Buzzards of Paradi$e

Hawaiians call them lawyers.


Sightings from The Catbird Seat

~ o ~

Shyster lawyers—a set of turkey buzzards whose touch is pollution
and whose breath is pestilence.

– G. G. Foster, New York in Slices, 1849

* * * * *

From PBS Frontline:

Interview with Charles Chidiac

Charles Chidiac is a financier-developer who knew Gene and Nora Lum in Hawaii. He was also involved in Asian Pacific Advisory Council-Vote, a Los Angeles Democratic fund-raising group once headed by Nora Lum. He has a checkered past. He was an unindicted co-conspirator in the BNL financial scandal.

~ ~ ~

FRONTLINE: Give me an example of corruption in Hawaii in the 1980s.

CHIDIAC: Well, if you want to do business in Hawaii, you go and you apply for a zoning. You get a call from an attorney. And he says, “I want to see you.”

“About what?”

“Oh, I want to talk about your application.” . . .

“But I already have an attorney.”

“It’s necessary to see you anyway.” So he comes over and he says, “Listen, you applied. This attorney of yours is no good. If you don’t hire me, you’ll never get your zoning….”

So, that’s how they do it. It’s called in Hawaii, “law firming,” instead of laundering.

FRONTLINE: In other words, bribery?

CHIDIAC: Pure, pure briberyunder the cover of being legal work

See also: Renton Nip


Alston Hunt Floyd & Ing – A biggie law-firm with clients like Hawaiian Electric Industries, Kaiser Development Company, Kaiser Aluminum Properties, Kacor Realty, Mokuleia Land Company, Victoria Group Limited, The Prudential Locations, Koko Marina Shopping Center, Market Place at Coconut Plantation, Temple Valley Shopping Center, Hawaii Kai Towne Center (Kamehameha Schools/Bishop Estate), Sheridan Ing Partners Hawaii, Kaiser Foundation Hospital, The Queens Health Systems, `Oleo: The Corporation for Community Television, Hawaii Conference Foundation, Family Planning Centers of HI, Inc., Aetna Insurance Company, Commercial Union, Fireman’s Fund, Mission Insurance, St. Paul Insurance Company, The Travelers, Otis Elevator Company, Carrier Corporation, Chevron U.S.A, Eaton Corporation, Georgia Pacific, Keene Corporation, Pittsburg Corning Corp., Chicago Title Insurance Co., Commonwealth Land Title Insurance Co., First American Long & Melone Title Company, Ltd., Lawyers Title Insurance Corp., Safeco Title Insurance Co., Security Union Title Insurance Co., Stewart Title Guaranty Co., TICOR, Title Insurance Company of Minnesota, and not last nor least, Japanese billionaire businessman Gensiro Kawamoto.

From their website:

Alston Hunt Floyd & Ing has represented a number of clients who have required legal counsel on issues involving Hawaii’s unique land situation. The firm has assisted clients in the complex areas of construction, development, and zoning. In the area of real property, the firm represents some of the largest residential and commercial real estate brokerage firms. The firm’s clients also include several title insurance and escrow companies. Among other issues, the firm has defended title insurers against claims of bad faith.

The firm has represented both corporations and individuals in lease negotiations involving nearly all of the major industrial and commercial developments on Oahu. Because much of the commercial and industrial development in Hawaii is on leased land, questions regarding leases become even more complex. Added to this complexity are such issues as traditional Native Hawaiian gathering rights and disputes to land titles transferred after the overthrow of the Kingdom of Hawaii….

In the area of professional malpractice, the firm represents Kaiser Foundation Hospital and its physicians in Hawaii in medical malpractice litigation. The firm has often been retained by insurance companies to represent their insureds….

The firm’s attorneys have many years of litigation experience involving investment and securities-related claims, including successfully representing clients who were defendants in several RICO and fraud cases…

The firm has assisted a number of foreign corporations doing business here in Hawaii…. In addition, AHFI has attorneys experienced in the area of regulatory law as the firm represents the largest public electric utility company in the state, as well as the largest public access television corporation in the state, among other clients whose businesses interact with various government agencies.

The firm also does work for numerous insurance and financial institutions….

See also: Judith Neustadter Fuqua

For more, GO TO > > > Claims By Harmon; Dirty Money, Dirty Politics & Bishop Estate; The Firing of Evan Dobelle; How to Pluck a Billionaire; The Harmon Arbitration; Paradise Paved; The Vultures of Maunawili Valley 


Bishop Estate – An educational trust with a “legal army” of in-house and out-house attorneys.

August 21, 1997

Fired exec questioned

State attorneys interview ex-worker

who alleges irregularities

By Bruce Dunford, Associated Press

A Bishop Estate official who says he was fired last year for raising questions about irregular and possibly illegal activities has been interviewed by state attorneys ordered by the governor to investigate the estate.

Bobby Harmon served for eight years as head of the estate’s insurance programs and ultimately served as president of P&C Insurance Co., a for-profit subsidiary of the $10 billion charitable trust that supports Kamehameha Schools.

He said he questioned:

>> An annual payment the estate made without accounting for why it was made;

>> His salary for the profit-making organization being paid by the nonprofit trust in apparent violation of IRS rules;

>> The company’s legal work being parceled to certain lawyers.

Harmon met for 1-1/2 hours yesterday with Senior Deputy Attorney General Lawrence Goya and the attorney general’s auditor, he said.

They expressed interest in obtaining a 50-page document he prepared detailing questionable and possibly illegal activities by Bishop Estate’s trustees and top executives, Harmon said.

Bishop Estate, however, earlier obtained a Circuit Court injunction against the release of the document, claiming it contains confidential and proprietary information that should not be made public.

Harmon has also offered to share his papers with retired Circuit Judge Patrick Yim, who is also conducting an investigation into the management of Bishop Estate and Kamehameha Schools at the request of the probate court.

Harmon said he was fired in November after he refused to sign off on a required financial report involving the estate’s contract with Marsh & McLennan Inc. as the estate’s insurance broker.

He said was worried about a $200,000 annual flat fee superiors wanted him to pay to MMI because there was no accounting why it was being paid, Harmon said.

Harmon said he felt if he “looked the other way” as encouraged by his superiors, “I would be breaching my fiduciary duties to the organization.”

Harmon also questioned why his salary was from the nonprofit trust when almost all his time was spent working for the for-profit P&C captive insurance company.

This appears to violate IRS rules against using tax-exempt trust funds to subsidize a profit-making company, he said.

It appeared that Bishop Estate attorney Nathan Aipa, Harmon’s direct supervisor, and trustee Henry Peters wanted to maintain tight control over all insurance matters, including parceling out related legal work to selected attorneys, he said.

Estate spokeswoman Elisa Yadao has declined to comment on Harmon’s allegations, but said they will be challenged in court.

Harmon’s documents support his proposed settlement for what he claims was his wrongful termination by Bishop Estate. It seeks up to $1.8 million.

The use of trust funds to support Bishop Estate’s various taxable subsidiaries was common, yet not reported on IRS forms as required, Harmon said.

* * * * *

August 21, 1997

Keeping lawsuits mum exposes estate,

 says former Bishop official

The trust is vulnerable to millions in
damage claims and legal fees

By Bruce Dunford, Associated Press

The $10 billion Bishop Estate trust that supports Kamehameha Schools is exposed to hundreds of millions of dollars in damage claims and millions of dollars in legal fees because trustees wanted to keep a lid on embarrassing lawsuits, according to a former executive of the trust.

Failure to disclose details of these lawsuits to insurance companies jeopardized insurance coverage of damage judgments or settlements as well as legal fees in defending against them, said Bobby Harmon, who headed the estate’s insurance program until last year.

Harmon, who was fired last November as president of the estate’s for-profit captive insurance subsidiary, P&C Insurance Co. Inc., has been talking to state attorneys investigating allegations of irregularities in the management of Bishop Estate by its five trustees.

Gov. Ben Cayetano ordered the probe.

The Bishop Estate won’t respond to Harmon’s specific allegations but is prepared to challenge them in court, said estate spokeswoman Elisa Yadao.

The estate’s 1989 $85 million investment in McKenzie Methane Inc., a Houston-based energy venture in which several trustees and estate executives piggybacked another $3 million of personal investment, resulted in a $2.3 billion lawsuit brought in Texas in 1993 against the trustees, the Bishop Estate and other investors.

The venture went into bankruptcy, whittling Bishop Estate’s investment down to some $20 million, according to attorneys in Texas.

The estate, its involved subsidiaries, the trustees and estate officers were entitled to legal defense under United Educators Insurance Co., which carries the estate’s legal liability policy, Harmon said.

Despite repeated efforts of the insurance company’s claims manager to get details on the lawsuit from Bishop Estate’s top attorney, Nathan Aipa, no information was provided and the company closed its files, not paying some $500,000 in legal fees that would have been covered, Harmon said.

It could also foreclose the insurance company paying for a settlement or judgment, he said.

Another $500,000 was spent defending against a $86.7 million lawsuit brought in 1995 by movie producer Frederick Field stemming from his partnership with Bishop Estate in investments dating to 1984, Harmon said.

Actor Wayne Rogers, an investment partner with Bishop Estate and several trustees in Kona Enterprises, filed a lawsuit in North Carolina in 1993 that was not reported to United Educators, which therefore paid no defense costs, Harmon said.

Although a subsequent lawsuit filed in Utah was reported to the insurance company, the company disallowed many of the legal fees due to noncompliance with the policy terms, he said.

U.S. District Judge David Ezra dismissed Rogers’ lawsuit last year, but his ruling was reversed on appeal, and the case remains pending.

(Catbird Note: Judge David Ezra was the same judge assigned to the Bobby Harmon vs. Trustees of Bishop Estate RICO lawsuit, after Judge Samuel King excused himself because he had openly criticized the estate.)

Total costs of defending Rogers’ lawsuit could have been limited to Bishop Estate’s $250,000 self-insured retention, Harmon said.

While the total costs of the defense covered by insurance are not yet known, one Honolulu firm, Cades Schutte Fleming & Wright, had billed the estate more than $750,000 as of September of last year, he said.

A lawsuit was brought in March of 1996 by members of the exclusive Robert Trent Jones Golf Club near Washington, D.C., in which Bishop Estate was a development partner and guarantor on a $40 million loan.

Bishop Estate trustee Henry Peters became a director and trustee of the golf club and negotiated the sale of the golf course and adjacent residential property to club members, according to the lawsuit, which has since been settled.

The lawsuit says those buying memberships were not informed that the club was stuck with the $33 million development loan from Bishop Estate.

Harmon said he doesn’t know who paid for the legal defense fees in that case or how much they totaled.

Yadao said Harmon was fired last year for work-associated misconduct and therefore was denied unemployment compensation.

Harmon is seeking up to $1.8 million in compensation from Bishop Estate for what he claims was his wrongful termination….

For more on Cades Schutte Fleming & Wright, GO TO > > > The Morgan, Lewis & Bockius Report

* * *

August 26,1997

Estate Tries To Muzzle
Fired Exec

It seeks contempt-of-court charges
against Bobby Harmon

By Jim Witty, Star-Bulletin

Bishop Estate is seeking to silence Bobby Harmon again.

The trust has filed an emergency motion in Circuit Court seeking contempt of court charges against the fired Bishop Estate executive for allegedly violating a previous injunction that blocked him from disclosing “confidential” information about his former employer.

Matt Tsukazaki, attorney for the $10 billion charitable trust, asked for a closed hearing “to protect the confidentiality of the information that may be discussed.”

This morning, Circuit Court Judge Bambi Weil continued the matter to Sept. 26; Bishop Estate attorneys are scheduled to conduct a deposition with Harmon Sept. 12.

“We’re not dealing with the formula of Coca Cola,” quipped Harmon’s attorney, Roy Hughes. “We’re dealing with business documents.”

John Goemans, who is representing Harmon in his $1.8 million wrongful-termination suit against Bishop Estate, told Weil: “Anything that Harmon has said has been either a matter of opinion or in aid of law enforcement.”

Bishop Estate attorneys contend that Harmon released a confidential and proprietary document that contained “false and defamatory allegations” and disclosed facts concerning his employment with Bishop Estate to “outside third parties.”

Harmon, who was fired last year after serving eight years as president and chief executive officer of Bishop Estate subsidiary P&C Insurance Co., has said his questions about irregular and possibly illegal activities led to his ouster. The Attorney General has interviewed Harmon as part of its investigation into the estate’s dealings.

“Here’s a guy who brought to the attention of his company things that were of benefit to the company,” Goemans said. “Instead of being rewarded for his diligence, the whole machinery of the estate came down on him like a ton of bricks, ending his career, to which he’d reached the pinnacle.”

Harmon said he questioned an annual payment the estate made without accounting for why it was made, his salary as chief of the for-profit insurance subsidiary being paid by the nonprofit trust in apparent violation of IRS regulations, and the parceling out of legal work to selected lawyers.

Harmon is out of state and did not attend today’s hearing.

* * * * *

August 27, 1997


The estate’s confidentiality provision isn’t meant to protect the trustees, he says

By Mike Yuen and Jim Witty, Star-Bulletin

Gov. Ben Cayetano says the Bishop Estate cannot use confidentiality agreements to bar employees from cooperating with the state’s investigation into whether trustees breached their fiduciary responsibilities.

Cayetano’s remarks yesterday came an hour after a hearing in Circuit Court on the estate’s emergency motion for a contempt finding against a fired executive for allegedly violating an injunction that prevented him from revealing “confidential” information about his former employer.

The hearing was recessed to Sept. 26.

Bobby Harmon, who was fired last year after working eight years as president and chief executive officer of the estate’s for-profit subsidiary, P&C Insurance Co., was questioned last week by state attorneys.

They talked with Harmon after Cayetano ordered Attorney General Margery Bronster to begin an investigation into the the $10 billion charitable trust, the largest private landowner in Hawaii.

Estate attorneys are also alleging that Harmon talked with reporters, leaking sensitive information.

“The confidentiality provision, in my view as an attorney,” said Cayetano, “will not hold any weight or water if the information that’s coming out is used to demonstrate or prove that there has been in fact a breach of fiduciary duty. You cannot hide information. The confidentiality provision should stand only if it is in fact protecting the trust and the beneficiaries – and not the trustees.”

Moreover, the law giving the attorney general subpoena powers outweighs any confidentiality provision an employer may have with employees, Cayetano added.

“I think if it should then happen that people bring a civil action against this employee for damages for breach of contract, the defense is he was required to do so by law,” Cayetano said.

Several hours after Cayetano spoke with reporters, Harmon’s attorney, John Goemans, filed a writ with the state Supreme Court, challenging Circuit Judge Bambi Weil’s jurisdiction to enforce the injunction against his client.

The injunction, Goemans claims, “denies Harmon’s established First Amendment right to express his opinion as to the corruption and criminality of the officers and directors of the Bishop Estate in matters of public concern and in aid of law enforcement by the attorney general of the state of Hawaii and others.”

Bishop Estate spokeswoman Elisa Yadao said the estate intends to cooperate with the attorney general’s investigation, but insisted that the inquiry should not be tied to Harmon’s case.

“It is not appropriate to discuss that case. That’s separate from the attorney general’s inquiry,” Yadao said. “He is under injunction from the court because of his unauthorized removal of estate property.”

Yadao expressed surprise that state investigators have not yet contacted estate officials, given that two weeks have passed since Cayetano announced Bronster’s inquiry.

As a result, estate attorney Nathan Aipa has called Bronster’s office, asking how to proceed, said Yadao.

Asked if estate employees and staff at its educational arm, Kamehameha Schools, will be allowed to talk to state investigators without being held to the confidentiality provision, Yadao declined to answer the question directly.

She would only say: “We have a long history of working with court-appointed masters. We’ve always cooperated fully with the masters. We have a good working relationship with the current master, who has spoken with current employees.”

Bronster has said she won’t talk to estate trustees or attorneys until she fully sorts out the allegations.

The Kamehameha Schools/Bishop Estate employee handbook, a copy of which was obtained by the Star-Bulletin, tells employees they must “keep institutional information confidential unless there are good reasons and authorization for its release.”

They are also told the release of information pertaining to the estate and the schools is handled through the trust’s public relations department, which must also clear any speeches or interviews “which might contain sensitive and/or confidential information.”

The employee handbook itself is labeled “CONFIDENTIAL.”

Cayetano said that during a talk with Bronster on Monday, there was concern expressed over “the resources” needed for the investigation, given the state’s tight fiscal situation.

“What we talked about was using some personnel from the state’s Tax Department, for example. Certainly in her investigation she will need to have people with accounting and auditing backgrounds,” Cayetano said.

“My inclination,” Cayetano said, “is to make the (preliminary) report public, because I think it will become public anyway if we do go to court.”

Cayetano stressed that Bronster is focusing on what might appear to be clear violations of fiduciary duties.

Trustees have said the preliminary report should not be released until they can meet with Bronster to respond to allegations.

