Tuesday, January 27, 1998

Stender: Troubles
hurt Kamehameha

The daily operations of the school
are being neglected, he says

By Rick Daysog

Controversy surrounding Kamehameha Schools/Bishop Estate is affecting daily operations of the $10 billion charitable trust, said trustee Oswald Stender.

Speaking at a Chamber of Commerce of Hawaii meeting this morning, Stender said the turmoil is keeping the estate from focusing on some long-term goals in educating children of Hawaiian ancestry.

"Strategically, we are being distracted," Stender said.

"We need to get this behind us so we can get on with the mission of the Bishop Estate."

Stender's comments come as state Attorney General Margery Bronster is investigating allegations of financial mismanagement and breaches of fiduciary duties by Bishop Estate trustees. The Internal Revenue Service also is conducting an audit of the trust.

The Bishop Estate was established to educate children of Hawaiian ancestry. Stender said it's a "sad statistic" that the schools reach just 4,000 children of Hawaiian ancestry when there are more than 50,000 native Hawaiian children in the state.

But he defended the quality of education at the Kapalama Heights campus. He said he believes the education system is improving, despite criticism by trustee Lokelani Lindsey.

He also addressed complaints that the estate was hurting the isle economy by investing millions of its dollars on the mainland and not in Hawaii.

He said if the estate didn't diversify, it would have a hard time generating enough money to run Kamehameha Schools. He added that the trust's $200 million in annual earnings comes back to Hawaii.

Stender said the estate probably should play a more active role in the local community by serving on boards and commissions like the Business Roundtable, the Chamber of Commerce and Gov. Ben Cayetano's economic revitalization task force.

Two sue Bishop Estate
for emotional woes

A plaintiff alleges a Lindsey staffer
destroyed important computer files

By Rick Daysog

A Kamehameha Schools/Bishop Estate employee who alleged that a trust employee may have destroyed important computer files has sued the estate's trustees for emotional distress.

But the trust's attorney, William McCorriston, dismissed the suit as frivolous, saying the employee and her husband appear to be "crass opportunists."

In a lawsuit filed yesterday afternoon, Laurian and Richard Childers say they suffered emotionally and psychologically after Laurian reported to the state attorney general's office that a co-worker told her that trustee Lokelani Lindsey's secretary had deleted computer files.

The attorney general is investigating allegations of financial mismanagement and breaches of fiduciary duties by Bishop Estate trustees.

The state had subpoenaed Laurian Childers to testify at a Oct. 24 hearing about the possible destruction of estate files.

The Childerses said they received an anonymous telephone call the day before that hearing threatening Laurian against testifying. The anonymous calls prompted the state to assign armed guards to protect the Childerses.

Laurian Childers, a Bishop Estate employee since 1989, said she suffered sleeplessness, anxiety, severe and frequent headaches and uncontrollable crying as a result of the events.

Her husband said he suffered "frequent feelings of anger" and "powerlessness at the mercy of evil wrongdoers." Both said they plan to move to another state.

"Laurian Childers has not worked because of the fear and anxiety associated with her workplace at the Bishop Estate," the suit said."She is uncertain whether she can ever return to work at the Bishop Estate because of fear for her life and well-being and that of her loved ones."

The Childerses could not be reached for comment and their attorney, Charles Hurd, was not available.The suit -- which names trustees Lindsey, Henry Peters, Richard Wong and nominally names trustees Gerard Jervis and Oswald Stender -- seeks damages to be determined at trial.

A spokesman for the estate said it does not condone the alleged threats. It says it has offered the state its full cooperation.

McCorriston, meanwhile, denied that Lindsey's secretary had destroyed important estate documents, and denied any link between trustees and the alleged phone threat.

He said the allegedly deleted information -- which included recordings of Hawaiian music and personal records of trips to New Zealand by Lindsey's secretary -- were not destroyed but were downloaded to a floppy disk.

Those records remain intact and have been handed over to the state, which had subpoenaed them, McCorriston said.

He said the Childers suit appears to show motive on the part of the couple, citing reports that they had been seeking $50 million in damages from the estate.

He likened the action to a class-action suit filed last month by a Big Island resident and her relatives alleging trustees mismanaged the estate's assets.

Two of the plaintiffs dropped out of the suit, saying they were misled, McCorriston said.

"I think this is symptomatic of the feeding frenzy that is going on: Everybody perceives that there is a weakness and are trying to take advantage of it," he said.

"There will be a day of reckoning on all of these frivolous claims."

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