PREDATORS IN PARADISE

Predators
in
Paradise

Part III

~ o ~

Continued from Part II ...

JMB Realty Corp. - A major US commercial real estate investment firm which owns, develops and manages real estate projects throughout North America, including regional malls, hotels, planned communities, and office complexes.

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Honolulu Star-Bulletin, 6/16/00 - Kamehameha Losses Top $335 Million - Despite unprecedented financial growth, the Kamehameha Schools recorded more than $335 million in losses and writeoffs during the past decade. . . . The troubled investments underscore criticisms that the estate’s embattled former trustees mismanaged assets and took ill-advised bets on speculative ventures....

The estate’s largest write-off was for $50 million. It involved a 1987 investment in Cadillac Fairview Corp, a Toronto-based office and retail property developer.

The estate, following the advice of Chicago-based JMB Realty Corp, joined 38 institutional investors in the $2.6 billion leveraged buyout of Cadillac Fairview, but the investment went south after the mainland recession of the early 1990s forced the developer into bankruptcy protection....

* * *

Honolulu Star-Bulletin editorial, 1/30/98: Waiahole Ditch - The Waiahole Ditch was built in 1916 by the sugar companies and was operated by them to transport water from Windward to Leeward and Central Oahu to irrigate sugar cane. But with sugar dead the ditch’s current owner, Amfac/JMB, has considered shutting down the facility or reducing service. For this reason, Governor Cayetano wants to buy the ditch for $8.5 million, with an additional $1.7 million to be spent on improvements and operation costs. . . .

* * *

Honolulu Star-Bulletin, 2/18/98: Liberty House to Eliminate 500 Jobs . . . Liberty House Stores is eliminating 500 jobs, or more than 10% of its work force, in the wake of the weak local economy and the growing Asian economic crisis.... The downsizing is the worst in Liberty House’s 149-year history.... Liberty House, a unit of Illinois-based JMB Realty Corp, operates 11 department stores and 30 resort and specialty shops in Hawaii and Guam... Its annual sales are in the $400 million range. . . .

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Honolulu Star-Bulletin, 3/19/98: Liberty House Bankrupt . . . Liberty House Stores, Hawaii’s largest and oldest department stores chain, filed for bankruptcy protection this morning.... The company filed for Chapter 11 ... listing assets of $284.2 million and liabilities of $248.4 million... Liberty House becomes the largest Hawaii company to file for bankruptcy reorganization ... Founded in 1849, Liberty House is a unit of ... JMB Realty Corp, which acquired the department store chain when it bought out then-parent Amfac Inc. in 1988....

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Honolulu Star-Bulletin, 10/9/98: Judge: Law Firm Can’t Work for Liberty House . . . A federal judge today ruled that a New York law firm could not work for Liberty House because it also represents some of the retailer’s major creditors. . . . U.S. Bankruptcy Judge Lloyd King ruled that the firm, Cleary, Gottlieb, Steen & Hamilton, has conflicts of interest because it represents major banks and other creditors in the bankruptcy. . . .

JMB argued Cleary, Gottlieb has a conflict because it represents creditors claiming more that $140 million in the Liberty House bankruptcy.

Those clients include Bank of America NT&SA; Merrill Lynch, Pierce, Fenner & Smith; Oaktree Capital Management LLC; Sanwa Bank; Capital Management LLC; and Canyon Partners...

* * *

Honolulu Star-Bulletin, 5/6/99: Liberty House is Hit with $138 Mil Claim . . . The Liberty House retail chain has been hit with a claim for $138 million in allegedly unpaid taxes and interest, adding a new difficulty to it already complex bankruptcy reorganization effort....

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Honolulu Star-Bulletin, 5/9/00: Liberty House Parent Settles Part of IRS Tax Claim . . . Liberty House parent JMB Realty Corp will pay a reduced $4.2 million tax claim to the IRS, answering a major tax question that has stalled the Liberty House bankruptcy since last year.

The IRS last week filed an amended claim in U.S. Bankruptcy Court, cutting its original bill from about $103 million to $4.2 million for 1992 through 1994.

The actual liability to Liberty House, then a member of a consolidated group whose taxes were paid by JMB affiliate Northbrook Corp, is expected to be about $500,000 ... but even though the tax logjam has been unclogged, another IRS claim totaling about $35 million for the years 1995 through 1996 still remains.

JMB believes its tax payments for those years are in order. The IRS recently began an audit of Northbrook’s taxes, a process that could take several years...

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Pacific Business News, 9/1/00: ERS Forecloses in Kaanapali - The state Employees’ Retirement System is foreclosing on two Kaanapali Beach golf courses, claiming in a lawsuit that golf course owner Amfac/JMB Hawaii LLC defaulted on $77.4 million in loans and interest earlier this year.

ERS, which invests retirement funds for state and county employees, is pulling the plug on a $66 million mortgage loan it provided to Amfac/JMB for the 18-hole, championship North and South golf courses that serve the sprawling West Maui resort destination. The 1^st Circuit Court lawsuit ERS filed on Aug 24 is five inches thick....

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From Honolulu Star-Bulletin, 11/16/00: Final Harvest for Sugar Fields - “See my eyes?” asks Joe Maneja. “Not angry. Just sad. No one can help the company. No one can fix it.” Maneja is one of a crew of about a dozen Lihue Plantation heavy-equipment operators and haul-cane truck drivers eating lunch at a field station near Wailua Falls...

It is the last field to be harvested this year. It is the last Amfac field to be harvested ever.

Maneja, a 28-year old Amfac employee, is one of about 400 at Lihue Plantation and Kekaha Sugar Co who will be unemployed at the close of business tomorrow, when Amfac shuts down its two sugar operations...

It is the largest layoff of agricultural workers in Kauai’s history and will cut the island’s farm labor force of 850 almost in half. But for each of the employees, it is a loss of a way of life...

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Sugar was king for more than 100 years. . . . The two Amfac/JMB sugar mills that will shut down tomorrow represent half of the surviving four sugar mills in Hawaii

Sugar was first grown commercially in Hawaii at Koloa Plantation on Kauai in 1835. At one time there were 32 plantations in Hawaii. Collectively, they imported the 385,000 workers from Asia, Europe and North America who created Hawaii’s unique multi-cultural society.

Lihue Plantation, which will officially close its doors tomorrow, has been producing sugar for 151 years. Kekaha Sugar Co, which also shuts down tomorrow, dates back to 1878.

Both are owned by Amfac/JMB, which traces its roots to a ship chandlery, Hackfeld & Co, started on Kauai by Hendrich Hackfeld, a German sea captain.

The firm, which remained in German ownership, was seized by the U.S. government during World War I and auctioned off to a group of Hawaii businessmen who changed its name to American Factors. In 1966 the name was shortened to Amfac and in 1988 the company was purchased by JMB Realty of Chicago and its name became Amfac/JMB....

Two years ago, the property that was the site of the Makee Plantation was sold by Amfac/JMB to Kealia Plantation Inc.

It is being developed into lots for multi-million-dollar homes....

* * *

July 8, 2004

Hawaiian Air owes $129M, IRS claims

The airline's bill for more than two years of underpayments
includes $40.5 million in penalties

By Dave Segal, Star-Bulletin

The Internal Revenue Service is seeking nearly $129 million from Hawaiian Airlines for the underpayment of federal excise and corporate income taxes over more than two years.

The IRS claim, filed in federal Bankruptcy Court, seeks $84.1 million in taxes, $4.3 million in interest and $40.5 million in penalties. The airline industry excise taxes, which cover such areas as fuel and transportation, are for 2001 and 2002 and the first two quarters of 2003. The corporate income tax claims are for $43.1 million in 2001 and $19.7 million in 2002.

