Sightings from The Catbird Seat

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February 12, 2006

Lingle aides bypass
procurement process

By Sean Hao, Honolulu Advertiser

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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March 28, 2004

Asia-Pacific forum puts us on map

By John Griffin, Honolulu Advertiser

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

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

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

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

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

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

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

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

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

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

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

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

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

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September 18, 2005

Hitman Ching dies in prison

The notorious killer succumbs
to hepatitis from past drug use

By Rod Antone, Star-Bulletin

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

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

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

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

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

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

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

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

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

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 February 9, 2005

Alleged shooter has roots in
old isle underworld

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

By Sally Apgar, Star-Bulletin

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mehau was never convicted….

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

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

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

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

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

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

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

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

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July 21, 2005

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

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

By Malia Zimmerman, Hawaii Reporter

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

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

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

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

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

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

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

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

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

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

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November, 2002

Tanonaka picked to head PBEC

Hawaiian Hard Drive

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

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

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

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

See also:

For an update, GO TO > > >

For more on PBEC, GO TO > > > Act 221; Broken Trust; The Indonesian Connection; Paradise Paved; Vultures of the Sandwich Isles; Yakuza Doodle Dandiesand

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June 2, 2005

Governor’s Top Campaign Promise Still Not Kept

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

By Malia Zimmerman, Hawaii Reporter

The first in a series

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

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

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

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

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

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

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

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

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

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

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

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

Wielding the Heavy Hammer on Political Corruption

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

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

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

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

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

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

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

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

Gary Okamoto of Wilson Okamoto and Associates, also can vie for state contracts, even after his wife pled no contest to making at least $60,000 in contributions on behalf of the company to Harris and paid a fine of $45,000 to the state Campaign Spending Commission.

Ed Noda of Ed Noda and Associates can be awarded state contracts despite laundering at least $80,000 to Harris and Cayetano and subsequently covering up his crime when investigators questioned him. Noda was fined $55,000.

The Lingle’s administration also continues to allow GeoLabs, the first company fined by the state Campaign Spending Commission in this series of investigations, to be qualified for state and county work, even though its officers laundered over $100,000 to campaign of Harris, Cayetano, Apana and was fined $65,000.

In stark contrast to the state, the federal government is taking action in an attempt to stop taxpayer dollars from going to politically corrupt companies.

Some federal agencies that procure government work in Hawaii are currently investigating a number of firms that were fined or prosecuted by the local government to determine if they should be debarred either temporarily or permanently from federal work.

So What’s the Problem?

Why isn’t the Lingle administration debarring companies that commit politically motivated crimes?

Especially when a Republican administration can use the opportunity to stomp out Democrats’ supporters and the Democrats’ primary money stream before the 2006 election when Lingle is up for re-election against a Democrat candidate.

Her administrators point fingers at the legislators and each other.

The procurement division personnel under the state Department of Accounting and General Services say lawmakers ignored testimony by Aaron Fujioka, then the chief procurement officer for the state, who said the law would actually make it more difficult to build cases against the contractors who violated campaign spending laws.

Before Fujioka left the state procurement office this Spring, he had prepared a debarment case against SSFM, but sources say the case was rejected by the state attorney general.

Russ Saito, director of the state Department of Accounting and General Services, and an appointee of the governor, says his department has not proceeded with any debarment hearings because of problems with the law.

He says firms that violate the campaign spending laws can be debarred in two ways. First, if they are convicted, and second, if they are not convicted but are fined more than $5,000 for violations committed after the rule went into effect in 2003, they may be debarred by the Chief Procurement officer. For violations before 2003, it is more difficult but possible to debar subject to the debarment statute in the Hawaii Revised Statutes, Saito says, claiming the burden of proof is “high.”

Mark Bennett, the state attorney general, would not return numerous calls made by Hawaii Reporter to his office about the status of debarment proceedings against the more than 30 companies that could be debarred for political corruption under Hawaii law.

Follow up calls made to him through the governor’s policy advisor and press secretary also were not returned, though Bennett has willingly commented on several other stories in Hawaii Reporter.

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

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January 5, 2004

Campaign donation scandal rocks Hawaii

HONOLULU (AP) – Behind his state-issue desk in a small fourth-floor office sits a slightly built, soft-spoken man who has managed to shake Hawaii’s power structure to its core.

