Wednesday, December 15, 1999

Peters’ resignation
from Bishop Estate

Bullet The issue: Henry Peters has resigned as a trustee of the Bishop Estate.

Bullet Our view: The resignation allows the estate to pass the final hurdle in reaching a federal tax settlement and looking to the future.

HENRY Peters' formal resignation as a Bishop Estate trustee was the last obstacle to the estate retaining federal tax-exempt status. The decisions by Peters and last week by Richard S.H. Wong to step aside will allow the estate to focus solely on changing its system of management in the interest of its beneficiaries and in conformity with Internal Revenue Service conditions.

The resignations came seven months after Circuit Judge Kevin Chang ordered the temporary removal of trustees Peters, Wong, Lokelani Lindsey and Gerard Jervis. Oswald Stender voluntarily resigned. Jervis relinquished his trusteeship months later.

The Peters and Wong resignations came more than two years after publication of the "Broken Trust" essay in the Star-Bulletin by five distinguished citizens calling for the trustees' removal.

The IRS had specified the trustees' removal as a "non-negotiable" condition for settlement of federal tax issues stemming from an audit of the estate. Allegations of mismanagement and self-dealing appear to have prompted the IRS demand.

Chang's removal order was temporary and subject to hearings, so the resignations satisfy an IRS demand that had not been fully met. Lindsey, the only trustee who has not resigned, was permanently removed by another judge. Her unresolved appeal is not expected to stand in the way of the estate's tax settlement.

Wong and Peters cannot merely walk away from their lucrative years as trustees with their resignations. Wong faces federal charges of perjury in connection with his grand jury testimony on a Bishop Estate land transaction. Peters faces a theft charge in state court for his role in an alleged kickback scheme involving estate land.

The state also is seeking tens of millions of dollars in surcharges and from financial losses allegedly caused by trustee mismanagement and breaches of fiduciary duties.

The assertion in Peters' resignation letter that he fears the trust will become subject to the dictates of "whatever judge or political party is in power" is almost comical. Peters, a former speaker of the state House, and Wong, a former Senate president, had personified the estate's high political profile in recent years.

A distinguished panel appointed by Chang in May can continue its efforts to bring stability to the estate and confidence among its beneficiaries, the students of Kamehameha Schools. This phase of the controversy appears to be ending.

Bishop Estate Archive

Clinton’s absence at
turnover of canal

Bullet The issue: President Clinton did not attend the ceremony transferring the Panama Canal to Panama.

Bullet Our view: Clinton's absence, viewed as a slap in the face by some Panamanians, was a blunder.

PRESIDENT Clinton apparently put political expediency over presidential responsibility when he elected to pass up the ceremony transferring the Panama Canal to Panama. He should have been there.

Clinton's absence was glaring, and to make matters worse Secretary of State Madeleine Albright, who was supposed to represent him, decided to forgo the event in favor of the Mideast peace talks.

That left former President Jimmy Carter, who signed the Panama Canal treaties in 1977 with the late dictator Omar Torrijos, to lead the U.S. delegation.

Others in the U.S. delegation were Transportation Secretary Rodney Slater and Commerce Secretary William Daley. The highest ranking diplomat was Peter Romero, acting assistant secretary of state for Western Hemispheric affairs.

By contrast, King Juan Carlos of Spain and five Latin American presidents, including Ernesto Zedillo of Mexico, attended.

There was speculation that Clinton stayed away to avoid damage to Vice President Gore's presidential candidacy. The transfer of the canal became an issue in Carter's unsuccessful bid for re-election in 1980 and is still a sore point among some conservatives.

Panamanians wondered if Clinton's absence was an accidental diplomatic gaffe or a message that the United States is relegating the country to backwater status now that the U.S. military is leaving.

Panama has been administering the canal for the past decade in a transition that began in 1979, and has shown it is capable of handling the operation alone. Its feelings have been bruised by remarks in the U.S. Congress that the country is unprepared to manage and protect the 50-mile-long waterway.

In addition, Panama is offended by claims of a threat from China because Panama signed a 20-year contract with a Hong Kong-based conglomerate, Hutchinson Whampoa Ltd., that will control the canal's Atlantic and Pacific ports. Hutchinson has interests throughout the world, including the United States.

Although there are reasons to question how well Panama will operate the canal, there is scant cause to be concerned about a threat from China. In any event, the United States retains the right to intervene militarily if the canal's neutrality is threatened.

It's time for the United States to withdraw from the Canal Zone, as it is committed to do. The U.S. presence is an outdated symbol of colonialism that has snarled relations with Panama. Clinton should have been present to preside at the handover.

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