HONOLULU (HawaiiNewsNow) - As it deals with infighting in the boardroom and a criminal investigation into its contract awards, the Office of Hawaiian Affairs is facing new questions over the secrecy of some of its investments.
Since 2008, OHA has sunk about $20 million into purchasing, renovating and operating Waimea Valley, a poi mill on Kauai and other ventures.
But beneficiaries said they don't know enough about the investments. That's because OHA shields their records from the public by holding them in a separate nonprofit company, also known as a limited liability company or LLC, they said.
"This money could have been better spent" on social and educational programs for Hawaiians, said Germaine Meyers, an OHA beneficiary and Nanakuli homesteader.
OHA has repeated denied access to the Waimea Valley records when requested by local bloggers and beneficiaries, saying those records are not subject to the state's sunshine law nor are they subject to state procurement law because the nonprofits are separate entities.
Mona Bernardino, chief operating officer for Hiilei Aloha LLC, defended OHA's use of the nonprofits, saying they reduce red tape. She added that each of the nonprofits publicly file their own annual reports and IRS tax forms.
"Decision making can be very fast within the LLCs and we don't have politics and we don't have a bureaucracy. We can move very quickly," she said.
And OHA said those investments, after years of losses, are finally turning around.
"You guys are producing a profitable model, very valuable to the two Waimea Valleys. Waimea Valley in Kauai and Waimea Valley on Oahu," said OHA trustee Dan Ahuna.
But one prominent legal expert said OHA is breaking the law by keeping the finances secret.
University of Hawaii law professor Randy Roth said OHA continues to own and control the nonprofits, indicating that they are state entities and not private ones.
"I believe very strongly that these LLCs are subject to procurement laws and public information and sunshine laws," said Roth.
Roth is not the only prominent critic. An ethics complaint from Hawaiian royalty descendant Abigail Kawananakoa accuses OHA of diverting and misusing assets meant for Hawaiian programs.
"You simply can't hide things by dropping them into a wholly-owned subsidiary," said Roth.