The Abercrombie administration has rejected a controversial $100,000 grant by the Legislature to state Rep. Rida Cabanilla's nonprofit organization.
The Attorney General's office says the Ewa Historical Society isn't eligible for the grant because the IRS yanked its tax-exempt status last year.
The IRS did that after the nonprofit failed to file its annual tax forms for three consecutive years.
Matt LoPresti, who is challenging Cabanilla in next month's primary, said many Ewa Beach residents are relieved Cabanilla's group isn't getting the money.
"They are so outraged at the blatant corruption she has shown by getting this $100,000 or trying to get this $100,000 for what amounts to be a fake nonprofit," he said.
"It's pretty clear what the intent was, it was fraud."
We reached out to Cabanilla, who said she was disappointed that the much-needed money wouldn't be released.
House leadership also released a May 20 ruling by the state Ethics Commission, dropping its own investigation into the controversial grant.
But the letter, by the commission's Executive Director Les Kondo, doesn't say whether or not Cabanilla violated state ethical laws.
Instead, it said the commission is closing its investigation because legislators are generally exempt from the state's ethics laws while conducting their official duties.
State Sen. Sam Slom said lawmakers were asleep at the switch when they issued the grant.
"There's no mystery to it we keep giving people more and more money and we don't have oversight and it's not our money at the legislature, which makes it so easy," said Slom (R-Hawaii Kai).
"(It's) a phony charitable organization with plenty of nepotism and other questionable things."
Now that the money is blocked, it can't go to another nonprofit but has to go back to the general fund.
"That $100,000 ... could have gone to a deserving grant in aid," LoPresti said.