Prosecution of ex-trustees barred

By David Waite and Curtis Lum
Advertiser Staff Writers

The Hawai'i Supreme Court ended the state attorney general's longstanding attempt to prosecute two former Bishop Estate trustees, saying state prosecutors "threatened the integrity of the judicial process" while acting in "complete disregard of the attorney-client privilege and the rules of evidence."

Richard "Dickie" Wong was ousted as a Bishop Estate trustee in 1999. Advertiser library photo • April 9, 1999

In addition, the court affirmed the dismissal of theft cases against developer Jeffrey Stone, also ending any efforts to prosecute him.

"We are cognizant of the state's strong interest in prosecuting crime, but we are equally cognizant that the state's duty is to pursue justice, not convictions, and the prosecutor has a duty to act as a minister of justice to pursue prosecutions by fair means," the court said its 40-page decision barring the state from reinstating the charges.

The charges brought against Wong, Peters and Stone were the outgrowth of an investigation by then-attorney general Margery Bronster into alleged mismanagement by the trustees of the multibillion-dollar Bishop Estate, now known as Kamehameha Schools.

In 1999, a state judge ousted Wong, Peters and fellow trustees Lokelani Lindsey and Gerard Jervis from the trusteeships. Trustee Oswald Stender resigned.

Wong yesterday called the ruling "beautiful" and said justice has been served.

"We maintained this position from day one that this was nothing but a witch hunt and that it served no purpose," Wong said. "It's been very tough for (my family)."

Eric Seitz, Wong's attorney, said the justices' opinion was "as ringing a denunciation of the attorney general's office as I've ever seen."

Still on appeal to the state Supreme Court are Town's dismissals of perjury charges against Wong. But Seitz feels the outcome of that appeal will be the same.

"I think it ought to be clear that these cases are really badly motivated and never really were warranted in the first place," he said. "That's why the misconduct occurred because the cases really did not stand on their own anyway."

Deputy attorney general Larry Goya said he disagreed with the court's ruling, but said his office will abide by it. He declined to comment on the court's criticism of the state's behavior in the cases against Peters, Wong and Stone.

Renee Yuen, who represents Peters, said the court's decision "vindicates" her client. Yuen said she was pleased that the justices instructed the lower court to dismiss the charges permanently.

"The Supreme Court said that each of the times the cases were dismissed they were dismissed due to prosecutorial misconduct, and fundamental fairness requires that the prosecutions stop," she said.

Yesterday's ruling was delivered by a substitute panel of justices. They replaced the five regular Hawai'i Supreme Court justices who stepped down from hearing the issue because they selected the trustees in the past for the charitable trust which operates Kamehameha Schools for children of Hawaiian ancestry.

The substitute justices are George Masuoka, Ronald Ibarra, Daniel Kochi, Shackley Raffetto and Gary W.B. Chang, all circuit court judges.

Peters, Wong and Stone were entitled to "fundamental fairness," which included the way in which the case against them was presented to an O'ahu grand jury, the substitute justices wrote.

Peters and Stone were charged with theft in connection with the sale of Bishop Estate land under Kalele Kai, a Hawai'i Kai condominium, to Stone in 1995 for

$21.9 million. Peters was accused of accepting a $192,000 kickback from Stone.

In addition, Wong and Stone were charged with theft in another indictment stemming from the Kalele Kai sale and accused of a separate kickback scheme.

Town threw out the indictments. He ruled that prosecutors violated Stone's attorney-client privilege by calling Stone's lawyer Richard Frunzi before the grand jury, violated Peters' attorney-client privilege by calling Nathan Aipa, former Bishop Estate chief counsel, before the grand jurors, and "illegally bolstered" the grand jury testimony of Frunzi.

Wong's ex-wife, Mari, was indicted along with Wong and Stone on conspiracy and hindering prosecution charges. Town threw out the charges against her, and the high court's ruling yesterday also bars any attempt to prosecute her on the charges.

Attorneys are forbidden from revealing what their clients say to them except in cases where an attorney believes the client is committing a crime or fraud.

Still pending is a federal lawsuit filed by Wong, accusing the attorney general's office of malicious prosecution and violations of Wong's civil rights. Seitz said he and Wong will decide whether to pursue the lawsuit.

Reach David Waite at 525-8030 and Curtis Lum at 525-8025.