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The Honolulu Advertiser
Posted on: Saturday, October 4, 2003

Donor's fine dwarfs others

By Johnny Brannon
Advertiser Staff Writer

A $303,000 fine agreed to by SSFM International Inc. president Michael P. Matsumoto is the largest the state Campaign Spending Commission has issued by far.

The penalty, made public yesterday, stems from $425,000 in illegal campaign donations made to Mayor

Jeremy Harris, former Gov. Ben Cayetano, former Lt. Gov. Mazie Hirono, former Mayor Frank Fasi, former Maui Mayor James "Kimo" Apana and former City Councilman Arnold Morgado.

The money was given under the names of employees, friends and relatives between 1996 and 2002 to circumvent state campaign contribution limits, according to campaign spending commission director Robert Watada.

Harris' campaign received the most money, about $182,000, Watada said.

Matsumoto pleaded no contest this year to a felony money-laundering charge for illegal donations to Harris. He was sentenced in July to 300 hours of community service and ordered to pay $15,000 to the Crime Victims Compensation Fund.

Matsumoto was not prosecuted for the contributions to other politicians. Harris' attorney, William McCorriston, said the commission's findings prove prosecutors ignored other wrongdoing in order to smear Harris.

"This is absolutely proof positive that Jeremy Harris has been singled out for investigation and possible prosecution," McCorriston said. "None of the other five campaigns are under the same scrutiny. None of the other five have had to live under a cloud of suspicion with no evidence."

But Deputy City Prosecutor Randal Lee said investigators had been stretched thin looking into political donations connected to dozens of companies.

"Because it was so massive, we had to restrict ourselves in terms of what we're looking at ... When we looked at Matsumoto, we looked primarily at the Harris stuff," Lee said.

He said there were no plans to prosecute Matsumoto for illegal donations to others.

VP of Noda firm charged

In a related case, prosecutors filed two criminal charges against another engineering company executive.

Edward K. Noda, vice president of Edward K. Noda and Associates, was charged with money laundering and a misdemeanor campaign violation.

The company made donations under false names to Harris, Cayetano, Hirono and Gov. Linda Lingle, according to a complaint filed by prosecutors.

Lee said the case showed that illegal donations to Harris were not the only ones being scrutinized.

The Noda firm agreed in August to pay a $74,000 fine for making illegal donations totalling more than $120,000.

The penalty had been the commission's largest until Matsumoto's.

Most of the Noda money went to Harris, Cayetano and Hirono, according to the commission. Much smaller amounts went to Fasi and Lingle.

Noda could not be reached for comment. He is scheduled for arraignment Thursday in Circuit Court.

Fines handed down

Two others agreed to new campaign spending commission fines: Gary T. Okamoto, president of Wilson Okamoto and Associates Inc., will pay $44,500 for making illegal donations to Harris, Cayetano, Morgado, Apana and Hirono.

And attorney Edward Y.C. Chun, who pleaded guilty to a misdemeanor campaign violation last month, will pay $3,500 for helping to funnel illegal donations to Harris.

Chun, a senior partner in the Honolulu law firm Chun Kerr Dodd Beaman and Wong, admitted in the criminal case that he had arranged for the Food Pantry grocery chain to make illegal donations to Harris.

He is scheduled to be sentenced Dec. 1 and faces a maximum penalty of one year in jail and a $2,000 fine.

Circuit Court Judge Steven Alm has said he is inclined to sentence Chun to 10 days in jail, served possibly on weekends, a year of probation and fines and fees of $325.

Chun also could face sanctions by the state Office of Disciplinary Counsel. Attorneys are subject to penalties ranging from censure to disbarment if they lie, act unethically or commit a crime.

Watada said Matsumoto initially resisted his agency's investigation, but later cooperated. He said other firms under investigation should learn from the experience.

"The sooner you get it over with, the better," Watada said.

Matsumoto's attorney, Howard Luke, said Matsumoto wants to focus on his company's future.

"Mike is taking full responsibility for the alleged violations of the campaign spending law," Luke said. "Certainly he's been punished enough — excessively so, from my perspective."

Widespread practice

Luke said officials from many companies that bid on government contracts had told him it had long been a widespread practice to make political donations through others to bypass limits.

"Many of the companies felt it was necessary to engage in this practice as an insurance policy to ensure that the work they had and were qualified for would continue," he said. "They felt that if they did not pay the piper, the work would dry up."

McCorriston agreed that illegal donations had been widespread.

"This has been an unfortunate practice that has been occurring in many campaigns for many years, and Hawai'i people know that," he said. "The Harris campaign did not invent this practice and did not encourage it. It's just something that's been going on for years. That doesn't make it right, but it does make it unfortunate for Jeremy to bear the whole brunt of it."

None of the politicians or their campaign officials has been charged with wrongdoing in any of the cases.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.