Public
Access Profiteers plunders local Arts Council
by Ed Coll on 7 September 2006
The
State of Hawaii Department of Commerce and Consumer Affairs'
(DCCA) created and funds Ho`ike Kauai Community TV Inc.
This is the story of how the DCCA's eleven-year violation
of state procurement law and lax oversight over Ho`ike TV,
has resulted poor service, favoritism, misappropriation
of public monies, competition with private enterprise, and
the plundering of another nonprofit corporation.
Over the past several years, leaders of Ho`ike TV worked
together with a limited liability corporation, the Kauai
Center for Art Education, and Technology (KCAET LLC) to
concoct a real estate scheme than ended up economically
damaging non-profit organizations on Kauai. Known for being
one of the most generous communities for giving, people
on Kauai hoped they were funding a multi-use facility for
non-profits to occupy, but that dream was never realized.
Ho`ike's Managing Director, J Robertson, Kauai Realtor and
Ho`ike's past Board President, Rowena Cobb, and Mano Wai's
CEO, Robert Kihune worked together to convince several non-profit
organizations to sign documents of obligation called operating
agreements, and jump on the “community building”
band-wagon so in vogue among the State of Hawai'i created
and cable subscriber funded a Public Education, and Government
(PEG) non-profits.
The Kauai non-profits known to have been targeted by Ho`ike
included: Malama Pono, Garden Island Arts Council, Boys
& Girls Clubs, Boy Scouts, The Kekahu Foundation (KKCR
radio) and United Way of Kauai. By 2005, two of the targeted
organizations would be receiving invoices for half a million
dollars. The Ho`ike Board tried to keep their plans secret
from the public by talking in "code." Board members
would ask questions such as "does everyone agree with
page, paragraph, sentence number x" without the public
in attendance having copies of the documents as a point
of reference. Nobody in the public could tell what was under
discussion. The Ho`ike board was constantly moving into
executive session to discuss their secret plan to spend
public monies. Ho`ike ignored a May 19th 2004 public records
request for documents regarding this matter and State of
Hawaii Department of Commerce and Consumer Affairs (DCCA)
Director Mark Recktenwald was informed of Ho`ike's refusal
to provide the requested records on March 15, 2005. Ho`ike
refused public inspection of the records and Director Recktenwald
did nothing.
THE
DCCA REGULATORY SCHEME
The State of Hawaii mandates 3% of the cable companies (Time
Warner Oceanic) gross revenues be paid to the PEG entities
that the director of the DCCA designates. Time Warner Oceanic
passes this bill on to the cable subscriber (check your
bill). This amounts to a mandated user tax on every cable
subscriber in the state and amounts to well over 5 million
dollars annually. The DCCA created the PEG non-profits to
receive this mandated cable subscriber money (`Olelo on
O`ahu, Akaku on Maui, Ho`ike on Kauai, and Na Leo O Hawai`i
on Hawaii) in the early 1990s. The director of DCCA has
maintained appointment authority of the board majority ever
since. DCCA contracts with these DCCA created and controlled
PEG entities through non-competitive sole source contracts.
Here in a nutshell is the regulatory framework that allows
such waste and plunder to occur.
The first oversight function is to account for dollars in
and dollars out of the access entities.
The second oversight function is to avoid accountability
for performance and success of the PEG's in meeting the
federally mandated mission of providing "First-Come
Non-Discriminatory access" as described in the federal
authorizing document, the Federal Communications Act.
Failing the establish a nexus between the money spent and
any measurable performance evaluation in meeting their mission
is designed into the DCCA contracts. Reporting requirements
for performance lack specificity and definition. First-Come
Non-Discriminatory the federal mandate itself remains undefined
by DCCA and has been redefined in PEG bylaws.
WHAT CURRENT PEG REPORTING REQUIREMENTS DON'T TELL
YOU
1) Hours of PEG client produced compared to in-house produced
content
2) Number of local professionally produced programs compared
to local PEG client produced content
3) Hours of local compared to satellite feeds (such as Deutche
Wella, NASA TV, Armed Forces News, ARTS channel etc.) content.
4) Number of repeats of bulletin board segments per user
(some repeat 3 or more times per hour for many hours)
5) Hours of promotion for client programs compared to in-house,
satellite feeds and professionally produced content.
6) Hours of franchise area programming compared to neighbor
island programming
7) Total hours of premiere franchise area PEG produced programs
compared to their number of repeats.
8) Total hours (including repeats) of non locally produced
programs (by channel [all]).
9) Number of hours of presented program premiere compared
to repeat hours
etc.