Cayetano added that while Bronster can subpoena Bishop Estate trustees and even state Supreme Court justices, who appoint the trustees, he believes they will come forward voluntarily.

* * *

September 23, 1997

“No justification”
for trustee pay


Lowered compensation ‘would go a long way’
toward dissipating controversy

By Mike Yuen, Star-Bulletin

If the “enormous compensation” for Bishop Estate trustees is significantly lowered, that would go a long way toward dissipating the months-long controversy that has engulfed the $10 billion charitable trust, says Gov. Ben Cayetano.

Last year, each of the five trustees, who are expected to do the work of chief executive officers, received $843,109. In 1995, it was $938,047.

“There’s no justification for their compensation to be as high as it is,” Cayetano said yesterday. “The simple reason is this: It’s a charitable trust. It receives tax benefits from the state.

“And I think the people of this state are entitled to have some say in the compensation level of the trustees.

“If they were a private trust like the Campbell Estate, they can pay their people anything they want. But they’re not a private trust.”

Responding to Cayetano, Elisa Yadao, Bishop Estate/Kamehameha Schools spokeswoman, said this morning that the estate is “a private trust established by the will of Princess Pauahi Bishop.

“We are not charity in the conventional sense where we run our operations based on donations. We are self-sustaining, earning all the money to run our operations under the leadership of our trustees.”

The trustees’ compensation is tied to their performance, she said.

If the matter of trustee compensation is not addressed, Cayetano predicted that questions will resurface regarding breaches of trust responsibilities and the perception that politics permeates the selection of trustees.

Spurred by questions raised in “Broken Trust,” an opinion piece authored by five prominent leaders that ran in the Star-Bulletin last month, Cayetano ordered a state investigation into the estate, one of the nation’s wealthiest trusts and Hawaii’s largest private landowner.

Cayetano yesterday also reiterated that he will propose legislation next year to slash trustee compensation. He also called for House Judiciary Chairman Terrance Tom (D, Kaneohe), an attorney who received $49,200 in legal fees from the estate last year, to recuse himself when the administration’s bill or a similar measure goes before Tom’s panel.

“We are all going to be held accountable for our actions,” Cayetano said. “I think Terry Tom on this particular issue should recuse himself and not be involved in the hearing of the bill because obviously he has a direct conflict.”

Tom said he will leave it up to House Speaker Joe Souki (D, Wailuku) and other House leaders to determine whether he should step aside. “I will do whatever is in the best interest of the House. When I wear my legislative hat, I always act in the best interest of the state and not one client as I would do as a lawyer,” Tom said.

Several years ago, when a resolution involving Bishop Estate came up, Tom disqualified himself and turned the matter over to his vice chairman, he said….

* * * * *

September 23, 1997

Estate lawyers seek
reporters’ info, notes

They claim confidential information was
disclosed by a fired Bishop exec

By Jim Witty, Star-Bulletin

Attorneys for Bishop Estate have subpoenaed at least three Honolulu reporters they contend received confidential and proprietary information allegedly released by a fired executive of the trust.

Associated Press reporter Bruce Dunford, KITV-4 reporter Jim Dooley and Honolulu Advertiser reporter Sally Apgar were served with subpoenas yesterday that seek documents purportedly released by Bobby Harmon. A deposition was scheduled for this afternoon.

Bishop Estate filed an emergency motion in Circuit Court late last month seeking contempt of court charges against Harmon for allegedly violating a previous injunction that blocked him from releasing “confidential” information about his former employer. He has filed a $1.8 million wrongful-termination suit against Bishop Estate.

Harmon, who was fired last year after eight years as president and chief executive officer of Bishop Estate subsidiary P & C Insurance Co., has alleged in the media that his questions about irregular activities led to his ouster.

KITV News Director Wally Zimmerman said the station is consulting its attorneys but added, “My first inclination is that we ask that the only thing that we provide is what we broadcast” and not notes or outtakes. The subpoenas also ask for notes from meetings the reporters may have had with Harmon.

Bishop Estate attorney Matt Tsukuzaki could not be reached last night for comment.

Harmon’s hearing on the contempt allegation is set for Friday before Circuit Judge Bambi Weil.

For more, GO TO > > > Claims By Harmon; Woo vs. Harmon

* * * * *

October 3, 1997

Bishop legal team size exaggerated,
lawyer says

McCorriston says rumors that the estate has hired
several law firms are false

By Mike Yuen, Star-Bulletin

Bishop Estate attorney William McCorriston says Gov. Ben Cayetano was wrong in asserting that the five trustees for the $10 billion charitable trust are improperly using trust funds for legal representation during a state investigation.

Cayetano was also incorrect when he repeated a rumor that the estate was bracing for the inquiry by bolstering its “legal armament” by hiring five to seven law firms, including several from the mainland, McCorriston said yesterday.

There are only two outside lawyers – himself and Malcolm Moore, 60, who is regarded as one of the nation’s leading trust law experts, McCorriston said.

The Princeton-and Harvard-educated Moore, a former president of the American College of Trust and Estate Counsel, is with the Seattle law firm of Davis Wright Tremaine, whose 10 branch offices include Honolulu, San Francisco, Washington and Shanghai.

Responding to Cayetano

McCorriston’s rebuttal came less than two hours after Cayetano, in response to reporters’ questions, commented on the state’s investigation into the estate.

“Unfortunately, the governor was not aware of all the facts before he made a judgment. The fact of the matter is that the trustees, on my advice, have retained individual counsel on matters pertaining to the investigation that could lead to personal liability,” said McCorriston, who began representing the estate last month.

The trustees will be paying for their personal counsel – not the estate, said McCorriston. . . .

(Catbird Note: According to knowledgeable sources, this is a misleading statement. Actually, it should be the Estate’s Directors & Officers Liability insurance policy with Federal Insurance Company (Chubb Group) that pays for the trustees’ defense – after the Estate pays the deductible. The trustees should have NO out of pocket costs for personal counsel, says our source. That is, IF General Counsel Nathan Aipa tendered the defense to the insurance company!)

Trustee Gerard Jervis said his attorney, Ronald Sakamoto, 46, a partner in the Honolulu law firm of Char Sakamoto Ishii Lum & Ching, will represent him.

Jervis said he was confident there will be no finding that he breached his fiduciary responsibilities. “I welcome the inquiries,” he said, referring to the investigation headed by state Attorney General Margery Bronster and the fact-finding inquiry by retired state Circuit Judge Patrick Yim.

Trustee Oswald Stender is represented by attorney Crystal Rose, 39, a partner in the Honolulu law firm of Bays Deaver Hiatt Lung & Rose. Rose accompanied Stender when he met with Bronster last month.

Trustees Richard “Dickie” Wong, Henry Peters and Lokelani Lindsey could not be reached for comment yesterday.

Individuals investigated

McCorriston declined to reveal who are the personal attorneys for Wong, Peters and Lindsey. He also declined to say when trustees retained personal attorneys and when the estate hired Moore.

McCorriston said he and Moore are representing the institutional interests of the Bishop Estate, while the trustees have their own lawyers because “it’s hard now to ascertain what the attorney general’s investigation consists of.”

It is when Bronster’s investigation becomes more focused that he, Moore and the trustees’ personal attorneys will know who has to respond, McCorriston said.

“Until there are specific allegations, it’s like shadow boxing,” he added.

Cynthia Quinn, Bronster’s special assistant, said McCorriston should by now know where the state inquiry is headed. “It’s abundantly clear” that Bronster is investigating individual trustees – not the estate, Quinn said.

And if it becomes clear that McCorriston’s role, for example, is more in the interest of the trustees than the Bishop Estate, the state will ask the court that trust funds not be used to pay McCorriston, Quinn said.

‘Resistance is a mistake’

Cayetano, who had urged reporters to ask estate representatives if they were amassing a large and formidable legal team, did at the same time say, “If I am wrong, I apologize.”

But he also asserted that “resistance to us looking into (Bishop Estate) documents is a mistake.”

Cayetano added: “If you want to just get this thing over with, it’s not hard to separate the interest of the trustees from the estate. If what we want is information which may substantiate that trust money was used to repair someone’s home, how is that hurting the estate by giving us that information? In fact, it helps protect the estate from further misuse of money – if, in fact, it was misused.”

The “Broken Trust” opinion piece that appeared Aug. 9 in the Star-Bulletin, sparked the state’s investigation. One of the questions it raised: Did trustee Lindsey use Bishop Estate workers “to survey her North Shore property, process her permits and supervise the rebuilding of her house”?

Cayetano said even with 1998 an election year, the investigation won’t go away.

* * *

October 3, 1997

Reporters object
to subpoenas

By Gordon Pang, Star-Bulletin

Kamehameha Schools Bishop Estate will have to go to court
if it wants the notes and documents of three reporters
who have written on the estate.

Attorneys for the reporters are objecting to subpoenas served by Bishop Estate two weeks ago.

Paul Alston, who is representing reporters Jim Dooley of KITV News4 and Sally Apgar of the Honolulu Advertiser, yesterday filed formal objections in Circuit Court.

Both he and Corey Park, attorney for Associated Press reporter Bruce Dunford, have sent letters to the estate refusing to release any documents.

Bishop Estate alleges that information obtained by the reporters came from Bobby Harmon, an executive who was fired by the estate.

Harmon, who served as president and chief executive for Bishop subsidiary P&C Insurance Co., was sued by the estate to stop him from releasing information he gathered or learned while still in its employment.

The estate says Harmon stole documents from its offices.

Harmon countersued, claiming wrongful termination.

Alston said the subpoenas served to his clients were improperly issued and violate the First Amendment.

He added that Harmon never claimed to have given reporters anything more than a synopsis of information which he wrote.

Park said it didn’t matter even if Harmon had given his client documents that were stolen.

“The press in this case was not a party to any kind of alleged improper activity in obtaining the information.”

The estate must now ask a judge to intercede if it wants the documents.

Estate spokeswoman Elisa Yadao would not say if the estate would go to court to seek the documents.

“We are going to do what is appropriate and prudent in our attempts to get the information back,” she said.

* * *

October 20, 1997

“Most people would run for cover’’ from…

Bishop Estate’s
legal army

The estate employs a host of well-connected, top attorneys

By Rick Daysog, Star-Bulletin

When it comes to its legal armament, few can match the arsenal that Kamehameha Schools/Bishop Estate can bring to the courtroom.

The $10 billion charitable trust — the state’s largest private landowner — employs an army of well-connected attorneys that includes a former governor, two former state attorneys general and the former chairman of Hawaii’s Republican Party.

The estate’s outside legal team also lists House Judiciary Chairman Terrance Tom and Bill McCorriston, a former assistant U.S. attorney who has represented former Mayor Frank Fasi and was on the city Charter Commission.

“With this kind of legal cannon pointed at you, most people would run for cover,” said Beadie Dawson, attorney for Na Pua a Ke Ali’i Pauahi, which has criticized trustees’ management of Kamehameha Schools.

“They’ve (hired) every good litigation attorney in town.”

The estate maintains that it hires attorneys for their expertise.

Waihee and Tom were hired because they are good attorneys and not because of their political ties, the estate said.

McCorriston, who is representing the estate in Attorney General Margery Bronster’s investigation of the trust, added that the trust is like any major corporation that hires lawyers to represent its diverse legal interests.

For instance, for leasehold and litigation matters, the estate relies on Mike Hare and the Cades Schutte Fleming & Wright law firm. The Verner Liipfert firm conducts much of its Washington, D.C., lobbying, while McCorriston’s firm, McCorriston Miho Miller Mukai, has done mostly land-use work, McCorriston said.

Bishop Estate trustee Gerard Jervis considered joining the McCorriston Miho firm several months ago as an outside counsel. But Jervis said he decided against the move because of his heavy workload with the estate.

Jervis denied any conflict since he didn’t join the firm.

Jon Miho, one of the firm’s founders and a friend of Jervis’, added that if Jervis had joined McCorriston Miho, it would have made it more difficult for the firm to do work for the estate.

Jervis also shares close political ties with Washington, D.C.-based Verner Liipfert through its local partner Waihee. Jervis served on the Judicial Selection Commission during the Waihee years.

Verner Liipfert — whose mainland offices lists former U.S Treasury Secretary Lloyd Bentsen, former Republican presidential candidate Robert Dole and former Texas Gov. Ann Richards on its roster — also employs prominent labor-relations attorney and former Hawaii GOP head Jared Jossem and Renton Nip, who served as state Land Use Commission chairman during the Waihee years, in its local office.

Former Attorney General Warren Price and his successor, Robert Marks, through their firm serve as outside counsels to Verner Liipfert and have conducted legal work for the estate.

To be sure, the legal work for the estate can be lucrative. According to its tax filings, the estate’s nonprofit unit paid nearly $4.2 million in legal fees during the year ending June 30, 1996.

More than half, or $2.75 million, went to Cades Schutte, which does the legal work for the estate’s leasehold conversions and some of its real-estate litigation.

Waihee’s firm, Verner Liipfert, earned $844,245, while the Ching Yuen & Morikawa firm — whose partners include longtime Waihee friend Bill Yuen — was paid $580,603.

The estate paid McCorriston Miho $223,079 in legal fees for the fiscal year 1995 and another $235,050 for the 1993 fiscal year.

Randall Roth, University of Hawaii law professor and co-author of a scathing report that helped launch Bronster’s investigation of the estate, criticized the large amount of legal fees that the estate pays each year — especially since it is a nonprofit organization.

While the estate’s attorneys are among the top in town, Roth believes that political connections probably play a key role in who gets selected for its legal work.

“This strikes me as an exorbitant amount of money for a charity to be spending on legal fees, especially when it has its own legal department,” said Roth. “We can only wonder if the money is well-spent.”

And the spending doesn’t include legal bills wracked up by Bishop Estate’s for-profit subsidiaries.

The estate declined to disclose the amount of legal fees that its for-profit units incur each year. But recent news reports said the estate spent $500,000 to defend an $86.7 million lawsuit that film producer Frederick Field filed in 1995 over soured real-estate investments on the mainland.

An estate subsidiary, Royal Hawaiian Shopping Center Inc., wracked up at least $500,000 in legal bills in the McKenzie Methane Corp. legal battle.

The estate sued the Houston-based natural gas company’s founder Mike McKenzie in 1992, alleging that fraud and mismanagement led them to lose some $60 million in the venture.

The company filed for bankruptcy protection in 1994 and was sold to the estate, which now says it has been able to recoup much of its losses in McKenzie Methane.

McKenzie denied the estate’s fraud allegations, saying its hardball tactics have made his life a legal nightmare.

He said the estate wrongly accused him of stealing money from Hawaiian children and that the estate’s attorneys hired private investigators — two former FBI agents — to harass him.

“It’s been five years of hell,” said McKenzie.

“They’ve used their money, power and influence to beat the heck out of me.”

* * * * *

May 12, 2000

Kamehameha starts new inquiry

The board will conduct an investigation of employees
and outside contractors

By Rick Daysog, Star-Bulletin

Kamehameha Schools’ interim board of trustees will conduct an independent inquiry into whether employees and outside contractors took part in breaches of trust by the estate’s former board members.

In a recent email to the Star-Bulletin, the interim board said it is conducting an outside review in response to complaints that it did not clean house after taking over the daily operations of the $6 billion charitable organization.

But the board stressed that it will conduct its inquiry in a fair and open manner, and urged members of the Kamehameha community not to “rush to judgment.”

‘Cleaning house’ or terminating people because they were employees of the Kamehameha Schools at an unfortunate time does not accomplish this purpose, unless there is good reason to do so,” the board said.

During the past year, the interim board has released a number of employees tied to the former trustees and has terminated several patronage contracts, such as a $4,000-a-month legal retainer to former state Rep. Terrance Tom.

But one critic, University of Hawaii law professor Randall Roth, believes the changes did not go far enough. Roth, co-author of the 1997 “Broken Trust” article that prompted the state’s investigation of the former trustees, said the new board has retained many of the questionable employees while promoting some of them.

For instance, the estate’s former general counsel, Nathan Aipa, recently was promoted as the trust’s chief operating officer, while an outside law firm that spent considerable trust funds thwarting the state’s investigation continues to work for the trust, said Roth.

Employees, meanwhile, said Roth’s criticism is unfair since many workers were targets of the former trustees’ abuses. They also noted that the testimony of many employees was instrumental in the permanent removal of the embattled former board.

Four of the estate’s board members — Henry Peters, Richard “Dickie” Wong, Lokelani Lindsey, and Gerard Jervis — resigned under fire last year after the interim board sued for their removal. Former trustee Oswald Stender also stepped down voluntarily prior to the suit in response to the Internal Revenue Service demand that all five board members resign.

The interim trustees — retired Adm. Robert Kihune, former Honolulu Police Chief Francis Keala, American Savings Bank executive Constance Lau, attorney Ronald Libkuman and former Iolani School headmaster David Coonsaid their inquiry will allow critics to bring their complaints in writing to the trust.

