Friday, May 14, 1999

Board aims to
permanently oust
former trustees

By Rick Daysog


The Bishop Estate's new board of interim trustees said they plan to go to court to seek permanent removal of their predecessors who were temporarily ousted from their $1 million-a-year jobs last week.

Retired Adm. Robert Kihune, chairman of the five-member board of interim replacement trustees appointed by Probate Judge Kevin Chang, said the new board plans to file a formal petition calling for the permanent ouster of former trustees Richard "Dickie" Wong, Oswald Stender, Henry Peters, Lokelani Lindsey and Gerard Jervis.

The new trustees -- Kihune, attorney Ronald Libkuman, former Honolulu Police Chief Francis Keala, retired Iolani School headmaster David Coon and Constance Lau, treasurer of Hawaiian Electric Industries Inc. -- yesterday appeared before the local media to answer questions about the temporary trustees' negotiations with Internal Revenue Service officials on Monday and Tuesday.

The new board -- in the first full day at the helm of the 114-year-old charitable trust -- also met yesterday with employees at the estate's Kawaiahao Plaza headquarters and with Kamehameha Schools teachers and staff at the Kapalama Heights campus.

The IRS has been conducting an exhaustive, three-year audit of the multibillion-dollar trust's operation and has threatened to seek the revocation of the estate's nonprofit status if the former board members were not permanently removed.

"The IRS said the actions of Judge Chang were a clear signal that we could continue on with the negotiations," Kihune said. "They made it very clear that the permanent removal of the trustees remains a condition that is non-negotiable right now."

Kihune said the new board has made much progress toward protecting the estate's tax-exempt status, which is worth tens of millions of dollars each year. But he and fellow trustees stressed that they have several months of negotiations ahead before they reach a closing agreement with the IRS.

Kihune said the new board has scheduled its next meeting with the IRS in June.

The board also defended its weekend appointment of the estate's longtime general counsel Nathan Aipa as acting chief operating officer, saying they were confident in his abilities. Some staffers and outside critics have complained about Aipa's new role at the estate, citing his close ties to former board members.

Kihune said the board plans to take a role in selecting a new chief executive officer for the estate. Already, the interim trustees have shifted much of the management responsibilities of the estate to trust staff members, Kihune said.

The temporary board members said they are not interested in serving as permanent trustees, adding that they don't plan to get involved in the process of selecting future trustees. Kihune also said that the interim trustees have not formally requested compensation for their work for the Bishop Estate.

The former trustees, meanwhile, are in the process of moving out of their offices. Chang's Friday order gave the former board members 20 days to clear out their offices. The order also gave the interim trustees and the state attorney general 90 days to seek the permanent removal of the trustees.

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