Hawaii: An accidental email blows the whistle on a sketchy back-door collusion between a senator and a minor DLNR administrator

On a Wednesday back in July of 2021, we'd just released an article about the question-and-answer we had with DoBOR's administrator Ed Underwood. This particular article would be legally troubling for Hawaii's administration because the questions came from the public and Underwood's answers turned out to expose him for the many inconsistencies underlying his house-of-cards headlong rush to privatize public properties. Normally, when we send out a community-wide notice of a freshly released article, it's not unusual that we get email feedback.  Less than 50 minutes after we released this particular article, an interesting email coming from none other than Waikiki District's Senator Sharon Moriwaki landed in HON editor, Katherine Lindell's inbox. The email, with no greeting, sounded almost frantic and part of an ongoing conversation:

(Editor's note: Sen. Moriwaki's subject line below indicates that she meant to forward our notification of the posting of this article to Ed Underwood, along with her message (as printed below); all spelling and grammar as received)

Subject: Re: State-sponsored fraud, fiscal malfeasance, ethics and statute violations
Date: Wed, 14 Jul 2021 21:47:26 +0000
From:  Sen. Sharon Y. Moriwaki <senmoriwaki@capitol.hawaii.gov>

<Just give to your AG just in case this goes anywhere. But he’s acting up because he’s being ask to follow the rules. Are u planning WG meeting? We should meet again on enforcing rules. If Snoddy thinks liveaboard rake boat out once a year can we meet to go over. Then post clearly (Katherine said she would make signs) and have WG help you/DOCARE cite and enforce. Btw I like jason idea to pay special duty overtime to his guys. Everybody wins!

A senator's accidental email blew the whistle on an out-of-the-sunshine collusion

Moriwaki's email was accidentally directed to us. It was intended for Ed Underwood. The email format suggested that there was a normalized pattern of out-of-the-sunshine communication between them. The speed with which this particular conversation took off between the two of them suggested damage control mode.

After a pow-wow with other HON staff, I fired off a message to one of our contributor attorneys who suggested that we file a complaint with the Ethics Commission. We did just that (Ethics Commission Complaint, July 20, 2021), trusting that the Ethics Commission would act in a timely manner. Many months have since passed and absolutely nothing has happened.  We've held off writing this particular article to give the Ethics Commission the neutral ground it needed in order to properly assess our complaint. Way too much time has passed now and nothing has happened. No one was holding their breath. Hawaii's government is incapable of policing itself.

There is little room left for doubt that there has been an out-of-the-sunshine collusion between Underwood and Moriwaki in the design and the introduction of SB795 (now Act 42). This is a bill that was purpose-built to hand over carte blanche authority to a minor administrator (Underwood) and give him overarching — and questionable — power to set public harbor fees randomly and at will for the express purpose of preparing the public's harbors for privatization — transference to multinational corporations that have been waiting in the wings for years. Act 42 has resulted in driving families from their homes and may end up making Underwood and some legislators a tidy back-pocket deposit.

We now know that SB795 (Act 42) violated the State's Constitution (article 3 section 14). A recent Supreme Court ruling has just chastised the legislature for toying with agenda items within pending legislation — something that has been going on for decades. The "gut and replace" tactic that the Supreme Court referred to also points to a broader range of illegal lawmaking that has been rampid in legislator rule making procedure: illegally combining dissimilar agendas in the same bill for the purpose of attracting more votes from colleagues.  (Senate President Ron Kouchi, "disappointed" with the Supreme Court ruling, wondered aloud to the press why legislators couldn't just do whatever they wanted including ignoring the Constitution.)

Here's what happens when an illegal collusion generates illegal and unconstitutional laws:

We now have another homeless casualty as a result of the illegal Act 42 . . . and there will be many more to come, with no safety net

We now have another homeless casualty as a result of not only SB795 but also the similarly poorly-thought-through 2019 sweeping modifications to §13-234, designed in the dark by Suzanne Case and Ed Underwood. Despite thousands of testimonies in opposition to the §13-234 rules proposal (100% opposition amongst thousands of boat owners) Underwood and Case didn't incorporate a single suggestion in their wild-eyed §13-234 modifications. And on the day of the public hearing in Ewa Beach the two of them literally hid — nowhere to be found — leaving minor public servant minions to face the angry public.

