On Maui, owners of a cattle ranch on some 4,800 acres of state land stood trial in December on charges of cruelty to animals. Just one water trough (an old bathtub), filled manually from time to time, existed on the entire arid tract.
On O`ahu, agents of the Humane Society found that cattle and horses on land rented to a dairy that went out of business more than a year ago were left without water for four days.
In Wai`anae, meanwhile, a dairy operator leasing state land has declared bankruptcy, culminating a year in which the raw milk it sold was found to have high levels of bacteria and in which its milk barns failed sanitation inspections. Among its creditors: the state Department of Health, which for years has been trying to collect fines levied against the dairy for violations of the federal Clean Water Act.
The Perreira Ranch
On September 18, 1993, a veterinarian with the U.S. Department of Agriculture conducted an inspection of a small fenced area just mauka of the Pi`ilani Highway near Ma`alaea, Maui. Accompanying her were staff from the Maui Humane Society, the Maui County Prosecutor’s office, and the Maui Police Department.
The inspection team found four dead cows and several more emaciated and near death. Two starved and dehydrated calves were removed and given medical treatment at the Humane Society; both died within the next two days.
The owner of the ranch, and the tenant of record for the 4,815 acres of state land occupied by the ranch, is Stephen Perreira, doing business as S. Perreira Ranch. It was not the first time a ranching operation associated with Perreira had been investigated for cruelty to animals. In August 1993, the Humane Society had attempted to file 20 counts of cruelty to animals against Annette Niles, Perreira’s daughter and the day-to-day manager of ranch operations. That effort came to naught when a judge ruled that the investigating team failed to obtain a search warrant before entering the Pu`unene feedlot, operated by Perreira and Niles, where 34 dead animals were found.
The previous year — 1992 — complaints were made about dying cattle on 16,000 acres of barren land at Kahikinui, Maui, owned by the Department of Hawaiian Homeland but leased to Maui Factors, whose president was Perreira and whose secretary-treasurer was Elmer Cravalho, the former mayor of Maui and state Speaker of the House of Representatives from 1959 to 1967.
Newspaper accounts of starved or dehydrated cattle on the Ma`alaea land ranched by Perreira or Cravalho go back as far as the 1970s. In October 1978, for example, a reporter for the Honolulu Advertiser wrote, “At the feedlot at Ma`alaea, at least two carcasses could be seen from the highway, while several mounds of earth indicated that three or four more steers had been buried. The Ma`alaea pasture area is a portion of state land leased under a revocable permit to Maui Factors… The pasture areas seen yesterday were devoid of any grass or plants for grazing. Apparently as a result of the [police] complaint, several bales of hay had been tossed into the pasture, but most of the hay had been consumed by late afternoon.”
Within days of the September 18 inspection, Humane Society investigators, armed with warrants, had found two more cattle carcasses at the Ma`alaea ranch and nine dead cattle at Kahikinui. The inspections led to Niles and Perreira being arraigned in August 1994 on 32 counts of cruelty to animals, a misdemeanor offense. A jury heard the case in December 1994.
September 27, 1993: Alan Tokunaga, Maui District land agent for the Department of Land and Natural Resources’ Division of Land Management, writes Stephen Perreira: “To date, we have not received the executed documents regarding the subject General Lease No. S-5277 which were mailed on June 10, 1993, and received by you on June 14, 1993. In addition, according to the lease requirements, we have not received the following: 1. Conservation plan; 2. Performance bond; and 3. Surety bond.
“Also, your insurance policy coverage is inadequate… You are hereby notified that your subject lease will be terminated 30 (thirty) days from receipt of this letter if these deficiencies are not corrected within this period.” No mention is made of the Humane Society inspection.
Musical Cows
The cattle found dead in August 1993 at the Pu`unene feedlot, in central Maui, had been moved there from Kahikinui. The Maui Factor lease had expired on March 31, 1992, and Perreira had been told to clear out the cattle by the end of 1993. Other cattle from Kahikinui were taken to Ma`alaea, against the advice of Aimee Anderson, an investigator with the Humane Society. According to a report in The Maui News of September 29, 1993, when Anderson learned that Niles was planning to add some of the Kahikinui cattle to the Ma`alaea herd, “Anderson objected that the Ma`alaea pastures already were overgrazed and couldn’t support any more cattle.”
