Tuesday, June 2, 1998

Souki made $100,000 on Bishop deal

The House Speaker was
a developer's consultant in an
estate land purchase

By Rick Daysog


House Speaker Joe Souki was paid more than $100,000 on a $5.8 million land deal involving the Bishop Estate.

Critics of the estate cited Souki's involvement as an example of conflict of interest in recent legislation affecting the estate.

Souki (D, Maalaea) earned the fees as consultant to Maui developer Everett Dowling, whose Kulamalu Limited Partnership sold the estate a 100-acre parcel in Pukalani in December 1996.

Dowling today said Souki was not the deal's broker but provided general advice on the transaction.

The estate is in the process of building its permanent Maui campus on the Pukalani property. The school is set for fall 1999 completion.

Neither Souki nor a Bishop Estate spokesman was available for comment this morning.

But in a financial disclosure form filed with the state Ethics Commissions last week, Souki reported income of $150,000 to $200,000 from his real estate brokerage firm. For the previous year, Souki reported $39,750 in income from his real estate business.

The disclosure comes as state Attorney General Margery Bronster is investigating allegations of financial mismanagement and breaches of fiduciary duties by Bishop Estate trustees.

The state declined to say whether it is investigating the Maui transaction but Bronster today wondered whether the deal serves the best interests of beneficiaries.

"We question whether the trustees have the children's best interest in mind when they enter into transactions resulting in large payments to legislators," Bronster said.

As House speaker, Souki led opposition to a controversial bill aimed at limiting compensation paid to trustees of the Bishop Estate and other charitable trusts. After failing on an initial vote, public pressure prompted the House to pass the proposal.

Donne Dawson - spokeswoman for Na Pua a Ke Ali'i Pauahi which represents Kamehameha Schools students, parents and staffers - said Souki should have recused himself from the vote at the start.

"Mr. Souki needs to know that the voting public will not sit still while he and other legislators like him agree to abuse their power and influence in such an egregious way," Dawson said.

Desmond Byrne, chairman of the citizen's watchdog group Common Cause Hawaii, said that Souki's fee from the Maui deal raises the question of whether the estate was channeling funds indirectly to Souki through its real estate transactions.

"If Souki was serious about avoiding any perception affecting his integrity as a legislator and speaker, he would avoid these kinds of transactions," Byrne said.

"It looks so transparent."

Sources say Souki is a long-time friend of Bishop Estate trustee Lokelani Lindsey, who had served as the lead trustee for Kamehameha Schools' education programs.

But Dowling said that all negotiations were conducted with estate executive and former state Budget Director Yukio Takemoto.

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