Kauai is a very special place for me. I was born in Kipu and grew up in Puhi, and from time to time visited The Coco Palms. We went fishing, picnicking, swimming at Lydgate Beach Park, and I worked one summer on the Wailua River as a student employee for the Department of Land and Natural Resources.
Yes, I did spent time on the grounds of Coco Palms visiting the monkey in the coconut grove and even had a few meals at the hotel restaurant. I am aware that my family (Albert S. Morgan) was involved in developing the swimming area at Lydgate, for my step dad Charlie Scharsch, the Kauai Harbor Master is a cousin of Albert. Anyway, the Coco Palms.
Then come the owners of the Sept. 11, 1992 Hurricane Iniki that destroyed the Coco Palms hotel, ready to finally clean up the property and rebuild a new Coco Palms. A plan that I believed is needed, right and nostalgic for the area and for all Kauai.
I read in The Garden Island that there were squatters (Mr. Noa Mau-Espirito et al.) on the Coco Palms property claiming they are legally the owners of the property for they are direct descendants of King Kaumualii. Excuse me. Now, you got my interest.
All land ownership in Hawaii is recorded and available for review at the State Department of Land and Natural Resources, Bureau of Conveyances, who is the recorder and keeper of all land deeds and titles for the State of Hawaii.
The process of land recordings for Hawaii was started under King Kamehameha III, as he initiated the Great Mahele of June 7, 1848 and developed the process of recording all of Hawaii’s land holdings that continues today.
Yes, the Great Mahele includes the Island of Kauai.
The Kingdom Constitutions from 1852, includes the control and management of the Government Lands. A few years later, on Jan. 3, 1865, the Crown Lands under King Kamehameha V were transferred to the Government to settle financial claims against the King.
Then on Jan. 17, 1893, citizens of the Kingdom removed the Queen, her cabinet and her sheriff and proclaimed the Provisional Government of the Hawaiian Islands under the 1887 Kingdom of Hawaii Constitution.
The Provisional Government approves the conduct of a Constitutional Convention, that presents on July 4, 1894, the Constitution of the Republic of Hawaii, including the continued control of the government lands (including the Crown Lands).
These same Hawaii Government lands were transferred to the United States of America on July 7, 1898, as an agreement of the Organic Act. And, the same Hawaii Lands, less lands for military bases, national parks, and Hawaiian Homes are transferred back to the now State of Hawaii on March 18, 1959.
Who owns that 33.4 acres (16.4 acres along Kuhio Highway and the 17 acres coconut grove leased from the State) making up the Coco Palms hotel? Well, the article in the Star-Advertiser on May 7, 2017 states, “Coco Palms Hui LLC has acquired the property from Prudential Insurance’s PR II LLC with a $23 million loan from Private Capital Group of Alpine, Utah. The title has been transferred to Coco Palms Hui from Prudential after escrow closed Friday.”
My opinion, remove the squatters and allow the owners of the property to develop their project.
•••
James Kuroiwa is a resident of Kaneohe.
on Jan. 3, 1865, the Crown Lands under King Kamehameha V were transferred to the Government to settle financial claims against the King. WHOA, TELL US MORE PLEASE.?…to settle financial claims against the King???
Then on Jan. 17, 1893, citizens of the Kingdom removed the Queen, her cabinet and her sheriff and proclaimed the Provisional Government of the Hawaiian Islands under the 1887 Kingdom of Hawaii Constitution.
WHOA, TELL US MORE PLEASE…?…citizens…removed…the Queen…?
Mahalo,
Charles
You will know who the Hawaiians are by their actions. We can’t take anything .. but We can take great care of it while we are here
move along mr charles hepa and noa mau-espritu. Or should I say “Kamu Kapulu O-Kamehameha”. Anyone can make up a name and say they have ownership to the land, but your 5% hawaiian(if that) does not entitle you to this land. It’s been sold off multiple times since your supposed ancestors accquired it, and it is now up to the new owners what to do with the land… not you. Move on and stop using tax payers money and making not only yourself but your people look like fools in the process.
James Kuroiwa…. Thank you for your input on this. It gives all of us a better understanding of the truth of the background and how this has become what it is. I totally agree let’s get the project finished. The owners efforts will make a tremendous impact to the existing conditions surrounding the traffic mess along the Wailua corridor as well.
