Cleaning House at OHA

by Tom Yamachika, President, Tax Foundation Hawaii

A financial investigation, by auditing firm Plante Moran, recently confirmed 22 instances of “fraud, waste, or abuse” at our Office of Hawaiian Affairs.

“We are determined to ensure accountability for past wrongdoing,” OHA Chair Carmen Hulu Lindsey is quoted as saying at a news conference. “We know we have to do much better to deliver what our beneficiaries need.”

As an example, the Plante Moran report examined a transaction with WCIT Architecture, Inc. involving the expenditure of nearly $3 million in public money.  The contract was for the creation of a conceptual master plan related to OHA’s Kakaako Makai project.  Plante Moran found that although WCIT did a good deal of the work and provided some deliverables, the work was “put on hold” by OHA.  The plans that WCIT developed are still unused to this day, and it is unclear if those plans are still viable.  If they aren’t or can’t be used, then a lot of money went down the drain.  It is unclear why the project was put on hold, but Plante Moran found a connection between the contractor and one OHA trustee that seemed to be a conflict of interest.

One thing we all need to remember is how we got to this point.  In September 2018, the OHA trustees, at the urging of one of the newer Trustees named Keli‘i Akina, engaged CliftonLarsenAllen, another national accounting firm, to conduct a review of OHA’s contracts and disbursements at a cost of $500,000.  The review found 38 “red flag” transactions – transactions that looked suspicious.  These transactions were then examined by Plante Moran, leading to the report above.

When the CliftonLarsonAllen report came out, however, it was by no means certain that the investigation would continue:  on the day the report was issued, as we previously reported, a statement of OHA’s Chair of the Board Colette Machado and Chair of the Committee on Resource Management Dan Ahuna said, “While this report observed indicators of potential fraud, waste or abuse, it did not identify actual instances of fraud, waste or abuse.”  This technicality was then taken to voters as an argument to kick out Mr. Akina:  on a PBS Insights candidates’ forum, Keoni Souza, who was then running for OHA Trustee-At-Large against Akina, said, “Do I think there was a waste of $500,000?  Absolutely.”  OHA Chair Machado then doubled down by saying, “Keli’i, you tried to find the smoking gun.  And there was none.  It’s on you now.”

Despite this opposition, Mr. Akina won his 2020 race and is still an OHA trustee.  He was able to convince lawmakers and the OHA trustees to press forward with the financial investigation. 

This reminds me of German philosopher Arthur Schopenhauer, who said that all truth goes through three steps.

First, it is ridiculed.

Second, it is violently opposed.

Finally, it is accepted as self-evident.

Hopefully, the ridicule of and violent opposition to uncovering the previous financial shenanigans at OHA has passed.  It now seems to be accepted by the current OHA trustees, and OHA seems to be on a path toward cleaning its house.

So, lawmakers:  OHA can’t and shouldn’t have a monopoly on cleaning house.  There are certainly other places in state government that could use a dose of investigation and transparency.  How about our Department Land and Natural Resources?  It was flagged in a State Auditor’s report, and a subsequent House investigation ultimately recommended sacking the Auditor.  Hopefully we’re now past the violent opposition and can concentrate on the truth.