IOLANI - the Royal Hawk: Whistleblower Greg Wongham's Website - He was the Host of OLELO TV "CORRUPTION IN HAWAII"

Dirty Money, Dirty Politics and

Bishop Estate

Stealing the Legacy of a Hawaiian Princess

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PART I - The Stealing Begins....

PRINCESS BERNICE PAUAHI was born on December 19, 1831, the last in the royal lineage of Kamehameha the Great, conqueror and first king of the Hawaiian Islands.

As was the custom for Hawaiian royalty, it had been planned from childhood that Pauahi would marry her hanai brother, Lot Kamehameha. She doted upon her brother but declined to take him as a husband. Instead, the attractive young Pauahi met and fell in love with a commoner, a foreigner from Sandy Hill, New York -- Charles Reed Bishop.

The love between Princess Pauahi and the foreigner faced great opposition from her family, other ali'i and members of the community. But the young princess was intelligent and independent, and in June 1850, at age 18, she married the young "haole" businessman.

The Princess and her husband eventually won over many of their critics and their relationship came to be admired by Hawaiians and westerners alike, and she eventually reconciled with her family and the other ali'i.

Pauahi grew and developed as a young matron and counselor to her people. At the age of 25, she inherited over 16,000 acres of land from her parents. Other inheritances followed as other members of the royal family passed away. The greatest of the inheritances came from Princess Ruth, her first cousin. Ruth had declared Pauahi sole heir to her entire estate. The amount of land was mind-boggling: about 353,000 acres.

Ruth's gift to Pauahi made her the largest landowner and the richest woman in the Kingdom. At the same time, she presented Pauahi with the greatest challenge and responsibility of her life. Pauahi now owned a giant estate, and she would have to decide how it would be used.

The Bishops had a multitude of blessings, except one. They never had children of their own. Possibly from this came Pauahi's inspiration to use her legacy to establish the Kamehameha Schools for all the children of Hawaii.

On Thursday, October 16, 1884, the princess passed away. Charles was by her side.

The newspapers reported that a heavy downpour of rains reached a crescendo just about the time Pauahi died. In ancient days, the Hawaiians said when rain fell at a the time of a person's death or funeral, "Kulu ka waimaka, uwe `opua." (The tears fall; the clouds weep.), for the gods mingle their tears of affection with those who weep in sympathy and aloha.

Of all the eulogies that were held upon her death, perhaps that of Reverend J.A. Cruzan was the most moving and prophetic:

"The great loss which Hawaii sustained last Thursday was not that the last of this great line of High Chiefs died, nor that the possessor of great wealth died, but that a true woman died...True in all times and among all races...

That Bernice Pauahi Bishop was such a true woman her life bears witness....Refusing a crown, she so lived that she was crowned. Refusing to rule her people, she did what was better, she served them, and in no way so grandly as by her example....

'The world can do without its masters better than it can without its servants.'...For fifty-three years her royal life here has borne unswerving witness in favor of virtue and purity...

She hated that which was impure with an intense hatred. She had only loathing and contempt for that which was coarse and low. Place, power, wealth, nor influence could win her favor or regard if it was joined with degraded character. And her womanly example was all the more potent for good because it was so quiet...

The things that are most noisy are not the most powerful. Nay, things that make no noise, and make no pretension, may be really the most powerful. This quiet, modest, true womanly life has been for years, and still is, and will be for years to come, a mighty power for good here in Hawaii.

Only the God who loveth purity and righteousness can measure this one true woman's influence for good upon her people..."

- Source: PAUAHI: THE KAMEHAMEHA LEGACY,
by George Hu`eu Sanford Kanahele

It was from Pauahi's legacy that vast amounts of wealth eventually flowed, until the Bishop Estate became the wealthiest charitable organization in the United States. It is her estate that has been systematically looted over the last decades by persons "with degraded character" that the princess undoubtably would have viewed with only "loathing and contempt."

In 1997, responding to a surging tsunami of criticism from the faculty, students and alumni of the Kamehameha Schools, and from concerned citizens of all ethnic backgrounds in Hawaii, Governor Ben Cayetano took an unprecedented action and directed the state's attorney general, Margery Bronster, to investigate the practices of the Estate's five highly paid trustees.

But the attorney general was not the only one investigating the estate. The IRS had already been auditing the records of the estate for several months -- empowered by the "interim sanctions" reegulations which had been passed by Congress in early 1996. At the same time, the court-appointed "master" who is charged by the probate court with oversight of the operations of the estate, was digging deeper into the activities of the trustees than a long line of previous masters.

