Farmer vs. Harmon - Witness Eric Grant, Esq.

Kamehameha Schools is trying to get back as much as $2 million of the $7 million it paid last year to settle a lawsuit that challenged its admissions policy favoring Hawaiian students, according to legal papers filed in federal court in California.

The papers are contained in new litigation filed after publication of an Advertiser news story in February that revealed that the settlement was $7 million.

The money was paid to a Big Island mother and child in return for their agreement to drop the lawsuit just before the U.S. Supreme Court was to decide whether it would hear an appeal of the case.

The plaintiffs, who have never been publicly identified and are known as Jane and John Doe, alleged in the California case that the schools "threatened" to publicly identify them if they did not place $2 million in an escrow account for possible return to the schools because terms of the confidential settlement had been revealed.

Ken Kuniyuki, a Hawai'i lawyer who now represents the pair, is alleging that David Schulmeister, an attorney for the schools, said that if the schools were forced to file suit over the issue, the names of the Does would become public.

Kuniyuki made the allegation in a sworn declaration filed this month in federal court in Sacramento, seeking a court order barring public identification of the plaintiffs.

Schools attorney Paul Alston denied that Schulmeister threatened to reveal the plaintiff's identities.

"Schulmeister told Kuniyuki that the (Kamehameha Schools/ Bishop Estate) believed the settlement agreement had been breached and that the estate was entitled to damages," Alston said in court papers filed April 14 in Sacramento.

"He further explained that a public lawsuit could make it difficult for the Does' anonymity to be preserved" and suggested that the $2 million be held in escrow while the parties discussed resolution of the dispute short of a lawsuit, according to Alston.

Alston stressed on Tuesday that Kamehameha Schools has not filed a lawsuit or taken any action that would publicly identify the Does.

"Kamehameha Schools is closely scrutinizing how to proceed," he said.

Tuesday night and yesterday, the Kamehameha Schools board of trustees and Chief Executive Dee Jay Mailer sent a mass e-mail to parents and alumni notifying them of the new legal skirmishing in California and alerting them that The Advertiser was preparing a story on the subject.

"A breach of confidentiality has occurred, and an investigation into the line of responsibility is in process. Legal action as appropriate shall follow," the trustees' e-mail said.

"It is aggravating to be drawn into this complicated and unsavory infighting," the trustees' message continued. "However, we will not allow this latest legal maneuver to distract us from our mission."

'Fear for our safety'

Jane and John Doe filed legal papers in Sacramento federal court denying any role in the release of the settlement figure by John Goemans, an attorney who used to represent them but who now is involved in a dispute over compensation for his services in the case.

Their attorney, Kuniyuki, also asked the federal court to issue a restraining order against all parties in the case preventing any attempts to disclose the identities of Jane and John Doe.

He attached an April 2 sworn statement from Jane Doe that said, "both John Doe and I fear for our safety if our identities are made public."

She noted that more than 1,550 reader comments were posted on the Advertiser's Web site following the February story that disclosed the settlement amount.

"Many of them are extremely critical of us. Some include threats of violence against us," she said.

"I have lived in Hawai'i for many years. The negative comments and threats posted to the Honolulu Advertiser's February 8, 2008 article are entirely consistent with my experience with many local residents regarding the admissions policy of the Kamehameha Schools."

If their identities become public, she said, "we are prepared to move and go into hiding."

Last week, following a hearing before U.S. District Judge Frank Damrell Jr., all parties in the federal court case stipulated that they would not disclose the true identities of the Does.

Goemans told The Advertiser in February that he believed the settlement amount should be a matter of public record, given Kamehameha Schools' status as the wealthiest and most influential nonprofit institution in Hawai'i.

Attorney's troubles

In a separate civil case now pending in Sacramento state court, Goemans was sentenced earlier this month to serve eight days in jail and fined $4,000 for violating a court order to keep the settlement amount secret.

Goemans, 73, now living in Florida with his sister, said by telephone, "I have zero money, I have serious health issues, and now I've been ordered to serve an eight-day jail sentence in California in the middle of May. I don't know what's going to happen."

The California state case was filed against Goemans by Eric Grant, a Sacramento attorney who litigated the Does' lawsuit from the time it was first filed in Hawai'i in 2003 through its settlement in May 2007.

Under the terms of the settlement agreement, Grant was entitled to 40 percent of the $7 million total, or $2.8 million.

