The new suit was filed last month by the remaining purchaser in the Montana Beach condominium project in Paia, who alleges violations of the federal RICO (Racketeer Influenced and Corrupt Organizations) Act in barring his use of the property.

In approving the expenditure, council members said they were appalled by and upset over the dispute that dates back to early 2001 when opposition broke out over the development of a 5.5-acre former limekiln site next to Baldwin Beach Park.

The Maui News reported that the controversy started when one house was near completion in the three-unit condominium, prompting public protests over loss of the site as a potential park. The condominium had been granted waivers from public hearing processes and granted special management area permits for three residential units.

But when the public protest broke out, then-Planning Director John Min withdrew the SMA exemptions and building permits that had been issued, agreeing that the waiver allowing three houses to be built did not comply with state Coastal Zone Management law. The county has since settled with two of the condominium purchasers, paying out $6 million to acquire rights to the properties.

But Asghar Sadri, who purchased the middle lot, has refused to settle, saying he still wants to build. In his lawsuit filed in U.S. District Court in Honolulu, he charges that county officials engaged in a conspiracy dating back to 2001 that deprived him of the right to build a house on the beach, and that the conspiracy is continuing.

The suit names James "Kimo" Apana, who was mayor from 1999 to 2002; Alan Arakawa, mayor from 2003 to 2006; Moto, corporation counsel under Arakawa and still in that job under Mayor Charmaine Tavares; James Takayesu, corporation counsel under Apana; Min, Apana's planning director; and Richard Minatoya, formerly a deputy corporation counsel.

The council Tuesday approved resolutions for the six to be indemnified or protected against claims made in the suit and to authorize private attorneys to represent the officials.

"I'm sorry to see this, but I will support the motion," said Council Member Mike Victorino.

He said he found it "sad" that government officials were being forced to defend actions they took in the best interests of the county at the time.

Victorino, a freshman council member, acknowledged he was not familiar with all the details relating to the Montana Beach dispute, but said he believes that the county's decision to block development of the site was the motivation behind the accusations of conspiracy.

Council Member Michelle Anderson said she was "appalled" that the people involved in the Montana Beach dispute would take a major step by filing lawsuits in federal court at a high cost to county taxpayers. She said the county has spent thousands of dollars in other civil suits related to claims in the Montana Beach dispute and now is being forced to spend more in legal fees over the same issue.

"I'm sick of people coming to Maui and playing monopoly with our parks," Anderson said.

"It really seems unjust," Council Member Jo Anne Johnson added, saying she was as appalled and upset as Anderson about the latest lawsuit.

Council Vice Chairman Danny Mateo said the council needed to approve hiring private counsel for the former county officials and authorize the expenditures after Sadri filed the 42-page lawsuit accusing the county officials of racketeering.