Tuesday, September 15, 1998

Trustees' case to be examined by Grand Jury

The investigation could
lead to criminal charges

By Rick Daysog


A state judge has impaneled a grand jury to investigate Bishop Estate's trustees, in what could lead to criminal indictments against board members of the multibillion-dollar trust.

The investigative grand jury--convened at the request of Attorney General Margery Bronster--issued a subpoena to at least one trustee last week, according to several sources familiar with the proceeding.

The grand jury, which could meet as early as tomorrow, will likely call additional trustees as well as a number of Bishop Estate staffers and businessmen with ties to the estate, sources said.

A grand jury investigation of Bishop Estate's trustees is unprecedented in the 113-year history of the charitable trust.

Bronster has been investigating allegations of mismanagement and financial wrongdoing by Bishop Estate trustees for more than a year, and she recently hinted that trustees may have conducted criminal acts. The attorney general's office would not confirm or deny that a grand jury investigation is under way.

A spokesman for the Bishop Estate had no response, saying he was not aware of the grand jury proceedings. Attorneys for individual trustees had no comment.

In the past, trustees have described the state's investigation as politically motivated and said the timing is intended to boost the reelection efforts of Gov. Ben Cayetano.

The grand jury proceedings come less than a week after Bronster petitioned the state Probate Court to remove at least three trustees, citing a pattern of mismanagement, self-dealing, cronyism and campaign finance abuses.

Bronster alleged that trustees Richard Wong and Henry Peters received kickbacks from Wong's brother-in-law, Jeffrey Stone, while Lindsey mismanaged the estate-run Kamehameha Schools and used estate staff to help her renovate her Punaluu home.

Trustees also hired friends and relatives to jobs in which they provide little service and orchestrated an illegal scheme in which $49,300 in campaign contributions were paid to Sen. Marshall Ige and former state Sen. Milton Holt, Bronster said.

Wong, Peters and Lindsey said they would challenge Bronster's charges in probate court, calling them politically motivated.

Sources say the grand jury is investigative in nature, meaning that criminal charges have not been filed against trustees.

As opposed to an indicting grand jury, in which an individual is already targeted for criminal charges, an investigative grand jury would hear testimony from witnesses and would examine the subpoenaed documents. The grand jury would turn over the case to an indicting grand jury if it believed criminal charges were warranted.

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