 Confessions of a
WHISTLEBLOWER
Sightings from The Catbird Seat ~ o ~ FINAL JUDGMENT KESSNER DUCA UMEBAYASHI STEVEN GUTTMAN
United States District Court For the District of Hawaii JAMES B. NICHOLSON SUCCESSOR TRUSTEE, Plaintiff vs.
BOBBY N. HARMON, Defendant
- - - - - JUDGE: The Honorable David Alan Ezra FINAL JUDGMENT ... Judgment is hereby entered under which Defendant Bobby N. Harmon shall within ten (10 days) from the date of entry of this Final Judgment permanently and forever remove and/or delete from any web-site owned, managed or operated by Defendant Bobby N. Harmon all offensive materials which contains any reference to “Protected Subject Matters”, as that term is described and defined in the Arbitration Award dated October 6, 2004. Defendant HARMON is also ordered to provide the Court with written confirmation, a copy of which shall be served on Plaintiff, that all offensive materials have been removed and/or deleted from any web-site owned, managed or operated by Defendant HARMON. “Post-judgment interest runs on the total Judgment amount of FOUR HUNDRED TWENTY-TWO THOUSAND NINE HUNDRED SEVENTY DOLLARS AND 54/100 ($422,970.54) at the legal rate of ten percent (10%) per annum on the unpaid principal balance, or $115.88 per day, from the date of entry of this judgment until the judgment is fully satisfied....” ~ ~ ~ The website that was found to contain such outrageously “offensive materials” to warrant such drastic punishment was...
THIS WEBSITE:
~ o ~
which was
of
and which has now been replaced by ~ ~ ~ This catbird-blogger invites YOU to visit this site and to JUDGE FOR YOURSELF as to whether or not YOU think these materials are “offensive” and should be forever removed and banned from the World Wide Web. Better hurry, though, before the POWERS THAT BE silence this whistleblower-blogger forever! Mahalo!
SAMPLE “OFFENSIVE” MATERIALS??? P&C INSURANCE COMPANY, INC. Mr. Cary M. Okawa, C.P.A. SUBJECT: P&C Insurance Company, Inc. - Annual Financial Report Dear Mr. Okawa: This is to provide further information regarding issues discussed in my meeting with you and Mr. Dennis Tsuhako in my office on October 18, 1996, regarding P&C Insurance Company’s (P&C) annual financial report. As you will recall, we discussed my concerns with respect to “arms-length” issues between Kamehameha Schools Bishop Estate (KSBE) and P&C, as they related to what I believed were efforts to direct and control the operations of P&C by my superior, Nathan Aipa, Esq., by Louanne Kam, Esq. and by Henry H. Peters, who is a Trustee of Bishop Estate, as well as Chairman of the Board of Directors for P&C. As examples, we discussed the blocking of my efforts to have P&C write the blanket property insurance program with reinsurance provided through the Hobbs Group, rather than by Marsh & McLennan, Inc. Also, I commented on what I considered to be excessive fees being charged by Marsh & McLennan, Inc. (MMI), and their failure to provide a satisfactory explanation for the services included in their flat fee of $200,000. Finally, I related to you and Mr. Tsuhako my concerns regarding attempts being made by individuals at KSBE to direct and control the settlement of P&C’s claims. In addition to the example we discussed, I have recently received a copy of the attached memo from Rocco Sansone dated 11/7/96, regarding a proposed “Consent to Settle (P&C Insurance)” endorsement. This memo addressed to Louanne Kam, Kamehameha Schools Bishop Estate, states: “The following proposed endorsement is submitted per our discussions and negotiations with Am-Re. This endorsement provides KSBE with the option of controlling the settlement process subject to the indicated agreements. Based on our discussions, we recommend KSBE accept the proposed wording. Please advise if there are any questions and with your approval to add the endorsement.” This “Consent to Settle Clause” would, in effect, take the control of claims settlements away from P&C’s independent adjuster and turn it over to KSBE. P&C and KSBE would also be exposed to uninsured and unlimited payments of claims due to the condition, “If, however, the Insured shall refuse to consent to any settlement recommended by the Company and acceptable to the claimant and shall elect to contest or continue any proceedings in connection with such claim, the Company’s liability for the claim shall not exceed the amount for which the claim could have been settled plus expenses up to the date of such refusal.” This recommendation by MMI is, in my opinion, highly unusual and one which could result in significant financial loss to P&C and KSBE. The enclosed documents (some written before our meeting and others afterwards) will provide further examples of what I consider to be improper and deceptive business practices by Marsh & McLennan, Inc. and M&M Insurance Management Services, Inc. It is due to the fact that these issues have not been resolved, that I am declining to sign my concurrence to P&C’s Annual Financial Report for the fiscal year 1995-96. Thank you very much for your understanding and concern. Very truly yours, Bobby N. Harmon, CPCU, ARM, AAI President cc: Insurance Commissioner, State of Hawaii (w/encls) Federal Bureau of Investigation Re: Racketeer Influenced & Corrupt Organizations Act (RICO) Lawsuit: Gentlemen: On September 19, 1998, I wrote to your office requesting that an investigation be made into apparent racketeering activities of Federal Insurance Company, the trustees of the Bishop Estate, et al. The purpose of this letter is to inform you that on April 27, 1999, I filed a civil lawsuit against a number of these entities. A copy of this lawsuit is being provided to you in hopes that this information will assist you in any criminal investigations that your office may be conducting with respect to alleged racketeering activities involving these organizations. Please feel free to contact me at the address shown above if I can be of any further assistance in this matter. Very truly yours, Bobby N. Harmon, CPCU, ARM Office of the Attorney General, State of Hawaii Colbert Matsumoto, Esq., Master, KSBE VIA FAX @ (202) 514-7021
Mr. Cliff Rones, Esq.
U. S. Department of Justice Criminal Division, Fraud Section P. O. Box 28188, McPherson Station Washington, DC 20038 RE: Report of Fraud and Racketeering: — Federal Insurance Company (Chubb Group) — State of Hawaii, Insurance Division Dear Mr. Rones: I realize this is a quick follow-up to my letter of October 27, 2000, but an article in today’s Honolulu Star-Bulletin may help explain why the State of Hawaii, and especially the insurance commissioner, took no action on my complaints of fraud and racketeering regarding the subject insurance companies. Under the front page headline of “Former trustees funneled donations to lawmakers,” reporter Rick Daysog writes: Former trustees of the Kamehameha Schools operated an underground political network that funneled money to the campaigns of dozens of key Hawaii lawmakers, according to trust documents obtained by the Honolulu Star-Bulletin. Between 1992 and 1997, the $6-billion estate’s now-defunct government relations department orchestrated contributions to incumbent Democrats friendly to the trust’s interests or to high-ranking politicians with regulatory control over the trust’s massive land and business holdings. Those on the receiving end of estate contributions included U.S. Rep. Neil Abercrombie, Honolulu Mayor Jeremy Harris and former Mayor Frank Fasi’s Best Party. . . . The state Campaign Spending Commission is looking into whether the trust illegally laundered contributions through former trustees, employees, relatives and outside contractors.... The list of recipients for that election year reads like a Who’s Who of island politics. They include: . . . Former state Sen. Rey Graulty: On March 22, 1994, Wong bought $250 worth of tickets for a Graulty fund-raiser ... The check was delivered by a staffer. Graulty, now a state Circuit judge, could not be reached for response. What the article does not say is that after Senator Graulty was defeated in his bid for re-election, he was appointed by Governor Ben Cayetano (D) as Hawaii’s Insurance Commissioner to replace Wayne Metcalf who was appointed to complete the term of another senator who passed away. Graulty was later appointed as a state judge, and Metcalf was re-appointed as the state insurance commissioner. My complaint letters to both of these regulators received little or no response. To my knowledge, no disciplinary action was taken against any of these companies, and they have been allowed to continue the fraud and theft activities under the current interim-trustees and several top executives who served under the ex-trustees. The Star-Bulletin article goes on to state: . . . The ex-trustees deny that they took part in an organized effort to finance the campaigns of isle politicians. They say their political contributions and those of staffers and outside vendors were personal in nature and have nothing to do with trust business. . . . However, in sworn testimony, some staffers say they not only helped organize the campaign contributions but also used trust facilities to direct the money to local politicians. . . . I am one of the former staffers who testified under oath during the Attorney General’s investigation of the estate, about how staff were encouraged to assist certain politicians, including ex-trustee Henry Peters, Milton Holt and Robert Herkes. The full Star-Bulletin articles can be retrieved from the internet at the following addresses: http://starbulletin.com/2000/10/31/news/story1.html and
More details regarding my RICO lawsuit, and copies of my letters to the Hawaii and California insurance departments can be found at the following address: www.the-catbird-seat.net/InsuranceCommissioners.htm My mailing address and telephone number appear above if I can provide further information, or I can be reached by e-mail at: In our initial conversation, you indicated that you would probably be contacting the Federal Bureau of Investigation for further action. If this is still the case, then I would appreciate your relaying this information to the proper party. Again, thank you very much for your assistance. Very truly yours, Bobby N. Harmon www.kycbs.net/AAA-JUSTICE-10-31-0.htm March 17, 2005 VIA fax 808-586-2806
J.P. Schmidt, Esq.
