Following the money behind the latest rail lawsuit

Once again, I noticed the mainstream reporting on the federal lawsuit filed last week challenging the environmental impact statement for the Honolulu rail project didn’t include links to the complaint itself. Hawaii News Now had the only story I saw that linked to a copy of the 56-page complaint. It linked to the copy posted on the HonoluluTraffic.com web site. My apologies in advance if I missed other stories that included a link to the court document.

In any case, here’s my own link to the complaint, downloaded from the federal court’s PACER records system.

HonoluluTraffic.com is the lead plaintiff, identified as “a Hawaii non-profit corporation.” Cliff Slater, president of the group, is quoted as saying they have already raised over $100,000 to fund the lawsuit. That raised my curiosity.

I’ll say at the front end that I agree with the contention that the city failed to perform a credible analysis of alternatives to an elevated fixed rail system, but I’m still curious about HonoluluTraffic.com.

According to the state’s business registration web site, HonoluluTraffic.com was formed in 2003 as Sensible Traffic Alternatives and Resources, Ltd, and used a registered trade name, HonoluluTraffic.com. The group formally changed its name to HonoluluTraffic.com on March 22, 2011 and cancelled the associated trade name. Officers listed on its most recent annual report are Cliff Slater, president/director; Garry Smith, secretary/director, and Rosalie Slater, treasurer/director.

Although registered with DCCA as a nonprofit organization since 2003, neither HonoluluTraffic.com nor Sensible Traffic Alternatives and Resources is on the Attorney General’s list of registered charitable organizations. Similarly, there is no record of the groups on the list maintained by Guidestar.org of nonprofit organizations registered with the IRS.

Now I see that there’s a note soliciting contributions on HonoluluTraffic.com:

To help fund our lawsuit please make a tax-deductible donation to SBH Foundation Rail Fund, 6600 Kalanianaole Hwy, Suite 212, Honolulu HI 96825

State business registration records show the Small Business Hawaii Entrepreneurial Education Foundation is headed by GOP Senator Sam Slom. It lists its purpose: “To promote and provide entrepreneurial information, training, education and scholarships through publications, radio and television, public meetings, conferences, seminars, and an interactive website in Hawaii.

I could not find the SBH Entrepreneurial Education Foundation, a 501(c)(3) organization, on the AG’s list.

State business registration records show Small Business Hawaii is a trade name registered by the Small Business Association of Hawaii, a “membership business association.”

According to the group’s web site, it changed its name to Smart Business Hawaii in 2009. However, it is still registered with the state as “Small Business Hawaii.” Smart Business Hawaii is not registered as an organization or trade name.


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21 thoughts on “Following the money behind the latest rail lawsuit

      1. Richard Gozinya

        If there is an allegation to be made, make it. If there are accusations, make them.

        If there are questions, get on the phone or email and ask them.

        This hint, wink, innuendo stuff does no one any good. Has anyone just called up and asked?

        Reply
        1. Ian Lind Post author

          Sorry. I’m just following my nose. Right now, just collecting info. You can’t eventually get to conclusions without first gathering data.

          Reply
  1. Kimo in Kailua

    SBH appears to be acting as a fiscal agent for HonoluluTraffic.Com. They are listed in the IRS Cummulative Bulletin of Exempt Orgs

    http://www.irs.gov/app/pub-78/search.do?nameSearchTypeStarts=false&names=Small+Business&nameSearchTypeAll=false&city=&state=HI&country=USA&deductibility=all&dispatchMethod=search&submitName=Search

    However using SBH as a “fiscal agent” or sponor to fund Rail Litigation does not appear to be a legitimate 501(c)(3) charitable, religious or educational purpose. It may endanger SBH’s tax exempt status

    Reply
  2. hugh clark

    Credibility io Mr. Slater and his followers always has been a ripe question in my mind.

    If Honolulu is to join this century it must do something to fix its traffic quagmire. I spent last weekend trying to negotiate the town without benefit of a copilot and struggked mightly on a weekend. I almost said I would never return.

