Hawaiian putsch

Sex, drugs, sunshine and suicide: How an esteemed philanthropic estate -- and one of Goldman Sachs' biggest outside shareholders -- wound up in the sewer.

By Barry Raine

Jul 11, 2000 | In March 1999, Gerard Jervis, a trustee of the Hawaiian philanthropic institution known as the Bishop Estate, was caught having sex in a public bathroom with a woman who happened to be a Bishop Estate lawyer. The next day, the lawyer committed suicide by inhaling fumes from her car in a closed garage. Jervis then attempted suicide a week later by taking an overdose of sleeping pills. He survived.

Thus began yet another tawdry chapter of an ongoing scandal -- once limited to the insular political turf of Hawaii -- that has enveloped the trust and spread a stain that extends from the white gloves of the prestigious investment bank Goldman Sachs to the verdant links of a golf course near the nation's capital. Today, along with stories of suicide, drug use and illicit sex, accusations of theft and political cronyism continue to rock the once-estimable Bishop Estate.

The princess wept

When Princess Bernice Pauahi Bishop reigned in Hawaii more than a century ago, it's hard to imagine she could have ever foreseen the likes of "Baywatch" being filmed on the shores of her family's enormous property.

After her death in 1884, Bishop -- the final heir of King Kamehameha, who owned some 500,000 acres of waterfront land and fertile agricultural tracts that are now among the world's most expensive real estate -- bequeathed her property to a private trust known as the Bishop Estate; its sole purpose was to build the Kamehameha Schools, a private institution for children of Hawaiian ancestry. Approximately 3,000 students now attend the Kamehameha Schools from kindergarten through high school. Since being used to found the schools in the late 19th century, the princess's largesse has helped educate thousands of Hawaiian children, many of whose families were too poor to afford private schools.

For decades, the Bishop Estate functioned as a proud legacy for the Hawaiian people, an agency of hope where members of a community often beset by rampant drug use, high crime and a sense of dispossession brought on by racial discrimination could find opportunities for a better future. Native Hawaiians often compare their status to that of Native Americans. In spite of their rightful claims to the islands, many Hawaiians are essentially locked out of profiting from the state's real estate market and the financial rewards of its reputation as a shimmering playland for the rich. It's no surprise then that the Bishop Estate, with its vast wealth and singular commitment, was long regarded as beyond reproach by the islands' native population.

Today, the name Bishop Estate is as quintessentially Hawaiian as the Fiat-founding Agnelli is Italian. The Estate's pockets have grown so deep that its endowment -- now more than $6 billion -- makes it one of the world's richest educational institutions. And not only is the Bishop Estate Hawaii's most powerful private trust, it is one of America's wealthiest philanthropies.

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