slaughtered his prize bull. Wong and others also filed a 1989 Federal Elections Commission complaint alleging illegal foreign contributions to local politicians.
Five years later, FEC investigators found more than 100 violations of federal campaign law.
Q: What are the purposes of neighborhood boards here on the island?
Wong: To look at land issues, development, how things are changing, what is needed in the community, what is going on, what is good and what is bad.
Q: So it tends to look at things such as zoning restrictions . . .
Wong: Absolutely, yes. . . .
Q: Did the sort of cases you were considering remain constant? Or did they vary?
Wong: Well ... not very many big issues came up in our small town of Kailua, except when a golf course was proposed in a very pristine valley . . . We learned that a foreign Japanese entity was looking at purchasing over 1,000 acres and putting in two golf courses. And that was a shock: Where'd the golf course come from? Why a golf course in Kailua, and just basically what is going on? . . .
Q: It's not land that was earmarked for golf course development?
Wong: No, it was agricultural land. And until there was a change in the law in 1986, golf courses had to go through a permitting system. And then the laws was changed and golf courses were automatically permitted on agricultural land, and then we came smack up against that, like what do we do now?
Q: Why was the law changed?
Wong: Well, what we've come to learn now is to smooth the way for this Royal Hawaiian Country Club golf course in Kailua.
Q: So the Royal Hawaiian interests were locally powerful and prominent Hawaiians who were well enough connected to get the law changed?
Wong: Well ... some lived in Hawaii, some acted as consultants, some acted as attorneys for the foreign investment money.
Q: What was at stake?
Wong: What was at stake is there happened to be farmers on this land ... 150 acres for each golf course, and there were two that were being proposed . . . So what happens to these farmers?
Q: And what had the new landowner and the developers proposed be done with these farmers?
Wong: Well, there was a conditional use permit that said the farmers had first right of refusal for relocation. And the neighborhood board and others worked real hard to get that in so that there would be a safety net for the farmers.
Q: So that at least if they're going to be moved, and their land is going to be made into a golf course, they would have someplace else to live and presumably, to farm.
Wong: Right. . . . and so we felt assured that they were sort of taken of ... until someone came up to me personally and said, "Donna, we got an eviction notice. Don't we have any rights?" And so I proceeded to tell them, what about the conditional use permit? Well, neither the landowner nor the state had told them about this permit or about any of their rights. They just went in with this eviction notice and said, "You've got to get out of here."
Q: And were they evicted?
Wong: Thankfully, the community stepped in and raised the issue, and they would have been evicted if lawsuits had not been filed to stay off an eviction. Eventually, after four or five years they were evicted.
Q: So you all were able at least to hold up the eviction, and therefore hold up the development of this golf course for a few years. Is it at this point that Gene and Nora Lum enter the deal as fixers for the people who have tens of millions of dollars at stake in the project?
Wong: They enter at the beginning. . . . There is an Old Government Road that runs through the valley, and Gene was brought in at this time. This is one of my first contacts with him, on a hike that was put together by the director of the state Dept of Land and Natural Resources. It was exchanging this Old Government Road for this insufficient trail, but he was trying to convince everyone that this was a good deal.
Q: And he represents himself how, as being a representative of this development company?
Wong: Oh, he did, yes.. . .
Q: Do you think the Lums were instrumental at all in the political maneuvering that was necessary to changing the law?
Wong: Sure. It was surprising to see Gene representing the developer at the hike, as an attorney, and then to see him show up at the city council working for the city council chair of the planning committee. . . .
Q: Where did the Lums fit into the "grease" game?
Wong: They came right at the beginning of the Japanese money boom. And so that just started a whole snowball of money and all that the money bought, whether it was permits or anything else like that. . . .
Q: . . . What happened to the farmers?
Wong: They were evicted, and it wasn't an easy eviction.
Q: How so?
Wong: They were, well, sort of put on notice that any minute now they're going to come in and they're just going to bulldoze down their homes. They sort of had a 24-hour watch to start up a phone tree to call and say, okay, they're coming. And then one day they just did.
You would have though it was a war zone. There were marshals, there were sheriffs, there were police. Helicopters. You know, there were elderly people, working class people, kids. It was terrible. They just went in and packed up all their belongings in moving trucks, held everybody else at bay, and then went in and just bulldozed their houses.
Q: Were they armed?
Wong: Oh yeah, lots of guns.
Q: So you have this small armed posse coming in to forcefully remove people from the places they've lived and made their living.
Wong: Yeah, for no reason. And it's a foreign entity that's been aided by our local Hawaiian attorneys, consultants, politicians. These are dispensable people. These are small people. They could go.
Q: So you have these middle men, these enablers, these fixers . . . people such as the Lums, who helped to grease the way, both politically and otherwise. Are they ever held accountable?
Wong: We tried. We tried going after the mayor, we tried the governor, we tried the DNLR ... and we were ignored. The powers to be to get this golf course through were just way too much for just small people.
Q: And at the end of the day it came down to money.
Wong: Yeah. There was a lot of money to be made. . . .
Q: Is this when the Wong's bull was butchered?
Wong: That was before the eviction, but the Lums were definitely involved. . . . Gene was on the hike that day. I was hiking right behind him . . . Shots were fired, pantiolos were riding on this little trail. I said, "What are these guys doing on this trail? We're hiking." "Oh, they're here to protect you from the cattle."
Q: I assume it's not the usual thing one runs into on a nature hike.
Wong: No, not at all. And to hear gun shots, no. But afterwards, we learned that's when they were stealing the Wongs' cattle and shot the bull.
Q: Were there any environmental issue at stake?
Wong: Oh, there's a lot of environmental issues at stake. This watershed, 11.5 miles, is the main water source for Kawainui Marsh, which is the largest freshwater marsh in this state. The golf course came in and they were allowed to channelize the streams ... so it cut down on this water source to this significant marsh. Bulldozing, of course, caused a lot of runoff, which eventually ends up in this marsh, as do the pesticides and the herbicides and the fertilizers and all the chemicals that are used on a golf course.
Q: And you have no state environmental protection agency?
Wong: Well, we do. We have those departments, and we have very good environmental and land use laws, but just not one ever enforces them . . .
Q: And how did the people who built this golf course fare?
Wong: Well, I don't know how they fared individually, but the golf course went bankrupt. . . .
Q: And what happened to the people who were moved off their land?
Wong: They had to go picket in front of the governor's house to get their belongings out of storage ... and then they just scattered. Some have gone to the Philippines, some have moved to other islands, and they just haven't done well. And they had a very close community. It was a rural community in an urban setting.
Q: It just ceased to exist.
Wong: It was bulldozed out of existence.
Q: And the Lums?
Wong: Oh, thy went on to what they consider was greener pastures when they went to the Big Island with another golf course....
Q: I get the impression that the favored procedure was to channel money from foreign investors through people like the Lums, who would pass it on to local politicians and facilitate whatever needed to be done.
Wong: Absolutely ...
Q: It was money from the foreign nationals going to whom?
Wong: It went to the mayor, to the governor, to senators, representatives....
Q: That Gene and Nora Lum would come to develop a relationship and ultimately a political union, with the head of the Democratic party, and move to Washington, and run in those circles and meet the President of the United States and attend his inaugural and so on. Does that come as a surprise?
Wong: No, it doesn't come as a surprise to me. Nora sought opportunities, and she knew opportunities when she saw them...
For more, GO TO > > > Paradise Paved; The Puna Connection
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From freerepublic:
Lum Pleads Guilty to Tax Fraud
Tulsa, Okla (AP) 8/13/98 - Democratic fund-raiser Gene K.H. Lum changed his plea in a tax fraud case to guilty Thursday as part of an agreement that seeks his cooperation in other investigations.
Lum, who pleaded guilty in 1997 to making illegal donations to Democratic campaigns, admitted he filed tax returns that claimed more than $7.1 million in false deductions for him and his wife.
Lum, 59, faces up to six years in prison and $500,000 in fines at a Nov 23 sentencing....
Under the pleas agreement, the government agreed not to seek indictments against his wife, Nora, or their corporations....
The Lums, who operated a Tulsa-based gas pipeline company at the time of the violations, pleaded guilty last year to a charge of felony conspiracy for laundering $50,000 in illegal donations to 1994 congressional campaigns.
Their daughter, Trisha C. Lum, pleaded guilty to a misdemeanor violation in a separate campaign finance incident.
Gene and Norn Lum each received 10 months in prison and $30,000 fines in that case.
The tax charges stemmed from information uncovered by independent counsel Daniel S. Pearson during his investigation of Commerce Secretary Ronald H. Brown. Pearson closed his inquiry when Brown was killed in an airplane crash. He transferred his findings about other people to the Justice Dept for continued investigation and prosecution.
* * *
Comments in the freerepublic forum: . . . Of some interest to me was the fact that the golf course Michael Brown (son of Ron Brown) was given a membership to (and which Bill Clinton often uses ...) in suburban Virginia was owned by the Bishop Estate of Hawaii. . . . Bishop put close to 100 million into a company called McKenzie Methane Gas a few years before Dynamic. Bishop also bought into a Red Chip bank with Mochtar Riady's brother in law. Bishop hired as its Washington law firm Verner Liipfert whose lobbyist is ex Gov. John Waihee. Waihee appointed 4 of the 5 Bishop Trustees. Waihee attends Clinton coffees. Waihee appointed Sen. Akaka. Verner Liipfert has another big name partner ex Sen. George Mitchell. Mitchell's son in law was president of Lum's company Dynamic Energy. Bishop owns 11% of Goldman Sachs. Sec of Treasury Robert Rubin's blind trust managed by Bishop, etc, etc. (abwehr, 8/13/98)
* * *
From PBS Frontline: Interview with Charles Chidiac - Charles Chidiac is a financier-developer who knew the Lums in Hawaii. He was also involved in Asian Pacific Advisory Council-Vote, a Los Angeles Democratic fund-raising group once headed by Nora Lum. He has a checkered past. He was an unindicted co-conspirator in the BNL financial scandal.
Q: Give me an example of corruption in Hawaii in the 1980s.
Chidiac: Well, if you want to do business in Hawaii, you go and you apply for a zoning. You get a call from an attorney. And he says, "I want to see you." "About what?" "Oh, I want to talk about your application."...
"But I already have an attorney." "It's necessary to see you anyway." So he comes over and he says, "Listen, you applied. This attorney of yours is no good. If you don't hire me, you'll never get your zoning...."
So, that's how they do it. It's called in Hawaii, "law firming," instead of laundering. "Law firming" is laundering money through law firms.
Q: In other words, bribery?
Chidiac: Pure, pure bribery, under the cover of being legal work.
Q: Describe Nora Lum.
Chidiac: Well, she is a Japanese woman ... And she's very smart. ... Her husband is an attorney. ... She knew all the tricks of raising money ...
Q: You had a very close relationship with them for awhile.
Chidiac: . . . I had everything ready and this thing was dragging on and on and on. And I didn't realize that the state of Hawaii, to extort half a million or a million dollars from a developer, would go to the extent of destroying a project that would create 3,000 to 4,000 jobs for the poorest part in the islands, where you have 30% unemployment. The sugar cane industry is collapsing, and they just didn't care. . . . We were planning to build three hotels....
Q: Big money?
Chidiac: The project was going to cost somewhere around $800 million.
Q: Did Nora and Gene have access to Governor John Waihee?
Chidiac: All the time, any time. Any time....
Q: What was her stock in trade?
Chidiac: Power pimping ... and greed. She pays for power; she buys power.
Q: Did she ever have big success in Hawaii?
Chidiac: I think I was her biggest success. . . . She introduced me to late Commerce Secretary Ron H. Brown in Honolulu. ... and she only boasted about her power....
Q: Did she have many businesses?
Chidiac: She had no business. She was just acting as a power peddler. And raised money for different councilmen and politicians. . . .
Q: What motivated them?
Chidiac: They told me that ... their only interest was to make money.
Q: How did the Lums and Ron Brown meet?
Chidiac: I think she met him through John Waihee because ... as the governor, he met Bill Clinton....
Q: Was she talking to big wigs on the phone all the time?
Chidiac: Yeah, -- We had calls from Hillary Clinton. . . . I heard her talking to Ron Brown....
Q: Does it surprise you that a woman who owns a souvenir shop and her part-time lawyer-husband can go in and out of the White House 13 times and accompany the president to Jakarta . . . Does it surprise you that their daughter ends up working for Ron Brown? That Gene almost gets on Amtrak's Board of Directors? That Nora can come and go with Bruce Lindsey, who helps them do an oil deal in Oklahoma?...
Chidiac: Well, I mean, if the President is corrupt, everything's possible....
* * *
The Honolulu Advertiser, 7/7/82, by James Dooley:
Yakuza Ties Cited at Olomana
A Japanese national who quietly purchased the Olomana golf course last year for $2.1 million in cash has been identified by Japanese law-enforcement officials as an associate of the yakuza -- Japanese organized crime. . . .
The subject of the allegation, Ken Mizuno, chairman of the board of Mizuno Kohgyo Co, Ltd, of Japan and a Hawaii subsidiary, Mizuno Kohgyo Hawaii Inc. The Hawaii firm last year purchased all the stock in Olomana Golf Links, Inc from reals estate developer Herbert Horita.
Mizuno also has an interest in a tour company here and has opened a gourmet Japanese restaurant in the Tropicana Hotel-Casino in Las Vegas.
The identification of Mizuno as a yakuza is contained in a report on Mizuno's finances and background compiled by the Clark County sheriff's office in Las Vegas....
County Asst Sheriff Jere Vanek told commissioners last week that the police recommended denial of a license to Misuno on grounds that he is an associate of the yakuza. Vanek said it was believed that the organization was trying to gain a foothold in Las Vegas....
Vanek said Mizuno had used yakuza members to collect golf club membership fees in his $100 million golfing empire in Japan.... Vanek said Mizuno had "an amicable relationship" with Morihiro Okita, the boss of the Towa Yuai Jigyo Kumiai yakuza group....
In an interview last month with The Advertiser, Mizuno's nephew Yukichi Mizuno, who operates Olomana Golf Links, said his uncle has no business ties with the yakuza....
Two investigators from Las Vegas visited Hawaii and Japan early this year as part of an investigation into Ken Mizuno's background begun after he applied for his liquor license in Las Vegas. . . . The investigators were advised by Japanese law-enforcement agencies that Mizuno, also known as Ken Arai, is an associate of Okita.
The Towa Yuai Jigyo Kumiai, headquartered in Tokyo, is dominated by Japan-born gangsters of Korean ancestry, and in recent years has gained business footholds in Korea, Guam, the Philippines, Hawaii and the U.S. mainland, according to federal and local law-enforcement sources and according to the results of an Advertiser investigation. . . .
The Clark County sheriff's office has recommended denial of the liquor license for four reasons, the primary one being Ken Mizuno's alleged yakuza association. Other reasons, contained in confidential report to with The Advertiser gained access, include:
>> . . . Mizuno's involvement in six companies, some of them of "questionable background" . . . In 1981 alone, according to the report, Mizuno and his companies suffered losses totaling a staggering $31 million-- yet during the same period Mizuno brought $3.1 million in cash, traveler's checks and bank transfers into the United States. . . .
Ken Mizuno's principal port of entry into this country has been Honolulu ... and he brought suitcases literally filled with cash through customs here. Mizuno properly declared all the cash....
The Las Vegas report stated a concern that Mizuno might be "laundering" money-- that is, importing illicitly generated cash and investing it in legitimate U.S. business enterprises.
>> . . . Ken Mizuno allegedly falsified a personal history questionnaire in Las Vegas when he stated that he had never been arrested. In fact, he was arrested in 1976 in Tokyo on a gambling charge, although it later was dropped.
Ken Mizuno incorporated Mizuno Kohgyo Hawaii Inc last July 23, capitalizing the firm at $100,000 . . . He is listed as treasurer and chairman of the board. . . . All stock in the company is owned by Mizuno Kohgyo Co. Ltd of Japan.
On the same day that the local company was incorporated, the company purchased all stock in Olomana Golf Links, Inc. from Horita . . . The state owns the land on which the golf course was built and it is under lease to Olomana Golf Links.
Horita, one of the most active and successful real estate developers in the state, told The Advertiser . . . "I don't know anything at all about him (Mizuno), he just wandered into town, somebody brought him in to see me, and he bought the golf course. I haven't seen him since."
Horita acknowledged that Mizuno paid cash....
As for Mizuno's yakuza associations, Horita said: "This is the first I've heard of it."
Mizuno is now the subject of intense scrutiny in Las Vegas by a variety of federal and local law-enforcement agencies, including the metropolitan police, the Nevada Gaming Control Board and the FBI....
Ash Resnick, in charge of international operations for the Aladdin Hotel in Las Vegas ... told The Advertiser earlier this year that Mizuno last year was a $300,000 "player" at the Aladdin's gaming tables until he switched his play to the Tropicana....
See also: Ken Mizuno
* * *
From a Frontline interview: Anthony P. Locricchio is an attorney who represented Hawaiian farmers in a lawsuit against Japanese golf course developers. Locricchio and others also alleged in a 1989 Federal Elections Commission complaint that foreign nations made illegal contributions to local politicians. Five years later, FEC investigators found more than 100 violations of federal election campaign law. . . .
Q: What was the money game here? . . .
Locricchio: The game was possible ... because of the huge imbalance between the yen and the dollar. One of the most beautiful places on earth suddenly became a bargain place, and Hawaii, a very tiny place, vied with California and New York for ... the largest investment of Japanese dollars ... It was for sale, it was cheap, and you found willing collaborators. The takeover of Hawaii economically and the loss of the environmental protections and protections for our people only occurred because lawyers, accountants, and political beings, were ready, willing and able to help sell their birthright.
Q: For a buck.
Locricchio: No, they were very smart. It was for several bucks.
Q: Where would you see Japanese investment?
Locricchio: It started with the tourist industry, with hotels, resorts, golf courses, and then started to move into restaurants, office buildings, really through the entire fabric of the economy. And the usual economic rules were thrown overboard. For example, a hotel might sell to a Japanese interest for $30 million. Two months later, it would sell for $60 million. In four months, it would be $120 million. ... You would have had to ... rented out rooms at $500 a day and 100% occupancy to meet the debt service. . . . Hawaiians couldn't afford to live in Hawaii. We had, during this period of time ... a huge outflow of people at the bottom of the economic sector, especially native Hawaiians....
