Broken Trust by Samuel King and Randy Roth. University of Hawaii Press, 2006.

Hubris - "Exaggerated pride or self-confidence."  Arrogance - " A feeling or an impression of superiority manifested in an overbearing manner or presumptuous claims."

Lord Acton- "Power corrupts and absolute power corrupts absolutely."

Edmund Burke - "The only thing that is necessary for evil to triumph is for men of good will to do nothing."

Was it only six years ago that such an outrageous thing happened? Four trustees of the multi-billion dollar Bishop Estate were dismissed or forced to resign under pressure. Their names were Henry Peters, Dickie Wong, Gerard Jarvis - and above all - Lokelani Lindsey.

But before they left office, they had managed to do grievous damage to the good name of Kamehameha Schools to say nothing of the fact that in many eyes, they also disgraced themselves. This is the story that our authors tell us in what is already an  Hawaiian best seller.

On Saturday, 4 March 2006, it was sold out at Barnes and Noble.

Princess Bernice Pauahi Bishop was the last of the direct Kamehameha line.  As a result, she had accumulated more than 400,000 acres of Hawaiian lands. Her will called for these lands, and the income accruing from them, to be used in perpetuity for the creation of Kamehamea Schools and the betterment of the Hawaiian people. Her will further stipulated that the appointment of the Bishop Estate trustees would be made by the justices of the Hawaiian Supreme Court.

For several decades, this system of operating Kamehameha Schools seemed to work reasonably well (regardless of the fact that almost all the trustees were haole and held the view that Hawaiians were to be educated to become labourers and not leaders).

However, there was at that time an unseen problem that would eventually prove to be the Achilles heel of Pauahi's will. This was the fact that the governor had the sole power to appoint Supreme Court Justices. The latter in turn had the power to appoint the Bishop Estate trustees.

In short, the justices were beholden to the governor for their positions and were likely to listen carefully to the governor's views on who should be appointed trustees.

This problem eventually arose when there came a veritable explosion in the wealth of Bishop Estate. This resulted primarily from two things: the hyperinflation of land values in Hawaii after statehood and the court's ruling in favor of forced land sales to homeowners.

All of a sudden the annual salaries of the trustees of the Pauahi charitable trust approached one million dollars a year.

A board appointment became the biggest political plum of them all. The governor now was in a position to politicize the positions of the trustees. Competence, knowledge, prior experience in handling an estate worth billions was no longer the issue. Now the Supreme Court was appointing as new trustees people like Henry Peters and Dickie Wong who were professional politicians.

Worse still, they appointed Lokelani Lindsey as a trustee. At the time of her appointment, she was female with Hawaiian roots and just happened to be a cousin of John Waihee, the governor of the state. Her experience as an educator was limited. She had been a PE teacher for a number of years before being shunted off as principal to several schools. Her terms in office at any one school were short, usually no more than one year.

A fourth appointee was Gerard Jarvis who would eventually have to resign after he was found to be engaged in a sordid sex scandal.

These were the kind of people who were running one of the richest charitable trusts in the world, perhaps the richest. The IRS described the actions of the trustees as running Pauahi's legacy "like a personal invrstment club."  Between 1994 and 1996 they entered into 46 transactions each of which lost more than two million dollars. The trustees covered up their losses by mixing them in with the huge increases in land values to make it seem that they were doing a brilliant job of management. They invested their own money in parallel with moneys committed by the B.E. They accumulated funds rather than spending funds as required by a charitable trust, reinvesting 99% of gains and using only 1% for Kamehama Schools. They created a system of "lead trustees" - each one with absolute power in their special field, accountable to no one, providing no reports - in some cases not even among themselves! Each lead trustee had the power of a medieval lord.

It is illegal for a charitable trust to engage in political activities, yet they were involved in selling vast numbers of tickets to fund raisers as well as providing funds indirectly to both Marshall Ige and Milton Holt, both of whom eventually went to jail. The trustees created a separate office known as the Government Relations Department whose sole purpose was to ingratiate the Bishop Estate with the Hawaiian government. Millions were spent on legal fees ostensibly to protect the Estate but also protected the interests of individual trustees. Every document the trustees did not want exposed were stamped, "Confidential- Attorney-Client Privilege."

The rest of the story is that of the brave men and women who stood up to fight these trustees at great personal peril, facing the real possibility of job loss, or blacklisting.  Eventually they won.

All the trustees were eventually eliminated and one went to jail. Lokelani Lindsey was found guilty of tax-fraud in a matter not directly related to B.E. matters. The authors say nothing of the fact that none of the others were indicted, but their inference is that the Interim Trustees, appointed after the five had left office, failed in their responsibility. Too interested in "healing," they were unwilling to pursue any of the issues involving the trustees that might have been actionable.

Near the end, our authors make us swallow a bitter pill: in a perfect legal way, Henry Peters entered into a delayed compensation package as a trustee that assures him an income of about $600,000 per year for the rest of his life.

Everyone who purports to be an Hawaiian, not just those of Polynesian birth, should want to read this book. As the biggest story in Hawaii since Pearl Harbor '41, I hope it would be included in the Iolani Hawaiian History program in some way.

My wife Margaret, an opera buff, tells me that the whole story would make a fantastic opera. Imagine the singing roles of Lokelani, Henry, Dickie and Jervis opposed by Nona Beamer, Beadie Dawson, David Shapiro, and Michael Chun. It would be a boffo performance!

Peter F.C. Armstrong  March 2006