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OHA Trustees excluded

Tuesday, June 29th, 2010

By: OHA TRUSTEE ROWENA AKANA

Source: July 2010 Ka Wai Ola o OHA Monthly Column

Chair Apoliona goes out of her way to exclude trustees from board discussions.  For example:

DUE DILIGENCE MEETINGS

Back in April, the SEC brought a civil action against Goldman Sachs, one of OHA’s two money managers, because of “a single transaction in 2007 involving two professional institutional investors.”  Goldman assured us that they believe the SEC’s allegations were “completely unfounded both in law and fact,” and that they would vigorously defend themselves.  Every trustee had reason to be deeply concerned since, as of December 31, 2009, Goldman managed $171,649,375 of OHA’s Trust Fund. 

On April 20, 2010, Goldman invited OHA to meet with them in New York on May 7, 2010 for an explanation.  Chairperson Apoliona, Trustees Machado and Stender, and CEO Namuo traveled to New York for the meeting.  I did not submit a request to travel so I don’t know if the Chair denied travel for anyone else.

On April 21, 2010, Goldman offered to provide Trustees that could not attend the New York meeting with a “live video conference feed” from their office to our boardroom.  This would allow all of us to at least listen in on the Goldman meeting.

Then suddenly, on April 23, 2010, the OHA Board Counsel cancelled the Goldman videoconference, most likely at the request of the Chairperson.  At the request of Trustee Heen, the Board Counsel wrote a legal opinion to explain his position.  The Board Counsel felt that, since Goldman refused to allow the video conference to be viewed by the public in an open meeting, OHA would end up breaking the Sunshine Law.  Since none of the trustees I have spoken to have actually seen any communication from Goldman Sachs objecting to an open meeting, I am not convinced that there was such a communication.

There were other ways to allow the trustees to listen in and still stay within the law.  For example, we could have gone into executive session during the “sensitive” portions of the broadcast.  While it wouldn’t have been the most ideal solution, Chair Apoliona has shown in the past that she has no problems taking things into executive session, even when it is not necessary except to keep the public from hearing what is going on.

It is clear to me that this was just a deliberate attempt to keep the majority of the board from hearing what Goldman had to say.  At the time of the writing of this article, there has been NO report to the Board of Trustees from Trustees Apoliona, Stender, or Machado regarding their New York meeting.

SELECTIVE DENIAL

Another example of Chair Apoliona’s selective denial happened back in 2008, when, without even the proper authority, Apoliona denied my travel to South Dakota on official business as a board member of the Governors’ Interstate Indian Council (GIIC).  I am the only non-Indian member of this national organization representing Native Americans and Alaska Natives in all 50 states.  The GIIC has supported OHA’s efforts for federal recognition with five resolutions that have been sent to Congress on our behalf.

WORKSHOPS

On May 4, 2010, the Board Counsel wrote another legal opinion about his decision to deny a Trustee from participating in a Board Workshop on April 22, 2010 by telephone.  The Trustee had been told by the Administration that it wouldn’t be a problem for him to participate over a speaker phone, but that decision was overruled by the Board Counsel, which went against OHA’s longstanding practice of allowing participation via telephone as long as the Trustee did not vote.

KAMEHAMEHA LEI DRAPING CEREMONY

On April 26, 2010, each Trustee received an invitation letter from the Hawai`i State Society of Washington, D.C. to participate in the 2010 Kamehameha Lei draping ceremonies on June 6, 2010.  Trustees have supported and attended the ceremony since 2003; including the historic first ceremony in Emancipation Hall at the new Capitol Visitors Center in 2009.  Despite this, on May 3, 2010, the Chairperson denied travel for all Trustees except for herself and OHA staff members CEO Namuo, COO Stanton Enomoto, and Special Assistant to the CEO Martha Ross. 

Meetings were scheduled by the Administration to meet with Federal Officials while in Washington, D.C. – meetings that the Trustees should have attended.  This has become a common practice with this Chair.  Despite this denial, I elected to pay my own way to Washington, D.C. as I had an important meeting scheduled at the White House. 

Chairperson Apoliona must stop interfering with our right to represent the beneficiaries that elected us.  Sadly, this has been going on for the last eight years.

OTHER NOTABLE ISSUES:  QUESTIONABLE SPENDING

In a May 3rd e-mail to the Trustees, Chair Apoliona explained that she was denying travel for the 2010 Kamehameha Lei draping in D.C. on June 6th, because of economic reasons, not mentioning that there were also important meetings scheduled with Federal Officials that Trustees should have attended.  Chair Apoliona wrote:

“Since 2009 Trustees have been asked to limit requests for out of state travel due to our downturn in the economy and the impact on OHA resources.  Although there is demonstration of what appears to be an ‘improving’ economy, we all continue to be vigilant and cautious.”  “…even in 2010 we should remain cautious about out of state travel costs and continue to manage out-of-State travel requests prudently.” — OHA Chair Haunani Apoliona

However, the Chair failed to mention that while she was denying Trustees’ travel, three OHA staff members went instead of Trustees.  While in D.C., OHA paid for a reception for 200 people, including entertainment.  How much did this cost our beneficiaries?  What about the “downturn in the economy?”

While I understand her reasons for being “cautious” with our spending during this economic downturn, a quick review of OHA’s recent spending shows that she is at worse a hypocrite and, at best, full of baloney.  For example, at a time when our people are living homeless on beaches, OHA authorized spending the following on June 3, 2010:

  • $100,000 to sponsor a Native Hawaiian men’s health conference in June 2010; and
  • $100,000 to sponsor an International Indigenous Health Conference.  There was no mention of how many Hawaiians were going to be able to attend this Conference.

