Racial Exclusion: Where There’s A Will, There’s A) A Way, Or B) No Way!

It seems to me that there are two elephants, one larger than the other, stomping about, largely unnoticed, in the china shop of the recent en banc Ninth Circuit opinion approving the racial exclusion policy of The Kamehameha Schools of Hawaii, discussed here.

The Small Elephant: Girard College

First, let me remind you that, as Judge Graber noted in her majority opinion (for herself and seven other Democratic appointees),

The Kamehameha Schools were created under a charitable testamentary trust established by the last direct descendent of King Kamehameha I, Princess Bernice Pauahi Bishop, who left her property in trust for a school dedicated to the education and upbringing of Native Hawaiians. [Citation omitted]

….

Part of the Kamehameha Schools’ stated admissions policy is to give preference to students of Native Hawaiian ancestry, defined to include any person descended from the aboriginal people who exercised sovereignty in the Hawaiian Islands prior to 1778. Practically, the policy operates to admit students without any Hawaiian ancestry only after all qualified applicants with such ancestry have been admitted. Because there are many more qualified students of Hawaiian ancestry than there are available places at the Schools, it is very rare that a student with no Hawaiian ancestry is admitted to the campus programs.

That tinkle of broken glass you hear in the background is coming from the wandering around in this china shop of the smaller of the two elephants I mentioned, the case Girard College from Philadelphia. Consider:

In his will dated February 16, 1830, Stephen Girard, a wealthy Philadelphia merchant, stipulated the establishment of a school for white males between six and eighteen years of age. Under the will, Girard having “sincerely at heart the welfare of the City of Philadelphia” left the principal part of his estate to “the Mayor, Alderman and citizens of Philadelphia, their successors and assigns” money for a number of charitable purposes of which the school was one. The purpose of these gifts was to foster “the prosperity of the City, and the health and comfort of its inhabitants.”

Not surprisingly, Girard College (actually, it is not a college; it is a boarding school that enrolls students from elementary school through high school) was a prime target of the civil rights movement, and in the 1960s it was required to abandon its racially exclusive policy. (See here and here, as well as the link above.)

Girard’s will was broken because the trust funds he bequeathed were administered by a public agency, and this state involvement was enough to invalidate the racial policy under the 14th Amendment. As the second “here” cited above states, the Girard case

must be taken to establish that to the extent that the State undertakes an obligation to enforce a private policy of racial segregation, the State is charged with racial discrimination and violates the Fourteenth Amendment.

I am not familiar enough with the facts of the Kamehameha Schools case to know whether there is any state involvement with its racial exclusion, but I suspect that either there is none or very little, making Girard of limited (if any) legal relevance. But it is not altogether irrelevant (which is why it’s still an elephant in the china shop, though a small one) because Kamehameha Schools’ defenders keep bringing up the relevance of Pauahi’s will in their arguments. Examples abound, but here’s an excerpt from one, “Pauahi’s Trust Is For Hawaiians,” an OpEd from the Honolulu Star Bulletin by Pohai Ryan, ex-oficio president of the Kamehameha Schools Alumni Association Oahu Region:

The 13th article of the will of Ke Alii Pauahi clearly states that assets be used to educate orphans and indigent children with “preference to Hawaiians of pure or part aboriginal blood.” She referenced aboriginal to be clear to everyone that her Hawaiian people, the native people of Hawaii, are the beneficiaries of the schools.

Although defenders of the racially exclusive admissions policy often cite the will as authority, they do so selectively. Here is another, less quoted provision of the will:

I also direct that the teachers of said schools shall forever be persons of the Protestant religion, but I do not intend that the choice should be restricted to persons of any particular sect of Protestants.

As this writer noted,

the requirement that “the teachers of said schools shall forever be persons of the Protestant religion” could also possible call into question the enforceability of the will under current federal discrimination in hiring standards.

And he is one of the few observers who also discussed the Girard College comparison:

It’s easy to look at this situation and say that the trustees should be permitted to maintain any admission policy that they feel is both appropriate and in compliance with the Princess’s wishes as expressed in her will.

After all, this is a private school which accepts no government funds. One should be entitled to bequeath their money in any way that they see fit.

Unfortunately, however, there are other further complicating factors which could ultimately force a change in the admission policy.

First, there is precedent for a court ordered change in policy in a virtually identical situation.

In 1831 wealthy Philadelphian Stephen Girard died. Wishing that his fortune continue to benefit not only his immediate family and friends, but also others of his race, he allocated in a legally executed will, millions of dollars to build and operate a boarding school. Specifically he stated: “I am particularly desirous to provide for such a number of poor male white orphan children,” A trust was set up for this purpose and Girard College was thus founded in Philadelphia.

