Thursday, October 29, 1998

Two trustees
fight Bronster

Wong claims a move to search
his home violates his rights, while
Peters' attorney says he wasn't
personally served with a subpoena

By Rick Daysog


Faced with allegations of taking kickbacks, Bishop Estate trustees Henry Peters and Richard Wong went on the legal offensive against state Attorney General Margery Bronster's investigation of the estate.

Wong filed a lawsuit in federal court yesterday, alleging that Bronster violated his constitutional rights.

Separately, Peters failed to show at a scheduled hearing before an Oahu grand jury investigating charges that he and Wong received kickbacks from Wong's brother-in-law, Jeffrey Stone.

The courtroom battles come as Probate Judge Colleen Hirai prepares to hold a hearing tomorrow on Bronster's motion to temporarily remove all five trustees of the multibillion-dollar Bishop Estate.

Bronster said yesterday that Wong and Peters are trying to distract the public from the harms inflicted on the estate and the estate-run Kamehameha Schools. She also said that legal actions may be designed as a delay tactic.

In a petition filed last month, Bronster alleged that Stone and a company headed by his associate paid inflated prices for Makiki condominiums previously owned by Peters and Wong. In return, Stone and partner National Housing Corp. received a "sweetheart deal" in 1995 when they acquired the fee interest to the 229-unit Hawaii Kai condo project known as Kalele Kai, she alleged.

Wong, Peters and Stone all have denied the allegation. Stone has denied that the Kalele Kai purchase was a sweetheart deal, saying he and his partners paid a high price.

In his lawsuit yesterday, Wong said Bronster is trying to indict him on criminal charges solely to influence the outcome of tomorrow's removal hearing. Wong also alleged that Bronster is violating his constitutional rights by seeking a search warrant for his Kahala home so that she could appraise its value.

Wong "already has suffered and will continue to suffer serious and lasting harm to his personal and business reputation and to the security and well-being of his family," the suit said.

Peters, meanwhile, declined to show for a 3 p.m. appointment yesterday with the grand jury, to avoid what his attorney Renee Yuen called an "ambush" by the media.

Failure to appear before a grand jury could result in criminal contempt charges. But Yuen said the attorney general's office did not personally serve Peters with a subpoena for the grand jury testimony, in apparent violation of court rules.

"He has not committed any criminal violations, but he will not be further ambushed or embarrassed by any star-chamber appearance," Yuen said.

Bronster, who declined to confirm or deny a grand jury investigation, called Yuen's comments incorrect and inflammatory.

In responding to Wong, Bronster said her office is going ahead with its removal actions to address harms to trust beneficiaries and to the will of Bernice Pauahi Bishop, the estate's founder.

"The fact remains that the will has been violated and the trustees have breached their fiduciary duty to the beneficiaries of the princess's will," Bronster said.

The grand jury yesterday also heard testimony from Bishop Estate's in-house attorney Nathan Aipa and Ernest Watari, a local real estate and tourism industry consultant.

Aipa declined comment. Watari, who heads the PKF Hawaii accounting and consulting firm, said he was asked questions about a Big Island deal for land which Stone and National Housing acquired in 1996.

Watari said that at one time, Bishop Estate had talked with Stone and his partners about trading some of the undeveloped Big Island parcel for the fee interest to some of the Kalele Kai apartments. The proposed swap was later shelved, he said.

Kamehameha faculty
files 5th charge

By Debra Barayuga


The Kamehameha Schools Faculty Association has filed another unfair labor practice charge against its employer, this time for withholding a 1.8 percent salary increase from teachers.

It's the fifth complaint filed with the National Labor Relations Board against Kamehameha Schools/Bishop Estate since teachers voted to unionize March 13.

Yesterday's complaint is the latest against a succession of actions by the employer that amounts to illegal activity, said the association's attorney, Dean Choy. "What's been consistent is an attitude to punish and frustrate. If that attitude remains, I guarantee more unfair practices (charges) will result."

Every year, KSBE makes adjustments to employee salaries based on changes in the cost of living. Teachers' salary levels are based on the highest academic degree earned and years of employment. The salary table for the 1998-99 school year shows a 1.8 percent increase across the board over the 1997-98 school year.

All employees, except for teachers and librarians who are members of the faculty association, have seen the increase reflected in their paychecks. Teachers at Kamehameha's neighbor island campuses are receiving it.

Kekoa Paulsen, estate spokesman, said the neighbor island teachers are not part of the bargaining unit so are not subject to ongoing contract talks.

The employer has refused to provide the increase to faculty association members, saying the status quo must be maintained while a new contract is being negotiated, Choy said.

Paulsen said all compensation issues are being addressed in the contract talks and declined to comment specifically on them. "We prefer to keep those discussions at the negotiation table."

While labor law does call for preservation of status quo during contract negotiations, the status quo in this case has been established by the employer's practice in at least the past 17 years of annually adjusting the salary table to set salaries, Choy said.

"With a track record that long, it's clear keeping that practice in place is status quo that the employer is obligated to preserve."

Paulsen responded, "That's a question they will have to resolve either with the Labor Board or at the negotiating table."

Since the faculty association filed a fourth charge against KSBE for failing to bargain in good faith, contract negotiating teams have met three times but were only able to agree on a preamble, Choy said. The teams meet again next week.

Tom Cestare, officer in charge at the Honolulu office of the labor board, said investigators are close to a decision on at least three of the four charges filed.

The faculty association sought earlier charges against KSBE for denying it use of meeting rooms; eliminating a $1,700 stipend previously paid to grade-level chairpersons; and selectively subjecting employees vocal against the estate to disciplinary action.

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