Suddenly the trustee's were, for the first time in the schools' 115-year history, under siege from all sides.

The full and sordid story of the looting of the estate is too long to relate here. To give you an idea of the magnitude of the financial losses, however, the Master's Report on the 109^th Annual Account of the Trustees revealed that the Estate's investment portfolio suffered substantial losses in 1994, the year under review. The records relating to the various investments showed that combined losses and loss reserves of $264,090,257 were recognized in fiscal year 1994 alone.

The short story is that, after long and hard-fought court battles, the five former trustees were forced to resign, and five interim trustees were selected to take their places until a new trustee selection process was created and implemented. The removal of the five former trustees was one of the non-negotiable conditions of the IRS to prevent the loss of the estate's tax-exempt status.

The long story can be found in the volumes of news articles and court proceedings in the on-line archives of the Honolulu Star-Bulletin.

The removal of the incumbent trustees was good news, hailed by many as the beginning of the healing process....

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The Catbird Chronicles: Bishop Estate

1986 - Bishop Estate joins golf course designer Robert Trent Jones and North Carolina developer Clay Hamner in the purchase of 1,100 acres at Lake Manassas, Virginia.

1989 - Bishop Estate trustees approve the McKenzie Methane acquisition, with trustees, principle executives, managers, family members, business cohorts and other insiders co-investing millions of their personal money. Among the investors are the estate's tax-adviser, Mark McConaghy of Price Waterhouse.

1989 - HFH, a holding company originally comprised of four major investors, William E. Simon, Sr., Gerald L. Parsky, Larry B. Thrall, and Roy Doumani, to purchase HonFed Savings & Loan Association, sells approximately 23 percent of its ownership stake in the thrift.

1991 - Bishop Estate and partners set up RTJ Acquisition LP to develop the Lake Manassas property, which is to become the Robert Trent Jones Golf Club -- the object of controversy and a lawsuit in which the later owners of the club claimed fraud was involved in the sale. The purchasers allege Bishop Estate was both the buyer and the seller (BE trustee Henry Peters also served on the golf club's board of trustees), and also had failed to inform them of a $33 million development debt they would have to pay off -- to Bishop Estate.

1992 - Bishop Estate trustees invest $250 million of the trust's money in Goldman Sachs.

1992 - Bishop Estate invests $31 million in Mid Ocean Reinsurance Co. with partners J.P. Morgan & Co, Marsh & McLennan Co. and Texas deal-maker Richard Rainwater. While a director of Mid Ocean, estate trustee Henry Peters received substantial director's fees and received options to acquire 6,000 shares of Mid Ocean Stock.

1993 - Bishop Estate, The MacArthur Foundation, and Duke University Endowment Fund back the formation of a Boston merchant bank called Orion Capital Partners LP.

1993 - Robert Rubin, worth an estimated $100 million at the time, resigns Goldman Sachs to join the Clinton administration. Rubin makes a phone call to Bishop Estate and the estate "insures" Rubin's stake in Goldman Sachs for $100,000 a year -- a real "sweetheart deal" for poor Rubin?

1994 - Bishop Estate invests another $250 million in Goldman Sachs.

1994 - The records relating to the various investments held by the Trust Estate and its Pauahi Holdings, Inc. subsidiary, showed that combined losses and loss reserves of $264 million were recognized in fiscal year 1994.

1995 - The Wall Street Journal exposes the estate nationally with their in-depth, front-page article, Bishop's Gambit - Hawaiians Who Own Goldman Sachs Stake Play Clever Tax Game.

1995 - According to The Cheating of America: “Tax attorneys for Verner, Liipfert, Bernhard, McPherson and Hand– the Washington, D.C.-based law and lobbying powerhouse whose members include the likes of Bob Dole and former treasury secretary Lloyd Bentsen – prepared a thirty-page confidential report for a client (Kamehameha Schools/Bishop Estate) in search of a new home. The attorneys surveyed the tax and legal consequences of relocating in 49 states (only Hawaii was excluded), then recommended a single location to their client: the Cheyenne River Sioux Reservation in South Dakota.”

1996 - Bishop Estate lends $1 million to Charles M. Harmon, Jr., an investment banker and former general partner at Goldman Sachs, and together with Larry L. Landry, chief investment officer of the MacArthur Foundation; and Brad Heppner, a consultant at Bain & Co. and former director of private investments at the MacArthur Foundation, they form Crossroads Group to purchase Bigler Investment Management, a Conn. firm that manages fund-of-fund accounts. Bigler's clients include: Connecticut State Treasury; Massachusetts' Pension Reserves Investment Management Board; Rhode Island Employees' Retirement System; City & Co. of San Francisco Retirement System; and pension funds of E.I. duPont de Nemours & Co.

