Construction contractor details controversy over project at University of Hawaii at Hilo

By Malia Zimmerman - HONOLULU — A University of Hawaii-Hilo spokeswoman insists a $28 million dorm project will be ready by August, but a report obtained by Hawaii Reporter and Watchdog.org outlines numerous flaws in the taxpayer-funded project.

The problems are so serious they could increase the project’s cost and delay its fall opening.

In a letter sent to SSFM International Construction Manager Robert Yamada on Thursday, Gary Nakatsuka, an architect employed by Mitsunaga & Associates who is serving as project manager, said “unapproved, lesser grade windows” are examples of decisions made by SSFM that may prevent the building department from issuing a certificate of occupancy, thereby delaying the dorm’s fall opening.

The selection also places the university “at risk of having to remove and replace the windows should the windows be found to be non-compliant with the building code requirements of this project,” Nakatsuka said.

Nakatsuka cited a number of other construction elements as “troubling” and not to the “benefit” or “advancement” of the University of Hawaii, including potential mold and bathroom venting issues, substandard paint and drywall, unwarranted and unapproved cost escalations for flooring and the unauthorized removal of important elements of the project already included in the budget such as security fencing.

Three hundred UHH students plan to move into the new dormitory, called University Village.

The University’s Office of Capital Improvements and its former manager, Brian Minaai, were overseeing the project, but the university recently put Minaai on paid leave as the state attorney general investigates allegations that Minaai directed contracts to personal and political friends.

Dennis Mitsunaga, owner of Mitsunaga & Associates, made the stunning allegations in a February 14 letter to the Hawaii State Senate, which he sent in support of pending legislation that would transfer procurement responsibilities from the university to the Department of Accounting and General Services, the agency that manages most state construction projects.

Mitsunaga accused Minaai of using his position to marginalize his company’s bids in favor of competitors with ties to Minaai, ultimately bloating the costs of university projects.

Minaai did not respond to inquiries from Hawaii Reporter.

“Working with the UH Office of Capital Improvement and its director Brian Minaai has been a nightmare for members of our firm working on the UH student Housing Phase 1 (in Hilo),” Mitsunaga wrote in his Feb. 14 letter. “In the process of giving us a difficult time, Brian gave away millions of dollars on this project alone and should be investigated for blatant mismanagement.”

Student safety and a fiscal bottom line

The Thursday letter from Mitsunaga’s project manager lists specific problems that may impact student safety and the university’s bottom line.

For example, a planned security fence around the perimeter with a controlled access gate included in the project budget was eliminated. Nakatsuka said the contractor should install the fence and gate to ensure student safety.

In addition, the university does not allow paint to be sprayed on its campus buildings for environmental and safety reasons, but SSFM and its subcontractor used spray paint, Nakatsuka said.

UH President M.R.C. Greenwood

Project cost increases are also a sticking point.

SSFM said changing the pattern of the vinyl tiles on the dormitory floor from a checkerboard pattern approved by the university to a swirl pattern would cost an additional $126,000 on top of the $241,837 budgeted for the flooring.

Nakatsuka maintained the more than 50 percent cost increase is “outrageous,” “way out of line” and should be more in the 5-10 percent range.

Although already budgeted, the university had removed all trees from the landscaping plan and all appliances, Nakatsuka noted in his letter.

The university remains silent on Minaai’s fate.

“As the Attorney General’s investigation is ongoing and the university has been requested not to comment on any aspect of it until completion, we are unable to respond to your specific questions about the Mitsunaga allegations,” Lynne T. Waters, associate vice president for external affairs and university relations for the University of Hawaii System, said in an email.

In another twist, UH President MRC Greenwood, who had ultimate authority over the university procurement and declined to appear before the legislature to answer questions about Minaai, the Hilo dorm and other university projects, announced her resignation last week, two years before her lucrative contract expires. She cited personal and health reasons for her early resignation.

Contact Malia Zimmerman at Malia@hawaiireporter.com

Photo: Emily Metcalf

By Malia Zimmerman - HONOLULU — Hawaii taxpayers have a heavy burden to bear when it comes to covering "other post-employment retirement benefits" for their public employees.

In a newly released analysis, the Chicago-based Truth in Accounting reports Hawaii’s OPEB — those "other post-employment retirement benefits" — is more than $9,800 per capita. That's more than any other state. The 50-state average is less than $2,000 per capita.

"Such levels of unfunded OPEB liability will result in higher taxes, cuts in other services, or broken promises," said Sheila Weinberg, founder of Truth in Accounting.

The other post-employment retirement benefits owed to the Hawaii Government Employees Association, the United Public Workers union, and the Hawaii State Teachers Association, stood at $13.6 billion in 2011.

Much of the debt is attributed to health care for employees, retirees and their families, managed through the Hawaii Employer-Union Health Benefits Trust Fund.

The Hawaii Employer-Union Health Benefits Trust Fund debt far exceeds Hawaii’s unfunded liability for pensions, which was $5.9 billion during that same year.

“While Hawaii’s has not fully fund its pensions, that is only half of the story — actually less than half. As these unfunded liabilities grow, Hawaii risks encountering a double whammy of pension and OPEB liabilities,” Weinberg said.

"The OPEB numbers are overlooked because people too often look only at a state's unfunded pension liability," she added.

Kalbert Young, director of the state Department of Budget and Finance, said the Hawaii Employer-Union Health Benefits Trust Fund unfunded liability exceeds $18 billion.

Hawaii is responsible for covering $15 billion of the debt to the EUTF, while the four counties and the University of Hawaii must cover the remaining $3 billion owed, Young said.

Gov. Neil Abercrombie with State Budget & Finance Director Kalbert Young (photo by Mel Ah Ching Productions)

Hawaii lawmakers deposited $217 million into the state’s Hawaii Employer-Union Health Benefits Trust Fund during the 2013 session. The money is to be used over the next two years to pay health care bills for state employees, their families and retirees and their spouses. The fund balance is $300 million.

“The amount the state needs to contribute each year is over $500 million based on the last actuarial study. And, the state would have to do so for the next 30 years,” Young said.

The legislation, House Bill 546 CD1, also establishes a trust fund task force; requires the annual public employer contribution to be determined by an actuary, not the Legislature, beginning in FY 2018-2019; and takes revenue from state General Excise Taxes and hotel room taxes.

While a positive step in the right direction, Weinberg said there is a long way to go to get Hawaii’s liabilities funded and back on track.

"Hawaii's unfunded retirement health care promises are twice as much as its unfunded pension promises," Weinberg said.

"In our analysis, Hawaii is the third worst state in the Union overall for unfunded liabilities, due in large part to these unfunded OPEB liabilities," Weinberg added.

Sheila Weinberg, Institute for Truth in Accounting (photo by Mel Ah Ching)

Though the state is required by law to have a balanced budget, Weinberg said Hawaii is far from being truly balanced because of its outstanding debt.

The Legislature recently approved  $24 billion for the state's biennium operating and capital budgets for fiscal years 2014 and 2015.

"As in prior years, the Legislature passed a ‘balanced’ budget, but it does not account for the fiscal reality of the unfunded pension and OPEB liabilities," Weinberg said.

Truth in Accounting has launched a State Data Lab for all 50 states, featuring a database of census and CAFR numbers from omprehensive annual financial reports as well as descriptions of the states’ current fiscal position.

The organization includes in this database a comparison chart of pension and OPEB unfunded liabilities.

First Family arrives in Hawaii aboard Air Force One in December 2012 (AP Photo courtesy of VOA News)

KAILUA - Aloha, U.S. Secret Service - you've been served. About those vacations to Hawaii, we want to know how much they're costing taxpayers.

Judicial Watch Inc., a nonpartisan Washington DC-based organization that focuses on transparency and accountability in government, filed the lawsuit on May 6 to obtain financial records from U.S. Secret Service related to the first family's Hawaiian vacations.

Hawaii Reporter and Watchdog.org has sought this information since 2008, when the first family and their entourage began traveling annually to Hawaii during the Christmas and New Year holidays.

The family and their friends, we've learned pay for the vacation rentals, yet the cost to taxpayers for travel on Air Force One, accommodations for staff and security and local police and ambulance detail exceed $4 million per trip.

The organization filed the Freedom of Information Act lawsuit — Judicial Watch v. U.S. Secret Service - against the U.S. Secret Service to obtain records related to the use of taxpayer money  to provide “security and/or any other services to President Obama and any companions on their January 1 and 2, 2013, trip to Honolulu, Hawaii.”

The suit was filed in the U.S. District Court for the District of Columbia.

View of Kailua Beach where the president stays

The lawsuit follows an attempt by the organization on Jan. 2 to obtain the information through a Freedom of Information Act request.

According to Judicial Watch, the U.S. Secret Service acknowledged the agency received the request Jan. 31, and by law, is required to determine whether to comply with the FOIA request within 20 days and notify Judicial Watch by Feb. 11.

As of May 6, the Secret Service produced no records and has failed to follow up on the request.

Judicial Watch President Tom Fitton said, “President Obama is not king and his administration should stop ignoring the FOIA open records law and account to the American people the spending on his luxury vacations.”

Keith Koffler, a veteran White House reporter, wrote in a column Jan. 4 that the “total cost to taxpayers of Obama’s vacations to Hawaii since becoming president is likely in excess of $20 million, and possibly much, much more.”

Hawaii Reporter’s detailed cost breakdown of the first family’s trips to Hawaii in 2009, 2010, and 2011, that piqued the interest of Judicial Watch, a statement said.

Much of the vacation cost, as Hawaii reported noted, is attributed to the expense of taking Air Force One — which costs about  $180,000 an hour — on the 18-hour journey to Honolulu and back. During the 2012 Christmas holiday, the president made two round trips to Hawaii via Air Force One within a matter of days bringing the total for his air travel to more than $6.4 million.

Obamas Christmas Photo in 2012

“The Obamas’ opulent vacation lifestyle is particularly objectionable during a time when government debt is out of control,” Fitton added.

Hawaii Reporter’s coverage has also included estimates from experts of the cost for:

• USAF C-17 cargo aircraft that transports the presidential limos, helicopters and other support equipment to Hawaii — flight time between Andrews Air Force Base and Hawaii is at about 21.5 hours roundtrip, with GAO’s estimated operating cost of $12,000 per hour.

• The Marine Corps presidential helicopter, along with pilots and support crews for the test flights, which travel on a C-17 flight. That is $258,000, not including costs for the 4 to 6 member crew's per diem and hotel.

• Cost for housing U.S. Secret Service, U.S. Coast Guard and Navy Seals in beachfront and canal front homes, about $200 per night for each person on protective detail.

• Accommodations for the first family’s staff at the Moana Surfrider in Waikiki, where rooms start around $270 a night.

• Honolulu Police Department officers are paid over time for the president’s visit, which has historically cost Oahu taxpayers $250,000; and the city ambulance the accompanies the president 24 hours a day through his entire visit is about $10,000 to city taxpayers.

Moana Surfrider Resort

The White House annually refuses to disclose the cost for several things, including a floor in the office building in Kailua on the canal during the president’s stay; security upgrades and additional phone lines to several private homes where Obama and friends are staying; installation of bullet proof glass and the disabling of home security systems, additional phone lines added, cost of car rentals and fuel for White House staff staying at a Waikiki Hotel, and additional travel costs Secret Service and White House staff traveling ahead of the president.

Judicial Watch has been successful in obtaining the records of other first family vacations since Obama took office — vacations, the organization said, “have come at great costs to taxpayers.”

Some of the costs include:

• $467,555 for First Lady Michelle Obama’s trip to Spain in August 2010; she brought multiple friends and one of her daughters.
• $424,142 for Michelle Obama’s trip with her daughters and staff  June 21 to 27, 2011, to South Africa and Botswana.
• $83,182.99 for Michelle Obama’s trip with her daughters and staff over President’s Day weekend in February 2012, to Aspen, Colo.

Manti Te'o's fake girlfriend (photo courtesy of Maxim.com)

Maxim has released its list of the “Hot100” – the 100 hottest women in America – and there’s one surprise on the list with a local tie to Hawaii.

The online news magazine lists Miley Cyrus, Selena Gomez, Rihanna, Mila Kunis and Jennifer Lawrence in its top 5 picks.

But coming in at number 69 dressed in a black bikini is “Manti Te'o's fake girlfriend.”

Manti Te’o, a graduate of Punahou School in Honolulu and Notre Dame university, recently signed a rookie contract with the San Diego Chargers.

Te’o made headline news for days earlier this year after he disclosed that his girlfriend, Lennay Kekua, who he believed died of leukemia in 2012, had not actually died because she was not a real person.

The woman, who Te’o only knew through texts, phone calls and social media accounts, was supposedly in a long-term virtual relationship with him.

Te’o later disclosed he learned she never existed, and he was the victim of a cruel prank pulled off Ronaiah Tuiasosopo.

Maxim said: “After Manti Te'o's fake girlfriend hoax of 2012, we think it might be nice to have an invisible girl of our own to love. Why not? She's got a ton of great qualities, including looking awesome in a bikini.”

And likely much to their suprise, there are more than 30 girls who rank lower than the invisible girl on the Maxim list.

See the full ranking in the men’s magazine here.

BY MALIA ZIMMERMAN - In a stunning twist, the Internal Revenue Service has apologized today for unfairly targeting two Hawaii tea party groups and 25 other tea party organizations in 18 states across the country.

The apology followed demands by IRS employees that tea parties applying for a 501(c)(3) or 501(c)(4) tax-exempt status disclose membership lists, associations, transcripts, videos of rallies and much more.

The American Center for Law and Justice, which represented some 30 tea party groups including the Honolulu Tea Party and the Maui Tea Party in an effort to get the IRS to retract the orders, called the demands “inappropriate”, “well outside the scope of legitimate IRS inquiry”, an “assault by the Internal Revenue Service” and a “violation of the First Amendment.”

“We knew from the very start that this intimidation tactic was coordinated and focused directly on specific organizations,” said Jay Sekulow, Chief Counsel of the American Center for Law and Justice, who formerly worked as a trial lawyer with the Office of the Chief Counsel for the IRS.

On Friday, May 10, Lois Lerner, head of the IRS unit overseeing tax-exempt groups, admitted the practice was wrong and should not have occurred.

Lerner explained the practice was “initiated by low-level workers in Cincinnati and inappropriately focused on groups that included the words ‘tea party’ or ‘patriot’ in their applications for tax-exempt status, singling them out for additional reviews,” the American Center for Law and Justice said in a statement.

Adrienne King headed the Honolulu Tea Party in 2011 and 2012 (photo by Mel Ah Ching)

The Washington DC-based organization called the IRS apology a "significant victory for free speech and freedom of association."

“This admission by the IRS represents a significant victory for free speech and freedom of association. There was never any doubt that these organizations complied with the law and applied for tax-exempt status for their activities as Americans have done for decades. And for the many tax-exempt groups we represent, this is an important day – and underscores the need to stand-up and defend your constitutional freedoms,” Sekulow said.

The IRS admission and apology should have come much sooner, Sekulow maintained.

“It took the threat of legal action to get the IRS to make this admission. And while many of the organizations we represent have finally been granted tax-exempt status, we demand the IRS to immediately approve the pending applications for the remainder of our clients,” Sekulow said.

Some 14 groups represented by the American Center for Law and Justice, including the Honolulu Tea Party and the Maui Tea Party, have been granted tax-exempt status by the IRS over the last several months, and others are pending, and none have been denied.

For Adrienne King, an attorney who headed the Honolulu Tea Party in 2011 and 2012, the apology is welcome news.

She was shocked and angered last year when she received an inquiry from the IRS demanding she provide detailed information on tea party activities, materials, pictures, videos, names of speakers and attendees as well as copies and recordings of actual speeches made at the events.

The July 27, 2012 IRS letter said: “Please provide details of your tax rally and confirm whether this is an accurate list (of speakers). How were these speakers selected? How much time was devoted to each speaker? What topics were discussed? Please provided any other information about the speakers that you think would be helpful to us in processing your application as well as copies of any materials or recordings from the speeches.”

The Maui Tea Party received a similar letter.

Senate Minority Leader Sam Slom was one of several lawmakers to speak at the Honolulu Tea Party rallies (photo by Mel Ah Ching)

King said she has retained the services of American Center for Law and Justice to respond to the IRS after she believed the inquiry to be a violation of the First Amendment. It took over a year for the Honolulu Tea Party to receive the 501c4 status, but it was finally granted in late March.

“This admission and apology by the IRS is incredible news. The IRS admitted that they targeted tea party groups to try and silence our voices and stop our efforts to halt the left wing ideologues assault on liberty,” King said. The price of liberty is eternal vigilance. Keep yur guard up and right will win in the end.”

Miles L. Terry, Associate Counsel for the American Center for Law and Justice, added, “While I appreciate the honesty, ‘sorry’ is just not enough.  Where is the compensation for hundreds of hours of attorney time?  Where is the compensation for thousands of hours spent by Tea Party groups compiling tens of thousands of pages of documents?”

The organization also called for Congressional oversight hearings on this issue after more than 50,000 Americans requested it.

Niger Innis, Chief Strategist for TheTeaParty.net, agreed an apology is not enough and demanded a thorough investigation to see why the IRS is being used as a “political weapon” by the Obama administration.

"What would Democrats have done if the Nixon administration ordered the IRS to actively target the National Organization of Women or the American Civil Liberties Union? Nixon had his own enemies list and resigned. These activities are eerily similar, and yet Obama remains in office even in light of Fast and Furious, the Benghazi tragedy, and now the active targeting of his political opposition,” Innis said.

“We demand a thorough independent investigation into who did what, when, why, and how far up into the administration this scandal goes. We would expect intimidation like this from third-world, tin-pot dictators, not our own US government."

Senate chambers

BY MALIA ZIMMERMAN - HONOLULU – Hawaii lawmakers took modest steps to address the state’s record $25-billion in unfunded liabilities during the 2012 and 2013 legislative sessions.

But taxpayer watchdogs are critical that not enough is being done to address looming debts and are concerned that overly generous benefits promised to thousands of public employees in influential public labor unions could eventually bankrupt the state.

“We cannot drain the public purse to provide benefits for public employees that no one else has,” said Lowell Kalapa, president of the Tax Foundation of Hawaii.

However, attempting to curb public union benefits has proven risky for politicians, since it is the public unions, including the Hawaii Government Employees Association, the United Public Workers union, and the Hawaii State Teachers Association, that guarantee a heavy Democratic majority party dominance in both Houses of the Legislature.

