Jul
31
Ron Migita’s story may be the most interesting in the history of Hawaii banking.
Migita, born and raised on Maui, worked his way up from the bottom of the Bankoh management until taking early retirement 29 years later as a senior vice president at the age of 53.
City Bank Chairman James Morita recruited him to come over as president, effectively promising that Migita would succeed him, only to deny him any real authority and then push him out for asking for it.
A revolt against Morita, led by mainland institutional investors, led to his ouster in 1997 — the stock value grew by a third on the news – with Migita brought back to run the bank.
City Bank’s closest rival was Central Pacific Bank. Both were founded in the 1950s to serve the ethnic Japanese business community. Both had close ties to banks in Japan. By the 1990s, both were working hard to expand beyond their original constituencies. Central Pacific hired Clint Arnoldus from California to broaden its base, and one of the first things Arnoldus decided was that he should acquire City Bank.
Migita, who had earlier tried without success to acquire Central Pacific Bank, resisted acquisition. The two men traded sometimes acrimonious news releases, and City Bank fought merger with everything from poison pill stock policies to grass roots sign-waving campaigns by employees that resembled politics more than corporate merger battles. Someone should have written a book about it.
In the end, and ironically after pressure from City Bank’s institutional investors on the mainland, Central Pacific won City Bank, but at a higher price, and Migita was made a non-executive board chairman while Arnoldus was left running the combined bank.
The merger was consummated in 2004. I attended the last City Bank shareholders meeting and it felt like a funeral (and I felt like a vulture, because I had gleefully covered the dueling press releases and other sideshows).
I confess to thinking to myself when I learned the terms of the deal, I wonder how Migita will regain the ascendancy this time? Because, in a quiet, dignified way, he seemed really scrappy. And he had come back from exile before.
The answer turned out to be that Arnoldus would stumble eventually, and people would look to Migita to save the day.
Arnoldus stumbled by doing something that he probably thought was very sensible. Looking to diversify the bank and make it less vulnerable to the vagaries of the Hawaii economy, he decided to get into the California market, and lent a lot of money to developers there.
Then the housing boom in California ended.
Central Pacific was left with hundreds of millions in non-performing debt — while the Hawaii economy outperformed California’s. Arnoldus had diversified into an economy weaker than ours.
In March, Arnoldus announced he would retire at the end of the year, while a national search for his successor would be conducted.
On Thursday, the bank announced that its board has chosen its chairman to be CEO. Ron Migita, while keeping the until now titular role as chairman, would also become president and chief executive officer.
“These are difficult times,” Migita said in a statement. “But, during my career, I have seen difficult times before.”
He takes the reins officially Friday — four months before Arnoldus had said he would retire. The official announcement didn’t play this up, but to me it means this: Migita has won again.
And get this. Migita is the first Hawaii-born CEO that Central Pacific Bank has ever had.
Jul
31
Return of the Potted Plant
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Twenty years ago, U.S. senators were investigating the Iran-Contra scandal, in which the Reagan administration sold arms to Iran (which President Reagan said he would never do) to raise funds to support the Contra rebels in Nicaragua (which was illegal, though a court challenge to the Congressional ban might have gotten it thrown out on Constitutional grounds).
At one point in the Senate hearings, Sen. Dan Inouye, D-Hawaii, got tired of hearing Oliver North’s lawyer speak for North, a Marine lieutenant colonel who played a key role in the matter. Inouye suggested that North speak for himself. And his lawyer, a little pugnacious guy, leaned into his own microphone and said, “What am I, a potted plant? I’m here as a lawyer. That’s my job.”
That was Brendan Sullivan. He is “a lawyer” the way Mauna Loa is “a mountain.” He got North off, though there is no question he committed crimes, by having him describe them in immunized Congressional testimony, so the courts could throw out his later conviction on the grounds that prosecutors could not prove they would have nailed him without the immunized testimony.
Sullivan is back. He’s representing Sen. Ted Stevens, R-Alaska, who faces seven counts of making false statements in the case of an oil contractor who made improvements to his home that more than doubled its size. On Thursday it was Sullivan entering a not-guilty plea, while Stevens stood silently, playing the potted plant role.
