OHA filed a complaint on February 14th asking the First Circuit Court for a declaratory judgment on whether trustees must provide the State Auditor with attorney-client privileged information, with the hope that a court decision will help clear the way for the completion of the suspended state audit of OHA, which would result in the release of the agency’s $3 million general fund appropriation for next fiscal year.
“Today’s legal action is intended to facilitate the completion of the state audit of OHA so the state can release $3 million to benefit those Native Hawaiians most in need,” said OHA Chair Colette Machado. “OHA wants this audit finished so our beneficiaries can receive these critical resources. After weeks of discussions with the auditor, the trustees felt that asking the court to intervene was our only recourse.”
OHA Board Counsel Robert Klein said:
“The state auditor is using an unprecedented interpretation of his powers to demand attorney-client privileged information that is protected by the law,” said Klein, a former Hawai‘i Supreme Court Justice. “Rather than subpoenaing OHA, which would result in a court reviewing his interpretation of his audit powers, the State Auditor has decided to suspend his legislatively-mandated audit and placed significant Native Hawaiian funds in jeopardy. We believe today’s action will resolve this legal dispute so these monies can be released.”
Last year, the Legislature passed a law that conditioned the release of OHA’s $3 million in general funds for fiscal year 2021 on the state auditor’s completion of a new audit of OHA. Shortly thereafter, Hawai‘i State Auditor Les Kondo informed OHA that he would be auditing the limited liability companies (LLCs) associated with OHA and requested 26 categories of information.
OHA and its associated LLCs fully cooperated with the state auditor, providing him with 937 documents, totaling many thousands of pages, within weeks of receiving his requests. OHA submitted all documents requested, including the minutes of 21 executive session Board meetings that included redactions to shield privileged legal advice, which is protected from disclosure by state law.
On December 30, Mr. Kondo proclaimed that he was suspending the audit indefinitely until OHA provides him with the unredacted meeting minutes.
OHA Chief Executive Officer Sylvia Hussey said that OHA and the LLCs have been responsive to all of the information requested by the State Auditor.
“The documents and information the State Auditor requested were turned over, in the majority of instances, within the one-week response deadline,” said OHA CEO Hussey. “Any questions about specific financial transactions of the LLCs can be answered in the documents already submitted to Mr. Kondo’s office, including contract and grant lists, check registers and meeting minutes of the LLC managers, none of which were redacted.”
Chair Machado said that OHA just wants to be treated fairly and move forward. She noted that the auditor completed his audit of the Honolulu Authority for Rapid Transportation (HART), despite HART only providing redacted executive meeting minutes.
“This whole situation is unfortunate,” she said. “We believe that today’s action will help us holomua.”