The state Circuit Court recently ruled that OHA’s limited liability corporations (LLCs) are state agencies subject to the Uniform Information Practices Act (UIPA), a law that allows the public to inspect the records maintained by state and county agencies.
Unfortunately, what began as a reasonable request from journalist Andrew Walden to view the LLCs’ records turned into an unnecessary and costly legal dispute. In my opinion, this raises the following concerns over beneficiary resources being used to fight what became a losing battle.
First, the results could have been anticipated. The ruling handed down in a prior case, ‘Ōlelo v. Office of Information Practices, already addressed whether a business entity, such as an LLC, established by a state agency would also be considered a state agency.
Secondly, going to court is costly. While the costs have not been released, one can infer that tens of thousands of dollars, and possibly more, were spent keeping the LLC financial records hidden from the public.
To some extent, the LLCs’ opposition to opening their financial books to the public may be part of a culture of resisting transparency that exists within OHA.
In my November 2018 Ka Wai Ola column, I shared that OHA receIved a failing grade of ‘F’ for its online financial transparency. (See “Following the Money 2017: Governing in the Shadows” by the U.S. Public Interest Research Group). One reason for OHA’s failing grade is that OHA doesn’t provide the public with “a register of online checkbook-level spending.”
In September 2018, a proposal was considered by the OHA Resource Management Committee to post OHA’s check registers online as part of a transparency website. It failed for lack of Board support, and one argument made against the online transparency website was that if the public really wanted to, they could access the information through the UIPA.
But filing a UIPA petition can be burdensome and costly. When Walden used the UIPA to request the LLC check registers and income and expense statements, his request was denied by the LLCs, who claimed that the LLCs weren’t subject to UIPA because they were not agencies of the government.
Walden then had to mount a legal battle that resulted in his request eventually being granted by the state Circuit Court. But not everyone has the means to do that, and that is the problem to be understood here. OHA should practice greater transparency to ensure access to information which beneficiaries and the public are entitled to.
OHA’s duty to promote transparency extends to OHA’s LLCs because ultimately, the LLCs (with the exception of Hiʻipaka, LLC which holds title to Waimea Valley and is profitable) depend completely on OHA for operational funding. That means the LLCs are funded by beneficiary trust funds. And for beneficiaries and members of the public to have to make a request under the UIPA in order to be able to see how the LLCs spend beneficiary trust funds is a barrier to transparency.
More importantly, a culture that resists transparency unnecessarily fosters mistrust, and that mistrust may have consequences. Consider for example the increased scrutiny by external agencies such as the state Auditor and Attorney General. Would OHA be subject to such scrutiny if it embraced a culture of transparency in the first place?
While a culture of unnecessary secrecy is bad enough, it raises the question as to why so much effort is made to keep information secret, especially after the law says it must be made available to the public. Is there something to hide? That’s a question beneficiaries and citizens need to ask the OHA Trustees.