Litigation challenging the will began in the 1950’s. Ultimately, in 1968, by order of the U.S. Supreme Court, Stephen Girard’s will was amended to strike the “poor, white, male orphan” provision, citing the 14th Amendment to the U.S. Constitution which prohibits discrimination.

The end result is that in the year 2003, the majority of students at Girard College are black.

In the final analysis, however, I suspect that Girard remains a small elephant if the state of Hawaii’s involvement with the schools is limited. After all, if the eight Ninth Circuit Democrats did not feel bound by the Supreme’s Court decision in Runyon v. McCrary, 427 U.S. 160 (1976), which held that the 1966 Civil Rights Act (now Title 42 U.S.C. 1981) bars racial discrimination in private schools, they were not likely to be swayed by an analogy to Girard College. (To be fair, or at least fairer, it’s not that they did not feel bound by Runyon; it’s that they thought for various reasons [all unpersuasive in my, and the dissenters’, opinion] that it didn’t apply to this particular private school.)

The Large Elephant: Bob Jones University

First, recall, as Judge Graber noted in the factual section of her majority opinion quoted above, that

The Kamehameha Schools were created under a charitable testamentary trust established by the last direct descendent of King Kamehameha I, Princess Bernice Pauahi Bishop, who left her property in trust for a school dedicated to the education and upbringing of Native Hawaiians.

And as a charitable trust, of course, the funds were exempt from taxation, which got the Schools in a good deal of trouble with the IRS at one point. As I soon as I mention “tax exemption” veteran readers, and knowledgeable others, should immediately think “Bob Jones.” I’ve discussed the Bob Jones case too many times to cite here (search in the search bar on the right, and if the search engine happens to be working when you do you should find 30 or so).

Here’s a long description from an early post:

In response to the “segregation academies” that sprouted across the South after the Brown desegregation decision, the IRS launched a campaign to revoke the tax exemptions of discriminatory private schools. One obstacle was that many of these schools were so hostile to blacks that they didn’t need clear, and hence provable, discriminatory policies. At Bob Jones, however (whose origins lay not in response to Brown but to the anti-fundamentalism stirred up by the Scopes trial in the 1920s), the clear policy against interracial dating seemed to present a tempting target. Revoking Bob Jones’s tax exemption, however, proved not to be so easy, and at some point in the future the way it was done conceivably could have some unintended but dramatic consequences.

Back in the 1970s the IRS ruled that BJU’s discriminatory dating policy was “against public policy,” and therefore the school could not be charitable and thus could not qualify for an exemption. The difficulty with this ruling lay in the fact that Section 501(c)(3) of the tax code provides exemptions for “religious, charitable, or educational” institutions, and BJU is and was both religious and educational. No problem, said the IRS, which deconstructed the tax code so that “or” was read as “and,” and BJU’s exemption was revoked because it was deemed not charitable, even though it was clearly both religious and educational.

Some in Congress objected to the IRS twisting the tax code to reach a desired result. Others objected to giving the IRS unbridled discretion to decide which social and especially religious practices were “against public policy.” Since BJU’s opposition to interracial dating was derived from its theology, could the IRS use the powerful threat of revoking tax exemptions to force practices derived from the teachings of other churches, such as strictures against homosexuality, to conform to “public policy”? Still others worried that in the absence of provable discriminatory admissions policies the IRS would inevitably force schools to employ de facto quotas in order to prove they were not discriminating.

These concerns were mainly limited to conservatives, although Slate Magazine, following up on charges leveled by Bill Bradley in his primary debate with Al Gore at the Apollo Theater in Harlem, revealed that Gore voted with this group of IRS critics five times when he was in Congress. (In one of the more humorous episodes of the last campaign, Gore defended those votes as “anti-quota,” a curious response from a politician who vociferously defends every racial preference program and policy and who apparently has never seen another one that looks like a quota.) Few wanted to be seen as defenders of discrimination, however, and so Congress did not reverse the IRS’s revocation of Bob Jones’s exemption.

When the Supreme Court finally decided this matter in 1983, Congress’s acquiescence was held to justify the IRS ruling, with only Justice Rehnquist dissenting. Justice Powell, concurring, provided one of the finest examples on record of adverse possession at work. He indicated that the IRS’s revocation of Bob Jones’s tax exemption was in all likelihood unjustified when it occurred, but in the intervening years it took the matter to reach the Supreme Court (of which there were quite a few) the Congress could have reversed the IRS action if it chose to. Since it did not, the initial wrong had, over the years, become right. In other words, Powell’s position was that Bob Jones’s objection to the revocation of its exemption may well have been correct originally but had somehow become incorrect before it reached the Court because “there has been a decade of acceptance.” Of course, viewing Congress’s inaction as rewriting the tax code by default ignored the fundamental fact that Congress is only one part of the law-making process. Each house must approve legislation, but that legislation is not law until signed by the president, and no president in the 1980s — Reagan and Bush I — would have signed such a law.

