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Saturday, August 31, 2019
OHA: Crabbe Spent Last Month in Office Hiding From Auditors
By Andrew Walden @ 9:53 PM :: 1262 Views :: Ethics, OHA

by Andrew Walden

Outgoing Office of Hawaiian Affairs (OHA) CEO Kamana’o Crabbe stonewalled auditors to the very end. 

Crabbe managed to hide from Auditors who were present at OHA HQ June 3 through June 14, 2019.  A status report from auditor CliftonLarsonAllen, August 6, 2019, describes CLA’s attempt to discuss contracts Crabbe managed personally:

There were 3 contracts selected for testing by CLA for which OHA identified Dr. Kamana’opono Crabbe, former OHA CEO, as the contract manager. While at OHA for testing the week of June 3, 2019, CLA was notified that Dr. Crabbe’s last day with OHA would be June 30, 2019. As such, CLA prioritized testing these 3 contracts so that CLA could meet with Dr. Crabbe prior to his last day with OHA to ask any questions related to the contracts.

On June 11, 2019, CLA emailed Ms. Ono-Evangelista (cc: to Raina Gushiken) to request a meeting with Dr. Crabbe and was informed that a meeting with Dr. Crabbe was being worked on. A meeting with Dr. Crabbe was not scheduled while CLA was on site at OHA (through June 14, 2019). CLA then requested a phone conference with Dr. Crabbe prior to his last day, and a call was scheduled for Tuesday, June 25, 2019 from 11:00am – 12:00pm HST. CLA provided the conference call information and called into the number at the scheduled time. CLA waited for approximately 15 minutes, but Dr. Crabbe did not call in. CLA sent a followup email to Ms. Gushiken and Dr. Crabbe, to which Dr. Crabbe replied and apologized for missing the call. He indicated that he would work with Ms. Gushiken for a possible reschedule of the call. On the same day, CLA provided its availability for this rescheduled call, but did not get a response on a new day/time.

The CLA status report is buried in the Meeting Packet for the September 4, 2019, OHA Trustees Committee on Resource Management, pages 106-112. 

On July 2, 2019, two days after Crabbe’s departure, OHA’s Interim CEO Sylvia Hussey agreed to abide by the Order of Oahu Circuit Court Judge Jeffrey Crabtree and hand over financial records of OHA’s LLCs.  Also as a result of Judge Crabtree’s order, OHA Trustees, July 25, 2019, voted to approve Action Item RM 19-08, revising a clause in the operating agreement of OHA’s LLCs which had previously allowed nepotism.

In addition to evading discussion of contracts he managed personally, Crabbe also evaded auditors’ attempts to discuss OHA’s LLCs with him. Crabbe only met with CLA once, on November 14, 2018, with time restricted to one hour and refused to talk about OHA’s Limited Liability Corporations (LLCs).  The scenario is described in our April, 2019 article  “Secret Timeline Shows OHA Lying to Legislature While Stonewalling LLC Audit:” 

November 6, 2018: “CLA emailed OHA to confirm interview with Mr. Crabbe on 11/14/2018 from 10:30 am to 12:30 pm.”

November 14, 2018: “OHA informed CLA that Mr. Crabbe would be available for the interview with CLA later that day (11/14/2018) at the starting time scheduled but would be available for only one hour.”

November 14, 2018: “CLA interviewed Kamana'opono Crabbe concerning OHA only (not able to discuss LLCs in person without ES&A being present). Present in this interview was Albert Tiberi.”

After eight months cowering under his desk, Crabbe decided not to seek reappointment as OHA CEO.  Before he left, some clues to his reasoning were buried 17 paragraphs deep in an article in the April 18, 2019 edition of Hawaii Business:

…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….

In addition to Crabbe’s refusal to meet with auditors, OHA insiders are continuing withhold LLC documents and are using their attorneys as an excuse to keep information from auditors.  The CLA status report describes the problem:

Project Obstacles – Obtaining Outstanding Documents on LLC Request List

As mentioned above, there are 9 items still outstanding from the original document request lists sent to the LLCs in 2018. CLA is following-up with the LLCs and their legal counsel to determine the status of these items. CLA previously communicated that it needed all remaining document no later than July 31, 2019; however, this date has now passed. CLA will communicate to the LLCs that all remaining documents on the LLC request list must be provided no later than August 12, 2019, in order for CLA to perform the testing required of the LLC sample selection.

Redactions on OHA supporting documentation:

As mentioned above, the supporting documents for the OHA sample selection were provided electronically (scanned PDFs). Based on the documents reviewed thus far, the supporting documents for 2 contracts include pages containing redactions. The redactions have been applied to attorney invoices (detailed time descriptions), email communications (which include OHA’s corporate counsel), and a Procurement Document Checklist (the portion of the form where OHA’s corporate counsel typically signs).

Based on discussions between CLA and Ms. Gushiken, current Corporate Counsel to OHA, Ms. Gushiken reviewed the supporting documentation prior to it being submitted to CLA. To the extent that she identified communications believed to be privileged, she redacted the applicable portions of the documents. CLA is unable to assess the impact these redactions have on its ability to fully assess the documentation provided as CLA does not know the substance of the information that has been redacted.

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