Friday, January 15, 1999

Judge doesn’t
block investigation
of Wong

A grand jury is looking into
Wong's role in a land deal
involving Bishop Estate
and his brother-in-law

By Rick Daysog


A federal judge today refused to intervene in an Oahu grand jury's investigation of Bishop Estate trustee Richard "Dickie" Wong.

U.S. District Judge Alan Kay denied Wong's request for a temporary restraining order and a preliminary injunction against the grand jury proceedings, saying that Wong has several options to challenge the investigation at the state court level.

Kay also said there has been no showing of bad faith on the part of state Attorney General Margery Bronster, who impaneled the grand jury and has been investigating trustees for allegations of financial wrongdoing.

Kay's ruling came after the grand jury yesterday abruptly postponed deliberations to accommodate his hearing. The jury is looking into Wong's role in a Hawaii Kai land deal between the estate and a partnership affiliated with Wong's brother-in-law, Jeff Stone. Bronster has alleged that Stone offered Wong a kickback in the deal.

Wong, chairman of the multibillion-dollar estate's five-member board, has denied the allegation. On Wednesday, he asked Kay to bar Bronster from prosecuting him on criminal charges on the grounds that it would violate his constitutional rights.

The attorney general's office hailed today's decision, saying it justifies the state's probe of the estate's trustees.

"This is a good win and it's nice to have validation from the federal court of the investigation," said Cynthia Quinn, special assistant to Bronster.

In court today, Eric Seitz, Wong's attorney, had said Bronster is trying to indict Wong on criminal charges to influence a separate petition by her seeking Wong's removal as trustee.

Seitz called Bronster's investigation "reckless" and "malicious." He said that no impartial prosecutor would think of indicting his client based on the evidence presented.

"This is a classic bad faith and abuse of power case by the attorney general," Seitz said.

The grand jury is questioning witnesses familiar with the Hawaii Kai deal.

Bronster has alleged the estate gave a Stone-affiliated partnership a "sweetheart deal" when it bought the fee interest for the 229-unit Kalele Kai condominium project for $21.9 million in 1995.

In return, Stone provided kickbacks to Wong and trustee Henry Peters by acquiring the two trustees' upscale Makiki condominiums for inflated prices, Bronster said.

A separate grand jury in November indicted Peters for theft, and Stone for commercial bribery and conspiracy, in connection to the Kalele Kai deal. Stone and Peters have denied the allegations.

Wong also has denied wrongdoing, saying he has recused himself from board decisions relating to the Kalele Kai transaction.

Lawrence Goya, senior deputy attorney general, labeled yesterday's postponement a precautionary move, saying it would be "highly unusual" for a federal judge to intervene in an ongoing state criminal investigation.

The grand jury is expected to reconvene next month.

"We want to be as careful as we can to ensure that the investigation is conducted properly," Goya said.

Before adjourning yesterday, the grand jury heard from Stone's comptroller, Kendall Kim, and secretary, Jeanne Murata. Before proceedings were suspended, the panel was scheduled to question the estate's in-house lawyer, Nathan Aipa; Wong's secretary, Ernella Kam; and Wong's accountant, Edwin Kobashigawa.

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