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Thursday, August 31, 2000

Ex-trustees influenced admissions, board says

Kamehameha Schools'
CEO says financial aid was
tampered with as well

By Rick Daysog

Former trustees and executives at the Kamehameha Schools exerted undue influence on the school's admission of students and its grants of financial assistance.

In a letter Tuesday to Hamilton McCubbin, the trust's chief executive officer, the estate's interim board of trustees acknowledged that certain staffers and ex-board members improperly influenced the admissions of students who may or may not have been qualified to attend the Kamehameha Schools.

Separately, McCubbin told members of an alumni and parent group last night that the Internal Revenue Service's four-year audit of the $6 billion charitable trust shows that the school's financial assistance programs were tampered with under the previous regime.

The startling disclosures confirm hotly contested charges that the former trustees and staffers played favorites in admitting children of friends, family and prominent local families.

Retired Adm. Robert Kihune, chairman of the estate's interim board, said the instances where trust officials influenced admissions policies were not widespread and that some appeared to be unintentional. But he conceded that there were cases where the influence was clearly unwarranted.

Kihune declined to identify students who may have benefited, and did not name staffers and ex-board members who may have influenced the admissions process. But he said the estate's admissions director, Wayne Chang, was under "heavy pressure" from his superiors to admit favored students.

Charges of favoritism in the admissions policy were first raised by retired Circuit Judge Patrick Yim, the court-appointed fact-finder who investigated the turmoil on the Kamehameha Schools campus in 1997.

Yim alleged that the trustees' influence was such that admissions committees were ordered to admit elementary school students on a list whose names were marked by red dots, regardless of their qualifications.

Former trustees have denied giving preferential treatment and said no such red-dot system existed. Former trustee Lokelani Lindsey has alleged that the charge was based on rumor and innuendo at the Kapalama Heights campus.

Kihune said that the IRS, in its four-year investigation of the estate's tax-exempt status, found that there had been improper influence.

The IRS, whose audit findings remain under a court-ordered seal, threatened to revoke the trust's tax-exempt status and demanded the permanent removal of former trustees Henry Peters, Richard "Dickie" Wong, Oswald Stender, Gerard Jervis and Lindsey, saying the ex-board members ignored the estate's core educational mission.

In its letter, the interim board said the perception of unfairness is a main reason it has decided to overhaul the Kamehameha Schools admissions department. As part of a systemwide reorganization announced yesterday, the schools' admissions staff will become an autonomous group that will be supervised by the chief executive officer. Previously, the admissions staff reported to the educational department.

Similar changes are in store for the school's tuition aid functions. According to the board, the estate's financial assistance division will be consolidated into the Ke Ali'i Pauahi Scholarship Fund, which is a tax-exempt support group. The consolidation would streamline the financial aid process.

Separately, the board also agreed to create the position of chief educational officer to oversee all of the trust's educational programs at the Kapalama Heights, Maui and East Hawaii campuses.

The idea of the new post is part of a newly approved strategic plan that will reduce layers of administrative bureaucracy and create more autonomy for each campus.

McCubbin said the post of chief educational officer has been offered to schools President Michael Chun, who will retain his title as president whether or not he accepts the new title.

Bishop Estate Archive
Kamehameha Schools

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