by Andrew Walden
With its founder locked in a Federal Penitentiary on felony tax evasion charges, Sandwich Isles Communications (SIC) is closing and laying off all 40 of its remaining employees this Friday March 2, 2018.
According to a January 3, 2018 letter to the State Department of Labor and Industrial Relations, released by DLIR to Hawai’i Free Press, Sandwich Isles Communications had “entered into a letter of intent to sell the company and currently is negotiating a definitive purchase agreement.” The putative buyer was not identified.
The letter states that SIC employed 62 workers, but according to DLIR spokesperson William Kunstman, “Forty employees will be laid off tomorrow, down from the 62 in the attached notice. The person we spoke with (at SIC) said many had already left the company so that’s why forty only remain.”
The layoffs apparently signal the failure of efforts to sell SIC. Interim CEO Brianne Liko Hee-Kahalewai told DLIR, “retention of current employees is one of the requirements of the proposed sale….”
In another blow to the company, the US Court of Appeals for the District of Colombia, February 16, 2018, rejected SIC’s request for relief from the FCC’s demand that it disgorge $27M of its ill-gotten gains. SIC, with a monopoly for telephone and internet service on Hawaiian Homelands properties, raked in over $500M from federal subsides intended for rural areas and millions more in per-line subsidies. But when Sen Dan Inouye died, its fortunes changed. Company founder Al Hee was indicted on numerous felony counts on December 17, 2014--the exact second anniversary of Dan Inouye’s death.
Akamai readers will remember Brianne Liko Hee-Kahalewai from the criminal trial of her father Al Hee. The Star-Advertiser July 14, 2015 explains:
Over the course of a three-week trial in U.S. District Court, the jurors heard testimony that Hee’s company, Waimana Enterprises Inc., paid his wife a salary even though she did no work for the company and paid his children’s tuition and salaries when they attended college.
The company also paid for a $1.3 million house in California where two of his children lived when they attended college and for his twice-weekly two-hour massages….
The government says that between 2002 and 2012, Hee had Waimana pay approximately $2.3 million in personal and family expenses and deducted them as legitimate business expenses, including:
»$1,676,685 in wages and benefits for his wife and three children for providing little or no work for the company.
»$736,900 in tuition and housing for his three children when they attended college on the mainland.
»$119,909 in credit card charges for personal and family travel.
»$96,000 for personal massages….
Hee said his company should pay for his children’s college tuition because they are the future leaders of the business….
He said the house Waimana purchased in Santa Clara is a company investment that gave him a place to stay on trips to California to check on a company investment nearby.
Daughter Brianne Liko Hee-Kahalewai testified that she rented out rooms in the house to other students and, instead of giving the money to Waimana, used it to pay the house expenses. She also testified that Waimana paid her $24,000 per year while she attending college and $50,000 after she graduated but stayed in California doing part-time work for other businesses.
The credit card charges included payments for a trip to Switzerland for his wife, daughter Brianne and her husband; a trip to Disney World’s Epcot Center in Orlando, Fla., for his other daughter, Adrianne, and a friend and Brianne and her husband; and a trip to Tahiti for his wife, son Charlton and his two daughters….
Under State law, sixty day advance notice of a company’s closure is required. Hee wrote, “…March 4, 2018, Sandwich Isles Communications, Inc. (SIC) may be ‘closing’…. out of an abundance of caution, SIC is providing the applicable notice under the Dislocated Workers' Act, Haw. Rev. Stat. ch. 394B.”
Sandwich Isles did not respond to an inquiry from Hawai’i Free Press.
Kunstman says DLIR is “providing materials for the workers tomorrow via the employer….”
Al Hee's brother, ex-Senator Clayton Hee, this week announced he is campaigning for Governor.
PDF: Letter to DLIR
2005: Sandwich Isles Communications: Political Connections Pay Off
2014: Corruption: Al Hee Indicted on 13 Counts--Could Get 39 Years in Federal Prison
Star-Adv March 6, 2018: Telecom company warns it could close