Randall Roth Interview on KSSK's Community Matters
Radio interview · January 1998
Guests: Randall Roth (interview subject; UH Law professor); Linda Coble (interviewer); Ken Carpenter (interviewer)
Duration: 0:56:14

[00:00:04] Linda Coble: Aloha and good morning, and we welcome you this morning to Community Matters, a public service of this Pacific Capstar station. We're glad you're with us. I'm Ken Carpenter.
[00:00:13] Ken Carpenter: Good morning Ken, and good morning everyone. I'm Linda Coble, very pleased to have you with us because we've got a wonderful guest today. Randall Roth, University of Hawaii Law School professor, an editor of that famous, now famous price of Paradise series of books and probably best known now as being a co-author of the Broken Trust essay concerning the Bishop Estate Trustees. Welcome Randall Roth.
[00:00:41] Randall Roth: Thank you and good morning Linda and Ken.
[00:00:43] Linda Coble: We are so pleased to have you here because obviously you've been a moving force in generating a lot of community awareness in our state, and we appreciate you very much for that. Where did you come from and why do you have such a burning desire to bring the truth out in this community?
[00:01:02] Randall Roth: Well, I'm originally from Kansas, a small town in Western Kansas and my family and I have lived in Hawaii now for about 17 years and I guess I feel as though my position at the Law School and just the way I was brought up have combined to to make me feel as though one way that I could contribute to the community is to help generate discussion of the issues that are that are challenging the people of Hawaii.
[00:01:29] Linda Coble: And when you say that the way you were brought up has lent itself, how were you brought up?
[00:01:34] Randall Roth: Well, in my family there was this very clear message that one should try hard to to contribute to a community. There was this sense that things are not predetermined that things aren't going to just happen in a certain way, whether we're a part of it or not a part of it. And for better or worse I feel some sense of of obligation to to try to have an impact on the way things develop.
[00:02:02] Linda Coble: I think that's really remarkable when somebody can I guess you maintain such respect in everything you've done. I can recall, and I'm sure Ken does too, when the price of Paradise series of books came out, and you had every mover and shaker, every economist, every politician that meant anything contributing to your book and the series went from how many editions?
[00:02:33] Randall Roth: Oh, we had I think whether it was two volumes about 70,000 copies ended up being distributed, but then we've had about 200 articles appear in the Honolulu advertiser, and I think of those as volume three, four and five.
[00:03:10] Linda Coble: How did this pop idea, price of Paradise come about?
[00:03:15] Randall Roth: Well, the name, I have mixed feelings about the reason for price of Paradise is that there's an old quote that's been attributed to a lot of different people, including Thomas Jefferson, that the price of liberty is eternal vigilance and we felt that the price of paradise, this place that we all love and and call our home and and want to make our home for for the foreseeable future, at least, that the price of that is eternal vigilance. That we can't take for granted what it is that makes this home. And so the price of Paradise name was to suggest that all of us have a responsibility to be informed and to be involved. Unfortunately, an awful lot of people think price of Paradise stands for cost of living in Hawaii, and that's a very small piece of what we consider the puzzle that that concerned us. So that's where the name at least came from.
[00:03:49] Ken Carpenter: Well you move from the price of Paradise in the last couple of years, particularly the past year, the top news story I think was arguably either the economy last year in 1997 or Bishop Estate, and all of their troubles. And you became involved in that somehow. Can you tell us how?
[00:04:05] Randall Roth: I teach trust law, and wills, and estates, and taxation, and a number of areas at the Law School that are directly related to what's going on at the Bishop Estate. And so, over a long period of time I've been troubled by a variety of things that I've seen at Bishop Estate. Perhaps as troubling as anything has just been the shroud of secrecy, the fact that so little information was available about this charitable organization. And I guess the more I became troubled by the absence of information, and troubled by the information that was available, I felt that there really wasn't anyone in this state who was more logically situated to start the ball rolling than than I, because of the courses that I teach, and being at the only law school in in this state, I think I have a special responsibility to to be involved in these sorts of issues that, at their core, have some, some very interesting legal aspects.
[00:05:07] Linda Coble: I think that there was some question at the beginning of this, uh, when the five co-authors surfaced, you, Gladys Brandt,
[00:05:19] Randall Roth: Sam King, Walter Heen and Monsignor Kekumano.
[00:05:22] Linda Coble: People were saying, 'Hmm, I all bet that Randy Roth wrote this thing and they just signed on to it.' Can you tell me about the evolution of that?