During the past two years, Robert Watada and his staff at the state Campaign Spending Commission have respected architects and engineers illegally made political donations in the names of their employees, wives and children, allegedly to win government contracts.

The results of the investigation so far: nearly $1 million in fines, jail time for a prominent lawyer, community service for business leaders, and the resignation of a Honolulu police commissioner.

“It’s what I get paid for,” said Watada, the commission’s executive director. “I believe our system requires all of us in the democracy in which we live to follow the laws.”

The civil and criminal reckoning has also been an embarrassment for some of the state’s most influential Democrats and played a role in giving Hawaii its first elected Republican governor in 40 years.

Under state law, individuals can donate no more than $6,000 to gubernatorial candidates and $4,000 to mayoral candidates. Watada found that some businessmen were subverting the law by making donations in other people’s names.

Watada’s persistence has led to a slew of investigations by Honolulu Prosecuting Attorney Peter Carlisle, who says he hopes to end a “pay for play culture” that has plagued Hawaii’s Democrat-dominated government for years.

The cases involve such things as $10,500 in donations over a five-year period in the names of three modestly paid Chinese-restaurant workers, and a $2,000 donation that supposedly came from a high school student.

The biggest fine was $303,000 levied against engineering executive Michael Matsumoto for allegedly laundering more than $400,000 in illegal contributions to Honolulu Mayor Jeremy Harris and other Democrats. Matsumoto, chief executive of SSFM International Inc., which won more than $7 million worth of city contracts, pleaded no contest to funneling money to family members and employees to donate to Harris’ campaign and was sentenced to 300 hours of community service.

Still, there has been no direct evidence that the illegal contributions influenced the awarding of state and local government contracts.

And so far, the scam’s chief beneficiary, Honolulu’s mayor, has not been publicly implicated. His attorney has said the may never solicited or knowingly accepted illegal contributions.

After a rapid rise in politics, Harris abruptly dropped out of the 2002 governor’s race in the midst of the investigation. Republican Linda Lingle went on to win the election. The mayor’s term ends in a year.

Lingle made political corruption a top campaign issue and won passage of a government-procurement reform law in her first year in office.

Since the probe began, the commission has levied fines against 75 companies for making illegal contributions to Democrats such as Harris, former Democratic Gov. Ben Cayetano, former Maui County Mayor James Apana and former Lt. Gov. Mazie Hirono. Up to 40 more companies are still being investigated.

Among those convicted was former Hawaii Bar Association President Edward Y.C. Chun, 71. Chun was the first to get jail time – 10 days. Nearly 20 others have been arrested and booked for investigation.

Also, Leonard Leong resigned as Honolulu police commissioner after being fined for illegal campaign contributions to the mayor.

The scandal has involved mostly design and engineering firms, while county or state construction projects or product purchases require competitive bidding, design contracts have been decided subjectively by public officials….

Stanley Kawaguchi, former national president of the American Council of Engineering Companies, said that before the scandal, political contributions had “effectively become mandatory.”

“The widespread perception was that you had to pay to play,” he said. “The old system really gave our industry a black eye.”

Apparently it had been going on for decades. Watada said one retired engineering company president told him that when he started 30 years ago, contributions of $25 or $100 would help in getting city contracts.

Watada said the investigations and changes in the law have curbed the illegal practices for now.

“But I’m realistic. When there’s money involved and politics involved and power involved, whether it’s in Hawaii or New Jersey or anywhere else, it’s something the public always has to be vigilant about,” he said.

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March 16, 2004

Harris donor arrested for gifts

The former CEO of an isle firm
had given $80,250 to the mayor

By Rick Daysog, Honolulu Star-Bulletin

Honolulu police arrested the former head of one of the state’s largest engineering firms yesterday for allegedly making illegal political contributions to Mayor Jeremy Harris.

Larry Matsuo, former chief executive of Park Engineering, was booked at police headquarters on suspicion of money laundering and making political donations under a false name.

Matsuo was not charged and was released pending investigation.

He was not available for comment, and his lawyer Darwin Ching could not be reached.

Money laundering is a felony punishable by up to 10 years in prison. Making a political donation under a false name is a misdemeanor punishable by up to a year in jail….

