The attorney general
suggests two men who could
serve as a court-appointed
receiverFull text of Court Master Colbert Matsumoto's
By Rick Daysog
First Supplemental Report
Star-BulletinThe state attorney general's office today named two candidates who could serve as a court-appointed receiver of the multibillion- dollar Bishop Estate if the probate court moves to remove the estate's current trustees.
The candidates are Harold Williams, past president of the J. Paul Getty Trust and a former chairman of the Securities and Exchange Commission; and Bevis Longstreth, a Wall Street attorney and past member of the SEC's board, the office said.
Attorney General Margery Bronster had urged that the probate court appoint a temporary receiver to take over the daily operations of the estate.
The move came after Bronster petitioned the court to temporarily remove all five trustees, citing a pattern of fiduciary breaches, financial mismanagement and cronyism.
Bronster also urged the trustees' permanent ouster, saying the estate has engaged in illegal campaign financing schemes and that two trustees -- Richard Wong and Henry Peters -- received kickbacks from Wong's brother-in-law.
In court papers filed today, the state renewed its calls for the trustees removal, saying they violated the will of the estate's founder, Bernice Pauahi Bishop, by holding back $350 million in income that should have been spent on the estate-run Kamehameha Schools.
"For each of the past 12 years, the trustees have failed to abide by the plain language of the will and have instead accumulated income," said Dorothy Sellers, deputy attorney general.
"It is not an overstatement to say that an educational tragedy has occurred."
An estate spokesman could not be reached for immediate comment. But trust lawyers are expected to file their response in court today.
One trustee, Gerard Jervis, said he was not aware that trust income was being accumulated at the expense of the schools until it was pointed out by the recent court-appointed master's report.
In a related matter, the state yesterday urged the probate court to make public the details of a report criticizing trustee investment decisions and alleging a perceived "leadership vacuum" at the Bishop Estate.
Deputy Attorney General Hugh Jones yesterday urged Probate Judge Colleen Hirai to deny the estate's request to seal an audit of the estate's operations by Arthur Andersen L.L.C., saying trustees want to hide a study that's embarrassing to them.
"The Andersen report is frank and candid in its assessments and documents deficiencies in the trust's management and accounting," Jones said.
"Suppression of the entire Andersen report would cast a veil of secrecy over the conditions of (Kamehameha Schools) when the will, common law, statutes and court rules mandate disclosure and accountability by the trustees to the beneficiaries."
An estate spokesman could not immediately be reached for comment.
But in recent court filings, estate attorney Robert Bruce Graham argued the Andersen report is a sensitive document that, if publicized, could lead to loss or disadvantage to the trust and the estate-run Kamehameha Schools.
The 336-page Andersen audit is a follow-up to court-appointed master Colbert Matsumoto's review of the estate's operations for its fiscal year ending June 30, 1994, which blasted the estate for its subpar investment returns and its more than $260 million in losses and loss reserves from high-risk ventures.
The Andersen report added that trustees may have violated the will of the estate's founder, Bernice Pauahi Bishop, when it held back $350 million in accumulated income that should have been spent on Kamehameha Schools.
A hearing on these issues will be held Friday morning.
The hearing also will address the master's report for the 1994-1996 fiscal years, as well as Attorney General Margery Bronster's petition for the temporary removal of all five Bishop Estate trustees.
In a related matter, Bishop Estate trustee Gerard Jervis today filed his response to the master's report for the 1994-1996 fiscal years.
Bishop Estate Archive
State wants Bishop report
made publicThe attorney general says the trustees
By Rick Daysog
want the audit sealed because
it's embarrassing
Star-BulletinThe details of a report criticizing trustee investment decisions and alleging a perceived "leadership vacuum" at the Bishop Estate should be released to the public, the state attorney general's office says.
Deputy Attorney General Hugh Jones yesterday urged Probate Judge Colleen Hirai to deny the estate's request to seal an audit of the estate's operations by Arthur Andersen L.L.C., saying trustees want to hide a study that's embarrassing to them.
"The Andersen report is frank and candid in its assessments and documents deficiencies in the trust's management and accounting," Jones said.
"Suppression of the entire Andersen report would cast a veil of secrecy over the conditions of (Kamehameha Schools) when the will, common law, statutes and court rules mandate disclosure and accountability by the trustees to the beneficiaries."
An estate spokesman could not immediately be reached for comment.
But in recent court filings, estate attorney Robert Bruce Graham argued the Andersen report is a sensitive document that, if publicized, could lead to loss or disadvantage to the trust and the estate-run Kamehameha Schools.
The 336-page Andersen audit is a follow-up to court-appointed master Colbert Matsumoto's review of the estate's operations for its fiscal year ending June 30, 1994, which blasted the estate for its subpar investment returns and its more than $260 million in losses and loss reserves from high-risk ventures.
The Andersen report added that trustees may have violated the will of the estate's founder, Bernice Pauahi Bishop, when it held back $350 million in accumulated income that should have been spent on Kamehameha Schools.
A hearing on the protective order will be held Friday morning. The hearing also will address the master's report for the 1994-1996 fiscal years, as well as Attorney General Margery Bronster's petition for the temporary removal of all five Bishop Estate trustees.
In a related matter, Bishop Estate trustee Gerard Jervis today filed his response to the master's report for the 1994-1996 fiscal years.
Jervis -- who was named trustee in November 1994 -- said he agrees with Matsumoto that the trust should create a chief executive to run its daily affairs and urged the trust to enact stricter conflicts of interest standards.
But Jervis said he was not aware the estate may have been accumulating income improperly until it was pointed out by the recent master's report.
He said some of criticisms of trustees raised by Matsumoto occurred before he was appointed to the estate's board.
Bishop Estate Archive