Q: Where does golf course development fit in this? ... Did Hawaii have any regulations in place governing land acquisition for golf development?
Locricchio: It should have been very difficult, because Hawaii is the only state in the country which has a constitutional protection for agricultural land. You were required, before you changed the use of agricultural land, to have a two-thirds vote to approve those kinds of changes by constitutional amendment. . . . For the Japanese, not only was the land a great bargain, but buying the politicians was a great bargain. They used to joke about how little money ... it took to buy influence. They were able to change the law and to get the Constitution ignored. ...The people who were involved in agricultural subsistence farming then became the targets, and the Japanese land owners were getting them thrown out and buying up the land, so they had no place to farm. In this very short period of time, within five years, you went from a predominantly agricultural-supported economy to literally a disappearance of agricultural land for local farmers.
Q: ... So what your need to do along the way, you're telling me, is first gain influence with the politicians. That turns out to be easy enough. Who else do you need?
Locricchio: You need to hit all the levels of politics. ... getting the state law changed was not enough. You then had to go to the local mayor. And he told you to hire his attorney and to give contributions to his campaign. And again, that was fairly easy...
Q: And when push came to shove, how would it play out? How would people be literally removed from the land they'd be farming?
Locricchio: We had situations where the police were actually used to help threaten and terrorize the farmers on these lands. They would come in with false eviction notices, with a policeman in uniform, and these farmers were uneducated, didn't know they were false evictions. .... The left because they were told, "You'd better get out, or we'll carry you out."
Q: You mean the police were privately employed for these purposes?
Locricchio: We have a unique situation here, where police are permitted to work on their off hours for private land owners and private businesses. They're permitted to wear their uniforms, to carry their guns, and to have many of the police powers they have as public officers. ... Or, it they didn't use the police posse and used somebody else, you'd go to make a criminal complaint, and absolutely nothing would happen. Whether cattle were shot, cattle were stolen or you had eye witnesses, absolutely no police action would be taken....
Even though we lived here and experienced it, we got numbed by our Americanism. We kept thinking, "This will work out. We will be able to stop this." Because Americans are ultimately optimistic . . . Even though we're angry at our government, we still believe deep down the American democratic system will prevail. And that was our stupidity.
Q: One of the things you observed during this Japanese economic invasion of Hawaii was the willing participation of all levels of Hawaiian residents (as opposed to native Hawaiians.) This was presumable motivated by what? . . .
Locricchio: Money. Hawaiian professionals ... had never seen anything like the Japanese invasion. Law firms overnight moved into marble-encrusted quarters because suddenly thier Japanese clients were paying huge legal bills. Middle men who had operated in political arenas and gotten mediocre money for it suddenly saw opportunities to make tens of thousands, hundreds of thousands of dollars . . .
Q: So Nora and Gene Lum present themselves to these money people as fixers. They can work one end of the political machine to the other and help get things done, help clear the way. Can you give us an example?
Locricchio: There are three key examples of when the Lums really used their fixer skills: One that affects a project outside of Hawaii, and two here in Hawaii... Mount Olomana is one of Hawaii's scenic treasures. It's Japanese-owned, and we believe ... Nora Lum ... was partially responsible for bringing the Japanese land buyer to this valley and buying 1,090 acres of land here in Hawaii for only $7 million. In Hawaii, that's an incredible bargain... After they were able to buy the state legislative vote change, that land became worth $40-$50 million overnight... Finally, there is a golf course. It was delayed for several years while we fought against it. . . . They actually built a golf course on the side of a mountain. It is a ridiculous location for a golf course, but in Japan they were selling memberships at $250,000 per membership. That did not even give the owners of the membership a piece of the land. They just got a membership, and then they would have fees over and above that...
Q: Who were the people with the money who connected with the Lums?
Locricchio: That spectrum of people was everyone from legitimate Japanese established businesses and the largest corporations in Japan to the criminal yakuza, which is the Japanese Mafia....
Q: What is the interest of the yakuza in Hawaiian golf development?
Locricchio: The incredible amounts of money ... there were reservations for thousands of memberships at $250,000 each, which was hundreds of millions of dollars before the golf course would even be built....
Q: What became of the Wongs and the other ranchers who were dislocated by the developers?
Locricchio: ... The houses of the "bad" farmers, who refused to buckle under, were bulldozed. The Wongs' children were shot at, the 93-year-old Filipino guy who had lived there for years and years had a SWAT team of 10 police officers pull him out of his house. He ended up in the emergency room and in the hospital for months and months. He had to have a tracheotomy, he was so petrified. 54 state and local police officers, sheriffs, helicopters, submachine guns with SWAT teams, moved little old ladies and elderly people and children, ripped them out of their houses with full governmental support ... and the area was sealed off so the press couldn't get in and take pictures. They had massive bulldozers....
My associate learned that two of the children were so panicked by what was going on ... they had hidden under their house, and the mother, who was off the land, was not allowed to go back on and find her children. She went ballistic, because she knew they were going to bulldoze the house. She couldn't get the police to go in and get the kids out of there. ... Tom Levine, an attorney, went around the police lines, ran in to try to get the kids out of there. He was arrested. He was booked. He was tried for criminal trespass.
Q: Arrested by this hired police force?
Locricchio: By the police, who on their off hours worked for the golf course owners.
Q: Were the children there?
Locricchio: The children turned out to be under the house. Tom finally convinced the guys who were dragging him off for booking to please go in and look under the house. ... sure enough, minutes before the house was bulldozed down, these frightened to death children were pulled out.
Q: What is there now?
Locricchio: It sits there, bulldozed today, and there was no need to do it. . . . And you'd see this opulent golf course now, which has lost lots and lots of money.
Q: Are Nora and Gene Lum typical or atypical . . . Are they low-level fixers who just got lucky?
Locricchio: I guess I have to say that their greed is exceptional . . .
Q: Should Ron Brown have known better than to tie in with these people, or did he see what he wanted to see?
Locricchio: . . . Putting on the shoes of the guy who's got major funding responsibility is a very difficult situation. I think you become blinded by the need . . . And whoever takes his place ... whether it's Democrat or Republican, is going to find the same pressures, and need to find the Genes and Noras.
This is our electoral process. Our whole system is so stupid that we now have a population that expects its politicians to be corrupt because that's the only way they can get elected. And something is very wrong....
For more, GO TO > > > Paradise Paved
* * *
The Reagan Information Interchange , 10/17/97, by Mike Reagan:
Reno Blocks Couple from Testifying
about Foreign Money to Clinton
I was going through one of my papers today and saw an article. It was the tiniest of articles....
It says, "The Justice Department opposes giving convicted Democratic Fund Raisers Nora and Gene Lum immunity from further prosecution in exchange for their congressional testimony about a scheme to funnel foreign money to Democrats in 1992. The Dept said immunity would cause irreparable harm to its investigation."
Well, I saw that and I thought I better go back because I've got a couple of stories I just haven't had time to get to. Because, there is probably a very good reason these people are not able to get immunity. So, let me share with you a story by Bob Novak. . . . What he said in his article ... is: "Two former high level Democratic Fund Raisers are ready to swear that the foreign leader ... [to whom] Bill Clinton's 1992 Campaign for President returned $50,000 was South Korea's President Kim Young-sam.
"The alleged $50,000 payment is the most shocking of many eyebrow lifters in the offing that is proposing to sing like canaries to win immunity from further prosecution for Democrat insiders Gene and Nora Lum...."
"The Lums say DNC Ron Brown who met the Hawaii-based Lums in 1991 asked them at the 1992 National Convention to go to California to help promote the Democratic party to Asian Americans there. They created a PAC. The Lums would testify to this . Working with the DNC in fund-raising they would testify they used conduit contributions - money disguised from its real illegal donors with the knowledge of the DNC personnel."
They also offer to tell about John Huang's links with the Indonesian billionaire Moshtar Rhiady and his son James, and Clinton friend and fund-raiser Charlie Trie's influence with the Chinese government.
Now that you have all that information ... who is it that is stepping in the middle and not allowing these people to have immunity to testify? And if you guessed Justice Dept Janet Reno you are 100% on target!
Janet Reno is a joke! She is a joke to the office.
But the problem is, no one, except the Clintons, are laughing....
* * *
GreaterThings by Greg Wongham: FBI Investigates Hawaii Democratic Party. According to news reports, Nora and Eugene Lum were dispatched by the Hawaii Democratic Party to meet with Bill Clinton. The purpose of the visit was to seek the Presidential candidate’s help in pulling the plug on an FBI investigation of Hawaii’s (D) Governor John Waihee.
The Lums admitted to FBI investigators looking into allegations that arose during the “Chinagate” investigation that after Clinton was elected, Webster Hubbell (3rd man in the Justice Dept during the early days of the Clinton administration) pulled the plug.
* * *
The N.Y. Times, 5/24/98 (AP): FBI Documents Suggest Help for Clinton Donors in '92 Inquiry . . . The FBI gathered evidence as early as 1992 that a Democratic couple who helped start Asian-American fund-raising efforts for President Clinton were engaged in wrongdoing, Justice Dept documents show.
