State of Repair

6 leaders discuss power & how to fix Hawaii

Who & why

Hawaii Business invited six influential people in Hawaii to talk about power in the Islands and how to create positive change. The moderator was Jerry Burris, editor-at-large of Hawaii Business. The panelists were:

Haunani Apoliona
Chairperson, Office of Hawaiian Affairs

Ben Cayetano 
Former Governor

Kitty Lagareta 
CEO, Communications Pacific and former chairwoman of UH Board of Regents

Colbert Matsumoto
CEO of Island Insurance Co. and
court-appointed master of Bishop Estate/Kamehameha Schools, 1996 to 2001

Peter Ho
President, Bank of Hawaii

Randy Perreira
Executive Director, Hawaii Government
Employees Association, and president of state AFL-CIO

For the full transcript of this Hawaii Business Forum, please click here.

Cayetano: Whether it has to do with business or other things, politics does have an impact. So you go to the governor and the Legislature to make your case. But interpersonal relationships count a lot. When my wife chaired the Chamber of Commerce, she managed to get passed a really important bill for businesses – the moratorium on the unemployment trust fund. She told me afterward that one reason the chamber couldn’t get anything done in the past was because its representatives had little personal connection with members of the Legislature. The Big Five had interlocking boards of directors. You’ve got basically the same things today except the faces and complexions are different. Whether it’s choosing the university president or the football coach – the people who are usually brought together tend to be the same people.Burris: There’s nostalgia about how things worked in the old days. There’s a story that Jack Burns (governor 1962-1974) realized the Community Chest was broken, so he summoned Jack Hall (ILWU union leader) and Walter Dillingham (business leader) and said, “Make it work.” And they said, “OK, boss,” and they did. It was easier to see where effectiveness and power rested. It appears that power is more diffuse now. So today, how do you get things done or fixed?

Burris: Peter, the banks, especially the two biggest banks, have been very influential in Hawaii. Do you think that is still true?

Ho: Gov. Cayetano is right. Relationships are important to how things get done in the state.

So I don’t think it’s coincidental that the banks play a major role because the banks are really receptacles of relationships. We try to be as unbiased as possible. We have 250,000 customers. It’s probably not good business for us to be too positioned one way or another. I think we do act as relationship conduits.

Matsumoto: It boils down to leadership – community leadership. Jack Hall and Walter Dillingham were acknowledged leaders in labor and business. Change happened because they were leaders. In Hawaii the banks tend to hire very capable leaders, so they play significant roles in the community. If you look at Walter Dods, he’s a business leader who effectively straddles the community, the business sector and government. But I think Walter saw it as his role as head of the largest financial institution to play that role. So I think it really boils down to leadership and whether or not we still have leaders of that caliber who can pull together diverse groups and push forward different initiatives.

Burris: Is it your feeling that we don’t have as much as we used to?

Matsumoto: Yes, that’s definitely the case. We don’t have the same kind of concentration of influence. The labor sector had at one time David Trask (former HGEA head), Jack Hall, these were guys who had tremendous influence among a broad range of labor leaders. I don’t know that even Randy can claim to have the same mantle.

Burris: Randy, is that a deliberate approach on the part of the unions to be a little less front and forward?

Perreira: That was a different time. That was the dawn of the public sector and collective bargaining – 30 years ago – so it dictated a different kind of leadership. Today, it’s really the personal characteristics of individuals that allow them to influence the community – not just the position.

Burris: Haunani, if you say today, “Something’s going to get done,” the interests of Hawaiians have to be taken into account. That was not the case prior to 1978, before OHA.

Apoliona: I think 1978 and the constitutional convention and the changes that established OHA, rose out of that sentiment (Hawaiians’ lack of power). We are imparted with responsibilities by laws that say we have to protect and be part of the consultation as it relates to any development. So I think we are a strong voice, a constitutional voice for the Hawaiians.

Burris: So if something major is going to happen in Hawaii would you expect to be consulted?

Photo: Rae Huo

Apoliona: Absolutely! Sometimes they do and sometimes they don’t. Part of it comes from the fact that the federal rules, regulations and statutes require some of these consultations.

Burris: Sometimes people will say that it’s not real clear where the power is in Hawaii. We have a Republican governor and a Democratic legislature and people say, “We don’t know where to go now.” Do you think that’s true?

Lagareta: Back 30 or 35 years ago when my first job was at Alu Like, I was loaned out to help the YWCA for a year. We had a strong feminist movement then, so if you wanted stuff done, you had to go talk to the women – people like Donnis Thompson (first female athletics director at UH) and Jean King (lieutenant governor). But today, the first thing that comes to mind is grassroots – activists in the community representing different positions. You may not always agree with them, but they bring transparency and more involvement from more people. People who disregard those voices run into trouble. Some are environmental groups. Sometimes they come together in different configurations and learning who comes together in different configurations, learning how big they can get to start or stop something, is really important. Look at Kanu, which I think is a great organization. Look at how widely they’ve gotten their message out. You cannot ignore the government, but the power is definitely diffused as community voices gain momentum. I remember working with George Kanahele years ago when he was trying to start the Native Hawaiian Hospitality Association. George’s mantra then was, “We have to have a seat at the table,” and look at what’s happened – the activists from the ’70s and ’80s are now sitting at the table making decisions from the inside. I think that’s a huge change for Hawaii – for the better.

Burris: Are the grassroots groups stepping into a vacuum or did they just mature?

Lagareta: The business community has been missing in action for a long time. I think what Vicky (Cayetano) said is important. I don’t think they have the relationships.

Matsumoto: I think Kitty’s point about the business community is correct because our business community has changed significantly from 30 years ago. You don’t have the same number of major companies that are still locally based and locally owned. That impacts the effectiveness of the business community in dealing with government. You might have the banks, but the banks aren’t going to take on every issue. You have other major players who don’t have the same kind of community interest that a CEO whose home is Hawaii, and whose kids grew up and go to school here, and intends to live here for the rest of his or her life is going to have.

The activists from the ’70s and ’80s are now sitting at the table making decisions from the inside. I think that’s a huge change for the better.

– Kitty Lagareta

Perreira: There are fewer Kittys and Colberts who have dedicated their lives to living here, so you have absentee ownership. They may, like WalMart, give money, but they’re not wed to the community.

Matsumoto: I’ll tell you one way that we can try to address this. For a long time, our government was more interested in helping local businesses. If you look at lot of major government contracts, the local companies have been outbid, outmaneuvered, and not necessarily because they couldn’t do the job. Maybe they couldn’t offer the lowest price, but you have to look at the total package – what is the benefit of giving the award to a local player as opposed to somebody from the Mainland who’s just going to hit-and-run.

Cayetano: The government is required to go with the low bidder, but what government needs to do is get the contractor to hire local subcontractors to do the work. When I was in the Legislature, there was a big concern about the Japanese taking over the hotels. But they were much more sensitive to local pressure to get local people in than American companies. Under pressure from local people, they would open doors for locals at the higher levels. Granted, the Japanese companies mostly chose Japanese Americans, but they’re better than the Mainland companies.

Matsumoto: When I worked for (attorney) Wally Fujiyama, he represented a number of major Japanese investors in Hawaii. Wally used to make it a condition that if a client wanted his services, he expected that they would give back to the community. He got them to make major donations to schools and community organizations. Community leaders need to make these people understand that if they want to play and profit in Hawaii, they have to give back to the community.

Lagareta: Like everybody else, I run into companies who come in here like, “We’re from New York and we’re going to tell you how we do things.” It’s obnoxious. But Target came in here 3 1/2 years before they ever opened a store and met with people at the community level and asked, “What do you need? How do we work with you?” They were giving away hundreds of thousands of dollars before they even came here. And there are other companies like that. In Target’s case, that’s just how they are. In other cases, they’re willing to do it, they just have to understand how it is. We think of Longs as one of the most local companies and Longs was never locally owned.

Leaders need to make (outside investors) understand that if they want to play and profit in Hawaii, they have to give back to the community.

– Colbert Matsumoto

Matsumoto: In Longs case, though, I think they have independent managers. That’s what distinguishes a “local” company from one that’s not so-called local. Local companies are led by management that have the understanding that their role is not just to make a profit, but also to improve the community. It’s about participating, volunteering, providing leadership. And leadership has to have vision. It’s not just about getting things done and getting things done faster. It’s to what end are you trying to get things done? It’s a problem that a lot of public decision has been very ad hoc. It doesn’t tie in to some vision of where we’re going and why we’re trying to get there. I think if we do it just for economic reasons, then we’ll lose the quality of our lives and all the things that made us choose to live here.

Apoliona: And the future is not reliant on one personality leading the charge. This is the time for collective leadership.

Burris: How do you achieve that?

Matsumoto: I was kind of hoping that the Hawaiian community would provide the spiritual and cultural guidance because it’s the cultural foundation that’s made Hawaii a special place.

Apoliona: I think that as the host culture, it is the foundation of how life proceeds, but it doesn’t just stop with the Hawaiians. These values are part of living in the Islands and have to cut across all of our communities. I think we have to look at how we’re going to balance the natural resources; how we work with each other. You talk about character and leadership, there are some lessons and guideposts in leadership and interaction between policy makers, business leaders, community leaders, grassroots leaders. You try to be civil, respectful. Also, the term haa haa (humility) doesn’t mean being a doormat. It’s understanding when you have to lead something and understanding when you have to be a player on a team. So those are examples of how we should interact as people – whether they’re Hawaiian or non-Hawaiian; local or non-local.

