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Supreme Court Overturns OIP Decision


The answer to a question posed in 2001 by the LWV Kaua'i chapter, as to whether a Public, Education and Government (PEG) access station met the definition of state agency, flipped and flopped over the years but finally the Hawaii State Supreme Court put their foot down. Their answer is “no”.

On December 21, 2007 the court Ruled PEG access entities are not state agencies, as the Office of Information and Practices (OIP) opined five years earlier. If the boards of the four nonprofit entities created over 15 years ago by the Department of Commerce and Consumer Affairs (DCCA), had been found to fit the definition of state agencies, they would have been forced to follow HRS92 and 92f, commonly known as state Sunshine laws.

According to this new decision, no PEG access corporation is required to follow Open Records laws (HRS92F). However, a possible unintended result is these nonprofit corporations may no longer qualify for the sole-source multi-million-dollar contracts awarded for many years by the state .

These PEG organizations, including 'Olelo on Oahu, Ho'ike on Kaua'i, Akaku on Maui and Na Leo on Hawai'i, have neither membership oversight nor are they required to comply with Sunshine laws. All four have received sole-source funding of state-mandated funds since their creation by the DCCA. The funds are derived from 5% of the cable company gross revenues, bypass the General Fund, and are awarded by state contract annually.

Issues of transparency and accountability by these four state-created organizations, who receive over $5 million annually from state-mandated cable franchise fees, have been the driving force behind the questions posed to the OIP. Watchdog groups included the League of Women Voters, the Community Media Producers Association and public access producers associations.

BACKGROUND: One PEG board, Hoike Kaua'i Community TV, systematically stripped major elements of open governance and Sunshine from the Ho’ike bylaws, so in 2001 the Kaua'i Chapter of the League of Women Voters asked the OIP to reconsider its 94-23 Advisory Opinion. This 1994 opinion said that the PEG nonprofit entity is not subject to the provisions of state Open Records laws because it is not a “board” as the term is defined in HRS section 92F-3.

§92-2 Definitions. As used in this part:

(1) "Board" means any agency, board, commission, authority, or committee of the State or its political subdivisions which is created by constitution, statute, rule, or executive order, to have supervision, control, jurisdiction or advisory power over specific matters and which is required to conduct meetings and to take official actions

A year later in 2002, the OIP revised its opinion and stated that the definition of state board had been met and, therefore, PEG entities should comply with open records laws. However, as OIP has no enforcement capability, the PEG boards refused to comply with consistency to state sunshine laws.

One well-funded PEG board, `Olelo Community TV, took the issue to First Circuit Court and in 2005 Judge Virginia Marks reversed the 2002 OIP opinion. The appeal by OIP was the focus of the Supreme Court decision No.27421 released December 21, 2007 .

The persistence of the four PEG entities to not comply with proper accountability and transparency and bring issues to court to fight compliance with sunshine laws is notable. The fact that 'Olelo alone receives over four-times the budget that OIP receives from the state each year may be a factor.

While that case was in progress, the entire issue heated up in late 2005 when then DCCA Director Mark Recktenwald asked the State Procurement Office whether the sole-source exemption from State Procurement Code could be renewed for the PEG contractors. The State Procurement Office announced that the four PEG entities would no longer be granted sole-source designation and must respond to an open-bid process like any other non-state corporation.


Finally, the four PEG entities have received the determination from the highest court in the state that they do not meet the definition of state board and therefore do not have to comply with state Sunshine laws. Unfortunately for them, now that this decision is clear, they are subject to state's procurement laws and may no longer enjoy sole-source funding from the government.

It is these contracts, worth several millions of dollars each year, that now are subject to the State Procurement Code according to the State Procurement Office. However, as recently as September 2006, 'Olelo attempted to be called a Public Utility in order to be exempt from the State Procurement Code. The SPO did not agree.

Though the four PEG entities may fight this SPO decision, they can't have their cake, eat it, and expect the public to keep paying for the meal ticket too. Either they are :

  1. regular nonprofits with no special sole-source exemptions to state open-bid contracts and no compliance with state Sunshine laws, or they are

  2. state-entities with sole-source exemptions for providing government services and comply with state Sunshine laws

Now that the Supreme Court has affirmed option A, these PEG entities must follow State Procurement Laws. Responses to the SPO's Request for Proposal for PEG services is due July, 2008. Let us hope the competitive open-bidding process results in better Public, Education and Government access services for all. May the best bidder win, with the knowledge that the documents will be public record.

### authored by Carol Bain, 12/31/07 co-president LWV Kauai County chapter

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