Blast 'em

This Blast 'em blog is going to shine a much needed bright light on legislative shanigans. We will provide details of the wrong doing, give names of the doer, and describe the ramifications to the public. Initially we will focus primarily on consumer issues.

Thursday, May 25, 2006


Remember the last posting regarding the ethics and IRS complaints against Bob Herkes? WeLl here is the reason these things continue to happen at the legislature, The return on investment for a political contribution is better than any other investment a corporation might make.

Representative Herkes receives many thousands of dollars from numerous special interests that have
bills before his committee. During his entire
2004 re-election campaign, Herkes received $31,905 in
donations, with over 60% identified as being from major special-interest groups including finance,
insurance, and developers.

In only the last 6 months of 2005, since assuming the chairmanship of the powerful
Consumer Protection and Commerce Committee, Herkes received $37,280 in donations.
Major corporate campaign contributors to Representative Herkes include;
Tobacco (Phillip Morris, RJ Reynolds), Anheuser-Busch, Pharmaceuticals, the insurance Industry, large engineering and construction firms, and medical laboratories.

We wait with anticipation to see how much money Herkes collects during 2006 period. ;-)

Honolulu Star Bulletin

State officials obligated to keep eye on insurance rates

The state's oversight of health insurance premium increases will lapse next month.

COME June 30, the state will relinquish control of premium rate increases that health insurance companies charge their customers.

Though insurers aren't expected to raise rates significantly without the supervision, state officials and lawmakers have an obligation to monitor the situation carefully and be prepared to reinstate regulation during next year's legislative session. Because Hawaii law requires employers to provide health insurance for their workers, the state must make sure rates are fair.

That requirement was part of the reason the Legislature instituted oversight in 2003, directing insurance companies to submit requests to the state Insurance Division for approval.

Under regulation, companies had to substantiate their need for raising premiums, allowing the commissioner to look over how they calculated rates. It provided accountability for customers and gave employers a window on how they might control their costs.

However, lawmakers allowed the provision to expire despite objections of the insurance commissioner, J.P. Schmidt, who warned that small businesses would be hurt and other insurance enterprises would be deterred from starting up in Hawaii to spur competition in the market.

Schmidt told the Star-Bulletin's Dave Segal that there were times when rate increase levels weren't justified. He calculated that the commission's limitations saved customers more than $18 million directly.

The law's expiration leaves health insurance costs to competitive forces though those don't have much steam since Hawaii's insurance market is dominated by the Hawaii Medical Service Association and Kaiser Permanente Hawaii, both nonprofits that aren't subject to state taxes.

HMSA -- the largest with 705,000 members -- this week reported that its first-quarter earnings increased 11.4 percent, while Kaiser -- a distant second with 226,000 members -- posted a 2.6 percent increase in earnings.

Premiums brought in $24.7 million more for HMSA in the quarter, but health care costs rose in tandem. HMSA's investment income rose by $1.8 million. The company holds $572.7 million in reserves, which it says it needs for emergencies.

Starting July 1, HMSA will raise rates between 3.8 percent and 7.9 percent under its various plans, increases the state approved. Those increases, however, were the last set by regulations and though HMSA's officials say customers should not expect the company will "do anything different," there won't be any way to know if future increases are warranted.


I have mentioned in prior postings that Representative Bev Harbin is one of the Good Guys in the State House of Representatives. Below you will find copies of letters of complaint she sent to the State Ethics Commission and the IRS< plus a response to House Leader Marcus Oshiro after he was quoted in the Honolulu Advertiser as saying she has a political agenda.

In my opinion these letters show why I say “she is one of the Good Guys”. First and foremost, she represents her constituents, all small business, and all consumers. Her letters speak for themselves.

May 20, 2006

Daniel Mollway
Executive Director and General Counsel
Hawaii State Ethics Commission
1001 Bishop Street, ASB Tower 970
Honolulu, Hawaii 96813

Re: Request for advisory opinion and definition of Legislative Intern
Request for advisory opinion and definition of “Embedded Lobbyist”

Dear Mr. Mollway:

Pursuant to your memorandum dated April 5, 2006, I would like to request clarity how the Ethics Commission would define “an intern” As you may be aware this 2006 session there were allegations that certain highly paid executives were being paid their salaries by their employers while being placed in key committees as “interns”.

I suggest that the public and elected officials would benefit from guidelines that defined an intern. Most of the descriptions I have seen define an intern as:

somebody who works as a low-level assistant or trainee in an occupation in order to gain practical experience

I am also enclosing a House Resolution 286 that was filed at the 2006 Legislature. This resolution attempts to set a procedure that House members would register any interns which would encourage transparency. Would the commission have any comments or suggestions regarding internal rule guidelines and definitions for the members of the Legislature when making a decision of what is an intern. I will be working with House Leadership during the Interim to develop rules for adoption for the 2007 Legislature.

I would also like clarification as to the requirement that interns of the 2006 legislature would be required to file an ethics disclosure with your office. If this is a requirement, would you advise me if Mark L. Forman as an intern or “embedded lobbyist” has filed the required forms.

Very truly yours,

House of Representatives

May 21, 2006

Steve T. Miller
Tax Exempt and Government Entities Division
Department of the Treasury
Internal Revenue Service
Washington, DC 20224

Re: Complaint against the HMSA Foundation
Political Activity Compliance Initiative (PACI)

Dear Commissioner Miller:

I am a member of the Hawaii State House of Representatives. I have concerns about the political and lobbying practices of the HMSA Foundation. Information on this organization may be found on their web site at

It has come to my attention that the HMSA Foundation placed a full time employee, who is the foundation’s Executive Administrator, into an “intern” or “embedded lobbyist” position with the Consumer Protection & Commerce Committee of the House of Representations in the 2006 legislature. This placement created public concern because of pending legislation that would have a direct impact on its parent and financial partner, the Hawaii Medical Service Association (HMSA). This organization insures more than 75% of our local market and is considered the predominant health plan provider in Hawaii.

HMSA is a member of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. Information on this organization can be found at I would specifically address your attention to the appearance of interlocking Executives of HMSA, HMSA Foundation and the boards of Directors of both boards.