Until recently, Matsuo headed Park Engineering, a local government contractor linked to more than $115,000 in political donations to Harris, former Gov. Ben Cayetano and ex-Maui Mayor James “Kimo” Apana….

Founded in 1958, Park Engineering is one of the state’s largest engineering firms, receiving more than $5.5 million in nonbid consulting work from the city during the past eight years….

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

~ ~ ~

For more on James “Kimo” Apana and the Maui connection, GO TO > > > Paradise Paved; Claims By Harmon; The Harmon Arbitration

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September 05, 2002

Sparks fly over campaign reform

By Crystal Kua, Honolulu Star-Bulletin

The only sitting member of the state Legislature who is running for lieutenant governor was taken to task by two of his Democratic opponents for an exemption state lawmakers gave themselves in a campaign spending reform measure passed this session.

“If you’re going to exempt the Legislature, then why even have the law?” asked Donna Ikeda, a former member of both the Legislature and Board of Education. “If you’re going to pass something, it should apply evenly across the board.”

Ikeda’s comments followed state Sen. Matt Matsunaga’s assessment of a bill that would have prohibited companies or people who do business with the city or state from donating to candidates for mayor or governor. Gov. Ben Cayetano vetoed the bill because of an exemption for the Legislature.

The exchange came during a live televised debate on ‘Olelo Community Television between Ikeda, Matsunaga, Office of Hawaiian Affairs trustee Clayton Hee and entertainment industry promoter Marvin Franklin….

One of the more lively verbal exchanges came when moderator Bob Rees asked all four candidates whether campaign finance reform is needed.

“Yes, absolutely,” Matsunaga said. “We had a wonderful opportunity this past legislative session. We passed a very good bill. It may have had a few flaws, but it was a good bill to try and break the connection between campaign contributions and state contracts. And, unfortunately, the governor vetoed it, but perhaps we can pick that up later.”

Ikeda was quick to respond.

“Well, there’s a reason why the bill was vetoed: The Legislature exempted itself from the coverage,” she said.

“Well, it should apply,” Matsunaga said, “but the reason why the Legislature was exempted is ’cause the Legislature doesn’t award the contracts. It’s the executive branch that actually awards the nonbid contracts, and I have no problem with putting the Legislature …”

But before Matsunaga finished, Ikeda interrupted, “Let’s be honest … legislators have a way of picking up the phone, calling up and putting pressure on people to do things. That happens all the time.”

She also said lawmakers should not be exempt “because by being exempt, they can profit from the very kinds of contributions that everybody else is supposed to be prohibited from receiving.”

Matsunaga continued, “I guess I’m not familiar with the legislators that pick up the phone and twist arms.”

Ikeda responded, “Oh, come on, Matt.”

Hee then weighed in, saying that the Legislature should not be let off the hook “because if Matt is right, what’s the harm with the exemption falling to the legislators? But in fact Matt is not right.”

As an example, Hee pointed to a $75 million tax credit the Legislature gave to the Ko Olina developers for construction of a world-class aquarium.

“That’s a way of packaging a project that has great financial implications to certain developers, and to me that must stop,” Hee said.

Hee said certain lawmakers have said that they like the way the situation is now.

“But that’s what I meant when I said business as usual cannot continue.

“Going along to get along must stop,” he said….

For more, GO TO > > > The Grand (and dirty) Ko Olina

* * *

July 4, 2002

Anzai says airport probe growing

He said a kickback scheme could become
the largest waste of state taxpayer dollars ever

By Rod Antone, Honolulu Star-Bulletin

State Attorney General Earl Anzai says his department’s investigation into an alleged Honolulu Airport maintenance kickback scheme could be the largest waste of state taxpayer dollars ever, with the potential of surpassing the $5.5 million lost in the city’s Ewa Villages scandal.

“The scope of the problem seems to be increasing all the time,” Anzai said yesterday. “It just seems to be getting bigger and bigger.”

Yesterday, state investigators arrested three people whom authorities say were involved in a scheme that inflated the cost of hundreds of maintenance projects and offered kickbacks to some airport employees.

Authorities arrested Richard Okada, administrator of the Airports Division’s Visitor Information Program, in a bribery investigation. They also arrested Richard I. Namba, president of R.I. Namba Construction, in a bribery and first-degree theft investigation and his daughter, Jodie Y. Namba, in a first-degree theft investigation. Jodie Namba is the company’s vice president….

