Hana Deserves Better

January 29, 2008

An Investigative Report and Opinion by John Blumer-Buell

Remember the infamous Hana Village Marketplace? The failed and disgraceful “community economic development project” was never completed and sits as a deteriorating eyesore in the center of Hana Town. The project cost county, state and national taxpayers approximately four million dollars. It cost the Hana Community in ways more damaging than just the loss of jobs and livelihood.

Now, there is an ongoing and even more costly deception at the former Hana Community Health Center (HCHC), now called Hana Health. The Hana Community continues to pay dearly for it in ways that go far beyond finances. The issues go to the health, heart and soul of the community. The issues are literally a matter of life and death. The financial cost of the proposed Hana Community Health and Wellness Village is $26-$52 million dollars. The name is misleading. This is not a proposal from the Hana Community. The proposal has been advanced by the unethically and deceitfully privatized Hana Health. Take the community out of the Hana Community Health Center and you are left with “Hana Health.”

The zoning entitlements Hana Health seeks are not the intent of the Hana Community Plan, not the intent of the Hana Community generated plan Ho‘o Ku‘i Kahi (1995), not the intent of the State Legislative Act 263 (1996), not the intent of the purchase of an additional ten acres by the State of Hawaii for expansion of medical services, not the intent of the one-dollar-a-year lease from the state to the HCHC (which has a $2.2 million dollar value to state taxpayers) and not the intent of the Hana Community Plan Designation.

That is a long list of valid reasons for the Maui County Council to deny any change in zoning to Hana Health. In addition, there are hundreds of community members on record as opposing the project and zoning. They have also requested the reinstatement of the community membership, and the community membership elected board of directors, as envisioned during the transition from the State owned and operated Hana Medical Center to the Hana Community Health Center in 1997. In 1998, the community membership of nearly 300 was extinguished in secret without a community membership meeting or notification.

Enrollment of membership took place at a community meeting on March 27, 1996. The annual membership meeting scheduled for June 10, 1997, was moved to September 9, 1997. That meeting was “deferred.” On December 27, 1997, Harry Hasegawa, representing the HCHC Board wrote, “The next annual meeting of HCHC will occur in June, 1998.” The meeting was never held. At a secret meeting on May 28, 1998, the community membership was eliminated. The original by-laws state clearly, “The corporation shall have members...” The proposed development required an Environmental Assessment (EA). However, the EA failed to provide credible information to the community and government officials for decision making. There remains a long list of unanswered questions regarding the financial impacts and other impacts of the proposal. Hana Health refuses to provide public disclosure of a comprehensive financial plan or answer questions regarding financial impacts of the proposal. The EA’s written response to financial questions states in part, “The HCHC (Hana Health) considers the financial information and business plans to be confidential and not for public review,” (November 22, 2004).

Without in-depth accountability, Hana Health continues to receive millions of dollars in public funds in the name of the Hana Community. Now, Hana Health wants an additional $26-$52 million more without public scrutiny or transparency. If entitled by the Maui County Council, every United States, State of Hawaii and Maui County taxpayer will be asked to pay part of the cost.

It is outrageous and hypocritical that on one hand, the proposed and privately funded Malulani Hospital in Kihei was denied by the state controlled Certificate of Need process (CON). On the other hand, elected “representatives” and the state government have enabled the state owned Hana Medical Center and twelve acres to be “gifted” to a private group against the wishes of the Hana Community and the intent of the enabling legislation.

The Maui News of January 14, 2008, stated State House Representative Mele Carroll is “championing Hana Health’s $5 million request for equipment, independent senior housing design, home-based dialysis, adult day care, respite services and medical facility expansions.” The proposals are a duplication of services already provided or being advanced by other community supported organizations. Why is Representative Carroll enabling this to move forward when she knows better? The Maui News story of June 24, 2004, was headlined, “Mayor tells Hana board to open up.” Part of the story stated, “D. Mele Carroll, the Mayor’s executive assistant who has been meeting with residents about the issue, recognized the gamut of feelings in the room that ranged from frustration to anger. ‘There needs to be a healing,’ she said to the crowd as the three hour meeting began winding down. ‘There’s a lot of hurt because there’s been no openness from the board. From here on, let’s be open.’” Her current position contradicts that statement. Current State Senator J. Kalani English has refused to discuss or help resolve the situation for a decade and supports funding Hana Health. Why?

