Sex and suicide shock for Hawaiian charity

Andrew Gumbel charts how a foundation set up to educate the poor has been corrupted by riches

IT IS, as more than one observer has pointed out, positively Clintonesque. Here we have an administration mired in scandal and the whiff of betrayal, a zealous prosecutor sniffing around suspicious land deals, an awkwardly timed suicide as embarrassing as it is tragic, and even an illicit sexual liaison between an older man and a younger woman employee.

That's quite a litany of troubles for what is, at least on the surface, a fat, contented charitable trust in the carefree tropical breezes of Hawaii. But, as the islanders are finding out with every shocking new twist, the shenanigans of the Bishop Estate are proving to be far murkier, far more corrupt and far more personally vindictive than anything the Clinton White House ever had to deal with.

One estate trustee has been indicted on charges of theft for his role in a property kickback scandal, and a second is fighting off indictment in the same affair. Two of the other trustees, meanwhile, have turned against a third, accusing her of gross mismanagement and intimidation of students and teachers at Kamehameha Schools, the estate's primary responsibility, which sits on a wooded hillside overlooking Honolulu and is among the richest educational establishments in the world.

Melodramatic enough, you might think, but the rumblings of corruption and political interference pale in comparison to the fall-out from an altogether more sordid episode: the discovery of trustee Gerard Jervis having sex in a men's toilet cubicle at Honolulu's Hawaii Prince Hotel last month with a married employee, estate lawyer Rene Ojiri Kitaoka.

The next day, Kitaoka was found dead in the garage of her home after she left her car engine running. A week later, as the illicit liaison was about to be made public, Mr Jervis took an overdose of sleeping pills. He has since recovered and apologised for his "mistakes".

All this could not be further from the intentions of the trust's founder, the 19th century Hawaiian princess, Bernice Pauahi Bishop, who left 378,000 acres of prime island real estate and other assets in a fund for the education of native Hawaiian children.

Certainly, the princess got her school, which currently educates more than 3,000 children from kindergarten up to high school, but what she could not have foreseen was the wealth that her estate would accumulate. Thanks to the soaring price of Hawaiian real estate, plus benefits such as a 10 per cent stake in the investment house Goldman Sachs, the Bishop Estate has swelled in value to an estimated $10bn (pounds 6bn).

And that's where the problems start. The trustees are appointed by Hawaii's state supreme court, which in turn is in the pocket of the island's solidly Democrat political elite. The estate has thus been vulnerable to cronyism of the worst kind - and, to judge by the comings and goings in the island's courts, has fallen victim to it in calamitous fashion.

In July 1997, five of Hawaii's most prominent citizens published a denunciation of the trustees in the local paper, the Honolulu Star Bulletin, arguing that the estate's financial affairs were riddled with conflicts of interest and stunning incompetence. In 1989, for example, they invested $85m in a Texas methane gas deal, into which they had also sunk more than $2m of their own private funds. Not only was that a breach of their duty to keep personal and trust interests separate, the denunciation argued; it also lost the estate more than $60m.

Meanwhile, trustee Henry Peters used estate money to start an elite golf club that charged a $70,000 initiation fee. When the estate decided to sell the golf club to its members, it was Peters, this time in his guise as a golf enthusiast, who conducted the negotiations on behalf of the buyers - effectively brokering a deal with himself.

The newspaper report, headed "Broken Trust", unleashed a torrent of new scandals, starting with the news that the Internal Revenue Service had been investigating the trust's activities since 1995. Then came the deal in which Mr Peters sold a flat for almost $200,000 above the market price to a real estate speculator who had business dealings with the trust and happened to be the brother-in-law of fellow trustee Dickie Wong. Mr Peters was indicted on charges of theft in November, and Mr Wong's indictment appears imminent after a judicial ruling against him last week.

Two of the trustees are pressing for the removal of a third, Lokelani Lindsey, following a row also involving the principal of Kamehameha School. Her alleged misdemeanours include ordering a $5m computer system, including satellite link-up to the continental US, that turned out to be unusable.

Much of the credit for uncovering these scandals goes to Hawaii's attorney general, Margery Bronster, who wants to remove all five trustees on the grounds that they have not spent enough of the estate's money on education. The trustees closed a community education programme in 1996 on the grounds that money was tight, but have still managed to pay themselves annual salaries of almost $1m each.

Ms Bronster is not immune to criticism herself, and indeed lawyers for the trustees argue that she has her own conflict of interests in her dual roles as public prosecutor and legal guardian for the Bishop Estate. Conflict of interest is a recurring theme throughout this shoddy tale; even the IRS investigation is tarnished by the fact that the US Treasury Secretary, Robert Rubin, is a former co-chairman of Goldman Sachs with continuing business links to the Bishop Estate.

The saddest reflection on the complex knot of relationships between the trustees and the Hawaiian establishment is that not one of the five has felt moved to resign, even temporarily. The first trial, of Mr Peters, is not due to start until next year, so this scandal will run and run.

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
One of the 'princesses' in the video
videoYouTube reinstates sweary video after takedown for 'violating terms'
Life and Style
Could you tell the difference between this and an organic alternative?
food + drink

Culinary experts in The Netherlands thought it was 'fresh' and 'tasty'

Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to US
Life and Style
tech

Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance

News
New look: Zellweger at Elle's Women in Hollywood awards on Monday

Actress sees off speculation about her face in an amazing way

Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidates on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
Arts and Entertainment
film

Marvel has released first teaser trailer week early after it leaked online

Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

SEN Teaching Assistant

£70 - £85 per day: Randstad Education Group: SEN Teaching Assistants needed in...

Year 4 Teacher required for 2 terms

£21500 - £35000 per annum: Randstad Education Cambridge: Randstad Education ar...

Accounts Assistant - Sales Ledger, Sage Line 50 - St Albans

£20000 - £22000 per annum + benefits: Ashdown Group: A highly successful and w...

EBD Teacher

£120 - £130 per day: Randstad Education Chelmsford: Are you a quailed Teacher ...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?