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Friday, May 12, 2000

starts new inquiry

The board will conduct
an investigation of employees
and outside contractors

By Rick Daysog


Kamehameha Schools' interim board of trustees will conduct an independent inquiry into whether employees and outside contractors took part in breaches of trust by the estate's former board members.

In a recent email to the Star-Bulletin, the interim board said it is conducting an outside review in response to complaints that it did not clean house after taking over the daily operations of the $6 billion charitable organization.

But the board stressed that it will conduct its inquiry in a fair and open manner, and urged members of the Kamehameha community not to "rush to judgment."

"'Cleaning house' or terminating people because they were employees of the Kamehameha Schools at an unfortunate time does not accomplish this purpose, unless there is good reason to do so," the board said.

During the past year, the interim board has released a number of employees tied to the former trustees and has terminated several patronage contracts, such as a $4,000-a-month legal retainer to former state Rep. Terrance Tom.

But one critic, University of Hawaii law professor Randall Roth, believes the changes did not go far enough. Roth, co-author of the 1997 "Broken Trust" article that prompted the state's investigation of the former trustees, said the new board has retained many of the questionable employees while promoting some of them.

For instance, the estate's former general counsel, Nathan Aipa, recently was promoted as the trust's chief operating officer, while an outside law firm that spent considerable trust funds thwarting the state's investigation continues to work for the trust, said Roth.

Employees, meanwhile, said Roth's criticism is unfair since many workers were targets of the former trustees' abuses. They also noted that the testimony of many employees was instrumental in the permanent removal of the embattled former board.

Four of the estate's board members -- Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, and Gerard Jervis -- resigned under fire last year after the interim board sued for their removal. Former trustee Oswald Stender also stepped down voluntarily prior to the suit in response to the Internal Revenue Service demand that all five board members resign.

The interim trustees -- retired Adm. Robert Kihune, former Honolulu Police Chief Francis Keala, American Savings Bank executive Constance Lau, attorney Ronald Libkuman and former Iolani School headmaster David Coon -- said their inquiry will allow critics to bring their complaints in writing to the trust.

Independent investigators will then evaluate the charges and turn over their findings to the board.

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