Tag: OHA Administration

Understanding OHA Politics: 5 Trustees + 1 CEO = Total Control

`Ano`ai kakou…  Due to the recent state audit, some have been calling for the ouster of all current Trustees.  Before people “throw the baby out with the bath water,” I think it’s important to understand how the politics at OHA allows six individuals to have complete control over OHA.  It’s a simple formula:

FIVE TRUSTEES

Five Trustees choose the Board Chair, which gives them an enormous edge over the remaining four Trustees.

The Board Chair serves as OHA’s Chief Procurement Officer and has complete control of OHA’s checkbook.  However, she has handed over this responsibility to the CEO so he can cut checks on a daily basis.  Some of the Trustees have questioned the CEO’s spending but the Board Chair is still OHA’s Chief Procurement Officer and if she is unwilling to investigate it, then nothing happens.

Another problem is legal representation for the “whole” Board as opposed to a few Trustees.

+ ONE CEO

Only Five Trustees are needed to hire the CEO, so he can ignore the remaining four if he chooses.  And that is exactly what he has done!  He has even gone so far as to tell his department heads to not meet with Trustees unless they have his permission.

The CEO has far more power over OHA than any Trustees or even the Board Chair.  Only the CEO (not the Trustees) has the power to hire and fire any OHA employee.

The CEO has complete control of OHA’s legal department and OHA’s Corp. Counsel answers directly to him.  So good luck asking the Corp. Counsel for help if you have a problem with the CEO.  Also, all of OHA’s legal department opinions must go through the CEO before the Trustees can see them.

= COMPLETE CONTROL

I’ve heard people argue that the Trustees should have known the CEO was misspending OHA Trust funds and that all Trustees share the blame for his misconduct.  Normally, I would agree with that statement.  However, when Five Trustees and the CEO form a political partnership, it is nearly impossible for the remaining Four Trustees to discover the truth.

As most people know, I have even gone so far as to sue the Board of Trustees to get some transparency.  That is the only option that minority Trustees have – go to court against the Board to allow information to flow to all Trustees and the public.

Aloha Ke Akua.

WAITING OVER A YEAR: Where is OHA’s Internal Audit?

`Ano`ai kakou…  Way, way back on February 8, 2017 – before the recent State Audit was completed – the Board of Trustees approved Action Item RM 17-02, which authorized a Request for Statement of Qualification from an independent CPA firm, for the purpose of conducting an audit of OHA and its subsidiary Limited Liability Companies (LLCs): Hi’ilei Aloha LLC, Ho’okele Pono LLC and Hi’ipaka LLC.

RM 17-02 authorized an independent auditor to look at the following:

  • Contracts:
    1. Sufficiency of contract/grant oversight provided appropriately by the assigned contract manager/monitor;
    2. Deliverables were met by the contractor/grant recipient;
    3. Conflict of interest with LLC managers and directors; and
    4. No fraudulent or wasteful disbursements were made.
  • All other disbursements of funds, excluding payroll:
    1. Conflict of interest with LLC managers and directors;
    2. Compliance with internal policies and procedures; and
    3. No fraudulent or wasteful disbursements were made.
  • Quarterly reports to the BOT:
    1. Sufficient internal controls are in place to ensure the integrity of the performance indicators as reported in the quarterly reports to the BOT.

On December 18, 2017, the independent auditor requested the check registers from Hi’ilei Aloha LLC, Ho’okele Pono LLC and Hi’ipaka LLC in order to finalize the audit.  It’s three months later and, at the writing of this column, we’ve still received nothing.

As a result of the stalling, on February 7, 2018, the Resource Management Chair, Trustee Hulu Lindsey, was forced to ask the Board to approved Action Item RM# 18-02 to compel the LLC Managers (OHA’s CEO, COO, & CFO) to submit any necessary LLC documents to her so she can transmit them to the independent auditor.