Are you staying that you have researched the land records and there are no errors? I’m curious how you trust it is a done deal that these are squatters when historically land records were used to steal from the people? I have not seen any proof yet that they are squatters so I believe we do not have any right to jump to conclusions.
Great point!
Time to move on,boot the Squatters off of the Property!
Below are excerpts from “Native Hawaiians and U.S. Law” by Melody Kapilialoha MacKenzie —
“Native Hawaiian participants in the 1978 Constitutional Convention saw the convention as an opportunity to further the goal of self-determination. Their vision was to establish a governing entity and to reaffirm the state’s obligation with regard to the public land trust, the former Government and Crown Lands of the Hawaiian Kingdom. A substantial portion of these lands had been transferred to the state in the 1959 Admission Act and impressed with ve trust purposes, including the “betterment of conditions of native Hawaiians”
“In November 1993, the U.S. Congress passed, and President Bill Clinton signed into law, a joint resolution apologizing to the Native Hawaiian people for U.S. participation in the overthrow of the Hawaiian Kingdom. Although styled as a “joint resolution,” the Apology Resolution was enacted as a public law and signed by the president. Consequently, it is a statute of the United States and has the same effect as other laws enacted by Congress.”
“Congress, in a section of the 2004 appropriations act that was identical to a provision in the pending federal recognition bill at the time, established the Office of Native Hawaiian Relations (ONHR). ONHR, housed in the Office of the Secretary of the Interior, is charged with “continu[ing] the process of reconciliation with . . . the Native Hawaiian people[.]” e purpose of ONHR is to e ectuate and implement the “special legal relationship” between the Native Hawaiian people and the United States; continue the process of reconciliation with the Native Hawaiian people; and fully integrate the principle and practice of meaningful, regular, and appropriate consultation with the Native Hawaiian people by assuring timely noti cation of and prior consultation with the Native Hawaiian people before any federal agency takes any actions that may have the potential to significantly affect Native Hawaiian resources, rights, or lands.”
“The Apology Resolution explicitly acknowledged the “special relationship” that exists between the United States and the Native Hawaiian people. Congress confirmed in the Apology Resolution that Native Hawaiians are an “indigenous people,” a key characterization that establishes that a political relationship, rather than one based on race, exists between the Native Hawaiian people and the United States government. In the resolution, Congress stated that the Hawaiian people had “never directly relinquished their claims to their inherent sovereignty as a people,” and it apologized for the participation of agents and citizens of the United States in the overthrow and “the deprivation of the rights of Native Hawaiians to self-determination.” The right to self-determination is the most basic of human rights under federal and international law, and efforts to facilitate the exercise of this right are mandated by fundamental human rights principles.”
“Congress also acknowledged in the resolution that the Republic of Hawai‘i had ceded 1,800,000 acres of Crown Lands, Government Lands, and public lands of the Kingdom of Hawai‘i without the consent of or compensation to the Native Hawaiian people or their sovereign government; that the Native Hawaiian people had never directly relinquished their claims over their national lands to the United States; and that the overthrow had been illegal.”
This entire document can be read at the following link —
http://www.naiaupuni.org/docs/pres/mm/Ch.%205%20NHwns.%20&%20U.S.%20Law%20excerpt.pdf
Below are excerpts of “Native Hawaiians and U.S. Law” by Melody Kapilialoha MacKenzie —
“Native Hawaiian participants in the 1978 Constitutional Convention saw the convention as an opportunity to further the goal of self-determination. Their vision was to establish a governing entity and to reaffirm the state’s obligation with regard to the public land trust, the former Government and Crown Lands of the Hawaiian Kingdom. A substantial portion of these lands had been transferred to the state in the 1959 Admission Act and impressed with ve trust purposes, including the “betterment of conditions of native Hawaiians”
“In November 1993, the U.S. Congress passed, and President Bill Clinton signed into law, a joint resolution apologizing to the Native Hawaiian people for U.S. participation in the overthrow of the Hawaiian Kingdom. Although styled as a “joint resolution,” the Apology Resolution was enacted as a public law and signed by the president. Consequently, it is a statute of the United States and has the same effect as other laws enacted by Congress.”
