By KIM MURPHY
TIMES STAFF WRITER

KAHULUI, Hawaii -- When 13-year-old Joseph Dickson applied to the Kamehameha Schools, a prestigious network of private schools for children of Hawaiian ancestry, he was sure he'd aced it. He had good grades, he played football and wrestled, the interview went well.

Then Dickson, who is half-native Hawaiian, got the news: Kalani Rosell, a boy with straight A's but no Hawaiian ancestry, got the slot. School trustees said they admitted the first non-Hawaiian student in 36 years because there were no other "qualified" native Hawaiian applicants.

The decision startled Hawaiians and contributed to an already rancorous debate statewide about race, preferences and sovereignty. Native parents circulated petitions demanding new admissions standards, newspapers carried strident letters on both sides of the debate, and school trustees were besieged with residents demanding an explanation.

"When they made this announcement, it was like spears went through my heart," said Maile Jachowski, a Maui physician and former valedictorian of the Kamehameha Schools. "It's really, really sad when you say Hawaiian children aren't smart enough to get into their own school."

But others applauded the decision, saying programs such as the Kamehameha Schools should be available to all Hawaiians. "You can't give a preference and say it's not race discrimination," said attorney John Goemans, who has urged the Bush administration to withdraw the schools' federal tax exemption.

For decades, this state has been looked to as a model of racial harmony. The nation's first Filipino American governor, Ben Cayetano, hails from here--he succeeded a native Hawaiian and beat out an Italian American and a Japanese American. Hawaiians are so mixed that 21% claim to belong to two or more races, 10 times the national average. Nearly half of all marriages these days are mixed race.

The uproar over the school admission on Maui made a lot of people wonder how much harmony there is here. It occurs at a difficult moment in Hawaiian racial politics. Increasingly, nonnatives are arguing with natives that their entitlements for health care, homesteads and special schools amount to illegal racial preferences. Native Hawaiians, seeking federal recognition as indigenous people, are arguing among themselves about what they want. A few go so far as to call for secession from the United States and formation of an independent government; others want to restore a quasi-sovereign Hawaiian government whose interests would be protected by the U.S.

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Much Is at Stake

Hundreds of millions of dollars in entitlement programs for native Hawaiians and control of about half the state--1.8 million acres of land once belonging to the Hawaiian monarchy--are at stake. Many Hawaiians have professed amazement at the rancor of the discussion.

"In a multiracial society, it's not good to start dividing people by race," said Patrick Hanafin, a Honolulu attorney who filed a lawsuit challenging the entitlement programs. "This is potentially going to tear Hawaii apart along racial lines, and we think the Constitution should protect us from that."

Native Hawaiians are building a defense in Congress, seeking recognition as indigenous people in an attempt to reverse four decades of federal policy that until now has considered American Indians and native Alaskans the only indigenous people of the U.S.

The bill, sponsored by Sen. Daniel K. Akaka (D-Hawaii), is stalled in Congress, in part because of widely varying views among native Hawaiians about what federal recognition and "sovereignty" might mean. Some native Hawaiians oppose the Akaka bill because it would not give them one of the biggest potential prizes of sovereignty: control over the 1.8 million acres ceded by the Hawaiian monarchy when the U.S. military helped oust it from power in 1893--including Pearl Harbor, the University of Hawaii campus and parts of Honolulu International Airport.

A 1999 survey showed that more than 43% of Hawaiians--evenly split among natives and nonnatives--either favored or partly favored the idea of sovereignty in principle. Perhaps more surprisingly, 41.8% of nonnative residents (compared with 35.4% of native Hawaiians) thought that natives should manage the ceded lands.

Hawaii's natives occupy a unique position in the American political landscape. Unlike American Indians, they don't belong to tribes that were forcibly resettled and recognized as semi-sovereign "nations within a nation" through treaties. Unlike Alaska's natives, they weren't allotted millions of acres and the chance to control the land through their own boards of directors and village councils.

Hawaiians, by contrast, were subjects of a constitutional monarchy that was overthrown in 1893. The archipelago was admitted as a territory several years later under an administration dominated by white sugar barons who used natives as low-paid labor.

"We suffered a unilateral redefinition of our homeland and our people, a displacement and a dispossession in our own country," said Haunani-Kay Trask, a writer, professor and leader in the native Hawaiian sovereignty movement.

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Official Apology

Today, native Hawaiians are a little more than 20% of the state's 1.2 million residents, with a disproportionate share of problems. A third of all victims of child abuse or neglect are natives, and the functional illiteracy rate is about 30% among native Hawaiian adults.

President Clinton in 1993 signed an official apology acknowledging the U.S. role in the overthrow of the Hawaiian kingdom and pledging to establish a foundation for reconciliation with the Hawaiian people.

What form that takes is a question: With so much intermarriage over the years, which Hawaiians should be recognized as natives? Should the Hawaiians have an elected governing body of their own? Should reparations be paid? What tax money should be available to fund health care, education and housing programs for Hawaiian natives? With ceded lands making up nearly half the state, who gets to control them and what form should that control take?

In addition to the 1.8 million acres, native Hawaiians hold claim to 200,000 acres set aside by Congress in 1921 for homesteads, allowing native Hawaiians to take out long-term leases on land at about $1 a year, with programs often available to help build affordable homes on the land.

