Wednesday, August 26, 1998

Bishop Estate
denies rumor it
will fire Chun

The trustees will meet Friday with
the president of Kamehameha Schools

By Rick Daysog


As Kamehameha Schools students today begin the first day of their 1998-1999 school year, a new round of fears over the fate of the schools' popular president, Michael Chun, has gripped the Kapalama Heights campus.

But a Bishop Estate spokesman said trustees have no plans to fire Chun, dismissing the reports as rumors.

Parents, teachers and alumni are meeting this week to discuss speculation that Bishop Estate's majority trustees -- Richard Wong, Henry Peters and Lokelani Lindsey -- plan to fire Chun on Friday.

One group, the Kamehameha Schools Association of Teachers & Parents, went so far as to issue a news release in support of Chun on Monday.

PTA President Gary Nihipali said the group originally sent out its statement to mark the new school year. But he said he was aware of the rumors about Chun and wanted to express support for him.

"We believe that the full empowerment of the president's office is essential to being successful in carrying out the mission established by the will and legacy of Princess Bernice Pauahi Bishop to educate our children," the group said.

Chun could not be reached for comment yesterday. But one family source said Chun was aware of the rumors, but said Chun has not been informed by trustees that he would be fired.

Kekoa Paulsen, Bishop Estate spokesman, today said the board has not discussed firing Chun and has made no recommendation to do so.

"Dr. Chun is the president, and any rumors about any changes about that are just that, rumors," Paulsen said.

Much of the speculation centers on a special Friday meeting between trustees and Chun. Trustees -- who typically meet on Tuesdays and Thursdays -- will discuss the various reports issued during the past year on the governance of the schools, according to Paulsen.

One of the reports -- authored by Lindsey and based on findings by mainland consultant Paul Ahr and local accounting firm Ernst & Young LLP -- criticized the progress of Kamehameha Schools students under Chun's tenure.

The trustees also will go over Chun's response to the Lindsey report and the recently completed study by Peterson Consulting LLC which faulted trustees and Chun in their management of the school.

Paulsen said trustees could take some form of action as a result of Friday's meeting, but couldn't specify what actions they could take.

The latest speculation over Chun's status comes more than a year after parents, teachers and alumni complained that trustees usurped Chun's duties and micromanaged the affairs of the schools.

The controversy will likely be a key topic of discussion of a scheduled meeting tonight by the 1,500-member Oahu chapter of the Kamehameha Schools Alumni Association.

Beadie Kanahele Dawson -- attorney for the 2,700-member Na Pua Ke Ali'i Pauahi, which has criticized trustees' management of the schools -- said many in the Kamehameha ohana and the local community as a whole are concerned about the impact on the children at Kamehameha Schools.

But Dawson said she was delighted that trustees publicly responded to the rumors and clarified Chun's current status with the schools.

"This is not how you establish a viable learning climate," Dawson said. "But I'm glad that this is either not going to happen or it is being delayed."

Bishop subsidiary
must submit
credit card records

By Rick Daysog


Bishop Estate's for-profit subsidiary must hand over credit card records and other financial information to the state attorney general's office by Sept. 8.

Circuit Judge Kevin Chang yesterday denied a motion by Pauahi Management Co., formerly Royal Hawaiian Shopping Center Inc., to quash a state subpoena seeking records of credit card transactions and disbursements to Kamehameha Schools/Bishop Estate trustees and employees.

The records are to be delivered under a protective order to preserve their confidentiality.

The attorney general's office -- which is investigating allegations of financial wrongdoing by Bishop Estate trustees -- subpoenaed the company after receiving sworn testimony from two former Bishop Estate employees that trustee Henry Peters had personal use of a company credit card.

Hugh Jones, deputy attorney general, wants to know if other credit cards have been issued to employees or whether there have been improper disbursements by Pauahi or other Bishop Estate for-profit subsidiaries.

Peter Lee, Pauahi Management's attorney, said the company has no problem producing credit card records and other information if the state would agree to limit the scope of the subpoena, which Lee described as overly broad.

Lee said that parent Pauahi Holdings has not issued credit cards to Bishop Estate employees. Henry Peters, who is chairman of Pauahi Holdings, has been given a company credit card, but that card has been used for legitimate business expenses, the company has said. Since becoming a trustee, Peters has charged less than $1,000 on company credit cards.

The subpoena for credit card records is one of several involving Pauahi Management. The state recently subpoenaed Bank of Hawaii, which issued the cards to Pauahi Management.

State investigators also issued a subpoena for employ-ment contracts, credit card records and other disbursements relating to Pauahi Management employees, family members and current or past Bishop Estate trustees.

Pauahi Management is contesting both subpoenas.

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