[00:05:31] Randall Roth: Well, sure, but first of all, anybody who knows any of those other four is rolling on the floor right now and in laughter. They, and I've thoroughly enjoyed working with them. They're the most wonderful people in the whole world. Uh, but let me tell you, they are fiercely independent. Uh, much smarter than me and, um, uh, many of the things that we decided were by 4-1 vote, and I was always the the one in the minority. But you know, as I look back on on all of the issues that were decided by a 4-1 vote, uh, they were right every single time. With 20-20 hindsight, I can see that that they knew just how something needed to be said, and, and where in the piece, and how we would respond to comments about the Broken Trust essay. Um, but getting back to your original question, I, for a variety of reasons, decided that, um, uh, something ought to be written, something ought to be publicly stated about what was going on at Bishop Estate. And so, I set up appointments with about three dozen different people, former justices of the Supreme Court, uh, masters, uh, um, people who in one way or another had been involved in Bishop Estate matters over the years. And I would tell them that everything was off the record, that I was going to take notes, but that I wouldn't use anything that I got from them unless I came back and showed them what it looked like in writing, and, and what the context of it was, and got their permission. And most of them would say, 'Well, I'll tell you right now, I'm not going to give you permission, but I will talk to you about this.' So I had a number of very candid conversations with people and the more I heard, the more troubled I was about what was going on at Bishop Estate. Some of my, uh, sources, uh, among these three dozen were Sam King and Gladys Brandt, etc., and, uh, each of them struck me as being particularly knowledgeable and, uh, particularly insightful in terms of just what it all meant. And so, when I asked each of them if they would be interested in teaming up and doing this as a group, um, they said yes, and, uh, the rest is is history.
[00:07:47] Linda Coble: And that, uh, essay has led to the State Attorney General's investigation of the 113-year-old charitable trust. Uh, from your perspective, do you think things have moved fast enough, uh, and can you give an assessment of the investigation to date?
[00:08:06] Randall Roth: I'm impatient by nature, and so, um, I'm wishing that this had been completed some time ago, um, but I knew from the very beginning that, uh, it would take some time. Partly because it's it's not a simple situation. Uh, there are a lot of moving parts and there's a lot of information that has to be gathered before any, um, definitive action can be taken. Um, I didn't anticipate the degree to which the three Trustee majority would spend a state assets fighting the investigation. Uh, I frankly thought the investigation would be nearing completion now and uh, and it really isn't at all. Uh, phenomenal resources have gone into to stalling out, to derailing the investigation. But, uh, it looks as though things are are back on track. Uh, we have an attorney general that I think is is both capable and, um, and highly motivated to get to the bottom of all of this. Uh, I don't think she's decided just what she's going to do other than having decided that she's going to do a thorough investigation, and then whatever that investigation uncovers will determine the step she takes from there. I'm, um, quite optimistic about where it's eventually going to go, but I'm an incurable optimist. I, I should mention that. Uh, but I'm optimistic in in this context. If the people of this state stay informed and involved, and really care about what happens, then I'm absolutely convinced uh, there's going to be a good outcome. If people sit back and say, 'Well, I have no control over it whatsoever, whatever is going to happen, will happen,' then I am no longer optimistic uh.
[00:09:52] Linda Coble: Speaking of control, Bill McCorriston, who's the attorney for, uh, Bishop Estate, says, 'You're in control of this investigation.' And they said that in print.
[00:09:59] Randall Roth: You know, I was, I am, I'm embarrassed to admit to you that I was terribly flattered by that. And it disappointed me that, uh, that the media didn't continue on that theme. Uh, but there was one glorious day where the people of this state were being told by Bill and, and some of the trustees that Randall Roth was the mastermind. And, uh, I, I, I really enjoyed it, but it was, it was so obviously untrue that, uh, it didn't last very long.
[00:10:27] Ken Carpenter: A lot of folks who are tuning in right now are thinking, talking about Bishop Estate. You know, it doesn't really affect my life very much. This is a very confusing issue, you get into so many different things. A lot of folks don't like Bishop Estate, a lot of folks do like Bishop Estate. Why is this important to the average citizen in Hawaii?
[00:10:42] Randall Roth: Well, the Bishop Estate touches everyone at least indirectly, if not directly. Uh, I must say though, just on a, a principle level, uh, what, um, uh, the princess, uh, Bernice Pauahi Bishop did, was, I think, so admirable, and so wonderful, and so important, um, that to have it, um, twisted, and, and manipulated, and abused the way I think it has been, uh, is terribly troubling even if you and I and others aren't directly affected by the, the charitable mission of, of that particular trust. The idea of putting all of that wealth into trust to educate children, um, and, and even though the will itself doesn't limit it to Hawaiian children, the, the circumstances are such that I think it's, it's very appropriate that, uh, that the students at Kamehameha are, are native Hawaiian. Uh, under the circumstances, I think that's so important not just to the Hawaiian community as, as a, um, a beacon if you will, if, if some hope for the, the future, but to the entire state because of of the importance of, of Native Hawaiians to what we are all about, what I think makes Hawaii an attractive place for, for all of us to live. Uh, I think so much more could be done for the beneficiaries of that trust than what has been done in recent years, that that alone, I think, should get all of us quite excited about this. Uh, but there's a lot more. It seems to me that anytime you have a, a waste of assets, an abuse of power in the context of a charitable organization where you and I and every listener is contributing to every charitable organization by giving them tax-exempt status, to see an abuse of power and, quite frankly, a lot of funds being wasted, um, should trouble us a great deal. Of course, the Bishop Estate is wrapped up in the whole leasehold and conversion to fee issue which is, is quite complicated. Uh, I'll just say on, on that score that I think the way the Trustees have approached that in recent years is, um, is not in the best interest of the beneficiary of the trust. There's a difference between driving a hard bargain on behalf of the beneficiaries on the one hand and being totally unreasonable, and, um, um, well, let's just say being totally unreasonable on the other hand. I think that it's possible to, um, to live up to one's fiduciary duties and yet not leave the other side of the negotiation feeling as though the process has been, um, somehow abusive toward them.
