Broken Trust: Greed, Mismanagement & Political Manipulation at America's Largest Charitable Trust
- Chapter 15: A World Record for Breaches of Trust
- According to the IRS, the trustees had been treating Princess Pauahi’s legacy like a “personal investment club.” What does that mean?
- The authors describe diversification as “a cornerstone of prudent investing.” What is diversification? Why is it so important?
- Do you think it was a good idea for Bishop Estate to buy the 30,500 acres of Big Island land? Why or why not? Would your answer change if you knew that it now was worth a lot more (or a lot less) than what the Bishop Estate paid for it?
- Should fiduciaries be judged based on how their investments turn out, or based on how they went about making their investment decisions? For example, what would you think of a trustee who gambled someone else’s life savings in Las Vegas … and won! Would you recommend that trustee to others, or would you tell others that person was a lousy trustee?
- The story of KDP appears on pages 196-197. What did the trustees do wrong when they made that investment? Would your answer change if the investment had resulted in a big profit rather than a total loss?
- Do you think the decisions to invest in Goldman Sachs were good decisions, or bad decisions? Why?
- Trustee Wong said, “Sometimes I guess it’s better to be lucky than right.” Do you agree with that statement? Some people say that “luck” is not random. What does that mean? Do you agree?
- The authors are critical of the trustees’ decision to guarantee a $50 million promissory note. What is a “promissory note,” and why might it not be a good decision to guarantee someone else’s payment of a promissory note? What did trustee Stender mean when he said the money received for guaranteeing a promissory note was “almost like free money?”
- Why do you think the trustees refused to say what Bishop Estate land was worth?
- When asked if the trustees had ever sought contributions to the trust, trustee Wong replied, “No, I don’t think it ever crossed our minds.” Why would they not even think about seeking contributions? If you were a Bishop Estate trustee, would you ask others to make contributions to the trust? Why or why not?
- Explain the cartoon on page 201.
- Trustee Peters thought it perfectly appropriate to give jobs to people in his ohana. Do you agree? Why or why not?
- In your own words, describe what Bishop Estate trustees did for Marshall Ige. Was it wrong for them to do that? Why or why not?
- Beginning at the bottom of page 203, the authors tell the story of Bobby Harmon. Did Harmon do anything wrong? What, if anything, would you have done differently if you had been in his position? How did that story make you feel?
- In the middle of page 207 the authors describe a member of the GRD staff. In your own words, explain what that person did for Bishop Estate and why he did it. Were his actions proper, or improper? Why?
- What would you do if you wanted to do business with some company, and it asked you to make a big political contribution to some politician that you knew nothing about? What if they said, “Do that and we’ll let you do business with us?” What would you do?
- In your own words explain the intermediate sanctions bill. Why did the trustees try so hard to prevent it from becoming law? What would you have done if you had been in their position?