E holomua kākou! Update on AG Subpoena of KAHEA's bank records

Posted by Lauren Muneoka at Feb 07, 2020 02:06 PM |
The State AG served First Hawaiian Bank with a subpoena for nearly three years of our bank records.Though it wasn’t clear at first, it has become apparent that their inquiry is related to our support of the kiaʻi mauna currently holding space at the bottom of the Mauna Kea Access Road.

Recent updates:
-We are assured that online testimony will be taken for SB42 SD1, however, the system is not taking submissions just yet (as of 8:30 AM on Feb 7.) Mahalo nui for your patience and for taking the time to have your thoughts heard. We will post as soon as the system goes "live."

Phew -- itʻs been a crazy few months! As many of you may have seen in the news last week, the State AG served First Hawaiian Bank with a subpoena for nearly three years of our bank records.Though it wasn’t clear at first, it has become apparent that their inquiry is related to our support of the kiaʻi mauna currently holding space at the bottom of the Mauna Kea Access Road.

Following a disturbing trend, in which public funds and resources are being used to intimidate and discourage the constitutionally protected rights of free speech and assembly, we are the third mauna-loving organization to receive such an inquiry. The first one went to the Office of Hawaiian Affairs, who ultimately complied. The second went to Hawaiian Airlines, and was subsequently withdrawn after the company resisted. In the latter instance, the AG was attempting to get information on donors who gave their frequent flier miles in support of those traveling to Hawaiʻi Island to stand in protection of Mauna Kea.

We suspect that this sort of collection of donor information is part of what the AG hopes to gain from their subpoena of our bank records. We think it is entirely inappropriate for the AG to have access to donor information and are prepared to fight to protect the names of our supporters.

One issue we wanted to clarify in this message is the "delinquent tax filing" that the AG named as justification for the subpoena.  To be clear, we have never been delinquent in our annual IRS tax filing. It's a little in the weeds, but in the service of transparency, hereʻs what happened:

All nonprofits must file a 990 form with the Federal IRS, and then transmit that form to the State. Unlike personal taxes, which run with the calendar year, non-profit taxes run on a fiscal year, which can end at different times during the calendar year. The end date of KAHEAʻs tax year is June 30th. This means that our tax year straddles 2 calendar years.

The year in question is what the IRS calls tax year 2017, but what most of us would call the fiscal year ending (FYE) 2018. The standard deadline for the annual filing of a 990 form is the 15th day of the 5th month after oneʻs fiscal year ends — so for us, that would have been November 15th, 2018. That year, we filed for a 6-month extension, however, which gave us until May 15th 2019 to file for tax year 2017 (aka FYE18).

In June 2018, we received a call from the State saying that we failed to transmit the tax year 2016 (aka FYE17) IRS form to the State. Immediately, we logged on to the state’s tax filing website, saw there was a new two-person authentication process we missed, completed that process and remedied the oversight that day. However — and this is where the confusion happened — we mistakenly thought that this remedy addressed an issue for our tax year 2017 (FYE18) filing, when it was in fact it was to address an issue with our tax year 2016 (FYE17) filing.

Confusing, right?

In any case, this oversight is what the AG is using to justify the subpoena — when just a year prior, they simply called us on the phone to iron out a similar hiccup. And just as when we received the phone call in June of 2018 — regarding our tax year 2016 transmission — when we were made aware of the error with our tax year 2017 transmission we remedied it immediately. Only this time notice came via subpoena instead of phone call.

While itʻs been a stressful time, we have been heartened by the outpouring of support from people and organizations from across our paeʻāina and beyond. The Hawaiʻi Alliance of Nonprofit Organizations (HANO) wrote a powerful letter, saying:

“While we support the protection of our state’s charitable resources, we disagree with the idea that a legitimate nonprofit organization’s participation in nonviolent protest, assisting those that are, or free expression, should be grounds for investigation. The targeting of organizations expressing opposition — and in particular, to government — is undemocratic and erodes our civil society.”

The ACLU also lent their support writing, “Using the Attorney General’s oversight to penalize advocacy groups for their “support” of the Mauna Kea demonstrations is not only wrong, it is unconstitutional.” And a national publication, Nonprofit Quarterly, even ran a story relating our subpoena to other struggles, “We’ve seen this type of unconstitutional overreach employed before when the rights of indigenous people come up against corporate interests. Actually, it’s a surprise the judge did not quash the measure in its entirety.”

Kia`i Mauna recently visited the state Senate Hawaiian caucus to discuss the subpoena against KAHEA. In response, senators from the Hawaiian Affairs committee drafted S.B. 42, S.D. 1, which would prevent the attorney general from “investigating” nonprofits where they are exercising rights by nonviolent civil disobedience.

We are so grateful for this outpouring of support in defense of the work that we do and will continue to do at KAHEA. Weʻve received so many offers and inquiries about how to help, so hereʻs a quick list to get you started:

  • Attend a hearing on SB42 SD1 next week Tuesday (2/11) at 1:16pm Capitol Basement Room 016 (flier above)
  • Canʻt attend in person? You can track SB42 SD1 here and SUPPORT the bill by submitting testimony online -- youʻll need to create a user profile for the state legislative website. Quick and easy, we promise!
  • Submit letters to the editors on this topic. For example, Trisha Kehau Watsonʻs excellent piece here.
  • Self-publish words of support on your own social media
  • Join us at the court hearing (limited space) on the subpoena TOMORROW, February 7th at 10am (First Circuit Courtroom, 777 Punchbowl, 4th floor, Courtroom 12)

In these turbulent times in Hawai'i and beyond, let us not lose sight of the larger picture. Collectively we are standing strong for the values we believe in. We are voting with our donations and more importantly with our aloha. Mahalo nui for standing with us to fight for the future we all want to see for our keiki.

Mahalo pumehana,
US guys at KAHEA

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