Wednesday, June 24, 2009


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.


Blahblahblah said...

Bit of a fractured fairy tale. Austal ha already built similar ferries for Mediterranean service. They also had the design contract for the Littoral Combat vessel before the HSF construction began.(May 2004 vs June 2004) And then the construction contract long before the Alakai was finished. (Oct 2005 vs 2006)

Just what is the purpose of "demonstrating" via the HSF if you've already got the contract to build the military vessel in hand, plan to start work before the HSF launches and have no funding issues for the military contract?

"Construction of the first ferry has been underway since June 2004 at Austal's Mobile, Alabama shipyard based on initial funding from Hawaii Superferry and a strategic decision by Austal to advance work on the structure in order to develop the workforce in readiness for the US Navy's Littoral Combat Ship order"

from Austal's website. You might argue they are dishonest, but the dates are a matter of public record. Getting the workforce hired and ready is a bit different than using the HSF as a lever to get the military contracts as Joan keeps claiming. The conclusion is drawn to fit the bias rather than the facts.

This was about pork in Trent Lott's backyard. These shipyards are basically in his hometown. As usual, the simpler explanation fits better.

Joan Conrow said...

It seems you've confused the Littoral Combat Ship with the Joint High Speed Vessel.

Joan Conrow said...

Just to clarify, Andy, my comment was made in reference to Noyer Biz' comment, not your post.

Blahblahblah said...


Similar to the Austal-built “WestPac Express” operated by the US Marines for the past seven years, the JHSV will be capable of transporting troops and their equipment, supporting humanitarian relief efforts, operating in shallow waters and reaching speeds in excess of 35 knots fully loaded. The vessels will be a joint-use platform operated by both the United States Army and Navy.

WestPac Express:

built in 2001. There's the test bed. Same size/shape

Hate the ferry all you want, I'm on board. But the military paranoia always smelled like a Conspiracy Theorist's wet dream. There was no need to sneak around to fund anything military in the Bush era. He had carte blanche to waste as much as he wanted. Pork for Lott and the boy's in Pascagoula survives Occams razor IMO. Your theory doesn't.