However, the LLC Managers and OHA’s Administration have objected to submitting their “proprietary” information to the Resource Management Chair.  Instead, they want to submit the documents directly to the independent auditor.  However, as contract administrator for the audit, the Resource Management Chair acts as the point of contact and is responsible for oversight of the audit.  Therefore, there shouldn’t be a problem with routing documents through her office for transmittal to the independent auditor.  The Resource Management Chair and her staff are willing to sign nondisclosure agreements to address this concern.

The LLC Managers and the Administration have also expressed doubts about legal issues related to the Board’s authority to request information from the LLCs.  In response, Trustee Hulu Lindsey consulted the State Attorney General’s office and received a letter stating that OHA (the Member) has rights to the information requested, pursuant to the Operating Agreements between OHA and each LLC, and pursuant to HRS Chapter 428, the Uniform Limited Liability Company Act.  The right of access includes the opportunity to inspect and copy records during business hours.

As the highest authority at OHA, the Board of Trustees should not have to tolerate all of the excuses and stalling tactics by the LLC managers and OHA’s Administration.  The OHA Chair needs to show some courage and demand that the information we need to carry out our audit is delivered to us immediately.  After all, this is one of the areas that the State Auditor said needed to be looked at.  This obvious stall is an indication of mismanagement.  Aloha Ke Akua.

IT’S WHAT I’VE BEEN SAYING FOR YEARS: OHA needs more Fiscal Responsibility, but certain Trustees have lacked the political will

`Ano`ai kakou…  Recently, there has been a lot of critical news about OHA’s recent spending on grants, sponsorships, and Limited Liability Companies (LLCs).  But this is definitely not news to me.  It’s what I’ve been saying all along.  Here are some highlights of my past Ka Wai Ola articles during the past year:

  • January 2018 – OHA publishes a book and hands over Scholarship Program to UH. On November 21, 2017, OHA published a book on mana that took five years of staff time to print.  I’ve been waiting months for a response about where the money to publish the book came from.
  • December 2017 – Bring Back OHA Run Programs. I wrote that change will not occur unless the Trustees begin to hold our Administration responsible for their actions.
  • April 2017 – Back to Normal: Ho Hum, Business as Usual. I wrote that one of OHA’s money managers recommended that we get rid of the Fiscal Reserve slush fund.  Trustees seemed supportive, but nothing has happened since.  Now the State Auditor is calling this out!  I also wrote that we need to find a more efficient way to run our essential programs such as community grants.  The State Auditor’s February 2018 Audit of OHA (LINK: http://files.hawaii.gov/auditor/Reports/2018/18-03.pdf) vindicates my position that OHA grants are still not being monitored and mostly given to those who know who and how to ask.
  • March 2017 – Transition: Change doesn’t have to be painful. I argued that OHA must be an agency that treats our beneficiaries equally and it’s now up to the new leadership to make sure there is an even playing field at OHA.  However, this has not occurred.  I also mentioned that on February 8th, the Trustees formed an Advisory Committee to make recommendations to the Board on the scope of a proposed financial audit and management review.  This only came about because our beneficiaries demanded it and wanted an answer to the one question I’ve been asking nonstop for the last decade:  Where is all the money really going?”  This effort has met with great opposition from the Administration.

ON ANOTHER NOTE:

Mona Bernardino, who currently serves as chief operating officer of Hiilei Aloha LLC, one of OHA’s five nonprofit LLCs, recently wrote an op-ed piece to Civil Beat.  In it, she tries to shift the blame for OHA’s misspending and lack of transparency solely on the Trustees by hinting that it has to do with Trustee Allowances.  What Ms. Bernardino fails to mention is that nothing was spent on things that weren’t allowed under current OHA policies.

Also, the fact that OHA’s LLCs are shrouded in secrecy and riddled with complaints rests mostly on Ms. Bernardino’s shoulders.  Her objections to the audit of the LLCs has caught our attention for sure.

