Bishop Estate and Nā Pua a Ke Aliʻi Pauahi
Price of Paradise · Hawaii Public Radio · aired 1998-05-10
Guests: Randall Roth (host); Toni Lee (President, Nā Pua a Ke Aliʻi Pauahi); Jan Dill (Vice President, Nā Pua a Ke Aliʻi Pauahi); Ed Case (State Representative)
Duration: 1:04:41

[00:00:05] Randall Roth: Aloha, this is Randy Roth, host of the Price of Paradise show. We're broadcast live Sunday mornings on KHPR and KKUA and then rebroadcast Sunday evenings beginning at 8:00 on KIFO. Everyone who brings this program to you is a volunteer who believes in the importance of lively, informed, public dialogue. We believe the brightness of any community's future is directly related to the level of activity in its marketplace of ideas. Our sponsor is the Hawaii Community Foundation, an organization that encourages grassroot efforts to improve the quality of life in Hawaii and that administers charitable funds with efficiency and compassion. One of the foundation's many funds is designed specifically for women and girls in Hawaii. A recent grant from it enabled a group of Big Island women to learn skills such as parenting, nutritional cooking, budgeting, and domestic violence awareness.
[00:00:58] Randall Roth: If you've seen this morning's Honolulu Advertiser, you know on the front page, there's a picture with the caption the long march. Under it is a headline event was major step in changing attitudes and what it's talking about is a march that took place almost exactly a year ago today, having to do with what has come to be called the Bishop Estate controversy. A group was formed at about the same time called Na Pua a Ke Ali'i and we've got the president and vice president of that organization with us this morning. Tony Lee who just happens to be the mother of Brook Lee and has been very busy the last few days, and happy Mother's Day by the way to you Tony, is the president of Na Pua and she's with us in the studio. Good morning Tony.
[00:01:48] Toni Lee: Good morning Randy.
[00:01:49] Randall Roth: The vice president is Yan Dill and Tony is from the class of 1959 and Yan, who tells me graduated at the age of six, is from the the class of 61. Both proud Kamehameha graduates. Good morning Yan.
[00:02:04] Jan Dill: Good morning, thank you for that.
[00:02:06] Randall Roth: Well, this morning's article by Sally Apgar I think more than anything, gives people a reminder of what happened about a year ago and some of the key events since then and for the benefit of of people who who weren't there, tell us just a little bit about the march. What what brought it on and what were the folks who participated in it, hoping to accomplish. Tony Lee, what what do you think?
[00:02:36] Toni Lee: Well, we're talking about last year's march?
[00:02:39] Randall Roth: That's right.
[00:02:40] Toni Lee: Okay, well actually, last year's march I was not at. I was in Florida getting ready for the Miss Universe contest. However, we did do the planning and I was doing some coordinating all the way from Florida. It was really a good event, very positive, and many, many people turned out for it, which of course, we all knew would. We marched for specific reasons and the march coming up is for some of those very specific reasons again.
[00:03:11] Randall Roth: In other words, at the the first anniversary of the original march, there's going to be another march.
[00:03:17] Toni Lee: That's right.
[00:03:18] Randall Roth: Okay, I will we'll find out more about that in just a bit. Yan Dill, some more of the background on on the original march.
[00:03:25] Jan Dill: Well, as Tony was, I was out of town, I was in Turkey at that point, but the the concept was very simple. The trustees were not responding to an increasing concern on the part of the parents and the students and the alumni, over the management of the schools, particularly the walling off of any management responsibilities of the president, Michael Chun. And I think it's interesting in looking back on it, it was the student body that really kind of served as the final catalyst to energize the Ohana in the march by their signing of the petition. I think it was really the spark that ignited the consciences of all of us.
[00:04:17] Randall Roth: I think there were a lot of people in Hawaii that were very surprised that a Hawaiian group, specifically, a group with so much aloha for Kamehameha would publicly show their displeasure about what it is that the trustees of of the Bishop Estate were doing. Yan was that a difficult thing for for the leaders of the group to do to to somehow publicly let the entire community know that that there was some some conflict within the Ohana.
[00:05:10] Jan Dill: Well, I think Tony will agree with me also that even for months afterwards, people wanted to restrict the the criticism of the estate because this is not a Hawaiian way of doing things. But it it from before the march and even more so after the march, the behavior of the trustees was such that more and more people came to the conclusion that we did, that they had to stand. They had to bring accountability to the estate and the trustees and it was interesting.
[00:05:34] Randall Roth: Tony, the people who who organized the march and and many many of them who participated in the march came together shortly thereafter and and formally established an organization called Na Pua a Ke Ali'i. You're the president of the organization. What's what's its mission? What's what's its its vision and really I'm just asking very simply, what's it hope to accomplish? Or has it already accomplished what it was formed to do.
[00:06:03] Toni Lee: Well, we formed Na Pua a Ke Ali'i to show the Bishop Estate and the people of Hawaii how serious we are in making things pono. In getting those things that were wrongfully done, corrected. And we incorporated, which is very much a part of our mission, to show these seriousness of ours that we do mean business. Our mission was to get Dr. Chun's job back, which has not been gotten back yet. He is the president of Kamehameha schools but he doesn't have his job as president of which he was hired back for. That's not in place yet. We've formed to with a mission to to get the education better on campus for the children, for the teachers, to make sure that they're you know, their contracts were signed earlier than the week before school and all of these things are put in in a package as part of our mission to to get everything set back on track for our alma mater.