Hawaii Insurance Commissioner 335 Merchant Street, 2nd Floor, Rm 213 Honolulu, Hawaii 96813 Re: Complaint Against: Ace Ltd.; Marsh & McLennan; Chubb Group; XL Insurance
Their Insured:Kamehameha Schools; P&C Insurance Co., et al. Dear Commissioner Schmidt: Due to new information regarding Ace Ltd. and the other companies listed above, this is to file an amended complaint against these companies for fraud, racketeering, bid-rigging, price fixing, unfair competition, and unfair claims settlement practices. I quote some of the latest information from a Forbes article dated March 16, 2005: Ace Ltd. Slammed by 43 Subpoenas Ace Ltd., the property and casualty insurer recently implicated in a probe of insurance industry practices, on Wednesday said it received 43 subpoenas and legal inquiries regarding its involvement in bid rigging and price fixing. The Bermuda-based company said in a filing with the Securities and Exchange Commission it received subpoenas and other inquiries from 9 state attorneys general and one from Washington, D.C. Further, insurance commissioners and other regulators from 10 states also launched some form of legal action. In addition, Ace said the SEC and New York Attorney General Eliot Spitzer have issued subpoenas for information relating to “non-traditional or loss mitigating insurance products.” The insurer said it will continue to cooperate with such requests, and is also conducting its own internal investigation. Ace was one of four insurers implicated, but not formally charged, in an investigation of brokerage Marsh & McLennan Co. launched in October by Spitzer. Spitzer filed a lawsuit against the nation’s largest insurance broker accusing it of bid rigging, price fixing, and demanding incentive fees from insurance companies in exchange for sending more business their way.... Ace said Chief Executive Evan Greenberg received a $1 million salary in 2004, with a $2.7 million bonus. He is scheduled to get a raise of $25,000 this year, according to the SEC filing. Greenberg is the son of Maurice Greenberg, who stepped down this week as CEO of American International Group Inc. Greenberg’s older brother, Jeffrey, was CEO of Marsh & McLennan before being ousted in the wake of Spitzer’s investigation. The insurer said it has received legal inquiries from attorneys general in Connecticut, Florida, Massachusetts, Minnesota, New York, Ohio, Pennsylvania, Texas and West Virginia. Insurance commissioners and other regulators from California, Florida, Illinois, Maryland, Michigan, Minnesota, New York, North Carolina, Pennsylvania and Texas have also contacted Ace.... < END OF QUOTATION > You will, no doubt, recall that in 1992, Hawaiian Insurance & Guaranty Co. was declared insolvent largely due to Hurricane Iniki losses, and that the company was later sold to Vesta Insurance Group. In 1998, Vesta was involved in a financial scandal which was reported by the Honolulu Star-Bulletin on June 2, 1998, as follows: Hawaii insurer’s parent pounded on Wall St. Vesta Group, which owns Hawaiian Insurance & Guaranty, NEW YORK -- Vesta Insurance Group Inc, which owns a major Hawaii insurer, saw it shares plunge 47 percent today, a day after the parent company said "possible accounting irregularities" will force it to restate earnings for the last two quarters. Vesta's president and chief executive officer, Robert Y. Huffman, also has resigned. However, the company's Hawaii operation, Hawaiian Insurance & Guaranty Co., said it has not been affected by the changes at the Birmingham, Ala.-based parent. "I expect no impact whatsoever on HIG's operations," said Pete Grimes, HIG general manager. HIG had been declared insolvent in 1992 after Hurricane Iniki losses. It was later rehabilitated by the state insurance division and was sold to Vesta in 1995 for $35 million.... * * * To show you the connection between these entities and Kamehameha Schools, their for-profit captive, P&C Insurance Co., Ltd., and Chubb Group, I quote the following from Vesta Insurance Group’s Form 8-K, dated July 18, 2001: On July 10, 2001, Vesta Fire Insurance Corporation, an Illinois corporation ("Vesta Fire") and a wholly owned subsidiary of Vesta Insurance Group, Inc. completed its acquisition of 100% of the outstanding shares of capital stock of Florida Select Insurance Holdings, Inc. for approximately $64.5 million in cash. Vesta Fire acquired the stock of FSIH from FSIH's four stockholders - Centre Solutions (Bermuda) Limited, Mynd Corporation, Orienta Point Group, L.L.C., and Kamehameha Schools Bernice Pauahi Bishop Estate.... * * * Vesta Insurance Group, Inc. Securities Litigation Subsequent to the filing of our quarterly report on Form 10-Q for the period ended March 31, 1998 with the U.S. Securities and Exchange Commission (“SEC” or “Commission”), we commenced an internal investigation to determine the exact scope and amount of certain reductions of reserves and overstatement of premium income in our reinsurance assumed business that had been recorded in the fourth quarter of 1997 and the first quarter of 1998. This investigation concluded that inappropriate amounts had, in fact, been recorded and we determined that we should restate our previously issued 1997 financial statements and first quarter 1998 Form 10-Q.... We restated our previously issued financial statements for 1995, 1996, and 1997 and our first quarter 1998 Form 10-Q for the above items by issuance of a current report on Form 8-K dated August 19, 1998. These restatements resulted in a cumulative decrease to stockholders’ equity of approximately $75.2 million through March 31, 1998. Commencing in June 1998, we and several of our current and former officers and directors were named as defendants in several purported class action lawsuits filed in the United States District Court for the Northern District of Alabama. Several of our officers and directors also have been named in a derivative action lawsuit in the Circuit Court of Jefferson County, Alabama, in which Vesta is a nominal defendant. In addition, we received various inquiries and requests for information from various state departments of insurance and other regulatory authorities, including a subpoena issued to Vesta on August 24, 1998 by the 34 Commission as part of a formal, non-public order of investigation.... We have several layers of directors’ and officers’ liability insurance coverage (“D&O insurance”), the terms of which may cover all or a portion of the damages or settlement costs of the class action. These policies provide up to $100 million in D&O insurance to cover damages or settlement costs and an additional policy provides another layer of $10 million D&O insurance to cover any damages awarded by a court in these actions. Cincinnati Insurance Company (“Cincinnati”) issued the primary policy that provides the first $25 million of D&O insurance. Federal Insurance Company (The Chubb Group) issued an excess D&O insurance policy which provides coverage for the second $25 million in losses, if necessary. The balance of the coverage is provided by a group of insurers and was purchased after the class actions comprising the consolidated class action were filed.... In September 1998, after these actions were filed, Cincinnati, which provides the primary insurance policy, filed a lawsuit in the United States District Court for the Northern District of Alabama seeking to rescind the policy and avoid the coverage.... A dispute has also arisen with CIGNA Property and Casualty Insurance Company (“CIGNA”) (now ACE USA) under a personal lines insurance quota share reinsurance agreement, whereby we assumed certain risks from CIGNA. During September 2000, CIGNA filed for arbitration under the reinsurance agreement, seeking payment of the balances that CIGNA claims are due under the terms of the treaty. In addition, during the fourth quarter, the treaty was terminated on a cut-off basis. Vesta is seeking recoupment of all improper claims payments and excessive expense allocations and charges from CIGNA. This arbitration is in its early stages and the ultimate outcome cannot be determined at this time.... < END OF QUOTATION> In previous complaints to your office, and in my RICO lawsuit, I have already detailed many of my allegations against Marsh & McLennan, Inc. and Federal Insurance Company. However, since this news related to Ace Ltd. has just been released, and as Ace Ltd. was one of the insurance carriers used by Marsh & McLennan for the insurance programs of Kamehameha Schools and P&C, I am now requesting that you add Ace Ltd. to the list of companies which I have submitted for your investigation. More information regarding these matters can be found at the following Internet addresses: www.kycbs.net/Claims-By-Harmon.htm www.kycbs.net/Claims-Branch-Kamehameha.htm www.kycbs.net/Claims-Branch-Marsh-McLennan.htm Due to these recent revelations, I would also strongly encourage your office to join with the Insurance Commissioners of the other states named in the above article, to pursue recovery of overcharges and other damages from these insurance companies and their agents and brokers, for the benefit of Hawaii’s taxpayers and consumers. Please feel free to contact me if you have any questions or if I can provide any other information which may be helpful in your investigation of this complaint. Thank you very much for your consideration in this extremely serious matter. Very truly yours, Bobby N. Harmon, CPCU, ARM cc: Fraud Branch, Insurance Division, Dept of Consumer Affairs (via e-mail: insfraud@dcca.hawaii.gov) Captive Insurance Branch, Insurance Division, Dept of Consumer Affairs (via e-mail: captiveins@dcca.hawaii.gov) National Association of Insurance Commissioners (via e-mail: www.external-apps.naic.org/fraud) Michael G. Cherkasky, President and Chief Executive Officer Marsh & McLennan Companies, Inc. (via fax @ 212-345-4838) John D. Finnegan, President and Chief Executive Officer The Chubb Corporation (via fax @ 908-903-2027 and info@chubb.com) William K. Slate II, President/CEO, American Arbitration Association (via fax @ 212-716-5905 and Websitemail@adr.org) Mark Appel, Senior Vice President, International Centre for Dispute Resolution (via e-mail: AppelM@adr.org) Harry Kaminsky, Vice President, Neutrals’ Services, Phoenix, AZ (via e-mail: KaminskyH@adr.org) James B. Farris, Senior Case Manager, American Arbitration Association (via fax @ 559-490-1919 and e-mail: Farrisj@adr.org) Mary Lou Woo, c/o Steven Guttman, Kessner Duca Umebayashi, et al. (via fax @ 808-529-7177 and e-mail: sguttman@kdubm.com) Mark Bennett, Attorney General, State of Hawaii (via fax @ 808- 586-1239 and e-mail: hawaiiag@hawaii.gov ) Dee Jay Mailer, CEO, Kamehameha Schools (via fax @ 808-523-6313) Board of Directors, P&C Insurance Co., Inc. (via fax @ 808-523-6313) Matt A. Tsukazaki, Esq., Torkildson Katz Fonseca Jaffe Moore & Hetherington (via fax @ 808-523-6001 and e-mail: mat@torkildson.com) Governor Linda Lingle, State of Hawaii (via fax @ 808-586-0006) Hugh Jones, Deputy Attorney General (via fax @ 808-586-1477) Janet Hughes, Internal Revenue Service (via fax @ 303-844-3596) Billy Beaver, Pension & Welfare Benefit Admin. (via fax @ 626-229-1098) Ralph F. Boyd, Jr., U.S. Dept. of Justice (via fax @ 202-514-1116) Lyn Flanigan Anzai, Hawaii State Bar Association (via e-mail: lanzai@hsba.org) Susan Tius, Esq., c/o Rush Moore Craven Sutton Morry & Beh (via fax @ 808-521-0597) Gerard Jervis, Lokelani Lindsey, Henry Peters, Oswald Stender, and Richard Wong, c/o Kenneth Hipp, Esq., Marr Hipp Jones & Pepper (via fax @ 808-536-6700) Jeffrey H.K. Sia, Esq., Ayabe Chong Nishimoto Sia & Nakamura (via fax @ 808-526-3491) Robert S. Tameler, ALPS, Claims Admin for Bradley Tamm and Greg Dunn Mike Coulter, Deputy Managing Director, Aon Insurance Managers Casimer Fidele, Tradewind Insurance Company Colbert Matsumoto, CEO, Island Insurance Co. Roy F. Hughes, Esq. (via e-mail: hthughes@hawaii.rr.com) PricewaterhouseCoopers, c/o Warren Price III, Esq. Terry Mullen, CEO/Pres., John Mullen & Co. (via fax @ 808-531-0053) National Association of Consumer Advocates (www.naca.net) (via e-mail: info@naca.net) Public Citizen (via e-mail through website: www.citizen.org) U.S. Public Interest Research Group (www.uspirg.org) (via e-mail: uspirg@pirg.org) First Amendment Center (www.firstamendmentcenter.org) (via e-mail: info@fac.org) Trial Lawyers for Public Justice, National Headquarters (www.tlpj.org) (via fax @ 202-232-7203) Consumer Action (via e-mail through their website: www.consumer-action.org) Consumers Union, DC Office (www.consumersunion.org) (via fax @ 202-265-9548) Honolulu Community-Media Council (via e-mail: hc-mc@verizon.net) Mark Burch, University of Hawaii (via e-mail: burch@hawaii.edu) CPCU Society (www.cpcusociety.org) (via e-mail: membercenter@cpcusociety.org) Hawaii Chapter, CPCU (www.hawaii.cpcusociety.org) (Joseph Hu, CPCU, President: Josephh@servco.com) (Jeff Bronaugh, CPCU, President Elect: Jeff@kingneel.com) (Wayne Hikida, CPCU, V.P.: fax: 808-564-8456) (Ann Donohue, CPCU, Sec.: Ann.donohue@ace-ina.com) (Janet Ng, CPCU, Treas.: fax: 808-540-4301) (Marian Brown, CPCU, Past Pres.: Mbrown@atlasinsurance.com) (Gloria Sumitani, CPCU, Past Pres.: SumitaniGs@aol.com) (Bruce McEwan, CPCU, Education Chairperson: bmcewan@htbyb.com) (Greg Tsuda, CPCU, Membership Chairperson: gregt@nogins.com) Risk and Insurance Management Society, Inc. (via e-mail through their website: www.rims.org) Risk and Insurance Management Society, Inc., Hawaii Chapter (Nahua Maunakea, ARM, President: via fax @ 808-921-6505) (Bruce McEwan, ARM, CPCU, Director: via fax @ 808-543-9458) (Denice Goto, CPA, RIMS Delegate: via fax @ 808-836-4795) ~ ~ ~ MORE EXAMPLES??? www.kycbs.net/IRS-11-10-97.htm www.kycbs.net/InsuranceCommissioners.htm www.kycbs.net/FBI-IRS-AG-Matsumoto-5-13-99.htm www.kycbs.net/Fax-PeterCarlisle.htm www.kycbs.net/FBI-IRS-AG-Matsumoto-5-13-99.htm www.kycbs.net/Harmon-Trustees.htm www.kycbs.net/Claim-PC-5-26-4.htm www.kycbs.net/Claim-Guttman-8-4-4.htm www.kycbs.net/Claim-Katz-9-18-4.htm www.kycbs.net/Claim-Tamm-9-28-4.htm www.kycbs.net/Claim-Tius-10-4-4.htm www.kycbs.net/Claim-IRS-3-28-5.htm www.kycbs.net/Claim-Hawaii-AG-6-24-5.htm www.kycbs.net/CV05-00030-Guttman-8-6-5.htm www.kycbs.net/Claim-Guttman-4-1-6.htm www.kycbs.net/Claim-KS-Offer-4-28-6.htm www.kycbs.net/CV05-00030-OUST-8-25-6.htm www.kycbs.net/CV05-00030-Bennett-8-26-6.htm
FURTHER CLARIFICATION OF ‘OBJECTIONABLE MATERIALS’??? www.kycbs.net/CV05-00030-OUST-8-25-6.htm www.kycbs.net/CV05-00030-Guttman-8-29-6.pdf
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MORE SONGS BY... ~ ~ ~ May 19, 2009 RE: CV05-00030 - U.S. Dept of Justice, David C. Farmer, Trustee vs. Bobby N. Harmon - New Exhibit: "Marsh & McLennan & AON have participated for decades in fraud and bid rigging..." From: Bobby N. Harmon, CPCU To: "President Barack Obama" <president@whitehouse.gov>, "U.S. Attorney General Eric Holder" <AskDOJ@usdoj.gov>, "David Farmer" <farmerd001@hawaii.rr.com>, "Steven Guttman" <sguttman@kdubm.com>, "Carol K. Muranaka" <ustp.region15@usdoj.gov>, "Judge David A. Ezra" <theresa_lam@hid.uscourts.gov>, "Judge Kevin S.C. Chang" <shari_afuso@hid.uscourts.gov>, "Judge Barry M. Kurren" <tammy_kimura@hid.uscourts.gov>, "Securities & Exchange Commission Enforcement Division" <enforcement@sec.gov>, "U.S. Treasury Dept. Office of Inspector General" <hotline@oig.treas.gov>, "Office of Inspector General US Dept of Justice" <oig.hotline@usdoj.gov>, "Executive Office for U.S. Trustees" <ustrustee.program@usdoj.gov>, "Judge Robert Faris" <hib@hib.uscourts.gov>, "SEC Office of The Inspector General" <oig@sec.gov>, "Hawaii State Bar Association" <info@hsba.org>, "Charles Goodwin" <HONOLULU@FBI.GOV>, "Hugh Jones" <hugh.r.jones@hawaii.gov>, "Insurance Division Fraud Branch" <insfraud@dcca.hawaii.gov>, "Lawrence Reifurth" <dcca@dcca.hawaii.gov>, "Linda Lingle" <governor.lingle@hawaii.gov>, "Jo Ann Uchida" <rico@dcca.hawaii.gov> Cc: "ACLU Hawaii" <office@acluhawaii.org>, "All Representatives" <reps@Capitol.hawaii.gov>, "All Senators" <sens@Capitol.hawaii.gov>, "Andrew Walden" <hfpeditor@email.com>, "Aon Insurance Managers" <mike_coulter@agl.aon.com>, "Arthur Rath" <imua@spamarrest.com>, "Benjamin Kudo" <bkudo@imanakakudo.com>, "Bradley Tamm" <btamm@hawaii.rr.com>, "Carl Morton" <ethics@hawaiiethics.org>, "Charles Hurd" <mcp@mediatehawaii.org>, "David Shapiro" <volcanicash@gmail.com>, "Dee Jay Mailer" <ksinfo@ksbe.edu>, "J C Shannon" <Hapa1234@aol.com>, "James B Nicholson" <jamesbnicholson@aol.com>, "James B. Farris" <Farrisj@adr.org>, "James Cribley" <jcribley@caselombardi.com>, "James Wriston" <jwriston@awlaw.com>, "Jeffrey Watanabe" <jwatanabe@wik.com>, "Jim Dooley" <jdooley@honoluluadvertiser.com>, "Joe Moore" <news@khon2.com>, "John D. Finnegan" <info@chubb.com>, "John Goemans" <wip@kamuela.com>, "Judson Witham" <jurisnot2@yahoo.com>, "Ken Conklin" <ken_conklin@yahoo.com>, "Lyn