“Congress, in a section of the 2004 appropriations act that was identical to a provision in the pending federal recognition bill at the time, established the Office of Native Hawaiian Relations (ONHR). ONHR, housed in the Office of the Secretary of the Interior, is charged with “continu[ing] the process of reconciliation with . . . the Native Hawaiian people[.]” e purpose of ONHR is to e ectuate and implement the “special legal relationship” between the Native Hawaiian people and the United States; continue the process of reconciliation with the Native Hawaiian people; and fully integrate the principle and practice of meaningful, regular, and appropriate consultation with the Native Hawaiian people by assuring timely noti cation of and prior consultation with the Native Hawaiian people before any federal agency takes any actions that may have the potential to significantly affect Native Hawaiian resources, rights, or lands.”
“The Apology Resolution explicitly acknowledged the “special relationship” that exists between the United States and the Native Hawaiian people. Congress confirmed in the Apology Resolution that Native Hawaiians are an “indigenous people,” a key characterization that establishes that a political relationship, rather than one based on race, exists between the Native Hawaiian people and the United States government. In the resolution, Congress stated that the Hawaiian people had “never directly relinquished their claims to their inherent sovereignty as a people,” and it apologized for the participation of agents and citizens of the United States in the overthrow and “the deprivation of the rights of Native Hawaiians to self-determination.” The right to self-determination is the most basic of human rights under federal and international law, and efforts to facilitate the exercise of this right are mandated by fundamental human rights principles.”
“Congress also acknowledged in the resolution that the Republic of Hawai‘i had ceded 1,800,000 acres of Crown Lands, Government Lands, and public lands of the Kingdom of Hawai‘i without the consent of or compensation to the Native Hawaiian people or their sovereign government; that the Native Hawaiian people had never directly relinquished their claims over their national lands to the United States; and that the overthrow had been illegal.”
This entire document can be read at the following link —
http://www.naiaupuni.org/docs/pres/mm/Ch.%205%20NHwns.%20&%20U.S.%20Law%20excerpt.pdf
IRT Charles, the transfer of Crown Lands to the Hawaiian Kingdom Government on January 3, 1865, is available for review at the State of Hawaii Judicial Records, also at the State of Hawaii Library and the U.H. Hamilton Library. The information are available because of the research and making the information public by; Sandra Burgess, Bill Burgess, Ken Conklin, and Jere Krischel.
The United States Court of Claims recorded the following case:
“LILIUOKALANI v. THE UNITED STATES. 45 Ct. Claims 418 (1910)”
Liliuokalani’s law suit was to gain income from Ceded Lands filed on November 20, 1909, with the Court ruling against her on May 16, 1910, and without appeal from Liliuokalani. One of the documents presented to the Court was the January 3, 1865 Act signed by Kamehameha V.
“AN ACT TO RELIEVE THE ROYAL DOMAIN FROM INCUMBRANCES AND TO RENDER THE SAME INALIENABLE”
[Body of the Act.]
“Approved this 3d day of January, A. D. 1865.
KAMEHAMEHA R.”
***
On your second question, it was citizens of the Kingdom of Hawaii who replaced Queen Liliuokalani. Attached is the affidavit of the Committee of Safety presented to the hearing of the U.S. Senate Committee on Foreign Relations, that began on December 27, 1893, on the overthrow. The entire hearing is recorded in the Congressional Records and available at the State of Hawaii Library and the University of Hawaii Hamilton Library.
“5. TESTIMONY BEFORE THE COMMITTEE ON FOREIGN RELATIONS, UNDER THE FOLLOWING RESOLUTION OF THE SENATE OF DECEMBER 20, 1893:
“6. FIRST DAY. Monday, December 27, 1893
6.1. SWORN STATEMENT OF REV. OLIVER P. EMERSON.
“AFFIDAVIT OF COMMITTEE OF SAFETY.
“We the undersigned hereby upon oath depose and say:
“That we are the persons appointed as a citizens’ committee of safety, at Honolulu, in January last.
“That neither prior to nor after our appointment as such committee, did we or either of us, individually or collectively, have any agreement or understanding, directly or indirectly, with the U. S. minister, Mr. Stevens, or Capt. Wiltse, that they or either of them would assist in overthrow of the monarchy or the establishment of the Provisional Government.