Most of the claim covers time before the airline's Chapter 11 reorganization filing on March 21, 2003, when John Adams was chairman and chief executive of the company. He was removed two months later by Bankruptcy Court Judge Robert Faris for financial decisions he made involving the airline's $25 million stock tender offer in 2002.

Hawaiian Airlines had been aware that the federal agency was conducting an audit for 2001 and 2002, but airline trustee Joshua Gotbaum, who took over the company in July 2003, called the magnitude of the claim "unjustified."

"We believe the estimate is substantially overstated and expect the claim will be greatly reduced by the bankruptcy court," Gotbaum said. "Hawaiian Airlines has been providing detailed information and cooperating fully with the IRS over the past year."

The state Department of Taxation also has filed a claim with Bankruptcy Court but lists the amount it is seeking as "unknown."

State Tax Director Kurt Kawafuchi said he does not know how much the state might seek from the airline in back taxes.

"We definitely will follow up on it and will do whatever we can to protect the state's interest," Kawafuchi said. "We need to look into what the IRS was making as claims to see if we have parallel state adjustments, and if we do, we'll do whatever steps we can to protect the state's rights."

Hawaiian Airlines, which expects to emerge from bankruptcy this fall, has received claims in excess of $500 million since filing for reorganization. Insiders connected with the case expect the number of legitimate claims to end up around $300 million.

The IRS claim is the largest so far in the case, just ahead of a $110 million claim by aircraft lessor Ansett Worldwide.

Insiders say the amount that Hawaiian ultimately pays likely will be considerably less than what the IRS is seeking.

For example, the IRS initially sought $138 million from bankrupt Hawaii retailer Liberty House but ended up settling $103 million of that claim for $4.2 million and capped the remainder at $14 million.

Carol Muranaka, special assistant U.S. attorney, said the two cases cannot be compared because they are different taxpayers. She declined to discuss any details about the Hawaiian Airlines case due to privacy issues.

"The government always tries to determine the correct amount of tax," Muranaka said. "We filed the proof of claim because we believe we have determined the correct amount of tax that is due."

http://starbulletin.com/2004/07/08/news/index1.html

For more, GO TO > > > Paradise Paved

James Ahloy - President, Ali’i Petroleum; Trustee for Lunalilo Trust; past president, Aloha Petroleum (the company in the political spotlight because of its spinoff from Harken Energy Corporation – George W. Bush’s tenacious albatross).

January 9, 1991

Excerpted from a Letter from Bruce N. Huff, Sr. V.P., and CFO, Harken Energy Corp. to Edmund Coulson, Chief Accountant, Securities and Exchange Commission:

. . . June, 1989, the Company decided to sell Aloha (Petroleum) due to the lack of strategic fit and the need to redeploy assets and management effort... determined that Intercontinental Mining & Resources, a major shareholder of the company, was the most logical buyer.

. . . At the end of March, 1990, IMP completed the sale of its interest in Aloha to Advance Petroleum Marketing Co.

. . . Advance at this time raised the possibility of a long and costly dispute over environmental liabilities....

. . . Prior to entering into the Letter of Intent dated February 22, 1990 with Advance concerning this sale, IMR through its affiliate Quadrant Management Co. had contacted a number of potential third parties towards locating a prospective purchaser of IMP’s interest in Aloha including potential purchasers in Japan, New York and in Hawaii, after which it determined that Advance constituted the most acceptable purchaser for its interest....

...Concessions:

– Assumed Jimmy Ahloy’s Employment Contract obligation.

* * *

February 2, 1999

Bill would limit amount of money paid to
board members of charitable trusts

By Craig Gima, Star-Bulletin

Trustees of the Bishop Estate and other charitable trusts would be limited to compensation of not more than the salary of the chief justice of the Hawaii Supreme Court under a bill heard today in the Senate Judiciary Committee.

The chief justice makes $94,780 a year. In the last few years, Bishop Estate trustees received more than $800,000 annually in compensation.

Critics of the Bishop Estate told senators that excessive compensation is the genesis of many of the estate's problems. . . .

In written testimony, Beadie Kanahele Dawson, of Na Pua a Ke Ali'i Pauahi, told the committee, "Eliminate the fat commissions and you eliminate much of the court battles, greed, self-interest, and future politically connected, unqualified trustees."

Another bill before the committee would impose a five-year renewable term limit on trustees, allow a designated group of beneficiaries to sue trustees and receive attorneys' fees if they win, and prohibit public officers and employees except probate judges from appointing trustees of a charitable trust.

James Ahloy, a trustee for the Lunalilo Trust, opposed the measure because it would also affect the selection process for the estate that supports the Lunalilo Home.

"The precedent set by changing King Lunalilo's will may lead to other changes of negative results for Lunalilo Home," he told the committee....

For more, GO TO > > > Aloha, Harken Energy!

James Duffy - Honolulu attorney; past Master for Kamehameha Schools/Bishop Estate; arbitrator for the insurance settlement with Federal Insurance Company for the state’s claims against the Kamehameha Schools’ trustees.

The Honolulu Advertiser, 01/04/01: Clinton again nominates Duffy to U.S. appeals court. In his waning days as president, Bill Clinton yesterday renominated Honolulu attorney, James Duffy for a seat on the 9^th U.S. Circuit Court of Appeals....

Duffy, 58, was first nominated in June to the 9^th Circuit seat...

Sen. Daniel Inouye, D-Hawaii, submitted Duffy’s name to Clinton for consideration.

“I am very grateful to Sen. Inouye for his continued support,” Duffy said yesterday....

The former president of the Hawaii Bar Association closed his former law firm, Fujiyama, Duffy and Fujiyama, when he was first nominated and now runs his own firm....

James Riady - From msnbc 1/12/01 (AP):

Billionaire agrees to record
plea bargain for Clinton donations

In a record-setting plea bargain, Indonesian billionaire James Riady agreed to pay an $8.6 million fine and plead guilty to using foreign corporate funds to back Bill Clinton’s 1992 presidential campaign, the Justice Dept announced.

RIADY, A KEY FIGURE in the Democratic campaign finance scandal, is set to plead guilty to a felony charge of conspiring to defraud the United States, prosecutors said....

Riady pledged $1 million in 1992 to support the then-Arkansas governor’s campaign, the Justice Dept said Thursday.

Riady used John Huang, an officer of his Lippo Group, to reimburse foreign contributors to Clinton and other Democrats, according to 70 pages of government documents filed with the plea bargain in U.S. District Court.

Foreign campaign contributions are illegal under U.S. law. The money was funneled through Hong Kong bank accounts and Lippo entities overseas, the government papers said.

Huang, who pleaded guilty earlier to campaign finance violations, has been cooperating with the government since Aug, 1999. Many of the allegations appeared to be based on his information.

Riady also has been talking. The government said he has met a half-dozen times with U.S. prosecutors and FBI agents to outline the information he could provide as part of a plea bargain.

Asst U.S. Attorney Dan O’Brien, who negotiated the deal, said the lack of an extradition treaty was the biggest hurdle, because Riady, an Indonesian citizen, could not have been forced to surrender if he had been indicted.

In addition, LippoBank California, a California state-chartered bank affiliated with Lippo Group, agreed to plead guilty to 86 misdemeanor counts charging that its agents, Riady and Huang, made illegal foreign campaign contributions from 1988 through 1994.

Government documents said that the Lippo Group hoped to influence American foreign policy for its own advantage.

