Native Hawaiian Legal Corporation

The need for fiscal responsibility

`Ano`ai kakou… On May, 30, 2012, the Star Advertiser reported that the state Council on Revenues lowered the revenue projection for next fiscal year, which prompted Governor Abercrombie’s administration to cut back the state’s spending.

This is not surprising. When revenues are down, everyone cuts back on spending. Everyone except OHA.

Trustees Keep on Spending

Our new CEO, Ka Pouhana Kamana’opono Crabbe, has been working diligently to cut our budget wherever possible and to streamline operations to save money, but there are still Trustees who insist on spending more.

This extra spending puts enormous pressure on our dwindling resources at a time when OHA has already accepted major financial commitments such as Waimea Valley, ownership of the Kaka’ako Makai Settlement Properties, and other commitments such as the $3 million/per year for 30-years debt service for the Department of Hawaiian Home Lands and funding for organizations such as Alu Like, Inc. and the Native Hawaiian Legal Corporation that have made their way into our annual budget. These are huge amounts of revenues being contracted to these entities. Add to this the grants and annual operational expenses and we are maxed out.

A Constant Issue

Overspending has been a longstanding problem at OHA. In April of 2004, our money committee chair asked for a legal opinion that would allow OHA to spend more of the Native Hawaiian Trust Fund. He even questioned whether it’s even appropriate to build the Trust at all.

I have consistently argued against OHA’s 5% spending policy and strongly recommended that it be reduce instead to 4%, at least until the economy fully recovers again. Even Kamehameha Schools operates at a lower spending rate than 5%.

Fiscal Restraint

In these tough economic times, there are nearly a hundred nonprofit organizations asking for OHA grants each year. While giving the money away will make OHA very popular in the short-term, we should be focusing on the long-term health of the Native Hawaiian Trust Fund.

We have worked carefully for two decades to build the Trust to over $300 million. I would hate to see this relatively modest amount shrink down to nothing in shortsighted spending sprees that forces us to realign our budget several times a year and draw more money from our corpus (trust). What other organization does this?

Greater Transparency

State law (Hawaii Revised Statutes §10-14.5 on budget preparation and submission; auditing, Section b) requires that: “The (OHA) board shall provide opportunities for beneficiaries in every county to participate in the preparation of each biennial and supplemental budget of the office of Hawaiian affairs. These opportunities shall include an accounting by trustees of the funds expended and of the effectiveness of programs undertaken.”

I have recommended time and time again that OHA needs to take its proposed budget out to the community so that our beneficiaries can give us their input as well as tell us what their needs are.

This was the common practice of OHA in the past and I believe it helped OHA to develop a budget that was more in-sync with our beneficiaries’ concerns.

I will continue to press OHA’s money committee chair to take our next proposed budget out to the community, as required by law, including the neighbor islands.

So which path will OHA’s leadership take?

It has long been understood that OHA is a “temporary” organization that will someday be dissolved and its assets transferred over to the new Hawaiian Nation.

So the critical policy question is: “Will OHA continue to be a ‘temporary’ organization that will give the Hawaiian Nation the assets it needs to survive or will OHA continue to spend freely and shrink the Trust Fund?”

OHA desperately needs Trustees who will make the tough decision to focus on building towards a more permanent, long-term goal instead of taking the easy and popular path of short-sighted spending.

In this election year, OHA beneficiaries should look carefully at the candidates running for OHA Trustee and choose individuals who will take OHA in a more fiscally responsible direction.

What has been sorely lacking is for Trustees to prioritize our spending and focus on the things that our beneficiaries need and NOT use OHA’s “Strategic Plan,” which is at best a wish list of too many things and does not focus on the top priorities of our people.

NOT listing priorities leaves the door wide open for certain Trustees to continue to fund anything and everything while neglecting meaningful programs in healthcare and housing.

As long as trustees keep drawing money out of our corpus, or trust fund, we are taking money away from future generations of Hawaiians. After all, what is a nation without assets? Aloha Ke Akua.