1996 - The estate spends more than $330,000 on federal lobbying - most of it going to three firms to fight, unsuccessfully, the "interim sanctions" law that created penalties for employees or officers of charitable institutions who gain undue "excess benefits" from their positions. The three lobbying firms were Verner, Liipfert, Bernard, McPherson & Hand, a prominent Washington, D.C. firm that employs former Hawaii governor (and friend of Bill Clinton), John Waihee; Hecht Spencer & Associates; and Price Waterhouse. Other Verner firm members enlisted in the effort included former Treasury Secretary Lloyd Bentsen of Texas, former Senate Majority Leader George Mitchell of Maine and former Texas Governor Ann Richards. Also, enlisted to fight the "interim sanctions" regulations was the Rev. Jesse Jackson.

1996 - In October, Bobby Harmon, the estate's Risk Manager and president of P&C Insurance, reports suspected fraud and collusion between Trustee Henry Peters; Nathan Aipa, the estate's general counsel, and Marsh & McLennan, Inc. to the organizations' auditors, Coopers & Lybrand. In November, Harmon is terminated from both positions.

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The Chronicles Continue in Part II.

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IF YOU WANT TO TAKE A CLOSER LOOK AT SOME OF THE CAREFULLY HIDDEN NESTS INHABITED BY BIRDS OF A FEATHER, JUST TRAIN YOUR FIELD GLASSES BELOW!

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

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

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

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

For more, GO TO > > > Paradise Paved; The Grand (and dirty) Ko `Olina

Benson Forests - Kamehameha Schools’ 390,000-acre timberland investment in Michigan.

For more, GO TO > > > Part II

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

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

GOVERNMENT FRAUD, CORPORATE FRAUD, AND MORE FRAUD

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

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

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

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

They are Frank Carlucci and Richard Armitage.

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

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

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

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

They are two separate organizations.

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

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

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

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

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

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

And it was such a scam.

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

And then what happened?

The Russian bailout.

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

It’s exactly the same scheme.

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

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

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For more, GO TO > > > Birds that Drink from Cesspools; The Blackstone Group; Predators in Paradise

Bruce Nakaoka - Former investment manager at Kamehameha Schools/Bishop Estate.

Ex-estate workers to talk to Bronster

They were granted immunity from suits that could come up

By Honolulu Star-Bulletin Staff

Two former investment managers at Kamehameha Schools/Bishop Estate have agreed to comply with subpoenas issued by Attorney General Margery Bronster in the state's investigation of the $10 billion charitable trust.

Bruce Nakaoka and Eric Martinson agreed to meet with the attorney general before Nov. 26, after they were granted immunity from civil suits that may arise from their cooperation, said Deputy Attorney General Hugh Jones.

The agreement was approved today by Circuit Court Judge Kevin Chang.

In another Bishop Estate investigation, retired Circuit Judge Patrick K.S. Yim today said he met with the five estate trustees Monday to update them on the progress of his fact-finding report into management of the schools.

Yim did not disclose the nature of the discussion. He is required by court order to complete his report on or by Dec. 5.

None of the trustees commented on the meeting.

Critics of the trustees' management said Yim was wrong to privately meet with the group before he releases his report....

See also: Dan Inouye

For more, GO TO > > > Buzzards of Paradise

James J. Kayoda - From the JAIMS website: JAMES J. KAYODA is an accounting professional who provides general business services to small businesses. He is also an accounting instructor at the Japan-America Institute of Management Science.

Previously, Mr. Kayoda was a Certified Public Accountant at the international accounting and consulting firms, Price Waterhouse and KPMG Peat Marwick, and Controller/General Manager at Hawaiian Tuna Packers, a real estate development and ice-manufacturing firm. Before becoming a CPA, Mr. Kayoda was a Japanese language instructor at the University of Hawaii at Manoa. He also served in the United States Air Force Security Service as a Chinese Mandarin linguist.

Mr. Kayoda received his B.A. (Asian History) and M.A. (Japanese Language) degrees from the University of Hawaii at Manoa.

Professional Experience

2000 to present: Counselor, Genki Sushi Hawaii, Inc. Advises the board of directors on all administrative, financial, and business planning matters.

