On March 8, and again on March 20, it was reported that the Office of Hawaiian Affairs trustees are now being investigated by the Federal Bureau of Investigation.

This comes on the tail of the audit of OHA that showed extensive potential breaches of the Trustees’ fiduciary duties to spend OHA’s funds properly for the benefit of the OHA beneficiaries (as previously discussed here and here). Ideally, CEO Kamana’opono Crabbe and all the Trustees, except Trustee Keli’i Akina, would resign so that a new slate of trustees could be elected with a new CEO.

At the very least, CEO Crabbe should be replaced, Trustee Colette Machado should resign as chairwoman, and Trustee Akina should be made the chairman by the end of the week.

Trustee Akina had the fiscal discipline to avoid using his allowance account in questionable ways, has pushed relentlessly for reform at OHA since before he was elected a trustee, and has been the driving force behind OHA’s upcoming independent audit that will cover OHA’s limited liability companies. He has earned the opportunity to lead OHA.

Office of Hawaiian Affairs OHA Chair Colette Machado meeting.

Office of Hawaiian Affairs OHA Chairwoman Colette Machado.

Cory Lum/Civil Beat

If such a lucky course of events comes to pass, what should OHA do with a refreshed administration? Here is a non-exhaustive list of suggestions:

First, OHA should get its fiscal house in order. All nonbudgeted discretionary grants should be eliminated. This includes the Kulia initiatives and the CEO sponsorships. The trustee allowances should be changed to a reimbursement procedure instead of the lump-sum system that currently exists. OHA should only be spending budgeted funds on programs properly vetted through a transparent procedure. OHA should stop spending down its fiscal reserve

To the extent some sort of flexible grant program really would be useful for improving the condition of all native Hawaiians, a budget for such a program should be created. If the money for that program is not disbursed, the funds should be recycled into OHA’s reserve or investment funds. The program’s budget should never be exceeded.

Generate Revenue

Second, OHA should shift focus to revenue generation.  Kakaako Makai should be turned into a masterpiece of live/work/play development. OHA should strongly consider selling the parcel it owns near Restaurant Row to the city for the city’s new sewer facility, unless some higher and better use is found in the near term. Those funds from the sale can then be invested in the development of Kakaako Makai.

OHA should then seek to maximize revenue from Kakaako Makai. That will probably mean building a series of high-rise residential towers. OHA should agree to surrounded the towers with street level commercial activity.

OHA should only be spending budgeted funds on programs properly vetted through a transparent procedure.

OHA should seek to coordinate such development with Kamehameha Schools and the state, which own nearby parcels, to create an integrated master planned community. This will generate hundreds of millions of dollars in condo sales and lease rent for OHA, creating a wealth of funds for expanded programs. It will also revitalize a decrepit, underutilized, polluted, brownfield blight zone and generate millions of dollars in property tax revenue for the city and conveyance tax revenue for the state.

The plan should include public access to the surf breaks and parking for the same. Such development will be exactly aligned with the current transit-oriented development and densification of Kakaako. Other revenue generating opportunities include geothermal facilities on Hawaii and the telescope facilities on Haleakala and Mauna Kea. Regardless of whether the current or future telescope facilities should stay or should be built, they should be generating revenue for the state and OHA while they are there.

Third, OHA should investigate how its funds can serve as a catalyst for improving native Hawaiian median incomes, homeownership, and health and education outcomes.

This will likely lead to an increase in early childhood education programs, home building and housing support, more business loans, health programs targeting problem areas identified by OHA, such as obesity and substance abuse, and legal services and advice to avoid incarceration. Instead of providing one-off payments direct from trustee allowance accounts to buy wrapping paper for gifts (page 64 of the audit), suing one another, or funding federal recognition and independence initiatives, OHA should develop an overwhelming obsession with programs that will improve the daily lives of Native Hawaiians. 

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