Independent investigators will then evaluate the charges and turn over their findings to the board….

~ ~ ~

For the story of another “independent inquiry” involving PricewaterhouseCoopers, GO TO >>> Tracking the Tyco Flock

* * * * *

Suer of estate finds it tough to hire a lawyer

By Rick Daysog, Star-Bulletin

When Bobby Harmon filed a wrongful termination suit against Bishop Estate in February, he couldn’t find a lawyer to take his case.

The former president of the estate’s in-house insurance company, P&C Insurance Co., was turned down by eight local law firms because they either did business with the estate or wanted to, said John Goemans, Harmon’s attorney.

Some were just afraid to oppose them, he said.

“The reality is that it’s virtually impossible to take on the estate,” said Goemans.

Harmon sued the estate after the estate sued him for releasing confidential information.

The estate said Harmon was fired for cause and that the firing was upheld by a state Department of Labor review, which denied him unemployment benefits.

Documents released by Harmon contained false and defamatory allegations, the estate has also said.

A Circuit Court judge recently ruled that Harmon violated a court order not to disclose estate information. The court also said that Harmon did not act in bad faith since he was acting on advice of his lawyer.

For Goemans, the Harmon case underscores the estate’s clout in Hawaii’s legal community and the difficulties of opposing it. Goemans said his client has run up about $20,000 in legal bills.

“Few have the capability of resisting a $10 billion behemoth with an unlimited supply of lawyers who have a clear modus operandi of deluging opponents with paper,” Goemans said. . . .

~ ~ ~


Now, for a closer look at
some of the buzzard nests….



Ashford & Wriston – A law firm established in Hawaii in 1955, listing such clients as American Savings Bank; Bank of Hawaii; Chicago Title Insurance Co; First Hawaiian Bank; Hawaii Medical Services Association (HMSA); Kamehameha Investment Corporation (a Kamehameha Schools subsidiary); Kamehameha Schools; Liliuokalani Trust; Lunalilo Trust; The Queen Emma Foundation; Queen’s Medical Center; Ticor Title Insurance of California; Title Guaranty Escrow Services, Inc; Title Guaranty of Hawaii Inc.

~ ~ ~

April 20, 2000

Trust Played Role In Effort
To Fund Ige Campaign

By Rick Daysog, Star-Bulletin

Kamehameha Schools coordinated political donations from its outside lawyers to state Sen. Marshall Ige’s campaign in what could be a violation of campaign spending laws.

Records subpoenaed by the attorney general’s office show that the $6 billion charitable trust played a role in the 1994 campaign contributions to Ige from attorneys C. Michael Heihre and Cheryl Nakamura and the law firm of Ashford & Wriston, Dwyer Imanaka Schraff Kudo Meyer & Kudo and Ching Yuen & Morikawa.

The documents – discovered last year in the office of former trust manager Namlyn Snow – include binders containing detailed logs of the attorneys’ contributions to the Ige campaign, as well as photocopies of canceled checks to pay for the contributions.

Each attorney or firm contributed $250, for a total of $1,250. all of the checks were received by the Ige campaign on Aug. 17, 1994, and were deposited together in the campaign’s bank account on the following day, suggesting that the contributions were bundled by Bishop Estate representatives….

On Monday, the Star-Bulletin reported that an investigation by the attorney general’s office had found that the estate engaged in a massive attempt to influence legislation and direct tens of thousands of dollars to isle politicians during the tenure of previous board members Richard “Dickie” Wong, Henry Peters, Lokelani Lindsey, Gerard Jervis and Oswald Stender.

The findings of the attorney general’s inquiry, along with documents relating to the law firms’ contributions to the Ige campaign, were turned over to the state Campaign Spending Commission last week, which has opened a separate investigation of the trust….

Federal law also bars tax-exempt trusts from making campaign contributions or taking part in a political election. Violations could lead to the loss of a charity’s tax-exempt status.

The latest disclosure comes as Ige is facing misdemeanor charges for alleged campaign finance abuses. The charges stem from an alleged campaign laundering scheme involving Bishop Estate’s architecture and engineering firms.

Ige has pleaded not guilty, and a trial is scheduled for next month….

Attorneys with the Ashford & Wriston and Dwyer Imanaka firms had no response, while Bill Yuen of the Ching Yuen firm said he could not recall the circumstances of the contributions.

Nakamura, who does civil litigation work for the trust at the law firm of Rush Moore Craven Sutton Morry & Beh, said she remembers purchasing the fund-raiser tickets and attending the event with her parents. Nakamura, who lives in Ige’s district, added that she may have purchased the tickets with the assistance of Bishop Estate personnel.

Heihre, formerly known as C. Michael Hare, said his donation to Ige was a personal contribution on his own checking account. But Heihre, a partner in the Cades Schutte Fleming & Wright firm and former chairman of the state Judicial Selection Commission, said he could not recall if he discussed his contribution to Ige with Kamehameha Schools personnel.

Each of the law firms that contributed to the Ige campaign has billed the trust tens of thousands of dollars each year for legal work.

Last year, the estate paid the Cades Schutte firm about $1.8 million.

See also: Cades Schutte Fleming & Wright

For more, GO TO > > > Claims By Harmon; Harmon’s Letters to Dr. Hamilton McCubbin; Predators in Paradise


Cades Schutte Fleming & Wright – Cades Schutte was founded in 1922 and is one of Hawaii’s largest and oldest law firms with approximately 70 attorneys.

May 20, 2000

Kamehameha fires
law firms

A special master’s report says much legal work served
board members’ interests, not the trust’s

By Rick Daysog, Star-Bulletin

Kamehameha Schools has terminated several of its law firms, one day after a court-appointed special master issued a scathing report on their roles in the three-year trust controversy.

In a brief statement yesterday, the estate’s interim board and Chief Executive Officer Hamilton McCubbin said they would immediately discontinue the firms’ services pending the completion of an internal investigation.

The estate said it would decide what action, if any, it would take against the firms once its inquiry is completed.

“The report of the special master … raises question about the propriety of services rendered by some of these advisors,” the estate said.

The charitable trust did not identify which firms were terminated, but one, Cades Schutte Fleming & Wright, confirmed its suspension. At least one other firm, Ashford & Wriston, also was terminated, a person close to the trust said. Partners at the Ashford firm did not return calls.

In a report filed in Circuit Court on Thursday, court-appointed special master Robert Richards said several of the estate’s outside attorneys assisted in a “Herculean effort” to circumvent disclosure to the attorney general’s investigation and took part in a “destroy the opposition” effort by former majority trustees Henry Peters, Richard “Dickie” Wong and Lokelani Lindsey.

The Richards study, which examined legal work by 12 of the estate’s outside firms in the 1998-1999 period, also recommended that the probate court surcharge the former trustees for nearly $5 million in fees, saying much of the law firms’ work served the interests of the board members and not the trust.

Richards singled out Cades Schutte’s work as “the most troubling” and urged the probate court to order the disgorgement of $880,000 of the $1.3 million that it earned between 1998 and 1999.

Richards said the firm spent considerable trust funds researching the free-speech limitations of senior U.S. District Judge Samuel King, an outspoken critic of the trust, and looked into possible remedies against Bobby Harmon, the former head of the estate’s insurance subsidiary, in an apparent attempt to silence criticism.

The law firm also reviewed sets of photographs taken of a May 1997 protest march, in an apparent attempt to assist the former majority trustees in identifying opponents, Richards said.

Cades Schutte strongly disagreed with the master’s findings and said its work for the trust was appropriate. The firm said its staff was not trying to silence criticism when it reviewed photos of the march but was attempting to prepare documents in response to various subpoenas and legal requests.

The firm, which has represented the estate for at least 30 years, said it expects to be vindicated once the Probate Court hears its side of the story.

“There was never any attempt by us to identify any of the people in the photographs,” the firm said.

“The master’s report was wrong about that, and about other allegations, in large part because he never talked to us. We are amazed and disappointed that he took several months to prepare his report and made serious allegations without ever asking our attorneys or staff members about what they did or why.”

Meanwhile, the attorney general’s office applauded the estate’s decision to suspend some of their outside firms in light of the disclosures in Richards’ report.

“This is a prudent course of action,” said Deputy Attorney General Hugh Jones.

“The attorney general strongly supports the announcement by the estate’s chief executive officer.”

In a brief statement yesterday, the estate’s interim board and Chief Executive Officer Hamilton McCubbin said they would immediately discontinue the firms’ services pending the completion of an internal investigation.

The estate said it would decide what action, if any, it would take against the firms once its inquiry is completed.

“The report of the special master … raises question about the propriety of services rendered by some of these advisors,” the estate said.

The charitable trust did not identify which firms were terminated, but one, Cades Schutte Fleming & Wright, confirmed its suspension. At least one other firm, Ashford & Wriston, also was terminated, a person close to the trust said….

In a report filed in Circuit Court on Thursday, court-appointed special master Robert Richards said several of the estate’s outside attorneys assisted in a “Herculean effort” to circumvent disclosure to the attorney general’s investigation and took part in a “destroy the opposition” effort by former majority trustees Henry Peters, Richard “Dickie” Wong and Lokelani Lindsey….

For more on Cades, Schutte, Fleming & Wright, GO TO > > > The Morgan, Lewis & Bockius Report

* * *

December 9, 2000

Kamehameha Schools to rehire
some law firms let go last May

A $500,000 investigation contradicts findings that
legal work personally benefited former trustees

By Rick Daysog, Star-Bulletin

The Kamehameha Schools will rehire several of the outside law firms that it terminated when a report by a court-appointed special master raised serious questions about the firms’ legal work.

But Hamilton McCubbin, the Kamehameha Schools’ chief executive officer, said the estate will not retain all of the firms that it suspended in May.

The firms were let go as a result of special master Robert Richards’ report, which alleged that several of the trust’s outside lawyers conducted millions of dollars of work that personally benefited the estate’s former trustees.

McCubbin said the trust is looking at the firms on a case-by-case basis and has not yet decided which firms it plans to rehire.

McCubbin’s comments were in response to Probate Judge Kevin Chang ruling yesterday that the $6 billion estate is not required to pursue former trustees Henry Peters, Richard “Dickie” Wong, Oswald Stender, Gerard Jervis and Lokelani Lindsey and the trust’s outside law firms for the millions of dollars in legal fees.

The Richards report recommended the surcharges, saying that the ex-trustees and several of the law firms took part in a “Herculean effort” to stonewall the state attorney general’s investigation of the trust.

All firms deny wrongdoing

The Richards report singled out the Cades Schutte Fleming & Wright and McCorriston Miho Miller Mukai firms for taking part in a “destroy the opposition” campaign by former majority trustees Peters, Wong and Lindsey.

Richards alleged Cades Schutte spent considerable estate funds researching the free-speech limitations of senior U.S. District Judge Samuel King, an outspoken critic of the former trustees. Cades Schutte also reviewed sets of photographs taken of a 1997 protest march against the ex-trustees, in an apparent attempt to identify critics, Richards said.

As a result of the special master’s report, the estate terminated its contracts with Cades Schutte, Ashford & Wriston, Verner Liipfert Bernhard McPherson & Hand and PriceWaterhouseCoopers. The McCorriston firm resigned after the former trustees were temporarily removed from the estate by Chang in May.

All of the firms denied wrongdoing.

McCubbin’s decision to rehire some of the law firms is largely based on a trust investigation, conducted by the Washington, D.C., firm of Morgan Lewis & Bockius L.L.P., that contradicted several of the findings made by Richards.

The 252-page Morgan Lewis study, which was completed on Oct. 31 and reportedly cost $500,000, concluded that there are no grounds to pursue claims against the law firms and that work conducted by most of the firms benefited the trust.

‘Like being blindsided’

David Schulmeister, a Cades Schutte partner, argued in court yesterday that the Morgan Lewis report found no evidence that his firm protected the personal interests of the former trustees.

Morgan Lewis also contradicted Richards’ claim that Cades Schutte improperly reviewed photographs of the 1997 protest march, he said. Cades Schutte reviewed the photos to help the estate respond to subpoenas from the attorney general’s office, according to Morgan Lewis.

Schulmeister asked Chang to strike many of the charges raised by Richards, saying they were based on speculation, not facts.

“The (Richards) report from the point of view of Cades Schutte Fleming & Wright was an experience a little bit like being blindsided with a crowbar in an alley,” Schulmeister said.

“The problem here is, the bell was rung. It has tremendous ramifications. It has caused tremendous damage,” he said.

In yesterday’s ruling, Chang did not address Schulmeister’s request to strike portions of the Richards report.

The judge also did not adopt the findings of either the Richards report or the Morgan Lewis report as a court finding.

Instead, Chang said that the recent settlement between the ex-trustees and the attorney general’s office, which had sued the former board members in an effort recover millions of dollars in damages, made moot any surcharge claims for legal fees.

See also: Morgan Lewis & Bockius

For more, GO TO > > > Claims By Harmon; Predators in Paradise


Chun, Kerr, Dodd, Beaman & Wong – A firm adhering to “the highest professional and ethical standards.”

From their web-site:

CHUN, KERR, DODD, BEAMAN & WONG, a Limited Liability Law Company, was founded in 1970 by Ed Chun, George Kerr and Bill Dodd. Since that time, the firm has developed a reputation for excellence and outstanding client service – a reputation that is borne out in national publications and by the many clients who have stayed with the firm over the years. In rendering legal services to its clients, Chun, Kerr, Dodd, Beaman & Wong adheres to the highest professional and ethical standards.

The Martindale-Hubbell Legal Directory has given Chun, Kerr, Dodd, Beaman & Wong its highest rating for its ability and integrity for 32 straight years. Members of the firm also earned recognition in the first and every subsequent publication of The Best Lawyers in America and in Hawaii’s own, Honolulu Magazine. Since 1990, the firm has served as Hawaii’s representative to the American Counsel Association. The members of the firm have been and continue to be active members of the Hawaii State Bar Association, the American Bar Association and numerous community organizations….

Representative clients include Aloha Tower Development Corporation, Gannett Pacific Corporation, Hawaiian Island Development Company, Ltd., Honu Group, Inc., Kaahumanu Center Associates, KSL Grand Wailea, Maui Land & Pineapple Company, Inc., Outrigger Enterprises, Inc., Outrigger Hotels and Resorts, PacificBasin Communication, LLC, Security Alarm Shop, Inc., Shinsei Bank, Limited (formerly, The Long Term Credit Bank of Japan, Ltd.), The Sanwa Bank, Limited, and the State of Hawaii.

See also: Edward Y.C. Chun


Colleen Hanabusa – Hawaii State Senator and attorney for Gov. Linda Lingle’s Chief of Staff Robert Awana. Built her nest in Ko Olina.

March 25, 2005

Local 5 Sues Unity House

By Jim Dooley, Honolulu Advertiser

The Hawai’i hotel-restaurant workers union has filed a civil racketeering lawsuit against Unity House Inc., charging that former president Anthony Rutledge Sr. and other officers used Gov. Linda Lingle’s chief of staff Robert Awana, former state Rep. Romeo Mindo and others to divert millions of dollars of Unity House money for the personal benefit of Rutledge, his family members and associates.

The lawsuit, filed in federal court last weekend, does not name Awana as a defendant but calls him a “co-conspirator and/or wrongdoer” in an alleged scheme to defraud the nonprofit labor organization of assets.

Awana could not be reached for comment yesterday. His attorney, state Sen. Colleen Hanabusa, D-21st (Nanakuli, Makaha), yesterday said, “I don’t know anything about the suit. I can’t comment.” Hanabusa said in January that Awana testified before a federal grand jury investigating Unity House but was told he was not a target of the investigation.

Mindo’s attorney Eric Seitz said he hadn’t seen the suit and had no comment on it. He has previously said Mindo, a former Unity House employee, committed no wrongdoing.

The racketeering lawsuit was filed Sunday by the union and Eric Gill, head of the Hotel Employees and Restaurant Employees Union Local 5 and a longtime opponent of Tony Rutledge. Fourteen other officials and members of Local 5 are plaintiffs in the suit seeking unspecified monetary damages from the senior Rutledge and other defendants.

The lawsuit repeats many allegations in a criminal fraud case against Tony Rutledge and his son Aaron, a former Unity House executive. That case is scheduled to go to trial in federal court in May. Some of the allegations contained in the suit are also drawn from records introduced in court after federal agents seized control of Unity House Dec. 14.

IRS agent Gregory Miki said in a sworn statement justifying the Unity House seizure that, “The unchecked use of Unity House contracts and monies have resulted in political influence that has opened doors from which (Tony) Rutledge has benefited personally.”

One example cited by Miki was a “generous consulting contract” that Unity House gave Awana in 1999-2000 to survey union members. The Local 5 lawsuit said the value of the contract was $250,000 and the survey “included questions on whom they would vote for in the upcoming mayoral and other elections.”

