Bishop Estate Issues
Price of Paradise · Hawaii Public Radio · aired 1997-11-16
Guests: None (Randall Roth solo with callers)
Duration: 01:09:26

[00:00:09] Randall Roth: Aloha, this is Randy Roth, host of The Price of Paradise radio show. Our topic this morning is the Bishop Estate. One of the other things that we're going to be doing this morning is talking specifically about this McKenzie methane gas deal that is described in headlines on this morning's Honolulu advertiser. Also we'd like to address some of the issues that relate to the future. Well while we're waiting for some calls, I want to start by explaining a a couple of things about how the different investigations relate to one another. Everyone else is aware I think of the internal revenue service out there and so there are at least four investigations going on.
[00:02:59] Randall Roth: Well in order to answer that you have to go way back to the beginning and understand that the Bishop Estate is called an estate but it's really a trust. It's a charitable trust.
[00:06:53] Alfred from Kaimuki: We go to Alfred from Kaimuki. Good morning, Alfred. Good morning. Uh it is the testamentary trust and uh if it's the we have to determine whether it's a public trust or private trust. If it's a public trust, it cannot discriminate. My father holds a certificate of Hawaiian birth and because we are Chinese, we cannot come in. Discriminating against us because we're Chinese. Now, once you say my people, she should mean that my people who anybody who holds a certificate of Hawaiian birth is considered her people. So if it's a public trust, it cannot discriminate.
[00:07:35] Randall Roth: Okay. If it's a private trust it falls under the category of, it cannot uh uh it cannot, it violated the rule of perpetuity. It cannot keep on going forever. It must terminate somehow and the benefits should go to to the school. It cannot continue forever if it's a a private trust. Alfred, I'm going to give you the last word on this. Let Let me go back and make sure the listeners understand the implications of some of the things that you've said, and then I'm going to come right back to you, okay?
[00:08:10] Alfred from Kaimuki: Yes.
[00:08:11] Randall Roth: Um, you started off by saying we have to decide whether it's a public trust or a private trust. It's very important for listeners to understand that this is a charitable trust, and sometimes people will refer to charitable trusts as public trusts, but there are basically two kinds of charitable trusts. There's a so-called public charity, and then what's called a private foundation. Thank you.
[00:12:14] Alfred from Kaimuki: Okay, thank you, Alfred. Thank you.
[00:12:17] Steve from Honolulu: Our next caller is Steve from Honolulu. Good morning, Steve. Good morning. Um thanks for giving us a shot. There is an anomaly, and the anomaly is that the Bishop estate exists because of the existence of the peculiarities of the land law [unintelligible — audio glitch] what was not an American entity, which was a royal kingdom which existed before the state of Hawaii. And we have inherited the Bishop estate, we the people of Hawaii, and I'm not Hawaiian, I don't claim to be Hawaiian, but I am a resident, and I have been for most of my life.
[00:14:59] Randall Roth: Okay, so what's what's your point?
[00:15:00] Steve from Honolulu: Well my point is [unintelligible — audio glitch] basically American law is trying to deal with a very un-American situation.
[00:17:03] Randall Roth: Okay. Steve, I and I think that's the real why this issue is getting so nasty. Yeah. Well, I I appreciate your call and and we're going to have to move on but um the the last one uh who is a Hawaiian is tied into all of this, and and I guess I would simply agree with you that that's uh one of the core issues that is going to have to be addressed at some point.
[00:17:24] Steve from Honolulu: and won't be addressable.
[00:17:25] Randall Roth: Thank you very much. Fine. Um, again, this is the Price of Paradise Radio Show. My name is Randy Roth. We're talking about the Bishop Estate. thing that was written up in the newspaper as a possible ingredient in some possible legislation this coming session. Well, another issue that I think is at the heart of this Bishop estate conversation that the community is having and has been having over the last three or four months is the question of who should be selecting trustees of the Bishop estate.
[00:19:23] Randall Roth: Those of you who read the Broken Trust article know that I'm one of five co-authors who were critical of the Supreme Court's involvement in this, and I think there are a lot of people out there who ask the question, well, if the Supreme Court justices don't do this, who would do it? And that's a very good question and I'm going to invite callers to um, to share their thoughts about that. But first just as a a little bit of background, I have on the phone Hazel Bay, who is a colleague of mine at the Law School. Uh Hazel has a a PhD in American Studies, I believe, as well as her law degree.
[00:20:03] Randall Roth: She was the associate dean at the Law School for a few years before joining the faculty. Hazel, can you hear me?
[00:20:10] Hazel Bay: I sure can.
[00:20:11] Randall Roth: Uh, I asked Hazel if she would be so kind as to help our listeners understand what the critics of the status quo, the critics of the justices doing the selection, um, where what it is that they base their criticism on and and so Hazel, without telling us what's right and what's wrong, can you, can you help listeners understand why people would be critical of the justices being involved?
[00:20:40] Hazel Bay: Sure. Uh, one of the things that um the has been interpreted over the last 100 years is that the justices perform this duty in their individual capacity. In other words, when they appoint the trustees to the estate, they're doing so as individuals and they do it to honor the will as individuals.
[00:21:02] Hazel Bay: A lot of people feel though, that they never would have gotten this honor to appoint, had they not been appointed first to the Supreme Court of the state of Hawaii. And so it's hard to say that it's really an individual act that they're doing, when it really looks like a a perk of the job, something that they get, uh by virtue of being a Supreme Court Justice.
[00:21:24] Randall Roth: So when they cease to be a justice, they cease to be involved in picking trustees?
[00:21:30] Hazel Bay: Exactly. Exactly. And the other thing that people have to understand about justices, or any judge is that we ask them to make a a tremendous personal sacrifice. We ask them when they take on the task of being a judge not to be involved in political activities, um, to to live their lives circumspectly, so that everybody who comes before the court, whether they're Republicans or Democrats, whether they're rich or poor, all have confidence that these particular judges will treat them fairly. And so we do ask them to um, to govern their private lives in a way that gives everybody confidence in the judiciary.
[00:22:10] Randall Roth: Why why would people not think that the the plane the plain field is level, that they might not get a fair hearing in front of the justices because they're involved in picking trustees?
[00:22:23] Hazel Bay: Well, I'll give you an example. I personally feel that I would be I would be treated fairly by the justices because as an attorney, I understand that we've we train our judges to be um, fair-minded and to set aside evidence that they can't consider, to set aside biases that they might have in their personal life. But I don't think the average citizen has that kind of natural confidence in them because they haven't understood that that's the way judges are trained.
[00:22:51] Hazel Bay: And so if I were a a litigant with a quarrel against the Bishop estate and I was told by my attorney that by the way the judges that will now hear and decide your case, um, honor the will of a princess from a 100 years ago, they feel a great tremendous duty to this wonderful estate and so they appoint the trustees of this estate, um in their individual capacity. I have to say that I wouldn't be surprised if my client were a bit nervous, that they might not be treated as fairly as the estate would be, given the um the admiration that the justices have have expressed toward the perpetuation of this estate.
[00:23:33] Randall Roth: Mhm. Well and I I should have mentioned in in your credentials that that you were a a clerk for Chief Justice Slum some years back and and you know many of the current justices, perhaps all of them and I I know you personally hold each of them in in very high regard. And so you're not saying that you personally think that they would somehow be biased, but your focus is on how others might perceive the situation?
[00:24:01] Hazel Bay: Exactly. And you know, it's not it's not a small thing that others might perceive it um with with doubt. Um, we live in a society where we all play by this this game that we will abide by the rules of law. And the one thing that we have to believe about that is that we'll be treated fairly, otherwise we'd live in anarchy and chaos. And so it's really fundamental to our governmental structure that the the judiciary of all our branches of government be above politics and be above bias. Otherwise, we won't play by those rules.
[00:24:39] Hazel Bay: And it's so fundamental to government that I think that we expect our justices to act um, above reproach and really almost in a in a saintly manner.
[00:24:52] Randall Roth: In the Broken Trust essay, uh, my co-authors and I suggested that um having the justices involve might involve a breach of judicial ethics and and unfortunately I think a lot of readers they see the word unethical and and they think that that we're using ethics in a very general sort of way. We're talking about morality and so it's almost as if we're saying someone is doing something that's immoral. But as as you and I know, there's a real specific code of ethics that judges uh are supposed to adhere to.
[00:25:28] Randall Roth: Could you explain a little bit what the argument is that under that code of conduct that they're being involved, even though they're honest people, doing the best job they can possibly do, that simply being involved could arguably be a breach of that code of conduct?
[00:25:48] Hazel Bay: Well, I think that the first thing that the code says is that they can they must avoid the appearance of impropriety and bias. And so the code itself asks them to evaluate what public perception will uh how public perception views what they do. So it it doesn't ask them to carry themselves just with integrity. It asks them to to really evaluate how um how much confidence their conduct instills in the public. And so that's I think the first thing that we have to question. The second one is it asks them to be completely loyal to the judiciary of the state. Um, in other words, they're not to accept fiduciary responsibilities, um, generally.
[00:26:34] Hazel Bay: So, when they say that they appoint under the will, they owe a fiduciary duty to the beneficiaries. In other words, they owe their their primal allegiance to the beneficiaries of the will. They have to choose a trustee that will will be good for the estate. And in doing so, they necessarily have to place the state of Hawaii second. And so I I believe that that too raises this concern of conflict.
[00:27:02] Randall Roth: Hazel, one last thing is the politics of it.
[00:27:05] Hazel Bay: Judges are supposed to be above politics and we've tried to develop a selection process that raises them above politics. But when we look at the estate, this is not a small estate where, for example, a a small charity that has little influence in Hawaii, the ability to as to select the trustees is really a way to consolidate power of an incumbent party, whichever party that is at the time. And so, my feeling is that it's really a way [unintelligible — audio glitch] become involved in politics, um, even though it is an a private charity.
[00:27:44] Randall Roth: And and I think what you're saying is that even if the reality was that it hasn't been politicized, if the perception is that it's been politicized, then it's unethical. Again, using ethical in a very narrow way, it would be a violation of the code of of conduct of judge justices and justices for them to continue to be involved in the selection process given that perception?
[00:28:11] Hazel Bay: Exactly.
[00:28:12] Randall Roth: Okay. Hazel, I really appreciate your um sharing all of that with us.
[00:28:16] Hazel Bay: Well, thank you.
[00:28:17] Randall Roth: Okidoke. Carry on. Okidoke. Thank you. Uh, we have a caller, Mike from Kaneohe. Good morning, Mike.
[00:28:23] Mike: Good morning. I have a couple of comments on the uh Bishop Estate thing. Um, first of all, I think the trustees should be chosen by the Hawaiian people. Um, in other words, it should be a vote similar to the uh plebiscite on sovereignty. And second of all, I think the question of who is a Hawaiian is kind of would if I was I've grown up in Hawaii and if I was Hawaiian and and people started in the court system talking about well, who is really a Hawaiian? I would be insulted.
[00:28:55] Mike: I think a Hawaiian is anybody with Hawaiian blood and the trustees should be chosen by anybody with Hawaiian blood who is a resident of Hawaii.
[00:29:08] Randall Roth: Okay. And so those people who can trace their ancestry back, uh, 100 years or 150 years, whose, uh, great-great-great grandparents were citizens of the the kingdom of Hawaii, they're not Hawaiians for this purpose, but anyone with any degree or any quantum of Hawaiian blood, by by your definition, would be Hawaiians for purposes of things like, uh, selecting trustees of the Bishop estate.
[00:29:38] Mike: Okay, I see your point there. There, I do agree that there will be people who don't have Hawaiian blood in them who would, um, who would fall into that category. If they were citizens of Hawaii and say they were friends with the king or or whatever the case may be, just like myself. I mean, I've grown up in Hawaii since 1970, and I have not a drop of Hawaiian blood in me, but, uh, but I I feel the spirit of Hawaii, and I have a lot of the same values.
[00:30:12] Randall Roth: So, should you be allowed to vote to select trustees of the Bishop estate?
[00:30:18] Mike: Personally, I don't feel that I would be eligible, because I don't have Hawaiian blood and my and you know, and my loyalty to the Kingdom of Hawaii doesn't go back to the Kingdom of Hawaii.
[00:30:32] Randall Roth: Okay. All right. Mike, appreciate your call.
[00:30:34] Mike: Thank you.
[00:30:35] Randall Roth: We go to Wayne from St. Louis Heights. Good morning, Wayne.
[00:30:37] Wayne: Good morning, Randy. I think what's getting lost in the shuffle here is a rush to make the Bishop Estate into a native Hawaiian organization, and I think what's being what is being forgotten is the fact that in the will, it looks as if Princess Pahu Bishop wanted this estate to be essentially a religious organization, because both the faculty and the trustees were supposed to be of of Protestant persuasion. And I think this whole thing is getting, you know, it's getting a little sidetracked here.
[00:31:09] Randall Roth: Okay, and just to give listeners a little bit of background, there's two specific references to members of the Protestant religion in the Princess will. One says that uh the teachers at Kamehameha should be members of the Protestant religion, and a few years back, uh a federal court declared that that's unconstitutional. And so now they don't limit uh the hiring of teachers to just members of the Protestant religion, because even though the will says they should do that, the law has since determined that they cannot do that. Uh, at least they cannot do that and maintain their tax-exempt status and and they want to have that tax-exempt status.
[00:31:53] Randall Roth: Uh, the second place in the will where it's mentioned is that it says trustees must be members of the Protestant religion. But the justices of the Supreme Court, who have been told that it would be officially told that it would be unethical for them to participate in the selection of trustees if they limited it to members of the Protestant religion, because that would be discriminating based upon religion and justices and judges cannot do that under the code of ethics.
[00:32:23] Randall Roth: They have said that they are not going to consider religion in deciding who should be a trustee, even though the will says it has to be a member of the Protestant religion, they have said they're going to ignore that provision of the will. and Wayne I guess what you're saying is that there's really more emphasis on religion than anything else in the will.
[00:34:56] Wayne: That is correct, and I think this goes back to an issue brought up by your second caller that we are dealing with a will that comes from the Kingdom of Hawaii and we're trying to interpret in terms of United States law and I think we're dealing with two different uh ponds here. Um, I think, you know, it's very clear to me, uh at least in my view, that the when Princess Pahi Bishop wrote this will, separation of church and state was not practiced by the Kingdom of Hawaii. And then there was so there was no conflict between, you know, with having the Supreme Court uh appoint officers of a religious organization.