As I review the IRS Code and excerpts from the IRS Publication 1828, September 2003, I am concerned that neither organization could pass the substantial part test as their employee was in a position to directly influence legislation. In fact, many of the outcomes of the Consumer Protection & Commerce Committee did, in fact, provide benefits to HMSA.

For your information, I have also filed a complaint with the Office of the Ethics Commission citing both Mr. Mark L. Forman and the HMSA Foundation for failing to comply with State of Hawaii Ethics and Lobbying requirements. I am enclosing copies of those complaints which contain the alleged violations and background information.

I would appreciate your review of my concerns and advise me if you need any further information. If possible, I would appreciate this complaint be placed on the fast track process to expedite the review of this referral and determine if it merits examination and also whether there was a “reasonable belief criterion” in which the organization may have engaged in political or lobbying activities as prohibited by section 501(c)(3) when considered fairly and in light of reliable information.

It is my understanding that, with the upcoming 2006 election, your office has developed a two-part effort that will include both education and enforcement. It is my experience that, while the HMSA Foundation and its parent association HMSA have been the most flagrantly visible, there may be other similar organizations that engage in similar prohibited activities in political campaigns and lobbying efforts. Your fast-tracking process could alleviate many potential other violations in upcoming Hawaii elections.

Thank you in advance for your consideration of my concerns. I can be reached at my direct phone line at 808-591-0000 if you have any immediate questions.

Very truly yours,

State House of Representatives
State of Hawaii
808-586- 6180

Cc: Calvin Say,
House of Representatives
Robert P. Hiam

TO: Marcus Oshiro
House of Representatives
Majority Leader

FROM: Bev Harbin
House of Representatives
Downtown, Chinatown, Keeaumoku/Kakaako

CC: All Reps

Date: May 25, 2006

Re: HMSA “embedded lobbyists” complaint and request for an advisory opinion of the Ethics Commission and the Internal Revenue Service


I take your comments in the Honolulu Advertiser today as an insult to my integrity and an embarrassment that you have failed to hear my message this session as to how important health care is to the people of Hawaii. That you would accuse me of a “political agenda” indicates to me that you have not been listening to my many floor speeches since the beginning of the 2006 Session. I have over and over again stated that the Health Care Rate Regulation is (was) one of the most important pieces of legislation enacted by the 2002 Legislature for the employees and workers of the Small Business Community. I have also over and over again stated that SB 2917, RELATING TO HEALTH INSURANCE RATE REGULATION was one of the most important pieces of legislation needing to be passed in the Senate language by the 2006 Legislature. If you had taken the time to review the testimony and attend the hearings on this measure as I did, you would have seen the overwhelming testimony in support of this measure. There were only TWO against the measure. That would be HMSA and KAISER PERMANENTE, the only two entities that would benefit from the outcome of the death of the measure.

In this specific instance regarding the intern placed by HMSA in the office of the Chair of the Consumer Protection & Commerce Committee, my position has consistently been that this practice was absolutely contradictory to the mission of the committee, “Consumer Protection.” The consumers of health care, the workers that we in the majority caucus hold dearly, have in fact been abandoned by the unfettered access of HMSA to the Chair of the CPC Committee.

Majority Leader Oshiro, your position as the leader of the Majority Caucus in the House of Representatives is not a position that should be taken lightly. Health Care to our people is of such importance that we are proud of our legislative history in the passing of the Prepaid Health Care Act. This is what leadership is supposed to be -- decisions for the good of the employees and citizens of Hawaii.

The issue of the HMSA intern has been a very visible issue of concern to many, both privately and publicly. That you, as the Majority Leader, did not step to the plate and remove the intern has tainted and embarrassed our 2006 session and I share in that embarrassment.

Yes, these are serious accusations and it is my place as a legislator to address these accusations for the protection of the people of my district and the employees and workers of the State of Hawaii. It is unfortunate that the only recourse that I as a Representative have to address your lack of leadership is with the Ethics Commission. My biggest disappointment is that you, as Majority Leader, in spite of the loud public outcry and media coverage, did not remove the intern to remove any cloud on the 2006 Legislature. Majority Leader, this is what leadership is about: taking risks and making the hard decisions for what is right, especially when it addresses public perception.

I hope you will join me in asking the Ethics Commission for the advisory opinion requested so that you as Majority Leader will have a clear view of what is right for our employees and health care consumers at the 2007 Session or in a Special Session this summer.


The following is a speech given to The Lion’s Club by Richard Miller, Professor Emeritus and once Dean of the U of H Law School. Dick has actively worked in the public interest at the legislature for at least the past ten years.

To the Lion’s Club

Carl Miura and Distinguished Members,

I’m delighted to be here to talk to you about the late, sometimes lamented, gas cap.

I am probably not the most knowledgeable person to hear from; a couple of my colleagues in Citizens Against Gasoline Price Gouging know a lot more both about the industry and how pricing of gasoline works. You should know a little more about our group: none of us has any financial interest in limiting or reducing gasoline prices other than as an auto owner. One is an auto repair guy who owns a big shop and who has a beef against Chevron, two are former executives of companies which produced and sold fuel, like PRI, one is a retired Dep. AG who was a participating counsel on behalf of the State in the antitrust action against Chevron, one is a retired accounting professor – a brilliant guy – who is retired from the Univ. of Michigan. I’m just a retired law professor and former dean at UH. I know less than any of the others. By way of contrast, it is my understanding that key members of our current state government have had strong ties to Chevron.
I got into the business of criticizing oil companies when I discovered that we in Hawai'i were paying $.30 to $50. per gallon more, on average, than the mainland and that there was no market reason why that should be so. That extra tariff, multiplied by the millions of gallons of gasoline sold each year, represented a small fortune that would leave Hawai'i every year as oil company profits, was clearly responsible in significant part for our high cost of living – not just what we pay to fuel our cars but every company we buy from charges us for the cost of gasoline they use.
The high relatively high cost of gasoline is caused only in very small part by the taxes we impose on gasoline. On average our taxes are about $.14 higher than the mainland’s. And the taxes, you will note, do not usually leave the island but are spent here, though not necessarily wisely!
The key question is: Why is gasoline so expensive? To answer that, let me step back a little. Hawai'i is a relatively small, and most importantly, a relatively isolated state. This creates a problem for several important commodities, because by virtue of our size and isolation we do not have the competition that other states may enjoy. That is true of interisland airlines – we came darn close to ending up with one airline. That is true of newspapers and newspaper advertising – came within an inch of ending up with one major Honolulu daily, owned by Gannett and called the advertiser. I was very proud, by the way, to work with Save our Star Bulletin – a Canadian newspaper publisher showed up with the desire and ability to buy the Star Bulletin; and I was also involved in insuring the continued viability of Hawaiian and Aloha, when it really looked like we would lose one of them. It is true, of course, of the electric company on this island. And it is true of health plans – HMSA has a virtual monopoly of the PPO business – something like 70% with a reserve of half a billion dollars. Kaiser has pretty much cornered the managed care business.