1995 to present: Business consultant, accounting and general business services. Throughout 1997, as an outside accountant, worked with Shigemura and Sakamaki, CPAs, Inc., in the firm’s engagement to assist the Court Master in his examination of the 1994 and 1995 annual reports of the Trustees for Kamehameha Schools/Bishop Estate. The Master’s examination for these years began the process that resulted in the total reform of the trustee system of the Estate in 1999.

1996 to present: Instructor, Intercultural Management Program, Japan America Institute of Management Science. Teaches topics in financial and management accounting.

1995 to 1998: Controller, Hawaiian Tuna Packers. Returned to oversee the company’s finances until the firm’s dissolution in 1998.

1993 to 1995: Manager, KPMG Peat Marwick. Recruited to establish the Honolulu office’s International Business Section to assist Asian start-ups in Hawaii.

1990 to 1993: Controller and General Manager, Hawaiian Tuna Packers. Oversaw the administration, commercial rent, and production divisions; prepared budgets and managed cash flow; provided the real estate development division with financial modeling assistance.

1988 to 1990: Japanese Business Coordinator, Price Waterhouse. Recruited to establish the Honolulu office’s Japanese business division to assist Japanese start-ups in Hawaii.

1987 to 1988: Staff auditor, KPMG Peat Marwick, Guam. Worked on audits in Guam, Saipan, and the Marshall Islands.

1976 to 1987: Instructor in Japanese, University of Hawaii at Manoa. Taught first through third level Japanese language courses.

See also: Dan Inouye

See in Part II: Zenith National Insurance

Lloyd Bentsen - Former U.S. Secretary of Treasury.

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

Bentsen, along with Hawaii's ex-governor (and FOB) John Waihee, are also lobbyists with the Washington, D.C.-based law firm Verner Liipfert Bernhard McPhearson Hand which was hired by Bishop Estate to lobby against the federal "interim sanctions" legislation. The state Attorney General's Office disclosed that the trust paid the firm more than $900,000 for its unsuccessful lobbying efforts on intermediate sanctions legislation between 1995 and 1998.

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New Holland N.V. Press Release, 10/29/96: Former U.S. Treasury Secretary Bentsen appointed Chairman of New Holland N.V. New Holland N.V. announced today that Lloyd Bentsen, the 69^th U.S. Treasury Secretary, who played a pivotal role in the Clinton Administration during 1993 and 1994, and former U.S. Senator from Texas, has been appointed Chairman of the Board of Directors of New Holland.

Senator Bentsen was appointed Treasury Secretary by U.S. President Clinton in Jan, 1993, and served in the Clinton Administration until December, 1994. As Secretary he was a major policy adviser to the President and was credited with playing a key role in the Administration’s successful efforts to reduce the federal deficit and to increase trade and economic opportunity through NAFTA (North American Free Trade Agreement) and GATT (the General Agreement on Trade and Tariffs.)

Mr. Bentsen said: “As one who has for may years owned farms, I can attest to the high quality of New Holland’ agricultural equipment. I am pleased to become a board member of this leading international manufacturer.” . . .

Before joining President Clinton’s Cabinet, Lloyd Bentsen, born in Texas, was one of the most powerful members of the U.S. Senate where he served from 1971 until his appointment as Secretary of the Treasury. He was Chairman of the Senate Finance Committee, which has the responsibility for tax and trade issues. He also served as Chairman of the Joint Committee on Taxation and the Joint Economic Committee. In 1988, he was the Democratic Party’s nominee for Vice President of the United States.

Mr. Bentsen began his public service as a Texas County Judge, then served three terms in the U.S. House from 1948 to 1954. After that he pursued a successful business career. . . .

NEW HOLLAND - THE INITIAL PUBLIC OFFERING: As previously announced, New Holland has filed with the U.S. Securities and Exchange Commission a registration statement for a global initial public offering for 46,500,000 Common Shares . . . A registration statement relating to the Common Shares has been filed with the U.S. Securities and Exchange Commission but has not yet become effective . . .

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J.P. Morgan Press Release, 11/12/99: J. P. Morgan, as New York transfer agent and registrar, is pleased to announce the name change for New Holland N.V.’s NYSE listed shares of New York registry to CNH Global N.V. The name change coincides with the closing of the company’s merger with Case Corporation....

The world’s largest ADR depository and a global financial services firm, J.P. Morgan serves clients through an integrated range of advisory, financing, trading, investment management, and research capabilities....