[00:07:20] Randall Roth: Over that last year, an amazing number of events have occurred and I think if a year ago before that march took place, if somebody had suggested that the Attorney General would launch an investigation that would be as detailed as the current one is, if someone had suggested that the State Supreme Court Justices would take themselves out of the selection process and recuse themselves from hearing any of the appeals having to do with Bishop Estate, if someone had suggested that the faculty at Kamehameha would form a union, if anyone had suggested that there would be legislation having to do with the compensation of Bishop Estate trustees, legislation that the trustees correctly perceive as not being in their individual best interest. And I could go on and on, there have been so many things happen over the last year. It's it's almost unbelievable looking back on it, a year ago, I'm sure you had no no idea what you were starting.
[00:08:18] Toni Lee: Absolutely not. In fact, when this all started, we thought we could correct this around a table like this, sitting with the Board of Trustees and getting them to agree that there was major problems and that all they needed to do was to let us know how they were going to fix them and we would have been gone. But of course, with all the arrogance that was going on and is still going on, they don't really believe that they've done anything wrong and so therefore, we are still here and therefore all of these things have taken place.
[00:09:25] Jan Dill: Well, I I agree and it's it really I think we've come to the understanding that there has to be an accountability built into the estate and its functioning and the management of the Board of Trustees. And the whole concept of being a beneficiary was a concept that we'd never had really looked at before. I think I think Tony would agree with me that we now have come to understand that the students, their parents, and the alumni really form the beneficiaries of the estate of Ke Ali'i Pauahi and as beneficiaries, we have a responsibility to stand and hold the stewards of that estate accountable. Again, I think that's the real revolution that has taken place is that more and more people have started to realize that this is important, this is a critical building block for the future of Kamehameha.
[00:09:53] Randall Roth: Speaking of of revolutions, there are a lot of people who are in awe of what happened over the last few days in the State Legislature. In past years when someone would attempt to change a law in a way that was perceived by Bishop Estate trustees as not being in their best interests, that legislator who had proposed that change would be cut down at the knees and the chances of anything happening were were minuscule. This year, there was a bill in the Senate to limit compensation to trustees to a reasonable amount. The House conference committee or the House judiciary committee voted simply to to study the matter and it looked as though the whole issue was just dead and then representative Ed Case raised it at the last minute on the floor of the House, lost by one vote, 26 to 25 but then a few days later, slowly but surely people who had voted no started saying, hey, I I don't want to vote no, I want to vote yes on this and two days ago it ended up passing 50 to 1. We've got representative Ed Case on the line and I thought we would just get a few of his thoughts about what happened and what it means not only for the Bishop Estate but politically what does it signal and then I want to get Yan and Tony's thoughts about the issue of of compensation of Bishop Estate trustees. Ed, good morning.
[00:11:18] Ed Case: Good morning Randy.
[00:11:19] Randall Roth: I I don't know if the public fully appreciates that this wasn't the first year that you had attempted to do something like this but obviously this was the first year that you've been successful. Could you tell us just a little bit about what happened?
[00:11:33] Ed Case: Well, first of all, it wasn't the first year I had done it but certainly there were many representatives in the legislature that had been concerned about this long before I even got there. So the first thing I want to point out is it wasn't you know, wasn't my effort and similarly for this to happen, you had to have the Senate taking the action that it did and that there were 25 other representatives besides just me that felt this way so I want to be sure that everybody you know realizes this was an effort on the part of a lot of people. Essentially what the legislation that we passed does is to shift the compensation of charitable trustees, including the Bishop Estate trustees over to a system of being compensated on a reasonable basis and contrary to the current system where they're compensated pretty automatically according to a statutory schedule. I think actually Yan used the word that comes to my mind the most and that's accountability because under the current system, essentially there's no accountability on compensation for for the charitable trustees. Under the system that we're I hope I hope going to institute with the Governor's signature, the accountability will be to the probate court and also indirectly to the beneficiaries, as well as to the Attorney General, those people that have the standing to come in and say they think it's too high or too low so I think that that's the key here is that we have tried to mesh with Na Pua's efforts to to provide for increased accountability on the part of the trustees and I think that that will in turn lead to much better decisions, you know within the estate.
[00:13:05] Randall Roth: You know Ed, I I think a lot of people don't realize just how flawed the the old law was. As you indicated, it provides a a formula. Trustee Henry Peters has testified that that formula does a great job of measuring performance but the most recent year for which we have the the views of of an objective party, a Kobet Matsumoto, the court appointed master has issued a report on fiscal year 1994 and he's somebody who had a close look at just what happened. That's a year that he says the estate lost $264 million or incurred $264 million in in losses and according to the statutory formula as applied by the Bishop Estate trustees, they were entitled to total fees that year of over $11 million.
[00:13:54] Ed Case: I think that's true. I think one thing that people do tend to forget a little bit here is that the trustees are entitled under the statutory formula in place right now to be making probably twice or more the amount that they actually are taking in. They have voluntarily quote, unquote, uh uh waived a number of the fees but they're still being paid 800,000 plus. So again the the point here is that they will now have to go into the probate court and say, this is what um the estate has done, this is what we have done, and this is what uh trustees in comparable situations across the country are being paid for comparable work and this is what we think we're worth. And then the Attorney General will be entitled to come in and say, well, I agree or disagree, as well as I hope some of the beneficiary groups such as Na Pua who I I hope will eventually gain legal standing to be able to to come in and make those same arguments.