Flanigan Anzai" <lflanigan@hsba.org>, "Margery Bronster" <info@bchlaw.net>, "Marsh Affinity Group" <prosecure@marshpm.com>, "Michael N. Tanoue" <mtanoue@paclawgroup.com>, "Michelle Tucker" <michelle@sterlingandtucker.com>, "Nathan Aipa" <nathan@pitluck.com>, "Paul Alston" <palston@ahfi.com>, "Randall Roth" <rroth@hawaii.edu>, "Rick Daysog" <rdaysog@honoluluadvertiser.com>, "Robert Bruce Graham" <bgraham@awlaw.com>, "Robin Campaniano" <aigh001@aighawaii.com>, "Samuel P. King" <leslie_sai@hid.uscourts.gov>, "William K Slate" <Websitemail@adr.org>, "Jim Terrack" <tnthawaii@aol.com>, "Don Michak" <dmichak@journalinquirer.com>, "Rocco Sansone" <rocco.c.sansone@marsh.com>, "Ted Pettit" <tpettit@caselombardi.com>, "Laura Thielen" <dlnr@hawaii.gov>, "Vaughn & Lynda Robinson" <ronpaulslcutah@yahoo.com>, "Rebecca Christie" <rchristie4@bloomberg.net>, "Catbird" <the-catbird@hotmail.com>, "James Duca" <jduca@kdubm.com>, "Ian Lind" <diary@ilind.net>, "Roy F. Hughes" <hthughes@hawaii.rr.com>, "Malia Zimmerman" <Malia@hawaiireporter.com>, "Jack Cashill" <JCashill@aol.com>, "Marshall Chriswell" <mc@whistleblowers.org>, "Laser Haas" <laserhaas@msn.com>, "Lucy Komisar" <lkomisar@msn.com>, "Democrats.com" <activist@democrats.com>, "Debra Sweet" <debrasweet@worldcantwait.org>, "Jane Kirtley" <kirt001@umn.edu>, "V K Durham" <vkdtdht@pionet.net>, "John Jubinsky" <Jube@tghawaii.com>, "Yamil Berard" <yberard@star-telegram.com>, "Global Exchange" <communications@globalexchange.org>, "William K. Black" <blackw@umkc.edu>, "Carole Williams" <cjwms@up.net>, "Susan Tius" <STius@rmhawaii.com>, "Human Rights in China" <hrichina@hrichina.org>, "Michelle Malkin" <writemalkin@gmail.com>, "Heather Vsn Doren" <heather.vandoran@yahoo.com>, "Phil J. Berg" <philjberg@obamacrimes.com>, "Amnesty International U.S.A." <aimember@aiusa.org>, "Michael Moore" <bailout@michaelmoore.com>, "California Anti-SLAPP Project" <info@casp.net>, "Thomas Fitton" <info@judicialwatch.org>, "Ron Branson" <VictoryUSA@jail4judges.org> California Insurance Fraud Attorneys The Law Offices of Nadrich & Cohen, LLP, a successful and aggressive California and nationwide law firm is seeking appropriate companies and/or individuals who have utilized Marsh & McLennan or AON as their insurance brokers for placement of insurance policies. Marsh & McLennan & AON have participated for decades in fraud and bid rigging by placing its clients' insurance with certain carriers solely to obtain additional commissions undisclosed to their clients. What Marsh & McLennan and AON clients did not know was that a secret commission was paid to Marsh & McLennan or AON for their insurance placement in addition to the disclosed brokerage fee. Unlike markets for securities, commodities, and other financial products, commercial insurance is bought and sold in private. Insurance brokers such as Marsh & McLennan & AON are no more than middle-men who match up buyers and sellers in return for a cut of the transaction. Marsh & McLennan is the leader in selling property casualty coverage to businesses around the world. Industry wide, premiums paid last year just in the United States totaled $176 billion. The bid-rigging scheme worked as follows: Marsh & McLennan or AON steered business toward certain insurance companies at designated prices. They then would solicit additional artificial higher fake bids from other companies to give the appearance to the client of real bidding. Marsh & McLennan did this even as it claimed in public statements that its "guiding principles" was to consider its clients' best interests "first and foremost." By this activity, Marsh clearly did not consider its client's best interest "first and foremost." The kick-back scheme worked as follows: Insurance brokers such as Marsh & McLennan & AON received directly from insurance companies additional secret commissions over and above their ordinary commissions. These commissions were paid for steering volume business to a particular company's way. Insurance companies called these fees "contingent commissions" or "market service agreements". The client never knew. Critics call these commissions for what they are: "undisclosed kickbacks." These improper fee arrangements date back for decades. Many insurance industry executives say it was known to select insiders that these arrangements were in place in order to boost insurance brokers' revenue. However, these payments were never disclosed to the insured/client to which the brokers owed a fiduciary duty to. Critics and New York Attorney General Eliot Spitzer maintain these practices are poorly disclosed and are a conflict of interest for brokers ostensibly acting on a policy holder's behalf. Attorney General Spitzer has obtained documentation of employees of AIG who supplied fake quotes to provide the illusion of competitive bidding for Marsh & McLennan clients knowing; at all times, that another insurance company would nonetheless win the bid. Attorney General Spitzer's investigation includes AIG Insurance Company, Bermuda based Ace Insurance Company, Hartford Insurance Company and others. Marsh & McLennan received $800 million in revenue from contingent commissions in 2003 - the equivalent of more than half of its $1.5 billion income. Marsh & McLennan cheated its own corporate clients by rigging bids and wrongfully collecting huge fees from insurance companys for throwing business their way. They purposefully did not disclose these fees to their clients. If this occurred to you and/or your company, please immediately contact our experienced insurance class action law firm as we are vigorously investigating a class action against Marsh & McLennan and AON. The effect of contingent commissions are that they wrongfully reward brokers for hitting profit or volume targets and thus provide brokers a financial incentive to choose one company over another, even if the other company offered a better price or better terms. Nadrich & Cohen, LLP and co-counsel are actively interviewing Marsh and AON's clients for purposes of bringing a civil lawsuit against Marsh & McLennan and/or AON. The lawsuit's basis will be that the incentive fees or contingent commissions or placement service agreements paid in exchange for sending more business to an insurance company's way were in reality, wrongful commissions which defrauded the policy holder by not intentionally providing the policy holder with the best deal possible. The cost of insurance was also artificially raised, forcing buyers to pay higher premiums, thus further cheating buyers. The lawsuit will seek to have contingent commissions declared illegal, recover damages for Marsh customers and forces Marsh & McLennan to give up illegal profits. Nadrich & Cohen, LLP and its co-counsel are pursuing a separate class action to demand reimbursement to Marsh & McLennan stock investors because Marsh's wrongful actions devalued the price of the stock. The Law Offices of Nadrich & Cohen, LLP is seeking clients of Marsh & McLennan who were victims of the undisclosed contingent commission bid-rigging and other anti-competitive activities. We strongly believe Marsh's actions harmed its clients by keeping their insurance prices artificially inflated. Our law firm is an experienced and aggressive insurance fraud law firm actively seeking policy holders who purchased insurance through Marsh & McLennan or AON, Inc. Companies that we know who are involved in the bid-rigging process included AIG or American International Group, Hartford Fire Insurance Company, Chubb Indemnity Corp., and other insurances. If you or your business purchased insurance through Marsh & McLennan of AON, please contact us immediately. Nadrich & Cohen, LLP works on a contingent fee basis only. We are paid a fee only if we obtain a recovery. If we do not obtain a recovery our clients owe us nothing for our services. http://www.insurance-broker-fraud.com/ * * * * * May 19, 2009 Dear President Obama, Attorney General Holder, Trustee Farmer, Mr. Guttman, and All Concerned: Due to the discovery of new facts, I am adding the subject Exhibit as it relates to this lawsuit which violates my Constitutional Rights of Free Speech and a Fair Trial, and Federal and Hawaii Anti-SLAPP statutes. You will find related information on-line at: http://www.kycbs.net/Allied-World-Assurance.htm http://www.kycbs.net/Bad-Faith-Buzzards.htm http://www.kycbs.net/Broken-Trust-Book.htm http://www.kycbs.net/ChubbGroup.htm