[00:35:34] Wayne: Now that the Hawaii is part of the United States, we have a situation where we have to live under a doctrine of separation of church and state and this causes the the will in effect to be violated.
[00:35:47] Randall Roth: Okay. Wayne, appreciate your call this morning.
[00:35:49] Wayne: Okay, thank you.
[00:35:51] Randall Roth: Um, if you've tuned in late, you're listening to the Price of Paradise Radio Show. My name is Randy Roth. We're talking about the Bishop Estate. I would encourage you to call us at 955-8821 if you want to ask a question or especially if you want to make a comment. And the comments that we're most anxious to hear are those from people who feel that their point of view hasn't been expressed very well or maybe hasn't been expressed at all in the media thus far. Our number again is 955-8821 or if you're on a neighbor Island 1800-955-8821.
[00:36:29] Randall Roth: Most recently we've been talking about um the justices involvement in the selection of trustees and a question that um uh has been asked a lot is if not them then who, and if any of you have some thoughts that you feel are especially um novel uh but grounded nonetheless, give us a call, share those with us. We had one caller who said they ought to be chosen by the Hawaiian people and another caller who suggested that the Bishop Estate really should be considered more of a religious organization, a Protestant organization as opposed to being considered a a Hawaiian organization. Let's go to the Big Island, Dean. Good morning, Dean.
[00:37:15] Dean: Hi, good morning. Uh this is a different issue. Uh as you know, Bishop Estate has lease leased uh 24,000 acres of land to Prudential Timber for eucalyptus pulp plantation. And also as you know the state is recently um turned down a lease to uh excuse me, uh OG Timber of Japan because of uh public sentiment against this. And it doesn't seem like the people here are any kind of a beneficiary of the estate, you know. It's an issue that doesn't seem to be addressed.
[00:37:56] Randall Roth: Okay. So in evaluating the job that the trustees of the Bishop estate,
[00:38:00] Caller: state are doing one of the things that ought to be looked at is how they are using those funds and using that land, and in this case, the tens of thousands of acres on the Big Island that perhaps are going to go into one form of forestry or another. Right, they're not listening to the people, the people Okay. they turned this back. Okay. Thank you. Appreciate your call, Dean. Um, if you haven't looked at your Morning Honolul Advertiser, the headline on the front page is gas deal cost estate $100 million. Take a look at at the article.
[00:38:41] Caller: Uh, there's a very troubling history to this whole thing and I've got to tell you what troubles me the most about it is that there isn't a strategic plan in place, there isn't some sort of framework within which individual investment decisions are made. Uh, Jim Duffy, who is a court appointed master some years ago, uh, very forcefully recommended that the trustees adopt such a plan, and they didn't. Um, the next master, uh, recommended that they adopt such a plan and they didn't.
[00:39:16] Caller: Um, I would be very surprised if the current master, Colbert Matsumoto, didn't do the same thing recommend that they adopt such a plan, and it wouldn't surprise me if they wouldn't unless for some reason they would be forced to do so. The reason for this is that if if you don't have some sort of of long-term plan, if you don't have benchmarks and goals, you you don't have a way of knowing how a specific opportunity fits into the whole. You can't really achieve diversification on a number of levels and you're not really going to be able to hold yourself accountable.
[00:39:50] Caller: You're not going to be able to determine whether this thing performed in accordance with your expectations or not. This particular methane gas deal was brought to the Bishop Estate Trustees on February 22nd, 1989, and the very next day, February 23rd, 1989, the trustees agreed to go into this. Um, there were all kinds of problems with it, for example, they didn't know until much later that the person who brought the deal to them, uh, was getting a 3% commission on this, got uh a commission a very large commission on this.
[00:40:32] Caller: They thought that he was somehow or they were somehow together on this that there was uh a fiduciary duty that this other party had toward them and again, they were surprised later to discover that there was a commission that the fellow was being paid. Secondly, in order to uh protect their tax exempt status, they um had to have a a passive sort of interest in this business opportunity. So they got the promoter who had brought this deal to them, who unbeknownst to them was getting a commission for signing them up, got him to be more or less like a general partner in a limited partnership in which they were the limited partner.
[00:41:18] Caller: But he didn't have the money to buy his interest, so they sent him to to the bank and he happened to go as was noted in this morning's article to Bank of Hawaii, but I want to emphasize that it could have been any bank and there was nothing improper done by the bank itself. But he went to the bank and he borrowed a very large amount of money and the bank said well, we can lend this only if we've got collateral. And he says well, I don't have it, um but the state over here, I think will guarantee that this will get repaid.