Within this broad DCCA regulatory scheme to overseeing the
public's money are schemes within schemes. Any public access
profiteer aware of the dysfunctional contractual requirements
of DCCA can apply the same scheme to pursue their own pet
projects or self-serving activities.
$72,000
FOR A PILE OF PAPER
The following example demonstrates a specific instance of
how this DCCA regulatory scheme allowed a past PEG board
president and current General Manager to use a PEG entity
as a launch pad to waste $72,657.23 and plunder another
non-profit. The PEG was Ho`ike Kaua'i Community TV, Inc.
on the island of Kauai. The plundered nonprofit was the
Garden Island Arts Council (GIAC). The Managing Director
of Ho'ike is J Robertson. The past Ho`ike board president
was Rowena Cobb, who also owns a Kauai realty company. In
2003, using the same mailing address of her realty company,
Cobb became the sole agent for a newly created limited liability
company called Kauai Center for Arts Education and Technology
LLC (KCAET). Mano Wai Corporation is listed as officers
managing KCAET.
On the DCCA business registry website recently, the KCAET
LLC is listed as “not in good standing”. Although
Cobb resigned as agent in December, 2005, Cobb's mailing
address is still listed as the mail contact for KCAET LLC.
The April 26, 2006, Ho`ike minutes reveal that GIAC paid
$39,000, which amounted to “a lifetime of savings
for piles of paper, and nothing to show for it.” Ho`ike
spent $29,000 of the public's money, leaving the organization
with over $300,000 squirreled away, a fact not disclosed
to the GIAC board members present. These minutes never mention
former Ho`ike president Rowena Cobb was the agent for KCAET
as the Ho`ike board attempted to distance themselves from
Cobb and her role in the scheme. According to Garden Island
Arts Council representatives, the GIAC, a membership-based
arts organization, was left with $70 in the bank. Relying
on Ho`ike Board minutes and other public records here is
what happened:
In 2002 Ho`ike Managing Director, J Robertson, and then
Ho`ike Development Committee Chair, Rowena Cobb contacted
Mano Wai on Oahu and from those meetings a plan was hatched
to build an $8 million multi-use facility to house a TV
studio, meeting rooms, offices and an on-site food service.
Ignoring the fact that the small Ho`ike studio sat empty
most of the time and no needs analysis was conducted, Cobb
and Robertson began to beat the bushes doing island-wide
dog-and-pony shows for any non-profit with money to join
them in their empire building. I personally witnessed one
of these performances done for the Kekahu Foundation Board
(the operators of the KKCR Radio station) without success.
Cobb and Robertson did meet with some initial success getting
partial buy-in from Kaua'i United Way, Malama Pono and even
an endorsement of the idea from county of Kauai Mayor Brian
Baptiste.
October 24, 2002 Development Committee Meeting Rowena Cobb
reported on a meeting to discuss a possible facility to
house organizations such as Ho’ike, GIAC, Boy Scouts
of America, Boys and Girls Club and United Way of Kauai.
Minutes state “Rowena and J will be doing a presentation
to the Mano Wai board in Honolulu.” Over the next
two years, many nonprofits were targeted and pitched to
by Cobb and Robertson. The minutes are sketchy around this
time period, and indicate that Ho'ike board was unable to
make quorum for many months.
Cobb moved from Ho`ike Development chair to the position
of Ho`ike Board President. With Cobb as Ho`ike board President
the Kauai Center for Arts, Education, and Technology a limited
liability corporation (KCAET LLC) was created to represent
the interests of the non-profits that bought into the idea.
Cobb became the designated agent for the LLC and the managers
of the LLC was Mano Wai. The agent for Mano Wai was Robert
Kihune, who is also the organizations CEO and President
( Kihune is also a Vice President of Sandwich Isle Communications).
Cobb requested and was granted power of attorney by Hoike,
and was now in a position of authority to act on behalf
of the LLC in concert with Mano Wai. (It should be noted
that whenever a member of the public was present, the Hoike
board went into Executive Meeting to discuss these details).
The subsequent actions of Cobb on behalf of KCAET LLC and
Kihune on behalf of Mano Wai resulted in what Ho`ike Board
member and attorney Teri Tico would describe as “so
much confusion that even she who had been an attorney for
30 years didn’t get it." GIAC spokesperson, Diane
Sumida, concluded that, “due to the lack of clarity
in the paperwork, and inability to obtain information, made
it one of the most difficult tasks of her entire business
career." Both Cobb and Kihune were given authority
to act on behalf of KCAET and reimburse Mano Wai for expenses
incurred. Mano Wai engaged in a variety of billable activities
and submitted the bills to KCAET (Cobb and Kihune) for payment.
