State joins
bid to speed
KS/BE inquiry

The petition asks for a special
administrator to oversee the
estate's response to the probe

By Susan Kreifels

The state attorney general has joined a petition filed yesterday by two Bishop Estate trustees to expedite an investigation of the estate, saying trustees have stonewalled requests for information to protect themselves.

Kamehameha Schools/Bishop Estate trustees Gerard Jervis and Oswald Stender filed the petition asking the Circuit Court to appoint a special administrator to oversee the estate's response to the investigation. They said there was an "inherent conflict" for trustees to make decisions about information that could incriminate them.

The petition, filed without the knowledge of the other three trustees, says: "Other trustees have argued to withhold information or delay disclosure to the attorney general."

In court papers, Attorney General Margery Bronster said she sought copies of all records turned over to the Internal Revenue Service, including information from each trustee about personal benefits, prerequisites or emoluments he or she had received.

The subpoena was issued to the estate Oct. 20 with a return date of Nov. 3.

On the return date, estate attorney William McCorriston served objections to the subpoena. The information still has not been turned over.

This "is an archetypical example of how the trustees or certain of them (and their legal representatives) have a personal interest in preventing or delaying disclosure of information to the attorney general," the court papers said.

McCorriston said it would be difficult to prove in court there had been undue delays in handing over information.

Claims that "the investigation has been unduly impeded are actually gross misstatements of the actual record," McCorriston said. Any appeals of subpoenas have been due to legal technicalities rather than specific information, he added.

"If they want a lawyer to just take a dive and not represent the interest of the trust, then I'm not their boy," McCorriston said. "As long as there is a legitimate trust interest to contest a subpoena, we're going to do it.

"I think the trustees should think very carefully about advocating their role. The will is viewed as sacred."

Bronster is investigating alleged breaches of trust and financial mismanagement by individual trustees.

Jervis and Stender yesterday said they filed the petition because of trustees' conflict of interest and the ensuing delays. "It's in the best interest to move the state along and remove the conflict of interest," Jervis said.

Circuit Judge Virginia Crandall will hear the petition at 9 a.m. Feb. 27.

An organization that has called for the removal of the trustees gave "wholehearted support" to the petition.

"It will succeed in speeding up the attorney general's investigation," said Beadie Kanahele Dawson, attorney for Na Pua Ke Ali'i Pauahi, which represents alumni, faculty and parents upset with the management of Kamehameha Schools. "We simply must end the turmoil and concern that surround the entire controversy."

Dawson said the special administrator should oversee the investigation by the Internal Revenue Service as well.

But Jervis and Stender said the IRS was conducting an audit rather than an investigation of the estate and so should not be included in the petition.

The special administrator would be responsible for responding to all requests for information from the attorney general, including document requests and subpoenas.

The trustees would retain their powers and responsibilities for decision-making on all other school and estate matters.

Jervis and Stender said the administrator would have access to all information and could decide that some is confidential and proprietary.

Dawson recommended Colbert Matsumoto for the job because of his extensive knowledge of the estate.

Matsumoto was the court-appointed master who reviewed the estate's accounts and compiled a stinging report and recommendations in November.

Dawson said the job will be a "delicate balancing act."

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