Guaranteeing health care for life

A majority of Hawaii’s public employees receive health care coverage for themselves and their families courtesy of the taxpayers. After they retire, public employees and their spouses retain their health care coverage for life.

Hawaii’s public employee health care benefits are managed through the Employee Union Trust Fund, which has just about $300 million in assets. However, much more money is needed to cover health care costs for government workers, retirees and their families.

Kalbert Young, director of the state Department of Budget and Finance, said the Employee Union Trust Fund total unfunded liability exceeds $18 billion.

To put it in perspective, the state’s biennium operating and capital budgets are $24 billion during the next two fiscal years.

Hawaii is responsible for covering $15 billion of the debt to the EUTF. The remaining $3 billion is owed by the four counties and the University of Hawaii.

During the 2013 session, which ended May 2, lawmakers set aside $217 million over two years to fund the Employee Union Trust Fund and set up other legislation to ensure future payments.

Kalapa of the Tax Foundation of Hawaii is critical of lawmakers and HB 546 CD1, and said the legislation could be bad news for taxpayers.

“This is this an automatic license to increase state taxes,” Kalapa said.

If lawmakers are serious about paying down the debt, they should do that, Kalapa said.

The $217 million barely makes a dent in the debt. It would take more than 100 years to satisfy the liability at that rate.

“The amount the state needs to contribute each year is over $500 million based on the last actuarial study. And, the state would have to do so for the next 30 years. $100 million is only about 20 percent of what is required,” Young said.

Besides allocating $217 million for the next two years to the EUTF, the legislation establishes a trust fund task force; requires the annual public employer contribution to be determined by an actuary, not the legislature, beginning in FY 2018-2019; and will take revenue from state General Excise Taxes and hotel room taxes.

At a town hall meeting on Tuesday, Sen. Laura Thielen, D-Kailua, Rep. Mark Hashem, D-Aina Haina, andRep. Gene Ward, R-Hawaii Kai, praised House Bill 546 CD1.

Unlike Kalapa, Young said the legislation is a good start.

“The Legislature should be commended for agreeing with my proposal to fund, even if it’s not the amount that will yet fix the problem,” Young said.

But Kalapa is not convinced.

“The problem with this legislation is the legislators are just inserting a default,” Kalapa said. “What if we go through another recession? Is the EUTF the first claim and everything else gets cut? I don’t think lawmakers really thought this legislation through. There are other demands for the state’s General Excise Tax and Transient Accommodation Tax revenues.”

Part of the discussion should be about changing health and pension benefits for the future, not for those on the payroll, because they have been promised these benefits, but moving forward, Kalapa said.

Public employee health benefits were set up in the territorial days when people didn’t live until they are 100 years old. Hawaii also reimburses public employees for their Medicare contributions.

Kalapa maintains that like in the private sector, public employees should not have health care for themselves and their spouses once they retire.

Employee Retirement System nearly three decades from full funding

Senate and House conference committee

While health care for public employees is the largest unfunded financial burden state taxpayers face, the Employee Retirement System also has its challenges.

The state and county, as employers, contribute a percentage of payroll each year to the ERS.

About $12 billion in assets are under management, but the ERS needs another $9 billion to be considered fully funded.

Young said the ERS is funded at about 59 percent, but will be funded at 100 percent in 27 years because of reform measures passed by the Legislature in 2011 and 2012.

A point of contention nationally is what the rate of return for ERS investments should be.

In Hawaii, it is the Legislature, not financial experts, who set the expected rate of return at 7.75 percent. Up until 2011, it was 8 percent, but the Legislature agreed to lower the figure to 7.75 percent at the request of the ERS, Young said.

While some national reports and experts suggest the rate of return for public pensions should be around 3 or 4 percent, not 7 or 8 percent, Young said the rate needs to be realistic and based on the asset and investment mix as well as the outlook for financial markets.

“The ERS board does agree that the rate of return assumption should be considered lower over time,” Young said. “However, you cannot lower the rate of return assumption too fast, because it will spike unfunded liability calculation too drastically.”

Sheila Weinberg, Institute for Truth in Accounting (photo by Mel Ah Ching)

Under Hawaii’s law, if the funding duration extends beyond 30 years, the Legislature must consider increasing the contribution by county and state employers.

This was the case in 2010, and why the Legislature increased the contribution rates for employers in 2011, Young said.

Hawaii’s ERS also was depleted by lawmakers who used the fund to pay for projects and programs for decades until the practice was stopped by then-Gov. Linda Lingle in 2006.

“Lawmakers should have caught up on these payments 20 years ago, but instead they raided these funds so they could keep their favorite programs funded,” Kalapa said.

Hawaii’s unfunded liabilities got the attention of Sheila Weinberg, founder of the Washington DC-based watchdog group, Institute for Truth in Accounting.

Hawaii was ranked by her organization as the third worst “sinkhole state” because of its debt.

Weinberg has also traveled to the 50th state to meet with lawmakers about Hawaii’s unfunded liabilities problem and what should be done to address it.

She warns Hawaii’s liability could increase further under the new pension accounting rules that will require the unfunded portion of the liability to be calculated using the municipal bond rate. The impact will be reported in the 2014 financial report, she said.

Weinberg maintains that although Hawaii has a balanced budget requirement, the budget is not truly balanced if there are unfunded liabilities. She compares lawmakers’ action to paying the minimum due on a credit card instead of paying the whole balance.

Contact Malia Zimmerman at malia@hawaiireporter.com

M.R.C. Greenwood

By Malia Zimmerman - Less than 18 hours after University of Hawaii President MRC Greenwood announced she plans to retire several months before her lucrative $475,000-a-year contract expires in 2015, the controversial academic has gone silent – at least for now.

Lynne Waters, spokesperson for Greenwood, issued a statement Tuesday morning: “President Greenwood feels she has said all she wishes to say on the subject of her pending retirement in the print interview given yesterday, the news release and the letter to the UH ohana, and has answered most of the relevant questions. … There will likely be no media availability today or tomorrow due to her existing heavy schedule.”

On Monday afternoon, Greenwood, 70, said in a written statement that she is stepping down for "personal, health-related, and family oriented" reasons. After an unspecified amount of unpaid personal leave, Greenwood said she plans to return to the University as tenured faculty, but in the meantime, is looking forward to "retirement to once again be ‘grandma’ and to write, teach and do some policy work.”

Greenwood detailed a number of accomplishments: “Through the support and hard work of our faculty, staff and friends we’ve been able to accommodate the largest student enrollment in history, streamlined course availability and transfers, incurred no lost days of instruction, and maintained a very robust research portfolio.”

Board of Regents Chair Eric Martinson, who has been an ally to Greenwood, said her accomplishments have been "outstanding" and he claimed the university’s reputation “has advanced nationally and internationally” because of Greenwood.

Martinson also listed numerous University projects that Greenwood helped establish including the UH Hilo Hawaiian Language building, the UH Cancer Center, Windward Community College’s learning center, UH West Oahu campus, the UH Maui College campus center, and the new information technology building under construction at UH Manoa.

While Greenwood has her allies like Martinson, she has powerful critics, including those who want to make sure the University regents select a new president who is less controversial and more suited to the University of Hawaii.

Controversy in California

Greenwood joined the University of Hawaii in 2009 after regents hired a search firm to recruit possible candidates from the mainland. There were three finalists, but two dropped out, leaving just Greenwood for the Board’s consideration unless its members voted to renew the search.

Former regents told Hawaii Reporter that the board was split down the middle on Greenwood’s appointment but agreed to come out publicly united. Despite numerous requests to the University for minutes of that regent meeting, Hawaii Reporter has not been able to obtain them.

While Greenwood had numerous academic credentials, she also had ethical challenges while working in the University of California's system as a provost - ethical challenges so serious that they led to her early resignation.

Through a Freedom of Information Act request to the state of California, Hawaii Reporter obtained the documents that detailed the University’s investigation into Greenwood for “possible improper hiring practices and conflict of interest concerns.” (See the documents here: http://www.universityofcalifornia.edu/news/greenwood/welcome.html/)

University of California President Robert C. Dynes said after the University launched the investigation with the help of the General Counsel and University Auditor’s Offices, Greenwood resigned.

The investigation focused on two hirings, including one involving Professor Lynda Goff, who was hired by Greenwood first as a Faculty Associate and then as Director of the Science & Math Initiative. Greenwood and Goff were in a real estate venture together, and Dynes said “it appears that Provost Greenwood may have been involved in Dr. Goff’s hiring to a greater extent than was appropriate, given that her business investment with Dr. Goff had not been properly and fully resolved in accordance with conflict of interest requirements.”

Greenwood’s son, James Greenwood, was also hired as a paid Senior Intern on the UC Merced campus. Investigators questioned whether Vice President for Student Affairs Winston Doby acted improperly when helping her son secure the position.

Controversy Follows Greenwood to Hawaii

University of Hawaii Associate Vice President for Capital Improvements Brian K. Minaai

Controversy surrounding Greenwood’s leadership continued in Hawaii. Lawmakers and some former regents have been critical of Greenwood for her poor fiscal management, spending, frequent travels out of state, and not being upfront with lawmakers.

Data obtained from the University of Hawaii by Hawaii Reporter showed Greenwood was traveling off island or out of state for nearly an entire year of the four years she spent on the job. Between June 2009 and February 2013, Greenwood was out of state for 238 days and traveling between islands for 68 days. She also took 42 days of vacation. The travel cost the University of Hawaii Foundation $133,000.  The University maintains traveling is an important part of her role as president of the University.

There have been allegations of corruption surrounding the University of Hawaii’s billion-dollar construction and procurement program. Brian Minaai, a university administrator in charge of procurement, was put on paid leave after one prominent contractor called him “a nightmare” guilty at least of “blatant mismanagement.” School officials announced they asked the state attorney general to investigate the charges, including claims that Minaai directed contracts to personal and political friends.

Under Greenwood’s tenure, student tuition increased at a record pace - more than 100 percent in 5 years - and is set to rise another 29 percent, but lawmakers said the money appeared to be going to a bloated administration, not students and classrooms.

The Hawaii Senate convened an investigation into Greenwood's management and fiscal practices after the University lost $200,000 in a scam that involved con artists from Florida and North Carolina who claimed they could host a fundraising concert with Stevie Wonder on campus. After the real agents for Wonder contacted the University, the administration announced the concert was cancelled because Wonder was not available. During the Senate's investigative hearings, Greenwood admitted the University had been scammed and the fiasco became known around town as the “Wonder Blunder.”

Senate President Donna Mercado Kim speaks to reporters after a University of Hawaii Hearing (photo by Mel Ah Ching)

Senate President Donna Mercado Kim introduced seven bills during the 2013 legislative session to reign in Greenwood's spending and autonomy.

Rep. K. Mark Takai, another graduate of the University, was critical of Greenwood's unwillingness to appear before lawmakers at hearings involving the University. He also introduced resolutions and bills to reduce excess spending at the University.

Relations between Greenwood, the regents and the Senate were so stressed in the fall of 2012, Greenwood sent the regents a letter demanding $2 million to leave the University ahead of her contract expiring. She withdrew the letter after U.S. Senator Daniel Inouye stepped in on her behalf.  Inouye has since passed away.

Greenwood and her partner were also criticized for taking a $60,000 housing allowance instead of living in the University's home that has always accommodated the president.

They also were under fire after donating $50,000 to the new cancer research center in Kaka’ako - not for the donation, but for having their names prominently displayed in large gold letters at the entrance of the center, when other donors who had contributed considerably more received no such recognition.

Rep. Mark Takai

Moving Forward, Go Local

While Senate President Donna Mercado Kim issued a statement saying she believes Greenwood’s resignation is best for the University, Rep. K. Mark Takai said he is looking forward to what’s next at his alma mater.

Takai hopes regents will consider local candidates for the job of University president, rather than hiring a national search firm that may cost the University hundreds of thousands of dollars. Search firms potentially bring in more money from mainland candidates because they are typically paid more because those candidates command higher salaries, Takai said, creating a bias toward mainland candidates over local ones.

“I think we in Hawaii tend to sell ourselves short. We need to step up and support people from Hawaii because I think understanding who we are and understanding the university history is critical for the next president,” Takai said.

For the last decade, Takai has also been pushing for the offices of the president and the Manoa campus chancellor to consolidate as they once were. He said if the president of the University also serves as the chancellor for the main University campus, the University will save $6 million a year.

“Bottom line, we have to find someone who loves Hawaii and cares about our people. That is going to be critical as we move forward,” Takai said.

Photo: Emily Metcalf

The Hawaii Association of Realtors was the top donor to Hawaii lawmakers in 2011 and 2012, with the association donating $110,100 to 83 percent of the state's 76 lawmakers.

Not far behind the realtors' group was the Hawaii State Teachers Association, the state's only union for Hawaii's public school teachers, which donated $108,250 to Hawaii lawmakers.

Another labor organization, Hawaii Operating Engineers, donated $73,000 to their favorite lawmakers.

Rounding out the top 5 contributors are Hawaii's two most influential lobbyists, John Radcliffe and George "Red" Morris, who between them locally represent the interests of many of the nation's largest industries and businesses.

Money in Politics, a non-profit organization that tracks donations to lawmakers across the country, released this report summary on Monday, suggesting the public and media can check out why a legislator might be supporting or opposing a particular bill.

"Remember www.FollowTheMoney.org when you’re searching for answers. You can examine the complete records of who has contributed to those lawmakers’ campaigns, and how much they gave. We leave it to you to fill in what contributors might expect in return," said Amanda Harrow, Communications & Outreach Specialist for the National Institute on Money in State Politics.

The organization, which provides data in a searchable database, said the top industry donating to Hawaii lawmakers is labor followed by lawyers and lobbyists; finance, insurance and real estate; health; and general business.
The top five 2011-2012 donors, excepting political parties or candidates, to current Hawaii legislators: 

The top five economic sectors that contributed in 2011-2012 to current Hawaii legislators:

To see more about Hawaii lawmakers and who contributes to them, log on here

Hawaii harbor

By Zach Weissmueller & Sharif Matar - "What would an enemy want to do to the people of Hawaii during war time?" asks Ken Schoolland, professor of economics at Hawaii Pacific University and scholar at the Grassroot Institute. "They would want to cut us off from international shipping. Well, this is what the law does to us all the time."

Reason TV sat down with Schoolland to talk about the Jones Act, federal legislation that restricts foreign-flagged ships from engaging in commerce in domestic shipping lanes. Schoolland argues that this protectionist measure is crippling the Hawaiian economy and results in Hawaii's imports being among the most expensive in the world.

Attorney John Carroll petitioned to overturn the Jones Act, but the petition was dismissed by the court with prejudice. Carroll says he intends to mount a vigorous appeal.

About 4 minutes.

Produced by Zach Weissmueller. Shot by Sharif Matar, Paul Detrick and Weissmueller.

HONOLULU — Hawaii’s government is growing, and Hawaii taxpayers are going to foot the bill.

Senator Clayton Hee, chair of the Judiciary and Labor Committee (photo by Mel Ah Ching)

HONOLULU — Senate Judiciary and Labor chairman Clayton Hee is not known for his compassion, consistency or tolerance for mainland folk.

It is not uncommon for members of the public who go before his committee to be attacked, told they are not allowed to speak or grilled for several minutes about subjects that may only be vaguely related to the hearing at hand — all while he wears his dark glasses and cocks his head sideways to look at them from another angle.

Judicial nominees may spend hours or even days trying to justify their qualifications and experience and occasionally Hee fixates on the smallest of details using them to destroy the candidacy of a nominee he doesn’t see fit for duty. To his fellow senators, Hee can be cordial or threatening, depending upon the minute and his mood.

This year, it was the media — not a particular person or judicial candidate — who was the focus of his ire. This followed an unflattering and brief story in a Republican blog during the 2012 election that used no sources when accusing Hee of misdeeds clearly in an attempt to influence voters in the November election.

Jeff Portnoy, Hawaii media attorney

Hee won re-election and never sued the blog owner or spoke publicly about the accusations to confirm or deny them.

But when he was on the verge of considering whether to renew Hawaii’s journalism shield law, considered one of the best in the nation because it gives protections to traditional, online and non-traditional journalists, the disparaging blog entry appeared to raise his ire. Hee took his revenge out on all “so-called journalists,” saying they are “reckless” and “inaccurate” and have been afforded too much protection under the current law that expires in June.

Throughout the session, Hee kept his fellow Senate Judiciary Committee members in the dark about details of new bill drafts and told them to vote without seeing the drafts. The media also was kept from viewing the drafts even after the drafts had been voted on.

“This is a statute that benefits a limited group of people and also the public — but it is for journalists — and to not allow or permit the journalists to participate in the process is outrageous,” said Jeff Portnoy, a media attorney representing the Hawaii Shield Bill Coalition made up of 22 news outlets. ”We were given zero input, the hearing was a joke, it was intimidating. And so subsequent to that, we sent communication to various legislators telling them it was unacceptable.”

Classic Hee: Sen. Clayton Hee sits behind Sen. Will Espero on the Senate floor with dark glasses on and his head cocked sideways

The bill, as Hee wrote it, defined who a journalist is and what a media publication is, and did so without any consideration for 21st century journalism and without any input from journalists, said University of Hawaii journalism professor and former daily newspaper columnist Gerald Kato.

“There was a reason James Madison, in writing the First Amendment, said that government should keep its hands off the press. There is a great temptation, as there is here, to define who or what constitutes journalism to the exclusion of others. Lawmakers sometimes can’t resist the opportunity to say you’re a journalist because you own a printing press and you over there aren’t because you don’t. By doing that, they can define who is ‘legitimate’ and who is ‘not’ — who is ‘responsible’ and who is ‘reckless.’  It is a slippery slope to trying to control the message by controlling the messenger,” said Kato, who helped lobby for the bill five years ago and its extension this year.

Hee claimed to have changed the bill because of input from the American Civil Liberties Union, the State Attorney General’s office, and the Judicial Committee on Evidence, but his claims were rebutted.

The ACLU did meet with Hee on the journalists’ behalf, but disowned the Senate draft that emerged.

Portnoy also disputed Hee’s claims.

Stirling Morita, SPJ Hawaii Chapter president

“What is critical, and is deceitful, in preamble of that (Senate) bill, it states that the changes they had made were at the request of the Judiciary Committee on evidence. That is an absolute falsehood because the Senate version, which passed the Senate (Tuesday), removed from the statutes non-traditional journalists and redefined who is a journalist and who isn’t. The Judiciary Committee never suggested that was one of the provisions the Legislature might want to look at.”

