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Reservation for=20 a Broken Trust?
Special from=20 Hawaii Free Press
By = Andrew=20 Walden, 8/27/2005 1:12:43 AM

The Aug. 25, 2005, = announcement of=20 an agreement between Gov. Linda Lingle and the Bush=20 administration=E2=80=99s Department of Justice on four = amendments to=20 the Akaka Bill (S147) increases the chances of the = Bill=E2=80=99s=20 passage in the U.S. Senate and the House. Since no = court in=20 the history of the United States has ever overturned=20 Congressional approval of a tribal group, there is = cause to=20 look ahead at the possible forms a Hawaiian "tribal"=20 government could take.=20

U.S. history has precedent for two types of native=20 organizations: Indian reservations and Alaskan native=20 corporations. Alaskan native corporations are = for-profit=20 corporations owned and operated by the members of = native=20 Alaskan tribes as stockholders. Each member is an = equal=20 shareholder. They are subject to most of U.S. = corporate law,=20 but are able to protect the tribal benefits from=20 race-discrimination lawsuit claims by providing = benefits on=20 the basis of tribal membership rather than race -- = even when=20 the two are indistinguishable. Alaskan natives have = been able=20 to enjoy the profits coming from their corporate = assets, thus=20 increasing their economic status. Indian Reservations, = on the=20 other hand, operate often as a power unto themselves = without=20 state oversight and with very limited federal = oversight. For=20 that reason, poverty and corruption are the norm on = many U.S.=20 Indian reservations.=20

Contrary to popular opinion, Indian reservations = have a=20 history in Hawaii. An Oct. 12, 1999, article in the=20 Honolulu Star-Bulletin describes the efforts of = Kamehameha Schools/Bishop Estate (KSBE) trustees in = 1995 to=20 evade oversight of their corrupt doings. The = Trustees=E2=80=99=20 self-serving investments caused losses of $264,090,257 = in 1994=20 alone. To avoid scrutiny, they considered moving KSBE=20 corporate headquarters out of Hawaii to the windswept = plains=20 of the Cheyenne River Sioux Indian reservation in = South=20 Dakota.=20

In an apparent attempt to circumvent state and = federal=20 oversight, the Bishop Estate paid Washington = D.C.-based (law=20 firm) Verner Liipfert Bernhard McPherson and Hand more = than=20 $200,000 to look into moving the estate's legal = domicile, or=20 corporate address, to the mainland, sources said.

Verner Liipfert, whose local office is headed by = former=20 Gov. John Waihee, identified the Cheyenne River Sioux=20 Reservation as the top relocation prospect after = reviewing the=20 legislative, tax and judicial environments of 48 = mainland=20 states and Alaska.

The study was part of a broader effort by the = former=20 board members to lobby against federal legislation = limiting=20 trustee compensation and to convert the tax-exempt = Bishop=20 Estate to a for-profit corporation.

The KSBE trustees=E2=80=99 efforts are also = described in "The=20 Cheating of America" by Charles Lewis and Bill Allison = of The=20 Center for Public Integrity. They quote former Hawaii = Attorney=20 General Margery Bronster explaining KSBE=E2=80=99s = actions: "Their=20 main motivation was to avoid oversight from the State = Attorney=20 General and the IRS."

The Honolulu Star-Bulletin further points = out:=20

Gregg Bourland, chairman of the Cheyenne River = Sioux=20 tribal council =E2=80=A6 said there is good reason for = an entity like=20 the Bishop Estate to make inquiries about changing its = domicile to the South Dakota reservation ...

Since the 1800s, the Cheyenne River Sioux have = had a=20 government-to-government relationship with the United = States=20 which allows them to operate their own police force, = court=20 system and legislative functions.

Such a system may shield the trust from Hawaii = Probate=20 Court jurisdiction, although Bourland was unsure if = the IRS=20 would continue to oversee the trust.