The fund-raisers, Nora and Gene Lum, were not prosecuted for making illegal donations to Democrats until 1997, well after the controversy over the party's campaign financing efforts broke open.
Now investigators have gathered testimony that accuses the Lums of getting help during the earlier investigation from Ronald H. Brown, who was the chairman of the Democratic Party at the time, and Webster L. Hubbell, a longtime Clinton friend who became an official at the Justice Dept in Clinton's first term, according to documents and interviews.
Brown was killed in a plane crash in Croatia on April 3, 1996.
Among FBI memorandums obtained by The Associated Press, a 1993 document relying on information from a cooperating witness says that "Nora Lum once stated to him that she transported $150,000 in cash in a travel bag to the mainland to be delivered as campaign contributions on the national level."
Two years later, a former business associate of the Lums, Stuart Price, told investigators that Lum "brought the two suitcases of money back to the United States and turned the money over to the DNC," documents say. In 1997, Lum denied that such an incident had occurred....
The advisory council was the start of what would become a much larger Asian-American fund-raising effort for Clinton. It brought the Lums together with John Huang, who later emerged as a central figure in the 1996 fund-raising controversy.
According to documents released recently by Congressional investigators, bank statements and canceled checks showed that the Lums had transferred $159,000 raised by the advisory council, some at an Oct 1992 fund-raiser in Clinton's name, to their own accounts.
The emergence of FBI files on the Lums comes as pressure is mounting on Atty Gen Janet Reno to name an independent counsel to take over the fund-raising investigation.
In a public statement, the Justice Dept said the decision to shut down the inquiry was made by career prosecutors and there was "not a scrap of evidence or inference that Hubbell ever attempted to inquire about or influence any matter concerning the Lums."
Hubbell was the No. 3 official at the Justice Dept in the first 15 months of Clinton's Presidency.
Hubbell was indicted on tax charges this month and remains under investigation by Whitewater prosecutors....
After their 1997 conviction, the Lums admitted to other infractions that the FBI had been investigating in 1992, including bringing in $10,000 in donations to Hawaii's governor from "Japanese clients" and laundering thousands of dollars in contributions to another candidate.
* * *
Free Republic, 10/14/97, by Linda Franklin (AP):
Death of Man Investigated; He Recorded Fund-Raisers
The state medical examiner's office is investigating the death of an Oklahoman who tape-recorded business dealings with a controversial husband-wife team of Democratic fund-raisers.
Ron Miller, 58, of Norman died Sunday at Integris Baptist Medical Center, where he had been taken last week after becoming ill at home Oct 3.
Kevin Rowland, chief investigator for the state medical examiner's office, said the case was turned over to the state because the hospital said the death was not fully explainable....
Miller owned Gage Corp, an energy company that was sold in 1993 to Dynamic Energy Resources, Inc in a transaction studied by federal and state investigators.
Nora Lum, the chief executive of Tulsa-based Dynamic Energy, and her husband, Gene, were sentenced last month to 10 months confinement and $30,000 fines apiece after admitting to using "straw donors" to conceal their $50,000 in illegal contributions.
The money went to the re-election effort of Sen. Edward Kennedy, D-Mass, and the unsuccessful congressional candidacy of W. Stuart Price of Oklahoma in 1994 and 1995.
Miller tape-recovered phone conversations he had in recent years involving his business dealings with the Lums and their associates. More than 150 tapes have been given to the FBI.
J. Dell Gordon, president of Mid-America Lamborghini, said Miller had turned over boxes of material to a congressional government oversight committee. ... Miller and Gordon were partners in Mid-American Lamborghini....
The state Corporation Commission studied an Oklahoma Natural Gas contract that Dynamic received after it bought the assets of Gage and Creek Systems, a Gage subsidiary. Transcripts from a 1995 civil case said a condition of the sale was that Creek Systems settle disputes with ONG....
Gordon said Miller's death was surprising.
"He went from being healthy to dying in a week," Gordon said Monday.
~ ~ ~
On 3/19/98, five months after his mysterious death, Oklahoma's Medical Examiner's Office quietly ruled that Ron Miller died from "natural causes."...
George Arioshi - Former Governor of Hawaii.
July 21, 1997
Ariyoshi writes book on being Hawaii’s chief executive
By Richard Borreca, Star-Bulletin
It took the birth of his grandson, Sky, for former Gov. George Ariyoshi to realize he wanted to write a book.
After serving for 13 years as Hawaii's governor, the first in the nation of Japanese ancestry, Ariyoshi left office in 1986.
In his 208-page book, Ariyoshi, a quiet, reserved gentleman, not given to boasting, recalls working steadily through his last night in office....
The book was produced with the help of Tom Coffman, author of "Catch a Wave," a case study of the 1970 Hawaii governor's race. It was that campaign that raised Ariyoshi from state senator to lieutenant governor and started him on his unprecedented three terms as governor.
Ariyoshi formed a private nonprofit foundation last year with the money left over from his campaign treasury. Although still active in politics as the state Democratic Party national committeeman, Ariyoshi is not interested in running for office again.
Coffman arranged for the University of Hawaii Press to print and distribute the book, a service that UH Press director William Hamilton said is offered to any nonprofit organization....
The book is a combination memoir of Ariyoshi's time in politics, his Japanese upbringing and the values imparted to him and some recommendations for present public leaders.
He was known in office as a planner, a strict budgeter and a staunch Democrat.
In his book, Ariyoshi repeatedly returns to his theme of planning Hawaii's future today and making decisions that will last through the decades and not just for the next election.
That is why, he explains, his administration was so devoted to buying up large tracts of open space on Oahu's Windward side and North Shore.
He also preaches strict financial control, saying the only time you can really save money is when the treasury is fat.
Left unsaid is any mention of several controversies.
There is no reference to his longtime relationship with Larry Mehau, former member of the state Board of Land and Natural Resources, Big Island rancher and private security executive, who was accused of having ties to the local underworld.
Mehau denied the charges.
Also not mentioned is any discussion of how the former governor and his wife were stopped by customs agents after returning from a foreign trip with undeclared jewelry....
Ariyoshi's greatest praise is reserved for his political father and mentor, former Gov. John Burns.
"John Burns had vision. He had a passionate concern for correcting injustice," Ariyoshi wrote....
See also: Larry Mehau
For more, GO TO > > > The Puna Connection
George Mitchell - Former Senate Majority Leader; lobbyist for the tobacco industry.
From freerepublic: Lum Pleads Guilty to Tax Fraud - Tulsa, Okla (AP) 8/13/98 - Democratic fund-raiser Gene K.H. Lum changed his plea in a tax fraud case to guilty Thursday as part of an agreement that seeks his cooperation in other investigations.
Lum, who pleaded guilty in 1997 to making illegal donations to Democratic campaigns, admitted he filed tax returns that claimed more than $7.1 million in false deductions for him and his wife.
Lum, 59, faces up to six years in prison and $500,000 in fines at a Nov 23 sentencing. . . .
Under the pleas agreement, the government agreed not to seek indictments against his wife, Nora, or their corporations....
The Lums, who operated a Tulsa-based gas pipeline company at the time of the violations, pleaded guilty last year to a charge of felony conspiracy for laundering $50,000 in illegal donations to 1994 congressional campaigns.
Their daughter, Trisha C. Lum, pleaded guilty to a misdemeanor violation in a separate campaign finance incident.
Gene and Norn Lum each received 10 months in prison and $30,000 fines in that case.
The tax charges stemmed from information uncovered by independent counsel Daniel S. Pearson during his investigation of Commerce Secretary Ronald H. Brown. Pearson closed his inquiry when Brown was killed in an airplane crash. He transferred his findings about other people to the Justice Dept for continued investigation and prosecution.
Gilbert Tam - From RICO lawsuit Harmon v. Federal Insurance Company; P&C Insurance Company; Marsh & McLennan, Inc. et al.:
Gilbert Tam is a Director, P&C Insurance Company, Inc. and the former Administrative Group Director for Kamehameha Schools Bishop Estate. Tam is currently an officer with Bank of Hawaii, which has substantial financial connections with KSBE.
Tam was also a co-investor in the McKenzie Methane deal at the time he was a KSBE manager. Plaintiff alleges that Tam's actions, through his complicity, deceptions, and breach of fiduciary duties, in collusion with some or all of trustees of KSBE, with other managers and employees of KSBE, with other officers and directors of P&C, and with outside contractors, attorneys, politicians and others, constituted a conspiracy to defraud P&C and the beneficiaries of the Estate of Bernice Pauahi Bishop; racketeering; mail fraud; wire fraud; extortion; and violation of IRS interim sanctions regulations....
For more, GO TO > > > Sandwich Isles Communications
GMP Associates - An architectural and engineering firm with political designs.
January 14, 1999
Isle campaign donor faces
U.S. Labor suit
GMP Associates violated its trust in managing employee plans,
the U.S. Labor Department says
By Debra Barayuga, Star-Bulletin
GMP Associates Inc. – an architectural and engineering firm that has been a major contributor to Hawaii politicians – has been sued by the U.S. Labor Department for violations relating to its employee retirement and profit-sharing plans.
