Saturday, February 6, 1999

Court order on
Bishop trustees
soundly based

BISHOP Estate trustees have been ordered removed from their role as representatives of the estate in dealing with an audit by the Internal Revenue Service. While Circuit Judge Kevin S.C. Chang's ruling is extraordinary, it is soundly based on trustees' conflicts stemming from allegations of self-aggrandizement, not on alleged violations unrelated to the trustees' personal benefits.

Although the IRS's exhaustive findings, detailed in 2,500 pages, are confidential, trustee Henry Peters says they include a challenge of the Kamehameha Schools' policy of limiting admission to children of Hawaiian ancestry. If the audit were confined to that issue, the trustees would be justified in retaining their role as defenders of the estate before the tax agency.

However, the IRS audit is known to extend far beyond the issue of admission policy and to encompass actions by the trustees that allegedly resulted in personal benefits at the expense of the estate. The IRS investigation could result in substantial fines not only for the estate but for the trustees as individuals.

Trustees Richard Wong, Henry Peters and Lokelani Lindsey argued unconvincingly that any attack on them personally amounted to an attack on the estate. Trustees Gerard Jervis and Oswald Stender recognized the conflict of interest and welcomed Chang's ruling.

Chang, acting as probate judge, has ruled that he will appoint five "special purpose trustees" to represent the estate in all matters relating to the IRS audit. The regular trustees will continue in their capacity regarding all other duties.

William McCorriston, the Bishop Estate's attorney, is expected to appeal Chang's ruling. McCorriston should be required to separate his expenses relating to his defense of trustees' personal interests from those pertaining to issues such as admission policy, and to bill the estate and individual trustees accordingly.


Closing military bases

CONGRESS is revisiting an ever-sensitive issue -- closing unneeded military bases. The Clinton administration's budget proposes new base closing rounds in 2001 and 2005, but doesn't say how many bases, or which ones.

Defense Secretary William Cohen, taking the administration's case to Congress, said prior closings and cuts, affecting nearly 250 bases, will save $14 billion and avoid spending $5.6 billion a year after 2003. The administration figures it will need further cuts of about 10 percent in bases in the United States to hold spending within projected future defense budgets. With the new rounds he seeks, Cohen said, the Pentagon would save $20 billion on bases, plus $3 billion a year after 2008.

The White House has requested legislation to renew the commission system that succeeded in closing nearly 100 bases in the past decade. By taking the choice of bases to be closed out of Congress' hands, the system protects lawmakers from political backlash from their constituents. Without such a system, it is extremely difficult for the Pentagon to persuade Congress to accept base closings.

Unfortunately for the White House, Republicans remember how the president managed to make use of a loophole to avoid two politically sensitive base closings in 1995. Clinton kept operations going at bases near Sacramento, Calif., and San Antonio, Texas, by ordering a shift from the military to civilian contractors.

Sen. John Warner of Virginia, chairman of the Senate Armed Services Committee, said he recognizes the need for more base closings, but isn't ready to commit to the new rounds the Pentagon wants. In a reference to Clinton's 1995 shenanigans, Warner told Cohen, "We really have to determine whether or not we can make a politically bulletproof bill to avoid what happened -- and you know what I'm talking about."

Just as legislators hate to have bases in their districts closed, they hate to have other politicians put one over on them by rescuing bases that were supposed to be shut down. Clinton's slipperiness on this issue four years ago is making it difficult to get Congress to go along with more base closings now.


Mizuguchi’s proposal

IN his remarks in opening-day ceremonies at the Legislature, Senate President Norman Mizuguchi proposed conversion of Linapuni Elementary School into a pilot center for early childhood education. At first blush, it seemed like a useful idea.

However, it turns out that Mizuguchi did not bother to consult the school's teachers or parents -- or the Board of Education, which runs the public schools and should be making such decisions -- not the Legislature.

Linapuni serves children in grades kindergarten through second grade who live in Kuhio Park Terrace and Kunio Homes, public housing complexes in Kalihi.

At a board meeting the other night, teachers, pupils, parents and supporters turned out en masse to protest the plan. Principal Evelyn Nugent asked, "How is it that no dialogue, conversations or forums were held to obtain information, ideas and feelings of the Linapuni community before the closure of a school?"

Stephanie Feeney, a professor of education at the University of Hawaii, said, "I was delighted that Senator Mizuguchi wanted a demonstration early childhood program...but it doesn't make sense to eliminate an outstanding program which is already serving young children."

Board of Education Chairman Mitsugi Nakashima commented, "I can't understand why Senator Mizuguchi did it this way."

Maybe it's the arrogance of power. No person who was not high in the state Democratic power structure would dream of going about attempting to make such a change without consulting the people involved.

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