See also: Dan Inouye

Lucent Technologies - GO TO > > > Part II

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

For more, GO TO > > > Part II

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

For more, GO TO > > > Part II

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

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

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

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

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

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For more, GO TO > > > The Marsh Birds

For Harmon's letters to California and Hawaii Insurance Departments, GO TO > > > Insurance Commissioners

Marshall Ige - From Honolulu Star Bulletin, 1/19/01, by Rick Daysog: Ex-legislator Ige Could Face Prison Terms - Investigators got onto the case during the probe of Bishop Estate trustees and their political cronies.

In the latest twist to the state’s criminal investigation into the Kamehameha Schools former trustees and their political cronies, the attorney general’s office has filed new charges against former state Sen. Marshall Ige. Ige, who was arrested and released on bail yesterday, appeared in court this morning for his arraignment and plea...

Ige, who lost his Windward Oahu Senate seat last year, said he plans to plead not guilty to all of the counts...

In its criminal complaint, the state alleged that Ige improperly took $30,000 from an elderly Beverly Hills couple and laundered the proceeds through a businessman.

The state also alleged he improperly took $7,000 from a Windward Oahu farmer in June 1999 after threatening to evict him.

If convicted, Ige faces up to 10 years in prison for the first-degree theft and money laundering charges and up to five years in prison for the tax evasion, extortion and second-degree theft charges.

The new complaint is in addition to campaign finance-related charges faced by Ige. The attorney general’s office alleged in July 1999 that Ige failed to report $22,500 in campaign contributions laundered by the trust’s outside contractors.

Ige, a longtime associate of former Bishop Estate trustee Henry Peters, has pleaded not guilty to the campaign-related charges, which are misdemeanors. That case was scheduled to go to trial next month but may be delayed.

Senate President Robert Bunda, a former colleague of Ige’s, said he was shocked by the new criminal charges. Bunda (D) called Ige a “tenacious” individual who is a good person at heart.

Ige played an instrumental role in the controversial 1999 confirmation defeat of then-Attorney General Margery Bronster in the Senate....

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May 29, 2002

Former Windward senator gets
6 months in prison

A judge comes down hard on Marshall Ige in a theft and tax case

By Rick Daysog, Honolulu Star-Bulletin

Saying the former lawmaker's actions were "glaringly wrong," a state judge has sentenced former state Sen. Marshall Ige to six months in prison.

Circuit Judge Sandra Simms yesterday also gave Ige five years of probation after the former Windward Oahu senator pleaded guilty in January to second-degree theft, attempting to evade taxes and failure to file tax returns.

Simms said Ige's case is troubling given that he took advantage of an elderly California couple and a farmer who didn't speak much English.

"It's like you knew who to pick on," Simms said. "That's just glaringly, glaringly, glaringly wrong."

Ige, who lost his Senate seat in 2000, appeared in court yesterday and pleaded for no jail time. His attorney Richard Sing said Ige was in dire financial straits.

"I'm not trying to make excuses," Ige said. "I regret going down this path. I should have never done it."

Ige, 48, served in the Legislature from 1982 to 2000 and is a former state Democratic Party vice chairman and a former chairman of the Senate Human Services Committee.

He is the latest local politician to be facing prison for crimes committed while in office. In December, a federal judge sentenced former city Councilman Andy Mirikitani to four years and three months in prison for a kickback and extortion scheme. That came after state Sen. Milton Holt served a one-year federal prison term for mail fraud.

"I think it's clear that the courts have recognized that we have an epidemic of public corruption," said Deputy Attorney General Kurt Spohn. "It's clear that people are fed up with this type of behavior."

According to the state, Ige improperly took $7,000 from Windward Oahu farmer Hahn Lam in June 1999 after threatening to evict Lam from leased land. Spohn, who asked for a one-year jail sentence, said Ige used his position in the state Legislature to bully Lam.

Ige's tax convictions arose from an "elaborate scheme" to defraud $30,000 from Morris and Rita Wolfred of Beverly Hills, according to Spohn.

The Wolfreds said Ige promised to expunge a Hawaii criminal conviction against their daughter, Joan Wolfred, in exchange for the money. But Ige was unable to expunge her criminal record and did not return the money to the couple voluntarily.

Ige then hid the money from the state tax collector by giving it to a businessman who parceled it back to him in small amounts.

The state initially obtained indictments for first-degree theft against Ige in the Wolfreds' case. But those charges were dropped with the couple's consent. Ige has repaid the $30,000 to the Wolfreds, but still owes $4,400 in restitution to Lam.

Spohn said Ige failed pay the balance due to Lam, even after the former lawmaker gave more than $16,000 to his son and daughter and paid for more than five trips to Hong Kong, Taiwan and the U.S. mainland.