And of course, we have a similar situation with gasoline. We have two refineries who manufacture all the gasoline we use; that situation, which is not a monopoly but an oligopoly, involves just a couple or very few players.

In each of these areas we either have no competition or competition is weak or shaky. It is true that real competition is the best regulator of prices in the market. But with regard to the wholesale market for gasoline, there is no true competition. Chevron and Tesoro provide gasoline to Shell and all the other gasoline sellers in Hawai'i. Aloha had plans to break into our market by buying gasoline in Singapore, where it is rather inexpensive, and shipping it to Hawai'i. It built a very large storage capacity for a very large price, and when it was done, Chevron idled up to Aloha and said: Why buy from Singapore and ship to Hawai'i ???– that involves a lot of risk, from the weather, the sea, from spills, etc? We will sell it to you at the same price that you could get it from Singapore if you had to ship it yourself. That price is known as market parity. And Aloha said “Great!” So every gasoline seller who buys gasoline at wholesale from Chevron (And maybe from Tesoro, but I’m not sure) – Shell, 76, and all the rest – gets it at market parity.

There is no competition at the wholesale level. The very few sellers at that level sell pretty much at the same price, and all of them live with that very happily. So long as none of them go head-to-head with Chevron by really lowering their retail price, Chevron will continue to sell them gasoline at Market Parity. All make big fat profits; Indeed, Chevron at the antitrust trial testified that for the prior year it had made 25% of all of its profit on gasoline, nationwide, in Hawai'i.!!!

If you want to fantasize about how profitable the situation is for all of those who sell gasoline at the wholesale level, think about this: Aloha buys its gasoline from Chevron at Market Parity and then sells it to Costco, who retails it for 15-20 cents a gallon less than Chevron and most of the other dealers. Unless Costco is giving it away at less than cost as a loss leader, (and why would it do that?) everyone seems to be cleaning up. In other words, without any explicit agreement – which would be necessary to establish a conspiracy in restraint of trade – the few gasoline manufacturers can insure that most of the gasoline will be sold at pretty much noncompetitive prices, and each of the companies will clean up with fat profits.

At the Chevron’s antitrust trial, its management made it pretty clear that if Texaco or others began to seriously undercut Chevron’s prices, Chevron would shut off the tap.

Why doesn’t Chevron cut off Aloha for selling to Costco who undercuts the retail price market? Probably because Aloha, alone of the possible competitors with Chevron, has the capacity to return to its original plan of importing gasoline from Singapore at low cost. That would give Aloha the independence to really undermine the happy scheme where all generally charge similar prices. Chevron doesn’t want that to happen.

Now, if I’m correct that we have an oligopoly that can pretty well set its own prices for wholesale gasoline, what should we do about it? First, the fact that there was an oligopoly which could avoid real competition was Chevron’s principal defense at the anti-trust trial. What we have traditionally done where we have a necessity – and let us not kid ourselves – gasoline is today a necessity -- we regulate. That is what we do and have always done in the electric industry, nationwide, where a limited number of companies have cornered the market. That is what the insurance commissioner has been doing, with great positive effect, in the area of health plan rates until this session when rotten politics managed to give effect to a sunset provision in the rate regulation law. Watch what happens to HMSA’s and Kaiser’s rates. We saw what happened to electricity in California when regulation was removed – they had nothing but terrible problems of rising costs, blackouts, and you name it.
Where there is a failure of competition, as there is so often in Hawai'i, and market forces are not controlling prices, it is, in my opinion, the duty of government to protect citizens by stepping in and regulating. And that is what we tried to do with gasoline in Hawai'i.
What happened and what went wrong?

It is very difficult if not impossible to establish a competitive price for a commodity based upon what is happening within a noncompetitive market. But we do know a couple of things: 1. The market for oil and gasoline is often governed nationally and internationally. 2. The high cost of gasoline in Hawai'i was partly the result of a phenomenon that where mainland prices went up, our gasoline prices would go up very soon afterward and match or exceed the mainland increases, but when mainland prices came down, Hawai'i gasoline prices would either not come down or would come down after great delay. 3. There was no real competition at the wholesale level, but there was supposed to be real competition at the retail level. Indeed, these were findings made in court by US District Judge Mollway.

From this it was concluded that tying Hawai'i's gasoline prices to an average of several widespread places in the mainland (we discovered from the earlier bill that limiting the average prices to west coast gasoline prices didn’t work mainly because of California’s special requirements and unusual markets) would be likely to produce a fair price and would cause Hawai'i's prices to fall, as well as to rise, when mainland prices fluctuated. The three places selected were NY Harbor, the Gulf Coast, and L.A.

Adjustments for special market costs – location adjustment factor - $.04 per gallon; marketing margin factor of $.18 per gallon; mid-grade adjustment of $.05 per gallon, premium adjustment factor of $.09 per gallon, 8 zones were created to account for different conditions on the various islands and isolated spots on the islands. The PUC was directed to establish zone price adjustments for the various grades of gasoline.

Manufacturers, wholesalers, and jobbers were given the power to petition the PUC for adjustments based on changes in the costs, and most importantly, the PUC was given the power on its own, “Regardless of whether a petition has been filed and notwithstanding a determination of the adjustments made pursuant to subsection (a), the commission, in its discretion, may make such other and further adjustments deemed necessary and appropriate to establish maximum pre-tax wholesale gasoline prices that reflect and correlate with competitive market conditions.”