He sued Goemans in Superior Court in Sacramento last year to try to settle the outstanding question of how much Goemans should be compensated.

Goemans conceived the civil rights lawsuit against the schools, found the plaintiffs on the Big Island and brought them together with Grant.

Goemans said the only money he has received was a $20,000 loan from Jane Doe but believes he is entitled to as much as 25 percent of the total settlement, or $1.75 million.

According to documents filed in the California state case, Grant became concerned early this year that Goemans intended to reveal the amount of the legal settlement and on Feb. 5 obtained a court order against Goemans blocking any such disclosures.

Three days later, The Advertiser published a news story based on Goemans' statements about the settlement amount.

Goemans said in a sworn statement filed with the California court March 17 that he is "not medically or mentally 100 percent" and had no memory of being informed of the Feb. 5 court order.

"I want to emphasize to the court that it was not my intent to deliberately and knowingly violate the court's order," the statement said.

But he reiterated his belief that Kamehameha Schools, as a tax-exempt organization, should not and cannot keep the terms of the settlement confidential.

After the settlement terms were made public, Grant filed a new federal lawsuit March 28 in Sacramento against Kamehameha Schools and his own clients, Jane and John Doe, asking the court for a ruling that he was not responsible for the disclosure and has no financial liability because of it.

Grant and an attorney who represents him did not return telephone requests for comment.

Alston filed a lengthy legal memo in the case last week questioning the Sacramento court's jurisdiction in the matter since the Does and the schools are in Hawai'i.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.

www.kycbs.net/KS-Seeks-Recovery-4-24-8.mht

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February 8, 2008

Kamehameha Schools settled
lawsuit for $7M

By Jim Dooley, Advertiser Staff Writer

Kamehameha Schools paid $7 million to settle a lawsuit filed by an anonymous student who claimed the schools' Hawaiians-first admissions policy violates civil rights laws, according to an attorney involved in the case.

Terms of the confidential settlement have been a closely guarded secret since it was signed in May just before the U.S. Supreme Court was to decide whether to hear the case.

The settlement ended a four-year effort by a non-Hawaiian teenager, known only as John Doe, to enter the Kamehameha Schools system.

Attorney John Goemans — who planned the legal action, found the plaintiff and brought the case to Sacramento private attorney Eric Grant to litigate — revealed the amount of the settlement in an exclusive interview with The Advertiser.

"The amount of the settlement is important public information that should be disclosed by a charitable institution that receives tax-exempt status from the Internal Revenue Service," Goemans said in a telephone interview.

The lawsuit challenging the schools' admissions policy was the first case of its kind to reach the doors of the U.S. Supreme Court and stirred enormous controversy in Hawai'i.

Critics of the settlement pointed out that additional legal challenges could still be mounted against the admissions policy, and news of the $7 million that the schools paid could increase the chances of new lawsuits.

Local attorney David Rosen, who made news last year by actively seeking plaintiffs for a new challenge to the admissions policy, said yesterday he is preparing a suit against Kamehameha Schools.

Kamehameha Schools, previously known as Bishop Estate, is a nonprofit organization with assets of $7.7 billion.

Grant, appearing yesterday at a University of Hawai'i law school symposium on the lawsuit, known as John Doe vs. Kamehameha Schools, declined to discuss the settlement when told that Goemans had disclosed the $7 million figure.

Kamehameha Schools' lead attorney in the lawsuit, Kathleen Sullivan, a former dean of the Stanford University law school, also declined comment.

"Terms of the settlement are inviolate," said Sullivan, also a participant at the UH symposium yesterday.

Ann Botticelli, spokeswoman for the Kamehameha Schools board of trustees, also declined to comment on Goemans' statements or the size of the settlement.

The settlement says that anyone who discloses its contents is subject to a $2 million penalty, but Goemans said he was not a party to the agreement and never signed it.

Goemans, who is recovering from heart surgery, said yesterday that he was opposed to the $7 million settlement but that "it was the client's decision" to accept it.

PART OF TAX RECORD

Goemans said an attorney representing Grant breached the confidentiality clause by mailing a copy of the agreement to Goemans last year.

Goemans added that Kamehameha Schools must disclose details of the settlement on its 2007 tax return, which is due to be filed later this year, and on annual financial reports the charity is required to file with the state attorney general's office and with the state court.