AMONG ITS GOALS WAS TO GAIN MOST FAVORED NATION TRADE STATUS FOR CHINA; NORMALIZATION OF U.S. RELATIONS WITH VIETNAM; OPEN TRADE POLICIES WITH INDONESIA; COMMUNITY REINVESTMENT ACT EXEMPTIONS FOR LIPPO BANK AND A REPEAL OF THE GLASS-STEAGALL ACT WHICH LIMITED BUSINESS OPPORTUNITIES FOR LIPPO BANK....

For more, GO TO > > > The Indonesian Connection

Jeremy Harris - Mayor of Honolulu, Hawaii.

September 05, 2002

Harris jury begins inquiry

By Rick Daysog and Gordon Y.K. Pang, Honolulu Star-Bulletin

Current and former department directors under Honolulu Mayor Jeremy Harris were among the first to appear this morning before an Oahu grand jury investigating the mayor's 2000 political campaign.

City Corporation Counsel David Arakawa, arriving at Circuit Court shortly after 8 a.m., said he and others in the Harris administration have cooperated fully with law enforcement authorities...

Shortly afterward, city Design and Construction Director Rae Loui and former Budget Director Caroll Takahashi were escorted by Deputy Corporation Counsel Gary Takeuchi into a side entrance leading to the grand jury room, thus avoiding the clamor of reporters and cameras at the front entrance to the room.

Also appearing this morning were former Budget Director Roy Amemiya and Chris Parson, an attorney for the Harris campaign and former assistant corporation counsel. Parson said he was appearing on behalf of the Harris campaign.

The investigative jury, a 13-member secret panel led by City Prosecutor Peter Carlisle, has subpoenaed not only several current and former department heads, but also executives of several architecture, engineering and construction firms that receive city work.

The grand jury also has subpoenaed officers of R.M. Towill Corp. and Park Engineering.

The panel did not issue a subpoena to Harris.

Harris -- who had been the Democratic front-runner for this year's governor's race before he dropped out May 30 -- has denied wrongdoing.

William McCorriston, an attorney for the Harris campaign, believes the grand jury will find no instance where contractors were required to give political contributions in exchange for city work....

The grand jury comes after nine months of investigation by Carlisle's office. In January the prosecutor's office received a complaint for a criminal referral from the state Campaign Spending Commission, which alleged that the Harris campaign booked political contributions under false names.

Carlisle's office has declined comment on the status of its investigation. But the Star-Bulletin reported last month that prosecutors were examining the Harris administration's development of the $23 million Waipio Peninsula Soccer Complex. One month before the city awarded a $2.5 million architectural contract to a consulting team lead by Stringer Tusher Architects, mainland residents linked to Stringer Tusher's president sent more than $20,000 in political contributions to the Harris campaign.

Carlisle's office also is investigating two nonprofit organizations, the Environmental Foundation and the Friends of the City and County of Honolulu, which are headed by Harris campaign official Peter Char.

The tax-exempt groups received more than $170,000 in donations from companies that receive millions of dollars in work from the city....

For more, GO TO > > > APCOA: Vultures in The Parking Lot

Jeff Stone - From Equity No. 2048 - Petition of the Attorney General ... to Remove and Surcharge Trustees: . . . Kickbacks to Peters and Wong – Wong has a brother-in-law, Jeffrey Stone ... In 1990, the Trust owned land in Hawaii Kai that it leased to Kapalele Associates ... to develop and construct Kalele Kai, a leasehold condominium project.

The Kalele Kai project was completed in 1993. ... In 1995, Kapalele sold the improvements to One Keahole Partners (OKP) for $36.5 million. OKP is a partnership between National Housing Corporation (50%) and Pacific Northwest, Ltd., (50%) an entity owned and controlled by Jeffrey Stone...

OKP financed its purchase of Kalele Kai in part with a loan from the Bank of Hawaii and in part by negotiating with the Trust a restructuring of the original note. ... Under the restructuring, the Trust reduced the principal amount due, waived an annual 5.0% increase in principal, extended the balloon due date, reduced the amount of collateral required for security, and set the interest rate at 2.75%. . . . The restructuring artificially inflated the value of the land in order to affect anticipated future mandatory sales by the Trust of its leased fee interest in other leasehold condominiums. . . .

The restructured note was worth millions of dollars less to the Trust than the original note and conferred millions of dollars profit on OKP and Jeffrey Stone...

Wong claimed to have recused himself from any participation in the Kalele Kai transaction ... Contrary to Wong's assertions, he did participate in the negotiations. ... Peters and Wong each immediately thereafter received a substantial personal benefit through Jeffrey Stone...

The petition then goes on to disclose a series of transactions involving sales of apartments and homes by Peters and Wong and Pacific Northwest, OKP and other companies connected with Stone.

Henry Peters, Richard Wong and his wife, and Jeff Stone were indicted, but the case was dismissed; indicted again but dismissed again (both cases were dismissed on the grounds that one of the witnesses was an attorney, and the testimony violated attorney-client privilege).

National Housing Corporation has never been indicted for their participation in the alleged kick-back scheme. National Housing and Jeff Stone have since formed new partnerships which have purchased the multi-million dollar development, Ko `Olina on Oahu....

John Waihee - former Governor of Hawaii and big FOB (Friend of Bill).

Honolulu Star Bulletin, 10/2/85:

Waihee:
$10,000 Rewald Down Payment Returned

The administrator of Ronald Rewald's bankrupt company testified yesterday that Rewald loaned Lt. Gov. John Waihee's law firm $10,000 in January 1983. Waihee, however, said ... that the money was a down payment on a land deal and was later returned.

Thomas Hayes said the check was made out to Waihee but deposited in the law firm of Waihee, Manuia, Yap, Pablo and Hoe. Hayes said Waihee was "embarrassed" about the transaction after Rewald's company collapsed and paid the money back in Nov 1983.

Waihee said the $10,000 wasn't a loan, but a deposit on some Big Island land Waihee owned that Rewald wanted to buy. He said he does not know why the check was marked as a loan...

WAIHEE DID receive $4,500 during the 1982 lieutenant governor campaign from Rewald and his companies.

Waihee said he was unaware of the large amount of political donations from Rewald until the collapse of Bishop, Baldwin, Rewald, Dillingham and Wong.

Waihee met with Rewald on three occasions before and after the 1982 election because of his interest in international trade. Rewald at the time was preparing a report on flight capital from Hong Kong...

For more, GO TO > > > Flying High In Hawaii

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A Fiscal Policy Report Card on America's Governors - 1994, by The Cato Institute:

Hawaii: John Waihee, Democrat - Took Office 12/86 - Grade F.

Waihee has helped to create and prolong the recession in Hawaii by his spendthrift budget policies. In his first five years, he allowed the state budget to mushroom from $3.2 billion to $5.3 billion- an average annual increase of 10 percent. That amounts to about $1,200 per family every year....

Despite ... "pro-growth" spending initiatives, the unemployment rate in Hawaii has increased by 2 percentage points since 1989, and property values are in a depression. The spending path charted under Waihee is clearly unsustainable- both fiscally and economically.

* * *

From 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 (3^rd man in the Justice Dept during the early days of the Clinton administration) pulled the plug.

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From Honolulu Star-Bulletin, 10/28/96, by Ian Y. Lind:

Isle Woman Part of Campaign Probe - Former resident Nora Lum figures in congressional investigation into ‘92 finances. 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...

* * *

The Price of Paradise - Vol II - Randall W. Roth, Editor: Is the State Employees’ Retirement Being Abused?, by Bill Wood:

. . . I’ll tell you a few things about the Hawaii State Employees’ Retirement System and let you draw your own conclusions...

