Saturday, September 25, 1999

Ex-trustees’ attempts
to shield overpayments

Bullet The issue: The former trustees of the Bishop Estate studied moving the estate out of Hawaii and converting the trust to a for-profit company.

Bullet Our view: This confirms the ex-trustees' willingness to damage the estate to protect their own interests.

Nothing came of it, but the fact that the former Bishop Estate trustees considered moving the estate's corporate base out of Hawaii and converting the trust to a for-profit company shows the lengths they might have gone to protect their own interests.

The former trustees' actions were detailed in an amended lawsuit filed by the interim trustees seeking the permanent removal of Richard Wong, Henry Peters and Lokelani Lindsey.

The suit says that the former trustees directed former Gov. John Waihee's law firm, Verner Liipfert Bernhard McPherson and Hand, to lobby Congress to lower the "exit tax" on organizations that surrender their tax-exempt status.

The purpose of ending the tax-exempt status would have been to remove the estate and its trustees from the scrutiny given tax-exempt organizations by the Internal Revenue Service and perhaps from the Probate Court. But it would have come at the cost of many millions of dollars in income taxes that the estate does not currently pay.

This would have been an gross breach of trust, causing enormous harm to the estate. It is shocking that such an action could have been considered.

The interim trustees said the effort "was a further attempt to preserve excessive compensation at the expense of the trust."

Former trustee Henry Peters said moving the estate out of Hawaii was raised by Lokelani Lindsey in her "disgust" over the way the state attorney general's office was handling its investigation but was not considered formally by the board. At least some of the former trustees evidently recognized it as a hare-brained idea.

These disclosures further confirm the irresponsibility of the former trustees and the correctness of the decision to remove them from their positions. That decision, initially made on a temporary basis, should now be made permanent.


Interim trustees’ pay

Bullet The issue: Probate Judge Kevin Chang has ruled that the interim trustees of the Bishop Estate will be paid $15,000 a month.

Bullet Our view: This decision should not be interpreted as affecting the new permanent trustees.

THE interim trustees of the Bishop Estate will be paid $15,000 a month, by order of Probate Judge Kevin Chang, but that shouldn't be taken as an indication that the new permanent trustees will get as much.

Chang, in his decision, cited the "extraordinary circumstances" surrounding the May 7 appointment of the interim board and the enormity of the task they had undertaken. The judge specifically stated that the ruling on the interim judges' pay would have no bearing on the determination of reasonable compensation for the permanent trustees.

A consultant firm has recommended to the state attorney general's office that the trustees receive no compensation except an annual allowance of $5,000 for travel expenses and $200 for each meeting that lasts longer than six hours.

The former trustees, at the time of their ouster, were paying themselves about $1 million a year. That vastly excessive compensation was one of the issues against them.

The interim board's compensation works out to about $180,000 a year, far less than the former trustees were getting, but perhaps more than the new permanent trustees will receive. That question is still undecided.

Bishop Estate Archive

UPW right of recall

Bullet The issue: Proposed amendments to the UPW constitution would eliminate members' right to recall union officers and to elect their stewards.

Bullet Our view: The proposals should be rejected.

IT makes sense: Weeks after a union hearing officer cleared United Public Workers state director Gary Rodrigues on charges that he violated the union constitution, proposed amendments to the constitution are Info Boxbeing circulated that would eliminate the right of union members to recall officials and elect their stewards.

The proposals would strengthen Rodrigues' grip on the reins of power in the blue-collar public employee union and discourage his critics from further challenges to his authority.

The Star-Bulletin's Ian Lind reports that the proposals are part of a complex set of amendments being presented to UPW members during a series of meetings being held state-wide.

Members attending the meetings have been provided with a two-page summary, along with a 27-page document containing both the constitution's original language and the proposed changes. However, the summary does not mention the elimination of the right of recall.

The recent ruling by a hearing officer from the American Federation of State, County and Municipal Employees, the parent of the UPW, on complaints by three current or former chief stewards critical of Rodrigues' leadership, was a blatant whitewash. Now the idea seems to be to head off any further criticism.

These tactics give the union movement a bad name. UPW members should reject this attempt to strip them of their rights.

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