http://www.kycbs.net/Confessions.htm http://www.kycbs.net/Freedom-To-Sing.htm http://www.kycbs.net/Hartford.htm http://www.kycbs.net/Insurance-Vampires.htm http://www.kycbs.net/JUSTICE.htm http://www.kycbs.net/MarshBirds.htm http://www.kycbs.net/Mid-Ocean.htm http://www.kycbs.net/RICO-BH.htm http://www.kycbs.net/Vesta.htm http://www.kycbs.net/Zurich.htm In view of all the facts that I have presented in this and hundreds of other Exhibits and witness descriptions, it is beyond comprehension that former Attorney General Alberto Gonzales; Assistant U.S. Trustees Curtis Ching, Gayle Lau and Carol Muranaka; Judges Eden Hifo (fka Bambi Weil), Kevin Chang, David Ezra, Barry Kurren, Lloyd King and Robert Faris; Trustees Mary Lou Woo, James Nicholson and David C. Farmer; American Arbitration Association arbitrator Judith Neustadter Fuqua, attorney Steven Guttman, and others, can still claim that they were non-conflicted, fair, impartial, and unbiased in this case. Mr. Farmer and Mr. Guttman, in spite of all this factual evidence (not just "political opinions" or "conspiracy theories" as you have previously alleged), I am again asking that we attempt to reach a global settlement of this matter through confidential negotiation or mediation rather than continuing these costly and seemingly-endless court proceedings. However, if you, and your insurance carriers, are still not willing to attempt to negotiate or mediate a settlement, then I ask that you perform your mandated review of this new Exhibit in accordance with Judge Ezra's Order, and advise me if you find it contains any so-called "protected subject matter", and whether or not you intend to OBJECT to my filing a Motion to reopen this case. I respectfully request your immediate reply. If I do not receive a response from you or your insurance carrier within 15 days, I will assume that you have found no "PSM" in these updated pages, and that you will NOT file any objections to my Motion. Very truly yours,
Bobby N. Harmon, CPCU, ARM Additional References: http://whistlersongs.blogspot.com ~ ~ ~ < < < FLASHBACK < < < August 21, 1997
Keeping lawsuits mum exposes estate,
says former Bishop official
The trust is vulnerable to millions By Bruce Dunford, Associated Press The $10 billion Bishop Estate trust that supports Kamehameha Schools is exposed to hundreds of millions of dollars in damage claims and millions of dollars in legal fees because trustees wanted to keep a lid on embarrassing lawsuits, according to a former executive of the trust. Failure to disclose details of these lawsuits to insurance companies jeopardized insurance coverage of damage judgments or settlements as well as legal fees in defending against them, said Bobby Harmon, who headed the estate's insurance program until last year. Harmon, who was fired last November as president of the estate's for-profit captive insurance subsidiary, P&C Insurance Co. Inc., has been talking to state attorneys investigating allegations of irregularities in the management of Bishop Estate by its five trustees. Gov. Ben Cayetano ordered the probe. The Bishop Estate won't respond to Harmon's specific allegations but is prepared to challenge them in court, said estate spokeswoman Elisa Yadao. The estate's 1989 $85 million investment in McKenzie Methane Inc., a Houston-based energy venture in which several trustees and estate executives piggybacked another $3 million of personal investment, resulted in a $2.3 billion lawsuit brought in Texas in 1993 against the trustees, the Bishop Estate and other investors. The venture went into bankruptcy, whittling Bishop Estate's investment down to some $20 million, according to attorneys in Texas. The estate, its involved subsidiaries, the trustees and estate officers were entitled to legal defense under United Educators Insurance Co., which carries the estate's legal liability policy, Harmon said. Despite repeated efforts of the insurance company's claims manager to get details on the lawsuit from Bishop Estate's top attorney, Nathan Aipa, no information was provided and the company closed its files, not paying some $500,000 in legal fees that would have been covered, Harmon said. It could also foreclose the insurance company paying for a settlement or judgment, he said. Another $500,000 was spent defending against a $86.7 million lawsuit brought in 1995 by movie producer Fredrick Field stemming from his partnership with Bishop Estate in investments dating to 1984, Harmon said. Actor Wayne Rogers, an investment partner with Bishop Estate and several trustees in Kona Enterprises, filed a lawsuit in North Carolina in 1993 that was not reported to United Educators, which therefore paid no defense costs, Harmon said. Although a subsequent lawsuit filed in Utah was reported to the insurance company, the company disallowed many of the legal fees due to noncompliance with the policy terms, he said. U.S. District Judge David Ezra dismissed Rogers' lawsuit last year, but his ruling was reversed on appeal, and the case remains pending. Total costs of defending Rogers' lawsuit could have been limited to Bishop Estate's $250,000 self-insured retention, Harmon said. While the total costs of the defense covered by insurance are not yet known, one Honolulu firm, Cades Shutte Fleming & Wright, had billed the estate more than $750,000 as of September of last year, he said. A lawsuit was brought in March of 1996 by members of the exclusive Robert Trent Jones Golf Club near Washington, D.C., in which Bishop Estate was a development partner and guarantor on a $40 million loan. Bishop Estate trustee Henry Peters became a director and trustee of the golf club and negotiated the sale of the golf course and adjacent residential property to club members, according to the lawsuit, which has since been settled. The lawsuit says those buying memberships were not informed that the club was stuck with the $33 million development loan from Bishop Estate. Harmon said he doesn't know who paid for the legal defense fees in that case or how much they totaled. Yadao said Harmon was fired last year for work-associated misconduct and therefore was denied unemployment compensation.... www.starbulletin.com/97/08/21/news/story2.html ~ ~ ~ For more, GO TO > > > Broken Trust: The Book
August 20, 1997 Fired exec questioned State attorneys interview ex-worker By Bruce Dunford, Associated Press A Bishop Estate official who says he was fired last year for raising questions about irregular and possible illegal activities has been interviewed by state attorneys ordered by the governor to investigate the estate. Bobby Harmon served for eight years as head of the estate’s insurance programs and ultimately served as president of P&C Insurance Co., a for-profit subsidiary of the $10 billion charitable trust that supports Kamehameha Schools. He said he questioned: > An annual payment the estate made without accounting for why it was made; > His salary for the profit-making organization being paid by the nonprofit trust in apparent violation of IRS rules; > The company’s legal work being parceled to certain lawyers. Harmon met for 1-1/2 hours yesterday with Senior Deputy Attorney General Lawrence Goya and the attorney general’s auditor, he said. They expressed interest in obtaining a 50-page document he prepared detailing questionable and possibly illegal activities by Bishop Estate’s trustees and top executives, Harmon said. Bishop Estate, however, earlier obtained a Circuit Court injunction against the release of the document, claiming it contains confidential and proprietary information that should not be made public. Harmon has also offered to share his papers with retired Circuit Judge Patrick Yim, who is also conducting an investigation into the management of Bishop Estate and Kamehameha Schools at the request of the probate court. Harmon said he was fired in November after he refused to sign off on a required financial report involving the estate’s contract with Marsh & McLennan Inc. as the estate’s insurance broker. He said he was worried about a $200,000 annual flat fee superiors wanted him to pay to MMI because there was no accounting why it was being paid, Harmon said. Harmon said he felt if he “looked the other way” as encouraged by his superiors, “I would be breaching my fiduciary duties to the organization.” Harmon also questioned why his salary was from the nonprofit trust when almost all his time was spent working for the for-profit P&C captive insurance company. This appears to violate IRS rules against using tax-exempt trust funds to subsidize a profit-making company, he said. It appeared that Bishop Estate attorney Nathan Aipa, Harmon’s direct supervisor, and trustee Henry Peters wanted to maintain tight control over all insurance matters, including parceling out related legal work to selected attorneys, he said. Estate spokeswoman Elisa Yadao has declined to comment on Harmon’s allegations, but said they will be challenged in court.... The use of trust funds to support Bishop Estate’s various taxable subsidiaries was common, yet not reported on IRS forms as required, Harmon said. www.starbulletin.com/97/08/20/news/story1.html ~ ~ ~ For more, GO TO > > > Broken Trust: The Book
