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Sunday, May 27, 2018
Secret OHA LLC Created to Sell Marijuana
By Andrew Walden @ 9:03 PM :: 2656 Views :: Ethics, OHA, Drugs

by Andrew Walden

Hawai’i Free Press has been attempting—unsuccessfully--to obtain the six OHA LLCs’ check registers since 2016.  Now we have discovered a seventh OHA LLC. 

Information provided to Hawai’i Free Press shows the Office of Hawaiian Affairs (OHA) secretly created and then dissolved a Limited Liability Company -- apparently to finance Ola Investments--a company seeking a Hawaii medical marijuana dispensary license.

Ho’opakeu, LLC was registered with the DCCA BREG October 30, 2015 by Mona Bernardino, who is manager of several other OHA LLCs.  On BREG its three managers are listed as Kamanapono Crabbe, Lisa Victor, and Iona Hawley—respectively, OHA’s CEO, COO, and former CFO.  In its’ Articles of Organization, the sole ‘member’ of the LLC is listed as Ho’okele Pono—one of OHA’s six known LLCs--Bernardino signs as “attorney in fact for Kamana’opono M. Crabbe, Manager.”

Note: Ho’opakeu, LLC involves a separate OHA dope-dealing scheme from the one identified in a July 19, 2015 Hawai’i Free Press article titled: ‘OHA Trustee to Use Trust Funds to Sell Marijuana?’ 

Apparently, somebody inside OHA spilled the beans on Ho’opakeu, LLC this week.  From the resulting flurry of finger-pointing emails bouncing around OHA, some details are emerging.

In a May 22, 2018 memo from Hi’ilei Aloha LLC, another of OHA’s six known LLCs, to OHA Board of Trustees, Crabbe and Victor admit to the secrecy—blamed on an alleged ‘Non-Disclosure agreement’ which they apparently believe supersedes state open records laws--and attempt to blame Trustees:

Because of a Non-Disclosure Agreement signed by OHA Executive Leadership, the LLC Managers cannot share details of the venture ….

On September 10, 2015. OHA's Board of Trustees (BOT) created the Ad Hoc Committee on Economic Innovation. see attached BOT Agenda and pertinent minute pages. OHA's COO and CFO were tasked by the Ad Hoc Committee on Economic Innovation Chair Leina’ala Ahu lsa to: (a) conduct due diligence on the process for creating a particular type of joint venture; and (b) evaluate the appropriateness of the proposed venture. At that point in time, the hope was that the proposed joint venture could be very profitable and could assist OHA with its Fiscal Sustainability efforts.

Second, when the proposed venture was presented to the COO and CFO, the details about the venture needed to be developed and articulated, and the timeline for creating a "business entity'' for the proposed joint venture was extremely short. In order to meet the short timeline. the LLC Managers supported the creation of an LLC, as a placeholder, in the event the BOT decided to move forward with the proposed joint venture. This “shell" LLC- Ho'opakeu was formed on October 30, 2015.

Third, Ho'opakeu never engaged in any business activities. After detailed review and legal counsel opinion, OHA ultimately decided not to move forward with the proposed venture for various reasons. and the LLC Managers closed the shell in June 2017.

The OHA BOT Minutes Sept 10, 2015 mention only “Approval of the Ad Hoc Committee on Economic Innovation.”  There is nothing about selling weed or forming a seventh LLC.

Countering Crabb’s claim, in the email string activist Geraldine Meyers reminds readers of an: “Hi’ilei Aloha LLC update and Ho’okele Pono LLC update at OHA BOT Meeting on May 25, 2017. Mona Bernardino, LCC COO, gave a ‘Setting the Record Straight Presentation’ of all LLCs created by OHA from conception to current date status.  No records were disclosed by Mona Bernardino or Kamanao’pono Crabbe about Ho’opakeu LLC’s creation, purpose, and existence. No record disclosed also by Ad Hoc Committee Chair Trustee Lei Ahu Isa or Vice Chair Trustee Peter Apo.”

