Editorials
Friday, December 3, 1999

Malaysian elections
victory for repression

The issue: Prime Minister Mahathir Mohamad has led his National Front to another victory in Malaysian parlimentary elections.
Our view: Mahathir's treatment of his former deputy failed to generate widespread support for the democratic opposition.

The autocratic Mahathir Mohamad has won a record fifth elective mandate as Malaysia's leader despite protests against his persecution of a former protege. With 18 years in office, he is Asia's longest-serving leader.

Calls for democratic reform in the wake of the dismissal of Anwar Ibrahim as deputy prime minister and his subsequent arrest, beating while in prison and prosecution on charges of sexual crimes and corruption appeared to have little effect on the voters.

Of seemingly greater importance was the prosperity the country has enjoyed under Mahathir's leadership, which was only temporarily interrupted by the Asian economic crisis two years ago.

The parliamentary elections gave Mahathir's National Front coalition another two-thirds majority, which had been its goal. But Islamic fundamentalists cut into the coalition's Malay base, which could pose problems in the future for the governing alliance.

Anwar's wife, Wan Azizah Ismail, in her first bid for elective office, won her seat handily as head of the newly formed National Justice Party and emerged as the most visible opposition figure in parliament. But the candidates most closely associated with Anwar's reform movement all lost in the capital region.

The big opposition gains were scored by the Islamic fundamentalist PAS, which increased its representation in the 193-member parliament to 27 seats from eight while retaining the Kelantan state assembly and wresting oil- and gas-rich Terengganu state from the National Front for the first time in 38 years.

The gains give the opposition a decided Islamic stamp that Mahathir is expected to exploit with Chinese voters fearful of a resurgence of violent persecution by the mostly Muslim Malays, who are the country's dominant racial group.

Mahathir's victory was expected but disappointing nonetheless in view of his outrageous treatment of Anwar Ibrahim.

One observer remarked that the elections marked the death of the democratic reform movement.

Despite the results, some analysts believe the leadership style represented by the prime minister is unacceptable to younger voters and that they will demand a more democratic system.

But the immediate impact of the election results is to confirm the impression that Malaysia is moving in the direction of its neighbor, Singapore -- repressive and authoritarian.

Bishop tax settlement
hinges on ousted trustees

The issue: A state judge has agreed to a settlement allowing the Bishop Estate to retain federal tax-exempt status by paying back taxes and making structural changes.
Our view: The settlement will not become final until all the deposed trustees are permanently removed, an issue that remains unresolved.

COURT approval of a tax dispute settlement with the Internal Revenue Service brings the Bishop Estate a step closer to an end of its difficulties. The estate will be allowed to retain its tax-exempt status by paying $9 million in back taxes plus interest to the IRS and making structural changes in the estate's operation. Final approval will depend on the resignations or permanent removal of deposed trustees Henry Peters and Richard "Dickie" Wong, but they are not going quietly.

The settlement comes four years after the IRS began an audit of the estate. Earlier this year, the agency made the extraordinary threat of removing the estate's tax-exempt status for the 1990-96 period if the estate's board was not permanently removed.

Circuit Judge Kevin Chang, functioning as probate judge, responded by temporarily removing Wong, Peters, Lokelani Lindsey and Gerard Jervis from the board and accepting the resignation of trustee Oswald Stender. Jervis later resigned and Lindsey was permanently removed after a trial before another circuit judge.

The amount of back taxes in the settlement is modest compared with the $65 million initially sought by the IRS. Losing its tax-exempt status could cost the estate more than $750 million, according to a consultant's estimate.

Key changes ordered by the IRS to retain that status include adoption of a system based on management by a chief executive officer and a plan for calculating compensation for trustees. An interim board appointed by Chang already has agreed to implement a CEO management system and establish reasonable pay levels for future trustees and executives.

Wong and Peters have shown no signs of relinquishing their trusteeships. A suit charging Wong with receiving excessive compensation and mismanaging the estate is set for trial Dec. 13. Peters contends that the settlement violates the will of Princess Bernice Pauahi Bishop.

The two men clinging to their trusteeships maintain that the IRS demand for their permanent removal is a personnel matter that exceeds the agency's authority. That issue must be resolved before the settlement becomes final unless Wong and Peters resign.

---

Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor