Politics / Half of the legal fees awarded in a lawsuit that challenged the state over how its agencies handled the Big Island’s Hokulia real estate development project must be given to the state under the Legislature’s funding plan for the Office of Hawaiian Affairs.

“We won on every point,” said Alan Murakami, a Native Hawaiian Legal Corp. attorney who argued the Hokulia case. “And now to see that money go back to the entity whose agencies were so integral in allowing violations to happen is very disheartening and unjust.”

NHLC received some $2 million in legal fees in a settlement of the case, which challenged construction of the billion-dollar luxury home and golf course project on agricultural lands near Kona. NHLC turned over the fees to OHA, which provides the bulk of its funding.

But when the Legislature began debating whether OHA should get some $3 million annually in general funds, in addition to the $15.1 million it receives as its share of revenues from the so-called “ceded lands,” Sen. Clayton Hee argued that the legal fees “windfall” should be figured into the equation.

Hee, a former OHA chairman, proposed giving OHA no general funds, which would have resulted in dramatic budget cuts for NHLC, Alu Like and Na Pua Noeau, all of which are funded by those monies. The House, meanwhile, suggested giving OHA the same 20 percent reduction that other state agencies were receiving.

During committee conferences, legislators finally agreed to give OHA $2.5 million in general funds for each of the next two years. But OHA, in return, must give the state a share of the legal fees, plus interest, totaling about $1.2 million.

While the compromise averted crippling budget cuts, NHLC attorneys who participated in the Hokulia lawsuit chafed at the forced sharing of their legal fees. They saw it as rewarding the state for breaching its trust duties and obligations because the judge found, among other issues, that the State Historic Preservation Division failed to properly administer the law.

On behalf of its client, Protect Keopuka ‘Ohana, NHLC successfully sued to prevent urban uses of ag land, protect burials, keep coastal waters from being polluted by grading activities and preserve an ancient ala loa, or stepping stone trail. In each of these instances, the problems arose because state and county governments failed to exercise proper enforcement and oversight, Murakami said. “The Hokulia case was all about the flaws of the state to allow the development to go forward on ag land and bulldoze burials and archaeological sites.”

During Hee’s tenure as chairman, OHA contractually required NHLC to collect legal fees when they were available. Ironically, Hee’s push to have OHA turn over the fees came amid reports that the U.S. Legal Services Corp. had required NHLC to give the fees to OHA because it did not accept that contract provision as valid. NHLC and Legal Aid are both programs of the Legal Services Corp., a nonprofit organization created by Congress to ensure the poor have access to legal representation.

NHLC had been collecting legal fees awarded by courts for the past 20 years—with no objection from Legal Services Corp. monitors —under an exemption that allows qualified Native American entities to compel legal services providers to collect fees when they are able. But use of that exemption by Native Hawaiians was recently disallowed, Murakami said, despite over 150 congressional authorizations treating Hawaiians as Native Americans.

“It raises the larger question of why Hawaiians are being treated differently than other native people,” Murakami said.

Since the Reagan administration, federal laws governing the Legal Services Corp. have steadily imposed a series of restrictions on the legal services providers it funds. Now Congress is moving to pass an amendment that would delete the restriction against Legal Service Corp. programs receiving attorney fees under the rationale that it hurts the very people the agencies are charged with helping.