Ka Wai Ola - Office of Hawaiian Affairs, Volume 16, Number 4, 1 April 1999 — The state's fiduciary standard [ARTICLE+ILLUSTRATION]

The state's fiduciary standard

APURPOSE OF government is to protect the people. As I pondered the topic for this month's artiele, that thought flowed through my mind. How appropriate it was to receive a memorandum from OHA's administrator addressed to all tmstees. It was short and "on target." Attached to his very short memo was a copy of Article XVI, Section 7 of tbe Constimtion of the State of Hawai'i titled "Complianee with Trast." "Any tmst provision whieh the congress shall impose, upon admission of this State, in respect of the lands patented to the State by the United States or the proceeds and ineome therefrom, shall be comphed with by appropriate legislation. Such legislation shall not diminish or hmit the benefits of native Hawaiians under Section 4 of Article XII." Every elected official and pubhc employee should keep this paragraph in mind every day as a reminder of our duty and responsibility to the people. This simple paragraph embedded in our state constitution affirms a trust relationship imposed upon the state, its elected officials and its public servants to uphold its tmst responsibilities to the beneficiaries of this public land trust. The state, through its elected and appointed officials, is the collechve trustee of this tmst. The state, through its legislative process, created the Office of Hawahan Affairs to serve as representative trustees of this pubhc land tmst on behalf of the Native Hawaiian beneficiaries.Therefore, we ean draw a conclusion that

the state is to maintain this tmst on behalf of all cihzens of the state, and OHA's duty is to ensure that such trust assets are managed appropriately on behalf of its beneficiary class, the Native Hawaiian. It is apparent, from its achons over the last 1 8 months, that the state clearly understands the duties and responsibilities under trast law. In its suit against the tmstees of the estate of Bernice Pauahi Bishop, it charges conflict of interest, illegal achvities and breach of fiduciary duties. If we use the same standard of evidence the ahomey general is using in this case, it is easy to see the state, as frustee of the pubhc land trast, is guilty of the same misconduct. The state has placed its own interests ahead of the interests of the

beneficiary; it has co-mingled general funds, investments and other assets. It has failed to act in a prudent manner in its land lease policies, eolleehon of lease rent and dissemination of its pro-rata share of lease ineome to the Native Hawaiian beneficiary. It has even passed legislation in direct violation of the intent and purpose of the above cited constitutional section. When the legislature and the governor instigated a eap on the revenue (pro-rata share) to be tumed over to OHA, they passed legislation whieh "diminished or limited the benefits of native Hawaiians" in direct violahon of this section of the state constitution. The question comes to mind, "Who watches the watchdog?" If the state is the "guardian" of the tmst, and the state is responsible to enforce eomplianee with all hust provisions, then who compels the state? Is it

II OHA? I think we know the answer to that question. It has always been 1 my belief that we ean be understanding and patient as long as the state shows a reasonable effort to

acknowledge the problem and takes reasonable and good faith efforts toward correcting the problems. However, pahenee and good will have a deadline. I believe this deadline is approaching. If these problems are not immediately addressed, we, as responsible OHA trustees, must take every legal aehon available to ensure eomplianee with the tmst, just as the attorney general has stated she must do to protect Bishop Estate against adverse actions of the tmstees of the estate. What is good for the goose is certainly good for the gander ! "For with God, nothing shall he impossible." Luke 1:31 ■

"The state has placed its own interests ahead of the interests of the beneficiary."

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