We’ve all had our issues with the Judiciary at times, but U.S. Bankruptcy Judge Lloyd King deserves credit for overseeing the sad end of Aloha Airlines with a righteous sense of propriety.

Last Friday, he turned down bonuses of up to $600,000 for former CEO David Banmiller and chief financial officer Jeffrey Kessler for helping to sell off what’s left of the company, which the bankruptcy trustee tried to sell as “fair.”

“I don’t think fairness is an appropriate thing to discuss unless you want to talk about fairness to people who lost their jobs on virtually no notice (and) the hardship that has been imposed upon thousands of people,” King said. “Now we have the top insiders potentially making a big score on this case. I think that’s a very ugly aspect of this motion.

“It simply looks bad when the people who are with the company can make more money when it’s going out of business than when it is a going concern. Should Mr. Banmiller and Mr. Kessler be singled out for such favorable treatment in a Chapter 7 case where the other employees of the company have come out so poorly?”"

Well said. Banmiller and Kessler are already being paid $500 an hour for their services.

This week, King at least temporarily put the brakes on the trustee’s plan to hurriedly auction off the right to pursue Aloha’s lawsuit against Mesa Air Group to one of Aloha’s creditors.

“It seems to me that this whole process is unfair because it cuts out potential bidders,” King said, telling the parties to take another week to review the deal.

The courts have the burden of not only being fair to litigants, but also giving the public at large a sense that justice is being served. King’s recent actions live up to that high standard.

The state Intermediate Court of Appeals achieved an important bit of tax reform with its ruling that the state can’t collect more than it needs from insurance companies to fund a special compliance fund, and then transfer the excess millions to the general fund to pay for unrelated state programs.

The court ruled that such abuses of special funds amount to illegal back-door general tax increases that violate both the Hawai’i and U.S. constitutions.

The Legislature has created hundreds of special funds for various specific purposes that currently hold more than $1 billion, and officials are worried it could wreak havoc on the state budget if the concerns raised by the court in the insurance case are extended to other special funds.

Attorney General Mark Bennett is considering an appeal to the state Supreme Court.

The problem is that lawmakers routinely assess more taxes and fees than are needed to pay for the purposes of special funds, then use the excess as slush money in the general fund to finance pet projects that have nothing to do with what the special fund was created for.

This is a sneaky way to pass general tax increases under the radar of public scrutiny, and the court was absolutely right to blow the whistle on a practice that reflects poorly on the integrity of the state’s tax policy.

If legislators want to raise taxes, let them state the reason, invite full public discussion and accept accountability for raising no more than they need for the intended purpose.

I’ve always admired state Senate President Colleen Hanabusa as one of our brightest and most talented elected officials, but her problem is that sometimes she wastes her smarts on political games that aren’t as clever as she thinks.

The Pacific Business News provided an excellent example in a story by Linda Chiem detailing how Hanabusa appointed former Kaua’i Judge George Masuoka to the state Judicial Selection Commission after a fast shuffle to circumvent a constitutional prohibition against stacking a majority of lawyers on the panel that plays a key role in picking judges.

Masuoka would have been the fifth attorney on the nine-member commission, so the retiree resigned from the Hawai’i State Bar Association and gave up his license to practice law in order to technically qualify himself, according to PBN.

Masuoka has close ties to Chief Justice Ronald Moon of the State Supreme Court, who gets to make his own appointment to the Judicial Selection Commission in addition to Hanabusa’s two.

The betting here is that this is part of a political play to make sure Republican Gov. Linda Lingle’s options are limited when Moon hits the mandatory retirement age of 70 in 2010 and Lingle gets to appoint his successor from a list of candidates provided by the Judicial Selection Commission.

The Judiciary is the one branch of government that needs to be protected from any taint of politics, and Hanabusa should know that as a practicing attorney.

There were plenty of qualified candidates for this appointment. Making a mockery of the Constitution to slip in Masuoka was shabby, unnecessary and destructive to public trust in the integrity of state institutions.

Let’s not return to the bad old days of the Bishop Estate scandal when the Judicial Selection Commission and the Judiciary itself were disgracefully rolled into the political patronage machine.

That sorry episode already left enough of a stain on the legacy of the Moon Court.

Kudos to Pacific Business News for breaking this important story that deserves more visibility and discussion.
***
For another example of cheesy politics in the Hanabusa-led Senate, check out my column in the Opinion section of today’s Advertiser, “Senate is playing cynical game with public elections bill.”