Dirty Money, Dirty Politics and
Bishop Estate

Stealing the Legacy of a Hawaiian Princess


Sightings from The Catbird Seat

~ o ~

PART III – The Scandals Begin Again….

* * *

Where we left off in Part II

Many of the key players in the conspiracy are still in place.

Only time will tell if these powerful birds of prey can succeed in sinking their talons even deeper into the corpus of the estate. Let us all pray that persons of honor and integrity are selected as future trustees and that Princess Pauahi’s legacy is restored to her deserving children….

* * *

November 8, 2003

Sex arrest acknowledged on Kamehameha campus

By Rod Antone, Honolulu Star-Bulletin

Kamehameha Schools officials acknowledged last night that one of their high school students was arrested yesterday for allegedly sexually assaulting another student on campus.

This is the third allegation of sexual misconduct by Kamehameha students in the last week.

“We are deeply disturbed by the suggestion of widespread sexual misconduct on campus,” said a Kamehameha press release issued last night. “The kinds of behavior that have been alleged in the last week are not condoned and are not tolerated at Kamehameha Schools.”

Honolulu police reported yesterday that they arrested a 15-year-old male for allegedly raping a 14-year-old female classmate over eight months. According to police, the victim said the assaults took place during school hours and on campus.

The juvenile suspect was arrested on two counts of first-degree sexual assault and one count of third-degree sexual assault. He has been released pending investigation.

Though police identified the campus only as a “Honolulu-area high school,” Kamehameha School officials confirmed the arrest of one of their students last night.

The press release also stated that yesterday’s arrest was a “police matter,” and therefor it is “inappropriate for us to comment while the investigation is under way.”…

A school spokesman said that yesterday’s arrest is not related to the two earlier cases….

In response to the alleged videotaping incident, schools officials said that when they first heard about it, the “immediately began a review of the allegations” and found that there were “a number of students involved, and there were different versions of what actually occurred.”

“Our investigation lasted a week and will result in disciplinary action,” the press release said. “We are in the process of assembling a team of experts to help us review our sexual harassment policies and identify additional actions we can take to encourage and influence health, appropriate, respectful attitudes, relationships and behaviors.


November 5, 2003

Student sex cases rock Kamehameha

A suit claims actions by a male student
led a girl to leave the school

By Mary Adamski, Honolulu Star-Bulletin

Kamehameha Schools officials, who have dealt with numerous scandals over the past seven years, are now grappling with two separate cases of alleged sexual misconduct by students, both involving current or former football players.

In a lawsuit filed yesterday, a former Kamehameha student alleged that she was forced to leave the school in her sophomore year because campus officials would not expel a football player who, she said, had sexually assaulted and harassed her since seventh grade.

The 17-year-old girl and her mother filed the suit in U.S. District Court yesterday under a federal statute that bans sexual discrimination in schools. They did not file a police report about the incidents, which allegedly began in 1998 and continued until the girl left the Alewa campus in 2001 when Kamehameha paid her tuition to another school.

It is the second report within the past week of alleged student sexual misconduct at the private school.

The 17-year-old boy accused in the suit is not one of six Kamehameha football players who were suspended from playing in a key game Saturday, reportedly after a videotape surfaced of some of the boys having sex with a female student.

Attorney David Simons, who is representing the girl’s family, said they decided to file now, “following the events of this weekend.” He said the two incidents demonstrate a need for an independent investigation similar to the outside scrutiny into actions of the schools’ trustees five years ago.

The investigation should seek “to determine whether or not there is favoritism shown to athletes or other students based on who they are, not what they do,” and whether there is a consistent and fair sexual harassment policy, he said.

In a statement, Kamehameha Schools officials chided Simons for “attempting to capitalize on the current allegations involving students at Kamehameha Schools.” It was the school’s first official comment on televised reports over the weekend of the student sex video.

“The current allegations involving videotapes and Kamehameha students are very serious,” the release said. “They affect the future of the students involved, and they require a thorough and balanced review. If any disciplinary actions are appropriate, they will be implemented in a confidential manner between the students involved and Kamehameha Schools.”

School spokesman Kekoa Paulsen said actions such as suspension or expulsion will not be announced to the public.

A source familiar with the latest alleged incident told the Star-Bulletin that two football players were videotaped having sex with a female student, and the other boys were benched because they knew but did not tell school authorities.

Honolulu police are not investigating the allegations involving the videotape because no one has submitted a complaint or brought in evidence, according to police spokeswoman Michelle Yu. State law prohibits possession and production of child pornography, which includes videotapes depicting minors engaged in sexual conduct.

The suit filed yesterday does not name the plaintiffs or defendants to protect the two minors, said Simons. It alleges:

>> Complaints of sexual harassment from five girls led the school to suspend the boy for three days in 1998.

>> Only after her daughter was hospitalized for attempting suicide by taking Tylenol tablets did the girl’s mother learn that she had complained of sexual harassment and received campus counseling.

>> No action was taken even after the boy violated a campus restraining order to stay away from the girl. Among numerous incidents detailed was one in which the girl “was pressured and harassed … into having sexual intercourse.”

>> A psychiatrist advised that she leave the school as long as he remained. The school “agreed to pay for Jane Doe’s psychologic counseling and her tuition to attend (another private school), but did not take action against” the boy.

Simons said the boy was a football player until he was let go from the school in fall 2002, his junior year, for reasons not revealed in conferences with school attorneys.

“We tried in February to have my client readmitted to the school, but the school said no,” he said.

The school replied that “many of the allegations in Mr. Simons’ complaint are simply not true and will be addressed in court.”

It described the allegations as “a situation that occurred several years ago, and one in which Kamehameha Schools did everything it could to support and assist his client.” The statement said the schools paid for the girl’s “treatment and educational support” since she left the campus.

Kamehameha has endured numerous scandals since 1997, when its former trustees were accused of mismanaging the multi-billion-dollar trust devoted to educating children of native Hawaiian ancestry. Subsequent investigations led to the resignation of the former trustees.

More recently, the schools’ CEO, Hamilton McCubbin, resigned amid allegations of an inappropriate relationship with a female employee. He has denied the allegation. Also, the school faces two legal challenges to its Hawaiians-only preference admissions system.

(Star-Bulletin reporter Susan Essoyan contributed to this report.)

For a look behind the legal facade, GO TO > > > Harmon’s Letters to the New Trustees


October 21, 2003

Ex-teacher sentenced
in sex assault

By Jason Armstrong and Cris Loos, Hawaii Tribune-Herald

A former Honokaa teacher will spend a year in jail for sexually assaulting a 13-year-old boy placed under his care.

Tranquilino “Kia” Fronda Jr., 58, also will serve 20 years probation and must register as a sex offender, Circuit Judge Terence T. Yoshioka ruled Monday….

In rejecting the defense’s plea for no jail time, Yoshioka said he wants to deter others from committing rape and the satisfy the public that an adequate sentence was imposed….

In a letter to Yoshioka, the boy’s mother said Kamehameha Schools, the Boy Scouts and the Queen Liliuokalani Children’s Center identified Fronda as a suitable mentor for her two boys. As a result, she allowed them to attend summer immersion programs “Uncle Kia” ran on his farm….

When the younger boy later started getting into trouble and acting rebellious, the woman said she sought help from the man with whom the children had placed their trust. The woman and Fronda agreed for the boy to spend two months with him.

After getting into more legal trouble, the boy again was placed under Fronda’s supervision and went to another immersion program last summer.

It was during this time that the boy confessed that he was sexually assaulted, his mother said.

The woman said she then confronted Fronda, who said, “I never did anything to (the boy) that he didn’t let me do.”…

“Quite frankly, I don’t see how (jail) would benefit Mr. Fronda or, quite frankly, society,” his attorney, Stanton Oshiro, told the court.

Fronda confessed to police and is not an “enlightened individual” who doesn’t need to be taught a lesson, Oshiro said….

He agreed to “expedited sentencing,” a process under which a defendant waives a grand jury hearing or trial and goes directly to sentencing.

In exchange, Fronda became eligible for probation. First-degree sexual assault usually carries a 20-year prison sentence.

“The purpose in expedited sentencing is to protect the child and not force the child to testify at grand jury and go through the horrors of a trial,” Deputy Prosecutor Darren Ching previously told the Tribune-Herald.

Fronda taught at Honokaa High and Intermediate School from November 2000 until August 2001, according to the state Department of Education…. 

Lance Niimi, unit manager of the Hilo office of the Queen Liliuokalani Children’s Center, was Fronda’s supervisor when he was affiliated with the center.

She declined to give any specifics about Fronda’s work with children….


October 25, 2003

Estate selects land managers

By Andrew Gomes, Honolulu Advertiser

The nonprofit trust recently informed the companies — CB Richard Ellis Hawaii Inc., Colliers Monroe Friedlander, MMI Realty Services Inc. and Sofos Realty Corp. — of its intent to assign them management contracts, which may still need approval from top officials at Kamehameha Schools….

The $5 billion trust, set up in 1884 to help educate children of Hawaiian ancestry, announced the outsourcing plan in August as part of an effort to improve efficiency by reducing management costs, taking a more passive role in its investments and making more resources available to support educational programs.

More than 100 Kamehameha Schools employees are expected to be affected, though the estate said it would negotiate with contractors to hire estate employees. Those not retained will be eligible for separation packages including pay and training support….

… Continued at CB Richard Ellis


July 16, 2003

How Kamehameha
Admitted A Haole

By Bob Jones, Midweek Magazine

You thought the 1997 “Broken Trust” essay and subsequent ouster of all the Bishop Estate trustees except Oswald Stender ended the internal fighting at Kamehameha Schools?

Not by a long shot. It’s back, just as bitter and the newest trustees have stepped into a legal minefield that could take their legs off and alter the school forever. They’ve in effect invited a federal lawsuit and might cause the somnambular Probate Court and Special Master to wake up and notice that something’s very wrong. And then there’s the Internal Revenue Service.

And when some activist members of the Kamehameha Schools family get to the end of this column they should be pounding on trustees’ doors and demanding explanations.

School spokesman Kekoa Paulson says “Kamehameha Schools’ admissions policy and procedures were followed throughout the 2002 process. Both the attorney general’s office and the court appointed master have been briefed on the questions that have been raised about the situation in Maui last year, and neither of them have voiced concern over how the policy had been applied.”

I wonder if they had these facts.

My story goes back to November of 2001 and April-May of 2002 when K.S. candidates for admission were being screened and interviewed and selected. That was an unusual time of low applications for the new Maui campus and, so, low openings —— the latter set by the school based on the expectation of how many would apply.

According to well-sourced information, notes and personal recollections I gathered last week, the trustees and some administration officials at the schools manipulated the vacancies in 8th grade in order to admit the first non-Hawaiian student since some haole-faculty kids were let in more than 40 years ago. Then the trustees decided to keep silent about that shattering decision and did —— until there was a news leak from Maui campus officials in July 2002.

Faced with a Hawaiian community uproar, the trustees met in an emergency session with advisory board members and decided to say they had only admitted non-Hawaiian Kalani Rossel because there were no more qualified Hawaiians. Material and personal recollections I gathered show that was an untrue statement. There were two qualified Hawaiian girls on the list of qualified applicants, vying for one remaining 8th-grade vacancy that April.

But the vacancy was on the boys’ side. The school does split the vacancies by gender but does not require total gender equity. So the one boys’-side vacancy was awarded to one of the Hawaiian girls. That left the preference-qualified girl and non-preference-qualified Rossel unaccepted. Both had exceeded the test-score cut-off.

That should have been the end of it under KS policy in effect in 2002; sorry, but our admissions are now closed. That no-fudging policy had been adopted to end the old days when “red dots” put by certain applicants’ names meant they were friends of friends of the old trustees and that room should be created for them. The Probate Court had ordered fair, transparent admissions implemented by school officials, not the trustees.

In apparent disregard of that mandate, the meeting’s notes show, the trustees with the blessing of then chief legal officer Colleen Wong (now the schools’ interim chief executive officer) created two new vacancies and admitted the other Hawaiian girl and the non-Hawaiian Rossel.

Then after fixing the process in order to admit him, they agreed to say nothing publicly about Rossel, whose parents say they marked right on the initial application that he was not Hawaiian. The trustees claim they had planned to make an announcement of admitting the first non-Hawaiian later in the year. A source in the admissions process tells me that despite my doubts, that’s true. They wanted to wait until Rossel was in, it was an irreversible, done deal, and then they’d take the heat but could say there’s was nothing they could do about it. They’d also keep claiming it was only because of no qualified Hawaiian applicants and hope the community bitching would go away.

According to material provided, an internal audit confirmed that trustees previously deviated from Hawaiian preference during admissions with a non-Hawaiian student who subsequently withdrew before the school year began. It was the first effort to slip in a non-Hawaiian. Everyone kept quiet on that, too, and it didn’t cause a problem because of the student’s eventual withdrawal.

It’s rather amazing that the trustees could ever have thought such an explosive decision as the Rossel case could be kept secret. Did they think that since this new student’s first name was Kalani nobody would question his ethnicity and it would be a non-issue? Surely they knew there was high risk of a leak.

But why would the trustees do anything so stupidly risky and guaranteed to make many Hawaiians go ballistic without some advance discussion and community preparation?

The trustees have tended to play a very cagey game of balancing between the Princess Pauahi Bishop’s will (as interpreted by her haole husband after her death to favor Hawaiian-blood children) and the lurking problem of a federal-tax-exempt trust potentially being cited as racist. They said after this started blowing up last year that “we feel we could not change the admissions policy from one of preference to one of exclusion. We must stand by the decision, despite the pain it has caused. We do regret the way the decision was communicated, and we have apologized for that. The process of evaluating individual applicants is confidential and must be kept private in order to protect the integrity of the trust and the privacy of applicants.”

The more likely answer is that the trustees feared a lawsuit by the Rossel family if their son was excluded in a year of very few qualified-by-test-scores Hawaiian applicants. They wanted to dodge a legal bullet and did not want to make an announcement that would arouse the wrath of many Hawaiians who feel the school should stay Hawaiian.

The operational culture established by the Probate Court after the scandal of the ‘97 shake-up of trustees says that admissions were to be controlled by the new CEO, Hamilton McCubbin, and chief admissions officer Wayne Chang. But those two were overruled by the trustees and legal officer Wong….

Now here’s the corker. Up through the Rossel affair, K.S. admissions used the term qualified Hawaiians. That meant cut-off test scores. But that also lowered the number of OK applicants and opened the way for non-Hawaiians to get in if Hawaiian applications were very low. So the trustees changed the rules for school year 2003. No more test scores. Just a preference for anyone with any amount of Hawaiian blood.

The current website says “Hawaiian preference so far as permitted by law.” Ironically, that no-more-test-standards decision has really complicated things for the Hawaiians-only crowd.

Here’s why:

A lawsuit was filed last month in Hawaii federal court on behalf of an unnamed non-Hawaiian student who says that his civil rights were violated when the school denied him admission for this school year due to race. The attorneys are Sacramento, Calif., constitutional law expert Eric Grant, and local lawyer John Goemans, who successfully challenged the Hawaiian-only voting for the Office of Hawaiian Affairs elections three years ago in the Rice vs. Cayetano case. They will argue that if there are no test-score or other standards for admission, other than having some drops of Hawaiian blood, isn’t that illegal racial exclusion?

Many law experts say you can’t be “legal” with the IRS tax-exemptions code if you admit strictly on the basis of race, which K.S. now does. That word “preference” is unlikely to save it. It would fly in the face of the latest Supreme Court decision on affirmative action and many other, older federal court decisions. The trustees have been painfully aware of this conundrum and even stopped taking ROTC money so they could say they don’t get federal money.

Grant and Goemans will argue that a tax exemption is federal money.

New shenanigans like those that brought in the IRS in ‘97 over trustees’ bloated salaries could mean the end of Kamehameha Schools’ special tax status. When the feds stomped down on Bob Jones University for religious exclusion, the school had to pony up six years’ worth of back taxes. It’s been estimated that Kamehameha Schools could be assessed a billion dollars if it were to be found in past and current violation of its tax-exempt status.

Four of the trustees involved in that contentious Maui admission decision last year—— chair Constance Lau, vice-chair Nainoa Thompson, Douglas Ing and Robert Kihune —— are said to favor Hawaiian-only admissions. Only the fifth trustee, Diane Plotts, has been mentioned in news stories as amenable to opening the schools to everyone. My sources say she has voiced that opinion privately as well.

On top of these calamitous problems, Kamehameha Schools has the issue of the forced departure and golden parachute severance for ousted CEO Hamilton McCubbin over an alleged improper relationship with his secretary. He has denied that it was a sexual affair. McCubbin is married and also was alleged to have had an improper relationship with a woman when he was at the University of Wisconsin. He is suing the UW in federal court for defamation over that.

If you believe McCubbin’s position that he’s simply the victim of the jealousy of two former secretaries who were demoted in favor of the woman in question, then the trustees’ decision to use that matter to force him out could have been the culmination of something much bigger —— McCubbin’s strained relations with a board of heavyweights not content to let a newly-named CEO run everything he wanted to run. I emphasize could have been.

