Akahi Kona
golf course permit
extension rejected

The extension request,
which may be resubmitted, was
denied because of $41,398
in unpaid back taxes

By Ian Lind
Star-Bulletin

A request to extend a key permit for a controversial South Kona golf course was rejected after county officials learned the developers owe $41,398 in unpaid property taxes dating back three years.

Friday's rejection marks another setback for Akahi Joint Venture, with two of its key figures -- Nora and Eugene Lum -- convicted in the national Democratic fund-raising scandal.

Hawaii County Planning Director Virginia Goldstein said the extension request is being returned without further processing but could be resubmitted if the taxes are paid. A new county ordinance requires a tax clearance before any zoning-related application can be considered, Goldstein said.

Akahi asked the Hawaii County Planning Commission last month for an extension of its use permit for a projected 324-acre golf course development, first approved in 1992.

The project has been opposed since its inception by area residents and the Opihihale Community Association.

Opponents earlier lost administrative and court appeals aimed at blocking the development.

Akahi is a partnership between Cal-Pacific International, controlled by former island businesswoman Nora T. Lum; and Hawaii Island Fudosan & Associates, headed by real estate broker Osamu Murata, business registration records show.

Lum and her husband, former Honolulu attorney Eugene K.H. Lum, pleaded guilty last September to federal charges of conspiring to illegally funnel $50,000 to the campaigns of Massachusetts Sen. Edward Kennedy and Stuart Price, a former Oklahoma business partner who ran unsuccessfully for Congress.

The illegal transactions involved secret reimbursements and contributions recorded in the names of family members and business associates.

The Lums were sentenced to 10 months imprisonment and each ordered to pay a $30,000 fine for the felony convictions. The prosecution was the first stemming from the ongoing probe into campaign fund-raising by the Democratic National Committee and the Clinton campaign.

Ben Tsukazaki, attorney for Akahi Joint Venture, said the Lums apparently retain their financial interest in the project.

Business registration records show that Nora Lum was president of Cal-Pacific International Inc. as of Dec. 31, 1994, when the firm last updated its officers list.

Cal-Pacific has not filed annual corporate registrations with state regulators since 1995 and is currently listed as delinquent.

Filings at the Bureau of Conveyances show Cal-Pacific pledged the Akahi property as security in several transactions, including a September 1992 loan of $100,000 from an undisclosed lender, and a $129,606 loan in January 1993 from a mainland business partner.

Tsukazaki said he was not aware the property had been used as security and does not know whether any liens remain.

Tsukazaki also said he was not aware of reports that Akahi benefited from funds the Lums raised in California for the Democratic National Committee during the 1992 presidential campaign. However, Tsukazaki added, "that could very well be."

Bank records obtained by congressional investigators show Nora Lum wrote checks totaling $159,990 from a campaign account in late 1992 and early 1993, according to the Associated Press.

The checks were payable to companies she controlled, or to Lum personally.

Most checks went to CPI Inc., a company set up to purchase the Akahi property, and one check was made out directly to Akahi Joint Venture, AP reported.

The checks were drawn on an account set up in the name of "Democratic National Committee Asian Pacific Advisory Committee," a fund-raising group established by Lum in 1992 with the support of then-Democratic Party chief Ron Brown.

Tsukazaki said the requested extension covers the planned golf course and a clubhouse "geared towards users of the golf course." A related permit for a larger clubhouse and visitors' lodge was killed by the Planning Commission earlier this year after Akahi said it was no longer pursuing those plans.

The developers have not completed final plans or located a viable water source, as required by the permit, Tsukazaki said.

The time extension, if eventually granted, would be used for water source development.

"If you can't get over that requirement, you can't proceed," Tsukazaki said.

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Lums gained fund-raising name
in 1991 with $25,000 promise

By Ian Lind
Star-Bulletin

The Akahi Joint Venture provided part of the campaign cash that fueled Nora and Eugene Lum's rapid rise to prominence in national Democratic Party circles, according to available public records.

The Lums' entry into big time campaign fund-raising began when Nora Lum "personally guaranteed" to turn over $25,000 to the Democratic National Committee during a December 1991 Honolulu stopover by the late Ron Brown, then party chief, according to records disclosed during the ongoing federal campaign finance probe.

Federal election records show Lum made good on her promise.

Akahi Joint Venture contributed $10,000 to the Democratic National Committee on Dec. 16, 1991, the same day Nora Lum made a similar contribution.

Cal-Pacific International, controlled by Nora Lum and a partner in Akahi, contributed $1,000, while CPI Inc., formed by the Lums to make the initial investment in the Big Island property, gave an additional $5,000.

Brown developed a close social relationship with the Lums, whose children later referred to him as "Uncle Ron," acquaintances say.

Lum also used Akahi's Big Island property as collateral to complete the 1993 purchase of an Oklahoma natural gas pipeline company, according to information later disclosed in court. Lum gave stock in the new company to Brown's son, Michael, and to the mother of one of Brown's top aides.

Michael Brown pleaded guilty last year to charges that he made $4,000 in secret contributions to the 1994 re-election campaign of Sen. Edward Kennedy, D-Mass.

According to the federal charges, Brown received $5,000 from Nora Lum, which he then contributed using his own name and those of business associates.

Opponents of the Akahi project have contended that the Lums also violated state campaign spending laws while seeking initial permit approvals for the South Kona golf course, charges that appear more serious in light of the Lums' subsequent federal convictions.

In mid-1991, nearly $30,000 was contributed to the re-election campaign of then-Big Island Mayor Lorraine Inouye in the names of the Lum family, friends and business associates.

Less than two weeks later, the county's planning director dropped a number of costly requirements for the project, paving the way for issuance of its initial permits.

A county probe later determined the planning director had not acted improperly, but possible campaign law violations were never probed.