This is an election year and people like Ms. Bernardino would like nothing more than to get rid of the Trustees who have been demanding accountability.  This is what prompted her op-ed letter.  However, what she has done is open the barn door for not just the auditors, but for the Trustees to re-examine the need to have five LLCs.  I have NOT been a fan of OHA’s LLCs.  Three of them were secretly created by two former Trustees and the former Administrator without Board approval.  They were eventually approved by the Board two years after they were formed, but only because I started asking questions about them.  Aloha Ke Akua.

OHA turmoil: Trustee Akana says staffers told of flagrant disregard for policies

NOTE: This op-ed was originally printed in the Honolulu Star Advertiser on February 25, 2018

LINK:  http://www.staradvertiser.com/?p=722471?HSA=44dec0285d36f9e93efa1bd7b3c84c45c183bddf

In January 2017, as then-chairwoman of the Office of Hawaiian Affairs’ board of trustees, I and four other trustees offered OHA CEO Kamana‘opono Crabbe a buyout of his contract so that we could have a fresh start with a new CEO and correct many of the issues that have now been revealed by the state auditor.

However, three trustees fought us hard: Colette Machado, Bob Lindsey and Dan Ahuna went above and beyond to protect the CEO. They all refused to deal with the problems plaguing OHA and lacked the political will to make the necessary changes.

Over the past few years, OHA has had a problem with a mass exodus of administrative staff. Whole divisions were gutted and we lost our most capable and experienced staff.

Several of these employees confided in trustees they trusted and shared their horror stories of unqualified managers, friends of the CEO, who flagrantly disregarded policies and procedures. When they brought up their concerns, they were threatened, bullied and reprimanded. Most of them left for greener pastures.

There were always at least a few grant applicants who complained to trustees about the application process during every grant-giving cycle. They sent us emails and personally testified at the board table about the unfairness of the whole process. Many of them said their grants were denied based on technicalities. And yet, at the same time, many of the organizations that received grants were not properly evaluated on their deliverables. Many of the institutions that did receive grants had some sort of personal connection to the CEO. Beneficiaries constantly urged the trustees to do something, but the trustees in power believed the CEO was doing a good job and ignored the complaints.

In February 2017, I was removed as the board chairwoman because, I believe, of the sweeping changes I intended to make within the organization. The efforts to reform OHA came to a halt and things went back to the status quo when Machado was chosen as my replacement, and the CEO was back in business.

At the time of my ouster, I warned OHA’s new leadership that one cannot hide the truth, that it was only a matter of time before the public found out about what was really going on here. I believe the recent state auditor’s report says it all.

A year has passed since the new faction took over and, as predicted, nothing has changed.

Further, legislative measures such as Senate Bill 1303, which calls for amendments to the OHA election process, are dangerous because many of the reform-minded trustees calling for fiscal responsibility, such as Trustees Hulu Lindsey, John Waihee IV and myself are up for re-election this year. SB1303 specifically targets our races. Those who want to maintain the status quo are hoping that the new voting format will help them knock us out of office. Proponents of the bill say they want a head-to-head race with the three at-large candidates, but this already happens in the primary election. Six candidates will move on to the general election for three seats.

The Return of Trustee Accountability: Bring Back OHA Run Programs

`Ano`ai kakou…  With a New Year coming up soon I continue to hope that there will be positive changes at OHA.  However, change will not occur unless the Trustees begin to hold our Administration responsible for their actions.

The biggest problem is that the current system encourages Trustees to do nothing but show up to vote for action items written by the Administration.  Many of these action items are delivered to us a few days before a meeting, giving us very little time to properly review them.  This is why Trustees often feel blindsided at the table by last minute proposals.

Another problem is that OHA only reacts to problems as they pop up instead of proactively solving issues before they get serious.  With the many emergencies we face, our beneficiaries cannot afford Trustees that only sit back and passively wait to put out fires.

OHA used to be a hands-on agency with a variety of programs to help our beneficiaries.  Whenever a beneficiary would call with a problem, whether it had to do with health, education, housing, or even funds for an emergency, we could call someone in the OHA Administration for help.  Our beneficiaries were assisted quickly and efficiently by an OHA staffer.  That’s why having in-house OHA programs, closely monitored by the Trustees, are so important.

Today, OHA mostly operates like a charitable foundation that simply hands out grants and conducts research.  Most of the successful OHA-run programs, like Aha ‘Opio and Aha Kupuna, which took years of hard work by past Trustees to develop, have been contracted out or quietly discontinued.

OHA also had a very successful housing program through a partnership with Fannie Mae and implemented through First Hawaiian Bank.  We not only provided assistance with down payments but also classes on how to control debt in order to qualify for a mortgage.  In those productive years OHA ran many programs with just a quarter of our current staff.  While farming work out to nonprofits is appropriate in some cases, I believe OHA has gone too far.

A STEP IN THE RIGHT DIRECTION

Rebuilding our programs won’t be quick or easy, but there is hope.  For the last eight years, OHA contracted with a third-party “middle-man” to administer OHA’s funds to support 17 Hawaiian-focused charter schools.  The middle-man took a small percentage of the funds as an administrative fee to cover the costs of distributing the fund and ensuring compliance.  Since the Trustees approved $1.5 million for this school year and next school year, the administrative fee was estimated to be up to $200,000 for each year.

On October 19, 2017, the OHA Trustees approved distributing the $3 million directly to the charter schools over the next two years.  Amazingly, the Trustees finally decided to get rid of the middle-man.  This means that the administrative fee will now go to the schools.  It’s a win-win situation I’m hoping we can replicate with other OHA programs.

ACCOUNTABILITY

The Trustees are ultimately accountable for OHA.  Therefore it makes more sense to run our programs in-house so that we can monitor them.  That way, OHA Trustees will be more involved and regularly kept up to date on our programs’ progress.  This should be our goal for 2018.  I pray that the New Year will bring constructive and meaningful change.  Aloha Ke Akua.

Transition: Change doesn’t have to be painful

‘Ano‘ai kakou.  As you may have heard through the media, this has been a turbulent few months for OHA.  It is heartbreaking that OHA cannot be focused on what our beneficiaries are demanding – assistance with housing, education, and health.

Change is never easy, but I want to state for the record that all of the initiatives I fought for in the past two months were for one purpose only:  To protect the Native Hawaiian Trust Fund, now and into the future, for our beneficiaries.  If my first initiatives were passed by the Board, our beneficiaries would have seen immediate change for the better.  We were so close.

By a majority vote of the Board we wanted to negotiate a buyout of the CEO/Administrator/Ka Pouhana’s contract.  We felt that OHA could do so much more for our beneficiaries if we could change the course of where the Administration was headed.  A buyout would have been the least painful way to bring about that change.  The CEO would receive a negotiated sum of money and his reputation would be intact since we wouldn’t have to air any “dirty laundry” in the public.  But as everyone who read the newspaper or watched the evening news lately knows, it didn’t work out that way.

On a positive note, Trustee Keli‘i Akina’s proposal to conduct a more comprehensive audit of OHA, which will look into things that the three mandated OHA audits don’t cover, looks like it will become a reality.  On February 8th, the Resource Management Committee formed an Advisory Committee to make recommendations to the Board on the scope of a proposed financial audit and management review.  Our beneficiaries should be proud because this is only coming about because you demanded it.  I look forward to the audit and finally answer the one question I’ve been asking nonstop for the last decade:  Where is all the money really going?

On February 9th, the Board elected Colette Machado as the new Chair of the Board of Trustees.  While she has been part of a faction that has no love for my demands for fiscal accountability, I know that she will do her best to be fair.  I will definitely to my part to help her move OHA in the right direction again so that the Board can make a real impact in the lives of our beneficiaries.

However, I was disappointed to see that Trustee Machado was able to let former Trustee Haunani Apoliona use her column space in the February Ka Wai Ola as her soapbox to attack me, while my original February article was banned by the CEO because he felt it was too critical of the Administration and the Trustees that support him.  I’ll let you, the readers, be the judge of whether that is favoritism or not.