Matsumoto: To me, those of us who were born and raised here or have lived here most of our lives, we develop a certain consciousness. I think it has to do with the fact that we live on an island. And I think what Haunani’s talking about is that we’re very sensitive to the fact that we have limits. We act with restraint, both in how we use our resources and how we interact with each other. Then we become very conscious of our interdependence. Because of that, we realize that we have to resort to collective action. So it’s not about one person or leader. It’s about all of us coming together as a community to accomplish things. I think we’re losing that because we have a lot of guys coming from the continent who have a continental perspective. They think there’s unlimited opportunity, unlimited resources and they can just exploit it all.

Photo: Rae Huo

Lagareta: When something bad happens here, whether it’s in your neighborhood or across the state, we look after each other. Everything you said is true, Colbert. But I can’t reconcile that all the time with the fact that I’ve seen some of the ugliest power players and battles in the state that I think you see anywhere, and you see it consistently. It’s inconsistent with what we all say and love about Hawaii.

Cayetano: I think what Haunani was talking about is not so much a question about whether the person lives her or was born and raised here. I know people from the Mainland who come here, and they’re much more concerned about the environment than local people who take things for granted. And some of the people leading the fight for Hawaiians are very antagonistic, and if you go to the University of Hawaii, they teach people how to hate other people.

Apoliona: Just to be clear, I’m talking about the values and the culture. People, whether they’re Hawaiian or not, can live, discard and abuse the values and the culture. It’s like what you said, governor, come from someplace else, and you got it; the values are with you.

Matsumoto: I take back what I said about being born here. A lot of people that I know who were born and raised here, don’t have that sensitivity. It really is about education, culturalization.

Burris: Do you have any hope that there are institutions, individuals or procedures that will get Hawaii moving in a good direction? Randy?

Cayetano: Ha, he’s the most powerful guy right now in this room (everybody laughs).

Perreira: I don’t know about that. I think part of the challenge lies in the lack of political leadership and really the need to try to bring people together. We lack elected officials in this recent generation that are willing to make hard decisions, and not short-term decisions that are premised on getting re-elected.

Cayetano: You know, Randy, you guys are very hard on people who have supported you for many years, when, on occasion, they don’t agree with you guys.

Perreira: One thing that we’ve seen in the public sector and to some degree the private-sector unions is the same challenge we face in the community at large and that is generational differences. There are individuals who went through the Cayetano years, the Ariyoshi years, who have a mindset that is markedly different from our members from the Kanu generation, and the internal clash creates challenges trying to change the agenda.

We lack elected officials who are willing to make hard decisions, not short-term decisions premised on being re-elected.

– Randy Perreira

Matsumoto: I think there is a significant breakdown in trust among different institutions, so relationships we were talking about earlier are frayed. They’re not conducive to having dialogue. The governor talked about reaching out to the heads of the UPW and the HGEA. (Pointing to Cayetano) They may not have agreed with you, but they respected you. They knew you were a man of your word. I think that’s what Randy was referring to.

Perreira: Well, I think integrity today is a lost virtue. For some, integrity lasts a minute after you walk out the door.

Ho: I think that’s what more public officials need to appreciate. It doesn’t mean you make enemies with the other side. It actually means that sometimes saying “no” wins you the respect of the people on the other side. If you have good reason and you’re able to articulate it and you’re willing to stand on your convictions. But to get back to Jerry’s question, which is what can be done to move us forward, I think it will be circumstance. We could face tough times in this state for a long time. And if things don’t go so well for a period of time, then circumstance will bring people together.

Photo: Rae Huo

Burris: You mean like an economic slap in the face or a physical disaster?

Cayetano: Take 9/11. Right after 9/11, the Republican Minority Leader Galen Fox came up to see me and said, “We want to work with you folks.” I thought that was really sincere, so we worked together – for about two months (everybody laughs).

Ho: Nothing pulls people together like crisis.

Burris: But statehood, was by in large, a positive thing for most people and it pulled everyone together.

Apoliona: Maybe nationhood.

Burris: Could it be something to do with Hawaiians and nationhood?

Apoliona: Well, I think we kind of end where we started about leadership, the values of leadership, who the leaders are. It’s not just going to be Hawaiian people. It’s going to cut across all of the other groups. But there is a place for the Hawaiian community. So given that, if people can accept that, then let’s build on it. Lead with integrity, not da kine talk and forget. And it’s got to be collective.

Matsumoto: There’s no one person that will lead us to the promised land. People and leaders have to come together. In the next 12 months, it’s going to be really tough and we know that. There has to be leadership and action now. I would like to see our governor, our legislative leaders, the public-sector unions, as well as the business sector be more collaborative to address the challenges that lay ahead. But I don’t see that happening. They’re following the defined legal process, but legal processes are only intended to service people when there’s conflict and they cannot resolve it. But before you get to that, you need to try to informally try to come up with solutions and avoid going down that path, because then you get unintended results.