[00:14:47] Randall Roth: Okay, well Ed's down the line just a minute. I want to hear Yan Dill's thoughts about all this.
[00:15:02] Jan Dill: Oh, first of all, Mahalo Representative Case for for taking the front position in this. It shows all of us that it just takes a few people that are willing to stand to to change something that is seemingly too powerful to to change or or turn around. So, I think I think it's wonderful that you chose to stand and I give credit to all your colleagues who stood with you.
[00:15:22] Ed Case: Well, you're welcome. [unintelligible — audio glitch] want to point out also that um that I think there were a flood of calls from Na Pua and its and its members over the last couple of days last week to many of the members that had voted no on this. And I think I think this um this success goes to you from that perspective.
[00:15:39] Randall Roth: You know there there this is Randy Roth again and there are some organizations that issue their press releases and go home and Na Pua, from my experience does their homework and they follow through on everything that they start. Tony, do you have any thoughts on on what Representative Ed Case has has done or reasonable compensation or or anything else before we let Ed go?
[00:15:58] Toni Lee: Well Ed, I too as president of Na Pua want to say a big Mahalo to you for taking the lead and taking the responsibility to to step up. We know how the how much the pressure has been on you and all that you have done like it has for Yan and I and the rest of our leadership for Na Pua, but it's a sense of of our conscience wanting to make things right and enough is enough and I think the people of Hawaii finally has also taken the responsibility and let their conscience come forward and and say this is enough, let's make it right. So a big Mahalo to you sir.
[00:16:43] Ed Case: Thank you.
[00:16:44] Randall Roth: Ed, before you go, some people perceive what happened on the trustee compensation bill as to be symbolic of of something that has broader what I'll call political ramifications that somehow the old way of doing things where leadership strong arms members of of the legislature to just follow along without really thinking about things themselves, is maybe giving way to a new approach where individual members of the legislature are going to be a bit more independent and issues are going to be decided more on the merits. Any thoughts on that?
[00:17:18] Ed Case: Well, I I don't want to overstate it. I I do believe that this issue was an issue that had welled up in in the thoughts of many legislators as a result of talking to many people, including the Na Pua group which was foremost. And I think what accounts for this more than anything else is is just a tremendous flood of of desire to change the system. In in that sense it was a little bit unique because you don't always have kind of the confluence of events that really came together in the last one or two weeks in the legislature over this particular issue. That's that's the situation was a little unusual. So I I don't want to say it stands too much for that. On the other hand, in my in my floor remarks on this effort I did say that to my to my colleagues that I felt that the vote was was a choice and I think I use those exact words was a choice between the old way of doing things and the new way of doing things. And hopefully the new way of doing things is is much more, again to use Yan's words, accountability where you're trying to do what the public wants you to do. In this case, it was very very obvious I think what the public wanted and what what the right direction was and what the options were that were available. They were all there on the table and you just had to step across and and actually do the vote and of course there was there was very active opposition from a a very small number of people, a very small minority primarily I believe the trustees who were lobbying on the other side of this. So I think what we're trying to say is [unintelligible — audio glitch] the vast majority of people want to go in a certain direction and they're being stonewalled perhaps by a very small but nonetheless very powerful uh group in any situation, that the
[00:19:00] Speaker 1: the mechanisms of the legislature will not be manipulated to to prevent the result, which is the right result.
[00:19:06] Randall Roth: Okay. Jan, deal.
[00:19:08] Jan Dill: Yeah, just one thing. I think what we see here, and I in one sense agree with representative Case, but on the other side, I I think that the issues that are involved in the Bishop Estate controversy are basically issues that revolve around the call to bring values back, to bring commitment to common values and have the estate and the trust and other institutions in the community driven by values rather than by personalities, by political advantages or financial advantages. And I think this is something that more and more I hope we see in our community, that people stand up and say, no, these are the values we need to pursue, these are the goals that bring health to our community, rather than wealth to my pocket.
[00:20:07] Randall Roth: Ed, thank you so much for joining us this morning.
[00:20:10] Ed Case: Okay, thank you.
[00:20:11] Randall Roth: You're listening to the Price of Paradise Radio Show. My name is Randy Roth, and I think Jan and Tony and Ed have put their various fingers on what we're talking about this morning, and it's accountability. Specifically, we're talking about the Bishop Estate controversy and the Napua Kaali'i group and the fact that we are just within days of the one-year anniversary of the March on the Supreme Court building that started all of this. If you'd like to ask a question or make a comment, now's the time. Our number is 955-8821. If you're on a neighbor island, it's 1-800-955-8821. There have been a tremendous number of events over the last year or so. Again, I think of it as starting with the march. There were other things going on at the same time. Certainly Nona Beamers letter to the editor of the advertiser was a key piece of this this large puzzle. But beginning at about that time, we've had this wonderful group, Napua Kaali'i formed. We've had major changes come from the Supreme Court of Hawaii. We've seen the Attorney General and and the governor of this state take a very hard stance in terms of demanding that the inner workings of the Bishop Estate trustees be looked at closely, that they be held accountable for what they've done and not done. We've seen a lot of change out at the out at the campus. Not enough change, Tony has indicated that President Michael Chun still is not really in power the way the Napua group feels that he should be. The faculty has unionized. You talk to them and they don't feel great about that. They feel like they've been pushed into it, but they've been unified in a way that I think a year ago nobody could have possibly predicted. So, again, if you'd like to ask a question or make a comment, our number is 955-8821.
