Lawsuit: OHA Budget Process Rooted in Illegal Power Grab
by Andrew Walden
Akamai readers will remember Kai Kahele’s self-imposed chaos at OHA Trustee’s June, 2025 budget meetings.
Now, in a lawsuit filed November 5, 2025 in Oahu’s First Circuit Court, OHA CEO Stacy Ferreira is alleging the entire $136M process was ‘unlawful.’ Ferreira says she reported Kahele to the State Attorney General’s office July 2, 2025. Ferreira alleges that OHA C-suite officers could be subject to criminal sanctions for going along with Kahele’s demands to endorse the budget.
Ferreira was placed on leave and escorted out of her office by OHA Trustees’ Vice Chair Keoni Souza September 23, 2025, allegedly in illegal retaliation for her legally protected whistleblowing. Her removal was not announced to the public until it leaked to the press three days later. She was obligated to sign a statement saying she had ‘voluntarily’ taken personal leave.
Souza’s 2020 and 2022 OHA campaign manager was Michael Miske’s lawyer Thomas Otake.
Ferreira’s complaint provides an inside view of the budget process which riled OHA beneficiaries.
There is more to come, this is only part of the story.
Here are some key excerpts:
Kahele’s Interference in the Biennium Budget
36. Pursuant to OHA’s EPM (Executive Policy Manual), as administrator, Ferreira was responsible for evaluating, formulating, and recommending to the Board of Trustees a proposed biennium budget.
37. Under her employment contract with OHA, Ferreira was hired, in part, to “[d]evelop for Board approval OHA biennium budgets. . .”
38. Under OHA’s EPM, in effect as of May 31, 2025, the Board’s role was limited to “[c]onsider[ing] the proposed Biennium Budget” recommended by Ferreira’s administration.
39. Although Ferreira’s employment contract and OHA’s EPM both require that the administrator develop and propose the biennium budget, on or about June 2, 2025, Kahele discarded the EPM and developed his own biennium budget without Board consultation or approval.
40. Although review of the biennium budget was under the purview of the Budget and Finance Committee, and not yet with the full Board, Kahele independently bypassed Budget and Finance Committee leadership and directed a new budget be prepared with then-Chief of Staff Summer Sylva, Deputy Chief of Staff Alena Auyoung, and Finance Analyst Grace Chen.
41. As a public official and trustee, Kahele is required by the State Ethics Code, HRS Chapter 84, to keep confidential any information concerning the budget that is not publicly available and is expressly prohibited from using that information to benefit either himself or a third party.
42. On or about June 17, 2025, Kahele directed his aide to email a Native Hawaiian organization, and potentially others, to solicit testimony in support of his proposed budget, which included a testimony template and a specific budget line item favorable to that organization.
43. In exchange for public support from the Native Hawaiian organization that would lobby in favor of his deeply unpopular proposed biennium budget, Kahele conveyed confidential and preliminary budget 9 information to that organization, which would benefit from the budget’s passage.
44. Ferreira reasonably believed that Kahele’s disclosure violated the State Ethics Code and OHA’s EPM on confidentiality because the email implied that his proposed budget would be approved by the end of the month and disclosed confidential and nonpublic budgetary details prior to their official release, which had not been made publicly available until the following day.
45. Between June 20 and June 24, 2025, Kahele issued multiple directives to Ferreira, Ramona Hinck (“Hinck”), the Chief Financial Officer, and Ryan Lee (“Lee”), the Endowment Director, demanding that they certify his proposed biennium budget that had been developed entirely outside the administration’s executive and division leadership.*
*Blaze Lovell, OHA Staff Baffled By Spending Plan Filled With Dramatic Cuts, Changes, Civil Beat (June 30, 2025).
46. Ferreira and Hinck, having played no role in crafting Kahele’s biennium budget, raised serious concerns regarding material inaccuracies and the absence of a transparent development, review, and vetting process.
47. Being an integral part of the budgetary process, certification requires adequate time and a careful, extensive analysis and balancing process to determine whether the requested funds are actually available based on the sources of funds.
