HONOLULU (HawaiiNewsNow) - Kamehameha Schools trustee Janeen-Ann Olds has stepped down from the board, just hours after a state judge rejected her bid for a second term.
"As I have had the privilege to represent Kamehameha Schools as a trustee, I have often had the best seat in the house," she said in a statement issued late this afternoon.
"It has been an honor and a privilege to serve the trust and I wish nothing but the best for the Kamehameha Schools."
After serving five years at the $11 billion trust, alumni and her fellow trustees recommended that Olds not be reappointed to the $120,000 a year post because of her role as an executive with companies run by convicted tax evader Albert Hee.
Although Olds was never charged with a crime, critics said she should have been more vigilant over Hee's activities, which included diverting millions of dollars from his company for personal use.
"At the end of the day, we were concerned about the impact on the reputation of Kamehameha Schools. Kamehameha Schools is more important than any of us individually," said Robert Nobriga, chairman of the Kamehameha Schools board of trustees.
Nobriga's made his comments outside of the courtroom moments after Probate Judge Derrick Chan rejected Olds' bid for a second, five-year term today.
Olds who also attended today's hearing and hugged fellow trustee Corbett Kalama as she left the courtroom. Her term would have ended in January.
Her attorney Lex Smith said she was the victim of a letter writing campaign by a vocal minority.
"We're disappointed as I told the court we did not feel there was a reason not to reappoint Mrs. Olds," Smith said.
Olds has served as a board member of the organization, which educates nearly 50,000 native Hawaiians. She's also the CEO of Sandwich Isles Communications, whose founder was convicted of looting the company in July.
In a letter to the state Probate Court, a number of influential graduates, including former Kamehameha Schools trustee Douglas Ing and Lunalilo Homes trustee Kamani Kualaau, called on the court to reject Olds' reappointment.
It was under Olds' watch that Sandwich Isles' founder Albert Hee skimmed $4 million from the company and its parent Waimana to pay for a home in California, his children's college tuition and phony wages for his wife. The Federal Communications Commission is now investigating the company's finances.
"We believe Mrs. Olds has lost credibility not just with her fellow trustees but with the Hawaiian community at large," said Rhonda Griswold, attorney for the trust.
Founded by the 1884 will of Princess Bernice Pauahi Bishop, the Kamehameha Schools educates children and adults of native Hawaiian ancestry.
It's the state's largest private landowner and operates the Kamehameha Schools at Kapalama Heights as well as several neighbor island campuses.
The issue of trustee selection and retention is extremely sensitive here because 15 years ago, allegations of corruption and mismanagement led to the removal of former board members Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender.
Back then hundreds of students, parents and graduates marched against the former trustees, prompting investigations by the state and the IRS that brought the school to the brink of ruin. Major reforms and a massive expansion of the school's educational mission followed.