It’s been no campus secret that current trustee Douglas Ing and former trustee Oswald Stender thought the better-politically-connected Michael Chun should have been given the top job. Chun was demoted and subordinated to McCubbin by McCubbin when he was hired away from the University of Wisconsin to run what used to be called Bishop Estate and is now just Kamehameha Schools, with about a $6-billion corpus and ties to nearly every career politician in Hawaii.

Most of its cash is at First Hawaiian Bank, with smaller amounts at other institutions, but not American Savings Bank because trustee Connie Lau also sits on the board of directors of HEI Inc., that bank’s parent company. The competition for that money is not insignificant in a time of extremely low-interest-payout and big demand for new mortgages.

There have been complaints at K.S. that McCubbin was too publicity hungry or too egotistic. On the other hand, trustees traditionally have been campus butt-inskies and never more so than in the late ‘90s when Lokelani Lindsey instituted personal micro-management. (Lindsey has been convicted in a money-laundering case and is scheduled to start serving prison time in August.)

It’s gotten so petty and personal at K.S. that the trustees had the latest Ke Alii Pauahi Foundation annual report re-printed at substantial cost (some say $50,000) in order to erase McCubbin’s name and picture, even though he was the CEO and also president of the foundation for the period covered by the report and was the one who approved the report before the alterations….

I like the observation of a sympathetic, long-time KS faculty member, now retired: “The problem up there is that everything they do is done to excess.”

I don’t know how much more of this the school can stand and still fully function.

Says a well-known alumnus involved in spreading word to Hawaiians of this current dispute: “The previous board was accused of a quid pro quo style. Are we witnessing an emergence of the same mind set, along with a penchant for micro-management and an organizational culture focused on personalities, with power rather than service the dominant concern and with personal integrity cast aside?”

The lackadaisical Probate Court needs to examine who is actually running admissions, the CEO as directed by that court and the IRS or the trustees? The state attorney general needs to get cracking on potential fiduciary violations if it can be shown that the trustees lied in the Rossel case, and the IRS needs to consider pulling the tax-exemption because of too many violations of the spirit of federal law on racial exclusions.

The trustees need to come clean to the Hawaiian community.

Hamilton McCubbin and former admissions chief Wayne Chang and former legal officer Colleen Wong should be subpoenaed by somebody to testify with immunity about the admissions blunder and the tug-of-war over who runs the school.

End the feints and deceits.

Some candor, please, for a change.

– E-mail Bob Jones at BanyanHouse@hula.net



May 5, 2003

McCubbin out as CEO of Kamehameha trust

By Dan Nakaso, Honolulu Advertiser

Hamilton McCubbin, who brought stability to the Kamehameha Schools after years of scandal and controversy, announced his resignation today as the trust’s first chief executive officer.

McCubbin, 61, signed a new three-year contract with Kamehameha on Feb. 1 but suddenly resigned on Friday. He said in an interview today that he resigned to spend more time with his grandchildren and looked to possibly return to teaching at the university level.

“I really am looking to my health,” he said. “I have a son in the Middle East and family considerations.”

However, a person familiar with the situation said the trustees for months had been investigating a complaint of an inappropriate relationship between McCubbin and a female employee.

The person asked not to be identified because of the sensitivity of the situation and the fact the trustees did not plan to talk publicly about the allegation….

… Continued at: Hamilton McCubbin


May 17, 2003

Trust sets record on educational spending

Despite losing money, Kamehameha Schools
still spends $144.2 million

By Sally Apgar, Honolulu Star-Bulletin.com

Kamehameha Schools spent a record $144.2 million on educational programs in its last fiscal year, according to records filed with the Internal Revenue Service.

The money was spent on its preschool to grade 12 students and to reach thousands more Hawaiian children in off-campus educational programs or financial aid.

“The emphasis and focus of the trust has been extending the legacy to more Hawaii children, and I think the financial activity of the trust reflects that,” Kamehameha spokesman Kekoa Paulsen said yesterday about the increase in educational spending.

At the same time, Kamehameha, like many companies and institutions over the past two fiscal years, was hit hard in the stock market and on other investments. Unlike the previous two years, last year’s losses were not offset by the whopping windfall the trust received from selling its stake in the New York investment firm of Goldman Sachs LLP after it went public.

For the year ending June 30, 2002, the trust listed a loss of $93 million for one group of investments compared to a gain of $548 million the year before when it benefited from selling shares in Goldman Sacks.

The trust, which has $4 billion in assets, had revenues of $174 million in fiscal 2002 compared with revenues of $303.5 million the year earlier when the trust spent $138.7 million on educational programs.

What the trust spends on educational programs is budgeted a year or more ahead of time so it is not directly tied to the revenues earned in the year the money is spent.

In fiscal 2002, Kamehameha educated 4,835 students in its preschool-to-grade 12 program, which serves about 7 percent of native Hawaiian children.

“We reach more than 12,000 other students through various programs outside of the campuses,” said Paulsen….

In addition to education programs, Kamehameha spent $120 million on capital and major repair projects. Among the major projects is the design and initial construction of high school facilities for Kamehameha’s Maui and Hawaii campuses.

In the late 1990s, when the five trustees each earned between $800,000 and $1 million a year, the big news of the annual tax return typically was how much they made. But since the investigations of the IRS and the state attorney general and the ouster of the previous board, major educational and financial reforms have been instituted.

Last year, all five trustees together made a total of $525,000. The trustees’ individual compensations ranged from a low of $99,000 to a high of $113,500.

The highest paid officer was Wendell Brooks Jr., the trust’s former chief investment officer, who received $504,160 in salary and $4,088 in employee benefits. Brooks left in November 2001 and the amount included a severance package, said Paulsen.

Hamilton McCubbin, who resigned recently as chancellor and chief executive, was paid $350,240 in salary, $8,608 in benefits and $103,500 for his expense account and other allowances. McCubbin has a $400,000 severance package with the trust.

Colleen Wong, the chief legal officer for the trust, who has been appointed acting CEO, was paid $168,831 in salary and another $9,231 in benefits. Mike Chun, headmaster of the schools, was paid $195,057 and $1,111 in benefits.

During the height of the scandal of the late 1990s, the trust maintained armies of inside and outside accountants and lawyers. Now, the highest paid outside firm is Group 70 International, a Honolulu architectural firm that was paid $5 million.

Arthur Andersen, the accounting and management consulting firm, came in second at $1.5 million.


January 29, 2003

Education executive resigns
from isle trust

By Rick Daysog, Honolulu Star-Bulletin

Another top executive with the Kamehameha Schools has resigned from the $6 billion trust.

The estate announced yesterday that Dudley “Skip” Hare, the estate’s vice president for education and its first chief education officer, will step down Friday after a year-and-a-half tenure.

Hare’s planned departure follows last month’s resignation of Chief Financial Officer Eric Yeaman. Yeaman is now chief financial officer and treasurer of Hawaiian Electric Industries Inc.

Hare will return to the educational consulting field in which he had worked before joining the Kamehameha Schools.

“We’ve been very pleased with the leadership and guidance Dr. Hare has provided,” said Kamehameha Schools Chief Executive Officer Hamilton McCubbin.

“He joined Kamehameha at a critical time of major growth and development, and he worked closely with me to design and direct important new programs.”

Hare was not immediately available for comment, but the trust said that Hare decided to step down after major portions of the estate’s education group was reorganized.

McCubbin said he had wanted Hare to remain until the end of the year but Hare decided to leave at the end of the month after discussing matters with his family.

During his tenure at the Kamehameha Schools, Hare worked on the completion of the trust’s two new neighbor island campuses, marshaled support for the trust’s new charter schools and implemented a new preschool scholarship program.

Hare is the estate’s first chief education officer. The position was created by the estate’s board in the wake of the three-year campus controversy that led to the 1999 ouster of former trustees Henry Peters, Richard “Dickie” Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender.

Before joining the Kamehameha Schools, Hare served as executive director of the Westchester Education Coalition, a nonprofit organization formed by corporations, government agencies and public schools in Westchester County, N.Y.

The coalition helped build community-based technology centers for low-income neighborhoods.

Between 1995 and 1998, Hare served as district superintendent of the Putnam/Northern Westchester Board of Cooperative Educational Services which was responsible for staff, curriculum development and other services for 18 school districts in New York.


The Catbird Chronicles:


JAN. 1, 2003 – DEC. 31, 2003

2003 – Jan 6. Kirk Belsby, a former Arthur Andersen partner, joins Kamehameha as their new V.P. for Endowment.

2003 – Jan 29. The estate announces that Dudley “Skip” Hare, the estate’s vice president for education and its first chief education officer, will step down Friday after a year-and-a-half tenure.

2003 – Mar 21. Hawaiian Airlines files for Chapter 11 bankruptcy (again).

2003 – May 2. CEO Hamilton McCubbin hands in his resignation, to take effect immediately. News reporters reveal that accusations had been made against McCubbin that he had inappropriate sexual relations with a female employee – and that he may have left his previous employment at the University of Wisconsin for similar reasons. Accusations were “internally investigated” by Kamehameha’s outhouse law firm, Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington.

2003 – July 24. Former Kamehameha Schools trustee Henry Peters sues the estate’s former chief legal officer Nathan Aipa, alleging he improperly disclosed confidential information.

2003 – Nov. Sex scandals involving Kamehameha students hit newspapers. Several students arrested.

2003 – Dec. The trustees announce they have chosen a new CEODee Jay Mailer – to replace Dr. Hamilton McCubbin.>

2004 – Continued at > > > PART IV: THE CONSPIRACIES CONTINUE

~ o ~







Arthur Andersen LLP – The company from whence Hamilton McCubbin and the new Trustees sought insight and integrity in their internal investigations and interesting investments.

See also: Eric Yeaman; Kirk Belsby

For more, GO TO > > > P-s-s-t, wanna buy a good audit?; The Story of Enron; XO Communications


Bedford Property Investors, Inc. – From a Bedford Properties press release: Bedford Property Investors, Inc. announced the appointment of Scott R. Whitney as Sr. V.P. and CFO. Whitney, 45, has been serving as Sr. VP/CFO of WCI Communities (a Bishop Estate investment) of Naples, Florida since 1995.

Before joining WCI Communities, Whitney was with Equity Group Investments, Inc. Prior to joining Equity Group Investments, Whitney worked with Balcor/American Express, Inc. as V.P. Banking and Sr. Controller.

* * *

From Midweek, 3/7/01, by Robert M. Rees: Years of pursuing the Bishop Estate trustees revealed more than the self-seeking greed and hubris of its five now-deposed incumbents.. . .

Bina Chun, widely referred to as “the queen of the school,” (and wife of Kamehameha Schools’ president, Michael Chun) had her own rewards. In 1992, for example, Bedford Properties paid her a cool million just for negotiating the purchase price of the Kalele Kai condo project with the trustees….


Blackstone Group – A New York-based private investment bank.

From The Conspirators: Secrets of an Iran-Contra Insider, by Al Martin:


People in the media often ask me to give them examples of frauds that began in Iran-Contra and continue to this day, albeit under different names.

It’s essentially the same fraud and the same cast of characters.

The examples I always give (about which I have substantive information, since I was involved in all three of the original frauds and also involved in marketing some of the partnerships for the secondary fraud) are the Ocean Reef Development Group, Ltd., the Omni Development Group, Ltd., and the Tri-Lateral Investment Group, Ltd.

Who are the common players who are links between all three deals during Iran-Contra ?

They are Frank Carlucci and Richard Armitage.

When Frank Carlucci and Richard Armitage left government service immediately after Iran-Contra (they literally had to leave in order to avoid being subpoenaed as part of the overall coverup), they became principals with Pete Peterson, the infamous Republican player and GOPAC money launderer, in the Blackstone Investment Group, which is a big organization.

Then they simply continued the same real estate development frauds which were begun under Iran-Contra.

This time all the original deals went bankrupt. A certain set of banks got burned. The property reverted to them, and then they refinanced the property again through Blackstone.

Subsequently they entered into an arrangement with another similar sounding company (there’s always been some confusion) the Capstone Development Group, which was also a post-Iran-Contra creature.

They are two separate organizations.

Some people will try to claim that Capstone was simply a subsidiary of Blackstone.

It is not. It is a separate company. Look at the directors. They are none other than Larry Eagleburger and Bernie Aronson, former co-workers of Frank Carlucci and Assistant Secretary of State, Richard Armitage.

However, the real estate frauds continued essentially until the early 1990s. It’s interesting to note how former government officials who were in the Reagan-Bush Administration during Iran-Contra profit by subsequent frauds – post-Iran-Contra frauds, if you will.

For instance, in 1994-95, there was the great Mexican Diversion Fraud, when Blackstone immediately opened an office in Mexico City to take advantage of American taxpayers’ money being lent to Mexico vis-a-vis the OCED and OPEC and other United States lending and/or guaranteeing agencies.

The opportunity to commit fraud against the United States Treasury during that Mexican bailout was just like a walk in the park.

You buy a busted out Mexican company for pennies on the dollar, pump it up, make it look nice, make sure you’ve got your hands out for a twenty or thirty million dollar loan from somebody else, like the IMF, or a direct United States lending agency, and you would be given Brady Bonds which could then be rehypothecated.

And it was such a scam.

Dinnerstein alone documented $130 million of fraud committed by former officials of the Reagan-Bush Administration during the “Great Mexican Turkey Shoot” as it became known.

And then what happened?

The Russian bailout.

Blackstone suddenly opened an office in Moscow and promptly proceeded to do the same thing again. This time they were raping and pillaging the American taxpayer with the same corporate schemes to get money out of U.S. agencies and/or collateral guaranty or fidelity instruments that could be rehypothecated.

It’s exactly the same scheme.

It was another $38 million of fraud according to our estimates at the time.

To follow fraud from the Iran-Contra period and to continue to do it to this day – just look at where the Blackstone Investment Group is opening up offices in the world….

* * *

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….

See also: Chris Hemmeter; VMS Realty

For more, GO TO > > > A Connecticut Yankee in King Kamehameha’s Court; Birds that Drink from Cesspools; The Blackstone Group; Paradise Paved; Predators in Paradise; The Washington Baseball Club; Yakuza Doodle Dandies


Bruce Nakaoka – Employed by Kamehameha Schools from 1987 through 1996, Bruce Nakaoka was appointed Director of the Real Estate Investment and Appraisal Division in September 1990, where he managed its domestic and international portfolio of real estate investments and administered the land appraisal department. He also served as President of six wholly-owned subsidiaries involved in developing and marketing mixed-use communities and office/distribution parks.

Prior to joining Kamehameha Schools, he was Assistant Vice President with Hastings, Martin & Conboy, the largest commercial real estate appraisal firm in Honolulu, where he conducted appraisals and feasibility studies of office buildings, shopping centers, hotels, timeshares, condominiums and research parks in Hawaii and Guam.

He is currently the Managing Director of MN Capital, and serves on Kamehameha Schools Board of Advisors.

See also: Bedford Properties; Eric Martinson; Kirk Belsby

For more, GO TO > > > RICO in Paradise


Cades, Shutte, Fleming & Wright – GO TO > > > The Morgan, Lewis & Bockius Report


Carlyle Group – a Washington-based merchant bank that is chaired by Frank Carlucci, the former Secretary of Defense in the Reagan Administration. Among Carlyle’s partners are numerous former Reagan and Bush administration notables, including Richard Darman, economic adviser to President Bush, and James Baker III, the former White House Chief of Staff, Secretary of State, and Bush-Quayle campaign chairman….


For more, GO TO > > > A Connecticut Yankee in King Kamehameha’s Court; Birds That Drink From Cesspools


CB Richard EllisThe world’s largest commercial real estate services company.

October 25, 2003

Estate selects land managers

By Andrew Gomes, Honolulu Advertiser

The nonprofit trust recently informed the companies — CB Richard Ellis Hawaii Inc., Colliers Monroe Friedlander, MMI Realty Services Inc. and Sofos Realty Corp. — of its intent to assign them management contracts, which may still need approval from top officials at Kamehameha Schools.

According to some of the firms involved, the trust is assigning management and leasing for about 20 properties, including shopping centers, small office buildings, the estate’s headquarters and industrial properties on O’ahu and the Big Island.

Management of the estate’s prime retail centers, Royal Hawaiian Shopping Center in Waikiki and Windward Mall in Kane’ohe, is not included, but is expected to be outsourced later.

An estate spokesman yesterday said he could not confirm the deal because final contracts had not been negotiated, but the vendors are expected to take over management Dec. 1.

The $5 billion trust, set up in 1884 to help educate children of Hawaiian ancestry, announced the outsourcing plan in August as part of an effort to improve efficiency by reducing management costs, taking a more passive role in its investments and making more resources available to support educational programs.

More than 100 Kamehameha Schools employees are expected to be affected, though the estate said it would negotiate with contractors to hire estate employees. Those not retained will be eligible for separation packages including pay and training support.