"It was the classic case of robbing Peter to pay Paul," Spohn said.

McKenzie Methane - A Texas methane gas company in which Bishop Estate was the majority investor-- AND IN WHICH THE ESTATE’S TRUSTEES, MANAGERS, FRIENDS AND OTHER INSIDERS CO-INVESTED THEIR PERSONAL FUNDS, THEN LET THE ESTATE BAIL THEM OUT WHEN THE DEAL FIZZLED.

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From the RICO lawsuit, Harmon v. Trustees of Bishop Estate, et al.:

. . . Plaintiff alleges that Aipa's wrongful acts are multitudinous. These acts include, but are not limited to: . . . Facilitating and concealing co-investments in KSBE deals by the Trustees, employees, family members and business associates.

In 1989 the four KSBE Trustees, Peters, Takabuki, Richardson and Thompson approved of the investment of approximately $85 million in a Houston-based energy venture with McKenzie Methane. (Trustee Lyman had recently passed away and a fifth trustee had not been appointed.)

This same venture also received more than $3 million in personal funds from all four trustees and employees and business associates of the estate. The Honolulu Advertiser reported in their February 26, 1995 issue that: "The troubled deal may cost the estate as much as $65 million in lost capital and at least twice that much in lost earnings and tax benefits."...

Honolulu businessman Desmond Byrne ... called the personal investments by estate trustees and staffers 'an absolutely improper conflict of interest. It raises the appearance that their official decisions are affected by their own personal financial interests'...

The current board is almost completely different from that of 1989. Only one trustee, Henry Peters, remains. But the current board still holds that the old one did nothing wrong, according to [Nathan] Aipa....

"There was no conflict of interest," Aipa said. The Texas court files clearly show, however, that the trustees, their employees and associates relied on estate reports and financial data when they decided to put their own money in the deal. Estate personnel have immediate access to the high-priced and sophisticated financial expertise of such firms as First Boston Bank and Goldman, Sachs & Co.

The estate, a non-profit, tax-exempt institution ... must be very careful in structuring its investment activities so it won't imperil its tax-exempt status. The Houston investment was particularly tricky because one of the principal benefits was that the estate would receive federal energy tax credits, which the tax-exempt estate intended to sell."

This same news article went on to describe other personal investments in estate-related business deals: "According to court records, the estate board of trustees was told in April, 1989 by Aipa, that 'no conflict (of interest) exists in the personal investments.'

The personal investments were made 'only after careful review of the issues and advice from the law firm of Rush Moore Craven & Stricklin,' Aipa said. But current trustee Oswald Stender ... said under oath in a 1993 deposition that he would not have made such a personal investment ... that he would not invest in activities ... that I had self-dealing in.

Takabuki, his wife, three children and family company, Magba Corp., invested $1.5 million...

The investments were made through a series of five partnerships, called the 'HAK Partnerships', that were organized and administered by Mitchell Gilbert, Bishop Estate financial assets manager from 1988 to September 1994...

Gilbert and members of his family invested nearly $72,000 in the five partnerships, the court records show. And he invited various influential 'investment affiliates' of the estate to invest in the HAK Partnerships. . . In 'marketing' the deal to potential investors, he was acting individually and not as a representative of the Bishop Estate, Gilbert said in his deposition... But the letters he wrote were on estate stationery and he signed them as Bishop Estate's financial assets manager....

A Texas lawyer for Bishop Estate said in Houston bankruptcy court last month that the estate can only hope to recover $20 million at most of its $85 million investment...

According to the Honolulu Advertiser, other co-investors included:

Henry Peters (trustee)

William Richardson (former trustee and subsequent consultant; Sec./Treasurer of P&C)

Myron Thompson (former trustee)

Matsuo Takabuki (former trustee and subsequent consultant)

Dave Thomas (owner of Wendy's restaurants and co-investor with KSBE on several other projects)

William E. Simon (former U.S. Treasury Secretary, and co-investor with KSBE on several other projects, including HonFed Savings & Loan, Sino Finance, Xiamen Bank (China), and SoCal Holdings)

Wayne Rogers (the Mash actor, who later brought many suits against KSBE for the Kona Enterprises deal)

Bruce Nelson (treasurer of the Rockefeller Group)

Raymond Pettit (CFO of the Rockefeller Group)

Frederick "Ted" Field (Big-time movie producer. Three Field employees also invested. Field was the estate's partner in the corporate takeover of European conglomerate DRG, Inc. He later brought suit against the estate in a co-investment deal involving The Pantry)

Mark McConaghy (Bishop Estate's principal tax lawyer and lobbyist. McConaghy, who works for the Price Waterhouse accounting firm's national headquarters in Washington, D.C., was a finalist on the state Supreme Court list of nominees to fill the latest vacancy on the estate board of trustees, losing out to Gerard Jervis.)