Tax returns of nonprofit institutions such as Kamehameha Schools are public records under federal law. The institution's annual financial accountings — which date to its founding by Princess Bernice Pauahi Bishop in 1888 — are also open to the public.

Kamehameha operates three campuses — its flagship at Kapalama Heights on O'ahu, one on Maui and another on the Big Island — for the benefit of children of Hawaiian ancestry.

The institution plays a central role in Hawai'i society, in part because of its financial clout and in part because of its mission to educate children of Hawaiian ancestry. It is also the state's largest private landowner.

There are about 70,000 school-age children with Hawaiian blood, and 5,400 students were enrolled at Kamehameha's various schools last year. Kamehameha served 30,000 other children and adults through outreach programs and through its support of charter schools.

TO SUPREME COURT

Hawai'i federal Judge Alan Kay initially dismissed the John Doe lawsuit in November 2003, upholding the schools' argument that the admissions policy helped address cultural and socio-economic disadvantages that have beset many Hawaiians since the 1893 overthrow of the Hawaiian monarchy.

The plaintiffs appealed that decision to the 9th U.S. Circuit Court of Appeals, which overturned it in a three-judge decision in 2005. That ruling prompted protest rallies, prayer vigils and other gatherings around the state in support of the schools.

Lawyers for Kamehameha Schools then asked that all members of the appellate court review the matter and the full court reversed the three-judge panel's decision by an 8-7 vote in December 2006.

Grant then petitioned the U.S. Supreme Court to hear the case, and last May, on the eve of the high court announcement on whether it would take the case, the matter was settled out of court.

"We didn't think that there was a strong possibility (of losing) but that risk is always out there," J. Douglas Ing, chairman of the Kamehameha board of trustees, said in announcing the settlement in 2007. "There are no guarantees and there certainly were no guarantees from our lawyers that we would win the case."

Grant, the attorney for John Doe, said after the case was settled, "Obviously, a settlement is not exactly what either side wanted. But it is something both sides eventually came to terms on."

SPATS OVER FEES

Goemans is involved in a continuing dispute with John Doe, whose identity has never been revealed, and with Grant over how much money Goemans should receive for his part in the case.

Grant received 40 percent of the overall settlement — $2.8 million — although he had to sue the plaintiff and the plaintiff's mother in federal court in Sacramento last year to collect the money, according to Goemans and federal court records.

That collection lawsuit was filed in June after Kamehameha had paid the $7 million settlement. The dispute over the payment of Grant's fee was settled and dismissed in September.

Goemans said he asked John Doe and Jane Doe for 25 percent of the total settlement — $1.75 million — but has not yet received a response.

Grant filed a separate lawsuit against Goemans in California state court last year regarding how much compensation Goemans is owed for his part in the case.

That suit is still pending, although Goemans said he believes it is groundless and will be dismissed.

Grant yesterday declined comment on the collection lawsuit he filed in Sacramento against his own clients or the related action he filed against Goemans.

Goemans said he has received $20,000 in compensation to date from John Doe and his mother and is contemplating filing a new legal action of his own against them.

Honolulu Advertiser

~ ~ ~

February 9, 2008

School's $7M deal
raises ire, eyebrows

By Jim Dooley, Advertiser Staff Writer

Yesterday's disclosure of the $7 million payment made by Kamehameha Schools to settle a civil rights lawsuit prompted questions and anger from individuals on both sides of the schools' controversial admissions policy that gives preference to students of Native Hawaiian ancestry.

"It does seem like a lot of money. It sure would be if it was in my pocket," said University of Hawai'i law school professor Jon Van Dyke, who served as a legal consultant to Kamehameha in the lawsuit.

Van Dyke said yesterday he wasn't part of the settlement discussions and still believes the payment led to the right outcome for the school.

The settlement was signed in May just before the U.S. Supreme Court was scheduled to announce whether it would hear an appeal of the case. Terms of the settlement had been kept confidential until this week. John Goemans, an attorney for the plaintiff in the case, revealed the $7 million figure to The Advertiser.

The settlement meant that an earlier 8-7 vote by the 9th U.S. Circuit Court of Appeals in favor of Kamehameha's admissions policy is still the prevailing law.

H. William Burgess, a local attorney who filed legal papers with the U.S. Supreme Court supporting the plaintiff in the case, said yesterday, "Wow. The settlement was much larger than I thought."

Burgess said he still believes the case should have been heard by the Supreme Court so that legal questions surrounding the school's Hawaiians-first admissions policy were settled.

