The state earned the dubious distinction in a new report on higher education fraud: diploma mill haven.

Verifile Limited, an international employment screening company, says Hawaii is number two in the country for having bogus degree granting institutions. (See:)

The study says that there are 94 unaccredited colleges in this state, which is exceeded only by California, which has 134 diploma mills.

For employers that means that there's a lot of questionable degrees floating around out there. It also means that there are a lot of students who are being ripped off, thinking the college education they are paying for has any value.

Take the case of the 100 or so students who enrolled in the Hawaii School of Pharmacy several years ago. Back then, the Kapolei school passed itself off as legit and collected more than $7 million in tuition, or about $28,000 per student.

Pharmacy schools are pretty tough to get into these days so admission into a solid program is necessary to start a career.

But because this school was not accredited, students would be barred from taking the pharmacy licensing exam in Hawaii and other states. The school later shutdown after state regulators sued the school and its executives for deceptive trade practices.

Jeff Brunton, attorney for the state Office of Consumer Protectio, said diploma mills like the Hawaii School of Pharmacy are able to flourish in Hawaii due to the lax state laws. He said a person can operate an unaccredited school in Hawaii with just 25 students, miminal staffing and a single classroom. They don't have to show expertise in the subject they teach.

Only when the schools misrepresent to students that their unaccredited degrees will allow them to be licensed professionally or when they make other bogus claims can regulators take action against them.

"We have hundreds of them operating," said Brunton, who has taken legal action against dozens of unaccredited schools. "A lot of them are just a mailbox."

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Symphony update. The union representing the Honolulu Symphony's employees says it has no faith that management will be able to reorganize the orchestra and emerge from bankruptcy.

The symphony, which calls itself the oldest orchestra west of the Rocky Mountains, filed forbankruptcy protection in December after laying 89 of its full time and part-time musicians.

In a filing yesterday, the Musicians' Association of Hawaii Local 677, said management has not raised enough money to pay for its skeleton staff, let alone formulate a reorganization plan that will get the organization on its feet again.

They are asking that a trustee be appointed or the case be turned into a Chapter 7 liquidation bankruptcy, which would mean that the symphony would cease to exist.

"Their decison first to cease fundraising, then operations and then to announce (and subsequently proceed with) a bankruptcy defies all logic, in light of the fact that no creditor was forcing the issue," wrote David Farmer, attorney for the union.

"(Based) on its history of gross mismanagement and incompetence ... management is incapable of the task reorganization and a Chapter 11 trustee should be appointed, or, in the alternative, the case should be converted to Chapter 7 or dismissed."

Central Pacific Financial Corp.'s stock has declined 20 percent despite ongoing talks with an outside investor.

CPB's stock closed at $1.29 per share today on the New York Stock Exchange, down from Friday's close of $1.62.

In its earnings release Friday, the company disclosed that it is in discussions with "potential outside investors." The company declined to identify the buyers.

Typically, such discussions will boost a stock. But the company's finances are in such dire straits.

In its earnings statement, the company reported a record loss of $292.8 million for 2009, which is probably the largest ever single-year loss by a Hawaii-based company.

On Monday, B. Riley & Co. analyst Joseph Gladue downgraded his rating for CPF to sell.

One measure of Wall Streets interest or disinterest: During Friday's investors teleconference call, none of the analyst who follow the company asked any questions about the company's latest quarter, its prospects going forward or about the pending deal talks.

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Symphony update: The Honolulu Symphony filed is financial schedules before Friday's court-imposed deadline and avoided having its cased dismissed by U.S. Bankruptcy Judge Robert Faris.

During the creditors meeting Friday, symphony officials also disclosed that its Executive Director Majken Mechling was hired to a three-year contract last year at around $175,000. The symphony previously had asked that it be allowed to file Mechling's salary under seal.

Hawaiian Telcom took its reorganization plan to the state Public Utilities Commission.

In an 824-page filing earlier this month, the state's largest telecommunications company is asking the PUC to approve its $460 million, stand-alone reorganization plan.

The application comes after U.S. Bankruptcy Judge Lloyd King in November approved the company's reorganization plan, which slashes the company's debt by nearly $800 million by converting much of it into equity.

Details of the PUC filing are nearly identical to Hawaiian Telcom's filings in U.S. Bankruptcy Court, with the notable exception that Hawaiian Telcom will emerge with a little bit more cash.

Hawaiian Telcom previously said that it will receive a minimum of $45 million in cash. Now it's saying it will get at least $52 million in cash.

An extra $7 million doesn't sound like a lot of money for a company that generates nearly $500 million a year in revenue.

But that extra cushion is going to help Hawaiian Telcom as it emerges from its year-long bankruptcy, which is costing the company nearly $2 million a month in legal and consulting fees.

It's hard to say it will take the PUC to rule on the matter but it could take atleast six months. The PUC currently has a back log of about 30 telecommunication cases, although the state agency is likely to fast-track Hawaiian Telcom's reorganization plan due to its importance.

The PUC, which has hired its own financial experts to review Hawaiian Telcom's reorganization, would benefit from a more careful review.

In 2005, the agency quickly approved Washington, D.C.-based Carlyle Group's $1.6 billion buyout of Hawaiian Telcom despite concerns about the phone company's huge debt, which later forced the company into bankruptcy.

Honolulu Symphony officials are asking a federal bankruptcy judge to file under seal the details of salaries paid to its executive director Majken Mechling and other staffers.

The symphony terminated more than 60 of its musicians and all but two or three of its administrative workers prior to filing for Chapter 11 reorganization last month. The symphony also canceled the rest of its 2009-2010 concert season.

Symphony attorney Jerrold Guben said in a recent bankruptcy court filing that the salary figures should be sealed to prevent "unnecessary embarrassment or harrassment to the debtor's staff and management."

Guben cites no legal precedent for filing the document under seal. His basis to avoid "unnecessary embarrassment or harassment" is not convincing and cites no legal precedent.

There is a strong presumption of openness in federal courts. The standards for sealing documents is high and should be done in rare and extraordinary cases and avoiding "unneccessary embarrassment and harassment" is not one of them.

Mechling's salary is already a matter of public record. Under federal tax law, tax-exempt organizations such as the Honolulu Symphony must list the salaries of top executives and board members.

What's more, the "embarrassment and harrassment" of disclosing an executive's salary is hardly equivalent to the financial pain that many of the symphony's musicians, who not only have lost their salaries but have had their health benefits cut off.

Bank of Hawaii Corp. could be among the big losers in Mesa Air Group Inc.'s bankruptcy.

Mesa, the controlling owner of interisland carrier go! Mokulele, filed for Chapter 11 reorganization yesterday in New York, saying it needs to downsize its Mainland aircraft fleet.

In a filing yesterday, Mesa said it plans to reject a Bank of Hawaii aircraft lease worth $11 million. Mesa listed Bank of Hawaii as one of its 30 largest creditors.

Mesa owns or leases 178 aircraft, which are used to provide regional air services for partners such as United Airlines, Delta Air Lines Inc. and U.S. Airways Group Inc.

The carrier has taken 52 of its aircraft out of service in recent years and plans to park another 25 jets by May.

Federal bankruptcy law allows debtors like to reject contracts such as airline leases.

In most bankruptcies, aircraft lessors and manufacturers have fought hard to preserve their leases. Don't expect Bank of Hawaii to be an exception.

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Mesa CEO Jonathan Ornstein's stock holdings took a hit from yesterday's bankruptcy filing.

Bankruptcy filings show that Ornstein owns 199,956 shares of Mesa common stock.

Shares of Mesa dropped 6.4 cents to close at 5.5 cents on the Nasdaq market yesterday, giving Ornstein a paper loss of $12,797.18

Compared to a year ago, Mesa's stock is off 21.5 cents. It's far south of the $8.90 closing price on June 2006 when Mesa launched go! in Hawaii.