The suit also repeated an allegation from Miki that Rutledge met with Awana 11 times after Awana became Lingle’s chief of staff in 2002.

Jeff Rawitz, defense attorney for Tony Rutledge, declined comment on the lawsuit other than to note that it was filed for Local 5 by T. Anthony Gill, brother of Eric Gill.

“That has the appearance of a conflict of interest because the brother who filed the lawsuit stands to make money from it regardless of the merits of the case,” Rawitz said.

T. Anthony Gill declined to respond to Rawitz’s statement.

Brian DeLima, attorney for Aaron Rutledge, said he had not seen the suit and could not comment on its contents….

Prominent Honolulu criminal defense attorney Michael Green, a former Unity House director, is also named as a defendant in the lawsuit. His office said yesterday Green was out of state and unavailable for comment.

David Louie, an attorney who represents another defendant, former Unity House director Arlene Hae, was unavailable for comment yesterday on the lawsuit.

Hae this month filed a legal protest against the government’s “usurpation of control” of Unity House, saying the takeover “impairs and impedes” the ability of Hae and other officers and directors to protect the rights and assets of Unity House.

In response, Anthony Pounders, the receiver appointed by federal court to run Unity House while the criminal case against the Rutledges is pending, said: “Even if some members of the prior management were not directly involved in any corporate mismanagement or malfeasance, I have found no evidence of any attempts to expose, investigate or otherwise stop such mismanagement or malfeasance.”

Pounders said the net worth of Unity House declined from $49 million at the end of 2001 to $31 million today, owing largely to bad investments.

He also said Unity House last year was billed $793,000 in legal expenses to defend the Rutledges in the federal criminal investigations.

Unity House has paid $50,000 a year for insurance coverages of its officers and directors but “failed to make a claim” for insurance coverage* of the legal bills, Pounders said.

“Instead, Unity House used its own money to pay Anthony Rutledge Sr.’s attorneys’ fees,” said Pounders.

Rutledge lawyer Rawitz yesterday declined comment on Pounders’ statements…

* (Catbird Note: Hmm…. An organization not filing claims when they have insurance? Attorneys Eric Seitz and Michael Green? Smell familiar? Go sniff out Claims By Harmon and Dirty Money, Dirty Politics & Bishop Estate)

~ ~ ~

For more on Colleen Hanabusa, Gov. Linda Lingle, Robert Awana, and Eric Seitz, GO TO > > > Predators in Paradise; The Grand (and dirty) Ko Olina; Who’s Getting Into Hawaii’s Act 221?


Edward Y.C. Chun – Founding member of Chun, Kerr, Dodd, Beaman & Wong.

May 20, 2003

Attorney is indicted in
fund-raising probe

A company allegedly reimbursed its workers
for donations to Harris

By Sally Apgar, Honolulu Star-Bulletin

Edward Y.C. Chun, a Honolulu trust attorney, was indicted yesterday by an Oahu grand jury for allegedly making illegal campaign contributions to Mayor Jeremy Harris.

Chun, 71, faces misdemeanor charges of using false names on campaign contributions and of exceeding the campaign contribution limits for individuals.

Chun, longtime attorney and corporate counsel for Food Pantry Ltd., a grocery store and its affiliate chain Foodland Super Market Ltd., allegedly advised three employees of Food Pantry to donate a total of $9,000 to Harris’ 1996 and 2000 mayoral campaigns. Food Pantry allegedly reimbursed the employees for the contributions that were made between Aug. 1, 1996, and Feb. 28, 2000.

City Deputy Prosecutor Randal Lee said: “The contributions were disguised and not made in the name of Food Pantry, but made in the name of the employees.”

Because the $9,000 came from Food Pantry, it exceeded the $4,000 legal contribution limit for individuals to a mayoral campaign. But Chun, rather than Food Pantry, was indicted for exceeding the campaign contribution limit because the grocery chain acted on his advice, Lee said.

“Food Pantry provided the money, but I have to make it clear that Food Pantry had nothing to do with it,” Lee said. “The board (of directors) did not approve it, the board had no knowledge of it. So they were victimized by Mr. Chun’s advice.”

Lee said that Chun, as an attorney, should have known that what he was asking the employees to do is illegal.

Honolulu attorney Howard Luke, who represents the three Food Pantry employees who testified before the grand jury yesterday, said: “My clients are neither targets or suspects in the case. And Food Pantry itself is not suspected of any wrongdoing. They are not a target either.”

Lee said a Harris campaign officer had solicited Chun for contributions. Lee declined to name that campaign worker.

Moments after the indictment, Chun, reached by telephone at his office, said, “I have no comment.”

Chun was a confidant of the late founder of Foodland, Maurice Sullivan, and remains close to the family, which is still involved in Foodland and Food Pantry. Lee said he was unaware of similar alleged campaign contributions being made by Foodland.

Lee said the case is still being investigated. He declined to explain Chun’s motivation or identify what Food Pantry may have wanted in return for its contribution. Lee stressed that “Food Pantry is the victim in this.”

Chun is the first attorney to be indicted in the 16-month investigation of the Harris campaign, which until now has focused more on architects and engineers with city contracts.

Lee said Chun’s indictment “shows the wide-reaching effect of the campaign violations. It’s now gone beyond just the architects and engineers. It’s now extending into other areas in our community.”

At the same time city prosecutors have been investigating possible campaign violations, the state Campaign Spending Commission has been conducting its own separate investigation.

Yesterday, Robert Watada, executive director of the Campaign Spending Commission, said his office is analyzing about $20,000 worth of campaign contributions from Food Pantry that look questionable.

Watada also testified yesterday before the grand jury, mostly to answer questions about false names on contributions and contribution limits.

Chun, who was not questioned before the grand jury, acknowledged that he had been questioned by the Prosecutor’s Office as part of its investigation.

Lee said he would call Chun to give him the opportunity to turn himself in. He also said Chun should be released on his own recognizance because he is not a flight risk.

Lee said: “Attorneys don’t get a free pass. Attorneys who violate the law will be prosecuted the same with engineers, the same with architects.”

If convicted, Chun faces a fine of $1,000 for each count and one year in prison for each count. If convicted, Chun could be sanctioned by the Office of Disciplinary Counsel, which oversees lawyers’ conduct.

Carol Richelieu, chief disciplinary counsel, said attorneys can be sanctioned if convicted of a felony or of dishonesty and making false statements.

* * *

From the Chun Kerr Dodd Beaman & Wong web-site:

Edward Y.C. Chun : Senior Counsel

Areas of Practice : Mr. Chun’s practice is concentrated in the areas of real estate, corporate and trust and estate law.

Professional Affiliations : Mr. Chun formerly served as a director of the Hawaii State Bar Association and the Disciplinary Board of the Hawaii State Bar Association (1987-1992).

* * *


Hawaii State Bar Association – The main buzzard nest.


The Hawaii State Bar Association (HSBA) was founded in 1899 and incorporated in 1985 as a non-profit trade organization under Section 501 (c) (6) of the Internal Revenue Code.

In November 1989, the Hawaii Supreme Court ordered the creation of a unified bar and designated it as the administrative entity of the unified bar. In so doing, the Supreme Court democratized the governance of the legal profession by conferring upon the HSBA the power and responsibility to aid the Court in regulating, maintaining, and improving the legal profession….

The mission of the HSBA is “To unite and inspire Hawaii’s lawyers to promote justice, serve the public, and improve the legal profession.”…

~ ~ ~

Who may I call in regard to purchasing malpractice insurance?

There is currently no requirement for lawyers to carry any malpractice insurance unless an attorney is with the Lawyer Referral & Information Service. In this case, he/she is required to have a minimum coverage of $100,000 per year. Contact Blossom Tong at Marsh Affinity (formerly Marsh McLennan) at 585-3615 for information on the HSBA’s endorsed carrier….

~ ~ ~

For more on the HSBA’s endorsed carrier, GO TO > > > The Marsh Birds

~ ~ ~


Jerrold Chun – Hawaii attorney with the law firm of Chun, Chipchase, Takayama Nagatani; sentenced to 10 years in prison and a fine of $25,000 for theft, racketeering, and money laundering in connection with the liquidation of two insurance companies which were declared insolvent after Hurricane Iniki.

October 14, 2003

Isle lawyer accused of stealing $12 million

Jerrold Chun allegedly diverted money
from an insurance company

By Debra Barayuga, Honolulu Star-Bulletin

A Honolulu attorney has been charged with fraudulently diverting at least $12 million from the estate of an insurance company declared insolvent after Hurricane Iniki.

Jerrold Chun, 55, of Chun & Nagatani, made his initial appearance yesterday in District Court on theft charges. He was released after posting $150,000 bail – reduced from $300,000 – pending a preliminary hearing Nov. 10….

Chun is accused of diverting more than $20,000 on each of three occasions from June through July from HUI/UNICO, acronyms for two insurance companies set up by Hawaiian Electric Industries and taken over by the state insurance commissioner in 1992, said Richard T. Bissen Jr., first deputy attorney general….

The insurance commissioner in 1993 declared Hawaiian Underwriters Insurance Co. Ltd. and United National Insurance Co. Ltd. insolvent and ordered them liquidated because the amount of their insurance claims exceeded their abailable funds, due to losses from Hurricane Iniki, Bissen said. Iniki hit Kauai in September 1992.

HUI/UNICO provided property insurance, workers’ compensation and other lines of insurance. Chun was hired by HUI/UNICO as counsel to the liquidator to help administer the estate.

But while Chun was successful in negotiating settlements of creditors’ claims and administering the claims of policyholders, the state Insurance Division uncovered irregularities in financial reports, said state Insurance Commissioner J.P. Schmidt.

Schmidt conducted an internal investigation that resulted in the criminal charges.

The inquiry found that “significant sums had not been properly accounted for and appeared to have gone to Mr. Chun and other individuals,” Schmidt said.

“At this time, we believe there has been at least $12,401,343 misappropriated,” he said.

Schmidt said Chun does not dispute he received the money and provided various explanations, including an agreement he claimed he struck with the previous insurance commissioner, Wayne Metcalf, regarding a “success fee.”

(For another controversial “success fee”, see Hawaiian Airlines: Flying with the Bankruptcy Buzzards.)

According to Chun, Metcalf agreed that if Chun negotiated a smaller payment to creditors than anticipated, he could keep the difference, Schmidt said.

Chun allegedly received the “success fee” in addition to his hourly fee.

Schmidt said there is no evidence of any verbal or written approval or authorication of such an arrangement and called it “highly unusual and inappropriate.” Chun had said he discussed it only with Metcalf.

Metcalf could not be reached for comment.

Schmidt, in his capacity as liquidator of HUI/UNICO, filed a civil complaint Friday against Chun, asking the court to issue a temporary restraining order to protect the estate’s funds.

Before filing the complaint, Schmidt had learned that substantial amounts of money had been transferred from HUI/UNICO to client trust accounts and business and personal accounts in the names of Chun and Chun & Nagatani.

From the trust account, $2,699,740, which Schmidt says is part of the$12 million diverted from HUI/UNICO, was deposited into an account in the name of Michael Chong of Adjusting Services of Hawaii. Chong is named in the civil complaint.

“He was apparently a part of the ‘success fee’ arrangement and received some of the funds,” Schmidt said.

Chong could not be reached for comment. He was not named in the criminal complaint. The Attorney General’s Office is continuing its investigation, Bissen said.

Chong’s position was that the arrangement had been approved and that they were acting properly, Schmidt said.

The civil suit, which alleges fraud, conversion, unjust enrichment and negligence, was filed because both have refused to return the money, Schmidt said.

The Insurance Division is continuing its investigation and conducting an audit of all HUI/UNICO operations to ensure no other money had been improperly disbursed and all money has been appropriately accounted for, he said. Chun was removed shortly after the fraud was discovered.

Despite the alleged diversion, people who held policies with HUI/UNICO will be paid “100 percent,” Schmidt said.

The money that was allegedly misappropriated is a surplus “over and above the amount paid to people who had policies and claims based on those policies,” he said.

* * *

August 3, 2004

$8 Million no ‘common’ theft

A lawyer chooses not to contest
charges he stole client trust funds

By Debra Barayuga, Honolulu Star-Bulletin

A Honolulu lawyer pleaded no contest yesterday to stealing nearly $8 million in claims arising from Hurricane Iniki in 1992 from insurance companies taken over by the state.

Jerrold Chun, 55, an attorney who was hired to help administer the estate of HUI/UNICO – two insurance companies that were declared insolvent by the state insurance commissioner in 1992 – entered the pleas in Circuit Court to three counts of first-degree theft, racketeering and 10 counts of money laundering.

Chun asked for a deferral of his pleas, which would allow him to clear his record if he meets conditions similar to probation.

“There are mitigating circumstances which he is the first to tell you does not excuse him, but what we have found explained what happened and tells us this is not a common white-collar theft,” said Brook Hart, one of two attorneys representing Chun.

Chun was indicted in October of diverting a total of $7.9 million from the client trust account of his law firm, Chun & Nagatani, into his and two other individuals’ personal accounts.

The money was transferred into the trust account by HUI/UNICO at Chun’s request to pay for settlements in two cases and outstanding tax assessments owed to the state. According to state attorneys, Chun requested more money than was needed to pay the claim and kept the surplus.

Although claimants were paid, Chun kept $3.3 million for himself and distributed the rest to two individuals to disguise the illegal nature of the transfer, said Deputy Attorney General Mark Miyahira, who argued that Chun should enter a guilty plea, not a no-contest plea.

Chun should be held to a higher standard because, as an attorney, he knew he was breaking the law and abused his position of trust by stealing a large amount of money that he did not need and should have gone to people who had suffered losses, Miahira said. Allowing Chun to plead no contest and not admit his guilt would undermine the public’s trust in the judicial system, he said.

At the time he took the money, Chun was living a good lifestyle and had billed HUI/UNICO $279,450 for the services rendered from January to August, Miyahira said. “Simple greed fueled this case.”

Chun, who was scheduled to go to trial this month, entered his plea because he is taking full responsibility, said William Harrison, also Chun’s attorney.

Chun has repaid nearly $8 million of the amount the state says was diverted, is paying accumulated interest and is cooperating in the lawsuit filed by the state against him, his attorneys said.

The state actually obtained a $20 million windfall after Chun turned the company with a $70 million deficit around, Hart said.

“The short of it is, he did a wonderful job helping the people who were injured enormously and then inexplicably took a success fee, which was unauthorized.”

Deputy Attorney General Chris Young, who heads the criminal justice division, questioned where the state savings are if the money Chun took was indeed a “success fee,” as he claimed.

And just because a defendant pays back the losses does not fix the fact that he committed the crime, he said.

“But for the fact he was caught, the money would not have been recovered,” Young said….

~ ~ ~

See also: Linda Chu Takayama

For more, GO TO > > > Zephyr Insurance


Judith Neustadter Fuqua – Maui attorney; arbitrator for the American Arbitration Association; Hearing Officer for the County of Maui Planning Commission; officer for real estate firm owned by Ray Fuqua.

~ ~ ~

June 28, 2001

Maui Commission Turns Down
Church’s Plan for a New Chapel

By Gary T. Kubota, Star-Bulletin

WAILUKU – The Maui Planning Commission denied a church’s request to build a chapel on agricultural land yesterday, triggering the likelihood of a legal challenge to state and county land-use-laws.

Attorney Anthony Picarello Jr. said Hale O Kaula church planned to appeal the decision and go as high as the U.S. Supreme Court if necessary….

Hale O Kaula church, a nondenominational Christian group, wants to build a chapel as the second story of an agricultural building at the end of Anuhea Place in Kula.

Several neighbors who opposed the permit said the church would increase traffic and noise in a quiet farm area. Picarello, who works for the Washington, D.C.-based Becket Fund representing groups in religious freedon lawsuits, alleged the decision placed a substantial burden of the church as opposed to nonreligious groups.

He said the decision violated the Religious Land Use and Institutionalized Persons Act, passed by Congress last year….

Church attorneys said they were denied a continuance to prepare legal arguments about the new law and decided not to present arguments during a contested-case proceeding because they felt the hearing officer was biased….

Church officials said they did not present arguments during a contested-case hearing because the hearing officer Judith Neustadter Fuqua expressed an opinion in favor of neighborhood residents during a settlement conference….

“Throughout this process I have remained impartial,” Fuqua said.

* * *

On July 10, 2003, a Complaint was file by the UNITED STATES OF AMERICA, Plaintiff vs. MAUI PLANNING COMMISSION, Defendant, brought by the United States to enforce Religious Land Use and Institutionalized Persons Act of 2000 (“RLUIPA”). This is related to the Hale O Kaula Church case described above.

