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Tuesday, November 14, 2000

Tax settlement may
infringe on rights

Bullet The issue: Newly elected state Rep. Guy Ontai says he has been ordered to resign from his teaching job at Kamehameha Schools because of a rule mandated in the estate's IRS settlement with Bishop Estate.
Bullet Our view: If the rule was instigated by the IRS, Ontai's First Amendment rights are being violated.

ONE of the stipulations of last December's settlement between the Bishop Estate and the Internal Revenue Service was that the estate refrain from political activity. That was a reasonable requirement given the estate's questionable -- if not illegal -- political involvement in the past. But the solution's implementation may be an unconstitutional infringement of the political freedom of Kamehameha Schools employees.

Guy Ontai, a physics teacher at Kamehameha Schools for the past seven years, last week was elected to the state House. A Republican, he soundly defeated Charlotte Nekota, a gubernatorial appointee to fill a vacancy caused by Rep. Ron Menor's appointment to the Senate to fill another vacancy. Ontai had run for the seat in the past, before the IRS agreement, but had lost.

The IRS settlement allowed the Bishop Estate -- since renamed Kamehameha Schools -- to retain its tax-exempt status by paying back taxes and making structural changes. Nonprofit companies are not allowed to engage in political activities. The settlement may have been emphatic in ordering adherence to that restriction.

Ontai says he was told two months ago that Kamehameha Schools had adopted a policy forcing its employees to resign from political offices they may hold. The rule purportedly was adopted as part of the IRS settlement.

Companies -- both profit and nonprofit -- are allowed to restrict the political activities of their employees. News organizations, for example, impose such restrictions to enhance their image of impartiality. A company is within its rights to adopt such a rule for whatever reason it chooses, but it cannot be required to do so by the government.

The First Amendment forbids government from infringing on an individual's right to free speech, including running for and holding political office. If the IRS, in its settlement with the Bishop Estate, forbade Kamehameha Schools employees from engaging in politics, it overstepped its authority.

Earlier this year, former state Rep. Bob Herkes of the Big Island said he was told that the IRS settlement required that he resign his House seat because of his position as an executive with a Bishop Estate subsidiary. Herkes instead resigned from the company and ran for mayor.

If Kamehameha Schools takes the position that its rule is required by the terms of the IRS settlement, Ontai should challenge the rule in probate court. If the estate's rule is voluntary, Kamehameha Schools should say so and not pass the responsibility on to the IRS.

Estrada should resign

Bullet The issue: The Philippine House has impeached President Joseph Estrada and referred the issue to the Senate.
Bullet Our view: Estrada should resign instead of putting the Philippines through further agony.

PHILIPPINE President Joseph Estrada seems to be trying to play one of the tough guys he portrayed as a movie actor as he clings to power despite impeachment proceedings. Although his party holds a majority in the Senate, Estrada's acquittal is far from assured. His resignation would relieve the Philippines of an agonizing ordeal that could take an economic toll on the country.

The Philippine House has impeached Estrada on corruption charges allegedly involving millions of dollars in payoffs. The House speaker said no vote was necessary because more than one-third of the chamber had signed a petition supporting impeachment. The bill of impeachment was passed on to the 22-member Senate, where two-thirds could force Estrada's removal from office.

Estrada is accused of taking $200,000 a month in payoffs from illegal gambling operators, accepting $2.6 million in tobacco taxes and underdeclaring his personal worth. The alleged gambling payoffs included more than $8.6 million from a popular numbers game called jueteng. Estrada has acknowledged being offered a $4 million bribe from a provincial governor, Luis Singson, but insists that he refused it. Singson is Estrada's chief accuser, alleging that he delivered the gamblers' payoff money to a presidential aide.

Estrada's administration has been criticized for mismanagement, corruption and cronyism since his election in May 1998, following economic gains under his predecessor, Fidel Ramos. Political and business leaders have been dismayed by his lack of interest in economic management. The Catholic archbishop of Manila called for Estrada's resignation last month.

In a radio address, Estrada said, "My conscience is clear. I did not become president to rake up money." He asked his countrymen to "join hands and pull out of this, for the sake of the nation." A coalition of groups including labor unions and business organizations organized a nationwide general strike, and a fierce battle is expected in the Senate.

Estrada's supporters are challenging the House impeachment, calling its adoption unconstitutional because of the absence of a vote. Meanwhile, a move initiated by an Estrada ally has toppled the Senate president, who demanded Estrada's resignation, and has replaced him with an independent.

The turmoil has sent the peso plummeting. When Estrada first vowed to stay on the job two weeks ago, the peso fell to an all-time low of 51.95 to the dollar. The stock market fell yesterday amid news that the impeachment battle might last for weeks or months.

The situation is bound to become worse as Estrada keeps digging in his heels. His past allies need to persuade Estrada to resign and allow the country to rebound from his disintegrating leadership.

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor

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