by Andrew Walden www.PajamasMedia.com  (originally published March 22, 2008)

With Tony Rezko on trial, the national media is beginning to skim the surface of the dirty deals paving the rapid ascent of Democratic presidential frontrunner Barack Obama. But Chicago, Syria, and Iraq are not the only places to look. There is also a $9-billion story in Hawaii and in spite of Obama’s recent 3-1 victory in the Hawaii Democratic caucuses, both Obama and Clinton are still clawing for the prize.

Obama’s Hawaii supporters sought to leverage the limited contribution pool of their small state by latching on early. Calling Obama “Hawaii’s third senator”, they began raising early money for a presidential bid as soon as Obama won his Illinois Senate seat in 2004. But of course they want something in return. At the top of their agenda in discussions with Obama in December 2004 was the multi-billion-dollar tropical land and money grab which would be made possible by passage of the so-called Akaka Bill.

Congress is now considering another “Apology Resolution” — for American Indians. The degree to which the Hawaiian Apology Resolution and the fight for the Akaka Bill have distorted the presidential race should be a sharp warning against passage. The Indian Apology Resolution is amended to S 1200 by Senator Sam Brownback (R-KS). The House version is contained in House Joint Resolution 68 being pushed by Rep. Dan Boren (D-OK).

The Akaka Bill (Senate Bill 310 and House Bill 505) would create a Hawaiian Indian reservation. Its backers claim they are righting historical wrongs done to Hawaiians. Its opponents claim the Akaka Bill is racially discriminatory. Both groups miss the point. A more accurate assessment comes from the Akaka Bill’s chief proponent in the House of Representatives, Rep. Neil Abercrombie (D-Honolulu). Abercrombie explained to the House Committee on Natural Resources on May 2, 2007, “The bottom line here is that this is a bill about the control of assets. This is about land, this is about money, and this is about who has the administrative authority and responsibility over it.”

The bill in different forms has passed the House several times since 2000 — most recently on October 24, 2007. It is now again before the Senate after coming up four votes short in 2006.

Contrary to popular opinion, Indian reservations have a history in Hawaii. An Oct. 12, 1999, article in the Honolulu Star-Bulletin describes the 1995 efforts by corrupt trustees controlling America’s largest charitable trust — Kamehameha Schools/Bishop Estate (KSBE) — to evade state and federal oversight. And not without reason: trustees’ salaries were over $1 million per year. KSBE money, along with trustees’ personal funds, had been invested in a pornographic website. Spending on the Kamehameha School was being cut. One trustee was running rampant in the school, micromanaging teachers and administrators. The trustees’ self-dealing and their investments with Goldman Sachs — at the time headed by current New Jersey Democratic Governor John Corzine — had brought losses of $264 million in 1994 alone. Investigators were starting to ask questions. Hawaiians were beginning to protest. The trustees’ plan? Get the IRS and the state attorney general off their backs by moving KSBE’s legal domicile to an Indian reservation.

The Star-Bulletin on October 12, 1999, explains:

Verner Liipfert, whose local office was at the time headed by former Gov. John Waihee, identified the Cheyenne River Sioux Reservation as the top relocation prospect.

[…]

Gregg Bourland, chairman of the Cheyenne River Sioux tribal council … said there is good reason for an entity like the Bishop Estate to make inquiries about changing its domicile to the South Dakota reservation.

[…]

Since the 1800s, the Cheyenne River Sioux have had a government-to-government relationship with the United States, which allows them to operate their own police force, court system, and legislative functions.

It would be politically impossible to remove KSBE — the estate of Hawaiian Princess Bernice Pauahi Bishop — from Hawaii. Nothing ever came of the effort and it remains a little-noted footnote in recent Hawaii history. By 1999 state and IRS investigations and protests by native Hawaiians forced the removal of all five trustees. The affair became known as “Broken Trust” and is the topic of a Hawaii best-selling book of the same name.

Within a few months of the trustees’ ouster, the first version of the Akaka Bill was introduced into the U.S. House and Senate. Sen. Akaka, who introduced his namesake bill in the U.S. Senate, had for years been a low-key defender of the corrupt trustees. Rep. Abercrombie, who introduced the House version of the Akaka Bill, had been a close associate of disgraced KSBE trustee Dickie Wong. If the trustees could not move KSBE to an Indian reservation, they were going to build an Indian reservation around themselves.

When Obama was a longshot, his valuable early-money Hawaii support came from a group of Democrat politicos including Waihee cronies, officers of Hawaiian Electric — a company deeply interconnected with KSBE — Abercrombie, failed Democrat congressional candidate Brian Schatz, and all coordinated by Andy Winer, former chief of Senator Daniel Akaka’s 2006 campaign.

