Friday, July 25, 2003

Former trustee alleges
improper disclosure

Former Kamehameha Schools trustee Henry Peters has sued the estate's former chief legal officer, alleging the attorney improperly disclosed confidential information.

In a seven-page lawsuit filed in state Circuit Court yesterday, Peters said that the estate's ex-general counsel Nathan Aipa did not obtain a waiver of attorney-client privilege when he testified before an Oahu grand jury in 1998 and 1999.

Peters, who resigned from his $1 million-a-year trustee post in December 1999 under pressure from the Internal Revenue Service, was indicted twice by the grand jury for theft, but the charges were later thrown out by a state judge.

Eric Seitz, Peters' attorney, said in the lawsuit that Aipa violated Circuit Judge Michael Town's orders that he obtain a court ruling before testifying on confidential matters.

Seitz added that Aipa failed to notify Peters about his testimony and did not give the former trustee the opportunity to assert his attorney-client privilege.

Aipa, who now works for a private law firm, could not be reached for comment yesterday.

Aipa served as the $6 billion estate's general counsel during the three-year controversy that culminated in the 1999 removal of the trust's former board members Peters, Richard "Dickie" Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender.

Shortly after their removal, the estate's court-appointed interim board appointed Aipa as the trust's chief operating officer, but he stepped down in 2000 after a court-appointed special master criticized Aipa's handling of the estate's outside law firms.

In 2001 the estate paid Aipa more than $413,000, or nearly $100,000 more than the $321,000 it paid its then-Chief Executive Officer Hamilton McCubbin. Aipa said at the time that the compensation, which was more than double Aipa's 2000 pay, included his annual salary and severance.


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