Bobby N. Harmon, CPCU, ARM
Honolulu, Hawaii 96818
June 28, 2000
VIA FAX @ 523-6313
And U.S. Mail
Chief Executive Officer
Kamehameha Schools
567 South King Street, Suite 200
Honolulu, Hawaii 96813
Re: Kamehameha Schools Bishop Estate Pension Plan
Dear Dr. McCubbin:
A number of circumstances suggest that fraud may be involved in the handling of the subject pension plan, of which I am a beneficiary:
1. While employed by KSBE as Risk/Insurance & Safety Manager from November, 1988 to November, 1996, I had the responsibility for handling the Fiduciary Liability Insurance and Fidelity Bonds for the organization. During this time, the Plan Co-ordinator was Mary Ann Inouye.
2. Ms. Inouye indicated to me that there were some problems with a separate “deferred compensation” program that had been created for the estate’s trustees (and possibly other executives).
3. The company that administers this pension program is Prudential Insurance. Prudential has been the subject of several investigations and lawsuits involving fraud and, in fact, has been found guilty in some cases.
4. The auditor for this Plan, as well as for KSBE and most of its subsidiaries, is PricewaterhouseCoopers, LLP. KSBE’s principal representative for this firm Mark McConoghy. Mr. McConoghy has several apparent conflicts of interest in this situation. He has acted as a political lobbyist for the estate trustees in their controversial attempts to defeat the “interim sanctions” provisions of the IRS code. He has also been a co-investor with the estate in several business ventures.
5. The Annual Reports for the Pension Plan are also prepared by the accounting firm of PricewaterhouseCoopers. These reports contain no specific disclosures regarding either the separate deferred compensation plans for the prior Trustees, or of the conflicts of interest of Mark McConoghy.
These circumstances raise considerable doubt as to the proper handling of these employee pension funds. As one of the beneficiaries, I would strongly suggest that an independent audit of the plan is warranted at this time.
Would you please advise of your intended actions to assure the safety and appropriate handling of these pension funds.
Thank you very much for your attention to this matter.
Very truly yours,
Bobby N. Harmon, CPCU, ARM
This is a leaf from
~ ~ ~
To go to the top of the tree