The ERS now has total assets of about $5 billion, with two-thirds invested in U.S. Stocks and bonds and the remaining third divided among five other categories, the biggest of which is real estate...

Direct investment in real estate offers the possibility of a comparatively high return, but as a relatively high risk...

The fund had not directly invested in real estate prior to 1989. Governor John Waihee says he suggested the move then as a means of broadening the fund’s investment base. His administration paved the way by convincing the legislature to double the statutory ceiling on real estate investments to 10 percent.

Run by trustees. The ERS is administered by seven unpaid trustees and a paid staff. Three of the trustees are elected by the members of the system, three are appointed by the governor, and one, an ex-officio by voting trustee, is a member of the governor’s cabinet, the director of the state’s Dept of Budget and Finance. So the governor appoints four of the seven trustees.

The trustees have a great deal of discretion in the day-to-day operations ... They do, however, get lots of help with their investment decisions. Currently, about 30 investment advisory firms– some local, some not– monitor and make buy-sell recommendations. And there is other help. ERS’s data processing, legal and actuarial work, and financial audits are done by outside firms.

Okamoto, Himeno & Lum. In 1989, when the trustees made their first direct real estate investment, the purchase for $68 million of the newly built City Financial Tower in downtown Honolulu, they decided the legal advice they had been getting in-house– mostly through the state attorney general’s office– was inadequate. The needed specialists. So they hired an outside law firm, known then as Okamoto, Himeno & Lum.

The firm’s partners were Kenneth Okamoto (whose wife, Sandra, was an assistant to then-State Attorney General Warren Price), Sharon Himeno (Sandra’s sister and by November of that year Warren Price’s wife), and Bettina Lum (the law firm’s real estate expert).

Bettina Lum assisted the ERS in its purchase of City Financial Tower. She also helped the trustees evaluate the many mortgage loan applications that were coming in to the ERS as a result of a decision to step up that activity. Much of the $628,000 in fees earned by the law firm from the ERS account between 1989 and 1992 came from evaluating these applications.

Not all the fees came directly from the ERS. Some loan applicants paid Okamoto, Himeno & Lum directly for help in preparing and evaluating their applications. One of these applicants was Waikele Commercial Associates, a partnership seeking a $154 million loan from the ERS to develop a shopping center on land purchased from Amfac/JMB in central O`ahu. Governor Waihee now says he had urged the ERS trustees to increase their loans to Hawai`i businesses such as Amfac/JMB and Waikele Commercial Associates “because it makes good economic sense.”

Political tool. Some people complain that the governor has openly used the ERS as a political tool and improperly interfered in its decision-making. They contend that this amounts to abuse. . . .

The ERS trustees used more than Lum’s services in buying the City Financial Tower. They also hired the local real estate firm Marcus & Associates. That firm had been recommended by the trustee and budget director, Yukio Takemoto, who was a golfing buddy of its chairman, Marcus Nishikawa. Marcus & Associates was named exclusive leasing agent for the 24-story City Financial Tower and given the contract to review the leasing program for the building.

Marcus & Associates also participated in other real estate purchases. Later in 1989, it was a player in the ERS’s $26 million purchase of the CentrePointe office-warehouse complex in Carson, Calif, and in the 1991 purchase, for $17.5 million, of Huntington Plaza, another commercial center in Southern Calif. In each case, the real estate firm was paid a six-figure commission, not by the ERS, but by the sellers.

A quick $3 million. The CentrePointe purchase came back to haunt some of its participants. That deal began when Honolulu businessman Stanley Himeno (father of Sharon Himeno) approached the ERS trustees wanting to borrow money to buy the California property. Marcus & Associates got involved and soon it was decided the ERS would itself buy the property. CPA’s Ernst & Young, who had started to work for Himeno, appraised the property for the ERS trustees at $26.2 million, and the ERS then offered Himeno’s company $26 million. The offer was quickly accepted and the sale closed. The trustees later said they had no idea Himeno had bought the property for only $23 million and arranged back-to-back closings, thus making an apparent $3 million gain in a matter of minutes.

Okamoto, Himeno & Lum declined to participate in that particular purchase because of the obvious conflict of interest. Besides the family relations, Sharon Himeno and Sandra Okamoto were officers and directors of the Himeno company that bought and sold the CentrePointe property. Another law firm was hired to help out: Hoe, Yap and Sugimoto, Governor Waihee’s former law firm. . . .

Jurist resigns. Late in 1991, the trustees voted to pay $31 million for Wood Ranch, a California golf course. That deal had been brought to them by Honolulu developer Rodney Inaba, a friend of ERS trustee Gordon Uyeda. But retired Hawai`i Supreme Court justice Edward Nakamura, who had been appointed an ERS trustee only months before, strenuously opposed the purchase. He also had grown upset over the pending $154 million loan to Waikele Center Associates. Saying he couldn’t stomach such treatment of public funds, the respected jurist resigned his trusteeship when the Wood Ranch acquisition was approved by a majority of the board.

The governor then told “Yuki” Takemoto to kill the deal and the trustees reversed their decision. Another trustee later said Takemoto told the board the governor “didn’t want the hassle.”

By mid-1993 the ERS had made one other real estate investment, a 400-unit apartment complex in Arlington, Virginia, that cost $38 million, and it was considering two others...

But in the summer of 1993 the ERS faced a State Senate special committee probe into its investment decisions and contract practices. Gov. Waihee labeled the investigation “McCarthyism.”

The ERS met the challenge by hiring another consultant: Hill and Knowlton, a high-powered international public relations firm that specializes in crisis management.

The first this the big PR firm did was launch a newsletter for ERS members called “Safe & Sound.” The first issue contained blanket denials of any wrongdoing.

Katsuhiro Kawaguchi - The Japanese purchaser of “Gilligan’s Isle” (otherwise know as Coconut Island), later to be deported for “criminal activity.”

See also: Sun International Hotels

For more, GO TO > > > Paradise Paved; The Grand (and dirty) Ko Olina; Dirty Money, Dirty Politics and Bishop Estate; The Puna Connection; Buzzards on the Hill & Knowlton

Landmark Networks Inc. - A Honolulu-based startup wireless technology flock of familiar birds-of-a-feather.

June 3, 2003

Local tech firm looking for workers

Landmark Networks Inc., which has $3.2 million in funding,
builds wireless fidelity networks

By Tim Ruel, Honolulu Star-Bulletin

A Honolulu-based startup wireless technology company plans to hire 40 to 50 workers locally this year for jobs including engineering and product development.

Landmark Networks Inc., which develops equipment to build wireless fidelity, or Wi-Fi, networks has new investors including Hawaiian Electric Industries Inc. and venture capital firm Menlo Ventures of Menlo Park, Calif.

Landmark has raised $3.2 million in funding, and turned away more than $1.5 million in additional investment because it doesn't need the money right now, said Tareq Hoque, president and chief executive of Landmark. He noted that Landmark will seek more funding later.

Hoque, a former president of Adtech, was part of a core group that worked on Landmark's concept last year.

Wi-Fi technology can make a computer laptop or a personal digital assistant act like a cell phone, allowing a person to access the Internet while in a "hotspot," without any wires or cables. Landmark says its technology is cheaper, faster and easier than competing products, and would conceptually allow for a whole city to act as a hotspot.

Hoque declined to elaborate on how Landmark's technology will do this.

Landmark's customers are companies that install and run Wi-Fi networks around the world. Locally, it is in talks with ShakaNet Inc., an Oahu Internet provider that recently signed a five-year agreement to provide Wi-Fi access at Honolulu Airport.