[More in body of affidavit.]
“Subscribed and sworn before me this 4th day of January, A. D. 1894, by C. Bolte, Ed. Suhr, F. W. McChesney, William O. Smith, Wm. R. Castle, Andrew Brown, John Emmeluth, W. C. Wilder, Theodore F. Lansing, Henry Waterhouse, and L. A. Thurston, as a true and correct statement.
[SEAL.] THOS. W. HOBRON.
Notary Public.”
***
And on your third question, the following is Article 91 of the July 4, 1894, Constitution of the Republic of Hawaii.
“Article 91. – Constitution Supreme Law.
“This Constitution when promulgated, shall thereupon become the Supreme Law of the Republic, and the Constitution promulgated on the 7th day of July, 1887, and all other Constitutions at any time the Supreme Law in the Hawaiian Islands and also all Laws and parts of laws inconsistent herewith, are hereby expressly abrogated and are declared to be null and void.”
Latearrivelocal said, “historically land records were used to steal from the people”
Ah…no. Historically and truthfully, land records are used to protect people’s ownership. If you want proof, get off the couch and go research the King of Hawaii’s 1883 Supreme Court ruling that conveyed the land from an actual descendent of Debra Kapule to Junius Kaae. Hawaiian to Hawaiian by Hawaiians. Hepa and Noa-Espiritu are trying to make this into something it’s not. They have no valid claim and think everyone else is a ill-informed as are they. Go get yourself an education and quit being a “victim” looking for free stuff.
What if the landowners and Charles Hepa and Noa mau-espritu worked together? The developers could make an agreement with them to stay and live on the land as the ancient Hawaiians did. Allow tourists to only visit their taro patch to learn about Hawaiian farming methods. Leave them to live peacefully in the back of the property and keep visitors away from their private area. The hotel could feature programs in Hawaiian culture and give 10 -20% of all revenue derived from the culture back to the Hawaiian people. The state should enact a Hawaiian Cultural tax on any corporation or businesses that derive profits from the native culture such as hotel luaus. I was just visiting NZ and the Maori people own the cultural centers that the tourists visit so any revenue goes right to them. The Polynesian Cultural Center on Oahu is the biggest tourist attraction in the entire state and it is owned by the Mormon Church. They pay no taxes and many of their workers are not paid a wage but are employed in exchange for attending Brigham Young University. The Hawaiian culture is the attraction and its seems fair that revenue collected by any hotel luau or cultural event should give a percentage back to the Hawaiian people who created that culture. Even Disney is in Hawaii now making money off the Hawaiian culture. So the hotel owners should work with the squatters and create a win win for all. Rather than fighting about it, make the best of the situation. None of what happened regarding the takeover is fair in hindsight. We cannot go back in time so now we need to make laws that give revenue back to the Hawaiian people for profits made by marketing Hawaiian culture. The property should have never have been sold to create yet another hotel. It’s a shame that there was not a movement by the local community to purchase the property to create a Kauai Cultural Center which could have employed native people and provide an income stream directly to them to assist with housing, healthcare and education. Profits made off the Hawaiian culture need to be taxed and portions given back to the people of this land. This could help pay back a debt that is owed to the people whose land was stolen from them by the US government so long ago.
IRT Charles, the transfer of Crown Lands to the Hawaiian Kingdom Government on January 3, 1865, is available for review at the State of Hawaii Judicial Records, also at the State of Hawaii Library and the U.H. Hamilton Library. The information are available because of the research and making the information public by; Sandra Burgess, Bill Burgess, Ken Conklin, and Jere Krischel.
The United States Court of Claims recorded the following case:
“LILIUOKALANI v. THE UNITED STATES. 45 Ct. Claims 418 (1910)”
Liliuokalani’s law suit was to gain income from Ceded Lands filed on November 20, 1909, with the Court ruling against her on May 16, 1910, and without appeal from Liliuokalani. One of the documents presented to the Court was the January 3, 1865 Act signed by Kamehameha V.
“AN ACT TO RELIEVE THE ROYAL DOMAIN FROM INCUMBRANCES AND TO RENDER THE SAME INALIENABLE”
[Body of the Act.]
