Campbell Estate Spends Big For Tax Break

HONOLULU -- The Campbell Estate has spent some $400,000 over the last two years lobbying Congress for a very special tax break.

It was money well-spent, according to KITV4 News investigative reporter Jim Dooley, because it's part of the $1.3 trillion tax cut bill that will be signed Thursday by President Bush.

The law that favors the Campbell Estate allows estate beneficiaries and others in the same position to defer paying millions of dollars in inheritance taxes for four years. The law then allows those payments to be made on a graduated scale over a 10-year period.

Before the amendment, which was introduced by Rep. Neil Abercrombie, D-Hawaii, the tax deferral was available to businesses owned by no more than 15 individuals. The new law expands that number to 45 owners, falling squarely within the needs of the Campbell Estate.

To read the amendment, click here

There are currently 25 direct heirs to the $2 billion James Campbell fortune. But in the year 2007, when the Campbell Estate must be terminated and its assets distributed, there should be between 30 and 40 heirs.

A Campbell Estate lobbyist has told beneficiaries, trustees and other estate personnel that Rep. Neil Abercrombie, D-Hawaii, was very helpful in pushing the legislation.

Abercrombie admitted that he has been in regular contact with Campbell Estate lobbyist David Rae about the inheritance tax legislation. But he denied specifically tailoring the language of the bill to benefit the Campbell Estate beneficiaries. He says that it's meant to help hundreds or even thousands of family-owned businesses in Hawaii.

Federal lobbyist disclosure records show that last year, Campbell Estate paid lobbyist Rae $260,000 for his work of tax reduction legislation. In 1999, the estate spent $120,000 for Rae's tax-break lobbying.

In addition, the Campbell Estate trustees, beneficiaries and employees gave $7,000 to Abercrombie's campaign in 1999 and 2000 while lobbyist Rae personally gave the Abercrombie campaign $2,000 last year.

Rae also gave $1,000 to another key figure in the tax bill legislation, Rep. Jennifer Dunn, R-Washington.

Rae couldn't be reached for comment. But he's expected to be at the White House for the ceremonial signing of the tax bill by Bush. Abercrombie has also been invited to attend the bill signing.

Campbell trustee David Heenan said Wednesday he does not believe it's accurate to say that Rae helped to write the language that Abercrombie inserted in the tax legislation. But sources told KITV4 News that in a meeting earlier this year, Rae told Campbell beneficiaries, trustees and others that he helped write the Abercrombie amendment.

The other three members of Hawaii's congressional delegation voted against the overall bill. Senators Daniel Inouye and Daniel Akaka said that they support the inheritance tax break, but can't go along with other parts of the bill.