Until recently, the Office of Hawaiian Affairs operated seven limited liability corporations (LLCs) that claimed to be private organizations not subject to state laws such as the Uniform Information Practices Act (UIPA). In other words, OHA’s LLCs asserted that they were under no obligation to open their books to the public or other government agencies despite the fact that OHA has poured at least $34 million of public funds into these LLCs. That assertion was refuted in March 2019, when a state Circuit Court ruled that OHA’s LLCs are indeed public agencies for the purposes of the UIPA.
Nonetheless, OHA is now standing in the way of a legislatively mandated audit of its LLCs by refusing to hand over privileged attorney client communications that arose during executive session meetings requested by State Auditor Les Kondo, prompting him to suspend the audit. In short, OHA has refused to hand the minutes over in unredacted form because OHA has asserted attorney-client privilege over the redacted portions. OHA and the Auditor are essentially disagreeing over whether the privilege is waived if OHA discloses the information, in unredacted form, to the Auditor. Now OHA has gone to court for a declaration that the State Auditor violated Act 37 by refusing to continue the audit, and that the auditor’s refusal has resulted in the legislature’s withholding of about $3 million in general funds due to OHA that legislators approved last year.
Upon learning of Kondo’s decision to suspend the audit, OHA released an official statement on December 30, 2019, accusing him of not doing his job and attempting to “play politics.”
As a sitting OHA trustee, I am in disagreement with the stance taken by the Board in this matter. Our fiduciary duty is to serve the needs of Hawaiian beneficiaries, and ensuring a transparent, accountable agency is at the heart of being able to serve these needs.
To the public, the story of OHA’s resistance to transparency is growing wearisome. If there is nothing to hide, why doesn’t OHA simply cooperate fully with the State Auditor? The greatest benefit of cooperation would be an immediate upgrade to OHA’s credibility, which is at an all-time low in the eyes of the public and the legislature. OHA has been well aware of its crisis of credibility since at least 2015, when OHA commissioned a scientific survey to gauge public perception of the organization. The survey showed that among Hawaiian serving institutions, OHA ranked least favorable. According to those surveyed, this was due to a perception that the organization and its management “are ineffective, poorly managed, or corrupt” and “do not help or represent the Hawaiian people effectively.”
Enough is enough! It’s time for OHA to let the sunshine in.