Michael Chun (President of Kamehameha Schools)

Gilbert Tam (then-Director of Administration, KSBE; currently, an officer of Bank of Hawaii and director, P&C)

Guido Giacommetti (then Director of Asset Management, KSBE; now court-appointed trustee for the Sukamto Sia mega-bucks bankruptcy)

Anthony Sereno (deceased, then Board of Directors, Royal Hawaiian Shopping Center, Inc.)

Neil Hannahs (head of the estate's Kakaako development project)

Charles Maeda (head of Information Services Division, KSBE)

Richard Wong (president of RHSC and Pauahi Holdings Corp.)

Wallace Tirrell (then president of Kamehameha Investment Corp.)

Gilbert Ishikawa (KSBE tax manager)

Ed Hendrickson (KSBE Financial Assets Division)

Rodney Park (then KSBE Controller; currently Dir, Administration Group, and President, P&C)

Wally Chin (then Deputy Controller; currently Controller, KSBE)

Donald K. H. Pang (father of KSBE employee, Leeanne Crabbe)

AIPA and others did such a good job of concealing this information, that Plaintiff was unaware of these co-investments until he read about them in the newspaper -- even though his job at the estate required him to be informed of the details of mergers and acquisitions for insurance and risk management purposes....

For example, in March 1993, B. M. McKenzie and McKenzie Methane Corporation filed a lawsuit for $2.3 billion against the trustees and KSBE. Additional defendants were the HAK Partnerships I, II, III, IV and V; Smith-Gordy Methane Co.; SG Methane Co., Inc.; Gordy Oil Co.; L. H. Smith; R. D. Gordy; D. A. Barras; Lee H. Henkel, III; Mitch Gilbert; Royal Hawaiian Shopping Center, Inc.; Maralex, Inc.; M. O'Hare; Kukui, Inc.; JGI Resources, Inc; and Northwestern Mutual Life Insurance Co.

AIPA initially did not report this lawsuit to the insurance company, United Educators. Plaintiff learned of this lawsuit several months after it was filed, and only as a result of his inquiring about unreported claims in preparation for the renewal of this policy. When Harmon did report this claim to the insurance carrier, Aipa immediately took control and directed that all correspondence to or from the carrier would be made by him.

AIPA repeatedly refused to furnish information to the insurance company regarding the claim, despite frequent and urgent requests. Eventually, the insurance company closed its files on the case due to Aipa's failure to respond to the carrier's request for information. The actual cost to the estate is unknown, but Plaintiff estimates that the loss of legal defense costs alone could easily have been in excess of a million dollars....

* * *

For more, GO TO > > > Claims By Harmon; RICO Lawsuit - Harmon v. Federal Insurance Company et al.

Michael Chun - President of Kamehameha Schools.

February 20, 1999

Bumbler or martyr?
Chun portrayal a key dispute in trial to oust Lindsey

The Kamehameha Schools' president
defends his record under questioning by Lindsey's lawyers

By Rick Daysog, Star-Bulletin

Is he a tortured martyr who selflessly placed the educational needs of the children and teachers at the Kamehameha Schools over his own interests?

Or is he an inept manager who lacks the basic educational background to properly run the Kapalama Heights campus?

The diverging portrayals of Kamehameha Schools President Michael Chun represents a central dispute in the trial to remove Bishop Estate trustee Lokelani Lindsey from the estate's board.

Trustees Oswald Stender and Gerard Jervis are seeking Lindsey's ouster on the grounds that she breached her fiduciary duties, mismanaged the estate-run Kamehameha Schools and usurped the popular Chun's authority.

Lindsey has argued that the school's academic program declined during Chun's tenure, prompting her to intervene.

Chun yesterday took the witness stand for the third day in the three-month-old removal trial, to answer questions from Lindsey's lawyers about his management record.

Chun told Circuit Judge Bambi Weil that while he does not have an advanced degree in education, he considers himself a strong educational leader.

Previously, Chun had testified that student admissions to four-year colleges have increased and test scores have risen during his tenure.

"I think I have a commendable reputation in education," said Chun, a former University of Hawaii engineering professor.

But Lindsey's attorney, David Gierlach, spent most of his cross-examination attempting to show that Chun helped fuel the campus controversy.