The Administration also proposed to transfer $421,300 in education grant money to fund a “Continent Community Education” program in Hi’ilei Aloha LLC, a nonprofit that currently manages Waimea Valley.  This program would have given OHA funds to an organization outside of the Trustee’s direct oversight.  Hi’ilei Aloha would then determine who gets to travel to the mainland to educate people about the Akaka bill.  My guess is that her relative, who now works with Hi’ilei Aloha, would be doing most of the traveling, since that was the case when she worked for OHA.  This highly questionable proposal was quickly scuttled after several trustees and I brought up serious concerns at the board table, specifically that this private organization would in fact end up doing the work that OHA Trustees are charged to do.

OHA TOO TOP-HEAVY?

Just about five years ago, OHA’s budget was around $23 million.  Today, OHA’s budget has ballooned to $42,107,095.  A whopping $12,320,998 is spent on salaries and benefits.  Another $7,541,655 is spent on work that is contracted outside of OHA.  Only $1,410,130 is spent on OHA programs to assist our beneficiaries!  What’s up with that?

FALLING THROUGH THE CRACKS

I have always said that OHA’s two committee system allows too many important issues to slip through the cracks.  The system was put into place by Chair Apoliona to consolidate her control over the Board of Trustees.  Since the two committee chairs have to oversee every function of the Board, there are just too many issues for each committee chair to consider and a lot of important issues fall through the cracks.  Things are so bad now that almost nothing is being done by the committees.

The Asset and Resource Management (ARM), chaired by Trustee Stender, meets only twice a month (if there are no sudden cancellations), despite the huge swings in the stock market and the volatile nature of the world economy.  Also, the ARM committee is responsible for evaluating OHA programs and deciding whether to continue, modify, or terminate their funding, but this has not occurred for the past several years.  The State Auditor’s recent report will back this up.

In the past year, the ARM committee has cancelled or rescheduled many meetings, reducing the number of meetings we have in a month.  For example:

  • The August 5, 2009 and September 2, 2009 ARM Committee Meetings were cancelled.
  • The September 23, 2009 meeting was rescheduled to September 22, 2009.  Since there was no quorum for the September 22, 2009 meeting, it was postponed.
  • The ARM Committee meeting scheduled for May 12, 2010 was cancelled.  There were no ARM meetings in all of May 2010.

Since Trustee Stender has chaired the ARM committee, OHA has not taken its budget out into the community as required by law.

The Beneficiary Advocacy and Empowerment (BAE) committee, Chaired by Trustee Colette Machado, is responsible for developing programs which focus on beneficiary health, human services, native rights and education and evaluate all OHA programs to ensure a positive impact on our beneficiaries.  Not only has the BAE Chair failed to develop any new programs, she is actually trying to eliminate them.  Just ask members of the Native Hawaiian Historic Preservation Council (NHHPC).  In fact, since Chairperson Apoliona has chaired the Board and Trustees Machado and Stender have chaired the two Committees, virtually all OHA programs have been discontinued.

Another byproduct of this system is that the active participation of the six other trustees has been cut-off.  The only thing that the other Trustees get to do is vote on whatever is being brought to the board or committee table.  In the past, the five committee system gave the majority of the trustees the responsibility of running a committee.  Today, I believe that the saddest result of the two committee system is that several of the trustees have become apathetic.  They aren’t as interested in board affairs since they are not consulted about any subject matters prior to a meeting.  Chair Apoliona has also acquiesced trustees’ power to the CEO, which further exacerbates the problem.

Chair Apoliona always likes to say that OHA has never been better.  There is no truth to that statement.  There was a time when Trustees were passionate about the issues near and dear to their hearts; worked tirelessly to improve the lives of our beneficiaries; and when the moral of our employees were at its best.  Let us look for change in the November elections.  Aloha pumehana.

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Change is good – or is it?

Tuesday, June 15th, 2010

By: OHA Trustee Rowena Akana

Source: June 2010 Ka Wai Ola o OHA Column

Sometimes, even the best of intentions can go amiss.  This past February through April, OHA underwent a massive reorganization.  The purpose of the restructuring was to make OHA better able to implement the recently passed 2010-2016 OHA Strategic Plan.  While I appreciate all of the hard work that our Administration put into reorganizing OHA, I have the following concerns:

(1) COMPLICATED & CONFUSING: 

Prior to the recent re-organization, OHA had a simple structure that was easy to understand.  The Board of Trustees set the policy for the Administrator and he would oversee the day-to-day operations of OHA.  He had two Deputies helping him, one in charge of beneficiary advocacy & empowerment and another for OHA operations.

Now, OHA has been split into three levels.  The top level is the Board of Trustees.  In the second level, the “Chief Executive Officer” (CEO) oversees the “Chief Operating Officer” (COO) with the help of the “Corporation Counsel” and the “Chief Knowledge Officer.”  The CEO also directly oversees OHA’s Nonprofit, Hi’ilei Aloha, LLC.  In the third level, the COO oversees four “Line of Business” managers that have direct control over their respective divisions.  They include:  (1) the Resource Management Director/Chief Fiscal Officer, (2) the Community Relations Director, (3) the Chief Advocate, and (4) the Research Director.

The new structure has made it difficult for Trustees and their staff to assist our beneficiaries.  For example, if someone calls my office and needs help with ceded land maps, do I call the “Chief Knowledge Officer” or the “Resource Management Director” or the “Research Director?”  The answer is the “Research Director.”  So now, what happens to the unwritten rule that “employees are not to consult with trustees?”

(2) OUTSIDE CONSULTANTS: 

According to COO, the Administration is planning to conduct a large amount of research so that OHA can operate based on hard data.  Unfortunately, they also plan to contract much of this work to outside companies instead of doing it “in-house.”  Given the many expert managers and advocates that we have hired, such as the “Chief Knowledge Officer,” the question is — Why?  OHA is paying these new managers generously high salaries (compared to similar state employees) and I believe they should be doing more to earn it.  Trustee Machado’s concern that OHA may be too “top-heavy” at a recent meeting appears to be correct.  Also, Hawaiians have been studied to death on almost every subject, whether it’s culture, health, housing, history, land, legends, rights — you name it and there are studies and books full of data on it.  So why are we re-inventing the wheel?

(3) GRANTS: 

The Administration is currently revising the new guidelines for approving OHA grants, but there is no word yet on when it will be completed.  My concern is that the guidelines won’t be stringent enough to prevent abuses by certain trustees to “fast tracking” grants for favored nonprofit organizations.

(4) JOB TITLES: 

Many of the new positions have ridiculous titles that seem to be either too vague or too broad and the staff members who will be responsible for completing the tasks have yet to be completely identified to the trustees.  We are a Hawaiian governmental agency formed to serve our Hawaiian and native Hawaiian beneficiaries.  We are not a private corporation.  I believe the titles of the new positions and divisions need to clearly reflect the tasks and duties they are charged with.  At present, they make no logical sense at all.  My fear is that we are creating layers of bureaucracy that in the end will not produce many benefits for our beneficiaries.  So is this change good?  We shall have to wait and see.

If you have a comment to share or if you have subjects that you would like to know more about, please send it to my office or write a letter to the editor of the Ka Wai Ola o OHA.  Aloha pumehana.

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State Auditor confirms the lack of vision and foresight within OHA’s leadership

Monday, March 15th, 2010

By: OHA TRUSTEE ROWENA AKANA

Source: March 2010 Ka Wai Ola o OHA Column

Back in September of 2009, the trustees were given a draft of State Auditor Marion Higa’s Investment Portfolio Review of the Office of Hawaiian Affairs.  The 48-page report to the Governor and the State Legislature had many critical things to say about OHA’s investment structure and ability to carry out its duties.

Here are just a few of the Auditor’s concerns:

  • The board’s Investment Policy Statement (IPS) is inadequate to ensure potential conflicts and other violations are identified, reported, and resolved.
  • OHA does not have a “whistleblower” policy or a toll-free phone line available to OHA staff and beneficiaries to report potential conflicts, violations, or other issues.
  • OHA does not track general beneficiary concerns or complaints specifically related to the trust.  Complaints are therefore less likely to be reported and OHA cannot ensure complaints are properly received and resolved.

The Auditor also wrote that the Trust’s lackluster performance warrants review of the advisory service’s policies, processes, and performance. 

  • The trust’s investments were underperforming for the majority of the review period of FY2004 to FY2008, not only failing to meet its own target earnings goals in nearly half of the quarters, but also falling below average nationwide peer performance in 18 of the 20 quarters reviewed.
  • OHA did not consistently monitor investment compliance during FY2004 to FY2008.  In addition, the investment advisors do not certify quarterly or annually that they are compliant with the trust’s investment guidelines.

On September 8, 2009, Chair Haunani Apoliona responded to the State Auditor and tried to address the concerns the Auditor brought up and what OHA planned to do about it.  It was clear that the Chair wanted the Auditor to soften the harsh report.

However, on October 1, 2009, I received a copy of the State Auditor’s Final Report and, to no surprise to me, nothing substantive was changed.  The Auditor concluded that:

  • While a cursory reading of the board’s response may appear to contradict the Auditor’s findings, in most instances the board challenged secondary points but ultimately acknowledged the major points of the Auditor’s findings.
  • Moreover, many of those arguments misconstrued the facts presented in the Auditor’s report.
  • The Auditor’s final report contains only a few editorial changes based on the board’s response.

On October 2, 2009, an obviously irritated Chair Apoliona personally responded to the Auditor, complaining that she could have gone over the auditor’s comments point-by-point but chose to focus on the “big picture.”

In a memo dated October 23, 2009, I wrote that I agreed with many of the criticisms made by the State Auditor.  Further, Chair Apoliona should focus on making the much needed changes that the State Auditor suggested.  Only then can we move forward as an organization and do better for our beneficiaries.

If you are interested in reading the State Auditor’s report on OHA in its entirety, please visit the State Auditor’s website at http://hawaii.gov/auditor/Reports/2009/09-10.pdf.  Until the next time.  Aloha pumehana.

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Looking Back at 2009 and Looking forward to 2010

Friday, January 15th, 2010

By: OHA TRUSTEE ROWENA AKANA

Source: January 2010 Ka Wai Ola o OHA Column

Last year started out with the whole world caught up or affected in some negative way by America’s recession.  Economists said it would probably last through to 2010 and they were right. 

During the 2009 session, I found it embarrassing to sit through OHA’s budget briefing to the state legislature and listen to Senators and Representatives ask about OHA’s budget.  Questions included things like “Where are OHA’s priorities for spending?” and “How much was being spent on Kau Inoa registrations and OHA’s Washington D.C. office?”

They basically scolded us for not making any sacrifices and were reluctant to give us any more money.  At least that was my impression of their message to us.  However, it is important to note that the approximately $3 million that we receive annually from the state helps us to serve the less than 50% Hawaiian beneficiaries that we are also mandated to serve.

SETTLEMENT WITH THE STATE

I supported Senate Bill 995, introduced by Senator Clayton Hee, which attempted to resolve the claims and disputes relating to OHA’s portion of income from the public land trust between 11/7/1978 and 7/1/2009. 

Senator Hee’s proposal offered OHA $251 million in cash and 20 percent of the 1.8 million acres of ceded lands to be determined in negotiations between the agency and the Lingle administration.  During the Cayetano administration, OHA was offered 20% of all ceded lands and $150 million in cash.  Five OHA board members refused the offer; two of which are still on the OHA board (Trustees Haunani Apoliona & Colette Machado).  In Governor Cayetano’s recent book, he speaks to the foolishness of those board members and refers to the events as a “missed opportunity” for OHA.  SB995 SD2 offers OHA another opportunity to redeem itself.