Last week, investigators arrested maintenance superintendent Dennis Hirokawa and airfield and grounds maintenance supervisor Antonio Bio. Hirokawa was arrested for investigation of first-degree theft and bribery, and Bio was arrested for investigation of second-degree theft. Both men also were released pending investigation.

Anzai said that in 1999 between $7 million and $8 million was spent on airport maintenance projects, more than double the $3 million to $4 million usually spent annually by the department.

Most of the work was for small-contract projects under $25,000 and involved minor repairs such as cracks in floors, holes in walls and replacing ceramic tile. Anzai would not say exactly how many projects his department was looking at, only that there were hundreds of them.

“Basically all the projects are suspect,” he said.

Though the focus is on the fiscal years 1999 to 2000, Anzai said investigators are looking as far as back 1995 or even earlier. Anzai also said some “contractors” who received kickbacks may have not done any work at all.

“Many or most of them ran their businesses out of their houses and in fact may have subcontracted actual work,” Anzai said.

“For example, company X gets the bid, but company X doesn’t really have a contractor’s yard, equipment, etc., and the work is done by company Z.”

Anzai said one company in question received up to $1.6 million in airport maintenance projects over a one-year period. Anzai said he does expect more arrests to be made next week….

For more kickbacks at Honolulu International Airport, GO TO > > > Hawaiian Airlines: Flying with the Bankruptcy Buzzards

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October 27, 2002

Mayor’s Palau trip not reported

A spokeswoman says city attorneys ruled the air fare
and hotel stay did not constitute a gift

By Rick Daysog, Honolulu Star-Bulletin

Honolulu Mayor Jeremy Harris did not disclose that the Republic of Palau paid for his travel to an environmental conference earlier this summer, in what one city councilwoman said is symptomatic of the Harris administration’s lack of openness.

But a city spokeswoman said that the mayor did not list the trip in his annual disclosure report with the Office of the City Clerk after city attorneys determined that it was not a gift.

Harris was in Palau in late June at the invitation of its president Tommy Remengesau Jr. to deliver the keynote speech for the 21st annual Pacific Islands Environment Conference at the Palasia Hotel in the city of Koror.

The Palau government agreed to pay for Harris’s air fare and hotel costs for the June 24-28 conference, which attracted more than 200 environmental experts and government officials from about a dozen countries, said Tom Yocum, one of the enent’s organizers and an official with the Environmental Protection agency.

Yocum, and EPA wetlands expert, said he could not recall the total costs, but that the Palau government received a discounted, $824 air fare with Continental airlines for the mayor. Typically, two-way fares for Honolulu to Palau flights range between $1,600 and $2,000, he said.

Under city ethics laws in effect at the time, elected officials are required to list all gifts that they receive from outside sources. Such gifts include any form of money, goods, services, loans, entertainment, lodging and travel that comes from a donor that has an interest before the city official.

(The city’s ethics law was amended earlier this year to ban all gifts above $200. but the amended law, which took effect July 1, eliminated the reporting requirements for gifts.)

The Palau trim came less than a month after Harris dropped out of this year’s governor’s race. At the time, Harris was considered the Democratic front-runner.

City spokeswoman Carol Costa said city attorneys advised the mayor’s staff in July that the Palau trip is not a gift and should not be included in Harris’ gift disclosure form….

City Councilwoman Ann Kobayashi said the omission of Harris’ Palau trip illustrates his administration’s lack of candor.

Kobayashi, a frequent critic of the Harris’ fiscal policies, said the administration has been reluctant to disclose information that should be public….

“It’s a question of accountability,” Kobayashi said. “Why don’t they just disclose these things? What is there to hide?”

Under city law, failure to disclose a gift could result in penalties as severe as impeachment of an elected official. The corporation counsel also could sue a donor or a recipient if a gift is not disclosed.

In his July 31, 2002, gift-disclosure form, Harris revealed that he received more than $21,000 in gifts during the past year, including several honorary memberships to exclusive clubs such as the Waialae Country Club, the Pacific Club and the Mid-Pacific Country Club.

