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For the first time in 11 years, Honolulu Weekly has an April 1 edition this week. No pranks or fake stories from us this year, though—instead, we’re thinking about how Wall Street didn’t need a calendar to make fools out of all of us, and of how often even the most circumspect of us end up with egg on our faces—and all too often, holes in our wallets.

As the national—and increasingly the state—economy comes crumbling down around us, we’ve begun to wonder who will eventually emerge as the public face of this crisis here in the Islands. While we’ve seen more than our share of hardship, the fallout from the global meltdown hasn’t yet produced a homegrown villain as in previous economic bubbles, like the construction boom of the 1960s or the real estate explosion of the 1980s, have done.

What was that third name again?

Bishop. Baldwin. Dillingham. Each of these names is writ large in Hawaii’s history, each representing generations of wealth and power. Taken together, they would form an unrivaled constellation of political and economic power unrivaled. Of course, the three kamaaina dynasties never did join forces, so a malihini named Ron Rewald took it upon himself to bring them all together.

In 1978, Rewald hung a shingle that read “Bishop, Baldwin, Rewald, Dillingham & Wong” and quickly fell into favor with the local gentry, investing millions of dollars on behalf some of Honolulu’s most prominent businesses and families. Rewald moved into a sprawling estate near Kuliouou and traveled around town in a black stretch limo that featured a coat of arms and Rewald’s initials on the doors. He bought up property around the island and generally came across as a hugely successful local financier in an era when they were growing on trees, promising 20 percent returns on investments and claiming a waiting list of two years to contribute funds. Sound familiar?

Of course, you can’t fool all the people all the time, as even Bernie Madoff recently learned, and eventually people started asking questions of this strange new giant of local finance. The authorities stepped in, and, as Frank De Lima later sang, “Bishop, Baldwin, Dillingham were nowhere to be found…all they found was Rewald, and some local guy named Wong.”

Oops.

Rewald’s defense against charges of massive fraud and theft involved what he alleged was a secret CIA operation based in Honolulu, responsible laundering money for US covert activities around the world. Perhaps it’s not surprising that a con man would make extravagant claims when backed up against a wall. What was surprising: it seems to have been true. Maybe. At least in part. Rewald was able to produce substantial documentation of his CIA connections, and by all accounts he was meeting regularly with the local station chief to relay some sort of information.

Whether he was a government operative or an old-fashioned con man, however, the question remains: why would smart, successful local folks trust a malihini guy they’d just met with huge sums of their money? Because Rewald knew to aim high. Faking the involvement of the Bishops, Baldwins and Dillinghams seems, in retrospect, almost pathetically foolish. A lesser pro might have taken it a little easy, switched a letter or added an “e” somewhere. What Rewald knew, however, was that, especially during boom times, the best cons are the ones that aim for the sky.

King for a day

Chinn Ho was nobody’s fool. The pioneering local businessman built his banking, real estate and media empire on hard work and brilliant business instincts—and had to run circles around the racist Honolulu establishment to do it. During the 1950s and ’60s, Ho rode a massive wave of construction and investment to create wealth unheard of for previous generations of local Chinese-American businessmen, and knocked down existing racial barriers in doing so. His accomplishments were such that his obituary was carried in the New York Times under the epitaph “major figure in the success of Hawaii’s Asians,” but even Ho was no match for the guile and daring of one Sammy Amalu.

Amalu, a lifelong check-kiter and swindler who claimed to be descended from Kamehameha the Great, put together a scam for the ages when, in 1962, he came within one day of “purchasing” local Sheraton properties controlled by Ho, along with other Hawaii real estate holdings, in deal worth a then-whopping $62 million. The deal would have been the biggest in modern Hawaii real estate history.

That the scheme advanced as far as it did—Time reported that Sheraton executives were waiting to sign the deal in New York when word came in that Amalu had been arrested in Seattle on an unrelated bad-check charge—is a testament to Amalu’s sheer chutzpah.

Acting through a noted Honolulu realtor and employing the services of a California based “pro-regent,” Amalu had convinced some of the wariest and sharpest minds in local and national finance that some sort of shadowy global investment conglomerate was prepared to take possession of some of Waikiki’s premier addresses, including the Ilikai and the Sheraton Waikiki. Local folks in and outside the press speculated as to who was financing the secretive purchase. Was it King Saud? Swiss nobility?

It was just Sammy Amalu, a well-known local character who had previously duped San Francisco society into believing he was some sort of Indian prince, and he had apparently done the whole thing more or less for the attention. Amalu was sentenced to prison and began a correspondence with Honolulu Advertiser publisher Thurston Twigg-Smith, a Punahou classmate who soon began publishing Amalu’s missives as a regular column in that paper.

Amalu died in 1986. In a self-penned obituary, he had written, “Sing no sad songs over my mortal dust,” he wrote. “I have known laughter. I have known tears. I have tasted victory. I have sipped of failure. Is not all this enough?”

Thanks to his legendary charm, Amalu did not end up a pariah, but he did become synonymous with an era of freewheeling cash and shady deals that changed Honolulu forever, and not always for the better.

This year’s fools?

Even in the Internet era, we’re still often a step behind the continental United States, and that’s true for economic trends as well as cultural ones. We’re only now beginning the precipitous decline in housing prices—and the rise in foreclosures and unemployment—that have already decimated many similar markets to the east. And while many local companies are struggling, we haven’t yet found a local face to put on this mess. Recent reports indicate that most large Honolulu financial institutions are sound, but that doesn’t mean there isn’t some very bad news in the offing for some group of investors.

We talk a lot around here about our Island values and care and concern for others, and of course it’s true that this is a compassionate community. But it only takes one bad apple to spoil the party. Is there another Ron Rewald out there, sweating out the numbers while putting off nervous investors? We’ll have to wait and see—and hope we’re not the ones getting fooled.