[00:13:03] Ken Carpenter: Was there a time that the estate, uh, was managed well you think and then it got off course at some point, and at what point was that?
[00:13:14] Randall Roth: I've only lived in the state for 17 years and I've tried to do my homework so far as the history of, of the Bishop Estate is concerned, but people like, uh, Sam King, for example, can tell you about a thousand times more than I could about the history of the organization. I really need to just focus on recent years because those are the years that I'm, um, uh, most familiar with and, and capable of, of speaking to. And all I can say about them is that there's been, actually I could say more than this, but I'll start by saying there's been a real lack of accountability. Um, the master's process has been structured in such a way as to virtually guarantee that it would not hold anybody accountable. The attorney general, up until just recently, has sat on on his hands, and I say his over the years we've had a lot of different Attorney Generals. None of them has done what the Attorney General in any state is supposed to do, which is to hold accountable the Trustees of charitable trusts. Um, we could go down a long list of players that in theory are going to be part of the accountability process who have uh, have not fulfilled their roles. Um, so lack of accountability is, is very troubling. The selection process, it's obvious in recent years, again, I can't really speak to the earlier days, but it's obvious in recent years that the whole thing has been politicized. Um, I frankly don't blame some of the current Trustees for their shortcomings as much as I would blame the people who appointed them. My own feeling is that a lot of us get distracted by the very, very high compensation, but the much bigger problem to me is the, um, lack of credentials uh, of the people who've been appointed trustee, the almost certainty that they weren't going to be able to perform at the level that that the trustees of an important organization, on a complicated organization like that, need to perform. So I see trustee selection as being as big a concern to this community as is trustee performance.
[00:15:06] Linda Coble: Did it surprise you when the Justices of the Supreme Court recused themselves from, um, the the case as it is now?
[00:15:53] Randall Roth: The the only thing that surprised me about them recusing themselves just stepping aside and letting some replacement justices make all the decisions regarding Bishop Estate. The only thing that surprised me is that it took them so long. Same thing in their decision to, uh, get out of the trustee selection business. It it just shocks me that it's taken them so long, and I don't mean to say that individually they, they aren't good people or smart judges or well-intentioned or anything like that. I'm simply talking about the, the obvious conflict that exists when you've got the Justices of the Supreme Court making these selections and you know that the Bishop Estate is going to be in front of the Supreme Court on a regular basis. I mean, it's, it's, it's absolutely certain that it's going to happen. Uh, I, I'm just really surprised that it's taken this long for the justices to do what to me at least, was a very obvious step that had to be taken at some point in time.
[00:17:01] Linda Coble: Now fill us in about what is the status now with the Supreme Court. Didn't they have to they they have a fill-in team that, um, will be taking a look at the issues with the, um, Bishop Estate investigation.
[00:17:17] Randall Roth: Right, um, and what what's to say that that the fill-in team is any different? Aren't all justices and and people in the judiciary sort of political appointees anyway? Well, you've asked, uh, a very loaded question. Let me, let me see if I can respond at least to, to part of it, and if I don't respond to what you think are the important parts just, uh, ask it again. Um, first of all, it took the, the Justices of the Supreme Court, um, many months. Uh, they were only formally asked several months ago, but they've known for many months that they would be asked to step aside so far as any issues regarding the Bishop Estate is concerned. It took them, by my counting, about six months to decide to, um, to step aside. Uh, their replacements have started making their decisions within one week. And personally, I think that that's saying something to this community. It's saying something quite frankly to the justices who took so long in appointing the replacement judges. Um, secondly, I don't know the replacement justices personally. Um, they generally enjoy a good reputation. Uh, I'm quite pleased that they've started making decisions so quickly. Uh, the decisions they've made have been on the side of, of the attorney general, but that's to be expected. These appeals, in my opinion, are really, um, bordering on frivolous. Anything that the Attorney General has tried to get that, potentially, would assist her in deciding just what's going on at the Bishop Estate, um, the attorneys, the, the, attorneys, the the
[00:19:00] Speaker 1: the army of attorneys that the trustees have hired have been throwing every legal argument conceivable at and yet again to me it's obvious that eventually it's going to be decided in favor of the attorney general as most of these appeals over the last week or so have been.
[00:19:15] Speaker 2: Why the delaying tactics do you think are they waiting until this all dies down and some of the heat's off or or why do you think that they've been so consistently um throwing out these obstacles?
[00:19:29] Speaker 1: Well I mean the Bishop state attorneys. Yeah I think that um uh the information that the attorney general is seeking in all probability is um uh very damaging to the trustees. I think that if they had nothing to hide, uh they would go ahead and make this information available. The fact that they're spending phenomenal amounts of estate funds that ought to be used to educate uh Hawaiian children, instead they're using those funds to um uh to at least slow down and from their point of view ideally derail completely the investigation. Uh to me speaks volumes in terms of the fact that they've got something to hide.
