A sacred settlement

By Pat Omandam Star-Bulletin Thursday, September 24, 1998

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The state and the Office of Hawaiian Affairs   try reach an agreement on ceded lands before   Dec. 1; some hope Washington Place   will be a partf those negotiations.

What are ceded lands?

Public trust or ceded lands in Hawaii comprise about 1.8 million acres of property on all four counties, making up about 43 percent of the islands' area.

The lands were given to the United States shortly after the 1893 overthrow of the Hawaiian kingdom. Under the 1959 Admissions Act, the state of Hawaii became trustee for 1.4 million acres. The statehood act set aside five purposes for its use, one of them for the betterment of native Hawaiians.

Hawaii law requires OHA be paid 20 percent of revenue derived from ceded lands, to be used for the betterment of native Hawaiians. Those payments go to OHA, the semiautonomous agency in charge of carrying out that mandate.

For the past 28 years, "Uncle Charlie" Kauluwehi Maxwell Sr. avoided Washington Place because the former home of Hawaiian royalty didn't belong to Hawaiians anymore.

But Maxwell changed his mind this summer, and twice visited the historic mansion. The disabled Hawaiian cultural practitioner likened both visits to Queen Liliuokalani's home as "emotionally cleansing."

He believes all Hawaiians would frequently visit the home if it were returned to the Hawaiian people.

As such, he hopes Washington Place becomes part of a settlement agreement between the Office of Hawaiian Affairs and the state over past due revenue from ceded lands.

"If we truly are a cultural people, then money is really not important," said Maxwell, who visited Washington Place during the Aug. 12 centennial annexation and again later last month for a state event.

"Money is not the basis of our culture, but the land is. And the sacredness of it. That's the important thing to native Hawaiians," he said.

More than three months have passed since Gov. Ben Cayetano and OHA Chairwoman A. Frenchy DeSoto announced plans to settle the dispute over how much the state owes OHA for its use of ceded lands.

Negotiations stem from a court ruling two years ago that said OHA could sue for ceded land revenue generated from housing sales and rentals, Hilo Hospital patient services, off-site Duty Free Shoppers and interest income. The July 1996 order by Circuit Court Judge Daniel G. Heely fueled estimates of past due revenue ranging from $500 million to $1.2 billion.

Hawaii law requires OHA be paid 20 percent of revenue derived from ceded lands, to be used for the betterment of native Hawaiians. Those payments go to OHA, the semiautonomous agency in charge of carrying out that mandate.

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So far, negotiators have met once, on Sept. 4, for an organizational meeting, said Janet Kawelo, an executive research assistant for Cayetano. Kawelo was named to replace Rick Egged, who recently resigned his post as state planning director.

Both sides agreed to release information on the negotiations only through their offices. A second meeting date was not given.

"I know that the staff is dealing with the problem of trying to coordinate the trustees and the negotiation teams' schedules, so it's not that easy to get meeting dates," said Kawelo, who joins Sam Callejo, Cayetano's chief of staff, and Joe Blanco, the governor's executive assistant, on the team.

Team leader Callejo declined to discuss state goals in the talks but believes it can be done by Dec. 1, the deadline given by the Hawaii Supreme Court to settle the issue. The high court heard oral arguments during an appeal of the case last April, but indicated it wanted the parties to attempt an out-of-court settlement before it ruled.

"We're going to try like hell, that's our job," Callejo said. "It's still early, but yes, we have a lot of work to do. And I'm doing a lot of reading right now."

Foremost for negotiators is how to proceed. OHA, under different leadership last year, considered hiring high-powered negotiators to do its bidding, but that effort became lost in a struggle for board leadership.

Earlier this year, OHA hired attorney James Duffy and planner Norma Wong to its negotiation team of DeSoto, OHA Vice Chairwoman Haunani Apoliona and trustee Herbert Campos. Previously, Wong handled talks for the state on Hawaiian issues, including the return of Kahoolawe, but now finds herself negotiating for Hawaiians against the state. Duffy represented OHA before the Hawaii high court.

Another issue for officials is whether a cash and land settlement is possible, given the cash-strapped state economy. Jon M. Van Dyke, a University of Hawaii law professor and a consultant to OHA, said the parties will likely remain flexible on a settlement, given the case's appeal before the high court.

"It seems to me that it's a useful time for a compromise, but from OHA's perspective, they need to fight for the strongest possible amount for their beneficiaries," Van Dyke said.

To foster public understanding of the talks, OHA has launched a media campaign that focuses on the state's obligation to native Hawaiians, emphasizing OHA's fair share. The ads will continue throughout the talks, said OHA spokesman Ryan Mielke.

"It's simply to educate people on what the issues are, and that there's an issue of fairness at hand," Mielke said.

Also on the bargaining table is whether the settlement will resolve past as well as future revenue payments to OHA. Currently, a task force of OHA and state officials is discussing annual ceded land revenue payments to OHA that have remained frozen at $15.1 million for the last two years.

