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Two weeks before the general election, Office of Hawaiian Affairs Trustee Rowena Akana is the focus of a contested case hearing regarding multiple violations of state law.
But her 28-year political career and her reputation are arguably also on the line.
Akana, who has served on the OHA Board of Trustees since 1990 — longer than any other trustee — is charged by Dan Gluck, executive director of the Hawaii State Ethics Commission, with accepting prohibited gifts, failure to report the acceptance of gifts and using her office for personal benefit. Her attorneys at Bickerton Dang reject the claims.
If the ethics commission concludes that Akana is at fault, she could be subject to tens of thousands of dollars in fines. But she would likely keep her job, as was the case with Trustee Peter Apo. He paid a $25,000 fine to the commission in 2017 for using his office to conduct personal business and settled a sexual harassment claim for $50,000.
But Apo decided not to seek another four-year term this year while Akana did. In the Aug. 11 primary, she finished third in a crowded field for three at-large seats.
In the Nov. 6 general election, Akana faces not only two other sitting trustees but three other competitors, some of whom have talked about the need to reform the way OHA operates.
Given that OHA races historically attract few voters — 425,890 voters, or fully half of all voters in the August primary, left their OHA ballot blank — any negative publicity could influence the outcome of the at-large election. In addition to Civil Beat, reporters for Hawaii News Now and the Honolulu Star-Advertiser were on hand for Akana’s case, which began Monday in downtown Honolulu.
Akana, who is in her mid-70s, knows she is in trouble. She tried unsuccessfully to postpone her ethics case until after the election. She has also spent $15,000 on campaign commercials on KHNL and KGMB this month.
Why is this important?
OHA is a trust valued at $600 million that includes a $379 million investment portfolio. It has an operating budget of about $50 million.
The agency relies on a combination of public trust land revenue, state appropriations, interest and investment earnings, commercial property leases and withdrawals from a trust fund to operate. Its mission is to improve the well-being of Native Hawaiians. And only about $3 million comes from state general funds.
But OHA and its trustees have fought among each other for years. A state audit earlier this year found that the agency had spent millions of dollars “loosely and without proper oversight” to such an extent that it may be failing its trust obligation.
The outcome of the election and case could decide the direction of OHA for years to come. Just two years ago, the results of the OHA races helped make Akana board chair and nearly led to the ouster of CEO Kamana’opono Crabbe. No wonder that current chair Colette Machado, sitting next to former trustee Haunani Apoliona, stayed for all seven hours of the opening day of the ethics commission case.
It was not an easy day.
It involved a mind-numbingly long admission of evidence — at least 57 documents, by my count, much of it consisting of quarterly financial reports from Akana to OHA — and examination and cross examination of one former OHA employee and one current employee.
“It’s like watching paint peel,” one attendee observed to others.
All the while Akana sat quietly at a table with her lawyers, Steve Tannenbaum and Jim Bickerton, sometimes taking notes, sometimes twirling a pen, sometimes whispering with her counsel.
In Gluck’s view, Akana broke the rules to benefit herself and others with trust funds. He said that a lengthy paper trail and the testimony of witnesses will back him up. And he appeared prepared and methodical in his delivery. (Read the full charges filed here and here.)
Besides that, Akana was and is a very difficult person to work for and with at OHA, according to past and present colleagues. The two witnesses — OHA controller Gloria Li and former controller and CFO Hawley Iona — described their interactions with the trustee as contentious and Akana herself as intimidating, threatening and even hostile. Iona quit as soon as Akana became chair in late 2016.
Tannenbaum, however, worked to cast doubt on Gluck’s exhibits, picked apart testimony and suggested that the ethics commission’s overall case just doesn’t hold up. (Read the full answers filed here and here.)
“She can be something of a bulldog,” Tannenbaum admitted, but that’s only because she speaks out strongly and stands up for the rights of Hawaiians.
“She has used that tenacity from the start to today to follow OHA’s mandate,” he said.
At the core of the ethics case is what OHA trustees do with their annual $22,200 allowance. As Civil Beat reported last week, recent allowances ranged from supporting athletic competitions to paying for charitable galas and sponsoring beauty pageants.
Gluck is focused on what one Akana supporter described to me as “manini,” or minor, things that Akana submitted receipts for: cable television bills, food from places like Leonard’s Bakery, a gift card from Apple iTunes.
Others appeared more weighty such as political donations, membership in Hawaiian Airlines Premier Club and a home security system (this last charge has since been dismissed). Akana is also charged with failing to report taking $72,000 in legal fees from Hawaiian heiress Abigail Kawananakoa, who herself has sued OHA.
Much of Monday’s deliberations centered on Akana submitting receipts for cable and internet access from Oceanic Time Warner and its successor Spectrum. Trustees are allowed to spend money on communications. Paying for internet service, Gluck noted, is a covered expenditure but cable is not.
What about meals? If Akana picked up food for a meeting from, say, Royal Kitchen for $66 or from Zippy’s Restaurant for $61, as she apparently did, is that allowed? OHA controllers allowed the meal expenses and did not ask Akana to reimburse out of her own pocket. As one controller pointed out, food is central to local culture.
Problem is, OHA’s policy on meals is kind of fuzzy. Same goes for helping Native Hawaiian beneficiaries, another permitted allowance use. Akana was flagged for giving a small donation to the Hawaiian Humane Society. But what, Tannenbaum posited, if society money went to help low-income and elder Hawaiians with pets?
At one point, Commissioner Wesley Fong, an attorney and adjunct professor teaching law and ethics at the University of Hawaii Manoa, asked Iona, the former OHA controller and CFO, “What kind of animal is OHA?”
By then the hearing was in its sixth hour, and many in the room let off some needed laughter. But Fong’s point, as confirmed by Iona, is that OHA is a quasi-governmental agency and thus subject to the same ethics laws governing all state agencies. Gifts and donations can be considered to garner political influence.
Monday’s proceedings ended with the introduction of a third witness, another former OHA controller named John Kim. His testimony resumes Wednesday morning, and there are at least two more witnesses scheduled. The ethics commission has said it could meet Thursday and Friday and even into next week, if necessary.
Will Rowena Akana survive?
She is smart, tenacious and crafty and has lots of friends. So are the people who want to take her down. Neither will give up without a fight, either in the hearing or in the voting booth.
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