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Monday, May 15, 2000

revenues soar
to $839 million

The record total for 1999 was
a result of the Goldman Sachs
Group initial public offering

By Rick Daysog


Kamehameha Schools, benefiting from a $552 million windfall from last year's initial public offering of Goldman Sachs Group, saw its revenues soar to $839 million during the 1999 fiscal year.

The results are more than double the previous year's revenues of $334.7 million and well above the previous record of $377.5 million during the estate's 1997 fiscal year.

In its 1999 tax return filed with the Internal Revenue Service today, the estate also said it spent about $143 million on educational programs and school construction, an increase from the year-earlier period.

Estate spokesman Kekoa Paulsen said the recent financial gains will help finance the trust's planned expansion of its educational programs.

The estate's interim board of trustees said they plan to spend about $160 million on its educational programs this year. Over the longer term, the trustees are targeting to spend between $125 million and $300 million a year on the Kamehameha Schools' Kapalama Heights campus, its satellite schools and various outreach programs.

While the estate's record revenues were largely the result of the Goldman Sachs IPO, trust officials declined to characterize the results as a one-time gain. Gilbert Ishikawa, the estate's director of tax administration, confirmed that the estate is considering selling the remaining holdings in Goldman Sachs.

The estate's tax filing also listed a detailed description of salaries and expenditures paid to the current interim trustees, former trustees, key employees and large outside contractors.

For instance, former board members Henry Peters, Richard "Dickie" Wong, Oswald Stender, Lokelani Lindsey and Gerard Jervis were paid commissions of $735,429 before they were removed from the trust by Circuit Judge Kevin Chang on May 7, 1999.

The trust also paid the interim board members -- retired Adm. Robert Kihune, American Savings Bank executive Constance Lau, retired Honolulu Police Chief Francis Keala, former Iolani School headmaster David Coon and attorney Ronald Libkuman -- about $42,000 each during the 1999 fiscal year.

As for key employees, former chief counsel Nathan Aipa earned $196,595 last year while school president Michael Chun earned $176,254. Aipa currently is serving as the trust's chief operating officer.

Former state Budget Director Yukio Takemoto, now the trust's principal executive for budget and review, earned $157,434 while Rodney Park, principal executive for administration, took home $160,926. Recently dismissed asset manager Randall Chang was paid $170,217 last year.

The law firm of Cades Schutte Fleming & Wright was the estate's largest outside vendor, billing the estate $1.5 million last year, while the computer consulting firm of DataHouse Inc. conducted $1.4 million of work for the estate.

The McCorriston Miho Miller Mukai law firm, which defended the former trustees in the attorney general's investigation, billed the estate for $1.4 million during the 1999 fiscal year.

Bishop Estate archive

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