[00:20:15] Speaker 2: There are some people who are skeptical might say that they're waiting for the Attorney General to change. We have an election coming up at the end of the year, we may have a new governor and conceivably a new Attorney General who might not push this as as fast and as hard. Is that a possibility?
[00:20:31] Speaker 1: Absolutely and I think it's um multi-faceted. There's the possibility of a new governor and a new Attorney General by virtue of having a new governor. There's also the possibility that the attorney general will um leave her job and do something else. I don't think it's a secret that there's a background search going on right now to uh uh background check I guess it's called to um uh determine whether there's any reason why she wouldn't be appointed to the Ninth Circuit Court of Appeals. And if that appointment were made my hunch is that she would accept that and so even if we don't have a change in the governor there's the possibility that with the passage of time for one reason or another the um uh the person in the Attorney General's chair would change and that could have an impact.
[00:21:19] Speaker 2: But don't you think that there's enough community uproar over this by now that's been Aha well that was the third leg of this stool that uh that I was working on and that is quite frankly I think these trustees are saying if enough time passes this thing's just going to blow over. I think they have have had situations in the past where terrible terrible things would come to light whether it had to do with them as trustees, or they are them as Speaker of the Senate, or Speaker of the House, or President of the Senate or or Chairman of the Judicial Selection Commission, or whatever it might be, and they've just hunkered down, and they've just stonewalled and they've just kind of waited and son of a gun the media kind of lost interest and the people of Hawaii who are busy trying to earn a living and be decent parents and all sorts of things like that just kind of lost interest and felt as though they didn't really have any power and if you don't feel you've got any power, then you feel like you don't have any responsibility and it blew over and quite frankly even more important to them than a change in governor or change in Attorney General. I think they're counting on with the passage of time the people of Hawaii losing interest. And I pray that they're wrong on that score.
[00:22:35] Speaker 2: Do you think that the associations that have been formed will allow that to happen? Napua, for example?
[00:22:42] Speaker 1: Well I don't think so. And yet Napua is but one organization and I really believe this price of paradise eternal vigilance stuff I think that that everybody in this state has to feel some degree of power and some degree of responsibility, not just on this issue, this is an important issue this community but there are lots of important issues. There needs to be this sense that everybody has to stay alert, watch what's happening, think about this, talk to one another, listen to one another. Again, this isn't simple.
[00:23:14] Speaker 2: And you just had the accreditation team up there uh more or less agreeing with findings of the Master and others uh with one interesting difference. And uh and that was that they almost patted the trustees on the back for building up such a broad financial trust. Did you get that message in the accreditation report?
[00:23:37] Speaker 1: I read it very differently.
[00:23:41] Speaker 2: Really?
[00:23:42] Speaker 1: Um to begin you you can't really evaluate the performance of these trustees in recent years. You can't get it out of the materials that are available. The trustees they like to say well since 1979, we've had an annual compound rate of return of 17% or some ridiculous number like that. And I say ridiculous because we know that that's not true, but we don't have the information to actually figure out what the number is. The court appointed Master, who had some ability to go in and actually look at books and records that the trustees are trying to to keep secret, the court appointed Master said, well you know for the last year that I've looked at where according to the trustees they've had this banner year according to the mastery, he says I've come up with $250 plus million dollars of losses, and the court appointed Master has said given the way they keep their books given the way some would say cook their books I'll just say given their methods of accounting, he said it's impossible to actually pin down what their rate of return was and so it's impossible to compare how they've performed to how other organizations that are investing large amounts of money have performed. They don't have a strategic plan. It's real hard for people to really believe that an organization this big this old this important where the trustees have been told over and over and over not just by court appointed masters but by the probate court that it isn't just a good idea, but that they have to develop a strategic plan. It's hard to believe that they still don't have it. And among other things what that means is that they haven't established benchmarks to compare their performance to. So if they say here's what we've done but they provide information that's inadequate to really determine how that is in the abstract and they don't give you benchmarks so you can compare it to what they were trying to do, what they thought they could do and they don't use a method of accounting that enables you to compare how other organizations are doing, there's no accountability there whatsoever. And I personally believe that once the investigation is complete it's going to be real clear that there's been multiple serious abuses of power but right now we know clearly beyond a shadow of a doubt that there's been an absence of accountability and that alone ought to alarm this community a great deal. So when you look at what the master had to say take for example the the court appointed fact finder, retired judge Yim where the trustees are saying well he's just giving rumor and innuendo, well he's a court appointed fact finder. The court made him a deputy to go out and to determine what the facts are.
[00:26:41] Speaker 2: No matter who who picked him to do it. Well that's right, and you read the Yim report which an awful lot of people and I understand this haven't had the time to read. It's quite long, but you read that and it's devastating to the trustees. A thousand people were interviewed for that, at least.
