It has been a major concern for many years that 'Olelo does not account for incurred expenses by sector. I feel that because it calls itself a Public, Education and Government (PEG) Access Center, their accounting should reflect the equity of distribution to all three sectors. In the 1996 Audit they spent approximately $ 375,000.00 on grants and in 1997 they spent $1.2 million. I believe that in light of the fact that there are the three sectors (PEG) and they are supposed to have "equal access" there should be a breakdown of where grant monies went. Since none of the active producers were notified of any grant monies being available, it would appear that these grants were either made available only to Education, Government and Non Profits or there were only a select few people given this information. This could be construed as self-serving by board members affiliated with other non profit boards and discrimination against Public producers.

Attached to the full financial audit you did for 'Olelo for 1997, was the "Manager's Letter", from 'Olelo Executive Director Lurline McGregor in which she stated:

"Finally; 'Olelo's operations expenses are included under "Program services" and "Management and general" (page 5[of '97 audit]). The two line items, "Client services and support" and "General and administrative", which total $ 2,275,573 include all operations spending categories, from staff salaries and benefits to technical services, ground lease rent and office supplies. Because staff and operations support all the public, educational and government spending for each of the P, E and G categories. In future audit reports there will be a more comprehensive breakdown of categories so that reporting of expenses will be more consistent with the layout of 'Olelo's annual operating budget."

According to the proposed budget for 1998 there was still no breakdown of P, E and G funds. As I have not been able to get a copy of the '99 proposed budget since requesting it at the 'Olelo board of directors meeting of December 11, 1998 (when the proposed budget was given to the board for approval), I have no way of knowing if accommodation for "a more comprehensive breakdown of categories so that reporting of expenses will be more consistent with the layout of 'Olelo's annual operating budget" has been included.

It would appear that 'Olelo's and the DCCA Cable Television Division's inability to provide me with the operating budget that by the 'Olelo/DCCA contract is supposed to be available by now, is intended to keep the public unaware of potential improprieties.

Over the past year 'Olelo's board has violated its bylaws innumerable times. To date action on how DCCA will handle this is pending. (see attached documents)

In the past, and especially this last year, board minutes did not truly reflect what went on in the meetings. Our corrections to the minutes of one meeting extended to TWO pages! Consistently, comments from the public where either shaded to 'Olelo's liking or eliminated altogether.

In the 1997 IRS Form 990 a curious omission was made. In Part V (List of Officers, Directors, Trustees, and Key Employees) only Richard Turner was listed as Executive Director, although he was retained in that position only until August of that year, after which time Lurline McGregor carried that title.

The above named troublesome areas could well indicate attempts at misdirecting attention from possible mismanagement of funds. Thus we feel it is imperative to look into these areas to "obtain reasonable assurance about whether or not the financial statements are free of material misstatement". *

It has long been a concern of the Public Access Producers that there is neither equitable treatment nor equitable distribution of funds between the PEG entities. We sincerely hope that the audit report you are currently preparing will reflect the above quote regarding "future audit reports".

Sincerely,

Jeff Garland

Owner, Hawaii Public Access Media (HPAM)
Vice President
Community Television Producers' Association (CTPA)

* Quoted from "Report of Independent Certified Accountants", (page 3 of Grant Thornton's "Financial Statements and Report of Independent Certified Accountants, 'Olelo: The Corporation for Community Television, December 31, 1997 and 1996")

CC:
Governor Cayetano
Kathrine Matayoshi
Congressman Neil Abercrombie
Hawaii State Auditor
Office of Information Practices
State Ethics Commission
Senator Ihara
Senator Whitney Anderson
Senator Fukunaga
Senator David Ige
 

Attachment 1 of 2:

27 May 1999

Kathy Matayoshi, Director
DCCA
PO Box 541
Honolulu, HI 96809
 

Dear Ms. Matayoshi,
 

On 8 December 1998 I sent you a letter outlining Olelo's most recent bylaw violations. Nearly six months have passed since that time, during which additional violations have occurred. Since you are a party to a contract with Olelo in which Olelo is obligated to follow its bylaws, I would like to know what action, if any, you have taken in this matter.

I would also like to take this opportunity to point out the absence of communication with regard to the planned HPBA/Olelo merger to Olelo’s producers. At the informational meeting held in August 1998 Robbie Alm promised he would keep the public apprised of decisions as they developed from the twice -monthly meetings. Except for one report given eight months ago he has made NO reports either directly to the public or to Olelo’s Board as far as can be ascertained from Board minutes. We know there has been some action with regard to the merger because accounts have been presented to the HPBA Board by its representative. It would also be appropriate to add here that Mr. Alm has not attended an Olelo Board meeting in over a year. Is this not grounds for your removing him?