In late 1994, Niles started moving some of the cattle from Ma`alaea to 16 acres of state-owned land in Kula, occupied by the Perreira ranch on a month-to-month revocable permit from the state. According to a letter from a neighboring Kula farmer to the state Division of Land management, that land, too, “is being very badly abused by overgrazing.” When Humane Society inspectors and reporters viewed the Perreira-occupied land from the adjoining parcel, they saw “a steep, rocky piece of land with no vegetation except a dozen or so kiawe trees,” according to a report in the November 4, 1994, Maui News. The Maui district land agent, Phil Ohta, told a reporter that water and feed were available at the mauka end of the property. The Humane Society observers saw no cattle droppings, however, and none of the 40 or so cattle appeared to be chewing its cud, the Maui News report stated.
The Lease
At the time of the September 1993 inspections, the Ma`alaea acreage was occupied by Perreira and Niles without an executed lease. Perreira had been awarded the lease earlier in the year, having bid $56,500 in annual lease rent, but the lease had not been signed nor had Perreia posted the required performance bond. Prior to the award of the lease, the land had been encumbered by a month-to-month revocable permit, rent for which was $826 per month. In fact, from 1965 on to the present, the land had been ranched by Maui Factors or Perreira, or both.
In October 1993, hundreds of Maui residents, appalled at what they were reading in the newspapers, called and wrote the DLNR, asking that Land Board Chairman Keith Ahue hold off signing the lease. On October 17, the Maui Humane Society, the Conservation Council for Hawai`i, the Maui chapter of the Sierra Club, and Animal Rights Hawai`i jointly requested that the lease not be issued until the complaints against Perreira could be more fully investigated.
October 14, 1993: Land Board Chairman Keith Ahue responds to a letter from Linda Swanson of Kihei, one of many outraged citizens: “We are presently awaiting additional information concerning the health of the livestock. Reports from Mr. Perreira’s veterinarian and the U.S.D.A. office have not been received to date. But, we have been advised verbally by the U.S.D.A. office that an inspection conducted on September 27, 1993, revealed that there were a few thin cows present but they did appear to be alert and healthy.
“In addition, our staff inspection of the premises indicates that water is available through a water trough in that area and that three (3) truckloads (total of 45 tons) of pineapple feed is provided each week to the livestock…
“We anxiously await receipt of the reports. Once this is done, the department will then assess the reports and determine the corrective action that needs to be taken.”
Without fanfare, Ahue and Perreira signed the lease on October 15. Mason Young, administrator of the Department of Land and Natural Resources’ Division of Land Management, attempted to justify the lease as giving the state more control over its tenants by requiring them to develop and comply with management plans and the like.
December 3, 1993: Young responds to a letter from Anne P. Crowe of Kula: “The Department of Land and Natural Resources is also concerned about the situation and has been working with the Perreiras in order to improve the situation.
“Among its many duties, this department is responsible for leasing public lands to bona fide applicants. The Perreiras were deemed qualified to participate in the public auction at which they were awarded the lease as the highest bidder.
“We regret that you were not told that the lease for this area had already been signed when you called with your objections on October 18, 1993, but we are fairly certain that the person to whom you spoke on the phone was also unaware of that fact at the time.
“We are aware that there have been earlier allegations about the mistreatment of their cattle. However, we are not aware that they have been charged and/or convicted of these or any subsequent allegations. Chapter 711, Hawai`i Revised Statutes, states that for a person to commit the offense of cruelty to animals, his or her action(s) must be intentional, knowing or reckless. Personnel from the department’s Maui District office have inspected the premises with and without the lessee’s presence after learning of the problem. They discovered that supplemental feed is provided on a regular basis and water is available. This makes it difficult to prove that the lessee’s actions or lack thereof are intentional, knowing or reckless…
“No one benefits from this situation but canceling the lease may not be legally prudent or the panacea some believe. Rather than aggravate the situation further, we are trying to work with the lessee to resolve the problem as soon as possible.”
Noncompliance
Hardly was the ink dry on the contract when the DLNR began pressing Perreira and Niles to supply the performance bond and conservation plan. Under lease terms, the performance bond should have been provided to the DLNR within 30 days of receipt of the lease document (July 14, 1993). The conservation plan was to have been delivered to the DLNR for approval “within six months following lease commencement” — in other words, by the end of August 1993 (the lease commenced in February). Yet on December 23, 1993, Mason Young was still asking for both these items to be provided — the bond by January 1, 1994, and the conservation plan by April 15, 1994.
On March 4, 1994, Land Agent Alan Tokunaga again asked about the performance bond. If the DLNR did not receive it by March 11, Tokunaga threatened, “a ‘notice to vacate’ will be issued to you to initiate termination of your subject lease.”
March 11 came and went. On March 16, finally, Meyer M. Ueoka, attorney for the ranch, responded to Tokunaga: “Please be advised that an application has been made for the performance bond, all papers have been submitted to the bonding company. As soon as the bond is received, we will transmit the same to you.” Five days later, Ahue signed a notice of default letter to the ranch, giving Niles and Perreira sixty days to provide the required bond.
In May, the performance bond still had not come through. Ueoka proposed that, in lieu of the bond, the DLNR accept a personal bond signed by Stephen and Mary Perreira and Annette and Kimo Niles and secured by half an acre of real estate they jointly own in Kula. The state’s initial response was to reject it, “since the real property is not a form of liquid asset,” as Tokunaga explained in a letter to Ueoka on May 17, 1994. By September 9, 1994, however, with no other security having been provided, the state acceded to the unusual request.
Access
Among the many problems that the DLNR has had with the Perreira lease at Ma`alaea has been the interpretation of Paragraph 47: “Access. The existing road to the forest reserve boundary shall be retained for public use.” The road in question leads from the coastal highway to the Hanaula Forest Reserve above the ranch.
While the language seems straightforward enough, Perreira and Niles gated and locked the road.
January 13, 1994: Alan Tokunaga writes a memo to Mason Young: “We recently received oral inquiries from two members of the general public regarding the access road to the forest reserve boundary through Mr. Perreira’s leased land, TMK 3-6-01:14. Apparently, they object to being denied access to the forest reserve by Mr. Perreira’s locked gate off Honoapi`ilani Highway. They point out that Condition #47, page 17 of the subject lease allows the public to utilize the unimproved service road to get to the forest reserve seemingly at will. However, page 2 of the same document reserves to the state, among other things, the ‘existing road for public use to the Forest Reserve boundary.’ Which statement prevails?…
“We prefer and recommend the language contained on page 2 of the documents since controlled public access will still be permissible.”
On February 3, Diane E. Shepherd, a veterinarian, notified Tokunaga that the Maui Humane Society, the Sierra Club, and the Conservation Council for Hawai`i “will be visiting the forest reserve on Tuesday, February 15. I will pick up the key on February 14 at 9 a.m. at your office and at that time will make arrangements to return it to you the following afternoon.” In answer, Tokunaga informed Shepherd that she would need “written concurrence from Mr. Perreira and the Division of Forestry and Wildlife” — a condition that, as Shepherd noted in her own response to Tokunaga, had never before been imposed, despite a long history of naturalists using the area to study native plants.
Throughout February, Tokunaga was in regular communication about the access issue with Mason Young, the Division of Land Management’s administrator in Honolulu.
February 15, 1994: Tokunaga writes Young: “Special Condition No. 47, page 17, of the subject lease has us in a quandary… A group antagonistic to the lessee has seized upon paragraph 47 and is demanding access with or without concurrences [of the Perreiras] and are accusing us of denial of access to the forest reserve.
“We have contacted Ms. Dawn Chang of the Attorney General’s office by phone and, based only upon paragraph 47, she advised me that the lessee, basically, has no right to keep anyone, regardless of motive, from traversing the road to get to the forest reserve. However, the lessee has a right to quiet enjoyment. If paragraph 47 is discovered by the general public, we foresee a host of problems as the district forester has informed me that anyone can legally enter any forest reserve provided they can secure access to the boundary…
“Please advise…”
(The memo just quoted disappeared from the Honolulu file as soon as a copy of it had been requested by Environment Hawai`i. The copy quoted was obtained from the Maui office. A four-page memo faxed from Young to Tokunaga on February 24, 1994, has vanished from the files without a trace.)
On March 2, 1994, the DLNR appears to have found a trump card up its sleeve. Land Agent Phil Ohta informed Young that the upper third portion of the roadway to the forest reserve “does not entirely run on state lands. As a matter of fact, the majority of this roadway portion is located on C. Brewer lands… Therefore, if we do allow the public use of the roadway to access the State Forest Reserve, these parties will also need to obtain permission from C. Brewer to access their lands. C. Brewer has been reluctant to involve themselves in these types of issues, so there is a possibility the public may run into difficulties in acquiring C. Brewer’s permission.”
Eco-Tourism?
As shy as the Perreiras were about the public traveling through their leased land, by late May 1994, they seem to have been entertaining thoughts of turning their ranch into a tourist destination. On May 31, Meyer Ueoka, their attorney, asked Land Board Chairman Ahue to modify the lease.
“While ranching will be the major operation on the leased property,” Ueoka wrote, S. Perreira Ranch now wanted to conduct guided tours on recreational vehicles (the tours would be open to “locals as well as visitors,” he said); to plant native plants such as koa and sandalwood; to “propagate nene;” to conduct horseback tours; to build “a pavilion for picnic lunch for those who participate in guided tours;” to build “a house in the upper section for camping purposes;” to build “a house and office for the caretaker;” to conduct “guided hunting for pheasants,” and to conduct “helicopter tours.”
No response to Ueoka’s request could be found in the DLNR files.
A Gentle Hint
In June 1994, Perreira and Niles submitted to the DLNR the conservation plan prepared for them by the Soil Conservation Service. A study done in conjunction with that plan, by Burt Smith of the University of Hawai`i, reported that in places, ranch land had been grazed to the point that 48 percent of the ground was bare, “an indicator of both immediate grazing pressure as well as prolonged over-use.” Only one working water trough was found on the entire ranch, and that, he reported, was in an “inappropriate location,” and, he noted later, “badly in need of cleaning and repair.” All things taken together, Smith wrote, “there is no doubt in my mind that this area has been and is rapidly deteriorating under the herd and grazing management strategies and policies that have been in operation over the years.”
Smith noted that the cattle at the lower elevations of the ranch “were generally in poorer body condition than those at higher elevations… A number of newborn calves were seen. Older calves were light and many showed signs of ‘hay belly.’ This is a condition in young animals resulting from poor nutrition and caused by consumption of large quantities of low quality forage, this in turn distends the rumen giving them a somewhat bloated appearance. In the case of calves, it is triggered by an insufficient milk supply of their dams.”
If no improvement were made in ranch conditions, Smith wrote, “then the stocking rate should be reduced to one animal per 40 acres,” or, in other words, 100 head of cattle instead of the 350-plus population there now. With changed management policies, up to 600 mother cows could be raised at the ranch “on a sustainable basis,” Smith wrote.
After receiving the Soil Conservation Service plan, the DLNR approached Smith, asking for his comments on it. On June 21, 1994, Smith responded:
“Based upon the January meeting with Mrs. Annette Niles … and my five-day observation of the operation, I do not believe that the present tenants possess the necessary level of knowledge and skills to effect the required changes. While the SCS and the University Extension Service are willing and able to assist, this is not sufficient. There is a core body of knowledge that is best presented in a formal environment where the participants have made a commitment to learn. There are schools on the mainland where the basics of this knowledge are taught during a week to ten-day period.”
On July 7, Mason Young wrote Perreira, informing him that the Conservation Plan had been approved. However, he added, the DLNR and others felt “that you and your daughter, Mrs. Annette Niles, need to increase your level of knowledge and skills… [W]e feel that it is advisable that you and your daughter make every effort to attend a pasture and livestock management school on the U.S. mainland.” Young went on to list the name and address of two such ranch schools, both in Albuquerque, New Mexico.
Default, Again
By October, Perreira and Niles had made no measurable progress in carrying out the tasks set forth in the conservation plan. This, combined with what seems to be a mounting desire of the DLNR to distance itself from the Perreira operation, led the state to issue a notice of default to Perreira Ranch on October 14, 1994. The sole cause cited in the default letter was failure to achieve certain tasks by deadlines called out in the conservation plan, such as the removal of cattle from the makai fields during the dry summer season; the construction of fencing by June 1994; and the installation of water pipelines and troughs by June 1994 (this despite the fact that the DLNR did not approve the conservation plan until July).