[00:26:56] Speaker 1: You know I have have shown uh excerpts from that report and excerpts from the master's report to my colleagues on the mainland who teach trust law in other law schools and they simply cannot believe me when I tell them that those trustees are still there that those trust and when I tell them what the credentials of some of the trustees are they can't believe that those trustees were appointed. And then when I tell them they were appointed by justices of the Supreme Court, my friends and colleagues on the mainland just um sit there with their jaw dropped and stunned disbelief. And you know here in Hawaii, we've had this nonsense for so long that we've kind of gotten used to it. And hopefully what the media is helping us to see is that the old adage the emperor has no clothes that that something really wrong desperately wrong is right here in the middle of our community, but the process has started and I think we're doing something about it and frankly I'm hoping that it will lead to to other uh issues where there is a lack of accountability or an abuse of power where the community will take more of an interest in doing something about that.
[00:28:09] Speaker 2: And on that note I'm going to have to ask that we take a bit of a break here. You're listening to Professor Randy Roth. He's the editor of the Price of Paradise books. He's also the co-author of the landmark Broken Trust essay that has stirred up a lot of controversy in this community. We have a lot more to talk about in this program. You're tuned to Community Matters on this Pacific Capstar Station. Randy Roth UH Professor, co-author of the Broken Trust, that fabulous essay that led to so much happening with the bishop estate. And also a co uh the editor rather, of the Price of Paradise book series. And uh fascinating as those were, we're still on the topic of Bishop Estate.
[00:28:51] Speaker 2: You know one thing a lot of us are wondering, there's a split amongst the trustees on the estate. What is it like in those board meetings? Do you have any idea? You you talk to a lot of people that know the the what's going on over there, it must be awfully cold during their board meetings. Do Oswald Stender and Jervis sit together and Uh I I don't know. I don't have firsthand knowledge. The impression I have from different things I've heard from different people is that it's not cold at all, it's really quite hot. Um but uh I I don't have firsthand knowledge of exactly what goes on over there but they're not getting along.
[00:29:25] Speaker 2: So all their decisions must be made by a majority vote. Is that the way it works or is it a unanimous vote for certain things?
[00:29:31] Speaker 1: Uh it has to be any action by the estate has to have at least a majority and um there are three of the trustees, Peters, Lindsay and Wong, that uh are together on everything uh seemingly and then uh Jervis and Stender are in the minority on most of the votes that have anything to do with this investigation and so just about everything right now is being done by three to two vote.
[00:29:59] Speaker 2: Okay. Uh there's been a lot of talk obviously about the trustees leaving this particular group of trustees. There was motions by Napua to remove all but four, I think and then there was all but three, it was very confusing what Napua was doing there for a while as far as Stender and uh Jervis. Uh what would what would be required for these these particular trustees to be removed? Would it take court action? Uh what is it possible to remove them?
[00:30:22] Speaker 1: It it definitely is possible to remove one or more trustees, and um probably the way it will happen and I'm confident that at least some of them are going to be removed is just a matter of time. Probably it's going to be by decision of of the probate court judge, but it could be done in a very different sort of way. For example, Trustees Jervis and Stender have uh filed a motion originally with the probate court, but it's been transferred to a circuit court on the regular civil calendar calling for the removal of Trustee Lindsay. And so there the attorney general isn't even directly involved and that could result in the removal of a trustee, but I think what you're going to see is that when the attorney general's investigation is complete, I think she's going to take steps in court to have at least three, probably four, possibly five trustees removed, and eventually it will be litigated and the court will make that decision.
[00:31:43] Speaker 2: Look Elani Lindsay seems to be the one who is constantly under fire, calls for for her resignation, um ordered stewardship of the Kapalama Heights campus, reckless, irresponsible, creating an atmosphere of fear. I mean we've heard this month in and month out. Um any any attempt at getting inside her mind there, uh Randy to to tell us what's going on in in her brain and why she wouldn't step away and and doesn't it harm the the estate?
[00:32:09] Speaker 1: Yes. If if she and trustees Wong and Peters really cared about the beneficiaries of that trust, uh they would have stepped aside a long time ago. Clearly, this controversy is is hurting the beneficiaries. Uh clearly, millions of dollars eventually are going to be spent defending them, defending their actions, and yet the money for the most part is being spent out of funds that should be used to educate children. Um I just uh [unintelligible — audio glitch] don't think too much of those three trustees in any event, but the fact that they don't step aside voluntarily troubles me a great deal. Frankly, I think um trustees uh Jervis and and Stender have some accounting to do as well. I don't see this in black and white terms with three trustees with black hats and two trustees with white hats, but um sooner or later there will be a day or days in court where somebody on one side I think the attorney general is going to be saying to the court here's why three or four five of these trustees need to be removed. Lawyers on the other side are going to be able to provide a defense for their clients and the court's going to decide and again, I'm an incurable optimist but I'm absolutely convinced that unless the public loses interest, I'm convinced that the court is going to do the right thing which from my point of view would appear to be the removal of at least three trustees.
[00:36:42] Speaker 2: Is there a a snowball's chance in hell of having the cap put on the trustees compensation? The bill is still alive in the was in the Senate, I think it's moved over to the House for some working?
