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Trustees' school plan draws fire

Critics say it should include
input from the Kamehameha
teaching staff and students

By Debra Barayuga, Kulani Mahikoa and Rod Ohira

Critics of the way Bishop Estate trustees have been managing Kamehameha Schools are skeptical of a strategic plan adopted this week because it lacks feedback from faculty, teachers and students.

"It's very difficult to implement a plan that is top down," said Beadie Kanahele Dawson, attorney for Na Pua A Ke Ali'i Pauahi, an organization of Kamehameha students, parents and alumni.

Other developments in the Bishop Estate controversy:

A group that co-authored a Star-Bulletin essay attacking the Bishop Estate hierarchy wants the state to file suit to have four trustees removed.

"Based on what is currently available, they have clearly breached their fiduciary duties," said University of Hawaii law professor Randall Roth, who co-authored "Broken Trust" with U.S. District Judge Samuel King, Monsignor Charles Kekumano, Walter Heen and Gladys Brandt.

The group asked for the removal of all trustees except Oswald Stender.

Gov. Ben Cayetano promised his administration will carry out whatever recommendations result from an investigation by the attorney general into Bishop Estate. "I must tell you that we will do it in a fair or objective manner," he said at his town hall meeting in Waiau last night.

The strategic plan, outlined by trustee Lokelani Lindsey in the Star-Bulletin yesterday, charts the direction for Kamehameha Schools through the year 2005.

The absence of such a plan was criticized by members of the native Hawaiian and legal community in the "Broken Trust" essay.

Yesterday, Dawson said the strategic plan should have been created with help from teachers, students and others at Kamehameha Schools.

"Only if you have direct input -- consent and dedication -- at all levels do you have a vibrant, viable strategic plan for any organization," she said.

The strategic plan outlined by Lindsey is an administrative directive, Dawson said.

Roy Benham, president of the Kamehameha Alumni Association, Oahu Region, said, "I think it's interesting that they are going to make it public."

"The couple of teachers I talked to didn't know anything about it," said Benham, a former Kamehameha teacher.

Another former Kamehameha teacher, George Schnackenberg, called the Star-Bulletin to voice his reaction to comments made by Lindsey in yesterday's article.

Schnackenberg said he was laid off in 1996 when the adult and alternative education programs were ended.

He was a teacher and counselor for the alternative education program on Molokai.

He took issue with Lindsey's statements that the trustees' decision to cut the adult and alternative education programs was an economic one.

He said that at a meeting he attended with teachers who were to be laid off as a result of the cuts, Bishop Estate trustee Stender "told us the cuts had nothing to do with money. There are other reasons," he said.

Stender is the only trustee who should be retained, according to the five "Broken Trust" authors. The others, Roth said, have breached their fiduciary duties.

Roth pointed to trustee Henry Peters' negotiating the purchase of a championship-caliber golf course developed by Bishop Estate on behalf of buying members, which included himself, and to trustee Lindsey's use of Bishop Estate personnel to survey her North Shore property, process her permits and supervise the rebuilding of her house without payment.

During a one-hour meeting Wednesday with Cayetano, Roth and King asked that the attorney general take legal action.

"The accusations and existing evidence is so serious that we feel it would not be in the best interest of Kamehameha Schools/Bishop Estate that those trustees continue to serve," Roth said.

"If they win the litigation, they can be reinstated," he added.

Cayetano did not offer comment on the request, Roth said.

"The governor made it real clear that his primary concern is to make sure Kamehameha Schools/

Bishop Estate emerges as a strong, viable organization," Roth added. "He doesn't want to do something that tears down or hurts KSBE."

At last night's town hall meeting in Waiau, the governor pledged to carry out whatever recommendations were made by Attorney General Margery Bronster.

"We want to be fair, but we will be persistent, and whatever action that comes out of the investigation, whatever recommendations she makes, we will pursue those recommendations," the governor said.

Bronster is seeking to determine "whether the trustees breached their fiduciary duty to the beneficiaries," Cayetano said.

The investigation will take into account issues raised by the "Broken Trust" authors, the governor said.

Reactions of officials vary
to trustee investigation

By Star-Bulletin staff

City Councilman John Henry Felix says he thinks the state attorney general's office has been remiss in not investigating Bishop Estate earlier, saying its trustees have lost sight of their duties and are motivated by greed.

"I think it's way overdue," he said yesterday. "No eleemosynary organization should be immune from public scrutiny."

But a colleague, Councilman John DeSoto, said the trustees are doing a good job, and the state should keep its hands out of their business.

"They're being successful," the Council chairman said. "What's wrong with it? Do we get in the private sector and look into the way they do things? Or other charitable organizations?"

Their comments are representative of the varying reactions to Gov. Ben Cayetano's decision Tuesday giving Attorney General Margery Bronster a week to make a preliminary inquiry into Bishop Estate to determine if a broader investigation is warranted.

The directive was made as the influential estate -- a $10 billion charitable trust and the state's largest private landowner -- faces growing allegations of conflicts of interest, political deals and mismanagement of its financial assets and Kamehameha Schools.

Among state legislators, party affiliation did not seem to be a controlling factor in evaluating the Democratic governor's action.

House Speaker Joe Souki (D, Wailuku) felt the investigation is premature, since an independent inquiry already is under way by court-appointed fact-finder Patrick Yim, who is looking into charges the trustees are micromanaging the schools. He is expected to file a report Aug. 29.

"I think the state has enough problems of its own than to go looking into private nonprofit corporations," Souki said.

But House minority leader Gene Ward (R, Hahaione Valley) welcomed the inquiry because it could help determine whether the estate is operating properly.

He thought the previously untouchable trustees are in "serious jeopardy."

He said, "The fear factor that kept people from speaking out is gone, and this level of openness in the dialogue is what I'm just excited about."

Rep. Quentin Kawananakoa (R, Nuuanu) also gave his nod to the administration's inquiry, saying it is important to look at how the estate operates and how it makes its investments "just to set the record straight so that there's no sense anything is inappropriate for the beneficiaries and for the rest of the people of Hawaii."

Kawananakoa said it took courage on the part of trustee Oswald Stender to call into question some of the estate's actions, and faulted the attorney general's office for failing to start an examination earlier, since numerous allegations have been around for years.

Sen. Sam Slom (R, Kalama Valley) said he had no problem with the investigation, but added that he would rather have Bronster look at state agencies that affect taxpayers, like the Land Use Commission.

He also saw a political motive to looking into Bishop Estate, "a good whipping boy."

"It's interesting that this is coming together now at the opening of the '98 gubernatorial election, when change is going to be the major theme and the people want answers to their questions," he said.

Maui Mayor Linda Crockett Lingle, a Republican who is trying to unseat Cayetano, said it is important to remember that the inquiry must be done for the benefit of Kamehameha Schools and its students, faculty and alumni.

"The trust is responsible for the education of children of Hawaiian ancestry, and that purpose must be kept in the forefront of any discussion or investigation," she said in a prepared statement.

U.S. Rep. Patsy Mink said Cayetano's investigation is an extension of the annual judicial review of the estate and is not an "unusual" move.

"I think in view of the public outcry and the statements made by prominent citizens in recent days, I think it's appropriate for him to join in the review to see if there are things that are extraordinary, or can be corrected, or subject to change," she said.

U.S. Rep. Neil Abercrombie said his focus is to ensure Bishop Estate retains its tax-exempt status and that its fundamental mandate to educate native Hawaiian children not be obscured by personalities or policy disputes.

"There's always the danger if a political clash or confrontation becomes acrimonious enough or accusatory enough, that someone will try and take a look at the basis for the establishment of the trust," he cautioned.

Meanwhile, the son of Frank Midkiff, who was a trustee from 1939 to 1983, said the estate suffers from "thousands of problems" and should be changed into a not-for-profit corporation -- like Punahou School and Harvard University -- run by a volunteer board of directors.

"It shouldn't be run as a trust, it's too big to be a trust anymore, and then they get away from appointment of trustees and all the rest of those questions," said Robert Midkiff, a businessman and community leader.

Many praised the courage of the five authors of a lengthy Star-Bulletin article on Saturday that examined the estate and its trustees, and spurred Cayetano into calling for the inquiry.

"They were eloquent in their historical account and added their thoughts on solutions to the present situation," Lingle said.

The writers were Gladys Brandt, former principal of Kamehameha School for Girls and chair of the University of Hawaii Board of Regents; Walter Heen, a retired state appeals court judge and a former state legislator and city councilman; Msgr. Charles A. Kekumano, chairman of the Queen Liliuokalani Estate and a retired Catholic priest; Samuel P. King, senior U.S. District Judge, and Randall Roth, a University of Hawaii law professor.

Waihee’s and Monsignor's
memories don’t jibe

Each says he decided the time
wasn't right for Waihee's trusteeship

By Star-Bulletin staff

Former Gov. John Waihee's recollection of a 1994 meeting to discuss his candidacy as a Bishop Estate trustee "is not the same as my clear remembrance of what transpired," Monsignor Charles A. Kekumano said.

Kekumano, a member of a blue-ribbon panel to name possible replacements for outgoing trustee Myron "Pinky" Thompson, said he requested the meeting after the group submitted a list of five nominees that did not include Waihee.

The day after the names were given to state Supreme Court justices, "I heard that the governor was upset with me," Kekumano said in a written statement yesterday to the Star-Bulletin.

"Because I suspected that Gov. Waihee had been told of my opposition, I wanted to explain myself directly to him," he wrote.

The governor's name had been offered by someone in his office, Kekumano recalled.

He said he felt at the time Waihee could make an excellent Bishop Estate trustee, and that he still thinks so.

His opposition was based on appointing a sitting governor, which would raise "loud and voluminous" public objections and unfairly subject Waihee's wife and children "to the inevitable clamor," the retired Catholic priest said.

Waihee earlier this week said there was no truth to an allegation made by Kekumano, chairman of the Queen Liliuokalani Estate, and four other prominent native Hawaiian and community leaders that he was in line for a trusteeship.

Waihee said Kekumano approached him after the panel had completed its work and asked on its behalf whether he wanted to be included in the list.

"I told the monsignor that although I would be flattered to be considered, I would not accept an appointment, and that I had already told the court of my decision," he said.

Kekumano, though, said there would be no reason for him to speak on behalf of the panel because it had disbanded at the time of the meeting and had finished its work, as Waihee acknowledged.

"I'm sorry if Gov. Waihee has forgotten these facts," Kekumano said.

August 14 - Lindsey outlines plans
August 13 - Trustees face inquiry
August 9 - The original articles: Betrayal of Trust

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