It was claimed that the adjustments were too high, but the PUC never acted to reduce them, though it could and should have.

Unlike the first bill, which tried to cap both wholesale and retail prices, this bill just capped the wholesale prices on the theory that that is where competition was non-existent and “conscious parallelism” existed. Conscious parallelism has been held NOT to be a violation of the antitrust laws. (That is probably why the State’s case went down the tubes, tho’ Chevron did settle for $30 million.)

Well, what happened?

Katrina and Rita hit! They, along with the Gulf war, caused the price of oil to soar. Those prices affected world markets. The averages used to calculate the baseline price also soared. (It was argued that Hawai'i's prices for oil are based on different sources and would not have increased like those on the mainland, but that is naïve. Oil is a world commodity and what happens in the Gulf or the Gulf Coast affects the world price.) A second thing occurred which we suspected. Because wholesale gasoline is noncompetitive – an oligopoly – the wholesalers could and would raise their prices pretty-much to the cap. That they could do that proved what we believed, that they represent an oligopoly and there is no competitive market for wholesale gasoline.

But what also happened is what we were hoping for: When mainland prices fell, prices for gasoline in Hawai'i would also fall. TAKE A LOOK AT THE CHART THAT CARL MIURA HAS PROVIDED. THAT WAS WHAT THE GAS CAP LAW WAS DESIGNED TO DO, AND IT DID IT. What remained to be done, What could have been done by the PUC (See 486H-16(c) – Regardless of whether a petition has been filed and notwithstanding a determination of the adjustments made pursuant to seucsection (a), the commission, in its discretion, may make such other and further adjustments deemed necessary and appropriate to establish maximum pre-tax wholesale gasoline prices that reflect and correlate with competitive market conditions) and was never done, was to adjust the adjustment factors to lower levels and to change the formula to avoid the overeffect of unusual and important events, like Katrina and Rita, on the mainland. Indeed, the new law which requires the PUC to calculate the gas cap price does both of those things, requiring the average used to create the baseline price to be the average of the lowest three locations, with Singapore being added as one of the four locations to be used. (Singapore was where Aloha was going to get its gasoline before Chevron offered them gasoline at Singapore “Market Parity” Prices.) It also makes the factors for which amounts are adjusted more realistic and, in consequence, lower.

Unfortunately, the Legislature responded to public ignorance, often aided and abetted by newspaper reporters, and blamed the gas cap for the large increases in gasoline prices. In consequence, it suspended the price cap. However, it also established a petroleum industry monitoring, analyzing and reporting program and special fund; requires the PUC to continue to calculate and publish what the maximum pre-tax wholesale price would have been if the cap had not been suspended. The call for transparency may be defeated by the industry’s ability to hide its facts on the ground that they are trade secrets. It changed the adjustment factors as I mentioned before, especially to reduce the add-ons allowed on the baseline price and to add Singapore as a forth location whose prices may be averaged if it falls in the bottom three.
One section that could be helpful sets forth and prohibits unfair trade practices by the petroleum industry. One of my former students said that he thinks that Chevron was vulnerable to state claims of unfair trade, but the California attorney representing the State would not pursue those claims, just the federal antitrust claims.
Finally, the law gives the governor “the authority to reinstate the weekly maximum wholesale gasoline price for 30 days after publishing a notice that the reinstatement would be beneficial to the economic well-being, health and safety of the people of the State.” I don’t know what is supposed to happen after the 30 days but I suppose the governor can keep on reinstating if prices exceed the price determined by the PUC or if there is a natural disaster.
It remains to be seen how this new law will work, but it sure does have the potential of putting the governor in the hot seat if prices rise above the amounts determined by the PUC.

Finally, gas caps aside, we are likely in for very bad times fuel-wise. The increasing demand for motor fuels from China and India and the view, which seems to be shared by insiders, that oil production has peaked in most places where it is produced (not to mention the anti-US views of big oil producers like Venezuela and Iran) may very well create acute shortages in the years to come with the result that gasoline prices could rise to enormous levels, creating uncontrollable inflation (or deflation) and putting a huge crimp into our economy.

When I recently was in Florida driving on I-95, I tried to get some classical music on the radio and failed. I did get public radio and heard a guy named Stephen Leeb, the President of Capital Management and an author, being interviewed. It led me to buy his book, “The Oil Factor”. This is the central point of what he said, and I quote:

. . . “We believe that we are on the verge of a historic transition away from relying on oil as our primary fuel. This transition won’t be something we choose. Rather, it will be forced upon us by the fact that oil supplies are peaking—within a very short time, oil producers simply aren’t going to be able to produce as much oil as the world needs. This will be the key big-picture trend of t he 2000s, and it will lead to a long-term uptrend in oil prices. Oil shortages and rising oil prices will be the order of the day, and they will play havoc with the economy”.
* * * *
All in all, oil prices are likely to rise to triple-digit territory -- $100 a barrel at a minimum, and probably higher—by the end of the decade and possibly sooner. Inflation ultimately is likely to reach levels well into the double digits.

In this kind of situation, capping the price of gasoline won’t work to hold down prices except marginally. So, at best, gas caps are a temporary solution. What we need to do is to develop a national bandwagon for alternative energy that, if necessary, will make the Chevrons of this world irrelevant. And we have to do it quickly.

Why is it no longer news that gas prices in Hawaii are not falling since the suspension of the gas cap law? At the time the Governor signed the Bill, Hawaii was only 36 cents above the national average. Some of the closeness is due to the fact that there is no longer an excise tax on gas, a savings that consumers were beginning to enjoy. As of today the difference has grown to 53 cents! This is the highest gap between us and the mainland in a long time and may continue to get bigger. No reporting of this is a disservice to the consumers of Hawaii as there is no one else that can put as much public pressure on the wholesalers as the media.