Paragraph 17 of the complaint reads:

On April 30, 2001, Maui Planning Commission Hearing Officer, Judith Neustadter Fuqua recommended denial of the Hale O Kaula Church’s application for a Special Use Permit, finding that the use of the subject property as sought by the Church was not an “unusual and reasonable use” under the relevant codes and rules. She found that the use of the Subject Property sought by the Church would adversely affect the properties along Anuhea Place by creating unacceptable levels of traffic and noise in an isolated agricultural neighborhood. In addition, she found that the use of the Subject Property sought by the Church would burden public agencies to provide water, police, and fire protection….

Paragraph 23 reads:

The Defendant’s denial of the Church’s special use permit application constitutes the imposition or implementation of a land use regulation that discriminated, and continues to discriminate, against Hale O Kaula Church on the basis of religion or religious denomination in violation of Section 2(b)(2) of RLUIPA, 42 U.S.C §2000cc (b)(2)….

The complaint is signed by JOHN ASHCROFT, ATTORNEY GENERAL.

For more, GO TO > > > Paradise Paved; The Royal & Sun Alliance; Woo vs. Harmon: Witness Judith Neustadter Fuqua


Linda Chu Takayama – A partner since 1994 in the Honolulu-based law firm of Chun Chipchase Takayama and Nagatani, which specializes in government and regulatory affairs, insurance, corporate law, real estate and litigation. Previously, Ms. Takayama served as Deputy Director of the State of Hawaii’s Department of Commerce and Consumer Affairs and also served for three years as the Insurance Commissioner for the State of Hawaii. She is also a former General Counsel and Director of Human Resources for the U.S. Senate Sergeant at Arms. Ms. Takayama is a member of the Board of Governors of the East-West Center and is Chair of the Hawaii Foodbank.

* * *

October 21, 2003

Ex-state Official’s Role in Liquidation Disputed

Two insurance firms went
bankrupt after 1992’s Hurricane Iniki

By Bruce Dunford, Associated Press

Senate Minority Leader Fred Hemmings says answers are needed to “serious questions” about the role of former state insurance commissioner Linda Chu Takayama, a Democratic Party insider, played in the liquidation of two bankrupt insurance companies following Hurricane Iniki.

J.P. Schmidt, the insurance commissioner under the new Republican administration of Gov. Linda Lingle, agrees, even thought the liquidation was unusually successful and the state stands to gain a windfall of up to $15 million.

The liquidation was handled by Honolulu attorney Jerrold Chun, who was arrested last week on three counts of felony theft and allegations that he diverted more than $12 million from insurance claims and creditor settlements resulting from the 1992 hurricane that devastated Kauai.

As insurance commissioner, Takeyama won court approval in 1993 to assign the liquidation of Hawaiian Underwriters Insurance Co. and United National Insurance Co. – subsidiaries of Hawaiian Electric Industries’ subsidiary, the Hawaiian Insurance Group – to the McCorriston Miho Miller Mukai law firm, where Chun was assigned to handle the case, said Hemmings, (R-Lanikai-Waimanalo).

Takayama, an attorney, resigned as insurance commissioner in 1994 to become deputy director of the Department of Commerce & Consumer Affairs, and later joined McCorriston Miho.

She then joined Chun in leaving McCorriston Miho to start their own law firm, Chun Chipchase Takayama Nagatani, taking the liquidation case with them, said Schmidt, who has filed a civil claim against Chun, seeking the $12 million for the state. That case does not name Takayama….

At some point, private attorney Takayama, with the court’s approval and probably because of her familiarity with the case, was appointed as a “deputy liquidator,” serving “up until we uncovered these misappropriations and what have you, at which time I removed her and Chun and the other folks involved and appointed my own deputy liquidator,” Schmidt said yesterday.

“It raises some questions,” he said. “Until we get the files and look at it, I’m not sure whether it’s improper. If it was improper, then we need to know whether it then led to any improprieties because of the conflict or not.”

A deputy liquidator is responsible to the judge overseeing liquidation and is paid out of funds from the liquidated company, Schmidt said.

Schmidt said that the files with details on the HUI/UNICO liquidation have been subpoenaed in the criminal case against Chun and are now sealed [emphasis added].

A question that has to be asked is, “During the tenure of Linda Chu Takayamas partnership with Chun, was she a beneficiary of the business she assigned to him, directly or indirectly?” Hemmings said Friday. “She can claim, ‘I never collected a direct commission,’ but what did she collect?”

However, “if you connect all the dots, there’s a lot of politics and conflicts of interest in it,” he said. “I’m confident the attorney general and insurance commissioner are going to do what should have been done a long time ago regarding the improprieties in the insurance industry.”

Takayama, who is closely allied to U.S. Sen. Daniel Inouye, is a former top aide in the office of the U.S. Senate Sergeant at Arms. She is also a member of the board of governors of the East-West Center and is chairwoman of the Hawaii Foodbank. Her husband, Gregg, is a reporter for KHON television news in Honolulu and served for 12 years as Inouye’s press secretary, followed by three years as press secretary for then-Lt. Gov. Ben Cayetano.

In 1999 she was named to a four-year term as one of 78 public interest directors of the Federal Home Loan Banks, ans is registered with the state as a lobbyist for Abbott Laboratories Inc., Hawaii Pacific Health, Hawaii Psychological Association and Pfizer Inc.

The attorney general’s office launched a criminal investigation of the HUI/UNICO liquidation after an internal investigation by Schmidt’s office found that Chun negotiated substantially lower payouts for three claims and then kept the difference for the original claim amount.

After Hurricane Iniki hit on Sept. 11, 1992, homeowners and property owners flooded the two companies with claims that overwhelmed their reserves, at which time HEI said it would not provide additional capital, which resulted in a Circuit Court order granting Takayama’s motion for the state to take possession of the companies and their assets.

In April 1993, Takayama, then the insurance commissioner, filed a complaint against HEI on behalf of creditors and policyholders, alleging the company had misled the public about its financial support of the Hawaiian Insurance Group and had mismanaged and drained HIG’s financial assets.

In February 1994, HEI agreed to pay a $32 million settlement to reduce the anticipated $73 million deficit faced by its HIG subsidiary.

Schmidt said Chun did such a good job in liquidating the assets of HUI/UNICO that not only will the policyholders get their claims, the state general fund could end up with a potential windfall of $10 million to $15 million.

See also: Lyn Anzai

For more, GO TO > > > I Sing The Hawaiian Electric; The Firing of Evan Dobelle; The Puna Connection; Zephyr Insurance


Lyn Anzai – Former in-house attorney for Kamehameha Schools who handled many of the major “questionable” investments of the former trustees; wife of Earl Anzai – the replacement of politically-ousted Hawaii Attorney General Margery Bronster.

* * *

November 3, 2003

Former Congresswoman Saiki, Three Others Appointed to East-West Center Board

East-West Center News Release

HONOLULU – Patricia F. Saiki, former Hawaii congressional representative, has been appointed to a three-year term on the East-West Center’s Board of Governors by U.S. Secretary of State Colin Powell.

Also appointed were former Sen. William V. Roth Jr. of Delaware; Tai-Young Lee, president of PTC International, Inc., a marketing firm in Baltimore, Maryland; and Albert C. Chang of San Francisco, president of Eastern Sea, Inc.

Saiki was elected to Congress in 1986 and again in 1988, representing the 1st Congressional District of Hawaii. She served as a member of the Committees on Banking, Finance and Urban Affairs; and Merchant Marine and Fisheries. She also was a member of the Select Committee on Aging. From 1991-1993, Saiki was appointed by the president as administrator for the U.S. Small Business Administration….

The EWC board also includes five members appointed by the governor of Hawaii. They are Roland Lagareta, client services at Morgan Stanley and interim chair of the EWC Board; Lyn Flanigan Anzai, executive director of the Hawaii State Bar Association and interim vice chair of the EWC Board; Joan Bickson; Eddie Flores Jr., president of L&L Drive Inn; and Miriam Hellreich, president of Speech & Pathology Associates. Puongpun Sananikone, president of PACMAR, Inc., serves as the governor’s designee….

Ex-officio members are Gov. Linda Lingle; Patricia Harrison, assistant secretary of state for educational and cultural affairs, U.S. Department of State; and Evan Dobelle, president of the University of Hawaii.

~ ~ ~

For more financial and political connections between the University of Hawaii; CB Richard Ellis; and Kamehameha Schools, GO TO > > > The Firing of Evan Dobelle; The Nests of CB Richard Ellis; Dirty Money, Dirty Politics & Bishop Estate – Part IV; How To Pluck A Billionaire; Kajima; Paradise Paved.

* * *

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 on Lyn Anzai and Hawaiian Airlines, GO TO > > > Hawaiian Airlines; Predators in Paradise

* * *

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.)

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


Morgan Lewis & Bockius – The law firm that conducted Kamehameha Schools’ own “internal investigation” of wrongdoing.

June 11, 2001

 Convicted Morgan Lewis Partner
Denied New Trial

From New York Lawyer

Former Morgan Lewis & Bockius partner Allen W. Stewart — who was convicted of racketeering, fraud and money laundering in 1997 and sentenced to 15 years in prison — has been denied a new trial by a federal judge, Philadelphia’s Legal Intelligencer reports.

The former head of Morgan Lewis’ insurance department was convicted on charges of draining the assets of two insurance companies he controlled and then selling the companies to unwitting buyers who soon discovered they were insolvent. . . .

The indictment charged that Stewart’s schemes were designed to obtain money and property, including licenses and the retention of licenses, premiums from policyholders and customers, dividends, consulting and management fees, and an inflated sales price for the Summit National Life Insurance Co.

* * * * *

August 15, 1996

Mary Frangipanni’s Political Notebook

By Mary Frangipanni, Philadelphia

California Schemin

By 9 p.m. Monday, Pennsylvania Republicans attending the Republican convention in San Diego had to chill out after listening to all those speeches. And what better way to relax then at the poolside party for Lackawanna County Congressman Joe McDade?

This was a victory party for McDade, who was just acquitted on charges of campaign fund fraud after an eight-year investigation. McDade is the Chairman of the House Appropriations Committee and as Northeast Philadelphia State Rep. George Kenney put it, “Now the Republicans are back in power, which means more tax dollars for our state.”

There was, however, much more interesting —— and ironic —— news floating around the McDade soiree.

A prominent Philadelphia law firm and its senior partners will soon be indicted, according to sources close to the case.

The firm, Morgan Lewis Bockius, represented defrocked State Attorney General Ernie Preate.

What’s ironic about that?

The fact that people attending a party to celebrate the exoneration of McDade were talking about the continuing miseries associated with a local pol who wasn’t able to dodge the prosecutorial bullet.

The crux of the investigation into Morgan Lewis Bockius, sources say, are the legal fees paid to the firm by the Commonwealth of PA.

The Commonwealth, according to sources, paid the law firm $441,000 to represent not Preate, but the office of attorney general.

However, say sources, the law firm used a portion of that money to represent Preate personally in the mail fraud case against him because Preate could not afford to pay his legal bills.

Investigators, say the sources, are specifically looking into whether there was any conflict of interest involved because one of Preate’s top deputies, Walter Cohen, at the time worked for the law firm.

Mark Dichter, managing partner of the law firm’s Philadelphia office, acknowledged the investigation. However, he said he has “no knowledge of any pending indictment, or any discussion of an indictment, in this matter.”

Sources say the firm knew that the money was going to Preate’s personal defense. They add that they expect the indictment to occur shortly after Labor Day.

Jack Lewis, a spokesman for the state attorney general’s office, confirms that there has been an investigation into the matter ongoing since February. It was scheduled to be completed at the end of June, but Craig McKay, an independent attorney hired to handle the case asked for and received a 30-day extension. . . .

For more on Hamilton McCubbin and Morgan, Lewis & Bockius, GO TO > > > The Morgan, Lewis & Bockius Report


Renton Nip – Honolulu attorney with the firm of Verner, Liipfert, Bernhard, McPherson & Hand; attorney for Sukamto Sia.

From their website:

Areas of Practice

Renton Nip has practiced in the areas of commercial litigation, public and municipal finance, international finance, international and domestic real estate transactions, and business immigration. He has represented a wide range of overseas and domestic owners and developers in condominium and office project development in Honolulu, as well as in various other phases of project development. He has represented clients in projects in China, Hong Kong and Singapore. In addition, Mr. Nip has represented various underwriters and issuers in connection with the issuance of tax-exempt bonds and clients in private financings.

Other Professional Experience

Prior to joining Verner Liipfert, Mr. Nip was a partner with Foley Machara Nip & Chang from 1982 to 1995. He served a per diem judge in District Court, State of Hawaii, from 1982 to 1986 . . . Mr. Nip has also served as law clerk to Chief Justice William S. Richardson, Hawaii Supreme Court, from 1975 to 1976 . . .

Board Memberships and Affiliations

Director, Bank of Honolulu; Director, Chinese Chamber of Commerce of Hawaii; President, Chinese Chamber of Commerce of Hawaii

Community Activities and Service

Chairman, Land Use Commission, State of Hawaii 1988-1992; Commissioner, Land Use Commission, State of Hawaii 1987-1995; Chairman, Hawaii Employment Relations Board 1981-1986; President, Legal Aid Society of Hawaii 1978-1980; Director, Native Hawaiian Legal Corp 1980-1986; Director, Hawaii State Bar Association 1982-1984 . . .

* * *

August 6, 2004

Sukamto Sia’s Lawyers To Pay
$6 Million In Settlement

By Tim Ruel, Honolulu Star-Bulletin

A Honolulu attorney and a high-powered law firm that represented imprisoned businessman Sukamto Sia during his bankruptcy proceedings must pay $6.25 million in a settlement over allegations they helped the former Indonesian investor hide assets from creditors.

Attorney Renton Nip and the former Washington, D.C., law firm Verner Liipfert Bernhard McPherson & Hand must pay the money to Sia’s bankruptcy estate, a Singapore bank, casinos that are owed money by Sia and the Federal Deposit Insurance Corp.

Sia pleaded guilty to federal bankruptcy fraud in 2001 and is in prison in Big Springs, Texas. He was to be released next month but his sentence has been placed in an indefinite status because Sia was recently found in contempt for not complying with a U.S. Bankruptcy Court order.

Sia’s bankruptcy trustee Guido Giacometti sued Verner Liipfert and Nip in 2002, saying they “entered into an overarching conspiracy to conceal and divert assets from (Sia’s) bankruptcy estate.” Later, the Singapore bank and the casinos filed separate lawsuits over similar allegations.

“I know in my heart that the suits were not fair and not right. The settlement, however excessive, brings the Chinese water torture finally to an end,” Nip said yesterday. He declined to elaborate.”

Warren Price III, attorney for the former Verner Liipfert law firm, said the defendants settled based on the decision of their insurance carrier, and that the settlement will be covered by insurance. Verner Liipfert and Nip dispute all of the claims against them.

“There were a number of parties involved and the defense costs were just going to be horrendous,” Price said.

Nip, who shares a law office with former Gov. John Waihee, was once affiliated with Verner Liipfert, which has since merged into the national law firm Piper Rudnick.

Under the settlement, approved last week by U.S. Bankruptcy Judge Lloyd King, Nip and Verner Liipfert do not admit liability. The casino companies, including London Clubs International plc, Aspinall’s Club Ltd. and Rio Casino, will get $2.5 million from the settlement, which is not as much as the $12 million in initial claims they filed against Sia’s bankruptcy estate.

The suits against Sia’s former lawyers will be dismissed and the casinos are waiving their right to seek more money from the bankruptcy estate.

Sia, who once was involved in selling land to the state for the $350 million Hawaii Convention Center, ran into financial problems with creditors in 1998. He filed bankruptcy in Honolulu, claiming he had nearly $300 million in debts and only $9.3 million in assets. Giacometti has since estimated the face value of Sia’s assets at $53 million.

Giacometti has raised $7.4 million for creditors, and the estate will receive another $1.25 million for its role as receiver for the now-defunct Bank of Honolulu, where Sia was once chairman and Nip was a director.

Another $1.25 million from the settlement will go to an Asian unit of Commerzbank AG, a major bank based in Germany.

Meanwhile, Giacometti said he is in talks to resolve the contempt order that is keeping Sia in prison. A local attorney for Sia declined comment yesterday….

See also: Warren Price III

For more on Guido Giacometti, GO TO > > > RICO in Paradise

* * *

August, 1991

Chidiac’s Lawyers Take a Number
In Growing Queue of Creditors

(c) 1991 Environment Hawai`i, Inc.

In the June and July issues of 1991, Environment Hawai`i considered plans for and feasibility of the super-luxury Hawaiian Riviera Resort proposed for Ka`u by one Charles Chidiac. There have been further developments in the case and additional information obtained with regard to Chidiac.

Here is a summary:

Poor Lawyers

As was disclosed in the July Environment Hawai`i, Chidiac has received loans totaling more than $45 million from a network of foreign banks, with the collateral for each loan being the land he owns in Ka’u. This is in addition to almost $40 million that he owes his former partners in the resort venture since purchasing most of their stake in the land in August 1990. Again, security for the promissory notes he gave his partners was the land.

