A board member for a state agency dedicated to helping Native Hawaiians is calling for the organization’s chief executive officer to step down in light of a damning state audit alleging widespread misspending.
The Office of Hawaiian Affairs is a semi-autonomous state agency that manages a $600 million trust for the benefit of Hawaii’s indigenous people.
A state audit recently revealed both the chief executive officer and the members of the Board of Trustees have spent millions of dollars without proper oversight and rules.
OHA Trustee Keli‘i Akina, a fiscal conservative, issued a press release Tuesday calling for the removal of Kamana‘opono Crabbe, the organization’s chief executive officer.
The audit found Crabbe sometimes overrode staff recommendation to approve expenditures. In 2015 and 2016 Crabbe exceeded his discretionary budget for sponsorships by more than $300,000, Akina wrote.
“Failure to act decisively to remove the CEO, considering the overwhelming evidence presented by the state Auditor, would be a dereliction of our fiduciary duty as Trustees to protect the Native Hawaiian trust fund,” Akina said in the press release.
Crabbe did not reply to a request for comment. But OHA Board of Trustees Chairwoman Collette Machado issued a statement Tuesday evening criticizing Akina’s description of the audit.
She said that it’s a “gross mischaracterization” to say OHA misspent millions. While the audit criticized the discretionary process for spending $14 million, the money still went to important programs helping Native Hawaiians. Machado added that the state auditor didn’t recommend firing the CEO.
“The employment of OHA’s CEO is a confidential, personnel matter for the full Board of Trustees to decide and inappropriate to discuss in public,” she said in the statement.
Machado says the first issue the board will take up will be a moratorium on the use of certain funds criticized in the audit — including CEO sponsorships and trustee allowances — until their policies are updated. The next board meeting is next week.
“This has been festering and going on for so long,” she said. “Something has to change.”
What About The Trustees?
Akina’s call to remove Crabbe isn’t unexpected, but it ignores the audit’s highly critical findings regarding the trustees themselves.
The audit found board members tripled their individual allowances and spent them on fancy dinners, trip upgrades, and favors to beneficiaries. The audit detailed the expenses in a lengthy appendix that didn’t identify any of the trustees. The expenses included money to pay for a beneficiary’s rent and funding for another’s trip to Las Vegas to compete in a rodeo competition.
One trustee gave thousands of dollars to God’s Ohana Day on Molokai despite a prohibition against donations to faith-based organizations. Hundreds of dollars also went to support Maui County Mayor Alan Arakawa’s campaign despite a rule barring political contributions.
But the audit noted that board members were unwilling to sanction one another for misusing their allowances. No trustee has ever been sanctioned despite flagrant rule violations, the audit found.
Akina has asked his fellow trustees to pay back any money that they misspent. But he doesn’t know if anyone has done that yet, and he hasn’t called for any trustees to be sanctioned.
“The reason I am urgently focused upon the CEO is that this person currently has executive power to spend vast amounts of money, unlike the individual trustees,” Akina wrote in an email Tuesday.
“The financial expenditures for which the CEO was responsible, pointed out by the state auditor, dwarf the spending by trustees from their trustee allowances. This does not justify any trustee misspending, but puts in perspective the importance of dealing with the CEO issue immediately.”
Akina says that he personally has not spent any money from his trustee allowance but says he plans to do so once there is better oversight of the money. He says his focus on Crabbe doesn’t excuse any trustees who have misspent their allowances.
In Hot Water Before
Crabbe has had a rocky tenure long before the release of this year’s state audit.
Four years ago, Crabbe sent a letter to then-Secretary of State John Kerry requesting a legal opinion about the status of the Hawaiian Kingdom. The Board of Trustees disagreed so strongly they sent another letter to Kerry rescinding Crabbe’s.
But they later publicly shot down rumors that they wanted to get rid of Crabbe, issuing a statement saying, “There is no clandestine plot by the trustees to terminate Ka Pouhana/CEO.”
Two years later, the board renewed Crabbe’s contract. But not everyone was happy — Abigail Kawananakoa, a descendent of Native Hawaiian royalty, filed a lawsuit alleging the contract signed by then-Chair Robert Lindsey should have been approved by the board.
But he’s currently under scrutiny for his management of several nonprofits funded by OHA. The Board of Trustees recently voted to require the limited liability companies to open their books for an independent audit that’s supposed to be more comprehensive than the state audit.
Crabbe has served as CEO of OHA since January 2012. His annual salary is $150,000.
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