Such a move would have also shielded Bishop Estate = from the=20 investigations that state Attorney General Margery = Bronster=20 was forced to launch as "Broken Trust" revelations = emerged in=20 the press. According to Lewis and Allison the = activities=20 Bishop Estate trustees were attempting to shield = included:=20

Giving themselves significant pay raises, even = while=20 programs at the school were being cut;=20
Moving profits from the estate=E2=80=99s taxable = subsidiaries=20 back into the (non-profit) estate to lessen the=20 subsidiaries=E2=80=99 tax burdens;=20
Investing in questionable ventures recommended = by a=20 trustee=E2=80=99s personal acquaintances, including = an Internet=20 directory of would-be-adult-film actors and casting = agents;=20
Frequenting adult entertainment clubs and = casinos using=20 money from the charitable trust=E2=80=99s coffers, = reportedly=20 inviting state legislators on such trips; and=20
Lobbying Congress to defeat or alter legislation = designed to give the IRS more authority to penalize = their=20 multi-million dollar compensation packages. =

As U.S. District Judge Samuel King told the = Honolulu=20 Star-Bulletin:

"It's another indication of how arrogant, greedy = and=20 insensitive this whole bunch is ... Their claim that = they are=20 supporting Princess Pauahi's will is laughable."

While looking into a move to the Cheyenne River=20 Reservation, KSBE trustees paid $900,000 for Verner, = Liipfert=20 to lobby Washington against the 1996 "Intermediate = Sanctions=20 Act" which, as Lewis and Allison explain:

...(would impose) an excise tax on "insiders" at = non-profit organizations who partake in "excessive = benefit=20 transactions" --exactly the sort of transactions that = the=20 Bishop Estate trustees were involved in for years.

Among those enlisted by the Bishop Estate was = former=20 Hawaii governor John Waihee, who after leaving the=20 gubernatorial mansion joined Verner, Liipfert. Waihee = met with=20 Clinton=E2=80=99s then deputy chief of staff, Erskine = Bowles, in late=20 1995 to discuss the bill; he and his wife have also = spent the=20 night at the White House as a guest of the President=20 (Clinton). Waihee=E2=80=99s partner at Verner = Liipfert, former Senate=20 majority leader George Mitchell, also contacted = Clinton=E2=80=99s then=20 chief of staff, Leon Panetta, about the bill.

The Akaka Bill is justified by its supporters as = necessary=20 for the defense of public and private native Hawaiian=20 entitlement programs set up beginning with the 1884 = founding=20 of the Bishop Estate, continuing with the 1920 = Hawaiian=20 Homelands Act and the 1978 creation of the Office of = Hawaiian=20 Affairs.=20

These programs are thrown into question by what = Hawaiian=20 leaders refer to as "the lawsuits" -- starting with = Rice v.=20 Cayetano. The Feb. 23, 2000, U.S. Supreme Court = decision=20 in the Rice v Cayetano case ended Hawaiian-only = elections for=20 the Office of Hawaiian Affairs (OHA). Rice=E2=80=99s = attorney at the=20 time of filing in 1996 was John Goemans, a former = Hawaii=20 Democratic state legislator who describes himself as a = "left=20 wing liberal" in an Oct. 27, 2003, interview with = The=20 Honolulu Advertiser. Representing the state of = Hawaii=20 before the U.S. Supreme Court was John Roberts. = Roberts is now=20 President Bush=E2=80=99s nominee for the U.S. Supreme = Court.=20

But these were not the only attacks on Hawaiian=20 entitlements in the 1990s. In fact what Hawaiian = leaders refer=20 to as "the lawsuits" began almost exactly at the same = time as=20 the Broken Trust scandal revelations emerged. Lokelani = Lindsey, the last of the five "Broken Trust" Bishop = Estate=20 trustees, was forced to resign Dec. 16, 1999. A few = months=20 later, in 2000, the first version of the bill that = bears his=20 name was introduced by Sen. Daniel Akaka.=20

Passage of the Akaka Bill would open up debate and=20 negotiations on the form and scope of a new Hawaiian=20 government. This could bring lobbying for an Indian=20 Reservation by those political forces wishing to = restart their=20 looting of Princess Bernice Pauahi=E2=80=99s legacy.=20

The corrupt forces who believe in moderation to = avoid=20 detection may favor the Alaskan Native Corporation = model. To=20 understand the danger posed by adoption of the Indian=20 Reservation model, consider this: over 100 Hawaii = Democrat=20 politicians (and one Republican) have been charged, = convicted=20 and sentenced for campaign spending violations and = other=20 illegal political schemes since 1997.=20

Current OHA trustees include OHA Vice President, = John=20 Waihee IV, son of former governor John Waihee III.=20

Another current OHA trustee is Oswald Stender who = resigned=20 as a Bishop Estate trustee in 1999. Singled out for = praise by=20 the five authors of the key "Broken Trust" Honolulu = Star-Bulletin article, Stender nonetheless was one = of the=20 five trustees whose high pay forced the IRS to = threaten to=20 revoke non-profit status for KSBE.=20

OHA Chief Counsel, Robert Klein was an associate = justice of=20 the Hawaii Supreme Court until he resigned on Feb. 1, = 2000. He=20 authored the PASH decision in 1995 which includes the=20 statement, "western understandings of property law = =E2=80=A6 are not=20 universally applicable in Hawaii." An editorial in the = Jan.=20 19, 2000, Honolulu Star-Bulletin explains:=20

Klein=E2=80=99s most notable act as a Supreme = Court justice may=20 have been his authorship of a decision allowing native = Hawaiians to go onto private property to engage in = traditional=20 religious, cultural and gathering practices ...