The House, which had made minimal changes to the current law before sending it to the Senate chairman for his consideration, agreed with the media to reissue an amendment on Tuesday that changed nothing in the current bill except the sunset provision, which it extended for two years. That passed unanimously in the House. The Senate was aware of the amendment and so was the media after a news release was issued.

Senate Democrats were being barraged by emails from several media organizations in the Hawaii Journalism Shield Bill Coalition asking them to adopt the House amended bill. Senators met three times in caucus on Tuesday to battle the issue in secret, emerging with no resolution.

UH Journalism Professor Gerald Kato

“A (Senate) chair obviously ‘out to get the media’ scuttled the House version and came up with a version that made the law, if it passed, not one of the best in the country but worthless — virtually one of the worst. It deleted all of the protection for anyone who does not work for pay for a paid printed or broadcast media. … all of the 21st century media, and it took out any privilege for unpublished information, which is critical,” Portnoy said.

After a barrage of emails to House and Senate conferees, the unpublished information provision was reinserted, but the bill as proposed by the House and Senate conferees still eliminated all protection for non-traditional journalists.

Portnoy said he gives the House “tremendous credit for its guts and courage” because they were not willing to kill the bill without more analysis and input from everyone who should be involved.

Portnoy also thanked the nine Senators who voted against Hee’s Senate draft, but noted in the end, not one senator was willing to stand up to Hee and propose the House version. Portnoy said he was told there were not enough votes to pass the House version.

Sen. Sam Slom, minority leader (photo by Mel Ah Ching)

“We have spent so much time this year trying to bring rationality to the discussion but when the Senate judiciary chair holds up Dewey defeats Truman (headline from 1948) as an example of how journalism is, you know that you don’t have a chance with someone who does not understand the shield law has nothing to do with truth of falsity,” Portnoy said.

Portnoy said the shield law did not protect the journalist from “bad journalism” or defamation laws. What it did was protect the journalist who gets important information from people who did not want their identities disclosed.

“There are a number of cases in Hawaii that people do not even know about that would not have come out without the shield law,” Portnoy said, noting the experiences of his own local media clients.

“There are two very significant stories that might not have been published in this state without the shield law. One series of stories deals with Jimmy Pflueger and the breach of his Kauai dam, and another series of the stories on the Big Island elections. Attempts were made to try to get confidential sources and records, and in both cases, we were able to convince the lawyers attempting to get the information that the shield bill protected that information.”

House Majority Leader Scott Saiki helped journalists this session by introducing an amendment that would keep the current law intact

Hee has attacked journalists and Portnoy in committee and from the Senate floor and referred to some of Portnoy’s comments as “lies.”

The struggle to keep the journalism shield bill intact has attracted the attention and advocacy from the Reporters Committee for Freedom of the Press, the ACLU, the Hawaii Community-Media Council and the Society of Professional Journalists national and local chapters. Stirling Morita, the local SPJ president, along with Kato and Portnoy, took the lead on pushing for the bill’s extension.

Senate Minority Leader Sam Slom told journalists on Wednesday that “anything can happen” until the gavel falls ending the 2013 legislative session on Thursday if the Senate cooperated with the House, but that is not likely.

“Three weeks ago, Sen. Hee reminded or cajoled everybody that it was the duty and the obligation of all senators on all Senate conference committees to represent only the Senate position and if they in fact did not represent the Senate position, he was going to lodge a complaint with the Senate president and Senate leadership,” said Slom, the Senate’s only Republican.

“Sen. Hee threw down the gauntlet at that time, which made it extremely difficult for my colleagues in the majority to stand up and be independent.”

Hawaii State Senate Majority Leader Brickwood Galuteria blamed the House leadership for the bill's likely demise.

“Passing the amendment without consulting with the other chamber affirmatively kills the bill.  The draft that was passed out of conference in the form of HB622, HD1, SD1, CD1 continued the additional protections of a shield law above and beyond what is provided by Hawaii’s constitution for the press.

"The floor amendment presented a very substantive change to the conference draft that was agreed upon by the House and Senate conferees. Every draft of the bill up until that point sought to make the shield law permanent.  To introduce such a substantive change, moments before the Senate began its floor session, lacked the transparency and openness that the public expects and deserves. “

Photo: Emily Metcalf

Many of Hawaii's teenagers hired for their first job or unskilled workers looking to be trained and promoted, are making minimum wage, which in Hawaii is $7.25 an hour.

Several of Hawaii's 76 lawmakers wanted to increase that wage by more than $2 in two years, and in the House, representatives wanted to tie future increases to inflation. The governor asked lawmakers for a $1.50 per hour boost.

However, locally owned small businesses warned lawmakers that any increase could keep them from hiring inexperienced or untrained workers or force them to lay off workers. With the increase, not only would wages go up, but the costs of benefits would as well.

It appeared the minimum wage bill would pass after gaining momentum over the last several weeks in the House and Senate. However on Friday night, after lawmakers in both Houses could not agree on final language in the bill, the legislation died.

Lowell Kalapa, president of the Tax Foundation of Hawaii, testified this session against the proposed minimum wage increase.

“The minimum wage was never considered to be a 'living wage,' but rather an entry-level pay scale. It allowed workers who had no experience to be employed and to gain that important characteristic called 'experience' something that all employers seem to want to see if they are out shopping around for potential employees,” Kalapa said.

The idea of boosting the minimum wage, whether it be at the state or federal level, has “political appeal” because most people believe they should be earning more than what they are earning currently, Kalapa said.

“It is all about ego and self-esteem that we are all worth more than what we are currently being paid,” Kalapa said.

Kalapa and many business owners maintain a higher wage would mpact everyone negatively, even the direct beneficiaries, because the costs of goods will also go up.

HAWAII STATE CAPITOL Photo: Emily Metcalf

Hawaii legislators have killed what some business owners deemed the worst bill of the 2013 legislative session.

House Bill 634 — the “successive owner” legislation — would have forced people purchasing a business to retain all employees. The legislation designated the restriction on businesses with 100 or more employees, but could have easily be lowered this year or in future years to affect companies with considerably fewer employees.

The bill made it through third reading in both Houses, but was highly controversial.

The bill was killed in conference committee on Friday evening.

Organizations such as the Tax Foundation of Hawaii, Chamber of Commerce of Hawaii, Maui Chamber of Commerce, National Federation of Independent Business, Retail Merchants of Hawaii and Smart Business Hawaii, opposed the measure.

Lowell Kalapa, president of the Tax Foundation of Hawaii, said the legislation had not been given much thought, and seemed to be very bad legislation that would close the doors on future investment in Hawaii.

The AFL-CIO and ILWU Local 142 - and legislators they helped elect - supported the legislation, saying it would create “job security” and remove stress and uncertainty from the lives of employees facing transition.

Sen. Sam Slom, the Senate’s only Republican member who heads the business advocacy group Smart Business Hawaii, said there is no other state with such a bill and for good reason.

“It would cripple existing businesses and make sales and purchases nearly impossible, while reinforcing Hawaii’s image as a hostile business climate with nearly weekly national organizations rating us F for business,” Slom said.

Senate President Donna Mercado Kim speaks to reporters after a University of Hawaii Hearing (photo by Mel Ah Ching)

According to CareerCast.com, a web site that annually releases the best - and worst - jobs across America, the worst job to have in 2013 is that of a newspaper reporter.

Probably no surprise to those in the industry, a job as a newspaper reporter ranks lower than lumberjacks, dairy farmers, mail carriers and enlisted military personnel.

"A job that has lost its luster dramatically over the past five years is expected to plummet even further by 2020," Paul Gillin says. “The print model is not sustainable. It will probably be gone within the next 10 years.”

The top 10 worst jobs for 2013 are:

1. Newspaper Reporter
2. Lumberjack
3. Enlisted Military Personnel
4. Actor
5. Oil Rig Worker
6. Dairy Farmer
7. Meter Reader
8. Mail Carrier
9. Roofer
10. Flight Attendant

On the other side of the scale, the best job to have in 2013 is an Actuary.

According to the report: "Those skilled in mathematics and statistical analysis can find rewarding opportunities as an actuary. The career is challenging, and becoming an actuary requires passing a series of three exams. It’s also constantly evolving."

The entire list is below of best jobs in 2013:

1. Actuary
2. Biomedical Engineer
3. Software Engineer
4. Audiologist
5. Financial Planner
6. Dental Hygienist
7. Occupational Therapist
8. Optometrist
9. Physical Therapist
10. Computer Systems Analyst

See the full report with salaries and job descriptions at http://www.careercast.com

Malia Zimmerman

HONOLULU (HawaiiNewsNow) - As a journalist and publisher of the Hawaii Reporter web site, Malia Zimmerman tells other people's stories.

Her own story involves donating bone marrow to a woman in need.

"Without this transplant, she will have a zero percent chance of living," she said.

Zimmerman doesn't know the recipient, but she does know it's a 54-year-old woman with cancer who dreams of a cure.

"She wanted to live a year, and then five years, and be cancer free," she said.

See the full report by Jim Mendoza on Hawaii News Now: http://www.hawaiinewsnow.com/Global/story.asp?S=22071046

Paulette Kaleikini and her attorneys from the Native Hawaiian Legal Corporation stopped construction on the city's rail project until the Archeological Surveys are completed

Construction on the city’s $5.2 billion Honolulu rail project ground to a halt last August after attorneys from the Native Hawaiian Legal Corporation representing Paulette Kalekini convinced Hawaii Supreme Court justices that the city violated environmental laws.

The city administration began construction on the 20-mile elevated steel on steel rail project without completing an archeological survey.

The city argued the archeological survey could be completed in four segments. But the justices disagreed, ruling that under current Hawaii law, all segments should be completed to determine if there are any native Hawaiian burial sites before construction began.

The ruling will put the rail project on hold for more than a year.

But some Hawaii lawmakers who support the rail and other development projects impacted by this Hawaii law want to change it.

Lawmakers introduced Senate Bill 1171, which authorized the phased review of certain projects by the Department of Land and Natural Resources’ State Historic Preservation Division.

Proponents say the changes would ensure state and federal laws are “consistent.”

But a group calling itself “FRIENDS OF SHPD” or the State Historic Preservation Division is opposed to the change.

The group has partnered with the Society for Hawaiian Archaeology, the Sierra Club Hawai'i Chapter, the Society for American Archaeology, Office of Hawaiian Affairs, the O'ahu Island Burial Council, the Native Hawaiian Legal Corporation and Coalition of Students to rally against SB1171 and get the legislation killed.

They said the measure puts “historic sites and iwi kupuna at risk, while allowing for poor planning practices that could cost the state and developers more in the long run.”

The bill is currently in conference committee. The legislative session ends May 2.

Great Lawn, Hawaii Kai

Rep. Gene Ward, R-Hawaii Kai, Sen. Laura Thielen, D-Kailua-Hawaii Kai, and Sam Slom, R-Hawaii Kai-Diamond Head, sent a letter on April 16 to the Honolulu City Council asking its 9 members to oppose development of the “Great Lawn”, a parcel 14-acre parcel in Hawaii Kai now zoned as preservation land.

The land is one of the last remaining open spaces in the community, but owner Kamehameha Schools, wants to develop 4.5 acres into a shopping center anchored by the locally owned grocery store chain, Foodland.

For the development to proceed, the Honolulu City Council would need to rezone the parcel from preservation to commercial. The Hawaii Kai Neighborhood Board, the Outdoor Circle, the organization that runs the Hawaii Kai dog park, many paddlers from Hui Nalu Canoe Club, and several other environmental and community groups, have already come out in support of keeping the land zoned as preservation and free from commercial development.

Hundreds of Hawaii Kai residents opposed the plan at a town hall meeting on Thursday, March 21, with just four people at the meeting indicating support.

Several residents spoke on their concerns about the project and how it would impact the popular dog park and Maunalua Bay, which is heavily used by paddlers, boaters, fishermen, picnickers, tour buses, firefighters in training and workout clubs. They also cited concerns about already heavy traffic fronting the Great Lawn property on Kalanianaole Highway. Others mentioned the view of the mountains that surround Hawaii Kai would be marred by development, and preservation land and open space is disappearing at too rapid a pace.

“East Oahu residents, have on more than one occasion, expressed the need to uphold the East Oahu Sustainable Community Plan by keeping that land zoned preservation. The community has also expressed the essence of who they are as people and place are not defined by shopping convenience, but rather by the natural beauty of the area,” the letter from Ward, Thielen and Slom said

Kamehameha Schools and Foodland hired OmniTrak Group Inc. to poll the community on the project and claimed 72 percent of the nearly 400 people contacted were in support of the project. However, Marian Grey, a resident who received a call from the polling company, said the pollster who she spoke to tried to convince her to support the retail project, even after she said several times that she was opposed and wanted the area to remain open preservation space.

Ward said he took his own poll with the results turning out much differently: 87 percent of residents oppose the strip mall’s construction on preservation land.

Council member Stanley Chang is a key vote on the 9-member council that will decided whether to rezone the property because he represents the east Oahu area.

Chang was “booed” at the March 21 meeting after he first said he would listen to the people of Hawaii Kai who made their feelings opposing the project clear, but then qualified his statement moments later saying he had not decided whether he would support the project.

Chang declined to sign the letter authored by Ward, Thielen and Slom.

Rep. Mark Hashem, who represents the Hawaii Kai area, also declined to sign the letter.

Neither Chang nor Hashem responded to media inquiries yesterday asking for clarification on their position on the project and why they declined to sign the letter expressing opposition to the project.

Dante Carpenter

The Democratic Party of Hawaii will file a lawsuit in U.S. District Court to seek an injunction against the state of Hawaii over its primary election laws, according to Party chair Dante Carpenter.

As the law stands now, the Democratic Party of Hawaii must allow candidates who claim Democratic Party affiliation to run as Democrats, but the party leadership said that provision "does violence to the party’s own association of freedoms and freedoms of its membership."

Party leaders want to regulate who can run for office under their party banner.

They also want to have Hawaii return to a closed primary election system to prevent Republicans and independents from crossing over to vote in Democratic primaries. That would mean those voting in the primary election would have to show a party card or prove party affiliation before casting votes for Democrats on the ballot.

Currently, Hawaii law restricts voting on the primary election to candidates in one party, but the voter does not have to prove party affiliation.

The party central committee and leadership notes: "The Democratic Party of Hawaii believes that its primary election, a state imposed mandatory nomination procedure, ought to be open to participation of only such persons as are willing to declare their affiliation with and support of the party, either through public registration to vote, or through maintenance of of membership in the party. The party further believes that the current Constitution and laws of the United States, by maintaining secrecy of affiliation, and by compelling the party to admit to its nomination procedures those who have no interest in it, or actually oppose the interests, values and platform of the party, do violence to the party's associational freedomrs and the individual freedoms of its membership to define their own political views, guaranteed under the Constitution of the United States.  The State Central Committee and party chairperson shall take the appropriate action to correct this injustice."

Labor Attorney Tony Gill will proceed with the lawsuit on the party's behalf.

HONOLULU - Photo courtesy of HTA

HONOLULU — The Kauffman Foundation’s Thumbtack.com gave Hawaii an F for small business friendliness, considering regulations, taxes, labor, hiring, licensing and zoning in determining the bad mark.

Numerous other organizations have deemed Hawaii as the most expensive — or worst — place to own a business.

Hawaii lawmakers, for the most part, have failed to take the warnings seriously, and they’ve introduced a number of controversial proposals that would place even more restrictions on business owners.

Most onerous is House Bill 634 — “successive owner” legislation — which would force people purchasing a business to retain all employees. In the current draft, the legislation designates the restriction on businesses with 100 or more employees. But as one lawmaker points out, that can easily be lowered this year or in future years to affect companies with considerably fewer employees.

The bill is “flawed” because it does not designate how long the employees must be retained. “So, as it stands, employees must be kept for perpetuity,” Kalapa said.

Some businesses are sold because they are not doing well financially. Under the new legislation, downsizing or changing the workforce is not an option.

“What investor is going to want to go into that deal?” Kalapa asked.

The legislation could backfire and lead owners to lay off employees before the business is sold – as a condition of the sale.

“The legislation has not been given much thought, and seems to be very bad legislation that will close the doors on future investment in Hawaii,” Kalapa said.

Matt DiGeronimo

Organizations such as the Tax Foundation of Hawaii, Chamber of Commerce of Hawaii, Maui Chamber of Commerce, National Federation of Independent Business, Retail Merchants of Hawaiiand Smart Business Hawaii, oppose the measure.

However, unions including the AFL-CIO and ILWU Local 142 testified in support of the legislation, saying it will create “job security” and remove stress and uncertainty from the lives of employees facing transition. The state Department of Labor and Industrial Relations director supported the bill as well.

Matt DiGeronimo, mergers and acquisitions specialist from Smith Floyd Hawaii, shook his head in disgust when hearing about the legislation.

“What this bill is really going to do is prevent people from selling their business – they are just going to have to walk away,” DiGeronimo said.

“The deal just will not go through,” DiGeronimo said, calling the legislation “a slippery slope” that will cause the worst kind of economic downturn “when jobs and businesses just evaporate” and people’s retirement plans get decimated.

Sen. Sam Slom, minority leader (photo by Mel Ah Ching)

Sen. Sam Slom, the Senate’s only Republican member, heads the business advocacy group, Smart Business Hawaii. He said it’s not the first time this “bad” bill has been introduced, but it is the first time it has garnered this much momentum.

“There is no other state with such a bill and for good reason,” Slom said. “It would cripple existing businesses and make sales and purchases nearly impossible, while reinforcing Hawaii’s image as a hostile business climate with nearly weekly national organizations rating us F for business.”

While some advocates of the legislation said it affects just 4 percent of businesses with 100 employees or more in Hawaii, Slom said past anti-business legislation that started with limits such as 100 or 50 employees was enacted into law and later amended to include all employees.

“Instead of damaging business further, Hawaii lawmakers should pay attention to what every business owner and investor advises us to do to improve our business climate. We need to lower taxes and have less burdensome mandates,” Slom said.

Dan Grabauskas

One of the most controversial decisions by the city’s rail authority was to award a contract to build the elevated steel on steel rail trains to the financially troubled Italian company Ansaldo.

The city’s HART CEO Dan Grabauskas maintained in a University of Hawaii student forum this week that the company was the best choice to design, build, operate and maintain Oahu’s $5.2 billion system.

