Tuesday, May 5, 1998

Legislature '98

Case pushes for
House vote to limit
trustee salaries

He notes the Senate has
already set a 'reasonable' level,
so 'there's no need to delay'

By Mike Yuen


House Hawaiian Affairs Chairman Ed Case was to force a floor vote today to have the salaries of Bishop Estate trustees, who earn about $800,000 annually, capped at a "reasonable" level.

The Manoa Democrat said last night he wants the House to agree to the language in a Senate bill that limits the compensation for trustees of charitable trusts to an amount deemed reasonable.

A Senate Judiciary Committee report states that the Internal Revenue Service has established regulations to determine the reasonableness of trustee compensation.

Last week, House and Senate conferees failed to agree on how to set the salaries of trustees for Bishop Estate, a $10 billion trust that is the state's largest private landowner and whose beneficiaries are the native Hawaiian students at Kamehameha Schools.

Estate trustees are under investigation by Hawaii Attorney General Margery Bronster for possible breaches of their fiduciary responsibilities.

During conference talks, the House rebuffed the Senate's compromise of setting trustee pay at $94,780 annually -- what Hawaii's chief justice is paid. Instead, the House insisted a task force study compensation of trustees for various charitable trusts.

"To me and to many of my colleagues, everybody in the state except for a handful believe that the charitable compensation statute should be changed," Case said. "We have an established, tested, legal approach to comparable situations."

House majority floor leader Marcus Oshiro (D, Wahiawa) last night expressed surprise that Case would challenge leadership's decision to quash the issue "at this late hour." Case didn't express any concerns during the six-hour majority caucus yesterday, Oshiro said.

Case said: "Obviously, the leadership of the House does not want this issue to proceed this session. I agree with the Senate. There's no need to delay. Let's get this (issue) over with and let's move on."

The Senate proposal to tie the salaries of Bishop Estate trustees to the chief justice is also backed by Bronster; the authors of "Broken Trust," the scathing critique of estate management; and Na Pua a Ke Alii Pauahi, which has been highly critical of how the estate runs Kamehameha Schools.

But the House battle will be fought over the bill that the Senate has already approved -- capping trustee salaries at a reasonable level.

Case said he has not been rounding up votes. But, he added, he believes more than two dozen of the 51 House members feel the same way he does.

Bishop Estate Archive

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