Copyright 2001 (c) Kenneth R. Conklin, Ph.D. All Rights Reserved
INTRODUCTION: What are Kamehameha School and Bishop Estate? A brief history and description of the school, how it was founded, what its purpose is, and recent problems
Bernice Pauahi Bishop was an extremely wealthy ali'i. As the last living member of the Kamehameha dynasty, she inherited large tracts of land from other Kamehameha descendants. At her death in 1884 she owned about 11% of all the land in Hawai'i. Her estate, which included some extremely valuable lands, was valued at about $300,000 during the probate of her will. Her husband, haole banker Charles Reed Bishop, helped her to set up the Bishop Estate, and he was its first chairman of the board of trustees. After a few small bequests, all her wealth was to be used to establish the Kamehameha Schools and maintain them forever.
At first there were two schools: one for boys, which focused on vocational training for shopworkers and farmers; and one for girls, which focused on home-making skills. The will of the princess had required such a focus, so academic preparation for higher education was not an important part of the program. After about 25 years, some of the school's former pupils who had gone on to become successful businessmen or professionals urged a change of focus toward preparation for high school and college; and gradually the emphasis changed. Today the main campus in Honolulu is one single school for both boys and girls, from elementary through high school, and is primarily focused on a college-preparatory curriculum. Another campus was recently built on a neighbor island, and sometimes Kamehameha School has partnerships with public schools in areas where kanaka maoli make up most of the public school students. Some scholarships are also awarded for graduates going to college.
For further information about the history, purposes, and events at Kamehameha School, see their official website: http://www.ksbe.edu
Officially, the sole purpose of Bishop Estate has always been to support the Kamehameha School(s). At first there was not much income from the trust, because the land was kept rather than being sold, and the lease-rents were low. In recent years the estate has had enormous increases in its income, partly because the laws governing lease-hold residential land have changed to require that such land be sold to the homeowners rather than merely being leased. Large amounts of money have flowed into the estate. The capital and income have been invested in the stock market and in real estate in far-away places. These investments yielded high rates of return and large capital gains. Some estimates place the net worth of KS/BE at around $10 Billion. Trustee compensation, based on a percentage of the trust's income, grew very large, approaching a million dollars per year per trustee. Politicians, political insiders, and their cronies were named as trustees. There were scandals involving trustees' unlucky personal investments being bailed out by later investments by the trust; and scandals involving the personal lives of some trustees. The percentage of the trust's income actually being spent on the school's educational programs was very low, with most income going to the investment portfolio. Influential people published essays exposing the corruption and political chicanery. Bishop Estate was looking like a for-profit private partnership filled with graft and corruption.
The U.S. Internal Revenue Service began an investigation of the estate's finances. IRS demanded huge back-taxes on the estate's commercial operations, and threatened to take away its tax-exempt status because of the pattern of mismanagement, insider profiteering, and absurdly low expenditures on education. The State of Hawai'i prosecuted some of the trustees and was successful in getting them removed through judicial decisions and resignations. New temporary trustees were appointed, the management style was changed, a new CEO was hired, and things appear to be improving. The official name of the trust was changed to the name of the school, affirming a renewed central focus on education. The hated and scandal-ridden Bishop Estate is no more, and is now known simply as Kamehameha Schools. For the remainder of this webpage, I shall use the name KS/BE to refer to it, recognizing that the entity being served is Kamehameha Schools, which was created and supported for 115 years by the Bishop Estate.
In April 2001 the Honolulu Star-Bulletin ran a series of articles updating the history of corruption in the relations between KS/BE and the political structure of the State of Hawai'i. Although all five Trustees have been replaced and improvements have been made, questionable practices continue. Here are excerpts from three Star-Bulletin articles, including URLs for the complete articles.
Kamehameha Schools Bishop Estate
ran a potent lobbying and political
action network, according to files
of the late Namlyn Snow.
The Star-Bulletin previously reported that the estate's former trustees secretly
funneled tens of thousands of dollars in campaign contributions to dozens of
isle lawmakers, lobbied Congress and the White House to preserve their hefty
paychecks, conducted polls in the districts of legislators friendly to the trust's
interests and played a role in the controversial 1999 confirmation defeat of
Attorney General Margery Bronster.
But the complete story of the $6 billion trust's political clout and Snow's role
in that shadowy network of power remained buried in the secret files Snow
During the past several months, the Star-Bulletin has reviewed more than
40,000 pages of records subpoenaed by the Attorney General's Office in its
three-year criminal investigation into the political and lobbying activities of the
Kamehameha Schools, formerly known as the Bishop Estate.
Requests from special people
got some children admitted over
others, the admissions chief says
In sworn testimony, the estate's admissions director,
Wayne Chang, said that former trustee Lokelani Lindsey
ordered him to admit the child only after she received a
request from then-state Supreme Court Associate Justice
struggle with political
The trust's new point person
in the state Legislature was a
key person in its past
A professional lobbyist since 1965, the low-key Thompson is part of the
old-school ethos that has long dominated Hawaii's political system.
Thompson -- who once listed more than a third of the state Legislature as his
friends in an interview with state investigators -- is a former local precinct
chairman and has served as a delegate to the Hawaii Democratic Party
Convention several times.
Like many longtime employees who played key roles in the reorganized trust,
Thompson was an integral part in the machinery that served former trustees
Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, Oswald Stender
and Gerard Jervis.
AS A SPECIAL-PROJECTS OFFICER, Thompson was a key member of the
Kamehameha Schools' Government Relations Division, which the state
Attorney General's Office recently characterized as a "government
That division, headed by now-deceased manager Namlyn Snow and former
state Sen. Milton Holt, helped funnel tens of thousands of dollars to the
campaign coffers of isle legislators, drafted legislation and floor speeches for
key state lawmakers and entertained dozens of Hawaii lawmakers at local
restaurants, according to the Attorney General's Office.
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