According to the suit, GMP and its president Wagdy Guirguis, withheld employee contributions from the paychecks of participants and failed to forward them the to the profit-sharing plan within the 30 days required by federal labor laws.
GMP also failed to pay about $82,019 in matching contributions in 1995, plus lost interest, to the plan, the suit said....
The lawsuit resulted from an investigation by the Los Angeles Pension and Welfare Benefits Administration Regional Office, which enforces the federal Employee Retirement Income Security Act, or ERISA.
Guirguis this week said he and GMP attorney Roger Fonseca signed a consent decree with the Pension and Welfare Benefits Administration Dec. 29 that will settle the matter.
Fonseca said an agreement was worked out before the lawsuit was filed but the department requested additional information from GMP, preventing the lawsuit and a consent decree from being filed simultaneously....
But David Ganz, Los Angeles regional director for the Pension and Welfare Benefits Administration, said the department has not yet agreed to a settlement.
The Labor Department said GMP and Guirguis failed in their fiduciary duties, resulting in losses exceeding $137,000....
The suit seeks restitution for any losses and asks the court to order Guirguis and GMP to step down as fiduciaries of the plan and to appoint an independent fiduciary.
It also asks that Guirguis and GMP be prohibited from serving as fiduciaries to any employee benefit plans covered by federal pension laws....
Three return contributions
Guirguis intends to continue the plan and some contacts have been made to independent parties who can take over its administration, Fonseca said.
GMP Associates has received millions of dollars in nonbid city contracts and has contributed to political campaigns in Hawaii – including those of former Gov. John Waihee, former Senate Ways and Means chairwoman Ann Kobayashi, who ran unsuccessfully for Honolulu mayor in 1994, and former Honolulu Mayor Frank Fasi.
Kobayashi and Waihee, who served as director and legal counsel of GMP Associates after leaving the governor’s office, were asked by the Campaign Spending Commission in October 1996 to return contributions. Each received combined contributions of more than $4,000 from GMP Associates and G-Power Inc., a firm controlled by Guirguis. The commission felt that since GMP and G-Power are both Guirguis companies, the contributions exceeded the legal limit of $4,000 from any single source.
Faso earlier that year returned $2,000 after learning contributions from GMP and G-Power exceeded the state’s campaign contribution limit.
No penalties were imposed on G-Power, Waihee or Kobayashi...
$ $ $
August 10, 2003
Honolulu Star-Bulletin Business
On the Board
Terrill S. W. Chock has been elected president of the Chinese Chamber of Commerce of Hawaii for 2003-04. Chock is president of Hawaii Pacific Finance Ltd., and chief financial officer of the affiliated companies of GMP Hawaii. He has been a member of the Chamber since 1979 and a director of the Chamber since 1993....
Hawaii State Bar Association - The mother nest.
From www.hsba.org:
The Hawaii State Bar Association (HSBA) was founded in 1899 and incorporated in 1985 as a non-profit trade organization under Section 501 (c) (6) of the Internal Revenue Code.
In November 1989, the Hawaii Supreme Court ordered the creation of a unified bar and designated it as the administrative entity of the unified bar. In so doing, the Supreme Court democratized the governance of the legal profession by conferring upon the HSBA the power and responsibility to aid the Court in regulating, maintaining, and improving the legal profession....
The mission of the HSBA is “To unite and inspire Hawaii’s lawyers to promote justice, serve the public, and improve the legal profession.”...
~ ~ ~
Who may I call in regard to purchasing malpractice insurance?
There is currently no requirement for lawyers to carry any malpractice insurance unless an attorney is with the Lawyer Referral & Information Service. In this case, he/she is required to have a minimum coverage of $100,000 per year. Contact Blossom Tong at Marsh Affinity (formerly Marsh McLennan) at 585-3615 for information on the HSBA’s endorsed carrier....
Hawaii Strategic Development Corp. - A state-owned venture financing company, remarkably similar to Bill Clinton’s “personal piggy bank” — the Arkansas Development and Finance Administration (ADFA).
(For those of you not familiar with ADFA: From The Secret Life of Bill Clinton: . . . In 1989 the Arkansas Committee started investigating the alleged nexus of drug-running, money-laundering, and covert activities linked to Mena Airport.... The Arkansas Committee’s lead advocate, Mark Swaney, came to suspect that Dan Lasater and others were laundering funds through the Arkansas Development and Finance Administration (ADFA), a state-controlled investment bank created by Governor Clinton in 1985 to provide “low interest finance for economic development.”)
* * *
From HSDC’s web-site:
Promoting Hawaii's economic diversification through
venture capital investment partnerships
Hawaii Strategic Development Corporation is a State agency created in 1990 to promote economic development and diversification in conjunction with private enterprise.
The Corporation is precluded by law from investment in economic development projects that involve tourism-related service businesses, retail sales or housing construction. HSDC also prohibits the following: providing grants; assuming voting control of an organization in which it invests; exceeding $5 million in investments in one enterprise; investing more than 5 percent ($300,000) in direct investments (up to 25 percent of its capital asset base with a two-thirds vote of the Board of Directors); investing in an entity in which a Board of Directors has any financial interest.
It is intended that beneficiaries of the corporation's financial assistance will make payments to HSDC, i.e., repayments of loans, earnings on investments received pursuant to venture agreement, royalties, and premiums or fees charged by the corporation. These receipts will accrue to the revolving funds.
The corporation is placed within the Department of Business, Economic Development & Tourism (DEBT) for administrative purposes only.
BOARD OF DIRECTORS
HSDC is administered by a board of nine directors which is responsible for establishing and overseeing its investment policies.
Robert M. Fujii, Chair
Randolph G. Moore, Vice Chair - President and CEO, Kaneohe Ranch
Constance H. Lau - Treasurer, Hawaiian Electric Industries, Inc. (Not to mention one of the trustees for Kamehameha Schools)
Ted S. Mina - President & Chairman of the Board, Investors Management Enterprise Corp.
Robert F. Mougeot - Chief Financial Officer and Financial Vice President, Hawaiian Electric Industries, Inc.
Seiji F. Naya - Director, Department of Business, Economic Development & Tourism
Audrey E.J. Ng - Attorney at Law, Partner, Goodsill Anderson Quinn & Stifel
Andrea L. Simpson - Vice President, Corporate Communications, BHP Hawaii, Inc.
Ryan S. Ushijima - Vice President, Hawaiian Capital Securities (See Bank of Hawaii)
* * *
From The Honolulu Advertiser, Oct. 5, 2001:
State Hires Managers for Venture Financing
Two former Kamehameha Schools Bishop Estate portfolio managers are now in charge of millions of dollars in state investments in local venture-capital funds.
Bruce Nakaoka and Eric Martinson have signed a contract to manage venture financing for the Hawaii Strategic Development Corp., which has committed $13.5 million to venture firms investing in Hawaii start-up companies.
Nakaoka, 44, and Martinson, 38, managed Kamehameha Schools’ real estate and financial portfolios in the mid-1990s. They hope to use their professional contacts to raise tens of millions in additional venture financing for Hawaii companies in need of capital.
Their firm, MN Capital, will manage a “fund of funds,” which would place investors’ money in about a half-dozen Hawaii-focused venture funds. This would give venture investors a more diverse portfolio – and hopefully attract larger-scale investors than the individual funds could handle on their own, Martinson said. . . .
Several observers said Martinson and Nakaoka add another piece to the professional infrastructure that is slowly building around Hawaii’s small high-tech scene. In recent years, increasing numbers of lawyers, accountants, investors and professional groups have attempted to support entrepreneurial start-up companies.
Start-ups and supporters alike have been deterred, however, not only by a shortage of good deal prospects, but by a lack of venture capital – speculative money that finances promising companies in expectation of high returns. . . .
The state has financed companies in Hawaii for years, but Martinson and Nakaoka bring a new level of sophistication, said John Chock, who runs the Hawaii Strategic Development Corp for the state.
Martinson, a Kamehameha Schools employee from 1984 to 1996, at one point managed the nonprofit estate’s substantial financial holdings, with included a multibillion-dollar interest in Goldman Sachs. . . .
Nakaoka worked for Kamehameha Schools from 1987 to 1996, and in 1990 became manager of the estate’s domestic and international real estate portfolio, which included the largest private land holdings in Hawaii. . . .
The pair started MN Capital in 1997 as an investment and real estate consulting firm.
State venture financing dates back to the mid-1980s, when the Department of Business, Economic Development and Tourism formed the Hawaii Strategic Development Corp. The corporation has tried to increase the amount of venture capital available to Hawaii technology companies.
HSDC did so by funneling money to local venture capitalists, who invested the money in start-up firms.
Among those financed by state money was Digital Island, a company that went public in 1999 and soared on the stock market. The state’s return on its Digital Island investment exceeded $50 million at one point, though by the time it “cashed out” that return had dropped to several million dollars.
Meanwhile, private venture capital financing has jumped from virtually zero to tens of millions of dollars for small local tech firms – plus the occasional big deal.
Pihana Pacific, a Honolulu-headquartered data center company, raised more than $230 million in venture funds last fall.
For more, GO TO > > > Act 221; Dirty Money, Dirty Politics and Bishop Estate
Hawaiian Airlines - A financially, and ethically, bankrupt airline.