48. Hinck informed Kahele that certifying his biennium budget under those circumstances would violate professional standards.
49. On Friday, June 20, 2025, Kahele emailed Hinck, demanding that she certify his biennium budget by Monday morning, June 23, 2025. Hinck declined.
50. On Sunday, June 22, 2025, Kahele emailed Ferreira, directing her to order Hinck to certify his biennium budget by the following morning.
51. Kahele’s directive placed Ferreira in an ethically untenable and coercive position. Kahele’s persistent directives made clear that her refusal would be interpreted as insubordination or grounds for removal.
52. Against her professional judgment and ethics, Ferreira relayed Kahele’s directive to Hinck. In response, Hinck again declined and reiterated to Kahele that the process was fundamentally flawed and that the pressure he exerted to certify his biennium budget constituted harassment and intimidation.
53. On June 24, 2025, Kahele again ordered Ferreira and Lee to certify his biennium budget that day, inducing them make false statements and subject them to criminal sanctions Ferreira responded that Kahele was overreaching his authority by bypassing the Board’s Committee on Budget and Finance.
54. Under pressure, Ferreira and Lee drafted a conditional certification that they could truthfully stand by and submitted it to Sylva, the then-chief of staff, for Kahele’s review. The draft was rejected by Sylva after Kahele reviewed the revised statement because it failed to meet his unilateral demands. The original certification statement being the only acceptable statement for Lee to sign, he agreed to do so just minutes before Kahele’s self-imposed deadline.
55. That same day, the financial analyst working with Kahele on his proposed biennium budget identified additional errors in the budget, requiring another revision. This confirmed Ferreira and Hinck’s earlier concerns that Kahele’s budget was unstable and unreliable because the funds were not properly accounted for.
56. The release of a revised third version of Kahele’s biennium budget undermined confidence in the accuracy, fidelity, and reliability of the June 18, 2025 budget, which had been posted online as the “final” budget for the trustees’ review.*
*See Blaze Lovell, OHA Trustees Race To Beat Deadline For New Controversial Budget, Civil Beat (June 30, 2025).
57. Kahele was unconcerned with the accuracy of his proposed biennium budget or any potential compromise to OHA’s financial integrity.
58. By misappropriating Ferreira’s responsibility to prepare the biennium budget — as designated by her employment contract and OHA’s EPM — and demanding that Ferreira, Hinck, and Lee expose themselves to legal jeopardy by falsely certifying that the funds for his budget were accounted for, Kahele’s biennium budget was deeply unpopular and proposed cutting funds to certain Hawaiian immersion schools and eliminated millions in grants to various organizations. Kahele violated OHA’s rules and professional standards, and demonstrated a lack of integrity, transparency, and due diligence.
59. Kahele’s actions eliminated the fiduciary safeguards designed to protect OHA, replacing OHA with a process driven by intimidation and singular authority. Kahele’s pattern of coercion, undue pressure, and executive interference directly compromised professional standards, eroded public trust in OHA, and placed the executive team in ethical, legal, and professional jeopardy by asking Ferreira, Hinck, and Lee to certify the budget knowing that the funds were not properly accounted for.
60. On June 30, 2025, the Board approved Kahele’s biennium budget.
61. On or about August 21, 2025, the Board amended OHA’s EPM to formally grant itself, “or an appropriate designee,” authority to prepare the biennium budget. This was an effort to cover for Kahele’s disregard of OHA’s prior EPM.
62. On or about August 21, 2025, the Board further amended OHA’s EPM to grant itself the authority to not just “consider” the administration’s proposed biennium budget, but to “amend, or reject” it. The previous version of the EPM, effective May 31, 2025, only permitted the Board to “consider” the budget. Moreover, this amendment now permits the Board to “introduce and adopt its own budgetary or financial proposals as it deems necessary.”
63. The Board recognized that Kahele’s subversion of Ferreira’s role in the budgeting process violated OHA’s EPM and the longstanding responsibilities traditionally held by the administrator….
PDF: Ferreira vs OHA
BACKGROUND:
COVERAGE: