Native Hawaiian community and Maui labor leader Perry Artates resigned last week from his post as a Hawaiian Homes Commission member after pleading guilty to federal wire fraud and false loan application charges in June, according to state officials and federal court documents.
"The governor has received and accepted the letter of resignation that Mr. Artates sent on Tuesday," Louise Kim McCoy, Gov. Neil Abercrombie's press secretary, told The Maui News on Friday.
While the governor had not asked for Artates' resignation prior to receiving it - in fact, he had not known about the federal charges against Artates until the day he received the resignation - there are certain statutes that require public officials to vacate their positions if found guilty of federal charges, McCoy said.
The federal case against Artates and his wife, Ronnette Artates, stemmed from a real estate transaction in February 2007. According to a 2012 indictment, Ronnette Artates had negotiated a deal with a couple who was facing foreclosure of their home in Makawao.
Ronnette Artates had offered to have her husband, Perry, buy the house and allow the couple to continue to live there for six months while paying rent, and then allow them to buy back the house once their financial situation improved.
To finance the purchase, the Artateses decided to seek a loan for 100 percent of the sale amount, but such a loan was only available to owner occupants. Knowing this, Ronnette Artates, a licensed real estate agent at the time, allowed her husband to fill out a loan application in which he falsely certified his intention to reside in the property, even though he did not intend to live there, according to the plea agreement filed in June.
Federal agents indicted Perry and Ronnette Artates on charges of conspiracy, wire fraud and making a false loan application in 2012.
The couple pleaded guilty to reduced charges in June. Each could face a maximum of five years in prison, a fine up to $250,000 and three years of probation.
Sentencing hearings are scheduled for Sept. 23.
"It's not like he was denying having done this, but this is not Wall Street, they (the feds) caught low-hanging fruit," Perry Artates' attorney Philip Lowenthal said Friday.
"He (Perry) has been a very positive person in the community. He's very remorseful that this happened because his life has been dedicated to the community, and this makes it more difficult to serve the community, and we all lose for that," Lowenthal said. "But he did what he did, and he got caught. It was a mistake."
Lowenthal also noted that "the statutes call for astronomical sentences," but he doubted that the judge would impose the full extent of the law, especially because "it doesn't seem like anyone lost money from this."
The Hawaiian Homes Commission did not return phone requests for comment on Friday. The Department of Hawaiian Home Lands' website lists Artates among past commissioners, showing he resigned this month. His term was supposed to end in 2015.
In light of Artates' resignation, as well as the absence of three other commissioners, a special meeting scheduled for Wednesday morning was canceled because of a lack of quorum.
Born and raised on Maui, Artates was appointed as a Hawaiian Homes commissioner in 2007 by then-Gov. Linda Lingle. Abercrombie reappointed him to a four-year term in 2011.
The nine members of the commission, each appointed by the governor with the advice and consent of the Senate, oversee the Department of Hawaiian Home Lands. The department manages state land set aside for Native Hawaiians.
Artates also served for nearly 20 years as the executive director of the Hawaii Operating Engineers Stabilization Fund, which lobbies for union-backed legislation related to construction and development. According to local union members, he retired earlier this year.
Artates' biography on the DHHL website said he served for six years as chairman of the Waiohuli Hawaiian Homesteaders Association.
* Eileen Chao can be reached at firstname.lastname@example.org.