The report, which covered July 1, 2001, through June 30, 2002, also said that Harris and his wife, Ramona, each received annual parking passes worth $100 from APCOA Inc. The couple also received movie passes valued at $175 each from Consolidated Theatres, Wallace Theatre and Signature Theatres.

Chuck Totto, executive director of the City Ethics Commission, declined to comment on Harris’ gift report….

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

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June 22, 2002

Inquiry targets Dem donors

A federal grand jury issues subpoenas to an engineering
firm linked to donations

By Rick Daysog, Honolulu Star-Bulletin

A federal grand jury is investigating political contributions by local contractors to the campaigns of Honolulu Mayor Jeremy Harris and other isle Democrats.

The secret panel recently issued subpoenas to the local engineering firm SSFM International Inc., which is linked to nearly $200,000 in political donations to Harris, Gov. Ben Cayetano, Lt. Gov. Mazie Hirono and Maui Mayor James “Kimo” Apana, according to people familiar with the inquiry.

The subpoenas are believed to be the first by the grand jury, which appears to be targeting companies that the state Campaign Spending Commission says funneled campaign contributions through their employees.

The federal inquiry coincides with a parallel criminal investigation by city Prosecutor Peter Carlisle into the Harris 2000 re-election campaign and its officials.

Steven Hisaka, an attorney for SSFM, could not be reached for comment.

The Office of the U.S. Attorney had no response. A lawyer for the Harris campaign also had no comment, saying the federal investigation does not target their campaign.

Harris, the former front-runner for this year’s Democratic gubernatorial race, dropped out of the election last month, citing weak poll results.

The FBI and the U.S. Attorney’s office have contacted several local engineering and architecture firms as part of the same federal inquiry, while the Internal Revenue Services’ criminal division is looking at whether any of the donors violated federal tax laws.

Phillip Li, an attorney representing several local engineering firms, said that federal authorities have interviewed some of his clients, who are cooperating with investigators.

But Li, a former commissioner with the state Campaign Spending Commission, declined to identify the companies or give further details.

SSFM is one of the state’s largest engineering firms with millions of dollars in state and city contracts.

The Star-Bulletin previously reported that relatives of SSFM’s officers made about five dozen contributions worth nearly $200,000 to some of the isles’ top-ranking Democrats.

More than $92,000 went to Harris’ 2000 mayoral campaign, while Cayetano’s 1998 re-election campaign received about $71,000. Apana’s campaign raised about $30,000 from people linked to SSFM. The Hirono campaign received $4,050 in 1998.

The state Campaign Spending Commission has alleged that SSFM operated a special banking account in which the firm’s officers were able to transfer company money to friends and relatives for political contributions.

The federal grand jury investigation comes as SSFM is contesting several administrative subpoenas issued by the commission for banking and other financial information held by the firm and its officers.

SSFM has argued that the commission does not have jurisdiction since it referred its probe of the Harris campaign to the city prosecutor’s office for a criminal investigation.

However, the commission has argued that it is entitled to the records since it did not refer its investigation into SSFM to the prosecutor’s office.

* * *

June 22, 2002

Hawaii warned of
asbestos in homes

A Montana mine sent potentially
dangerous vermiculite to Hawaii

By Helen Altonn, Star-Bulletin

The U.S. Environmental Protection Agency cautioned consumers who suspect they have asbestos-contaminated vermiculite insulation in their homes not to disturb it.

Hawaii has been identified among states receiving vermiculite from Libby, Mont., where it has been linked to 200 deaths and 750 illnesses.

Federal health officials are trying to determine if ore mined in that area and shipped across the country may have spread potentially fatal asbestos.

Lung cancer and fatal asbestos poisoning rates in Libby are 40 to 60 times higher than would be expected, the Associated Press reported.

The high rates have been blamed on asbestos contamination, caused by breathing in the dust from the vermiculite.

W.R. Grace & Co. closed the mine in 1991 after 67 years of operation and is now in bankruptcy.

“We are very concerned about the other sites that have received asbestos-contaminated vermiculite,” said Henry Falk, assistant administrator of the Agency for Toxic Substances and Disease Registry in the U.S. Health and Human Services Department.

The EPA identified 240 sites in 40 states where vermiculite was shipped from Libby but said it hasn’t found asbestos poisoning at those sites similar to what occurred at Libby.

