Ka Wai Ola - Office of Hawaiian Affairs, Volume 12, Number 5, 1 May 1995 — OHA's funds are not unlimited [ARTICLE+ILLUSTRATION]

OHA's funds are not unlimited

by Billie Beamer Trustee-At-Large The Office of Hawaiian Affairs was named by state law to be the repository for reparations and payments due the Hawaiians for the misuse of, and non-payment for the use of, 1.8 million acres of ceded lands.

For a while the dream of a windfall seemed inevitable. $3 million in federal funds was given to (3) groups (Sovereignty Advisory Committee and Hui Na'auao, and the metamorphosed Sovereignty Elections Council).

All intended to study the feasibility and transition to sovereignty. Unfortunately, these appointed committees squandered the funds, knowing not how to administer the power and funds vested in them. OHA also faltered as it tried to serve its mandate. The same growing pains and the constant bombardment of adversary groups brought out the worst in us. We began reacting defensively. After 14 years, OHA has no strategy for sovereignty except the often heard ridiculous demands of separate nations and countries. We are 12.5 percent of our population. Is it conceivable that the other 87 percent will play dead and allow us to take over the islands and secede? Even the American indians did not receive all of the more than two hillion acres of the U.S. land. They received 40 million acres. In 1993, OHA eame into its first

lump sum payment of $134,584,489. There were great expectations of more money to follow. The floodgates of requests overwhelmed the OHA trustees. Formulating a "giving policy" for the beneficiaries' asking hands could never be satisfied. The selfish expected $134 million to be divided among them.

A typical bureaucracy mushroomed within OHA. Ten divisions and prohibitive salaries is the new burden the "new neh" OHA entity has prudently hone. Only two years after the first alloeation that raised high

hopes of wealth, the source has been deleted on every front. The federal government has tumed off its faucet and our state is claiming bankruptcy. The fussing about among unrealistic groups has cost us a badly needed leveraging threshold even from a small sovereign entity on a small land base. Now we must make do with what we have. Trustees and beneficiaries must be aware of the limit of our resources and our fiduciary responsibility to manage that endowment pmdently. We are a medium-sized quasigovemmental endowment. Our assets are: $177,600,995 Our liabilities are: $ 1,307,462 Our total fund equity is $176,293,532 Included in this equity is the annual receipt of $22 million, $18 million from ceded land revenues, and $4 million for the state's share of operational costs.

We must preserve most of the equity as an endowment for growth and giving. Nine investment managers are paid $370,000 to protect our funds. We invest $155 million or 87.5 percent of our funds. Our operating budget is $12.5 million or 6.5 percent of our funds We give grants and loans of $3.5 million or 1.9 percent of our funds In March, Chairman Hee appointed me to attend a symposium for endowment and foundations in New York. There were 250 prominent foundations in attendance. The total cost to send me to the symposium was $6,000. I have shared my newly leamed insights with the trustees and beneficiaries. The main theme was tmstee and beneficiary accountability and awareness of our investment stratagem. Tmstee pmdent use of the funds owned by the beneficiaries is paramount. This we do in a monitored investment plan, a prudent giving plan and placing limits on operational costs. It is the responsibility of the trustees to set limits for operations. Thereafter, the administration must adjust its staff to meet the needs of the beneficiaries ... No more eanoe junkets or the other myriad of non-primary priorities that do not address human needs, as housing, education, and heakh. We all need to protect the resource that we do have. If eaeh Hawaiian was given $1,000 our bank would be liquidated. At this juncture, being Hawaiian cannot be enough to elaim a grant.