Saturday, May 8, 1999


Interim board vows
‘to work diligently’

Members meet into the night
to plan ahead for an undetermined
tenure as Bishop Estate caretakers

By Gordon Y.K. Pang


At 3:45 p.m. yesterday, four men and a woman suddenly found themselves interim caretakers of Hawaii's biggest land trust.

That's when Probate Judge Kevin Chang ordered the temporary removal of four trustees of Kamehameha Schools/Bishop Estate and approved the temporary resignation of the fifth one.

Within hours, the new board of retired Adm. Robert Kihune, former Iolani School headmaster David Coon, former Honolulu Police Chief Francis Keala, Hawaiian Electric Industries Inc. Treasurer Constance Lau and attorney Ronald Libkuman issued its first news release:

"Although none of us sought the position of interim trustees, we accepted this appointment by Judge Chang and pledge to work diligently to carry out the legacy of Ke Alii Bernice Pauahi Bishop," said Kihune, newly appointed chairman of the board.

How long the five will remain as interim trustees is unclear. Nor is it known who will guide the trust when they are gone.

The five met late into the evening last night to discuss their new responsibilities -- and finish planning for their meeting Monday with IRS officials.



Ronald D. Libkuman
Bullet Background: Attorney; arbitrator; former law partner of Libkuman Ventura Aybe Chong and Nishimoto.
Bullet Personal: In litigation law from 1960 to 1992.

Constance H. Lau
Bullet Background: Oversees financial management of $1 billion pension and retirement assets for Hawaiian Electric Industries Inc.
Bullet Personal: Married to Russell J. Lau, president of Finance Enterprises Ltd., with three children.

David Paul Coon
Bullet Background: Retired headmaster of Iolani School; former president of Hawaii Medical Service Association.
Bullet Personal: Married with four children and seven grandchildren.

Francis A. Keala
Bullet Background: Director of safety for GTE Hawaiian Tel; former Honolulu police chief.
Bullet Personal: Spent 25 years in Honolulu Police Department.

Robert K.U. Kihune
Bullet Background: President of the USS Missouri Memorial Association Inc.; retired admiral.
Bullet Personal: Graduate of Kamehameha Schools.



The five were appointed by Chang in February as a special panel to negotiate a settlement with the IRS, which has conducted an extensive, five-year audit of the trust.

But now Chang has entrusted immense, albeit temporary, power in the group by giving it full and complete authority over the trust, the school and all of Bishop Estate's vast assets.

Kihune, during a break from last night's meeting, said the change came suddenly.

The group had met in the morning to discuss the IRS meeting, he said.

"In just a few hours, we were assigned interim trustees," Kihune said. "We had no idea -- we could read the papers, we had an insinuation something was going to happen. But we had no expectation of what (Chang) was going to do."

Kihune said he was initially reluctant to take on even the special panel post.

"I turned them down a couple of times," he said. "Finally, it was obvious I couldn't walk away with such a large task needing to be done."


Despite the challenge ahead, Kihune has complete confidence in the team that has met an average of four times a week since Chang assembled them.

"The people on this panel are absolutely dedicated people," he said. "We are working toward the goal of protecting the tax-exempt status of the estate and preserving the legacy of Princess Pauahi."

He described his colleagues as "intelligent and industrious."

Kihune also noted the group represents "a good mix" of talents joined by a common thread: "In one way or another, we've all been involved in either training, education or tax-exempt organizations."

Kihune, a 1955 graduate of Kamehameha, retired from the Navy in 1994 as chief of Naval education and training. In that capacity, he managed a budget of $2.4 billion and was responsible for more than 179 naval training schools and facilities.

He now heads Waimana Enterprises, which is developing a power plant in Kawaihae on the Big Island. He is perhaps best known for his work as president of the USS Missouri Memorial Association, credited with bringing to Hawaii and restoring the ship on whose deck World War II ended.

Lau, a 1970 graduate of Punahou School, attended Yale and got a law degree at Hastings College before receiving her master's in business administration from Stanford University.

She is a trustee at Punahou School, where she helped restructure the management of its endowment and assisted in long-range financial planning. Lau also is chairwoman of the board of the University of Hawaii Foundation.


Coon was headmaster at Iolani from 1970 to 1992. He also served on the board of directors of Hawaii Preparatory Academy and is a past president of the Hawaii Association of Independent Schools and past chairman of the Hawaii Medical Service Association.

Keala was police chief for 13 years before directing security, health and safety at GTE Hawaiian Tel for 10 years. A 1948 graduate of St. Louis High School, Keala is on that school's board of trustees. He serves on the boards of numerous other nonprofit groups, including the Muscular Dystrophy Association and St. Francis Medical Center West.

Libkuman has been an attorney in Hawaii since 1960. He gained fame as a specialist in accident and product liability cases and resolving commercial and business disputes. Now 66, Libkuman is active primarily as an arbitrator or mediator in various legal disputes.

"We bring a lot to the table," Kihune said. "And it's a healthy board when there is a good dialogue and exchange of ideas."


Others are offering their advice to the interim trustees.

"The first thing they should do is waive the attorney-client privilege with respect to everything that has transpired in the past," said Randall Roth, attorney and co-author of the "Broken Trust" article, which spurred the attorney general's case against the estate.

"Related to that, they should do everything possible to cooperate with the attorney general's investigation so that the process can be completed and the estate can move forward."

Roth said the group also needs to "take a close look at the governance structure (of the school) and move full-speed ahead in changing the role of the trustees from hands-on CEOs to policy-oriented directors."

Roy Benham, Oahu region president of the Kamehameha Schools Alumni Association, said the interim trustees need to "make sure operations of the school are not affected. I think the staff at Bishop Estate is perfectly capable of maintaining the status quo until this thing is settled."


Bullet The attorney general, special panel or interim trustees have 90 days to seek permanent removal of the five Bishop Estate trustees.

Bullet If they fail to ask for removal, the trustees may petition the judge for a review of Probate Judge Kevin Chang's order.

Bullet If they ask for removal, an evidentiary hearing will be scheduled within 90 days to decide whether the resignation of trustee Oswald Stender and temporary removal of trustees Richard Wong, Henry Peters, Lokelani Lindsey and Gerard Jervis should be permanent.

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