THAT DOG NEVER DID HUNT: The Superferry is making headlines again today but as Joan Conrow pointed out this morning, the Honolulu Advertiser’s story missed the mark in reporting that “Hawaii Superferry wants to abandon both its catamarans when the real story, as reported in the Mobile (AL) Press Register (P-R), is that it was anything but about what Hawai`i Superferry (HSf) Inc. wanted to do but rather about the fact that the “Government (is) to repossess Hawaii Superferry”
One things that stands out is a discrepancy between how much of their “investment” in the project HSf maker Austal is eating on the deal, with the Advertiser reporting the figure at $29.9 million and the P-R saying it is only 11 of that 29 million that they will “write off”.
As Joan points out a key passage in the P-R article- at least for those of us who have seen through all the gorilla dust and spin and seen how the project was always about demonstrating the aluminum catamaran design of Austal’s so that they could get the huge military contract they have now signed- says:
Browning said that Austal approved lending $23 million to the ferry venture in part because the deal would help raise the profile of Austal's U.S. shipyard, which at the time had been operating in Mobile for only a few years. Although it succeeded in doing that — the Mobile shipyard in November won a potential $1.6 billion contract to build up to 10 high-speed fast ferries for the military — Browning said the company's lending days are over.
But another couple of passages in the P-R article were, well, pretty outrageous, the first saying
Talks among MARAD, Austal and Hawaii Superferry broke down last week, Austal officials said....
Austal Ltd. President Bob Browning said he was disappointed that MARAD decided to seize the ferries without involving Austal in a project to prepare them for military use.
Maybe Austal is “disappointed” but that is certainly good news for HSf- it seems that the “taxpayer guarantee” is now being “activated” which lets the owners off the hook for trying to find work for the apparently unwanted ferry, as evidenced by the lack of interest thus far in leasing the vessels even to the military.
But the bombshell in this, if true, might just be this sentence:
MARAD made the ferry loans under its Title XI program, which is supposed to support U.S. shipyards by reducing their reliance on military work.
With what we know now about how the whole deal went down in order to have Austal positioned to do military work, the fact that MARAD- the U.S. Maritime Administration- made the loan to “support U.S. shipyards by reducing their reliance on military work” points to one conclusion- the whole deal was a fraud.
Austal has admitted as much by saying publicly and repeatedly that their “investment” was in order to prove the ferry’s seaworthiness so it could eventually rely on military work, while knowing full well of the thus-far-unreported “strings attached” to the MARAD loan.
And by fraud we don’t mean just some petty theft- we’re talking about defrauding the taxpayer out of $136.8 million.
If nothing else it goes a long way in explaining the constant, adamant denial of military involvement in the venture- for no good reason- in the face the mounting evidence, as first reported by Conrow.
It also raises the question of what the liability of former Naval Secretary John Lehman may be now that MARAD has stepped in. Funny how he personally seems to be getting away scot-free, at least financially, when it was his machinations that cost everyone big bucks, including the Hawai`i taxpayers who will probably never see the $40 million Harbor improvements Governor Linda Lingle’s “Unified command” was duped out of .
As a matter of fact, he may turn a profit since, as the Advertiser article reports:
The company has no current source of revenue yet has to cover the cost of insurance, maintenance, security, storage and a skeleton crew for the catamarans at an Alabama shipyard owned by J.F. Lehman & Co., the project's main private investor.
So Lehman gets off from any financial responsibility for the fiasco he created and is most likely collecting “maintenance storage, security, and (salaries for) a skeleton crew” now that MARAD has taken “possession” of the boats.
We’ll see what happens in bankruptcy court where proceedings are now taking place in Delaware although the state is trying to move them to Hawai`i. But due to the insane bankruptcy laws that allow fat cats to form “limited liability” companies and duck out of obligations through bankruptcy yet stick working class credit card and home debtors with paying back every penny, don’t expect Lehman to be crying all the way to the bank.
Yesterday we said that Councilman Darryl Kaneshiro served in the Eduardo Malapit administration as Mala’s “Administrative Assistant”, a second-in-command “assistant mayor” position as defined in the county charter.
Rather, Kaneshiro’s service was in the administration of Tony Kunimura where he served as economic development director and, apparently, as a generic administrative aide. We regret the error.