by Andrew Walden
Fired in 2019, former Office of Hawaiian Affairs Chief Financial Officer David Laeha has a story to tell. And now, in a lawsuit filed January 26, 2021, in Oahu's First Circuit Court, he is finally telling it.
According to Laeha’s suit he was suspended by OHA’s then-CEO Kamanao Crabbe one day before he was set to reveal OHA’s real budget and "corrupt and unlawful practices" to Legislators.
As OHA's CFO, Laeha was also an officer of OHA's notorious LLCs.
Here are key excerpts from Laeha vs OHA:
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Between May 2017 and January 2019, Mr. (David) Laeha was employed as the Chief Financial Officer (hereinafter “CFO”) for Defendant OHA….
Mr. Laeha was threatened and discharged due to his reporting of violations of Hawaii State laws regarding prohibited practices. In a misguided attempt to cover up corrupt and unlawful practices, Defendants discharged Mr. Laeha wrongfully in violation of public policy and in breach of his employment contract….
17. On or about August, 2017, Defendant OHA’s Board of Trustees created an ad hoc committee tasked with reviewing the policies and practices regarding grants, sponsorships, and trustee allowances and required Mr. Laeha to participate in the work of this ad hoc committee.
18. Throughout the course of his employment, this ad hoc committee was focused primarily on trustee allowances and paid minimal attention to grants and sponsorships.
19. Throughout the course of his employment Mr. Laeha diligently attempted to work with Defendant OHA’s Executive Team, including Defendants CRABBE and NISHIJIMA, to address concerns related to grants and sponsorships.
20. In August, 2017, Mr. Laeha denied a request from OHA’s Director of Community Engagement Nicole Mehanaokala Hind and Defendant CRABBE to sponsor a monetary grant to a for-profit organization in violation of state procurement and state ethics laws, HRS Chapter 103D and HRS Section 84-13, respectively.
21. In response, Defendant CRABBE sent an e-mail to Mr. Laeha expressing his disappointment that Mr. Laeha did not see the value of supporting this for-profit organization.
22. In contravention of Mr. Laeha’s decision, Defendant CRABBE then authorized the sponsorship as a grant through a non-profit organization and instructed that entity to pay the for-profit organization.
23. In November 2017, Mr. Laeha was tasked with overseeing and reviewing a contract for consulting services provided by Spire, a firm providing general consulting services and financial advice.
24. Based upon his analysis, Mr. Laeha determined that the deliverables produced by Spire were based on incorrect excel spreadsheets and financial models which yielded significant forecasting errors exceeding $40 million.
25. Mr. Laeha concluded that the work completed by Spire did not justify payment and noted that Spire consultants charged Defendant OHA for time from others on their team who were not involved on the project.
26. Mr. Laeha pointed out these excess billings to COO Victor, but was instructed by COO Victor to pay the bills nevertheless.
27. Throughout his employment Mr. Laeha made numerous requests to interim COO Defendant NISHIJIMA to be removed as the Contract Manager for Spire. On or about July 10, 2018, Mr. Laeha made his first request to be removed as Contract Manager. As late as September 19, 2018, Mr. Laeha again asked Defendant NISHIJIMA that he be removed as Spire’s Contract Manager.
28. Mr. Laeha’s removal requests were ignored, and he was required to approve and pay invoices for Spire without actual knowledge of what work was being performed.
29. On or about March 14, 2018, Mr. Laeha was working on a contract to award approximately $149,000.00 to SustyHI to complete work that had not been completed by another contractor under a previously awarded contract totaling $400,000.00.
30. Mr. Laeha recommended to COO Victor that Defendant OHA should pursue actions to recoup the money paid to the previous contractor but no such efforts were made.
31. At an October 12, 2018, Executive Team meeting, in a discussion about Defendant OHA’s policies and practices concerning grants and sponsorships, Defendant CRABBE and Director of Community Engagement Hind objected to full compliance with the ethics laws under HRS Section 84-13, with Defendant CRABBE concluding, “we’re unique at OHA, we can agree to disagree with the auditors.”
32. Consequently no policy changes were made to Defendant OHA’s programmatic sponsorship practices up through the date of Mr. Laeha’s termination in January, 2019.
33. In January 2018, Mr. Laeha noted that Defendant OHA did not have a policy governing its ownership and management for land assets valued at approximately $350 million because a draft Hawaii Direct Asset Policy that had been created in May 2015 had not been approved by Defendant OHA’s Board of Trustees.
34. Mr. Laeha raised this deficiency with Defendant CRABBE, COO Victor, Defendant NISHIJIMA, who was then serving as Director of OHA’s Land Division, and Board of Trustees Resource Management Chairwoman C. Hulu Lindsey (hereinafter “Trustee Lindsey”).