But Kina'u Boyd Kamali'i, a former OHA trustee and state lawmaker, maintains the ceded land talks must only be for revenue owed and should not involve possible transfer of public trust lands, which already have been set aside by the federal government for Hawaii's native people.

"If they think they can pay us through lands, instead of revenues, that is unacceptable because you cannot pay us with what is already ours," said Kamali'i, a OHA candidate who believes the parties need to again sit down to address ceded land claims on the 1.8 million acres of trust land.

Looming over negotiators is a November general election that, judging from last week's primary, could drastically change the makeup of the state administration, OHA and the Legislature.

For one, the anti-incumbent wave has already affected Hawaii lawmakers. Three of the five incumbent state senators who lost their seats in the primary were of Hawaiian ancestry: Sens. Malama Solomon, Lehua Fernandes Salling and James Aki.

Lack of support for Hawaiian issues in the Legislature could thwart any settlement agreement reached by negotiators. More important, voter approval of a state Constitutional Convention in November could put the future of the 20-year-old Hawaiian agency in jeopardy.

As one who helped create OHA in the 1978 state Constitutional Convention, DeSoto fears a new Con Con may focus on unraveling the gains OHA has made in the past two decades.

"Over the last 20 years, we have put in place programs that are the seedlings of progress of our people," DeSoto said. "I will not stand idly by and watch a new and expensive constitutional convention end those efforts before they've reached fruition."

Meanwhile, some may view any settlement with OHA as giving the agency the edge as the entity to represent the Hawaiian people under a sovereign government, although Van Dyke sees OHA as just a step toward that entity. He believes the large number and quality of candidates running for the five OHA seats this fall is a sign of the agency's new respectability.

"OHA has always felt like it should play a facilitative role in promoting sovereignty but has never put itself forward as the ultimate entity to be the sovereign nation," Van Dyke said.

January '97 OHA Ceded Lands Ruling

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With 26 years as a bank researcher and a government planning analyst, Janet Kawelo is accustomed to making sense of it all away from the spotlight.

But that all changed when Gov. Ben Cayetano named his longtime special assistant as a negotiator to resolve ceded land revenue payments with the Office of Hawaiian Affairs.

While this is the first time Kawelo will be actively involved in state negotiations, the University of Hawaii teaching degree major said she has done her homework.

"Actually, I have looked into the whole issue for the governor in the past, so I'm up to speed on a lot of it," she said.

"But both teams have staff people that are meeting, and working on some of the nitty-gritty planning agendas for the meetings," Kawelo said.

The state and OHA met Sept. 4 to begin negotiations over a 1996 court ruling that OHA could sue for ceded land revenue generated from housing sales and rentals, Hilo Hospital patient services, off-site Duty Free Shoppers and interest income.

The Hawaii Supreme Court last April heard an appeal of the case but has given both parties until Dec. 1 to settle the issue before rendering its decision.

Joining Kawelo on the state's team is Cayetano executive assistant Joseph F. Blanco, a small businessman who also serves as a UH regent. Most recently, Blanco this summer helped bring the Miss Universe Pageant to Hawaii, earning the reputation as "The Hammer" for keeping to the state's bottom line in pageant negotiations.

Leading the state team is Sam Callejo, a former state comptroller and now Cayetano's chief of staff. Callejo, who also served as public works director and deputy managing director for the city, said he's confident negotiators can meet the Dec. 1 deadline.

Heading the talks for OHA are Chairwoman A. Frenchy DeSoto, Vice Chairwoman Haunani Apoliona and trustee Herbert Campos. DeSoto, who helped create OHA in 1978 and served as its first chairwoman, said the agency will save money by not hiring high-powered negotiators, as proposed last year by former board Chairman Clayton Hee.

DeSoto said each trustee has the background to make them skilled negotiators. Apoliona is the former chief executive officer of Alu Like Inc. and serves on several boards and panels, including Bank of Hawaii and the U.S. Department of Commerce Advisory Committee, Census 2000.

Campos is a retired Maui fire chief who served as Maui director of the Boy Scouts of America, American Red Cross and Hospice of Maui.

"If you believe that some of us, although we're Hawaiians, may have skills with which to negotiate, then certainly you can support it that we're not spending millions of dollars so people fresh off the plane in New York are going to be our mouthpieces of the Hawaiian community," DeSoto said.

"I think when people make a commitment to work in good faith, that many things are possible," she said.


Settlement Points

  • Here's what the Office of Hawaiian Affairs says is being negotiated with the state:
  • bullet Rent calculated on the gross revenues generated by the Waikiki Duty Free Shop;
  • bullet Rental and sales income from the Housing Finance and Development Corp. and Hawaii Housing Authority;
  • bullet Patient service fees, cafeteria sales and rental income charged by Hilo Hospital.
  • bullet Interest calculated at 6 percent per year on all of the above income from June 16, 1981, to June 17, 1982, and at 10 percent thereafter until the sum has been paid.

Source: Office of Hawaiian Affairs