Ian Simmons
Computers and Finance Section
Antitrust Division
Department of Justice
554 Fourth Street, N.W.
Washington, DC 20001
(202) 307-6164, Fax: (202) 616-8544

COMMENTS REGARDING:
Proposed Order Modifying Consent Final Judgement
Civil No. 90-00904 DAE
US v. First Hawaiian & First Interstate

The Independent and Sovereign Nation State of Hawaii (hereinafter "Nation of Hawaii") was established under customary international law by the Proclamation Restoring the Independence of the Sovereign Nation-State of Hawaii on Jan. 16, 1994, following the official apology and admission against interest of the United States, enacted as U.S. Public Law 103-150, Nov. 23, 1993. The Nation of Hawaii submits the following comments under Article XVII, Transitional Provisions, of the Hawaii Consitution, ratified at `Iolani Palace on Jan. 16, 1995. A full documenation package on the Nation of Hawaii is being forwarded to you in hard copy for your review and background information.

The Nation of Hawaii is in general agreement with the facts, findings and violations outlined in the original complaint filed by the Plaintiff with the Court on December 28, 1990 and hereby incorporates by reference the full contents of this complaint as well as related research carried out by the U.S. Department of Justice into its comments. The Nation of Hawaii believes that it is not in the public interest to allow First Hawaiian to sell most of the assets and deposit liabilities of the three divestiture branches in question to Finance Factors.

The Nation of Hawaii believes that approval of the proposed modification would not adequately address the competitive concerns which the United States raised in its 1990 complaint against First Hawaiian and First Interstate, including the importance of increasing competition in transaction account services for small business consumers. Since the Final Judgement was first entered, First Hawaiian has substantially increased both its share of the business banking market and the fees it charges small businesses for transaction account services. Sale of the assets and deposit liabilities in question to Finance Factors would not alleviate these symptoms of a highly concentrated business banking market as Finance Factors does not offer transaction account services as defined by the Final Judgement.

Recent revisions to US Interstate Banking laws have increased the field of potential buyers for the three branches in question to the US Mainland. However, First Hawaiian appears to have made no efforts to find a "qualified purchaser" from financial institutions outside of Hawaii. The Nation of Hawaii believes that selling the branches in question to a qualified purchaser -- within the meaning of the original Final Judgement -- from the US Mainland would do much more to increase competition and improve the financial services environment for small business than selling them to a unqualified purchaser such as Finance Factors. However, the Nation of Hawaii would prefer that these branches be sold to a QUALIFIED purchaser in Hawaii.

The Nation of Hawaii must question the validity of the Memorandum of the United States in Support of Motion of First Hawaiian to Modify the Final Judgement. This Memorandum was submitted to the Court on January 19, 1996 by Elliot Enoki as the United States Attorney - District of Hawaii. However, Mr. Enoki is no longer the United States Attorney for the District of Hawaii. Mr. Enoki was replaced as US Attorney by the Clinton Administration with Mr. Steve Alm. Steve Alm should be the only individual authorized to file with the Court using the title, United States Attorney - District of Hawaii. Given the above facts, the Court should consider invalidating the submission of this Memorandum of Support

The Nation of Hawaii believes that as the current United States Attorney for the District of Hawaii, Mr. Steve Alm should be more forthcoming regarding his brother's current employment status with First Hawaiian Bank. The brother of US Attorney Steve Alm, Mr. Robert Alm, is currently Senior Vice-President at First Hawaiian Bank and has policy making responsibilities in financial management and other areas which could impact this case. The Nation of Hawaii is concerned that this situation seems to indicate a possibility for self-dealing and the potential for a serious conflict-of-interest. [see biography of Robert Alm]

The Nation of Hawaii wishes to note that the United States submitted its Memorandum of Support to the Court on January 19, 1996 -- less than 48 hours after the Nation of Hawaii had submitted comments to US banking regulators alleging that First Hawaiian was in noncompliance with the Final Judgement. Before this, the last Court proceeding involving Docket 90-00904 occurred on February 17, 1994 -- nearly two years before.

The Nation of Hawaii also wishes to note that on page 22 of First Hawaiian's 02-12-96 response to the above mentioned comments submitted by the Nation to US banking regulators First Hawaiian claims that:

"The Department of Justice has approved the proposed divestiture to Finance Factors. The Bank and Finance Factors have scheduled the consummation of the divestiture for March 15, 1996."

In fact, according to documents filed with the Court on January 19, 1996, the United States has only tentatively consented to the proposed modification of the Final Judgement and:

"The United States reserves its right to withdraw its consent in light of any comments received from interested persons."

The Nation of Hawaii is concerned as to why First Hawaiian Bank seems to believe that the proposed divestiture to Finance Factors is as good as "approved."

In consideration of the facts outlined above, the Nation of Hawaii urges the following: