Cayetano: Estate can't hide behind confidentiality

The estate's confidentiality provision
isn't meant to protect the
trustees, he says

By Mike Yuen and Jim Witty

Gov. Ben Cayetano says the Bishop Estate cannot use confidentiality agreements to bar employees from cooperating with the state's investigation into whether trustees breached their fiduciary responsibilities.

Cayetano's remarks yesterday came an hour after a hearing in Circuit Court on the estate's emergency motion for a contempt finding against a fired executive for allegedly violating an injunction that prevented him from revealing "confidential" information about his former employer.

The hearing was recessed to Sept. 26.

Bobby Harmon, who was fired last year after working eight years as president and chief executive officer of the estate's for-profit subsidiary, P&C Insurance Co., was questioned last week by state attorneys.

They talked with Harmon after Cayetano ordered Attorney General Margery Bronster to begin an investigation into the the $10 billion charitable trust, the largest private landowner in Hawaii.

Estate attorneys are also alleging that Harmon talked with reporters, leaking sensitive information.

"The confidentiality provision, in my view as an attorney," said Cayetano, "will not hold any weight or water if the information that's coming out is used to demonstrate or prove that there has been in fact a breach of fiduciary duty. You cannot hide information. The confidentiality provision should stand only if it is in fact protecting the trust and the beneficiaries - and not the trustees."

Moreover, the law giving the attorney general subpoena powers outweighs any confidentiality provision an employer may have with employees, Cayetano added.

"I think if it should then happen that people bring a civil action against this employee for damages for breach of contract, the defense is he was required to do so by law," Cayetano said.

Several hours after Cayetano spoke with reporters, Harmon's attorney, John Goemans, filed a writ with the state Supreme Court, challenging Circuit Judge Bambi Weil's jurisdiction to enforce the injunction against his client.

The injunction, Goemans claims, denies Harmon's "established First Amendment right to express his opinion as to the corruption and criminality of the officers and directors of the Bishop Estate in matters of public concern and in aid of law enforcement by the attorney general of the state of Hawaii and others."

Bishop Estate spokeswoman Elisa Yadao said the estate intends to cooperate with the attorney general's investigation, but insisted that the inquiry should not be tied to Harmon's case.

"It is not appropriate to discuss that case. That's separate from the attorney general's inquiry," Yadao said. "He is under injunction from the court because of his unauthorized removal of estate property."

Yadao expressed surprise that state investigators have not yet contacted estate officials, given that two weeks have passed since Cayetano announced Bronster's inquiry.

As a result, estate attorney Nathan Aipa has called Bronster's office, asking how to proceed, said Yadao.

Asked if estate employees and staff at its educational arm, Kamehameha Schools, will be allowed to talk to state investigators without being held to the confidentiality provision, Yadao declined to answer the question directly.

She would only say: "We have a long history of working with court-appointed masters. We've always cooperated fully with the masters. We have a good working relationship with the current master, who has spoken with current employees."

Bronster has said she won't talk to estate trustees or attorneys until she fully sorts out the allegations.

The Kamehameha Schools/Bishop Estate employee handbook, a copy of which was obtained by the Star-Bulletin, tells employees they must "keep institutional information confidential unless there are good reasons and authorization for its release."

They are also told the release of information pertaining to the estate and the schools is handled through the trust's public relations department, which must also clear any speeches or interviews "which might contain sensitive and/or confidential information."

The employee handbook itself is labeled "CONFIDENTIAL."

Cayetano said that during a talk with Bronster on Monday, there was concern expressed over "the resources" needed for the investigation, given the state's tight fiscal situation.

"What we talked about was using some personnel from the state's Tax Department, for example. Certainly in her investigation she will need to have people with accounting and auditing backgrounds," Cayetano said.

"My inclination," Cayetano said, "is to make the (preliminary) report public, because I think it will become public anyway if we do go to court."

Cayetano stressed that Bronster is focusing on what might appear to be clear violations of fiduciary duties.

Trustees have said the preliminary report should not be released until they can meet with Bronster to respond to allegations.

Cayetano added that while Bronster can subpoena Bishop Estate trustees and even state Supreme Court justices, who appoint the trustees, he believes they will come forward voluntarily.

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