See also: Lyn Anzai
For more, GO TO > > > Hawaiian Airlines: Flying with the Bankruptcy Buzzards
Heiwa Corporation - Established in 1960, Heiwa Corp is a leading manufacturer of pachinko (Japanese pinball) machines. Packinko is a major form of gambling in Japan.
In April, 2001, Hawaii Governor Ben Cayetano announced with great fanfare that Heiwa Corporporation has set up a captive insurance subsidiary in Hawaii, Heiwa Insurance Inc., which the state calls the first foreign company to base its internal-insurance operations here.
In captive insurance, an organizer incorporates a new company in Hawaii or other domicile, and gets a special license to insure itself and its affiliates. Hawaii has licensed 96 companies to operate captive insurance subsidiaries, placing it among the top 10 such locations worldwide.
See also: Mitsui Trust
* * *
Copyright (c) 1995, by Intersect Japan:
PACHINKO HITS THE JACKPOT
Yoshiyuki Yasuda wants to come clean.
by Jared Lubarsky
It's a little hard to imagine him truly overwhelmed by his problems, though: Mr. Yasuda is in the pachinko business, a recreational gambling industry unique--so far--to Japan, that rings up gross receipts of $194 billion a year. Pachinko accounts for 23 percent of all Japanese spending on leisure, and fetch in more, collectively, than the domestic automobile market.
With that kind of cash flow, how bad can things be for Mr. Yasuda and the 8,000-odd pachinko hall owners and operators who share the profits with him nationwide?
Not too bad, really. His problems are pretty much those of any mature industry in a developed industrial society: technological obsolescence, changing consumer demand, government regulation, and the depredations of organized crime....
Like anything else in an area so gray, this was an opportunity for the Mob: a substantial percentage of kankin operations--three in ten, by some estimates--came under the control of yakuza crime organizations.
The first primitive pinball machines, with manual flippers, gave way to marvels of electric engineering with flashing lights, fantasy themes, and ever-more complicated payoffs. (The Heiwa Company, the nation's largest developer and manufacturer of pachinko machines, is listed in the Second Section of the Tokyo Stock Exchange; last year it reported sales of 96 billion yen, or $960 million.)
By 1982, the average customer was playing pachinko about twice a month and spending 32,500 yen ($325) a year--bringing total gross receipts to the industry of over 4.7 trillion yen ($47 billion)....
See also: Yakuza
Henry Peters - Ex-trustee of Kamehameha Schools/Bishop Estate.
From the RICO lawsuit : Civil No. CV 99 00304-DAE - Harmon v. Federal Insurance Co., P&C Insurance Co. Inc.; Marsh & McLennan, Inc., PricewaterhouseCoopers ...
Defendant Trustee Henry H. Peters, was appointed in 1984 by the Justices of the Supreme Court of the State of Hawaii, acting as individuals, and was entrusted with the fiduciary duty to administer the Estate of Bernice Pauahi Bishop for the education of the children of Hawaii. . .
Defendant Peters is also Chairman of the Board of Directors of P&C. Peters has also served on the Board of Directors of Mid-Ocean Reinsurance Co. (a Bermuda company); Underwriters Capital (Merritt) Insurance Co. (a Bermuda company); SoCal Holdings, Inc.; and numerous other companies owned by, or related to, KSBE....
Beginning around March 1996, Harmon began questioning what appeared to be excessive premium charges being made by Marsh & McLennan ... and for fees M&M was billing to P&C.
For the next several months, Plaintiff was subjected to threats, intimidation and various abuses from Aipa and Kam for questioning the excessive fees of M&M . . . Harmon asked Aipa about the status of his transfer (to P&C). Aipa's response was that it wasn't going to happen because "arms-length was no longer an issue," (referring to previous legal opinions from Price Waterhouse that the IRS might revoke the Trust's tax-exempt status if it did not maintain arms-length from its taxable subsidiaries)....
* * *
Honolulu Star-Bulletin, 5/21/99, by Rick Daysog:
It is alleged that trustees Peters and Wong
helped conceal $350 million
Two weeks after a state judge temporarily removed four of the five trustees of the Bishop Estate, the state attorney general's office today filed court papers in a separate proceeding spelling out why trustees Henry Peters and Richard "Dickie" Wong should be temporarily ousted from their $1 million-a-year jobs. . . . In an 89-page proposed findings of fact, Deputy Attorney General Hugh Jones argued that Peters and Wong helped conceal $350 million in trust income that should have been spent on the estate-run Kamehameha Schools, paid themselves $131,000 more than they were entitled to and failed to adopt strict conflict-of-interest policies at the trust....
The result of these actions deprived scores of native Hawaiian children of an education at the Kamehameha Schools, Jones said....
* * *
August 18, 2000
Ex-trustee Peters assessed $6M by IRS
Pacific Business News
Henry Peters, former trustee of Kamehameha Schools/Bishop Estate, must pay the Internal Revenue Service $6.43 million for compensation he received between 1995 and 1999.
Peters, a trustee for 15 years, was responsible for the estate's investment portfolio until he and other trustees were ousted or resigned. He is defending his compensation but the IRS believes he was overcompensated for his services. The estate is now known as Kamehameha Schools....
For more, GO TO > > > Claims By Harmon; Dirty Money, Dirty Politics and Bishop Estate; Marsh & McLennan: The Marsh Birds
IGW Trust - From Honolulu Star-Bulletin, 01/10/97, by Ian Lind:
ISLE INVESTORS IN LIMBO AFTER 'TOO GOOD' DEAL
More than $4 million was accepted in
what officials say was a Ponzi scheme
Dondi Ho Costa, daughter of well-known Waikiki entertainer Don Ho, went to the Kukui Grove branch of her bank on Kauai a week before Halloween in 1994 to put $16,100 into an exciting investment.
It offered extremely high returns and little risk.
It seemed too good to be true.
It was.
The deal was with IGW Trust, a Honolulu company operated by her sister, Dorianne Ho DeMattos. IGW Trust arranged investments in exotic-sounding financial transactions involving "prime bank" notes, foreign currency trades and other complex arrangements.
Demattos, whose experience includes 10 years performing in her father's show and another eight years in his administrative office, had agreements with Bankers Alliance, a Michigan company, to do the actual investing.
IGW promised a fixed return of 120 percent a year, along with safety provided by "bank endorsements," federally insured accounts, and supplemental insurance where necessary, according to copies of IGW's contracts with Costa and other investors.
Today Costa's money is missing, along with that of other local residents who paid up to $150,000 each to IGW Trust.
A lawsuit by the Securities and Exchange Commission charging Bankers Alliance and its officers with fraud is pending in a federal court in Washington, D.C., and an injunction has shut down the company while the case proceeds.
At least two local investors have filed for bankruptcy since the returns failed to materialize, and all are waiting to see whether they will get any money back.
Documents detailing the IGW transactions were turned over to the SEC in response to a subpoena last year, and were recently obtained by the Star-Bulletin.
State securities regulators have confirmed that they are investigating DeMattos and IGW for securities fraud after receiving complaints from at least one disgruntled investor.
"The state is currently investigating all parties involved in this activity," said securities Commissioner Russell Yamashita, whose staff has been serving subpoenas.
'Loans' also in question
In another type of deal offered by IGW Trust, clients applied for "loans" that required them to deposit 10 percent of the requested loan value as "collateral." IGW records show one person deposited $150,000 in hopes of obtaining a $1.5 million loan, and another put down $100,000 for a desired $1 million loan. Neither loan was received and the deposits have not been returned.
Yamashita said this deal appears similar to "a classic advance fee loan scheme" in which the loans are never delivered.
DeMattos said she is aware of the state investigation, but says, "they haven't found anything wrong."
DeMattos said she remains on good terms with all of those who invested with her, and still believes they will eventually get their money back.
Money likely gone for good
But any recovery seems unlikely. Although the SEC quickly obtained a court order freezing the assets of Bankers Alliance, it has been able to locate and recover only $375,000 out of more than $4 million taken in, said Deborah R. Meshulam, assistant chief litigation counsel for the SEC's enforcement division.
"It is the commission's view that this has been an utter fraud from day one, part of a Ponzi scheme," Meshulam said. "We have shown in court that the money taken in was used to pay people who had put money into a prior scheme, a classic mark of a Ponzi scheme."
Meshulam said DeMattos and IGW Trust are not named in the lawsuit, although DeMattos says she worked closely with two of the defendants when arranging investments.
Meshulam declined to comment on whether criminal charges are expected in the Bankers Alliance case.
Steven Higley, president of Bankers Alliance, is in hiding and believed to be out of the country, Meshulam said. Higley has been cited for contempt of court for failing to appear for certain court proceedings and for not complying with a court order to account for all investor funds.
DeMattos said she became involved in the investment business while working for her father.
"He had people coming to him every week asking for money for projects," DeMattos said.
DeMattos blames SEC
DeMattos said she was introduced to Bankers Alliance through Sanford Fernandez, a California investment consultant who grew up in Hawaii. Fernandez and DeMattos eventually became partners in placing clients' funds into Bankers Alliance.
DeMattos said she has not profited from the deals, despite her partnership with Fernandez.
"It's not about greed or money. We really are just trying to help people here, that's our whole motivation," she said.