That same real estate is now further burdened with a lien placed against it by several attorneys who aided Chidiac in his successful efforts to win Land Use Commission approval of his resort. (At its meeting May 14, the commission allowed Chidiac’s land to be placed in the urban district.)

Rather than pay legal fees to George K. Lindsey, Jr., and to the law firm of Moon, O’Connor, Tam & Yuen, Chidiac has given them a mortgage.

Bill Yuen, a partner in the law firm, is a former LUC chairman. He did not argue Chidiac’s case to the commission directly, but he did appear at commission hearings and aided in the presentation of Chidiac’s case. Many people who followed the proceedings closely believe Yuen’s presence at hearings and behind-the-scenes lobbying helped win over LUC Chairman Renton Nip.

The amount of money owed by Chidiac to Lindsey and to Yuen’s law firm is not given in the document filed with the Bureau of Conveyances. The mortgage does state, however, that the lawyers’ claims are subordinate to previous claims totaling roughly $90 million. Chidiac signed the mortgage January 23, 1991. It was not filed with the Bureau of Conveyances until June 24, 1991.

To the Court

Two of the interveners in the LUC hearings who are opposed to the resort have appealed the commissions decision in state circuit court in Hilo. The Native Hawaiian Legal Corporation has appealed on behalf of Pa’a Pono Miloli’i, while Glen Winterbottom has appealed on his own behalf.

Among other issues, the NHLC appeal raises the point that state law requires the commission to issue a final decision and order within 120 days of the end of hearings in any given case. The decision and order issued by the commission on June 4, 1991, does not satisfy this requirement, NHLC attorneys state. Far from it being a final document, it is contingent upon Chidiac’s Palace Development Corporation providing additional information – information, the attorneys note, that should have been furnished prior to the commissions decision.

Meanwhile, in London

Following publication of the July issue, a reader has submitted further information on Chidiac’s activities abroad, as reported by the Financial Times of London. In its editions of February 20, 1990, the newspaper reported that a Tory Minister of parliament, one John Browne, was found guilty by a House of Commons committee of having failed to disclose his business interests – specifically, his business interests in a firm controlled by Chidiac. Quoting from the Times:

“An all-party committee of MPs said that action should be taken against Mr. Browne for failing to register his interest ‘In a firm of Lebanese middlemen controlled by Mr. Charles Chidiac, whilst lobbying Ministers and officials on their behalf and on the behalf of their own clients.’ His ‘undisclosed pecuniary interest’ in carrying out this lobbying was particularly serious, the committee said.”

Browne was also judged to have erred in not disclosing an $88,000 payment from Saudi Arabia, as well as having failed to disclose his relationship with the Saudi Arabian Monetary Agency, Saudi Arabia’s central bank.

Environment Hawaii

* * *

September 15, 1998

It’s Not The First Time
for Takemoto

Bishop Estate budget chief was
investigated for financial abuses in 1993

By Ian Lind, Honolulu Star Bulletin

Bishop Estate budget chief Yukio Takemoto is no stranger to charges of political favoritism and cronyism. Last week, the state attorney general’s office accused Takemoto of a scheme to improperly wipe out an $18,690 dept by then-Sen. Milton Holt, using payments from four nonbid contractors with the estate…

Takemoto, appointed state budget director by former Gov. John Waihee, spent months at the center of a 1993 legislative probe into state purchasing abuses and dealings of the state Employee Retirement System.

The hearings, directed by the late Sen. Richard Matsuura, did not result in any formal charges against Takemoto. But they publicly aired details of several situations in which Takemoto appeared to direct nonbid contracts to friends, or improperly accepted gifts or favors from companies seeking business with the state….

Takemoto resigned under pressure at the end of 1993, and joined Bishop Estate months later….

According to information disclosed during the 1993 hearings, the Waihee administration awarded nearly $13 million in nonbid contracts to Data House even though he had no computer expertise, and either ignored or did not seek out the advice of computer experts on his staff.

Throughout the hearings, Takemoto denied his 25-year friendship with Arita played any major role in the contract decisions….

Soon after his appointment as budget chief, Takemoto stopped putting multimillion-dollar state bond sales out for competitive bid and substituted a nonbid process. The new negotiated deals gave him total control over who would sell state bonds and what fees they would collect….

With Takemoto in charge … two attorneys with close ties to the Democratic Party and Waihee were named as local bond counsel on dozens of bond issues. The two captured all legal work not handled by large mainland firms specializing in bond deals during Takemoto’s tenure….

Honolulu attorney Renton L.K. Nip advised the state or bond underwriters on more than 30 bond series issued by the state between 1990 and 1993….

In 1989, Nip assisted Takemoto in soliciting funds for Waihee’s re-election campaign.

Nip, then-Land Use Commission chairman, sent letters to a number of companies seeking to do business with the state.

Mr. Yukio Takemoto of the Dept of Budget & Finance has asked our assistance in distributing tickets to you for the governor’s fundraiser …,” the letter said.

Computab, a computer services firm, was about to sign a $700,000 contract to provide computer equipment to Takemoto’s department when it received the letter and 20 fundraiser tickets, according to a complaint filed by Desmond Byrne, a former Computab officer.

Bryne called the letter “a very unsubtle attempt to lean on the company” and, because of the pending contract, “Computab had no option but to give.”

* * *

Honolulu Star-Bulletin, 9/6/00, by Tim Ruel: Former Isle Banker Sia First Ordered Freed, then Held Pending Appeal –

A federal judge said today that Asian businessman Sukamto Sia should be released on bail pending an Oct 31 trial, but agreed to keep him behind bars pending an appeal by the U.S. Attorney General’s office. . . .

While Federal Magistrate Barry Kurren called Sia a possible flight risk, Kurren did not think the U.S. government had showed enough evidence that he would leave the United States.

Kurren placed several conditions on Sia’s release, including $150,000 in cash and two Hawaii properties with equity worth a total of $760,000, all posted by friends.

Stockbroker Al Souza, friend of Sia for 15 years, offered his Waialeale home, worth $320,000 in remaining equity. Eric Yanagihara, formerly Sia’s Hawaii asset manager and former senior vice president of Bank of Hawaii, offered remaining equity in his Waialae Ridge home, worth $440,000.

Also, attorney Jon Miho will post a cashier’s check worth $100,000 and Sia lawyer Renton Nip will post $50,000.

Entertainer Danny Keleikini offered testimony in support of Sia’s release.

Federal authorities downplayed the significance of the collateral, arguing that Sia could leave the country, then later make it up to his friends for what they would lose.

“This person is an extraordinary flight risk,” said Poirier during the hearing….

Sia, a former director and major shareholder in Bank of Honolulu, filed for bankruptcy on Nov. 8, 1998 listing $296.4 million in debts and $9.3 million in assets.

The bankruptcy was filed a month after his arrest in Las Vegas on charges of bouncing more than $13 million in checks at several casinos. Sia has blamed his financial woes on a downturn in the Asian economy….

* * *

For more on Renton Nip and Sukamto Sia, GO TO > > > The Indonesian Connection


Richard Frunzi – Attorney who played a role in several major scandals; convicted of laundering drug money.

Sept. 13, 1995

Kihano Contract Helped Pay
Office Rent

By Ian Y. Lind, Star-Bulletin

A controversial nonbid consulting contract pushed by then-House Speaker Daniel J. Kihano in 1991 paid the rent at least briefly for an office shared by a business in which Kihano and the consultant, Henry Blakley, were partners, state records show.

The contract was one of two that were funded by the Legislature, and then awarded to Blakley over the objections of Health Department administrators. Kihano pushed the department to approve the contracts, and had several meetings in his office with then-Health Director John Lewin regarding Blakley, Lewin said last week.

The business, Hale Nani Partners, was operating from Blakley’s office in September 1992, when it filed a letter of intent to build a surgery center on Maui and four othe facilities on Maui and Hawaii. At that time, Blakley was still under contract with the Health Department and Kihano was near the end of his last term in the Legislature.

Blakley was subsequently designated the managing partner in the business, and shared authority over the business checking account with Kihano….

Blakley first rented the office at One Main Plaza in Wailuku after receiving a $110,000 consulting contract in 1990, Health Department records show. The budget for the contract included funds for office rent, equipment, and clerical services.

Blakley retained the office after being awarded a second, two-year contract initially valued at $273,000, records show. The contract was early terminated on Oct. 30, 1992, following budget cutbacks and a dispute of Blakley’s performance.

Blakley failed to complete the studies called for in the contract, and the state later went to court seeking a refund of $42,778 paid in advance for work that was never satisfactorily completed, court records show.

Hale Nani Partners was formed in June 1992, according to state business registration records. On Sept. 14, 1992, the company notified the State Health Planning and Development Agency that it intended to apply for certificates of need for five medical facilities to be proposed for Maui and the Big Island.

The letter was signed by Honolulu attorney Richard L. Frunzi, a Hale Nani Partner, with copies to Blakley and Kihano…

For more, GO TO > > > The Puna Connection

* * *

March 5, 1996

Prosecutors tie ex-pol’s firms
to drug money

Daniel Kihano’s lawyer says Kihano was
not involved with the money

By Ian Y. Lind, Star-Bulletin

A federal grand jury is investigating allegations that several hundred thousand dollars from one of the state’s largest drug rings was “laundered” through two companies involving former House Speaker Daniel Kihano, according to court records and attorneys familiar with the case.

Federal prosecutors allege that John Bowley, who has pleaded guilty to drug and money-laundering charges, conspired with others to launder drug proceeds through Hale Nani Partners and Evets Ltd., one of its two partners.

Kihano is a shareholder and officer of Evets, shared signature authority over Hale Nani Partners’ bank accounts, and has been actively promoting the firm’s proposal to build a $5 million surgery center on Maui. The project was approved last month by the State Health Planning and Development Agency.

Attorney Ben Cassiday, who represents Kihano, now executive assistant to city Managing Director Robert Fishman, siad he believes the grand jury is considering indictments against one or more people associated with Hale Nani Partners….

Evets Ltd., which controls 80 percent of Hale Nani Partners, was formed in 1991 by attorney Richard Frunzi, according to documents filed with the state during hearings on the surger center proposal. Frunzi later sold a majority of the stock to Kihano and business consultant Henry Blakley, a friend of Kihano’s….

According to documents filed last year in federal court, Bowley made more than $1 million in profit distributing crystal methamphetamine and cocaine during 1993-94 through a drug ring led by confessed drug kingpin Frank Moon. Bowley, also known as “Hollywood John,” transferred “hundreds of thousands of dollars” directly or indirectly to Hale Nani and Evets, while seeking to conceal “the nature, location, source, ownership and control” of the funds, the government alleges….

Bowley pleaded guilty in October 1995, but the plea agreement remains sealed, court records show. He is scheduled to be sentenced this year…

For more, GO TO > > > The Puna Connection

* * *

April 18, 1996

Two Indicted in
Money Launder Scheme

The funds ended up in the accounts of Hale Nani Partners

By Ian Y. Lind, Star-Bulletin

A federal grand jury has indicted a Honolulu tax attorney and a Maui health consultant for their roles in an alleged scheme to launder more than $400,000 in illegal drug proceeds.

The funds ended up in the bank accounts of Hale Nani Partners, which is seeking to develop an outpatient surgery center on Maui.

According to yesterday’s indictment, attorney Richard Frunzi received $100,000 in cash from convicted drug dealer John “Hollywood John” Bowley in August 1993, and an additional $310,000 in November 1993. The funds were proceeds from the sale of large quantities of cocaine and crystal methamphetamine by Bowley, currently awaiting sentencing in an earlier case, court records show.

Frunzi then gave some of all of the funds to Henry “Hank” Blakley, managing director of Hale Nani Partners, who used a variety of methods to transfer the money into company bank accounts while concealing and disguising the actual source of the cash, the indictment alleges….

“Mr. Blakley intends to fight this indictment to the fullest and establish his innocence,” said his attorney, Howard Chang.

“We believe that the indictment represents overkill by the U.S. attorney since the charges could have been made in three or four counts and had the same effect. Unfortunately, the indictment may destroy Hale Nani Partners and their efforts to a much needed surgery center on Maui,” he added….

Former House Speaker Daniel Kihano, also a shareholder in Evets, was not named in the indictment….

Kihano’s attorney, Ben Cassiday, said this should put to rest any rumors that Kihano had a role in the alleged conspiract. “The message is clear,” Cassiday said….

The indictment says that the cash was split into smaller amounts and deposited in various accounts at First Hawaiian Bank and First Hawaiian Creditcorp….

U.S. Attorney Steven S. Alm said yesterday’s indictment resulted from a joint investigation of the Internal Revenue Service and the FBI….


* * *

April 19, 1999

Wong Pleads Not Guilty

The Bishop chairman’s wife and brother-in-law
also plead innocence in an alleged kickback scheme

By Rick Daysog, Honolulu Star-Bulletin

Bishop Estate Chairman Richard “Dickie” Wong today pleaded not guilty to criminal charges relating to an alleged kickback scheme involving trust land in Hawaii Kai.

Wong’s wife, Mari Stone Wong, and his brother-in-law Jeffrey Stone also pleaded not guilty to all charges relating to the estate’s sale of its fee interest to the 219-unit Kalele Kai condominium project.

Wong, a former state Senate president, appeared at his arrangement before Circuit Judge Michael Town this morning….

Last week, an independent Oahu grand jury – convened by Attorney General Margery Bronster – indicted Wong for theft, perjury and criminal conspiracy for allegedly taking a $115,800 kickback from Stone.

The grand jury said Stone received preferential treatment when he and his mainland partners acquired the land beneath the Kale Kai project in 1995 for $21.9 million.

The secret panel also indicted Mari Wong for criminal conspiracy and hindering prosecution, and Stone for commercial bribery, conspiracy and serving as an accomplice to theft….

Meanwhile, Stone’s lawyer, John Edmunds, said he plans to seek a dismissal of the charges, saying the grand jury’s proceedings were “tainted” by testimony from a key witness, attorney Richard Frunzi.

Frunzi is Stone’s former lawyer who recently was sentenced by a federal judge to five years in prison for an unrelated money-laundering scheme.

Transcripts of Frunzi’s testimony before a separate grand jury that indicted trustee Henry Peters for theft last November were rife with unsubstantiated speculation by Frunzi, Edmunds said.

That grand jury also indicted Stone for commercial bribery and conspiracy. Peters and Stone have pleaded not guilty to all charges.

Senior Deputy Attorney General Lawrence Goya said Frunzi’s grand jury testimony in the Peters case is separate from his later testimony in the Wong case….

* * *

June 17, 1999

Wong is off the hook
in land case – for now

A judge says the grand jury
was misled by the attorney general

By Rick Daysog, Honolulu Star-Bulletin

Bishop Estate trustee Richard “Dickie” Wong calls a judge’s decision to throw out criminal charges against him a first step toward clearing his name.

However, the attorney general’s office may seek a new criminal indictment against the chairman of the multibillion-dollar charitable trust.

Circuit Judge Michael Town yesterday ruled an Oahu grand jury was tainted and he dismissed charges against Wong, his wife and Wong’s brother-in-law, local developer Jeffrey Stone, in connection with an alleged kickback scheme involving Bishop Estate land.

The decision could have a major impact on separate civil and criminal cases against the 66-year-old Wong and other trustees. Lawyers for trustee Henry Peters, who faces similar kickback charges, plan to ask Town today to dismiss criminal charges against their client.

“The prosecutors’ conduct invaded the province of the grand jury and denied the defendants a fair and unbiased grand jury,” Town said. “If the grand jury is tainted, the result is tainted.”

Town said that the attorney general’s office “illegally bolstered” the testimony of former local attorney Richard Frunzi, who played a key role in the grand jury’s April indictment of the Wongs and Stone.

Frunzi, Stone’s former attorney, is serving a jail sentence on the mainland after he was convicted of federal money laundering charges. Defense lawyers contended state prosecutors did not inform the grand jury of Frunzi’s conviction when Frunzi went before the panel.

They also argue that as Stone’s attorney, Frunzi is prohibited from testifying unless Stone waives his attorney-client privilege.

“Overall, the testimony at a minimum prejudiced the grand jury,” Town said.

Town’s order stopped short of accusing prosecutors of flagrant misconduct. His ruling also allows the attorney general’s office to seek a new grand jury indictment….

Wong continues to face a barrage of legal actions, including the criminal proceedings, a long-running Internal Revenue Service audit of the estate, a permanent-removal suit by the attorney general’s office and an interim-removal action...

* * *

February 23, 2002

Court Vindicates

A ruling admonishes the state in favor of
Henry Peters and Richard Wong

By Rick Daysog, Honolulu Star-Bulletin

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

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

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

Eric Seitz, Wong’s attorney, called the ruling a “ringing denunciation” of the Attorney General’s Office….

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

Yesterday’s ruling upholds Circuit Judge Michael Town’s dismissals of indictments against Peters, Wong and Stone. Town found that the state violated Stone’s right to attorney-client privilege when it allowed Stone’s former attorney, Richard Frunzi, to speak to the grand jury about matters involving his former client.

