From plantation
to power: Matsuo
Takabuki and Hawaii
Tracking the former Bishop Estate
By Rick Daysog
trustee's life is an exercise rich in history
Star-Bulletin
His nomination as a Bishop Estate trustee in 1971 sparked protests by native Hawaiians, who called it a political payoff, angry that a non-Hawaiian was selected.
But when Matsuo Takabuki retired from the estate more than two decades later, he was revered as a kupuna or elder who, as former Bishop Estate trustee Myron "Pinky" Thompson put it, "was as Hawaiian as anyone around here."
In its 113-year history, few have left a bigger imprint on the daily operations of the Bishop Estate. During his tenure, the trust evolved from a land-rich, cash-poor charity that barely met the expenses of the estate-run Kamehameha Schools to a multibillion-dollar conglomerate whose vast holdings span three continents.
The estate, the isles' largest private landowner, today boasts a 10 percent stake in Goldman Sachs Group, which is worth between $2 billion and $4 billion. The estate also owns hundreds of thousands of acres of timberland in upper Michigan and condominium complexes in Las Vegas, and has an interest in a mainland China bank.
Investment decisions made by this former trustee will end up paying for the education of hundreds of native Hawaiian children for years to come.
"I give him high marks for supporting the intentions of Princess Bernice Pauahi Bishop," said Senior U.S. District Judge Samuel King, who once represented a Kamehameha Schools graduate who sued the estate over Takabuki's appointment.
"I think he was supportive of Hawaiians and did a good job on the educational end of the estate."
A rich history
War veteran. Political kingpin. Financial wizard. Bishop Estate trustee.In many ways, Takabuki's storied career exemplifies Hawaii's transformation from a plantation-based society prior to World War II to a Pacific Rim economic power.
Takabuki, now 75, documents many of his experiences in a 237-page autobiography entitled "An Unlikely Revolutionary: Matsuo Takabuki and the Making of Modern Hawaii" (University of Hawaii Press, $20).
Written with UH professor Dennis Ogawa, author Glen Grant and attorney Wilma Sur, the book details the formative events in Takabuki's life, starting with his childhood as a nisei growing up in rural Waialua, his experiences in World War II as a member of the famed 442nd Regimental Combat Team during World War II and his 16 years as a member of the Honolulu City Council, then known as the Board of Supervisors.
Takabuki, who retired from the estate in 1993, said he was more interested in documenting the sweeping economic and political changes that transformed Hawaii during his lifetime than in writing an exhaustive account of his life.
As a result, the book doesn't do justice to the rich history that Takabuki witnessed and helped shape. Readers looking for an insider's account of former Gov. John Burns' administration or of events surrounding the Bishop Estate during the past two decades will be disappointed.
The book also does not directly address the current controversy that has engulfed the Bishop Estate and Kamehameha Schools.
The publicity-shy Takabuki downplays the historical significance of his career, saying he was no different than many others in his generation. He doesn't think that his experience in World War II -- which included acting as a Japanese soldier in an Army training film -- was anything extraordinary, either.
"As far as I knew, I never shot or killed anyone. I fired my carbine in the direction of the enemy line, but never directly at a person," Takabuki wrote. "I was a lousy shot anyway."
His political rise
To be sure, Takabuki's connections to the 442nd Regiment served him well in his later career in politics. During the early 1950s, he served as president of the 442nd Veterans Club, which was his power base when he was elected to the City Council in 1952. He and other nisei war veterans also played a big role in Burns' 1962 election as governor, and Takabuki would remain as Burns' closest adviser in the governor's office.In their 1985 landmark study "Land and Power in Hawaii," authors George Cooper and Gavan Daws argued that nisei politicians like Takabuki personally prospered as a result of their newfound power. The Democrats of Takabuki's era revamped the state's land-use laws during the 1950s and 1960s in ways that allowed them and their supporters to acquire huge landholdings.
Takabuki also benefited from his relationship with Burns when state Supreme Court justices -- all Burns appointees -- nominated him to the Bishop Estate board, according to Cooper.
Takabuki takes issue with this account, saying the legislative changes opened opportunities and "expanded" the economy so that more people could achieve wealth.