DeMattos said she did not solicit clients. "I didn't want anybody to get involved, but they heard that I was doing something and they contacted me."
DeMattos continues to express a firm belief that the Bankers Alliance investments are legitimate, and she blames the SEC lawsuit for freezing the company's funds and leaving Hawaii investors without their money.
See also: Don Ho
Industrial and Commercial Bank of China - From The Straits Times-Asia, 10/31/00:
Anti-graft Audits to Include Top Leaders
China's chief auditor plans to take his fight against corruption to almost the top of the country's political system, according to state media.
This follows the discovery of US$11 billion in mismanaged funds at Chinese government offices and businesses.
The astounding sum, reported by Mr. Li Jinhua, Auditor-General of China's National Audit Office, is one of the strongest indications of how mismanagement is in China....
"Corruption thrives under a lack of efficient supervision," the paper said...
According to earlier official reports, the auditing led to the discovery of misuse of funds at the Industrial and Commercial Bank of China, and the Construction Bank of China, causing losses worth more than 10 billion yuan (S$2 billion)....
Mr. Li's auditors found that individual officials and managers had misappropriated 590 million yuan. But this marked only a fraction of the 96.17 billion yuan mismanaged, if not embezzled, by offices and firms, the China Daily said.
The reports did not give details of how the funds were misused . . . But in previous reports over the past 18 months, Mr. Li has criticised officials for diverting government subsidies and spending lavishly on offices. There has also been talk of speculation in stocks....
* * *
Asia 2000, 11/8/00, by Jeremy Page:
CHINA SENTENCES 14 TO DEATH IN SMUGGLING CASE
China sentenced 14 people to death on Wednesday, including senior police and customs officials, in the first verdicts of a multi-billion dollar smuggling scandal, the biggest corruption case of the Communist era.
Those sentenced to death included the former customs chief and deputy mayor of the southern port of Xiamen, and the former deputy police chief of southern Fujian province . . .
But state media said the mastermind of the smuggling scam, businessman Lai Changxing had fled overseas after being tipped off by police. . . .
Lai's Yuanhua Group smuggled more that $6 billion worth of cars, luxury goods, oil and raw materials in the early 1990s, paying off city and provincial officials to facilitate and cover up duty evasion, Xinhua said.
"The group also used money and women to seduce a number of government officials for the convenience of their smuggling activities," Xinhua said.
The smuggling "caused serious damage to the normal economic order, brought huge financial losses to the state, led to rampant corruption, and impaired the social, political and economic life in China," it said. . . .
The death sentences included Xiamen's former customs chief Yang Qianxian and former vice mayor Lan Pu, and former Fujian deputy police chief Zhuang Rushun, Xinhua said.
Ye Jichen, head of the Industrial and Commercial Bank of China in Xiamen, was also given a death sentence....
For more, GO TO > > > Crouching Dragons...Hidden Rats
Investors Equity Life Insurance Company - Failed insurance company – BIG TIME!
From the Honolulu Star-Bulletin, 10/14/96: . . . The State of Hawaii will become the owner of thousands of acres of Colorado real estate, in its ongoing effort to recover assets for the 13,000 policy-holders of failed Investors Equity Life Insurance Co....
Gary Vose, who was chairman of Investors Equity when the state took it over in June 1994, has agreed to hand over The Meadows, a 4,000-acre subdivison at Castle Rock, Colo, to Hawaii Insurance Commissioner Wayne Metcalf....
Metcalf and the previous insurance commissioner, Lawrence Reifurth, have been working to recover assets since the state seized the insurance company after its management had run up a $60 million deficit....
The deficit, which has since grown to more than $90 million, was incurred largely because Vose lost policy-holders’ money in highly speculative leveraged investments known as derivatives, the state charges....
Vose’s agreement to transfer The Meadows and a smaller subdivision settles the state’s lawsuit against him, Eugene Sprague, an attorney in Denver representing the Hawaii Insurance Division, said today....
Neither Vose’s attorney nor Metcalf could be reached for comment, so it was not immediately clear what the value of the Colorado properties might be. Sprague said he could not go into details because of a confidentiality agreement....
The Meadows was the brainchild of former savings and loan executive Charles Keating and was put up for auction after Keating’s Lincoln Savings & Loan Association became insolvent....
* * *
For more, GO TO > > > Vultures in The Meadows
CONTINUED IN PART III
state....
Takemoto resigned under pressure at the end of 1993, and joined Bishop Estate months later. . .
According to information disclosed during the 1993 hearings, the Waihee administration awarded nearly $13 million in nonbid contracts to Data House even though he had no computer expertise, and either ignored or did not seek out the advice of computer experts on his staff.
Throughout the hearings, Takemoto denied his 25-year friendship with Arita played any major role in the contract decisions....
Soon after his appointment as budget chief, Takemoto stopped putting multimillion-dollar state bond sales out for competitive bid and substituted a nonbid process. The new negotiated deals gave him total control over who would sell state bonds and what fees they would collect....
With Takemoto in charge ... two attorneys with close ties to the Democratic Party and Waihee were named as local bond counsel on dozens of bond issues. The two captured all legal work not handled by large mainland firms specializing in bond deals during Takemoto's tenure. . . . Honolulu attorney Renton L. K. Nip advised the state or bond underwriters on more than 30 bond series issued by the state between 1990 and 1993....
In 1989, Nip assisted Takemoto in soliciting funds for Waihee's re-election campaign.
Nip, then-Land Use Commission chairman, sent letters to a number of companies seeking to do business with the state.
“Mr. Yukio Takemoto of the Dept of Budget & Finance has asked our assistance in distributing tickets to you for the governor’s fundraiser ...,” the letter said.
Computab, a computer services firm, was about to sign a $700,000 contract to provide computer equipment to Takemoto’s department when it received the letter and 20 fundraiser tickets, according to a complaint filed by Desmond Byrne, a former Computab officer.
Bryne called the letter “a very unsubtle attempt to lean on the company” and, because of the pending contract, “Computab had no option but to give.” . . .
* * *
Honolulu Star-Bulletin, 9/6/00, by Tim Ruel: Former Isle Banker Sia First Ordered Freed, then Held Pending Appeal -
A federal judge said today that Asian businessman Sukamto Sia should be released on bail pending an Oct 31 trial, but agreed to keep him behind bars pending an appeal by the U.S. Attorney General’s office. . . .
While Federal Magistrate Barry Kurren called Sia a possible flight risk, Kurren did not think the U.S. government had showed enough evidence that he would leave the United States.
Kurren placed several conditions on Sia’s release, including $150,000 in cash and two Hawaii properties with equity worth a total of $760,000, all posted by friends.
Stockbroker Al Souza, friend of Sia for 15 years, offered his Waialeale home, worth $320,000 in remaining equity. Eric Yanagihara, formerly Sia’s Hawaii asset manager and former senior vice president of Bank of Hawaii, offered remaining equity in his Waialae Ridge home, worth $440,000.
Also, attorney Jon Miho will post a cashier’s check worth $100,000 and Sia lawyer Renton Nip will post $50,000.
Entertainer Danny Keleikini offered testimony in support of Sia’s release.
Federal authorities downplayed the significance of the collateral, arguing that Sia could leave the country, then later make it ujp to his friends for what they would lose.
“This person is an extraordinary flight risk,” said Poirier during the hearing....
Sia, a former director and major shareholder in Bank of Honolulu, filed for bankruptcy on Nov. 8, 1998 listing $296.4 million in debts and $9.3 million in assets.
The bankruptcy was filed a month after his arrest in Las Vegas on charges of bouncing more than $13 million in checks at several casinos. Sia has blamed his financial woes on a downturn in the Asian economy....
* * *
See also: Bank of Hawaii; Bank of Honolulu; Barry Kurren; Danny Kaleikalani; Don Ho; John Waihee; Larry Mehau; Sukamto Sia; Trinity Investment Trust; Verner, Liipfert; William S. Richardson; Yakuza; Yukio Takemoto
For more, GO TO > > > The Indonesian Connection
Rey Graulty - Former Hawaii State Senator; former Hawaii Insurance Commissioner; and now a state Circuit Court Judge.
October 31, 2000 by Rick Daysog:
Former Trustees Funneled
Donations to Lawmakers
By Rick Daysog, Star-Bulletin
Former trustees of the Kamehameha Schools operated an underground political network that funneled money to the campaigns of dozens of key Hawaii lawmakers, according to trust documents obtained by the Honolulu Star-Bulletin.
Between 1992 and 1997, the $6-billion estate's now-defunct government relations department orchestrated contributions to incumbent Democrats friendly to the trust's interests or to high-ranking politicians with regulatory control over the trust's massive land and business holdings.
Those on the receiving end of estate contributions included U.S. Rep. Neil Abercrombie, Honolulu Mayor Jeremy Harris and former Mayor Frank Fasi's Best Party. . . .
The state Campaign Spending Commission is looking into whether the trust illegally laundered contributions through former trustees, employees, relatives and outside contractors. . . .
The list of recipients for that election year reads like a Who's Who of island politics. They include:...
Former state Sen. Rey Graulty: On March 22, 1994, Wong bought $250 worth of tickets for a Graulty fund-raiser ... The check was delivered by a staffer. Graulty, now a state Circuit judge, could not be reached for response. . . .