Chun conceded that he, and not the trustees, was responsible for shortening the length of teachers' contracts from the previous five-year term to the current one-year period.

The move contributed to a mood of uncertainty among Kamehameha faculty members and other staffers.

Chun also played a role in the demise of the Kamehameha Schools Association, which had served as a sounding board for teacher concerns and grievances to management.

The association's shutdown left teachers without a formal organization to voice their concerns and promoted an environment in which rumors flourished, Gierlach said.

Chun said he did not "cancel" the association, but he may have contributed to its end after expressing concerns that members wanted to form a faculty union.

The organization later dissolved after several poorly attended elections for association officers were held, Chun said.

Gierlach also grilled Chun about his financial status.

In addition to the $210,459 that Kamehameha Schools paid him for the year ending June 30, 1997, Chun said he earned an additional $62,000 last year for serving on the boards of Alexander & Baldwin Inc. and Bank of Hawaii, a subsidiary of Pacific Century Financial Corp.

In the past, Lindsey and trustees Richard "Dickie" Wong have raised concerns that Chun's outside work may distract him from his duties at Kamehameha Schools, Chun added.

Gierlach also questioned Chun about nonbid contracts that he awarded to his former employer, Park Engineering, and a former classmate, local architect Lloyd Sueda.

Chun said he awarded the two firms and their subcontractors between $1.5 million and $2 million in design and engineering work between 1988 and 1995.

But he said the work, which covered dormitory renovations and drainage projects, was awarded to the firms because they were qualified to do the work and not because their principals were friends....

See also: Dan Inouye

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

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

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

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

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

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

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

For more, GO TO > > > Buzzards of Paradise; Claims By Harmon

Trinity Investment Trust - From: Honolulu Star-Bulletin, 7/31/97: . . . A Chicago-based partnership is buying the 318-room Keauhou Beach Hotel on the Kona Coast . . .

Trinity Investment Trust LLC, which is also purchasing the mortgage to the Aloha Tower Marketplace, has signed a letter of agreement to acquire the beachfront hotel from Azabu USA.

The hotel, built in 1970, sits on land leased from the Bishop Estate....

Azabu, headed by maverick deal maker Kitaro Watanabe, acquired the Keauhou Beach Hotel in 1987 for $13 million. During the 1980s, Azabu invested about $600 million in Hawaii, acquiring the Hyatt Regency Waikiki, the Ala Moana Hotel, the Maui Marriott and the Kona Lagoon [also on land leased from Bishop Estate].

Since then, Azabu has run into a string of financial difficulties. In 1993, lender Mitsui Trust & Banking filed a foreclosure suit on the 1,200-room Hyatt Regency.

In 1994, Mitsui wrote off $1 billion in bad debts from loans to Azabu.

Last month, Tokyo officials arrested Watanabe and two other Azabu officials alleging that they illegally concealed company assets from creditors. Azabu's Hawaii subsidiary said then that the arrests had no effect on the company's local operations.

Trinity, meanwhile, is part of a new wave of American buyers who are purchasing properties from financially troubled Japanese investors. . . .

The company -- whose investors include former VMS Realty executives George Ruff, local attorney Jon Miho [of McCorriston Miho Miller & Mukai, defense attorneys for the Bishop Estate trustees] and hotel developer Charles Sweeney -- is trying to acquire the $60 million mortgage to the Aloha Tower Marketplace from Mitsui and take over the waterfront complex.

Last year, Trinity and Apollo Advisors L.P. bought the $130 million mortgage to the nearby Harbor Court luxury office and condominium complex for an undisclosed price from Mitsui.

Trinity has also joined up with Apollo, time-share operator Signature Resorts Inc. and Goldman Sachs' Whitehall Fund [another Bishop Estate investment] to buy the 413-room Embassy Suites Resort on Maui for $78 million....

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

* * *

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

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

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

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

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

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

"I would have recused myself," Hanneman said....

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

See also: John Waihee; Verner Liipfert; Yakuza

USS Missouri Memorial Association - From The USS Missouri Memorial Association Website: . . . The USS Missouri Memorial Association, Inc. is a private Hawaii-based (501-C3) non-profit organization selected by former Secretary of the Navy, John Dalton, as the caretaker of the historic Battleship Ex-USS Missouri. The Association was formed in 1994 and includes a cross-section of leaders from Hawaii’s business, civic, political, and retired Navy and Marine Corps communities....

IOLANI - the Royal Hawk

Sunday, August 29, 2021

Whistleblower Greg Wongham's Website - He was the Host of OLELO TV "CORRUPTION IN HAWAII"

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