Deadline set for
OHA, state deal

Hawaii Supreme Court says
settle the revenue dispute by Dec. 1
or it will do the job

By Pat Omandam
Star-Bulletin

The Hawaii Supreme Court has given the Office of Hawaiian Affairs and the Cayetano administration until Dec. 1 to resolve their dispute over past-due ceded land revenue -- or else the justices will do it for them.

Attorney James Duffy Jr., a member of the OHA negotiation team, said the high court this week stated it will not grant any further extensions past Dec. 1, putting pressure on both sides to settle the issue.

"That does not mean that they will automatically issue a decision on Dec. 2 or immediately thereafter," Duffy told trustees. "But it's trying to keep the heat on both parties to do the best they can in hopes to get the case resolved by Dec. 1. So what that means in the practical world for all of us is that we have four months to do this in."

OHA yesterday approved its negotiation team of Duffy, consultant Norma Wong, accountant Gary Nishikawa, OHA Chairwoman A. Frenchy DeSoto and trustees Haunani Apoliona and Herbert Campos.

Negotiators chosen by Gov. Ben Cayetano, according to Duffy, include executive assistant Joseph Blanco, state Comptroller Sam A. Callejo and state Planning Director Rick Egged.

No date has been set for the first round of talks.

The parties are seeking a resolution to a 1996 ruling by former state Circuit Judge Daniel Heely that declared the state should pay OHA more revenues for its use of ceded lands, specifically those used by the Waikiki Duty Free Store, Hilo Hospital, state housing sales, state low-income rentals, as well as the interest income from these sources.

The high court this April heard oral arguments on whether to overturn Heely's decision but had suggested the state and OHA seek an out-of-court settlement.

Various officials estimate a settlement range between $200 million and $1.2 billion.

OHA's team said it needs complete access to state records to identify revenue from ceded lands before it can talk about a specific dollar figure.

Team members say timely access to data will speed up negotiations.

Still, it may be late October or November before an amount is determined.

"Even if we had all the cooperation in the world, we have to work really hard at it," Nishikawa said.

"But I guess I could say by the time the fall comes around we would have an amount, probably not entirely accurate, but close enough that we would feel comfortable with the amount," he said.

Wong said negotiators don't have to wait for hard dollar figures to discuss elements of the settlement, such as the percentage of cash, land and power given to OHA. Also, she said, OHA needs to separate what is owed to the agency now, and in the future.

Former OHA Chairman Clayton Hee had proposed that OHA negotiate for certain parcels of state land and property, such as Molokini Island, Iolani Palace and Diamond Head, which could then become steady revenue streams for the agency.

The OHA team will set some internal ground rules during talks, such as regular communication with the full board, confidential strategy talks to ensure information is not leaked to the other side, and a coordinated public response to questions about negotiations.

"We're going to sink or swim together," Duffy said.

Another concern for trustees is a settlement's impact on Act 329, the state law that sets OHA's ceded land payments at $15.1 million per year through 1999, with a task force studying future ceded land payments to the agency.

Meanwhile, Duffy is not yet sure who should put the first offer on the table.

But he believes it may be OHA.

"If we ask the state to make the first proposal, its gonna be so insultingly low that we're not going to want to go further," he said.

January 97 OHA
Ceded Lands Ruling

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Trustee questions whether
right ones picked to negotiate

By Pat Omandan
Star-Bulletin

With ceded land talks between the Office of Hawaiian Affairs and the state poised to heat up in the next four months, at least one OHA trustee questioned whether the board chose the right trustees for the job.

By a 5-3 vote, with one abstention, the nine-member OHA board yesterday selected Chairwoman Frenchy DeSoto, Vice Chairwoman Haunani Apoliona and trustee Herbert Campos as members of the team, along with attorney James Duffy Jr., accountant Gary Nishikawa and former state Planning Director Norma Wong.

But trustee Rowena Akana voiced concerns on whether Apoliona and Campos are the best people to represent OHA. She believes former Chairman Clayton Hee is the man for the job.

"As everyone knows here, the results of these negotiations could be a defining moment in the history of Hawaii, and the history of OHA," Akana said.

"It would behoove us to name our most talented and experienced trustees to represent us. Knowledge and experience are important weapons that could give us the cutting edge in order to gain a good settlement for Hawaiians," she said.

In response, DeSoto said Campos' negotiation background includes helping to design OHA in the late 1970s. Moreover, such experience should be shared among the trustees, she said.

"As we grow older . . . who then do we prime to pass the banner to, other than a void, if we're not willing to share our so-called expertise and whatever mana each and every one of you have," DeSoto said.

Besides, DeSoto said, she initially offered Hee the job, but heml6 Rowena

Akana didn't want it.

Hee, however, countered he didn't decline it. Instead, Hee said he had philosophical differences with Wong and wouldn't take part if she was there.

Hee listed his concerns in a confidential memo to trustees, but asked that it not be copied or distributed to anyone else.

Besides serving as a state director, Wong worked with former Gov. John Waihee at his law firm last year.

She also represented the state in the 1993 negotiations with the federal government on the return of Kahoolawe.

Duffy asked Wong to join the negotiations team under a subcontract.