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The Honolulu Advertiser
Posted on: Wednesday, November 22, 2006

VOLCANIC ASH
The history lesson of Kamehameha Schools

By David Shapiro

The selection of a new Kamehameha Schools trustee to succeed Constance Lau is focusing attention on whether the $6 billion institution to educate native Hawaiian children has Fully reformed since the scandal that led to removal of the previous board of trustees in 1999.

Three trustee finalists chosen by a panel assigned by Probate Judge Colleen Hirai banker Corbett Kalama and attorneys Allen Hoe and Ivan Lui-Kwan are courting support among alumni and others in the Kamehameha 'ohana.

The public has until Dec. 1 to submit written comment, after which Hirai will make her appointment.

Since the turmoil of the 1990s, there have been obvious changes for the better at the schools funded by the will of Princess Bernice Pauahi Bishop.

The compensation of more than $1 million a year paid to each former trustee has been greatly reduced, and current trustees have abandoned the speculative deal-making of their ousted predecessors for a more prudent investment strategy to keep the trust financially sound.

Trustees have devoted far more of the estate's assets to the primary mission of education, opening new campuses on Maui and the Big Island, restoring outreach programs axed by the former trustees and sponsoring public charter schools in predominantly Hawaiian areas.

But critics worry that some of the conditions remain that got the estate into trouble before.

Trustees are as secretive as ever in their dealings, and the agencies most responsible for finally holding the old trustees to account the state attorney general, the Probate Court and the IRS have pulled back their oversight.

The job doesn't pay $1 million anymore, but the remuneration of about $100,000 a year is still high for a part-time commitment; the average received by trustees of U.S. charitable institutions is about $6,500.

With pay possibly heading higher yet, a trusteeship remains a political plum, and critics such as senior U.S. District Judge Samuel King, co-author of "Broken Trust," believe the reforms won't be complete until Kamehameha Schools is converted into a nonprofit corporation with directors serving for little or no compensation, like schools such as Harvard and Yale.

The political overtones of the current trustee selection are nothing like the scandalous years, when the Bishop Estate board had a former president of the state Senate, a former speaker of the House of Representatives and a confidant to former Gov. John Waihee.

But all finalists to replace Lau have deep ties to Hawai'i's political and business establishments.

"They are perfect if you want to continue keeping Kamehameha under the thumb of the powers at be," said Jan E. Dill of Na Pua a Ke Ali'i Pauahi.

Kalama, an executive vice president at First Hawaiian Bank, worked for Democratic Party stalwart Walter Dods and was involved in providing input for the Akaka bill for Native Hawaiian political recognition.

Hoe was appointed by Waihee to the state Land Use Commission and served on a panel appointed by Hirai which recommended in 2004 that pay for Kamehameha trustees be nearly doubled to $180,000 for each trustee and $207,000 for the chairman. Trustees declined the increases at the time after community opposition.

Lui-Kwan was a law clerk for former Supreme Court justice and Kamehameha trustee William Richardson, served as Honolulu budget director under former Mayor Jeremy Harris and helped manage U.S. Sen. Daniel Akaka's political campaigns. Akaka supported the deposed trustees and suggested at one point that their $1 million compensation might be too little.

The three finalists will be interviewed next week by alumni and other members of the Kamehameha 'ohana, and can expect some tough questions about their ties to the status quo and commitment to moving the Hawaiian community forward.

David Shapiro, a veteran Hawai'i journalist, can be reached by e-mail at dave@volcanicash.net. Read his daily blog at blogs.honoluluadvertiser.com.