But the Washington DC Metro operators have a different take. Their Ansaldo rail cars have been plagued with brake, lighting and air conditioning problems.

A Washington Post article on April 9 said the transit agency has decided to replace the Ansaldo rail cars at a cost of $889 million years ahead of schedule.

In addition, the DC Metro will contract with Kawasaki to provide the new rail cars, instead of having the Ansaldo’s failing cars repaired or refurbished.

According to the Washington Post, Metro board member Tom Downs called the Ansaldo rail cars a “fleet full of dogs,” and he maintained the chronic breakdowns were “killing” the agency.

Panos Prevedouros, PHD, a professor of Engineering at the University of Hawaii and an outspoken critic of the 20-mile elevated rail project, appeared in a forum with Grabauskas and two others at the University on Tuesday.

During the more than 2-hour forum on rail, Prevedouros notes that Grabauskas extolled his confidence on Ansaldo for the trains that he ordered from them, and then just hours later the Washington Metro announced their opinion and action about their Alsaldo-Breda rail cars.

Panos Prevedouros, PHD

International news reports in recent weeks have highlighted other troubles Ansaldo is facing because of one of its major investors, Finmeccanica.

Finmeccanica Chairman and CEO Giuseppe Orsi is being held in prison in Milan after he was arrested February 12, 2013, on a warrant that alleges he bribed officials in an effort to secure a 560 million euro Indian contract.

According to Milan news reports, the alleged bribes occurred in 2010 when Orsi headed company’s helicopter unit, AgustaWestland.

Depending on the outcome of the case, and the Indian government’s own probe, Finmeccanica could lose the $753 million contract. Meanwhile the company is facing other money troubles, according Reuters, which noted July 6, that Finmeccanica lost $2.85 billion in 2011 and hopes to sell off Ansaldo STS.

“It is obvious that Grabauskas and the HART Board will say anything to excuse the inexcusable decision to buy troubled rail cars from a troubled rail car company in a troubled country on the other side of the planet,” Prevedouros said.

“At least DC and Rome are connected with direct flights so if a critical part breaks down it can possibly be received within a day. It'll take twice as long or longer for the same replacement to occur in Hawaii and at a larger expense.”

Prevedouros said while perhaps there was nothing unlawful in the procurement choice of Alnsaldo, the criteria for the choice were flawed.

“That is because no current decision maker in Honolulu ‘speaks rail.’ Many more mistakes to come due to the built-in cluelessness at HART and City Hall,” Prevedouros said.

Steam vent near Volcano House where the California boy fell. A nearby sign reads: Rain water encounters hot rock as it seeps into the ground, and rises as vapor through a system of cracks to condense in the chilled air. Vapor temperature four feet down is 160 degrees F, cooling to 120 degree F at the surface. NPS Photo.
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Report from the Hawaii National Park, Hawai‘i – A 15-year-old San Rafael, California, boy who fell 25 feet into a steaming earth crack at Hawai‘i Volcanoes National Park Wednesday night was pulled to safety by Park Search and Rescue (SAR) personnel.

The Hawai‘i Volcanoes National Park SAR team, and County of Hawai‘i Fire crews based in the park, responded to a 911 call from the victim’s mother at approximately 6:43 p.m. It was reported that the youth had attempted to leap over the protective railing surrounding a steam vent between Kīlauea Visitor Center and Volcano House.

Park SAR Coordinator John Broward, assisted by County Fire, rappelled into the deep, narrow, chimney-like crack and rescued the boy, who suffered a bump on his head and minor abrasions. His family declined further medical treatment, and he was released at the scene following assessment by County of Hawai‘i responders.

“This young visitor and his family are extraordinarily lucky that he survived this mishap,” Park Superintendent Cindy Orlando said. “This incident serves as a reminder that park visitors are urged to stay on trails and not engage in reckless behavior while visiting their national parks.”

Rescues like this also put park staff and other first responders at risk, Orlando noted.

This is the seventh SAR mission conducted by park staff so far this year. Last year, park SAR crews responded to a total of 26 incidents.

Peter Heckmann shown in this photo (left)

Peter Heckmann had been on the run since allegedly stealing $1 million from Kauai residents through a Ponzi scheme, but today, Heckmann pleaded guilty to Wire Fraud and could spend up to 20 years in prison and pay a fine of $250,000.

According to FBI Special Agent Tom Simon, "Heckmann acknowledged in court that the victim losses in this case exceeded $1 million and that his scheme involved paying older investors with money from new investors in a scheme to defraud the victims."

Heckmann, 53, was indicted by federal grand jury in Honolulu in 2007 on seven counts of wire fraud. The indictment alleged Heckmann operated a Ponzi scheme, convincing Kauai residents to invest $1.2 million in his failing recording studio in exchange for returns of between 10-to-15 percent within two weeks.

Heckmann, who worked as a record producer and a recording engineer, claiming his business, "Raining Heart Records", is a "World Music record label," learned of the federal charges pending against him just before being indicted in 2007 and fled the state.

In January, the FBI intensified its efforts to locate Heckmann, offering a $10,000 reward for information that led to his capture and arrest. The FBI included an Internet "Wanted" poster featuring Heckmann, and asked its 500,000 Twitter followers here (https://twitter.com/FBIMostWanted) and 300,000 Facebook page users worldwide here (https://www.facebook.com/FBI), to help them locate him.

He was captured in March.

Heckmann remains custody of the U.S. Bureau of Prisons at the Honolulu Federal Detention Center until he is sentenced on July 25, 2013, at 2:15 p.m.

"We hope that today's guilty plea will serve as one more step towards closure for the victims in this case," Simon said.

"This case should serve as a reminder to the people of Hawaii to investigate before you invest."

BY MALIA ZIMMERMAN - HONOLULU- The University of Hawaii lost $200,000 to scammers claiming to represent Stevie Wonder, but the timeline details of who was responsible has not been released to the media until last Friday when the university released a long awaited “fact-finders” report naming the people and businesses involved with the so-called “Wonder Blunder.”

The Office of Information Practices said in a March 28 ruling that the University and its attorneys violated the Uniform Information Practices Act by redacting the August 2012 report released to the legislature and the press. Since, the University agreed to release the unredacted version.

The University paid Torkildson, Katz, Moore, Hetherington & Harris $65,000 to redact names of University employees and outside parties in the report “to protect their rights”, but OIP staff attorney Jennifer Brooks said the document was “of high public interest” and the decision not to release it “appears not to have been supervised by anyone with even a passing familiarity to the actual law governing public records requests.”

Report: System Failures From the Top

M.R.C. Greenwood

There were many other University employees named in the report who played a role in the state institution getting scammed, because they took no initiative to do their own due diligence and simply did what they were told by others involved in the concert plans.

The then University’s Manoa Chancellor Virginia Henshaw and University of Hawaii President MRC Greenwood were largely uninformed about the concert that was supposed to be a fundraiser for the cash strapped athletics department, even though University rules require the president to have signed off on the fundraising plan, the report said.

The fact finders report said Greenwood did not even know about the planned August 18 concert until June 19. By June 22, the University had already sold $108,932 worth of tickets, and by June 24, ticket sales surpassed $200,000.

Rich Sheriff took center stage at the University as the Wonder Blunder played out. Sheriff, the manager of the University’s arena named for his father Stan Sheriff, was the key person organizing the concert in conjunction with local promoter Bob Peyton of Bob Peyton Entertainment Corp. Sheriff admitted to fact finders that he did not do much diligence on Peyton before planning the event with him, and that he sent or received 300 emails about the concert before realizing the University had been scammed.

While it was Karyn Yoshioka in the university’s Disbursing department who executed the $200,000 wire transfer to the EPIC Talent LLC escrow account in Miami, Florida, the report said no one at the University that should have supervised her appears to have confirmed anything about the escrow account or the companies that the money would go to before the money was wired.

Jim Donovan (Photo courtesy of UH)

Then Athletic Director Jim Donovan, who has since been replaced, was supposed to supervise the concert plans that were being handled by Sheriff, but he didn’t know until July 2 that the $200,000 had been wired several days earlier, or that local promoter Bob Peyton of Bob Peyton Entertainment Corp, the organizer of the concert, had not obtained concert cancellation insurance as the University required.

Tickets, which had been presold to select donors and alumni, went on public sale on July 6 without the insurance in place, another violation of university policy.

The plan that was months in the works came crashing down on July 9, when Brett Steinberg, an agent with Creative Artists Agency (CAA), called the University to tell administrators the concert they were planning was “unauthorized.” Rob Light of CAA followed up with a letter to the University president stating no one in his organization knew about the concert and that he’d been Wonder’s agent for 18 years.

Peyton would not acknowledge they’d been scammed, telling University officials he believed CAA was not exclusive and was just looking for a cut. The now indicted alleged scammers, Sean Barriero of Epic Talent LLC in Florida, and Marc Hubbard of Castle Entertainment in North Carolina, called Donovan the next day to tell him to be patient as they negotiated with CAA.

But the next day, realizing they had been dealing with unauthorized “talent” agents, the university held a press conference and announced tickets would be refunded and the FBI was called in to investigate.

On November 8, 2012, the FBI confirmed University employees had been cleared of any fraud allegations, but Barriero and Hubbard had been indicted by a grand jury in relation to the missing $200,000.

University Criticized for Spending Spree

Senate President Donna Mercado Kim speaks to reporters after a UH Hearing (photo by Mel Ah Ching)

The University has spent more than $1.2 million on outside legal counsel, public relations contracts and a legal settlement with Donovan as a result of the Stevie Wonder concert blunder.

Besides paying $65,000 to redact names in the fact finders report, the University allocated another $50,000 to study accountability in the Athletic Department.

Then in February, the University spent another $260,000 to study its organizational chart to identify gaps that led to the concert fiasco.

Students and lawmakers have criticized the University leadership for spending more money to study the Wonder Blunder than was lost in the wire transfer, and for wasting taxpayers’ money on outside legal counsel and public relations personnel, and high salaries and perks for themselves, leading to record increases in student tuition.

Senate President Donna Mercado Kim, who held three Senate hearings to look into the parties responsible for losing the money last Fall, questioned three nominees to the University of Hawaii board of regents about the report in a recent Senate Higher Education Committee hearing.

She asked whether the University should pay the $65,000 bill to the private law firm hired to redact the report, since there errors and violations of Hawaii law.

More on the People Involved in the Wonder Blunder

• Bob Peyton’s company, Bob Peyton Entertainment Corp (BPE Corp), entered into an agreement to hold the fundraising concert featuring Stevie Wonder in August 2012. The University used ticket pre-sales to fund the $200,000 deposit to Epic Talent LLC, the Miami talent company claiming to represent Wonder. The concert, which was supposed to cost the University $450,000, was to be a fundraiser for the cash strapped Athletics department.  Peyton helped produce a Stevie Wonder concert when he was working for Hawaii’s most respected concert promoter, Tom Moffatt, in the 1970s and 1980s. In March 2012, Peyton approached the University about holding a concert at the arena. He believed Wonder would give the University a discount since it was a fundraiser. He would hold a second show on Maui. Peyton was in debt and his house was in foreclosure since November 2011. A judgment had been entered against him for $24,000 by the International Alliance of Theatrical Employees. No one at the University looked into his background or financial situation. Peyton died in January 2013 after he lost his leg to diabetes over the Christmas holiday.
• Peyton was working with Colin Davie, a promoter in England, on a Crater Festival in Diamond Head and they hoped Stevie Wonder would be a possible act. Davie introduced Peyton to Helen Williams who according to the fact finders report, claimed to represent Stevie Wonder as his international agent.

Helen Williams, Managing Director and founder of Elite Artists Live.

Helen Williams, the European promoter based in Spain who claimed to be Stevie Wonder’s UK representative, operated Elite Entourage Management. One university official questioned her authenticity saying she was only in business for 14 months, but his questions were ignored.

• Sean Barriero, head of Epic Talent LLC, a Miami, Florida based company that received the University’s $200,000 in its escrow account and then spent some of the money on personal effects. Epic Talent claimed to have “elite clients” and displays photos and biographies of some of the world’s top entertainers including Beyonce, Prince, Jay Z and Kanye West, with Epic Talent’s contact information as a link to the bevy of stars.
• Sannise “Sunny” Crosby, fiancée to Barriero and account executive with Epic Talent LLC, helped Barrerio keep up the façade of representing some of the nation’s top singers and celebrities – and according to the FBI, helped Barriero spend $25,000 of the University’s money on a Mercedes Benz SUV;
• Marc Hubbard, owner of Castle Entertainment, located in North Carolina, is the alleged orchestrator of the theft.
• Both Barriero and Hubbard were indicted by a federal grand jury in Hawaii in November in relation to the missing $200,000. While Barriero, a British citizen, has pleaded guilty to transporting the University’s money, Hubbard has pleaded not guilty and will go on trial. Court records in South Carolina show Hubbard was already indicted on securities fraud and forgery charges for a similar scam in October 2012 in Spartanburg, South Carolina, for allegedly taking $700,000 to put on an Alicia Keys concert.

SPLAT: Wild birds get revenge at the State Capitol after lawmakers vote to ban the feeding of feral birds and make those who violate the ban subject to a misdemeanor

Hawaii lawmakers met at the state capitol yesterday for several hours for the second “crossover” of the 60-day working session. They debated and voted on bills before the legislation passed third reading in their respective Houses.

Bills that passed the Senate yesterday will:

• Make wild bird feeding a misdemeanor offense to help curb ... bird poop;
• Legalize same day registration and voting;
• Force religious hospitals to dispense morning after pills in the emergency room;
• Fund pay increases for public unions;
• Mandate that entrepreneurs buying a business with 100 or more employees to retain all of the employees working under the previous employer;
• Substantially weaken Hawaii’s current journalism shield law.

Legislation that would cover settlements in lawsuits filed against the state also passed. That includes a $5.3 million settlement against the state for sex assaults that took place on the campus of the Hawaii School for the Deaf and Blind. Once that settlement is paid, the case will be sealed.

Another bill would use taxpayer funds to pay for campaigns of political candidates. The so-called voter owned elections were established in Hawaii years ago over the objections of then Campaign Spending Director Bob Watada.

Watada asked what Hawaii taxpayers want their money to go to politicians – including politicians they might not like?

But the voter owned elections advocates launched an aggressive campaign this year to expand their program, and so far their bill has survived this session.

In the House, several measures passed including:

• A bill that requires financial institutions to report any abuses they suspect to the county police department and Department of Human Services;

• A bill that establishes and funds a “School Readiness Program”, which gets Hawaii’s children in to school at age 4 with taxpayers support;

• A bill that will place more scrutiny on the people nominated for the University Board of Regents to ensure they are qualified. As a statement from the House majority notes, “Several concerns have been raised as to the selection process, which has hampered the work of the Board of Regents Candidate Advisory Council, and this bill seeks to address those concerns.”

Animal related measures also passed including one that will require that a person convicted of cruelty to animals in the first or second degree be prohibited from possessing or owning any animal for a yet to be designated amount of time; a second animal related bill makes any cruelty offense involving 25 or more animals a class C felony.

Another measure that both restricts tobacco displays by ordering retailers keep cigarettes behind the counter and amends the medical marijuana law to increase the number of plants that can be grown by registered patients and caregivers, also passed.

One of the major debates in the House was over SB1092 SD1 HD1, which would recapitalize the Hurricane Relief Trust Fund. The two warring Democratic factions debated the amount that should be replenished into the account that has been raided many times by lawmakers since it was established after Hurricane Iniki hit Hawaii.

Another bill that tourism industry officials opposed will make the 9.25 percent Transient Accommodation Tax - or hotel room tax - permanent. A two percent increase imposed two years ago was supposed to be temporary.

On Thursday, lawmakers will meet again to debate bills on third reading before the final crossover deadline that day.

Next week, some 200 bills will move into conference committee, where lawmakers from both Houses will meet to negotiate language in the bills before they are put up for final passage.

The legislative session ends May 2.

Dan Grabauskas

One year ago, the city’s Honolulu Authority for Rapid Transportation board hired Dan Grabauskas as its CEO and executive director. Unlike his predecessor, Grabauskas promised to run an open and transparent administration and he started with putting several thousand documents about the rail that the media and the public had been requesting on HART’s web site.

But he wouldn’t debate rail opponents in the media or at an event. In fact, it took Grabauskas one year to agree just to appear in a public forum with opponents of the city’s planned $5.2 billion rail project.

On Tuesday, April 10, at the University of Hawaii's art center, Grabauskas participated in a student-organized panel on the rail project along with HART Board member Ivan Lui-Kwan.

Grabauskas and Kwan faced off against rail opponents Dr. Panos Prevedouros, an engineering professor at the University, and Randy Roth, University of Hawaii law professor, who is one of the plaintiffs in a federal lawsuit challenging the rail project.

There were several restrictions at the educational forum that prevented opponents showing photos of what the rail will look like should it be built, and opponents of the rail project were also prevented from speaking about the lawsuit filed against the city and the Federal Transportation Administration. Roth, a lawyer and professor of law, said he was disappointed that at an educational forum he was not allowed to show photos of the rail project or discuss legal issues. Grabauskas said he was prevented from handing out educational materials about the rail.

Students protesting the rail brought hand made signs and banners, but they were told not to display the signs and the security threatened to confiscate the materials or have the students removed from the forum if they did not comply.

The moderator made at least three announcements that warned students not to get out of hand.

However, the forum was anything but rowdy. The four panelists shared information about the Honolulu rail project, traffic congestion on Oahu and the cost and effectiveness of rail in other cities.

The forum continued for more than two hours, with panelists taking questions from the diverse audience of students, faculty and community members.

As the panelists debated the cost, effectiveness and impact of the elevated rail line on Oahu, construction of the controversial 20-mile rail line from West Oahu to Ala Moana Center is on hold.

The project was halted temporarily by the Hawaii Supreme Court after a native Hawaiian plaintiff challenged the city over its Archeological Impact Statement. The high court ruled the city has to complete the AIS for the entire project before starting construction. HART officials estimate they can resume construction in the fall of 2013.

