Lingle criticizes estate for
lobbying expenses

By Rick Daysog
Star-Bulletin

Republican gubernatorial candidate Linda Lingle has criticized Bishop Estate trustees for spending estate money to lobby against federal legislation barring excessive pay for trustees of charities.

The Maui mayor, during a meeting with the Star-Bulletin's editorial board yesterday, said the lobbying expenses show that the trustees have placed their own personal interests above those of the estate and the estate-run Kamehameha Schools.

She added that the estate should be required to use more of its assets to fund the operations of Kamehameha Schools.

"That was a blatant example that their concern was for themselves and not for the trust," Lingle said, referring to the lobbying expenses. "Obviously, they were not operating in the best interest of the trust."

Bishop Estate trustees are under investigation by the state attorney general's office, which is looking into allegations of financial mismanagement and breaches of fiduciary duties.

Lingle has said she would continue the state's investigation if she were elected governor. But she said she would have completed the inquiry much sooner than the present administration, saying a prolonged investigation would harm students at Kamehameha Schools.

Lingle's remarks come after the estate's court-appointed master, Colbert Matsumoto, last week called the lobbying expenses "inappropriate" and said they could constitute a conflict of interest on the part of trustees.

The federal legislation, known as the intermediate sanctions law, prohibits board members of charitable organizations from receiving excessive salaries or perks at the expense of the charity.

The estate has said it spent about $1 million on lobbying Congress but said the expenses were legitimate. The estate lobbied Congress to change language to a draft of the 1996 legislation that would have made all Bishop Estate and Kamehameha Schools employees liable.

But Bishop Estate spokesman Kekoa Paulsen said the estate is not opposed to the overall concept of the intermediate sanctions law. Without the law, the estate's tax-exempt status could have been at risk if trustees or future trustees were found to have benefited at the expense of the estate.

The current intermediate sanctions law allows the federal government to order trustees of a charity to pay back excessive benefits or seek penalties of up to 25 percent of any excessive benefits.

"For our institution, the intermediate sanctions law is a good thing, and we wanted to be included in the legislation," Paulsen said.

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Bishop Estate Archive

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Lingle unveils
plan to solve state’s
economic problems

The Maui mayor's plan is similar to ones
pitched by Frank Fasi and incumbent
Gov. Ben Cayetano

By Star-Bulletin staff and wire

Republican gubernatorial candidate Linda Lingle believes she can turn the state's economy around by curbing government waste and regulation and enhancing the business climate.

The Maui County mayor unveiled a 15-page plan yesterday that she said puts most of the proposals she has been talking about for the past year all in one package.

But her GOP primary opponent, former Honolulu Mayor Frank Fasi, said the plan uses many of his own proposals.

The plan also is similar to the overall plan pitched for the past several years by incumbent Democratic Gov. Ben Cayetano. The difference, according to Lingle, is that she believes she can get her plan implemented, whereas Cayetano failed to do so.

"I'm able to work very effectively with a wide cross-section of people to put my ideas into law and them implement them administratively," said Lingle, a Republican mayor working with a Democratic-controlled Maui County Council for nearly eight years.

Cayetano scoffed at what he called "Linda Lingle's so-called plan" and wondered if that's the best she can do.

"We've been there. We've done that, and it's interesting some of the things she proposes we have considered, others have considered and we have discarded because they are either not practical or they cost too much money," Cayetano said.

Former Honolulu Mayor Frank Fasi, who faces Lingle in the GOP primary, said, "Lingle offers subsidies, tax incentives and tax breaks but does not total the cost in dollars or where the money will come from."

When questioned by reporters, Lingle declined to provide even a rough estimate as to what her programs would cost.

"Generally, anything that is going to cost us money as opposed to make us money is going to wait until there is a good economy," she said.

Fasi also accused Lingle of "hypocrisy and dishonesty" for including "zero tolerance for cronyism or favoritism in awarding government contracts." He pointed to the state Supreme Court's ruling in 1996 that she had improperly hired her then-husband, William Crockett, for representing her in a wrongful-firing lawsuit. Crockett was paid $77,037.

Tax reform is a key part of the Lingle plan, including a cash rebate for businesses equal to 5 percent of the amount by which they expand their payroll.

If a company expanded its payroll by $100,000, it would get $5,000 cash. At the same time, the state would get $8,000 back in income taxes from that bigger payroll, so the state ends up making money, Lingle said.

She also wants to cut immediately the 4 percent general excise tax on commercial leases to 1 percent, instead of the gradual seven-year reduction to 0.5 percent approved by this year's Legislature. "Using the dragged-out approach won't help the economy and is too long to wait," she said.

The plan also would return to the counties their previous share of the hotel room tax revenues, which the Legislature reduced this year to provide more funding for tourism promotion.

The revenues from the rental car surcharge and the new tax on time-share condominium units would provide sufficient additional funds for tourism promotion and keep the counties from having to increase property taxes, Lingle said.

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Star-Bulletin reporters Mike Yuen and Craig Gima
and the Associated Press contributed to this report.

Lingle's initiatives Here are some of the key initiatives Republican Maui Mayor Linda Lingle says she will undertake if elected governor: ECONOMY Assist small businesses by breaking procurement contracts into smaller lots and allowing competitive bids. Give small businesses the exclusive right to bid on all contracts less than $125,000. Give 5 percent cash rebate to any company that invests in Hawaii by expanding its payroll. Immediately reduce the 4 percent general excise tax on commercial leases to 1 percent. Establish a film school in Hawaii, creating an isle film work force that negates the need for outside film production workers. GOVERNMENT DOWNSIZING Transfer the new state convention center to the city. Trim the number of positions in the attorney general's office and the Department of Business, Economic Development and Tourism. Reduce the number of government public relations positions, including cutting the governor's communications staff from three to two. EDUCATION Reduce class size. Examine the implementation of the Felix v. Waihee consent decree by conducting a management and financial audit of all special-education programs. Shift all responsibility for budgeting, maintenance and repair from other departments to the Department of Education. ENVIRONMENT Minimize coastal erosion. Land bank open space. WELFARE Require able-bodied people to complete a job search before applying for welfare. Help single mothers by maintaining family medical coverage even if a person takes a part-time job. CRIME Require criminals to serve 85 percent of their sentence. Have certain misdemeanor crimes treated as a felony if a person has three prior convictions for the same crime.