Details of the contracts will not be available until signed.

Honolulu-based CB is being assigned five Kaka’ako buildings, including Gold’s Gym, Alu Like and Keawe Business Center, plus a group of mostly Kalihi industrial properties.

Colliers, another local firm, is to manage Kawaiaha’o Plaza, the estate’s headquarters in Kaka’ako; New Town Square in Pearl City; two Kahala office and retail properties; and industrial property at Halawa business park and in the Bougainville area that formerly housed Costco Warehouse.

MMI, which has offices in Honolulu and California and manages Kahala Mall and Pearlridge Center for other owners, is to manage Hawai’i Kai Towne Center, which includes Costco, Roy’s Restaurant and vacant land with development potential.

Honolulu firm Sofos Realty is being assigned management of Keauhou Shopping Center on the Big Island.

Real-estate management outsourcing is becoming increasingly popular with large landowners, including investment trusts and big national corporations, according to Wendell Brooks III, commercial property vice president with PM Realty Group in Honolulu.

Campbell Estate, Hawai’i’s second-wealthiest private trust, outsourced management of about 500,000 square feet of property to Colliers this month as part of a plan to become a limited liability company in 2007 and divide $2.3 billion in assets among the heirs of James Campbell.

* * *

July 1, 2003

Sexual Harassment Charges Leveled Against
CB Richard Ellis, Inc.

From www.classactionamerica.com

Federal civil rights legislation prohibits discrimination based on gender, age, race, or national origin. A class action has been filed against real estate services company CB Richard Ellis, Inc. on behalf of current and former female employees who allege that the company created a hostile work environment when it allowed male employees to sexually harass them in violation of Title VII of the 1964 federal Civil Rights Act.

For more on CB Richard Ellis, GO TO > > > Arbitrate This!; The Nests of CB Richard Ellis

For more on CB Richard Ellis, Bishop Estate & Gensiro Kawamoto, GO TO > > > How to Pluck a Billionaire


Central Pacific Bank – one of Hawaii’s largest commercial banks, formerly majority-owned by Japan’s giant Sumitomo Bank. The major financial asset of Senator Daniel K. Inouye (D-HI).

See also: Dan Inouye; Sumitomo Bank; Yakuza


Chubb Corporation – Chubb is a holding company whose subsidiaries are engaged in two industries: property & casualty insurance and real estate.

The second largest institutional investor in Chubb is Putnam Investment Management, a subsidiary of the world’s largest insurance broker, Marsh & McLennan. The third largest institutional investor in Chubb is Citigroup, which was formed through the mega-merger of Citicorp and Travelers Insurance Company.

Citigroup is co-headed by Robert Rubin, the former U.S. Treasury Secretary and former co-chairman of Goldman Sachs. A leading institutional owner of Goldman Sachs is Hawaii’s wealthy Bishop Estate.

The broker for Bishop Estate is Marsh & McLennan. Marsh & McLennan placed the estate’s Directors & Officers Liability insurance policy in Federal Insurance Company, a Chubb subsidiary.

Federal Insurance Company provided the excess liability insurance policy for Bill Clinton that defended him in the Paula Jones lawsuit.

Just one big happy flock!

* * *

From the RICO lawsuit: Harmon v. Federal Insurance Co, et al.:

Defendant Federal Insurance Company, Inc. (Federal), a member of The Chubb Group, conducts business in the United States and was, at all times, registered with the Insurance Commissioner, State of Hawaii, as an admitted foreign insurance company. Federal conducts business through insurance brokers as well as through licensed general agents of the company. In Hawaii, one of Federal’s licensed general agents is Marsh & McLennan, Inc. (M&M).

On or about October 27, 1995, Plaintiff, in his capacity as Risk/Insurance & Safety Manager for Kamehameha Schools Bishop Estate (KSBE), caused Federal, through its agent M&M, to bind coverages under an Association Liability Insurance policy….

Plaintiff alleges that the failure of Federal, and its agent, M&M, to provide defense coverage to Harmon in Civil No. 97-0512-02 constitutes mail fraud, wire fraud, misrepresentation and fraudulent inducement to purchase this insurance….

As detailed in Plaintiff’s complaint, there was collusion among the Defendants, the primary purpose of which was to increase their profits through the awarding of non-bid insurance contracts to Federal and its agent, M&M.

Profits were further enhanced by Federal through reduction in their claims payments by means of fraudulently “back-dating” an exclusion endorsement in their Association Liability Policy in order to wrongfully deny defense coverages to Plaintiff….

For more, GO TO > > > The Chubb Group; Arbitrate This!; The Kamehameha School Retirement Plan

For Harmon’s letters to California and Hawaii Insurance Depts, GO TO > > > Insurance Commissioners


Colleen Wong – Kamehameha Schools’ Chief Legal Officer; will serve as acting CEO until a replacement for Dr. Hamilton McCubbin is found.

From a letter from Bobby Harmon to Hamilton McCubbin:

July 26, 2000

Dear Dr. McCubbin:

Thank you for the opportunity to meet with representatives of Morgan, Lewis & Bockius, LLP on this date. As I understand the major focus of your investigation to be the improper use of outside legal counsel, accounting firms and other third-parties, the following is a list of individuals and companies that, in my opinion, colluded to improperly transfer trust assets from the Kamehameha Schools and related companies:

Attorneys and Law Firms

Cades Schutte Fleming & Wright (Michael Hare)
Chee & Markham (Kevin Chee)
Devens Lo Nakano & Youth
Watanabe Ing & Kawashima (Douglas Ing and James Kawashima)
Goodsill Anderson Quinn & Stifel
Law Offices of Stanford Manuia (Stanford Manuia)
Torkildson Katz Jossem Fonseca Jaffe Moore & Heatherington
Carlsmith Ball Wichman Murray Case & Ichiki

Nathan Aipa, Louanne Kam, Lyn Anzai and Colleen Wong often directly engaged these firms to handle insurance claims without the required authorization of the insurance companies, including P&C.

Once the firms were engaged, these KSBE employees “controlled” and “managed” the claim directly with outside counsel, deliberately disregarding insurance company guidelines regarding the use and payment of these firms. Nathan Aipa, as principal executive of the Legal Group, had ultimate approval of all legal bills including P&C’s.

Aipa would frequently pay these legal fees and costs from his General Counsel Account, without approval from the insurance companies. Often the amounts billed by the law firms exceeded allowable fees and costs provided in the insurance company guidelines. When, if ever, KSBE submitted the legal bills to the insurance company, many of the charges were disallowed.

This practice led to the loss of millions of dollars that were never recovered from the insurance companies….

See also: Hamilton McCubbin; Lyn Anzai; Nathan Aipa; Torkildson Katz…

For more, GO TO > > > Harmon’s Letter to the New Trustees; RICO in Paradise; Kamehameha Schools Retirement Plan


Crossroads Group – GO TO > > > A Connecticut Yankee in King Kamehameha’s Court


Dan Inouye – U.S. Senator (D) from Hawaii, called by some Hawaii’s “Political Godfather”.

GO TO > > > Part I


David Ige – GO TO > > > Part I


Dennis Fern GO TO > > > Aloha, Harken Energy


Eric Martinson GO TO > > > Part II


Eric Yeaman – GO TO > > > Part II


George Mitchell – GO TO > > > Part II


Gerald L. Parsky – Chairman of Aurora Capital Partners, L.P., a Los Angeles-based investment firm specializing in the acquisition of U.S. companies. From 1977 to 1992, he was affiliated with the law firm of Gibson, Dunn and Crutcher, specializing in international corporate and tax law. He served as assistant secretary of the U.S. Treasury Department from 1974 to 1977. Mr. Parsky has served as a trustee of the University of California San Diego Foundation and serves on the Board of Visitors for the Anderson Graduate School of Business at the University of California, Los Angeles. He is on the advisory council for the Woodrow Wilson School at Princeton. He is a member of the Council on Foreign Relations and is a trustee of the George Bush Presidential Library Foundations and the Ronald Reagan Presidential Foundation. California Governor Pete Wilson appointed Mr. Parsky to the Board of Regents of the University of California in 1996.

Gerald Parsky was one of the original partners, along with William Simon, in HonFed Savings and Loan and SoCal.

* * *

From The Opal File:

10th May, 1968. Hawaiian meeting between Onassis and top lieutenants William Colby and Gerald Parsky to discuss establishment of a new front company in Australia – Australasian and Pacific Holdings Limited – to be managed by Michael Hand. Using Onassis-Rockefeller banks, Chase Manhattan and Shroders, Travelodge Management Ltd set up another front to link the operations to the US.

Onassis crowned head of the Mafia; Colby (head of CIA covert operations in S.E. Asia) ran the Onassis heroin operations in the Golden Triangle (Laos, Burma, Thailand) with 200 Green Beret mercenaries – i.e., the Phoenix Programme.

Gerald Parsky, deputy to ex-CIA/FBI Robert Maheu in the Howard Hughes organisation, took orders from Onassis and was made responsible for laundering skim money from the Onassis casino operations in Las Vegas and the Bahamas.

Mid-July, 1968: Placid Oil Co and the Seven Sisters (major oil companies) begin Great South Basin oil exploration – Hunt finances 45.5% of exploration costs, Gulf Oil 14.5%, Shell (US) 10%, B.P. Oil 10%, Standard Oil California 10%, Mobil 6.5% and Arco 6.5%.

12th October, 1968: Hunt and Seven Sisters announce confirmation of new oil source comparable to the Alaskan North Slope – gas reserves estimated at 150 times larger than the Kapuni Field.

Early 1969: Mafia consolidates its banking operations; David Rockefeller becomes Chairman of Chase Manhattan; Wriston at Citibank and Michele Sindona captures the Vatican Bank, Partnership Pacific launched by Bank of America, Bank of Tokyo and Bank of New South Wales.

24th February, 1969: Onassis calls Council meeting in Washington to discuss strategy to monopolise the Great South Basin discovery. Council members included Nelson Rockefeller and John McCloy, who managed the Seven Sisters, and David Rockefeller, who managed the Mafia’s banking operations.

McCloy outlines the plan to capture all oil and mineral resources in Australia and New Zealand.

10th March, 1969: Parsky and Colby use Australasian and Pacific Holdings to set up a “front” company in Australia. Using old banks – Mellon Bank and Pittsburg National Bank – they buy control of near-bankrupt Industrial Equity Ltd. (I.E.L.) Managed by New Zealander Ron Brierly. Australasian and Pacific Holdings ‘consultant’ Bob Seldon helps Michael Hand set up the new organisation. Seldon took orders from Mellon and Pittsburgh National Banks, while Hand was directly responsible to Gerald Parsky and William Colby. Ron Brierly would take orders from Hand.

24th July, 1969: New board established for I.E.L. includes Hand, Seldon, Ron Brierly, plus two Brierly associates – Frank Nugan and Bob Jones. Both are appointed consultants to Australasian and Pacific Holdings Ltd.

Jones will help Brierly launder funds into real estate (Brierly/Jones Investments) while Seldon and Nugan will channel funds into oil and mineral resources through I.E.L.

October 1969: Chase Manhattan begins new operation in Australia with National Bank Australasia and A.C. Goods Associates – Chase-NBA.

J.C. Fletcher appointed chairman of Seven Sisters’ company – British Petroleum (N.Z.).

17th February 1970: Gerald Parsky sets up a new heroin-dollar laundry in Australia – Australian International Finance Corp – using the Irving Trust Co., New York….

* * *

See also: HonFed Savings & Loan

For more on Gerald Parsky and the University of California Retirement Fund, GO TO > > > The Great Nest Egg Robberies


Gilbert Tam – From RICO lawsuit Harmon v. Federal Insurance Company; P&C Insurance Company; Marsh & McLennan, Inc. et al.:

Gilbert Tam was 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 > > > Vultures of the Sandwich Isles


Goldman SachsThe Goldman Sachs Group is a leading global investment banking and securities firm with three principal business lines: Investment banking; Trading and Principal Investments; and Asset Management and Securities Services.

* * *

From USA Today, May 3, 1999: Trust Scandal Haunts Goldman — Sullied Bishop Estate Owns 10% of Bank: . . . Daytime television has nothing on the Bishop Estate, a charitable trust that will make a huge windfall in Goldman Sachs’ initial public offering expected Tuesday… The trustees of the estate are mired in an explosive scandal with subplots of greed, cronyism, sex and suicide that are worthy of the tawdriest soap opera….

Kamehameha Schools/Bishop Estate was set up 115 years ago to educate Hawaiian children as stipulated in the will of Princess Bernice Pauahi Bishop, the last direct descendant of the king who united the islands. With assets of about $10 billion, it is one of the richest trusts in the USA and the largest private landowner in Hawaii….

Among its assets: a 10% stake in Goldman Sachs, the leading investment bank that is ending its long reign as a private partnership. When Goldman goes public, the estate stands to at least triple the value of its $500 million investment….

* * *

For more GO TO > > > Dirty Gold in Goldman Sachs?


Hamilton McCubbin – Kamehameha’s first CEO in its 119 years.

May 5, 2003

Kamehameha CEO resigns

Hamilton McCubbin became head of the trust in 2000,
after the former trustees were ousted

By Rick Daysog, Honolulu Star-Bulletin

Hamilton McCubbin, the first chief executive officer in the 119-year history of the Kamehameha Schools, has stepped down.

The $6 billion trust announced today that McCubbin has submitted his resignation, which took effect immediately.

The trust also said that its Chief Legal Officer Colleen Wong will serve as acting chief executive officer until a replacement is found.

McCubbin, a 1959 graduate of the Kamehameha Schools, could not be reached for immediate comment but was scheduled to speak at a news conference later today.

Kamehameha Schools trustee Constance Lau met with employees today to inform them of McCubbin’s resignation, according to several people who attended the meeting. Lau did not discuss the reasons for McCubbin’s departure but said he offered his letter of resignation to the board on Friday.

McCubbin, a world renowned expert on early childhood education, earned about $350,000 a year. He has served as the Kamehameha Schools’ chief executive officer since January 2000.

His appointment was hailed as a major milestone in the three-year controversy surrounding the estate and its former trustees Henry Peters, Richard “Dickie” Wong, Lokelani Lindsey, Oswald Stender and Gerard Jervis.

During his tenure, McCubbin oversaw the trust’s ambitious expansion of its educational reach as it opened new satellite campuses on the neighbor islands, reinstituted several early childhood education programs and looked to partner with the state Department of Education to establish charter schools in areas heavily populated by native Hawaiians.

McCubbin also was in the middle of the Maui campus controversy last year in which the schools admitted its first non-Hawaiian student in more than 40 years.

Prior to joining the estate, McCubbin served as dean of the School of Human Ecology at the University of Wisconsin-Madison.

McCubbin’s resignation is the latest in a string of recent departures at the Kamehameha Schools. In January, the schools first chief education officer, Dudley “Skip” Hare stepped down.

That move came a month after Chief Financial Officer Eric Yeaman left to become Hawaiian Electric Industry Inc.’s chief financial officer….

* * *

May 5, 2003

McCubbin out as CEO of Kamehameha trust

By Dan Nakaso, Honolulu Advertiser

Hamilton McCubbin, who brought stability to the Kamehameha Schools after years of scandal and controversy, announced his resignation today as the trust’s first chief executive officer.

McCubbin, 61, signed a new three-year contract with Kamehameha on Feb. 1 but suddenly resigned on Friday. He said in an interview today that he resigned to spend more time with his grandchildren and looked to possibly return to teaching at the university level.

“I really an looking to my health,” he said. “I have a son in the Middle East and family considerations.”

However, a person familiar with the situation said the trustees for months had been investigating a complaint of an inappropriate relationship between McCubbin and a female employee.

The person asked not to be identified because of the sensitivity of the situation and the fact the trustees did not plan to talk publicly about the allegation.

McCubbin said today he was unaware of any allegations that he had an inappropriate relationship with anyone at Kamehameha. He said he spoke with trustees over the weekend, “and the question was whether I had moved the organization in the last three years, and whether I was challenged.”…

The Kamehameha trustees issued a statement today confirming McCubbin’s resignation but the statement did not give a reason for his departure.

“As a personnel matter, it is not in the best interest of this institution to discuss the details of Dr. McCubbin’s departure,” the statement said.

“What is best for Kamehameha has always guided us and will continue to guide us. This includes our decision to accept Dr. McCubbin’s resignation.”

The trustees selected Colleen Wong, vice president for legal affairs, to serve as acting CEO while they search for a replacement.

“We affirm the CEO governance structure and we are committed to keeping the CEO management structure in place,” the trustees said in their statement.

“We plan to have a new CEO in place within six months.”

Trustees Constance Lau and Doug Ing met with state Attorney General Mark Bennett and deputy attorney general Hugh Jones this morning to brief them about McCubbin’s resignation. The attorney general’s office has oversight responsibilities for charitable trusts, such as Kamehameha Schools.

