 And welcome to Business in Hawaii with Reg Baker, where I show the broadcasts every Thursday from 2 to 2.30 in the downtown studios of Think Tech Hawaii and Pioneer Plaza. We focus on successful stories of individuals and companies in Hawaii who have overcome the challenges and made it work for them here in Hawaii. We keep making these top one, top two, top three rankings for the worst state to do business. And there's some truth to that. The costs out here are very high, but there are companies and individuals that have made it work and they've done very well. So this show highlights those success stories. We also have individuals who help small businesses in Hawaii, define as 500 employees or less, to be successful with rules, regulations, taxes. And one of those people we've got today, Gene Ward, a lot of people know who Gene Ward is. He's a member of the House of Representatives here for Hawaii. Been in Hawaii for many, many years and has had a very successful career. Gene, welcome to the show. Thank you for having me, Rich. I like the backdrop, but we'll really down tell him, although I thought we were going to be in Waikiki Beach, but I guess it's good. It's raining in Waikiki, so... Okay. Well, you've been on the show before. Thank you for coming back again. We were talking a little bit before the show that you've got a very successful career. You've got a lot of accomplishments in your history. And a lot of people know who you are. They know what you do presently, but they don't always know or appreciate everything that you've done in your career. Can you kind of just talk to us a little bit about... I say, who I am and what am I doing here? Yes. Give us some history. Who are you, Gene? Probably the biggest defining moment in my life was when I went to Hilo as a Peace Corps trainee. I was a Peace Corps volunteer for two years in Borneo and came back to the University of Hawaii to major in Asian studies and everything thereafter. Even though I had met my wife who was Malaysian, everything became Asian-oriented. And that was in Hilo? No, I met her at the East West Center. If you've got time, I've got two hours of soliloquy about this, but it essentially became an Asian orientation. My undergraduate is in Asian studies and my wife is from Malaysia, my daughter is from China. I speak Malay, Indonesian, a bit of Chinese. Vietnamese. And I was a Vietnamese translator in Vietnam. I guess in related more to your show is that I was the small business administration advocate of the year a couple of decades ago. In fact, it was a national advocate, not an advocate, advocate for the year for Hawaii. And then I went to Washington and I was the advocate for the country because George Conahaley and I, some people will remember Dr. George Conahaley. We founded the Hawaii Entrepreneurship Training and Development Institute and trained 3,000 people throughout the world. We had 10 different countries. Started here with Hawaiians, did Kamehameha schools, went to Guam to do Chamorro training, to New Zealand to do Maoris, and then Africa and Mainland. And you even had a mokana, didn't you? Wasn't there a mokana that was used? We, in fact, were still putting the website together to keep it alive even though because I've been in politics, I haven't been doing the consulting as much as I should. But with the text, how to start a business, how to run a business, how to write a business plan, how to borrow money, how to work with a CPA like yourself. Entrepreneurship is, I guess, the next biggest influence I ever had. My wife and I did 15 years at the Royal Hawaiian Hotel selling clothing. And I was her marketing guy, paid the bills and washed the windows and wiped the typical entrepreneurial activities. You've got to be able to be the bottle washer to everything. But to me, the salvation of our economy is small business. I guess I come out of that Asian orientation and then out of the small business orientation as kind of in a nutshell. Right, and one of the themes that we encourage here is to understand how important the small business community is to our local economy. I think it's 97% of the businesses in Hawaii are defined as small business. Using the SBA 500 and below, but if you use, I think the Chamber of Commerce sometimes says 20 employees and below, there's probably 75%. It's still a large part of the economy. Yeah, but we are just really a lot of small businesses. You remember in the old days, there used to be the Big Five, Alexander Baldwin and all the other guys. They're no longer the guys that we can count. There's no Big Five, except the Big Five Republicans and the Legislative. There's only five of them. I know you don't want to get to that yet, but I call us the Big Five. All right, well, very good. And you all seem to sit together, too, so. On the telephone booth. Now, I was just going to say, it's a nightmare thought, but if using the 20 and 75%, if they ever got sick, it would have devastating results in the economy. I mean, think about it, 75% of all the business in Hawaii all of a sudden goes away. You know, that's a scary thought, and