Stevens, whose career dates back to an Interior Department post in the Eisenhower administration, has been a good friend to Hawaii for many years. Stevens and Inouye, though of different parties, are friends, and close allies, each working with the other to round up bipartisan support for federal grants and projects to aid their two remote states.
It is difficult to imagine any outcome to this matter which does not pose some peril for Hawaii. Stevens will be acquitted or convicted or settle out of court, but regardless of which way the matter ends legally, politically it will lead to a new campaign focus in the battle to succeed Stevens, who is 84 and approaching his 40th anniversary as a senator. Hawaii benefits from an Alaska senator who gets things done.
Is Stevens, apart from a senator who gets things done, one who engages in improper conduct? Perhaps the court case will answer that. What he allegedly did is fail to report gifts from VECO Corp., and its chief executive officer. VECO is an Alaska-based oil pipeline construction and maintenance firm. It hired more than 2,000 workers to clean up the mess after the Exxon Valdez oil spill in Prince William Sound, a spill so great that if it had happened along the Atlantic Coast it could have stretched from the mouth of Chesapeake Bay to Cape Cod. CEO Rick Allen and Vice President Rick Smith pleaded guilty last year to extortion, bribery and conspiracy. Allen and Smith resigned and Allen’s daughter Tammy became chairman. The FBI and the IRS raided Ted Stevens’ home a year ago Wednesday. The indictments Tuesday said Stevens received hundreds of thousands of dollars in unreported gifts.
We’ll see how Stevens does, and what kind of performance is turned in by the “potted plant.”
Jul
30
Brevity, brains and bread
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My father can take out a yellow legal pad and write down a page full of short thoughts, gags and opinions, so aphoristic you can almost fit them on bumper stickers. The way his mind works, for better or worse (which depends on the circumstances), is to zero in on the crux of the matter, yielding an opinion or conclusion that has clarity and simplicity.
As a radio network anchor who wrote his own scripts, I learned how to tell stories as succinctly as my father does, but for me it is an acquired skill, not a natural talent. Different people’s brains work differently, and mine races down countless corridors of side issues.
Want an example?
We’ve started a new feature on “Sunrise” called “Ask Howard.” We send a cameraman and a producer out into the community and invite people to ask questions. Most, so far, have turned out to be pithy questions about the economy, on matters I have already written and spoken about, so I have answers ready.
This morning, however, I got a question out of left field:
“What’s your favorite bread?”
Before punting (withdrawing my wallet and saying that my favorite bread was what was inside it) my brain flooded with the following thoughts:
- My favorite food is bread pudding — I like it so much I ask for it instead of a birthday cake — but I hate raisins in bread pudding and prefer no fruit or nuts of any kind.
- I bought some rye a few days ago and it was really dry.
- Hamburger rolls are perfect for sandwiches for which you don’t want a lot of bread, and because they’re soft they don’t squeeze out the innards.
- Fresh-baked whole wheat bread tastes better than fresh-baker white bread, but otherwise I like white bread better.
- Pumpernickel is nice now and then.
- I don’t like seeds on rolls because they’re messy.
- The heels of a loaf of bread can be useful in prevent leaks from a juicy sandwich.
- If making a grilled cheese sandwich in a waffle iron with reversible grilling surfaces, keep it on the waffle iron side and the parts that get smashed will taste crunchy like Cheese-Its.
- Microwave-melted cheddar on toasted bread actually tastes better than a grilled cheese sandwich without the need for any butter.
- When I was kid and we were briefly poor, an enjoyable snack was a piece of toast covered with butter, cinnamon and sugar.
- One of Ronald Reagan’s contributions to American culture was acquainting millions of people with monkeybread. He liked it, so it was served at Thanksgiving and Christmas, and the news is so slow on those holidays that White House correspondents always file reports on the dinner menu.
All these thoughts come from someone asking, what’s your favorite bread. Can you imagine the difficulty of speaking or writing coherently when you brain is running in all directions at once like this?
Maybe you can. I’ve read that so-called “autism,” once considered a rare condition, is in milder form a common alternative wiring of the brain, which may actually be better to have if you work in certain professions. Boy, I hope this is one of them!
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