Programs need to be self-sufficient

By: TRUSTEE ROWENA AKANA

Source: September 2008 Ka Wai Ola o OHA Column

`Ano`ai kakou… OHA gets millions from the state general fund each year, which OHA matches through trust fund dollars, which totaled about $2.8 million in 2005. Most of these funds goes to three nonprofit organizations that benefit Native Hawaiians — Na Pua No’eau, the Native Hawaiian Legal Corporation (NHLC) and Alu Like. In 2005, Na Pua No’eau received about $700,000 of its $1.5 million budget from OHA. Roughly $600,000 went to the NHLC, which represented more than half of its operating budget. In 2006, OHA earmarked $750,000 toward Alu Like programs. All of these amounts do not include separate grants, contracts, and programs funded by OHA that are outside of these organizations’ budgeted appropriations.

While I applaud the mission of these organizations and the dedication of their employees to better the conditions of Native Hawaiians, OHA does not have the resources to fund these programs indefinitely. Add to that the fact that our economy is slowing and OHA’s Native Hawaiian Trust Fund portfolio has fallen to approximately $375 million (as of June 30, 2008) and the outlook seems even more doubtful.

Given these tough economic times, OHA needs to find a way to help these organizations become more self-sufficient and less of a drain on our budget. Some organizations, such as the Native Hawaiian Legal Corporation, should be completely eliminated from our budget. Funds allocated for legal representation for our beneficiaries should be given to more than one firm so that they may get the best representation they can.

Despite our generous assistance to NHLC over the years, we are constantly hearing complaints from the community regarding NHLC’s treatment of our beneficiaries and the quality of their customer service. Things have gotten so bad lately, that it now seems as if a beneficiary is appearing at almost every meeting to complain about the way NHLC has treated them.

OHA has even been forced to set-up a special fund to handle cases that were rejected by the NHLC, which we call our “conflict fund.” However, in order to qualify for these funds, our beneficiaries have to go through the bureaucratic hassled of first getting a letter from NHLC stating that they cannot take the case. Unfortunately, NHLC seems to be dragging their feet on getting these letters out. For example, one beneficiary claimed that NHLC refused, despite repeated requests, to give them a letter stating they could not represent them because of a conflict of interest.

In another case, a beneficiary in Hilo claimed that NHLC dropped their case at the eleventh-hour. This forced the beneficiary to scramble and find other assistance in order to save her case. There are also several beneficiaries who have reported that NHLC has not responded to them regarding the status of their cases, even after years have gone by. It seems as if the NHLC is keeping certain cases “ongoing” so they can keep them on their books to justify additional funding.

Several trustees have also brought up concerns that the NHLC’s lawsuits against the Department of Hawaiian Homelands (DHHL) on the island of Hawaii will have detrimental affects on OHA’s ability to develop affordable housing. Currently, NHLC is trying to stop DHHL from leasing out lands in order to generate revenue through several lawsuits. Clearly, they are not looking at the larger picture – how can DHHL operate and assist their beneficiaries without more revenue? All the lawsuits are doing is creating a negative sense in the community at-large that “Hawaiians are suing Hawaiians.”

Clearly, if NHLC wants OHA to continue finding their organization, they must conduct a major overhaul. Our administrator has also suggested that they send a report on their caseload to OHA on a weekly or bi-monthly basis so that we are no longer blindsided at the board table. I would require that their continued funding depends on it.

Employee Exodus to Date for 2008

On August 8, 2008, our Chief Financial Officer (CFO), a senior officer in OHA’s administration, resigned from his position effective October 8, 2008. So for those trustees who insist on taking a Pollyanna attitude and insist everything is OK, I would like to remind them of the glaring fact that in the last six-months, OHA’s fiscal department has lost: (1) an accountant, who wrote a letter to trustees saying she felt she was unfairly terminated; (2) our Comptroller, who moved to another state, and (3) our CFO, who left while OHA is in the midst of an audit and finishing up our upcoming total operating budget.

In total, there have been at least six staff members who have left OHA by choice or otherwise this year.