Trustee Hulu Lindsey remains Chair of the Resource Management Committee, so we can expect the new leadership structure to honor our beneficiaries’ call more transparency at OHA.

OHA must be an agency that treats our beneficiaries equally and it’s now up to the new leadership to make sure there is an even playing field at OHA.  Most of the OHA Staff just want to do their jobs and I ask that the general public withhold their judgment during this time of change.  Rome wasn’t built in a day and we cannot change OHA in a few months.

Mahalo nui loa and God bless you all.

Looking forward to a new year

Happy Year of the Rooster!  I would like to offer my warmest Aloha to Trustee Haunani Apoliona who left OHA after 20-years of service to our beneficiaries.  We may have had our share of differences in the past two decades but I never doubted the commitment of Trustee Apoliona or her dedicated staff, Reynold Freitas and Louise Yee-Hoy, to serving our Native Hawaiian beneficiaries.  I wish them all a fond farewell and best wishes on their future endeavors.

I would also like to congratulate newly elected OHA Trustee William Keli’i Akina and welcome him to the Board of Trustees.  He shares my passion to make OHA fiscally sustainable and I look forward to working with him to fulfill OHA’s mission to better the conditions of Native Hawaiians.

Hope for change

A new year brings new hope that OHA can finally make the changes it needs to improve its overall effectiveness.  Some of the areas we can focus on include:

  • Getting OHA back in touch with the “Big Picture.” We must refocus our Administrative Staff towards areas that our beneficiaries feel matter the most such as health and housing.
  • OHA needs to move towards a merit-based system that relies more on what you know instead of who you know. Loyalty alone should not determine who gets to be the highest paid and promoted employees.  Those who actually know things must be included in decision making process.
  • OHA needs to revisit its policies and rules. In the past 5 to 6 years we have tied our own hands with rules that hamper our efforts to help our beneficiaries.  We need to find a more efficient way to run our essential programs such as community grants.  In 2017, we must re-evaluate what we have been doing and where we should be going.
  • OHA needs to allow some amount of criticism to enter our discussions about how we operate. A Trustees or staff member that points out a problem should not be seen as some sort of threat or obstacle.  No one should be afraid of sharing their ideas or intimidated into keeping quiet.
  • Cooperation between Trustees and the Administration should be encouraged. Current communication protocols forbid Trustees from directly contacting Administrative Staff and Managers.  All communications must go through a process that is inefficient and discourages collaborative work.  This needs to change.

It will take dedication and a commitment by Trustees to transform OHA back into the effective agency it once was.  We need to serve our beneficiaries with a purpose that will produce meaningful results in all aspects of their lives.  Somewhere along the way we lost sight of what a Trust is and its true purpose has been pushed aside.  Our goal for 2017 should be to return our focus back to our beneficiaries.

I would like to wish my fellow Trustees and all of our beneficiaries a very safe and Happy New Year!  Aloha Ke Akua.

Are you satisfied with the status quo?

`Ano`ai kakou…  After serving on legendary boards that worked hard to build OHA and strengthen its ability to serve our beneficiaries, it frustrates me that we’ve become so stagnated in the last few years.  If you don’t agree that OHA is standing still, ask yourself this – When’s the last time you’ve seen OHA in the news?

In the past, OHA accomplished big things with less staff and less money.  OHA was frequently in the news doing important things that mattered like establishing a state-wide property tax exemption for Native Hawaiians living on Kuleana lands (an effort which I spearheaded); providing $4.4 million in grants to Hawaiian Focused Public Charter Schools; preserving 25,000 acres of Native Hawaiian rainforest known as Wao Kele o Puna on Hawaii Island; and saving the 1,875-acre Waimea Valley.

We also haven’t been getting anywhere at the state legislature.  This was one of the first years I can think of that none of the bills in the OHA legislative package passed.  This should be a cause for concern that OHA’s clout at the legislature is waning.

