by Andrew Walden
Oahu First Circuit Court Judge Jeffrey Crabtree has ruled.
Limited Liability Corporations (LLCs) owned and controlled by the State of Hawaii Office of Hawaiian Affairs are subject to the State Uniform Information Practices Act (UIPA).
Represented by Honolulu attorney Michael Lilly, Hawai’i Free Press editor Andrew Walden applied to the court for an order directing three of OHA’s seven LLCs to release their check registers.
OHA has poured over $34M into its seven LLCs—contradicting attorney Kimberly Greeley, “represent(ing) Hi’ilei Aloha, LLC, Ho’okele Pono, LLC, and Hi’ipaka LLC” who, in January, 2017, falsely claimed “the State … does not provide any funding for the Companies.”
To find out where the money went, Hawai’i Free Press, in November, 2016, filed a separate open records request for the entire check register for three of the LLCs. After two months of stalling, the LLCs then-attorney Greeley wrote back claiming that the LLCs were private organizations and they—and their assets such as Waimea Valley--were no longer property of the Office of Hawaiian Affairs.
Since that shocking response from Greely, The LLC check registers have been sought by attorneys for Abigail Kawananakoa, by OHA Trustees, and by an auditing firm hired by OHA to look at the LLCs. None of them have yet succeeded in making the records public. Greeley did not represent the LLCs in court.
After five months of litigation, Judge Crabtree, March 29, 2019, issued a seven page ‘Minute Order’ proclaiming:
“…Managers have explicitly limited OHA's access to information, and reserved their right to continue to do so….”
“The court finds as a matter of law that each (LLC) is an ‘agency’ for UIPA purposes….”
“It is apparently not disputed that OHA is an instrumentality of the State of Hawai’i….”
“…the court finds as a matter of law that OHA owns, and has authority and control over the operation and management of the LLC’s operations….”
A final court order should be forthcoming. Crabtree explains: “…this Minute Order is intended as a summary. Further details can be included in the final and binding order….”
The LLCs are represented in court by Honolulu attorney Anna Elento-Sneed. Sneed’s ES&A law firm has pulled down over $140K in legal fees from OHA starting soon after ES&A’s 2015 foundation. Among her first acts—negotiating OHA CEO Kamanaopono Crabbe’s controversial employment contract signed in August, 2016, with then-Trustees Chair Robert Lindsey. That factoid came out in a long rant by Crabbe recorded in minutes of the OHA BoT January 7, 2017 (p12).
Sneed’s legal strategy featured a 403 page ‘supplemental memo’ and unsuccessful attempts to force the recusal of Judge Crabtree and to block the filing of friend-of-the-court briefs by the Civil Beat Law Center and the Tax Foundation of Hawaii.
The litigation may have helped Sneed’s bottom line—at the expense of OHA beneficiaries—but it didn’t do much to advance her case.
The jig was up when, in an earlier Minute Order, March 5, 2019, Judge Crabtree noted, “The Court has spent extensive time digesting respondents voluminous 11/30/2018 brief and therefore the Court respectfully requests that respondents submit only new arguments or factual material which are truly responsive to a new argument or issue in the supplemental briefs.”
OHA CFO David Laeha seems to have vanished shortly after supplying a November 30, 2018 ‘declaration’ that “Managers have explicitly limited OHA's access to information, and reserved their right to continue to do so.” As CFO, Laeha was “also a Manager of Hi'ilei Aloha, LLC, Ho'okele Pono LLC, and Hi'ipaka LLC.”
Desperate to keep the LLCs secrets, OHA insiders are already planning counter strategies.
Minutes of a February 13, 2019 meeting of OHA Trustees Resource Management Committee (p17), show Chair Dan Ahuna acknowledging an executive session discussion was being held “pertaining to Walden v Hi’ilei.” Trustees discussed a plan (p19) to recruit three managers for each LLC, “although” as Trustee Brendon K. Lee explains, “it could possibly be more costly.” The resulting “Action Item RM 19-01” was approved at the OHA Board of Trustees February 21, 2019.
Of course OHA may simply be expanding the number of appointed LLC managers because it always has so many C-suite vacancies. But just in case, Crabtree’s Minute Order explains: “…the court concludes that it elevates form over substance to say the delegated manager actually operates and manages the LLC.”
PDF: Minute Order
ILind: Judge: OHA-controlled LLCs are subject to sunshine
Free Hawaii: VICTORY FOR TRANSPARENCY - COURT RULES OHA MUST MAKE ITʻS LLC CHECK LEDGERS PUBLIC
TFH: Walden v Hiilei Aloha the Documents
2018: OHA CFO: We Keep Trustees in the Dark About LLCs