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Tuesday, November 30, 1999




State says
trustees should repay
estate for polls

The state asks a court
to force ousted trustees also
to pay for IRS battles and
questionable investments

By Rick Daysog
Star-Bulletin

Tapa

The state attorney general's office today charged that the ousted trustees of the Bishop Estate conducted extensive polling campaigns for several prominent isle legislators.

In a 79-page amended complaint filed in probate court, the attorney general's office also alleged that ousted trustees Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, Oswald Stender and Gerard Jervis spent trust funds to battle investigations by the state and Internal Revenue Service, and engaged in dozens of questionable investments that led to tens of millions of dollars in losses.

The state -- which sued for the permanent removal of the ousted trustees in September 1998 for allegedly mismanaging the school and personally benefiting from the trust -- is asking the probate court to order the trustees to repay the estate for any losses they may have caused.

"The breaches of trust committed by the trustees have damaged the beneficiaries by diminishing the value of the trust estate," wrote Deputy Attorney General Dorothy Sellers.

"The trustees are jointly and severally liable to the beneficiaries for all losses caused by the trustees' breaches of trust."

Trial is scheduled for September 2000.

In its amended complaint, the state alleges that the former Bishop Estate trustees conducted polling for Rep. Joe Souki, former state Sen. Milton Holt, Sen. Marshall Ige, Robert Herkes, former Sen. Donna Ikeda and Sen. Whitney Anderson. The value of the polling was estimated at $200,000.

The state also alleges the former trustees contributed to unspecified political fund-raising events.

Under federal law, the estate is barred from making political contributions and could lose its tax-exempt status for doing so.

Anderson, Souki, Herkes, Ige and Ikeda previously denied they received polls from the estate. An attorney for former trustee Wong, who headed the estate's government affairs department, declined comment. Peters' attorney could not be reached for comment.

The Star-Bulletin previously reported that the estate conducted extensive polling for the former legislators.



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