Bob Jones University V. United States, 461 U.S. 574 (1983), in short, upheld the revocation of Bob Jones’s tax exemption because racial discrimination cannot be “charitable.” Justice Powell, writing for an 8–1 majority, held that (citations omitted)

there can no longer be any doubt that racial discrimination in education violates deeply and widely accepted views of elementary justice….

Congress, in Titles IV and VI of the Civil Rights Act of 1964, … clearly expressed its agreement that racial discrimination in education violates a fundamental public policy….

Few social or political issues in our history have been more vigorously debated and more extensively ventilated than the issue of racial discrimination, particularly in education…. [I]t cannot be said that educational institutions that, for whatever reasons, practice racial discrimination, are institutions exercising “beneficial and stabilizing influences in community life” … or should be encouraged by having all taxpayers share in their support by way of special tax status….

It would be wholly incompatible with the concepts underlying tax exemption to grant the benefit of tax-exempt status to racially discriminatory educational entities, which “exer[t] a pervasive influence on the entire educational process.” Whatever may be the rationale for such private schools’ policies, and however sincere the rationale may be, racial discrimination in education is contrary to public policy. Racially discriminatory educational institutions cannot be viewed as conferring a public benefit within the “charitable” concept discussed earlier. [Emphasis added]

In some respects the discriminatory practices of The Kamehameha Schools is much more egregious than the policy that cost Bob Jones its exemption. The Kamehameha Schools, as noted in my previous post on the case cited at the beginning, actually have a policy of racial exclusion (though its motives, of course, are benignly “remedial). Bob Jones, by contrast, did not have a policy of excluding minorities. It lost its exemption because of its prohibition (for which it claimed divine sanction, and it was a religous institution) of interracial dating.

The tax status of The Kamehameha Schools was not at issue in the recent case, and I do not mean to criticize either the majority or the dissenters for the fact that no opinion mentioned Bob Jones (or Girard, for that matter). But I would appreciate it if someone who knows more about tax law than I do (and that would mean anyone who knows anything about tax law) could explain to me why The Kamehameha Schools should have a tax exemption but Bob Jones should not.

UPDATE

David Bernstein has much more to say about how the Ninth Circuit “is implicitly overruling Runyon by logical necessity, though it claims not to be.”

UPDATE II

I suggested above that the Girard College case may not be directly relevant. But as Hans Bader argues forcefully in this comment to David Bernstein’s post, if the reach of Section 1981 is identical with the reach of the Fourteenth Amendment then it’s hard to see why Princess Bernice Pauahi Bishop’s will shouldn’t meet the same fate as Stephen Girard’s.

Say What? (2)

  1. superdestroyer December 8, 2006 at 7:34 am | | Reply

    If I remember correctly, the will of Princess Bernice set up the state Supreme Court (or the previous version) as the entity that appoints the trustees of the estate. The corruption was created when the friendly politics of the one party state (Democratic) of Hawaii appoint former Supreme court Justices, Speakers of the State House, and State Senators to the board of Trustees.

    I do not think that the trust can function without the oversight of the State Supreme Court.

    The Honolulu Star Bulletin had a long series of articles about the graft and corruption entitled “Broke Trust.”

  2. Mark Seecof December 8, 2006 at 12:47 pm | | Reply

    May I propose a very tiny potential elephant? I’ve read several comments to the effect that the Kamehameha Schools feed a disproportionate number of alumni into Hawaiian government. I don’t know whether that’s true. But supposing it is, consider the admission controversy in the light of the Supreme Court’s rationale in Terry v. Adams, the “Jaybird Democratic Association” voting-rights case from Texas. In Terry the Court forbid a purely private social club and straw- poll- taking organization (the Jaybird Ass’n) to continue its racially-exclusive membership policy because it was notoriously a vehicle for members to work out their political preferences ahead of Texas’ lawful, race-neutral election proceedings.

    The Court ruled that the Jaybirds, though concedely free of any formal connection to government, had such influence that their activities ought to be controlled by the 14th and 15th Amendments.

    If the “old Kamehameha Warriors club” has a lot of influence on Hawaiian politics or Hawaiian government hiring/ appointing then perhaps the Terry rationale should hold Kamehameha Schools admissions to a race-neutral standard.

Say What?