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Sunday, January 27, 2019
Naming Names: Hawaii Politicians Profit from Sub-Minimum Wage Sweatshops for the Disabled
By Selected News Articles @ 8:36 PM :: 9326 Views :: Ethics, Health Care, Labor

by Michael Tada

After my article from January 4, “Government-Funded Sweatshops: No Minimum Wage for Hawaii Disabled Workers,” I received an outpouring of calls and emails from readers. People had questions, and they wanted to know more about the deep dark secrets of the system in our state through which public funds are funneled into private pockets while workers with disabilities toil away in sweatshops.

Jerry Darnell, a pioneering teacher of the blind, is known for telling his students “What happens in the dark always comes out in the light. If you don’t want it to come out in the light, don’t do it in the dark.”

These sweatshops should not operate like prisons, but they all too often have similar characteristics.

Marian Tsuji, recently retired CEO of Hawaii’s largest sweatshop operator, Lanakila Pacific, has a professional background in the corrections system.  She began her career working Rikers Island jail complex in her native New York City and later, according to Pacific Business News, moved to Hawaii and became “deputy director overseeing eight Hawaii jails and prisons and the contract administration of three Mainland private prisons.”

Senator Jill Tokuda’s connections to Marian Tsuji go back 20 years.  Tokuda worked under Tsuji in the late 1990s when Tsuji was then-Lt Gov Mazie Hirono’s Chief of Staff.  

But Tsuji ended her career with a lavish retirement party last year.  Will this be the session Legislators finally shift vocational services away from the outdated sweatshop model? 

Sweatshops Back Political Campaigns—But Some Politicians Refuse

Let us now dive into the questions:

Q. You wrote: “Some of these sweatshops have supported political campaigns, which has included providing food and drinks for fundraisers or perhaps printing campaign t-shirts and canvassing materials. It may look like an ordinary business transaction, but the sweatshops, due to their extremely low labor costs, can produce these campaign products at extremely low prices.”

Can you give some examples?

A. Marian Tsuji gave $2050 to Friends of Mazie Hirono between 2006-2010.

To find state contributions on the Hawaii Campaign Spending Commission website, Schedule B (Expenditures Made), search the names of sweatshops, like “Lanakila Pacific.”

Some politicians who bought campaign supplies from the sweatshops in the past have learned about how corrupt they are and stopped doing business with them. After several purchases from Lanakila Pacific in 2014, HD27 Rep. Takashi Ohno stopped doing business with them once he learned about what they were doing. Sadly, his 2018 Republican opponent, Mela Kealoha-Lindsey, chose to buy from Lanakila Pacific.

Newly elected HD23 Rep Dale Kobayashi bought from Lanakila Pacific in 2016 and 2018.

Ernie Martin, former Honolulu Council Chair, in 2010 used Lanakila Pacific for campaign supplies, but, after learning about the sweatshops, authored a successful 2018 Council resolution taking a stance against the practice.

Senator Tokuda’s campaign committee made several purchases from Lanakila Pacific:

- On 6/29/2010, she spent $420 for “Food & Beverages” explained as “Reimburse for food for 5/19 Fundraiser” for her campaign for the office of “Lt. Governor”

- On 9/28/2010, she spent $693.19 for “Printing” explained as “Silk Screen T-Shirts” for her campaign for the office of “Lt. Governor”

- On 12/31/2010, she spent $100.50 for “Professional Services” explained as “Preparation of canvass materials” for her campaign for the office of “Lt. Governor”

- On 1/13/2011, she spent $100.50 for “Professional Services” explained as “Preparation of Door Hangers” for her campaign for the office of “Lt. Governor”

- On 7/30/2014, she spent $621.20 for “Printing” explained as “Campaign t-shirts for volunteers” for her campaign for the office of “Lt. Governor”

In 2015 and 2016 Lanakila Pacific approached the Senate Committee on Ways and Means -- then chaired by Tokuda -- for funding.  

Tokuda served as the Chair of the Senate Committee on Labor in 2018, when House Bill 1627 and Senate Bill 3023 -- bills to end the payment of subminimum wages to workers with disabilities -- went through public hearings. House Bill 1627 passed both chambers and made it to conference committee, where it died a mysterious and secret death.  Sen. Tokuda’s leadership on that conference committee has fallen under scrutiny from people with disabilities, especially after watching the March 20, 2018 Labor Committee hearing where Marian Tsuji testified in opposition in front of Tokuda.

Sweatshops an Issue in Lt Governor Race

Hawaii needs leaders who ensure that state funds are not spent on programs that openly discriminate against a minority group. 

