Don’t Let Them Double Up!

by Tom Yamachika, President, Tax Foundation Hawaii

On January 8, OHA Trustee Brandon Kalei’ana Lee wrote an op-ed in the Star-Advertiser entitled “OHA has right to attorney-client privilege.” In that article, Lee was reacting to State Auditor Les Kondo’s insistence that the OHA trustees turn over unredacted executive session minutes that apparently contain legal advice given by their hired counsel. He contended that “it is clear that such communications are clearly protected as part of the OHA board’s attorney-client privilege as a matter of longstanding U.S. Supreme Court constitutional law,” and turned the matter into an indigenous peoples issue: “Why is it when Native Hawaiians seek the same rights and protections to which everyone else is entitled, they are called protesters, are deemed uncooperative, or are accused of hiding something?”

This deserves an answer.

The answer starts with Hawaii Revised Statutes section 23-5(a): “The auditor may examine and inspect all accounts, books, records, files, papers, and documents and all financial affairs of every department, office, agency, and political subdivision…”

Section 23-1 defines “departments, offices, and agencies” to mean “all executive departments, boards, commissions, bureaus, offices, agencies, and all independent commissions and other establishments of the state government (excepting the legislature) and all quasi-public institutions and all courts which are supported in whole or in part by, or which handle state or public funds.”

So, if you are a department, office, or agency, and you handle public funds, then the auditor gets to see all, and I repeat “all,” accounts, books, records, files, papers, and documents. In other words, if you are handling public money then it’s the auditor’s prerogative to see what is going on with it.

The attorney-client privilege protects confidential communications between an attorney and a client and protects against disclosure of those communications to a third party. It doesn’t prohibit disclosure to someone who is not a third party. Suppose I was the store manager of the Pa’ia branch of Tomco, a national retail store chain, and I consulted with an attorney on store business, receiving a memo from her as a result. If Tomco’s San Diego-based regional finance manager wanted to see the memo, he has the right to see it regardless of my wishes, and the attorney-client privilege would not stand in the way. It would be a different story, however, if I hired the attorney myself and did not pay her with Tomco money.

The flaw with Trustee Lee’s reasoning is that he has a myopic perception of the “client.” We the People, speaking through the Hawaii Constitution, created OHA (article XII, section 5), the Office of the Auditor (article VII, section 10), and the rest of state government. No government official, not even an elected one like Trustee Lee, has the authority to create a fiefdom unaccountable to the rest of government, or to the people of Hawaii who put that government in place. The same result, by the way, applies when public moneys and assets are dropped into a limited liability company owned by the agency. The limited liability company thus created is still a part of government and, as we found out from the courts recently, is subject to our Uniform Information Practices Act and other open records laws.

This is not an indigenous peoples' issue. The same result would apply to any other agency. Our state constitution says that the auditor will “conduct post-audits of the transactions, accounts, programs and performance of all departments, offices and agencies of the State."  That’s what the auditor is doing. There are consequences for getting in the auditor’s way, and, barring a last-minute attitude adjustment, we will soon find out what they are.

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Related: Crooks Cry Racism: Debunking OHA’s Audit Excuses