“At this point, it does not look like the attorney general’s going to get involved in this situation,” Jones said….

* * *

May 7, 2003

$85,813 paid in
McCubbin complaint

A Wisconsin college settled charges filed by
a female professor

By Rick Daysog, Honolulu Star-Bulletin

A month before Hamilton McCubbin was named as the first chief executive officer in the 119-year history of the Kamehameha Schools, the University of Wisconsin paid $85,813 to settle charges that he sexually harassed a female professor.

McCubbin, a former dean of the Wisconsin’s School of Human Ecology, said yesterday he was unaware of the December 1999 settlement and that the university found no wrongdoing when it investigated the woman’s complaint.

The sordid allegations of a 5-year-old sexual harassment complaint came to the forefront this week after the 61-year-old McCubbin resigned from his $350,000-a-year post at the Kamehameha Schools amid allegations he had an improper relationship with a female staffer.

McCubbin had no comment on the Kamehameha Schools’ investigation, and the estate refused to discuss the circumstances of McCubbin’s departure. The trust also had no comment on the Wisconsin matter.

McCubbin, a 1959 Kamehameha Schools graduate, said on Monday that he resigned because he has achieved many of the goals he set when he joined the trust three years ago and wanted to spend more time with his family. He added that he took the job with the understanding that he would serve as a transitional CEO.

The Kamehameha Schools’ five-member board began an investigation of McCubbin several months ago after it received a complaint from employees who work in McCubbin’s office that their boss was having an affair with another employee in that office.

A person close to the investigation said the $6 billion charitable trust re-examined the Wisconsin case in light of the recent allegations.

In the University of Wisconsin complaint, a former assistant professor, Jikyeong Kang, alleged that McCubbin pursued an unwanted personal relationship with her over three years, beginning in 1995 while he served as dean of her department.

Kang, now a professor at the University of Manchester in England, alleged that McCubbin repeatedly kissed her against her will, persistently called her at her home at night, asked her to massage him, and suggested that they have an intimate relationship.

During one uninvited visit to her home on Aug. 13, 1997, McCubbin asked Kang to give him a massage, Kang said. When Kang refused, McCubbin asked her if she would massage him if she received tenure, she said.

During the summer of 1997, Kang alleged that McCubbin pressed her to take his hotel room key when they were both in London on separate business trips.

She said that McCubbin obtained a copy of her itinerary before the trip and booked a room in the same hotel. McCubbin later moved to another hotel after he found out that she was staying with colleagues, Kang said.

He later told her not to tell their colleagues that they met in London, said Kang.

“Dr. Kang found this behavior unwelcome and did not accept his invitations so far as she felt able,” Linda Harfst, Kang’s attorney, said in the complaint. “She tried to make it clear to Dean McCubbin that she did not want an intimate relationship with him.”

McCubbin said a formal investigation conducted by the University of Wisconsin in early 1999 found that Kang’s allegations were false. A Jan. 7, 2000, story in the Wisconsin State Journal quoted university official Casey Nagy as saying that a university investigation in early 1999 revealed no misconduct. But Nagy also told the Journal that the investigation led to discussions between McCubbin and the school’s provost and chancellor over the direction of the school.

McCubbin stepped down as dean in 1999 after serving 14 years in the position, but remained as a tenured university professor until January 2000, when he joined the Kamehameha Schools.

McCubbin previously told the Star-Bulletin that Kang filed her complaint after she was denied tenure by faculty members.

As dean, McCubbin had the authority to override the faculty’s decision, but he declined to do so, he had said.

McCubbin said yesterday that he disclosed the matter to the Kamehameha Schools board when he was hired three years ago.

“Had I been under investigation or if there was a lingering issue, I would never have put Kamehameha Schools in that predicament,” he said.

According to a December 1999 settlement agreement, the University of Wisconsin paid $85,813 to Kang. The payment represented the amount that Kang would have earned as an assistant professor for the period in which the alleged incidents occurred. The settlement also called for Kang to resign from the university.

Harfst said yesterday that Kang settled because she wanted to move on with her life. Harfst added that she was not surprised by McCubbin’s current controversy at Kamehameha.

* * *

May 15, 2003


That’s how much McCubbin gets
for resigning

By Sally Apgar, Honolulu Star-Bulletin

Hamilton McCubbin, who abruptly resigned as the chief executive of Kamehameha Schools last week in the midst of accusations of an inappropriate relationship with a female staffer, will be paid $400,000 in a confidential severance package, according to sources close to the negotiations.

McCubbin, 61, was also ordered to vacate by August the Kahala home he and his family have lived in, according to the sources. The home, which according to property records is assessed at $679,000, is owned by Kamehameha Schools.

His May 5 resignation came one week after a second estate inquiry into an alleged inappropriate relationship with a female employee. Both McCubbin and estate officials have declined comment on the investigations.

Beadie Dawson, a close friend of McCubbin, said the agreement includes a silence provision that McCubbin would not respond to allegations against him.

Kekoa Paulsen, a spokesman for the trust, declined to comment on the severance package because it is considered “a personnel matter” and is confidential….

McCubbin could not be reached by telephone or at his Kahala home.

Deputy Attorney General Hugh Jones declined to comment on the package.

Jan Dill, president of Na Pua a ke Ali’i Pauahi, an organization of about 1,000 alumni, teachers and parents, also declined to comment on the package.

“It’s time to move on,” said Dill. “We’ve been enmeshed in this battle for the soul of Kamehameha for six years now. McCubbin was part of the reform and brought some needed changes, but what we really need is a cultural change.”

* * *

May 18, 2003

Letters to the Editor, Honolulu Star-Bulletin

In support of Hamilton McCubbin …

Reporting was no crowning achievement

As a graduate of Kamehameha Schools Class of 1989, I have witnessed first-hand many changes at Kamehameha Schools. And yes, my mother is Toni Lee, who with concern of many Hawaiians heavy on her shoulders helped form Na Pua, which took on the dark past of the Bishop Estate trustees.

In regard to Hamilton McCubbin’s sudden departure from office, those of us who are educated enough to read through the article “McCubbin resigned after 2 inquiries” (Star-Bulletin, May 8), from the sensationalism it begins with to its half-hearted reporting of the fact that he was not found guilty of those allegations just really rips me in two. I weep for the Hawaiian people who have constantly been led astray about who to believe in our community. I hope you have made your quota on paper sales.

I used to be proud to be affiliated with this paper, even proud to have my crowning picture on the side of the delivery vans awhile back, but now I am just sad and disappointed because I can no longer trust that the information you put out is balanced and concise.

Brook Lee
Miss Universe 1997
Pearl City

~ ~ ~

Papers gave readers a lascivious feast

Recently the front pages of the local papers have read more like The National Inquirer than like the family dailies we’re used to. It hardly bespeaks aloha, and it doesn’t say much for paradise. Hamilton McCubbin hasn’t been tried, but he sure has been pilloried in the press.

We’ll never know how many of the charges are true. I have strong doubts about much of what has been said for several reasons. One is that I’ve sat on several committees with McCubbin. While it certainly cannot be said that I know him well, he appears far too normal to be mixed up in the kinky, obsessive behaviors reported in the newspapers. He also appears to be too quiet, almost too reticent and shy a man to be so occupied. He’s also good- natured. When we maneuvered him into picking up the check for dinner for 10 of us one evening, he did so without complaint.

As one looks carefully at the Kamehameha allegations, it appears that it may all boil down to a jealous office worker’s resentments. Of course, it may not. But the point is we don’t — and can’t — know that. Yet some people seem ready to vilify with or without confirmation. That’s the shame of it. We all ought to be ashamed of ourselves for a lascivious 10 days at a fellow human being’s expense.

Mary Anne Raywid

~ ~ ~

Father has been unfairly tarnished

It is 5:30 a.m. on May 7 in Minnesota as I read the details of the alleged scandal surrounding my father, Dr. Hamilton McCubbin, in the Star-Bulletin. The insensitive nature of these articles takes me back to 1999 as my father, my sister, Laurie, and I traveled to bury my grandmother Betsy McCubbin. En route to the burial in Kaneohe, my father received the call on his cell phone: The University of Wisconsin provost, John Wiley, informed my father of the same details that are being shared with the Hawaii community today.

I only wish Wiley and the authors of today’s articles took the time to inform the Hawaiian community of the truth. Instead, the articles were expressions about the destruction of a fine individual.

The McCubbin ohana began to work together to present the truth, as I do today on behalf of my brother, my sister, our extended family and for the Hawaiian community.

>> Following its official ruling against Jikyeong Kang regarding her allegations against my father, the University of Wisconsin-Madison entered into a financial agreement with her, which also called for her to resign from the university.

>> Upon receiving the official report of the university’s findings that there was no wrongdoing and no violation of university policy, my father announced to Chancellor David Ward that he was resigning from the deanship to return to teaching and research.

>> My father returned to being a professor in child and family studies. Ward announced this to the public and praised his accomplishments as an administrator and scholar.

>> He became a consultant and friend to the sheik of the United Arab Emirates and agreed to help design two English-speaking universities for women there. He took time off to volunteer to serve as a dean of these universities.

>> While in the Middle East, my father was invited by the Kamehameha Schools trustees to consider and ultimately accept the invitation to become its first CEO. His dream to give back to Hawaii and the Hawaiian people was now a reality.

>> My father realized that he could not take a leave from the University of Wisconsin to become a CEO, so he chose to retire. He did not leave the university under pressure.

I know my father and mother will once again feel the anguish and pain generated by this revisiting of the past. How my sister, brother and I wish we could remove the pain that your articles create for both of my parents.

My father spoke the truth then as he does now. If he has a major fault it is that he is much too open and transparent. He has spent his lifetime seeking to find the truth, particularly through science. He talked to the McCubbin ohana about his need to reveal (the new jargon is “disclose”) to the trustees the allegations against him at the time of his candidacy for CEO. He had nothing to hide then as he has nothing to hide now.

We, his children, are indeed biased in how we see our father, but this bias is not void of seeing the truths about this special man. He is filled with pride in being a Hawaiian and Kamehameha graduate, and he cherished the wonderful opportunity to give back to his alma mater and to become a living part of the will of Bernice Pauahi Bishop to give to future generations of Hawaiians.

Those who mock and judge my father will never take away his sense of fulfillment and quiet pride in having given to the people of Hawaii. My mother Marilyn also sacrificed her prominent career to give to the Hawaiian people. Their contributions, however small, will forever be a part of the history of Hawaii and Pauahi’s legacy.

Mahalo to the people of Hawaii and particularly those of you of Hawaiian ancestry for listening to a daughter and children of a nice man, father and mentor. Dad and Mom, we are with you and always will be. We know and shared the truth as best we could, and we love you.

Wendy Ann (McCubbin) Frantz
Laurie Dawn McCubbin
Todd Jonathan McCubbin

Graduates of the Kamehameha Explorations program

* * *

May 17, 2003

McCubbin cites threats
against him and family

By Rod Antone, Honolulu Star-Bulletin

Hamilton McCubbin, who abruptly resigned as CEO of Kamehameha Schools last week, says he and his family have been subjected to threats and he blames a “dysfunctional part” within the estate.

In a more than 2,100-word essay, which will appear in the Insight section of tomorrow’s Star-Bulletin, McCubbin writes about the past and future of the trust he led for three years. He resigned on May 5 after two estate probes into an alleged inappropriate relationship with a female employee. Both McCubbin and estate officials have declined comment on the investigations.

In his essay, McCubbin decries the media attention to his resignation.

“I also transition from the leadership of the Kamehameha Schools with a heavy heart knowing that misinformation has found its way into the media to cast doubt upon my leadership, and more importantly about the people who have served me and with me.

“I will remember the threats on my life, threats of harm to my wife and children, and the continuous need for security at my home to protect us,” he writes.

A spokeswoman for McCubbin said he was out of town yesterday and could not be reached for comment on details of the threats.

But McCubbin further writes: “As time progresses and the truths are revealed, it will become apparent that ill will rather than the truth continues to be a dysfunctional part of the Kamehameha Schools. These acts, which appear to be of malicious intent, have no place in an institution devoted to the well-being of others.”

The essay addresses a number of other topics, including his achievements at Kamehameha over the last three years and his hopes for the future.

“I transition from the Kamehameha Schools with a renewed sense of hope that the steps taken in the past three years are forward-looking, affirming of all the Hawaiian people and not just the select few, and will be continued on into the future,” he writes.

* * *

May 18, 2003

Honolulu Star-Bulletin Editorial


By Hamilton McCubbin
Former chancellor and CEO of the Kamehameha Schools

As I resign and return to retirement from my role as the first chancellor and chief executive officer of the Kamehameha Schools, I take this opportunity to respond to the community’s concerns about the impact of my sudden and early departure.

I also reaffirm the importance of what the Kamehameha Schools has evolved into – a responsive educational institution that has the Hawaiian people and the Hawaiian community paramount in its plans for the future. In the midst of recent events, we would do well to join hands in unity to restate our commitment to work together as Hawaiians and as an ohana.

The Kamehameha Schools has made a public pronouncement to be open and honest with the Hawaiian people, children and their families. We have promised to nurture the Hawaiian children, families and community through education and, in so doing, we have made a deeper commitment to improving the capabilities and well-being of all Hawaiians as a true reflection of the will of our benefactor, Bernice Pauahi Bishop.

We must take the right course of action and never abandon or cast doubt on our promise to the Hawaiian people to be transparent, to be accountable and to take responsibility for our actions….

In restating Kamehameha Schools’ promise to the Hawaiian people, I turn to the Hawaiian community to look beyond the media coverage plastered in the newspapers during the past few weeks. We need to remain unified and renew our commitment to serve the common good – all the people of Hawaiian ancestry….

I transition from the leadership of the Kamehameha Schools with a heavy heart knowing that misinformation has found its way into the media to cast doubt upon my leadership and, more important, about the people who have served me and with me. I will remember the threats on my life, threats of harm to my wife and children, and the continues need for security at my home to protect us.

On this matter, I leave the Hawaiian people with but one message, for I can say little to nothing about such personnel matters: As time progresses and truths are revealed, it will become apparent that ill will, rather than the truth, continues to be a dysfunctional part of the Kamehameha Schools. These acts, which appear to be of malicious intent, have no place in an institution devoted to the well-being of others.

We must do what we can to reveal such behaviors and expose those persons whose intentions are less than honorable. They bring dishonor to a trust built on the premise of integrity, honesty and openness….

 Star-Bulletin Editorial Special

* * *

September 3, 2003

‘I have no reason to hide,’
McCubbin tells audience

By Mary Adamski, Honolulu Star-Bulletin

About 70 University of Hawaii faculty and staff members turned out yesterday to hear Hamilton McCubbin, a finalist for the position of vice chancellor for academic affairs, describe his ideas for achieving academic excellence on the Manoa campus.

But the first questions he faced from the audience were personal.

He was asked about published allegations that he had an inappropriate relationship with a female staffer while he was chief executive of Kamehameha Schools, a position from which he resigned in May, and that he sexually harassed a female professor while he was dean of the University of Wisconsin School of Human Ecology.

“If I was ethically and morally wrong, I wouldn’t apply for this position, that I can assure you,” McCubbin said in answer to questions posed by political science professor, Neal Milner, who pointed out that sexual misconduct cases would be brought to the vice chancellor.

“It is the same set of principles that could lead me to make the choice to leave,” he said.

“Kamehameha Schools and I have an agreement that I don’t talk about what is going on at Kamehameha Schools and they don’t talk about my perceptions of Kamehameha Schools. You can draw an inference that Kamehameha Schools and I had a difference of opinion.”

He continued after a second questioner followed in the same vein:

“First of all, what you read in the press is false,” he said.

The report “leaked from Kamehameha Schools” was that he was investigated after an employee accused him of having an affair with another employee.

He went into some detail about the other report, “leaked” at the same time, about a former assistant professor at University of Wisconsin who claimed five years earlier that he sought an intimate relationship with her.

“What happens in a university setting when a person seeks tenure is they may not get it. People do get angry,” he told the university audience. McCubbin, dean for 14 years, said he accepted a university committee recommendation against tenure for the woman.

“I have no reason to hide,” McCubbin said….

See also: Colleen Wong

For more, GO TO > > > Harmon’s Letters to McCubbin; The Morgan Lewis Bockius Report; Harmon’s Letter to the New Trustees


Hawaii Kai – This nest under construction.


Hawaiian Airlines – Hawaii’s major low-flying airline.

September 3, 1997

Bishop Estate swings
for the fences

Some investments have been home runs;
others, disappointing strikeouts

By Rick Daysog, Honolulu Star-Bulletin

When Hawaiian Airlines flew into financial turbulence several years ago, it cost Kamehameha Schools/Bishop Estate about $700,000.

Bishop Estate had quietly owned about 1 percent of Hawaiian Air through a private investment fund, but the shares lost nearly all their value after the carrier filed for bankruptcy reorganization in 1993, said the fund’s manager, George McCown.