[00:36:54] Speaker 1: I'm uh personally and the other Broken Trust co-authors and and the Napua leadership we all are against putting a cap on this compensation. We feel that the compensation that's been paid in uh in recent years is is outrageous. It's it's grossly in excess of what would be reasonable compensation under the circumstances. We think the law needs to simply say that that any compensation paid to a trustee of a charitable trust has to be reasonable under the circumstances. And we realize that that's terribly ambiguous. Well what does reasonable mean? But under the the federal tax law and under trust law generally, there are a lot of guidelines. And among other things they focus on the credentials of the trustees and the performance of the trustees. And those are two factors that have simply been ignored in establishing compensation for the existing trustees. Henry Peters in testimony before the two uh judiciary committees in the state legislature has said our compensation is based on performance. We've performed well we get paid well but we
[00:38:00] Speaker 1: burned it. Well, that's nonsense. Utter nonsense. The current law isn't focused on performance, it isn't focused on credentials. It basically is saying, well, you know, there have been a lot of big dollar transactions, and therefore you apply the formula and you come up with a big number, but that has nothing to do what's important under federal law and trust law, when it comes to reasonable under the circumstances.
[00:38:25] Speaker 2: Interesting times ahead.
[00:38:26] Speaker 1: Well, is this thing going to drag out for a long time, or is there going to be some court action, perhaps some of the trustees removed and new trustees temporarily put in?
[00:38:35] Speaker 2: I think there's going to be um, a lull in the action. The um investigation is picking up now that we have replacement justices who are deciding these appeals on the various subpoena. And so it it is going to speed up, but um I suspect that the Attorney General's investigation isn't going to come to a close for at least a few months.
[00:39:00] Speaker 1: And then her nature, she's extremely thorough, um, sometimes uh, um, painfully thorough, because it takes time to be thorough, but in the long run that's good. Uh, she's going to approach this very, very carefully, and I suspect that we are um, at maybe a year, maybe two years away, and conceivably even longer, so we're not talking about this thing being resolved in a matter of weeks or in a matter of months, but it is moving, and a lot of it's going to be behind um, you know, the under the surface for a while just by the nature of it, but it's it's going to work out. It really will, again, if people continue to stay informed and continue to care about the outcome.
[00:39:46] Speaker 2: We are talking with Randy Roth, a UH professor of law and uh, co-author of the Broken Trust essay concerning Bishop estate, also the editor of that uh wonderful series of essays uh, under the book title of Price of Paradise.
[00:40:02] Speaker 1: Yeah, and for those people who tuned in a little bit late, I was saying earlier that uh, Price of Paradise is supposed to be part of a longer quote, the Price of Paradise is eternal vigilance. So don't think of cost of living in Hawaii when you hear Price of Paradise. Think in terms of each of us having on an individual basis responsibility to stay informed, to stay alert and to feel as though we can contribute to what the future of this great place is going to be.
[00:40:29] Speaker 2: Does the future of this great place uh, give you the willies? Are you afraid of what's happening economically, um, and does it make you feel that maybe people didn't read my uh, my contributors essays as as thoroughly as they should have in the past and did not take heed?
[00:40:48] Speaker 1: Well, the economy, obviously is is not in great shape right now, but I really think that if people um, try hard to figure out how to get where we want to go and and you have to decide where you want to go first. But if we can reach some sort of sense for uh, a preferred future, what we would like for our children and our children's children, and then talk in terms of how we get from here to there, I'm optimistic that it's going to happen. I I don't think that anything is completely out of our control, but the challenge is great, no question about it.
[00:41:23] Speaker 2: The uh the book, if you had your third, third edition, what would be in it? Who would be in it?
[00:41:32] Speaker 1: Well, those of your listeners who have seen our first two volumes know that we had lots of contributors. Uh, in the first volume, we had a total of 30 authors and cartoonists, and the second volume, I think it was 56 authors and cartoonists. If we were doing a a third volume, we would try to have as many people as possible and as much diversity as possible in terms of uh, their perspectives, their backgrounds. The goal of those two books and if we did a third, uh the goal again would not be to convince anyone of any specific solution so much as we would simply be trying to provoke thought, provoke lively and informed dialogue, provoke a community process whereby people are talking and listening to one another about um, what we need to do in order to make this as as good a place, not just for ourselves, but for future generations as as we possibly can. Another way of saying it is that that we believe that that any community's future is is directly related to the level of activity in its marketplace of ideas and we have this this trust that if there's a lot of activity in this marketplace of ideas, the best ideas are going to percolate to the top. It it's going to be frustratingly slow, but sooner or later people are going to recognize the good ideas as good ideas. But you've got to go through that sometimes frustrating process of uh of engaging in dialogue and listening to people that you are convinced are absolutely wrong and trying to convince them when they're not really listening, but if you go through that as a community, this lively and informed public dialogue process, I'm absolutely convinced that we'll end up in a better place than we otherwise would have.
[00:43:11] Speaker 2: It doesn't it tick you off though? Every time people get together in one room to discuss things, they are always accused of being special interest. And um, I mean, I could point to just about every group that has put uh, ideas on, on butcher paper on the wall at at these events, um, and after the event, they're always criticized for being you know, just a gaggle of special interest individuals who all have their own axes to grind. That's not that's not very positive.
