‘No justification’
for trustee pay
—Cayetano

Lowered compensation
'would go a long way' toward
dissipating controversy

By Mike Yuen
Star-Bulletin

If the "enormous compensation" for Bishop Estate trustees is significantly lowered, that would go a long way toward dissipating the months-long controversy that has engulfed the $10 billion charitable trust, says Gov. Ben Cayetano.

Last year, each of the five trustees, who are expected to do the work of chief executive officers, received $843,109. In 1995, it was $938,047.

"There's no justification for their compensation to be as high as it is," Cayetano said yesterday. "The simple reason is this: It's a charitable trust. It receives tax benefits from the state.

"And I think the people of this state are entitled to have some say in the compensation level of the trustees.

"If they were a private trust like the Campbell Estate, they can pay their people anything they want. But they're not a private trust."

Responding to Cayetano, Elisa Yadao, Bishop Estate/Kamehameha Schools spokeswoman, said this morning that the estate is "a private trust established by the will of Princess Pauahi Bishop.

"We are not charity in the conventional sense where we run our operations based on donations. We are self-sustaining, earning all the money to run our operations under the leadership of our trustees."

The trustees' compensation is tied to their performance, she said.

If the matter of trustee compensation is not addressed, Cayetano predicted that questions will resurface regarding breaches of trust responsibilities and the perception that politics permeates the selection of trustees.

Spurred by questions raised in "Broken Trust," an opinion piece authored by five prominent leaders that ran in the Star-Bulletin last month, Cayetano ordered a state investigation into the estate, one of the nation's wealthiest trusts and Hawaii's largest private landowner.

Cayetano yesterday also reiterated that he will propose legislation next year to slash trustee compensation. He also called for House Judiciary Chairman Terrance Tom (D, Kaneohe), an attorney who received $49,200 in legal fees from the estate last year, to recuse himself when the administration's bill or a similar measure goes before Tom's panel.

"We are all going to be held accountable for our actions," Cayetano said. "I think Terry Tom on this particular issue should recuse himself and not be involved in the hearing of the bill because obviously he has a direct conflict."

Tom said he will leave it up to House Speaker Joe Souki (D, Wailuku) and other House leaders to determine whether he should step aside. "I will do whatever is in the best interest of the House. When I wear my legislative hat, I always act in the best interest of the state and not one client as I would do as a lawyer," Tom said.

Several years ago, when a resolution involving Bishop Estate came up, Tom disqualified himself and turned the matter over to his vice chairman, he said.

Cayetano declined to say at what amount he would cap trustee compensation. But he noted that a former trustee of Williams College told him the trustees for the Williamstown, Mass., school did not receive a cent for their work and had to pay their own way to board meetings.

The college's trustees are willing to forego financial compensation because they are committed to doing the best for the school, Cayetano said. "That's the same kind of attitude that should be with the Bishop Estate," he added.

Others, Cayetano noted, have suggested tying the commissions of estate trustees to the governor's annual salary, which is $94,780. But if the governor's salary is the barometer, there also could be political pressure to raise the governor's pay so that Bishop Estate trustee compensation is higher, Cayetano said.

A poll taken Sept. 11-14 for the Star-Bulletin and KHNL NBC Hawaii News 8 found that 91 percent of 420 registered voters believed trustee pay is too high.

Estate lawyers seek
reporters’ info, notes

They claim confidential information
was disclosed by a fired Bishop exec

By Jim Witty
Star-Bulletin

Attorneys for Bishop Estate have subpoenaed at least three Honolulu reporters they contend received confidential and proprietary information allegedly released by a fired executive of the trust.

Associated Press reporter Bruce Dunford, KITV-4 reporter Jim Dooley and Honolulu Advertiser reporter Sally Apgar were served with subpoenas yesterday that seek documents purportedly released by Bobby Harmon. A deposition was scheduled for this afternoon.

Bishop Estate filed an emergency motion in Circuit Court late last month seeking contempt of court charges against Harmon for allegedly violating a previous injunction that blocked him from releasing "confidential" information about his former employer. He has filed a $1.8 million wrongful-termination suit against Bishop Estate.

Harmon, who was fired last year after eight years as president and chief executive officer of Bishop Estate subsidiary P & C Insurance Co., has alleged in the media that his questions about irregular activities led to his ouster.

KITV News Director Wally Zimmerman said the station is consulting its attorneys but added, "My first inclination is that we ask that the only thing that we provide is what we broadcast" and not notes or outtakes. The subpoenas also ask for notes from meetings the reporters may have had with Harmon.

Bishop Estate attorney Matt Tsukuzaki could not be reached last night for comment.

Harmon's hearing on the contempt allegation is set for Friday before Circuit Judge Bambi Weil.

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