The Hana Community has attempted to correct the situation for years. Letters have been written, meetings have taken place and complaints have been filed. One of the complaints is a civil case alleging medical malpractice. Another complaint was filed with the Office of Mayor Arakawa, Community Development Block Grant (CDBG) Program, Agnes M. Hayashi, CDBG Coordinator and the U.S. Department of Housing and Urban Development (HUD) in 2004. Part of the response from Ms. Hayashi stated, “We have also been in continuous consultation with HUD-CPD. We were advised that a proposed project shall be rejected by HUD should a regulatory violation be found. As mentioned in our first letter to you dated May 13, 2004, the allegations you raised are serious and grave. As such, we have taken immediate action to investigate...” The letter also stated, “The CDBG Office together with the Mayor’s Executive Assistant assigned to the Hana Community, Mele Carroll, have been investigating the concerns that you raised to the CDBG Office and Mayor’s Office.”

More than four years later, the County of Maui recently discovered at least one false statement in the 2003 CDBG application for the Hana Nutrition Center. The CDBG grant was signed under penalty of law by HCHC Executive Director Cheryl Vasconcellos. The Independent Auditors’ Report stated on page 10, #9, “LEASED PROPERTY, in addition, the County of Maui provides a house in Hana, which the Health Center uses to accommodate a full-time doctor. The house remains the property of the County of Maui with a month-to-month agreement for the Health Center’s use.” In fact, the HCHC (Hana Health) did not have a lease with the county. The false statement of fact raises more fundamental questions regarding a number of statements made in the application. It appears this is a “regulatory violation.” Who is responsible? The auditor stated, “These financial statements are the responsibility of Hana Community Health Center, Inc.’s management.” The CDBG application request was $146,862 for Schematic, Design and Construction Documents. There appears to be a case of fraud. Who will be held accountable? This matter is directly related to the proposed zoning and funding issues regarding the Hana Nutrition Center, which is part of the proposed 90,000 square foot Hana Community Health and Wellness Village (see plan front page). There are more documented reasons for concern and investigation. On April 26, 1996, the HCHC reported to the U.S. Internal Revenue Service that a fundraising letter “was sent to a selected group of Hana residents, who made donations totaling approximately $40,000 to the Hana Maui Trust for the benefit of the Health Center.”

The letter was sent via U.S. mail and referenced the community report Ho‘o Ku‘i Kahi in soliciting, “A minimum of $200,000 is needed to begin and carry this endeavor through the next two years and, while asking for donations is not done lightly, I truly feel this is a worthy and necessary cause. We need tax deductible gifts of cash, marketable securities, or real estate now.” The letter was signed by Harry Hasegawa, President of the Hana Maui Trust and President of the Hana Community Health Center. Several members of the Hana Maui Trust were part of soliciting large amounts of money in the name of the Hana Community and then participated in privatizing the Hana Community Health Center. The Hana Maui Trust continues to solicit funds in the name of the community without accountability to the community. This situation calls for an IRS investigation. Who will be held accountable? What is really going on here?

Has there ever been an explanation to the Hana Community for the current situation at Hana Health? Yes. The Maui News story of May 17, 2004, titled, “Need for dialysis in Hana a flash point,” contained an explanation from HCHC President Harry Hasegawa. “He said original health center bylaws, which stated that the organization would have members, were changed legally by the board in 1998 because ‘we were vulnerable.’ ‘Outside forces could have tried to take us over,’ said Hasegawa, implying that a large group of individuals with a set agenda could have signed up as members and swayed a vote.” That sounds like democracy! The very community members the community trusted did not trust the community!

The solution is simple, democratic and pono. Restore a community membership elected board of directors. The current board needs to step aside and honor the community intentions as expressed in Ho‘o Ku‘i Kahi and Act 263. After years of exclusion, some community members favor returning the facility to the state and/or pursuing a small community controlled hospital. The Hana Community requested resolution is long overdue.

There was a recent community meeting in Hana with Mayor Tavares and Council Member Medeiros. During that meeting, T.D. Howell, grandson of Hana’s esteemed retired physician Milton Howell, M.D., was a testifier. He reminisced about the services his grandfather offered the community for decades. His emotionally charged testimony was concluded with an appeal to support the community efforts to establish a dialysis treatment center and with a simple statement of clear understanding and intention, “Hana deserves better...” Malama pono.

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John Blumer-Buell is a long time advocate for the East-Maui Community. As a board member of the Hana Community Association, he helped facilitate the transition from the Hana Medical Center to the Hana Community Health Center. He currently serves on the Maui General Plan Advisory Committee and a number of Hana Community organization boards.

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