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

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

In 1999, Peters, Wong, Gerard Jervis, Oswald Stender and Lokelani Lindsey resigned from their $1 million-a-year jobs as Kamehameha Schools trustees after the Internal Revenue Service threatened to revoke the $6 billion charitable trust’s tax-exempt status. Yesterday’s ruling was made by Circuit Judges George Masuoka, Ronald Ibarra, Dan Kochi, Shackley Raffetto and Gary Chang. The judges were serving as substitutes for the five Supreme Court justices, who recused themselves from all cases involving the Kamehameha Schools.

Until recently, the high court selected the trustees of the Kamehameha Schools.

For more, GO TO > > > Dirty Money, Dirty Politics & Bishop Estate


Robert Smith – Another de-feathered buzzard.

September 6, 2004

Isle attorney disbarred over
$1M estate actions

By Rick Daysog, Honolulu Star-Bulletin

The state Supreme Court disbarred Kaneohe attorney Robert A. Smith for a number of ethical violations stemming from his representation of an elderly client and her $1 million estate.

The high court said Smith had a conflict of interest when he made his longtime companion Paz Abastillas the trustee for the estate of Edith Kam.

Kam, who died in 2000 at age 96, “was in mental decline and subject to undue influence,” and Smith took advantage of her condition by charging “unusually high” legal fees, the Supreme Court said.

Between 1995 and 1996, Smith billed Kam more than $152,000 for estate planning and other nonlegal services, according to the state Office of Disciplinary Counsel, which oversees lawyer conduct in Hawaii….

The 69-year-old Smith, who has practiced in Hawaii since 1975, could not be reached for comment.

The order, which goes into effect Sept. 29, prohibits Smith from accepting new clients and new retainers.

In a September 2003 report on the Kam matter, the Office of Disciplinary Counsel alleged Smith replaced Kam’s son Cedrick as the trustee of her assets, which were valued between $750,000 and $1.2 million. He eventually named Abastillas trustee of Kam’s estate.

The Office of Disciplinary Counsel also alleged that Smith improperly drafted a power of attorney document that allowed Abastillas to make gifts to herself with Kam’s assets….

“(Smith) was aware that his conduct was unethical but … intentionally took advantage of a client in mental decline,” according to the Office of Disciplinary Counsel.

The Supreme Court said its decision to disbar Smith was based on several factors, including his refusal to acknowledge the wrongful nature of his conflict.


Stanford Manuia – A Maui-born attorney who counts among his clients Kamehameha Schools Bishop Estate; GTE Hawaiian Telephone Co.; and Travelers Insurance Co.

April 2, 2001

Secret Files Reveal Extent
of Estate Clout

By Rick Daysog, Star-Bulletin

Before dozens of mourners at the Star of the Sea Parish, Henry Peters delivered a moving eulogy – less than three weeks after his historic removal from his $1 million-a-year job as a Kamehameha Schools trustee.

Ex-House Judiciary Committee Chairman Terrance Tom – whose cozy ties to the estate led to his election defeat seven months before – accompanied the proceeding on the piano.

Former state Sen. Milton Holt, who would serve a one-year federal prison term for a mail fraud charge stemming from his failed 1996 re-election campaign, also was in the crowd.

The tragic symbolism of the May 1999 funeral for Namlyn Snow could not have been clearer. As Peters spoke, several in the audience felt they were witnessing the passing of a political leviathan whose influence extended throughout state government. Snow, who died of cancer, had headed the Kamehameha Schools Government Relations Division.

In many ways, she was the central nervous system for an organization that was more like Tammany Hall than a charity that educates native Hawaiian children.

The Star-Bulletin previously reported that the estate’s former trustees secretly funneled tens of thousands of dollars in campaign contributions to dozens of isle lawmakers, lobbied Congress and the White House to preserve their hefty paychecks, conducted polls in the districts of legislators friendly to the trust’s interests and played a role in the controversial 1999 confirmation defeat of Attorney General Margery Bronster.

But the complete story of the $6 billion trust’s political clout and Snow’s role in that shadowy network of power remained buried in the secret files Snow kept in her office.

During the past several months, the Star-Bulletin has reviewed more than 40,000 pages of records subpoenaed by the Attorney General’s Office in its three-year criminal investigation into the political and lobbying activities of the Kamehameha Schools, formerly known as the Bishop Estate….

THE FORMER TRUSTEES took part in some behind-the-scenes lobbying of their own. An internal memo by trust attorney Stanford Manuia described a private meeting held on Feb. 25, 1991, between the estate’s board members and then-Gov. Waihee on the leasehold controversy.

Manuia’s memo, dated March 1, 1991, said Waihee requested the meeting to “salvage” his administration’s leasehold conversion bill, which proposed a cap on residential leasehold rents. Waihee offered to exclude the Kamehameha Schools from the administration bill in exchange for their support, Manuia wrote.

The trustees, however, raised concerns about the rent cap and the formula that the state would use to determine the value of the leasehold land, Manuia said. The bill did not pass….

Waihee – whose firm, Verner Liipfert Bernhard McPherson and Hand, later billed the estate about $1 million to lobby Congress and the White House to protect the former trustees’ salaries – recalled that he accompanied former trustee Stender to Washington, D.D., in 1991 to meet with the Internal Revenue Service to resolve tax issues that may arise as a result of the bill.

“There was a lot of give and take going on to try to pass a bill,” Waihee said.

HOLT, MEANWHILE, played a role in the estate’s government relations efforts, confirming longtime suspicions that the former senator’s employment at the trust conflicted with his duties as a state lawmaker.

Trust personnel records indicated that the estate expected Holt to use his position in the Legislature to provide the trust with political intelligence. One of the duties listed in a position description for Holt stated that he “conducts community reconnaissance to facilitate KSBE strategic planning.”

In sworn testimony, Holt’s former boss Gil Tam likened the ex-senator’s role to that of a military intelligence officer for the trust. Tam said that Holt provided the estate with “G-2 intelligence,” which refers to the type of information that a spy acquires at the battle lines.

“It’s like … what’s happening at the Legislature, who’s doing what, what strategies (are there) to consider,” said Tam, a West Point graduate.

~ o ~

For more, GO TO > > > Dirty Money, Dirty Politics & Bishop Estate; Harmon’s Claim Letter to Marsh & McLennan; RICO in Paradise; The Puna Connection


Thomas Foley – From Environment Hawai`i, Inc.:

Anatomy of a Speculation:
The Many Flips of Mahai’ula

(c) 1995 Environment Hawai`i, Inc.

On July 12, 1990, Richard A Stellmacher, an appraiser hired by the state, accompanied George A. Magoon II on a tour of a 40-acre shoreline parcel owned by members of the Magoon family at Mahai’ula, just north of the Keahole Airport on the west coast of the island of Hawai’i. The state had hired Stellmacher to prepare an appraisal of the land’s value, in anticipation of acquiring the property for inclusion in a five-mile long coastal wilderness park.

Stellmacher submitted his report to the state on July 31, 1990. The “highest and best use” of the land, in the state Conservation District, was in accordance with the ‘grandfathered’ residential use,” Stellmacher wrote. And while there was no clear legal access to the parcel, Stellmacher added, he “assumed that the access granted under revocable permit the state to the lessee of a portion of the subject property for commercial luaus was its legal access.”

Stellmacher’s conclusion was that a “fair and reasonable” value of the property was $17,110,000.


At the time of Stellmacher’s tour of the property, it was well known that the state was seeking to purchase the land. As early as March 28, 1990, William Paty, then the director of the Department of Land and Natural Resources, had written Thomas M. Foley, attorney for the Magoon estate, that the state would be “making an offer to purchase the property upon completion of the independent appraisal establishing its fair market value.”

Another client of Foley’s was Robert Iwamoto, who, at about the same time, began negotiations with Foley to buy the property from Magoon. Iwamoto, owner of Roberts Hawai’i and a host of related tourist-service firms, also has had several business relationships with Larry Mehau, a former member of the Board of Land and Natural Resources. When Iwamoto heard that Larry Mehau was showing Big Island property to a Japanese investor in the spring of 1990, Iwamoto asked Mehau: “Well, why don’t you show her mine?” – referring to the Magoon land.

By July 19, 1990, Iwamoto and the investor, Chiyoko Isayama, through her company, Tenzan Corporation, agreed on a purchase price of $23 million for the Mahai’ula property, even though Iwamoto did not himself own it at that time.

According to Iwamoto, “I believe when I was negotiating with Tom Foley, Tenzan was interested in that property. And I required them to put down a $2.3 million deposit, unconditional deposit. And then I used two million dollars of that money to put down the initial deposit to Tom Foley. ”

At that time, however. Iwamoto had yet to seal the deal with Magoon. Probate court records show that in late June, Iwamoto had offered to purchase the land from Magoon for $17 million – an offer that George Magoon Jr., who was claiming a 70 percent interest in the property, and Nancy Magoon, George Jr.’s mother and George Sr.’s second ex-wife who held a 30 percent share, accepted on June 24. But the agreement was not completed until July 30, 1990, when Iwamoto himself finally signed the purchase contract.

Aborted Sale

A year earlier, in September 1989, the court had approved sale of the property to Haseko (Hawai’i), Inc. Haseko had offered $18 million, but for reasons that remain hidden from public view, the deal fell through.

In September 1990, notice of the second court confirmation hearing was posted, as required by law, on the courthouse bulletin board in Kona, but apparently no one from the state Department of Land and Natural Resources took heed. With no better offer presented at the hearing, the court confirmed sale of the land to Iwamoto.

On September 24, Land Board Chairman Paty wrote Foley, attorney for Magoon (and Iwamoto), making a formal offer to purchase the property for $17,110,000, which was the value assigned to the land by Stellmacher.

“However,” Paty wrote, “we have now heard that the property may have been sold. We are very concerned and disappointed that the land owners would take such action knowing full well the intention of the state. If this is true, please provide us with the name of the new owner so that we can proceed with filing of a condemnation action.

At the time Paty wrote, the property was still owned by the Magoons. Not until September 27 were the documents signed that conveyed title to Iwamoto. When that occurred, Iwamoto immediately resold the land to Tenzan, raking in a clear profit of $6 million.

Too Late

On October 5, the state filed a lis pendens, which put anyone with an interest in the land on notice of the state’s intent to acquire the land by condemnation. In the condemnation suit itself, filed the same day, Iwamoto was named as a defendant, although Tenzan’s purchase of the land had been recorded at the Bureau of Conveyances on September 28, 1990.

The same day the lis pendens was filed in court, title to the Mahai’ula land flipped again, landing this time in the lap of Blue Point Land Development, Inc. The purchase price reported to the Bureau of Conveyances was $30 million.

The sale probably would not meet the criteria of an arm’s-length transaction. As became clear in documents obtained by the state during pre-trial discovery and in records obtained by Environment Hawai`i from the Department of Commerce and Consumer Affairs, Tenzan and Blue Point shared many of the same owners and officers.

In addition, Tenzan never collected from Blue Point any part of the $30 million reported purchase price.

Interlocking Directors

In 1990, Isayama was president of both Tenzan and Blue Point, which was incorporated in September 1990. Ownership of Tenzan’s stock is unclear, but Isayama was identified as owner of 60 percent of Blue Point’s stock. In a deposition taken by the state of Hawai’i, Isayama said she owned stock in Tenzan, although her ownership interest was not disclosed.

Blue Point, according to Isayania, was established by Tenzan to develop the Mahai’ula property. Isayama said Tenzan obtained the money to purchase Mahai’ula through a loan from a Japanese bank; when asked to name the bank, she could not, saying the loan had been arranged by Ryozo Ito, a Tokyo resident who was vice president of both Tenzan and Blue Point and owner of 25 percent of Blue Point’s stock.

Other shareholders in Blue Point were Kiyoshi Wakaume, a Tokyo resident and Blue Point’s corporate secretary; Brian Sturdivant of Honolulu, who was Blue Point’s treasurer; and Andy Hirama of Honolulu, a director of Blue Point. Each of these three men held a to percent interest in Blue Point. Hirama also identified himself as Tenzan’s secretary in correspondence with the DCCA in 1989.

Chairman of Blue Point’s board of directors was Larry Mehau. In a deposition, Mehau described his role in the Mahai’ula transactions as merely that of a go-between. Isayama, however, had promised to build him a house there, he said:

“Chiyoko was going to build me a home. There is a small, little sandy area on the Kawaihae side of the property. And she took a picture of it, brought it to my office. Mehau said, ‘‘here, I would built you a house over here.’ Later on, it’s, ‘You and I will build a house.’’ That kind of deal.

“I said, ‘Chiyoko, I just wanted to help you. If it happens, fine. If it doesn’t happen, no problem. Don’t make any commitments.’ But that was her commitment, that I would have a home there.”

Meanwhile, in Court

None of this was known to the state at the time the state sued to take possession of Mahai’ula. For the better part of the next three years, the state battled lawyers for Iwamoto, Tenzan and Blue Point in an effort to determine who had paid what for the land.

Iwamoto’s lawyers asked that he be dropped from the lawsuit. The state’s attorneys said they’d be willing to dismiss Iwamoto, if he would produce records related to the sale that verified he had no ongoing interest in the property. In lieu of that, Iwamoto filed an affidavit on August 16, 1991, in which he said he sold all his interest in the property to Tenzan on July 15, 1990.

In a brief filed with the court on September 12, 1991, the state disputed the claim, noting that the “Deposit Receipt Offer and Acceptance Agreement (DROA) covering the tentative sale of the subject property… is dated July 19, 1990.” Had the state been aware of the records that were available in probate court, it would have had even greater evidence to dispute Iwamoto’s affidavit. In any event, in September 1991, the court granted Iwamoto’s request to be dismissed as a defendant, although it denied his request for attorney’s fees.

Soon after filing the condemnation suit, the state asked to take possession of the property. The request was granted by the court, subject to the state’s paying $10 million to Blue Point as a down payment.

The state had asked for a jury trial. Many of the pre-trial disputes concerned what appraisals or other evidence of land value could be presented to the jury. Soon after the state had received the Stellmacher appraisal, settling the land’s value at $17,110,000, the state hired a second appraiser to review Stellmacher’s figure. That appraiser, Mitsuo Shimizu, put the value at between $8 million and $10 million. On the other end of the spectrum, Peter Young, an appraiser hired by Blue Point after the condemnation suite was filed, found the property to be worth $25 million.

In January 1993, the matter was ready to go to trial and jury selection had been scheduled for the following month. With property values in the Kona area having begun a precipitous fall, Blue Point appears to have been motivated to settle with the state. The price Tenzan had paid for the land $23 million – was accepted as the price the state would pay.

On February 16, 1993, a check for $13 million, the balance owed to Blue Point under terms of the agreement, was given to a representative of Blue Point by the fiscal officer of the Third Circuit Court in Hilo.

Thus ended nearly two decades of efforts by the state to acquire the land….

For more, GO TO > > > Paradise Paved; The Puna Connection

* * * * *

March 31, 1997

Probation sought in driving death

Honolulu Star-Bulletin

Honolulu attorney Thomas M. Foley, who was legally drunk and had prior drunken-driving convictions when he killed a man in 1995, was to ask for probation with conditions this morning when he is sentenced.

Michael Weight, Foley’s attorney, said he would offer alternatives to prison for Foley, who pleaded no contest last year for his role in the death of Ho Pin Tsai, 33, and injury of his wife, Thianh Luu.

First-degree negligent homicide carries a 10-year term, and first-degree negligent injury carries a five-year term.

The state could ask the court to double the terms for the two felony offenses and run them consecutively for a 30-year total.

“He has to be punished,” Deputy Prosecutor Chris Van Marter said after Foley’s plea. “He took a life. The sentence has to reflect the seriousness of it.”

Sentences in previous high-profile drunken-driving cases with fatalities in the last decade have ranged from 10 to 20 years.

Foley, 49, said he had no memory of the Jan. 4, 1995, accident in which he traveled at a high rate of speed in his BMW and plowed into the couple, who were waiting in a Buick at a stop light.

His blood/alcohol level was 0.28, almost three times the then-legal limit of 0.1. . . .

* * * * *

August 16, 2000

Cayetano gave out
84 pardons

A former legislator and three
police officers are included on the list

By Debra Barayuga, Star-Bulletin

A former lawmaker convicted of voter fraud and three police officers are among 84 people pardoned by Gov. Ben Cayetano since he took office in 1994.

The list, released yesterday by the governor’s office, includes former attorney Tom Foley, who was nearing the end of a four-year minimum term for driving drunk and causing a 1995 car crash that killed Ho Pin Tsai and injured his wife.

Foley’s pardon prompted criticism from Republican lawmakers and Mothers Against Drunk Driving, who say he got special treatment and that sends the wrong message to the people of Hawaii.

