Wednesday, September 1, 1999

Wong, Peters
ousted again
as trustees

The latest ruling bars the
pair from being on the estate
board until at least March 28, 2000

By Rick Daysog


Bishop Estate trustees Henry Peters and Richard "Dickie" Wong, ousted temporarily from their $1 million-a-year jobs back in May, have been removed for a second time.

Probate Judge Colleen Hirai yesterday granted the attorney general's request for interim removal of the two trustees, saying Peters and Wong should remain out of office at least until March 28, 2000.

Hirai's order, which takes effect immediately, could be extended beyond March 28 to the conclusion of a yet-to-be scheduled trial over a state suit to permanently remove the trustees.

Hirai's ruling is more extensive than the one issued on May 7 by Probate Judge Kevin Chang. Chang's ruling -- which temporarily removed Peters, Wong, Gerard Jervis and Lokelani Lindsey -- was in response to a threat by the IRS to revoke the estate's tax-exempt status.

In her 35-page findings of fact and conclusion of law, Hirai said Peters and Wong violated court orders that barred them from accumulating trust income and restricted them from taking income on payments on construction of buildings.

Hirai also found that Peters and Wong had failed to heed a court order to implement a management system headed by a chief executive officer.

Hirai said that if these issues were tried in a permanent removal suit, the attorney general's office would likely win.

The decision -- following a five-week trial that ended in May -- represents an important victory for the state's two-year investigation into allegations of fiduciary breaches and financial mismanagement of the five former Bishop Estate trustees.

Last September, the attorney general's office sued for the trustees' temporary and permanent removal, saying the former board members took excessive compensation, engaged in a widespread pattern of mismanagement and self-dealing, and accumulated more than $350 million of the estate's income that should been spent on the estate-run Kamehameha Schools.

Former Attorney General Margery Bronster said the trustees' behavior described in the Hirai's findings are grounds for their permanent removal and will play a role in the eventual trial over the board members' permanent ouster.

"It's very far-reaching decision because she (Hirai) agreed with us that there were serious breaches that warranted the trustees' removal," said Bronster, whose second term as attorney general was rejected by the state Senate in April in a highly unpopular vote.

Attorneys for Peters and Wong said they were disappointed by Hirai's decision and will consider filing a legal challenge.

Hirai's interim removal order comes as Chang plans to schedule an evidentiary trial over the permanent removal of the former trustees of the Bishop Estate.

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