I recently completed reading the book
Broken Trust: Greed Mismanagement & Political Manipulation at America's Largest Charitable Trust written by Judge Samuel P. King and Professor Randall W. Roth. The book is a compelling history of recent events that almost brought down the powerful Bishop Estate trust and its beneficiary, the Kamehameha Schools, one of the State's leading private educational institutions.
The
Kamehemeha Schools were founded in 1887 after the death of
Princess Bernice Pauahi Bishop in 1884. She was an heir to the royal throne and was bequeathed with thousands of acres of land in Hawaii by her
ali'i class parents and her cousin,
Princess Ruth Ke'elikolani of the Big Island. She was married to
Charles Reed Bishop, who was a prominent businessman in the 1800s.
Upon the Princess's death,
her will stated that a school for Hawaiian children had to be built. It would be operated with funds generated out of her estate's vast landing holdings. Mr. Bishop along with 4 others created the Kamehameha Schools in Honolulu. They comprised the estate's first board of trustees.
Over the next hundred years, several people served on the Bishop Estate Board of Trustees. All of them were appointed by the Hawaii Supreme Court as outlined in Princess Bernice's will. By the late 20th century an appointment to the trusteeship was viewed as a "political plum." The Supreme Court justices who appointed the trustees were in turn appointed themselves by the sitting Governor of Hawaii and confirmed by the State Senate. That set up a system of political rewards for future appointees.
Broken Trust is the story of how the Bishop Estate Trust was abused by trustees Richard "Dickie" Wong, Henry Peters, Gerard Jervis, Lokelani Lindsey and Oswald Stender. These people were highly paid trustees who were appointed to manage and set policy for the estate and Kamehameha Schools. They screwed up their obligations and used the trust as if it were their own personal bank and playground.
Ms. Lindsey was the lightning rod that triggered public outrage against the Bishop Estate. She micromanaged the Kamehameha Schools much to the disdain of that institution's faculty, staff, students, parents and alumni.
Broken Trust tells us of her misdeeds which included, intimidating students, faculty and staff at the school, questionable investments with trust funds and diverting some of those funds for her own personal use. She took it upon herself to lash out against a well liked Kamehameha Schools president who in turn was too timid to speak out against her. She was so disliked by the students that they booed her name when she was not present at a practice for the annual Kamehameha Schools song contest.
And she was not the only one. Wong, Peters and Jervis, all Democrat party member appointees were Lindsey's allies. For the longest time they went along with whatever Lindsey did and were also involved in their own wrongdoings within the estate. For a while it seemed like Oswald Stender, who was making repeated calls for changes and accountability, was painted as sort of a white knight. In the end events caught up with him even though he was not involved with much of the wrongdoing.
Stender in fact turned out to be the only non-political appointee to that board. The Hawaii State Supreme Court wanted to appoint the alleged "godfather" of Hawaii crime, Larry Mehau, Tony Ramos, a Kamehameha Schools principal and another individual to the trust. The court was deadlocked and instead appointed Stender of the Campbell Estate out of the blue, without prior notification or interview to the post.
At one time the Supreme court wanted to also appoint former Governor
John Waihee to the board. They could not because they were conflicted about appointing the governor who had appointed them to the bench.
Let me emphasize that many of these appointments were "political plums" for people closely tied to the ruling Democrat party. Several prominent Democrats are mentioned in Broken Trust. Read how their stories got tangled up in this complicated web of mismanagement, greed and political payoffs.
The names are familiar:
John A. Burns, Marshall Ige, Milton Holt,
Ronald Moon and others. Even some of the good guys were Democrats, like State Attorney General
Margery Bronster, who was in the midst of an ongoing investigation of the Bishop Trust before her fellow Democrats in the Hawaii State Senate turned down her re-nomination to the post in April 1999.
Everything came to a head in 1997 after parents, alumni, some faculty, students from Kamehameha Schools and supporters marched to the headquarters of Bishop Estate and demanded that changes to the trust be made. A few months later, the
Broken Trust essay written by this book's authors and 3 others was published in the
Honolulu Star-Bulletin. After the publication of the essay, several events were set into motion that ultimately led to the fall of the trustees two years later.
Much was published in the media.
Broken Trust retells many of those stories; expands on some of their details and makes it convenient for the reader to have it all in one place.
Broken Trust is supplemented
by a website that provides source documents and additional information that did not make it into the book. In the end it is a sad but hopeful story which many have said should be required reading for anyone who manages a charitable trust and a good account of recent historic events that still impact Hawaii today.
I highly recommend this book.
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