Other members of Landmark's original group include Ike Nassi, former senior vice president of Apple; Keith Klemba, former chief technology advisor for Hewlett-Packard; Ellary Kim, former finance director at Adtech; and former Apple executive Barbara Cardillo.

Landmark now has about 14 employees. The company is looking to fill a range of jobs, primarily product development and engineering, but also sales, marketing, operations, administration and business development.

The firm recently ran advertisements seeking jobs, and received more than 200 resumes, Hoque said.

Landmark, at 928 Nuuanu Ave., is keeping its headquarters in Hawaii, but is talking about outsourcing its manufacturing to Asia, Hoque said.

Other investors in Landmark include Hoque; former Digital Island Chairman Ron Higgins; Larry Johnson, former head of Bank of Hawaii; HMS Ventures; and the state Hawaii Strategic Development Corp.

H. DuBose Montgomery, co-founder of Menlo Ventures, is joining the board of Landmark, which includes Hoque, Higgins, Dick Grey of HMS Ventures, and Nassi, who is chairman of Landmark.

Larry Mehau - Alleged by some – but never proven in court – to be the Godfather of organized crime in Hawaii.

From Land and Power in Hawaii, by George Cooper and Gavan Daws: . . .

Organized Crime

Organized Crime, by nature secretive and shrouded in a certain mystique, is difficult to study, in the Islands or anywhere else.

Greatly complicating the effort to assign a proper weight to organized crime in Hawaii have been unproven allegations, whispered for years and then made public from 1977 on, that a close associate of both of Hawaii’s Democratic governors was the leader of organized crime in the Islands.

In the end, the power position to be accorded organized crime in Hawaii ... depended heavily on whether that friend of John Burns and George Ariyoshi, Larry E. Mehau, was or was not directing organized crime....

~ ~ ~

In writing about organized crime in Hawaii, a given topic must often be left hanging, the full picture unclear. As of early 1985, the greatest enigma of all remained: what was Larry Mehau vis-a-vis the syndicate?

Gov. Burns in 1970 appointed Mehau to the powerful State Board of Land & Natural Resources. At about the same time, George Ariyoshi launched his first campaign for a statewide office, lieutenant governor, and he named Mehau his statewide coordinator. . . . In Ariyoshi’s races for governor Mehau played a major role . . . Ariyoshi in 1974 reappointed him to a second BLNR term . . .

There were two camps of opinion apparently believing with equal certainty that Mehau was or was not the top man in organized crime in Hawaii....

To illustrate how widely opinion diverged on Mehau, consider the following:

In Feb 1977, KHON-TV reporter Scott Shirai aired a story following up on a heroin bust the previous summer . . . Quoting unnamed “reliable sources,” Shirai said there were several prominent Hawaii residents who were members of the heroin ring who had not yet been arrested or publicly named.

He said one was “a member of a state board – the so-called ‘godfather’ of the operation. Several meetings were held between this State board member with those arrested in the bust, sometimes at the apartment of a well-known Waikiki entertainer.

One of those arrested worked for this entertainer and was also directed to act as a bodyguard for a candidate for statewide office in last year’s election. That candidate was also seen publicly with at least one of those arrested.

Then, in June, a small newspaper on Maui picked up the ball on the “godfather” question raised by Shirai. The Valley Isle created a major uproar by publishing several stories claiming Larry Mehau was the “godfather” of all organized crime in Hawaii. Mehau subsequently sued the paper for libel, as he did a number of other media organizations that republished the allegations, as well as several individuals, including Shirai.

During the furor, two Republican politicians, Kinau B. Kamalii and D.G. “Andy” Anderson ... met with the then-chief of the Honolulu Police Department, Francis A. Keala [later to be named as an interim trustee for Kamehameha Schools] ... to ask him whether, in his opinion, Mehau was a syndicate godfather.

Anderson and Kamalii, talking to reporters later, could agree about Keala’s more concrete statements concerning Mehau and organized crime.

To quote Anderson: “Keala described Larry’s position this way: He said that whenever there’s a gang war or fighting between factions and they want to talk it over, they call Larry and ask him to arrange a truce. He is used as a mediator. I understand, too, that even the police have on occasions asked him to intercede and bring peace to some situations.”

But Anderson and Kamalii diverged radically on what this might mean.

Anderson’s understanding was that Mehau was performing a sort of public service by mediating syndicate problems, and that this in no way made Mehau a godfather. Anderson also said that “the chief said Larry was nowhere involved in gambling, pimping, heroin, drugs or anything else as far as the police know.”

Kamalii, on the other hand ... asked rhetorically: “If that isn’t aiding and abetting the underworld, what is? What is a godfather?”

For statements like these Kamalii was sued in 1977 by Mehau, who simultaneously sued a host of news media organizations and several other individuals. Most media defendants successfully sought dismissal on grounds that they were merely republishing statements made by the Valley Isle.

KHON-TV on behalf of itself and its reporter, Shirai, settled out of court with Mehau in 1978 for $42,500....

* * *

Honolulu Star-Bulletin, 12/6/84, by Charles Memminger and Pat Guy: Huihui Testimony on Mehau Draws Minimal Comment - Hawaii’s political and legal community is having little to say about the testimony of organized crime figure Henry Huihui that Big Island rancher Larry Mehau was aware of plans to kill labor leader Josiah Lii in 1977.

The accusation is against one of the state’s most powerful men, a close associate of the governor.

Huihui made the statement Tuesday in the trial of two men charged with the murder of Lii, head of the Inland Boatmen’s Union. Huihui already has pleaded guilty to Lii’s murder, saying he ordered it on the instructions of the late Akito “Blackie” Fujikawa, who was head of the International Brotherhood of Electrical Workers in Hawaii.

Huihui testified in the trial of Jeffrey Kealoha and Gilbert Madrid.

MEHAU is a former state land board member, head of the security guard firm Hawaii Protective Association and a longtime friend and political supporter of Gov. George Ariyoshi.

According to Huihui, the day before Lii was killed on May 7, 1977, he spoke with Mehau outside the Naniloa Surf Hotel in Hilo.

Huihui said Mehau asked him, “You guys gonna take care of Joe?” and asked if it was going to be done quickly.

Huihui said he said, “Yeah.”...

* * *

Honolulu Star-Bulletin, 12/6/84, by Charles Memminger: Huihui Testimony About Judges Gets No Response - An allegation by one of the state’s most well-known criminals that he was given favors by, in his words, “certain judges” as an indirect result of killing a union leader in 1977 sounded like a bombshell.

But the officials responsible for investigating the integrity of state judges are having nothing to say about the testimony of Henry Huihui in state court Tuesday.

Testifying in the joint murder trial of Gilbert Madrid and Jeffrey Kealoha, who also were accused in Josiah Lii’s death, Huihui was on the verge of telling what favors he received from “unnamed” judges as an indirect result of killing Lii, but Huihui was cut off by an objection from a defense attorney.

Huihui, who has pleaded guilty in Lii’s death and is now a government witness, testified that Big Island businessman Larry Mehau knew in advance of the plan to kill Lii.

After the shooting, Huihui testified, he “went to see Larry to return the favor” for a Huihui associate who was “sure to go to jail” on a firearms violation.

A defense objection cut short his testimony on the subject at that point.

With Huihui ready to go into more detail, defense attorney Chester Kanai objected on the grounds that it was not relevant to the murder charges against his client Madrid. Circuit Judge Robert Chang agreed and stopped the prosecutor from questioning Huihui about the “favors.”

Huihui also has told authorities privately that after the killing he “collected favors” from Mehau and that some of his associates were given “special consideration” by “certain judges.”...