Meanwhile, eight other plaintiffs including Roth, former Gov. Ben Cayetano, retired Judge Walter Heen, transportation expert Cliff Slater, the Outdoor Circle, Hawaii's Thousand Friends, Small Business Hawaii Entrepreneurial Education Foundation and Dr. Michael Uechi, are appealing a U.S. District Court ruling on the rail's Environmental Impact Statement to the Ninth Circuit Court of Appeals. The plaintiffs maintain the city and FTA violated federal law when they did not consider other alternatives to the elevated heavy steel on steel rail project. Wallace Tashima, a Ninth Circuit Judge sitting in on the case because all local federal judges claimed they had a conflict of interest, sided with the plaintiffs on three of 23 counts, but it was not enough to stop the project altogether as the plaintiffs had hoped.

Senator Clayton Hee, chair of the Judiciary and Labor Committee (photo by Mel Ah Ching)

By Malia Zimmerman | Hawaii Reporter

HONOLULU - Hawaii’s law is considered by media advocacy groups and working journalists as one of the best in the country. However the battle between Senate Judiciary Chair Clayton Hee and local journalists to keep the Journalism Shield Law in place did not end well for journalists at a Wednesday committee hearing.

Journalists from 22 media organizations who teamed up to form the Hawaii Journalism Shield Bill Coalition, the University of Hawaii journalism department and other advocates of the current law including the Society of Professional Journalists national and local chapters, hoped the legislature would merely eliminate the June 30 sunset provision.

Instead, the Senate committee chair made changes to a House version of the bill, and in doing so, removed any protection for online journalists or non-traditional journalists. The new version of the bill was not shown to Senate committee members before they voted or to journalists who will be impacted by changes.

“This is an outrage. … It’s rubbish,” said First Amendment Attorney Jeff Portnoy who worked diligently in partnership with the attorney general, the judiciary, the media and the ACLU five years ago to pass the existing law, Act 210.

University of Hawaii Journalism Professor Gerald Kato said Hee’s substantial changes to the state's shield law “pose a threat to journalists and journalism in Hawaii.”

“It provides a ‘privilege’ only in the most narrow of circumstances involving confidential sources, and even then, the proposal is replete with means of piercing any privilege,” said Kato, who was especially concerned that online journalists were eliminated and Hee defined journalists only as "Journalist or Newscaster"; "Magazine"; "News Agency"; "Newspaper"; "Press Association"; and "Wire Service."

“If you do not fall within the definitions of these categories, then you're not entitled to any protection,” Kato said.

Jeff Portnoy, Hawaii media attorney

In addition, the current law gives broad protection to previously employed journalists, but Kato notes that Hee’s proposed changes protected journalists only during the period of their employment.

Hee’s decision to eliminate existing protections for "unpublished information” is a “big deal”, Kato said, “because it will subject all journalists to subpoenas for outtakes, notes, materials that have been collected in the course of reporting stories.”

Sen. Les Ihara, who introduced the bill, and Sen. Sam Slom who sponsored a bill 5 years ago that led to the current law, asked Hee as they had previously to keep the existing law in place without changes.

“I support Sen. Ihara’s call to go back to the original bill,” Slom told the chair, adding the bill was passed so journalists could report controversial and corruption stories, particularly about government in Hawaii.

But Hee said the bill will in fact protect what he called “bona fide journalists.”

“We put a lot of work into this and as I said earlier our intent was to put something together where the judge would be able to - to the best of our ability at this time - be able to determine whether the individual or company indeed met the standards required,” Hee said.

Hee, who is the Judiciary chair but not an attorney, also cited a U.S. Supreme court, Branzburg v Hayes, in justifying his changes.

“The preamble to this is absurd. To cite Branzburg v Hayes … that is why state’s passed shield laws, because there is no constitutional protection. That is the whole reason. And for the Senate chair not to understand that basis and to cite Branzburg shows the absurdity of the entire proceeding,” Portnoy said.

Hee said he worked with the state attorney general, Judiciary Evidence Committee and the ACLU to get the current draft and refused to amend it.

Deirdre Marie-Iha, Deputy attorney general

“If the attorney general is involved, he ought to be ashamed. If the ACLU is involved in these changes, it ought to be ashamed. And to say the Judiciary is in favor is an outright misstatement,” Portnoy said. “The Judiciary said the bill should be passed as previously passed with the deletion of the sunset provision and no other recommendations.”

An ACLU representative said after the hearing that the ACLU had not seen the final draft and did not know what was in the bill.

“Hee disingenuously invoked the Judiciary Evidence Committee and the ACLU as supporting these changes. Not true,” Kato said.

Hee, who wore his signature dark tinted sunglasses throughout the hearing and went from irritated to irate when challenged by fellow senators on his proposal, slammed the media saying journalists make mistakes and are not always truthful or accurate.

Hee used as an example the notorious Chicago Tribune headline from 1948 “Dewey Defeats Truman” that referred to a story that erroneously reported Thomas E. Dewey won the presidency Harry S. Truman and another story that appeared on KITV News in 2007 that said Big Island Rancher Larry Mehau had died, when in fact his death was prematurely reported.

“This bill is worthless and it is a travesty that after 5 years, the chair of this committee would come up with a bill with an explanation that is totally wrong legally and factually. And to present Dewey vs Truman as an exhibit on journalism is … is … I don’t even know what to say, really,” Portnoy said.

Journalists were told a fourth member of the 5-member committee, Sen. Mike Gabbard, would support their version of the bill, but he kept silent. His decision was key because Gabbard would have been the third member of the 5-member committee to ask Hee to go back to the original version.

Stirling Morita, SPJ Hawaii Chapter president

In the end, the Senate committee members voted on a bill they had not been permitted to read or review before voting. Ihara and Slom voted with reservations for the bill, in hopes it would move into conference committee and get amended there.

“To watch the process is outrageous. … Members on the committee voted on this blind. They never even saw it. … After all of the work we put in to watch this happen the way it did is an embarrassment to the state of Hawaii and this legislature.”

Forty-nine states and D.C. recognize some form of reporters’ privilege.

The Student Press Law Center has described Hawaii’s law as “the best in the country in terms of the clarity and breadth of its coverage.” It has been cited as a model for a national shield law.

The existing law does not impact journalists subpoenaed in criminal cases or protect journalists sued for defamation.

Hawaii Reporter is a direct beneficiary of the media shield law, which passed in 2008, and has used it to block subpoenas of notes, sources and other unpublished materials in relation to the breach of the Ka Loko dam.

In the civil case, the defendant tried to obtain information related to a March 2007, 21-minute investigative television report Hawaii Reporter produced in partnership with ABC 20/20 on the March 14, 2006 dam breach. That subpoena was not acted on after Hawaii’s law passed protecting journalists in civil cases.

Because of the shield law, human trafficking victims from Asia, sex trafficking victims from Hawaii, and those with knowledge of illegal gambling operations and other crimes have been more willing to come forward, telling Hawaii Reporter their lives would be in jeopardy if their identities were revealed.

Sen. Clayton Hee sits behind Sen. Will Espero wearing his signature dark glasses

Keoni Kealoha Alvarez, a Native Hawaiian filmmaker was the first non-traditional journalist to use Hawaii’s 2008 journalism shield law to protect his work in 2009.

Hee said “…there has only been one case, so I am not sure anyone could make a compelling argument on clarifying and defining the elements of the so called journalist.”

Portnoy said he has cited the journalism shield law dozens of times to protect his journalist clients from having to turn over notes, sources and unpublished materials.

Portnoy said if the bill passes as Hee has drafted it, and does not get changed for the better in conference committee, he will ask the governor to veto it, adding journalists are better off without a law than the proposed legislation Hee designed.

“This is a complete gutting. Our only hope is that at the conference committee some sort of rationality prevails, facts prevail, the law prevails and that the senate version is completely rejected,” Portnoy said.

Stirling Morita, the chapter president of the Society of Professional Journalists, said for the most part, Hee's amendments "are based on objections from the Attorney General’s Office – which have no basis in reality."

"It is sad to see the committee’s emasculation of a law that has proven its worth. Hopefully, the conference committee will do its job and pass a version of the bill that mirrors the current Shield Law," Morita said.

Kato, who met with Hee about the bill along with the ACLU, said: “Sen. Hee's actions are outrageous, as Jeff Portnoy said after the hearing. There is no basis in law or logic for his proposals, which are nothing less than a full frontal assault of any kind of journalism in this town. It is petty, but threatens to take one of the best shield laws in the country and turn it into the worst.”

Reach Malia Zimmerman at Malia@Hawaiireporter.com or follow Hawaii Reporter on Facebook

Jason Pascua

BY MALIA ZIMMERMAN - Jason Pascua knew how to put on a good act – at least that’s what the U.S. Army reservist and former Hawaii House of Representatives candidate told local residents.

According to a March 27 federal indictment, Pascua solicited a collective $1.4 million over three years from 29 Hawaii families on the promise of getting them a 25-to-50 percent return on their “investment” into his concert and promotion business.  Pascua told his victims that he ran concert and nightclub promotion events in Honolulu and Las Vegas with musical artists and celebrity talent. Pascua told potential investors that their money would be “used for up-front costs and spread among multiple concert and night club events that he was promoting to mitigate risk.”

Pascua used money from new investors to pay off earlier investors in what the indictment describes as a “Ponzi scheme.” Other investors received no returns at all or partial returns, the indictment said.

“Rather than using investor money for concert and nightclub promotions, the Defendant used the investors money for personal expenses and to create the illusion of legitimate investment returns derived from actual business activities when there was none,” the indictment said.

In reality, through his business J2 Marketing Solutions, Pascua focused on pets, not celebrities, and he put on pet expos at Waterfront at Aloha Tower.

The former Kaneohe resident, who now lives in Arizona, served as an Army reservist at Fort Shafter.

According to FBI Special Agent Tom Simon, that is where he found some of his “investors,” and their trust in Pascua will have a lasting impact.

“Many of the alleged victims in this case have been financially ruined from their decision to invest in the defendant’s program.  It will take them years to rebuild what was lost,” Simon said.

Jason Pascua on Facebook

MidWeek magazine’s society pages feature Pascua at events with some of Hawaii’s most well known politicians, including former Honolulu Mayor Mufi Hannemann and prominent Democratic activist Amy Agbayani. House Speaker Joe Souki has “Liked” Pascua’s campaign page on his Facebook page and many other politicians are listed as his “friend” on Facebook.

In 2010, Pascua joined the Democratic Party of Hawaii to run for House District 48 on the promise of “real change.”

He made his political announcement and had a candidate web site and candidate Facebook page created, but according to news reports, party officials challenged his qualifications as their candidate because his membership was not in good standing 60 days before filing.

The Filipino Chamber of Commerce embraced Pascua as the group’s president, and he helped start the Taste of Kalihi community event in 2009.

His social media accounts said after he graduated from Maryknoll Schools and attended Hawaii Pacific University that he served as the marketing director of the Hawaii Central Credit Union and the Japanese Chamber of Commerce.

FBI agents have not arrested him. According to Simon, Pascua’s defense attorney has negotiated Pascua’s planned surrender to authorities in May 2013 coinciding with his return to Honolulu to face the charges in federal court.

Pascua could not be reached for comment, but court records show he will plead guilty on May 23, 2013, at 2:45 p.m. before U.S. District Judge Leslie Kobayashi.

Jason Pascua and friends

The Pascua scam is another hard lesson for Hawaii residents, who tend to easily get suckered into get-rich-quick schemes.

“The people of Hawaii need to learn that there is no such thing as an investment with guaranteed returns of 25 percent to 50 percent.  Somehow these cases keep recurring here. It’s baffling,” Simon said.

“The past four years have seen an epidemic of Ponzi schemes plaguing the Hawaii economy. Hopefully, this latest case will serve as a lesson to the people of Hawaii to investigate before they invest,” Simon added.

This is the second case involving fake concert promoters that Simon and the FBI have investigated in recent months.

The University of Hawaii athletic department planned a Stevie Wonder concert last year, but after wiring a $200,000 deposit to promoter Epic Talent LLC in Florida, learned they had been scammed.

Simon arrested two men in that case, Sean Barriero, 44, of Miami, Florida, who owned EPIC Talent LLC and Marc Hubbard, 44, of North Carolina. Barriero plead guilty in November 2012 and Hubbard is awaiting trial.

Following the money government spends isn't easy in Hawaii, according to a new report - Photo: Emily Metcalf

BY MALIA ZIMMERMAN- HONOLULU — A new study confirms what many reporters and taxpayer watchdog groups already know: Hawaii’s public records are difficult to get.

Hawaii received an “F” in the Annual Report on Transparency of Government Spending released March 26 by the U.S. PIRG Education Fund.

The report, “Following the Money 2013: How the States Rank on Providing Online Access to Government Spending Data,” said many state governments across the country are getting better about documenting the movement of public money. But Hawaii isn’t one of them.

Hawaii’s online government websites put the state in the category of a “failing state,” according to the report, “because it has limited checkbook-level information, is hard to use, and does not include links to the state’s tax expenditure reports or information on the projected and achieved benefits of economic development subsidies.”

Hawaii’s “F” grade is a dramatic decline in last year’s C grade, and reflects a relative failure: so many other states are improving their web sites and online data access that Hawaii looks relatively worse, said Phineas Baxandall, senior analyst for tax and budget policy with the U.S. PIRG Education Fund.

“This year’s higher standards call for searchable checkbook-level information for contracts, grants, economic development tax credits, and other expenditures. Hawaii currently only meets these standards for grants and contracts,” said Baxandall.

“Open information about the public purse is crucial for democratic and effective government. It is not possible to ensure that government spending decisions are fair and efficient unless information is publicly accessible.”

Kalbert Young, director of the state Department of Budget and Finance, said he “totally agrees” with the report.

“This is one of the things that the State Chief Information Officer Sonny Bhagowalia and I have been saying for the last two years. Hawaii’s state technology systems are so antiquated that they do not have the capacity to provide robust online access for transparency,” Young said.

What is even more problematic, Young said, is the internal systems for accounting, budget construction, execution and financial reporting are antiquated to the point where business managers do not have access to real time data or analysis.

“It is not a problem of willingness to provide transparent financial information, it is plainly an inability to provide that type of information,” Young said.

“You may have heard me say at a number of events that, as the state’s finance director, I can tell you more about the fiscal condition of the State of Michigan or Massachusetts sitting at my desk than I can tell you about the fiscal condition of the State of Hawaii.  There is no real-time data for me to analyze,” Young said.

Hawaii has stood still for more than four decades with minimal investment in information technology infrastructure while other states have continued to move forward, Young said.

But the state budget director had some good news for taxpayers and watchdog groups interested in following their money: the state is making some important changes.

“CIO Bhagowalia and I have embarked on a project to bring contemporary technology into the state. The biggest project to note is the Enterprise Resource Planning project, which will modernize revenue systems (tax modernization), financial accounting systems, HR and Payroll, with budget and execution processes,” Young said.

“This is a significant project with major investment implications that will take more than 6 years to deliver. Once implemented, Hawaii can look forward to real time transparent financial analysis for public access, but more importantly, state business managers and staff will have better access to real data for making financial and operational decisions.”

Baxandall said Hawaii should try to model itself after the most transparent spending states, because they include data on economic development subsidies, expenditures granted through the tax code, and quasi-public agencies.

“The best state transparency tools are highly searchable, engage citizens, and include detailed information—allowing all the information to be put to good use,” Baxandall said. Those states include Texas, Massachusetts, Florida, Illinois, Kentucky, Michigan, and Oklahoma.

Kam Napier, editor of the respected city-magazine Honolulu, annually compiles a report called “Grading the Public Schools” and the magazine also prides itself on investigative reporting and in-depth features.

Napier said he looks forward to taking a closer look at the “Following the Money” report.

“I can’t speak to the Department of Education’s financial transparency as it stands in 2013; the last really intensive look we’ve taken at the cost of education was in our 2001 “The Death of Public School” feature. I remember that the data was there, but difficult to find.”

“Websites then weren’t what they are now, that’s part of it. But a big challenge was that funds for the public schools were distributed across a wide range of departments. The Department of Accounting and General Services had all the Capital Improvement Project and maintenance money; a huge expense not reflected in the DOE’s per-pupil cost.”

“Another department had the cost of pensions, another major expense. Even the budget for the governor’s office at that time had a line item for education. I spent months in 2001 hunting all that down and I’m still not confident I found everything,” Napier said.

In recent years, Honolulu magazine’s “Grading the Public Schools” chart has used the DOE’s School Quality Surveys and student performance on the state’s math and reading assessments.

“Both are pretty easy to find online, so our research effort goes into tracking changes in both instruments over time and extracting and combining the measures we’ve selected into a single snapshot of each school’s performance. The next edition of this chart will be published in May,” Napier said.

Baxandall maintained the improvement of the state’s transparency website should be a priority in order to “shine a light” on Hawaii’s government spending.

“States that have created or improved their online transparency have typically done so with little upfront cost. In fact, top-flight transparency websites can save money for taxpayers, while also restoring public confidence in government and preventing misspending and pay-to-play contracts,” Baxandall said, adding ”Given the state’s difficult budget choices, Hawaii taxpayers need to be able to follow the money.”

MORE ON THE WEB 

To access the state’s transparency website, click here.

To read the report, click here.

Honolulu International Airport - Photo: Emily Metcalf

By Malia Zimmerman - HONOLULU - Many visitors and residents have complained about Honolulu International Airport's deteriorating facilities, long security lines and lack of air conditioning particularly in the summer months. There can be considerable walks to get to the proper gate and extensive waits in the baggage claim area.

But the results of a new survey by MeetingAtTheAirport.com puts that all aside. Never mind the hassles - the Honolulu International Airport apparently can be a great place to find love and romance - and not the U.S. Senator Larry Craig-foot tapping-underneath-the airport-bathroom-stall kind of romance. In fact, the airport is rated the fourth best place in the country to meet people in between flights.

According to a report from Meetingattheairport.com, Honolulu was ranked on airport size; food and bar options, entertainment venues, Yelp ratings, amenities, demographic groups; and a survey of MeetAtTheAirport.com members.

Honolulu's review entitled "Getting Lei'd" said Honolulu International Airport is one of the busiest airports in the United States with more than 21 million passengers passing through annually.

"The principal hub of Hawaiian Airlines, the largest Hawaii-based airline, also serves Australia, New Zealand, Samoa, Tahiti, Philippines and Japan -- which have some of the most beautiful women in the world.

"With a beautiful, lush garden area, couples can enjoy a quiet walk or just work on a quick tan.

"And there’s no rush. Ever heard of “Island Time”? Well, it applies at the airport, as well."

Hawaiian Airlines is based in Honolulu

"With 3 out of 5 Yelp stars, expect everything to run just a little slower than normal, and that’s a good thing for our purposes."

