Saturday, November 1, 2008

The Campbells are Coming!

From the Hawaii Island Journal, earlier this year:

The Campbells are Coming!
Off-island dollars skew mayoral race

by Alan D. McNarie

The heirs of the Campbell Estate have been known to occasionally lavish funds for good causes on Hawai'i Island. In 2006, for instance, the James and Abigail Campbell Foundation donated $15,000 to Puna Friends of the Park and $5,000 to Pahoa Schools for youth projects.
But the heirs' biggest local beneficiary, recently, has been a Hawai'i County mayoral candidate.

Billy Kenoi, the former executive assistant to Mayor Harry Kim, has been holding campaign rallies and fundraisers, both on this island and on O'ahu. According to the most recent campaign spending reports filed, for the period ending December 31, 2007, he has already raised more than twice as much money as his nearest competitor, Councilmember Stacy Higa; the difference is due to been off-island donations.

Higa's campaign spending report lists $36,600 in total donations, while Kenoi raised $73,890. But Higa's Hawai'i Island donors who gave at least $100 gave him more money ($20,100) than did Kenoi's on-island supporters ($18,270). The vast majority of Kenoi's cash comes from O'ahu and, to a lesser extent, the mainland.

Many of Kenoi's O'ahu supporters donated relatively small amounts-in the $100-$250 range. But he also has attracted plenty of money from real estate and construction industry heavy hitters, such as Baywest Property's Jonathan McManus, who donated $1000 and whose company chipped in $1000 more; NORDI Construction president Glen Kaneshige ($1000); WCIT Architecture's president, Robert Iopa ($4,000), whose job description says he's "responsible for leading design and project management on resort and luxury residential projects," and Gary Okamoto of the engineering firm Wilson Okamoto ($2000)-a perennial heavy donor that also frequently gets government contracts (it recently redesigned the Pohoiki boat ramp in Puna). And Kenoi, an attorney who has practiced both here and on O'ahu, understandably has picked up some checks from other lawyers.

Many of Kenoi's contributors listed their profession as "investor." Most of those "investors" contributed $1000 or more, and most contributions were dated October 31, 2007, according to the Campaign Spending Commission's online records.

As it turns out, all of those listed as "investors" are heirs of the James Campbell Estate.

The Journal tracked down at least $26,150 in direct contributions to Kenoi's campaign from 13 Campbell Estate heirs. The Campbell heirs' donations accounted for more than a third of Kenoi's swollen war chest.

Pocket change
For over a hundred years, the Campbell Estate managed the holdings left by a former ship's carpenter who made his fortune by acquiring land in
Hawai'i. The estate officially dissolved in January 2007, 20 years after the death of James Campbell's last daughter. The 31 heirs received hundreds of millions, mostly in stocks, in a new successor company, James Campbell Corporation LLC, which has approximately $1.46 billion in real estate holdings.

For the Campbell heirs, Billy Kenoi's entire campaign budget would be pocket change. Campbell heir/Kenoi donor James Shingle, for instance, received $100 million when the estate dissolved.
But the heirs' generosity is hampered by
Hawai'i's campaign spending law, which limits contributions by an "individual or entity" to $4,000 per election period.

"An individual and any general partnership in which the individual is a partner shall be treated as one person," the law states.

Of course, stockholders are not exactly the same thing as partners. The Journal called the Hawai'i Campaign Spending Commission to see what they made of the Campbell heirs' cumulative contribution.

"To the extent that they're making an individual decision, that's fine," a staff attorney told us. "To the extent that they're huddling, they may have to register as a campaign spending committee."
We asked him if a situation like this would be something that the Campaign Spending Commission would investigate.

"We don't go on fishing expeditions," he said.

We later spoke to Barbara Wong, the commission's executive director.

"As long as it's their own money and it's in their own name, it's okay," she said.

We pointed out that this was allowing a single family to exert massive influence on the outcome of a local election.

"Sometimes you have candidates that are individually wealthy, and they can spend a million on their campaign," she countered, and pointed out that that was legal, too.

