INDEX - JUSTICE
www.islandbreath.org ID# 0611-15
SUBJECT: KAUAI PUBLIC ACCESS TELEVISION
SOURCE: ED COLL email@example.com
POSTED: 8 September 2006 - 7:30am HST
How bad are things at Hoike TV
typical public access TV control room: this is Charlottesville's public access TV facility
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
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.”
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