Wednesday, May 6, 1998

House defeats bill to limit trustees' pay

Two lawmakers are allowed
to vote despite apparent
conflicts of interest

By Craig Gima


Amid questions of conflicts of interest, loyalty and proper procedure, the House leadership prevailed by one vote to defeat an attempt to limit the pay of trustees of Bishop Estate and other charitable trusts.

Legislature '98 "Charitable trustees, under our current state laws, are paid a percentage of gross revenues. As I have said a number of times on this floor already, that does not encourage incentive; that does not encourage good performance. There is no check and balance," said Rep. Ed Case (D, Manoa), who brought the issue to the floor yesterday in a rare challenge to House procedures.

Case wanted the House to adopt the Senate version of the trustee compensation bill, which would have set pay at a "reasonable" level to be determined by a probate judge. The House bill asked for a study of the issue.

A Republican, Rep. Paul Whalen (R, Kona) joined the House leadership in the 26-25 vote to kill the Senate-approved version. The other 11 Republicans in the House voted for it. Rep. Lei Ahu Isa (D, Puunui) cast the final no vote after passing when her name was first called.

House Speaker Joe Souki (D, Wailuku) cut off debate on the issue after less than an hour because he said lawmakers were tired and it was time to go on to other business.

But that was not before Rep. Cynthia Thielen (R, Kailua) raised objections about conflicts of interest by Reps.

Terrance Tom (D, Kaneohe) and Robert Herkes (D, Kau). The two representatives declared their conflicts and received permission from Souki to vote.

That outraged "Beadie" Kanahele Dawson of Na Pua a Ke Alii Pauahi, a group of Kamehameha Schools students, parents and alumni.

"I can't believe that there is no rule that prevents such a blatant conflict of interest," she said. "Those two votes, had they not been there, would have meant that the compensation bill would have gone through."

Case, who as a lawyer has worked for and against Bishop Estate, said he does not think it is possible for part-time legislators to completely avoid conflicts.

But he and Dawson noted Tom had recused himself from voting on the compensation bill until last night.

"He (Tom) made a determination throughout the entire Legislature that he should not take part on this issue, and tonight he did," Case said.

Tom receives a $4,000-a-month legal retainer fee from Bishop Estate.

"I asked for a ruling. I've recused. I've done everything I can on this matter. I've recused myself from hearing the bill. I didn't hear the bill," Tom said. "I remain out of it because I am an attorney and I do legal business. I believe that what I did was very proper."

Souki and Case said votes on the measure changed throughout the day. Case said many representatives would have voted for the bill but did not out of loyalty to Souki and the leadership.

"It was a vote on the system and a vote on the substance," he said. "Clearly it was a sort of referendum. There's an old way of doing things which involves a lot of insider stuff, and there's a way that I think the public wants us to do things, which is open debate."

Rep. Nobu Yonamine (D, Pearl City) provided a key vote so the measure could be debated. But he said he ultimately voted against the bill because he believes in the rules set up by House leadership.

"We can't afford to have bills, motions and amendments after we have gone through our decision-making apparatus," he said.

"I don't know what their goal was," said Rep. Brian Yamane (D, Kapahulu), who chaired the Judiciary Committee when it considered the compensation bill. "Either it was to embarrass the process or embarrass me. We had the arguments before."

During debate on the measure, Rep. Gene Ward (R, Aina Haina) warned inaction by the Legislature could lead to more severe action by the Internal Revenue Service against the estate.

"What the bill is about is saving the Bishop Estate," he said. "It's about putting it back in the hands of the Hawaiian people."

Rep. Kenny Goodenow (D, Waimanalo) argued against the Senate bill. He said it would be better to simply repeal a 1943 state law that originally set compensation for Bishop Estate trustees.

"Let's keep out of estate affairs," he said. "To me we are just continuing an unnecessary and dangerous link between the Legislature and politics and Kamehameha Schools. This is a link that should be completely severed."

Case said he was not surprised at the outcome of the vote.

"It's going to be back next year," he said. "There's no question about it."


How they voted on trustees' pay

The House voted 26-25 to reject Rep. Ed Case's move to have the House agree with the Senate's position that the compensation for Bishop Estate trustees should be capped at a "reasonable" level. Here's how the vote went:


Bullet Democrats (25): Speaker Joe Souki, Felipe Abinsay Jr., Lei Ahu Isa, Romy Cachola, Jerry Chang, Nestor Garcia, Kenny Goodenow, Robert Herkes, Ken Ito, Merwyn Jones, Michael Kahikina, Ezra Kanoho, Bertha Kawakami, Ron Menor, David Morihara, Bob Nakasone, Tom Okamura, Marcus Oshiro, Paul Oshiro, Calvin Say, Terrance Tom, Michael White, Brian Yamane, Noboru Yonamine and Terry Nui Yoshinaga.

Bullet Republican (1): Paul Whalen.


Bullet Democrats (14): Ed Case, Dennis Arakaki, Eric Hamakawa, Kenneth Hiraki, Marilyn Lee, Hermina Morita, Scott Saiki, Alex Santiago, David Stegmaier, Nathan Suzuki, K. Mark Takai, Dwight Takamine, Roy Takumi and David Tarnas.

Bullet Republicans (11): Minority Leader Quentin Kawananakoa, Sam Aiona, Galen Fox, Chris Halford, Barbara Marumoto, Bob McDermott, Colleen Meyer, Mark Moses, David Pendleton, Cynthia Thielen and Gene Ward.

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