SB995 would have given OHA the right to choose from the following properties, among many others: Kaka’ako Makai; Kahana Valley and Beach Park; La Mariana and Pier 60; Heeia meadowlands; Mauna Kea: Mauna Kea Scientific Reserve; Waikiki Yacht Club; Ala Wai Boat Harbor Complex; Kalaeloa Makai; and any and all other lands that the State may agree to convey to OHA.

Even a few of these properties could generate all of the revenue OHA needs to operate indefinitely and would have given our future nation the concrete assets it needs to serve the Hawaiian population.  SB995 would have made Native Hawaiians self-sufficient (the very essence of sovereignty) and relieved the State of Hawaii of a large burden on their budget. 

Unfortunately, SB995 failed to pass during the last days of the legislature because according to Advertiser Staff Writer Gordon Y. K. Pang, “key House members,” no doubt let by Speaker Calvin Say, declined to support the bill.  Let us hope that we can convince them this year.

SAINT DAMIEN

It is fitting that we closed the year with the celebration of the sainthood of Father Damien, a non-Hawaiian who unselfishly gave his life to care for Hawaiians.

On October 1, 2009, I traveled along with a Hawaii delegation on a pilgrimage to Belgium and to Rome to honor Father Damien.  We visited Father Damien’s hometown of Tremelo where the people of the town embraced us.  I can now truly understand where the kindness and compassion that father Damien had for our Hawaiian people came from. 

In a ceremony led by Pope Benedict XVI in St. Peters Basilica in Vatican City, Rome, we witnessed the canonization of Father Damien on October the 11, 2009.

To Father Damien, people were people, and his service to his God meant that he must serve all of God’s people.  We would undoubtedly have a more peaceful world if we could all embrace the compassion for others that was exemplified by Saint Damien.  Let us think of these good thoughts and deeds as we move forward into this New Year.

My best wishes to all for a happy and successful 2010.  Aloha pumehana.

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OHA budget: It’s time to bite the bullet

Sunday, February 15th, 2009

By: OHA Trustee Rowena Akana

Source: Ka Wai Ola o OHA, February 2009

‘Ano’ai kakou… On Jan. 6, OHA’s administration briefed the state House and Senate’s money committees about OHA’s budget and funding needs for fiscal years 2010 and 2011. After listening to the questions that the legislators asked our Administrator, I couldn’t help but feel like I’ve heard them all before.

Back in August of 2008, I wrote about my concerns regarding the health of OHA’s portfolio and our out-of-control spending. At the time, our Native Hawaiian Trust Fund portfolio had lost 10 percent of its value (approximately $39 million) and national consumer and prognostic indicators were saying that investors should have at least 20 percent of their investments in cash that can be liquidated and moved quickly. Unfortunately, OHA had less than 10 percent or $25 million of its portfolio in cash at the time.

I also wrote that according to a June 2008 report from one of our money managers, global equity markets had fallen by more than 8 percent, with U.S. and European equity markets returning -8.4 percent and -11.7 percent, respectively. As of July 9, 2008, the estimated preliminary return for their share of OHA’s portfolio in the month of June was -4.95 percent compared to benchmark performance of -4.48 percent.

They also stated that the growth outlook for the U.S. economy remains weak, as increased unemployment, a weak dollar and further pressure on the financial markets contribute to expectations of higher inflation over the next year, with expectations beyond that more restrained. In other words, we were warned. Given all of the bad news, it was more important than ever to bring our spending under control.

On Oct. 16, 2008, right before the November election, the board approved a $40,682,161 budget for Fiscal Year 2010 and a $39,675,268 budget for Fiscal Year 2011, with no reductions. The board also supported an increase in spending all the way through 2012. In other words, these realigned budgets are being approved using money that we have yet to receive and probably will not receive given that our spending policy is tied to our three-year return on investments. Since that time, our Native Hawaiian Trust Fund has fallen from $430 million to $312 million. It is very difficult to defend and justify a budget that has expanded by more than $20 million over the past six years to the Legislature or anyone else.

At present, our budget is approximately $41 million. Add to that all of the recent budget realignments and commitments made well into the future and the budget will probably climb to well over $50 million a year.

It appears that the whole world is caught up or affected in some negative way by America’s recession. Economists say this recession will probably last through 2010. That said, I found it embarrassing to sit through OHA’s budget briefing to the state Legislature and listen to senators and representatives ask why OHA had not made any cuts to its budget.

Here are some of the suggestions and questions asked of us:

* Are you willing to cut salaries if necessary?

* Will you be able to make the necessary reductions to your budget if needed?

* Where are OHA’s priorities for spending?

* How much of OHA’s budget is committed to housing and health?

* What did the Administrator mean when he said that he had spent the last seven years cleaning up OHA programs?

* How much was being spent on Kau Inoa registrations and OHA’s Washington, D.C., office?

There were many more questions, but I have not included them because of space limitations.

In this New Year of 2009, I still have great hopes that our board will come together and do what is best for our beneficiaries despite the fact that we may all differ in our opinion as to what must be done and how. This can only occur if ALL of us look at the reality of the situation that confronts us. We cannot, in this economy, continue to spend the way we have in past years. We must also convey this message to our beneficiaries.

When one of our money managers late last year cautioned us about the stock market volatility, they suggested that we should consider reducing our spending policy from 5 percent to 3 percent during these uncertain times, until things get better. I think it’s obvious that the time has come for us to take the advice of the professionals that we hired and “bite the bullet.”

It is understandable that the Legislature is critical of OHA’s lack of spending restraint. They basically as much as told us that, if you haven’t made any sacrifices and we have, why should we give you any more money? At least that was my impression of their message to us. Criticism like, “You obviously have enough to get by” only makes us appear arrogant.

