EXCLUSIVE: Telecom exec faces tax charge - Hawaii News Now - KGMB and KHNL

EXCLUSIVE: Telecom exec faces tax charge

HONOLULU (HawaiiNewsNow) - A politically connected telecom executive is facing federal tax charges.

Prosecutors allege that 59-year-old Albert Hee underreported about a quarter of a million dollars in income on his personal tax filings for 2007.

If convicted, the founder of Sandwich Isles Communications faces up to 3 years in prison and a fine of $100,000.

Hee is the younger brother of state Sen. Clayton Hee. Sandwich Isles is led by Kamehameha Schools trustee Janeen Olds and its board members include retired Adm. Robert Kihune.

When asked about the indictment, Olds issued this statement: 

"The investigation has not and will not have any impact on Sandwich Isles Communications' ability to provide ... state-of-the-art broadband communications," said Olds.

Sandwich Isles provides telecommunication services for people living on Hawaiian homestead lands. For those services, it has received hefty subsidies from the federal government.

Since 1998, Sandwich Isles has received more than $400 million in low-interest federal loans. 

At one point, the company's federal subsidy was equivalent to about $13,000 per customer, or about 100 times the mainland average for rural telephone services.

Those subsidies have come under heavy attack from lawmakers like former California Congressman Henry Waxman. The federal government eventually began cutting that subsidy and it's now at around $250 per line.

"The numbers don't compute, we have the highest costs per subscriber in the county and I mean they were outrageous costs," said state Sen. Sam Slom, R-Hawaii Kai.

"Where does that money come from? It comes from the taxpayers, the overburdened taxpayers."

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