[00:22:09] Randall Roth: Trustee selection. This is something that doesn't have to be discussed right now, because we've got five trustees, but sooner or later, there's going to be an opening, and Napua, I know, has some some thoughts about the old way and possible new ways. How should the court go about selecting a trustee for the Bishop Estate, Jan Dill?
[00:22:36] Jan Dill: Well, we have we have proposed to the court a process that we we have tried to make as inclusive as possible. The estate touches everyone in the community. And and one level, everyone should have a right to bring forward candidates, bring forward suggestions in terms of individuals that might fill an opening on the on the board. But the process that we have put forward includes [unintelligible — audio glitch] community committee that would sort out those who stand are are proposed as candidates, and then bring them to Napua Kaali'i Pawahie. And we feel as beneficiaries that Napua, the parents, the students, and the alumni must take the responsibility of bringing forth the final candidate for any open position.
[00:23:22] Randall Roth: Okay. Tony, any thoughts on on trustee selection? I just not the specifics, not the details, but the kind of person, for example, that ideally would be chosen as a Bishop Estate trustee?
[00:23:57] Toni Lee: Well, number one, they should be qualified. Okay. And the many trustees that we have now, which is why the problem that we are engulfed in, is the fact that we feel they really are not qualified. You know, they were legislators, they were politicians, and we should have been looking for people that were qualified. And so we were looking very hard and coming up with that list of qualifications for a Bishop Estate trustee.
[00:24:37] Randall Roth: Well, we have a caller on the line. Peter from Kailua. Good morning, Peter.
[00:24:41] Peter: Good morning, Randy.
[00:24:43] Randall Roth: You're on the air.
[00:24:44] Peter: Thank you. I think the the bill to make the trustee's compensation reasonable is fine, but you're going to have problems in in administering that. That is, it's throwing the burden on the court now to make that determination. Oh, 20 years ago, Judge Kato with the probate court named me and another several other attorneys to study the problem of compensation of attorneys doing probate work, and we had a schedule at that time which was a percentage of the gross estate, and we taught we started to work with the reasonable compensation idea, but the judges found that it was very difficult to administer because you'd have they'd have to view the attorney's statement to figure out whether in fact it was reasonable. But that's why they went back to the percentage type of compensation.
[00:25:59] Randall Roth: Well, they two years ago, they abolished the statutory fee, and they went back to reasonable compensation, so it's kind of deja vu all over again or something like that.
[00:26:11] Peter: And the problem of executive compensation like that, it results in a battle of experts because you have one side or the other will probably end up hiring experts to give their opinion as to whether the compensation is fair or reasonable.
[00:26:56] Randall Roth: Yeah. You know, Peter, let me just make a couple general comments about that. Since your experience 20 years ago, one of the key developments I think is that the Federal intermediate sanctions law has come up with a reasonable compensation standard and in legislative history, which sooner or later will be put into regulations, provides some real detailed instructions as to how trustees can go about creating a presumption of reasonableness, and if they do that, where they've got an outside independent party that's doing a study and is looking directly at the credentials and performance of the specific trustees as opposed to just a job description, that's the only way under the federal law that there can be a presumption of reasonableness and I'm optimistic that that's going to be the approach that the trustees of any charitable trust paying themselves substantial compensation is going to take which I think is going to create a different backdrop if you will, as compared to 20 years ago when our courts experimented with it in the probate area.
[00:28:09] Peter: Yeah, that that sounds good.
[00:28:11] Randall Roth: I guess we can be optimistic anyway at this point in time.
[00:28:14] Peter: Thank you, Randy.
[00:28:15] Randall Roth: Thank you, Peter. Appreciate your call. We go to Carol from Kalihi. Good morning, Carol.
[00:28:20] Carol: Good morning.
[00:28:22] Randall Roth: You're on the air.
[00:28:23] Carol: Yes, I just wanted to find out are the adult and the children of come with the investigation, with the admissions, findings, are they going to be getting involved?
[00:29:40] Randall Roth: Good question and for our listeners sake, one of the many issues that the Attorney General is looking into is the allegation that there was favoritism in admissions. Supposedly, there was a red dot system whereby certain files would have a red dot on it and the admissions committee was told to automatically admit them if that red dot was there. Again, at this point in time, that's just an allegation and the Attorney General is looking into it. Tony, is Napua concerned about that particular allegation and if so, what if anything is Napua doing?
[00:30:44] Toni Lee: No, I think that the the children and the parents of all those children that have filled out applications can rest assured that unless there was specific favoritism on your part, you will not be involved at all. To clarify that of which Judge Yim brought out in his report, is why the Attorney General is following through on that. So, you can breathe easy and rest assured that there probably will be very little, if any, or none of parents and students that will be taking part in that.
[00:31:11] Randall Roth: I know a lot of people were upset. Bill McCortton had some ads in the newspaper suggesting that maybe the Attorney General was motivated in doing all of this so that the public would know about parents of applicants who had applied for food stamps or what their income was or something like that and there was a lot of concern that this was just an attempt to get confidential information into the public realm, but you folks I get the impression you don't think that was what this part of the investigation was all about at all.