August 26,1997 Estate Tries To Muzzle Fired Exec It seeks contempt-of-court charges By Jim Witty, Star-Bulletin Bishop Estate is seeking to silence Bobby Harmon again. The trust has filed an emergency motion in Circuit Court seeking contempt of court charges against the fired Bishop Estate executive for allegedly violating a previous injunction that blocked him from disclosing "confidential" information about his former employer. Matt Tsukazaki, attorney for the $10 billion charitable trust, asked for a closed hearing "to protect the confidentiality of the information that may be discussed." This morning, Circuit Court Judge Bambi Weil continued the matter to Sept. 26; Bishop Estate attorneys are scheduled to conduct a deposition with Harmon Sept. 12. "We're not dealing with the formula of Coca Cola," quipped Harmon's attorney, Roy Hughes. "We're dealing with business documents." John Goemans, who is representing Harmon in his $1.8 million wrongful-termination suit against Bishop Estate, told Weil: "Anything that Harmon has said has been either a matter of opinion or in aid of law enforcement." Bishop Estate attorneys contend that Harmon released a confidential and proprietary document that contained "false and defamatory allegations" and disclosed facts concerning his employment with Bishop Estate to "outside third parties." Harmon, who was fired last year after serving eight years as president and chief executive officer of Bishop Estate subsidiary P&C Insurance Co., has said his questions about irregular and possibly illegal activities led to his ouster. The Attorney General has interviewed Harmon as part of its investigation into the estate's dealings. "Here's a guy who brought to the attention of his company things that were of benefit to the company," Goemans said. "Instead of being rewarded for his diligence, the whole machinery of the estate came down on him like a ton of bricks, ending his career, to which he'd reached the pinnacle." Harmon said he questioned an annual payment the estate made without accounting for why it was made, his salary as chief of the for-profit insurance subsidiary being paid by the nonprofit trust in apparent violation of IRS regulations, and the parceling out of legal work to selected lawyers. Harmon is out of state and did not attend today's hearing. www.starbulletin.com/97/08/26/news/story1.html ~ ~ ~ For more, GO TO > > > Broken Trust: The Book
August 27, 1997 Cayetano: The estate's confidentiality provision isn't meant
to protect the trustees, he says
By Mike Yuen and Jim Witty, Star-Bulletin Gov. Ben Cayetano says the Bishop Estate cannot use confidentiality agreements to bar employees from cooperating with the state's investigation into whether trustees breached their fiduciary responsibilities. Cayetano's remarks yesterday came an hour after a hearing in Circuit Court on the estate's emergency motion for a contempt finding against a fired executive for allegedly violating an injunction that prevented him from revealing "confidential" information about his former employer. The hearing was recessed to Sept. 26. Bobby Harmon, who was fired last year after working eight years as president and chief executive officer of the estate's for-profit subsidiary, P&C Insurance Co., was questioned last week by state attorneys. They talked with Harmon after Cayetano ordered Attorney General Margery Bronster to begin an investigation into the $10 billion charitable trust, the largest private landowner in Hawaii. Estate attorneys are also alleging that Harmon talked with reporters, leaking sensitive information. "The confidentiality provision, in my view as an attorney," said Cayetano, "will not hold any weight or water if the information that's coming out is used to demonstrate or prove that there has been in fact a breach of fiduciary duty. You cannot hide information. The confidentiality provision should stand only if it is in fact protecting the trust and the beneficiaries - and not the trustees." Moreover, the law giving the attorney general subpoena powers outweighs any confidentiality provision an employer may have with employees, Cayetano added. "I think if it should then happen that people bring a civil action against this employee for damages for breach of contract, the defense is he was required to do so by law," Cayetano said. Several hours after Cayetano spoke with reporters, Harmon's attorney, John Goemans, filed a writ with the state Supreme Court, challenging Circuit Judge Bambi Weil's jurisdiction to enforce the injunction against his client. The injunction, Goemans claims, “denies Harmon's established First Amendment right to express his opinion as to the corruption and criminality of the officers and directors of the Bishop Estate in matters of public concern and in aid of law enforcement by the attorney general of the state of Hawaii and others." Bishop Estate spokeswoman Elisa Yadao said the estate intends to cooperate with the attorney general's investigation, but insisted that the inquiry should not be tied to Harmon's case. "It is not appropriate to discuss that case. That's separate from the attorney general's inquiry," Yadao said. "He is under injunction from the court because of his unauthorized removal of estate property." Yadao expressed surprise that state investigators have not yet contacted estate officials, given that two weeks have passed since Cayetano announced Bronster's inquiry. As a result, estate attorney Nathan Aipa has called Bronster's office, asking how to proceed, said Yadao. Asked if estate employees and staff at its educational arm, Kamehameha Schools, will be allowed to talk to state investigators without being held to the confidentiality provision, Yadao declined to answer the question directly. She would only say: "We have a long history of working with court-appointed masters. We've always cooperated fully with the masters. We have a good working relationship with the current master, who has spoken with current employees." Bronster has said she won't talk to estate trustees or attorneys until she fully sorts out the allegations. The Kamehameha Schools/Bishop Estate employee handbook, a copy of which was obtained by the Star-Bulletin, tells employees they must "keep institutional information confidential unless there are good reasons and authorization for its release." They are also told the release of information pertaining to the estate and the schools is handled through the trust's public relations department, which must also clear any speeches or interviews "which might contain sensitive and/or confidential information." The employee handbook itself is labeled "CONFIDENTIAL." Cayetano said that during a talk with Bronster on Monday, there was concern expressed over "the resources" needed for the investigation, given the state's tight fiscal situation. "What we talked about was using some personnel from the state's Tax Department, for example. Certainly in her investigation she will need to have people with accounting and auditing backgrounds," Cayetano said. "My inclination," Cayetano said, "is to make the (preliminary) report public, because I think it will become public anyway if we do go to court." Cayetano stressed that Bronster is focusing on what might appear to be clear violations of fiduciary duties. Trustees have said the preliminary report should not be released until they can meet with Bronster to respond to allegations. Cayetano added that while Bronster can subpoena Bishop Estate trustees and even state Supreme Court justices, who appoint the trustees, he believes they will come forward voluntarily. www.starbulletin.com/97/08/27/news/story1.html ~ ~ ~ For more, GO TO > > > Broken Trust: The Book
