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By Dennis Oda, Star-Bulletin
Pacific Business News publisher emeritus George Mason,
left, who just received the Small Business Hawaii Silver
Leadership Award, magazine publishing magnate Steve
Forbes and businessman Lex Brodie talk after Forbes'
keynote speech at the Small Business Hawaii
Conference yesterday at the Ala Moana Hotel.

Forbes slams
Hawaii again

The ex-presidential candidate
says political suppression still
is hindering the state's
business environment

---

By Tim Ruel
Star-Bulletin

Steve Forbes has strayed little from his biting criticism of Hawaii's business and political climate, this time accusing Gov. Ben Cayetano of using the power of his office to intimidate critics.

"The message is if you don't play ball . . . you're going to be in trouble," Forbes said yesterday after a keynote speech at the 25th annual Small Business Hawaii Conference. In the speech, given to a packed room at the Ala Moana Hotel, the former Republican presidential hopeful listed several problems he has found with the state's business climate.

Forbes noted the case of Edward Medeiros, who operated the Aloha Stadium flea market for 20 years until 1999, when his three-year contract was not renewed.

Medeiros, who supported former Maui Mayor Linda Lingle in her 1998 effort to unseat Cayetano, has said the state ended his long-standing contract for political reasons. The state agreed in December to pay $295,000 to settle three lawsuits brought by Medeiros, who continues to work in private business.

Forbes said the incident, along with others, has had a chilling effect on those who might question the governor's actions, saying there was an implied threat of retaliation through state agencies.

Kim Murakawa, the governor's press secretary, objected to Forbes' criticism and said the billionaire was being used to voice concerns raised by Sen. Sam Slom (R, Kalama Valley, Aina Haina), who runs Small Business Hawaii.

"The governor has not used his influence in the way some would have Mr. Forbes believe," Murakama said.

In the speech, Forbes noted that suppression of political opposition is becoming common all over the United States. "There's been too much quashing dissent, even in Washington," he said.

Forbes' speech, titled "Hawaii's Potential for Real Prosperity," was otherwise similar to one he gave in March at the annual meeting of the Pacific Basin Economic Council, in which the magazine publishing magnate said Hawaii has taken steps toward fixing its business environment.

"There has been some relief, but not nearly enough," Forbes affirmed in yesterday's speech.

In 1997, Forbes magazine published a story titled "The People's Republic of Hawaii," which slammed the state for having the nation's highest rates of personal taxes, workers' compensation and bankruptcy.

Forbes is the biweekly magazine's president and editor-in-chief.

Cayetano had dismissed the article as a promotional tool for Lingle, who is now chairwoman of the Republican Party of Hawaii.

Forbes yesterday defended the article, though he noted several improvements made since then. Hawaii is lowering its income and general excise taxes, but needs to do so faster, he said.

The state needs to continue reforming workers' compensation to reduce the cost on small business, and Cayetano must continue pushing civil-service reform, Forbes said.

"Hawaii must do far more to create a business-friendly, pro-entrepreneurial climate," he said. "At least in Hawaii, you haven't found a way to tax the sunshine, yet."