The cover-up is worse than the crime  

by Andrew Walden

On August 6, 2026, Oahu First Circuit Court Judge Steven Nichols is set to hear Plaintiff Stacy Ferreira’s “Motion to Disqualify Denton’s LLP” from representing the Office of Hawaiian Affairs Board of Trustees (OHA BOT) majority in the lawsuit that has dogged OHA BOT Chairman Kai Kahele since it was filed last year--1CCV-25-0001822 - Ferreira v. Office of Hawaiian Affairs.  

Ferreira, OHA's CEO, has been forced onto paid 'personal leave' since last September allegedly in retaliation for reporting alleged illegal acts by Kahele to the State Attorney General.

Meanwhile OHA Trustees Vice-Chair Justin Keoni Souza, whose campaign chair is Michael Miske’s lawyer Thomas Otake, is demanding silence from the four minority trustees who recognize that every day of continuing illegal retaliation against Ferreira makes OHA liable for an ever-larger lawsuit settlement.

The legal exchange between Souza and attorney John S Mackey, representing the minority Trustees is available in pdf format: Souza Complaint and Four Trustees Response.  Among other things, the exchange reveals that Trustee Hulu Lindsey reminded Kahele, September 24, 2025, that OHA had recently paid a $705K settlement to former CFO David Laeha for similar violations of his Whistleblower rights.

In spite of this warning, Kahele continued unabated.

(See: OHA Trustees Never Approved $705K Hush Money Payment)

Here are key excerpts:

Re: Response to Demand to Withdraw Answer to Amended Complaint

Dear Chair Kahele:     July 10, 2026

This provides the response of Trustees Akaka, Akina, Alapa and Lindsey (“the Four Trustees”) to the demand of the majority Trustees, per vote taken on Monday July 6, 2026, that the Four Trustees withdraw their Answer to Stacy Ferreira’s amended complaint.1

The Four Trustees decline to withdraw their answer.

The answer and the majority’s challenge to the Four Trustees’ right to file such a pleading are matters of importance relating to the powers, duties and responsibilities of all Trustees. A motion to strike the answer has been filed, so those important questions are already teed up for decision by the court in the Ferreira litigation. Withdrawing the answer would deprive all parties and the public of the court’s impartial ruling on these important questions. Contrary to the claims of the majority trustees and their counsel, the Four Trustees have never sought or purported to act on behalf of OHA. Their answer is filed solely on their own behalf, in their official capacities as individual Trustees.

Further, the Four Trustees decline to withdraw the answer for the same reason they filed it in the first place, which was to fulfill their fiduciary duties as trustees to prevent, stop or mitigate fiduciary breaches by co-trustees. This explanation was fully articulated to you on July 1, 2026 in a letter to you responding to the June 29, 2026 complaint against the Four Trustees filed by Vice Chair Souza. Vice Chair Souza’s complaint relates to this exact issue of the Four Trustees’ authority to file the answer. Copies of Vice Chair Souza’s complaint, Trustee Galuteria’s letter of support, and the Four Trustees’ response to you are attached.

The Four Trustees wish to further point out that their July 1 response providing this full explanation was copied to all members of the majority. Consequently, members of the majority demanding at the July 6 Board meeting that the Four Trustees explain their court filing, while feigning ignorance of the Four Trustees’ full rationale, was true political theater.

Additionally, given the timing of the July 6 meeting, the agenda aligning with the content of Trustee Souza’s complaint and the Chair’s insistence that the Four Trustees provide any written response to Vice Chair Souza’s complaint no later than close of business on July 1, the Four Trustees reasonably anticipated that their written response would be appropriately addressing the purposes of the July 6 meeting. Instead, the Four Trustees were silenced on points of order when they sought to reference the Vice Chair’s complaint and their response to it was not accepted into the record of the hearing in their defense, apparently on the pretense that, although the full content of Vice Chair Souza’s complaint was effectively revealed at that public meeting, the complaint itself was something the Four Trustees were forbidden to discuss or even refer to.

Finally, the majority’s efforts to compel withdrawal of the answer, and to sanction the Four Trustees for filing a truthful answer to the amended complaint, unconstitutionally seek to coerce and punish the Four Trustees in their exercise of their First Amendment rights, as well as retaliate against the Four Trustees for reporting law violations to the judiciary which is protected whistleblowing under Hawaiʻi law.

Very truly yours,

John S Mackey

GOODSILL ANDERSON QUINN & STIFEL

PDF:  Souza Complaint and Four Trustees Response

FOOTNOTE:

1) To clarify a point of apparent confusion on the part of Vice Chair Souza in his remarks at the July 6, 2026 Board meeting, the answer was filed by the Goodsill law firm on behalf of the Four Trustees. It was not filed by Trustee Akaka in any sense other than that each of the Four Trustees separately authorized Goodsill to make the filing on their behalf.

  *   *   *   *   *

Excerpts from Four Trustees Response:

…the Chair and majority are maintaining an ongoing violation of the Hawaii Whistleblowers’ Protection Act (“HWPA”) by having placed OHA CEO Stacy Ferreira on indefinite paid leave based on a complaint by the Chair which retaliated against Ferreria for her protected whistleblowing….