    It’s worse not better. No major European or Asian city would function without a true transit system. Being outated or quaint ain’t gonna do it anymore.

    Reply
    1. zzzzzz

      I don’t think visitors being able to get around without a copilot is a valid reason to spend billions on a rail system that probably would, at best, only get them to a few of their destinations.

      Most if not all rental car agencies offer a GPS option.

      Reply
  3. HI4Life

    Good questions. Here are some more:

    1. Where are they going to get the money to pay that big fancy lawyer? The city set aside a million dollars to fight lawsuits.

    2. Where did they get the $100,000 and from who?

    3. Where is the transparency?

    4. Who are all these groups all these guys belong to. Small Business Hawaii, Small Business Hawaii, The Grassroots Institute, The Hawaii Reporter. Who funds them?

    5. What is there plan to raise the money they will need to fight the city – right or wrong – what kind of lawyer would agree to take a case where the client can’t pay?

    Suspicious. There has got to be more to this

    Reply
  4. Manoa Kahuna

    This is interesting as far as it goes. But, where did Cliff Slater, Sam Slom & HonoluluTraffic.com get the $100,000.00 they claim to have to finance the suit. It should be noted on their IRS Form 990.

    Reply
  5. Kimo in Kailua

    Their IRS Form for 2011 Fiscal Year won’t be due until May 15, 2012 and even then they can get two more extensions of up to 6 months. The lawsuit could be over by the time we know.

    Reply
  6. yobo

    Well, there was that funny chintzy TV commercial with Ben Cayetano and Sam Slom went on the air to beg for money for their lawsuit. That was rich! Since the TV spots stopped airing pretty quickly, my guess is the air time cost more than any money that might have been brought in.

    Reply
  7. Finally

    What a wonderful and valid question.

    It certainly could be that the lawsuit is being financed by the same cabal of special interests like taxi and tour bus companies (and some right-wing zealots) that Slater has always been fronting for:

    http://www.honolulutraffic.com/whoweare.htm

    which includes some of the key players that Panos has always been fronting for:

    http://www.hhua.org/hhua-board.html

    Now why on earth would taxi and tour bus companies oppose a major public transportation project that will wipe out their virtual monopoly on lucrative airport runs and other services?

    The elitists and industries behind the Cliff and Panos “managed lanes” toll road for the rich (with special access for private transportation providers) “alternative” propaganda have gone completely unquestioned for years.

    Cayetano may have his own reasons for opposing the rail project, and that’s fine. It’s just sad to see him and a few others hop into bed with this bunch.

    Reply
    1. Ben C.

      I just sat down this morning to write exactly what is written here. The core support for this anti-rail cabal behind the website are taxi and tour bus companies. Now, Panos is not for the taxi companies, his motives are ideological, and it seems to be a rather simplistic and odd ideology, not really conservatism (I mean, nuclear power in Hawaii???….). Ben Cayetano is different, he is outspoken in a “I’m as mad as hell, and I’m not going to take it anymore!!” kind of way. I do think we need him in the US Congress, in the House or Senate.

      But let’s look at the other side of the debate. As your wife may well know, the UH needs $200-300 million for deferred maintenance. That’s roughly what the City has spent on publicizing the rail system. Some of that money went to the Honolulu Star-Advertiser, and it effects the editorials therein. But also if you go to Civil Beat and google the names of pro-rail commenters, you will find that most of them work for public relations firms in Hawaii. In fact, there was an editorial in Civil Beat yesterday by the head of a “grassroots” pro-rail organization who also happens to be vice president of First Hawaiian. So what we have in this debate is a few taxi companies versus banks, real estate developers, insider politicians, law firms that will make a fortune fighting lawsuits over condemnation — all the usual suspects. So to look at a certain faction of the anti-rail group in a puritanical fashion, as if their motives are impure, it’s a bit like wading into a sewer system and finding a dead mouse and saying “Gross! This place is tainted by a dead mouse!”

