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Saturday, April 20, 2019
OHA's Crabbe out of the Bucket?
By Andrew Walden @ 10:49 PM :: 4189 Views :: Ethics, OHA

by Andrew Walden

What’s Next for OHA?  The news is buried 17 paragraphs deep in an article in the April 18, 2019 edition of Hawaii Business:

This year may be (Kamana’opono) Crabbe’s last year as (the Office of Hawaiian Affairs) CEO; his contract expires this summer.  (OHA Trustees Chair Colette) Machado says the board is working with a firm to jump-start the application process for the next CEO. Crabbe says he’s discussing his options with his attorney as to whether he will apply again. “It will also depend on how much the current board leadership addresses inherent governance matters and provides concrete action steps to address them,” he says….

“Inherent governance matters” -- What could Crabbe possibly mean by that?  The article continues:

The problem facing OHA and its fiscal reputation is usually not who the organization spends its funds on, but rather how. The main state audit found … Crabbe ignored “do not fund” recommendations for the CEO sponsorship grant program. He also had the authority to move funds without board approval, even when program funds were exhausted. In fiscal year 2016, the CEO sponsorship budget was $100,000, but $210,700 in grants were awarded….

The board limited Crabbe’s authority to make operating budget expenditure adjustments without the board’s approval to amounts of $100,000 or less. The board also approved new guidelines for discretionary spending….

OHA’s finances are also being investigated by the state attorney general and the FBI. “We’ve been a cooperating partner,” says Machado of the investigation….

“I have not been personally involved nor presently impacted by the investigation,” Crabbe says….

Crabbe is not the only C-level executive climbing out of the OHA bucket.  The CFO position has been vacant since David Laeha left in December.  And the trend line for “inherent governance matters” is getting less and less favorable to Crabbe’s ways.

On March 29, 2019, Judge Jeffrey Crabtree ruled that OHA’s LLCs are subject to the state’s open records law known as UIPA.

A legislative conference committee is now considering HB402 which transfers an important element of the CEO’s power to Trustees.  HB402 “requires that all grants and contracts awarded by the Office of Hawaiian Affairs shall be subject to be individually approved by the Board of Trustees.”

Meanwhile Crabbe’s effort to stall the log-awaited audit of OHA and its LLCs has apparently been brought up short by Judge Crabtree’s ruling.  With auditors from CliftonLarsonAllen unable to complete their report after months of stonewalling by Crabbe and the LLCs, Trustees voted to extend the audit contract, which had been set to expire April 30, 2019, until December 16, 2019.   

And to top it off, SR151, approved by vote of State Senate, April 12, 2019, (the same day Trustees voted to extend) calls on OHA to “complete the 2017 independent financial audit and management review of the Office of Hawaiian Affairs and its subsidiaries.”  

Does this mean OHA’s problems will soon be solved?  Hawaii Business reports:

“I have critical concerns about the effectiveness of the [OHA] administration,” says trustee-at-large Keli’i Akina. “In fact, when I became a trustee in 2016, I articulated those concerns and they remain. I ran for OHA on the platform of being a watchdog.”

Akina, who is also the president and CEO of the nonprofit conservative advocacy group, Grassroot Institute of Hawaii, says one of his main priorities is scrutinizing OHA’s fiscal practices. His first goal was to have OHA and its LLCs independently audited. “The greatest problem facing the Office of Hawaiian Affairs today is its reputation,” he says. “The improvement of reputation ultimately depends on regaining credibility. To regain credibility, we have to take a hard look at our financial condition.” For the past two years, as trustee, Akina has been advocating for OHA to reduce discretionary spending and institute a budget and finance committee for the board of trustees.…

For the first time, OHA is also conducting an independent audit of itself. OHA is paying audit firm CliftonLarsonAllen $500,000 to audit the organization and its LLCs to identify potential areas of fiscal waste, fraud and abuse. The audit’s main proponent is trustee Keli’i Akina. But he says he’s not sure if the audit firm has even received the documentation it needs to complete the audit and believes it’s due to stalling within OHA. He declined to say who, though, or why. “The length of time that it’s taken is simply not appropriate to the urgency of the audit,” he says. Machado and Crabbe both say the organization is cooperating, but neither predicted when the audit will be completed….

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