In May 23 and May 24 emails widely distributed at OHA, Trustee Lei Ahu Isa tries to clarify:

Ranson Kepa Shepherd and my committee met to establish a “shell” LLC as he was trying to close a fabulous deal for a dispensary, one of the 8.

OHA has to sign a non disclosure so nothing was leaked as it was proprietary in nature….

Our beneficiary that presented now makes profits of upwards to $1M per month and is helping so many native tribes in Vegas.

Too bad, too sad OHA closed the door on this opportunity​ to diversify and expand.​…

I felt I needed to follow up and explain the created "shell" of Ho’opakeu, LLC.... as it was advised that we have an LLC created in the short turn around time for application for the medical marijuana license application with John Henry Felix....

Ranson Shepherd runs a Nevada marijuana grow op profiled on Hawaii News Now, August 21, 2017.  Shepherd tells HNN he can produce two tons of marijuana every year.  His name does not show up on published lists of Hawaii medical marijuana dispensary applicants. 

John Henry Felix is a co-owner of ‘Ola Investments’ per its dispensary application dated January 29, 2016.  Other owners included ex-HPD Chief Lee Donohue.

In the email string, activist Mililani Trask responds to Lei Ahu Isa:

The OHA Bot never authorized the creation of a new LLC.

Crabbe’s memo claims that because "time is extremely short", they then decided to create a "shell" corporation. This explanation is ridiculous given the fact that OHA regularly has weekly meetings for its RM committee and the BOT. The need for a new LLC could have be placed on the RM and BOT agenda the following week. Instead, Crabbe, a few executive staffers and yourself decided to skip the required BOT procedure for approval and quietly created another illegal LLC. NO information on here actions was ever shared with the BOT or beneficiaries until May 22, 2018  -   just two days ago.

It is clear that Crabbe's untenable explanation was prompted by recent revelations that another illegal LLC was created and by the public knowledge that there is an ongoing State AG/FBI investigation.

I recommend that you seek an interview with the State AG and FBI to explain your actions in this matter because the facts indicate your complicity in these secretive and unauthorized activities of Crabbe and the Executive staff at OHA.

I am forwarding this response to the State AG and FBI.

Why was time “extremely short”?  

HRS329D requires a dispensary applicant have:

“financial resources under its control of not less than $1,000,000 for each license applied for, plus not less than $100,000 for each retail dispensing location allowed under the license applied for, in the form of bank statements or escrow accounts, and that the financial resources have been under the control of the applying entity for not less than ninety days immediately preceding the date the application was submitted.”

Ninety days before the date Ola Investments’ dispensary application was submitted, January 29, 2016, is Saturday, October 31, 2015—exactly one day after Ho’opakeu was registered with DCCA BREG

Ola Investments original October 14, 2015 articles of incorporation were amended January 5, 2016 to allow for the sale of 900,000 shares of ‘Series A’ preferred stock at $5.56 a share.  These would provide a theoretical 8% dividend—which is of course uncollectable if the company has no revenue.  Notably, 900,000 shares sold at $5.56 would bring in just over $5 million, the capital amount targeted by Ola Investments in its original articles of incorporation.

According to its 2015 form 990 (pg33), Hi’ilei Aloha LLC granted Ho’opakeu $26.00 “to support operations” explaining that Ho’opakeu “is a sub - entity of Ho'okele Pono, LLC.”

Pukui and Elbert’s Hawaiian Dictionary explains “pakeu” means “excessive” and “ho’opakeu” means “to exceed.”

According to filings with DCCA, Ho’opakeu was terminated by its managers June 29, 2017.

On the agenda of the May 17, 2018 OHA BoT -- Exec Session, Trustees again discussed “Contract #3147” – Crabbe’s employment contract.

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OHA Marijuana Background:

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