The ex-trustees deny that they took part in an organized effort to finance the campaigns of isle politicians. They say their political contributions and those of staffers and outside vendors were personal in nature and have nothing to do with trust business. . . .
However, in sworn testimony, some staffers say they not only helped organize the campaign contributions but also used trust facilities to direct the money to local politicians. . . .
* * *
Honolulu Weekly, 1/27/99: . . . Mike Gabbard and his supporters were instrumental in targeting key legislators seen as gay-friendly. To that end, Senate Judiciary Chair Rey Graulty lost his seat in November 1996 . . .
* * *
Pacific Business News, 2/4/97: . . . Gov. Cayetano named former state Sen. Rey Graulty insurance commissioner for Hawaii. He replaced Wayne Metcalf, who was appointed state senator to replace retiring Sen. Richard Matsuura.
* * *
Honolulu Star-Bulletin, 11/30/98, by Ian Lind: . . .
PGMA’s Wong accused of siphoning millions
An investigator says an investment
network stretched to the Caymans
Pacific Group Medical Association founder Peter P. Wong allegedly constructed an intricate network that enable insiders to siphon off millions of dollars from the failed health insurer, according to financial investigator Thomas E. Hayes.
The network had more than 60 separate bank, brokerage, and investment accounts stretching from Kakaako to the Cayman Islands, said Hayes, a special assistant to state Insurance Commissioner Rey Graulty....
Despite the fraud allegations repeatedly raised by Graulty and Hayes in court proceedings, the state has not taken action directly against Wong or any other individuals who may have been responsible for the insurer’s collapse.
PGMA was declared insolvent and seized by the state regulators in March 1997, leaving its members and medical providers with more than $18 million in unpaid bills.
The company provided health insurance coverage for 28,000 people before its collapse, with nearly half drawn from the memberships of the United Public Workers and Hawaii Government Employees Association, the state’s two largest public employee unions.
Hayes said he provided documents to the attorney general’s office “on areas of wrongdoing,” but a criminal probe launched last year was slowed by the heavy workload involving the Bishop Estate investigation.
Cynthia Quinn, special assistant to Attorney General Margery Bronster, said she could not comment except to confirm that PGMA “is an active case within this department.”
But several former PGMA employees who were interviewed by the attorney general’s office last year say there has been no follow-up by investigators.
Graulty, appointed in court proceedings to oversee the liquidation of PGMA’s assets, views Wong as “an empty basket” because he already faces millions of dollars in federal tax liens. . . .
“Many times, in these cases, by the time you chase after the individual, the trail is cold. You have to concentrate on the assets you see in front of you where the chances for recovery are greater,” Graulty said. “It’s much easier to pursue an insurance payout than chase the Cayman Islands and Peter Wong and what he’s done with the money.” ...
Graulty has said he has at least temporarily dropped his probe of payments made to Four Winds RSK, a Kauai company headed by Robin Rodrigues, daughter of UPW State Director Gary Rodrigues. The firm provided unspecified services related to PGMA’s coverage of UPW members. . . .
“We have not determined whether the payments were appropriate or not,” Graulty said. “We have our suspicions, but suspicions are not something you can take to a judge.”
Graulty said his efforts are focused on areas that promise a significant return, and that the payments to Four Winds are not a priority.
“It might be major to you, but to us, in the scheme of things, it is not as significant. We’re after the $2 million, not the amount his daughter was paid for a management contract,” Graulty said.
* * *
January 13, 1999
Rodrigues in conflict of interest? The UPW head sat on a judicial panel screening a candidate suing his union
By Ian Lind, Star-Bulletin
Gary Rodrigues took part in Judicial Selection Commission deliberations on Insurance Commissioner Rey Graulty's application for appointment to the bench even though Rodrigues was involved in a lawsuit and investigation by Graulty's office.
Graulty, acting as court-appointed liquidator of the failed health insurer Pacific Group Medical Association, has sued Rodrigues' union and is probing questionable payments to a company owned by Rodrigues' daughter.
But when Graulty arrived for his interview with the commission in the latter part of last year, Rodrigues, also state director of the United Public Workers union, was there.
"In light of the fact I had sued Mr. Rodrigues to get my money back, absolutely, it was a little awkward," Graulty said this week.
Commission Chairman B. Martin Luna won't say whether Rodrigues disclosed the conflict of interest, but Graulty said he informed the commission of the situation in advance.
"Through my attorney, I had notified commissioners (David L.) Fairbanks and (James) Kawashima that there was ongoing litigation," Graulty said.
"I took it there was a little discussion among them before I came in," Graulty said. "If there is a problem, it is on their side. I attended the hearing on the date and time appointed. Mr. Rodrigues was there. They asked me all the hard questions that I presume they asked of others."
Graulty was appointed a Circuit Court judge last month by Gov. Ben Cayetano from among six names submitted by the commission. He is now awaiting Senate confirmation.
Luna, a Maui attorney, declined to comment, saying he would have to discuss the matter with the commission, which is not scheduled to meet until early February.
Rodrigues, through a spokesman, denied any wrongdoing in the matter.
The Judicial Selection Commission requires members "to exercise diligence in becoming aware of conflicts of interest" and to disclose "any personal, business or legal relationship" with an applicant.
The rules provide that when a conflict is disclosed, the commission as a whole must decide whether the commissioner should withdraw from further deliberations.
Luna said he was unfamiliar with a commission rule specifically authorizing public disclosure concerning conflicts of interest.
Rep. Cynthia Thielen (R, Kailua) said Rodrigues should have recused himself from anything dealing with Graulty's application.
"That's just wrong," Thielen said of the union leader's participation.
"That's not ethical."
"Graulty as insurance commissioner questioning a transaction that involves Gary's daughter, while Gary votes on his judicial nomination, is as close as kissing cousins," Thielen said.
"It's just too close."
PGMA was seized by insurance regulators in March 1997, leaving an estimated $18 million in unpaid bills.
Graulty has a pending lawsuit against the UPW seeking to recover $1.5 million in insurance premiums withheld by the union in the months preceding PGMA's collapse.
The UPW had an agreement to offer a PGMA health plan to its members as an alternative to the plans offered through the state's Public Employees' Health Fund. The union promoted PGMA's plan and accounted for nearly 25 percent of all PGMA members at the beginning of 1997.
Graulty is the named plaintiff, and Rodrigues is a central figure in the case, which so far has focused on the legal nature of the agreement between the union and PGMA.
Graulty also had an ongoing investigation of questionable payments made by PGMA to a company headed by Rodrigues' daughter, court records show.
The payments were disclosed earlier in court files when Graulty issued subpoenaes for records of the company, Four Winds RSK Inc., which provided unspecified services tied to PGMA's coverage of UPW members.
Graulty told the Star-Bulletin in October 1998 that he had at least temporarily dropped his probe into the payments in order to concentrate on areas offering the possibility of recovering larger sums, although potential claims involving Four Winds remain.
The statement came while Graulty was under active consideration by the commission.
"This calls into question the integrity of the judicial selection process," said Ted Hong, assistant corporation counsel for Hawaii County, who has clashed with Rodrigues on several labor matters in the past.
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From RICO Case Statement, Harmon v. Federal Insurance Co; P&C Insurance Co; Marsh & McLennan, Inc; PricewaterhouseCoopers; Trustees of Bishop Estate, et al.:
Plaintiff alleges that the following persons and agencies have a duty in law to act upon complaints of citizens, yet failed to act, pretended to act but did not act, or misled or deceived Plaintiff in other ways when, in good faith, he brought to their attention evidence and suspicions of serious ongoing criminal activity endangering the citizens of the United States. By their acts and omissions they either sanctioned or perpetuated the crimes. It was clearly within the duties and functions of these people and agencies to act and take seriously the allegations plaintiff had set forth:
a) Insurance Commissioner’s Office, State of Hawaii.
b) Wayne Metcalf, Insurance Commissioner, State of Hawaii
c) Rey Graulty, former Insurance Commissioner, State of Hawaii
d) California Department of Insurance
e) Chuck Quackenbush, Insurance Commissioner, State of California...
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Small Business Views, Aug, 2000, by Sam Slom: . . . Inquiring minds want to know: how did the newly-appointed judge (former Democrat Senator) Rey Graulty get assigned to the high profile City Ewa Estates fraud trial and then excuse Mayor Jeremy Harris - the Governor’s and Dan Inouye’s choice for his successor - from being put under oath?...
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See also: Gary Rodrigues; Investors Equity Life Insurance Co; P&C Insurance Co.; Pacific Group Medical Association; Wayne Metcalf
For more, GO TO > > > Harmon’s Letters to Insurance Commissioners; Marsh & McLennan: The Marsh Birds
Continued in Part III
For more, GO TO > > >
A Connecticut Yankee in King Kamehameha’s Court
Dirty Money, Dirty Politics & Bishop Estate
The Grand (and dirty) Ko Olina
Kajima: Blood, Bribes & Brutality
Marsh & McLennan: The Marsh Birds
Pointing the Finger at WorldPoint
The Morgan, Lewis & Bockius Report
Vultures of the Sandwich Isles
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MORE OF THE CATBIRD’S FAVORITE LINKS
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Last update May 7, 2009, by The Catbird