Klein disagreed with the decision by the other = four=20 justices in December 1997 to withdraw from the role of = appointing trustees for the Bishop Estate, calling it = an=20 "uncharted leap of blind faith."

Klein admits giving "recommendations" for = Kamehameha School=20 admission while serving on the Supreme Court bench. As = an=20 April 3, 2001, Honolulu Star-Bulletin article = explains:

'''In sworn testimony, the (Bishop) estate's = admissions=20 director, Wayne Chang, said that former (Bishop = Estate)=20 trustee Lokelani Lindsey ordered him to admit the = child only=20 after she received a request from then-state Supreme = Court=20 Associate Justice Robert Klein ..."

Chang -- in a Aug. 11, 1998, deposition taken in = preparation for the trial to oust Lindsey -- said = ex-board=20 members Lindsey, Gerard Jervis and Henry Peters and = senior=20 school officials pulled strings for friends and = relatives of=20 several politically connected isle families, = including:=20

A distant relative of ex-Gov. John Waihee.=20
A relative of Big Island rancher Larry Mehau.=20
Former state Sen. Milton Holt's sons.

The former trustees denied that they influenced = the=20 admission process. However, investigations by the = Internal=20 Revenue Service, the Attorney General's Office and the = estate's internal auditors concluded that trust = officials=20 improperly influenced the Kamehameha Schools' = admissions and=20 financial aid awards.

Lindsey declined comment, but Klein confirmed = that he=20 spoke with the former trustee after the child's = mother, a=20 longtime friend, asked him to put in a good word. = Klein said=20 he saw no conflict in the request and added that = school=20 administrators were welcome to ignore his = recommendation.

'''"The fact of the matter is, judges recommend = children=20 and people for jobs (and schools) all the time, = whether it's=20 Punahou Schools or Kamehameha Schools," said Klein, = who is now=20 in private practice. "That's what judges do. That's = what=20 people do in this community ..."

Those kind of "doings" would be facilitated by lack = of=20 state and federal legal oversight -- such as on an = Indian=20 reservation. Recent debate over the support for ANWR = drilling=20 by Hawaii Senators Daniel Akaka and Daniel Inouye is a = further=20 reflection of opposition to the Alaskan Native = Corporations=20 (ANCs). In an April 20, 2005, article published in = Honolulu=20 Weekly and later in the Hawaii Island = Journal,=20 Lance Holter, the Maui Group Chairman and Conservation = Chair=20 for the Hawaii Sierra Club, condemns as "corporate" = those ANCs=20 which dare to support oil drilling on their own lands: =

[Inouye] speaks about these 229 tribes, which = are really=20 corporate entities. They are not tribal governments; = they are=20 not representative of the tribe.

Robin and Jade Danner are leaders of the Council = for Native=20 Hawaiian Advancement (CANH). Native Hawaiians who = lived for=20 many years in Barrow, Alaska before their return to = Kauai, the=20 Danner sisters have extensive experience with ANCs. = They might=20 reasonably be expected to champion the formation of = one or=20 more Hawaiian Native Corporations modeled on the = Alaskan=20 natives=E2=80=99 experience. Opposing the Danners = publicly, are the=20 secessionists calling for reestablishment of an = independent=20 Hawaii. A key series of 2003 articles attacking the = Danners=20 are authored by Anne Keala Kelly and reproduced on = several=20 secessionist Web sites. They are attacked for working = with=20 "corporate" ANCs and oil lobbyists in support of ANWR=20 drilling. Kelly, a supporter of independence, spoke in = Honolulu at an Aug. 23, 2005, Akaka Bill forum held in = the=20 Japanese Cultural Center.=20