[00:32:36] Jan Dill: You've hit the nail right on on top of the head so to speak. You where are the interest of the beneficiaries, where are the interests of the and you know just one little side light to this compensation issue. More and more we're starting to realize that in addition to the quote percentages that the trustees were getting, they were paying themselves director's fees from the various corporations that the estate had interests in and I haven't seen a comprehensive list of those fees, which are amounts of money beyond what they receive as their trustee compensation.
[00:33:16] Randall Roth: I think we go back to that word accountability. I don't think anybody has seen this and one would think that a trustee first and foremost would put on the table exactly what it is that that they are receiving so that people can be assured that there isn't something inappropriate going on. Tony Lee.
[00:33:33] Toni Lee: Yes, you know Happy Mother's Day, ma'am. Thank you, sir. It's it's really never been a real issue to the beneficiaries on how much these trustees made because through the years we were always told that they were doing a great job and that everything was fine and there was no impropriety and and no wrongdoing on their part. However, once we started Napua Kaali'i Pawahie and got into areas that we didn't even think we were going to get into and touch, we found out otherwise and so that's why this is all very important now. We found that there was a lot of self-interest going on and not very much accountability going on. So, you know, this is very important to us now and more so than it was a year ago when we started this. So we're very happy with what's happening.
[00:34:37] Randall Roth: John.
[00:34:38] John: And we keep up the good work. Thank you. Appreciate your call, John.
[00:34:42] Randall Roth: In case you tuned in late, you're listening to the Price of Paradise Radio Show. My name is Randy Roth, and we're here talking about the Bishop Estate controversy. I have Tony Lee, who's the president, and Jan Dill, who is the vice president of Napua Kaali'i Pawahie, and I wasn't saying the name of the organization right earlier. I apologize. Napua Kaali'i Pawahie, and this is an organization that's been around now for almost exactly a year. And I guess more than anything, it's watching out for the interests of the beneficiaries. It's demanding that the trustees be held accountable and it's doing just a lot of specific things and I think we'll be getting to even more of those during the last half hour of the show. You also heard earlier from representative Ed Case, who was at the front of an effort, we now know a successful effort, to replace the old law that called for a what in theory was a cap on compensation for the trustees but as a practical matter, it set an astronomical figure that they could always come within and then they had the presumption of reasonableness and a lot of people felt that that statute was very much at the heart of what has evolved into an unfortunate situation. Well, that's been repealed and we had representative Ed Case on the phone talking about it. If you'd like to ask a question or make a comment, our number is 955-8821 from the neighbor islands, it's 1-800-955-8821. Again, with me in the studio is Tony Lee and Jan Dill. They're the president and vice president respectively of Napua Kaali'i Pawahie. We go to Merv from Honolulu. Good morning Merv.
[00:36:17] Merv: Oh, well, and and Tony and and Jan.
[00:36:21] Randall Roth: This is Merv Thompson.
[00:36:23] Merv: Good morning. I'll be mother's Day to all our listening audience.
[00:36:27] Randall Roth: And Merv is as Hannahide my family and given us each a Hawaiian name, which we're fiercely proud of. Uh what do you have What do you have for us this morning, Merv?
[00:36:36] Merv: I think one of the things that we haven't really taking a little credence and and credit for is the fact that the passage of this bill sets the tone for any possible heavy duty penalty that these trustees might get in the future. This is retroactive. So that maybe five years down the line they may come back and say you had unreasonable compensation in 1998, and come back for five years and assess the 200% penalty, plus the 100% repayment. That's 300% of what they may have taken that they were not entitled to. Now, who is going to be able to be able to to pay back these kind of sums of money five years down the line plus interest and plus penalties? So, our audience knows Merv, you've you've said, a little bit about the the local law and a little bit about the federal intermediate sanctions law. That's when the the intermediate sanctions law comes into play with all of their, you know, when they start publishing their and I just wanted to make sure they're their measures. Merv was the the first CPA of Hawaiian ancestry in the state of Hawaii and as he and I have talked about on a number of occasions, this federal intermediate sanctions
[00:38:00] Speaker 1: law really poses a a terrific threat to the trustees as individuals to the extent that they're determined to have paid themselves unreasonably high compensation the sanctions that they could end up personally having to pay are really very very big numbers and that's got to be a concern to them yon Dale
[00:38:16] Speaker 2: and there's also a question of the money uh the estate money that was spent lobbying against the intermediate sanctions law and that it runs into hundreds of thousands of dollars
[00:38:26] Speaker 1: I uh happened to have dinner with some executive directors from big charitable organizations a few weeks ago and they were saying how charitable organizations on the mainland were just at first uh surprised and then confused and then outraged as they slowly but surely realized how much money Bishop Estate was pouring into an effort to fight the enactment of that intermediate sanctions law and then working for its repeal because they were saying and we've all come to realize that that legislation is of great benefit to the organization itself to the charity it only poses a threat to trustees who are abusing their positions of power uh Merv, thanks a lot for your call this morning. We've got
[00:39:04] Merv: Just just one last thing. Okay. But, but the uh there stonewalling this is just magnifying the amount of money that they're going to be responsible for some place down the line.
[00:39:16] Speaker 1: Well, hopefully that's
[00:39:17] Merv: Have have we even thought of that?
[00:39:20] Speaker 1: Well, let's hope that they're thinking about it Merv.
