Election 2010

Election 2010
Friends in high places?
Image: Chris McDonough

Mufi’s money men (and women)

Election 2010 / Editor’s note: Over the next two weeks, Alan McNarie explores the truly big guns contributing to the Democratic candidates for governor. We start with Mufi Hannemann–next week’s feature will explore the Abercrombie campaign.

Hawaii election law states that any individual or entity (such as a company or union) can donate a maximum of $6,000 to a candidate for governor during an election cycle. But the law virtually invites abuse: A couple, for instance, can donate $6,000 each, and individuals in an organization can donate $6,000 apiece, so long as they don’t collude on the donation. Not so easy to enforce.

Eight years ago, a number of entities and individuals got in trouble with the law for stretching these loopholes beyond the breaking point, by giving money to friends, colleagues or relatives to donate, in an attempt to bypass the spending limit, particularly with the Jeremy Harris campaign.

That may or may not be happening again this year. But one thing is certain: Some families and organizations are collectively donating far more than $6,000 to gubernatorial candidates.

Take Alan C. Wulkan, who donated $6,000 to Mufi Hannemann’s gubernatorial campaign. The Hannemann Committee 2010 online campaign disclosure forms list Wulkan as a “managing partner” in a company called Infiza Consult. The Weekly was unable to find any information about Infiza Consult. We did discover that the website for a company called InfraConsult listed Wulkan as a partner. That website also noted that it had a contract for the “Honolulu High-Capacity Transit Corridor Project.” The city of Honolulu confirmed that InfraConsult still holds a consulting contract on the rail transit project.

Companies with state contracts are not allowed to contribute to a gubernatorial campaign. But again, there are loopholes. The company must have a contract in effect during the election period. If it’s a frequent government contractor but it’s currently between contracts, it’s off the hook.

Two other InfraConsult officers –Managing Partner Michael Schneider and Chief Project Manager Simon Zweighaft–also chipped in $6,000 apiece to the Hannemann campaign.

They aren’t the only ones. Sharon Greene of Sharon Greene Associates also kicked in $6,000. According to [www.sharongreene.org], “SGA is providing financial consulting services as part of the Program Management Consultant team currently under contract with City and County of Honolulu (the City) to assist with the implementation of the Honolulu High Capacity Transit Corridor project.”

Homemaker, moneymaker

And then there’s the case of the Happy Homemakers. Nancy Grosfeld of Southfield, Mich., who listed her profession as “retired,” took a $6,000 interest in Hannemann’s election.

So did Jenna Grosfeld of Los Angeles.

Nancy, as it turns out, is married to investor James Grosfeld, who in the 1990s settled out of court with investors who claimed one of his corporations had, in the words of the Detroit Free Press, “bilked thousands of unsophisticated investors out of up to $100 million.” Last year, Grosfeld got involved in a three-way lawsuit between himself, Donald Trump and buyers for a project called “Trump Ocean Resort Baja,” which Iron Gate Financial Investments, of which Grosfeld is a principle, failed to build. Jenna Grosfeld co-owns an LA apartment with Jason Grosfeld, who is a director at Iron Gate Investment Partners.

Another homemaker who pitched in $6,000 for Hannemann is Lori T. Okamoto, the wife of Gary Okamoto, president of Wilson Okamoto and Associates, an engineering and planning firm with numerous private and state contracts for major projects, including the Hilo Judiciary Center and the Waikiki Shell. Lori and Gary Okamoto have been in trouble with the Campaign Spending Commission before; on Oct. 9, 2003, they agreed to pay a $44,500 fine for making false-name contributions of about $80,000 to five candidates, including then-Gov. Ben Cayetano and then-Mayor Jeremy Harris.

Yet another member of Mufi’s $6K club is Michael Pepper of Highland Park, Ill., who listed himself as president of Pepper Development Services on his campaign disclosure form. What he didn’t mention is that he’s also senior managing partner at Iron Gate.

The Grosfelds have made numerous contributions to Democratic candidates across the country. Perhaps Hannemann simply tapped into a list of wealthy Democratic contributors to find them. But the Grosfelds and their friends do have a financial interest in Hawaii. It’s the Trump International Hotel and Trump Tower Waikiki, whose opening-day condo sales, an Iron Gate press release trumpeted, had totaled a world record $900 million. The engineer on the Trump Tower Waikiki was Wilson Okamoto.

Now the buyers are suing Iron Gate, saying that it misrepresented the degree of Trump’s involvement in the project.

Lori Okamoto isn’t Hannemann’s only $6,000 donor with a powerful other half. There’s Dawn MacNaughton, “homemaker,” who’s affiliated with Duncan MacNaughton, CEO of the MacNaughton Group, real estate developers. Ian MacNaughton , a realtor in the same company, has chipped in $1,659. MacNaughton Partner Jeff Arce has given $1,300; Duncan himself has put in $1,500. Grand total for the MacNaughton family and colleagues: $10,459.

Other Hannemann power couples include Linda S. Yonamine and Mark Yonamine, and Nikaela and Frank Lyon. Mark Yonamine is vice president of Lyon Associates, another engineering firm; Frank E. Lyon Jr. is CEO/president. Between them, the two couples put in $19,000 (everybody gave $6,000 except Mark, who gave a measly grand). Lyon Associates vice president Frank J. Lyon had already given $6,000 in November 2009.

Troubled pasts

Like Mrs. Yonamine, Theolinda Matsumoto made her husband look cheap; she gave Mufi $6,000 while her husband, Michael Matsumoto of SSFM Inc., another Honolulu engineering firm, only gave $1,000. SSFM Vice President Norman M. Kawachika added another $6,000.

SSFM is an engineering firm that has held contracts on numerous federal and state projects, including a highway expansion in Maui, a new building at the University of Hawaii at Manoa, the installation of fiber optic duct lines on rights of way statewide for the Department of Transportation, public school building renovations on most of the islands, dormitory construction at University of Hawaii at Manoa and a parking structure at Honolulu International Airport.

Michael Matsumoto was convicted in 2003 of false-name contributions and money laundering in connection with the probe of former Mayor Jeremy Harris’ campaign. Although the prosecutor in the case asked for probation and $594,000 in fines and fees, the judge in the case granted Matsumoto a deferred sentence, which means that his record was wiped clean after five years of good behavior, with no fines and a $15,000 fee to the Criminal Victim Compensation Fund.

Not all members of the Hannemann’s Super 6K Club are family. Sometimes they’re just colleagues. For instance, there’s the accounting firm of N&K CPAs. Managing principle Alton K. Miyashiro, Vice President Wesley Hiyane, and accountants Brian S. Isobe, Kenneth Yamato, and Ronald Shiigi each chipped in $6K for Mufi, a $30,000 haul.

Is any of this actually illegal?

“It may be or may not be…,” the Weekly was told by a legal counselor for the Campaign Spending Commission who requested anonymity. “It depends on the facts of the particular case.”

If a company gave money to its employees to give to a candidate, he said, it would definitely be illegal, but “the law allows people contribute….”

New rules enacted after the Harris scandal required donors giving more than $1,000 to state their profession. But if an individual is an officer in more than one company, he or she could give any of his or her positions. And spouses don’t have to disclose one another’s identities

The Weekly attempted to contact the Hannemann campaign for comment, but had received no reply at press time.