Text Fwd: Hawaii fights release of details on drone contracts

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Hawaii fights release of details on drone contracts
January 29, 2011 by kyle

Jim Dooley wrote an interesting article on watchdog.org about the proposed use of aerial drones to monitor harbors in Hawai’i as part of no-bid contracts awarded to Hawaiya Technologies. Hawaiya is a military technology company owned by Paul Schultz. Schultz, formerly a Rear Admiral and commander of a fleet stationed in Okinawa, was demoted to captain when he retired from the Navy. He had come under investigation for allegations of adultery and fraud tied to a Navy research contracts scandal at the University of Hawai’i and the Pacific Missile Range Facility.

While in the Navy, the married Schultz allegedly had an affair with an Office of Naval Research program manager Mun Won Chang Fenton who helped to steer research funds and technology to Schultz’s ships outside of normal procurement channels. Fenton later awarded several grants to University of Hawai’i professors for research related to missile defense systems. She directed the UH researchers to hire technical personnel under the grant. These “directed hires” took their orders from Chang Fenton. Chang Fenton directed these personnel to write a large net-centric warfare technology contract proposal under the auspices of the Research Corporation of the University of Hawai’i (RCUH) and submit the proposal to Navy research programs that Chang Fenton helped to manage. The Navy awarded RCUH a contract for its proposal named “Project Kai e’e”, to establish a military Pacific Research Center to serve as a conduit for federal military high technology funding.

Naval Criminal Investigation Service (NCIS) documents and other sources allege that the Schultz and Chang Fenton tried to use government funds to create jobs for themselves in the new Pacific Research Center. The job announcement for Executive Director of the Pacific Research Center was posted on the bulletin board in the RCUH office for a few minutes. After Schultz submitted his application the job announcement was taken down. RCUH staff were directed by Chang Fenton to rate the applicant favorably. Schultz was offered the job, but he never formally accepted it. RCUH Executive Director Harold Masumoto suddenly sent a letter to the Office of Naval Research canceling the contract award.

Naval investigators were closing in. My theory is that someone may have tipped off Schultz and his co-conspirators, sending them scurrying for cover.

The Project Kai e’e scandal morphed into the proposed University Affiliated Research Center (UARC), a military classified research lab that met fierce protest by students, faculty and community groups in 2004 – 2006. The really interesting part of the this sordid tale is that the various projects were earmarks from Senator Inouye. Sources familiar with the scandal told me that the investigation went nowhere because it could have implicated four admirals and a senator.

As Dooley’s article suggests, Schultz seems to have found a new niche in the homeland security gold-rush. But the proposed use of unmanned aerial drones to monitor harbors raises many issues of civil liberties, safety and propriety. The contracts were awarded without any bidding. The plans for aerial drones are proceeding without approval from the Federal Aviation Administration. And details about the project are being kept from the public.

Could the no-bid contract have been awarded via Aina Kai, a Native Hawaiian Organization (NHO) established by Schultz and Chang Fenton (who are now married) in partnership with former Hawai’i governor John Waihe’e? NHOs are given special preferences for federal contracting to receive contract awards without competition and without a limit on the size of the award.


High stakes government funding, exotic and dangerous military technologies and secrecy are a recipe for corruption. The tsunami of military spending that was unleashed in the wake of the 9/11 attacks have brought with it a flood of corruption. Such is life in the military-industrial-political complex.

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http://watchdog.org/8124/hawaii-fights-release-of-details-on-drone-contracts/
Hawaii fights release of details on drone contracts
Posted on January 28, 2011

BY JIM DOOLEY — The state and a private contractor are installing extensive new security and surveillance measures at harbors and shorelines that include planned use of unmanned aerial drones, according to public records.

Neither the contractor nor state officials have applied to the Federal Aviation Administration for necessary permission to deploy the unmanned aerial vehicles in civilian air space here.

Repeated requests for details about the plans and their status made to the state and its contractor have not been answered for more than a month.

Paul Schultz, chief executive of Hawaiya Technologies, the company installing the new security measures, refused to discuss his company’s shoreline security plans in general or the use of UAV’s in particular.

“You can go find out your story on your own,” Schultz said.


“This is not a friendly story,” Schultz continued. ”You’re coming after me. You can come after me by yourself. But don’t call me looking for information.”

State Department of Transportation and harbors division personnel did not respond to repeated requests for comment submitted by email, telephone and in-person since late last year.

Glenn Okimoto, nominated by Gov. Neil Abercrombie as director of the Transportation Department, and his harbors division deputy director, Randy Grune, have said a department response was being prepared.

Okimoto was head of the harbors division in 2007 and personally recommended award of the original $1.46 million non-bid Honolulu harbor security contract to Hawaiya Technologies, according to state purchasing records.

Some $1 million of the contract is paid with federal grant money and the remainder comes from the state.

Grune said three weeks ago the department was still researching “technical issues” about non-bid security contracts awarded to Hawaiya.

The UAV’s are described as an anti-terrorism tool in documents describing new security measures at Honolulu and Kalaeloa Harbors on Oahu under a 2009 contract awarded to Hawaiya Technologies.

Another non-bid contract award worth nearly $1 million to Hawaiya is planned for Kahului harbor on Maui and the contractor has proposed installing the same system on Kauai and the Big Island.

The jobs would include use of UAV’s to conduct surveillance flights in the congested skies above state harbors, which abut two international airports, a general aviation airfield and Hickam Air Force Base.



The drones can’t fly without an FAA “certificate of authorization” and the state has not applied for one, said Ian Gregor, FAA spokesman.

The drones cost $75,000 each, according to purchasing records posted at the state procurement office website.

The type of drones – there are many different designs being marketed now – and the number to be purchased are details that the state has redacted from contracting files.

Only two civilian government agencies in the country – one in Texas and one in Kansas – have applied for and received necessary certifications for use of the drones, which must be operated by licensed pilots from ground control stations, said Gregor.

The Texas aircraft would be used to patrol remote sections of the Mexican border and the Kansas drones would be flown at a UAV testing and training facility 30 miles outside of Wichita.
The FAA requires that civilian-operated airborne drones must also be tracked by either a ground spotter vehicle or a manned chase plane.

The American Civil Liberties Union has expressed concern about invasion of privacy issues raised by use of surveillance drones in other states and is monitoring the Hawaii plans.

“Use of ‘Unmanned Aerial Vehicles’ or ‘drones’ by law enforcement has a vast potential for abuse,” sad Daniel Gluck, senior staff attorney for ACLU Hawaii.

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