Wednesday, August 19, 1998

Bronster wants
Bishop Estate
subsidiary data

The investigation is to find
if trustees' relatives and friends
were improperly rewarded

By Rick Daysog


Attorney General Margery Bronster is investigating whether current or former Bishop Estate trustees, their family members or friends were improperly rewarded by the estate's for-profit subsidiaries.

The attorney general's office has said this information is a key part of its yearlong investigation into charges of financial mismanagement and breaches of fiduciary duty by Bishop Estate trustees, which it hopes to wrap up soon.

State attorneys yesterday filed court papers seeking to compel the estate and its for-profit unit, Royal Hawaiian Shopping Center Inc., to hand over employee contracts, credit card information and other financial records relating to trustees Richard Wong, Oswald Stender, Henry Peters, Lokelani Lindsey and Gerard Jervis.

The state also wants the trust to hand over employment contracts relating to former trustees William Richardson, Matsuo Takabuki and Myron Thompson and other financial information involving Royal Hawaiian employees.

The state subpoenaed Royal Hawaiian for the information in July, but the company filed a motion to quash the subpoena on Friday. A hearing is scheduled for Sept. 24.

An estate spokesman had no immediate comment and referred all questions to Royal Hawaiian's president, Richard Wong, who denied that favoritism played a part in hiring employees. Royal Hawaiian's Richard Wong is not related to Richard "Dickie" Wong, the Bishop Estate trustee.

In the past, Royal Hawaiian has opposed the state's requests for information, saying they were overly broad and did not target specific allegations.

Royal Hawaiian employs about 120 workers.

William McCorriston, the estate's attorney, could not be reached for comment this morning.

In an affidavit, Senior Deputy Attorney General Lawrence Goya said reliable sources have told state investigators that one trustee, Henry Peters, had personal use of a credit card that either was issued by or guaranteed by Royal Hawaiian.

Sources also told state investigators that Royal Hawaiian may have provided improper benefits to one or more current trustees, their friends, relatives and Royal Hawaiian employees, Goya said.

The alleged benefits include jobs in which employees didn't provide actual or necessary services and disbursements for credit card transactions that don't show up on Bishop Estate's accounts.

The state is working on the theory that any improper benefits were arranged as a favor by a current trustee so the employees, the trustee, their friends or relatives would receive income from Royal Hawaiian, Royal Hawaiian's parent Pauahi Holdings or other for-profit units such as Kamehameha Investment Corp. and Kukui Inc.

The estate's subpoenas specifically requested employee contracts with eight current and former Bishop Estate trustees and nine Royal Hawaiian employees. The employees include distant relatives of trustees Henry Peters and Lokelani Lindsey and a relative of Peters' longtime assistant.

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