The default notice, signed by Board Chairman Ahue, gave Perreira “sixty calendar days from your receipt of this letter to cure this breach.”
That 60-day deadline expired on December 18. According to Land Agent Phil Ohta, Niles and Perreira said they had tried to get some grass to grow, but nothing came up. None of the other tasks mentioned in the conservation plan had been undertaken.
Cancellation
On December 12, the Perreiras wrote to Keith Ahue, requesting that the lease be cancelled. According to Ohta, the Division of Land Management was now trying to figure out what to do next. If no cattle are on the Ma`alaea land, the grass could become a fire hazard by next summer.
The Verdict
A week later, the jury hearing the animal cruelty case against Perreira and Niles returned its verdict.
Toledo Twin Pine
It certainly was not the high rent charged by the state of Hawai`i that caused the Toledo Twin Pine dairy to go into bankruptcy in December 1994. For the use of 114.8 acres of land in the state Conservation District, Toledo Twin Pine was to have paid the state just $800 a year.
The low lease rent was explained by the Department of Land and Natural Resources’ Division of Land Management in a letter to the DLNR’s Fiscal Office in November 1992. The only use to which state land was put, according to Cecil Santos, O`ahu District land agent and author of the letter, was as a holding area for “dry cows” — “those cows who have gone through their milk producing cycle and are recuperating before being reactivated.” Because the cows on state land were not productive, Santos explained, “the current use of [the state land] is not solely for income-producing purposes.”
Contrary to lease terms, in 1990 owners of the dairy began extensive grading work without notifying the DLNR or obtaining its permission. Although Steve Toledo, operator of the dairy, insisted that the grading was done to correct a drainage problem, correspondence in the Division of Land Management files indicates that Toledo was suspected of selling some of the graded soil.
Clean Water Concerns
To be sure, the dairy did have a “drainage problem.” In 1989, the dairy had reported to the Department of Health a discharge of wastewater from its holding pond to Kaupuni Stream, the result of a broken berm. The grading was undertaken, the dairy said, to correct this problem and prevent manure from washing into a nearby City and County of Honolulu drainage ditch.
But the Clean Water Act violations continued. In 1992, approximately 100,000 gallons of wastewater spilled from a large animal waste holding pond at the dairy.
For both the 1989 and 1992 spills, the Department of Health issued a Notice and Finding of Violation and Order, assessing penalties totaling more than $10,000. After several years of futile efforts to resolve the violations, the Department of Health and the Environmental Protection Agency worked out a Consent Order with Steve Toledo. Under terms of that order, Toledo was to pay a penalty of $6,400 and submit, in early 1994, a remedial plan to ensure that no further spills would be likely to occur. Payment of the penalty was to be in monthly installments of $250.
Toledo never signed the consent order, according to Laurence Lau, the deputy attorney general handling the case. And, Lau added, because the previous two notices of violation were never adjudicated, it is unlikely that the penalties issued by the DOH for the Clean Water violations will stand up as claims against the dairy in bankruptcy court.
Sanitation Problems
The Clean Water violations were only the beginning of Toledo’s troubles with the Department of Health. In September and October 1993, the department’s Food and Drug Branch found that levels of bacteria in raw milk from the dairy exceeded acceptable standards. Whereas the maximum “standard plate count” for bacteria in raw milk is 50,000 per milliliter, a sample collected from the Toledo Twin Pine dairy in September had 68,000 per ml; the October count was 140,000 per ml. In February 1994, the dairy was notified that its milk once more exceeded bacteria standards — this time with an SPC reading of 60,000.
Since all milk is pasteurized, bacteria found in the raw milk are killed before the milk reaches the consumer. Bacteria counts can be useful, however, as indicators of dairies having sanitation or other problems.
And Toledo Twin Pine was having its share of sanitation problems, too. Inspections by the Department of Health’s Sanitation Branch revealed dirty corrals, with “pooling” of urine and “accumulated manure.” Milk barns were not effectively screened to keep out rodents and insects. Water supplies had cross connections, allowing for contamination. Flies were “excessive,” cows’ udders were not cleaned before milking, floors were described as “pitted” and “in poor repair.”