"I actually think the trustees of the Kamehameha Schools have a legal duty, when there's a legitimate legal question about what they're doing, to seek a resolution of the issue," Burgess said.

News of the $7 million payment provoked more than 500 online postings to The Advertiser that variously criticized school officials who approved the payment and the lawyers and the client who received the money.

Beatrice "Beadie" Dawson, a native Hawaiian attorney who is active in Kamehameha Schools affairs, said yesterday the settlement itself and now news of the $7 million amount "are like an open invitation for more lawsuits."

"I was very dismayed by news of the settlement last year and I was very surprised by the size of it today," Dawson said.

Hawai'i attorney David Rosen, who last year announced plans to file another legal challenge to the school's admission policy, confirmed this week that the lawsuit is taking shape but has not been filed.

He issued a news release yesterday reacting to the settlement amount that said, "The people of Hawai'i should be outraged that the trustees of Kamehameha Schools place a higher value on discriminating rather than educating."

Goemans, the lawyer who publicly revealed the $7 million figure, said he believes the settlement should be a matter of public record given Kamehameha Schools' status as a tax-exempt charitable institution.

Goemans helped bring the civil rights lawsuit against Kamehameha in 2003 on behalf of a non-Hawaiian student denied admission to the high school. The student and the student's mother, who live on the Big Island, have never been identified except as John Doe and Jane Doe.

Goemans also said the settlement is subject to review by the Internal Revenue Service and by the state attorney general's office, which oversees Kamehameha Schools' annual financial accountings filed with state Probate Court.

Attorney General Mark Bennett could not be reached for comment yesterday.

David Fairbanks, a Honolulu lawyer serving as the appointed "master" who must review Kamehameha's financial fillings for the Probate Court, did not respond to a telephone message for comment yesterday.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.

Honolulu Advertiser

~ ~ ~

February 9, 2008

$7M

An attorney involved in a challenge to Kamehameha Schools' Hawaiians-only policy reveals the amount of a settlement

By Ken Kobayashi, Honolulu Star-Bulletin

Kamehameha Schools made the first move to settle a legal challenge to their admissions policy giving preference to native Hawaiians and later agreed to pay $7 million, a lawyer involved in the case said yesterday.

John Goemans, an attorney for an unnamed non-native Hawaiian student who filed a lawsuit contesting the policy, said the charitable trust offered for the first time to talk about an out-of-court settlement last May, just days before the U.S. Supreme Court was to decide whether to hear the case.

Goemans, a former Big Island attorney recuperating in Florida from heart surgery, and Sacramento, Calif., lawyer Eric Grant, the lead attorney, represented the unnamed student and his mother.

"They (the schools) approached Eric and said we wanted to settle and we have to settle by Friday morning," when it was believed the high court was to make a decision about accepting the case, Goemans said.

He said it appeared the high court would accept their appeal of an 8-7 decision by the 9th U.S. Circuit Court of Appeals that upheld the policy.

"They (the schools) were worried about losing in the Supreme Court," Goemans said.

Goemans said he did not know how Grant and the Kamehameha Schools arrived at the $7 million figure.

The hotly disputed federal civil rights lawsuit caused a firestorm of controversy among Kamehameha Schools supporters who believed the challenge struck at the more than century-old admissions policy and the heart of the charitable trust's mission to educate children of Hawaiian ancestry.

The confidential settlement was announced on May 14. Those connected with the case repeatedly refused to disclose the terms.

Goemans said he was disclosing the amount because he said he recently learned from Internal Revenue Service officials that Kamehameha Schools, a tax-exempt charitable trust, cannot keep the figure confidential.

"Because exempt organizations operate in the public good, you got to report all your expenses with particularity, and you cannot keep information relative to those expenses confidential," he said. "It's in the public interest to have full disclosure."

Ann Botticelli, Kamehameha Schools spokeswoman, said yesterday the settlement contained a confidentiality clause.

"We intend to honor the terms, and we will not be discussing the settlement or John Goemans' assertions," she said.

Grant said yesterday he had no comment.

Kamehameha Schools, a multibillion-dollar charitable trust and the state's largest private landowner, was established under the 1883 will of Princess Bernice Pauahi Bishop. It educates more than 6,700 students at its flagship campus at Kapalama Heights, two other campuses on Maui and the Big Island, and 31 preschools throughout the state.

