Recent revelations about the Office of Hawaiian Affairs have caused some to ask whether OHA is the new Broken Trust.
In the 1980s, a group of community leaders and stakeholders rallied together around the cry “Broken Trust” to vocalize concerns over the finances and management of the Kamehameha Schools, then referred to as Kamehameha Schools / Bishop Estate. What resulted was a stirring exposé published in the Honolulu Star-Bulletin, written by the late federal judge Samuel P. King, Charles Kekumano, Walter Heen, Gladys Brandt and now-retired University of Hawaii law professor Randall Roth.
Broken Trust also became the title of the book co-authored by Samuel P. King, and Randall W. Roth, which chronicles the events that ultimately toppled the leadership of Kamehameha Schools/Bishop Estate. Broken Trust is freely available to read or download at scholarspace.manoa.hawaii.edu/.
Areas of concern over the Bishop Estate included financial mismanagement, self-dealing, loss of confidence in the organization by stakeholders and the public, failure of leadership and trustees’ dereliction of their fiduciary duties, all resulting in external intervention and reorganization.
So, is OHA the new Broken Trust? In my opinion, there are two answers to that question: no, and wait and see.
From one perspective, the answer is no. Kamehameha Schools and OHA are different in that the former is a private charitable trust, while OHA is a public trust and state government agency. Kamehameha Schools trustees are now chosen in a process involving a court appointed screening committee followed by stakeholder input and confirmation by a probate court. (Previously, they were appointed by the Hawai‘i Supreme Court.) OHA trustees are elected by the public. Kamehameha Schools has a narrow educational mission, while OHA’s mission of betterment of the conditions of Native Hawaiians is broad.
From another perspective, the answer is wait and see. Parallels between the organizations are resulting in similar external pressure from other agencies and from the greater Hawai‘i community. Findings made by the state Auditor regarding financial impropriety at OHA echo findings made in the investigation of Bishop Estate, including:
- Failure of leadership to fulfill ethical and fiduciary duties to hold each other accountable (in Kamehameha Schools, this finding ultimately led to a change in leadership at the top);
- Conflicts of interest, self-dealing and questionable spending practices; and
- Lax oversight of funds flowing out of the organization (in OHA’s case, through grants and sponsorships), and selective enforcement of fiscal policies.
Another similarity between Bishop Estate and OHA is the concern over their subsidiary LLCs. On May 25, 2017, Broken Trust co-author Randall Roth came before the OHA Board, warning that “OHA and OHA trustees cannot properly use wholly owned LLC subsidiaries to avoid otherwise applicable legal duties such as a trustee’s duty to provide full accountings when legally required to do so, or a government official’s duty to comply with procurement and sunshine laws.”
While the state audit of OHA raised questions about the LLCs, the answers may be forthcoming in the independent audit of OHA commissioned by the trustees. We will wait and see.
For now, the jury is still out on whether OHA is the new Broken Trust. However, just as the beneficiaries and stakeholders of Bishop Estate stood up to demand accountability, OHA beneficiaries and stakeholders are following suit. We have seen that this can result in transformational change. To that extent, the situations are similar. As OHA beneficiaries and stakeholders demand accountability from trustees, there is great hope for the necessary transformation which will result in a reformed and ultimately more effective OHA. In the end, that will be the pathway to restoring broken trust.