Neither the Legislature nor anyone else should have to tell us that belt tightening is necessary. This is the responsibility of our board. It is important to note that OHA pointed out to the Legislature that the $3 million that we receive from the state helps to serve the less than 50 percent Hawaiian beneficiaries that we are also mandated to serve.  Aloha Ke Akua.

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OHA Budget: It’s time to bite the bullet

Sunday, February 15th, 2009

By: TRUSTEE ROWENA AKANA

Source: February 2009 Ka Wai Ola o OHA Column

`Ano`ai kakou…  On January 6th, OHA’s administration briefed the State House and Senate’s money committees about OHA’s budget and funding needs for fiscal years 2010 and 2011.  After listening to the questions that the legislators asked our administrator, I couldn’t help but feel like I’ve heard them all before.

Back in August of 2008, I wrote about my concerns regarding the health of OHA’s portfolio and our out-of-control spending.  At the time, our Native Hawaiian Trust Fund portfolio had lost 10% of its value (approximately $39 million) and national consumer and prognostic indicators were saying that investors should have at least 20% of their investments in cash that can be liquidated and moved quickly.  Unfortunately OHA had less than 10% or $25 million of its portfolio in cash at the time.

I also wrote that according to a June 2008 report from one of our money managers, global equity markets had fallen by more than 8%, with US and European equity markets returning -8.4% and -11.7% respectively.  As of July 9, 2008, the estimated preliminary return for their share of OHA’s portfolio in the month of June was –4.95% compared to benchmark performance of –4.48%. 

They also stated that the growth outlook for the US economy remains weak, as increased unemployment, a weak dollar, and further pressure on the financial markets contribute to expectations of higher inflation over the next year, with expectations beyond that more restrained.  In other words, we were warned.  Given all of the bad news, it was more important than ever to bring our spending under control. 

On October 16, 2008, right before the November election, the board approved a $40,682,161 budget for Fiscal Year 2010 and a $39, 675,268 budget for Fiscal Year 2011, with no reductions.  The board also supported an increase in spending all the way through 2012.    In other words, these realigned budgets are being approved using money that we have yet to receive and probably will not receive given that our spending policy is tied to our three-year return on investments.  Since that time, our Native Hawaiian Trust Fund has fallen from $430 million to $312 million.  It is very difficult to defend and justify a budget that has expanded by over $20 million over the past six years to the legislature or anyone else.

At present, our budget is approximately $41 million.  Add to that all of the recent budget realignments and commitments made well into the future and the budget will probably climb to well over $50 million a year.

It appears that the whole world is caught up or affected in some negative way by America’s recession.  Economists say this recession will probably last through 2010.  That said, I found it embarrassing to sit through OHA’s budget briefing to the state legislature and listen to Senators and Representatives ask why OHA had not made any cuts to its budget.

Here are some of the suggestions and questions asked of us:

  • Are you willing to cut salaries if necessary?
  • Will you be able to make the necessary reductions to your budget if needed?
  • Where are OHA’s priorities for spending?
  • How much of OHA’s budget is committed to housing and health?
  • What did the Administrator mean when he said that he had spent the last seven years cleaning up OHA programs?
  • How much was being spent on Kau Inoa registrations and OHA’s Washington D.C. office?

There were many more questions but I have not included them because of space limitations. 

In this New Year of 2009, I still have great hopes that our board will come together and do what is best for our beneficiaries despite the fact that we may all differ in our opinion as to what must be done and how.  This can only occur if ALL of us look at the reality of the situation that confronts us.  We cannot, in this economy, continue to spend the way we have in past years.  We must also convey this message to our beneficiaries.

When one of our money managers late last year cautioned us about the stock market volatility, they suggested that we should consider reducing our spending policy from 5% to 3% during these uncertain times, until things get better.  I think it’s obvious that the time has come for us to take the advice of the professionals that we hired and “bite the bullet.”

It is understandable that the legislature is critical of OHA’s lack of spending restraint.  They basically as much as told us that, if you haven’t made any sacrifices and we have, why should we give you any more money?  At least that was my impression of their message to us.  Criticism like, “You obviously have enough to get by” only makes us appear arrogant.

Neither the legislature nor anyone else should have to tell us that belt tightening is necessary.  This is the responsibility of our board.  It is important to note that OHA pointed out to the legislature that the $3 million that we receive from the state helps to serve the less than 50% Hawaiian beneficiaries that we are also mandated to serve.  Aloha Ke Akua.

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OHA Trustees need to be more involved

Thursday, January 15th, 2009

By: TRUSTEE ROWENA AKANA

Source: January 2009 Ka Wai Ola o OHA Column

`Ano`ai kakou…  Happy Year of the Ox!  A fellow trustee recently asked me if the tone of my monthly message would change since OHA’s leadership remains exactly the same as it was before this past November’s election.  I will always continue to do what I have always done, which is tell the truth, keep our beneficiaries informed, and fight for what is right.  However, in this New Year, I continue to hope that there will be changes at OHA to make things better here for everyone.

Make no mistake – OHA’s problems have not simply vanished.  The challenges to our administration and to our trustees impact all of us.  The change we were all hoping for will not occur unless both trustees and administrative staff find a way to work together.

The biggest problem is that the majority of trustees are severely underutilized.  The current two committee system allows Chair Apoliona to ignore trustees that disagree with her and it encourages other trustees to simply coast by and basically do nothing but show up to vote for her agenda.  No trustee can refute this point.  Despite the many requests by Trustees and our beneficiaries, OHA meetings are not televised like the City Council and the state legislature on Olelo with minimal cost.  If OHA meetings were televised, the general public and our beneficiaries would be able to judge for themselves how things are going.