Senior U.S. District Judge Alan Kay upheld the school's Hawaiians-first policy, but a panel of the appeals court in San Francisco ruled 2-1 that the practice violated federal civil rights laws. That decision triggered statewide protests and marches by school supporters.

Later, a larger appeals court panel voted 8-7 to uphold the policy.

It was an appeal by Grant of that 8-7 ruling that was on the doorsteps of the U.S. Supreme Court when the settlement was announced.

At the time, school officials indicated that the settlement calling for the dismissal of the lawsuit leaves intact the appeals court's 8-7 decision upholding the admissions policy.

But the dismissal does not guarantee that another lawsuit might surface and make its way to the high court, although it would first have to go through the federal trial and appeals courts, where the 8-7 ruling would be considered to be binding on the issue. But even if those who file the new lawsuit lose on those two levels, they could still ask the high court to review the case.

Honolulu attorney David Rosen said he has plaintiffs for a lawsuit to challenge the admissions policy. He said the settlement does not affect his case. Rosen said he expects the suit will be filed this year.

Goemans said Grant received 40 percent, or $2.8 million of the $7 million. Goemans said he is preparing to file his own lawsuit seeking to recover a "reasonable percentage" of the $7 million for his work in the case.

Goemans said he found the unnamed student and arranged for Grant to be the attorney for the student and his mother.

"I put the whole thing together," Goemans said. "But for me there would not have been a $7 million payment."

The student never was admitted to Kamehameha Schools because his case was pending. He has since graduated from high school and had been attending college, Grant said last year.

http://starbulletin.com/2008/02/09/news/story02.html

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February 9, 2008

Amount of settlement
raises critical concern

By Robert Shikina, rshikina@starbulletin.com

Supporters and critics expressed surprise yesterday at the $7 million Kamehameha Schools paid a student to settle a lawsuit disputing its Hawaiians-first admission policy.

One Kamehameha Schools alumnus says disclosure of the settlement with the anonymous, non-Hawaiian student will prompt questions among Hawaiians.

"I'm not happy with $7 million," said Kamehameha Schools alumnus Jan E. Hanohano Dill. "Unfortunately, that's a lot of money, and it's going to create a lot of questions in the Hawaiian community whether it was right or wrong and to continue."

Dill, also a board member of Na Pua a Ke Ali'i Pauahi, a nonprofit group whose members include students, parents, and alumni of Kamehameha Schools, said he continues to support the school's decision.

"I don't know the details, and I think that's something that has to be cleared," he said. "You settle because you want to avoid costs that would be incurred as you go forward."

He added, "I have to believe that they understood that this was something good for the Hawaiian people. ... It will be clear as things unfold whether that was true."

Dill, who is also president of the nonprofit Partners in Development Foundation, said the admissions policy must eventually be addressed and that the settlement avoids this case but does not stop other cases.

Marion Joy, former vice president of Na Pua, called the settlement a "misuse of trust funds."

"The trust is continually going to be challenged," she said. "This is not going to be the last. ... As far as settling for the particular lawsuit, it's not in the best interests of the beneficiaries (of the 1883 will of Princess Bernice Pauahi Bishop)."

Kamehameha Schools declined comment.

Honolulu attorney David Rosen, who has sought potential clients to sue Kamehameha over its admissions policy after the settlement, sent out a statement yesterday that said the $7 million settlement was used to "buy off this case."

He added that the trustees should open a campus on the Leeward Coast of Oahu and possibly Molokai where increased educational opportunities are needed.

H. William Burgess, a retired attorney and founder of Aloha for All, a group opposed to Hawaiian sovereignty, said the settlement raises questions about the proper use of the trust funds.

"Normally, trustees, if they're doubtful about doing something, they ask the court to give them instructions," he said. "Yet in this case, the biggest charitable trust, probably in the nation, instead of welcoming the opportunity to get the highest court in the land to settle it, they pay $7 million to leave it open. And it is very much open."

http://starbulletin.com/2008/02/09/news/story03.html

* * *

From The Catbird Seat website:

The Wise Old Owl asks: How much of the settlement amount came from Kamehameha’s insurance companies, and how much came from the trust funds? How much did Kamehameha Schools (and/or their insurance company) spend for defense costs in this case before they decided to settle? Who is their insurance company? Their insurance broker? Who actually signed the Settlement Agreement?

http://www.kycbs.net/Bishop7.htm

* * *

Excerpts from the book ...