it's very important that we help that small business thrive and be healthy and help them to survive. Most definitely. Even though there's a considerable resiliency in the small business community, they generally are looked upon not with the economic engine that they are. The 70% of all new jobs come out of the small business community. They have a difficulty getting capital, the regulation. And quite frankly, in the legislature, we give, like lip service to farmers, we give lip service to small business. We haven't really been pro-small business. I think rank number five of the bottom five in the nation as a, quote, business-friendly environment in the state of Hawaii. We have the most entrepreneurial, ethnic groups in the world right here, right within the vicinity of where we're doing this show. But yet we kind of, we don't promote it, we're sort of underachieving, if you will, our entrepreneurial potential. Hawaii's got the best brand name that exists in the world. And we should be taking more advantage of that. And we haven't. Yeah. It's too bad. Well, and we can talk a little bit about some of the things that we can do that tends to embarrass us a little bit. We had a chance to touch on that. But before we get too far, you've also done some pretty interesting international positions within the government. I mean, you were involved in some countries that were interesting. My overseas experience began in the Peace Corps in Borneo, where the orangutans are and all of the other good things. But then when I was a young man, I would look at the globe and I'd say, how could there be so many countries? I've got to go there to prove that they're there. So I've been in 63 countries and I'm still willing and wanting to go to more. My wife and I joined the UN in the 80s, went to Malawi, and did small business development there. Recently after, as you know, as most other people know, I ran against then Congressman Abercrombie in 1998, lost, but went off to Washington and worked at USAID under President Bush as an appointee. But then one of my colleagues at USAID said, hey, Peace Corps is looking for country directors. I said, well, I was at the bottom of the group. What's it like to be a country? So I applied and I became the country director in a place where most people don't even know or heard of, East Timor. So I was there just about 10 years ago as the country director. Had 46 great volunteers, people who loved America and they wanted to give back. That's kind of a tradition that I think we're losing a bit in the last few years. I'm out of the old John Kendi. Don't ask what the country can do for you. Ask what you can do for your country. It's not corny, it's real because right now the mindset on the street is, hey, what have you got government for me? What can I get out of you? Exactly. That spirit is fit. They've got their hands out. The entitlement and other things. I know that maybe at some point we can talk about those issues, but, anyways, overseas is a big issue. East Timor, yes. Interesting environment that triggered your departure. Interesting environment, the poorest country in Southeast Asia, 400 years of colonial Portugal suppression and 25 years of military operations by the Indonesians. But in terms of what was going to happen and how the, let's say, and I would even apply this to Hawaii, you can unite a country, you can unite the islands, but if you don't unite the people, you haven't got a country yet. What was going on in East Timor is that the military was jockeying with the power structure within it with sometimes factions and some ethnic and some other regional stuff. So there was an insurrection. So the ambassador said, okay, all unessential American personnel leave. I thought our volunteers were essential, but they said, no, where are you going to go? It will come back. But Reg, after they evacuated us, it took 10 years to get Peace Corps back into a place which needed it so, so, so, so badly. As I said, the poorest country, but maternal, maternal death when the East Timorese would give birth was the highest in the world in terms of death rate. Well, we're going to have to take a short break here in a minute. And we're going to come back and talk about some of these other issues. But the reason why I wanted to just touch on that is that there's some similarities, I think, to what you went through and what I went through, the Dorn Evacuation of the Saigon, which was fragmented and we pulled out in 75. And it was a very terrifying and very sad experience, almost embarrassing. Could I interview you about that? Yeah, we'll do that sometime. All right, but this is Business in Hawaii with Reg Baker. We're here today with Gene Ward talking a little bit about his background in history, which is very colorful and interesting. And we're going to talk a little bit more about the upcoming special session and some other things that Gene's going to be working on for the rest of the year. We'll be right back after one minute. Aloha and Richard Concepcion, the host of Hispanic Hawaii. You can watch my show every other Tuesday at 2 