Cover Story

Edward H. Nakamura, associate justice of the Hawaii Supreme Court
Image: University of hawai‘i Press

Ed Nakamura’s career arc--442nd Regiment, labor lawyer, Hawai‘i Supreme Court Justice --was solidly Democratic Establishment, but he was also his party’s critic and conscience.

When I talk with students about Hawaii’s political history, I sometimes ask, “Do you know who Jack Burns was?” Possibly a few hands go up. I ask, “Do you know who Jack Hall was?” Sometimes no hands go up. And I think to myself, “Good God, how are we to know how we got here?”

For such reasons, I welcomed the chance to write a life of the late Ed Nakamura, a quiet, brilliant lawyer whose base of action was both figuratively and philosophically at the nexus of the two Jacks–the three-term Gov. Burns, who led the revitalized Hawaii Democratic Party and secured passage of statehood; and Hall, who more than anyone organized the working people of Hawaii. In this movement, Nakamura, who died in 1997 at the age of 74, was both a true “D” Democrat and organized labor’s quiet voice of logic and reason.

I was modestly acquainted with Nakamura when I covered the state legislature in the late 1960s. The person I trusted most, Herman S.Doi, told me that Ed was to be trusted in all his statements and dealings.The influence of the International Longshoreman’s and Warehouseman’s Union was at its highest tide, and so was the idealism of the Democratic Party. Returning to his legacy, I found many surprises but a person who was always true to his principles. He was prepared to see what others chose not to see and to take on issues that others cagily avoided.

By coincidence, Nakamura’s biography arrives as we are experiencing unprecedented strains on the community fabric via this 2012 election. In writing it, I learned that Nakamura’s story provides a needed perspective on our times.

The following narrative is excerpted with permission from I Respectfully Dissent: A Biography of Edward H. Nakamura, by Tom Coffman, published this month by University of Hawaii Press.

“I Dissent”

Sandy Beach was a rezoning case involving the coastline of the eastern tip of Oahu where Nakamura and his 442nd Regimental Combat Team buddies had gathered after World War II. It was a place of boulders, shells, tide pools, and breaking waves. Surfers and fishermen inhabited Sandy Beach. There a person might find the solace of an uncrowded shore and see the outline of distant Molokai.

Interest in Sandy Beach had been heightened by the fact that it was the subject of a clash involving two behemoths, Kaiser Development Company and Bishop Estate. Kaiser Development was founded by the American industrialist Henry J. Kaiser. It had built the Hawaii Kai residential neighborhood, which was constantly expanding. The latest proposed expansion was to build housing opposite Sandy Beach.

The fee-simple owner of the land was Bishop Estate, the financial supporter of the Kamehameha Schools, often described as the largest charitable trust in America. With urbanization of its lands, and with the investment of its cash, Bishop Estate became an ever more influential player.

In the political battle that preceded the court battle, the Honolulu City Council held a legislative-style hearing on Kaiser’s rezoning request. Kaiser wanted approval to develop within urban-zoned land and as well as in a protected coastal zone known as a Special Management Area, as defined by the Coastal Zone Management law. Despite a public outcry, the city council granted the zoning. The Save Sandy Beach movement petitioned successfully to put the zoning issue on the ballot of the 1988 election.

As the election campaign proceeded, the Save Sandy Beach forces took both the city council and Kaiser Development to court. They argued that the public hearing was inadequate, and that the Coastal Zone law required the council to hold a quasi-judicial proceeding that would allow evidence to be much more carefully developed. After losing in circuit court, they appealed to the Hawaii Supreme Court, which ruled against them by a four to one vote. The dissenting vote was Nakamura.

Two months later, the Save Sandy Beach group was back in court, this time fighting to defend its victory at the polls. Four of the five justices again ruled for the developer, more or less on the grounds that zoning was not a fit subject for the ballot box, notwithstanding the public initiative provision of the city charter. It was probably no coincidence that the opinion was written by Nakamura’s otherwise most kindred colleague, former House Speaker James H. Wakatsuki. Within the political culture of the Democratic Party, opposition to initiative and referendum was deeply embedded. Allowing the public to take the initiative in making policy–without the benefit of reflection and public hearing–was regarded as a California practice that undermined the lawmaking process. The fact that an initiative mechanism had been incorporated into the Honolulu City Charter was a wonder.

Under these circumstances, Nakamura’s dissent in the Sandy Beach case was also a wonder. Famously, for many lawyers who followed him, his opinion began: “Because I neither share the majority’s distrust of democracy nor subscribe to the notion that political decisions rendered directly by the electorate invariably are devoid of civic virtue . . . I dissent.”

