Thursday, October 1, 1998

Milton Holt indicted

The former senator
will be charged with theft
of campaign funds

By Rick Daysog


Federal prosecutors today were to indict former state Sen. Milton Holt over campaign spending abuses.

The U.S. Attorney's Office today sent notices to the local media that it was charging Holt for theft of campaign funds in connection to his unsuccessful re-election efforts in 1996.

U.S. Attorney Steven Alm could not be reached for comment. The federal prosecutor's office had scheduled a 3 p.m. news conference today to discuss details of the indictment.

Holt's attorney, Reginald Minn, had no comment.

Holt has been embroiled in controversy surrounding his personal use of Bishop Estate funds, and investigations by the state Campaign Spending Commission and the FBI into financing irregularities by his reelection campaigns.

The commission has told the estate that the trust may face criminal charges over alleged illegal campaign contributions involving Holt.

The commission on Friday sent notices to the estate; Holt, a Bishop Estate employee; and others, informing them that they may have violated spending rules.

Holt has acknowledged charging $21,000 on the estate's Bank of Hawaii Visa cards during the past six years.

The credit card expenses -- which include some $2,500 in charges at local strip bars like Misty II and Saigon Passion III -- were disclosed in court filings in January by state Attorney General Margery Bronster.

Bronster is investigating allegations of financial mismanagement and breaches of fiduciary duties by trustees.

Bishop Estate Archive

Wong, Kajioka
dealings scrutinized

The attorney general is
investigating a 20-year-old
alliance between an
estate trustee and his
campaign chairman

By Rick Daysog


In the 1970s when then-state Sen. Richard "Dickie" Wong was emerging as a power in the state Legislature, a small architectural firm co-founded by Wong's campaign chairman was playing a role in Wong's rise.

The company, now known as Kajioka Yamachi Architects Inc., paid for big printing costs for newsletters and designed Christmas cards for the campaign. The firm's co-founder, Allen Kajioka, later loaned the campaign money and floated the campaign thousands of dollars to cover costs for a fund-raising event.

He even bought sodas for campaign workers.

Nearly two decades later, Attorney General Margery Bronster is investigating dealings between the Kajioka firm and Wong and his fellow trustees of the multibillion-dollar Bishop Estate.

During the 1996-1997 fiscal years, the Bishop Estate awarded $193,792 in nonbid work to the Kajioka firm.

Bronster, in a Sept. 10 petition to remove the the estate's trustees, alleged that the Kajioka firm took part in an illegal campaign finance scheme involving state Sen. Marshall Ige and former Sen. Milton Holt, an estate employee.

The Kajioka firm referred all inquiries to its attorney, Lex Smith, who declined comment. Wong and his attorney, Philip Brown, did not return several calls yesterday.

But the estate has said trustees never authorized such activity and has opened an internal inquiry. It said such campaign-spending violations, if they occurred, would have been in violation of estate policy.

According to Bronster, the Kajioka firm paid an $18,262 debt Ige owned local printer Ryan's Graphics Corp. after Ryan's sent the firm a false invoice, according to Bronster.

Ryan's, a Bishop Estate vendor, sent the phony bill to the Kajioka firm at the request of Bishop Estate employee Namlyn Snow, a longtime assistant to trustee Henry Peters, the state has said.

Ige, elected to the Senate in 1996, denied wrongdoing, saying he was not aware that his campaign debts were paid.

Holt, meanwhile, ran up a $12,334.44 debt to Ryan's during his unsuccessful re-election campaign in 1996 against then-state Rep. Suzanne Chun Oakland.

According to Bronster, Snow instructed Ryan's to divide the balance of Holt's debt among three companies, which were given nonbid work by the estate: the Kajioka firm, Ronald N.S. Ho & Associates Inc. and Sato & Associates Inc.

Holt's attorney, Reginald Minn, had no comment.

The state Campaign Spending Commission recently sent letters to the estate, its employees and the trust's contractors, saying they may have violated campaign-spending laws and may be subject to criminal charges.

During the past year, attorneys for Wong have suggested that Wong was not a target of the state's investigation. Wong has stressed that he was cooperating with state investigators.

But when Bronster filed her petition earlier this month to remove the estate's majority trustees, it put him at the forefront of the investigation.

Bronster alleged that Wong and trustee Henry Peters took part in an illegal kickback scheme with Wong's brother-in-law -- local developer Jeffrey Stone -- over a Hawaii Kai condo project.