[00:41:52] Caller: Attorneys for the estate said well, you can't without jeopardizing your tax status, you can't guarantee that it's loan. So what they did was they simply agreed to buy the note from the bank at any time in the future for its face amount. Well, I would describe this as a guarantee by another name, but they did this in an attempt to enable the promoter to borrow the money, to get this thing rolling and uh did this because they wanted to maintain their tax status. Um, before you knew it, it turned out that they had misread the original contract, they thought they were obligated for $12.5 million, but upon rereading it it was more like $20.5 million.
[00:42:39] Caller: They also didn't realize that there was going to be some continuing responsibility for some unexpected costs like for example getting getting rid of excess water that appeared at the well site. Even after this deal was really quite troubled, uh they agreed to go in on some additional wells, they kept putting more money in and more money and more money in, and it might look to some people, and here, when you're talking about fiduciary duties, perception is just as important as reality.
[00:43:11] Caller: It might look to some people as though they kept putting more and more and more of the estate's money into this trying to save the investment, because this was one of those investments where some of the trustees at least had personally invested. And so to some people, it might look as though they were spending more and more of the estate's money in order to try to salvage their own investment.
[00:43:33] Caller: We don't know what the reality was, we don't know if that's the reason, but again, it looks bad and as Hazel Bay was saying with respect to judicial ethics, when we're talking about fiduciary duties, fiduciaries are supposed to be as concerned about perception as they are about reality. Well, if you've got a question or comment, especially if you feel that your point of view hasn't been expressed very well in the media, please give us a call at 955-8821 or if you're on a Neighbor Island, the number is 1-800-955-8821. Another item that uh has come up, I've had people ask me whether they think the broken trust essay really had serious allegations.
[00:44:19] Caller: For example, in some instances, we just talked about conflicts of interest, and a conflict of interest may look bad, but people have told me that that they really don't consider a conflict of interest by itself to really be all that bad. Well, let me give you one specific example that we didn't put into the broken trust essay, where there was a conflict of interest where we think it is has caused people to be um less than than comforted with the specifics of what they know, and if there wasn't this conflict of interest, then there would be some confidence in the trustees.
[00:45:01] Caller: Um, the trustees of the Bishop Estate, because they're trustees, not because they're nice guys or anything like that, but because they're trustees are giving honorary are given honorary memberships at Wy Lai Country Club. Uh, according to newspaper accounts, it costs roughly $40,000 for other people to join Wy Lai Country Club if they're admitted, but uh if you're a trustee of the Bishop Estate, you get free membership. Now, one could argue that this is inappropriate because trustees shouldn't benefit personally from their position, that if there is something of value that a lease holder wants to provide, it ought to go to the beneficiaries as opposed to the personal enjoyment of the trustees.
[00:45:49] Caller: But also, it creates a conflict of sorts, all of a sudden they've got a personal stake in the well-being of one of the lease holders, in this case Wy Lai Country Club, that's called a conflict of interest. Well, two years ago, when the Wy Lai Country Club land lease was renegotiated for a total period of 75 years where, according to the newspaper article at the time, there are no reopenings for renegotiated rent during that 75 year period of time.
[00:46:25] Caller: And at a time when most leaseholders are complaining that the Bishop Estate Trustees are totally outrageous and unreasonable in their demands, the leadership of the Wy Lai Country Club described this lease as having terms that were very fair and reasonable and wouldn't require that the dues of members be increased for at least a five year period of time. Now, if there hadn't been a conflict of interest, I think observers might have assumed that this was indeed an arm's length lease.
[00:46:58] Caller: Given those conflicts of interest out there, why there're an awful lot of people that I think are really quite skeptical and again, fiduciaries are supposed to be as concerned about the perception that they're doing the job right as they are about the reality. Well, we've got some people on the line now. Let's uh go through them first. George in Kapahulu. Good morning, George.
[00:47:20] George: Yeah, good morning.
[00:47:21] Caller: You're on the air.
[00:47:22] George: Uh Randy, what's what's in the Amerik Uh, who is an American?
[00:47:25] Caller: Who is an American?
[00:47:27] George: Yeah, or what is an American?
[00:47:28] Caller: Okay, trick question. You tell me.
[00:47:30] George: Not really, no. I mean, people ask what is a Hawaiian? I know I'm a Hawaiian because I got Hawaiian blood. What is an American?
[00:47:39] Caller: Well, I don't think there's such a thing as American blood if that's what you're getting at.
[00:47:44] George: Okay.
[00:47:45] Caller: So [unintelligible — audio glitch] your point that being Hawaiian has something to do with being a citizen of the state of Hawaii?
[00:47:53] George: No, it means having the koku, it means having the blood. It means being able to trace your ancestry to when they was well prior to 1778 if if we're using the legal term.
[00:48:06] Caller: Okay. Well, should we be saying Native Hawaiian, uh ethnic Hawaiian? Uh you know, if you're you're from Kansas, they call you a Kansan, but people from Hawaii aren't necessarily Hawaiian because many people and and I use the term the same way that you're using it limit the use of the word Hawaiian to people who have uh some quantum of of blood, uh Aboriginal blood. And you're saying that if if the question is, should this be a Hawaiian organization? We're really saying native Hawaiian and you would suggest that the Bishop Estate is a native Hawaiian organization.