Despite the serious nature of Huihui’s allegation, there has been no official response and no indication of any investigation to determine the identity of the judges allegedly involved.

Chief Justice Herman Lum said yesterday he “chooses not to respond to such allegations.”...

* * *

Honolulu Star-Bulletin, 10/24/86, by Mary Adamski: Mehau, Lazo, Wong Join 2,000 Who Attend Rally for Anderson - Gubernatorial candidate D.G. “Andy” Anderson told the crowd at the Honolulu International Country Club last night, “When I was invited here for a gathering tonight, I had in mind about 50 to 100 people.”

More than 2,000 people showed up for the rally at which they got heaps of food, free-flowing beer, music and comedy by some of the state’s best-known entertainers . . . and it didn’t cost them a cent.

Senate President Richard “Dickie” Wong, a Democrat, was there and so were many others who said “I’m a Democrat but ...”

Dozens’ of uniformed Hawaii Protective Association security guards were scattered throughout the packed parking lot...

And the president of the security agency, Larry Mehau, was there.

Several people in the crowd said they were told that the rally was underwritten by Mehau.

Mehau, however, said he was not the sponsor of the affair but had “helped” to organize it.

Mehau has supported Democratic candidates for governor since the days of the late John A. Burns, with whom he had served in the Honolulu Police Dept. He has been involved in organizing rallies like yesterday’s for the Democrats for years and has been the producer of opening day entertainment at the state Legislature.

Mehau agreed to pose for a photograph with entertainers but he said “no” to a request for a photo with Anderson. . . .

“I don’t want to hurt Andy,” said Mehau. He said the news reporters “dredge up things from the past and try to use my support to hurt Andy.”

Mehau has never been indicted or convicted of a crime but he has been the topic of verbal and printed attacks and innuendos about an alleged connection with organized crime in Hawaii. He sued several news organizations in 1977 over such allegations....

AMONG THOSE ATTENDING the party was one of former Philippine President Ferdinand Marcos’s most vocal local supporters, Joe Lazo, Don Ho, Jay Larrin, Clayton Naluai, Mel Cabang, Frank DeLima, Bla Pahinui and other entertainers whose talents have graced similar rallies for Democrat Gov. George Ariyoshi in past elections were there....

* * *

Honolulu Advertiser, 9/15/88, by James Dooley: Reed Releases the Documents on U.S. Probe of Larry Mehau - State Sen. Rick Reed, co-defendant with City Prosecutor Charles Marsland in a libel suit filed by Hawaii businessman Larry Mehau, yesterday released to the media some 100 pages of laws enforcement “intelligence reports” concerning Mehau, some of them dating back to 1974.

Reed said the documents “point to Larry Mehau as the godfather” of organized crime in Hawaii. But Mehau’s attorney David Schutter, said the documents are “a joke” – unsubstantiated collections of “spurious” and anonymous charges. He said if the anonymous charges had any merit, Mehau long since would have been indicted....

Reed said yesterday he has repeatedly warned the public about the “godfather.”

“But too many politicians, bankers, labor and business leaders, as well as judges and members of the media, have continued to maintain friendly ties with Mehau,” Reed said....

The bulk of the reports released by Reed are intelligence reports written by agents of the U.S. Drug Enforcement Administration between 1974 and 1979.

Several of them state categorically that Mehau – a former police officer who now runs one of the largest security guard firms in the state – is the head of organized crime in Hawaii....

* * *

Honolulu Star-Bulletin, by Rick Daysog: Kamehameha Schools/Bishop Estate trustees Gerard Jervis and Oswald Stender are questioning a campus security contract with a company headed by Big Island businessman Larry Mehau.

In court papers filed yesterday, Jervis and Stender said the security contract with Hawaii Protective Association Ltd. was never presented to the board for discussion or approval before it went into effect about July 1996.

The nonbid security contract for Kamehameha School's entry gates, which sources place at $40,000 a month, is one of several deals and policy decisions Stender and Jervis said were kept from them by trustees Richard Wong, Henry Peters and Lokelani Lindsey....

"A trustee who fails to keep his co-trustees so informed breaches the trust," Stender and Jervis said. "All trustees, whether in the majority or the minority, must be given notice and an opportunity to be heard on all significant issues regarding the administration of the trust."...

Mehau told the Star-Bulletin yesterday he is disappointed with the criticism of his company's contract to handle the gate security. Mehau said he was approached last year by Kamehameha Schools President Michael Chun and longtime friend and school Vice President Rockne Freitas about conducting the security work for the entire Kapalama Heights campus....

Hawaii Protective Association previously had handled security for Bishop Estate's Hamakua lands, for about $31,000 a month during the estate's fiscal year 1996. ... (the article doesn’t mention the lucrative long-time contract with Bishop Estate’s for-profit subsidiary, Royal Hawaiian Shopping Center, Inc.)

Mehau said he sees no problem doing work with longtime friends such as Freitas or trustees Wong and Peters.

"Most of our security contracts are with friends who gave us business."

(The article also doesn’t mention the extremely lucrative contracts that HPA has had for years with the State of Hawaii for providing security at the Honolulu International Airport.)

* * *

November 3, 1999

MEHAU, WONG MET WITH LEGISLATORS PRIOR TO BRONSTER VOTE, NOTES SHOW

Critics believe the Bishop Estate played a role
in the ouster of A.G. Bronster

By Rick Daysog, Honolulu Star-Bulletin

Three freshmen state senators who played a role in derailing the confirmation of former Attorney General Margery Bronster met with then-trustee Richard "Dickie" Wong and longtime political insider Larry Mehau prior to the ouster of the state's highest law enforcement officer.

Sens. Colleen Hanabusa, Jan Yagi Buen and David Matsuura said they met with Wong and Mehau to discuss organization issues at least two months before Bronster's controversial confirmation defeat.

But Wong, in a recent deposition, said they discussed Bronster's confirmation. Mehau, in a telephone message to Wong, said he thought they had the votes to stop Bronster's appointment, according to the deposition.

Critics said the meeting -- detailed in a series of telephone messages recorded by Wong's longtime secretary -- confirms that the Bishop Estate and its trustees were actively seeking to remove Bronster, whose two-year investigation of the multibillion-dollar trust had alleged criminal wrongdoing on the part of Wong and fellow trustee Henry Peters.

Gov. Ben Cayetano, who has strongly suggested that the Bishop Estate trustees lobbied senators against Bronster's confirmation, said he only recently learned of the January meeting.

"That message indicates those guys made up their minds long in advance right?" Cayetano said.

Wong's deposition and Mehau's phone message are among evidence presented in a suit to permanently remove Wong and Peters from the Bishop Estate board.

Wong and his attorney, Glenn Sato, could not be reached for immediate comment this morning. Wong -- who was temporarily removed from his $1 million-a-year post by Probate Judge Kevin Chang on May 7 -- previously denied that he lobbied for Bronster's removal. But in an Oct. 20 deposition, Wong confirmed that he met with the freshman legislators to explain the ins-and-outs of the legislative process, several sources said.

Wong said the issue of Bronster's confirmation came up during the meeting but was not discussed in detail. He said both sides expressed their concerns about the attorney general and Wong told them he believed that Bronster acted improperly, sources said. Mehau, a former state Land Use Commissioner and supporter of former Gov. Jack Burns, also confirmed the meeting but said they did not discuss Bronster's confirmation.

He also denied that he told Wong that he had enough votes to overturn Bronster's confirmation.

Matsuura and Hanabusa also confirmed that they met with Wong to discuss organizational issues but said they did not discuss Bronster's confirmation. Matsuura, who placed the meeting in February or early March and not in January as Wong had, said Mehau may have been present at the meeting.