During the 2018 session, Tokuda was in the heat of an intense primary race for Lieutenant Governor, which she narrowly lost to Josh Green. According to data from the Centers for Disease Control and Prevention (CDC), 15.8 percent of adults in Hawaii have some type of disability, so it is possible that the votes of people with disabilities made the difference. The sweatshops asked Tokuda to kill the bill that would end their reign, but voters with disabilities asked her to support it.  

At a February, 2018 Lieutenant Governor campaign forum jointly hosted by the Labor and LGBT Caucuses of the Democratic Party of Hawaii, candidates were asked if they supported ending the payment of subminimum wages to workers with disabilities. Tokuda avoided taking a stance on the issue, but Green expressed his support and showed understanding of the social problem behind the issue.  Green received backing from blind community activists including a Primary-eve endorsement published in Civil Beat.  

Workers with disabilities all across Hawaii celebrated when Tokuda gave her primary night concession speech August 11, 2018.

Honolulu Council Resolution Against Sweatshops

Q. These sweatshops for the disabled can receive grants-in-aid from legislative bodies at the city, county, and state levels to help pad their administrative budgets.” Can you give names, years, and amounts?

The Honolulu City Council admitted that they do this in the original text of 2018 Resolution 18-224, which included a discontinuation of giving public funds to the sweatshops for the disabled. In a subsequent meeting on November 27, 2018, the Committee on Executive Matters and Legal Affairs amended the resolution and moved it for adoption.

In that hearing, Councilmember Ann Kobayashi, State Representative Dale Kobayashi's mother, expressed her concern about taking Grant In Aid funding away from Lanakila Pacific: “They perform a good service.” She should know because they provided campaign t-shirts to help her son get elected to the Hawaii House of Representatives.

On December 5, 2018, the City Council adopted Resolution 18-224, CD1, which no longer took action on the Grants In Aid but still urged higher legislative bodies to repeal the discriminatory labor practice.

Lanakila Pacific leases its Bachelot Street Honolulu headquarters from the State for one-dollar per year.

The state legislature has provided Grant In Aid funding for many years, and this is a timely topic as we are once again entering the GIA season for the state legislature. Consider the following easily accessible resources:

- 2013 Grant In Aid application for Lanakila Pacific

- 2013 Notice of Delayed Dispersal of Grant In Aid Awards

- 2015 Grant In Aid application for Lanakila Pacific’s Capital Improvement Project

Attempting to sell Lanakila’s exploitation of workers with disabilities as a ‘service’ to those workers, Lanakila Pacific’s 2013 Grant in Aid application showcased Tsuji’s work with private prisons. 

Some private foundations offering grants have been tricked by the smooth salesmanship of Lanakila Pacific:

- The Harry and Jeanette Weinberg Foundation, Inc.

- Matson, Inc.

Profitable Nonprofits

Q. You wrote: “These sweatshops are generally nonprofits with complex business structures, which can be difficult to understand from the outside. They may have a for-profit business with a non-profit arm, where the non-profit arm is the employer of people with disabilities.” Can you give some examples?

A. One of the ones to look at here is the Helemano Plantation Buffet, which is connected to Opportunities and Resources, Inc. (ORI). It appears that they have the same address in Wahiawa. ORI holds the certificates to pay the workers, but Helemano is where they functionally work.

Lanakila Pacific is a non-profit with a certificate, but the same location houses Lanakila Meals on Wheels (which has the kitchen that may have been used to make Tokuda’s campaign fundraiser food), a custodial services enterprise (which contracts with the State to clean, strip/wax floors, etc.), and Lanakila Custom Products (which makes the campaign shirts and advertising materials for candidates like Tokuda). Hawaiian Electric Meals on Wheels donations go through Lanakila Pacific.

Former employees at Goodwill also report that the subminimum wage section was confusing to them because “the workers with disabilities worked with us but didn’t technically work for the same part of Goodwill as we did.”

Documents from the AbilityOne Commission list the corporations receiving special contracts, including Goodwill, Lanakila Pacific, and Opportunities and Resources, Inc., as well as other Hawaii sweatshops in Hawaii and Maui Counties.

At the November 27, 2018, Honolulu Council Committee on Executive Matters and Legal Affairs hearing, Carolee C. Kubo, Director, Department of Human Resources for the City and County of Honolulu, explained in her testimony that one of the entities on Oahu paying subminimum wages was “Winners at Work” doing business as “Abilities Unlimited.”  There is no federal certificate allowing them to pay subminimum wages.