Architects were hired, unsuccessful grants were written,
and as the bill came in non-profits not legally committed
to the venture dropped out leaving only Ho`ike and GIAC
holding the bag.
Although members of the Ho`ike and GIAC boards all live
on Kauai all interactions between members of these boards
was brokered by KCAET (Cobb and Kihune), the first ever
face to face meeting between Ho`ike and GIAC occurred in
April of 2006 when they jointly moved to dissolve KCAET
and pay a $7,000 outstanding bill to Mano Wai.
THE
CULPABLE, THE GULLIBLE, AND THE CLUELESS
THE CULPABLE: When the issue came before
the board in 2006, current Hoike managing director J Robertson
and Ho`ike president, Jose Bulato, act as if they had amnesia
and forget how involved they were with the entire debacle
from beginning to end. Cobb and Robertson were the ceaseless
boosters of this scheme to other non-profits and Bulato
knew or should have known what was going on. Cobb and Kihune
acting through KCAET (being build by Mano Wai) spent the
money, but it went I do not know and no one is telling.
THE GULLIBLE: Other Ho`ike board members
Mayebelle Fujiuchi, Teresa Tico, and Gabreille Dorman began
asking increasingly difficult questions, but continued to
vote with other board members to enter executive committee
keeping the public in the dark and refused to allow the
public inspection of the record.
THE CLUELESS: Although the entire Ho`ike
board agrees the scheme is so complex that everyone is baffled
they refuse to allow the public access to the $72,657.23
pile of paper paid for by cable subscribers and art patron
money. The people that pay the bill are the most clueless
of all.
The DCCA's lack of oversight and the failure to demand a
contractual nexus between money spent and public service
delivered was the regulatory scheme that allowed the transfer
public moneys into private hands.
The significance of this story of wasted public and donated
money is that while all Ho`ike money-in and money-out of
KCAET can be accounted for, it is difficult to answer the
central question "who benefited?" The cable subscribers
that are mandated by state law to fund Ho`ike did not benefit
from this scheme. The people who donated money to GIAC did
not benefit. It is apparent that agents Cobb and Kihune
benefited as did Mano Wai and any subcontractors who did
billable work, but exactly who got paid specific amounts
are inaccessible and buried in non-public Ho`ike, KCAET,
and Mano Wai files.
The lesson to be learned from this sad tale is that the
DCCA regulatory scheme allowed this travesty to occur. In
fact the whole scheme was working small scale model of DCCA's
regulatory scheme.
A state created, cable-subscriber funded non-profit (Ho`ike)
took the lead in creating and soliciting the buy-in of other
none profits to create KCAET LLC through which money flowed
from the actions of Cobb and Kuhine. This money flowed out
of the pockets of cable subscribers and art supporters,
through KCAET and into the pockets of Mano Wai their agents
and subcontractors. In the case of Ho`ike public money was
slushed from Ho`ike through KCAET to Mano Wai. The damage
done to the public Ho`ike serves was lack of access to services
such money would provide, but since Ho`ike's funding is
state mandated $36,000 is no big loss. In the case of Garden
Island Arts Council (GIAC) the consequence of this scheme
was far more damaging. GIAC, a vibrant membership-based
non-profit serving the needs of Kauai's art community saw
their bank account shrink from $39,000 to $70.
Eventually, Ho`ike: Kauai Community Television Inc. and
GIAC spent over $72,000 for what was described as a worthless
pile of paper. Today, they “hope for the best”
that no further invoices will be demanded for payment. It
was motioned and approved to dissolve KCAET at the April
26, 2006 meeting.
The consequences to Ho`ike from DCCA, the oversight agency
that created Ho`ike, appoints the board majority, and mandates
cable subscriber funding? Nothing, beyond DCCA administrator's
consistently repeated hands-off mantra, "We don't want
to micro-manage the daily activities of a nonprofit corporation.”
CONCLUSION:
This story of $72,000 of disappeared money and the plundering
of another non-profit is emblematic of what is and has been
occurring at Hawaii PEG entities for more than a decade.
It is not an isolated incident, but the rule under DCCA's
current regulatory scheme. Unfortunately without meaningful
oversight of competitive bid contracts that carry penalties
for non-performance, public access predation on the public
and other nonprofits will continue unabated.
