Saturday, August 25, 2001

Kamehameha Schools
trustees’ charges argued

By Rick Daysog

The attorney general's quest to overturn dismissals of criminal charges against former Kamehameha Schools trustees Henry Peters and Richard "Dickie" Wong went before the state Supreme Court yesterday.

Substitute high court Justices George Masuoka, Ronald Ibarra, Dan Kochi, Shackley Raffetto and Gary Chang heard more than an hour and a half of oral arguments before taking the matter under advisement.

Before a packed courtroom, Lawrence Goya, senior deputy attorney general, argued that Circuit Judge Michael Town erred in dismissing the theft charges against former trustees Peters and Wong and bribery charges against Wong's former brother-in-law Jeffrey Stone.

Town threw out grand jury indictments against the two trustees in 1999, saying the charges are based on privileged and "illegally bolstered" testimony from Stone's former attorney, convicted money launderer Richard Frunzi.

According to the indictments, Wong and Peters gave Stone and his partners a "sweetheart" deal when the developers acquired the estate's fee interest in the Kalele Kai condominium complex in Hawaii Kai.

In return, Stone acquired condos owned by Peters and Wong at inflated prices, the indictment said.

Goya said that Frunzi was just one of 21 witnesses who testified before an Oahu grand jury. Even if Frunzi's testimony is privileged, Town should have suppressed his testimony but should not have dismissed the charges, Goya said.

"To dismiss, the conduct involved has to be extreme," Goya said.

Attorneys for the defendants argued that the state committed misconduct to obtain the indictments, which they in turn used to seek their removal from the $6 billion trust's board.

Eric Seitz, Wong's attorney, said Town ruled correctly in dismissing the charges, saying that Frunzi's testimony was crucial to linking the Kalele Kai deal to the Makiki condos. Seitz added that contrary to the state's claim, Kamehameha Schools profited immensely when Stone purchased the fee interest to the condos in 1995.

"Their duty isn't to indict or convict, but it is to do justice," said John Edmunds, Stone's lawyer.

The substitute Supreme Court justices did not indicate when they planned to issue a decision.

The substitute justices are sitting in for the high court, which recused itself from all Kamehameha Schools litigation.

Until recently the Supreme Court selected the trustees of the estate.

Bishop Estate Archive
Kamehameha Schools

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