OHA is the only advocate at the legislature for all Native Hawaiian issues, such as water rights, gathering rights, or land rights.  Few organizations have the resources, staff and expertise to speak to legislators on our beneficiaries’ behalf.  If OHA doesn’t do something fast to reverse its shrinking clout at the legislature, caused in no small part by inconsistent decisions and our Administration making decisions for Trustees, we will be in danger of becoming inconsequential, insignificant and insolvent.

There is so much we can do to help our beneficiaries who are suffering under the lack of affordable housing, the high cost of living, lack of fresh local produce, and the continuing degradation of our fragile environment.  We just seem to lack the will to do anything.  I miss the passion and drive that previous Trustees had in years past.  Sure we got into a few scraps with each other, but we got things done and our hearts were always in the right place.  Everything we did was for the benefit of our people.

The Board of Trustees needs new energy

We must not be content with just sitting back and letting the Administration plod along without any direction.  We need to get the fire back in our bellies and go back to doing big things.  If we don’t, we will no longer be relevant to our beneficiaries and the state might decide to get rid of us by transferring all of our assets to the general fund.

So this election, seek change and elect new blood!  Don’t be satisfied with the status quo.  Elect New People!  Electing the same Trustees will not bring any meaningful change to OHA!  Aloha Ke Akua.

Help OHA reach its full potential: Look for Change

`Ano`ai kakou…  As the longest serving Trustee, it saddens me that OHA is no longer the proactive advocate for our beneficiaries that it once was.  When I was first elected to the board in 1990, OHA was at the forefront of many issues involving native rights, housing, education, and health.

Past Trustees were actively involved, spearheading major projects, and holding OHA’s Administration accountable.  Now everything seems, for want of a better term, “stagnant.”  While I’m sure the Board Chair can produce a long list of “great” things happening at OHA, to me it’s just all public relations fluff.  Make no mistake – This is not the OHA of old that used to get results.  I’m sure that every Trustee would agree that OHA could do more for our beneficiaries.  Much more.

So what’s the solution?  It’s simple: Restore the Board’s oversight over the Administration.  Right now, there are only THREE Trustees that are holding the Administration accountable:

  • The Asset & Resource Management Committee Chair, who oversees all of OHA’s fiscal, policy, economic development, land, and administrative matters;
  • The Beneficiary Advocacy & Empowerment Committee Chair, who has responsibility over federal and state legislation, on-going programs in health, housing, and education; and
  • Last, but not least, the Board Chair, who basically just acts as the liaison between the Administration and the Board instead of providing oversight and direction. In fact, the CEO has BANNED Trustees without committees from having direct contact with Administrative staff. All requests for information must go through the Chair’s office.

So basically, the rest of the Trustees have to depend on the three Trustees above for updates and reports at the board table – There are no other opportunities for us to get information.

We could easily increase the amount of Trustees providing oversight over the Administration by going back the five committee system.  Subject matters included (1) Land, (2) Policy & Planning, (3) Program Management, (4) Legislative & Government Affairs, and (5) Budget & Finance.  Bringing back these five committees would instantly double the amount of Trustees overseeing the Administration from three to six.

The increased oversight over the Administration would finally put an end to the frequent complaints by Trustees that they are not being kept in the loop or getting regular updates on important issues.

As many of my long time readers know, this is not a new proposal.  I pushed for this change last year but the current Board Chair decided to go in the opposite direction.  He actually got rid of the Land and Property committee!

OHA is simply too big for three Trustees to control the organization.  And, as a result, crucial information is able to stay hidden.  For example, under the old five committee structure, the Budget & Finance committee chair actually had the time to take our budget out to the community for comments and suggestions.  Every line litem of the budget was presented and none were hidden in “cost centers.”  Nothing could stay hidden in the budget with that much scrutiny.

So this election, seek change and elect new blood!  Ask OHA candidates what they think about how OHA is run.  Question them on their ideas to improve the office and the services we provide.  Vote wisely or we’ll continue to be stuck in the same stagnation for years to come.  Our beneficiaries deserve better!  Aloha Ke Akua.