Two years ago, the Sand Island Treatment Center, a nonprofit drug and alcohol rehab reliant largely on public money, told the Hawaii Attorney General that it would fix several problems identified in an independent consultant’s report.
One provision of the previously unpublicized agreement required the rehab to drastically cut the annual pay of executive director Mason Henderson, which had topped out at $500,000, far eclipsing his peers at other Hawaii rehabs.
Sand Island agreed to increase the independence and number of board members, impose term limits on them and come up with a plan for Henderson’s succession. Henderson, meanwhile, was supposed to pay back some of the salary the consultant found to be excessive.
In early May, a week after Civil Beat published an investigation of Sand Island that touched on many of the same issues, Attorney General Clare Connors’ department checked in to see if the drug rehab had complied.
The answer: Sand Island ignored much of the 2017 agreement until Civil Beat’s story and the attorney general’s follow-up.
In a June 19 letter, supervising Deputy Attorney General Gary Suganuma laid out Sand Island’s failures. Henderson, for instance, did not pay back excessive salary until one day after getting a May 3 letter from the attorney general.
Sand Island explained that Henderson “always intended to pay but got distracted.” Suganuma called this failure “the single most telling point in the behavior of the organization.”
The letter did not specify how much Henderson paid back in May, and Sand Island would not provide Civil Beat a figure or say whether it covered the entire amount. The rehab likewise declined to comment overall on the attorney general’s letter.
That letter lays out other broken promises. Sand Island didn’t come up with a succession plan until June 6, despite the promise to do so two years earlier. Though the letter does not say so explicitly, records show that changes to the board of directors were not made until recently.
Even after Sand Island agreed to a much curtailed salary for Henderson, his pay “went above the cap…,” according to the letter.
“Whether or not he paid back the difference does not change the fact that the system in place allowed Mr. Henderson to be paid more than was agreed to by the Attorney General,” Suganuma wrote.
He pointed out that Sand Island did not deal with the issues identified in 2017 for two years and “not until the Department of the Attorney General sent two letters requesting information.
“It is not clear to us whether this is due to the board’s lack of understanding of its duties, or if it simply did not take the agreement with our office seriously. Either way, this is not acceptable to us.”
Suganuma wrote that his letter would memorialize the 2017 agreement and that the attorney general would take a far more aggressive approach, closely monitoring the board and taking formal legal action if needed.
Sand Island, run by the Kline Welsh Behavioral Health Foundation, started treating alcoholics in the 1960s in a ramshackle Army chapel on the largely industrial Sand Island.
Over the years its revenues have grown, fed largely by contracts with state agencies, including the Department of Health and the court system. The rehab has operated rent-free for decades without a lease on state-owned land near the Sand Island Wastewater Treatment Plant.
Officials consider it so integral to the state’s drug and alcohol treatment network that when it was forced out of its current home by an expansion of the sewage plant, the city of Honolulu bought it a new home for $9 million and plans to lease it back to the rehab for a nominal amount.
It serves a mixture of clients, including those referred by courts, parolees and “dual diagnosis” patients dealing with both mental health and substance abuse issues.
Civil Beat was unaware of the attorney general’s earlier actions, which had never been made public, when it published its investigation in April.
That investigation found that Henderson’s pay for many years far surpassed that of his peers. The rehab, in its tax returns, stated that his pay was based on a comparison with the Betty Ford Center in California, which after it merged with the Hazelden Foundation in 2014, had revenues almost 50 times Sand Island’s.
Several employees identified on tax returns as “counselors” or “senior counselors” also were paid far beyond the norm in Hawaii, well into six figures.
One of them was Tiffini Limahai, a former Miss Hawaii who ended up in Sand Island after a drug bust in 2005. She was paid $119,126 as a counselor in 2009. Public records state that she has lived in recent years in a house owned by Henderson in a small town in the Rocky Mountains.
Two other counselors have lived in a Mililani house also owned by Henderson.
Sand Island’s six-member board of directors for years included Henderson and the rehab’s chief financial officer, Natividad Morin. Nonprofit guidelines warn of possible conflicts of interest from too many paid workers acting as directors.