Additionally, the newly appointed Director of the DLIR, Scott Murakami, served on the Workforce Development Council with Lanakila Pacific’s Marian Tsuji. At one point, Tsuji served as the Chair. Together, they prepared a 2015 report for Governor Ige on the employment of workers with disabilities in Hawaii. The Workforce Development Council later prepared a Unified State Plan for the Workforce Innovation and Opportunities Act (WIOA), which is supposed to create opportunities for workers with disabilities, effective July 1, 2016 through June 30, 2020. Murakami and Tsuji continued to work together on the Council, with meeting minutes showing them together even up until December of 2017.

Q. You wrote: “Some corporations and government agencies include these sweatshops in their supply chains in order to benefit from the reduced labor costs.” Can you give names and details?

A. An October 2018 report from the National Council on Disability highlights the supply chain topic.

It would be interesting to investigate corporations, schools, and government agencies buying catering services, event t-shirts and custodial services from Lanakila Pacific. Lanakila had the nerve to flaunt these connections for a 2018 KITV story after they repeatedly defended themselves in public hearings at the state legislature. People with disabilities were quite upset when this sweatshop ran around promoting itself in what appeared to be an indirect counter-argument to the civil rights advocacy that was coming out of the community of people with disabilities.

The State of Hawaii recently hired Maureen Bates, the former Vice President from the local Goodwill, another sweatshop for the disabled, to run its entire statewide vocational rehabilitation program. Vocational rehabilitation is supposed to be a process of preparing people with disabilities for competitive, integrated employment. Shortly after Bates took charge of the Division of Vocational Rehabilitation (DVR), it was announced that Lanakila Pacific would be contracted to administer a Summer Youth Employment Program. Thus, youth with disabilities are being introduced to work by a sweatshop for the disabled. Even if they did not end up working in the sweatshop directly, they are still likely to remember that sweatshop when it comes time to look for full-time work because that is where they are building their professional network.

The ARC (Association for Retarded Citizens) runs homes for people with disabilities in Hawaii and on the mainland. The networks are small in Hawaii, and everyone partners with everyone. If the sweatshops and the housing providers work together, then the disabled will stay in the system basically forever and keep bringing in revenue.

Q. Has the Hawaii Department of Education (DOE) been doing anything proactive about this?

A. The DOE has a habit of putting keiki with disabilities on track toward a certificate of completion instead of a high school diploma. This helps them to segregate the kids and not provide the necessary special education services to compete in the real world and real workforce. For example, when the DOE has high school students picking through rubbish bins looking for returnable bottles and cans, like homeless people, and then writes it up as vocational skill training, they are not preparing those students for the real workforce.  So, instead of a school to prison pipeline, kids with disabilities have a school to sweatshop pipeline.

Interestingly, Sen Tokuda, from 2006 through 2008, registered a for-profit company, Charitable Ventures, Inc, at the same Sand Island address as her private sector employer, Reynolds Recycling.  Tokuda’s Reynolds connection may also explain how recycling programs have gotten away with so much fraud for so long as documented by the Hawaii State Auditor.

Federal Resources to End Sweatshops

There are already many government resources being consumed by our State to transition people away from the sweatshops, but our State is not jumping through the ring of fire to abolish the practice. Hawaii has been receiving millions of dollars in Disability Employment Initiative grant funds from the US Department of Labor to help get people with disabilities into real jobs, but the sweatshops continue to function like Bermuda triangle whirlpools. The federal supports to get rid of this practice are in place, but our elected officials have to pull the trigger and do it.  

Hawaii has been declared an Employment First State, which means that we claim to embrace a “framework for systems change that is centered on the premise that all citizens, including individuals with significant disabilities, are capable of full participation in integrated employment and community life.” The Hawaii Employment First State Leadership Mentoring Program (EFSLMP) is a “cross-disability, cross-systems change initiative consisting of multi-disciplinary state teams whose focus is to implement the Employment First approach with fidelity through the alignment of policies, coordination of resources, updating of service delivery models, to facilitate increased integrated employment options for people with the most significant disabilities.” Hawaii Governor David Ige re-endorsed his support for Hawaii’s designation as an Employment First State in 2018.

The US Department of Labor Office of Disability Employment Policy (ODEP) offers many resources to help states and agencies transition to competitive and integrated employment for workers with disabilities. Some introduction is offered here through the Hawaii Department of Health. The US Department of Labor even hosts free webinars to help sweatshops like Lanakila Pacific transition to a respectful and non-discriminatory business model.



Government-Funded Sweatshops: No Minimum Wage for Hawaii Disabled Workers

Disabled: Hawaii Ranks 6th for Service, 49th for Opportunity

State Recycling Program: A Decade of Fraud (Part 6)


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