I believe that being a trustee is not about having a fancy title and simply showing up at few monthly meetings.  It’s about proactively working for the benefit of our people.  With the many emergencies we face, our beneficiaries cannot afford to have any passive trustees.

Instead of being a proactive agency with a variety of programs to help our beneficiaries, OHA now operates like a charitable foundation that just hands out grants.  While the grants do go to worthy causes, I can’t help but feel that OHA is just passing the buck.  I’m not saying that OHA should or could do everything, but I do believe that OHA can do much more for our beneficiaries in terms of programs and services.

The problem with simply handing out grants is that you can’t deal with long-term problems and the grant monies eventually run out and services get cut.  That’s why we need on-going OHA programs monitored by the trustees.  Many of our people are forced to live on the beach because of the lack of affordable houses and rentals.  OHA has been talking for years about helping our homeless beneficiaries get into shelters and transitional housing.  When is something meaningful going to happen?

We have nine trustees with an incredible amount of combined talents and experiences.  We also have over a hundred staff members who are eager to make a difference.  But without proactive leadership, nothing will ever get done.

There used to be five committees – Land, Policy & Planning, Program Management, Legislative & Government Affairs, and Budget & Finance – however, the current leadership consolidated the five committees into just two committees, which eliminates three committee chair positions for trustees.  This is the most ineffective committee structure I have served under. 

Currently, Trustee Stender oversees all of OHA’s fiscal, policy, economic development, and administrative matters.  Trustee Collette Machado has responsibility over all federal and state legislation, on-going programs in health, housing, education, land, the Native Hawaiian Revolving Loan Fund, and then some. 

These two committees were not created to foster efficiency, but to concentrate power.  The consequence of this is that the two committees’ chairs have too much on their plate and are clearly overwhelmed.  For example, the money committee only meets once or twice to hear updates from our money managers.  Under the five committee structure, the money committee chair actually had the time to take our budget out to the community for comments and suggestions.  Also, our programs committee only meets to discuss legislation and approve grants.  Are we just going to continue throwing money at our problems?  When are we going to take a leadership position on issues such as health and housing and get things done?  Our beneficiaries deserve better.

Developing good programs won’t be quick or easy, but they will do much more to serve the needs of our beneficiaries over the long haul.  Setting priorities and developing a plan to meet those priorities is desperately needed at OHA.  This should be our goal for 2009, despite the fact that the Chairperson used her Investiture speech to preach doom & gloom and even managed to take credit for the establishment of Kuleana Land property tax breaks on Oahu, the Big Island and Kauai, which she had nothing to do with.  I pray, that the New Year will bring constructive and meaningful change, even though the Board remains unchanged after the November election.  It is my hope that we will no longer focused on political paybacks and to get down to work.  Aloha Ke Akua.

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Fiscal Irresponsibility

Friday, August 15th, 2008

By: TRUSTEE ROWENA AKANA

Source: August 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou…  Here is an update on OHA’s recent spending:

OHA OWNED BUSINESSES

On January 17, 2008, the BOT approved a realignment of the OHA budget appropriating $4,567,511 from OHA’s Fiscal Reserve Fund to be distributed over 3-years to the Hi’ilei Aloha LLC for the operation of its subsidiaries Hi’ipaka LLC and Hi’ipoi LLC.  The operating budget for all three businesses for the July 1, 2007 to June 30, 2008 fiscal year was $2,276,882, of which we have already spent $614,809.70 as of March 31, 2008.

MASSIVE GRANTS

The OHA budget was realigned again at our board meeting on June 5th to accommodate the huge Board Initiative grants which were also approved at the same meeting.  The grants include:  (1) $1,000,000 to Kanu o Ka Aina Learning ‘Ohana; (2) $750,000 to the Lana’i Cultural Center; (3) $500,000 to Kaumakapili Church; (4) $500,000 to the Malama Learning Center; (5) $150,000 to Hawaii Maoli; (6) $300,000 to Na Maka Walu; (7) $300,000 to Papahana Kuaola; and (8) $150,000 to La’i’opua 2020.  The grand total for all of these grants is $3,650,000!

Hawaii Maoli is a permanent fixture in our budget as they are contracted by OHA to collect Kau Inoa registrations.  However, there is no accounting for all of the funds that are being spent through this organization, especially monies given to grantees that do not have a 501(c)(3) nonprofit tax status.  How much more money is Hawaii Maoli getting through fees or charge-backs from these organizations?  The trustees have no idea.

LONG-TERM DHHL LOAN

On June 5th, the board authorized the Administrator to enter into an agreement with the Department of Hawaiian Homelands to cover their debt service on a loan of $35 to $41 million for a period of 30 years starting on July 1, 2008 with an amount not to exceed $3 million annually.

DHHL is a government agency under the Governor’s budget.  The state has long neglected its obligations to house Hawaiians and it should, therefore, be the state’s responsibility to guarantee the DHHL loans – not OHA.  It is the only fair thing to do since the state receives 80% of ceded land revenues while OHA has to survive on only 20% of those revenues.  As advocates for Hawaiians, OHA should be holding the state accountable instead of funding their shortfalls.

Trustee Mossman asked whether the timing for this proposal had anything to do with the Sovereign Councils of the Hawaiian Homelands Assembly’s (SCHHA) recent opposition to OHA’s negotiated settlement bill at the state legislature.  Trustee Heen assured the trustees that there was no “quid pro quo.”  However, I agree with Trustee Mossman that the timing is awfully suspicious.  Not to mention the fact that Haunani Apoliona is running for re-election this year.  Make no mistake, I am NOT against giving grant money away.  However, in order to stay within our budget, we must cut costs elsewhere.

