Surprise: OHA secretly borrowed $2M to finance Tribal ‘Aha
by Andrew Walden
Did previous OHA Administrators under Kamanao Crabbe conspire to hide $2M in expenses for convening the 2016 DoI Tribal Aha in the budget for OHA Na Lama Kukui headquarters (formerly Gentry Pacific)?
Is this $2M spent on the Aha in addition to the $2.6M paid to Akamai Foundation for the Aha?
The 2016 Aha was held at John Waihee’s Royal Hawaiian Golf Club in Maunawili Valley. Is that where the hidden $2M went?
FLASHBACK: Golf Club Aha: John Waihee Returns to the Scene of the Crime
OHA trustees, Resource Management Committee, September 27, 2022, approved the following motion:
Motion 4: Debt – Approve the cash payoff of $1.2 million of debt currently held by American Savings Bank that was used to finance Native Hawaiian ՙAha.
The motion will be sent for final approval to the Board of Trustees meeting on September 29.
During the RM meeting, CEO Sylvia Hussey described the purpose for paying off the debt was to bring OHA into compliance with better practice as to how it finances operations. When asked why OHA borrowed the money in the first place, she stated that it was before her time and she did not know. She was also asked whether the borrowed monies had any relationship to the $2.6 million grant OHA made to Akamai Foundation on behalf of Na’i Aupuni which was red-flagged by the Clifton Larsen Allen (CLA) review. To this question Hussey also replied that she did not know.
Relating to Action Item RM #22-23A, page 44 of the Board packet explains:
Includes all expenditures associated with the payment of debt service for BOT-approved obligations in Table 8 and reflects BOT approved debt refinancing figures of a net increase in Debt Service of $497,355. In the refinancing of Na Lama Kukui, there were amounts at Bank of Hawaii that pertained to governance and financing the ‘Aha that was approximately $2MM, which was not in line with the debt management policy. Therefore, Administration will be seeking approval to pay off that amount, estimated at $1.2MM, now held by American Savings Bank (ASB), and reducing the ASB debt amount and being compliant with the debt management policy.
Page 60 of the Board packet explains:
The FY 2023 Na Lama Kukui Budget has a net decrease of by $1,932,982 because of FY22 debt refinancing as approved in RM#22-05….
Audit firm Plante-Moran is expected to present Trustees with a “follow up“ report on the CLA review in early October.
Are these moves designed to get in front of some bad news?
RM September 27, 2022: Agenda, Board Packet
2019: Red Flags: An Analysis of the Independent Audit of OHA and its LLCs