The Campbell Estate/James Campbell Co. has been diversifying its assets to mainland commercial properties in recent years, but remains a powerful force in the local real estate scene. It is best known for developing the "Second City" of Kapolei on O'ahu. On this island, the group is famous (or infamous) for acquiring the rainforest of Wao Kele O Puna in a land swap with the state in order to pursue geothermal development in the tract-a move bitterly opposed by Native Hawaiians and environmentalists. One result of that battle was a landmark court decision that confirmed Native Hawaiian gathering rights on private land, including Campbell Estate's holdings.
The company put the rainforest up for sale after the geothermal venture didn't work out; the entire tract was acquired last year by the Office of Hawaiian Affairs. The Campbell Company’'s Web site lists no major remaining holdings on this island, but the Campbell heirs individually still own at least nine properties on this island—mostly in Kona and Ka'u.

Billy Kenoi maintains that he's running a clean campaign.

"My strategy is real simple. Talk to people from the heart, treat everybody with Aloha. Setting a goal, keeping things simple, and not even thinking about money," he told the Journal. He said he voluntarily resigned his position in the Kim administration because "I felt it was inappropriate to wage a political campaign and use your office for benefit."

He said that the Campbell heirs became aware of him because he was volunteering as a motivational speaker with a scholarship program for students at Leeward O'ahu High School. His years as a lawyer there, he said, helped him to raise funds from the O'ahu legal community. He said that the figures in his campaign report were skewed toward O'ahu donations because he held his first fundraiser there.

Kenoi said that if he won and one of the Campbell heirs approached him about a matter related to one of their properties, they would get no special favors.
"One, they wouldn't. And two, that would be ludicrous to think that a campaign contribution buys a favor or a promise," he told the Journal.

But that notion was not so ludicrous in the recent past. During the 1990s, companies such as Wilson Okamoto, 1250 Oceanside Partners, and Waste Management were among the heaviest contributors to mayoral and council campaigns on this island. 1250 Oceanside Partners prevailed upon then-mayor Steve Yamashiro and the County Council to approve rezoning for its controversial Hokulia golf course development, which was later successfully challenged in court as an illegal use of agricultural-zoned land. Waste Management got a multi-decade contract to run the county's Kona-side landfill.

Under such circumstances, "special favors" and quid-pro-quo agreements aren't needed to meet the contributors' ends. If a big company pumps money into the campaign of a like-minded candidate and that candidate wins, the candidate will generally take a position that benefits the donor.

Other big fish
Despite Kenoi's protestation that the "ludicrous" possibility that big contributors could buy an election, his mentor, Harry Kim, saw it differently. When Kim first ran for mayor, he pledged not to accept contributions larger than $100.

Nobody's following Kim's pledge this year. Higa, especially, is relying almost exclusively on big donors. He reported that only three people gave less than $500, and 13 gave $1,000 or more. Among his top donors are Ken Fujiyama ($3,500), who owns the Naniloa Volcanoes Resort in Hilo and leases on Volcano House in Hawai'i Volcanoes National Park. Others include Volcano House Manager Lee Harlow ($4,000); Honolulu retiree Stanley H. Uyehara ($3,100), plumber Calvin Masaoka ($4,000), and David, Jackie and Wayne DeLuz, who each gave $1,000.

Even State Sen. Lorraine Inouye and Councilmember Angel Pilago have accepted $1,000 contributions-but the ratios of big donor/small donor and local/off-island are far different than for Kenoi or Higa.

Inouye's is by far the most grassroots-based of the four candidates who filed financial reports. Her campaign has raised $18,0475, of which only $1,750 are from off-island. Her report listed 43 donors who gave $250 or less, and only two who gave a thousand dollars or more. Her campaign actually has more than twice as many donors as Higa's, even though Higa's donors gave him nearly twice as much money.

Thirteen of Pilago's donors gave $250 or less, and only seven gave $1,000 or more. Pilago has raised a total of $15, 027, $2,250 of which were from off-island

Both Pilago and Inouye are far behind Kenoi and Higa in the money race. But as Harry Kim demonstrated, sometimes money isn't everything.

Additional reporting by Leah Gouker

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