[00:48:47] George: Oh, definitely. It's uh, it's the actual uh trust did not begin or the estate did not begin with the will and her estate began 2,000 years ago.
[00:49:02] Caller: Okay, so like Steve's comment, for example, even if the will itself doesn't limit benefits to Native Hawaiians, when you look at the history of this thing, then you ought to realize that it really ought to be limited to Native Hawaiians.
[00:49:18] George: Yes.
[00:49:19] Caller: Okay. Okay, secondly, Randy.
[00:49:21] George: Yes.
[00:49:23] Caller: Uh, in your investigation, do you know of any uh anyone who is who has no Hawaiian blood who has attended Kamemeya? Well, in in the past, yes, among other things there were were children of of faculty members. I'm told that the the current admissions policy, which has been in place for for some years now, I'm told is such that you have to have some quantum of Hawaiian blood.
[00:49:53] George: Okay, because uh if I'm not mistaken, there are two Maori up at Kamemeya today. They have no Hawaiian blood, they are Maori. Mahalo.
[00:50:04] Caller: Okay. Thank you, George. We go to Lynn from Waimea. Good morning, Lynn.
[00:50:10] Lynn: Good morning. Yes, um, not to switch the subject but a moment ago, someone brought up our wonderful and amazing victory here, uh, not to have OG Timber come in and pulp this area. But we still have uh 16,000 acres being uh planted with uh this insane product of eucalyptus by the less lessee of Bishop Estate. One thing that they could do now, seeing, you know, the writing on the wall, there is no market for pulp and if the the market is flooded worldwide, maybe these people will be smart enough to plant real trees.
[00:50:53] Lynn: They have a theory uh promulgated by our forestry division that that it takes 60 years to get a marketable koa tree, but my next door neighbor on his 900 acres has just planted a few koa trees for fun and he has four year old koa trees with a six inch diameter.
[00:51:13] Caller: Okay, Lynn, I want to avoid getting this into a discussion of Oh, right. Okay, okay, so my idea is that why not utilize this fabulous resource that they have, combine it with the fact that they're educating Hawaiian children, which I think they should be doing in six schools, you know, on every island, not just one school in Honolulu.
[00:51:35] Lynn: And that school could have an outdoor program of planting Koa, planting taro, um, planting other kinds of Hawaiian plants that are good to eat or good to use for construction or all kinds of purposes on this land, and they could do it while having the the lessee on the land. They could do it without breaking this lease that they've given them, which is giving them income.
[00:52:02] Caller: Okay, Lynn, hang on, I'll I'll come right back to you as as I'm listening to Lynn, I'm thinking of an article that was in the Star-Bulletin, I think about a week or so ago and it raised a philosophical issue. Should the trustees do that which will maximize financial returns, or should it factor into its decisions something that will encourage and support uh Hawaiian culture?
[00:52:32] Caller: And if for example, a decision is not going to be the best financial decision, but it is going to support the perpetuation of Hawaiian culture, is that something they should be doing as opposed again to just trying to get the uh the biggest return for their investment dollar that they possibly can? And I suspect that this is part of what Lynn, what you're suggesting.
[00:52:57] Lynn: Absolutely. I mean, I think that they they were obligated to do that, if they go back and read the will, that is what she's talking about. She isn't saying, go out and become a multinational corporation that doesn't pay any taxes. She is saying, educate Hawaii's children. She's also not even just saying Hawaii's children of Hawaiian blood, but I really think that that should be first and foremost. And when that's done properly and there's more left over, bring the others in for more cultural education and more education.
[00:53:32] Caller: Okay, Lynn, I appreciate your call. We're going to try and get to everybody before the end of the hour. Thanks again.
[00:53:37] Lynn: Thank you, Randy.
[00:53:38] Caller: We go to Andrew, who's in a car someplace.
[00:53:41] Andrew: Yeah, hi. Um, right around the corner from me, actually. Uh all applause is follies about the end. Um these people, these, you said perception and reality. Randy, I'm a stock broker, and basically, when you take money and you put into an investment and then you put somebody else's money on top of that, that's called front running. Okay? It's not called perceived reality. It's it's against the law. And as a matter of fact, you go to jail for it, you get suspended, the SEC takes away your license, there's a whole variety of things.
[00:54:19] Andrew: These people have obviously showed that they're amateurs, and that they've lost $100 million in one of the biggest bull runs of this century. Okay, they were looking for 27% return and stuff that's high risk.
[00:54:35] Caller: So you're referring specifically to this morning's article where the headline say they lost $100 million and the article the article itself says that they had been, not promised, but they were hoping for very high returns. And in the meantime, while they're losing $100 million on this very speculative investment involving a type of investment that they individually had no knowledge of, you're saying they could have been in the stock market, they could have gotten in on that bull market.
