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Sunday, September 13, 2020
Hiding LLC Records: OHA Lawsuit not Laughed out of Court
By News Release @ 11:11 PM :: 1035 Views :: Ethics, OHA

Judge rules for Office of Hawaiian Affairs, but auditor wants the minutes

Case: 1CCV-20-0000259 -- NOTE: Judge Crabtree obtained the Executive Session minutes from OHA and reviewed them --332 pages-- in camera before issuing his orders below.

PDF: Minute Order

PDF: Proposed Order

Star-Adv, Sept 12, 2020 (with accuracy-inducing material inserted in parenthesis)

…  The Office of Hawaiian Affairs claimed victory Friday after a 1st Circuit Court judge ruled in favor of its suit against state Auditor Les Kondo.

(Key word: ‘claimed’.)

But the dispute linked to an audit of OHA’s limited-liability companies might not be over.

(Translation: OHA’s lawsuit was not laughed out of court.  This is their big victory.)

Judge Jeffery Crabtree ruled Thursday that Kondo may not violate OHA’s attorney-client privilege, and threw out the auditor’s motion to dismiss the suit.

(Kondo never sought to ‘violate’ OHA’s atty-client privilege.  OHA is laughing at you.  They think you are stupid.  Read: Kondo Memo)

OHA filed its suit in response to Kondo suspending his office’s audit of OHA’s LLCs in December after the OHA board of trustees refused to hand over unredacted minutes of its closed- door executive sessions.

(Translation: OHA has something to hide in those minutes.  That’s why they are refusing to show the minutes to the Auditor.  Klein could lose his law license if it is discovered that he was fraudulently exploiting Executive Session rules and fraudulently claiming atty-client privilege in order to allow OHA to hide its culpability in criminal activities conducted thru OHA’s LLCs.)

Suspending the audit resulted in a $3 million state allocation to OHA being put on hold because the Legislature conditioned the release of the money on completion of the audit.

“OHA hopes that the State Auditor will now follow the law and complete their audit so the State Legislature can release the $3 million dollars in general funds,” OHA said Friday in a statement.

(IQ Test: Are you laughing?)

Contacted by the Honolulu Star-Advertiser, Kondo said the judge’s ruling “does not change the fact that we cannot complete the audit of OHA’s LLCs without the unredacted minutes of the Board of Trustees’ executive sessions.”

(Translation: I always get to see everything. If they can hide stuff, then they will use ‘atty client privilege’ to conceal their crimes.  Reality: OHA Sacrifices $3.2M to Hide Lawyer’s Conflict of Interest?)

In an email, Kondo said his office never challenged OHA’s assertion that the minutes contained attorney- client communication.

“However, if we cannot review those minutes, we cannot complete the audit. Until the Board of Trustees fully cooperates in the audit, including providing us with complete and unredacted minutes, the Government Auditing Standards issued by the U.S. Government Accountability Office compel us to suspend the audit,” he said.

(BINGO!  Nobody gets away with this sleazy con game.)

“We simply want OHA to be transparent so we can complete an important audit of the LLCs,” Kondo said.

From September 2007 to October 2015, OHA created seven LLCs to hold OHA assets, such as Waimea Valley, and to pursue outside business opportunities and other higher-risk ventures (transfer lots of money to insiders.)

The audit, which was ordered by the state Legislature, focuses on OHA’s use and oversight of its LLCs, which OHA had previously maintained were not subject to state laws applicable to OHA and other state agencies.

(That was OHA’s previous ‘legal’ theory.  Debunked--by none other than Judge Crabtree himself.)

“State agencies must be accountable, and in the case of OHA, that need for accountability is even greater given the Board of Trustees’ fiduciary responsibilities to its native Hawaiian beneficiaries,” Kondo said….

(Actually, OHA responsibility to beneficiaries cannot be upheld without transparency and accountability.)

read … Judge rules for Office of Hawaiian Affairs, but auditor wants the minutes

  *   *   *   *   *

OHA earns victory in ongoing lawsuit against state auditor

News Release from OHA, Sept 11, 2020 

HONOLULU  (September 11, 2020)­– First Circuit Judge Jeffrey P. Crabtree issued an order in favor of OHA yesterday, ruling that the redacted portions of the minutes of the executive sessions of OHA Board meetings that the State Auditor seeks to review are in fact protected by attorney client privilege.

