TO: All Media Outlets

FROM: Dennis Mitsunaga

DATE: 10/31 /16

http://savehonolulu.org/

The following are answers to anticipated questions from the media regarding my participation in the Save Our City LLC generated by filing of the Campaign Spending Report filed on October 31, 2016.

The Beginning

The idea to form Save Our City LLC was originated by my friend, Sarah Houghtailing.  She was initially motivated to take action when she found out that Kirk Caldwell was paying only $100 per year on his $4 million Manoa Estate while she was struggling to pay the full property tax on her newly built home. She felt that it was grossly unfair that She, a mother with 5 children and a dependent parent, had to pay the full amount of property tax while Caldwell was taking advantage of a loop hole that only the wealthy can benefit from. She felt that, in her words, Caldwell is a "greedy guy" and was not fit to be our Mayor.

As she continued to follow Caldwell and his many mishaps in dealing with the Rail Project, she came to the conclusion that he will raise the property taxes after the election to pay for the massive cost overruns and the $39.3 million lost annually by the Court's recent ruling against Caldwell's proposal to raise taxes on Residential A properties (Star Advertiser 10/19/16).

After reading about the structural defects in the Rail Guide structure reported in the Star Advertiser on September 30, 2016, she is now concerned about the safety of her children should they ride on the Rail years from now. She expressed this to Hawaii News Now reporter Rick Dasog in her interview with him but he never reported it, instead he FALSELY reported she is Anti-Rail. This really upset her and confirmed what she believed all along, that the media is grossly dishonest and biased heavily in favor of Caldwell. She is PRO-RAIL and wants to see the Rail constructed properly and safely all the way to Ala Moana Center.

MY INVOLVEMENT WITH THE PAC: Sarah's original intent in forming a PAC was to make it a grass roots effort with many small contributions, but I convinced her that it would be a waste of time and a futile effort. I told her that unions supporting Caldwell would pump in large amounts of money to flood the airways with Caldwell propaganda, like how they smeared Ben Cayetano in 2012. Plus she will be fighting an uphill battle against the biased media, namely Hawaii News Now (HNN) and the Star Advertiser (SA). I convinced her to file the PAC as a Super Pac so I could help by contributing whatever I could afford to without worrying about the $4,000 per person restriction of a regular PAC.

Why Did I Contribute As Much As I Did To The PAC? I contributed the amount that I did because: 1) It would have been hard for Sarah to get contributions from other businesses or professional people because of their fear of retaliation from Caldwell and his Kitchen Cabinet. 2) I firmly believe that Caldwell is UNQUALIFIED AND UNFIT to serve as Mayor. 3) Level the playing field in what small way I could to offset the biased reporting, and NON-REPORTING, of the Star Advertiser (SA) and Hawaii News Now (HNN).

Reasons Why I Believe Kirk Caldwell Is Unqualified and Unfit to Serve Another Term as Mayor:

In addition to Caldwell's misdeeds documented in SAVEHONOLULU.ORG website (Mismanagement of Rail, Moonlighting, Evasion of property taxes, Insufficient payment into Retiree's pension fund, Harry Mattson), I believe that he should also take responsibility for the following issues:

1. Repayment of $16 million in Housing Grants Back to HUD:

According to Civil Beat Article on 9/20/16 by Anita Hofschneider titled "HONOLULU MAY HAVE TO PAY $16 MILLION FOR MISUSE OF HOUSING GRANTS", the City may have to pay nearly $16 million back to HUD for allegedly wasting federal grant money from 2012 to 2015. The article goes on to say that "A federal audit slams the City for "dysfunction. inefficiency" on its administration of Community Development Block Grant funds", and also that "The audit found that the City approved nearly $16 million in questionable expenditures".

Two of the "questionable" expenditures were the granting by Caldwell of $10 million to fund the Hibiscus Hill Apartments and $2.9 million for the Kaneohe Elderly Apartments.

Questions to Ask:

a. Was proper procurement (HRS §103D-304) followed in selecting the recipients of these grants.

b. Was any member of Caldwell's campaign given any of the block grants?

Note that this Civil Beat article was not covered in both the Star Advertiser (SA) and Hawaii News Now (HNN).