p.m. We will bring you entertainment, educational, and also we'll tell you what is happening right here within our community. Think Tech Hawaii. Aloha. Aloha, I'm Tim Apocha, host for Moving Hawaii Forward, a show dedicated to transportation issues and traffic. We identify those areas where we do have problems in the state, but also the show is dedicated to trying to find solutions, not just detail our problems. So join me every other Tuesday on Moving Hawaii Forward. I'm Tim Apocha. Thank you. The Business in Hawaii with Reg Baker. This week we're talking with Gene Ward, who shared some very interesting details of his background and experience, always impressive to hear that. We're going to talk a little bit about the special session that's coming up and some other issues that we're going to be addressing here in the next year or so. Gene, I know we're switching gears a little bit here, but I guess we've got a special session coming up here pretty soon. Is it special? I'd say we're going to go back in the session. Whether it's special, it depends on where you are on the rail. And I'm not sure that I would call it special, but it's an extraordinary addition to what we've done, 16 years. As a layman, every session is special. Yeah, hold on to your wallet. So we've got to, I guess that's the single purpose of the session. It's going to be coming up as- If I understand these, there will not be any overrides of any of the vetoes that the governor has put forth. There will be no new legislation, only whether, and this is where the tug of war is, is it going to be an extension of the general excise tax? Or will it be an increase in the excise tax? Or will it be a combination of the TAT and the general excise? Because I doubt it's going to be a full on TAT, the travel, sorry, the transient accommodation, or the hotel room tax. So you think the property tax issue is off the table? To me, that would be an anathema. If we went into session and the result was that the property taxes went up for the people of Oahu, they should throw all of us out. The only thing we've got going tax wise in Hawaii are property taxes. I don't call it a sacred cow, but it's one thing that, my God, give people a break. We in the legislature have not cut the cost of living for decades. In fact, if anybody's cut the cost of living, it's when they brought in Costco, they brought in Walmart, they brought in Tarje, like my father would like to say. That's how we've cut down the cost of living. Otherwise, the people of Hawaii are hurting and to raise their property taxes, the landlords. And you know what the median household income, the household cost or the median value of a house now is $775,000. That's huge. It's huge. And I've heard that in the next five years or so it could go up over a million. That's what is projected by some of the economists. So those at the lower rung are going to be hit by a general excise tax because it's very regressive. The poor pay more to put it in very simple terms. And that's what makes that solution somewhat unfair. But also, you could build a similar case for TAT because then all of a sudden, unless you restrict it to just the Wabu, the neighbor islands, if they have to pay TAT, then that's- It would be a sucking sound for the whole of tourism. But the attractive part of that is that the tourists are going to pay. But then the tension is the goose that lays the golden egg is the visitor industry. And if we keep pushing the envelope to where we're going to be at the price of New York and all those people who come our family, they're not business travelers like they get in New York. We're going to push ourselves out of the business. And it's very competitive. And it's getting more competitive. There's a lot of markets out there that are seeing this golden egg, and would like to have a piece of it. And so they're getting pretty aggressive. So you have to be careful. My sense is, and I'm not going to be voting in any of the TAT or the general excise tax increase, is where- And you know Hong Kong by your own experience. Japan and Hong Kong gets the private sector to divvy up because they get development rights. You want to build a shopping center. You want to build underground areas for retail. You got it. You want to build a hotel. You want to build workforce housing. We have not got any private money into this at all. And I'm very saddened by that. We have not leveraged what we could leverage in that 20-mile stretch of the quote, transit-oriented development corridor. Do you see any possibility for a private public venture? I've talked to Mr. Bothy about this. He said, well, we are going to get some of the stations. Maybe the stations will have some vending or some part of it. I would hope there would be some creative entrepreneurial using again small business as we have showing up. And like the rent that the small businesses pay at the airport, basically fund the airport. It's almost self-funding by the amount of percentages that the vendors are getting. So we could be creative. We could be more entrepreneurial. But the way it is now, and