[00:39:22] Merv: I I just hope that, you know, I just hope that we've helped them in that in that respect by say by passing this local legislation.
[00:39:29] Speaker 1: Well, we let's hope so. Thank you Merv. Appreciate appreciate your call, Aloha. We go to Deborah from Kailua. Good morning, Deborah.
[00:39:36] Deborah: Yeah, and Randy, in all of of everything that's happened, the the vast number, [unintelligible — audio glitch] vast amount of dollars that's involved in the trust has become much much more open and and un in the awareness of of the rest of the people in Hawaii. A question has never nobody's ever answered the question, with that vast sum of money that that the trust is uh in charge of, why in heaven's name aren't there more campuses and more things for the the Hawaiian children? Um, why do the public schools have to have, uh, not that I'm against it but but have immersion classes when as far as I'm concerned, that's the responsibility of this state with all of its millions. It's in much better shape than the state is.
[00:40:28] Speaker 1: Deborah, let me get a a reaction from from Jan and and from Tony and and so our listeners can appreciate this. Most people who've taken a look at the financial situation of the estate agree that it's worth at least $10 billion right now. The most that they've ever spent in one year on Kamehameha school is about $100 million which is 1% I know of this generally agreed upon value of of the corpus itself. Um, Tony Lee, any thoughts on this?
[00:40:58] Toni Lee: Well, as um or maybe as you may not know, um since um this all has happened, there are now campuses opening in other areas. They've opened one on the big island, they've opened one on Maui, and there's one to be opened on Kauai, and there is another campus on Oahu. Uh and probably those um of course they started on smaller scales, and I'm sure now with all of this, um um they will continue to grow in leaps and bounds. Um, there is um a lot um in due respect to the Bishop Estate that they are doing for the public, for the community, in the public school system that you're not hearing about, and um perhaps Randy will um in the future get um Bob Worthington uh from Kamehameha schools here to give those statistics on exactly what they're doing. I just heard a whole presentation by him uh through the Association of Hawaiian Civic clubs, and all the money that is being spent to children other than Kamehameha for their education that is phenomenal. And I think it make you feel a lot better. However, yes, uh they need to spend a lot more money on the campus itself and the children that are there.
[00:42:19] Speaker 2: And and going beyond that, I think part of the uh concern that we have is uh that the estate has refused uh with this set of trustees to engage the community, they shut down all the extension programs, they essentially made Kapalama heights into a fortress and I think it's the wrong way to to deal with the community that you are a vital and important part of and this also speaks to the money issue. Uh in my mind, you don't Malama you don't take care of the community by sending a billion dollars and buying golf courses and half of Michigan, you know, I mean it's you know that's I'm very simple so that's how I look at it. I mean, I think there is some middle ground between your fiduciary responsibilities and your communal responsibilities to the economy of Hawaii.
[00:43:11] Toni Lee: in the way that that the community here has been uh touched by the campus and and all of the Aloha that comes out of there in their song contest, in all that they teach the graduates who then pass on all these wonderful things. That is wonderful but my opinion is this is Hawaii. It's the only place that Hawaiian can really be perpetuated. Um, it has to go a lot bigger and a lot faster than it's been doing in the last few years.
[00:43:45] Speaker 1: Okay. Deborah, I appreciate your call this way. You know Deborah mentioned the song contest. Uh people who like me watch that, you have to be so impressed with those kids from Kamehameha, they do just a a wonderful job. Um, we've got some more people who've been waiting patiently and we're going to get to everyone. Let's go to Larry from I think it's Manoa. Good morning, Larry.
[00:44:05] Larry: Hi, good morning. How how are you?
[00:44:08] Speaker 1: I'm just fine. What do you have for our guest Tony Lee and Jan Dale from Napua K ali'i Powahi this morning?
[00:44:14] Larry: Okay, uh for Mrs. Lee, uh is it possible to allow uh Loni Lindsay to uh remain in her position if she agrees to uh uh your group's uh demands? And um
[00:44:31] Speaker 1: Let's let's get an answer to that question Larry and I'll come back to you.
[00:44:34] Larry: All right.
[00:44:37] Toni Lee: Well, that's uh tough question, however, um when someone um specifically goes against their fiduciary responsibilities, um they should be removed. Um, that's like yourself and myself, in our jobs that we do, um if we don't um um do a good job, if we um um don't um do the things that we're supposed to and we step out of line and uh we are replaced, um and that's as simple as it is.
[00:45:13] Speaker 1: All right. I Let me get Larry, let me get Jan Dale's reaction, then we'll come right back to you.
[00:45:16] Speaker 2: Well, uh you know, again we we're facing uh the the simple problem. We don't know what she's done. We know what uh Judge Yim has said, and as an objective uh view of uh of her management style, it's clearly something that is reprehensible in terms of her her responsibilities as as a trustee, so I, you know, if those things can be clarified, fine. I I if they remain as they are, I believe that uh she has not acted in a manner that uh befits a steward of Keele Power. Back to you, Larry.
[00:45:54] Larry: Okay. Um I was wondering, we know how much the trustees are compensated, but uh what is their retirement uh packages? Is there a retirement package and if they their positions are terminated uh what what type of package will they have including the ones that they had from their previous careers?