Wrapping-up 2005

By: OHA Trustee Rowena Akana

Source: Ka Wai Ola o OHA, December 2005

‘Ano’ai kakou… Another challenging year for OHA has comes to an end. As we look forward to the coming year, I’d like to take this time to reflect on issues and events from the past year.

STATE LEGISLATURE

Although OHA was able to help Na Pua Noeau, the Native Hawaiian Legal Corporation, and Alu Like, Inc. boost their budgets, several of our most important bills ended up dying. For example, ever since 2001, we’ve tried unsuccessfully to pass legislation that would reestablish the continued funding of OHA from ceded land revenues. The Legislature needs to define, once and for all, the revenue stream from public trust lands that is to be given to OHA for the benefit of Hawaiians.

We must also do something to save our Kuleana Lands. For the past two years, I have submitted bills that would exempt Kuleana lands from real property taxes if the land has been continuously occupied by the descendants of the original titleholder. I am determined to give struggling Hawaiian families living on kuleana lands the tax relief they desperately need to hold on to their homes and legacy.

FISCAL

I brought up two concerns when Goldman Sachs and Frank Russell were hired to serve as OHA’s two financial managers on January 16, 2003. First, I felt that their fees were too high. Secondly, I argued that we should hire an independent consultant to make sure they were doing their jobs. Unfortunately, OHA’s leadership at the time didn’t agree with me and the contracts were approved. I finally got some vindication when State Auditor Marion Higa came out with her April 2005 audit of OHA and found that our money managers’ fees were too high and that we should have hired an independent consultant to help us evaluate them (which still has not occurred).

OHA POLICY

For years now, I have been calling for OHA to create a Land Division to be headed by a “Land Konohiki,” an expert specializing in land acquisition, management, and investment and ceded land claims. The Land Konohiki would be able to quickly consider private lands for acquisition. The Administration is now beginning to look at addressing this concern.

Also, back in April, I strongly opposed a proposal to establish two censors to control what trustees could print in their Ka Wai Ola columns. Thankfully, this threat to free-speech was quickly dropped after I brought up my concerns in an editorial to the Honolulu Advertiser and in my Ka Wai Ola Column. While the Chairman has publicly stated that there was no attempt to implement the censors, I have a copy of the written recommendation that was given to the trustees.

LAWSUITS

We made some progress in the Arakaki Lawsuit. The 9th U.S. Circuit Court of Appeals’ denied the Arakaki plaintiffs any standing regarding the Department of Hawaiian Home Lands and ceded land revenues. That just leaves OHA’s matching funds from the state, which I feel is pretty ridiculous since we are a state agency.

I was most disappointed by the October lawsuit filed by Virgil Day, Mel Hoomanawanui, Josiah Hoohuli, Patrick Kahawaiolaa, and Samuel Kealoha, Jr. against OHA. They want OHA to stop serving Hawaiians with less than 50% blood through programs such as Na Pua No’eau and the Native Hawaiian Legal Corporation. They also want us to stop supporting the Akaka bill. When will we learn that a people divided cannot stand? The only people that will gain from our bickering are those who do not want to see Hawaiians prosper in their own homeland.

FEDERAL RECOGNITION

We learned in late July that the previously unheard of Grassroot Institute of Hawai’i, led by Richard Rowland, had joined Thurston Twigg-Smith and H. William Burgess in opposing the Akaka bill. These people fed Congress false and misleading information in an effort to confuse the issue. They say that they are fighting for equality, but I believe they are really motivated by racism.

Urgent matters, such as Hurricane Katrina, ended up postponing the Akaka Bill. As of this writing, OHA is planning to lobby the Senate in the week before Thanksgiving. I believe it will be our last chance to get the bill passed this year.

ELDER CARE

On a positive note, I was very pleased that on June 23, 2005, the Board of Trustees approved a grant of $300,000 to help fund the Kupuna Continuing Care Assurance Program which will be administered by Lunalilo Home over the next two years. The program is designed to help make residential care, respite care, adult day care, and outreach nutritional services more affordable for Native Hawaiian kupuna.

Your prayers and guidance, for those of us in hardship in 2006, will help to make our journey successful. May the Lord bless and keep you all safe this holiday season. Aloha pumehana.