I look forward to your prompt response to these queries.

Sincerely,

Wendy Arbeit
President
Community Television Producers' Association (CTPA)
 

Attachment 2 of 2:

8 December 1998

Kathy Matayoshi, Director
DCCA
PO Box 541
Honolulu, HI 96809
 

Dear Ms Matayoshi:

It has recently occurred to me that I have been remiss in not keeping you up to date with regard to Olelo by-law violations. Accordingly I have prepared the following, which includes only those violations we are aware of.

According to KHET’s 26 August minutes:

Old Business:"HPTV/'Olelo Merger The HPBA and HPTF Boards agreed in principal to the merger of Hawaii Public Television and 'Olelo at their joint retreat on July 18. Chairman Shirai requested formal approval of the proposed merger by the HPBA Board."

This agreement was never mentioned at any previous Olelo Board meetings, which should have been done:

ARTICLE VIII MEETINGS

Sec 8.1 Definition:

For purpose of this Article "Meeting" shall mean the convening of the Board for which a quorum is required in order to make a decision or to deliberate toward a decision upon a matter over which the Board has supervision, control, jurisdiction, or advisory power. There shall be no decision-making or deliberation towards a decision unless such occurs at a properly noticed meeting.

In case the decision were made at an Executive meeting, it still would be a violation:

Sec 8.6 Executive Meetings:

The Board may hold an executive meeting closed to the public upon an affirmative vote, taken at an open meeting, of two-thirds. (2/3) of the members present, provided the affirmative vote constitutes a majority of the members of the Board. A meeting closed to the public shall be limited to matters exempted in Sec. 8.7. The reason for holding such a meeting shall be publicly announced and the vote of each member on the question of holding a meeting dosed to the public shall be recorded and entered into the minutes of the meeting.

Sec 8.7

In no instance shall the Board make a decision in an executive meeting on matters not directly related to the purposes specified in the above section. No chance meeting or electronic communication shall be used to circumvent the spirit or the requirements of this part to make a decision or to deliberate towards a decision.

And it would be a violation if made in an Emergency Meeting:

Sec. 8.9 Emergency Meetings:

If the Board finds that a compelling reason exists that requires a meeting in less time than is provided for in Sec. 8.8, the Board may hold an emergency meeting provided

(a) The Board states in writing the reasons for its findings;

(b) Two-thirds (2/3) of all members to which the Board is entitled agree that the findings are correct and that an emergency exists;

(c) An emergency agenda and the findings may be posted with the office of the lieutenant governor and shall be posted in the Board's office; and

(d) The Board shall make its best efforts to notify persons requesting notification
 

What makes matters even worse is Olelo’s attempt to put a spin on the merger in the September minutes that would make it appear that the concept had been properly raised previously by listing it inappropriately as Old Business.

At the September Board meeting (the third in the year) announced its intentions to have to have the next meeting scheduled for December. It was to have been the final meeting of the year. Only through dint of my strenuous objections (and being ruled out of order several times by Gerald Kato) was there a reevaluation of this position.

Sec. 8.4 Regular and Special Meetings:

There shall be at least six (6) regular meetings of the board per year, of which one shall be the Annual Meeting. Special meetings may be called by the President and/or any three (3) Directors upon three (3) days' notice by first class mail or on 48 hours notice delivered personally or by telephone, telegraph or electronic mail. Other acceptable communications services may be approved by the Board from time to time.

Unless the Board is planning to hold the Annual Meeting (usually held in March) in January, selecting the Nominating Committee in October is a bylaw violation

Sec 7.9 Election/Vacancies:

Three months prior to the Annual Meeting the Board shall appoint a Nominating Committee of at least three members of the board. The Nominating Committee shall develop a slate to fill any vacancies as well as a slate of officers...

Another violation is the amount of persons selected by the Nominating Committee. There will be three openings, but only three names were approved by the Board; there should have been five.

Sec 7.9 Election/Vacancies:

For the Founding Board of Directors the Initial Board shall recommend up to two (2) candidates for each vacancy on the Board. Thereafter, the minimum number of candidates for Directors on the slate shall be equal to two (2) more than the number of vacancies, the exact number to be set from time to time by the Board of Directors.

We have also observed a violation of equitable access to the channels

ARTICLE III PURPOSE

... the corporation shall:

...• develop and enforce such rules and policies that will ensure equitable access to these channels and production consistent with applicable State or Federal laws.