Wong denied the kickback charge, calling it an attack on his honor.

Stone also denied the state's allegations, saying the estate benefited from the Hawaii Kai transaction, which had been stalled prior to his involvement. Stone denied giving trustees favors and he denied that he and his partners were given special treatment.

The allegations of kickbacks are now a subject of an Oahu grand jury investigation.

Kajioka is a member of Wong's inner circle.

He is a director of the Jane C. Wong Private Foundation, a nonprofit trust that Wong established last year in memory of his mother who died in 1985.

Back in 1991, the now-defunct Hawaii Monitor newsletter reported that Wong held interests in a real estate management company known as Koya Consultants Inc., which was then headed by Kajioka.

At the time, Wong's staffer Gwen Joseph was listed in state business records as a company vice president and director.

State records also show that Koya Consultants currently is headed by Sharane Wong, a relative.

Wong's relationship with Kajioka dates back nearly 25 years. According to campaign-spending records, Kajioka had served as chairman of Wong's campaign between 1974 and 1992.

Wong was elected to the Legislature in 1966 as a state representative and served as Senate president from 1979 to 1992.

(Wong's records before 1974 are no longer kept by the commission.)

The old commission records also show that Kajioka paid for several campaign expenditures but was later reimbursed. In 1982, the Wong campaign repaid Kajioka $2,877.42 for food and other expenses relating to a fund-raising event.

Kajioka also paid a $3,000 advance payment so that the campaign could print 34,500 newsletters. He was reimbursed in April 1977 for the expenses.

In 1978, Kajioka was reimbursed $6 for sodas he bought for campaign workers, commission records show.

Kajioka and Wong in 1979 loaned the Wong campaign $6,000 to cover unspecified expenses. The loan was paid off later that year, records show.

Bishop Estate Archive

Kamehameha group:
Suspend all five

Students and teachers are suffering,
supporters tell a court deciding the fate
of Bishop trustees

By Rick Daysog


An organization representing 2,700 Kamehameha Schools parents, teachers, students and community supporters today urged the probate court to temporarily remove all five Bishop Estate trustees, calling the trustees' management of the school "Hitlerian."

On the eve of tomorrow's probate hearing on the removal of trustees, Na Pua a Ke Ali'i Pauahi filed legal papers saying the estate's trustees -- Richard Wong, Oswald Stender, Henry Peters, Lokelani Lindsey and Gerard Jervis -- should be removed on an interim basis while the estate sorts through the numerous investigations and legal actions it faces.

The estate -- founded in 1884 to educate children of native Hawaiian ancestry -- is the subject of a yearlong investigation by Attorney General Margery Bronster, who recently petitioned the probate court to remove all five trustees temporarily.

An Oahu grand jury, prompted by Bronster's probe, is looking into charges that trustees Peters and Wong received kickbacks from Wong's brother-in-law while the Internal Revenue Service is conducting a painstaking audit of the estate's finances.

Beadie Dawson, Na Pua's attorney, said the controversy is taking a toll on those whom the trust was created to benefit: the students and teachers of Kamehameha Schools.

"Trustees' activities on the Kamehameha Schools campus for the last three years have clearly demonstrated that the 'serious internal situation' on campus has exacted a painful toll on the students on the Kamehameha Schools," Na Pua wrote.

"On campus teachers have long felt the crushing stress of Hitler-ian management and total disregard for their expertise."

Estate spokesman Kekoa Paulsen declined comment on Na Pua's filing today, saying the estate has not yet reviewed it. But he noted that a number of the issues raised by Na Pua during the past several months will be addressed in an objective manner in court tomorrow.

Na Pua filed its remarks in support of Bronster's probate court petition to temporarily remove Bishop Estate's trustees and charge them for alleged breaches of trust. In its filing, Na Pua included more than 300 pages of affidavits and exhibits to demonstrate the controversy's impact on the schools.

One affidavit -- by Kamehameha Schools student body president Shelby Decosta-Galdeira -- described the impact of the controversy on students' self-esteem.

"I and many of my fellow students have a hard time concentrating on our education due to the constant threat of the latest bad news. Who can think about individual classes when the stability of the school itself is not guaranteed," Decosta-Galdeira said.

"Most of us wish it was all a bad dream that will be over soon, never to return again."

Bishop Estate Archive

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