“They weren’t happy campers,” said McCown, partner and founder of Menlo Park, Calif.-based McCown de Leeuw & Co., which teamed up with former major league baseball Commissioner Peter Ueberroth in the 1989 buyout of Hawaiian Air.

In many ways, the Hawaiian Air losses underscore Bishop Estate’s swing-for-the-fences investment strategy that has produced its share of home runs as well as a few disappointing whiffs.

The 113-year-old charitable trust, the state’s largest private landowner with assets estimated as much as $10 billion, is set up to educate native Hawaiian children. Its portfolio includes some 368,000 acres of land in Hawaii, the Royal Hawaiian Shopping Center in Waikiki, interests in a mainland China bank, timberland in Michigan and a majority interest in the parent of the People’s Bank of California — a thrift with $1.8 billion in assets….

* * *

March 21, 2003

Hawaiian Airlines files for bankruptcy protection; stock trade halted

Prabha Natarajan and Steve Jefferson, Pacific Business News

Hawaiian Airlines Inc. filed for Chapter 11 bankruptcy protection at 8:30 a.m. Friday. Trading of its stock — AMEX:HA — has been halted at $1.48 per share.

Hawaiian Airlines, a subsidiary of Hawaiian Holdings Inc., seeks legal protection as it struggles to reach agreements with lessors as part of its companywide restructuring plan. Originally, Hawaiian sought about $15 million in concessions from lessors and is said to be seeking more now.

“Despite our best efforts and extensive negotiations, however, we have been unable to reach agreement with certain of our aircraft lessors on reducing our lease rates to market levels,” said John Adams, airline chairman and chief executive officer, in a press release….

The airline hopes to be out of bankruptcy by fall, said airline spokesman Keoni Wagner….

According to the bankruptcy filing, debt to the top 23 unsecured creditors totals $35 million. Top creditors with unsecured claims are:

* Wells Fargo Bank Northwest — $10.3 million for aircraft leases;

* Panda Travel Inc. — estimated $5.6 million for agency commissions;

* Aviation Insurance Services Pacific Inc. — $2.5 million for liability insurance;

* American Airlines — $2.2 million (estimated debt in dispute);

* Tesoro Hawaii Corp. — $1.8 million for fuel (estimated);

* General Electric Capital Corp. — $1.5 million (disputed loan);

* Pratt & Whitney — $1.4 million for engine maintenance (estimated);

* Delta Airlines Inc. — $1.3 million (estimated);

* Rolls Royce Deutschland GmbH — $1.1 million for engine maintenance;

* Transamerica Equipment Financial Services Corp. — $949,437 for bank loan;

* Sabre Inc. — $940,000 for reservation system (estimated);

* Associated Aviation Underwriters Inc. — $828,203 for workers comp insurance;

* Honeywell — $640,000 for aircraft maintenance (estimated);

* Starr-Seigle Communications —- $570,000 for advertising (estimated);

* Hawaii Medical Service Association — $550,000 for employee health insurance (estimated);

* SBI and Company — $440,000 for revenue systems consultation (estimated);

* Hawaii Dental Service — $420,000 for employee dental insurance (estimated);

* Wackenhut Corp. — $400,000 for security services (estimated);

* Hamilton Sundstrand Power Systems — $350,000 for aircraft maintenance (estimated);

* Rockwell Collins Inc. — $340,000 for 767 avionics (estimated);

* AirTran Airways Inc. — $200,000 for parts;

* Mercury Air Group — $188,000 for handling ground cargo (estimated);

* Flight Safety Boeing — $170,000 for simulator training (estimated).

Parent company Hawaiian Holdings is not part of the Chapter 11 process.

© 2003 American City Business Journals Inc.

For more, GO TO > > > Hawaiian Airlines


Henry Peters – Ex-trustee of Kamehameha Schools/Bishop Estate.

See also: Nathan Aipa

For more, GO TO > > > Part I


HonFed Savings & Loan – Another major investment for Bishop Estate, later sold to Bank of America.

March 21, 2003:

In the United States Court of Federal Claims

Nos. 95-660C and 95-797C

Filed March 21, 2003






~ ~ ~



In 1986, a group of investors, led by the former Secretary of the Treasury, the late William E. Simon, Sr., approached the Bank Board about the possibility of acquiring HonFed, a then-failing thrift based in Honolulu, Hawaii. Recognizing the need to recapitalize HonFed, the investors proposed a plan by which the thrift would be converted from a mutual association to a stock association, with its stock to be sold to raise capital for the resulting institution. The proposal additionally envisioned the creation of HFH, a holding company that was to be wholly owned by the investors and created for the sole purpose of acquiring the thrift. Finally, the proposal anticipated the issuance of approximately $35 million in subordinated debentures to further bolster the thrift’s flagging capital levels….

On June 17, 1986, HFH, together with HonFed, submitted a formal application to the Bank Board seeking approval of the proposed restructuring and recapitalization of HonFed….

On August 29, 1986, the Bank Board adopted Resolution No. 86-910 approving HFH’s application to acquire HonFed….


On August 6, 1989, Congress enacted FIRREA, directing, inter alia, the promulgation of regulations setting forth new minimum capital standards. The resulting regulations, issued by the Office of Thrift Supervision (“OTS”) on November 6, 1989, provided that unidentifiable intangible assets, such as the goodwill arising from HFH’s acquisition of HonFed, would have to be excluded when determining compliance with the statute’s core capital requirements. The regulations additionally restricted HonFed’s ability to include subordinated debt in regulatory capital.

Shortly after the promulgation of these regulations, OTS informed HonFed that, based on its quarterly financial report, HonFed was in danger of failing one or more of the new capital requirements. Although HonFed objected to the conclusion that it was required to meet the more stringent FIRREA capital requirements rather than the capital requirements set forth in Resolution No. 86-910, HonFed nonetheless took steps to bring itself into compliance with the new capital standards. Toward that end, HonFed conducted a private equity placement involving the sale of preferred stock to a Hawaiian charitable trust, the Kamehameha Schools, Bernice Pauahi Bishop Estate. As a result of that placement, HFH relinquished approximately 23 percent of its ownership stake in the thrift but raised an additional $45 million to be counted toward the thrift’s regulatory capital.

HonFed continued operating under this shared ownership for an additional two years, but on October 10, 1991, BankAmerica Corporation and its wholly owned subsidiary, the Bank, acquired ownership and control of HFH and HonFed through the purchase of the outstanding shares of HonFed and HFH. Following this acquisition, both HonFed and HFH became wholly owned subsidiaries of the Bank. Within the next year, each entity was abolished, HonFed through a conversion of its shares into shares of the Bank and HFH through a liquidation and dissolution. It is on the basis of these transactions that the Bank now claims to stand as the successor in interest to the rights and interests of HonFed and HFH….


WIESE, Judge

Plaintiff Bank of America, Federal Savings Bank (“the Bank”) is the successor in interest to H.F. Holdings, Inc. (“HFH”), a bank holding company, and Honolulu Federal Savings & Loan Association (“HonFed”), a thrift institution. The Bank is joined in this suit by Beverly W. Thrall (successor by operation of law to the claims of Larry B. Thrall) and Roy Doumani, members of the original investor group that formed HFH and acquired, through their investment in HFH, a majority ownership interest in HonFed. (1) …


(1) The original investor group consisted of four individuals: William E. Simon, Sr., Gerald L. Parsky, Larry B. Thrall, and Roy Doumani, each of whom filed suit here in his individual capacity. William Simon and Gerald Parsky subsequently withdrew their actions, while Larry Thrall (now represented by his successor in interest, Beverly Thrall) and Roy Doumani have been permitted to join in the Bank’s claim as intervenors pursuant to RCFC 17…


For more on William Simon and Gerald Parsky, GO TO > > > The Opal File: A Secret History of Australia and New Zealand


Industrial and Commercial Bank of China – GO TO > > > Part II


Investcorp – Investcorp is a leading global investment group with offices in London, New York and Bahrain. Since 1982, it has completed transactions in North America and Western Europe, with a total acquisition value of approximately $19 billion.

Investcorp and its clients have investments in U.S. companies including Stratus Technologies, The William Carter Company, Jostens, Inc., Werner Holdings, TelePacific Communications and Independent Wireless One.

U.S. investments that have been taken public by Investcorp include Prime Service, Tiffany & Co., Circle K Corporation, Saks Fifth Avenue and CSK Auto Corporation.

In Europe, Investcorp and its clients currently have investments in Avecia (formerly Zeneca Specialties), Gerresheimer Glas, Polestar, Welcome Break, CityReach, and Helly Hansen.

For much more, GO TO > > > Investigating Investcorp; The Nests of Osama bin Laden


Irving Shain – Chancellor Emeritus and Professor Emeritus (Chemistry), University of Wisconsin-Madison; former officer and director of the Olin Corporation; a member of Kamehameha Schools’ Board of Advisors.

For more, GO TO > > > The John M. Olin Foundation


JMB Realty Corp. GO TO > > > Part II


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

August 9, 1997


By Samuel King, Msgr. Charles Kekumano,
Walter Heen, Gladys Brandt and Randall Roth

The time has come to say “no more.” The web of relationships between the Judiciary and our beloved Kamehameha Schools/Bishop Estate has pushed two great institutions to an absolute critical point. Immediate action must be taken. To understand the underlying causes, readers must piece together the following stories. Think of them as puzzle parts….

How trustees get selected

In the words of a former Supreme Court justice, here’s how the process worked: “The way we went about picking trustees was different each time. The time we named Chief Justice Richardson, for example, Justice Lum suggested that we select him, and we all agreed. It was just that simple. Another time, we must have gotten over 100 applications. It was pretty informal then too, but we did read through everything. It’s really hard to generalize about how we did things because it just depended on the circumstances.”

In the words of a different former justice, “When Os Stender was picked, we got lucky. Two of the justices wanted Larry Mehau very badly, another two were just as adamant about Anthony Ramos. The fifth justice, who was for Jimmy Ahloy, refused to switch to either of the other two candidates. Once it became crystal clear that we had a stalemate, someone — and I wish I could remember who — brought up Os’ name. We all knew he was Hawaiian and that he was the CEO at Campbell Estate, and it didn’t take long to agree on him. Chief Justice Lum immediately called and asked him to come over right away. When Os arrived 10 minutes later, we told him he had just been chosen to be a Bishop Estate trustee. He just sat there for a good minute. You know, a minute is a pretty long time to just sit there in a situation like that. Anyway, after that long pause, he just said thank you,’ and that was that. Just about everyone agrees that Os has been a great trustee. Like I said, we got lucky.”

Here’s the same scene as seen through the eyes of Os Stender: “You know, when they picked me, they practically picked my name out of a hat. Can you believe it? There was no process, not even an interview. I was speechless.”

We can’t knock good luck, but would rather rely upon clearly articulated criteria and a coherent selection process. Otherwise, the selectors cannot effectively be held accountable….

For more on George W. Bush, Harken Energy and Aloha Petroleum, GO TO > > > Aloha, Harken Energy!


Jim Boersema – ‘Spokesman’ for DataHouse, Unity House, and Sun Resorts International.

For more on Sun Resorts International, GO TO > > > Predators in Paradise


John Waihee Former Governor of Hawaii.

For more, GO TO > > > Part II; The Puna Connection


Kajima Corporation – The world’s third largest construction firm; building mega-buck campuses for Kamehameha Schools, and the University of Hawaii’s new John A. Burns Medical School.

For more, GO TO > > > Kajima: Blood, Bribe & Brutality


Kirk Belsby – Kamehameha Schools’ current Vice President for Endowment (or chief investment officer).

October 28, 2002

Former Andersen partner joins
Kamehameha Schools

By Andrew Gomes, The Honolulu Advertiser

Kamehameha Schools has hired a former managing partner from Arthur Andersen’s Los Angeles office to oversee the private trust’s $6 billion asset portfolio.

Trustees approved the selection of Kirk O. Belsby as chief investment officer last week after a year-long search to replace longtime Hawai’i real estate veteran Wendell Brooks Jr., who resigned in November over differences with the estate’s vision.

Hamilton McCubbin, Kamehameha Schools chief executive officer, said a search committee conducted two comprehensive nationwide searches to fill the position with the unanimous choice of Belsby.

“It is important that we took the time to reach a high degree of satisfaction that we were getting the right person for the job, and the trustees and I are comfortable that Kirk is that person,” McCubbin said in a statement.

Belsby will start work Jan. 6, but will immediately begin his orientation to the assets and operations of Hawai’i’s biggest private educational trust.

Kamehameha Schools has an endowment group with 66 employees to assist Belsby with managing the trust’s portfolio of real estate and financial assets, which are used to support the trust’s mission to educate primarily Native Hawaiians.

Belsby has a bachelor’s degree in economics from the University of California-Davis, and is a licensed real estate appraiser in Hawai’i and other states.

His professional experience includes being a stockbroker with Shearson Lehman from 1982 to 1983, a project feasibility analyst and asset manager for American Diversified Capital Corp. from 1984 to 1987, and vice president of real estate valuations for California appraisal firm Michael Frauenthal & Associates from 1988 to 1992.

From 1993 to earlier this year, Belsby was with Arthur Andersen, as managing partner of the company’s Pacific Southwest business and more recently regional managing partner for the Western region out of the firm’s Los Angeles office.

While with Andersen, Belsby assisted Dole Foods with selling the Hawai’i real estate development firm Castle & Cooke….

See also: Sports Shinko

For more on Arthur Andersen, GO TO > > > P-s-s-t, wanna buy a good audit?; The Story of Enron; XO Communications


KPMG LLP – One of the Big Five accounting firms. Current auditors for Kamehameha Schools, replacing PricewaterhouseCoopers.

* * *

November 6, 2000, Honolulu Advertiser:

SUSAN W.F. TODANI has resigned from the Real Estate and Hospitality Consulting Group of KPMG LLP, to accept the position of senior asset manager for investments at THE KAMEHAMEHA SCHOOLS. Todani will oversee strategic management for about 50 Mainland real estate investments, and for-profit subsidiaries in Hawai‘i.

* * *

August 19, 2001, Honolulu Star-Bulletin:

CLAIRE R. ANIYA has been named tax director at Kamehameha Schools. She will be responsible for reviewing and advising KS management on tax matters, as well as overseeing general operations of the tax division. Aniya, a certified public accountant, joins Kamehameha Schools after serving as senior tax manager at KPMG LLP.

* * *

For more, GO TO > > > P-s-s-t, wanna buy a good audit?


Kukui, Inc. – A for-profit oil and gas subsidiary formed by the Kamehameha Schools Bishop Estate to take over the operations of the bankrupt business venture McKenzie Methane.

* * *

For more, GO TO > > > The Myth & The Methane


Larry Mehau – GO TO > > > Part II


Lawrence Landry – GO TO > > > Part II

For more, GO TO > > > How to Pluck a Non-Profit


Lee H. Henkel – GO TO > > > Part II

For more on Harken Energy and Aloha Petroleum, GO TO > > > Aloha, Harken Energy!

For more on Charles Keating and Investors Equity Life Insurance Co., GO TO > > > Vultures in the Meadows


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….

For more, GO TO > > > Part II


Lyn Anzai – Former in-house attorney for Kamehameha Schools who handled many of the major “questionable” investments of the former, legally-ousted trustees, and responsible for the “work-outs” when the investments turned sour; wife of Earl Anzai – the politically-picked replacement of politically-ousted Hawaii Attorney General Margery Bronster.

* * *

February 5, 2002

Attorney General’s wife
lobbied for airline merger

By Johnny Brannon, Honolulu Advertiser

The wife of state Attorney General Earl Anzai lobbied last year on behalf of Hawaiian Airlines, which is seeking state approval for a merger with rival Aloha Airlines and reported spending more money on lobbyists last year than any other company in the state, according to records filed with the state Ethics Commission.

Attorney General Earl Anzai decided that it isn’t proper to take part in the review of the merger.

But Anzai, whose office is reviewing the merger plan, said he had recused himself completely from the review when he first learned of the proposal because his wife’s involvement with the company would otherwise pose a clear conflict of interest.

“It’s such an obvious conflict that it would be ridiculous for me to be involved,” he said. “It’s like being partially pregnant. It’s one or the other. I’m either involved or I’m not involved.”

Three reports that cover different periods of 2001 show that Hawaiian spent nearly $185,000 to lobby state lawmakers that year, and that Anzai’s wife, Lyn Anzai, was paid $104,467 for lobbying work from March through December.

A Hawaiian Airlines spokesman said yesterday, however, that the company incorrectly calculated figures supplied in the lobbying expenditure report it filed with the commission on Friday. He said the correct figure for lobbying was less than $10,000 and that the company would be filing an amended report.

“There’s no way Hawaiian should be at the top of the list,” company spokesman Keoni Wagner said.

Hawaiian and Aloha announced in mid-December that they would seek to merge because the Sept. 11 attacks and the travel slump that followed had threatened their survival as competitors.

Lobbying a small part of job

Opponents fear a merger would leave a monopoly that produces high ticket prices, poorer service, and a loss of jobs. Gov. Ben Cayetano has announced tentative support for the plan, pending a review by Earl Anzai’s deputies in the attorney general’s office and by the U.S. Justice Department.

Lyn Anzai, Hawaiian Airlines’ general counsel since 1997, said she also took on the role of lobbyist last year because the company and Aloha Airlines were seeking excise tax exemptions for leased aircraft, which the Legislature and governor approved. She said she has also helped lobby for the merger.

She said the $104,467 cited in the reports as payments to her reflect nearly her entire annual salary, but that she spent only a fraction of her time lobbying lawmakers on the excise tax or the merger.

“This is unbelievable for the amount of time I spend at the Legislature,” she said. “I don’t know how they came up with this number. This is greatly distorted, because I’m not spending that much of my time as a lobbyist.”

Practice of stepping aside

Earl Anzai has had to refrain from other state legal work in the past because of his wife’s occupation.

When Cayetano appointed him in 1999, Anzai briefly recused himself from matters related to the Bishop Estate because Lyn Anzai had worked there as an attorney and the couple’s children worked as clerks at a law firm that represented the estate.

The Hawai’i Supreme Court’s Office of Disciplinary Counsel and the Ethics Commission later found no conflict of interest in that situation.

In documents filed with the Ethics Commission, Aloha Airlines reported spending no money on lobbyists last year. But Hawaiian Airlines also donated $20,000 last year to a foundation that is restoring Washington Place, the official residence of the state’s governors, records show.

Sen. Sam Slom, R-8th (Wai’alae Iki, Hawai’i Kai), said the attorney general’s office should have clearly indicated during a Senate hearing on the merger last month that Earl Anzai had recused himself from the review.

“It makes it neater and cleaner, and then you don’t have to worry about whether there’s a problem,” said Slom, who opposes the merger. “I think the most unfortunate part is if the attorney general recuses himself, he doesn’t have the ability to look at the proposed merger in detail. But the issue fails on its merits regardless of how much they spend lobbying and who they’ve got on their payroll.”

Impartial review anticipated

Earl Anzai said Deputy Attorney General Thomas Keller will supervise the review, and a spokeswoman said Cayetano is satisfied with that arrangement.

“The attorney general has recused himself from any matter regarding the Hawaiian and Aloha airlines merger and the governor is confident that state attorneys will conduct an impartial review of this merger,” said Kim Murakawa, the governor’s press secretary.

“He does support the merger at this point, based on the information he’s been provided about their economic situation.”…

* * *

For more, GO TO > > > Hawaiian Airlines: Flying with the Vultures

* * *

January 26, 2003

On Politics


EWC may gain in importance under Lingle

Tucked away toward the back of the University of Hawaii-Manoa campus is one of the state’s rarely discussed gems, the East-West Center.

The location is stunning, the facilities, while not expansive, are good and the opportunities for cross-cultural understanding, education and discussion are among the best in the world.

Interestingly, the EWC, although now a quiet player on the local and national scenes, may become a highlight of the Lingle administration.

Although the center is run by Charles Morrison, a well-respected scholar, it draws much of its pull from its influential board of governors.

This is where it gets interesting, because the governor and the U.S. State Department each pick five members with five more international members elected by the U.S. members.

The names now read like a who’s who of Hawaii’s political insiders: George Ariyoshi, Lyn F. Anzai, Joan M. Bickson, Lawrence M. Johnson, Wayne T. Miyao and Linda Chu Takayama.

One of Governor Lingle’s close political friends is Patricia S. Harrison, the assistant secretary of state for education and cultural affairs. A businesswoman and author, Harrison is the former co-chairwoman of the Republican National Party and one of the original enlistees in the Lingle fan club.

Harrison is also a member of the EWC board, and the center falls under her review at the State Department. She stopped here recently on the way to a meeting in Singapore and fell in love with the EWC.

“I think the East-West Center can build on its stellar outreach and will become more important to the region,” she said.

“Because of the Sept. 11 attacks, we are more attuned to the need to connect to people on a people-to-people basis.

“The center is educating a new generation,” she said, and then excitedly ticked off the names of young students from India, the Solomon Islands and China who told her how their perceptions of the United States and other countries in Asia changed because of their stay at the center.

“More and more what Hawaii represents is an antidote to global terrorism. If global terrorism is pushing people apart through fear, Hawaii, which is an experiment of so many coming together, is the atmosphere that could be the prototype for the future,” Harrison said.

Lingle agreed this week, saying she was looking forward to meeting with Harrison again when she goes to Washington in February.

Lingle said she hasn’t asked any current EWC board members to resign, but when spots open up, she and Harrison will certainly be working together.

When the two do get together, look for the EWC to rise in importance both here and at the federal level.

* * *

From the RICO lawsuit Harmon vs. Trustees of Bishop Estate, Federal Insurance Co., Marsh & McLennan, et al.:


List Two — Plaintiff alleges that the following persons, corporations, partnerships and other business entities knowingly participated in, and improperly benefitted by, the Racketeering Activities of Defendants. By their acts or omissions, they either sanctioned or perpetuated the crimes:

x) Kona Enterprises – This was another financially troubled acquisition, which resulted in a lawsuit brought by Wayne Rogers. In the initial suit, filed in North Carolina, (Nathan) Aipa did not report the claim to the insurance carrier. In subsequent suits filed in Utah and Hawaii, Plaintiff did become aware of the lawsuits, and filed the claim. However, Aipa and Lyn Anzai directed the handling of the lawsuit with outside law firms. As was common in these situations, the outside and in-house attorneys “controlled” the litigation, and the insurance companies disallowed much of the legal costs due to the Legal Groups disregard for the insurance policy conditions. . . .

dd) Colleen Wong, Esq. – Wong is head of the corporate law department of KSBE, and as such her department, which included Allan Yee, Lyn Anzai, Rene Kitaoka*, and others, had responsibility for such legal matters as mergers and acquisitions, compliance with ADA, environmental laws, and employment matters. . . .

*(Catbird Note: On March 3, 1999, Rene Kitaoka committed suicide, one day after being caught in a sexually-compromising position with former trustee Gerard Jervis in the men’s restroom of the Hawaii Prince Hotel.)

See also: Hawaiian Airlines

For more, GO TO > > > RICO IN PARADISE


Mark McConaghy PricewaterhouseCoopers’ former tax expert for Bishop Estate and its subsidiaries.

* * *

From Harmon v. Trustees of Kamehameha Schools Bishop…et al:

Plaintiff alleges that the following persons, corporations, partnerships and other business entities knowingly participated in, and improperly benefitted by, the Racketeering Activities of Defendants. By their acts or omissions, they either sanctioned or perpetuated the crimes:

gg) Mark McConoghy, Price Waterhouse – McConoghy is the tax expert hired by KSBE and advises KSBE and its subsidiaries on matters of tax law. McConoghy was a co-investor with KSBE in the McKenzie deal, which had the appearance of, if not actual, conflict of interest. Plaintiff believes McConoghy also may have personally benefitted in other KSBE deals, including one or more of the HAK partnerships, and the Benson Forest purchase . . .

jj) Ben Benson, partner with KSBE in Benson Forest, now Shelter Bay Forests. Plaintiff alleges that Royal Hawaiian Shopping Center, Inc. arranged and paid for a life insurance policy for Benson, with Marsh & McLennan as the agent, which was possibly a “sweetheart deal”, and may not have been reported to the IRS as income to Benson. Plaintiff also alleges that there may have been misrepresentation and/or fraud involved in the purchase of this insurance as Benson had a heart attack (non-fatal) just prior to the binding of coverages, which Plaintiff believes may not have been disclosed by M&M to the life insurance company.

See also: McKenzie Methane

For more, GO TO > > > What Price Waterhouse?


Marsh & McLennan Companies, Inc. – From the RICO lawsuit: Harmon v. Federal Insurance Co, Marsh & McLennan, Inc., Trustees of Bishop Estate, Pricewaterhouse Coopers, et al: . . .

Defendant Marsh & McLennan Companies, Inc. (M&M) is the world’s largest insurance brokerage firm that conducts business throughout the United States and in many foreign countries, and is a licensed General Agent for Federal in the State of Hawaii.

On or about May 25, 1994, Plaintiff, in his capacity as Risk/Insurance & Safety Manager for KSBE, obtained a Captive Management Fee Proposal from Peter Lowe, VP, M&M Insurance Management Services, Inc. (M&MIMS), which detailed their proposed services and fees for managing P&C. Their services were to be on a time and expense basis, with an estimated annual cost of around $70,000. There was no mention in this proposal that their related subsidiary, M&M, would charge an additional flat annual fee of $200,000 for providing “brokerage”, “risk management” or other purported services to the captive.

This proposal, the subsequent contract, and periodic invoices from M&MIMS and M&M were transmitted by mail and/or wire. Plaintiff relied upon this proposal, its costs and representations, as an inducement to contract for these captive management services. Plaintiff alleges that M&M’s failure to disclose in their proposal an additional flat annual fee of $200,000 constitutes wire fraud, mail fraud, fraudulent inducement and misrepresentation.

Defendants M&M and M&MIMS, their employees, Rocco Sansone and Peter Lowe, and others in their organizations benefitted financially from these excessive fees in the form of salaries, commissions, bonuses, or other manner of compensation. Plaintiff alleges that M&M’s acts in collusion with some or all of trustees of KSBE, with officers and directors of P&C, and with Federal constitutes a conspiracy to defraud P&C and the beneficiaries of the Estate of Bernice Pauahi Bishop; racketeering; mail fraud; wire fraud; extortion; and violations of the “interim sanctions” regulations of the IRS . . .

* * *

For more, GO TO > > > The Marsh Birds


Marshall Ige GO TO > > > Part II

See also: Harmon’s Letter to the New Trustees



* *

For more, GO TO > > > Harmon’s Letter to the New Trustees; The Myth and the Methane


Michael Chun – President of Kamehameha Schools.

See also: McKenzie Methane; Park Engineering

For more, GO TO > > > Part II


Mid Ocean Reinsurance Co. – GO TO > > > Part II


Miller & Chevalier A Washington, DC-based nest of Lawyers and Lobbyists.

From their web-site, 8/1/00: . . .In 1920, Robert Miller and Stuart Chevalier founded Miller & Chevalier as the nation’s first law firm specializing in tax matters. Mr. Miller had served as Solicitor and Mr. Chevalier as Asst Solicitor of the Internal Revenue Service shortly after the first federal income tax laws were enacted. . . . Like our firm’s founders, many of our tax lawyers have worked in federal government service. . . . We serve clients in numerous industries: … aerospace, automobile, banking and finance, natural resources and energy, chemicals, electronics, pharmaceutical, retail, and health care insurance. . . . Our firm represents over half of the Fortune 50 companies. We also work with foreign-owned companies of similar size . . .

NOT MENTIONED in their website (though certainly worthy of note) is Miller & Chevalier’s tax services to Hawaii’s Bishop Estate. According to news reports, after a four-year audit the IRS was looking to recover around $680 million or more in back taxes and penalties due to some improper bookkeeping manipulations, plus possibly revoking the trust’s tax-exempt status.

Who do they call — TAXBUSTERSMiller & Chevalier.

Together with Tax Magician Mark McConaghy of PricewaterhouseCoopers they “negotiate” with the IRS to make over $650 million of taxes “disappear”.

(The secret behind this trick, if you watch closely, is to quietly slip the tax burden over to the millions of US ordinary citizens while we’re distracted by an attractive, young magician’s assistant named Monica showing hand-tricks to another master magician named Slick Willy.)

* * *

In addition to their legal services, Miller & Chevalier declared lobbying income of $1.4 million in 1998, with total lobbying expenditures of $320,000 (all to the lobbying firm of Akin, Gump)….

* * *

For more, GO TO > > > Harmon’s Letters to McCubbin; Harmon’s Letter to the New Trustees


Milton Holt – GO TO > > > Part II


Mitsui Trust and Banking Company – GO TO > > > Part II

See also: Sukamto Sia; Yakuza


MMI Realty Services – From their website:


Since 1984, MMI Realty Services has successfully leased and managed some of the premier retail and office properties in California, Hawaii, and Oregon….


Alecta Investment Management

Aloha Tower LP

AMB Property Corporation

Apollo Real Estate Advisors, LP

Bishop Estate

Capital & Counties, U.K.

Emerald Fund

Kahala Center Company

Louis W. DeMartini & Associates, Inc.

Mielke-Tellefsen Investments

Northwestern Mutual Life Insurance Company

Pacific Resources, Inc.

Panmer Associates

Rawson, Blum & Leon

Regents of the University of California

Shorenstein Company

SPI Holdings

Stone, Troger, Allen

Stone Bros. & Associates

The Estate of Philip Lyon

The Lalanne Group

The RREEF Funds

Trinity Investments

For more on Northwestern Mutual Life Insurance Co., GO TO > > > The Myth & the Methane


Mochtar RiadyA senior executive for the Riady family’s Indonesian enterprise, Lippo Group.

A billionaire, Mochtar Riady was an invited guest at Clinton’s inauguration and his son, James was on the “economic summit” convened after Clinton’s election. Riady has close ties with the military junta that has killed hundreds of thousands in East Timor.

When Clinton visited Indonesia in November 1994, he met with Mochtar Riady and John Huang. A point at issue here is not only the illegal foreign contributions to a presidential election, but also the close economic and social ties to an enterprise vying to market East Timor goods in America by a group that uses genocide and slave labor to compete in the global market.

The Bishop Estate reportedly has tenuous connections to the Riadys through the Panin Group, Sino Finance, and Xiamen International Bank….

For more, GO TO > > > The Indonesian Connection


Morgan Lewis & Bockius – “Reputable” Philadelphia and Washington D.C. lawyers hired by Bishop Estate to discredit a court-appointed special master’s report that raised boku-serious questions about the work of the estate’s outside law firms.

See also: Harmon’s Letters to Hamilton McCubbin; Harmon’s Letter to the New Trustees

For more, GO TO > > > Part II


Nathan AipaKamehameha Schools ex-chief legal officer.

July 25, 2003

Former Trustee Alleges Improper Disclosure

By Rick Daysog, Honolulu Star-Bulletin

Former Kamehameha Schools trustee Henry Peters has sued the estate’s former chief legal officer, alleging the attorney improperly disclosed confidential information.

In a seven-page lawsuit filed in state Circuit Court yesterday, Peters said that the estate’s ex-general counsel Nathan Aipa did not obtain a waiver of attorney-general privilege when he testified before an Oahu grand jury in 1998 and 1999.

Peters, who resigned from his $1 million-a-year trustee post in December 1999 under pressure from the Internal Revenue Service, was indicted twice by the grand jury for theft, but the charges were later thrown out by a state judge.

Eric Seitz, Peters’ attorney, said in the lawsuit that Aipa violated Circuit Judge Michael Town’s orders that he obtain a court ruling before testifying on confidential matters.

Seitz added that Aipa failed to notify Peters about his testimony and did not give the former trustee the opportunity to assert his attorney-client privilege.

Aipa, who now works for a private law firm, could not be reached for comment yesterday.

Aipa served as the $6 billion estate’s general counsel during the three-year controversy that culminated in the 1999 removal of the trust’s former board members Peters, Richard “Dickie” Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender.

Shortly after their removal, the estate’s court-appointed interim board appointed Aipa as the trust’s chief operations officer but he stepped down in 2000 after a court-appointed special master criticized Aipa’s handling of the estate’s outside law firms.

In 2001 the estate paid Aipa more than $413,000, or nearly $100,000 more than the $321,000 it paid its then-Chief Executive Officer Hamilton McCubbin. Aipa said at the time that the compensation, which was more than double Aipa’s 2000 pay, included his annual salary and severance.

See also: Henry Peters

For more, GO TO > > > Buzzards of Paradise; Harmon’s Letter to the New Trustees; The Morgan, Lewis & Bockius Report


National Housing Corporation GO TO > > > Part II


Oaktree Capital Management – A funds management firm for institutional investors.

See also: JMB Realty Corp.; Mitsui Trust; Sun International Hotels


Orion Capital PartnersA joint investment of Bishop Estate, MacArthur Foundation, and others. This partnership was later involved in the Connecticut Treasury scandals.

See also: Paul J. Silvester


P&C Insurance Company, Inc.Bishop Estate’s captive insurance company, domiciled in Hawaii, managed by Marsh & McLennan.

From: RICO LAWSUIT: Harmon v. Federal Insurance Company, P&C Insurance Co, Marsh & McLennan, PricewaterhouseCoopers, Henry Peters, Nathan Aipa, Rodney Park, et al:

Defendant P&C Insurance Company, Inc. (P&C), is a single parent captive insurance company formed in September, 1994, and was a wholly-owned subsidiary of Pauahi Holdings Corporation which, in turn, was a wholly-owned, for-profit subsidiary of KSBE….