The next generation

Having made the slow transition from political outsider in the 1950s to insider in the 1970s, then having taken a long sabbatical from capitol politics as a justice, Nakamura was now free [in his retirement] to reinvent himself in political terms. He returned to the State Capitol for the 1991 legislative session, working part-time as a volunteer in the office of Democratic Rep. Dwight Takamine, chair of the House Labor Committee and son of the ILWU’s Yoshito Takamine. He also became better acquainted with a network of younger legislators.

One of these younger lawmakers was Mazie Hirono, who would cast herself in the tradition of Nakamura’s friend and classmate, Patsy T. Mink. In 1991, Hirono represented a midtown House district and chaired the House Consumer Protection Committee, which worked closely with the Labor Committee on such issues as worker’s compensation, a hot item during this period.

Hirono said, “He had perspective on where Democrats came from and what they stood for. I liked the fact that here was a guy who had fought many battles.” Nakamura eventually helped organize Hirono’s successful campaign for lieutenant governor in 1994.

His friendship with Hirono was one of various clues that he was looking for change within the Democratic Party. The high point of his work at the capitol had been the long succession of labor and social legislation culminating in the Prepaid Health Act of 1974. The next memorable year in Hawaii’s political history was 1978, when the State of Hawaii held its second constitutional convention in ten years. [The 1978 “ConCon”] was the high-water mark of the utopian impulse that had been at work in Hawaii since the onset of statehood. Specifically, it attempted to preserve Hawaii’s prime agricultural lands, created the Office of Hawaiian Affairs, and declared the Hawaiian language as well as English to be the language of the land. In the course of the convention, an articulate young graduate of the UH law school, John D. Waihee III, came forward as the most engaging of a new generation of Hawaii politicians.

Waihee was elected to the state House of Representatives in 1980 and, only two years later, to the office of lieutenant governor under George Ariyoshi in the latter’s third term. In 1986, Waihee succeeded Ariyoshi as governor of Hawaii. He was re-elected in 1990, the year Nakamura left the bench.

In Waihee’s quick rise, he had studied history and counted votes. Although he had gotten his start in the political reawakening of native Hawaiians, he obviously realized that political success within state government was founded principally on organized labor and the Nisei backbone of the Democratic Party.

A quiet protest

In May 1991, Waihee sought out Nakamura to serve as a trustee of the State Retirement System (ERS). Waihee later recalled that he wanted Nakamura for reasons rooted in labor law. As a fledgling attorney, Waihee had worked on cases in the labor firm of Shim, Tam and Sigal and, from that perspective, “Ed was a legend in such areas as worker’s comp.” Waihee had represented state retirees in disputes over benefits and was aware that in cases where a retiree’s benefits were disputed, the recourse was to appeal to the ERS board, which Waihee had found to be filled with business and finance people who knew little about employee benefits. Waihee said he wanted Nakamura to bring an employee viewpoint to the board.

But more was at work than immediately met the eye. It seemed to be a little-known fact that in 1970, long before moving to the bench, Nakamura had represented a state employee in court in a challenge to the ERS board over disability benefits. Nakamura argued that as a matter of constitutional due process and in fulfillment of the State of Hawaii’s Administrative Procedures Act, beneficiaries in disputed cases should be entitled to full-blown administrative hearings with the right to legal counsel. In a landmark ruling, the Hawaii Supreme Court supported his view. Labor attorney Lowell Chun-Hoon, who had been mentored by Nakamura on handling ERS cases, said Nakamura “despised”–his word–the agency’s treatment of its beneficiaries.

Publicly the ERS appointment was of little note but a large responsibility, because the ERS managed the accumulated assets of all state and county retirees, amounting to about $4.6 billion in 1991 dollars. Nakamura’s ensuing and brief service as an ERS trustee might have been a footnote about his ethical sense had it not led to bigger things that in turn led to even bigger things. Within seven months, Nakamura had resigned from the ERS in protest. Within a year, the reasons became front-page news. Nakamura told law professor Randall Roth that the object of controversy, the ERS acquisition of a golf course in California, was the first ERS deal he examined. To which he added, “It really stunk.” His pointed questioning of the golf course deal quickly underscored conflicts of interest among ERS trustees, consultants, and investors.

Yet despite Nakamura’s protest, the trustees voted four to two with one abstention to acquire the golf course.

Nakamura first talked with Waihee, saying he was inclined to resign from the board. Waihee asked him to stay [telling Nakamura that] if something was wrong it had to be looked at by the attorney general, Warren Price. “I went to Warren Price with the ERS problem,” Nakamura recounted to Roth, “and he said, ‘You know, Eddie, you’re looking at this as a lawyer; the trustees are looking at it as entrepreneurs.’ I was stunned. Here was the state’s attorney general telling me not to look at it from a legal standoint. He wouldn’t do anything.”

When Nakamura followed through on his stated desire to resign, according to Uyeda, his parting shot was to describe the trustees as “Hawaii Development, Inc.”

In late April, The Honolulu Advertiser launched a rapid-fire string of [investigative reporter James] Dooley’s stories that began with the dual and inherently conflicting interests of the ERS’s legal counsel, the law firm of Okamoto, Himeno, and Lum. The Himeno in question, Sharon Himeno, was the spouse of Attorney General Warren Price (Problem One) and the daughter of a well-known developer, Stanley Himeno (Problem Two).

Under normal circumstances, legal counsel was provided to the ERS by a deputy of the attorney general, but Sharon Himeno’s law firm had been hired by the ERS to review loan applications. In several key instances, the law firm’s billings were paid not by the ERS but by the loan applicant, according to Dooley. Dooley wrote that in 1989 Himeno’s father, through a family-owned firm, had bought a half interest in a California property for $23 million. The same day the property was sold to ERS for $26 million.

The aftermath

Having come on and gone off the ERS board in short order, Nakamura initially said nothing publicly. When the administrator of the ERS, Stanley Siu, was asked in a Senate hearing why Nakamura resigned, he said it was possibly that Nakamura knew little about real estate and was not used to making the rapid-fire decisions that were necessary to making good deals.

For Siu to suggest that Nakamura was a little slow was likely a tactical error. Nakamura responded with a one-sentence rebuttal that wuld be repeated in the media often: “He, of all people, should know I left for one reason: I couldn’t stomach what he and Gordon Uyeda were attempting to do with public funds held in trust to pay retirement benefits to past, present, and future government employees.”

In February 1993, Waihee nominated attorney Sharon Himeno to a seat on the Hawaii Supreme Court.

In 1991, prior to the ERS story, Waihee’s approval in public opinion surveys was phenomenal. A year later it had softened. After the Himeno controversy, his public support went into an irreversible slide…[a] Star-Bulletin headline proclaimed, “Waihee’s popularity nose-dives.”

Change agent

The Democratic Party had won control of the legislature in 1954 and the governor’s office in 1962. Within a decade, all the justices of the Supreme Court were Democrats. They had been appointed by a Democratic governor and confirmed by a Democratic Senate. With control of the Supreme Court came the power to name the trustees of Bishop Estate and, one by one, the Republican trustees were replaced by Democrats.

The value of the Estate’s wealth increased dramatically in the decades after statehood. The assets were worth billions of dollars, and the trustees were paying themselves close to a million dollars a year each. In 1983, Nakamura had watched in apparent silence as Chief Justice William S. Richardson left the Supreme Court to become a Bishop Estate trustee. Nakamura told his cousin James Kawashima that, because of the obvious conflict of interest, he was pained by the appointment. Nonetheless, he deeply admired Richardson and said nothing. He told a second confidante, “Richardson was a statesman. Of course, we felt uncomfortable in that he was currently on the court, but he was an exceptional situation.”

Richardson enjoyed the prestige of having served 18 years as chief justice, while his time in elective office–well under four years as lieutenant governor–had been brief. Thereafter, two longtime and powerful legislators became trustees, House Speaker Henry Peters and Sen. Pres. Richard S. H. Wong. Each was known mainly for his time in elective office, which greatly heightened the public impression that a Bishop Estate appointment was the ultimate political plum awarded to the powerful within the Democratic Party.

Within Nakamura’s ongoing concern for the quality of the judiciary, his specific agenda was to separate the Supreme Court justices from their traditional role of appointing trustees of Bishop Estate. The effect of this appointment practice was to involve the Supreme Court in numerous conflicts of interest, as in the Sandy Beach case, in which Bishop Estate was the owner of the fee underlying the area of disputed zoning. As owner of 10 percent of the land in the Hawaiian Islands, Bishop Estate inevitably came before the court. As one legislator who argued for reform said,” The same people that are selecting the trustees … have to turn around the next day and evaluate the merits of a case.”

Together with attorney James Bickerton, Nakamura completed a five-page argument around the Canons of the Code of Judicial Conduct that opposed Supreme Court appointment of trustees. The paper was submitted to the citizen reform group Common Cause and by them to the Supreme Court.

The storm (which was to become known as “Broken Trust”) was yet to come.