It’s time DHHL seeks alternative to tainted provider
The money pit has been hollowed out for decades now, so the natural inclination is to keep falling back in.
However, where Sandwich Isles Communication is concerned, the state Department of Hawaiian Home Lands and its overseeing Hawaiian Homes Commission should be looking for a way to pull up stakes and move elsewhere.
Sandwich Isles is a telecommunications carrier to about 3,600 customers on Hawaiian homelands. It has also been at the center of a legal maelstrom that led earlier this year to the sentencing and imprisonment of its founder, Albert Hee, on federal tax evasion charges.
The case involved shocking examples of the way Hee spent federal subsidies funneled to the company, ostensibly to support the delivery of services to homesteaders. Instead, he was found to have spent $2.9 million in company funds on personal expenses, real estate and luxuries such as vacations.
The Federal Communications Commission, as a result, has suspended paying millions in subsidies to the carrier while it audits how Sandwich Isles spent all its money.
And until the facts on the spending emerge, the state Consumer Advocate has recommended that the Public Utilities Commission hold off recertifying the company, an approval required if it is to resume business as usual.
That’s the whole point: This is the time for DHHL to see if its communications needs could be handled some other way.
Anyone with the homesteaders’ interests at heart should support casting a wide net for alternatives, too. Instead, groups such as the Sovereign Councils of the Hawaiian Homeland Assembly have asked the Hawaiian Homes Commission to recertify Sandwich Isles so the tainted company can continue receiving the federal funds, estimated at about $1.4 million a month.
It’s all complicated, of course, by the fact that Sandwich Isles has been operating under an exclusive license DHHL awarded in 1995 for service to Hawaiian homesteaders. Technically the award went to Hee’s company Waimana Enterprises Inc., but the next year Waimana partially assigned that authorization to its subsidiary, Sandwich Isles.
In return for the license and the federal subsidies, Sandwich Isles installed the fiber optic cable connecting its customers. It may seem hard to surrender that costly infrastructure.
But the fact remains that in the intervening years, better technologies have emerged that could yield other solutions — from providers without the stained record of the current vendor.
Just to recap those questionable practices: Over two decades, Sandwich Isles paid Waimana millions of dollars in management fees, much of which went to Hee for personal expenses. It’s these payments that are being audited to evaluate how Sandwich Isles fulfilled requirements of its license.
The PUC has until Oct. 1 to give its answer on certification to the FCC. At this point, it seems plain the answer should be a resounding “no.”
DHHL needs to know what its options are. Given the need for legal clarity in this quagmire — understanding the constraints of the license, for starters — the state’s investing $150,000 in a contract to hire the Washington law firm Keller and Heckman LLP seems defensible.
But it’s simply galling that this situation was allowed to careen out of control so that such a hire, using taxpayer funds, is necessary. Further, DHHL needs to reveal findings of a “review and assessment” it claims to have undertaken last year, on how Hee’s crimes have affected homesteaders’ telecommunication services.
The drama is still unfolding. The Universal Service Fund, financed by a small charge levied nationally on consumers’ phone bills, has paid out $242 million to Sandwich Isles, a stunning sum considering the small, 3,600 customer count.
And Hee also took out more than $100 million in loans, much still owing, from the federal Rural Utility Service. A decision on that issue is now pending from federal authorities.
Throwing more good money after bad would be a foolish bet, one that should be avoided. Cutting our collective losses, instead, sounds like the best way to move on from this horrible mess.
9 responses to “It’s time DHHL seeks alternative to tainted provider”
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Very long overdue!
The closing paragraph is exactly right, and needs to be taken to heart.
“Throwing more good money after bad would be a foolish bet, one that should be avoided. Cutting our collective losses, instead, sounds like the best way to move on from this horrible mess.”
Hey, wait a minute! Wasn’t this editorial focused on the rail project? I thought the wise old editors of this brilliant newspaper were talking about the rail project.
The Hees were just rolling the way Hawaii rolls. Two omissions from the editorial that indicate that: 1 – KSBE trustees were part of the scheme. 2 – Dan Inouye diverted some 12 billion dollars he tricked congress into diverting from native american funding to the state for Hawaiian programs. So the Hees were just following the template. Also, this very same newspaper that now is calling for sanity was around when all this was going on and had no editorial of any kind opposing it, as journalism is espected to do. Why is that? The Council is an arm of the KSBE organized and funded CNHA, so KSBE is still involved, probably, and protecting its investment. Al was sacrificed to head off a deeper probe of what was a carefully constructed scheme by local law firms with Inouye watching their backs in DC. Colin Powell’s son was the DC end of the scheme. All this was explicated long ago by Andrew Walden.
Your comment about Inouye and KSBE leadership, including the former head of Sandwich Isles who now has a really cushy and high paying job at UH (what is her name?) at Hawaii taxpayer expense is accurate. Inouye was not like that when he entered service during WW2 and fought prejudice however after 40 or so years in Congress, he turned into a very powerful manipulator that enabled criminals like Hee to thrive, all at taxpayer’s expense. I would agree that others like the woman who now works at UH and many others who knew what Hee was doing or turned a blind eye like a Sergeant Schultz (“I know nothing”), should be up for Federal charges and if convicted, spend time in Federal prison with Hee.
PS: Did an online search and the name was Jan Gouviea who was vice president for Executive Operation of Waimana Enterprises under Al Hee and now is University of Hawaii vice president for administration. She was the vice president for executive operations at Hee’s company and she is going to claim she had no clue whatsoever that Hee was funneling millions of taxpayer money to his private piggy bank?
One day, an in-depth political history of Sen Inouye will be written. It will not be nearly as flattering as his auto-biography was.
Waimana Enterprises via Sandwich Isles Communications(SIC) pulled off the biggest scam in recent history. For example, Papakolea in downtown Honolulu is on Hawaiian Home Lands. Prior to Sandwich Isle Communications this area were provided telephone service by Hawaiian Telephone who is now Hawaiian Telcom.
Was it the goal of the Universal Service Act to provide subsidized telephone service to this community by allowing SIC to displace Hawaiian Telephone?
Another location in Hilo next to the airport is being served by SIC.
The Universal Service Act’s intent was to provide subsidized telecommunications services for underserved rural areas.
Why isn’t every officer at that corrupt company facing jail time?
Shut down the program, and sign up all 3,600 homesteaders with either DISH or DirectTV for phone/Intenert/TV service via Satellite. Not perfect as this past heavy rain from heavy storm clouds, satellite communications is temporarily lost but minor inconvenience as these homesteader already have cell phone (in case of emergency) service. Bet if it was put out for bid, DISH and DirectTV would compete to offer a discount of the standard $90 per month charge for 3,600 homesteaders. Saving taxpayers something like $13 million per year that was currently being pocketed to Hee so he can provide homes to his kids, lavish world wide vacations and “happy” massage sessions that always leave Hee walking around with this weird smirk/smile on his face.