Buen, who recalls that Mehau was present, said she could not remember whether Bronster was discussed.

In April the Senate, by a 14-11 margin, rejected Bronster's nomination. The controversial vote touched off a storm of protest, marked by demonstrations and hundreds of angry letters and e-mails to senators.

Critics believe the Senate's rejection of Bronster's confirmation underscores the 115-year-old trust's clout in the state Legislature. Wong is a former Senate president and Peters is a former House Speaker.

"This confirms the widespread suspicion that the Bishop Estate or the trustees played some role" in the Bronster controversy, said Walter Heen, chairman of the state Democratic Party and co-author of the 1997 "Broken Trust" article that prompted Cayetano to launch the state's investigation of the estate. . . .

When informed about the senators' meetings with Wong, Bronster yesterday said it all shows how much clout the Bishop Estate retained in the state Legislature. She also faulted senators for making decisions behind closed doors.

"It shows for me how insincere all of the other issues were," Bronster said.

"I think the people in the state deserve better."...

For more on Senator Colleen Hanabusa and former Senator, and Bishop Estate Trustee, Richard Wong, GO TO > > > The Grand (and dirty) Ko Olina

* * *

From Philippine Daily Inquirer, 10/31/99: . . . A surprise witness is expected to corroborate industrialist Enrique Zobel's claim that the late strongman Ferdinand Marcos gave gold bars worth $1 million to each of his favored men. . . . Amid a flurry of denials and verbal attacks sparked by his controversial deposition to Senate investigators, Zobel yesterday stuck to his story as he ended his third day of testimony.

He also said he learned that Marcos allegedly gave the gold bars to former President Fidel Ramos, Sen. Juan Ponce Enrile, the late Gen. Fabian Ver and the late Rep. Floro Crisologo between 1960 and 1970....

Before he died in 1989, Marcos also allegedly told Zobel that he had given "a small share of the gold bullion" and gold Rolex watches to 12 people. The so-called "Rolex 12" were allegedly the key strategists of martial rule....

Zobel, who was paralyzed from the neck down after an accident in 1991, yesterday put his thumb mark on his 69-page deposition at the Philippine consulate.

The last three days were an ordeal for the 72-year-old businessman who answered senators' questions for several hours while strapped to a wheelchair.

* * *

Deposition of Mr. Enrique J. Zobel Before the Senate Committee on the Accountability of Public Officers and Investigations and Committee on Banks, Financial Institutions and Currencies, at Philippine Consulate, Honolulu, Hawaii, on Oct 27, 1999:

THE CHAIRMAN. . . . Earlier, we also heard that you had communicated to Mr. Bongbong Marcos. . . .

MR. ZOBEL. Yes. . . .

THE CHAIRMAN. All right. And then ... he also told Chuck, "Nag-usap na rin kami nung Big Hawaiian, OK no planchado na."

MR. ZOBEL. Now, the Big Hawaiian was here a while ago, his name is Larry Mehau.

THE CHAIRMAN. Ah, so Larry. So, you are referring to Larry Mehau?

MR. ZOBEL. Larry is here now. You could ask him directly, if Bongbong talked to him.

THE CHAIRMAN. Yes, we will come to that. Now this Inigo name which is mentioned here is your son, Mr. Zobel?

MR. ZOBEL. Yes, my son.

THE CHAIRMAN. And according to this letter of yours, you talked to Inigo and you asked him if he indeed talked with Bongbong? . . .

MR. ZOBEL. No. We called him by telephone . . .

THE CHAIRMAN. So the Big Hawaiian refers to Mr. Mehau?

MR. ZOBEL. Mehau. He is here.

THE CHAIRMAN. So, probably we will ask ... We will take a break from the testimony of Mr. Zobel to ask Mr. Mehau if he is willing to answer a few questions regarding this point? Mr. Mehau, will you please come over, Mr. Mehau? Consul General, will you place Mr. Mehau under oath?

THE CHAIRMAN. . . . Kindly state for the record your name, Mr. Mehau, your full name.

MR. MEHAU. Larry Mehau.

THE CHAIRMAN. And how it's spelled? M- e- h- a- u?

MR. MEHAU. Yes. . . .

THE CHAIRMAN. All right. Do you know a person by the name Noel C. Calixto, Mr. Mehau?

MR. MEHAU. I know of him, yes.

THE CHAIRMAN. Have you had any occasion to talk with him in the last few days?

MR. MEHAU. Yes, we had breakfast together.

THE CHAIRMAN. And what did you talk about if you can share that with us?

MR. MEHAU. Nothing as important as it was discussed here. I informed him that I was taking care of Mr. Zobel's security.

THE CHAIRMAN. But there was no ... anything that could be interpreted to mean that you were talking with Mr. Calixto regarding the Marcos wealth?

MR. MEHAU. Not about the Marcos wealth, but about his testimony.

THE CHAIRMAN. His testimony?

MR. MEHAU. Yes.

THE CHAIRMAN. Unless Senator Flavier wants to ask further questions.

SEN. FLAVIER. I have a follow-up question for Mr. Zobel. . . .

THE CHAIRMAN. . . . All right. Thank you, Mr. Mehau. Thanks a lot.

SEN. FLAVIER. . . . Don Enrique, yesterday you alluded to an incident purporting to show that there was threat to life referring, I think, to your children? . . . Could you just corroborate because I have a follow up question.

MR. ZOBEL. Well, I have had calls from my very close friends of mine to tell me that they overheard that they wanted to harm me or my children or my grandchildren. And please, necessary precaution in Hawaii before the deposition.

SEN. FLAVIER. Who was your informant, Don Enrique, who told you? You are at liberty to do so.

MR. ZOBEL. Well, I'm sorry, but he asked me please not to mention his name which I promised.

SEN. FLAVIER. That would be fine. . . .

* * *

For more on Enrique Zobel, GO TO > > > The Consuelo Alger Zobel Foundation

For more on Ronald Rewald and the CIA, GO TO > > > Flying High In Hawaii

For more on Hawaii Protective Association, GO TO > > > WHO’s Guarding the Hen House???

For more on the Kamehameha Schools connection, GO TO > > > Dirty Money, Dirty Politics & Bishop Estate

For even more connections, GO TO > > > The Puna Connection

Lawrence Landry - From Journal Inquirer, 11/22/00, by Don Michak: . . . A former top official with one of the nation’s wealthiest foundations denied Tues that he was able to start his own investment partnership with $100 million in Connecticut pension money because he agreed to go along with an extortionate demand by former state Treasurer Paul J. Silvester.

But Lawrence L. Landry, who until two years ago was chief financial officer at the Chicago-based MacArthur Foundation, confirmed that he paid at least $1.09 million in “finder’s fees” to a mysterious New York investment banker, Andrew Ferdinand Moses, only after Silvester suggested that Moses was the man to help him get the state’s backing....

Landry said the corrupt former treasurer also had arranged for Moses to meet him and his associates in the Palm Beach, Fla-based Westport Senior Living Investment Fund, which buys and develops retirement communities....

Silvester was convicted last year on federal racketeering and money-laundering charges, and investigators are continuing to examine how he funneled bribes, and kick-backs through his or others’ political campaigns.

Landry and an investment banker associated with Westport, John Magee, meanwhile said they had no reason to suspect that Moses may have kicked back part or all of his finder’s fee to Silvester....

State treasury records show Moses received a $437,500 fee in connection with one other investment authorized by Silvester.

Landry and Magee said Westport signed a contract with Moses’ company, New York Capital Partners, which also was supposed to find investors in other states for the partnership....