Reg, we haven't even talked about the operational cost, the electricity, and all of the things that are probably going to run $200, $300 million a year. And that'll go on forever. Exactly. It's in perpetuity. So we have a real difficulty. I think there should be a discussion that Clipslater and Ben Caetano and Randy Roth and Sam Sloan will put forth. Run those buses back and forth. You could do it rapidly, more cheaply, get them off at the station just like it is with the automated rail cars. There's a number of options, but we got locked in early and we got ourself committed to where if you're swimming across the river and you're halfway there, if you go all the way or you come back, you've got the same amount of energy. And right now, well, you can't tear it down. Well, we can use a different technology to use it, because steel and steel is 100 years old. Well, it was old when we initially selected it. And if there was ever oppressions about the vote that was very close, if people knew, nobody believes later when you say, oh, it's going to cost three or four times the amount. Nobody believed that. If there was a vote now, it would surely go down. And I'm sure they're going to avoid any vote, like the plague, to do that. So anyways, that's quote the special session. It's basically something where there's going to be an understanding of this is a state project or is it a county project? Is it the Syrian county? Well, I know that the finance committee and Mayor Caldwell have been at loggerheads about the veracity, the truthness, and how if we're going to pay for something, give us a price tag, not a moving target of how much it's going to cost or how we're going to do it. It's probably one of the, and you're the expert business consultant, probably one of the worst kind of business plans that people make up like the back of an envelope in a bar. Well, it's got no credibility. So far from what I've been watching, they have not been accurate in any one of their projections yet. So they're 100% inaccurate. That's the way I've been reading it. So where's the credibility? Who are you going to believe and how are you going to believe? Because when you, you know, if they went to the bank to do this, the bank would, OK, when you know what you're going to do, come back and see me. When you know how much it's going to cost, give me your cash flow statement. Give me all these operational costs. They can't do it. It's loosey-goosey, and somehow government allows that to happen. And I'm hoping there will be whether it's going to be some skin in the game, some monitoring, and some accountability. Otherwise, as I said earlier, we're just taking the poor of Hawaii and making them poor. You know, the accountability and the transparency issue, I mean, didn't they just have an opportunity to have a little bit of a financial audit done, and they turned it down? They said there's a need for it. That would have cleared their name, and that would have made them a bit more credible. Why would you not want an audit? Why do you plead the Fifth Amendment when you know you're feeling guilty? The audit, unless it was going to be so costly, they couldn't afford it, which was not the case, they should have had it in order to clear their name. I'm confident Mr. Murthy is, if anybody is going to turn this thing around in an open and frank way, he can do it. As long as he's allowed to. And not balling to the political pressure of other forces in the world. Well, good luck to him, and good luck to us as a state that we can figure out a solution to this. The rule of thumb is unless you've got 3 million people in the vicinity or the corridor to do a real, you have not even reached square one to say, yes, we're going to do a master answer. Well, and that's why this is going to be a drain on the economy for a very long time. There's only one good thing that's there, and it's the gem of we have an identity crisis as to who we are and how we're going to develop. Sometimes we think we're Los Angeles, we're just going to sprawl all over, which we do look at what's going on in Ho'opili. Or sometimes we think we're Hong Kong, we're just going to go up. We kind of go between back and forth. The one good thing about the rail is there's got to be one way to develop to the second city, and that's going to be along the quarter. If we did that well or had plans, right now, Reggie, there's not even the infrastructure to put in some of the things I said if they had the rights to build a hotel. There's not the infrastructure to do it. Well, and that's where the costs just keep multiplying. Well, we forgot about this thing. Exactly. Then it's where, again, if you don't do it, you wasted the money that you've already put in. It's going to be an interesting 10 or 20 years to see how this all plays out. We meet the end of August till the 1st of September, so you'll be following this blow by blow. Well, hold on to our wallets. Yes, that's the... You know, we've got about three or four minutes left, and I just wanted to touch a little bit about another hat that you wear as the... I'll never wear a