[00:55:03] Andrew: They they they were uh what is it, Goldman Sachs is their uh, you know, they own 10% of them. It this this is a folly, it's got to end. When are when are people just going to say we're outraged, this is it, this is we don't, it's done.
[00:55:19] Caller: Okay. Andrew, you've said it and I appreciate your call. We go to Sean, Aloha. We go to Sean from Manoa. Good morning, Sean.
[00:55:27] Sean: Good morning. Um, I just wanted to make one comment about um, I suppose ethnic or race-based criteria, however they might be used in the Bishop Estate um controversy. I'm not particularly an advocate of um reifying matters of race and racial categories, but I I acknowledge they are a a social reality. Um, I want to refer and point out to listeners and people in Hawaii to a study, and I can't give you the exact citation here, but a study I'd come across um that had been conducted maybe about 10 years ago by some outside researchers um that is they were outside scholars or or academic researchers not affiliated with the Kamehameha Schools.
[00:56:18] Sean: And they were looking at how students at Kamehameha Schools self-identified themselves in terms of of their racial or ethnic um identification. And and when the students in this sort of a a controlled research were not um, of course, putting their admissions or acceptance into the programs at Kamehameha on the line by identifying or not identifying in a certain racial category. It seems as if I'm if I'm recalling things right, um the magnitude of the number of students who um did not identify themselves as Native Hawaiian
[00:57:00] Randall Roth: primarily were about like 30 to 50 percent, a large chunk of the students attending Kamehameha at that time identified themselves as their primary ethnic ethnic identity as being Caucasian or Japanese, Chinese, etc, etc. And so, you know, it seems clear that under the current guidelines for admission to Kamehameha, many students and families are are manipulating their identity in order to get benefits from that. And I think that raises an interesting aspect when we look at what kinds of criteria ought to be considered for um issues that surround um Bishop Estate.
[00:57:40] Caller: Well, and it's interesting too that that when [unintelligible — audio glitch] people who filed this lawsuit that I mentioned earlier in the show who are saying that the tax-exempt status ought to be lost because there's discrimination based upon race. What um the Bishop Estate has said in response is that they've got all races there. They've got Filipinos, they've got uh Japanese, they've got uh Caucasians, etc.
[00:58:08] Randall Roth: Yeah.
[00:58:09] Caller: And and you're supporting that in the sense that when the kids are asked, someone who's maybe 7/8ths Caucasian and 1/8th Hawaiian, we might not be surprised that they would identify themselves as a Caucasian.
[00:58:23] Randall Roth: Right.
[00:58:23] Caller: Given one choice.
[00:58:24] Randall Roth: Right.
[00:58:25] Caller: Um interesting.
[00:58:27] Randall Roth: It is.
[00:58:28] Caller: Okay.
[00:58:28] Randall Roth: Well, thank you.
[00:58:29] Caller: Thank you, Sean. Sure.
[00:58:30] Randall Roth: All right. We go to Jane on let's see, Kona. Good morning, Jane.
[00:58:34] Jane: Good morning. I'm calling about the blood quantum issue, which is really not a Hawaiian issue. Um by oath, one can become uh a denizen Hawaiian. And I think that's why it's not mentioned in the will because uh [unintelligible — audio glitch] queens and the kings knew that. Uh so, it is not a blood issue. Um know, I wrote an article about this, and I was published here in our local newspaper. I'd like to send that to you by fax if I can.
[00:59:04] Randall Roth: Okay. 956
[00:59:06] Jane: And it explains who is a Hawaiian.
[00:59:09] Randall Roth: Okay, why don't you send it to 956
[00:59:11] Jane: 956 5569
[00:59:14] Randall Roth: 5569. Okay?
[00:59:17] Jane: Thank you very much.
[00:59:17] Randall Roth: Thank you very much.
[00:59:19] Randall Roth: Uh you're listening to the Price of Paradise Radio Show. My name's Randy Roth. We're talking about Bishop Estate. We've got uh some lines open. If you'd like to get in here in just the last few minutes, our number is 955-8821. Some of the issues that uh our callers have raised this morning is um the uh philosophical issues as opposed to the legal issues that go to the heart of what Bishop Estate is all about or should be all about. And involved in that, one of our callers asked the question, uh who is Hawaiian? And we've had several callers who've said it very much should be limited to uh Native Hawaiians, that it's a function of of blood quantum.
[01:00:05] Randall Roth: We had Hazel Bay from the Law School explaining background information so far as this question of of whether the justices of the Supreme Court should be involved in the selection of trustees. And I've asked the question a couple times and haven't yet had a caller respond to this, but if not uh the justices then then who perhaps should be doing that? We've had uh callers from the Big Island talking about uh decisions that the trustees have made with respect to the use of land over there and just a host of other issues. But now we have Mike from Honolulu. Mike, you're on the air.
