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The Honolulu Advertiser

Posted on: Friday, June 28, 2002

Grand jury indicts Suzuki on bank, tax charges

By David Waite
Advertiser Courts Writer

Rep. Nathan Suzuki is the latest Democratic politician to face criminal charges. Suzuki, who represents Salt Lake and Moanalua, was indicted yesterday on tax-related charges.

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State Rep. Nathan Suzuki was indicted by a federal grand jury yesterday on five counts of failing to disclose his interest in foreign bank accounts and filing false income tax returns.

The charges against Suzuki are related to the work he did for Michael H. Boulware, head of a coffee distribution and vending machine empire in Hawai'i. Boulware was sentenced to four years and three months in prison last month after being found guilty in federal court last fall of tax evasion and bank fraud conspiracy charges.

Three of the counts against Suzuki — charges that he filed false personal income tax statements from 1995 to 1997 by not disclosing an interest in bank accounts in Hong Kong and Tonga — each carry a maximum sentence of three years in prison and a $250,000 fine.

The two other counts — allegations that he failed to file a required form as part of his federal tax returns that would have listed an interest in those foreign accounts — each carry a maximum sentence of 10 years in prison and a $500,000 fine.

Suzuki is the latest Democratic politician to face criminal charges. His indictment comes a day after former City Councilwoman Rene Mansho, also a Democrat, was sentenced to a year in jail for misusing campaign contributions and City Council staff.

During Boulware's trial, Edward Groves, a special attorney with the U.S. Justice Department's Tax Division, said that Boulware devised a way to keep from paying an estimated $21 million in state tobacco taxes and concocted "one scheme after another" to avoid paying federal income taxes on approximately $10 million.

But Boulware's lawyers said during his trial that he believed Boulware's tax strategies developed by Suzuki and another lawyer specializing in income taxes were legitimate.

Suzuki, 54, D-1st (Salt Lake, Moanalua), who prepared Boulware's tax returns for the years in question, was excused from having to testify on the grounds that forcing him to do so would violate his constitutional protection against self-incrimination.

State Rep. Nathan Suzuki
• Democrat, representing 31st District, Salt Lake, Moanalua
• Born: Feb. 2, 1948
• Occupation: Certified Public Accountant, Realtor
• Family: Married, four children
• Political experience: State House, 1992-present

At a hearing near the start of Boulware's trial, Suzuki's lawyer, former Hawai'i Supreme Court Justice Robert Klein, said Department of Justice officials in Washington, D.C., had told him in early 2001 that they planned to seek an indictment against Suzuki on conspiracy or other charges in connection with the case.

Suzuki and Klein did not return calls for comment yesterday about the charges.

The indictment does not refer to Boulware by name but says Suzuki ran about $1.9 million through banks in Hong Kong and Shanghai and about $2.1 million through accounts in Tonga and Switzerland " ... on behalf of M.H.B."

One of the two counts that charge Suzuki with failing to disclose his interests in bank accounts in foreign countries claims he used the fax machine at his State Capitol office to make disbursements through the Bank of Tonga.

Suzuki's colleagues in the House were surprised to learn of his indictment yesterday. They described him as a hard working, effective lawmaker who never sought recognition for his accomplishments and who was able to grasp complicated issues.

Suzuki is known as among the strongest advocates for reforms in the civil service system, collective bargaining and the public employees' health fund.

House Majority Leader Marcus Oshiro, D-40th (Wahiawa, Whitmore) said Suzuki is "one of the more outspoken, independent legislators on those reform issues and not afraid to challenge and take on the public employee unions and other interest groups as a strong advocate for the taxpayers of the state."

House Majority Whip Scott Saiki, D-20th (Kapahulu, Mo'ili'ili), agreed. "Nathan works very hard, and he took his role as a legislator very serious, and he always tried to do what was right for the state," he said.

House Speaker Calvin Say, D-18th (Palolo, St. Louis, Kaimuki), said he was saddened to hear of Suzuki's indictment. "For all of us as legislators, one of the major cornerstones of democracy is that no one is above the law," Say said.

Democratic politicians who were sentenced in recent years to time behind bars include the late former state House Speaker Daniel Kihano for converting campaign money to personal use, former state Sen. Milton Holt for violating state campaign spending laws, former City Councilman Andy Mirikitani for getting kickbacks from two staff members and former state Sen. Marshall Ige for obtaining money under false pretenses.

Lorraine Akiba, Hawai'i Democratic Party chairwoman, yesterday said "a new generation" of Democratic Party candidates is expected to "meet our standards of conduct."

Suzuki pulled nomination papers in late May, an indication that he was planning to run for re-election.

"If he does run, he will have a contested primary," Akiba said.

Hawai'i Republican Party Chairman Micah Kane said Suzuki's indictment is further evidence that local Democrats are "out of touch."

"They just don't seem to know the difference between right and wrong," Kane said.

Staff writers Johnny Brannon and Lynda Arakawa contributed to this report.