“Approved this 3d day of January, A. D. 1865.
KAMEHAMEHA R.”
***
On your second question, it was citizens of the Kingdom of Hawaii who replaced Queen Liliuokalani. Attached is the affidavit of the Committee of Safety presented to the hearing of the U.S. Senate Committee on Foreign Relations, that began on December 27, 1893, on the overthrow. The entire hearing is recorded in the Congressional Records and available at the State of Hawaii Library and the University of Hawaii Hamilton Library.
“5. TESTIMONY BEFORE THE COMMITTEE ON FOREIGN RELATIONS, UNDER THE FOLLOWING RESOLUTION OF THE SENATE OF DECEMBER 20, 1893:
“6. FIRST DAY. Monday, December 27, 1893
6.1. SWORN STATEMENT OF REV. OLIVER P. EMERSON.
“AFFIDAVIT OF COMMITTEE OF SAFETY.
“We the undersigned hereby upon oath depose and say:
“That we are the persons appointed as a citizens’ committee of safety, at Honolulu, in January last.
“That neither prior to nor after our appointment as such committee, did we or either of us, individually or collectively, have any agreement or understanding, directly or indirectly, with the U. S. minister, Mr. Stevens, or Capt. Wiltse, that they or either of them would assist in overthrow of the monarchy or the establishment of the Provisional Government.
[More in body of affidavit.]
“Subscribed and sworn before me this 4th day of January, A. D. 1894, by C. Bolte, Ed. Suhr, F. W. McChesney, William O. Smith, Wm. R. Castle, Andrew Brown, John Emmeluth, W. C. Wilder, Theodore F. Lansing, Henry Waterhouse, and L. A. Thurston, as a true and correct statement.
[SEAL.] THOS. W. HOBRON.
Notary Public.”
***
And on your third question, the following is Article 91 of the July 4, 1894, Constitution of the Republic of Hawaii.
“Article 91. – Constitution Supreme Law.
“This Constitution when promulgated, shall thereupon become the Supreme Law of the Republic, and the Constitution promulgated on the 7th day of July, 1887, and all other Constitutions at any time the Supreme Law in the Hawaiian Islands and also all Laws and parts of laws inconsistent herewith, are hereby expressly abrogated and are declared to be null and void.”
***
Enough is enough .theres too many hotels traffic and the west coast influence . There’s very little Hawaiian spirit left it all corporate America the land belongs to the people. Make it a landmark put a park on the property there far all to enjoy not a select few. Go. Back to 92 life was simpler there was a Hawaiian spirit .i love the island for over forty years now . The atmosphere like I said before is the west coast influence . Housing is out of. Reach for the locals thanks to the west coast visitor buy cheap sell high most of the people have to work two or more jobs to survive ,the costs keep going up chasing a lot of the locals deeper in debt n a lot left .to find better way to survive. Do you think that number. Cares. Look what he’s doing to The north shore like he cares there for themselves change is good to. What extent|
IRT Fathom,
SUPREME COURT OF THE UNITED STATES
HAWAII ET AL. v. OFFICE OF HAWAIIAN AFFAIRS ET AL.
CERTIORARI TO THE SUPREME COURT OF HAWAII
No. 07–1372. Argued February 25, 2009—Decided March 31, 2009
Held:
1. This Court has jurisdiction. Respondents argue to no avail that the case does not raise a federal question because the State Supreme Court merely held that the sale of ceded lands would constitute a breach of the State’s fiduciary duty to Native Hawaiians under state law. The Court has jurisdiction whenever “a state court decision fairly appears to rest primarily on federal law, or to be interwoven with the federal law.” Michigan v. Long, 463 U. S. 1032, 1040. Far from providing a plain statement that its decision rested on state law, the state court plainly held that the decision was dictated by federal law, particularly the Apology Resolution. Pp. 6–7.
2. The Apology Resolution did not strip Hawaii of its sovereign authority to alienate the lands the United States held in absolute fee and granted to the State upon its admission to the Union. Pp. 7 – 12.
(a) Neither of the resolution’s substantive provisions justifies the judgment below.