"Our members favorite feature? The lush garden and the variety of options for passengers waiting for their flights. Some of these options include free Hawaiian entertainment in the lobby, the Cultural Gardens, and the various art and exhibits located throughout the terminal."

The internet dating service, which has about 70,000 members from the United States, Mexico and Germany, helps people meet the perfect date at the airport.  The inspiration for the business came when CEO Steve Pasternack was stranded at Miami Airport.

“I noticed a lot of people at the bar looking for something to do, and I thought it’d be great if I could get them to meet each other,” Pasternack said.

Airports ranking above Honolulu in terms of best place to meet a date were Los Angeles International Airport,  Las Vegas McCarran International Airport and  Reno-Tahoe International Airport. The Santa Barbara Airport ranked at number 5.

Is this trend here to stay?

TSA security at HNL - Photo: Emily Metcalf

Rachel Greenwald, a dating strategist who wrote the New York Times bestselling book “Have Him at Hello,” said “many young professionals in their 20s and 30s are constantly traveling as they build their careers ...so airport dating could be very efficient.”

If the options are sitting alone at a bar, eating junk food or going on a quick date, MeetingAtTheAirport.com suggests dating may be the healthiest and most entertaining option.

MORE ON THE WEB

MeetAtTheAirport.com

Sen. Sam Slom (photo by Mel Ah Ching)

By Zach Weissmueller & Sharif Matar for Reason.com -

Hawaii may be the most reliably Democratic state in the union.

In 2012, President Barack Obama won his home state of Hawaii by more than 42 percentage points, a margin larger than in any other state.

Hawaii is so blue that its state senate seats only a single Republican.

That Republican is Senator Sam Slom, known by his colleagues as the Lone Ranger.

Watch Reason TV's interview with Slom above, or click below for the full text, links, and downloadable versions.

View this article.

M.R.C. Greenwood

BY MALIA ZIMMERMAN - HONOLULU - MRC Greenwood has traveled for nearly one year out of her four-year tenure as University of Hawaii President, according to records obtained from the University administration. (see MRC Greenwood's travel records)

Between June 2009 and February 2013, Greenwood was out of state for 238 days and traveling between islands for 68 days. She also took 42 days of vacation.

“It is vital to the university's national and international reputation for the president, in many ways the face of the University, to be active external to the campus,” said University spokeswoman Lynne Waters. “The benefits of this investment of time and energy may not be measurable in the short run, but they certainly will in the long run.”

State Rep. K. Mark Takai, a University of Hawaii graduate and former editor of the student newspaper Ka Leo, said Greenwood’s extensive travel is “clearly a concern.”

The University of Hawaii Foundation covered the vast majority of the travel costs, more than $133,000. Other organizations and associations of which Greenwood is a member paid between $500 and $7,000 for her to travel to conferences and events in the mainland. The University itself sponsored just over $6,200 for travel related costs, mainly for Greenwood to visit neighbor island campuses or attend regent meetings.

“We had this issue when UH President Evan Dobelle was around,” Takai said, referring to the university’s former university president. Dobelle  was asked to resign in 2004, in part because of what some regents believed were abuse of travel privileges and elaborate spending habits. Dobelle denied the allegations. When he threatened to sue the university, the regents folded: in return for his agreement to leave the university later, officials granted him a two-year teaching position and $1.6 million in cash, paid Dobelle’s legal fees, gave him a pension and insurance for life, and declared no wrongdoing on Dobelle’s part.

Rep. Mark Takai

“The regents are the boss of the president and they have the oversight of the president. The University regents need to reign her in,” Takai said about Greenwood.

“When President Dobelle was here, there were concerns about excessive travel, and the regents required him to report on every trip.”

“It seems to me that there is a lack of oversight of the president and her travels. Unless someone like you (Hawaii Reporter) asks the questions, there is no one providing any oversight.”

Some of the travel was not directly related to University business, University records show.

For example, because she was a Monterey Bay Aquarium board member, Greenwood traveled regularly to California to meet board obligations and the organization covered her expenses. Her staff said her participation with the premier aquarium on the West Coast was important to the university’s physical sciences programs. She also attended the President’s inauguration and while she was there, met with Hawaii’s congressional delegation and made another presentation about the University.

“President MRC Greenwood is a nationally recognized and respected research scientist and higher education policy advisor. Her travel is an important aspect of her job as president of the University of Hawaii,” Waters said.

“Her responsibilities include maintaining the university’s reputation in Washington, D.C., and in national and international organizations and professional associations such as the National Academies, including the Institute of Medicine, the Association of Public Land Grant Universities, and others.”

Senate Vice President Donna Mercado Kim

Some lawmakers have been critical that Greenwood is not paying close enough attention to University operations and that she and her appointed administrators are spending too much money, and not held accountable by the Board of Regents.

After the University lost $200,000 to con artists claiming they could bring Stevie Wonder to the University’s Manoa campus for a fundraising concert in the so called “Wonder Blunder,” and the FBI had to get involved, lawmakers drilled down on the financial and management operations of Greenwood and her team.

Senate President Donna Mercado Kim chaired three hearings in her special investigative committee to examine management and fiscal practices at the University, and in the process, Senators criticized Greenwood for spending more than $1.2 million on outside lawyers and public relations personnel. They also wanted to know why tuition costs have escalated by 141 percent over the last decade, making tuition unaffordable for some local students.

When Greenwood was first appointed, a former regent who wanted to remain unnamed said the Board of Regents president kept close tabs on the president’s travel, and she reported directly to him any time she left Hawaii. But the current board is considerably less strict, the former regent said.

Takai said he hopes the regents, based on their commitment to public and the legislature, reestablishes a policy that has Greenwood approve her travels, “otherwise there is no oversight.”

Ted Hong, who served as a regent from 2003 to 2004, said he is concerned that the University of Hawaii Foundation, to which people donate to in the hopes of bettering the University, is being used as a “travel slush fund” for various presidents.

“That is not why local people donate to our University.  Former President Dobelle was rightfully criticized for his out of State travel and the question is whether the same standard is being applied to President Greenwood.  You can't phone in or Skype leadership,” Hong said.

Former Regent Speaks Up for Greenwood

Kitty Lagareta

Despite Greenwood being criticized by some, she has her avid defenders.

Former Regent Kitty Lagareta said she believes Greenwood is an effective president who should be expected to travel extensively outside of Hawaii to fundraise, lobby and network rather than sit behind her desk. Lagareta, who helped get Dobelle removed from power, said she doesn’t believe Greenwood and Dobelle are anything alike, and that Greenwood is doing what she needs to do to keep the University thriving.

A Washington DC-based higher education watchdog group didn’t take a position on Greenwood’s travel, but said in general, a president’s travel could be beneficial to a University, particularly if that president brings money to the school.

Rita Kirshstein, Director of the Delta Cost Project, which is a part of the American Institutes for Research, said “I am not in a position to comment on whether the amount of travel by the University of Hawaii president is excessive, but I do know that college presidents are expected to travel in order to raise money and improve the recognition of their schools.”

Fundraising Increases Under Greenwood, Spokesperson said

University of Hawaii-Manoa Campus

The University provided Hawaii Reporter with additional information on Greenwood’s fundraising record. The University of Hawaii Foundation, which funds the vast majority of Greenwood’s expenses, has reported bringing in between $41 million and $66 million annually since Greenwood took charge. Fiscal year totals include:

• 2012 - $66,855,810;
• 2011-  $46,703,382;
• 2010 - $41,155,988 and
• 2009 - $46,551,275

“President Greenwood would not presume to take responsibility or claim credit for increased revenue or donations realized by the University of Hawaii Foundation and its staff over the last few years. She does, however, endeavor to maximize her time away from the university on university business by frequently combining university business with development work on behalf of the UH Foundation,” Waters said.

The University also brought in extramural grants to support research activities, pay salaries and patronize local vendors for goods and services, Waters said.FY 12 – $436,000,000

• FY 12 – $436,000,000
• FY 11 – $489,000,000
• FY 10 – $452,000,000
• FY 09 – $414,000,000
• FY 08 – $368,000,000
• FY 07 – $354,000,000

UH Cancer Center rendering

“President Greenwood arrived in 2009. She will be the first to say she cannot take personal credit for the university’s advancements in these areas; but her extensive relationships have allowed her access to many more potential friends and benefactors for the University,” Waters said. “This is money that otherwise would not enter the Hawaii economy.”

Waters said there are other measures to show Greenwood’s effectiveness, including record high enrollment figures that have exceeded 60,000 students.

“University of Hawaii is awarding more degrees, better-serving under served groups, and helping more students get their degrees paid for by other funding sources,” Waters said.

“Also, during a deep recession, the University of Hawaii was able to build and open the only National Cancer Institute designated Cancer Center in the Pacific after years of inactivity; build and open the new West Oahu campus after decades of languishing; and prepare to break ground on the Palamanui extension of Hawaii Community College to serve the west side of the island of Hawaii. This took determination, persistence, and creativity on the part of university leadership to execute.”

Takai said the rationale the University gives for Greenwood’s travel is she brings in money and fundraising, but that is not the only consideration. “That (the fundraising) is great, however what is missing is the considerable amount of support the university gets from state and taxpayers,” Takai said.

Greenwood should start to pay some attention to the legislature’s recommendations for the University and spend time at the capitol meeting with lawmakers, rather than traveling out of state so often and not appearing at hearings, Takai said.

“To my knowledge, she (Greenwood) has not spent too much time at the capitol visiting with legislators,” Takai said.

The some times rocky relationship with Senators who are critical of her management does not excuse her from meeting with House members and freshman legislators, Takai said.

“I asked some of the freshman legislators and they said she has never stopped by,” Takai said.

“As a legislator, what I see is the attention she gives others outside the state – and hope she could balance that out by spending time here.”

Residents at a town hall meeting in Hawaii Kai's Kamiloiki School on March 21 said they do not want Kamehameha Schools to build a commercial center on preservation land

BY MALIA ZIMMERMAN - Hundreds of East Oahu residents packed into Kamioliki School’s cafeteria Thursday night to hear more about a proposed commercial retail development on preservation land that the vast majority of attendees said they adamantly opposed.

Kamehameha Schools wants to build a “gathering place” on 4.5 acres of land on the entrance to Hawaii Kai, which would include stores and restaurants and possibly an educational facility and bike and walking paths along the marina.

Foodland, a locally owned supermarket that lost its lease for the nearby Koko Marina Shopping Center in 2011, would anchor what many residents are referring to as a “strip mall.”

"It's definitely not a strip mall," Kamehameha Schools Area Development Director Susan Todani told the skeptical audience. ”We're really thinking about a gathering place that's so much more than just retail.  We're thinking about combining community amenities, such as a waterfront-recreational path and pedestrian and bikeways and playgrounds.  Incorporating the dog park, that's a really important feature to this community."

The land, now zoned as preservation, is one of the few undeveloped parcels in the busy community, and it would have to be rezoned by the Honolulu City Council before development moves forward. There already are three major shopping centers in Hawaii Kai and a smaller one that is relatively unused at the entrance to Kalama Valley - all of the land under the centers is owned by Kamehameha Schools.

Residents did not buy Todani’s attempt to downplay the development’s size or purpose, and were upset by several of her statements, especially as she compared Hawaii Kai to other “anti development” communities, as she claimed the development would benefit Hawaiian children at Kamehameha Schools, and as she used Hawaiian words that native Hawaiians attending took offense at.

The meeting went further downhill for Kamehameha Schools and Foodland when they brought up their poll conducted by OmniTrak Group Inc. to gage support for the project. A representative from OmniTrak testified 72 percent of the nearly 400 people who were contactd were in support of the project, but several people in the audience said those results were highly suspect.

Marian Grey, a resident who received a call from the polling company, said the pollster who she spoke to tried to convince her to support the retail project, even after she said several times that she was opposed and wanted the area to remain open preservation space.

Rep. Gene Ward, the organizer of the town hall, announced he took his own poll with the results turning out much differently: 87 percent of residents oppose the strip mall’s construction on preservation land.

Foodland Vice Chairman Roger Wall and two Kamehameha Schools representatives maintained the "Great Lawn" at the entrance to Hawaii Kai was the best location for the popular Foodland store to reestablish itself. Many residents hoped Foodland would return after it lost its lease to Walgreens and Petco in 2011, leaving just Safeway as the only remaining grocery store.

"Following the Koko Marina store closure, we were asked by several community members to contact Kamehameha Schools because it owned parcels of land throughout Hawaii Kai that offered potential for us. The Kuapa site that we've really focused in on is the most viable.  It’s central, it's conveniently located close to the core of Hawaii Kai residents and to us, it's the only site that makes sense,” Wall said.

Ward co-sponsored the town hall with other area lawmakers including by Sen. Sam Slom, Sen. Laura Thielen, Rep. Mark Hashem, and City Council Member Stanley Chang as well as the Hawaii Kai Neighborhood Board.

“Hawaii Kai loves Foodland, but we love the 'Great Lawn' more," Ward said.

Several residents spoke on their concerns about the project and how it would impact the popular dog park and Maunalua Bay, which is heavily used by paddlers, boaters, fishermen, picnickers, tour buses, firefighters in training and workout clubs. They also cited concerns about already heavy traffic fronting the Great Lawn property on Kalanianaole Highway. Others mentioned the view of the mountains that surround Hawaii Kai would be marred by development, and preservation land and open space is disappearing at too rapid a pace.

"People know me as pro-business, pro-development, but you can't do that at the expense of the last open space. This should be open, wild, nature space for all of us to enjoy because we have so little of it,” said Slom, who received loud applause from the audience.

The Hawaii Kai Neighborhood Board, the organization that runs the Hawaii Kai dog park, many paddlers from Hui Nalu Canoe Club, and several other environmental and community groups have already come out in support of keeping the land zoned as preservation and free from commercial development.

Neighborhood Board Chairman Greg Knuden said it is important for the land, which is the gateway to Hawaii Kai, to remain preservation.

Resident Ann Marie Kirk also spoke passionately about keeping the land as preservation and said she had already written to the Kamehameha Schools President to ask if the land could be donated to the community so it could be a park for everyone in the area to use.

Todani said Kamehameha Schools wants residents to be a part of the planning for the commercial center, leaving many residents feeling like she was implying it was a done deal, and all that had to be decided was what the mall would include.

But after  Thielen detailed the extensive permitting and rezoning process Kamehameha Schools still has to go through, Todani admitted it would take at least four years to get the project completed if it moved forward.

Thielen suggested that many in the audience call their council member, Stanley Chang, to make sure they are informed if Kamehameha Schools tries to move the project ahead.

According to a show of hands at the meeting, Foodland owners have the public’s support for a new store in an existing Hawaii Kai mall, but not for a new project on the Great Lawn. With nearly 400 people in the cafeteria that had standing-room only, just four people raised their hand in support of the project, and everyone else raised their hand in opposition.

Realtor Rob Burns, who lives in Portlock not far from the land in dispute, is one of the residents strongly in support of the project. He asked his neighbors to keep an open mind.

"Most of the people in Hawaii Kai live in homes on land previously designated preservation with underlying urban residential," Burns pointed out. “The public should not crucify Kamehameha Schools who is doing the best thing they can do with their lands to create income to fund their [mission to educate] Hawaiian kids.”

But Burns was vastly outnumbered and his comments were met with groans. “I’m not trying to win a popularity contest,” Burns said.

The audience “booed” Council Member Stanley Chang after he first said he would listen to the people of Hawaii Kai who made their feelings opposing the project clear, but then qualified his statement moments later saying he had not decided whether he would support the project.

Several people after the meeting said they were disappointed by Chang’s “wishy-washy” behavior and would not support him in the council next election.

Ed Masaki is one of Hawaii's firearms owners

BY MALIA ZIMMERMAN- Hawaii firearms registrations shot up more than 70 percent in 2012, while gun violence continued a four-year decline, according to a new state Department of the Attorney General report.

“While there has been a tremendous increase in firearm registration activity in Hawaii since 2000, the annual trends for both the number of firearm-related violent crimes and the proportion of violent crimes involving firearms relative to other weapon types remained stable within a low and narrow range through 2007, and decreased substantially from 2008 through 2012, during which time registration activity increased the most sharply,” the Department of the Attorney concluded.

Officials processed a record 21,864 state and county firearm permits in 2012, the report found. One year before, that number was 15,375.

Hawaii law allows multiple long guns to be registered under one permit. That brought the total number of firearms registered in 2012 to 50,394, a 73 percent increase from the previous record high of 36,804 firearms registered in 2011.

Alan Gottlieb, spokesperson for the Second Amendment Foundation, said Hawaii’s increase in firearms permits mirrors what is happening all across the country.

“Gun and ammunition sales as well as the number of permits to carry firearms has exploded. This happens every time there is a move to restrict or ban firearms like we are seeing today,” Gottlieb said.

Some 94.1 percent of those who applied for a permit were issued one. Another 4.9 percent had permits approved but voided after failing to return on time to pick them up. Just 1 percent were actually disqualified.

Over half or 127 of the denials last year were due to applicants’ prior criminal convictions, 25 were due to pending charges, and 75 were not based on the criminal histories of the applicants.

An estimated 23,548 or 46.7 percent of the firearms registered during 2012 were imported, with the remainder of 26,846, or 53.3 percent from transfers of firearms already registered here, the AG report said.

Over the last 13 years, from 2000 through 2012, state statistics show a continuous rise in firearms ownership. Statewide permit applications processed annually climbed 336.9 percent, while the number of firearms registered soared by 370.1 percent, and firearms imported climbed 325 percent. County permit applications followed the same trend, the report said.

“Our Hawaii rate of denial of permits 1 percent,  lower than other states which are at 1.8 to 2.5 percent, indicates our Hawaii law-abiding gun owners are just that,” said Dr. Max Cooper, the legislative liaison for the Hawaii Rifle Association. “A small group of criminals still try to get a permit or register, about 200 per year, with only some arrests and prosecutions, although a felony is committed in a police station with signatures of the criminals to prove it, so we need better enforcement.”

"I wonder how many of those 200 people were prosecuted by the police for the felony they committed when they falsified their personal information? What is the purpose of passing even more laws when the current ones are not enforced? HRA has been on record for many years saying that we need more enforcement of our existing laws, not new ones.The presumed lack of prosecution of those 200 people a year that perjure themselves on the gun registration forms seem to suggest we've been right all along," Cooper added.

Hawaii has among the strictest firearms laws in the nation. However, there are likely more firearms in the state than its 1.3 million residents.

Hawaii does have a concealed carry law, however it allows the four county police chiefs to decide if they “shall issue” a concealed carry permit.

That’s an extremely rare occurrence, gun-rights advocates maintain.

Those trying to register their firearms and obtain a permit wait hours in line at police headquarters

“Four private citizens applied for a concealed carry license in the City & County of Honolulu, and one applied in Maui County, and all five were denied at the discretion of the respective county police chief. Some 168 employees of private security firms were issued carry licenses while two were denied,” the report said.

To become a registered gun owner in Hawaii takes patience and commitment, according to Cooper.

On Oahu, there is just one location to obtain a firearms permit – at the Honolulu Police Department’s main station — and firearms owners have told Hawaii Reporter they have waited as many as nine hours in line just to fill out or turn in paperwork.

To register a handgun, Hawaii law dictate firearms owners must return to the station three times and to the store where they bought the handgun twice. Some people have opted to wait in line from midnight until the station opens its doors. The Hawaii Rifle Association has launched an online petition to ask the city council to add additional locations and staffing for permit processing.

“Only six to eight officers and employees are available to staff the Honolulu Beretania St. firearms desk, during shortened business hours only, and only one person each for the other counties. The police officers and civilian employees are working as hard as they can, but the public is under-served,” Cooper said.

Similarly, Hawaii has limited places for firearms owners to practice shooting. For the island of Hawaii, lawmakers are considering appropriations for a new rifle and pistol range in Kona. Cooper said he hopes funding will be approved since the Big Island has no public range.

Kauai county also lacks any public rifle and pistol ranges, Cooper said. He said Oahu’s only range, Koko Head Range Complex, has likewise suffered from budget cuts and needs repairs and capital improvements. Because of heavy use, Oahu also needs a second range, Cooper said.

Cooper said the dramatic upswing in gun ownership points to the urgent need for more ranges.

“This is the only aspect of the criminal justice and public safety systems that has seen this kind of increase in activity, and range availability and development and county registration and permits capacity is paradoxically absent or reduced,” Cooper said.

Read the full report from the AG’s Crime Prevention and Justice Assistance Division at http://ag.hawaii.gov/cpja/rs/

Firearm Registration Activity, State of Hawaii and Counties, 2012

Construction contractor details controversy over project at University of Hawaii at Hilo

BY MALIA ZIMMERMAN - HONOLULU — Allegations of corruption surrounding the University of Hawaii’s billion-dollar construction and procurement program have settled on Brian Minaai, a university administrator one contractor called “a nightmare” guilty at least of “blatant mismanagement.”

School officials say they’ve asked the state attorney general to investigate the charges, including claims that Minaai directed contracts to personal and political friends.

The allegations have brought back memories for some investigators of a 1982 Democrat election fraud scandal in which Minaai was convicted with 26 others, including several of his fellow students at the University of Hawaii.

How Minaai ended up years later with authority over scandal-plagued budgets at the University of Hawaii — and how his compatriots in the 1980s vote-fraud scandal may now be in position to judge him — is a story that reveals how politics really work in Hawaii.

Way Back Machine: In 1982, fraud allegations surface

University of Hawaii Associate Vice President for Capital Improvements Brian K. Minaai

The Honolulu prosecutor’s 1982 case again Minaai and others concluded that 27 participated in a scheme to illegally register Honolulu voters. Their goal: to boost Democrat candidate Ross Segawa, a student in the University law school, into the District 19 state House seat that encompassed Manoa, where the university’s main campus is located.

The students, including some working in the Legislature or attending the university’s law school, were caught when Segawa’s opponent noticed something odd about Segawa’s youthful supporters: on voter-registration forms, they claimed to live at the Arcadia Retirement Residence.

“They recruited people from outside the 19th district – a total of 32 known names – and used false addresses to register them on the 19th district rolls,” George Cooperand Gavan Daws wrote in Land and Power in Hawaii: The Democratic Years. “In doing this, they drew on the cooperation of friends and acquaintances, several of whom served as volunteer voter registrars, others then working in political patronage jobs in the legislature or in the office of the state attorney general, plus one person in the sheriff’s office, others again who were in law school with Segawa, and family members, up to and including Sen. (Clifford) Uwaine’s father, wife, sister, and brother-in-law. The conspiracy was discovered and made public between the primary election and general. Segawa’s political career was over before it began; Uwaine’s was ended at the next election.”

University of Hawaii-Manoa Campus

Minaai and the other students each pleaded guilty to a misdemeanor, with the stipulation that their criminal records would be wiped clean within a year, sources told Hawaii Reporter.

Minaii gathered diplomas. After graduating from the University of Hawaii with a BA and MA in economics and a certificate in urban planning, he earned an MBA at the University of Hawaii and then Minaai attended the University of Chicago School of Business. He also worked for private developers Haseko Hawaii and West Beach Estates at Ko Olina Resort, according to his self-published biography on the social networking site, LinkedIn.

Fifteen years after the vote-fraud scandal, Gov. Ben Cayetano, a Democrat, named Minaai director of the Department of Transportation in 1997, the state agency overseeing Hawaii’s state roads, highways, harbors and airports. Three years later, in 2000, Cayetano, reaching back into history, pardoned Segawa for his role in the 1982 voter fraud case.

Former Gov. Ben Cayetano

Minaai’s resurrection was complete. But it wasn’t extraordinary. Several other students involved in the 1982 voter fraud scandal went on to find high-ranking government jobs, including some who, according to law enforcement sources, now work in the attorney general and city prosecutor’s offices.

For example, Patrick Pascual, who provided the initial statements to the Honolulu prosecutor in 1982 in exchange for immunity, is now a deputy attorney general. Edsel Yamada, who was chairman of Segawa’s campaign, worked for the attorney general according to news reports, and has subsequently gone into private practice as a partner at Ishida & Yamada LLLP, LinkedIn shows.

Former Republican Gov. Linda Lingle’s election in 2002 brought Minaai’s stint in government to a temporary end. Minaai went to work for the construction company Kobayashi Group and then for Marriott Vacation Club International.

In 2008, the University of Hawaii hired Minaai as its associate vice president for Capital Improvements. Complaints about his management and favoritism have plagued the university since.

Contractors allege favoritism, backroom deals under Minaai

In 2010, for example, the University of Hawaii agreed to pay $2.5 million to settle a complaint brought byTownsend Capital. The Maryland-based firm alleged that, in 2005, the university’s Board of Regents had selected Townsend to develop the school’s $120 million Cancer Research Center of Hawaii in Kakaako. But, the lawsuit alleged, when Minaai joined the university in 2008, the school changed direction, handing the lucrative deal to Kobayashi Group, a company, the lawsuit alleged, with “close personal ties to university administrators and regents.”

Townsend claimed that the contract switch was accomplished through a “secret political process.” Significantly, Townsend pointed out that the development contract was canceled after the university hired Minaai in 2008, a former Kobayashi employee.

Minaai refuted the claims, asserting that Townsend had never received an “enforceable contract,” court records show. In 2010, he told Hawaii Reporter that he retained no financial or personal ties to Kobayashi Group or its principal and that his previous work at Kobayashi Group posed no conflict of interest with his official duties at the university.

“The university has approved each of the processes along the way,” Minaai said at the time.

More allegations of fraud and favoritism surface

Like Townsend, Dennis Mitsunaga, a local engineer and contract manager who has worked for virtually every government agency on construction jobs, said he’s considering a lawsuit against the university. In a Feb. 14 letter to the state Senate, Mitsunaga charged that Minaai used his position to marginalize Mitsunaga’s bids in favor of competitors with ties to Minaai.

When Mitsunaga succeeded in winning a University of Hawaii-Hilo construction project, Mitsunaga said Minaai told him not to question design, prices, materials and schedules. The result: The new contractor was “constantly making changes to increase the profit margin,” Mitsunaga said, and there was no independent check to ensure the contractor’s prices were reasonable. Hiring Kobayashi, which in turn hired two subcontractors to do all the work, added another 12 percent to 15 percent to the project’s cost, Mitsunaga said.

Several Hawaii contractors were fined for giving illegal campaign contributions to then Mayor Jeremy Harris

In another case, Mitsunaga said, Minaai directed him to replace his own civil engineering company with Minaai’s pick, Wesley Segawa, even though Mitsunaga’s company already had been selected as the civil engineer of record. Wesley Segawa, a former chairman of the state public housing authority (and no relation to the 1982 candidate, Ross Segawa) pleaded no contest in 2004 to money laundering and using false names to hide donations to former Honolulu Mayor Jeremy Harris and other high-ranking Democratic politicians.

Like dozens of other architects, engineers and other business owners who made similar illegal donations to Harris, Wesley Segawa had his record wiped clean through a deferred acceptance plea arranged by Judge Richard Perkins, court records show. Wesley Segawa’s company also was fined $53,000 by the state Campaign Spending Commission for those illegal contributions, which was a fraction of the $1.3 million the commission issued in fines to local contractors reportedly involved in the scheme to generate millions of dollars for Harris’ gubernatorial run in 2000.

“Working with the UH Office of Capital Improvement and its director Brian Minaai has been a nightmare for members of our firm working on the UH student Housing Phase 1,” Mitsunaga wrote in his Feb. 14 letter. “In the process of giving us a difficult time, Brian gave away millions of dollars on this project alone and should be investigated for blatant mismanagement.”

According to Mitsunaga, Wesley Segawa charged the university another $293,260 for the civil engineering work and Mitsunaga and Associates said the additional work — a 10 percent coordination fee of $29,326 plus general excise tax — boosted their own costs, all passed along to the university.Mitsunaga said Minaai directed Mitsunaga and Associates to replace Kimura International on the university’s Hilo project as the environmental assessment consultant with Wilson Okamoto and Associates. Okamoto is another of the consultant firms nailed in the investigation of illegal contributions going to Harris. Campaign Spending Commission records show that in October 2003, the company was fined $44,500 for making about $80,000 in illegal donations to Harris as well as former Gov. Ben Cayetano, former Lt. Gov. Mazie Hirono, former Maui Mayor James “Kimo” Apana and former City CouncilmanArnold Morgado.

Similarly, Mitsunaga said Minaai directed Mitsunaga and Associates to use Palekana Permitting and Planning, a company co-founded by Dennis Enomoto, to handle the permit and processing, adding an additional $23,000 to the cost of the project. Enomoto is a politically connected businessman and real estate consultant who has contributed to thousands of dollars to Hawaii’s leading politicians, according to news reports and campaign spending records. Harris appointed him to chair the Liquor Commission for the City & County of Honolulu.

On another job for the University of Hawaii Cancer Research Center in Kakaako, Mitsunaga alleged that Palekana Permitting and Planning charged $120,000 to process permits even though the Kakaako district is exempt from such permitting.

The problem, Mitsunaga suggests, is a “highly suspect” process that is obscured by “no-bid contracts” in which Minaai “selects only friends from a pool of hundreds of qualified architects and engineers in Honolulu.”

Mitsunaga predicted that “an investigation will show that the consultants he (Minaai) selected were very small and not the best qualified for the projects he gave them.”

Senators debate university procurement changes

Senate President Donna Mercado Kim

Mitsunaga said he spoke publicly about problems at the university in hopes that Minaai would be replaced and his department abolished so that student tuition money is not wasted.

His detailed allegations of corruption added support to a Senate bill that would transfer authority for procurement to the state department that managed those projects until 1999. Introduced by Senate President Donna Mercado Kim and five others, that bill would curb the university president’s power, a broad-array response to the Senate’s charge that the university has wasted millions of dollars on salaries and perks for administration officials while tuition costs jumped 141 percent over 11 years.Meanwhile, the University of Hawaii, which opposes losing the autonomy it gained in 1999, has placed Minaai on paid administrative leave and asked the attorney general to look into Mitsunaga’s allegations.

But that attorney general’s office is staffed with at least one of the very people involved in the 1982 voter fraud scandal.

Minaai could not be reached for comment through calls to the school or emails to his university account or an email to his personal secretary. A university spokeswoman would not say how to reach Minaai or whether a private attorney is representing him during the probe.

University officials who supervised Minaai have remained silent on the allegations, confirming only that they requested the investigation and that upon its completion will report its findings to the Board of Regents.

“Until the investigation is complete we anticipate having no further comments,” the university told Hawaii Reporter.

Contact Malia Zimmerman at malia@hawaiireporter.com

James Pflueger

BY MALIA ZIMMERMAN - “Happiness.” That is what retired auto dealer Jimmy Pflueger told reporters he felt as he left the U.S.District Court House today, just after U.S. District Judge Leslie Kobayashi found him “not guilty” on four federal tax fraud charges.

The 87-year-old retired automobile dealer - who founded the Pflueger dealerships – had been charged with filing false tax returns after the U.S. Justice Department said he hid nearly $15 million in a Swiss bank account without paying taxes on the $27.5 million sale of the Hacienda Corporate Plaza in California.

Pflueger’s accountant, Dennis Duban, who has already pled guilty to a related tax fraud charge, testified Pflueger sent his money overseas to protect his assets after he was sued over the breach of his Ka Loko Dam in 2006. The breach killed 7 people and an unborn child.

Pflueger’s extensive defense team, made up of former law enforcement including a former IRS acting chief and the state tax director, claimed Pflueger’s signature was forged on key documents, that he was unaware of the tax fraud; and that his California accountant, Dennis Duban, took more than $2 million from him.

The defense team, headed by Steven Toscher, a Beverly Hills attorney from Hochman Salkin Rettig Toscher & Perez PC, and Edward M. Robbins Jr., called just three witnesses including the former IRS acting chief as a summary witnesses and a handwriting expert who claimed Pflueger’s signatures were forged. Pflueger did not testify in his own defense.

Although the judge said Leslie Osborne, chief of the Fraud and Financial Crimes division for the U.S. Attorney and Special IRS attorneys Timothy Stockwell and Dennis Kihm did not prove beyond a reasonable doubt that Pflueger knowingly conspired to defraud the United States of taxes he owed, the IRS will pursue a civil case against Pflueger to settle some $4.5 million in unpaid taxes from the sale of his California investment property, the Hacienda Corporate Plaza.

The IRS and state of Hawaii may also seek back taxes, fees and fines as a result of Pflueger filing inaccurate tax returns, in which his personal expenses were charged to the dealership after he sold it.

The IRS and U.S. Attorney spent three years on Pflueger’s criminal case and have a room full of thousands of documents at the federal building that were used as evidence against him.

Pflueger’s defense attorney would not say whether Pflueger will seek to have his legal fees paid by the federal government, which could exceed $20,000 a day for the 9-day trial.

Four Others Await Sentencing in Pflueger Tax Fraud Case

Ala Pflueger, in addition to running the family auto business, is a winning race car driver like his father was

Charles Alan Pflueger, Pflueger’s son who now owns the Pflueger Auto dealerships, two of the dealership employees, Randall Kurata and Julie Kam, and the Pfluegers’ accountant Dennis Duban, were also indicted in 2010 on related tax fraud charges. In May 2012, Charles Alan Pflueger, Kurata and Kam pleaded guilty to filing false tax returns for Pflueger Inc. and another entity and agreed to testify on the prosecutors’ behalf against James Pflueger.

Duban was the accountant for Pflueger, his businesses, his son Charles Alan Pflueger and the dealership, as well as Pflueger’s girl friend Cindy Foster and several of her relatives.

Prosecutors said Duban knew Pflueger’s personal expenses and that of Charles Alan Pflueger were deducted illegally on corporate income tax returns as business expenses; prosecutors also said Duban conspired with Pflueger to falsely report the tax on the sale of the Hacienda Corporate Plaza by falsely increasing the land cost basis by some $7 million.

The proceeds from the sale, nearly $15 million, were sent to a Cook Islands trust and subsequently wired to the Wegelin Bank in Switzerland under the account name "Southpac Trustee International Inc., as Trustee of the Vista Pacifica Trust."

As part of the plea agreement, Duban testified against Pflueger, admitted the tax loss to the government caused by his criminal conduct is $1 million, and will pay a 50 percent penalty on his personal undisclosed accounts in New Zealand. On April 13, 2013, Duban will be sentenced by U.S. District Judge Leslie Kobayashi and could face up to five years in prison and $500,000 in fines.

Charles Alan Pflueger will be sentenced April 4 on one conviction for filing a 2005 false income tax return that improperly categorized personal and family expenses charged to the dealership. He faces up to three years in prison, $250,000 fine and mandatory restitution.

Pflueger’s Legal and Financial Troubles Far From Over

Dennis Duban, the accountant for James Pflueger, who testified against his client

Pflueger, who has assets of $71 million, is one of Hawaii’s wealthiest residents, but the tax fraud verdict is not the end of his legal or financial troubles.

Pflueger still owes the state of Hawaii $5 million in fines for polluting Pilaa Bay, a spectacular beach and bay on the North Shore of Kauai where he owns more than 300 acres.

Pflueger was convicted on 10 felony counts in 2006 for the 1,000-ton mudslide he caused in November 2001 through his illegal grading and grubbing on land above the bay that went into the ocean and destroyed the reef.

Besides the back taxes and fines that could exceed $5 million and the $5 million Pflueger owes the state for the Pilaa pollution, Pflueger still owes his own family trust $4.5 million on the purchase of Pilaa, which he made several years ago.

In addition, Pflueger owes another $4 million to the victims of the Ka Loko dam breach for the civil settlement he is more than a year overdue in paying.

During the federal tax fraud trial, prosecutors also showed financials that detailed Pflueger’s extensive legal bills that have been in the millions of dollars.

According to Kauai residents, Pflueger’s realtor has been showing his Pilaa property to prospective buyers. If Pflueger sells the property for what some estimate could be as much as $20 million, he could use the money to pay off his debts.

Pflueger and his relatives inherited considerable sums of land from the matriarch of the family, Pflueger’s grandmother, Mary Lucas. While much of the land has been developed and sold, Pilaa has remained undeveloped beachfront property.

Manslaughter Charges Still Pending

Aurora Fehring Dingwall, Alan Dingwall and their son Rowan were killed in the dam breach on March 14, 2006, along with four other people and an unborn child.

Pflueger still faces 7 counts of manslaughter for his role in the March 14, 2006, dam breach, which occurred just days after he pleaded guilty to the pollution charges at Pilaa.

The powerful waves that witnesses say reached more than 40 feet high in the early morning hours of March 14, 2006, swept Aurora Solveig Fehring, her husband Alan Gareth Dingwall, and their 2-year-old son Rowan Grey Makana Fehring-Dingwall, to their death.