The resulting ridiculous tenant rate hikes, completely ignoring marketplace economics, had the chilling, near-immediate effect of clearing the harbors of a significant number of middle and lower income boat owners — with more than a few simply abandoning their vessels — and leaving the harbor system with huge rental deficits. Not surprisingly, DLNR Chair, Suzanne Case and DoBOR's Underwood have been mum about the dramatic drop in tenancy rents as a result of the §13-234 fiasco.

Ironically, Case and Underwood have resorted to yet another dicey scheme to cover their harbor revenue losses by inundating the Ala Wai Small Boat Recreational Harbor with illegal charter operations, according to §200-9, “Allowing the Department of Land and Natural Resources to issue commercial use permits for vessels with assigned moorings in Ala Wai and Keehi Boat Harbors", and Stand. C︃om. Rep. No. 939 for H. B. No. 1566 and also C︃om. Rep. No 130, “Allowing the limited issuance of commercial use permits for vessels with assigned moorings... .” These are rules that were supposed to restrict the number of commercial permits to 15% of the slips and restrict commercial boat lengths to 65 feet or less — limits long ago that have been more than exceeded.

Act 42's most recent homeless casualty

Act 42's most recent homeless casualty, now living on the street in Sen. Moriwaki's district, worked as a ranger at the Arizona Memorial, until the pandemic hit. When we confronted Underwood about the inevitable homelessness that his and Moriwaki's SB795 would create, he told us, in writing, that there would be safety-net agencies available to those individuals who would find themselves homeless as a result of the legislation. In that statement, Underwood told us two things: 1) he really didn't know what he was talking about regarding safety-net help for the homeless (One Oahu informs us that they — and government agencies familiar to them — will NOT act as a safety net for those principal habitation permit holders from the harbor system who find themselves homeless as a result of Underwood's eviction subterfuge); and 2) Underwood admitted that he knew his scheme would create homelessness in this demographic.  

What we know now is that Underwood's so-called Strategic Plan for the privatization of the public's harbor properties relies on the eviction ploy (designed to get around landlord/tenant legal hot water), through his deliberate price-gouging subterfuge, of all "average-Joe" tenants — liveaboard or not — from the public harbor system. See his full face confessions during Moriwaki's ZOOM town hall meeting.

Ironically, those made homeless will be sleeping in their cars or in parks in and around the Waikiki area — Sharon Moriwaki's Waikiki district. Sharon Moriwaki was lying right in the face of her constituents when she said that she was concerned about homelessness. She knew full well that this bill, from its very inception, would create homelessness in her own district. We're wondering about what clever verbiage Moriwaki will conjure to convince her constituency, during this reelection year, that she's doing something about the homelessness problem in Waikiki.

The anatomy of illegal law making

Fair market value? A suspicious second appraisal

In what seemed to be a desperate attempt to find a justifiable basis for introducing a bill like SB795, Moriwaki and Underwood came up with a feel-good plan that was sure to wow other legislators: a "fair market value" appeal that no self-respecting lawmaker could look away from. 

The CBRE appraisal that was used to justify the critical underlying "fair market value" component of SB795, while almost certainly fraudulent, provided the basis-in-fact for the ploy.  In reality, 1) no one at CBRE in Hawaii — a commercial property management company —  seems qualified to make that kind of assessment, and 2) all of the information fed to CBRE for this "appraisal" came directly from Ed Underwood's office and was regurgitated verbatim in the finished appraisal, represented as if it were independently acquired data for fair market value appraisal calculations. No one seems to be able to show us how, exactly, CBRE came up with their numbers.