Civil Beat was unable to reach any of the board members listed on a business filing as recently as the beginning of this year, including Glenn Pang, Paul Ramos, Tad Sewell and Conrad Eyre, in addition to Henderson and Morin.
A recently reconstituted board now includes Ramos, Henderson and new members David Graves, Vernon Suter, Bonnie Suter and Carol Manuwa, according to a list provided by the rehab’s law firm, Koshiba Price & Gruebner.
Well before Civil Beat’s investigation, in 2015, the attorney general inquired about Sand Island’s operation, apparently in response to a complaint. The rehab agreed to hire an independent consultant, Management Search & Consulting, Inc., to look into the issues.
The attorney general and Sand Island came to an agreement in 2017 to address several issues, according to Suganuma’s June 19 letter, including Henderson’s excessive pay, apparent lack of oversight by the board and some board member’s “loyalty and reliance on Mr. Henderson” in apparent conflict with their fiduciary duties as board members.
The consultant’s report suggested that Henderson’s pay should be limited to $168,000 with the possibility of a bonus for total compensation of as much as $226,800. That was a drastic cut from a salary of $486,615 the year the consultant did its study.
The consultant also said Henderson should only get this salary if he “were to be resident in Hawaii for the entire work-year.” Henderson owns a house in Colorado and is said by several sources to spend much of his time there.
Despite the consultant’s recommendation, the 2017 agreement with the attorney general did not require Henderson to live in Hawaii full-time.
“It appears that my former colleagues chose to exercise a light hand, and did not place that condition,” Suganuma wrote.
In 2017, Henderson got base pay of $227,000 as well as “not-taxable benefits” of $26,152, for a total of $253,152, according to Sand Island’s 2017 tax return, provided to Civil Beat by Koshiba Price & Gruebner.
Suganuma’s letter states that Henderson’s pay exceeded the agreed upon cap and implies that he paid back the difference, though it does not specify the year.
The 2017 tax return shows that counselor Cathy Ahana-Rose remains one of the highest paid employees, with total compensation of $153,620. The 2017 agreement apparently did not address the generous pay received by some of the rehab’s counselors. The average pay for a substance abuse counselor in Hawaii in 2016 was $42,760.
Sand Island’s law firm also provided two documents summarizing the contributions Henderson has made to the rehab over more than three decades. One states that it was written by the board of directors. It’s unclear who wrote the second document, though it is clearly in response to Civil Beat’s April article.
Together, the two documents give the following account:
Henderson came to Sand Island in 1984 at a time of disarray, after one patient had been stabbed during a therapy session and drug and alcohol abuse at the facility ran rampant.
One of Sand Island’s founders, Sid Kline, heard about Henderson through an employee. Henderson had been on a spiritual retreat for one year and was adept in several forms of karate and thus well prepared to cope with managing a treatment center.
While Henderson never had to resort to physical force at the rehab, he was “subjected to multiple physical assaults by fist and bat and knife when he was off site in the community” and had to rely on his karate skills. He still suffers damage to his back from these attacks.
Henderson’s organization and modernization brought Sand Island back from the brink. He slept in the dorm with the clients and put in 16 to 18 hour days, only stopping to eat and sleep.
“Mr. Henderson began visiting Oahu prison where he would choose from the ‘Baddest Actors’ he could find, of the various ethnic groups, and accept them for treatment at the Half-Way House,” the original name of Sand Island, according to one of the accounts.
After noting that other facilities were luring away counselors, he adjusted the salaries of key staff members to retain them.
The document written in response to Civil Beat’s article appears to address the fact that female employees have lived in houses he owns.
“Female staff, in particular, have been required to maintain a high degree of privacy and security in their personal lives,” it states. “This includes where they can safely reside when not at work. The Foundation has worked diligently to provide our staff with the security and safety they require.”
It continues, “Mr. Henderson has also helped many staff and clients rebuild lives destroyed by mental illness and/or addiction. He has co-signed on many car loans and taken other measures for staff in the process of rejoining the life of the community.”
The document states that Sand Island is reviewed and monitored by several state and federal agencies.
“If there was something not right with our operation it would certainly be detected by someone…
“There are people who don’t like Mason Henderson and there are people who will love him till the day they die for the good he has brought in to their lives or the life of a loved one.”