Vicki H. Tsuhako, manager of the EPA-Pacific Islands Office, was trying yesterday to learn more about the situation in Hawaii. Meanwhile, she referred inquiries to the EPA Web site.

The public health crisis at the Montana ore-mining town caused concern about the problem spreading to other towns where vermiculite was shipped to be processed in soil conditioner and home insulation.

At least 22 sites require some kind of EPA-overseen cleanup, Marianne Horinko, assistant administrator of the EPA’s Solid Waste and Emergency Response Office, told the Senate Superfund subcommittee Thursday.

They are in New Jersey, New York, Maryland, Pennsylvania, Massachusetts, Kentucky, Minnesota, Colorado, North Dakota, Arizona, California, Hawaii, Oregon and Washington.

Horinko told the Senate committee, “We have not found a pattern of asbestos contamination that in any way approaches what we’ve seen at Libby.” However, Sen. Patty Murray, D-Wash., questioned why the sites aren’t already designated for Superfund status, as was Libby.

If disturbed, fibers can be inhaled and trapped in the lungs where they may cause diseases developing many years after exposure. Left alone, the particles won’t become airborne.

If the material must be removed or disturbed because of renovations, consult an accredited asbestos contractor for tests, information and advice, the EPA advises.

More information on asbestos and health-related information may be obtained on EPA’s TSCA Hotline, 1-202-554-1404, or from the EPA asbestos Web site: asbestos….

For more, GO TO > > > Marsh & McLennan: The Marsh Birds

* * *

June 25, 2002

Kickback probe nets 2 airport officials

By Jim Dooley, Honolulu Advertiser

Two state airports officials were arrested this morning by the state Attorney General’s office, suspects in a widening investigation of an alleged cash-for-contracts kickback scheme at Honolulu International Airport.

Arrested were Dennis Hirokawa, the airport’s maintenance superintendent, and Antonio Bio, maintenance supervisor.

Neither man had any comment as the pair were led away in handcuffs from the main terminal at the airport.

A third suspect in the case, Richard Okada, is on emergency leave from his job as statewide director of the airports Visitor Information Program and was not at the airport when Hirokawa and Bio were arrested.

The Attorney General’s office had no comment on the arrests, but chief investigator Donald Wong said more information may be released later today.

Bio was arrested last week by state sheriff’s deputies in a separate investigation of theft of plants from the airport, officials said.

Today’s arrests follow a raid by state investigators last week of the offices of Hirokawa and Okada at the airport.

The investigation centers on millions of dollars in airport construction and repair contracts awarded by airport personnel to private firms since 1995.

Chief investigator Wong said last week the case involves “allegations of forgery, conspiracy to commit theft, theft and bribery related to small purchase contracts.”

A small, select group of contractors are alleged to have inflated bills for airport work and kicked back cash and other gratuities to airport personnel participating in the scheme.

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April 4, 2002

Advocates Of Casinos Spent Big On Lobbying

Mainland investors who want to open two casinos on O’ahu spent more money touting their agenda before lawmakers at the start of this legislative session than any other group, state Ethics Commission records show.

Marketing Resource Group, of Lansing, Mich., reported spending $108,679 on lobbying through January and February, the period covered by lobbyist expenditure reports due at the commission yesterday.

The company is a public relations firm employed by investors in a Detroit casino called MotorCity, and last year set up an organization of supporters here called Holomua Hawai’i, named after the Hawaiian word for progress.

The casino investors include Marian Illitch, whose family owns the Detroit Tigers baseball team and Little Caesars pizza chain. They want to build casinos in Waikiki and Leeward O’ahu, and Holomua Hawai’i collected petition signatures from 25,000 Hawai’i residents who support gambling.

The group also produced a video in which economists and others argue that gambling would create jobs, provide more government revenue, and boost the state economy.

But others said they fear gambling could increase crime and corruption, and lawmakers roundly rejected a bill that would authorize the casinos, leaving it very unlikely that the state will legalize gambling this year.

Marketing Resource Group could also be fined for failing to disclose its lobbying activities to the Ethics Commission for the previous reporting period, from May to December.

Commission executive director Dan Mollway said organizations that employ lobbyists and refuse to file reports could be fined up to $500, but most comply voluntarily. [Catbird: Guess that’s the high cost of doing business in Hawaii!]