During his half hour presentation to the IAC, Landry revealed that the biggest backer of Westport Advisors, Ltd., the general partner in Westport Senior Living Investment Fund, is Kamehameha Schools/Bishop Estate, a $10 billion Hawaiian education trust that owns 69.2% of Westport.

Similarly, Landry disclosed that Bishop Estate is also the second-biggest investor in the Westport Senior Living Fund itself, having put up $25 million.

Bishop Estate, said to be the nation’s wealthiest charitable trust, has been wracked by a scandal involving the former trustees, whom the Internal Revenue Service ordered removed after accusations that they mismanaged estate finances, took kickbacks, and paid themselves annual fees averaging around $900,000 each.

Its critics, like University of Hawaii professor Randall W. Roth, also say the trust was for years operated “as a multibillion-dollar candy store for the state’s political establishment.”

Landry, who has been quoted in the Hawaiian press as defending the estate’s treasurer, protested Tuesday that the controversy surrounding Bishop Estate has nothing to do with him or Westport.

The fact that he, Westport, and Bishop Estate now also have a connection to the Silvester scandal, he added, is purely coincidental....

For more, GO TO > > > A Connecticut Yankee in King Kamehameha’s Court

Leon Panetta - Leon Panetta served as White House Chief of Staff under President Clinton from 1994 to 1997.

PBS Online, 11/8/96: Presidential Press Conference . . . President Clinton held a news conference, the first since his re-election victory Tuesday. The major announcement was that of Erskine Bowles to replace Leon Panetta as White House Chief of Staff . . .

PRESIDENT CLINTON: . . . I must begin by announcing that Leon Panetta, who has been my chief of staff since 1994, will be resigning . . .

REPORTER: The election is over. ... but some questions remain. One of them is: How do you explain the obsession with fund-raising, especially from dubious Asian sources, and how do you overcome the image created by your opponent that you are a President who cannot be trusted?

PRESIDENT CLINTON: Let me answer the second question first. I think the American people, since they’ve been hearing this for five years, took a long, hard look at it, and they measured that against what they saw in terms of the work of this administration, in terms of the people who were laboring hard to make their lives better, and in terms of the President. And I think they made their judgment that I have worked hard for them, I will keep working hard for them ... and I think that they gave me their trust, and I’m going to do my best to be worthy of it.

Now, with regard to the contribution issue, the Democratic Party and the Republican Party raised a lot of money under the rules which now exist. The Democratic Party received over a million different contributions in two years. They determined two things: One is that a relatively small number of them – I think – I don’t know exactly what the number is but quite a small number out of a million, they should not have taken, and they have returned them.. They also– the Democratic Party said that they should have a tighter screen on contributions when they come in, and they’ve implemented an improvement so that they won’t receive contributions they shouldn’t give they can determine it at all. (Huh?) I think that’s a good thing. . . . Terry.

REPORTER: Mr. President. Attorney General Reno is considering whether to appoint an independent counsel to investigate these allegations of improper fund-raising by your campaign. She says that she’s got–

PRESIDENT CLINTON: Wait, wait, wait. There have been no allegations about improper–

REPORTER: Well, by–

PRESIDENT CLINTON: That’s correct– by the Democratic Party– let’s–

REPORTER: She says that she’s–

PRESIDENT CLINTON: That was the other campaign that had problems with that– not mine.

REPORTER: General Reno says she’s caught between a rock and a hard place and that she’ll be criticized no matter what she does. I know that it’s her decision, but what do you think? Do you think that these– these allegations should be investigated by an independent counsel, and secondly, do you think that General– would you like to see General Reno stay on for a second term?

PRESIDENT CLINTON: I think on the first question I should have no comment on that. On the second question, I should have no comment on any personnel decision until I have had a chance to meet with the cabinet members...

* * *

From PBS Online, 1/17/97: PANETTA HEADS WEST . . . On his last day in office he talks to Margaret Warner about ethics, money in politics, and Clinton’s Presidency....

MARGARET WARNER: . . . Now one of this group of problems did happen on your watch, and that is the Democratic National Committee fund-raising, and let me just ask you whether you think, in retrospect, you all put too much pressure on the DNC to raise these millions and millions for the presidential year and that there was also maybe something a little unseemly about the way you involved the President in all these special things for the donors or the nights in the Lincoln Bedroom or the coffees here at the White House....

LEON PANETTA: Well, obviously, I think the President and all of us were disappointed at what happened with regards to how the DNC checked the contributions and the fact that they had a check system in place and then ignored it or put it aside...

* * *

From The Detroit News, 1/29/98: . . . Negotiations to get Monica Lewinsky’s cooperation in the sexual scandal surrounding President Clinton inched forward Wednesday while investigators cast a wide net to gain corroborating evidence.

Independent counsel Kenneth Starr’s team called the biggest figure yet to testify before a federal grand jury sifting through charges that Clinton had sex with Lewinsky while she was a White House intern and then encouraged her to deny it under subpoena...

“I am personally not aware of any improper relationship, sexual or otherwise, by this president and any of the White House interns or anyone else for that matter,” Panetta said later.

Panetta’s testimony is seen largely as a building block for the investigation because of his access to Clinton and because Lewinsky worked for him when the alleged sexual encounters occurred.

Panetta, though, recently said he didn’t recall Lewinsky...

* * *

The Honolulu Advertiser, 02/05/00, by Sally Apgar: . . . Trustees helped by Inouye, Akaka in fighting pay limit...

The ousted trustees of Kamehameha Schools enlisted the aid of Sens. Dan Inouye and Daniel Akaka in 1995 to influence fellow members of Congress to vote against a bill that threatened the trustees’ $1 million-a-year paychecks, according to internal trust documents obtained by The Advertiser...

Thirteen confidential memos during the fall of 1995 through April 1996 detail the trustee’s strategy against the bill, which called for intermediate sanctions that penalize high-ranking insiders of charitable organizations for taking excessive personal benefits...

The memos express the trustees’ intent to “kill the measure” and their recruitment of influential contacts, such as Inouye, Akaka and the Rev. Jesse Jackson. They also targeted others, including Senator Patrick Moynihan of New York and even White House insiders such as Leon Panetta, then President Clinton’s chief of staff, to win support...

The memos give a glimpse of the behind-the-scenes political power and influence the former trustees once wielded and describe a costly, intensive effort to protect their interests...

Mark McConaghy of PricewaterhouseCoopers, a longtime tax adviser to the trust, was charged with contacting Leslie Samuels, then assistant secretary for tax policy...

* * *

Zenith National Insurance Corp. Press Release, 5/18/00: LEON PANETTA JOINS ZENITH’S BOARD OF DIRECTORS. Zenith National Insurance Corp announced today that Leon E. Panetta has been elected a Director of Zenith and its wholly-owned subsidiary, Zenith Insurance Company...

See in The Catbird Seat, Part II: Riscorp; Zenith National Insurance

Lloyd Bentsen - Former U.S. Secretary of Treasury. Bentsen sat on the Board of Directors of American International Group at the time Governor Clinton's Arkansas Finance & Development Authority (with help from Goldman Sachs and Robert Rubin) invested in AIG's Coral Reinsurance in Barbados.

Bentsen, along with Hawaii's ex-governor (and FOB) John Waihee, are also lobbyists with the Washington, D.C.-based law firm Verner Liipfert Bernhard McPhearson Hand which was hired by Bishop Estate to lobby against the federal "interim sanctions" legislation.

The state Attorney General's Office disclosed that the trust paid the firm more than $900,000 for its unsuccessful lobbying efforts on intermediate sanctions legislation between 1995 and 1998....