The first such provision’s six verbs—i.e., Congress “acknowledge[d] the historical significance” of the monarchy’s overthrow, “recognize[d] and commend[ed] efforts of reconciliation” with native Hawaiians, “apologize[d] to [them]” for the overthrow, “expresse[d] [the] commitment to acknowledge [the overthrow’s] ramifications,” and “urge[d] the President . . . to also acknowledge [those] ramifications,” §1—are all conciliatory or precatory. This is not the kind of language Congress uses to create substantive rights, especially rights enforceable against the co-sovereign States. See, e.g., Pennhurst State School and Hospital v. Halderman, 451 U. S. 1, 17 – 18.
The resolution’s second substantive provision, the §3 disclaimer, by its terms speaks only to those who may or may not have “claims against the United States.” The State Supreme Court, however, read §3 as a congressional recognition — and preservation — of claims against Hawaii. There is no justification for turning an express disclaimer of claims against one sovereign into an affirmative recognition of claims against another. Pp. 8–10.
(b) The State Supreme Court’s conclusion that the 37 “whereas” clauses prefacing the Apology Resolution clearly recognize native Hawaiians’ “unrelinquished” claims over the ceded lands is wrong for at least three reasons.
First, such “whereas” clauses cannot bear the weight that the lower court placed on them. See, e.g., District of Columbia v. Heller, 554 U. S. ___, ___, n. 3.
Second, even if the clauses had some legal effect, they did not restructure Hawaii’s rights and obligations, as the lower court found. “[R]epeals by implication are not favored and will not be presumed unless the intention of the legislature to repeal [is] clear and manifest.” National Assn. of Home Builders v. Defenders of Wildlife, 551 U. S. 644, ___. The Apology Resolution reveals no such intention, much less a clear and manifest one.
Third, because the resolution would raise grave constitutional concerns if it purported to “cloud” Hawaii’s title to its sovereign lands more than three decades after the State’s admission to the Union, see, e.g., Idaho v. United States, 533 U. S. 262, 280, n. 9, the Court refuses to read the nonsubstantive “whereas” clauses to create such a “cloud” retroactively, see, e.g., Clark v. Martinez, 543 U. S. 371, 381 – 382. Pp. 10 – 12.
117 Haw. 174, 177 P. 3d 884, reversed and remanded.
ALITO, J., delivered the opinion for a unanimous Court.
When a state supreme court incorrectly bases a decision on federal law, the court’s decision improperly prevents the citizens of the State from addressing the issue in question through the processes provided by the State’s constitution. Here, the State Supreme Court incorrectly held that Congress, by adopting the Apology Resolution, took away from the citizens of Hawaii the authority to resolve an issue that is of great importance to the people of the State. Respondents defend that decision by arguing that they have both state-law property rights in the land in question and “broader moral and political claims for compensation for the wrongs of the past.” Brief for Respondents 18. But we have no authority to decide questions of Hawaiian law or to provide redress for past wrongs except as provided for by federal law. The judgment of the Supreme Court of Hawaii is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
No. 07-1372
THINGS ARE NOT ALWAYS AS THEY APPEAR!
Coco Palms Hyatt Resort developers have solicited investment loans of $500,000 each from as many as 172 wealthy Foreign Nationals, in exchange for automatic Green Cards and a direct path to U.S. Citizenship for these rich investors and each of their family members. These EB-5 Visas are often referred to as “Golden Visas’ for this reason.
This Coco Palms Application, in the link below, shows how $86 million (2/3’s of the budget) for the 12,000 sq.’ Hyatt Resort was being raised through wealthy Foreign Nationals in exchange for Green Cards and a path to U.S. Citizenship for them and their family.
These types of insured $500,000 ‘investment loans’ from wealthy foreign investors are happening all over Kaua`i, Hawai`i, and the United States of America —
“The proposal identifies the new commercial enterprise (“NCE”) of the project as Lexden Coco Palms Loan Company, LLC, which was formed in the State of Delaware on January 31, 2014. The project is located at 4-947 Kuhio Highway, Kapaa, on the island of Kauai in the State of Hawaii. 172 immigrant investors will subscribe to the NCE as limited partners in exchange for capital contributions of $500,000 each and an aggregate of $86 million. The NCE will loan the $86 million of EB-5 capital to a third-party entity, Coco Palms Resort. The EB-5 capital loan proceeds will be used to acquire and re-launch The Coco Palm Resort as the Coco Palms by Hyatt in Kauai.”