The roaring, raging wall of water also killed Christina Michelle McNees, who was 7 months pregnant, and Daniel Jay Arroyo, her fiancé, who she was set to marry just hours later; Timothy Wendell Noonan, Jr., a friend who Aurora invited to stay with them after he lost his home; and Wayne Carl Rotstein, the Fehring’s caretaker and business partner.

On November 2008, Pflueger was indicted on seven counts of manslaughter and one count of reckless endangerment in the first degree by a secret grand jury convened by then State Attorney General Mark Bennett.

Witnesses testified Pflueger knowingly covered the dam’s main safety feature, its spillway, when without permits, he illegally flattened a hillside and placed dirt around the reservoir to prepare for home construction. Pflueger blamed the state and county for the breach.

In the Ka Loko Dam breach case, the attorney general who took over the case in 2010 with the election of a new governor, has reportedly offered Pflueger a deal that still must be finalized that would allow Pflueger to plead guilty to a felony reckless endangerment count, while his company would plead guilty to the seven counts of manslaughter.

Pflueger was scheduled to change his plea and accept the deal on March 14, 2013, exactly 7 years after the breach, but he postponed the court date until April 18, so the federal tax fraud case verdict could be behind him. Lawyers close to the case speculated that since Pflueger beat the federal tax fraud charges, he may also continue to fight the manslaughter charges. He has already delayed his trial for several years since being indicted in 2008 through appeals filed by his legal team.

US District Court - Hawaii

REPORT FROM THE FBI - Benjamin Pierce Bishop, 59, a former U.S. Army officer who works as a civilian employee of a defense contractor at U.S. Pacific Command (USPACOM) in Hawaii, has been arrested on charges of communicating classified national defense information to a person not entitled to receive such information.

The arrest and charges were announced by Florence T. Nakakuni, U.S. Attorney for the District of Hawaii; John Carlin, Acting Assistant Attorney General for National Security; Vida G. Bottom, Special Agent in Charge of the FBI Honolulu Division; Dwight Clayton, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Hawaii Field Office; and U.S. Navy Captain Patrick McCarthy of USPACOM.

Bishop, a resident of Hawaii, was arrested Friday without incident at his workspace at USPACOM in Hawaii and made his initial appearance on Monday in federal court in Honolulu.  The criminal complaint filed in the District of Hawaii charges him with one count of willfully communicating national defense information to a person not entitled to receive such information and one count of unlawfully retaining documents related to the national defense.  If convicted, he faces a maximum potential sentence of 20 years in prison.

According to an affidavit filed in support of the criminal complaint, Bishop currently works as an employee of a defense contractor that has a contract with USPACOM, whose command is based in Oahu, Hawaii.  Bishop has held a Top Secret security clearance since July 2002 and held access to Secure Compartmented Information from November 2002 to April 2012.  As a person holding a Top Secret security clearance, Bishop has been subject to multiple security briefings on restrictions regarding the disclosure of classified national defense information, as well as the handling, marking and storage of such information.

According to the affidavit, between May 2011 through December 2012, Bishop willfully communicated classified national defense information on multiple occasions to Person 1, an individual not entitled to receive such information.  The affidavit alleges that Person 1 is a 27-year-old female citizen of the People’s Republic of China who is residing in the United States on a visa and who does not possess, nor has ever possessed, a U.S. security clearance, and thus is not entitled to receive U.S. classified information.

According to the affidavit, Bishop and Person 1 originally met in Hawaii during a conference regarding international military defense issues.  Since June 2011, Bishop and Person 1 have allegedly been involved in a romantic relationship.  Despite a Defense Department directive requiring personnel, like Bishop, who maintain a U.S. security clearance to report to the U.S. government any contacts with foreign persons, Bishop has affirmatively hidden his relationship with Person 1 from U.S. government officials, the affidavit alleges.

The affidavit alleges that Bishop communicated information classified at the Secret level to Person 1 on several instances.  According to the affidavit, the national defense information that Bishop passed to Person 1 included information relating to nuclear weapons; information on planned deployment of U.S. strategic nuclear systems; information on the ability of the United States to detect low- and medium-range ballistic missiles of foreign governments; and information on the deployment of U.S. early warning radar systems in the Pacific Rim.

The affidavit further alleges that a court-authorized search of Bishop’s residence in November 2012 revealed approximately 12 individual documents each with classification markings at the Secret level.  Bishop’s residence is not an authorized location for the storage of classified information and Bishop was not authorized to remove and retain those documents.

This case is being investigated by the FBI Honolulu Division and the NCIS Hawaii Field Office in coordination with USPACOM and the U.S. Army.  The prosecution is being handled by Kenneth Sorenson, Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of Hawaii, and Robert E. Wallace Jr., Senior Trial Attorney in the Counterespionage Section of the Justice Department’s National Security Division.

The charges contained in the criminal complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Rep. Faye Hanohano apologizes for racial slurs and threats she made to state workers. (photo courtesy of HawaiiNewsNow.com)

BY MALIA ZIMMERMAN - State Representative Faye Hanohano, a Democrat from Puna who chairs the House Committee on Ocean, Marine Resources, & Hawaiian Affairs, tearfully apologized on the floor of the House of Representatives on March 1 for racial slurs she made to state exhibition experts from the State Foundation on Culture and the Arts earlier that week.

The House Majority press office also issued a written statement on Hanohano’s behalf saying she was sorry if she offended anyone when she told the art specialists as they hung paintings her staff selected that she did not want art produced by "Haoles, Japs or Pakes." (Caucasians, Japanese and Chinese).

Hanohano promised to rebuild the relationship with the State Foundation for Culture and the Arts. But when it came time to apologize to the very state employees she insulted, Hanohano’s letter was just 16 words:

“I humbly apologize for any comments I made that you may have found to be offensive.”

She didn’t elaborate and she did not apologize for threatening to cut funding to the department for the "Art in Public Places” program, which places about 5,800 pieces of art per year produced by local artists in state owned buildings, including the state capitol.

Hanohano, who is native Hawaiian, wanted native Hawaiian art in her office, but her staff had already selected artwork to match what was displayed in her office without realizing her preference. Hanohano in turn lashed out at the exhibition experts who had worked diligently with her staff to ensure she had the artwork she wanted.

Eva Laird Smith, Director of the State Foundation on Culture and the Arts, stood up for her employees and asked House Speaker Joe Souki to have Hanohano apologize publicly and in writing.

The House Speaker said he did not condone the offensive language and behavior and asked Hanohano to send a letter of apology to the State Foundation on Culture and Arts Exhibit team specialists. He also extended an apology to the members of the Exhibit team.

Hanohano’s letter to the State Foundation on Culture and the Arts, received March 5, surprised those who read it because of Hanohano’s brevity and seeming insincerity.

Michael W. Perry, a popular radio personality who co-hosts KSSK Radio’s Perry and Price Morning Show, said he didn’t see Hanohano’s one sentence statement as an apology. He received several dozen calls over the last few weeks from listeners who were offended by Hanohano’s remarks and weren’t satisfied with public statements and actions.

In explaining her actions, Hanohano called herself “an honest and straight speaking woman whom descends from long line of proud leaders and warriors from Puna of Hawaii Island.” And she pledged to “serve my people and the people of the State of Hawaii to the best of my ability, integrity and for the honor of my kupuna (elders)."

But Perry said her apology was more like a “non-apology” and he also noted that although Hanohano is the one who made the racial slurs and threats, she pledged to put her entire office staff through training with Equal Employment Opportunity Commission.

“My office has already reached out to the Equal Employment Opportunity Commission to assist us in obtaining additional training for all of our staff. We are committed to taking immediate steps to ensure that an incident like this never happens again," Hanohano said.

Perry joked that if he or his co-host Larry Price had said anything like she did on the air they would be working at K-Mart doing announcements for shoppers, and not on the state’s number one morning radio show. Some callers to KSSK have said they were so offended by her racist rant they want Hanohano to resign.

Keoni Alvarez

Native Hawaiian Filmmaker Asks Lawmakers to Extend Journalism Shield Bill

A Native Hawaiian filmmaker who was one of the first non-traditional journalists to use Hawaii’s 2008 journalism shield law to protect his work, is asking Hawaii lawmakers to make permanent the journalism shield law before it sunsets this year.

Keoni Kealoha Alvarez, president of Hawaiian Island Productions, is an independent filmmaker producing a historical documentary on native Hawaiian history and ancient burials in Haena on Kauai that will air on PBS in 2014.

After Kauai businessman Joseph Brescia subpoenaed Alvarez’s films, hard drives, unpublished notes and other correspondence in what Alvarez called a “fishing expedition”, the American Civil Liberties Union and local attorney Jim Bickerton used Hawaii's Journalism Shield Bill to protect his unpublished work and sources.

Brescia, who wanted to building a home on Naue Point in Haena where 30 Hawaiian graves had been discovered, was blocked from doing so by the county. But he subsequently filed a lawsuit against 17 protesters who he claimed had trespassed to demonstrate on his property and also delayed construction of his home and cost him hundreds of thousands of dollars. Brescia wanted a copy of Alvarez's films of the protest as evidence for his case.

Fifth Circuit Court Judge Kathleen Watanabe sided with Alvarez on September 2, 2009. As an outside party not involved in the lawsuit, the journalism shield bill protected Alvarez from having to turn over his work to Brescia.

Bickerton issued a statement on behalf of Alvarez, saying:  “With this decision, the media shield law can now be confidently asserted by journalists seeking to protect their work. The judge ruled that the media shield law means what it says — journalists can protect their confidential sources and can’t be forced to reveal their unpublished information.”

The Society of Professional Journalists brought Alvarez from Kauai to Oahu on Monday to meet with journalists to share his story. Alvarez also spoke to Senators at the capitol on Tuesday in hopes legislators would extend the five-year-old journalism shield bill before it sunsets this year.

Alvarez said as an independent filmmaker on a low budget production it was intimidating to have Brescia try to obtain all of his unpublished materials through an extensive subpoena. He disclosed that he had no intention of turning over what amounted to confidential communications, even if the judge ruled against him, and would have rather burned the materials to protect his sources and gone to prison than betray their trust.

The journalism shield bill extension, moving forward in House Bill 622, passed the House in January with amendments made by House Judiciary Chair Karl Rhoads. Journalists were disappointed with his amendments, because they believe the law is working and hoped it would remain untouched. However, they looked forward to vetting the bill in the Senate.

Senate Judiciary and Labor Chair Clayton Hee helped pass the first extension of the journalism shield bill two years ago before the 2008 law would sunset, but he also included a sunset date instead of making the law permanent so the law could be studied.

The attorney general's office has suggested changes to the law that would weaken it, which journalists, the Society of Professional Journalists and the ACLU oppose.  Hee has not yet scheduled a hearing on HB 622, but must pass the bill out of his committee by April 4 or it will die.

ACLU Attorney Laurie Temple, who testified in favor of the bill in the House, told lawmakers at the January 29 committee hearing that freedom of the press promotes speech and self-governance for all Americans.

"Investigative reporting helps ensure that our government is open to public scrutiny. Liberty is lost without a free and independent press," Temple said.

A “vibrant and meaningful” reporters’ shield will ensure that journalists continue to have the tools they need to hold the government accountable to the people, Temple said, adding it also will allow the press to continue to inform the public about substantial risks to health and safety without fear of government persecution.

The law would also allow journalists to maintain independence without access to information from confidential sources, Temple said.

"The Watergate scandal and the Pentagon Papers became public only after informants were assured anonymity. More recently, confidential sources broke stories about illegal government programs including torture, warrantless wiretapping, kidnapping, and detention. In retaliation, the government has used subpoenas to intimidate journalists into revealing sources and jailed them if they declined to name names. The government’s efforts to silence dissent are facilitated by the lack of a journalist’s privilege from identifying confidential sources,” Temple said.

Forty-nine states and D.C. recognize some form of reporters’ privilege. Hawaii's law is considered by journalism groups across the country as one of the nation’s most progressive because it protects both traditional and non-traditional journalists and their unpublished materials and sources in civil cases.

The law was first passed in 2008 in part to help Hawaii Reporter defend itself in a similar situation.

Hawaii Reporter's published and unpublished materials and correspondence records were subpoenaed in 2008 by retired auto dealer James Pflueger who was accused of causing the deaths of 7 people when his dam breached in March 2006 by his illegal grading.

Pflueger was also charged criminally by the attorney general on 7 counts of manslaughter and one count of reckless endangerment. Those charges are still pending.

MORE ON THE WEB

See an interview with First Amendment Attorney Jeff Portnoy on Hawaii's Journalism Shield bill

Taxpayers Will Cover $26.6 Million to Settle Lawsuits Against the State

Hawaii School for the Deaf and Blind

A bill moving through the state Legislature would have state taxpayers paying $26.6 million to cover lawsuit settlements against the state.

• That includes $14 million in back pay for substitute teachers in the public schools;
• $5 million for children who were sexually assaulted at the Hawaii School for the Deaf and Blind while they were on campus or on the school bus by a gang of students known as the Ringleaders. Some 35 special needs students are involved in the class action lawsuit against the state;
• And another $3 million will go to an autistic child who won a lawsuit against the Hawaii state Department of Education.

The amount of the settlements due likely will increase by May.

Lawmakers Consider Honoring a Hawaii Legend   

On March 19, the Hawaii State Senate will hear Senate Concurrent Resolution 47, which would re-name a section of Coral Street adjacent to Lex Brodie’s Tire Company as “Lex Brodie Street.”

Lex Brodie

Lex Brodie, a well respected entrepreneur, political advisor and elected school board member, died earlier this year at his home on Kauai.

Lex Brodie’s son Sandy, who also lives on Kauai, said in an editorial today in Hawaii Reporter that his father’s many contributions to the City & County of Honolulu and the State of Hawaii justify honoring him by naming a street after him.

Photo: Emily Metcalf (Honolulu freeway traffic)

A new survey of conditions and costs of driving in America's 50 most populated cities documents what drivers in Honolulu already know: Gas prices and congestion are high.

Honolulu is ranked 8th worst out of a list of 10 cities with the most frustrating driving conditions.

The report, published in Nerd Wallet, said about Honolulu: "Gas is very pricey on the island—with the high shipping costs, Hawaii has a higher cost of living than most cities.  The added traffic from Honolulu’s booming tourism industry makes it hard to get around the city."

The report considered traffic congestion, including how many hours commuters spend in their cars in traffic in addition to regular commute time; the cost of gasoline and how it varies from the national average, as well as population density.

Cities ranking even worse than Honolulu were New York City, NY; Chicago, IL; San Francisco, CA; Los Angeles, CA; Boston, MA; Washington, DC and Oakland, CA.

New York City took the number one slot with the authors noting "New York drivers are delayed by 59 hours each year, and gas costs 7.67% more than the national urban average."

Rounding out the top 10 worst cities for driving after Honolulu were Portland, OR, and Philadelphia, PA.

Cities faring much better were Raleigh, NC, ranked as the best big city to drive in, with Bakersfield, CA; Wichita, KS; Kansas City, MO; Albuquerque, NM; Omaha, NE; El Paso, TX; Colorado Springs, CO and Fresno, CA, following in the top 10 best slots.

Honolulu has been ranked low in a number of surveys and studies on traffic congestion and road conditions.

In February 2013, the Annual Urban Mobility Report produced by the Texas Transportation Institute claimed that in 2011, Oahu residents used an extra 11,298,000 gallons of fuel while stuck in traffic or about 24 gallons per driver stuck in rush hour traffic.

In January 2013, TomTom reported Honolulu ranked as the fourth most traffic-congested city in North America, with just Los Angeles, CA; and Vancouver, Canada, San Francisco, CA., coming in ahead of Honolulu.

In May 2012, Inrix Inc. reported Honolulu had even more traffic congestion than major California cities. The report called the fifth Annual INRIX Traffic Scorecard reviewed 100 of the largest metropolitan areas and found Honolulu drivers waste 58 hours in traffic per year.

In February 2013, Reason issued a report "Examining 20 Years of U.S. Highway and Bridge Performance Trends" in all 50 states. Hawaii's evaluation said: "Between 1989 and 2008, Hawaii improved in only three categories, and deteriorated in three others. The state posted a slight improvement in urban congestion, an average improvement in its highway fatality rate, and a vast improvement in the reduction of narrow lanes on rural primary roads. On the other hand, Hawaii saw more roads in poor condition among urban interstates and rural arterials, and more deficient bridges."

The report called Hawaiian highway infrastructure's history between 1989 and 2008 "a story of extremes."

"Its urban interstate roads deteriorated more than any other state’s, with the percentage of such roads in poor condition rising by 25 percentage points. On average, the U.S. improved in this category by 1.2 percentage points. On the other hand, Hawaii went from 80% narrow lanes on its rural primaries in 1993 to just 32.4% in 2008, the biggest improvement in the country at 47.6 percentage points," the report said.

Panos Prevedouros, PHD, a professor of engineering at the University of Hawaii who is one of the state's leading transportation experts, has done a number of studies on traffic congestion with his students, some of which the state used to improve traffic flow in busy corridors. He said excessive congestion is crippling to a local economy and quality of life.

"For various reasons ranging from rapid growth of population to neglect of the infrastructure, traffic congestion and transit crowding can become excessive and last for several hours. This has occurred in Honolulu due to neglect and misguided policies," Prevedouros said.

In a two part series in Hawaii Reporter, Prevedouros details what can be done to alleviate traffic throughout the island of Oahu and the price for each solution:

"Modest population growth on Oahu and vast population shifts to the Ewa plains combined with no investment for bottleneck relief have created intolerable traffic congestion in Honolulu which experiences congestion levels comparable to very large metro areas worldwide," Prevedouros said.

Prevedouros believes congestion on Oahu will only get more challenging because the city administration under the newly elected Mayor Kirk Caldwell is putting $5.2 billion into building a 20-mile rail system that will serve a tiny portion of commuters rather than making improvements to Oahu's roads that will help all commuters.

Reacting to the newly released Nerd Wallet survey, Prevedouros said the web site forgot to mention that all those cities with high traffic congestion and poor conditions for drivers have rail systems and yet they are still very bad.

"Honolulu is so lane deficient that it does not require a rail calamity in order to join this failure club," Prevedouros said.  "Honolulu rail, if it ever gets here, will make Honolulu float to the top of the least desirable U.S. cities for drivers."