35. After several meetings, it was decided on or about January 11, 2018, that Defendant NISHIJIMA would prepare a scope of work description to solicit a new consultant to review the draft Hawaii Direct Asset Policy, recommend any revisions, or propose a completely new policy to be presented to Defendant OHA’s Resource Management Committee in February 2018.
36. Several months passed with nothing produced by Defendant NISHIJIMA.
37. On or about June 15, 2018, Defendant CRABBE approved a memorandum directing Mr. Laeha to work with the staff of the Native Hawaiian Revolving Loan Fund (“NHRLF”) after the May 4, 2018, departure of Timmy Wailehua, the NHRLF Manager and former supervisor of five other staff members.
38. The Native Hawaiian Revolving Loan Fund program was initiated in 1989 through grant funding from the Administration for Native Americans (“ANA”) and matching funds by Defendant OHA.
39. Mr. Laeha, NHRLF staff, and the NHRLF Board of Directors were tasked with completing the business plans for fiscal years 2020 and 2021 and instructed that the plans “should address the steps to enable staff to utilize real estate as collateral[,]” “identify other strategies to increase disbursements[,]” and “continue the effort to be released from ANA’s oversight.”
40. On or about June 25, 2018, COO Victor resigned from her position as COO and was replaced by Defendant NISHIJIMA who was appointed as the interim COO.
41. Upon becoming interim COO, Defendant NISHIJIMA became Mr. Laeha’s immediate supervisor and began restricting Mr. Laeha’s direct communications with Defendant CRABBE and requiring all communications to flow through Defendant NISHIJIMA.
42. On or about July, 2018, Mr. Laeha prepared an analysis showing that landholdings should provide a return of approximately $24 million a year in net earnings and shared this analysis with former COO Victor.
43. After completing this analysis, Mr. Laeha asked Defendant NISHIJIMA why he had not prepared the scope of work to review the Hawaii Direct Asset Policy as requested, and Defendant NISHIJIMA responded by saying that Defendant CRABBE “did not want him to do it.”
44. At an All-Managers’ meeting in July 2018, Defendant CRABBE made a disparaging comment about Mr. Laeha to a newly hired Grants Manager, Maile Luuwai, and stated that, “if you work a long time here you will look old like David.”
45. On or about July 20, 2018, and consistent with his June 25, 2018 memorandum approving Mr. Laeha’s oversight of the NHRLF program, Defendant CRABBE verbally authorized Mr. Laeha to become more involved with the oversight of the NHRLF program and in the collection efforts to recover $468,000.00 from borrowers in default.
46. On August 28, 2018, Andrew Walden filed a lawsuit against Defendant OHA (hereinafter “Walden lawsuit”) to comply with sunshine laws and disclose all transactions related to its non-profit Limited Liability Companies (“LLCs”).
47. Sometime in September, 2018, during a Resource Management meeting with Trustee Lindsey, Mr. Laeha was asked by Trustee Lindsey if a $3 million annual Department of Hawaiian Home Lands grant obligation should be reported as a “note.”
48. Mr. Laeha informed Trustee Lindsey that it should not be reported as a note, that it was reviewed by auditors hired by Defendant OHA, and this obligation was properly stated as a “grant.”
49. Following this exchange, Defendant NISHIJIMA sent an e-mail on or about October 5, 2018, to Mr. Laeha, Defendant CRABBE, and OHA Senior Corporate Counsel Albert Tiberi (hereinafter “Senior Counsel Tiberi) and OHA employee Momilani Lazo, accusing Mr. Laeha of making several “inaccurate, incomplete, or ignorant” statements.
50. On or about October 10, 2018, Defendant NISHIJIMA privately acknowledged to Mr. Laeha that his comments in the email were unfounded and that he did not know of any other times Mr. Laeha had made any inconsistent, inaccurate, or erroneous statements.
51. At no time did Defendant NISHIJIMA publicly acknowledge or apologize for these false accusations made about Mr. Laeha’s work performance.
52. On or about October 3, 2018, when Grants Manager Luuwai requested the termination of another employee, Mr. Laeha informed Ms. Luuwai that she was to follow Defendant OHA’s protocols as set forth in the OHA Employee Handbook and to include Human Resources before she terminated any of her grants staff.
53. Despite this guidance, Ms. Luuwai discussed the termination with another grants specialist and, on or about October 11, 2018, Ms. Luuwai publicly confronted, yelled at, humiliated, threatened, and harassed this other employee.
54. On October 15, 2018, Mr. Laeha sent an email to Human Resources notifying Defendant OHA that Ms. Luuwai’s harassment and threatening behavior was unacceptable.
55. On October 16, 2018, Mr. Laeha informed Defendant NISHIJIMA about Ms. Luuwai’s performance including complaints from other managers and directors, improper review of previously released public announcements, missed deadlines, complaints from staff of favoritism, miscommunication, and creation of a hostile work environment.