2. DJOU's Ethics Commission Complaint that Caldwell Lied About His Bank Compensation:

According to a Civil Beat Article on 10/21/16 by Anita Hofschneider, Djou filed an Ethics Complaint that Caldwell lied on financial disclosure form about the value of his stock in Territorial Savings Bank.

a. Caldwell reported owning Territorial Bank Stock valued between $900,000 and $999,000; However, the bank's April, 2016 stockholders' proxy statement shows that Caldwell owned 72,997 bank shares including 34,395 stock options worth $1.9 million when he filed his financial disclosure. The Mayor was supposed to report all ownerships or beneficial interests having a value of $5,000 or more.

b. Caldwell's campaign claims that stock options do not count as having any value until they are exercised, but financial expert Dale Kobayashi says that according to IRS Topic 427, stock options do count as taxable income even if not specifically exercised. Dale Kobayashi is the son of Council Woman Ann Kobayashi and was the Chief Investment Officer for First Hawaiian Bank. He is also a CPA and a Yale University graduate.

If Dale Kobayashi is correct, then Caldwell may have evaded State and Federal taxes on all the stock options he has received to date.

c. According to a 2015 Territorial Savings stockholders' proxy statement (see SaveHonolulu.org website), as of 8/18/15, Caldwell had 87,355 shares of stocks and stock options worth $1,732,055 based upon a stock price of $28.03 per share and an exercise price of $17.36. Of the 87,355 shares, 33,020 shares are stock options with a value of $352,323 (33,020 shares X $28.03-$17.36).

If Caldwell subtracts the stock options worth $352,323 from the total value of $1,732,055, he still has a total stock portfolio of $1,379,732, which is much greater than the $900,000 to $999,000 he reported. This means that Djou is right in his Complaint. Caldwell LIED on his Ethics Disclosure Form.

d. Every newscast or news article, ends with the phrase "but Chuck Totto said two years ago that there was no conflict in Caldwell serving on the Banks board".

When Totto made that statement he probably did not know that Caldwell received over $2 million worth of stock and stock options FOR FREE!!

e. This article was not printed in the SA, except for a brief story on line by Gordon Pang. This story was glazed "over" in the HNN news cast with emphasis on 'Totto found no conflict two years ago with Caldwell serving on the Territorial Savings Board".

Media Bias- Hawaii News Now and Star Advertiser:

The media bias exhibited by Hawaii News Now (HNN) and the Star Advertiser (SA) is very obvious and many, many people comment about it. Any news that may be detrimental to Caldwell's campaign is not covered in the SA or HNN, like the $16 million Housing Grant and Ethics complaint stories.

1. On Friday, 10/28/16, Peter Carlisle called a press conference to say that Djou's ethics complaint regarding Caldwell lying on his disclosure form should be referred to the prosecutors or the U.S. attorney.  This important press release by a former Prosecutor and Mayor, was not covered by the SA and HNN, in fact, HNN didn't even show up.

2. On Sunday, 10/30/16, in the interest of Public Safety, I wrote and published in the SA an article titled "WILL THE RAIL BE SAFE TO TRAVEL ON?" It was an effort on my part as a Structural Engineer to inform the public of the possibility of a catastrophic failure of the Rail Guideway Structure if the project continues on the same track that it is now. It also discusses the liability the City may have to bear because of State's 10 year Statute of Repose on Latent Defects.

Instead of placing my article in a prominent place like the Caldwell ads, the SA BURIED" it next to the "Vital Statistics, Marriage Licenses and Birth Certificates", even though I paid $17,000 of my own money to make the public aware of this important problem. I believe that the SA did this because the article makes Caldwell look bad, adding to his mounting problems regarding his Rail boondoggle.

It is my hope that in the future, both the HNN and SA can put politics aside and service the public by reporting on this issue accurately with no censorship, and question Caldwell how he plans to deal with the State's 10 year Statute of Repose on Latent Defects (if it is applicable to this project).

MISCELLANEOUS QUESTIONS:

1. NO, I am not ANTI-RAIL. I supported Ben Cayetano in the last mayoral election only because he is my friend, and very few people (of any financial substance) were supporting him. Being a Consulting Engineer and General Contractor, I am naturally PRO-RAIL. My family company has been in the Carpenters Union for over 50 years.

2. I never met Charles Djou before this election. I was introduced to Charles by his father, SK Djou, a Geotechnical (Foundation) Engineer. With me being a Structural Engineer, SK and I worked on many projects together here in Honolulu.

Thank you for this opportunity to submit this narrative to you. It was written in the hopes of minimizing any misunderstandings related to Save Our City LLC and the Campaign Spending Report.

If you have one or two questions that you may want to ask of me, please submit them to me in writing and I'll try to respond in writing within 24 hours. I will not be able to respond to any questions asked of me at 3 p.m. and requiring an answer before your 4 p.m. deadline.

POSTED ON LINE ON: SAVEHONOLULU.ORG  

PDF: Star Adv Advert