Although Harmon was the president of P&C, he alleges that he was actually set up as a “straw man” to be controlled by Henry H. Peters, Trustee of KSBE and Chairman of the Board of P&C; Nathan Aipa, KSBE General Counsel and Assistant Secretary/ Assistant Treasurer of P&C; Louanne Kam, Esq., Litigation Manager for KSBE, and others….

For more, GO TO > > > Part II


Paradise Petroleum – A subsidiary of Autofuel Company (AFCO) which was a subsidiary of Kukui, Inc., which was a subsidiary of Pauahi Holdings Corp.

For more, GO TO > > > The Myth and the Methane; Harmon’s Letter to the New Trustees


Park Engineering – Politically-connected engineering firm which may soon be disconnected; former employer of Dr. Michael Chun, President of politically-connected Kamehameha Schools.

July 4, 2002 Election panel widens probe

Subpoenas will be issued to employees of a firm linked
to $100,000 in donations

By Rick Daysog, Honolulu Star-Bulletin

The state Campaign Spending Commission’s investigation into illegal campaign contributions is now targeting local contractor Park Engineering, which is linked to more than $100,000 in campaign contributions to Mayor Jeremy Harris and Gov. Ben Cayetano.

Bob Watada, the commission’s executive director, said yesterday his office is issuing five subpoenas for testimony of Park Engineering employees.

Watada said the commission is attempting to find out whether the company organized the contributions and reimbursed their workers.

“They seem to fit that same pattern where contributions are made by families and friends of the company,” Watada said.

Larry Matsuo, the firm’s chief executive officer, declined comment, saying he has not seen the subpoenas.

Since 1996, Park Engineering’s employees and their relatives have made more than 75 political contributions worth more than $118,000 to Cayetano, Harris, Maui Mayor James “Kimo” Apana and Republican gubernatorial candidate Linda Lingle, according to a computer-assisted study by the Star-Bulletin.

Harris netted $80,250 of the total, while Cayetano’s campaign received $26,500. Apana took in $9,000, while Lingle received $3,200.

Under state law, a donor can give no more than $4,000 to a mayoral candidate during a four-year election cycle. The limit for a gubernatorial race is $6,000 per donor.

Founded in 1958, Park Engineering is one of the state’s largest engineering firms with annual revenues of about $6 million, according to Hawaii Business magazine. Since 1996 the City and County of Honolulu has awarded the company more than $5.5 million in nonbid work, including a $1.5 million contract to help build sewer facilities in Kalihi Valley and a $300,000 engineering contract for the Ted Makalena Golf Course.

The firm recently did landscaping work along Farrington Highway for the state Department of Transportation.

The commission’s investigation into Park Engineering comes after a state judge upheld the commission’s right to subpoena bank records and employee testimony from local political donors.

Workers at Park Engineering and SSFM International Inc. recently filed motions to quash subpoenas issued by the commission, but Circuit Judge Dexter Del Rosario denied them last week.

Watada’s comments were made after the Campaign Spending Commission held its monthly meeting yesterday.

At that meeting, the panel’s five-member board approved fines totaling $3,000 against five local companies that gave excessive contributions to Harris’ 2000 re-election campaign.

The firms were Group Builders Inc., Hecker Design Ltd., Austin Tsutsumi & Associates Inc., Toft Wolff Farrow Inc. and Kodama/Okamoto Architects Inc.

See also: Michael Chun


Paul J. Silvester – Former Connecticut State Treasurer, now a confessed racketeer and money launderer.

The Hartford Courier by Jon Lender and Mark Pazniokas, 09/24/99:

Three Plead Guilty in Corruption Case. Former state Treasurer Paul J. Silvester pleaded guilty in federal court Thursday to charges of racketeering and conspiring to launder money — and, in a deal to cut his jail time, agreed to cooperate as the investigation targets well-connected political figures from Connecticut to Washington, D.C….

His brother, New York real estate investor Mark Silvester, 50, pleaded guilty to conspiracy to solicit and accept corrupt payments. Brother-in-law Peter D. Hirschi, 43, of West Hartford, a lawyer, pleaded guilty to conspiracy to launder money….

They … have been talking to federal prosecutors for a month and have promised to continue cooperating — including possible testimony against others. . . . Documents released Thursday detailed kickbacks from so-called finder’s fees totaling more than $330,000, but there may be significantly more money involved in activities still under investigation….

“We are looking at both other individuals and organizations,” U.S. Attorney Stephen C. Robinson said Thursday after the pleas were entered. His office worked with the FBI and IRS in the probe of the West Hartford Republican’s 17-month tenure as state treasurer….

Although Robinson declined to give specifics about where the probe will go, court documents indicated that prosecutors are looking closely at Wayne Berman, a prominent Washington, D.C. business consultant who is a major fund-raiser for Republican presidential front-runner George W. Bush.

Sources in recent days have said Berman received more than $900,000 from a fee or fees by virtue of Silvester’s placement of tens of millions of dollars with an investment fund of the internationally known Carlyle Group….

See also: Apollo Advisers; Carlyle Group; Lawrence Landry; Wayne Berman

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


PricewaterhouseCoopers – The biggest and (and baddest?) of the BIG FIVE.

For More, GO TO > > > What Price Waterhouse?; Harmon’s Letter to the New Trustees


Prudential The company with the ROCK symbol.

For more, GO TO > > > Prudential: A Nest on Shaky Ground


Renton Nip – Attorney with Verner, Liipfert, Bernard, McPherson, Hand, and the lawyer for Sukamto Sia.

From Honolulu Star-Bulletin, 4/10/96, by Rick Daysog: . . . Former Hawaii Republican Party Chairman Jared Jossem plans to join former Gov. John Waihee as a local partner in a Washington, DC, law firm.

According to a source close to the deal, Jossem will join Verner, Liipfert, Bernhard, McPherson, Hand.

Besides Jossem and Waihee, the firm’s big-name recruits include former Land Use Commissioner Renton Nip and Norma Wong, former Office of State Planning deputy director in the Waihee administration….

Besides Honolulu, Verner Liipfert has offices in Houston and Austin, Texas. Locally, the firm has represented Bishop Estate in its lobbying efforts in Washington. The firm lobbied under contract for the state Department of Transportation on aviation, highway and mass transit funding issues.

Last year, Gov. Ben Cayetano canceled that nonbid contract, saying the circumstances surrounding it created the appearance of impropriety.

Waihee and the law firm, which earned some $1 million in fees from the contract, insisted the contract was proper….

See also: John Waihee; Sukamto Sia; Yukio Takemoto


Rey Graulty – Former Hawaii State Senator; former Hawaii Insurance Commissioner; and now a state Circuit Court Judge appointed by Gov. Ben Cayetano.

See also: P&C Insurance Co.


Richard Macke – Retired Admiral Richard Macke was the former Commander in Chief, U.S. Pacific Command. He is currently the Senior Vice President of Wheat International.

For more, GO TO > > > The Sinking of the Ehime Maru


Richard Rainwater – Billionaire investor; power-broker. Co-investor with Bishop Estate in Columbia/HCA and Mid-Ocean Reinsurance.

For more, GO TO > > > The Sick Birds


Robert Kihune – Chairman of the new Board of Trustees, Kamehameha Schools; Vice Chairman and President of the USS Missouri Memorial Association.

See also: Harmon’s Letter to the New Trustees; The Sinking of the Ehime Maru; Vultures of the Sandwich Isles


Robert RubinFormer co-chairman of Goldman Sachs, former U.S. Treasury Secretary; current co-chairman of Citigroup.

* * *

For more GO TO > > > Vampires in the City; The Story of Enron; Dirty Gold in Goldman Sachs


Robert Trent Jones Golf Club – The Playground of Presidents – and a top nesting ground for politicians, lobbyists, and other predators of the highest order.

For more, GO TO > > > Part II


Robin Campiano – Former Hawaii Insurance Commissioner who became president of AIG Hawaii soon after leaving his commissioner’s post.

See also: The Un-American Insurance Group


Rockne Freitas – Vice President of Kamehameha Schools; President of GRG Enterprise Inc.; friend of Larry Mehau.

For more, GO TO > > > Part II


Rodney ParkExecutive formerly in charge of Bishop Estate’s Administration Group. Park was the estate’s controller at the time of their $85 million investment in McKenzie Methane. Park was also a co-investor in the deal. Park was also made president of the estate’s captive insurance company, P&C Insurance Co, Inc., replacing the fired president, Bobby Harmon.

For more, GO TO > > > Harmon’s Letter to the New Trustees


Sabrina Toma – From Honolulu Star-Bulletin, March 10, 2002:


>> Sabrina R. Toma has been named division senior counsel of Kamehameha Schools’ education legal division. She will provide legal counsel on issues relating to education and employment. Toma most recently practiced labor and employment law for 18 years at Torkildson Katz Fonseca Jaffe Moore & Hetherington….

For more, GO TO > > > Harmon’s Letter to the New Trustees; More Claims by Harmon: Torkildson Katz; RICO in Paradise


Sino Finance Group – Subsidiary of Bishop Estate, with William Simon and others as co-investors. Sino Finance owns nearly 5% of Xiamen International Bank in China.


Sports Shinko, Inc. – This Japan-based real estate development firm invested heavily in Hawaii in the bubbling 1980s (these were big bubbles, not tiny bubbles).

* * *

Honolulu Star-Bulletin, 7/6/98, by Rick Daysog: . . . House Speaker Joseph Souki was questioned by the state attorney general’s office over a Maui land deal involving the Bishop Estate that netted him a $132,000 commission….

According to Souki, the state subpoenaed the Bishop Estate for information about its $5.3 million purchase of a 100-acre parcel in Pukalani, Maui, from developer Everett Dowling. Souki had served as a consultant to Dowling. . . . Bishop Estate plans to build its permanent Maui campus on the site….

Estate critics have cited Souki’s involvement as a conflict of interest, saying he led opposition to a bill to limit the compensation of trustees of the Bishop Estate and other charitable trusts. After it failed on an initial vote, public pressure prompted the House to pass the measure….

Souki has denied any wrongdoing, saying it was a private real estate transaction….

As part of its inquiry into the Maui land deal, the state also has subpoenaed Dowling and state Sen. Joe Tanaka. . . . Tanaka earned $42,000 commission from Dowling last year but said his consulting work did not involve the Bishop Estate.

Tanaka, who has not yet met with state attorneys, said he helped introduce Dowling to Sports Shinko, Inc., which originally owned the Maui property….

State records show that Dowling acquired 273 acres from Sports Shinko in Dec. 1996, before selling 100 acres of it to the estate….

* * *

The Honolulu Advertiser, 5/8/86: Mililani Golf Course sold to Japanese firm . . . Oceanic Properties, Inc. yesterday announced sale of the Mililani Golf Course to a Japanese company …

The new owner, Sports Shinko Co. Ltd, plans “to beautify and improve the course…”

The seller, Oceanic Properties is the real estate subsidiary of Castle & Cooke, Inc. . . .

Sports Shinko Co was organized in 1959 by its president, Toshio Kinoshita, and opened its first golf course in 1962. It currently manages 26 golf courses in Japan…

See also: Kirk Belsby

For more, GO TO > > > Broken Trust; Yakuza Doodle Dandies


Stephen Friedman – a senior principal of Marsh & McLennan Capital

In 1994, Mr. Friedman retired as chairman of Goldman, Sachs & Co. He was co-chairman or sole chairman from 1990-1994, and from 1987-1990 he served as co-chief operating officer. He joined Goldman, Sachs in 1966 having previously held a position as a law clerk to a federal district court judge and as an attorney in New York City (1963-1966).

Mr. Friedman holds a B.A. from Cornell University (1959) and an LL.B. (Law Review) from Columbia Law School (1962). He is a Trustee of Columbia University (Chairman, Board of Trustees); Chairman of the Executive Committee of The Brookings Institution; Trustee of Memorial Sloan-Kettering Cancer Center and member of the Executive Committee.

He serves as a director of: Fannie Mae, Wal-Mart Stores, Inc., the National Bureau of Economic Research and the Concord Coalition.

Mr. Friedman is also a member of the President’s Foreign Intelligence Advisory Board and a director of In-Q-Tel, Inc. He is a former member of the Aspin/Brown Commission on the Roles and Capabilities of the U.S. Intelligence Community and the Jeremiah Panel on the National Reconnaissance Office.

For more, GO TO > > > Dirty Gold in Goldman Sachs?; The Marsh Birds


Sukamto Sia – Indonesian multi-millionaire businessman (before declaring bankruptcy). Sia, formerly known as Sukarman Sukamto, also owned a majority share of Bank of Honolulu, The Executive Center building, and the land purchased by the State of Hawaii for the Hawaii Convention Center.

Connections: The land under The Executive Center is owned by Bishop Estate. The insurance broker for Sia is Marsh & McLennan. A prime lender on The Executive Centre was Citibank.

See also: Rey Graulty

For much, much more, GO TO > > > The Indonesian Connection


Sumitomo Bank – This Japanese financial giant pumped around $500 million into Goldman Sachs in 1986. After Goldman’s IPO in 1999, Sumitomo held about a 6% interest in Goldman. In Hawaii, Sumitomo formerly owned the majority interest in Central Pacific Bank.

See also: Part II

For more, GO TO > > > Dirty Gold in Goldman Sachs; Yakuza Doodle Dandies


Sun International Hotels Ltd. – GO TO > > > Part II


Thayer Capital Partners – A private equity investment fund where some very big birds privately nest.

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


Torkildson, Katz, Fonseca, Jaffe, Moore & HetheringtonFrom RICO lawsuit, Harmon v. Federal Insurance Co; Torkildson, Katz, et al.:

Defendant Torkildson, Katz, Fonseca, Jaffe, Moore & Hetherington (Torkildson, Katz) is a law corporation conducting business in the State of Hawaii.

Plaintiff alleges that Torkildson, Katz, through its complicity; deceptions; threats; failure to disclose settlement proposals to all interested parties and insurance carriers; and failure to respond to Plaintiff’s good faith settlement proposals, acted in bad faith and in collusion with some or all of trustees of KSBE, with managers and employees of KSBE, and with officers and directors of P&C, constituted a conspiracy to defraud the beneficiaries of the Estate of Bernice Pauahi Bishop and P&C; racketeering; mail fraud; wire fraud; extortion; and violation of I.R.S. interim sanctions regulations as detailed in Plaintiff’s complaint….

For more, GO TO > > > Buzzards of Paradise; Harmon’s Letter to the New Trustees


Trinity Investment Trust – From: Honolulu Star-Bulletin, 7/31/97: . . . 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 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.

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, defense attorneys for the Bishop Estate trustees] 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….

[A Catbird Comment: Note that nowhere in this news article is there a tweet about Azabu’s connection with the Yakuza.]

* * *

Honolulu Star-Bulletin, 3/11/99, by Gordon Pang: Yoshimura Accused of Condo Conflict of Interest . . . Colleagues of Councilman Jon Yoshimura say he has a conflict of interest in the Harbor Court condominium project.

Council Chairman Mufi Hannemann and members Steve Holmes and Donna Mercado Kim say Yoshimura should not be voting on matters involving the Harbor Court project because he is working for the project’s chief lender.

Harbor Court Developers owes the city about $12 million for the fee interest of the property.

Yoshimura, an attorney, disclosed yesterday that he is being paid by the law firm of Verner Liipfert Bernhard McPherson Hand to do lobbying work at the state Legislature on behalf of Trinity Investment Trust LLC.

Yoshimura said that under the direction of former Gov. John Waihee, a Verner Liipfert attorney, he is lobbying to help Trinity gain the right to put up an underground parking lot at the Aloha Tower Marketplace’s Irwin Park.

In early February, after he began working for Trinity, he participated in a closed-door vote of the Policy Committee that rejected a $6 million offer from Trinity and the developer as settlement for the money owed. Yoshimura later met with several Council members to discuss whether the city should present a counteroffer to settle at $10 million.

“I would have recused myself,” Hanneman said….

Yoshimura said he does not believe there is a conflict because his work for Trinity has nothing to do with its situation with the city….

See also: John Waihee; Verner Liipfert; Yakuza

For more, GO TO > > > The Blackstone Group; The Nests of CB Richard Ellis; A Connecticut Yankee in King Kamehameha’s Court; Paradise Paved; Yakuza Doodle Dandies


USS Missouri Memorial Association – GO TO > > > Part II


Verner, Liipfert , Bernhard, McPherson and Hand – From The Moneymen : The number one lobbying firm– Verner, Liipfert, Bernhard, McPherson, and Hand– acquired its marquee names over a relatively short stretch in the mid-1990s. They included two former Senate majority leaders, Bob Dole and George Mitchell, and a former treasury secretary, Lloyd Bentsen….

* * *

Honolulu Star-Bulletin, 4/10/96, by Rick Daysog: . . . Former Hawaii Republican Party Chairman Jared Jossem plans to join former Gov. John Waihee as a local partner in a Washington, DC, law firm.

According to a source close to the deal, Jossem will join Verner, Liipfert Bernhard McPherson Hand.