[00:46:13] Speaker 1: Well, that that's part of this investigation is that uh there are a lot of rumors about former trustees being on the payroll for a long time as consultants and that sort of thing, but but these sorts of things shouldn't be resolved based on rumors and that's why this investigation is so important. Jan Dale.
[00:46:30] Speaker 2: Well, a funny story is uh one of the trustees was uh purported to have complained that uh you know they really have a hard time making it on their salary because they have to pay their medical insurance. You don't sound like you felt too badly for them. Well, I mean, you know, I can understand since I have to do the same.
[00:46:49] Toni Lee: Well, we have been um told that um by the trustees, I might add, that um there are no um uh retirement set up for them. Uh there is no medical. Um all of the um the perks that one gets from from employment uh are not given to them. However, um they are the most highly paid in the state of Hawaii and with the tremendous amounts of money that they do make, I would hope that in the years that they have spent as the Bishop Estate Trustee, that they have been setting aside money for their retirements.
[00:47:29] Speaker 2: Well, they became instant millionaires so yeah.
[00:47:32] Speaker 1: Larry, um I've got some people who've been waiting uh patiently. I'm going to have to get to them. We appreciate your call this morning though. Sure. We go to Ernie from Mililani. Good morning, Ernie.
[00:47:41] Ernie: Yeah, good morning. Uh my question is um you know the kids have to be part Hawaiian to be admitted to the school. I I sort of wonder how come the trustees do not have to be part Hawaiian to be a trustee or be appointed as a trustee.
[00:47:58] Speaker 1: Well, let me let me [unintelligible — audio glitch] the trust law professor here, just comment that that the will itself uh the will itself does not talk about having to be Hawaiian to be either a trustee or a student. It clearly gives the trustees the discretion to establish admissions policies at the school and they've established one that uh requires that the students have at least some Hawaiian blood. Um, Tony Lee?
[00:48:28] Toni Lee: Well, that's really interesting that you bring that up, because um for the first time in history um the trustees are all Hawaiian. And um yes, of course I'm sure that a lot of this has been going on, the problems in the Bishop estate has been going on for a long while. It just so happens that uh when we have five Hawaiians, of which we were at one time very proud of the fact that there were five Hawaiians, we're also very embarrassed as Hawaiians to see this all come to light when we have all Hawaiians as trustees. As we um get more engrossed and entrenched into this whole situation we are more inclined to think that no matter who they are, they need to be um qualified for the job and that's the furthermost part of our thinking right now.
[00:49:30] Speaker 1: Hawaiian or non-Hawaiian they've got to be qualified.
[00:49:33] Speaker 2: Yeah, I think I as as we spoke earlier, I think they have to have a demonstrated commitment to values that reflect the values and the hopes and the goals of Keele Power.
[00:49:46] Speaker 1: So you're talking I think in terms of of character and and Tony has mentioned qualifications and neither one of you is saying they have to be Hawaiian. No. Okay. Ernie, thank you for your call. We go to Richard from Hawaii Kai. Good morning, Richard.
[00:50:01] Richard: Good morning. Thank you for the opportunity to uh point out some things that I think are very important. Uh first of all, there was some discussion of the amount of activities that the estate and Kamehameha schools is providing to the uh general student population in the public schools and that is a very true and it's been very effective and they had a very effective outreach program that uh was terminated by the trustee uh as they said well we're going to have other campuses and therefore we don't need the outreach program or something to that effect. Although it was there's a time gap in there of several years or more before the two programs will be linked and I think that was very very bad planning. Um they uh they should have at least continued the program until the other campuses were ready to operate and I think that was their their consideration but they didn't do this. Uh another thing that I'd like to address And Richard I'll just mention being in the studio, the two guests are nodding and I think they agree with you. Um, yeah, they they agree with your statement. Once you go ahead and make your other one then we'll move on.
[00:51:16] Richard: Okay. The other one is the prime responsibility of the estate of course is to provide education for uh children uh uh Hawaiian children. But the economic ramifications of everything that the estate does on the all of the citizens is just tremendous. Um like their leasehold conversion program that they're trying to effectuate right now with unreasonable prices and and unreasonable lease rents uh [unintelligible — audio glitch] the event that people can't buy their their uh properties, their lease rent uh least fee properties. Uh and yet there they don't seem to be concerned with this. It affects everyone and I think it's it's just the point of the economic iceberg uh that Bishop estate could be so much more beneficial to the people including Hawaiian people if they were more inclined toward thinking in terms of what can they do for the community as a whole.
[00:52:17] Speaker 1: Let me let me get Jan Dale's comments on this for those who tuned in late. Jan commented generally about this earlier. It's not a simple issue. Um and and certainly um for the Bishop estate simply to to give away what they've got wouldn't be uh a good thing and yet Jan, you were talking earlier about some sort of balance.
[00:52:38] Speaker 2: Well, I I think there is an area of balance between your fiduciary uh responsibilities and your commitments to the community, particularly the economic dimensions because of the the size of the economic presence of Bishop Estate. It's uh, you know, it doesn't take a lot of thinking to to say that your investment in Goldman Sachs for example could be tied to some kind of percentage of investment in Hawaii. Some kind of percentage that would allow uh Hawaii to recoup some of the capital that essentially was exported through the fee conversion process, uh exported to uh parts elsewhere and have, I think uh been a burden economically to our community. And I think there's a whole series of ways that the estate can engage the community positively, not only educationally but uh in terms of economic opportunities.