Thursday, May 18, 2006


In yesterday’s posting we saw a letter from the U.S. Dept. of Education to Pat Hamamoto pointing out the lack of compliance by the Hawaii DOE “under the standards and assessment requirements of the Elementary and Secondary Education Act (ESEA), as amended by the No Child Left Behind Act of 2001 (NCLB).” Being out of compliance, our super DOE received two extensions for a total of 4½ years. As the letter points out they are still not in compliance and probably won’t be in 2007.

Pat Hamamoto shares the letter with Randall Yee, Board Chair and noone else. A request to put the issue on the agenda for the next board meeting is denied by Yee. This is unbelievable! This problem could, very likely, cost our school system millions of dollars in federal grants. Our two glorious leaders don’t seem to care, apparently they are only interested in covering their collective okoles. Yee keeps the Board in the dark and Hamamoto goes public with lies about how good her department is doing and how they are meeting goals. Is she nuts? Not really, I recognize a good marketing plan when I see one. Pat’s philosophy is to face a disaster head on and lie about it!

Randall’s philosophy appears to be, hide the problem and it will go away. Randall is preparing to put this nasty situation behind him by runing for the State Senate. He’s going to run against Senator Les Ihara, Jr. in the upcoming election. Senator Ihara is the best of the very few best in the legislature. He is the leader for all isues involving ethics in government, open government, and campaign finance reform. Moreover, he will only accept political donations not exceeding $250.00. Senator Ihara deserves to win espacially against an opponenet who hides important issues from his Board and who knows what else?

Getting back to the school board, I’m sorry to admit that I haven’t paid them much attention in the past eigtenn years I’ve been in Hawai. I have noticed nery little unplanned turnover, few if any of the Board Members ever lose an election. They seem to be elected for life and this is where the problem with your children’s education arises. I have also noticed that the spokesman for the Board is married to a long-time Board Member. Hmmmm. These third world situations keep cropping up, don’t they? Is the spokesman position a real job? I only see him quoted in the media a few time per year. Could this be evidence of the Board’s desire to treat us like mushrooms? Keep us in the dark and every once in a while throw some BS on us. Stay tuned. Aloha, George

Wednesday, May 17, 2006


State of Hawaii Board of Education Member Paul Vierling accidentally discovered the letter (printed below) sent to superintendent Hamamoto and who had apparently only shared the letter with BOE Chair Randall YEE. The U.S. Department of Education placed the letter on its website which is where I made the copy below.

The Elementary and Secondary Education Act (ESEA) was passed into law in 1965 as a means of providing more funding for disadvantaged students in state education systems. This act has now been on the books for 41 years, it was reauthorized in 1994 to add accountability and assessment provisions which required full compliance by 2001. The geniuses at the State DOE failed to meet this deadline and received a 2 year extension to December 2003 which they also failed to meet. Now 2 ½ years later all those overpaid folks at DOE still cannot find the time to comply!

Supervisor Pat Hamamoto has the solution, instead of directing her people to get their act together and comply, she is hitting the airwaves and lying, to anyone who listens, about the great job DOE is doing and how they are on target for meeting all the goals for student achievement under ESEA.

I don’t know who the hell is in charge of education, but whoever it is better clean house in the DOE and get our keiki educated!

Hawaii Assessment Letter

March 24, 2006

The Honorable Patricia Hamamoto
Hawaii Department of Education
P.O. Box 2360
Honolulu, Hawaii 96804

Dear Superintendent Hamamoto:

Thank you for submitting Hawaii's assessment materials for review under the standards and assessment requirements of the Elementary and Secondary Education Act (ESEA), as amended by the No Child Left Behind Act of 2001 (NCLB). We appreciate the efforts required to prepare for the peer review.

External peer reviewers and U.S. Department of Education (ED) staff evaluated Hawaii's submission and found, based on the evidence received, that it did not meet the statutory and regulatory requirements of Section 1111(b)(3) of ESEA. Further, based on information Hawaii has provided about future timelines designed to conduct and complete this assessment work, it does not appear you will administer a system that complies with these requirements until Spring 2007 at the earliest.

Based on this information, it seems unlikely that I will be able to approve Hawaii's assessment system for the 2005-06 school year. As a result, the Department has a range of options to consider in helping Hawaii move to a compliant system including: entering into a compliance agreement with the State, withholding Title I, Part A State administrative funds, or placing the State into mandatory oversight status. These possible outcomes of an unapproved system were detailed in a letter to chief state school officers on January 19, 2005 (refer to for this letter). I would like to talk with you and your staff before finalizing this decision about Hawaii's assessment system and determining a course of action to ensure that Hawaii can implement the very critical assessment requirements of NCLB in as timely a fashion as possible.

I have taken the unusual step of writing this short letter without details about the findings of the peer review to start the discussions. My team is compiling more detailed feedback based on the peer review, which I will send following our conversation. As part of our conversation, I would like to discuss the following issues with you: critical findings of the peer review regarding the assessment system, technical assistance the Department can offer to help Hawaii meet the assessment requirements, a timeline for developing and administering a fully compliant assessment system, and implications for accountability. I would also like to discuss the plans Hawaii has for a new standards and assessment system that will be implemented during the 2006-07 year.

Enclosed with this letter are detailed comments from the external peer review team that evaluated the Hawaii's assessment materials. The peer reviewers are experts in the areas of standards and assessments; they reviewed and discussed the State's submission of evidence and prepared a consensus report that is documented as the Peer Notes. I hope you will find the reviewers' comments and suggestions helpful.

I will call soon to arrange a discussion with you and your staff about Hawaii's standards and assessment system. I know first hand the challenges of leading a State education agency and know how hard you and your colleagues have been working to achieve these goals. I am confident we can work together to plan and implement the necessary steps to help Hawaii implement a high-quality assessment system that will achieve the goals of NCLB.


Henry L. Johnson


CC: Governor Linda Lingle

Saturday, May 13, 2006


I wrote in a previous post that I would revisit the Death With Dignity issue. This article from the London times explains it very well.

The Sunday Times - Comment May 14, 2006

An acceptable way to arrange our death
Minette Marrin

Last Friday the House of Lords voted, to my great disappointment, to wreck Lord Joffe’s private member’s bill on assisted dying for the terminally ill. The peers who oppose it, many of them for religious reasons, managed to kill the bill by 148 to 100 votes, and prevent any further parliamentary debate.
This was predicted. The Christian churches and others financed an enormous, very expensive campaign against it, organised by a group with the tendentious name of Care Not Killing — the Joffe bill has nothing to do with killing, only with the choice to commit suicide in extremis. All that Lord Joffe can now do is introduce another bill another time, and he has promised he will.