Some Indian reservations (including Cheyenne River) = have=20 their own judiciary, legislature, and executive = branches of=20 government. The secessionists=E2=80=99 rhetoric could = lead them to=20 prefer these "sovereign" trappings. They claim the = Akaka=20 process represents a surrender of sovereignty on the = part of=20 the Hawaiian people. This sly choice of argument = against Akaka=20 will create a justification for participation in the = Akaka=20 process once that sovereignty has been "surrendered."=20

The "Nation of Hawaii" group led by convicted felon = Dennis=20 "Bumpy" Kanahele (who was pardoned by former Gov. = Benjamin=20 Cayetano) seems to be preparing for integration into = the=20 "official" Hawaiian institutions. One sign of this are = the=20 December 2004 speeches given by Kanahele=E2=80=99s = attorney Francis=20 Boyle in a series of "Nation of Hawaii" meetings = across the=20 state. The events were funded by the Office of = Hawaiian=20 Affairs. Boyle is a University of Illinois law = professor who=20 also works for the Palestine Liberation Organization, = the=20 Bosnian Government, and Chechen forces led by the = recently=20 departed Aslan Maskhadov. Notably, Boyle has also = represented=20 the Lakota Nation of the Cheyenne River Sioux Indian=20 Reservation. At a 1998 UH Hilo meeting, Boyle spoke = alongside=20 a Lakota representative to Hawaiian sovereignty = activists=20 discussing "human rights, land titles and the Hawaiian = Kingdom."=20

In his December 2004 speeches, Boyle advised the = assembled=20 crowds: "what we really need now is a government of = national=20 unity for the Kingdom of Hawaii. We need all the = disparate=20 groups and factions to come together and settle ... = this was=20 the situation that confronted the Palestinians 35 = years ago.=20 There were many different groups, and organizations, = and=20 factions. And yet eventually the late president Arafat = and his=20 organization Fatah were able to pull them all = together, and by=20 the process of consensus and debate and argument and = set up a=20 government."

The demented idea that the West Bank and Gaza show = a way=20 forward for the Hawaiian people is so distracting that = it may=20 prevent readers from noting what underlies: an implied = appeal=20 for independence activists to involve themselves in = OHA and=20 other official Hawaiian bodies. The array of social = programs=20 administered by OHA, Department of Hawaiian Home Lands = and the=20 private trusts such a KSBE are certainly the closest = thing to=20 an Hawaiian "government of national unity" existing = today.=20

With its own judiciary, legislature and executive = branch=20 and government-to-government relations with the U.S.=20 government, the Indian reservation model provided by = the=20 Cheyenne River Sioux creates enough of an illusion of=20 independence that they could justify it to their = supporters.=20 If the Akaka Bill passes, Hawaii can look forward to = an effort=20 on the part of the "sovereignity" activists and the = corrupt to=20 push this model.

Anyone following the stories of Enron, WorldCom, = Martha=20 Stewart, and other corporate disasters in the recent = news=20 knows that organizing as a corporation does not = guarantee=20 clean operations. But the corporate model does allow = oversight=20 by the state Attorney General, the IRS and other = public=20 agencies. This type of oversight brought these = scandals to=20 light and brought some malefactors to justice. This = same=20 oversight brought the Broken Trust trustees of KSBE = and some=20 of their cronies to heel, if only for them to then = scatter and=20 form new schemes. The Alaskan Native Corporation model = maximizes the protection given Hawaiian beneficiaries = and the=20 body politic of Hawaii by increasing the enforcement = power=20 necessary to expose and prosecute corrupt activities.=20

Hnolulu Star-Bulletin on Akaka Amendments:

http://starbulletin.com/2005/08/24/news/index5.html

Recognition of Tribes:=20

http://www.tribalnation.com/RescindStatus.html=20

PASH Decision: PASH decision KSBE activities:

http://www.the-catbird-seat.net/Bishop.htm

Honolulu Star-Bulletin "Broken Trust" = archive:

http://starbulletin.com/specials/bishop.html

Articles attacking the Danners:=20

http://www.angelfire.com/hi2/hawaiiansovereignty/AkakaAla= skaKelly.html

Boyle=E2=80=99s PLO Speech:=20

http://hawaii-nation.org/boyle-transcript-2004.html

Andrew Walden is the publisher and editor of = Hawaii Free=20 Press, a Big Island-based newspaper. He can be reached = via=20 email at mailto:andrewwalden@email.com

HawaiiReporter.com reports the real news, and = prints all=20 editorials submitted, even if they do not represent = the=20 viewpoint of the editors, as long as they are written = clearly.=20 Send editorials to mailto:Malia@HawaiiReporter.com =

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