[00:43:39] Speaker 1: Well, and it's not a fair way to engage in conversation. If if a person has some ideas that you think are flawed for one reason or another, then there's a responsibility to address what's wrong with those ideas, as opposed to questioning that person's motives or questioning something else that doesn't go to the idea itself.
[00:43:56] Speaker 2: But it seems to me that whenever those events are covered, I think it's an entirely different subject altogether when you're inside that room and you have that open dialogue and it's exciting and you're rubbing shoulders with all kinds of interesting, sometimes weird people. But at the same time when these things are covered, they're never taken seriously enough.
[00:44:12] Speaker 1: I think uh, we as a community need to do a better job of not getting distracted. If you look for example at what Bill McCorkeston has done over the last few months in response to very serious accusations that have been made in the Broken Trust essay and a number of of other forums, the the Yim report, the Matsumoto's Masters report in in a variety of places, very serious allegations. If you listen closely, what he generally will do is talk about the motives of the other person, or he'll talk about well, Marjorie Bronster is just trying to get appointed to the Ninth Circuit, or the governors trying to And what we as a community need to do in a situation like that, in whatever way we can, is say to a person who's trying to do that, let's say Bill McCorkeston in the context of Bishop estate, and say, address the issues. What is it that we're here talking about? If there's something wrong with the allegations in the Broken Trust essay, tell us what it is. Show us what it is that's wrong with that essay, rather than questioning the motives of the authors or the Attorney General, or the court appointed master, the court appointed fact finder, let's stay on issue.
[00:45:23] Speaker 2: And the same can be said for our politicians of the day, the governor and uh and all of those who are running for election.
[00:45:30] Speaker 1: Well, I hate to throw any rocks because I live in a glass house too. I think all of us sometimes fall into this trap of um, of saying, well you're just, you have a special interest, you have a hidden agenda, you have this that or the other thing.
[00:45:44] Speaker 2: You heard a lot about that when they started talking about the Con-Con. Suddenly that those lines were drawn real real specific.
[00:45:50] Speaker 1: Right, so I I guess uh I don't mean to sound as though I'm I'm preaching to the politicians and the trustees. I I like to think that I'm I'm talking to myself and every other member of this community that we need to try hard not to be distracted, we need to try hard to have friendly collegial conversations, especially when it's somebody whose opinion is very different than ours. We've got to go out of our way to make that person feel comfortable sharing his or her thoughts and explaining why it is that that person has formed that opinion. And if we can develop that kind of civility, that kind of uh of um friendly conversation, then I think we can all be very optimistic about where we're going to end up.
[00:46:34] Speaker 2: Great point. Well, you use the word collegial and that's your background. You're uh professor at the University of Hawaii uh at this point uh there's a lot of concern, I know we have a lot of listeners who either have children or perhaps are going to the University of Hawaii. Uh there's some question about the the future of the university, the funding and all of that. What's the feeling over there at UH?
[00:47:03] Speaker 1: The cuts that the university as a whole has suffered over the last few years are um dramatic. Uh it's hard for people off the campus to appreciate what it means to take a third of what was there away and expect the quality to to be maintained. When you add to that the current call for possibly additional cutbacks of of 10%, probably, I think something less than that, um, it's uh it's a problem. I my bias, if you will, is that I think education is of tremendous importance. It's not just important to me as a parent in terms of making sure my kids have an opportunity to get a great education, but it's important to me as a member of this community. I think that we can't be optimistic about the future unless we have a lot of confidence that we have educational opportunities K through 12 as well as higher education, unless we feel good about the opportunities that we're providing for the youth of our community. Uh, I think we're in trouble. So I'm I'm very very concerned about the cutbacks there in general.
[00:48:05] Speaker 1: We're to a point now where the so-called horizontal cuts I think are over. Just asking everybody to tighten their belt, that just I'm not sure it works from the beginning, but it certainly ceases to work eventually because everyone's cutting into muscle and you're damaging quality all the way around. You've got to get to the so-called vertical cut cuts where you make the tough tough decisions of just getting rid of programs that aren't unimportant but they're not as important as those things that go directly to the core mission.
[00:48:37] Speaker 2: We were shocked that that the university's uh law school, of which you are part, and the med school, were two that that were put on a list, suggested that uh let's get rid of these. If they can't pay their own way, get rid of them.
[00:48:50] Speaker 1: Well, I personally think it's it's good to put everything on the table. I think it's good that there being no sacred cow, that you forget about who's got the political connections and who doesn't have the political connections and all that sort of thing. I think it ought to be on the table. If the budget's going to be cut, and I hope it isn't, but I realize there's a possibility, some would say probability that it will be. If it's going to be cut, some tough tough decisions have to be made, and I think the so-called vertical cut is where we are as opposed to the horizontal cut. And as important as I think my unit is, I think the members of every unit are going [unintelligible — audio glitch] say um, uh that their unit is is just as important. So I think it's good that it's on the table. I also think it's good that it's being discussed not just in the context of do we keep it or do we get rid of it, but is there some innovative way of of getting the best of of both possibilities. In the case of the law school, and I happen to know more about it because I'm a part of of that unit, what we have been focusing on is moving towards self-sufficiency. It's a form of privatization.
[00:49:55] Speaker 2: You have a plan already in place.