Remember Diane Pretty. She campaigned ceaselessly, despite the ravages of motor neurone disease, for the right to be helped to die, before her terrible disease reduced her to helpless misery, but she failed and she died exactly the terrifying death she most feared. This seems to me unspeakably inhumane.
There are conditions which palliative care cannot reach. Between 3% and 10% of the population cannot be helped by painkillers, for instance; besides, pain is not the only terror in the process of dying. In any case, why should a responsible adult be denied the freedom to die, with carefully supervised help, if she is one of the tiny minority of people who would wish to do so?
Whenever there are public discussions of matters of life and death, people never fail to talk ominously of slippery slopes. Last week’s impassioned debates, both inside and outside the Lords, were full of slippery slopes. Allow this one freedom, the argument goes — to choose to die, to select a healthy embryo or to do a few days’ stem cell research — and we will slide quickly into a hellish abyss of legalised mass murder or Nazi eugenics, or whatever.
The truth is that the slippery slope is the human condition. We are already on it, and we cannot escape it. It’s our destiny to struggle along in life, upwards or downwards, with very uncertain footing. There is no safe plateau of moral security; we are constantly faced with painful dilemmas. The threat of a slippery slope is no argument against something that’s acceptable in itself, even though if pushed to a logical conclusion it might lead to something unacceptable. That’s the nature of moral decision-making: human moral effort is to keep seeing and drawing the line, and struggling to stay above it.
Those who don’t believe in God are obliged to play God. Playing God on the slippery slope is not very comfortable, but unless you are religious, there is no alternative. Even religious people are not always agreed on what God has ordained. Christians disagree passionately on some matters of life and death, as was clear in the House of Lords, when some Christian peers spoke as eloquently in favour of doctor-assisted suicide as others spoke against it.
Friday’s debate strengthened my feeling that religion ought to be kept out of political decisions. You cannot argue with religious belief, or with holy writ; scriptures and edicts and personal convictions are knockdown arguments. You can, however, argue on secular questions. Secular thinking is open to change and compromise.
There has been a rather cunning rearguard action on the part of some religious people to suggest that the scientific-materialist world view is merely a chosen belief system like any other, in effect, another religion. It follows that that secular arguments are of no more value than religious. The Archbishop of Canterbury made this point in passing. But it isn’t true. The point about the scientific, empirical worldview is that it is open to evidence, it can be publicly tested and it can be shown to be wrong. It is corrigible. Scientific theories can be changed. Laws can be repealed. Facts help.
I’d like to suggest a few corrections that can be made to some current fears about the bill. In a letter to The Times on Friday, the Archbishop of Canterbury, the Archbishop of Westminster and the Chief Rabbi said that “such a bill cannot guarantee that a right to die would not, for society’s most vulnerable, become a duty to die”. There’s a widespread fear, we’re told, that insensitive, overmighty doctors might bully confused little old ladies into signing their lives away, perhaps because they were a burden, or under pressure from greedy relations, or because NHS funds were low.
But these fears can be allayed by strict, legally binding safeguards. There were more than enough in the Joffe bill. (Furthermore, had the bill been allowed to go on to a standing committee of both houses, this question could have been re-examined).
Under the Joffe proposals, nobody — no patient, no doctor — could be required to have any part in doctor-assisted suicide; nor could any hospital or other establishment. No doctor could be required to raise the question with a patient, or to refer the patient to another doctor who would. The little old lady herself must make the request herself, in writing, she must be examined by two doctors, one of them a consultant independent of the other, and they must be satisfied that she is indeed terminally ill, with six months or less to live and that she has the capacity to make such a decision.
If in any doubt, she must be referred to a psychiatrist or psychologist to assess her capacity. It’s my understanding that if she lacks capacity she will be protected by the Mental Capacity Act, like anyone else. She must also be told about and offered palliative care. If she still persists in wanting to die, she must sign a form, witnessed by two people, one of them a solicitor, and neither with any remote interest in her affairs (no greedy relations). Then after a period of two weeks, her doctor may give her a prescription, which she may never in fact choose to take, and she can revoke her decision to die at any time.
On my count that makes at the very least five independent professionals, not to mention the nurses and other care professionals surrounding her, who would all have to be complicit in pushing her into suicide, against her will and against her right to life. It assumes that her family members and friends would be either complicit or uninvolved. These sound to me like adequate safeguards; this is hardly a Shipman’s charter. It is indeed a slippery slope, but that’s inevitable in life, and how far we choose to slip lies in our own earthly power.

Based upon the above article, the subject Bill was about the ame as ours. We had sixteen pages of safeguards in an eighteen page Bill. All we ant is the freedom of choice. Aloha, George

Thursday, May 11, 2006


A few days ago, my neighbor, a locally born, raised, and educated lady; stopped at a super market for a small purchase. When she checked out her purchase came to $ 19.79. She gave the cashier a twenty dollar bill and as she did so the cash register went down. The cashier picked up a pad and pencil and wrote 20.00. Under that she wrote 19.97, drew a line under the numbers, and crossed out the seven. My neighbor thought” my god, she’s going to do second grade subtraction. In order to nip this fiasco in the bud, my neighbor said “twenty-one cents”. The clerk said “thank you, how did you do that”? My neighbor took her change and left the store in amazement. I wonder what the cashier would have done if my neighbor had said forty-one cents? We’ll never know.

This brought to mind the fact that I’ve been living in Hawaii for eighteen years. During all this time the story regarding education remains unchanged, “more money is spent per student than any other state, many pupils do not have text books, and Hawaii schools rank last in the nation”. Eighteen years and nothing has changed. If you ask the Department of Education (DOE) you receive, what is to me “cop out” answers such as, “teachers spend too much time on discipline and not enough time teaching, English is a second language for many pupils, The cream of the crop is scraped off by the private schools and public schools have to take all comers, and parents are too busy working two or more jobs for survival to spend time on their children’s education”.