Their effort closely parallels the high-risk/high-reward gamble Waihee took as an early-money backer of Bill Clinton’s successful 1992 bid for the White House. But the “old boys” have all their bases covered. Although Waihee cronies are prominent among Obama backers, Waihee himself is still loyal to Clinton, as is Hawaii’s senior senator Daniel Inouye (D). Hawaii’s other two representatives, Senator Akaka and Rep. Mazie Hirono (D-rural Hawaii), are remaining neutral until the dust clears.

As told in the 1997 PBS Frontline special “The Fixers,” the story of Clinton’s Hawaii early-money support begins in the late 1980s and early 1990s with poor Hawaiian farmers’ leasehold homes being bulldozed and cattle being slaughtered as Honolulu police stand by with fraudulent eviction notices. The evictions made way for the Maunawili Valley Oahu golf course funded by Japanese investors overflowing with yen at the top of Japan’s bubble economy.

The Maunawili Valley deal was the beginning of a long run for Waihee “fixers” Gene and Nora Lum. They bought support for the project in the Hawaii state legislature with $50,000 in contributions. Governor Waihee’s 1985 signature on the Lums’ bill declaring golf courses to be a legitimate use of agricultural land raised the value of the Maunawili property by about $43 million overnight.

Within a few years the Lums were recruited by Ron Brown — later named Clinton’s commerce secretary — to spearhead efforts to raise Clinton donations from Asian sources. Their gamble on Clinton’s candidacy even as the Maunawili evictions were ongoing in 1990 and 1991 raised thousands from Waihee associates.

PBS’ “The Fixers” ends with President Clinton in 1996, ten days after winning his second presidential term, stopping in Honolulu on his way to Asia and insisting on playing a full 18 holes of golf with Waihee in the pouring rain on the Maunawili Valley course where it all started.

The Lums ended up in prison in 1997, but backing Clinton paid off handsomely for Waihee and his cronies. Clinton in 1993 signed the so-called “Apology Resolution,” which fixes a single government-dictated interpretation of history and formally admits a U.S. role in the 1893 overthrow of the Hawaiian Kingdom. It also apologizes for the overthrow, thus implicitly placing Hawaii statehood in question and making the U.S. liable to native Hawaiians — or more accurately, to those who claim to represent them.

The Apology Resolution, in 1993 dishonestly pitched to Congress by Senator Daniel Inouye as “a simple resolution of apology,” has over the years provided the justification for politically motivated intimidation by gangs of thugs and for connected Hawaii political operators to capture ownership of tens of thousands of acres and rake in millions operating lucrative state and federally funded programs, and even private companies pretending to benefit native Hawaiians by claiming to address what Congress and President Clinton had admitted were past wrongs.

One deal alone, Sandwich Isles Communications, got $500 million in federal funds to provide nearly useless fiber optic connections to tens of thousands of Hawaiian Homelands residential lots — most of which are undeveloped. Costs are estimated at $278,000 per utilized connection.

The Hawaii state legislature is now considering handing over even more valuable shoreline acreage to the Office of Hawaiian Affairs (OHA) this session. Meanwhile, rising real estate costs are driving native Hawaiian families to live in tents on the beach. Last year ten thousand locals left Hawaii for opportunity on the mainland. About half of native Hawaiians are gone from the state. One might ask just what does it take to drive people out of Hawaii? At a recent OHA public hearing in Hilo, protesters gave a partial answer by shouting and carrying signs demanding: “OHA stop stealing from Hawaiians.”

But Sandwich Isles is small potatoes compared with the operations potentially enabled under a highly sovereign Hawaiian tribal government with government-to-government relations modeled on those of the Cheyenne River Sioux Indian Reservation. Not only could such a government shield trustees of KSBE from state and federal oversight, but it could also end up owning anywhere from 10% to 40% of Hawaii’s highly valuable real estate under the formulas being discussed.

The Apology Resolution is the cornerstone of the case for the Akaka Bill, despite Sen. Akaka’s floor statement during the 1993 debate: “Are Native Hawaiians Native Americans? This resolution has nothing to do with that.” In fact the record of the very short 1993 Senate debate contains a point-by-point litany of denials from Akaka and Inouye of almost everything which has since come to pass.

Just as the Apology Resolution was the return favor given to Hawaii Democrats by Clinton for their early-money support, Hawaii early-money supporters of Obama are hoping that a President Obama would be quick to repay the support they gave him when he was a long shot by signing the Akaka Bill. Obama has pledged to sign the Akaka Bill in order to “establish a federally recognized government-to-government relationship with the United States.”

What the trustees need is an indebted president — and Obama is their man. Meanwhile, what Hawaii needs is a brigade of lean and hungry federal prosecutors, a multi-pronged civil rights investigation by the Department of Justice, and prison space to house much of the state’s political and economic elite for the next 10-20 years.

Let us hope that Congress has learned its lesson.

Andrew Walden is Editor of the Hawai`i Free Press in Hilo, HI and may be reached at andrewwalden@email.com