Saturday, November 14, 1998

Bronster wants
four trustees

Stender's colleagues suggest
he must have cut a deal

Labor probe nears end

By Rick Daysog


Attorney General Margery Bronster wants the temporary removal of four Bishop Estate trustees, in a departure from her previous call for the interim removal of all five board members.

During a closed-door meeting before Probate Judge Colleen Hirai yesterday, First Deputy Attorney General John Anderson said that Bronster is now seeking the temporary removal of all but trustee Oswald Stender.

Anderson said that Stender has cooperated with the state's yearlong investigation of the multibillion dollar charity and does not represent a large harm to its operations.

"Stender could have done a lot more, but we don't feel like there will be a tremendous amount of harm if he is not removed," Anderson said.

Attorneys for the estate's majority trustees -- Lokelani Lindsey, Henry Peters and Richard Wong -- sharply criticized Bronster's change-of-mind, suggesting that the state cut a deal for Stender.

Trustee Gerard Jervis also faulted Bronster, saying the attorney general's office offered him a "back-room deal" for his support against the majority trustees.

Jervis -- who along with Stender has actively sought changes to the controversy-laden estate -- said that the attorney general's office offered to not seek his interim removal in exchange for a public statement or court filing supporting their call for the interim removal of the majority trustees.

Jervis said he refused because he believed the interim removal of trustees should be based on merit and the performance of trustees, and not because they support the attorney general's legal position.

Jervis added that many of the alleged breaches cited by Bronster in her request to temporarily remove the trustees don't apply to him since they predated his appointment to the board in 1994.

"I think my focus and my job is about protecting the trust from harm," said Jervis, who asked Judge Hirai during yesterday's meeting to make an immediate ruling on his removal. Hirai denied the request.

"This is not about cutting a deal to protect myself."

The attorney general's office in September asked the probate court to temporarily remove all five trustees and appoint a receiver for the trust's daily operations. The request was in response to a critical review of the estate's operations of the 1994-1996 fiscal years by the estate's court-appointed master, Colbert Matsumoto.

Based on Matsumoto's report, the state alleged that trustees denied $350 million in educational benefits to the estate, threatened the trust's tax-exempt status and engaged in various conflicts of interest.

Lawyers involved in the matter will meet Friday to set the date for an evidentiary hearing.

Bronster also is seeking the permanent removal of Wong, Peters and Lindsey, saying they engaged in a pattern of self-dealing and mismanagement. That petition is not expected to go to trial until next year.

The majority trustees have opposed Bronster's removal request and have denied her allegations.

Yesterday, the attorney general's office denied Jervis' charge of offering a back-room deal. Anderson said that Jervis approached his office, asking whether there was anything he could do to convince the state not to seek his removal.

Anderson also said the two sides discussed whether Jervis was in favor of interim removal of the majority trustees, but stressed that no offer was made for his support. He said Jervis did not say whether he supported the temporary removal of the three trustees or not.

Stender, meanwhile, offered his support for Jervis, saying he was in favor of the interim removal of just Wong, Peters and Lindsey but not Jervis. Crystal Rose, Stender's lawyer, also stressed that her client was not offered a back-room deal by the attorney general to remain on the estate's board.

"Trustee Stender has consistently argued that if there is to be interim removal, only the three majority trustees should be removed," said Rose.

"His position has not changed. Trustee Stender's actions are guided by his fiduciary duties and the interests of the beneficiaries, not back-room deals."

Lawyers for the majority trustees argued that the alleged deal indicates the state is trying to turn trustees against each other.

In doing so, it shows that the attorney general's office lacks evidence to back its removal request, said Wayne Sakai, Wong's attorney.

"They're going to try their case by the concept of 'divide and conquer' because they do not have their own objective evidence to seek the removal of anyone," Sakai said.

Michael Green, attorney for Lindsey, believes that Stender was offered a similar back-room deal. Green, whose client is the subject of a removal petition by Stender and Jervis, said he has evidence showing that Stender has breached his fiduciary duties.

But Green said the state has turned a blind eye to alleged breaches after Stender agreed to cooperate with the state.

"Ray Charles must have been looking at Oz Stender when he went into the attorney general's office," Green said.

Rose has denied allegations that Stender breached his duties.

Anderson, meanwhile, said that Stender had been vocal about problems in the operations of the estate and Kamehameha Schools.

In particular, Stender, through various memos to board members, insisted that the estate's accumulation of income be spent on educational programs and the schools and not on investments, Anderson added.

"Stender has tried to cooperate with the investigation to the best of his ability," Anderson said. "He has been stymied, but he has tried."

Kamehameha labor
probe nears end

The faculty union says even
a partial settlement with
the estate is all right

By Debra Barayuga


An investigation into five charges of unfair labor practices filed by the Kamehameha Schools Faculty Association against its employer is coming to a close.

"I hope to have some type of recommendation, barring a settlement, soon," said National Labor Relations Board attorney Peter Ohr, who is handling the case.

The faculty association since September has filed five charges with the NLRB, saying Bishop Estate/Kamehameha Schools continues to punish members and frustrate the group's efforts since it was certified as a union in March.

Kamehameha Schools Bishop Estate responded to a Thursday deadline on the latest settlement proposal it was offered. Whether the two parties will agree on a settlement is not known at this time, Ohr said.

Attorney Robert Katz, representing Bishop Estate, had proposed settling all five charges simultaneously.

The faculty union would be amenable to even a partial resolution of the charges, said Dean Choy, attorney for the faculty association.

The faculty has filed charges against KSBE for denying union members use of meeting rooms on campus; eliminating stipends for grade-level chairpersons; selectively subjecting employees to disciplinary action if they speak out against the estate; stonewalling in collective-bargaining negotiations; and withholding from teachers a 1.8 percent salary increase this school year.

Negotiators on both sides have failed to reach any significant agreement during ongoing contract talks, except for the contract's preamble.

The faculty has basically asked to maintain the status quo -- no further increases in existing wages and benefits, and a one-year term of employment.

If no settlement is reached, Ohr's recommendations will be forwarded to the NLRB regional director in San Francisco, who will make the final determination.

If there is insufficient evidence for a complaint, the charges will be dismissed or withdrawn.

If there is enough evidence to support the charges, a hearing will be held in Honolulu.

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