I grew up in the Bronx, New York. If there were any private schools they were so far over the horizon I never heard of them. Many of my classmates were from immigrant families and they sent their children to school with strict instructions to pay attention, learn English, and come home and teach the parents. They all knew that in order to prosper in this great country you had to be able to read, write, and speak English! Moreover, they learned early on that the streets were not paved with gold as they had been told, and they were going to have to work in order to prosper. Please note that prosper was the key word and not survive. These folks came to this country to prosper and if learning English and working hard was the answer than that is what they did.

Discipline was handled very simply by jerking the problem pupils out of the room and sending them to the principal’s office. The principle required a parent to come in for a meeting before the pupil was allowed back in class. Of course this was a great inconvenience for the parent because last time from work meant lost wages, just like now. These rules were strictly enforced and very few discipline problems remained after second grade. Those that did were handled in the time honored fashion, inconvenience the parent and they will handle the problem.

Back to the money, in Hawaii, more money is spent per pupil but not on pupils. The money disappears into the DOE never to surface again. It’s not spent on text books or teacher raises, so where does it go. My guess is it stays right there as fuel for the ever-growing quagmire that is the DOE. Moreover, the teachers union does its very best to stand in the way and make sure teachers do as little work as possible. No-one represents the students. As long as politician’s, DOE personnel, and teacher’s children attend private schools, nothing good will happen in public schools. I’ve heard at least two governors say they wanted to be known as the “education governor”. Maybe so, but can any governor do anything good for public education? I sure don’t have the answer.

A few weeks ago Dave Rolf, a lobbyist for the Automobile Dealers Association, wrote a great Op-Ed piece in the Advertiser. Apparently automobile dealers aren’t getting a sufficient number of entry level employees who can read and write. Hopefully, more lobbyists and their clients will step up and demand better education in the public schools. After all, it’s in their best interest. Think about it! George

Sunday, May 07, 2006


The Oil Industry has done a great marketing job against the Gas Cap. We have been constantly hammered by Letters-To-The-Editor complaining about the Cap and how it doesn’t work. Those of us who understand marketing see this as a concerted effort. Meanwhile, the Honolulu Advertiser has said all along that they are against the gasoline price cap. Have they been printing mostly “Letters” against the Cap or have been balanced? I certainly don’t know. What I do know is that my letters in favor of the Cap never made it into print. Moreover, the Advertiser is still running stories against the Gas Cap. They’ve interviewed drivers in gas stations while they fill their tanks and ask about the cap. The predominant answer that makes it into print is, of course, against the Cap. Anyone knowledgeable about the Cap can tell by the driver’s answers that few are knowledgeable about the Cap and about whether or not it was working.

Friday, Governor Lingle signed SB3115 into law thereby repealing the Gas Cap. 3115 contained a caveat that said the Governor could temporarily reinstate the Cap anytime she thought consumers were being gouged. When signing 3115 into law she says she would never reinstate the Gas Cap. Well Gov., one should never say never, especially one who is elected to office; you may want to change your mind at some future point in time.

Many consumers believed the Oil Industry shibai that prices were kept artificially high by the Cap. It this is true prices should be coming down now that the cap is gone. However, according to AAA the average price for regular on Oahu has gone up a penny per gallon today, just two days after the demise of the Gas Cap.

On another note, just before it became illegal to raise campaign funds on the mainland, the Governor went to Houston to hold a fundraiser. Why Houston? Why not Detroit, or Jersey City, or Indianapolis, or any other city in the country? My guess is that she went to Houston because that is where big Oil is domiciled. Any large oil company whose home office is not in Houston is less than an hour’s flight time away by corporate jet. The oil companies, law firms, suppliers, and the entire food chain could express their thanks for the Hawaii Governor’s position against the Gas Cap. Now that the session is over I’ll have time to check this out and see who gave and how much they gave.

Friday, May 05, 2006


The following allegation was widely distributed yesterday at the State Capitol. This allegation was not news to a number of persons who chose to ignore it.
Green Flash News May 4, 2006

“Representative Calvin Say violates state residency laws

Green Flash editor Jack Kelly today filed a complaint today alleging that Representative Calvin Say is not living in the district that he represents.

In the complaint filed with the City Clerk of the City and County of Honolulu, Kelly also Vice-President of Protect Keopuka Ohana, said, ‘Representative Say does not meet the qualifications of residency and as such is ineligible to serve as a state representative.’

Kelly says in the complaint that Say has lived at a residence in Makiki for the past 15 years with his wife and two sons. He has run for office and now represents Palolo on Oahu (House District 20). However, Kelly says that the representative actually lives in House District 26. Kelly is asking the City Clerk to investigate this complaint. ‘An investigation will show that Representative Say has clearly established a permanent and fixed residence outside of House District 20’.

’The mere act of maintaining a residence in District 20 does not constitute residency for electoral purposes,’ he added.

Kelly also asked the City Clerk to ‘refer this matter to the Attorney General or City Prosecutor to determine whether any offense was committed under HRS Chapter 19 (voter fraud).’

Asked whether he had any concerns if Say continues to serve in office, Kelly responded: ‘Continuing to serve in office may render any bill now being considered void and invalid.’”

Whether or not these allegations are true remains to be seen.


On another matter, the grass roots effort which defeated SB 2922 was led by Voter Owned Elections (also known as HICLEAN). VOE has had Campaign Spending Bills before the legislature for the past seven years. Early on, the House would vote unanimously to pass the Bill knowing full well that Cal Kawamoto would kill it in the senate. After Cal lost an election the House would kill the Bill always giving a shibai reason for doing so. Except 2005 when the Bill got all he way to conference committee where it was allowed to die. This session the House leadership refused to pull it out of conference committee and bring it to the floor for an up or down vote.

Instead of tucking tail and going home as usual, the VOE folks mounted a grass roots campaign that grew as the session went on. They selected certain Representatives for special attention in the form of sign waving and door to door canvassing in their districts. The House response was to ask if VOE wanted their Bill heard in committee. The response was, “no, been there done that. Pass our Bill!” Which of course, the House ignored. When it became clear that the House had no intention of ever passing their Boll, VOE reached out to other organizations also having trouble getting their Bills passed and the Grass Root volunteer effort grew. When it looked like SB 2922 would pass and allow unlimited corporate donations, the volunteers focused their efforts on this terrible Bill. Huge numbers of Emails, Faxes, and phone calls to House Members resulted in SB 2922 dieing in the House. What really worried House leadership is that other organizations will see how well this strategy worked and use it for their own issues during forthcoming sessions. Time will tell. Aloha, George


Yesterday was the final day of the 2006 Legislative session, a very exciting day as Bills were passed or killed and strategies were played out. Deals and double deals were rumored. For instance, why did the House pass the Senate Gas Cap Amendment after all the Conferees testify at length against passage? Then virtually the entire House rose one at a time to express their reservations. At that point in time no-one in the House is for passage. Then came the vote: Majority Party votes YES! Minority Party votes Yes! It is unanimous, every Representative voted YES! How could this be? It’s like I have written before, something was going on out of our sight commonly referred to as a “backroom deal” We’ll never really know. The bottom line is that the Gas Cap is technically dead but the calculation continues with the inclusion of Singapore prices in the mix along with the three original regional prices. Then the highest price of the four dropped and the remaining three averaged. Senator Menor said that this would reduce prices by $0.27/gal. if the Cap was still in effect. At any time the Governor believes that consumers are being gouged, she can re-institute the Cap for a period of four weeks. However, the Gov. is adamantly opposed to the Cap and will be very reluctant to play this card. The public will have to raise hell the get her to do so. By next session we will have amassed enough data to make it obvious to everyone except hard liners as to whether or not the Gas Cap is necessary. The numbers will be published weekly and we can all play the game. One number to remember is that Chevron just reported that their quarterly profit was $4.5 BILLION and they previously testified, under oath, that Hawaii represents 32% of their national profit while being just 3% of their market. We’ll have to watch this one play out.

Another surprise was SB 2922, the Campaign Spending Reform Bill that was supposed to retroactively kill the $1,000 limit on corporate donations. SB 2922 was killed in the House! The Senate sent a group to the House to negotiate a strategy and apparently was locked out. SB 2922 was killed and the law stands. This is another one that will bear watching.

As I traveled around the Capitol, little birdies whispered in my ear about legislative office managers -- and no one else – being invited by Representative Corinne Ching’s office manager for free lunches and a VIP tour of the capitol district, restricted to the first 10 office managers signing up. This after an April 11th Ethics Commission memo to legislative staff stated, "attendance at appreciation or 'thank you' receptions, dinners, lunches, meals, and parties, etc., would be prohibited for legislators or legislative staff to attend". This special offer was exclusively for the first ten office managers who took the morning off during the work day, since the tour was for 9:00-11:00 am yesterday, and cashed in on the free lunch at Liliha Pho. This perk is not available for any other government workers. I assume Rep. Ching knew about this offer of perks, so she should own up to this breach of public trust. You'd think these lawmakers would know the law, especially when the Ethics Commission goes out of its way to point it out. I should say “shame on you” but I won’t because there is no shame amongst this group, in my humble opinion.

I’ll follow these stories as they develop and get back to you. Aloha, George

Wednesday, May 03, 2006

Oops? Not!

During the 2005 legislative session, a Bill was passed into law which limits corporate political contributions to $1,000. This session SB 2922 calls for overturning the law. The justification being spouted by proponents is that the law was passed by accident. They must really be desperate because admitting to a mistake is definitely not their style. However, Conference Committee Report No. 185 clearly states “The purpose of this bill is to amend the campaign spending laws by, among other things:
(1) Limiting campaign contributions from banks, corporations, and nonresident individuals and persons;”
This does not look like a mistake to me. Rather, it looks like some thing they did to limit the fund-raising of the Republican governor and only now realize it also applies to them.
Late yesterday afternoon after a lengthy debate, the house recommitted SB2922. This means that unless they vote to pass it on Thursday after the mandatory 48 hour notice period, the contribution limit stays in effect. Apparently, yesterday they did not have sufficient votes to pass the Bill. By recommitting they keep it alive until midnight Thursday when the session ends. What will happen Thursday is anyone’s guess. However, the Representatives are being bombarded by Emails and faxes from good government fans requesting they not pass SB2922. It will be interesting to see if they listen to the wishes of the public or do the self-serving thing and vote to pass the Bill.
Stay tuned. With aloha, George

Monday, May 01, 2006


Here’s looking at you, again Bob-bee. In a previous posting we exposed the use of s corporate CEO as an intern by Bob “the Villain” Herkes. This intern is CEO of the HMSA Foundation. If you remember an amendment appeared magically out of Bob’s office and was inserted into a Bill after the public hearing. This amendment appears again in Conference Committee and Bob “the villain” jams it down the throats of the Senate Conferees by walking out of conference deliberations and in essence told the Senate and the public “accept the watered down draft of the House or let the Healthcare rate Regulation measure sunset”. If Bob “the villain” gets away with this ploy he will have benefited HMSA and Kaiser and screwed small business and the public. Currently, businesses in the State of Hawaii pay HMSA $1.8 Billion in healthcare premiums! Yes, you read it correctly, that’s Billion with a “B”!

Yo Bob-bee, they don’t need your help, they’ve got as big a surplus as the entire State of Hawaii.

In a previous posting I mentioned Representative Bev Harbin as one of the good guys in the legislature. The reason I selected Bev is because she does not sell out to corporate interests, she represents her constituents, the public and small businesses. Forget what you've read or seen in the media when she was first appointed, I've watched her in action ona daily basis. Click here for an example printed with permission: This also shows why I’ve chosen Bob “the Villain” Herkes as a project. He is just the opposite of Bev Harbin. He represents his own selfish interest above all, corporate interests second, and constituent interests a distant third if at all. I have made him my personal project. Every time he does something dumb, in favor of corporate interests, or against his constituents I will be on him like white on rice. Should any of Bob’s peer group think I’m only focused on him they might want to remember that the Blast’em turrets can rotate and bring guns to bear upon them at any time. Enjoy the read, George