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Wednesday, June 26, 2019
OHA Granted Marijuana Grower Right to Audit LLCs
By Andrew Walden @ 1:18 AM :: 1557 Views :: Ethics, OHA, Drugs

by Andrew Walden

Office of Hawaiian Affairs (OHA) CEO Kamanaopono Crabbe signed a secret non-compete, non-disclose agreement with Nevada marijuana grower Ranson Keola Shepherd. 

Existence of the September, 2015, agreement first came to light nearly three years later at a May, 2018, OHA Board of Trustees meeting -- and then only as a justification for keeping OHA Trustees in the dark regarding a secretly formed OHA LLC called Ho’opakeu.

As Hawai'i Free Press  reported May 27, 2018

In a May 22, 2018 memo from Hi’ilei Aloha LLC, another of OHA’s six known LLCs, to OHA Board of Trustees, Crabbe and (then-OHA CFO Lisa) Victor admit to the secrecy—blamed on an alleged ‘Non-Disclosure agreement’ which they apparently believe supersedes state open records laws….

Via a UIPA request, Hawai’i Free Press has now obtained a copy of the Crabbe-Shepherd agreement: Its' purpose, “…to discuss and evaluate a potential business relationship between them pertaining to a … medical marijuana enterprise in the state of Hawaii or elsewhere….”

OHA has stalled an audit of its LLCs for over a year.  Ironically, one clause of the agreement allows “Ranson Keola Shepherd, his assigns or Affiliates” to audit OHA at will:

10.3 Audit. (Shepherd) may audit any and all records of (OHA) relating to the Confidential Information, as well as (OHA’s) security and protection measures, and procedures therefor.  All audit inspections shall be made at reasonable times during normal business hours, and with reasonable notice provided to (OHA) ….

Presumably “any and all records of OHA” would include records of Ho’opakeu LLC and its parent organization, Ho'okele Pono, LLC, another of OHA’s LLCs.

Other aspects of the agreement may be illegal.  

The “non-compete” clause of the agreement effectively commits OHA to violate the State Procurement Law:

“…(OHA) agrees that, during the Term, they shall not, directly or indirectly, through an Affiliate or otherwise, engage or have any interest, direct or indirect, in any business in competition with the Project….”

Several “non-disclose” clauses commit OHA to violate Hawaii's Uniform Information Practices Act (UIPA).  One clause makes granting our UIPA request a breach of of the agreement:  

Confidential Information. With respect to any Confidential Information, (OHA) agrees and undertakes: to hold it in strict confidence and not to disclose it in any manner or to anyone except as expressly provided for herein….

…this Agreement and the existence, nature and scope of the Project and the Business Relationship are deemed Confidential Information of Disclosing Party….

Other clauses place OHA under Nevada jurisdiction and make OHA financially liable for “any breach of the agreement.”

Akamai readers will remember the 1990s Broken Trustees of Kamehameha Schools running the multi-billion dollar KSBE Trust as a personal investment club profiting themselves and their cronies.

The multi-million dollar OHA tries to imitate the masters of old—but comes up short.

According to the Hi'ilei Aloha memo to Trustees:

“On September 10, 2015. OHA's Board of Trustees (BOT) created the Ad Hoc Committee on Economic Innovation…. OHA's COO and CFO were tasked by the Ad Hoc Committee on Economic Innovation Chair Leina’ala Ahu lsa to: (a) conduct due diligence on the process for creating a particular type of joint venture; and (b) evaluate the appropriateness of the proposed venture. At that point in time, the hope was that the proposed joint venture could be very profitable and could assist OHA with its Fiscal Sustainability efforts.”

OHA Trustee Lei Ahu Isa tells Hawai’i Free Press, “My Ad Hoc Committee had volunteers such as Frances Oda, Eddie Flores, (and) Bert Kobayashi.”

Ho’opakeu, LLC was registered with the DCCA BREG October 30, 2015 by Mona Bernardino, who is manager of several other OHA LLCs.  On BREG its three managers are listed as Kamanapono Crabbe, Lisa Victor, and Iona Hawley—respectively, OHA’s CEO, COO, and former CFO.  In its’ Articles of Organization, the sole ‘member’ of the LLC is listed as Ho’okele Pono—one of OHA’s six known LLCs--Bernardino signs as “attorney in fact for Kamana’opono M. Crabbe, Manager.”

Ranson Shepherd's Nevada marijuana grow op was profiled on Hawaii News Now, August 21, 2017.  Shepherd tells HNN he can produce two tons of marijuana every year.  His name does not show up on published lists of Hawaii medical marijuana dispensary applicants. 

May 27, 2018, article in Hawai’i Free Press outlines evidence that Ho’opakeu was apparently organized to benefit the marijuana dispensary application of Ola Investments.

John Henry Felix was one of 16 co-owners of ‘Ola Investments, Inc’ per its dispensary application (pg 16) dated January 29, 2016.  Other owners included ex-HPD Chief Lee Donohue and several local businessmen.

In May 23 and May 24, 2018 emails widely distributed at OHA, Trustee Lei Ahu Isa tries to clarify:

Ranson Kepa Shepherd and my committee met to establish a “shell” LLC as he was trying to close a fabulous deal for a dispensary, one of the 8.

OHA has to sign a non disclosure so nothing was leaked as it was proprietary in nature….

Our beneficiary that presented now makes profits of upwards to $1M per month and is helping so many native tribes in Vegas.

Too bad, too sad OHA closed the door on this opportunity​ to diversify and expand.​…

I felt I needed to follow up and explain the created "shell" of Ho’opakeu, LLC.... as it was advised that we have an LLC created in the short turn around time for application for the medical marijuana license application with John Henry Felix....

Ola Investments failed to win a marijuana dispensary license.




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