hat, according to my wife. But yes, she reminds me I should always wear a hat, but I don't. Well, yeah, at least you still have a hat here. My son. But what I'm getting at is your role with the Republican Party at a national level. You're a national appointee. National committee man. Actually, it's not an appointee. It's an elected position. I ran for the position in May of 2016, and it's one of three positions that each state has, national committee man, national committee woman, and the state party chair. Throw in the American Samoa, Puerto Rico, Virgin Islands, and the territories, and you've got, I think, 169 people who basically won the Republican Party. And I find it's really invigorating to go to the RNC meetings and see so many red states. It's kind of like a vicarious, like, wow. The values and the attitudes that we have in Hawaii, we know there's a minority of us here. The values and attitudes of us here is what's in effect the governing model there. So we should take heart. Even though we're temporarily a blue state, the values and attitudes of America are being run out of the mainland. So I'm very, very encouraged by that. And you just had a conference call or a meeting? Right, I was at a conference call last week. One of the guest attendees in the conference call was Karen Handel. If people remember Georgia, six of the six congressional district of Georgia, broke all time records. It's almost embarrassing as a political person to say that that race cost $60 million. Six zero? Six zero, no, 50 had been reported, but she said on the phone call that there are new expenses coming in and it looks like it's gonna go up to $60 million. And that was quote the test case as to whether Trump could be pushed over or the ushering in of a new era, anti-Trump was gonna happen. So everybody in their uncle threw money into that, particularly the Democrats. I think huge amounts of money, more so than the Republican. But Karen Handel was a former Secretary of State, a God-fearing woman, conservative, and it was just a great encouragement to hear from her vis-a-vis what was going on in the White House. And they talked about it. And Cuba and others. Pardon me for asking, but was this a U.S. House or a U.S. Senate seat? U.S. House seat. A House seat. Yeah, Georgia's seat. $60 million, no. New Georgia's old seat. You know, I ran for Congress once. To get into the congressional race, you gotta have at least a million or a million, have a Congress spell on a million and a half, I spent $500,000. So for openers, you gotta have at least a million. To win, the average is $1.55 million, I think, in all the states. So when you jack it up to $60 million, you're pouring everything, including the kitchen sink into that. That is not good for money and politics. It's huge. It is. Too much. It is, and it makes it to the point where normal people who would like to run for office don't even want to try. It's like, it's out of the league, out of the fashion. A race in Hawaii is 35 to probably $50,000 a year. So it's doable in the sense you can raise that amount of money in a few years. But we have always had these public funding bills come forward, but we can't afford it. We have not been able to do that. And I don't think taxpayers want to fund political elections otherwise. Very interesting, but also a little sad, too, to hear that it's gotten to that point. But it's a good indication of things to come. I guess it was a bill where there in a sense that she won the position. There's other states that are gonna be in a similar type of election cycle that's gonna be coming up, I think, next year. And so there could be more opportunity for more GOP representation in the House. The GOP has got to deliver. It has the White House, it has a majority in the state houses. It's got the Congress, the Senate. We have to deliver. And I think the people are ready for that change. But as Churchill said, democracy is a messy thing, but it's the best thing we got going. It's like a sausage factory. Messy, but it tastes good when it gets done. Democracy is self-correcting, so all the stuff that's going on about the Trump and all the other things, it'll settle down. America's going through a lot of these trials. You know as a Vietnam veteran, when we came home, when you came home, if it wasn't spit, it was a vitriol about who you were as a man who serves your country. So we'll get through this, but it's a little bit... I just hope we can keep it civil. We need to bring some civil discourse. Speaker Sen and I just wrote a piece for civil beat on the need for civility in politics, either in Hawaii or in the Middle East. Perfect timing for that. I wish we had time to go into that, but we've run out of time today. We'll leave it on. We just got started. We could spend another half hour on this. But we'll have you come back and we'll talk some more. This is Reg Baker, business in Hawaii. We broadcast live every Thursday from 2 to 2.30. And we highlight individuals and businesses that have made an impact on the business community here in Hawaii. Until next week, aloha, we'll see you soon.