Setting the Record Straight – Ceded Land Revenues


Source: March 2006 Ka Wai Ola o OHA Column

`Ano`ai kakou…  As you have probably already heard, the Governor and the Board of Trustees have agreed upon an amount that the state will pay OHA from its pro rata share of ceded land revenues.  Legislation to make it law is currently making its way through both the state House and Senate and it looks as if it will pass without difficulty.

For the record, despite what you may have heard in the media, I am not opposed to the proposed amounts that were negotiated.  I do, however, have serious concerns about how the amounts were calculated.  I also question whether OHA’s negotiation team considered all of the facts and figures that were available to come up with a fair and justifiable amount.  The last discussion that I am aware of was in December, when our attorney told us that the state owed a past due amount between $17-$30 million.  Despite my inquires, I have not gotten a satisfactory answer on how the final $15.1 million figure was calculated nor why this amount is lower than the $17-$30 million range that was discussed.

Over the past six months, I have received bits-and-pieces of information from the negotiation team from time-to-time.  However, even very important information, such as the calculations and figures compiled by OHA’s accountant in the past, has changed over the years and I question whether they were even considered.  There also did not appear to be a clear formula by which the negotiators calculated the amounts owed or even the future payments to be paid to OHA.  Let me be absolutely clear – at no time was I ever privy to the formula which the negotiation team used to calculate the settlement with the Governor’s office, nor was I given any real numbers that showed exactly how the team had arrived at the numbers that they were suggesting.  Much of the specific details of the negotiations were kept a closely guarded secret.

By the time I found out that the negotiating team and the Governor’s office had come up with a deal, it was too late for me to express my other concerns.  For example:

  1. By what method was the past due amounts determined to be $17 Million?
  2. Was inflation factored into the equation?
  3. Did they consider the fact that the state has been re-negotiating leases every year and, consequently, the revenue stream is now much higher?  The $15.1 million figure goes way back to 1995.
  4. What about the interest that is owed to OHA on the unpaid amounts?

What’s really egregious is that during a recent board meeting, Trustee Carpenter asked the board to take a vote (which was not listed on the agenda) to deny me the formulas and numbers that I requested from the negotiation team.  To my knowledge, not only should this information be public, the vote goes against state “sunshine” laws.

On February 1st, the State House Committee on Hawaiian Affairs had a hearing on the proposed legislation.  During the questions and answers period, committee members asked the State Attorney General about where the revenue would come from.  The AG replied that they were looking at receipts from the airport shops, the University of Hawaii Bookstore, U.H. parking, etc.  State Representative Ezra Kanoho asked if those sources were included in the $15.1 million and the answer was yes.  This was confusing since those revenues have been in dispute with the state since the Heely case.  This begs the question – Is the state now settling a part of the Heely case with this settlement?

Again, I’d like to stress that I am not opposed to the negotiated revenue stream from the ceded lands.  The increased revenue will definitely strengthen OHA’s ability to assist its beneficiaries and the Governor should be commended for her work to address this issue.  I just feel that our negotiating team was too secretive about how they came up with the final $15.1 million figure.  I also haven’t heard a convincing argument that justifies the amount.  Perhaps they thought it was an amount that everyone could live with.  If so, they haven’t admitted it publicly.  Given their lack of trust for their fellow trustees and ambiguous explanations, on a personal level, I sure wouldn’t want them negotiating for anything on my behalf.