BROKEN TRUST

By Samuel P. King & Randall W. Roth

EMPLOYEES WHO QUESTIONED Bishop Estate's doings were not treated so well. Bobby Harmon was a prime example.

Harmon began working at Bishop Estate in 1988 in the area of risk management. He had solid credentials and worked hard. For eight years his job evaluations were excellent, and he was promoted to president of P & C Insurance, a wholly owned subsidiary of Bishop Estate. Harmon's job required him to evaluate risks, decide on insurance coverage and negotiate with brokers of independent companies for the best prices....

During the two years Harmon headed up P & C, from 1994 to 1996, Henry Peters was lead trustee for asset management. Between Harmon and Peters was Nathan Aipa (the estate's chief in-house lawyer). Harmon came to believe that serious breaches of trust were occurring, exposing Bishop Estate to potentially large lawsuits and putting its tax-exempt status at risk.

For example, the trust's tax counsel had stressed to Harmon the need for Bishop Estate to keep its for-profit subsidiaries, such as P & C, at arm's length to preserve the trust's tax-exempt status. Yet Harmon knew from experience that although he was president of P & C, it was Peters and Aipa who effectively ran the company.

Harmon also was concerned about decisions that seemed to go against the best interests of both P & C and Bishop Estate. Against his recommendation, a big insurance contract was given to a favored vendor at a cost more than double what Harmon thought he could have secured through competitive bidding.

Harmon also found instances in which trustees had not brought in the estate's insurance carrier to defend the claims. This meant the trust would unnecessarily pay its own defense costs, and trust funds would be used to pay any damages that the insurance company would refuse to pay. This subjected the trust estate to big risks without any compensating benefit that Harmon could see.

What Harmon did not realize at the time was that trustees had their own reasons for keeping under wraps the details of certain trust investments -- such as the McKenzie (Methane Corp.) deal in which four trustees secretly held personal interests.

In November 1996 Harmon made a list of things he had witnessed that made no sense to him or that appeared wrong, and (gave) it to Aipa and Peters. They told him not to concern himself with these matters; he should just do what they told him to do. But Harmon believed that his role as president of P & C required him to do more. He knew that new IRS regulations permitted someone in his position to be fined if a charitable trust incurred unnecessary expenses, and he saw no reason to subject himself to personal liability.

Harmon reported his concerns to the trust's outside auditors, Coopers and Lybrand. ... By the end of the following month, Harmon had been fired for "wrongful actions" and hit with an injunction that forbade him from discussing the circumstances of his firing with anyone. This was about six months before the publication of "Broken Trust."

HARMON tried to find a job elsewhere in Hawaii, but without success. ... And because the file said he had been fired for wrongful actions, he could not even collect unemployment benefits.

Harmon went to eight local law firms asking if they would be willing to sue Bishop Estate. ... All eight firms turned him down. Then Harmon sent a long memo to several government officials and media reporters, saying he wanted them to know what had happened.

Within hours, Bishop Estate lawyers hauled him into court for breaching the confidentiality clause in his employment contract and violating the terms of an injunction. Judge Bambi Weil ordered everyone who had received materials from Harmon to return them to Bishop Estate. The estate's director of communications, Elisa Yadao, declined to comment other than to say that Harmon was under injunction "because of his unauthorized removal of Estate property."

Harmon had personally witnessed what he believed to be serious wrongdoing within a charitable trust. He had tried to get help from within the organization, then from its outside auditors. When he was punished for doing this, he expected the judge to encourage him to tell all. Instead, she muzzled him....

~ ~ ~

RESPONSE TO EXCERPT FROM JUDGE EDEN ELIZABETH HIFO:

The Star-Bulletin recently printed excerpts from the book "Broken Trust: Greed, Mismanagement & Political Manipulation at America's Largest Charitable Trust" (University of Hawaii Press), by Judge Samuel King and law professor Randall Roth.

The March 1 excerpt concerned former Bishop Estate employee Bobby Harmon, a risk management expert who was fired after he questioned some of the estate's business practices. After Harmon communicated with government officials and reporters, Bishop Estate took legal action against him for breaching a confidentiality clause in his employment contract. The dispute was heard by Judge Bambi Weil (now known as Eden Elizabeth Hifo). Judge Hifo disputes the retelling of the Harmon incident in "Broken Trust." Her letter to the Star-Bulletin and the authors is below, along with a reply from Roth and King.