Besides Jossem and Waihee, the firm’s big-name recruits include former Land Use Commissioner Renton Nip and Norma Wong, former Office of State Planning deputy director in the Waihee administration….

Jossem, a longtime partner in the firm of Torkildson Katz Jossem Fonseca Jaffe Moore & Hetherington, declined comment on the matter. He took over as GOP chairman in 1991 and stepped down in 1994.

Waihee did not return calls….

Besides Honolulu, Verner Liipfert has offices in Houston and Austin, Texas. Locally, the firm has represented Bishop Estate in its lobbying efforts in Washington. The firm lobbied under contract for the state Department of Transportation on aviation, highway and mass transit funding issues.

Last year, Gov. Ben Cayetano canceled that nonbid contract, saying the circumstances surrounding it created the appearance of impropriety.

Waihee and the law firm, which earned some $1 million in fees from the contract, insisted the contract was proper….

* * *

From The Buying of the President 2000 : . . . Elizabeth Dole raised only $3.5 million through the first half of 1999. Her husband’s prestigious Washington law firm, Verner, Liipfert, Bernhard, McPherson, and Hand, is the top patron of her current campaign . . .

* * *

From Equity No. 2048 – In the Matter of the Estate of Bernice Pauahi Bishop, Report of Master Regarding Retention of Non-Staff Counsel, filed 5/18/00:

 . . . Prior to August 1998, Verner Liipert, a Washington D.C. based law firm which employed former governor John Waihee was retained to do certain legal work. From other pleadings filed in this matter we know that central to that retention was lobbying by the firm on the issues of intermediate sanctions and/or trustee compensation. It is also known from other pleadings that that firm was compensated for work done on investigating the feasibility of changing the domicile of the trust from Hawaii to a Souix River Indian Reservation. . . .

Minutes of a Special Trustees’ meeting of Sept 9, 1998 authorized instructing John Waihee to “transfer all files on the matter of Trustees lobbying efforts on Intermediate Sanctions legislation” to Hawaii for review by other lawyers, including “point person” William McCorriston. In addition, Verner Liipfert lawyer Sue Temkin was to come to Hawaii “as soon as possible to explain and elaborate on the lobbying efforts”. This was in response to Master Matsumoto’s request for information on the subject and the right to review the files.

However, it is clear from a review of all of the 1998 invoices that even before August 1998 Verner Liipfert was aware that the Attorney General had subpoenaed its files and was involved in efforts to not produce its files. As time progressed this firm did everything possible to delay production and, then, to attempt to limit the scope of that production. This Master reviewed the following invoices: . . . $347,564.09 TOTAL.

This entire amount should be surcharged to the Trustees. . . . Further, the bills do not contain charges for John Waihee, even though he clearly spent time on the file matter. If he was compensated in some other way or at a different time, that sum should be included in the surcharge total. . . .

It is not overstatement to say that there was nothing of legal substance in the work done in 1998 by this firm. Rather, it simply represents the formulation and implementation of a strategy to delay and obstruct, discussed ad nauseum among a large number of firm personnel, including the central involvement of N. Wong, S. Temkin and J. Waihee. . . .

Simply stated, as one proceeds through the billing records one is left with the inescapable conclusion that legal work being done was of no benefit to the trust. Rather it was designed solely to address allegations of past misconduct or at least errors of judgment made by the individual trustees with regard to the earlier retention of this firm. The goal of the work was to attempt to formulate a strategy to prevent or limit disclosure.

In the event that this court adopts this Master’s recommendation and orders surcharge, the possibility exists that one or more of the trustees will not be able to pay. The law permits, upon petition of an interested party and after notice to all interested persons, examination of the propriety of employment of any person, including attorney, by trustees. Refunds may be ordered from such persons. HRS 560:7-205. . . .

Absent a satisfactory explanation by Verner Liipfert and assuming an interested party files an appropriate action which gives the appropriate notice to Verner Liipfert, a refund is, in the opinion of this Master, in order. This master finds it inconceivable that a lawyer would hold that this type of work both benefitted the trust, did not encompass allegations of trustee misconduct and/or error and was, therefore, appropriate to be paid from trust assets. However, the statute does require that Verner Liipfert be given notice and that has not been done.

Finally, this Master also concludes that a surcharged trustee who satisfies the surcharge is an interested party who could petition for such a refund. . . .

See also: John Waihee; Renton Nip; Torkildson Katz

For more, GO TO > > > Harmon’s Letter to the New Trustees; RICO lawsuit: Harmon v. Torkildson Katz, et al


Vernon Jordan – GO TO > > > Part II


Vesta Insurance Group – GO TO > > > Hawaiian Insurance Group


Wally Chin – President of Kamehameha Activities Association.

See also: McKenzie Methane

For more, GO TO > > > Part II


Watanabe Ing & Kawashima – Home of current Kamehameha Schools’ trustee James Douglas Keauhou Ing. According to his bio, James Ing was a former associate of Judge Kevin Chang, the judge who ultimately selected the new trustees. Ing also represented former trustee Oswald Stender in an effort to remove former trustee Lokelani Lindsey, and represented the interim trustees in efforts to remove old trustees.

Sept 22, 1998

Estate sues lawyers over confidentiality


Bishop Estate has filed suit in Circuit Court, alleging its lawyers failed to keep a settlement confidential in a suit brought by a former employee.

William Rosehill, a Kamehameha Schools Bishop Estate land manager on the Big Island, was terminated July 10, 1992. Rosehill filed suit Feb. 22, 1993.

The lawsuit says an attorney with Watanabe Ing & Kawashima failed to guard the confidentiality of a settlement with Rosehill by attaching it to a court document not under seal.

In November 1996, a reporter with the Hilo Tribune Herald disclosed that Bishop Estate agreed to pay Rosehill $240,000 to settle the lawsuit.

For more, GO TO > > > Buzzards of Paradise; Harmon’s Letter to the New Trustees


Wayne Berman – GO TO > > > Part II

For more on the Paul Silvester scandals, GO TO > > > A Connecticut Yankee in King Kamehameha’s Court

For more on the Carlyle Group, GO TO > > > Birds that Drink from Cesspools


Wayne Metcalf – GO TO > > > Part II


Wendell Brooks – Former head of Bishop Holdings Corp.

May 23, 2002

CEO’s daughter gets job at Kamehameha

Hamilton McCubbin played no role
in the hiring, the trust says

By Rick Daysog, Honolulu Star-Bulletin

The Kamehameha Schools has hired the daughter of Chief Executive Officer Hamilton McCubbin to a part-time position in a potential conflict of interest.

In a 38-page report recently sent to the Internal Revenue Service, the estate’s internal auditor Arthur Andersen LLP said that the trust hired “an immediate family member of a top (Kamehameha Schools) executive” to a temporary job, starting March 26.

Arthur Andersen’s report — which also was given to the estate’s five trustees, the Attorney General’s Office and the trust’s court-appointed master Ben Matsubara — did not identify the executive and his relative. But the trust confirmed that McCubbin’s daughter, who is a doctoral candidate at a mainland college, was hired at the estate as a research assistant for the summer.

McCubbin did not return calls, but the trust said he was not involved in his daughter’s hiring and had no influence in the process.

The estate, in a statement approved by trustees, also said the position was advertised internally and externally. The position ends June 30.

Arthur Andersen said the division that hired McCubbin’s daughter reports to the chief executive officer, but the accounting firm described the hiring as an “isolated personnel matter” that was conducted through the normal employment process.

The trust’s in-house lawyers concluded that matter did not violate the estate’s conflict-of-interest policies, Arthur Andersen said.

The trust said McCubbin’s annual conflict-of-interest disclosure form was filed in February and predated his daughter’s hiring.

Subsequently, McCubbin has amended his disclosure form to list her employment.

Arthur Andersen indicated that McCubbin filed his amended disclosure form after the issue was first raised in April by the internal auditing team. The executive did not immediately update his disclosure form “due to an oversight,” Arthur Andersen said.

Peter Hanashiro, an Arthur Andersen partner, declined comment when asked why the firm did not identify McCubbin in the report. Deputy Attorney General Hugh Jones also declined comment.

Arthur Andersen has served as the estate’s internal auditor since February 2000. For the fiscal year ending June 30, 2001, the estate paid the accounting firm $2.1 million.

The report, known as the Closing Agreement Compliance Monitoring Report, was required under the February 2000 closing agreement between the IRS and the Kamehameha Schools.

In the closing agreement, the IRS reaffirmed the estate’s tax-exempt status after the $6 billion charitable trust agreed to implement major management reforms and remove former board members Henry Peters, Richard “Dickie” Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender.

The IRS and the Attorney General’s Office alleged that the former trustees engaged in numerous conflicts of interest and self-dealing.

The reforms included a strict conflict-of-interest policy.

The Star-Bulletin obtained a copy of Arthur Andersen’s report from the Attorney General’s Office after filing a formal request under the state’s open-records law.

The Star-Bulletin initially asked the estate for a copy of the compliance monitoring report, but trust officials denied the request. The estate said such reports typically cover internal and operational matters that are “often of a sensitive nature.”

The bulk of Arthur Andersen’s report described how trust officials have complied with the terms of the IRS closing agreement.

The report also described a management dispute involving the head of Kukui Inc., a for-profit trust unit which owns McKenzie Methane Corp., a Houston-based natural gas producer.

In a Feb. 27 letter to senior trust executives, Kukui President Dennis Fern alleged that Wendell Brooks, the former head of the estate’s nonprofit Bishop Holdings Corp., abused his power and intimidated Kukui’s management.

Fern, the estate’s former internal auditor, complained that several activities involving Kukui and Bishop Holdings were not conducted at arm’s length and were driven by the estate’s asset allocation strategies, Arthur Andersen said.

Bishop Holding is the parent of Kukui’s sole shareholder.

The estate said it hired an outside law firm to review Fern’s allegations.

The law firm found that the trust did not violate any of its internal policies and that there were sufficient checks and balances to avert potential abuses of power.

Fern, the estate’s former internal auditor, could not be reached.

Brooks declined comment….

* * *

May 16, 2002

Kamehameha top pay went
to lawyer in 2001

Nathan Aipa earned more than the trust’s CEO, IRS data show

By Rick Daysog, Honolulu Star-Bulletin

The Kamehameha Schools paid its former top lawyer $413,630 during its last fiscal year, making him the estate’s highest-paid employee, according to records filed with the Internal Revenue Service.

Attorney Nathan Aipa’s 2001 compensation was nearly $100,000 higher than the $321,026 paid to estate Chief Executive Officer Hamilton McCubbin and was more than double the $170,636 paid to the trust’s current chief legal officer, Colleen Wong, for the year ending June 30, 2001.

It is also double the $195,000 that the $6 billion charitable trust paid Aipa during its previous fiscal year.

Aipa, who left the estate last year and is now in private practice, said his compensation included his base salary as well as a severance package. Trust officials declined comment, saying it was a personnel matter.

Aipa, who served as the estate’s first chief operating officer before stepping down, has been criticized for his role in the estate’s three-year legal battles with the state, the IRS and members of the local Hawaiian community.

Robert Richards, a special master appointed by the probate court, faulted Aipa’s handling of the trust’s outside law firms, which represented interests of the estate’s former trustees at the expense of the estate.

Aipa is just one of several former and current employees who received big payouts in 2001. According to the estate’s Form 990 filing with the IRS:

>> Former Chief Investment Officer Wendell Brooks earned $300,000.

>> Ex-Chief Administrator Rodney Park received $260,023.

>> Gilbert Ishikawa, the estate’s former tax director, was paid $271,610.

>> Eric Yeaman, the estate’s current chief financial officer, earned $224,532.

>> Michael Chun, Kamehameha Schools’ president, earned $188,718.

Current estate trustees Doug Ing, Diane Plotts and Nainoa Thompson, who joined the board on Jan. 1, 2001, earned $51,000 each, while trustees Robert Kihune and Constance Lau received $122,000 and $100,500, respectively. Former interim trustees Ronald Libkuman, the Rev. David Coon and Francis Keala each received $49,500.

Lau and Kihune also served as interim trustees.

Prior to their removals in 1999, former trustees Richard “Dickie” Wong, Lokelani Lindsey, Henry Peters, Oswald Stender and Gerard Jervis each earned as much as $1 million a year.

The estate’s annual Form 990 filing also provided a broad look of the estate’s investment and educational operations.

The nonprofit Kamehameha Schools posted total revenues of about $303.6 million during the 12 months ending June 30, while the Kamehameha Activities Association, a tax-exempt support organization, recorded total revenues of about $1.3 billion thanks to the recent sale of stock in Goldman Sachs Inc.

On a consolidated basis, the two organizations grossed about $1 billion during its 2001 fiscal year, up from $936.3 million in the year-earlier period.

The trust said it spent about $192 million for educational programs and school construction last year and is poised to spend an extra $200 million this year.

The estate said it paid the local architecture firm Group 70 International $2.82 million largely for work related to its Maui and Big Island campuses, which are under construction.

The trust also paid $2.1 million to the accounting firm of Arthur Andersen LLP and $1.85 million to the Washington, D.C., law firm of Miller & Chevalier to resolve various tax issues with the IRS.

The Kamehameha Activities Association also paid Miller & Chevalier $488,091 during the 2001 fiscal year….

See also: Miller & Chevalier

For more on Arthur Andersen LLP, GO TO > > > The Story of Enron

For more on McKenzie Methane, GO TO > > > The Myth & The Methane


William S. Richardson – Former Chief Justice of the Hawaii Supreme Court; retired Bishop Estate trustee; Sec/Treas of P&C Insurance Co.

From: RICO LAWSUIT: Harmon v. Federal Insurance Company, P&C Insurance Co, Marsh & McLennan, PricewaterhouseCoopers, Henry Peters, Nathan Aipa, William S. Richardson, Rodney Park, et al: . . .

William S. Richardson is a retired Trustee, a salaried consultant to KSBE, and serves as a Director and Sec./Treas., P&C. As Treasurer, Richardson had a fiduciary responsibility to P&C that expenditures and other financial records of the company be honest and accurate. Plaintiff refused to approve the 1995-96 fiscal year financial report, as prepared by Peter Lowe, as he was aware that these records were not honest and accurate. Plaintiff alleges that Richardson, as Treasurer, had the responsibility to review the financial records and raise questions about any entries that may have been fraudulent or misleading.

Richardson was also a co-investor in the McKenzie Methane deal during the time he was a Trustee. Plaintiff alleges that Richardson’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.

See also: McKenzie Methane


William E. Simon – Financier, businessman, and Secretary of the Treasury during the Nixon and Ford administrations. He was also a member, along with George Bush, Sr., of the Committee of 300.

A partial business career listing: Partner, Solomon Brothers (1964); Deputy Sec of the Treasury (1973); Secretary of the Treasury (1974-77); Sr Consultant, Booze Allen & Hamilton (1977-79); Consultant, Allstate Insurance Co.; Pres, John M. Olin Foundation; Director, Kissinger Associates; Founding Board Member, Robert Trent Jones International Golf Club; Senior Trustee, University of Rochester; Director, Xerox Corp.

William Simon died on June 3, 2000 of heart and lung ailments. He was 72.

* * *

William Simon was a co-investor with Bishop Estate in several business ventures, including HonFed Savings & Loan, Sino Finance Group, Xiamen International Bank (China), SoCal Holdings, and the now-infamous McKenzie Methane deal.

* * *

See also: HonFed Savings & Loan

For more, GO TO > > > The Opal File; William Simon Says; The John M. Olin Foundation


The Woodlands George P. Mitchell, Chairman and CEO of Mitchell Energy & Development Corp, founded “The Woodlands” a 25,000-acre planned community located 25 miles north of Houston.

Opened in 1974, The Woodlands was sold in 1997 to a partnership of Cresent Real Estate Equities Company and Morgan Stanley Real Estate Fund II.

Recommended Reading: Conspirators Hierarchy, by Dr. John Coleman.


Xerox Corporation – GO TO > > > The Xerox Conspiracy


Xiamen International Bank GO TO > > > Part II

For more, GO TO > > > The World Trade Organization


Yakuza – The Japan-based organized crime mob.

For more, GO TO > > > Yakuza Doodle Dandies!


Yukio Takemoto – Takemoto is a former Hawaii State Budget Director who resigned under a thunderstorm of criticism in late 1993 to become Bishop Estate’s chief executive for budget and review. The Trust paid him $163,010 in 1997.

* * *

Honolulu Star-Bulletin, 1/24/01, by Rick Daysog: Estate’s Managers Shuffled in Shake-Up . . . Kamehameha Schools’ senior management team has undergone a major shake-up …

Yukio Takemoto, former state budget director who previously headed the Kamehameha School’s office of Budget and Review, was reassigned several months ago to a new position . . .

Takemoto is now director of the Kamehameha Schools’ Facilities Development and Support Division . . .

For more on Yukio Takemoto, GO TO > > > Part I

# # #




For more of the story on …


Part IPart IIPart IIIPart IVPart VPart VI


















































Last Updated on July 25, 2006, by The Catbird