Equitable access has not been given. The excessive use of "an even playing field on a case-by-case basis" (Kealii Lopez) has resulted in such aberrations as Volunteer Hawaii being scheduled for a minimum of twice-weekly replays for months and months, while for others the replay policy is fairly restrictive:

Specials will be allocated one premiere and two repeats within the premiere month.... Thereafter, a producer may schedule the program once a month as time allows. The program may also be used as filler, allocated at the discretion of the Program Manager.

At the September Board meeting an attempt was made to change the mission statement without prior notice. Again, as a result of my strenuous objections and being ruled out of order several times by Gerald Kato was there a retraction of this motion.

These Bylaws may be altered, changed, amended, or repealed at any meeting of the Board at which a quorum is present by the affirmative vote of two-thirds (213) of the members to which the Board is entitled; provided that the text of the proposed alteration, change, amendment or repeal be contained in this notice of such meeting.

Ironically, the mission statement that was attempted to be changed wasn’t even the correct one, but one originated in the August 1998 Olelo/KHET programming contract. .It completely leaves out the key line:

The specific and primary purpose of the corporation is to promote the creation, production and cablecasting of programs by, for and about Hawaii

Of all the violations, this rejection of its reason for being is the most troublesome and the most persistent. In its insistence at being dysfunctional (compare with other access stations across the country for examples of what Olelo should have become by this time), Olelo has disenfranchised the public. In its increasing inclusion of mainland and foreign programming, Olelo departs even farther from its mandate of promoting Hawaii-based programming. By Olelo’s Executive Director, Lurline McGregor signing a contract that misstates and distorts Olelo’s mission (the Olelo/KHET programming contract), purpose of Olelo is to promote lifelong learning through the cablecasting of programs that are aimed at the preservation, development and enhancement of the diversity of thought, culture and heritage on O'ahu she has revealed a conscious intent to further subvert Olelo’s "primary purpose."
 

For years we, the public access producers, have been told that we lack the qualifications to sit on Olelo’s Board. Yet we seem to care more than the present board members and the past and present executive directors about keeping Olelo on track. The recent underhanded attempts to change and subvert the mission reveals a stubborn determination by present management to ignore the crucial distinction between speaker-driven and viewer-driven programming.

In the last six months in just the actions we are privy to we were able to document an average of one violation or attempt of violation per month. If the most recent bylaw changes hadn’t made access to information about Olelo’s activities more restricted, we might have uncovered even more violations... and been more knowledgeable about unwise, inappropriate, or even improper fiscal practices.

Even as Executive Director Lurline McGregor loudly states that the abuses and dysfunction of the past are not continuing on her watch, we witness further bylaw violations, ongoing failure to reliably furnish basic services, and no cracking of Olelo’s closed-door policy. We have been refused copies of such widely diverse materials as client and viewer survey questions, estimated recurring costs related to carrying PBS programming, and "volunteer" election voter tally. Board President, Gerald Kato, has found "unreasonable" our requests for an update on any follow-up of the problems identified in the April 1996 report of the Board’s own Program Committee and an accounting of Alliance-related expenditures (estimated by us to be in the tens of thousands). No reports have been given of the ongoing twice-monthly merger talks, nor were queries possible as the Olelo representative to those meetings, Director Robbie Alm, has been absent from the last four Board meetings. We note that reports of these talks have been made monthly to the HPBA board. Those reports revealed talks with Olelo producers and a 2.5 million-dollar architectural reconfiguration quote — items not made public at Olelo.

Who is going to take responsibility for seeing that money taken from the cable-viewing public is used for the purposes originally intended?

Certainly not Olelo’s present board or upper level administration. While reassuring us that the merger with HPBA would be a positive move, neither Gerald Kato nor Robbie Alm could explain how sharing Olelo’s revenues, facilities, and staff with HPBA would not result in less of everything to the public access client. Neither could they name even one benefit that would accrue to us through the merger scheme. (Who is their allegiance to anyway?). Legislation intended to shine light on Olelo’s questionable management policies have been rejected by this Board.

The DCCA is reluctant to take the legal steps permitted it by law for contract violations. Because of political restraints an OIP decision that could invoke sunshine laws is years away. The only solution we see is to place a knowledgeable and motivated producer on Olelo’s Board. The presently constituted board has indicated that it would prefer to be "self-perpetuating." What this would perpetuate should now be crystal clear.

We await your upcoming board selections.
 

Yours truly,

Wendy Arbeit
President
Community Television Producers' Association (CTPA)

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