WAILUKU - Wailuku Main Street Association, a nonprofit organization that has been the recipient of more than $2.2 million in county funding in the last decade, and its board chairman, Thomas Cannon, have been ordered by a judge to comply with a subpoena and to hand over additional financial and organization documents to the state attorney general by Jan. 3.
Additionally, Cannon must make an appearance, tentatively set for Feb. 21, for sworn testimony.
Second Circuit Judge Joseph Cardoza on Wednesday morning granted the state's request calling for WMSA - which is being investigated for possible violations of Hawaii's nonprofit laws - to comply with its subpoena to produce documents and to take testimony from Cannon.
In October, the state filed a petition with the court against Cannon and WMSA, asking for compliance with the subpoena.
During the hearing Wednesday, Cardoza stressed that he was ruling only on the subpoena.
"I'm not saying or making any finding whether the association is conducting itself as it should," the judge said.
In response to Cannon's argument Wednesday that the subpoena and investigation were casting a cloud over the organization made up of "volunteers," Cardoza said the court recognized that complying with a subpoena is "never a simple matter" and commended generally "volunteers at any level."
Cardoza also ordered that the information produced from the subpoena not be disclosed to the public, as requested by Cannon, who appeared in court representing himself without a lawyer.
Cannon said it would be "harmful" if the information were released.
Cannon declined to comment to The Maui News after the hearing but did say that if the public wanted to learn WMSA's side of the story it could go to www.mauitowns. org. In a check of the website late Wednesday afternoon, there was no direct response to the day's court hearing, but there was a tab with letters to county officials, Viewpoints and Letters to the Editor to The Maui News and other communications and documents related to the dispute.
Supervising state Deputy Attorney General Hugh Jones of the Tax & Charities Division said outside of court: "We are pleased the court has enforced the subpoena."
He added that information obtained by the subpoena is a fundamental part of the investigation and could help determine how taxpayer funds have been used.
Jones said that if Cannon has nothing to hide, "why doesn't he swear under oath?"
"Tilting at windmills is the feeling I'm left with," Jones said. "This is a public charity not (the) CIA. We're trying to get to the bottom of this."
On Aug. 30, the state attorney general's Tax & Charities Division issued a letter detailing its findings in its months-long inquiry of the association that has received more than $2.2 million from the county since 2002, the vast majority of the organization's funding. The county in October told WMSA that it was terminating its grant immediately, citing a lack of information from the organization after repeated requests were made.
In the state's findings, it cited nepotism, lobbying in violation of its grant contract, conflicts of interest, inaccuracies with its IRS Form 990, little evidence of program services and a "terribly confused" structure of governance, among other issues.
It also called for the removal of then-Executive Director Jocelyn Perreira as well as conducting some review and revamping of board functions and bylaws, among other measures.
A former attorney for WMSA had said previously that WMSA was forced to downsize and had laid off its entire staff, including its executive director. A court filing said the downsizing was primarily due to the state's investigation.
At Wednesday's hearing, Cannon defended Perreira and the organization, which he said has received many accolades over the years and has helped not only the small town of Wailuku, but other island towns as well. The association was organized to promote, preserve and restore the culture, history and architecture of Wailuku.
Cannon added that according to a county expert, estimates show that for every dollar granted to WMSA, the county received at least twice that amount in value.
As in his court filings and letters, Cannon maintained at Wednesday's hearing that former board member and chairman Sam Clark, whom Cannon called a "disgruntled" board member, has been feeding Jones inaccurate information. Clark is one of several board members who have spoken publicly about being denied key documents and information about the organization's operations and finances. Cannon denied those claims.
Cannon added that there are others in the community trying to bring down the "Hawaiian grass-roots organization."
In response, Jones said the preliminary findings detailed in the Aug. 30 letter came from information from Perreira and documents subpoenaed earlier and not from Clark.
"Mr. Cannon is looking through rose-colored glasses, but they're smeared with Vaseline," Jones said. "This is a shuttered public charity."
He added that WMSA owes $5,000 in back rent.
"Nobody knows where the money is," he added of the organization's finances.
* Melissa Tanji can be reached at mtanji@mauinews.com.
* This article includes a correction from the original published on Thursday, Dec. 6, 2012. Due to an editing error, the wrong date appeared in the story for Wailuku Main Street Association's board Chairman Thomas Cannon's appearance for sworn testimony. The Maui News apologizes for the error.