At present, our budget is approximately $41 million.  Add to that all of the recent budget realignments and the budget will probably climb to well over $50 million a year.  This is a ridiculous figure.  Besides all this, OHA is too top heavy with “special assistants” who are getting contracts to work on “special projects” that are taking up a great deal of our inflated budget. 

The scariest thing of all is that Apoliona is supporting the increase in spending all the way through 2012.  In other words, these realigned budgets are being approved using money that we have yet to receive.  With the economy in the “drink,” our people struggling with high gas prices and unable to drive to work or losing their homes and being forced to live under freeway overpasses and beaches, OHA continues to spend money like “drunken sailors.”  The question is why?  At present, we are already $5 million overspent in our current budget.  Wouldn’t our people understand if we explained how important it is to tighten our belts at this time?  We should be leading by example.

“Making a lot of nonprofits happy now by offering them a lot of money into 2012 and then taking that money away after the November elections because we are not able to meet these commitments is cruel, irresponsible, and a terrible way to get votes.”

EXPENSIVE ATTORNEY’S FEES

One of OHA’s attorneys for our failed ceded lands negotiated settlement with the state and the OHA v. State II case was paid a total of $414,533.84 in attorney’s fees.  A second attorney was paid a total of $423,840.16.  As you may recall, the ceded lands negotiated settlement was shot down by the state senate and OHA lost the OHA v. State II case.

OHA’s Washington D.C. law firm that was hired to lobby for the passage of the Akaka bill was paid over $2,000,000 (that we know of, a request for a monthly billing statement would be much more accurate – these numbers are conservative).  A special consultant for the Akaka bill was paid an additional total of up to $450,000.  That is a total of up to $2,450,000 (conservatively) which have been paid to lobbyists who have not been able to deliver the votes.  Make no mistake, I support the passage of the Akaka bill, but I have also suggested many times that we hire people who are able to deliver.

OHA INVESTMENT PORTFOLIO DROPS

 The Native Hawaiian Trust Fund portfolio has lost 10% of its value (approximately $39 million) in these tough economic times, and probably more at the time of this printing.  National consumer and prognostic indicators say that investors should have at least 20% of their investments in cash that can be liquidated and moved quickly.  Unfortunately OHA currently has less than 10% or $25 million of its portfolio in cash

According to a June report from one of our money managers, global equity markets fell by more than 8%, with US and European equity markets returning -8.4% and -11.7% respectively.  As of July 9, 2008, the estimated preliminary return for their share of OHA’s portfolio in the month of June was –4.95% compared to benchmark performance of –4.48%.  They also stated that the growth outlook for the US economy remains weak, as increased unemployment, a weak dollar, and further pressure on the financial markets contribute to expectations of higher inflation over the next year, with expectations beyond that more restrained.  Given all of this bad news, it is now more important than ever to bring our spending under control.

TRUSTEE HEEN’S MEMORY

On another note, I was surprised to read OHA Trustee Walter Heen’s June 13th letter to the Star Bulletin where he wrote, “I do not recall Akana ever dissenting from any of the terms (of the ceded lands negotiated settlement) that were brought before the board, including the waiver provision that she now loudly decries.”

Heen was present at all of the executive session meetings where I expressed concerns regarding the waiver provision.  Further, all of the OHA trustees, along with the administrator, received a letter from me, in advance, which explained why I could not support the settlement bill and that I would be submitting testimony to the legislature in opposition to the bill.

I hope that Heen will make sure that OHA has lined up its “ducks” next time for the 2009 legislative session since he is now part of the negotiating team.  Further, I question why OHA’s negotiating team is still negotiating with the Governor’s office when she has publicly stated that she will not reconsider her proposal – a proposal that our beneficiaries have overwhelmingly rejected.  Why not just work with the legislature?

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OHA must televise its meetings

Tuesday, July 15th, 2008

By: TRUSTEE ROWENA AKANA

Source: July 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou…  Just like the resistance to conducting a forensic audit on OHA by certain trustees, efforts to broadcast our meetings on television are also facing the similar resistance.  The question is why? 

A forensic audit would be a useful tool to help us manage our assets better, as well as look at the things that we are doing right.  Similarly, broadcasting OHA meetings would be a great communication tool for our beneficiaries to learn about the programs we fund, how we are spending their Native Hawaiian Trust dollars.  More importantly, they can find out about the many, many other functions that OHA is also currently involved in such as land, water, and historic preservation issues (including litigation) on all islands.  We can also go more in-depth about the federal and state legislation that we support or object to.

Trustees at our May 22nd Committee on Beneficiaries, Advocacy & Empowerment (BAE) meeting were not supportive of a resolution (HCR 345), recently passed by the legislature, which asks that OHA be more accountable to our beneficiaries by televising our general meetings – similar to what the state legislature and city council already do on OLELO Community television.

One trustee insisted that, “If we had to do it, I would opt for the most inexpensive way.”  Another asked, “Who would watch us anyway?  There aren’t any numbers or demographics even on our radio show during our morning drive into work.”  I feel this is really a good question.  Why don’t we know who many people are listening to the show, especially since the show’s contract has just been renewed?  One trustee even said that “the legislature’s reso is just that!  It’s not law and we don’t have to do it if we don’t want to.”

Our deputy administrator’s comments were that he would have a recommendation to the board by September – Four months from our meeting!  Recognizing that it would only be a recommendation, it appears that there would NOT be a recording of an OHA meeting until the end of the year.  Why are these trustees worried about what the beneficiaries and the general public would see?  It should be obvious given the fact that it is an election year and Trustees Apoliona, Cataluna, Lindsey, and Machado are running for re-lection in the November 4th general election.