(Catbird Note: Emphasis and links in the following letters are provided by The Catbird Seat - not by the Star-Bulletin)

~ ~ ~

Authors erred in describing court proceedings

This is to correct inaccuracies regarding court rulings as to Bobby Harmon published March 1 in the Star-Bulletin, as an excerpt from the book of federal Judge Samuel King and law professor Randall Roth. The correct information is public record and available on the Hawaii State Judiciary Web site through Hoohiki information network.

As a former news reporter and current circuit court judge for the state of Hawaii, I greatly value accuracy and accountability. The excerpted publication inaccurately asserted that court rulings had silenced Bobby Harmon's whistleblowing. The court records in that case (Civil No. 97-0-0512) show that Harmon was subject to a stipulated (agreed by Harmon's first attorney) injunction prohibiting him from disclosing Bishop Estate confidential information and documents he obtained as an estate employee; another of Harmon's attorneys conceded Harmon had violated the stipulated injunction; and Judge Bambi Weil, in ruling on the stipulated and later modified injunction, expressly allowed disclosure to law enforcement agencies, the state attorney general, who at the time was investigating Bishop Estate, and any master reviewing Bishop Estate for the probate court.

The court also allowed Harmon to speak with the Internal Revenue Service if approached by them and later disclosed to the parties that Harmon documents had been provided through an intermediary to the IRS. At the time, 1997-98, the Whistleblowers Protection Act, chapter 378 of Hawaii Revised Statutes, protected employees who report or are about to report violations of law to a public body, which included law enforcement agencies, state executive agencies and the judiciary, among others.

The facts regarding the court records and rulings are set forth below.

In addition, the publication inaccurately asserted that Harmon could not collect unemployment benefits after Bishop Estate discharged him. Indeed, Bishop Estate sought to disqualify Harmon from unemployment benefits, but Harmon appealed the adverse state department ruling to the circuit court in Civil No. 98-2394. In that case Judge Weil ruled Harmon was entitled to unemployment compensation. Bishop Estate appealed the circuit court ruling to the Hawaii Supreme Court, but in October 2000 the parties filed a stipulation to dismiss that appeal. Thus, the circuit court ruling allowing unemployment benefits remained in effect. The May 27, 1999, circuit court order was signed by Harmon, who represented himself in that case before Judge Weil. The court order reads in relevant part as follows:

"(T)here was probative, substantial and reliable evidence in the record to support the finding that Appellant (Harmon) ignored his superiors directives because he concluded that he would be violating the IRS code or the insurance commissioners regulation if he complied with the directive. It is not disputed that Appellant was acting on information that indicated such action could or would jeopardize Employers (Bishop Estate's) tax-exempt status....

"The Court finds because of those uncontested findings for which there is support in the record, Appellant cannot be denied unemployment benefits because he was not fired for misconduct as Hawaii Revised Statutes Section 383-30(2) defines that term.

"The record shows there was no willful or wanton disregard of Employer's interests; Employer being KS/BE, the charitable estate as opposed to any individual who worked for KS/BE, and that his actions were an exercise of his discretion (as KS/BE's risk manager)."

Clearly, the authors of "Broken Trust" erred when writing because the (KS/BE) file said Harmon had been fired for wrongful actions, he could not even collect unemployment benefits. The court ruled he could.

Apparently equally unresearched and therefore inaccurate is the excerpt regarding court rulings on Mr. Harmon in the context of whistleblower. The publication quote is contrasted below with excerpts from enclosed public records in the court Web site.

Quote from "Broken Trust" excerpt:

"Then Harmon sent a long memo to several government officials and media reporters, saying he wanted them to know what had happened. Within hours, Bishop Estate lawyers hauled him into court for breaching the confidentiality clause in his employment contract and violating the terms of an injunction. Judge Bambi Weil ordered everyone who had received materials from Harmon to return them to Bishop Estate. ...

"Harmon had personally witnessed what he believed to be serious wrongdoing within a charitable trust. ... (H)e expected the judge to encourage him to tell all. Instead, she muzzled him."

Circuit Court public records for Civil No. 1CC 97-0-000512, P&C Insurance Co., Inc. et. al v. Bobby N. Harmon include the following:

» Feb. 20, 1997, before Judge Karen Radius. Mr. Harmon was represented by attorney J. Marshall. Plaintiffs were represented by attorneys