      Forget it, Jake. It’s Chinatown.

      Forget it, Ian. It’s human nature. It’s the nature of this vast, chaotic, indifferent universe. It’s life.

      And it’s politics. It’s special interests hooked up with ideological fanatics and a few guys who are As Mad As Hell And Not Taking It Anymore. That’s all politics is and all it can be. There is nothing transcendent here. I’m read your website because I hope that you are mad as hell, and not one of the fanatics.

      Now back to the way that public relations has largely replaced journalism.

      First, I recommend the BBC documentary “The Power of Nightmares” about the rise of corporate public relations from state propaganda after WWI (the very word “public relations” was coined because corporate advertising was known as “propaganda”, and people hated that). You can see all three parts of the documentary on the web under google video.

      Second, the City is broke, broke, broke. This is the new normal, and there won’t be any more money for public relations for the rail project. That means that so many of the pro-rail voices out there will be falling silent over the next few years as City contracts with public relations firms will not get renewed. Civil Beat pointed out that pro-rail organizations have been silent for some time now. The silence will be growing.

      Reply
  8. Bill

    the public is close to 50/50 split on rail

    well — here is my rant — I never liked the intellectual dysfunction that came from both sides on this — never can forget the tax payers paying for propaganda for the pro rail side — and the crazy wording on the ballot initiative that showed down right contempt towards the public — and it is too bad that the lead on the anti-rail side had to come from Cliff Slater folks and their ugly web site

    will the day ever come when we can have an honest debate on something of such public importance that shows respect for all — I am not holding my breath

    Reply
  9. ohiaforest3400

    Non-profit and tax-exempt are not the same thing. Slater’s orgm ay be a non-profit that does not qualify as tax-exempt so it’s getting money thru and soliciting for SBH which appears to be claiming tax-exempt status, for reasons unrelated to stopping rail. The AG and the IRS should get on that, pronto.

    Reply
    1. Kimo in Kailua

      Charitable nonprofits that are tax exempt cannot be a fiscal sponsor for non-exempt orgs to spend funds for purposes that do not qualify for tax exempt status under section 501(c)(3). Aside from registration with the AG by SBH Foundation, this is largely within the regulatory of the IRS Tax Exempt Organization Division from whom SBH Foundation derives its federal tax exempt status. The AG’s office is rather vigilent in following up on non registered “charities.”

      Reply
  10. MynahBlog

    Keep digging Ian…until you hit oil. Atlas, Reason Foundation, Slater and Grassroot Institute all drink from the same well.

    You just hit the first set of “shells.”

    Reply
  11. Hal Barnes

    The anti-rail Luddites are the same old, mostly white folks who have their share of the pie and could care less about the next generation. Remind me of those who vote against school bonds in California. Selfish and self serving IMHO.

    Reply
    1. Kolea

      Looks like there are plenty of white folks on both sides of this issue. While I don’t agree with every syllable in Ben C.’s eloquent poetry above, it fits pretty closely to what I see.

      There has been a PR effort to use brown faces and Westside people to front for the pro-rail push. But it is the banks, developers, and political moneymen who are the real movers.

      One of the interesting things I saw in the Hawaii News Now-Star-Advertiser polling data released the other day was that Union Members did NOT support building the Rail system more than the rest of the public. In fact, they were slightly LESS supportive, though the difference was within the margin of error.

      The arithmetic of the costs and benefits of Mufi’s Train only looks good to those awarding or receiving the contracts. For the rest of us, we can IMAGINE riding a nice train in our minds, but it depends too much on where the stops are, how frequently they come, etc. We an also imagine the terminals unmaintained, graffiti scarred and dirty. We can imagine clacka-clacka noise and massive elevated eyesores. It’s an act of faith as to which vision we come to believe, though skepticism is probably the safer bet.

      So it’s a wash for most of us. And an expensive one at that.

      Reply

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