56. Despite these complaints, Defendants NISHIJIMA, CRABBE, and OHA took no actions to reprimand Ms. Luuwai or correct her behaviors.
57. On or about October 18, 2018, oversight of the Grants Department was moved under interim COO Defendant NISHIJIMA’s authority, thereby preventing Mr. Laeha from doing his job as CFO.
58. On or about October 26, 2018, during another Executive Team meeting, Defendant NISHIJIMA falsely accused Mr. Laeha of not sending the budget model to members of the Executive Team.
59. Mr. Laeha explained that he did send the budget model, and other directors at the Executive Team meeting confirmed that they had received it.
60. Defendant NISHIJIMA offered no apology to Mr. Laeha even after Mr. Laeha showed Defendant NISHIJIMA the email in which the budget model had been shared with members of Defendant OHA’s Executive Team.
61. On or about October 30, 2018, Mr. Laeha met with Defendants CRABBE and NISHIJIMA and suggested alternative structures for the LLCs in response to developments related to the Walden lawsuit. Mr. Laeha further alerted Defendants CRABBE and NISHIJIMA to about $1 million in additional costs to cover LLC employees with State benefits.
62. On or about October 31, 2018, Mr. Laeha met with Senior Corporate Counsel Tiberi and Defendant NISHIJIMA to raise concerns that under HRS Chapter 10, Section 14.5, Defendant OHA was required to include its total operating budget of approximately $46 million in its biennium reports due to the Hawaii State Legislature, instead of the $3 million in spending that Defendant CRABBE and previous Chief Financial Officers had presented in prior reports as the portion related to the State’s annual general fund appropriations.
63. At this meeting, Mr. Laeha recommended that the total operating budget of $46 million be reported to the State Legislature. Defendant NISHIJIMA disagreed with Mr. Laeha’s recommendation and recommended following Defendant CRABBE’s previous decisions in continuing to underreport the amounts in the biennium report.
64. On or about October 31, 2018, Mr. Laeha reported Defendant NISHIJIMA’s false claims, harassment, and retaliation towards him to OHA’s Human Resources Manager Edwina Minglana and Senior Counsel Tiberi.
65. On or about November 1, 2018, Senior Counsel Tiberi reported to Mr. Laeha that he spoke with Defendant CRABBE and Defendant CRABBE agreed to comply with Mr. Laeha’s recommendation that the full total operating budget be reported to the State Legislature.
66. On or about November 8, 2018, Mr. Laeha again reported Ms. Luuwai’s harassment and threatening actions of October 2018 to an independent investigator hired by Defendant OHA.
67. On or about November 17, 2018, Mr. Laeha prepared and shared a “Summary Report Card” with former COO Victor documenting that only 4 of 18 statutory duties of Defendant OHA’s Board were being partially completed by Defendant OHA.
68. On or about December 12, 2018, Mr. Laeha sent an email to the newly appointed COO Sylvia Hussey noting the false accusations, harassing and retaliatory conduct of Defendant NISHIJIMA.
69. On or about January 3, 2019, Mr. Laeha discussed the above incidents of harassment and retaliation with former COO Victor and shared a draft letter with former COO Victor explaining Defendant NISHIJIMA’s retaliatory conduct.
70. Former COO Victor discouraged Mr. Laeha from sending the letter to Edwina Mingliana, the Human Resources Manager of Defendant OHA (hereinafter “HR Manager Mingliana”).
71. Following his meeting with former COO Victor, Mr. Laeha sent an e-mail to HR Manager Mingliana reiterating his complaints about Defendant NISHIJIMA’s continued harassment and Mr. Laeha’s own concerns over being targeted as a whistleblower.
72. On January 8, 2019, one day before Mr. Laeha was scheduled to testify before the Hawaii Senate Ways and Means Committee and Hawaiian Affairs Committee on January 9, 2019 about Defendant OHA’s total operating budget, Defendant CRABBE suspended and placed Mr. Laeha on administrative leave from his position as OHA’s CFO.
73. Defendant CRABBE based this suspension upon false claims of missed deadlines, unsubstantiated claims about Mr. Laeha making inappropriate comments to grants staff person, alleged micromanagement of the NHRLF program, and unfamiliarity with financial reports.
74. Defendant CRABBE formally terminated Mr. Laeha’s employment on January 29, 2019….
80. Defendants CRABBE and OHA retaliated against Mr. Laeha in the terms, conditions, and privileges of his employment, threatened him, and discharged him because of his imminent reporting of Defendants’ violations of state laws to public bodies, including the Hawaii Senate Ways and Means Committee and Hawaiian Affairs Committee, and his actual reporting of the same to his employer, Defendant OHA.
read … Laeha vs OHA
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