Only about 43,000 acres have been given out over the last 79 years, while the waiting list for homesteads has grown to 19,600 applicants. Many have waited for decades.

"I might be dead by the time I get anything," said Louie Pelekai, a plumber from Honolulu, who first applied for a homestead in 1976. He lives with his wife and son in a one-bedroom apartment so small they are forced to use the bedroom for storage. Pelekai and his son sleep on the living room floor. "My wife puts three chairs together and sleeps on them," he said.

Hard-line sovereignty advocates such as Trask have squared off against the Akaka bill, declaring that they will accept no less than full self-determination and control of revenues from all ceded lands. Even some moderates, such as Ikaika Hussey, head of the Democratic Party's Native Hawaiian Caucus, wonder whether Hawaiians should agree to become like American Indians rather than hold out for full independence.

"Our history is that of an independent country in which people came to us; they wanted to live with us as citizens of an independent Hawaiian nation," he said. "A lot of indicators point toward independence as the viable and really the preferred alternative to the status quo."

Others say it's time to seize on federal recognition as a starting point. "Federal recognition provides an opportunity for native Hawaiians to fully embrace and control their future by being able to control their assets, to be able to establish their own processes, policies and programs," said Robin Danner of the Council for Native Hawaiian Advancement.

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A Landmark Case

Almost everyone realizes that federal recognition is an attempt to defend against court challenges filed by nonnatives, many of whom were born and raised in the state, who question why natives deserve land and benefit programs not available to everyone else.

The U.S. Supreme Court, in a landmark case in 2000, Rice vs. Cayetano, rejected the idea that only native Hawaiians or those who traced their ancestry back to the state's original residents could vote for trustees of the Office of Hawaiian Affairs, the state agency that oversees entitlement programs. The court said such distinctions amount to an illegal racial distinction.

That opened the floodgates, raising questions about whether the $300-million trust fund that the office administers should be spent only on programs such as scholarships, housing and business loans for native Hawaiians.

Also now open to scrutiny are the homestead lands and even the Kamehameha Schools--although they are oper- ated under a private trust--because they have a federal tax exemption.

Earl Arakaki, a retired Honolulu police officer, filed a lawsuit with about a dozen other nonnative residents earlier this year that seeks to have many of these assets made available for everyone's benefit. To do otherwise, he believes, constitutes racial discrimination with tax dollars.

"I believe everyone should be treated equally, and I don't see why there are racial preferences, and monies to be disbursed, based on what happened a hundred years ago," Arakaki said. "Last time I checked, the American flag was still flying out in the state Capitol. If you want money, work hard and earn it for yourself. I've done it, and I'm no genius."

The decision to admit a non-Hawaiian to Kamehameha's Maui campus is where many Hawaiian natives have decided to draw a line. The school, which serves 3,800 students on three lush campuses, provides students with an excellent education, in addition to a grounding in Hawaiian culture and Christian values. Tuition, by private-school standards, is modest: $1,441 a year for middle school.

Many top professionals and others in leadership positions are graduates of the Kamehameha Schools, which Pohai Ryan, a 1980 graduate, called "the vehicle Hawaiian people have to rise socially, politically and economically."

"If they say the Kamehameha School is illegal, watch out. Watch out," said the Rev. Charles Kauluwehi Maxwell, a prominent native elder. "The Hawaiians are all loving people, but take away the last bastion of what they have, which is this school, and watch them react."

Hamilton McCubbin, chief executive of the schools, acknowledged that the trustees are concerned about legal challenges but said they were following their established policies when they admitted the non-Hawaiian boy. The situation was an unusual one that came about because an expansion at the Maui campus from 272 students to 592 left the school with more slots than qualified Hawaiian applicants.

Admissions decisions are based on standardized tests, grade-point averages, personal interviews, teacher recommendations and writing samples, and all applicants are normally required to have at least one native Hawaiian ancestor. This year, McCubbin said, the school exhausted all Hawaiian students on the eighth-grade wait list before giving the one remaining slot to Rosell.

A total of 64 eighth-graders applied for 44 spots on the Maui campus. Eight Hawaiians were immediately screened out of the admission process and four others did not score the minimum number of points on a number of evaluation factors to qualify. The Dicksons said Joseph's interview went well, and they were perplexed when they got the letter saying he had not been accepted. "I thought he'd be a preferred candidate," said his mother, Liane.

Last week, trustees announced "interim admissions changes" for the 2003-04 school year only that will eliminate preliminary screening and the minimum score. The interim policy will also waive the $25 admission fee, all in the hope of attracting more native Hawaiian applicants.

The trustees have reaffirmed their commitment to native Hawaiian education, laid out in the will of a former princess when she established the $6-billion trust for the schools, and they have pledged to consider admitting not only top academic achievers but also Hawaiian natives who might be good achievers if given a chance.

"There's a hurt and an anger and a frustration we're seeing now, which we have absolutely no trouble understanding and empathizing with," McCubbin said. "The whole organization is unwavering in its commitment to serving native Hawaiians, but we need to do it in a manner that's consistent with the law and with policies that have been approved."

For Joseph Dickson, that is scant comfort. He's been rejected three times by Kamehameha and will go to public school. For Kalani Rosell, it's probably a mixed blessing, at best. Jachowski shrugged. "That boy has the spot of the 20 kids that didn't make it."

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Copyright 2002 Los Angeles Times

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