September 26, 1997 Former Bishop exec admits contempt Honolulu Star-Bulletin The attorney for Bobby Harmon acknowledged to a Circuit Court judge that the fired executive for Kamehameha Schools Bishop Estate violated a court order by talking to others about possible improprieties at the estate. Harmon attorney Roy Hughes, under questioning from Circuit Judge Bambi Weil, admitted Friday that Harmon was in contempt of court in two instances - for meeting with another former KSBE official and for writing a letter to an accounting firm hired by the estate. Hughes said, however, that Bishop Estate attorneys had not shown any harm done to the $10 billion trust and argued that the motion barring Harmon from revealing information be lifted. KSBE attorneys succeeded, at least for the time being, in keeping the gag on Harmon, who was fired last year after eight years as president and chief executive officer of Bishop Estate subsidiary P&C Insurance Co. Weil said she needs more time to review documents and continued arguments until Oct. 10. But she did admonish Harmon for releasing documents without seeking court clearance and ordered him not to do it again - under risk of losing his standing in his $1.8 million wrongful-termination lawsuit against the estate - until the court could determine what is privileged and confidential. www.starbulletin.com/97/09/26/news/satnews.html - For the latest news regarding “keeping the gag on”, GO TO > > > Office of the United States Trustee vs. Harmon
October 3, 1997 Reporters Object to
Bishop Estate Subpoenas
By Gordon Y.K. Pang, Star-Bulletin Kamehameha Schools Bishop Estate will have to go to court if it wants the notes and documents of three reporters who have written on the estate. Attorneys for the reporters are objecting to subpoenas served by Bishop Estate two weeks ago. Paul Alston, who is representing reporters Jim Dooley of KITV News4 and Sally Apgar of the Honolulu Advertiser, yesterday filed formal objections in Circuit Court. Both he and Corey Park, attorney for Associated Press reporter Bruce Dunford, have sent letters to the estate refusing to release any documents. Bishop Estate alleges that information obtained by the reporters came from Bobby Harmon, an executive who was fired by the estate. Harmon, who served as president and chief executive for Bishop subsidiary P&C Insurance Co. was sued by the estate to stop him from releasing information he gathered or learned while still in its employment. The estate says Harmon stole documents from its offices. Harmon countersued, claiming wrongful termination. Alston said the subpoenas served to his clients were improperly issued and violate the First Amendment. He added that Harmon never claimed to have given reporters anything more than a synopsis of information which wrote. Park said it didn’t matter even if Harmon had given his client documents that were stolen. “The press in this case was not a party to any kind of alleged improper activity in obtaining the information.” The estate must now ask a judge to intercede if it wants the documents. Estate spokeswoman Elisa Yadao would not say if the estate would go to court to seek the documents. “We are going to do what is appropriate and prudent in our attempts to get the information back,” she said. www.starbulletin.com/97/10/03/news/story2.html For more, GO TO > > > Broken Trust: The Book
January 8, 2000 Trustees gone, case still going:
Atty. general seeks bigger budget
The state is pursuing $100 million Associated Press, Honolulu Star-Bulletin The state’s legal costs in the Bishop Estate case “are going up, not down,” Attorney General Earl Anzai says. In reviewing Anzai’s supplemental budget proposals, House Finance Committee Chairman Dwight Takamine, D-North Hilo-Hamakua, asked yesterday if there might be some money left now that the five trustees of the estate have resigned. Anzai said the opposite is true as the state pursues the former trustees for up to $100 million for alleged losses from questionable investment of trust funds. The state expects a judgment to include paying the state’s legal costs, he said. The state is now entering a more difficult phase of the case, Anzai said. “To pursue those claims, we need experts who are going to cost hundreds of dollars an hour. For example, we’ll need experts on return on investments, real property investments on the partnerships investments they entered into, etc.” The state’s claim focuses on getting money from the insurance company covering liabilities for the trustees, Anzai said. “I don’t think any of the trustees have personal assets that even come close to the losses we are claiming.” www.starbulletin.com/2000/01/08/news/story2.html
May 18, 2000 Report: Ex-trustees tried to
‘destroy the opposition’
A special master's report says they ran an expensive and By Rick Daysog, Star-Bulletin Lawyers for the former Bishop Estate trustees took part in a costly "destroy the opposition" campaign that targeted state and federal judges, law enforcement agencies, the Honolulu Star-Bulletin and the trust's own beneficiaries, according to a court-appointed special master. In a blistering, 67-page report expected to be filed today in state Circuit Court, attorney Robert Richards said the estate's former majority trustees Henry Peters, Richard "Dickie" Wong and Lokelani Lindsey wasted thousands of dollars of trust money in failed attempts to muzzle U.S. District Judge Samuel King's criticisms of the former trustees and to disqualify Probate Judge Kevin Chang from cases involving the estate. One of the trust's law firms, Cades Schutte Fleming & Wright, investigated former trustee Oswald Stender's role in an unsuccessful Maui business deal and reviewed photographs of Kamehameha Schools alumni and parents who marched in protest to the former trustees in May 1997, in an apparent attempt to intimidate critics. Richards, appointed by Judge Chang in March 1999 to review the estate's legal bills, found that the law firm of McCorriston Miho Miller Mukai drafted lawsuits against the Internal Revenue Service and the attorney general's office and conducted research into a possible racketeering suit against the attorney general's office. The McCorriston firm also conducted legal work in an attempt to prosecute the Star-Bulletin and this reporter for disclosing sensitive details of the IRS investigation, according to Richards. The intense civil and criminal investigations by the IRS and the attorney general's office prompted the former board members to resign from their $1 million-a-year posts last year. "The conclusion of this master (is) that no stone would be left unturned by the trustees in attempting to silence their critics," Richards said. "There was ... the adoption of a 'destroy the opposition' strategy. There was a constant effort made, nearly always unsuccessful, to take steps to silence or discredit what was perceived to be the 'opposition,' whether that was an employee, a reporter, the attorney general, a judge or a master." Attorney William McCorriston defended his firm's legal representation of the trust, saying his firm eventually recommended against filing actions against the IRS and the attorney general's office. McCorriston added that many of his challenges to the attorney general's investigation were made on sound constitutional grounds. The McCorriston firm billed the trust for $1.4 million in legal work in 1998-1999, and all of that is subject to a surcharge on the part of the former trustees. Mike Heihre, a Cades partner whom Richards described as the estate's "shadow general counsel," did not return calls. "I'm not embarrassed about anything," said McCorriston, who resigned as trust counsel last year. "I'm pretty well convinced that if the trustees followed my advice, they'd still be there." Critics have long argued that the estate's steep legal bills were inappropriate for a charitable trust established to educate children of native Hawaiian ancestry. They also believe the trust hired its high-profile lawyers to stonewall the IRS and state investigations. That sentiment is echoed in Richards' report, which recommended that the Probate Court surcharge the former board members for about $5 million in legal work done by its outside firms. Much of the attorneys' work, he said, was the result of the former trustees' alleged misconduct and was done to benefit the individual board members and not the trust. The special master also found that some of the work was so egregious that the law firms should refund part of their fees to the trust. Little benefit to trust For instance, Richards recommended that Cades Schutte disgorge about $880,000 of the $1.3 million that it billed the trust between August 1998 and May 1999. He also said that former Gov. John Waihee's firm, Washington D.C.