There are many positive points of broadcasting our meetings:

  • Broadcasting on OLELO would cost almost NO money since there are as many as fifty OHA staff members that are certified to handle OLELO video equipment and OLELO would run the show on their Native Hawaiian cable channel for free. 
  • OHA already produces regular programs and discussions on OLELO.
  • Most OHA meetings take place during work hours in the middle of the work week.  We should give our beneficiaries the option of viewing our meetings after they get home from work or on the weekends.
  • As for viewership, OHA deals with many hot-button issues that would resonate with the community and draw hundreds, if not thousands of viewers.
  • OHA’s mandate is so enormous that a one hour radio show couldn’t possibly address or explain exactly what we do here.  A television show would do more for OHA than any other paid advertising that OHA has ever done.
  • More and more people are turning on their televisions or their computers to view the news.  Unfortunately, less people are reading newspapers, like our Ka Wai Ola, these days.

All that said, broadcasting the OHA meetings would be a very good way to improve OHA’s image in the community.

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OHA beneficiaries demand accountability

Thursday, May 15th, 2008

By: TRUSTEE ROWENA AKANA

Source: May 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou…  Here are a few recent developments at the legislature and at OHA:

SCHHA REQUESTS BASIC INFORMATION 

On March 27th, the Sovereign Councils of the Hawaiian Homeland Assembly (or SCHHA, formerly the State Council of Hawaiian Homestead Associations) called on the legislature to audit OHA.  They argued that OHA did not provide them with the basic information they needed to review OHA’s settlement agreement with the Lingle Administration for back-payments of ceded land revenues due from 1978-2008. 

The SCHHA specifically asked: (1) How the $200 million dollar amount was determined, including whether the revenues considered included disputed and undisputed income sources; (2) How $187 million of the total $200 million was determined to be provided in lieu of cash; (3) How the annual minimum payment of $15.1 million a year to OHA was determined; and (4) What native rights are being waived.  The SCHHA also said the State and OHA need to conduct a meaningful consultation with them as required by law since they are native Hawaiian beneficiaries. 

None of this would have happened if Chairperson Apoliona properly informed our beneficiaries about what this kind of settlement would mean to our future.

FORMER STAFF CLAIMS GROSS MISMANAGEMENT 

Also in March, a recent former OHA employee testified to State senators that he had “witnessed a great many outrageous acts” at OHA.  He wrote that, “OHA staff morale has plummeted, programs implemented to benefit Native Hawaiians have been circumvented, and gross mismanagement has been apparent from the very top.”  He also said that, “Today, OHA is a self serving organization only interested in acquiring money and power for itself and is so hamstrung by politics that it has failed in its mission to help all Native Hawaiians…”

He explained that one reason for the low moral at OHA is that “…the employees who have either chosen to leave OHA or who have been fired are the most competent at what they do professionally… and have the passion and drive to create successful projects for the community.  Initiative is rewarded by reprimands and/or termination from OHA by its top Administrators.” 

He also supported my earlier statements in the December 2007 Ka Wai Ola that staff members are not allowed to speak directly with Trustees.  He said that, “OHA staff are forbidden to speak with any of the Trustees for fear that they will ‘complain’ to them about the Administrator and the Deputy Administrator.  If a request is granted to speak with a Trustee, a manager accompanies staff to monitor what is being discussed.” 

Like the SCHHA, he also called for a financial and management audit of OHA, but his reason was due to “gross mismanagement.” 

FOUR-MONTH RESPONSE TIME TO INFORMATIONAL REQUESTS

Here is an example of my experience, even as a Trustee, of how hard it is to get any information out of OHA.  On January 4, 2008, I put in a request for specific information regarding the money being spent on sponsorships by OHA in Washington D.C.

I sent a follow-up memo on February 28th asking what happened since I had not heard back from them. 

I sent another follow-up memo to the administration on March 10th asking why they had not responded. 

I was finally forced to ask the Office of Information Practices (OIP) for help on March 11th. 

On March 12th, my office received a memo from the administration apologizing for the delay and promising that the report will be completed by the end of the month and circulated to all Trustees.

On March 14th the OIP sent a letter to the Administration saying that they had ten days to provide the information I requested or provide a reason why they were denying my request.

On March 31st, I had my staff follow-up with the administration (17 days after the OIP letter) to see what was causing the delay.  The administrator assured me that the report will be coming shortly.

Finally, on April 2nd, almost four months later, I received the information I requested.

Clearly, there is a lack of wisdom and foresight in OHA’s leadership.  Mrs. Rubin, the senior aide for Chairperson Haunani Apoliona, has been way out of line with her attack ads against me.  The recent incidents that I’ve described above only prove what I’ve been saying all along.  Instead of addressing the problems to make things better at OHA, the Chairperson and her staff continue to deny that there are serious problems within the organization.  Our beneficiaries have made their voices heard at the legislature this year, asking legislators to make OHA more transparent by sharing information and by demanding an audit.

NEW/OLD LAWSUIT – MUST FOLLOW THE MONEY

On April 3, 2008, attorney William H. Burgess, filed another lawsuit against OHA (Kuroiwa v. Lingle).  Burgess is representing six people with a history of filing lawsuits against Hawaiians, including James Kuroiwa, Earl Arakaki (from the previous lawsuit Arakaki v. Lingle), and former Advertiser publisher Thurston Twigg-Smith.  These people are still using the same tired arguments from Arakaki v. Lingle that have been thrown out by both Hawaii and Federal courts.

I have always said that what we need to do is follow the money and ask, “Who could be paying for this?”  What is Burgess’ motivation?  No one sues someone for nothing.  While some people may think that a lot of people are suing us, this is not the case.  All of these lawsuits are being filed by the same people and among them is Thurston Twigg-Smith, a man that has unlimited resources.  One has to be asking why?  What is Twigg-Smith’s real motivation?  At some point, the courts need to realize that these complaints need to be thrown out permanently.  There should be a limit to the nonsense.  Perhaps what we need to do is sue these people for harassment.  Maybe then common sense can prevail.

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