I’m compelled to challenge the recent State Auditor’s report critical of property management and grant practices of the Office of Hawaiian Affairs. As the chair of the OHA Committee on Asset and Resource Management, which has the kuleana for decisions on managing trust assets, I take these charges seriously.

We proudly stand on our record of trust asset management beginning with the stellar recovery made when OHA, along with the rest of the country, took a bath during the stock market disintegration of 2008-09. OHA stock fell from $458 million to $277 million (although we took distributions of $24 million during that time). Since February 2009, we have rebounded to about $352 million, plus taken distributions of almost $100 million, thanks to our corps of outstanding investment managers such as Commonfund, Goldman Sachs, J.P. Morgan, Pantheon, and our internal investment staff.

The State Auditor criticized OHA’s investment strategy in acquiring what we refer to as our Legacy properties, such as 1,800 acres of Waimea Valley, 25,000 acres of Wao Kele o Puna on Hawai’i Island, and 500 acres in Wahiawa where the Kukaniloko birthing stones are located. These are known in the global investment community as Mission Related Investments, where the goal is other than strict financial return.

These Legacy lands constitute the physical re-manifestation of a Hawaiian nation. Buying back our sacred places, piece by piece, is a vital part of our mission-driven fiduciary duty to hold our lands in cultural stewardship until such time that a nation rises to assume the kuleana (responsibility). We created a system of LLCs some years ago for proper management of these properties.

The purchase of the Gentry Pacific building, as well as the acquisition of 30 acres of prime Kakaako waterfront property as a settlement of a $200 million debt owed OHA by the state, fall into a vastly different investment category. The Gentry Pacific purchase was subjected to due diligence by a uniquely qualified consultant team. This purchase culminated a long-standing policy to relocate ourselves into a building we own instead of paying the current $1 million plus rent for our headquarters. With respect to the 30 acres of Kakaako Makai, we have been more than deliberate in shaping policies for its development and are now engaged with a master planning consultant team led by Group 70. Both of these acquisitions have been under serious trustee discussion which is leading to structuring a long term commercial properties management strategy.

One of the major problems with the Auditor’s report was that it stopped as of June 30, 2012, and thus did not take into account the changes we have made in the past year. We already have increased the number of staff in our Land and Property Management Program, and completely revamped our Grants Program.

Like any organization, OHA can always improve. But, contrary to headlines made by the State Auditor, we are indeed fulfilling our mission.

About the author: Peter Apo is a longtime Native Hawaiian leader, well-known musician and member of the Office of Hawaiian Affairs board of trustees.*

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