You can find this quote in the Lexden-Coco Palms Loan Company, LLC application at this link —
http://www.cocopalmseb5.com/wp-content/uploads/2014/12/Approval_Lexden_Hawaii.pdf
The problem is, not even the U.S. Government is able to verify the true identities of these wealthy investors and their families, nor are they actually able to validate where this money comes from. That is why these types of investments may pose a National Security threat for us all. Here is a report from the United States Government Accountability Office —
“The report concluded that because of difficulties ensuring the integrity of the Regional Center Program, USCIS was limited in its ability to prevent fraud or national security threats and could not demonstrate that the program was benefiting the U.S. economy and creating full-time employment as required by law.”
“USCIS has identified fraud and national security risks in the EB-5 Program in various assessments it conducted over time and in collaboration with its interagency partners.”
“Specifically, a senior FDNS official noted that while adjudication of petitions in the EB-5 Program, like other immigration programs, centers on the eligibility of the petitioner, the EB-5 Program also has an investment component that creates increased program complexity and the potential for fraud risks.”
“However, according to USCIS officials, it can be difficult to verify the sources of immigrant investors’ funds and such verification difficulties could pose fraud risks to the program. For example, USCIS officials told us that some petitioners may have strong incentives to report inaccurate information about the source of their funds on their applications in instances when the funds come from illicit—and thus ineligible—sources, such as funds obtained through drug trade, human trafficking, or other criminal activities.”
“USCIS officials said that IPO and FDNS did not have a means to verify self-reported immigrant financial information with many foreign banks. In addition, both USCIS and State officials noted that they did not have authority to verify banking information with many foreign countries. For example, State officials said that because the U.S. government lacks access to many foreign financial systems, there is no reliable method to verify the source of the funds of petitioners.”
“Legitimacy of investment entity – The amount of investment required to participate in the EB-5 Program, coupled with the fact that EB-5 investors are making an investment in order to obtain an immigration benefit, can create fraud risks tied to unscrupulous regional center operators and intermediaries. According to SEC officials, they have identified instances of fraudulent investment schemes, including securities fraud, related to EB-5 investments.”
https://www.gao.gov/assets/680/671940.pdf
This ‘Advisory’ from the ‘U.S. Financial Crimes Enforcement Network’ (FinCEN) one of many reasons the Lexden-Coco Palms Loan Company’s statement about their EB-5 Visa program should be a concern to us all —
“Although FinCEN to date has focused on residential real estate, money laundering can also involve commercial real estate transactions.”
“Real estate transactions and the real estate market have certain characteristics that make them vulnerable to abuse by illicit actors seeking to launder criminal proceeds. For example, many real estate transactions involve high-value assets, opaque entities, and processes that can limit transparency because of their complexity and diversity. In addition, the real estate market can be an attractive vehicle for laundering illicit gains because of the manner in which it appreciates in value, “cleans” large sums of money in a single transaction, and shields ill-gotten gains from market instability and exchange-rate fluctuations. For these reasons and others, drug traffickers, corrupt offcials, and other criminals can and have used real estate to conceal the existence and origins of their illicit funds.”
“FinCEN’s analysis of BSA and GTO reported data, law enforcement information, and real estate deed records, as depicted by the case studies in this advisory, indicates that high-value residential real estate markets are vulnerable to penetration by foreign and domestic criminal organizations and corrupt actors, especially those misusing otherwise legitimate limited liability companies or other legal entities to shield their identities. In addition, when these transactions are conducted without any financing (i.e., “all-cash”), they can potentially avoid traditional anti-money laundering (AML) measures adopted by lending financial institutions, presenting increased risk.”
“Money laundering is a crime orchestrated to conceal the source of illegal proceeds so that the money can be used without detection of its criminal source.”
“Use of Shell Companies Decreases Transparency – Criminals launder money to obscure the illicit origin of their funds. To this end, money launderers can use a number of vehicles to reduce the transparency of their transactions. One such vehicle, highlighted in the below case study, is the use of shell companies. Shell companies are typically non-publicly traded corporations, limited liability companies (LLCs), or trusts that have no physical presence beyond a mailing address and generate little to no independent economic value.Most shell companies are formed by individuals and businesses for legitimate purposes, such as to hold stock or assets of another business entity or to facilitate domestic and international currency trades, asset transfers, and corporate mergers. Shell companies can often be formed without disclosing the individuals that ultimately own or control them (i.e., their beneficial owners) and can be used to conduct financial transactions without disclosing their true beneficial owners’ involvement. Criminals abuse this anonymity to mask their identities, involvement in transactions, and origins of their wealth, hindering law enforcement efforts to identify individuals behind illicit activity.”
“Criminals can use all-cash purchases to make payments in full for properties and evade scrutiny— on themselves and the origin of their wealth—that is regularly performed by financial institutions in transactions involving mortgages. All-cash transactions account for nearly one in four residential real estate purchases, totaling hundreds of billions of dollars nationwide, and are particularly exposed to abuse.”
The entire FinCEN report can be read at this link —
https://www.fincen.gov/sites/default/files/advisory/2017-08-22/Risk%20in%20Real%20Estate%20Advisory_FINAL%20508%20Tuesday%20%28002%29.pdf
Here is how another Kaua`i resort development is soliciting these EB-5 investment loans to wealthy Foreign Nationals —
http://www.sihl.in/pdf/hyatt-coconut-beach-resort-hawaii.pdf
As this 2015 column explains —
“WHAT’S REALLY AT STAKE IN THE EB-5 INVESTOR VISA OVERHAUL: HONESTY”
“Through the EB-5 visa program, wealthy foreigners can invest $500,000 to $1 million in development projects and in turn, receive green cards for themselves and family members if the investment can be shown to create 10 U.S. jobs. The program is now up for Congressional reauthorization.”
“The ability to monetize a scarce public asset — access to the United States — has become a gravy train for developers seeking cheap loans, immigration attorneys, China-based migration agencies and federally-authorized investment packagers known as regional centers.”
“The profits at stake prompt deceptive practices — both in marketing investments and claiming job creation — that distort the intent if not the letter of the law.”
“But claiming that EB-5 investments create jobs at no expense to the taxpayer is bogus. It’s also why an expected compromise regarding reauthorization of EB-5 falls short, despite improvements to the program.”
“The green card alchemizes profits. Think about it: As long they get green cards, the immigrant investors don’t really care about interest and will take a 1 percent return. Meanwhile, the entrepreneurs getting the loan are eager to pay the regional center 5 to 8 percent as opposed to 12 percent they might have to pay on the open market.”
“Yes, it’s unseemly that green cards can be acquired so cheaply. And I say cheaply, because remember, investors are not giving up $500,000; they’re just parking it for five years or so, and the major cost is foregone interest and fees.”
“The Government Accountability Office this year concluded that the agency overseeing EB-5, the U.S. Citizenship and Immigration Services, could not validly analyze job creation. After all, projects financed through regional centers don’t require a headcount of employees. An economist’s report, which calculates not only direct jobs, but also indirect and induced jobs caused by spending, can suffice.”
“One of the oddities about the EB-5 program is that the U.S. government is giving out the green cards, but the entrepreneur who puts together the investment gets the money. This scheme seems inefficient and open to corruption.”
“EB-5 represents “corporate welfare” for certain businesses.”
“In a modest reform, the new legislation mandates that one of the 10 required jobs be a direct job, validated with a head count.
“So the EB-5 industry will still benefit from rules that allow them to credit immigrant investors for jobs created by the entire pot of money.”
“In other words, the immigrant investors got credit for jobs financed by public subsidies and government-authorized tax-free bonds, funding that was already in place, not leveraged by the EB-5 investment.”
https://www.pbs.org/newshour/economy/column-whats-really-at-stake-in-the-eb-5-investor-visa-overhaul-honesty
We have to Wake Up to the reality that this is happening all over Hawai`i — not not only through the Coco Palms Hyatt Resort developers, but Everywhere!
Please support the Hawaiians in their fight to protect their homelands from big developers who are using opaque foreign investment `loans’ to develop their lands and reroute Hawaii’s natural water systems.