(Nobody ever questioned this.  In related news. Judge Crabtree ruled that water is wet and the Sun rises in the East.)

“While yesterday’s ruling isn’t the end to this lawsuit, it is still a major victory for OHA,” said OHA Chair Colette Machado. “We believe this brings us closer to compelling the auditor to complete his long-overdue audit of OHA, so the state can release much-needed state general funds to the Native Hawaiian people during this pandemic.”

(Reality: Nothing is preventing OHA from disbursing any COVID-related funds.  Red herring.)

In his ruling, Judge Crabtree denied State Auditor Les Kondo’s motion to dismiss OHA’s lawsuit.  OHA originally filed the lawsuit against the State Auditor in February, asking the court to decide whether trustees must provide Kondo with attorney-client privileged information. OHA filed the lawsuit with the hope that a court decision would help clear the way for the completion of the suspended state audit of OHA, which is now nine months late. Without a finished audit, OHA cannot receive $3 million general funds for the current fiscal year.

(Translation: OHA’s lawsuit was not laughed out of court.)

“We are grateful that Judge Crabtree’s careful decision yesterday will allow OHA’s lawsuit to continue so that a conclusion can be reached on the merits,” said OHA Board Counsel Robert Klein, a former Hawaiʻi Supreme Court Justice.

(Reality: OHA Sacrifices $3.2M to Hide Lawyer’s Conflict of Interest?)

Last year, the Legislature passed a law that conditioned the release of OHA’s $3 million in general funds for fiscal year 2021 on the State Auditor’s completion of a new audit of OHA. Shortly thereafter, Kondo informed OHA that he would be auditing the limited liability companies (LLCs) associated with OHA and requested 26 categories of information.

OHA and its associated LLCs fully cooperated with the state auditor, providing him with 937 documents, totaling many thousands of pages, within weeks of receiving his requests. OHA submitted all documents requested, including the minutes of 21 executive session Board meetings that included redactions to shield privileged legal advice, which is protected from disclosure by state law.

OHA Chief Executive Officer Sylvia Hussey said that OHA and the LLCs have been responsive to all of the information requested by the State Auditor.

(Except for the stuff we are hiding, lol!)

“The documents and information the State Auditor requested were turned over, in the majority of instances, within the one-week response deadline,” said OHA CEO Hussey. “Any questions about specific financial transactions of the LLCs can be answered in the documents already submitted to Mr. Kondo’s office, including contract lists, grants received, check registers and meeting minutes of the LLC managers, none of which were redacted.”

On December 30, 2019, just around the time the audit was due to the Legislature, Mr. Kondo announced that he was suspending the audit indefinitely until OHA provides him with the unredacted meeting minutes.

When OHA filed its lawsuit in February, OHA’s attorney Klein said:

The state auditor is using an unprecedented interpretation of his powers to demand attorney-client privileged information that is protected by the law. Rather than subpoenaing OHA, which would result in a court reviewing his interpretation of his audit powers, the State Auditor has decided to suspend his legislatively-mandated audit and placed significant Native Hawaiian funds in jeopardy. We (want you to) believe today’s action will resolve this legal dispute so these monies can be released.

(IQ Test: Are you laughing?)

In April, Kondo filed a motion asking the First Circuit Court to dismiss OHA’s lawsuit. He argued that the court lacks jurisdiction over the case because there is nothing the court could do to resolve the issues between OHA and the State Auditor. Kondo further represented that whether the court found the material to be protected by attorney-client privilege or not, he could or would not finish his audit without the redacted executive meeting minutes.

With Kondo’s motion dismissed, the case will now focus on whether the State Auditor’s legal powers allow him to review OHA’s Board executive session meeting minutes, which Judge Crabtree has now declared to be protected by attorney-client privilege.

(In other words, OHA’s lawsuit has not been laughed out of court.  That is all that has happened here.)

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