-based Verner Liipfert Bernhard McPherson & Hand, should be ordered to refund the estate $347,564 for work Richards said was of little benefit to the trust. "When one reviews the legal invoices one is drawn to the inescapable conclusion that the trustees thought of the assets of the trust as their own. No real thought was given to the advisability of spending money on lawyers," Richards said. Richards' report is based on an exhaustive review of legal billings from 12 of the estate's local and mainland legal and accounting firms. The study, which covered the August 1998 through May 1999 period in which the Kamehameha Schools controversy was at its height, found that several of the law firms conducted duplicative work and that much of it was done for the defense of alleged misconduct by the former trustees. Richards also noted that the former trustees and their law firms engaged in a "Herculean effort" to stall and avoid full disclosure in investigations by the attorney general and the estate's court-appointed master. In many cases, the retention of the law firms was approved by Nathan Aipa, the trust's then-general counsel. Aipa currently serves as chief operating officer. "There were monumental efforts made to keep trustee conduct from coming to light or, if it did come to light, to rationalize it," Richards said. "In fact, one can easily conclude, as this master has, that a strategy was adopted to obstruct the legal process, to delay where ever possible, to object where ever possible, to utilize so many lawyers and so many arguments that the opposition would be overwhelmed and would choose to give up...." Read the complete article at... http://starbulletin.com/2000/05/18/news/story1.html ~ ~ ~ For more, GO TO > > > The Silence of the Whistleblowers August 12, 2000 State deal with trustees rumored By Sally Apgar, The Honolulu Advertiser The state Attorney General’s Office has not yet reached a final settlement with the former trustees of the Kamehameha Schools, designed to avert a complicated civil trial in which the state seeks to recover more than $300 million from the former trustees on claims they mismanaged the charitable trust. Lawyers for the five former trustees and the attorney general’s office have been meeting behind closed doors since last month with mediators, Honolulu attorneys David Fairbanks and James Duffy to settle and avoid a costly year-long trial that was scheduled to begin Sept. 18. The attorneys and trustees have been ordered by the court to keep their discussions confidential. However, Eric Seitz, one of the attorneys representing former trustee Richard “Dickie” Wong in related criminal matters, filed a sworn statement in the Hawaii Supreme Court on Thursday that said a settlement had been reached Aug. 4 and put under seal with the court.... Seitz has represented Wong on criminal matters and has not been a participant in the negotiations to settle the civil surcharge suit. But the negotiations could affect Seitz, because the outcome could determine whether he gets fully paid for past legal work. The payment would be made from a $25 million policy the estate has with Federal Insurance Co. Yesterday Seitz said Federal Insurance has paid him $60,000 and he is still owed $20,000.... Seitz wrote in his statement filed at the Supreme Court that also on Aug. 4, Attorney General Earl Anzai was requested to inform the court of the settlement and withdraw the petition to surcharge the former trustees for alleged mismanagement of the trust. He wrote that “the attorney general’s knowing and deliberate failure” to inform the court of a settlement “is contemptuous and sanctionable.” Seitz also wrote that just after the Aug. 4 meeting, Deputy Attorney General Jones informed him that the issue of producing certain documents, including ones concerning how much Federal Insurance had paid him for Wong’s criminal case, was “moot” because of the settlement. The insurance policy has been paying criminal defense costs for ousted trustees Wong and Henry Peters. The attorney general wanted documents from Seitz showing how much of the insurance money had paid Wong’s legal fees, as that was one subject of the September surcharge trial. Seitz successfully defended former Bishop Estate Trustee Richard S.H. “Dickie” Wong on theft charges last year, and is suing the state Attorney General’s Office in federal court for alleged malicious prosecution for reindicting Wong in December 1999. The surcharge trial has created tensions between the attorney general’s staff and the trust. As parens patriae, the attorney general is responsible for protecting charitable trusts. Typically, when the attorney general pursues such litigation using state money, it is seeking repayment to the state. In this case, the attorney is seeking repayment from the trustees to the $6 billion charitable trust for alleged financial mismanagement and other alleged misdeeds. Further complicating the situation is the issue of the insurance money that would be used to pay for the trial and some of the damages. Terms of the $25 million insurance policy with Federal Insurance are an ongoing subject of debate. However, the interim trustees have been advised that legally they cannot help the attorney general gather evidence for the trial because it would nullify the insurance policy. September 25, 2000 Kamehameha Schools gets decent settlement An Editorial in The Honolulu Advertiser None of the parties to the settlement finalized last week between the state and the five former Bishop Estate trustees hit a “home run,” but all sides received substantially more in settling than they risked in taking the case to trial: > The Former trustees, Richard Wong, Henry Peters, Lokelani Lindsey, Oswald Stender and Gerard Jervis, are spared admitting any wrongdoing – not a minor consideration in light of the names they’ve been called – and from having to pay any restitution to the estate from their pockets. > The trust supporting Kamehameha Schools receives $14 million, its share of the $25 million insurance policy that covered the former trustees. Had the case gone to trial, that $14 million likely would have been consumed by legal costs, leaving the trust to collect – assuming a judgment were winnable – from the former trustees, who may or may not have recoverable assets remaining after their many months of legal wrangling. > The state and the taxpayers are spared the great expense of an extended trial, which might have produced a Pyrrhic victory in nailing the hides of the former trustees to the wall while recovering no money from them. More important, the state now has in place, as a result of this case, a far less politically disruptive mechanism for the selection of new trustees. > The Kamehameha Schools ‘ohana receives, as Gov. Benjamin Cayetano put it, a new start. After all, this case wasn’t so much about punishing former trustees as it was about giving the schools a new governance structure, expanded educational programs, a more stable investment policy, more reasonable compensation for trustees and preservation of the schools’ tax-exempt status. All of that is happening. If there is a loser in the settlement, it might be the Internal Revenue Service, which appears quietly to have agreed to let the former trustees off the hook for substantial penalties for their “excessive compensation,” which approached $1 million a year. The IRS may have decided it needed a more solid case with which to make its first court test of the new intermediate sanctions law. With that possible exception, all of the parties to the settlement owe a debt of thanks to mediators Clyde Matsui, David Fairbanks and James Duffy for discerning common ground in a swamp of disagreement, and to circuit Judge Kevin Chang, who forced serious negotiating by refusing to further delay the trial.... ~ ~ ~ – Catbird Note: This Honolulu Advertiser Editorial overlooks the big winner in this case: XL Insurance Company, which carried a $50 MILLION Excess Liability Policy for Kamehameha Schools. It appears that XL may have paid $ZIP in this case. Wonder WHY???
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