Keeping track of money in and money spent while ignoring
PEG mission success allows the exploitation of assets and
services that can be then put to use meeting the special
interests of state government (including education) while
claiming to be providing the public access. DCCA contractual
reporting requirements only track the flow of money in and
out of the entities they created. One unanswered oversight
question not asked by DCCA is “Are services being
delivered to the level that funding allows?” According
to Hoike's last published 990 tax forms, each year Ho`ike
receives almost $300,000 from state-mandated public funds
to manage and operate PEG access on Kauai. Instead of spending
it to deliver services, each year, Hoi`ke has diverted more
and more, and now has over $350,000 in savings.
DCCA regulatory oversight provides "plausible deniability”
of any wrong doing. If thousands of dollars in public money
disappear into the pockets of third parties, the Hoike board
members just vote to “...pay the bill, and hope for
the best.” (see Ho`ike minutes of April 26, 2006).
In 2006 The State Procurement Office determined that DCCA
had violated state procurement law for eleven years by sole
source contracting with PEGs and by 2007 must begin to follow
state procurement code and issue competitive Request for
Proposals (RFP). Hopefully, future RFPs will include a scope
of services that will contractually tie the monies spent
with measurable public services provided, but already Hawaii's
PEGs are lobbying state legislators and the State Procurement
policy board requesting exemption from procurement law.
[Editor's
note: Ed Coll is a member of the Community Media Producers
Association (CMPA), Past President of CMPA, and a former
cable company appointed Ho`ike board member (2000)]
Former
Ho`ike employee alleges corruption and duplicity
letter by Koohan “Camera” Paik on 15
February 2006
Cable
Television Division
Department of Commerce and Consumer Affairs
P.O. Box 541, Honolulu, HI 96809
Re: Exemption for DCCA from the requirement that
public access televisions services be procured through
a competitive bid process.
To the Department of Commerce and Consumer Affairs:
An effective public-access station is invaluable
and leads to a vibrant community. An ineffective
one is a big waste of public moneys.
As a former employee of Hoike: Kauai Community Television,
I had seen far more corruption, duplicity and flagrant
disregard for the community than I wish to know.
I have in my possession a sizeable file of instances
where I, as a staff educator, was discouraged from
providing outreach education to the community, discouraged
from pursuing grants,as well as instances where
discriminatory remarks were made by our General
Manager, Mr. Jay Robertson, about our local kids’
and teachers’ abilities and motivation to
learn. (By “local”, I mean people of
non-European descent born and raised in the islands.)
It was appalling to hear these remarks from the
leader of an organization whose mandate was to serve
the community, a community which is mostly comprised
of non-European-Americans.
Needless to say, Hoike’s prolonged existence
is one instance of a public-access television station
where inexcusable amounts of public moneys have
been going, and will continue to go, to waste, unless
something is done, such as a bidding process for
competitive services to the DCCA is instituted.
This is an extremely dire situation.
I was fortunate to escape the destructive work environment
of Hoike eight months ago, and thought I would never
again have to think about, or peruse my file on,
the station’s misconduct. However, when I
heard about these hearings, I felt that I owed it
to the community to take a day off from my schedule
to write this letter as very important testimony
as to why it is absolutely essential that the DCCA
not be exempt from procuring PEG access television
services through a bidding process.
Let me elaborate:
1) While organizing our student film festival, which
took place in May 2005, I procured a prize of 45
five-dollar gift certificates from K-Mart. These
were to be distributed to the second and third graders
from Kapaa Elementary who won the Best Hawaiian
Language Film. Mr. Robertson insisted I hand them
over to him, which I did. They were never seen again.
It was a small amount, but it would have meant so
much to the children. I feel so much shame on the
part of Hoike and Mr. Robertson, who, for some inexplicable
reason, saw the need to steal from the children
of our community.
2) Hoike policy clearly states that any staff member
found with drugs would “not be tolerated.”
Yet, Mr. Robertson, who pled guilty in December
2005 to a misdemeanor charge for the possession
of marijuana, was able to float above a policy which
would apply without exception to the “underlings.”
It is an outrage that, between Mr. Robertson and
his passive board of directors, Hoike harbors the
most undemocratic of values. I have heard from those
still on staff that this particular passivity has
had a tremendous negative impact on staff morale.
Surely, no good to the community can come from an
organization whose actions continuously and seriously
violate democratic values.
3) The most clever and insidious tool of corruption
is an accounting and inventory program called “Facil.”
This is a computer program which Hoike uses to inflate
its quantifiable value to the community. For example,
“value to the community” is expressed
by the dollars-worth figure of equipment which is
checked out by producers. In other words, how much
per day per item is given a dollar figure, say $150
for a video camera. Throw in a microphone, and that’s
$30 more, hypothetically. Some cables, a tripod,
a light kit, and the total value for one day’s
rent could easily total $400.
Minimum checkout time is two days, which would be
$800 “value” to the community. Usually,
producers extend their check-out period to four
days ($1,600“value”), and often a check-out
is extended to a week and a half ($4,000). For those
producers who are simply delinquent and just never
get around to returning the equipment, the software
keeps adding that $400 per day that the equipment
is missing to the total of Hoike’s “contribution
to the community.” At the end of the year,
the figures which supposedly express how much Hoike
has benefited the community are astronomical, and
needless to say, fallacious, in terms of “real“
benefit to the community, especially if you look
in the Hoike files to see how many individual producers
were actually checking out equipment, and how long
they had the equipment for. In the eight months
that I was with Hoike, the total of individual producers
easily numbered less than 20. On the other hand,
looking only at the dollar amount that represents
value to the community would lead a person to think
the numbers of producers totaled near 100or so.
For someone unaware of this accounting scam, as
I once was, one cannot help but be deceived into
believing the station is fulfilling its mandate
with enormous success.
I remember attending the 2004 Christmas party as
Mr. Robertson was boasting of these high figures,
for the benefit of important guests, such as Councilwoman
JoAnn Yukimura. Ms. Yukimura clapped and nodded
with approval, convinced that these figures were
evidence of Hoike’s tremendous contribution
to the community. In reality, Mr. Robertson had
duped her, along with his own board members, and
the rest of the guests.
4) If you were to look at Hoike reports which tabulate
the number of facility users, you can see the fairly
low numbers, with the exception of the months I
was employed -October 2004 to May 2005. During those
months of my employment, you would probably see
a marked increase in the number of users. That’s
because I initiated our collaborations with Ke Kula
Ni’ihau O Kekaha, Kapaa Elementary, Kapaa
High School, Eleele Elementary and Kalaheo Elementary.
Every step of the way, my outreach endeavors were
made excruciatingly difficult by management, even
though it was management who had hired me to do
just that. It is interesting to note that Mr. Robertson
initiated one education-outreach program on the
heels of the decision to hold these DCCA hearings.
According to an unidentified Hoike staff member,
this, along with accompanying publicity in the Garden
Island newspaper, was all an eleventh-hour effort
to get facility-user “numbers” up in
time to present them at the hearings, and show “proof”
of the station’s community service. Indeed,
Mr. Robertson will work, if his job depends on it,
which proves the necessity that the DCCA should
follow regulation by proceeding with a competitive
bidding process, rather than handing the contract
to Hoike, with little or no accountability. A bidding
process keeps vendors honest. Exemption creates
a situation where laziness and irresponsibility
-even corruption -can easily go unchecked, as has
been the case at Hoike: Kauai Community Television.
5)After my departure from Hoike, the only other
education-outreach program was begun with the Children’s
Discovery Museum in Kapa’a, teaching kids
video production for a watershed education program.
I was not present at any of the classes, but I can
report that in early January, the coordinator of
the program, Linda Sciaroni, contacted me, desperate
to hire me, because of what she described as “unprofessional”
and “unreliable” behavior on the part
of Hoike.
6) Though Hoike claims to give studio access to
producers, the procedure is set up in such a way
as to make it nearly impossible. In order to access
the studio, one must first have taken the studio
production class. In the eight months that I was
at Hoike, the class was not offered once. In other
words, in order to use the studio (which is ostensibly
for the public’s use), the producer is required
to take a class which is not offered! Again, policy
and procedures have been put in place to discourage
producers from access, thus requiring as few services
as possible from Hoike, while the DCCA money flows
in.
Clearly, a bidding process to procure the services
that Hoike has been providing is LONG OVERDUE. The
sooner this happens, the sooner the winning bid
provider can get on track serving a deserving community.
Urgently yours, Koohan “Camera” Paik
cc: State of Hawaii Procurement Office
Mark J. Bennett, State of Hawaii Office of the Attorney
General
Mayor Bryan Baptiste
Hon. Kaipo Asing
Hon. Jay Furfaro
Hon. Jimmy Tokioka
Hon. Mel Rapozo
Hon. Shaylene Iseri-Carvalho
Hon. JoAnn Yukimura
Hon. Daryl Kaneshiro
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see
also
http://www.writely.com/View.aspx?docid=ajdbqcfqdns6_0dc2gvd
Island
Breath: Hoike "Lack of Sunshine"
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