Marketing Resource Group could not be reached for comment yesterday. The firm’s Hawai’i lobbyist, John Radcliffe, said he did not know why the report was missing, but that it had been lost in a Michigan snow storm when it was first mailed. The report was due at the commission by the end of January.

Another group that wants to legalize gambling, the Coalition for Economic Diversity, reported spending $9,832 lobbying during the previous period and said it spent less than $10,000 in January and February.

The group is backed by Sun International Hotels Ltd., which wants to build a $1 billion resort and casino at Ko Olina in Leeward O’ahu.

Hawaiian Airlines reported spending $8,300 on lobbying during January and February. Hawaiian, which sought to merge with rival Aloha Airlines, had reported spending more than $140,000 on lobbying during the previous period.

But Hawaiian later said it had mistakenly inflated that figure by including payments for work other than lobbying. In an amended report, Hawaiian said it really spent only $8,250 on lobbying during the May-December period.

The company had initially reported paying more than $83,000 to lobbyist Lyn Anzai, wife of state Attorney General Earl Anzai, whose office was investigating whether the merger would be legal.

The amended report reflects no lobbyist payments between May and December to Lyn Anzai, who is also Hawaiian’s general counsel. The report for January and February said Anzai was paid $2,043 for lobbying during that period….

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

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Nepotism, Sole-Source Contracting,
and Corruption

How OHA, Hawaiian Homelands, and Kamehameha School/Bishop Estate Make Rich Hawaiians Even Richer at Everyone Else’s Expense

by Kenneth R. Conklin, Ph.D.

This web-page was started in December, 2001 after a new version of the Native Hawaiian Recognition Bill was introduced in Congress: S.1783. The new bill contained a curious section that was never a part of earlier versions of the bill. This Section 9, entitled “Ethics,” is an explicit waiver of the federal law that prevents people from holding federal government positions where they or their close relatives and family members can profit from the decisions they make.

The main supporters of the Hawaiian Recognition bill are huge, wealthy institutions whose administrators and staff stand to profit enormously if the bill is passed. Thus, it was clear why Section 9 was included in the bill. These people are shamelessly exploiting the Hawaiian grievance industry, getting land, money, and power for themselves by claiming to work on behalf of poor, downtrodden Hawaiians.

Passing the bill will let them pass lots of other bills — i.e., passing the Native Hawaiian Recognition Bill will give land, money, and power to large institutions and wealthy Hawaiians, allowing them to pass along to everyone else their BILL for housing, healthcare, education, infrastructure development, and lavish lifestyles.

Party on! …



Here is information about the upscale housing development on Hawaiian Homelands overlooking downtown Honolulu. The development is known as “Kalawahine Streamside.”

The Department of Hawaiian Homelands has the slogan that it is “putting Hawaiians back on the land.” Thus, we are led to imagine poor, downtrodden Hawaiians geting long-term $1-per-year leases for bucolic pastoral land where they can live in a small but decent house while doing subsistence taro farming or aquaculture. Instead, the perennially cash-short Department of Hawaiian Homelands has built Kalawahine Streamside, overlooking downtown Honolulu, where wealthy professionals get free land for homes worth up to $385,000.

This excerpt is taken from The Honolulu Advertiser of Sunday, January 28, 2001 – (

The $26 million Kalawahine Streamside project was developed by Kamehameha Investment Corp., a for-profit subsidiary of Kamehameha Schools Trust, for the Department of Hawaiian Home Lands.

This unique upper-middle-class neighborhood on Hawaiian homestead land has 54 multilevel duplex units and 33 three-story single-family homes. Selections were made off the Hawaiian Home Lands waiting list, but the asking price of $174,900 to $196,100 for a duplex or $214,900 to $225,900 for a single-family unit made it unaffordable for most.

“These are the most expensive homes ever offered to applicants, and the reason is the topography,” project manager Elton Wong said. “The conditions were challenging from a design and construction standpoint. But for location, it’s a good deal. Schuler Homes sells a market product of the same size for around $385,000.” . . .

“This is a throwback to the old Hawai‘i neighborhoods where you knew everybody and nobody had to lock their doors,” said stockbroker Mark Hee, who moved into a Kapahu Street duplex unit uphill from Ha‘alelea Place about a month ago. . . .

“It’s like living in a mini San Francisco because of the hills,” said Hee’s wife, Luana Alapa-Hee, a former Miss Hawai‘i. . . .

[It is unclear from the newspaper article whether stockbroker and Morgan-Stanley-Dean-Witter senior vice president Mark Hee, referred to above, is related to Clayton Hee, Chairman of the Office of Hawaiian Affairs; or to Al Hee, who is Clayton’s brother and the Chairman of Sandwich Isles Communications Inc. which has a sole-source $400 Million federal contract to provide fiber-optic cable to the racially exclusionary 203,000 acres of Hawaiian Homelands throughout the Hawaiian islands]

(c) Copyright 2002 Kenneth R. Conklin, Ph.D. All rights reserved. (

For more, GO TO >>> Vultures of the Sandwich Isles

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February 5, 2002

Ko Olina: tax break proposed

Two members of the Hawaii Senate have introduced a bill to provide a tax break to a developer if he builds certain kinds of projects in West Oahu.

The 100 percent tax credit would apply to any development at Ko Olina that qualifies as educational.

Developer Jeff Stone says he plans an aquarium there and also wants to build sports facilities for the University of Hawaii.

Sen. Colleen Hanabusa (D-Barbers Point-Makaha) and Sen. Sam Slom (R-Waialae Iki-Hawaii Kai) cosponsored the bill.

Ko Olina is in Hanabusa’s district. Slom usually opposes special interest legislation but says in this case he thinks the result could be economic diversification.

Copyright 2002 American City Business Journals Inc.


September 19, 2000

News Release: 00-102


Governor Ben Cayetano today announced the appointment of Charles Katsuyoshi as Chief Procurement Officer (CPO) for the State of Hawaii.

“Charles Katsuyoshi has the expertise and the desire needed to continue our efforts to streamline and improve the procurement process in this state,” Governor Cayetano said.

Katsuyoshi had served as head of the Purchasing Division of the City and County of Honolulu’s Department of Budget and Fiscal Services since 1994. Prior to that he was a contracts specialist with the City’s Finance Department.

The Senate must confirm the appointment for a term that would expire on June 30, 2002. Katsuyoshi replaces Lloyd Unebasami, who resigned May 31, 2000, to become the Chief Administrative Officer of the Hawaii Tourism Authority.

* * *

August 28, 2001

State, Lockheed close to traffic camera deal

By Scott Ishikawa, Advertiser Transportation Writer

The state is moving ahead with plans to install traffic cameras to catch drivers who run red lights and speed, despite a protest filed by a competing bidder.

State Department of Transportation officials plan to finalize the contract with company Lockheed Martin IMS within the next two weeks and want the traffic cameras in place as early as November, according to department spokeswoman Marilyn Kali….

The competing bidder, Redflex Traffic Systems Inc., filed a protest in July, claiming the state reversed its December 2000 decision to award the contract to Redflex without providing an explanation….

Lockheed had filed its own protest over the state’s initial selection of Redflex. The state did the process over and Lockheed won the second time, prompting Redflex to file the latest protest.

Charles Katsuyoshi, administrator of the state procurement office, gave the Department of Transportation permission earlier this month to move ahead with the Lockheed contract despite the Redflex protest.

Asked about the state’s decision to go with Lockheed after previously selecting Redflex, Kali said: “The department felt Lockheed’s proposal was most favorable to the state.” . . .

Redflex’s attorney, Lawrence Reifurth, said he is concerned the state is moving ahead in spite of the protest, which is being reviewed by the attorney general’s office.

“The state right now is pushing this camera project through by claiming that time is the essence,” Reifurth said. “But it took the state nearly three years to put this project out to bid and the delay caused by Lockheed’s protest was several months.”

Lockheed’s traffic cameras have been under the microscope in the San Diego courts system this summer. A San Diego judge earlier this month upheld the use of Lockheed cameras used to catch red-light runners, but ruled that the evidence collected by the devices is unreliable and should not be admitted as evidence against motorists. . . .

The judge scheduled an Aug. 31 hearing on whether the evidence against 398 motorists should be dismissed. . . .

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Last update February 13, 2006, by The Catbird Seat.