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The Honolulu Advertiser
Posted on: Thursday, September 27, 2007

Title insurance execs say bureau doesn't play favorites

By Derrick DePledge
Advertiser Government Writer

Executives with two title insurance companies told a state House and Senate investigatory committee yesterday that they do not believe there is favoritism at the state Bureau of Conveyances.

The committee, which is investigating mismanagement at the bureau, has previously heard testimony that described a culture of dysfunction between factions at the bureau and favoritism where certain title companies get bureau workers to speed up the recording of land documents.

Kent Pelt, director and first vice president of the Hawai'i Land Title Association and a vice president at Fidelity National Title Insurance Co., said title companies do talk with bureau workers about correcting errors the bureau makes on documents but he does not consider that favoritism.

Pelt also said that Title Guaranty of Hawaii which has the largest market share and has been mentioned most frequently in complaints about preferential treatment at the bureau is often a target of criticism by smaller companies in the industry.

"I don't believe there is any favoritism," Pelt told the committee under subpoena.

Sandra Furukawa, a special projects coordinator at Title Guaranty and a former registrar at the bureau, said she wanted to address what she described as false allegations and negative remarks about Title Guaranty and her access to the bureau.

The committee had heard that Furukawa, an expert on the bureau's land court branch, had been brought in last year to help navigate a military housing project through the bureau. An executive from a rival title company that was handling the project had told the committee he thought it was unusual Furukawa was hired but that her intervention made the process easier.

"This one was not a simple fix," Furukawa told the committee under subpoena.

Raymond Iwamoto, an attorney acting on behalf of the lender in the military housing project, has informed the committee in a letter that he recommended Furukawa and Title Guaranty because of their knowledge and experience and not because they could obtain favors from the bureau. He said "special favors in my experience are innocent helpfulness where there is no bribery involved and the ones seeking help are just pleasant and have interpersonal skills."

Under questioning from the committee, Furukawa said she receives telephone calls about once a week from bureau workers asking for advice about documents, including material submitted by rival title companies. Furukawa had worked at the bureau for 29 years before retiring as registrar in 1994.

"I think that they feel comfortable in asking me the question," Furukawa said.

After the meeting, state Sen. Jill Tokuda, D-24th (Kailua, Kane'ohe), the committee's co-chair, asked whether bureau management is so dysfunctional that experts like Furukawa are necessary to get complicated real-estate transactions recorded accurately.

Tokuda said Furukawa apparently has a "direct pipeline" into the bureau and believes that is a root of the questions about favoritism.

"I think the bottom line is, regardless of whether or not you have a great relationship and a long-term relationship with the bureau, you should be able to solve your problems if you're Joe Schmo title company or Joe Schmo attorney with the Bureau of Conveyances," Tokuda said. "It should not take this other relationship to be able to fix any problems that you have."

Along with the committee, the state attorney general's office and the state Ethics Commission have ongoing probes of the bureau.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.