Sovereignty advocates on Kaua’i are demanding the board of the Office of Hawaiian Affairs resign in the wake of a state audit charging the trustees misused public land trust funds. The charges include use of $1,000 by trustee Rowena Akana
Sovereignty advocates on Kaua’i are demanding the board of the Office of Hawaiian Affairs resign in the wake of a state audit charging the trustees misused public land trust funds.
The charges include use of $1,000 by trustee Rowena Akana for beauty salon visits and the use of more than $8,000 in personal expense allowances by two other trustees for interest-free loans.
Should OHA be dismantled, as called for by critics, no government entity will exist to accept land or reparations for Hawaiians, resulting in further delay of services to Hawaiian beneficiaries, Akana said.
Butch Kekahu, a Kaua’i sovereignty leader, said the board members who misused funds should be removed if the law allows it.
Michael Grace, a supporter of the kingdom of Hawai’i, said the charges and a federal lawsuit filed by Honolulu resident Patrick Barrett, seeking to invalidate an article of the Hawai’i constitution which created Oahu, are two reasons to do away with OHA.
“I want the money that is now managed by OHA to go to the kingdom,” he said. “The trust for Hawaiians never worked.”
OHA, which was created by a state constitutional amendment in 1978, has a portfolio of $350 million, received $15 million as its share of ceded land revenues and was given $2.5 million in state funds and another $2.5 million in federal funds in fiscal year 1998-99.
Sabra Kakau of the Hawaiian Convention said whether it is OHA or another organization that will speak for Hawaiians in the future, the “entity must work for the Native Hawaiians or the kanaka” maoli, the aboriginal people of Hawai’i.
Whether the Legislature has the authority to break up the OHA board is unclear, but it “would be inappropriate for us to ask (board members) to step down because they were elected to their positions,” said Rep. Hermina Morita (D-12th District), whose constituency includes north Kaua’i.
The public, she said, can move to oust the board members “if they feel these people have not fulfilled their fiduciary responsibilities.”
The auditor’s findings will result in closer scrutiny when OHA comes before the Legislature for funding in the future, Morita said.
Gov. Cayetano’s press secretary Kim Murakawa said any corrective action related to claims of mismanaged funds would be done by the OHA board.
House Rep. Ezra Kanoho (D-13th District) said “it is too early at this point to ask the board members to step down.”
Akana, a trustee for more than a decade, said critics of OHA have been trying to shut it down “for as long as I have been around.”
“People have to realize that this (the Governor Ben Cayetano) administration would like nothing better than to take back the money that we have earned, so that the state can pay back its debts,” she said.
Kekahu said Akana “did wrong” when she borrowed $1,000 for beauty salon services.
“She is using money which belongs to the beneficiaries,” Kekahu said.
Akana said she wasn’t aware of any OHA policy that prevented her from using the money for salon visits, and that when she found out in February that it was inappropriate to have done so, she repaid the money.
Akana said former trustees Frenchy DeSoto and Louis Hao used OHA funds for the loans and that they used “some discretion in doing something and that was their call.”
Neither DeSoto or Hao was available for comment.
State auditor Marion Higa’s report noted:
l The trustees have not adequately planned for projects to improve the conditions of Hawaiians, a claim Akana refuted. Akana said that when she became a trustee more than 10 years ago, OHA’s portfolio was at $11 million. Today it sits at $350 million, she said. “No one is giving us points for our accomplishments,” she said.
l The trustees spent $13 million on unplanned expenses, exceeding OHA’s budget by 100 percent. Akana said the funds were spent on “things that were necessary” for the continued operation of OHA.
More than $500,000 has been used to fund a claim panel to help Hawaiians secure the use of homestead lands. Other funds have been used to defend OHA in lawsuits, including the Cayetano vs. Rice case, in which the U.S. Supreme Court ruled that allowing only Hawaiians to vote in OHA elections was unconstitutional.
Funds also have been used to support the Native Hawaiian Legal Corp., which has defended Hawaiians on land claims, Akana said.
l A former investment counselor, Morgan Stanley Dean Witter, said OHA lost $2 million due to the delay in hiring two international money managers.
Akana said the figure is flawed because it “is based only on a projection. We didn’t invest, so we didn’t lose.”
Akana said trustee Clayton Hee, at a recent board meeting, denounced the “projections as being absolutely wrong.”
l OHA lost another $1 million by keeping inefficient fund managers.
“That is hypothetical,” Akana said. ” What are they comparing it to?”
Higa’s office recommended OHA improve the way it has managed its grants and Native Hawaiian Revolving Loan Fund programs, and develop clear policies and procedures for organizational changes. OHA had successfully administered the federal loan program for 11 years and the federal government would have ended the program if OHA had not done the right job, Akana said.
“Had they (state auditors) asked about the federal guidelines, they would not have written these things in the audit,” Akana said. “Whom do they think they are? Are they better than the federal government?”
The OHA board agreed with the auditor’s recommendations, but disagreed with findings that it had mismanaged funds.
Akana said the agency’s own audit will dispute the state auditor’s claim that the agency has mismanaged its funds.
“There were many things (Higa) said that were correct and which we must correct, but the key thing is about money mismanagement, which is not true,” Akana said.
Staff writer Lester Chang can be reached at 245-3681 (ext. 225) and mailto:lchang@pulitzer.net