But the Hawaii Paroling Authority defended the pardon process, saying it doesn’t mean a person is no longer guilty or is acquitted of a crime for which they have been convicted.

“The state forgives, but not forgets,” said Max Otani, acting division administrator of the Hawaii Paroling Authority.

In Hawaii, unlike some other states, the conviction remains on the defendant’s criminal record and is never expunged.

* * * * *

August 20, 2000

Readers react to governor’s
pardon of Foley

Honolulu Advertiser


He just lost a voter….

Gloria Gonzales


Birds of a feather.

Richard N. Kiyabu


A real shame! A slap in the face for anyone genuinely interested in justice against those driving while drunk. MADD isn’t alone in their concern about injustice of those charged with negligent homicide, resulting from driving drunk.

Cayetano fits well in the Democratic Party; i.e., NO REAL CONCERN ABOUT RIGHT AND WRONG. Words like moral, ethical, virtuous, righteous, or noble mean little to nothing for those in power. Economic success is far more important than morality. Everyone knows that from Clinton’s address at the Democratic Convention and from your newspaper, “President offers legacy, omits scandal.”

Whatever rationale, if any, was used by Cayetano to pardon Foley will be unacceptable for those of us who support a court of law as a deterrent. So be it for a “court of law,” as it’s evident in this state that the parole authority and the governor can easily set the court in its place.

As usual, what the public feels or cares is inconsequential. Model inmate and “exemplary” re: the work furlough program are malarkey. McNamee is right on the mark per the article regarding the foregoing sentence, i.e., “Foley made the same mistake and had the same charges as other offenders who have not been pardoned.”

I can see that Foley knows where to go for help, as he worked as a staff assistant to House Majority Leader Calvin Say GO DEMOCRATS!!

Steve Good


I am outraged by the pardon for Thomas Foley.

He has shown himself to be a serial drunk driver who has killed and maimed. Who knows how many additional close calls he has had, and will have.

What difference does it make what a nice guy he seemed while prison life kept him away from alcohol? He deserves the punishment the courts gave him, and the public deserves his absence from our roads.

This smacks of white-collar favoritism, and is unbecoming to the governor, who usually takes a higher road. I have lost a family member to a reckless driver, so take this very seriously.

John Thorvaldson, Waikiki


Deals, deals and more deals. How much money do we think Tom Foley waved in front of the grieving widow to get her to “testify in favor of his early release.” And it appears that some type of gag order for the widow was also part of the deal.

And to add further insult to injury, we’ve hired him to work as an assistant at the Capitol to Rep. Say?!

Welcome to Corrupt Hawaii Politics 101. Guess what? The people are fed up with it and we aren’t going to take it anymore. Stay tuned…

Lane Woodall, Candidate, House of Representatives, 15th District


Lawyers have got to stick together, protect one another…like the police.

James D. Cordeiro


What is the message to DUI offenders?

Got drunk, killed an innocent person, and depending on your connections (such as the governor or the speaker of the House), you may walk out free.

S. H. Lee


In reading this mornings’ paper, Tuesday 8/15/2000, my eye first fell upon an article where Gov. Ben Cayetano has pardoned “Honolulu lawyer” Thomas Foley.

I must say I feel a sense of duty as a human being and a citizen of the United States to go on record as saying I am extremely appalled at the actions of our governor and his decision on the representation of “We the people.”

This is a prime example of what is wrong with our government and judicial system today, and why it does not work effectively. This man was irresponsible not once, not twice, but three times for being arrested for alleged drunken driving. Only this time he killed someone and ruined the lives and family of others.

What ever happened to paying for our actions, being responsible for the choices we make good or bad, suffering the consequences?

Thomas Foley by choice consumed over three times the legal amount of alcohol and then made a choice to drive. He then because of this choice killed a man and seriously injured the man’s wife.

This women lost her husband, and Thomas Foley changed her life forever. These people didn’t have a choice as to whether or not they were going to die this day. No, but Thomas Foley had a choice, a choice of whether or not to get into his car and drive it straight to someone else’s death! A choice that changed people’s lives forever.

This isn’t just an irresponsible act of negligence; it is also a breach of the oath he took when he became a lawyer and swore to uphold the laws of our government. He of all people should have known better than to get into a car drunk and drive!

Now our governor thinks that after only serving two years five months, because he has been “a model inmate and “exemplary” in participating in the work furlough program he should be pardoned. Released with no further consequence of his negligent choice in committing this homicide. Well, governor, let me ask you this! If it were your family that Thomas Foley had killed, would you still feel so generous?

Lynn Lozier


Dear Ben Cayetano,

I am very disappointed in your decision on having attorney Foley released. That’s the problem with today’s society. Just because he’s a prominent attorney and you’re governor. This attorney killed someone and injured another person. This man should be locked up. And this is his second offense.

When he gets out, who knows he will not drive under the influence again?

If it was a regular person, I’m sure this wouldn’t happen, being released.

That’s the problem with politics now days. Just because you’re governor and he’s an attorney, he’s being released . To me that’s injustice. What about the family who is still mourning the death ?

That is very unfair justice and bullshit.

Bud Unagi


This is wrong, wrong, wrong!!!!!

Model inmate or not, a deadly crime was committed. Any other citizen would be put in jail on a consecutive sentence for life and no pardon will be even considered.

With Foley’s previous drunken driving record, how can the Governor give this man leniency. An Eye for an Eye.


Shiela Echevary


The governor’s act is a mockery of our judiciary system and an abuse of power. Just because the governor is not running for office again doesn’t give him the right to exercise the power of his office recklessly.

Stephen Lin


Something’s not right with the pardon of Tom Foley by Gov. Cayetano. It seems that there may be many deserving felons in Hawaii’s criminal justice system who could be pardoned.

Why a lawyer by another lawyer?

Kathy and Glenn Oshiro


I am absolutely certain that if it were me or any other “ordinary citizen,” I would not have received a pardon for repeat drunken offenses, which entailed even the most minor damages or injuries.

This is just another of the many examples that it is who you are much more than what you do. How many are serving out sentences for such actions?

It is a blatant mockery of justice!!!

Gov. Cayetano should be ashamed!!!

– Lyle R. Page, Panama City, FL


Verner, Liipfert, Bernhard, McPherson and Hand – Washington giant legal eagle nest.

October 22, 2001

Even Superstar Law Firms Find the
Need to Thin the Ranks

By James V. Grimaldi, Washington Post

Verner, Liipfert, Bernhard, McPherson and Hand, the law firm that attained superstar status in the 1990s by hiring big-name ex-politicians and bulking up on business from the cigarette industry, plans to lay off about 20 lawyers and lobbyists by year’s end and has already lost two dozen lawyers this year.

The K Street firm’s restructuring will mean a cut of at least 20 percent in the lawyer ranks, the dismissal of more than two dozen staffers, the closing or shrinking of four branch offices and a series of other cost-saving moves, including the firing of its accounting firm, firm officials said.

“Verner has never had anything like this in its 40-year history,” said Peter Pantaleo, co-chairman of the firm’s policy committee. “The very thought of talking to colleagues and saying we don’t have enough work has been traumatic.”

Lobbying income from tobacco companies has dropped to zero from $8.2 million three years ago at Verner, but firm officials said these layoffs are prompted primarily because of the declining economy.

The economic downturn also has forced similar cutbacks at other firms: Morgan, Lewis & Bockius, the 128-year-old Philadelphia-based national firm, also is laying off 50 of 1,100 lawyers across the nation, including 15 of 328 lawyers in Washington.

“Having associates who are not busy not only makes little sense from a financial perspective, it puts those associates in a position where they are not growing and developing as lawyers,” Morgan, Lewis Chairman Francis M. Milone wrote in a memo about a week ago to firm lawyers. “We felt it was better to acknowledge the situation, take appropriate action and move along.”

Until recent months, laying off associate lawyers has been considered rare. And, until the Verner, Liipfert and Morgan, Lewis cutoffs, the previous layoffs have occurred primarily among those that had rapidly built their firms to cater to technology companies. . . .

But now the hard times are hitting even firms that thought they were diversified enough to handle it. At Morgan, Lewis, the numbers told the story. Work had dropped and the number of lawyers leaving the firm through normal attrition was half what it had been a year earlier. “The result of those facts is that we simply have too many lawyers in certain practice specialties for the demand that we anticipate will occur in the next year,” Milone said.

Both Verner, Liipfert and Morgan, Lewis noted that other law firms have taken what has been a more traditional law-firm tack by letting lawyers go — but doing it by telling them they are failing to produce rather than admit that the real problem is the economy. These firms contend that their approach is more honest and they took it because they do not believe the layoffs reflect poor performance. Both firms formally notified their lawyers this month.

One measurement for determining who is laid off at Verner will be whether the attorney billed less than $1 million or less than 1,900 or so hours. But the layoff will not be considered for cause, but because of economic conditions.

“In law firms, layoffs are not rare,” Pantaleo said. “They are common. What is rare is treating them humanely, honestly and with integrity. When a law firm goes forth and suddenly has 20 fewer lawyers than they had, that law firm had a layoff, though they might claim they weeded out weaker people.”

Verner became known for its political superstars — including former Senate majority leaders Robert J. Dole (R-Kan.) and George J. Mitchell (D-Maine), former Treasury secretary and former senator Lloyd M. Bentsen (D-Tex.), former Michigan governor James J. Blanchard, former Texas governor Ann W. Richards (D) and former senator Dan Coats, (R-Ind.). While some have complained that the big names also required big bucks, the firm contends that the stars, particularly Dole and Mitchell, still bring in a significant amount of business.

But even those star-studded ranks are quickly thinning. Bentsen is largely in retirement, Coats is now ambassador to Germany, and Richards has left the firm. And former Hawaii governor John D. Waihee (D) has spun off a separate firm, and Verner has officially closed its Honolulu office.

The Houston office is closing and the Miami office is being cut back to do only governmental affairs; both offices already have lost about 20 lawyers, including Lenard M. Parkins, who has taken Verner’s entire bankruptcy practice to Haynes and Boone of Houston. In February, James F. Hibey and four associates took the litigation section to Howrey, Simon, Arnold & White, leaving the remaining litigators spread out among specific practice groups.

Verner plans to scale back in such areas as corporate and bankruptcy work and will instead focus on the heart of its business — federal affairs, energy, labor, communications and international trade. “We need to focus on Washington, and in Washington we need to focus on those practices that are the nexus of business and government,” Pantaleo said.

In the process of downsizing, there still have been problems. The departure of many of these lawyers in outlying offices meant problems collecting bills from clients, and the firm had to write off more than $1 million in fees as uncollectable.

The downsizing also has outpaced the firm’s Web site. Honolulu is still listed as a branch office.

Also, featured not once, but twice, on the Austin page are photos of none other than Richards, who now is at the Austin public-relations firm Public Strategies.

See also: Morgan Lewis & Bockius; Renton Nip

For more, GO TO > > > The Indonesian Connection


Warren Price III – Former Hawaii Attorney General; attorney for PricewaterhouseCoopers LLP in RICO lawsuit: Harmon vs. Federal Insurance Co.; Marsh & McLennan; Trustees of Kamehameha Schools Bishop Estate; PricewaterhouseCoopers, et al.; Mediator for University of Hawaii vs. Evan Dobelle case.

August 9, 1997


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

Honolulu Star-Bulletin Editorial

The community has lost faith in Bishop Estate trustees, in how they are chosen, how much they are paid, how they govern.

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….

Trustee selection

Many people are under the impression that the justices of Hawaii’s Supreme Court are legally obligated to select Bishop Estate trustees because that’s what the princess put into her will. Not so….

The reality is that Bishop Estate trustees are selected by five individuals who through no coincidence are also justices of the state Supreme Court. The further reality is that these same five individuals are virtually certain to be called upon to decide cases involving the trustees they select (the estate has been before the Supreme Court at least 18 time in the last 13 years). At a minimum this creates the appearance of a conflict.

Some people wonder why the justices would stretch logic and judicial ethics to the breaking point just to do something they clearly don’t have to do, and then do it poorly.

Can we be blamed for questioning the justices’ collective judgment in other areas? After all, if the justices exercise questionable judgment in their individual capacity when selecting trustees, why shouldn’t we expect equally questionable decisions in their official capacity? Worse, if selection of trustees is influenced by politics (as we believe it is), why shouldn’t the public assume that judicial decisions are equally political?…

Judicial Selection Commission

To understand why each member of the court would insist upon doing something that we consider unethical, it helps to consider the circumstances of their own selection.

The Judicial Selection Commission is an attempt to take politics out of the selection of judges and justices. A “reform” idea out of the 1978 Constitutional Convention, the commission is a bipartisan group that reviews potential applicants and submits a list to the governor for selection. Previously, the governor alone nominated judges….

But no process, no matter how well designed, will work properly when individuals are determined to manipulate it. For instance, we believe that during the period John Waihee was governor it was common for him to confer ahead of time with several commission members who then would strive to get a predetermined name on each list….

According to a prominent Democratic politician, “The commission always seemed to have at least a few people whose first and foremost allegiance was to Governor Waihee. With people like Warren Price, Tom Enomoto, Michael Hare and Gerry Jervis on the commission, it was easy to get one particular name on a list. The thing, though, is that it already had been determined who was going to get the appointment.”

This was the era when the commission put 36-year old Sharon Himeno on the list for the Supreme Court, from which she was selected by Governor Waihee. It bothered some people that Himeno was Attorney General Warren Price’s wife and that she wasn’t considered an exceptional lawyer.

But the bigger concern for many was an allegation of a serious ethical lapse in connection with a family corporation’s apparent $3 million profit on a back-to-back purchase/sale of a mainland golf course involving Himeno’s client, the state Employees’ Retirement System. Her nomination to the state’s highest court seemed to be based on the fact that she and Price had directed their good friend John Waihee’s gubernatorial campaign.

When Judge Walter Heen was interview as an applicant for the Hawaii Supreme Court, he was asked by Hare “what kind of person” he might select as Bishop Estate trustee, if he ever had the opportunity to do so. According to David Fairbanks, a current member of the commission, such a question, if asked, would have been “totally improper.”

That this question was asked of a candidate for the Supreme Court, by a member of the Judicial Selection Commission, illustrates how the trustee-selection power of justices played a significant role (with respect to some members of the commission) in the consideration of candidates for the state’s highest court.

Hare’s law firm has been paid more than $10 million in legal fees by the Bishop Estate since 1992. It’s an excellent firm, but we find it hard to believe that’s the reason it was selected by the trustees….

For more, GO TO > > > Claims By Harmon; Dirty Money, Dirty Politics & Bishop Estate; Firing Dobelle; Predators in Paradise; The Great Nest Egg Robberies; The Harmon Arbitration; RICO in Paradise; The Puna Connection


Watanabe Ing Kawashima & Komeiji – Another nesting law firm. 

April 25, 2003

Watanabe Named to A&B Board

Honolulu Star-Bulletin

Honolulu attorney Jeffrey N. Watanabe has been elected to the board of directors of Alexander & Baldwin Inc.

Watanabe, 60, is managing partner of Watanabe Ing Kawashima & Komeiji LLP, the firm he founded in 1970 that is recognized for its corporate-law practice. A former state deputy attorney general, Watanabe is a director of several local corporations including Hawaiian Electric Industries, First Insurance Co., Grace Pacific Corp. and MidWeek Printing Inc., which owns the Star-Bulletin. He also serves on the board of advisers for Oceanic Cablevision, a subsidiary of AOL Time Warner Inc….

For more, GO TO > > > Alexander & Baldwin; The Consuelo Zobel Alger Foundation; Dirty Money, Dirty Politics & Bishop Estate; The Firing of Evan Dobelle; Harmon’s Claim Against Steven Guttman and Kessner Duca; Harmon’s Letter to the IRS; I Sing The Hawaiian Electric; Paradise Paved; Predators in Paradise; RICO in Paradise







AIG: The Un-American Insurance Group

Alexander & Baldwin

Allied World Assurance

Aloha, Harken Energy!


Birds in the Lobby

A Connecticut Yankee in King Kamehameha’s Court

The Carlyle Group: Birds that Drink from Cesspools

Claims By Harmon

Crouching Dragon ~ Hidden Rats

Dirty Gold in Goldman Sachs

Dirty Money, Dirty Politics & Bishop Estate

Drowning in Think Tanks

Firing Dobelle

Flying High In Hawaii

The Harmon Arbitration

Homeland Security

NEW >>> I Sing The Hawaiian Electric <<< NEW

The Indonesian Connection


The Kissinger of Death

Marsh & McLennan: The Marsh Birds

Nests Along Wall Street

The Secret Nests

The Turnstone Birds

Paradise Paved

Predators of Paradise

The Puna Connection

RICO in Paradise

The Royal & Sun Alliance

Vultures of The Sandwich Isles

William Simon says…

The Xerox Conspiracy

Yakuza Doodle Dandies

Year of the Dragon



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Last update September 23, 2005 by The Catbird