[00:49:56] Speaker 1: Well, we have a plan in place, but quite frankly, uh our plan is to shoot for 70 or 80% self-sufficiency, and it sounds as though we may be asked to move to 100% self-sufficiency, but I don't think that's bad. If we can get autonomy, you know, the university's talking about autonomy from the legislature and and it really needs it. If the university can get that and if the law school and other units can get some degree of autonomy from what we call Bachman Hall, you know, the main administration at the university, then I think it's quite possible. I would in fact be optimistic that we could not just maintain our quality, that we could actually improve as an institution and at the same time be self-sufficient. But it's not going to happen if we don't have control over how we spend our limited resources. There has to be some autonomy. But again, with um, with that, I think self-sufficiency can be good. I think it can be win-win. The state keeps a law school, which does provide a lot of benefits over and above simply training lawyers. It provides a lot of benefits to the members of this community and yet it could cease to be a a drain on the limited resources.
[00:51:09] Speaker 2: Well, we're nearing the end of our time with Professor Randy Roth. Uh, a question I think a lot of folks may ask you from time to time, and it certainly has crossed my mind, uh, you've been uh a spectator to a certain extent, a critic from a distance. Have you ever thought personally of getting involved and running for office?
[00:51:27] Speaker 1: Thought about it. Um, I'm told that there's a law that I couldn't run for office and work for the state uh at the same time and I love my job. I really enjoy teaching. It's uh something that I I look forward to doing uh each day when I I get up. Um, I'm also not sure I'm at a stage of my life where it would make any sense, certainly if I had to um uh to quit my current job. Right now, I'm focusing on being as good a husband and parent and teacher as I possibly can be and contributing to the community in a variety of other ways. I doubt that I'll ever get to a stage where running for office makes sense for me, but uh to be honest, I think it's something that I would enjoy. Um, my problem is that there are too many things out there that uh that I think I would enjoy and I have I have a bad habit of getting over committed, trying to take on too many things and so uh for the foreseeable future, uh running for office is definitely not one of the things that I'm going to take on.
[00:52:31] Speaker 2: Well, a lot of law professors have another ambition as well, that's to get on to onto the court. Uh, any ambitions in that regard?
[00:52:39] Speaker 1: Again, I think that would be a blast. Um, but but you know, you you can't do everything and uh, um, frankly, I'm more of a people person. I the the best part of my job is interaction with with the students. Uh, I do the scholarship [unintelligible — audio glitch] get some degree of enjoyment, but not as much as working with the students. To be a judge, it's mostly scholarship, and uh and that would be fine. I would enjoy that, but it's not something that I would seek out and and quite frankly, if it were offered to me right now, I I suspect I would turn it down. Um, [unintelligible — audio glitch] was brought up to to be prepared, not to try to plan my life. You know, people plan and God laughs is what I've been told. Uh, but to be ready. Be prepared and and I believe in the concept of a calling. I think sometimes you get up in the morning and you look around you and you say for whatever reason I've been called to do something. And right now I don't feel a calling to do anything other than what I've been doing in the recent past. I certainly enjoy it and um, so that's I think what you can count on.
[00:53:51] Speaker 2: You have uh family then. How many children?
[00:53:54] Speaker 1: Have four children.
[00:53:55] Speaker 2: My gosh. Ages and range.
[00:53:58] Speaker 1: Our daughter graduated from the University of Kansas about a year or so ago and she's getting married this summer. We have a son who's a sophomore in the school of Engineering at the University of Wisconsin in Madison. We have a son who's a junior at Punahou and our little guy is a fifth grader at Punahou.
[00:54:15] Speaker 2: Amazing and how do you how do you what is it what is the secret for Randy Roth balancing family and work, schedule wise and mentally?
[00:54:26] Speaker 1: Well, the tone of your question uh, suggests that I I need help. [unintelligible — audio glitch] balancing uh this as opposed to simply trying to balance it. It's it's a never ending struggle. Um, I feel like I'm the luckiest person alive in that um, uh I I love my wife more every day. Uh, I'm I'm extremely proud of my children. Um, I feel as though far more has been given to me than what I've yet had an opportunity to to give back. Um, so I'm trying to balance, I'm trying to juggle a lot of different things and not drop anything, but to be honest I I drop things once in a while and I'm I'm trying my best to um to learn from that.
[00:55:10] Speaker 2: Ah, terrific. Well we're very pleased that you've been our guest this morning on Community Matters. Uh, if you just tuned in, you've missed a great interview with Randy Roth who is a professor at the University of Hawaii School of Law. Uh, he became fairly well known in our community as the editor of the Price of Paradise series and became very famous this past year as co-author of the landmark Broken Trust essay. We thank you for being with us today.
[00:55:35] Speaker 1: Thank you, Randy. It's um, especially pleasing to see that you're not only a very brilliant man, but a great family man as well. I need to come here more often. This uh, this has been fun. Thanks a lot.
[00:55:46] Speaker 2: We'll pump you up anytime you want to come. And thank you for joining us on Community Matters because as Ken and I, and our Pacific Star family always say, Community Matters. Aloha. If you've got questions, comments, or suggestions, write to Community Matters.