Additionally, the whole notion of a need for any appraisal was illegal to begin with, as there was already a public harbors appraisal done by Colliers in 2014 which was then supposed to act, according to Hawaii statute, as the baseline appraisal after which rate increases were supposed to be regulated by Hawaii's yearly CoLA index. And, while the Colliers appraisal was successfully completed, Underwood's DoBOR failed to comply with the law and trigger the required increases.

In their zeal to then pass the measure, the legislature snubbed the courts and sent SB795 to the governor's desk anyway

At the time of the preliminary committee hearings for SB795, the illegal components associated with the core issues embedded in SB795 were already being challenged in ongoing litigation in Hawaii's First Circuit Court — a lawsuit that was filed long before the introduction of SB795. The legislature simply snubbed the courts — so much for a system of checks and balances — and moved forward with the measure anyway.

Attorney General, Claire Connors, who was supposed to be protecting the legal interests of the public, never vetted SB795 for its legal problems; she was later schooled by the Supreme Court on the decades of unconstitutional lawmaking coming out of our legislature

We now know that the Attorney General, Claire Connors, never even vetted SB795 for legal problems, because had she done so, she would have come to the same conclusion as the recent Supreme Court ruling with regards to the unconstitutional mix-and-match tactic that was willy-nilly being applied to bills seeking wider approval among legislators. Had she acted properly, the measure might have been shelved or possibly redesigned for legality and perhaps reintroduced in the 2022 legislative session. But that never happened. Instead the bill was moved forward through the legislature as if there was nothing wrong with it and wound up on the governor's desk for a signature. This is what happens when you have poorly qualified legal help sitting in the AG's office.

Governor Ige, obviously clueless about the illegal and constitutional problems with this bill, signed it into law — a resounding exclamation point of just how broken the law making process is in the State of Hawaii.

And we now know for sure that our part-time lieutenant governor, Josh Green, who now wants to be our part-time governor, never even looked at this piece of legislation — he probably wasn't even in the office on the day it came across his desk.

Legislative committee chairs were easily duped by the bill's presentation.  For example, why was Sen. Sylvia Luke and her Vice Chair so easily conned by Underwood and his minions? And why did Rep. Tarnas appear so confused during his committee hearing on SB795?

We now know that part-time Senator, Sylvia Luke (Makiki, Punchbowl, Nuuanu, Dowsett Highlands, Pacific Heights and Pauoa) — who seems almost desperate in her attempt to convince us that she'd like to take on the side-hustle lieutenant governor job — was easily bamboozled, along with Vice-Chair Cullen (Royal Kunia, Village Park, Waipahu, Makakilo, West Loch), by Underwood's and his yes-people minions' artful con during committee hearings on SB 795. Never once did she or Vice-Chair Cullen even acknowledge the obvious unconstitutionality and illegality of the measure despite being cautioned in detailed written testimony that there were serious legal and constitutional problems with the measure as it was being heard in her committee.

When SB795 came before Rep. Tarnas' committee, Chair Tarnas (North Kohala, South Kohala and North Kona) seemed almost blissful as Underwood overran him and his committee with a world-class con.

There is an urgent need for a thorough Federal investigation

There is a need for a thorough Federal investigation, beginning with DLNR activity. In fact, it's more and more looking like the only thing that separates Ed Underwood, and perhaps others, from a jail cell is the lack of a thorough federal investigation.

The business-as-usual slate of candidates that are attempting to fill leadership seats again this election year will do nothing but further harm this community. Given the corruption throughout Hawaii's government, the contempt with which current legislators hold Hawaii's Constitution, and the dangerous precedent for rule making that is turning people out into the streets, it's clear that the people who are seeking office are doing so because they know that they can take advantage of the public's catatonic state and use their political position to enhance their own personal gain. In the current environment, there's no need for politicians to do the right thing; doing the right thing is not lucrative. 

This is an election year. Time to make changes.  Whatever happened to "of, by, and for the people"?

Ironically, we seem to have gone from being a democracy, in Hawaii, to a strange version of an authoritarian state, where "public consent" and "of, by, and for the people" are just illusions.

Moriwalki's accidental email reeks of illegal collusion . . .  and in the current environment, it almost seems like nothing will come of it.