At the time it filed for bankruptcy, Toledo Twin Pine was current in its lease rent to the state. Indeed, one of the DLM land agents for O`ahu described it to Environment Hawai`i as “one of our better tenants.”
Lucky S Dairy
The Lucky S Dairy occupied 1,885 acres of state land in the Kuaokala Game Management Area, high above Mokuleia, on O`ahu’s northeastern coast. It took over a revocable permit in 1990 from the previous tenant, James Dowsett. Rent was $2,800 a year.
In 1991, the 50th State Dairy Farmers Cooperative, to which the Lucky S Dairy belonged, asked the Division of Land Management for permission to fence the area into four paddocks. While 1,800 acres of open range land is fine for beef cattle, dairy cattle “require more attention,” the DLM was told by Terry Yamane, writing on behalf of the co-op. “Putting young dairy cattle (heifers) in too large an area would make impossible locating and monitoring each animal on a weekly basis,” Yamane wrote.
Clearly, the DLNR had anticipated Souza installing fences when it issued him the permit. “Fencing satisfactory to the Department of Land and Natural Resources shall be constructed … along and around the entire boundary of the permit area.” However, Mason Young, administrator of the Division of Land Management, routed Yamane’s request through the DLNR’s Division of Forestry and Wildlife, to see if it had any objections.
It did. In a long memo to Young, dated August 12, 1991, Herbert H. Kikukawa, DOFAW’s O`ahu district manager, explained that use of the land as pasture was not compatible with use of the land as a game management area. The Forestry Division had “encumbered operational funds to contract equipment to clear areas of undesirable vegetative growth and replanted more desirable plant species,” Kikukawa said. DOFAW, he continued, had “received complaints from hunters that they were harassed by a tenant rancher in the Kuaokala Game Management Area during the game bird hunting season. From the rancher’s standpoint, I’m sure that the dairy heifers, especially the pregnant ones, will not fare very well if hunters and their dogs are in the same paddocks.”
In September 1991, O`ahu land agent Cecil Santos notified Yamane that no new fence lines would be permitted until the Division of Forestry and Wildlife had completed its game management plan for the Kuaokala area.
Bankruptcy
In October 1992, a check from the Lucky S Dairy for two months’ rent was returned to the DLNR by the bank upon which it was drawn. In April of the following year, Steven Guttman, attorney for Norina E. Souza, doing business as Lucky S Dairy and Family Top Soil Service, informed the DLNR that his client had filed for bankruptcy.
At the time of the filing, the Lucky S was current in its rental payments. Over the next year, however, it fell into arrears. By December 1993, the Lucky S was no longer a producing dairy, according to the Milk Control Branch of the state Department of Agriculture.
And in July 1994, the dairy had fallen behind in its rental payments by $2,301.74. Keith Ahue, chairman of the Board of Land and Natural Resources, informed the Lucky S Dairy that the department would cancel the revocable permit, effective August 31, 1994, after which time the premises would be padlocked.
Forgiveness
The threats were hollow. Although the Lucky S Dairy had long ago gone out of business, it was allowed to keep its cattle on the state land for at least four more months. At a meeting held one week after the state’s ultimatum to the dairy had been delivered, the state agreed to give the Souzas and another dairy owner who had been using the land, Sparky Ferreira, more time to relocate their cattle, provided the Souzas paid the delinquent rent and repaired the existing pasture fence.
In October, the Hawaiian Humane Society received a report that cattle and horses on the property were without water. An inspector from the Humane Society found some 30 head of horses, belonging to Souza, and 250 head of cattle (100 belonging to Ferreira, the remainder belonging to Souza) had been without water for four days. Apparently, a cow had broken a water valve, causing a tank to empty. Two of the horses required medical treatment, according to Mike Burgwin, a Humane Society officer.
On October 31, 1994, Land Board Chairman Ahue informed David Souza that the Lucky S Dairy’s revocable permit would be terminated November 30, 1994. The Land Board ratified that decision at its November 18 meeting. On December 5, a certified letter was mailed out to Souza, informing him that this time, he really did have just 30 more days from the receipt of the letter to vacate the premises.
— Patricia Tummons
Volume 5, Number 7 January 1995
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