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Kamehameha The head of the state Campaign Spending Commission said he likely will hold hearings on the political activities of the Kamehameha Schools and its former trustees.
Schools’ political
action probed
The Campaign Spending
Commission will hold
hearings on the trustFormer trustees funneled
donations to lawmakersBy Rick Daysog
Star-BulletinBob Watada, the commission's executive director, said his office has been investigating political donations linked to the $6-billion trust for the past several months, but he declined comment on details of the inquiry.
The Star-Bulletin previously reported that the state attorney general's office sent the commission more than a dozen boxes containing records gathered in its lengthy criminal investigation of the estate and its former board members.
In an April 13 letter to the commission, the attorney general's office indicated that the estate under the previous management of ex-trustees Henry Peters, Richard "Dickie" Wong, Oswald Stender, Gerard Jervis and Lokelani Lindsey may have violated state campaign spending laws.
The attorney general's office said the alleged violations were largely civil, not criminal, in nature.
Hamilton McCubbin, the estate's chief executive officer, said the trust will cooperate with any investigation.
The commission and the attorney general's office aren't the first agencies to take a close look at the estate's political activities.
As part of its four-year audit that was completed last year, the Internal Revenue Service said it found evidence that the former trustees had engaged in a pattern of political intervention, in violation of federal tax laws.
The IRS -- which threatened to revoke the trust's tax-exempt status last year as a result of the audit's findings -- also said that an employee of the estate's for-profit subsidiary, Robert Herkes, couldn't serve in the legislature while working for the trust.
Herkes resigned from the trust to run in this year's election for Big Island mayor, only to lose in the primary.
In their agreement with the IRS, the estate's interim trustees have since agreed not to hire or contract with elected state and city officials within three years of their leaving office.
Under federal law, nonprofit charities such as the Kamehameha Schools are strictly forbidden from playing any role in elective politics and can lose their tax exemptions for doing so.
Not only are tax-exempts barred from giving direct campaign contributions to candidates for local, state or federal offices, they also are barred from giving in-kind, or indirect, campaign contributions such as the use of offices, personnel, mailing lists or political polls.
In 1998, the IRS moved to strip the tax-exempt status of the Freedom Alliance, a Virginia-based nonprofit founded by Iran-Contra figure Col. Oliver North.
According to the IRS, North improperly took part in a political campaign in 1991 when he criticized the policies of then presidential candidate, Iowa Sen. Tom Harkin.
North also benefited personally from the Freedom Alliance when the organization lobbied to repeal the independent counsels law.
Under the ruling, the Freedom Alliance not only loses its tax-free status but its donors, who have contributed $20 million to the foundation since 1991, lose the tax-free status of their contributions.
"The idea is that charities should stay out of politics or else you would have a bad situation where money collected from a tax-exempt charity for educating people or finding a cure for disease is spent on politics," said Greg Colvin, a San Francisco-based attorney specializing in laws governing tax-exempts.
Bishop Estate Archive
Kamehameha Schools
