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Hawaii Republican Party Sells HQ—Where is the $1.2M?
By Andrew Walden @ 7:10 PM :: 3743 Views :: Ethics, Republican Party

Hawaii Republican Party Sells HQ—Where is the $1.2M?

‘A fool and his money are soon parted.’

by Andrew Walden

After two decades of infighting, the Hawaii Republican Party sold its Kapiolani Boulevard storefront headquarters for $1.2M with a closing date of May 31, 2024.

Then the real trouble began.

Sellers’ proceeds--after closing costs--of $1,099,678.82 should be divided equally between the two 50% owners--Hawaii Republican Party and the Oahu League of Republican Women (OLRW)--with each receiving $549,839.41.  (See documents below.)

But the money is nowhere to be found.

Since closing the HQ sale, the Hawaii Republican Party has filed monthly Federal Election Commission reports dated June 26, 2024 and July 26, 2024.  Neither makes any mention of any receipt of money from selling the HQ.  Likewise, the most recent Hawaii Republican Party report filed August 1, 2024, with the Hawaii State Campaign Spending Commission, indicates only $25,148.62 total ‘fundraising and other income’ for the period January 1, 2024 through July 26, 2024.

Neither Hawaii Republican Party Chair Tamara McKay nor Treasurer Michael Jauch responded to an emailed request for comment from Hawai’i Free Press.  (UPDATE: Response received--see below.)

Oahu League of Republican Women is Suddenly a Corporation

The Oahu League of Republican Women is an 80-year-old unincorporated association which owned 50% of the GOP HQ.   But on May 24, 2024, just seven days before closing the HQ sale, OLRW Chair Shirlene Ostrov and Treasurer Mary Monohon created a non-profit corporation also called Oahu League of Republican Women.  Bare-bones articles of incorporation filed with DCCA show Ostrov and Monohon as the two sole incorporators.  (See documents below.)  OLRW’s proceeds from the HQ sale were deposited into new corporation’s bank account. 

OLRW was not required to file FEC reports.  Its last State CSC report was filed October 31, 2023.  A new OLRW PAC filed with the State CSC July 29, 2024.

Ostrov tells Hawai’i Free Press: “This year, we transitioned our ‘private club’ to an official 501(c)4 in the State of Hawaii.  The revenue from the sale of the building went into that account, which you can see that report when we file taxes this year.

“(The unincorporated association OLRW) filed form N-30 with State and form Pol 1120 with IRS.  (The incorporated OLRW will) file IRS form 990 this year as we are 501c4.  (The unincorporated association OLRW) never filed form 990.”

Hawaii Republican Party Hides the Money

Bizarrely, the two most recent Hawaii Republican Party FEC reports continue to use the former HQ as a mailing address.  A monthly expense item is included for a copying machine which was in the former HQ.  But other expenses indicate post-sale activities such as renting a storage unit and renting a Regus shared office and mail drop.

A former Hawaii Republican Party treasurer examined the Hawaii Republican Party FEC filings for Hawai’i Free Press.  She explains:

“Any income or expense should be included somewhere on the FEC Form 3x. This Form is a summary recap which is like a cash flow statement.

“FEC Form 3x must match/reconcile to the total reconciled Cash in bank(s) at the end of a reporting period. If the proceeds from the sale of an asset are deposited in the Party’s bank(s) and used for expenditures, it becomes part of the cash balance.  

“Proceeds of the sale would be reported on Line 17. This line says ‘dividends, interest, etc’ and the ‘etc’ should be the proceeds income.

“The Party is using a third-party vendor to prepare the FEC reports.  They should have the expertise to know how this is properly reported.  But, if the vendor is only given donations and expenditures and is not provided with the information about proceeds from the sale, the reported cash balance will not match the bank balance.

“It looks like they have at least two reports needing amendment. I would worry about penalty and interest being assessed if they neglect to file disclosing such a red flag amount.” 

A high-ranking Hawaii Republican official tells Hawai’i Free Press:

“Off the record I think they are grossly incompetent.  Also I think they are trying to pull a fast one.  Political parties have very strict rules.  They are acting like this money is without restrictions.  Taxes alone will wipe out $150K.

“I think they believe they are clever and put it in a total separate account so as not to be accountable. 

“(Chair) Tamara (McKay)’s stupid minions ‘approved’ a budget … but never showed a budget.  There is so much malfeasance.”

UPDATE

After three days of attempting to get a response from the Hawaii Republican Party we went ahead and published this article.  Then suddenly, Chair McKay emailed this:

“Our money is ina savings account at this time.  We are working with Aristotle on the appropriate handing of the money. We Are only allowed To reimburse Ourselves 64% use of funds at this time. We definitely have to pay capital gains.”

In response, we asked McKay four follow-up questions:

Why has HRP not included the HQ sale proceeds in the three FEC and CSC reports filed since May 31, 2024?

Do you have an estimate of the state and federal fines HRP will have to pay for these three omissions?

Have you self-reported the omissions?

When do you anticipate filing amended reports?

She responded:

“We met With Aristotle which had an FEC fella part of the meeting. Because we are a Political Party, 527, and how the money was used to pay for the building all is part of how we file.  This why we have sought an attorney and continue to work with Aristotle.”

In a bulk email discussion with Republican leaders, August 5, 2024, McKay added:

... we have a financial advisor that is assisting in proper investment of the moneys to aid in cushioning in the capital gains that we will have to pay...however, there seems to be a couple obstacles with the original company we were considering investing with ....

She refused to identify the 'financial advisor' or 'the original company we were considering investing with.'

Treasurer Jauch--after five days ignoring request for comment--then suddenly chimed in with profanities and a line of clown emojis.

---30---

PDF: OLRW incorporation docs and closing docs for sale of HQ

FEC: HAWAII REPUBLICAN PARTY - committee overview | FEC

CSC: Noncandidate Committee Filing System (hawaii.gov) (Use Search Term: ’Republican’)

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