We ended last month with the Board of Trustees violating its own by-laws to form a Permitted Interaction Group to investigate the development of Kakaʻako Makai. The Board of Trustees has used Permitted Interaction Groups in the past, but for things like investigating governance models, and updating the by-laws, not things that involved land and interacting with several contractors that Trustee Hulu Lindsey has personal connections with.
Trustee Lindsey has stated that the Board of Trustees will have a say after the report is completed and distributed to the Board of Trustees, which was distributed on July 26, 2022. Who attended these meetings, how many times they met, and what were the discussions at these meetings are not available to either the public or the Board of Trustees – and it is a misnomer that the entire Board of Trustees will now have input. While the Board of Trustees will discuss the report, four Trustees have already agreed to the findings of the report before it was released to the entire Board of Trustees. The practice continues with the Board of Trustees approving another Kakaʻako Makai development Permitted Interaction Group on September 15th once again in violation of their own by-laws.
While the Native Hawaiian Trust Portfolio has been under a manager of managers investment policy the Board of Trustees took under advisement the advice from Segal Marco, OHA’s current manager, and Commonfund that OHA should move to an Outsourced Investment Officer (OCIO) management model. In a RM Committee workshop on June 28, 2022 the use of a CIO versus an OCIO was discussed and it was acknowledged by committee chair Trustee Waiheʻe that further workshops would be held before any decision would be made. Last month a memo was sent out from Sylvia Hussey, OHA’s CEO, that after discussions with both Trustee Hulu Lindsey and Trustee John Waiheʻe, OHA would be putting out a new Request for Proposal for a new investment consultant. This was decided on by two Trustees and not discussed with, debated upon, voted on by all the elected Trustees nor was the public allowed the opportunity to provide any public testimony. The process and Sunshine Law do not appear to have any standing.
While Ryan Lee continues to help guide the Native Hawaiian Trust to a more balanced allocation more in line with being the 13th largest landowner in the state there continues to be those at OHA, both Trustees and administration, whose sole concern is how much OHA pays in fees to our current investment managers. While fee structures are important, they are not as important as returns, services provided and track records. Studies have shown that lower fees consistently provide lower returns; that is not to say that if you pay higher fees, you are guaranteed higher returns, but when a Trustee or an executive from administration asks how OHA can pay lower fees, it is embarrassing. Ryan Lee is a temporary hire and not a permanent employee of OHA. The majority of OHA’s budget comes from the Native Hawaiian Trust Portfolio. Everyone should be concerned about what will happen to the portfolio when Ryan leaves.
We have all heard a lot about transparency at the Office of Hawaiian Affairs. How this can be considered transparency is beyond my understanding and seems that no one out there is paying attention. No transparency, personal agendas, uniformed egotistical decisions, and complacency, welcome to the new OHA.