"These same critics have little understanding of the socioeconomic stranglehold that an entire generation of islanders suffered under when this 'land and politics' were truly in the hands of the few," he said.
The Bishop Estate years
During his 21 years as a Bishop Estate trustee, Takabuki was no stranger to controversy. But his autobiography either ignores or glosses over the uncomfortable legal battles that would have a big impact on the way the estate does business.The book briefly mentions his titanic courtroom battles with former trustee and Aloha Airlines head Hung Wo Ching, who died in 1996. In a 1980 federal court complaint, Ching alleged that Takabuki convinced the estate to acquire its current Kawaiahao Plaza headquarters to bail out a developer.
Ching's suit also called into question the competence of the three remaining trustees -- Thompson, Richard Lyman and Frank Midkiff -- who backed Takabuki.
The complaint, which was moved to the state courts, eventually was thrown out by the Supreme Court in 1985. Takabuki said Kawaiahao Plaza is now worth four times the amount the estate originally paid for the building.
And Takabuki's memoirs make only a veiled reference to the McKenzie Methane Inc. fiasco. The estate posted an $85 million loss in the Houston-based oil and gas venture in 1989 after it went into bankruptcy protection.
The bankruptcy proceedings also revealed that Takabuki and then-trustees Thompson, Henry Peters, Lyman and former Supreme Court Chief Justice William Richardson invested more than $2 million of their personal money in the venture.
Much of the losses have been reversed since the estate assumed control of the company. But estate critics cite the trustees' personal investment in the McKenzie Methane deal as a conflict of interest.
The estate contends that the McKenzies, the Texas family that founded the venture, misappropriated the estate's money. But the family said the estate and Takabuki conducted a hostile takeover of their company.
Takabuki now says that the estate and its partners were fooled by the McKenzies. He said the trustees and Bishop Estate employees, who invested in McKenzie Methane through an investment known as HAK Partnerships, were simply going along for the ride.
Takabuki denied charges of self-dealing and said that the investments in the HAK partnerships were structured differently.
Said King, one of five co-authors of last year's "Broken Trust" article that criticized Bishop Estate trustees for mismanaging trust assets: "He got them into high-risk ventures, and most of them may have paid off. But his philosophy of investing was not clearly the philosophy that a trustee should follow.
"He deserves all the kudos he gets, and he deserves all the criticism he gets."
Former trustee tries
By Rick Daysog
to stay out of conflict
Star-BulletinMatsuo Takabuki has seen his fair share of legal battles and financial conflicts during his lengthy career. But the former Bishop Estate trustee wants no part of the latest controversy that has engulfed the multibillion-dollar charitable organization.
Takabuki declined comment on Attorney General Margery Bronster's yearlong investigation into charges of financial mismanagement and breaches of fiduciary duties relating to the estate's current trustees.
He also refuses to judge the performance of the trustees -- Richard Wong, Oswald Stender, Henry Peters, Lokelani Lindsey and Gerard Jervis -- saying he doesn't want to be put into the middle of the conflict.
"It's their ballgame," he said.
But privately, Takabuki has expressed disappointment with the estate's 1995 decision to eliminate various outreach programs for native Hawaiian children. The programs -- which included preschool classes for children from poor families -- were cut by the current trustees, who felt they weren't cost-effective and wanted to use the money to fund the development of satellite campuses on the neighbor islands.
Takabuki -- noting that he, too, came from humble beginnings -- said the outreach programs over the long haul may be cost-effective if they could reach disadvantaged children at an early age and keep them out of trouble.
"On a cost basis, you might get more for your dollar if you put 30 kids in a school, but the responsibility of the estate is broader than that," Takabuki said.
"If we're able to save five or 10 kids, the cost might have balanced out."
Takabuki also has supported Kamehameha Schools President Michael Chun, whose rocky relationship with Lindsey, the former lead trustee for the estate's educational program, has fueled the controversy surrounding the Kapalama Heights campus.
According to Takabuki, Chun did a good job managing the campus when he was a trustee.
"He's very close to the people and he's very close to the school," Takabuki said. "And he basically has the support of the faculty and the students, which is so important."
Bishop Estate Archive