The HWPA violation is remarkably clear.

On June 29, 2025 Ferreira made a complaint to the Board of Trustees pursuant to the OHA Code of Conduct. In its first sentence, Ferreria’s complaint says it is protected whistleblowing, specifically citing the HWPA and the complaint’s allegation that Chair Kahele violated HRS Chapter 84, the State Ethics Code…

The Ethics Code violation Ferreira referred to was the allegation that Chair Kahele violated the state statutory ethics code by disclosing confidential budget information in exchange for support for a personal benefit to him of supporting the budget as he created it…

The ethics code provision Ferreira cites quite broadly prohibits disclosure or use of non-public information the state employee learns of from their job…

Three days later Ferreira apparently provided the same complaint to the Hawaii Attorney General. Doing so was clearly protected activity under the HWPA which prohibits employer retaliation against employees who report law violations to a “public body” …

At an executive session meeting on September 23, 2025 Chair Kahele presented the Board with his own complaint against Ferreira. The Chair’s complaint made a number of allegations, but the first, which the Chair characterized as most serious, was that Ferreira had provided her complaint to the Attorney General without notifying the Chair or Board….

There is nothing in the HWPA that allows an employer to require that reports of law violation to a public body be made with employer notice or approval. Indeed, such a requirement would allow employers to effectively prevent reporting of law violations outside the organization and thwart proper law enforcement and the operation of the HWPA.

Nonetheless, apparently on the advice of highly experienced employment counsel Anna Elento-Sneed, the Board voted to place Ferreira on paid administrative leave pending an investigation.1 Ferreira has now been on leave for just over nine months. …

Although Attorney Sneed failed to advise the Board that Chair Kahele’s complaint and taking action on it such as removing Plaintiff from her position constituted a violation of the HWPA, it was sufficiently clear to Trustee Lindsey (who is not a lawyer) that she sent Chair Kahele an email the next day pointing this out and linking to the whistleblower poster Hawaii employers must post….

(2025: OHA Trustees Never Approved $705K Hush Money Payment)

Not only was the violation of the HWPA clear, it is ongoing. Ferreira remains on leave based on the Chair’s complaint. As the Chair and majority continue Ferreira’s leave, and weigh further disciplinary action against Ferreira, they create ongoing exposure to OHA to adverse litigation risks and costs and reputational harm to the agency and in turn the beneficiaries. It is the belief of the Four Trustees that the actions of the Chair and the majority have caused harm to the agency beyond the obvious impacts on Ferreira alone. OHA has lost long-tenured administrative staff, and remaining staff is demoralized, impeding operations critical to supporting beneficiaries. And the treatment of the current CEO will only serve as a warning against any future responsible, qualified candidates seeking to fill this critical position. It is the position of the Four Trustees that this ongoing law violation constitutes an ongoing breach of the fiduciary duties of the Chair and the majority who allow it to continue.2

And it is this breach that the Four Trustees seek to correct. Contrary to the legal arguments contained in Vice Chair Souza’s complaint,3 it is a fundamental tenant of trust law that when a trustee becomes aware of a breach of fiduciary duty by a co-trustee, that trustee has an obligation to try to correct the breach. And it is a breach of that trustee’s own duty to fail to act….

FOOTNOTES:

1) We understand that the vote to do so was ultimately 6-3 and included Trustee Akaka, who had initially voted against doing so, but was then persuaded to change her vote upon further strong advice to that effect by Attorney Sneed. Ordinarily trustees may protect themselves from claims of breach of fiduciary duty by following the advice of subject matter experts. Trustee Akaka has come to recognize that Attorney Sneed’s advice failed to account for the clear whistleblower violation and recognizes she was misguided into her support for this decision at the September 23, 2025 executive session.

2) The Four Trustees understand that Ferreira remained on leave pending an investigation into all allegations of the Chair’s complaint, that the investigation is now complete and the report prepared by Susan Ichinose has been “accepted” by a majority of the Board. The report was accepted without any meaningful discussion by the Board. For reasons that the Four Trustees would be happy to expound on in another communication, the investigation report is deeply flawed. For current purposes, the Four Trustees will only point out that its failures include, at a minimum, (i) lack of any discussion of the HWPA issues involved or whether that law would override Board policy or employment contract provisions, (ii) failure to thoroughly investigate by interviewing more than a single Trustee (the Chair) with respect to certain critical allegations, and (iii) failure to identify and apply the appropriate, applicable standards for disclosure of conflicts of interest.

3) The Four Trustees cannot help but observe that the content of the complaint was undoubtedly prepared by Dentons, which formerly represented all trustees, including the Four Trustees in the Ferreira litigation, before the Four Trustees obtained separate counsel. The Four Trustees, through their separate counsel, have repeatedly reminded Dentons attorneys of their obligations under the Hawaii Rules of Professional Conduct that they are prohibited from taking positions adverse to the Four Trustees in this matter. Yet Dentons continues to do so, most egregiously now in apparently enabling the Chair and the majority’s efforts to punish the Four Trustees for their recent court filing through this complaint….

PDF:  Souza Complaint and Four Trustees Response

RELATED: Disqualify Dentons, Alston from OHA Litigation?