Tuesday, May 18, 1999

Estate spent millions
with vendors

Some of the outside
contractors were involved in the
estate's controversy

Wong seeks dismissal

By Rick Daysog


One firm is under investigation for taking part in an alleged illegal campaign finance scheme. Another defended the estate from the attorney general's investigation into trustee misconduct. A third conducted a court-ordered management and financial audit that found that the estate's financial and management controls lacking.

Those companies were among the Bishop Estate's largest outside contractors last year, according to the estate's Form 990 disclosure report filed with the IRS yesterday.

For the year ending June 30, 1998, the estate said it paid four of its outside vendors more than $1 million for services ranging from legal work, architectural services and computer consulting jobs, the tax filings said.

All of the consultants' work was awarded on a nonbid basis. And several of the firms played a big role in the 2-year-old controversy.

One vendor, Kajioka Yamachi Architects Inc., is a target of the state attorney general's investigation into an alleged illegal campaign contributions by trust employees.

The estate said it paid the Kajioka firm $1.05 million during its 1997 fiscal year for design and architectural work for the estate's Maui campus. For the previous year, the estate paid the Kajioka firm about $193,792.

The architectural firm is headed by Allen Kajioka, a longtime friend of trustee Richard "Dickie" Wong's and has served as Wong's campaign chairman when Wong was president of the state Senate.

In a September 1998 removal suit, former Attorney General Margery Bronster charged that an estate employee directed the Kajioka firm and two other vendors to pay a $12,000 campaign debt owed to a local printing company by estate employee and former state Sen. Milton Holt.

The Kajioka firm also paid an $18,000 campaign debt owed by state Sen. Marshall Ige, a longtime friend and associate of trustee Henry Peters.

An estate spokesman said the firm was hired to conduct work on the new Kamehameha Schools Maui campus because of its familiarity with the Maui construction business and regulatory environment and not because of the company's ties to Wong.

Lex Smith, Kajioka's attorney, also denied wrongdoing to charges that the architectural firm abused state campaign finance laws. Smith said the firm's architectural work for the trust was legitimate and wasn't awarded as a result of Kajioka's friendship with Wong.

Another company linked to Wong, McCorriston Miho Miller Mukai, billed the $1.1 million for the year ending June 30, 1998.

The McCorriston law firm, whose partners include longtime Wong associate Stan Mukai, defended the estate and trustees from Bronster's investigation into the alleged misconduct by board members.

The attorney general's office has charged that the firm and partner William McCorriston unnecessarily delayed the state's investigation and said that it may seek to surcharge the estate and its trustees for some of the McCorriston firm's legal fees.

McCorriston could not be reached for immediate comment but in the past has said that the firm was representing the estate's due-process rights by questioning the numerous subpoenas issued by the state.

Another law firm, Cades Schutte Fleming & Wright, received $1.73 million worth of estate work for the 12 months ending June 30, 1998, making it the trust's largest outside contractor.

But most of the work by the Cades law firm, whose Bishop Estate team is headed by former state Judicial Selection Commission member Michael Hare, involved tax and leasehold litigation and was not related to the ongoing controversy, according to an estate spokesman.

The second largest contractor, Data House Inc., received $1.2 million in nonbid consulting work from the estate in the 1997 fiscal year.

Data House, whose work for the estate largely involved Y2K compliance issues, is headed by Daniel Arita, a golfing buddy of Yukio Takemoto, head of the estate's budget and review department and a past state budget director under former Gov. John Waihee.

Takemoto resigned under fire as budget director in 1994 due in part to a state procurement scandal. A special state Senate panel disclosed then that the Data House firm received nearly $12.9 million in mostly nonbid state contracts between 1987 and 1992 from the Waihee administration.

Data House has denied that it received preferential treatment from the estate and Takemoto.

Trustee Wong seeks
dismissal of charges

By Debra Barayuga


A hearing is scheduled in Circuit Court May 24 on a motion to dismiss the criminal indictment against ousted Bishop Estate trustee Richard "Dickie" Wong, his wife and brother-in-law.

Court papers filed yesterday and last week are seeking to dismiss the indictment based on "inadequate" evidence, said Eric Seitz, one of Wong's attorneys.

The evidence presented "attempted to inflame the grand jury and inflame two witnesses not qualified to testify," Seitz said.

Among those who testified before the grand jury resulting in the indictment were Patrick Keller, an appraiser who lost his license, and disbarred attorney Richard Frunzi.

The attorney general's office today declined comment on the latest motion.

Tomorrow, Judge Michael Town is to hear the attorney general's request to move the May 24 hearing to a later date, saying that the office needs more time.

An Oahu grand jury in April indicted Wong, his wife, Mari Stone Wong, and brother-in-law Jeffrey Stone relating to an alleged kickback scheme involving the estate's sale of its fee interest in the Kalele Kai condominium project in Hawaii Kai.

Wong has been charged with theft, perjury and criminal conspiracy for allegedly taking a $115,800 kickback from Stone.

Mari Stone was charged with criminal conspiracy and hindering prosecution.

Jeffrey Stone was charged with commercial bribery, conspiracy and serving as an accomplice to theft. He allegedly received preferential treatment when he and his partners acquired the land beneath the condominium in 1995 for $21.9 million.

Wong, his wife and Stone have pleaded not guilty to all charges.

Court papers filed by Seitz ask the attorney general to specify how the alleged transactions involving the sale are linked and how Wong was supposed to have benefited.

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