‘Abuse, waste and fraud’: Another critical audit slams OHA’s past management

The highly critical audit slams the former management at the Office of Hawaiian Affairs.
Published: Nov. 10, 2022 at 10:23 PM HST
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HONOLULU (HawaiiNewsNow) - A highly critical audit slams the former management at the Office of Hawaiian Affairs.

And at least one OHA trustee is calling for a criminal investigation.

“More than $7 million of trust assets were inappropriately expended primarily by activities of the then-OHA administration, executive staff and many on the outside who benefited from those breaches,” said OHA Trustee Mililani Trask.

“You have to refer it for criminal investigation and prosecution.”

The forensic audit by the firm Plante Moran — which was released Thursday by OHA — flagged 22 OHA contracts and grants between 2012 and 2016 for abuse, waste and fraud.

Several of these transactions were subjects of previous investigations and news stories by Hawaii News Now.

“Some of the examples are: An organization that was given millions of dollars for which no clear work product was given, for which there were no receipts ... for which there were just no records,” said OHA Trustee Kelii Akina.

Akina is referring to OHA’s $2.5 million grant to help organize the Nai Aupuni convention to create a framework for native Hawaiian self-governance.

The event was canceled due to litigation but the audit said much of the money spent on the convention was not fully accounted for in OHA records.

The audit covered the period when OHA was run by former CEO Kamanao Crabbe, who resigned under fire in 2019. We reached out to his attorney who had no immediate comment.

“There are instances of individuals who were friends of leaders in OHA at that time who are not here today who received contracts, bypassing the contracting process,” said Akina.

For example, the audit cited a non-bid $435,000 OHA contract to a consulting firm called Kuauli Aina-Based Insights LLC. The company is led by Hawaiian scholar Kamana Beamer, who is also a friend of former CEO Crabbe, the audit said.

The company was supposed to document the sale of crown lands. But the Plante Moran report said that after paying Beamer’s company $250,000, OHA terminated the contract because little work was done on the project.

The auditors also criticized a $25,000 payment to Hawaiian scholar David Keanu Sai in 2014.

Sai was hired to do follow-up research after OHA’s former CEO Crabbe sent a highly controversial letter to then-U.S. Secretary of the State John Kerry, asking whether the Kingdom of Hawaii still exists under international law.

The letter was rescinded by OHA’s board.

The auditors said Sai was supposed to produce research memos and letters on the subject but apparently did not conduct any lectures as required under the contract.

Sai — a lecturer at Windward Community College — was previously hired by OHA at a cost of $70,000 to write a book about land titles that he never completed.

Sai is also a convicted felon.

Back in 2000, he was sentenced to five years of probation for theft. His company Perfect Title convinced a number of people to stop making mortgage payments because the illegal overthrow of Hawaii rendered land titles invalid.

The audit only goes up to 2016. Since then, OHA said it has implemented a number of internal controls to prevent fraud and waste.

“OHA has made incredible strides towards addressing improvements in policies, procedures and practices,” OHA Trustee and Chair Carmen “Hulu” Lindsey said. “These implementations strengthen OHA’s internal controls.”

OHA’s current management added that it cooperated with the audit.

“The Office of Hawaiian Affairs is today a totally different place from 2012 to 2016,” Akina added.