Molokai Land Trust in Detail

For many months the idea of a sacrificial tradeoff that allows La`au Point to be developed in exchange for thousands of Molokai Ranch-owned acres has been the central theme of the conflict surrounding the Master Land Use Plan.

Give up La`au and in return you will be given the ability to control the destiny of your island.

This idea has been ingrained in the hearts of many, but the question is: who exactly will control the destiny of Molokai?

It has been common knowledge that the Molokai Land Trust (MLT) would be the receiving body of the traded ranch lands. What hasn’t been common knowledge is the detailed nature of who and what the MLT is. Equally important is understanding what the community’s involvement with MLT will be as well as potential shortcomings that the organization may face.

Let’s start with what the Molokai Land Trust is:
In a recent meeting with the press, MLT members said that the use of the term “trust” has no legal significance but is how the public generally associates nonprofits which practice land conservation.
To the IRS, MLT is more accurately classified as a “supporting organization” to another public charity. This is important to understand but a bit difficult to describe.

MLT planners originally had wanted to be a standalone tax exempt non-profit. But, because MLT has planned to receive most of its assets from a single private donor, specifically 24,000 acres from Molokai Ranch, the organization could not be granted the most common status of public charities, the 501(c)(3).
Therefore MLT planners applied for and were recently granted “supporting organization” status from the IRS. This allows MLT to receive most or all of its income from a single entity, so long as they have a strong and “supporting” relationship with a bona fide 501(c)(3) public charity.

In this case MLT has chosen to be a “supporting organization” to its own founding body, Ke Aupuni Lokahi (KAL), otherwise known as the Molokai EC.
In a nut shell, the IRS is giving MLT public charity status so long as they operate in support of KAL. For more information simply Google “supporting organization” and click on the first link.

Now on to who the Molokai Land Trust is:

The controlling party of more than 24,000 acres of Molokai land will be comprised of nine internally elected board members who make up the MLT.
Current voting board members are Colette Y. Machado, Richard Cooke III, Stephanie Crivello, Cheryl Corbiell, Clarence Halona Kaopuiki, William Akutagawa, David Lunney, Davianna McGregor, and Edwin Misaki.

Most of these members were part of a volunteer steering committee that were involved in the initial creation of MLT and were internally elected and approved by KAL.

Election of directors of nonprofits is ordinarily an internal, rather than public process. In the future, a nomination committee will develop a slate of board members for approval by the board and a majority of the board confirmed by KAL.
Board members serve four year terms and will not at any time receive compensation.

MLT will also have one non-voting member each from KAL and Molokai Ranch.
MLT has adopted an extensive conflict of interest policy as recommended by the IRS and Land Trust Alliance standards and practices.

Now onto to the community’s interaction with MLT:

The term “public,” as used in “public charity,” generally denotes where the organization receives its income. The use of the term does not mean that the organization requires any system of public transparency.

Besides access to MLT’s articles of incorporation, the public does not have access to MLT bylaws, board meetings, or election proceedings because, like most public charities, MLT has a right to keep its organizational matters private.
Charitable organizations in Hawaii are regulated by the State Department of Commerce and Consumer Affairs as well as the IRS.

Though input from the community has played an integral part in the creation of MLT, the organization’s forthcoming relationship with the public can be characterized as a one way street. MLT is structured to benefit the Molokai community through conservation land management – the community will not partake in how MLT members decide to manage these lands.

Conversely, public transparency is mandated of KAL, to which MLT serves as a supporting organization. This is because KAL receives most of its funds from the federal government. In Hawaii, government funded bodies must comply with an open records policy. The KAL board is also open to a public election process.
Possible shortcomings of the Molokai Land Trust:

MLT is currently short on resources, both in man hours and funding. Recognition of the organization’s non-profit status by the IRS, which took place less than one month ago, was supposed to have triggered an initial land trade of around 1,200 acres of ranch land to MLT. However, the transaction has been pushed back by MLT whose members say that funds to hire a lawyer and a land manager must first be generated through grant acquisitions. Whether further resource shortages would hamper the land management roles of MLT is unknown.

Another possible weakness within the MLT could come from its role as a supporting organization to KAL. Walter Ritte has recently submitted a request for a formal investigation of KAL by is grantor, the USDA, citing alleged conflict of interest issues with several board members. Regardless of the validity of Ritte’s assertions, the issue illustrates a possible weak link in the organizational structure of MLT which currently relies on KAL for its public charity status. Unless MLT has another non-profit waiting in the wings, a potential threat to the existence of KAL could be considered a threat to MLT.

Learn more:

For a complete list of questions and answers discussed by MLT board member in their recent meeting with the media, visit www.themolokaidispatch.com.
The public is also free to attend the upcoming KAL meeting on Thursday, Dec 21 at the OHA/DHHL conference room at 4 p.m. in Kalamaula.