[01:00:42] Mike: All right. Thank you. I'll make it quick because there are other callers. Um I think a helpful term uh in deciding who is uh can go to to receive benefits uh from Bishop Estate might be aboriginal. And uh I think there needs to be a distinct difference made between uh Hawaiians and Aboriginal Hawaiians. And I I still think the, you know, there are many Aboriginal Hawaiians that are scattered throughout, especially the outer islands, uh who are still uh much more connected to the land and to the uh old uh way of living, and they seem to be being get passed up uh in terms of rights and benefits from, let's say, more cosmopolitan Hawaiians who often have less Hawaiian blood in them.
[01:01:36] Randall Roth: So it has to has to do with blood quantum, but it also has to do with the culture that that they're living.
[01:01:42] Mike: Uh Yes, uh the culture and it just seems as though there's when you talk in terms of cosmopolitan and when an aboriginal, you you also have many more uh Hawaiians who are much more cosmopolitan and who can adjust easier to this advanced uh Hawaiian society we live in. Okay. Whereas the Aboriginals are not, they can't adjust as easily.
[01:02:07] Randall Roth: Okay. Thank you, Mike.
[01:02:09] Randall Roth: We had a couple other people on the line and we had a technical glitch and we lost a couple of them, so if you'll call back real quickly, we'll get you on uh on the air. Another issue it's been written a lot uh in the papers including something in the Star Bulletin last night, has to do with the federal law. You know, we've got all these these local investigations going on, the Attorney General, the court appointed master, the court appointed fact finder. I think a lot of people are confused that intermediate sanctions is a federal law. It's it's part of the the tax code. And basically what the critics have said is that this is a law that benefits the beneficiaries of the Bishop Estate just as it benefits all charities. If it poses a threat to anyone, it poses a threat just to trustees who are abusing their power.
[01:03:21] Randall Roth: And what was written up last night, and has been written up a number of times, and I think people haven't quite focused on yet, is the fact that the Bishop Estate trustees not only spent a lot of money fighting the enactment of this law, and then working for its repeal, but they spent a lot of the estate's money. In other words, rather than spending their own to try to get a situation that's better for them, worse for the charity, they used the charity's money. And I think that's at the heart of what a lot of uh the critics are concerned about. Hey, we have back the two people who were inadvertently cut off the line. Let's go to, I think it's Samad. You're on the line.
[01:03:44] Samad: Hi, I have a question regarding the justice's selecting trustees, and would it be possible to eliminate the conflict by if there was a matter that was going to be adjudicated at the State Supreme Court level, could they not recuse themselves and possibly the matter be dealt with within the federal court?
[01:04:07] Randall Roth: Um, well, it wouldn't go to a federal court. They could recuse themselves and be replaced by circuit court judges who would sit just for that particular case. But [unintelligible — audio glitch] people who are critical of the justice's involvement would say that justices are supposed to put their job as justice ahead of any other uh aspect of their life, and that they shouldn't put themselves in a situation that would require them to recuse themselves. But but you're right, if they feel that there'd be a perception of unfairness or the possibility of unfairness, they could always recuse themselves. There's just the issue of whether they should put themselves in a position where they would have to do that.
[01:04:50] Samad: Okay, thank you.
[01:04:51] Randall Roth: We go to Carol from Kona. Carol, you're on the air and you've got just a few seconds.
[01:04:56] Carol: Well, I'm I'm just uh amazed at the the um number of Hawaiians that are not in the Kamehameha School, and I have for the last 35 years wondered why the like the Princess said, the indigence and the orphans are not being helped by that school instead of the Chinese, the Japanese, the Hallis and so on. That will make it anyway.
[01:05:21] Randall Roth: Okay. And that and that was the only mandatory part that there would be provision for the education and support of orphans and indigents, and that's the only part of the will where there was this preference for Native Hawaiians. Although many people feel and and personally I I'm I'm in this category that that there's a lot to be said for focusing the benefits of the Bishop Estate on Native Hawaiians.
[01:05:44] Carol: Well, I know when I when I took my husband's youngest son for his test, that he was the darkest Hawaiian up there and he didn't make it. Okay. All right. That I've always felt that way.
[01:05:54] Randall Roth: Oh, the music means we're running out of time. I want to Thank you. I want to thank everybody uh who called in and everybody who tried but but didn't get through. Uh we really appreciate your participation. Our producer is Susie Roth. Our Director of Operations at Hawaii Public Radio on Technical Wiz is Jeff Ilarity. Our helper today, assistant producer was Tom Roth. You've been listening to the Price of Paradise Radio Show. I'm Randy Roth, Aloha.
[01:06:08] Randall Roth: Our producer is Suzie Roth, our director of operations at Hawaii Public Radio and technical wiz is Jeff I Lardy, our helper today, assistant producer was Tom Roth. You've been listening to Praise of Paradise Radio show. I'm Randy Roth. Aloha.
[01:09:26] NOTE: music outro ~198s