A former Wailuku Main Street Association board chairman said he felt "vindicated" Wednesday after the release of a scathing state attorney general's report confirmed the organization had failed to produce pertinent information to its directors, as he originally alleged.
Former board Chairman Sam Clark said he and former board member Bryan Sarasin have been vindicated after being "chastised" by current nonprofit board Chairman Tom Cannon and Executive Director Jocelyn Perreira for allegedly working against the organization, after he and Sarasin complained publicly that key operations and finance information had been withheld from board members.
"We were trying to do our legal obligation of a board to do the oversight required, and we weren't allowed to do that. It was very frustrating," Clark said Wednesday.
Motorists and a pedestrian pass the Wailuku Main Street Association office Wednesday.
The Maui News / MATTHEW THAYER photo
Sarasin said he was reserving comment on the matter "until it's settled."
Calls and an email to some former and current board members were not returned Wednesday.
The attorney general's report said its findings were "preliminary" because, as of the date of the letter sent to the nonprofit board's attorney, the organization had failed to produce additional information as requested by the attorney general.
The report cited nepotism in hiring, lobbying in violation of its county grant contract, conflicts of interest, little evidence of program services, the board having little control over its executive director and a "terribly confused" structure of governance.
Wailuku Main Street Association has received more than $2.2 million in grants from the county since 2002.
On Wednesday, Maui County Council Member Don Couch called the report "very harsh" and said "it opened my eyes quite a bit."
Couch said that, with his experience of having served on a nonprofit board, he knows "the board is essentially the manager of the (executive director)" and that proxy voting is not allowed, something that is alleged in the attorney general report against WMSA.
In deliberations for the current fiscal 2013 budget, the County Council upheld Mayor Alan Arakawa's request to set aside $243,000 that would have been allocated to WMSA. The mayor said the move to set aside the money for small-town planning was not for or against WMSA but was done as a precaution while the state investigated the organization.
"I'm glad we held the money to the side," said Couch. "I'm interested in hearing (WMSA's) response.
"There's more than two sides to every story, I want to hear them all first," he added.
In light of the issues facing WMSA, the Maui Non-Profit Directors Association has advice for other nonprofits.
Association President Susie Thieman said that it's important that board members have training, not just when they are new, but on a regular basis.
"The board has to know what its responsibilities are," Thieman said, while commenting generally on how nonprofit organizations function.
She added that the highest-paid staff member of an organization, whether it be an executive director or a CEO, "works at the pleasure of the board."
Thieman said board members should monitor their nonprofit's income and expenses so they know where their donors' money is going. This information can be found online, Thieman added.
Thieman, who is also the interim executive director of the nonprofit Lokahi Pacific said even though her nonprofit's board meets once a month, she always wants to let them know what's going on.
"I think one of the important things I do is that weekly update to my board members," she said. "(So) when they walk in a board meeting, they don't say, 'What is this all about?' "
The 70-member association does not include WMSA, Thieman said.
The Maui News, through a Freedom of Information Act Request, obtained the state attorney general's report on WMSA from the Maui County Planning Department on Tuesday.
The report from the state Attorney General's Tax & Charities Division detailed the division's several-month inquiry into the operations and governance of WMSA.
The state attorney general's office said in the report that the county was sent the information because it provides the nonprofit most of its grant income and because matters discussed in the report "are relevant" in determining compliance with past county grant agreements.
In an email responding to the report Tuesday, Cannon said the board had not had an opportunity to thoroughly review and discuss the report.
But added that an "initial review is in nearly complete disagreement with its analysis and conclusions."
Cannon also noted that some of the "remedial measures" proposed in the report have already been done.
On Wednesday, Cannon did not return phone or email messages that asked what measures have been completed along with board minutes that document the implementation of those measures.
As part of those remedial measures, the report says Perreira should be terminated, which Cannon said on Tuesday is a "moot" point because the board had been forced to temporarily lay her off, which will be effective soon, due to a lack of sufficient funds. A client has not paid the organization for work performed, Cannon said.
The report also asks WMSA to review and revamp some of its bylaws and not engage in proxy voting.
On Wednesday, Wailuku property owner Jonathan Starr, whose tenants include WMSA along Main Street, said that last week furniture and files were moved out of the organization's office.
"It looks like it's empty," Starr, a former board member, said of the offices.
A Maui News staff member witnessed what appeared to be a WMSA board meeting at the office Wednesday afternoon.
Starr said WMSA has a lease with him and has been a good tenant.
Cannon was asked in an email Wednesday about the status of the office. He did not respond.
* Melissa Tanji can be reached at mtanji@mauinews. com.