Nonprofit group permit rules tweaked
WAILUKU — Officials with Maui nonprofit groups received some relief Wednesday from strict new procedures for single-event liquor licenses, including extensive background checks and fingerprinting, that were putting a crimp on their fundraising efforts.
The Maui County Liquor Control Commission unanimously approved removing the requirement that all nonprofit board members submit to the background checks and provide their Social Security numbers and other personal information. The panel chose to limit those requirements to the executive director and a nonprofit officer.
The commission also decided that nonprofit groups do not have to provide an advance list of auction items, but must sign an affidavit stating that no liquor or other prohibited items shall be sold, and allowed nonprofit groups to file their license applications closer to their events — going from six weeks to four weeks out.
Deputy Director Mark Honda gave no timetable on when the changes will take effect, saying that they are subject to review by Deputy Corporation Counsel Gary Murai.
Over a dozen people testified Wednesday against the department’s handling of nonprofit licenses, with some nonprofit officials saying they have had to cancel events that normally raise tens of thousands of dollars.
Nonprofit leaders were encouraged by the proposed change but were far from satisfied.
“I think it’s a step in the right direction but there’s more to do,” said Debbie Cabebe, chief executive officer of Maui Economic Opportunity and president of the Maui Nonprofit Directors Association.
Cabebe said she and several other nonprofit directors met with the department Tuesday to talk about their issues. She said Director Glenn Mukai assured her that he was “not against nonprofits” but had to follow the law.
The department explained last month that it had to impose the more stringent requirements for single-event licenses because the state Legislature voted in 2008 to remove exemptions to some licensing requirements, such as criminal background checks. The department only became aware of the Legislature’s action nine years ago when an investigator with the state attorney general’s office came to Maui to look into a nonprofit event earlier this year.
“We had a rather spirited conversation about the interpretation of the law and really didn’t resolve anything,” Cabebe said. “Their solution was for us to go to the state Legislature to get the statute reversed.”
Peter Horovitz, a board member of several nonprofits and an attorney who works with liquor licensees, challenged the commission’s and department’s interpretation of the 2008 legislative action. He said there is no state law or county regulation that requires the department to vet any board member and volunteer.
“I urge the commission to work quickly to address these issues because we can’t wait a year,” Horovitz said. “These organizations will go away. Services will be lost. This is a pressing need in the community and it’s affecting its members.”
A survey of other counties’ liquor departments showed that Maui County is the only one in the state that requires the extensive background checks for single-event licenses for nonprofit groups.
Commission Chairman Bob Tanaka defended the department’s handling of single-event licenses and said “people don’t know what the rules are.” He said Oahu, Big Island and Kauai are not following liquor laws and can be sued.
“What they’re concerned about now is that they may be illegally doing what they’re doing,” Tanaka said. “I’m not going to say they’ll follow us, but I guess they’re going to have to get their act together. They’re going to have to review what they’re doing and see if it’s legal or not, but I’m not an attorney.”
Kauai Liquor Director Gerald Rapozo said Wednesday that Kauai, Hawaii and Oahu have not changed their practices since the 2008 legislative action. During a meeting of all county liquor department officials on Maui last month, Rapozo said representatives with the three counties explained to the Maui officials how they handle one-day events for nonprofits.
“For Kauai, our nonprofits and most of our directors are local people and we would know if they got arrested for some serious charge,” Rapozo said. “If a treasurer was caught embezzling money, we would read or see it on the news.”
Don Pacarro, administrator for the Honolulu Liquor Commission, said it was not following Maui’s lead and will not require fingerprinting for any nonprofit one-day events. He said every county operates differently.
“We interpret it our way and they’re free to interpret it the way they want to,” Pacarro said.
Many nonprofits asked the commission to request a written opinion from the state attorney general’s office about the law and whether the department has any flexibility in the interpretation of the statutes. An official the attorney general’s office told The Maui News last month that counties have the authority to impose backgrounds for single-event licenses but are not required to.
Horovitz said he appreciated the commission’s changes but believes more needed to be done.
“We’re willing to compromise,” he said. “They still in my view have the ability under current law not to require the vetting of anyone. The law doesn’t say you shall do it, it says you may do it.”
In the meantime, the department’s procedures have led to some nonprofits to cancel major fundraising events. St. John’s Episcopal Church in Kula was forced to cancel its September “Starry Night” event, the Rev. Kerith Harding said. She said the event brings in about $12,000 that is used to replace the church’s “ancient floor in the parish hall” and to give to other charities.
Wailuku liquor commissioner Nane Aluli said he was happy the commission was able to agree on some changes to provide relief to nonprofits and believes more oversight was needed. He said the commission did not foresee the “intensity of the kickback” it received from the community.
“I think that it behooves us as commissioners to ask more perhaps, probing questions in the hopes that we can be better advisers to the things that should take place before they become rules,” Aluli said. “I think as commissioners we need to be better informed so we can help the operation function more properly.”
“I think every situation can be improved upon and I think with some of the issues that have come before the commission recently, I think there’s obviously room for improvement,” he continued. “I think, therefore, it’s in the best interest of all concerned that we have a discussion about that.”
* Chris Sugidono can be reached at firstname.lastname@example.org.