[00:54:05] Speaker 1: Okay. Richard, thank you for your call. We really appreciate it. We're getting down to the last few minutes and I've got some callers. I want to get to, and we're also going to give Tony Lee and Jan Dale an opportunity to make some closing remarks. We go to Ann from the North Shore. Good morning, Ann.
[00:54:38] Ann: Good morning. Um I would like to thank you for this show. The show is so great. I listen to it every week and I'm very impressed. Um I'm a public school teacher and I would like to um ask your guests what their vision is we for the education of all Hawaiian children. And if this revolution we're talking about is going to extend to the concept of all Hawaiian children benefiting.
[00:55:28] Speaker 1: Let's start uh Jan Dale.
[00:55:31] Speaker 2: Well, uh again this is a personal perspective uh as I read the uh the will of as I read the background of the the time in which she uh in faith put all her resources towards the education of good and industrious men and women, she was concerned. She was she was uh very concerned about the fate of the Hawaiian community. In essence, the population had dropped precipitously and there was real concern that the Hawaiian community as a community would might not survive. And so I I think in general uh Kamehameha Bishop Estate really needs to look at how it can Malama the whole community uh you know I'm talking about all of Hawaii, but particularly the Hawaiian all the Hawaiian children as much as possible, and that can be done in ways other than the direct expenditure of resources. Another is providing a vehicle for example much of the millions many of the millions of dollars that were spent in the extension program were federal monies, but Kamehameha acted as a conduit, as a management entity, as a hopefully an organization with a conscience that could uh facilitate this kind of direction of resources, and that's one one facet that uh I think needs to be explored again as a role in which Kamehameha can touch all of the Hawaiian children and Hawaii as a community.
[00:56:32] Speaker 1: And uh we're running out of time. I'm going to have to move on. I appreciate your call though. One other person has been waiting a long time. We'll go to her and then close the show. Kelly from Liliha. Good morning, Kelly.
[00:56:43] Kelly: Yeah. Just two two questions and then I'll hang up. Um what makes Kapu think that um they could find someone to run a trust that large for less than a million dollars a year. And um also, what makes them think that um educational outreach programs haven't already been put into motion, that there are plans afoot.
[00:57:00] Speaker 1: other people talk in terms of the trustees are are never going to fire themselves and so there really isn't a system of accountability when they're running it themselves, they need to hire a CEO, high-priced CEO to run things, and if they do that then the reasonable compensation for the policy setting function of of the trustees would be a lot less than what it's been in the past. Um, Tony, any thoughts on it?
[00:57:22] Toni Lee: You're absolutely right uh Randy and if um those of you that follow the newspapers and the history, um in looking at covert months Moto's um um reports, it's been for years that they have said that uh what needs to be done is a CEO needs to be hired, and that's exactly what would happen. And the CEO would do would be the the one with the with the pay and of course they would be compensated for what he is worth and what he what he does and then the trustees would the reasonable would kick in there, which would really make sense, which is done all over the country in in other organizations very much like ours.
[00:57:47] Speaker 1: Tell you what, let's uh let's take the first one. I guess it goes to to governance, um because some people say as long as the trustees are going to function as five CEOs that the compensation has to be high. Right. Where the trustees at Punoho or Iolani, or or the ERS retirement system etcetera aren't paid at all. They just set the policy and then high priced highly qualified people are running the day to day operations.
[00:58:14] Toni Lee: Absolutely.
[00:58:14] Speaker 1: Okay. Well, we're down to the last minute or so. I want to give each of you, and I guess it's only about 30 seconds. Um, first of all, again, happy Mother's Day, uh Tony Lee, uh, president of Napua K Ali'i Pawahi. Any closing thoughts?
[00:58:29] Toni Lee: Yes, I'd like to invite you all out to Kukanaka nona Pua o Kamehameha. Stand up for the children of Kamehameha, come and march with us on the 15th to celebrate the anniversary of of Napua, um, of, I'm sorry, of the march of last year, and, um, make your um, self visible so that the people will know that you really care, that our job is not done and that we have other things to do. Please come out and join us. Um, we'll be there at, uh, 4 o'clock in the afternoon. It starts at Mauna Ala, and, uh, then we will proceed down to the, um, the the governor's mansion and to the Rotunda by 5:30 and the Iolani Colony statue by 5:45 and Iolani Palace at 5:50 and go to Kamehameha statue at 6 o'clock and then we'll go to Kua Ha'o Plaza. So please come and join us.
[00:59:22] Speaker 1: That's this coming Friday. Yan, you have 10 seconds.
[00:59:25] Yan: Well, thank you to the community for your support and uh just stand with us Kukanaka.
[00:59:31] Speaker 1: Our producer is Susie Roth. Our production chief is Jeff Alardi. Let me tell you folks, I am so impressed with this Napua group and they need your support. Their arms are wide open. It's not an us versus them. It's not Hawaiian, non-Hawaiian. Everybody's invited to jump on board and be a part of what they're doing. You're listening to Pop Radio. Aloha.
[00:59:32] Speaker 2: Our producer is Suzy Roth. Our production chief is Jeff Alardi. Let me tell you folks, I am so impressed with this Nupua group and they need your support. Their arms are wide open. It's not an us versus them. It's not Hawaiian, non-Hawaiian. Everybody's invited to jump on board and be a part of what they're doing. You're listening to Pop Radio. Aloha.