Wednesday, August 11, 1999

Interim trustees
offer changes

The current Bishop board urges
differences in how future
trustees are chosen

By Helen Altonn


Candidates for Bishop Estate trustees could not hold political office within five years of their nomination if suggestions of the interim trustees become part of a trustee selection plan.

The interim trustees of the $6 billion-dollar charitable trust yesterday filed a petition in probate court asking that a procedure be established for selection of future Bishop Estate trustees.

They offered "observations and comments" for consideration in a selection procedure and asked the court to establish a means to allow others to submit suggestions.

Probate Judge Kevin Chang scheduled a hearing for Oct. 1 and appointed attorney Benjamin Matsubara to review the petition and solicit comments.

The interim trustees are Robert Kihune, chairman; David Coon; Francis Keala; Ronald Libkuman; and Constance Lau.

They said their suggestions are based on discussions with community and Kamehameha Schools representatives.

Chang appointed the interim trustees in May after temporarily removing the permanent $1 million-a-year trustees because of actions he felt were detrimental to the trust.

The Internal Revenue Service threatened to revoke the estate's tax-exempt status.

Ousted board members were former Senate President Richard "Dickie" Wong, former House Speaker Henry Peters, Oswald Stender, Gerard Jervis and Lokelani Lindsey, who was permanently removed as a trustee on May 6 by Circuit Judge Bambi Weil.

Princess Bernice Pauahi Bishop created the charitable trust in her 1884 will to operate the Kamehameha Schools for Hawaiian children.

Under the will, trustees have been selected by a majority of the five Hawaii Supreme Court justices.

Chief Justice Ronald Moon and Associate Justices Steven Levinson, Paula Nakayama and Mario Ramil ended the tradition in December 1997, saying they felt it created "a climate of distrust and cynicism" and eroded public trust in the Judiciary.

Associate Justice Robert Klein dissented, calling it an "unwise" decision.

The interim trustees suggest that the probate court appoint a trustee selection committee to consist of members of the Kamehameha Schools (including alumni, teachers and students' families), the Hawaiian community and the community at large. They would serve without pay.

Committee members "should possess experience and insight into the operation and management of large private educational institutions, large financial institutions or large charitable trusts or foundations," the interim trustees said.

The names of three finalists for permanent trustee would be submitted publicly to a probate judge. If they were rejected, the panel would submit new names.

Appointments could only be made from the panel's recommendations.

Other suggestions:

Bullet In the case of two equally qualified candidates, preference would go to one who is a Kamehameha Schools alumnus or of Hawaiian ancestry.

Bullet Trustees would be limited to two five-year terms. When more than one trustee is selected at the same time, the terms would be staggered so that no more than two terms expire in the same year.

There would be no mandatory retirement age.

Trustees now generally serve until they're 70, although that isn't prescribed in the will.

Bullet Candidates could not have held political office within five years preceding the nomination.

The "optimal candidate" would have a history of success in business, finance or related areas, a formal education and outstanding personal traits, including Hawaiian values, the interim trustees said.

Similar recommendations on the selection process also were submitted to the court yesterday from the Kamehameha Schools Alumni Association; Na Pua a Ke Ali'i Pauahi, including students, parents and supporters; Na Kumu O Kamehameha, the faculty group; and authors of the "Broken Trust" essay criticizing management of the estate and schools by the former trustees.

The groups recommended an 11-member trustee selection committee representing Kamehameha Schools and Hawaiian, business and community organizations.

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