Kierkiewicz a board member for company receiving CARES funds

Puna Councilwoman Ashley Kierkiewicz steered taxpayer money to a not-yet nonprofit corporation on whose board she sits, records show.

Kierkiewicz gave $63,000 to the nonprofit Hawaii Rise Foundation, earmarked for Vibrant Hawaii, a corporation Kierkiewicz helped form and where she currently serves as an unpaid director.

The money was part of $100,000 each council member was allocated from the county’s $80 million share of federal coronavirus relief funds. In all, Vibrant Hawaii received about $2 million as a subcontractor for Hawaii Rise.

Kierkiewicz did not disclose her relationship with Vibrant Hawaii on her annual financial report filed Jan. 31 with the Office of the County Clerk, as required by law. On a subsequent report filed Tuesday after West Hawaii Today started asking questions, she disclosed she served on the leadership council for the organization from September 2019 until September 2020, and then on the board from October 2020 to the present time.

“I have consistently disclosed my service to community-based organizations, including Vibrant Hawaii, on all required disclosure filings, which are public record,” Kierkiewicz said Wednesday. “I was not involved in submission or review of any applications. I always have, and will continue, to operate with integrity, transparency, and excellence in all that I do.”

Nor did Kierkiewicz disclose her relationship to Vibrant Hawaii when the newspaper asked her Dec. 8 why she chose Hawaii Rise as the recipient of some of her funds, which came to the county as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Instead, she extolled the work Vibrant Hawaii was doing in the Puna community.

“I directed CARES funds to Hawaii Rise Foundation to support the Vibrant Hawaii Resilience Hubs Initiative as I wanted to keep as many federal dollars circulating in our local economy as much as possible and amplify the positive impact of every dollar,” Kierkiewicz said at the time.

Kierkiewicz defended her involvement with Vibrant Hawaii as participating in a “collective impact framework, where the strengths of all sectors — government, business, community, nonprofits — are harnessed to get things done, uplift our people, and build a thriving island.”

Vibrant Hawaii used the money to create 30 “resilience hubs” scattered across the island, primarily in East Hawaii, to increase access to digital connectivity, improve food security while supporting the local economy and provide a suite of resilience and wellness programming, according to its website.

Rachel Solemsaas, chairwoman of the Vibrant Hawaii board where Kierkiewicz serves as a director, said Thursday the corporation is currently working on getting its nonprofit status. Solemsaas said the structure of community hubs allowed for more flexibility to rapidly deliver services to the community.

“We’ve grown, we’ve connected and that’s the idea. (It) is to empower our community,” she said.

But government officials handling taxpayer money have specific procurement and ethics laws that must be followed to ensure all transactions are transparent and above-board and don’t create perceived or real favoritism in awarding contracts.

“The State of Hawaii Procurement Code of Ethics (HAR Chapter 3-131 Compliance) mandates that a public employee shall ‘refrain from any activity that would create a conflict between personal interests and the interests of the state,’” said an attorney responding to the newspaper’s request for an opinion on HARO, a source connection for experts and journalists.

“The law mandates that any such conflict should be identified and eliminated,” said David Reischer, CEO of the New York City-based LegalAdvice.com. “At the very minimum there should be disclosure of the conflict and a full hearing on the matter. A Hawaii County Council person that does not do the above can be charged with unlawful conduct.”

The county ethics code requires immediate disclosure of actions “proposed or pending before the council.”

“It shall be incumbent upon all employees or officers of the County to make a full disclosure in writing to their appointing authority or to the council in the case of an elective officer, whenever the employee or officer possesses or acquires any interests, financial or otherwise, that might reasonably tend to create a conflict with the public interest in the performance of the public duties and responsibilities of the officer or employee,” the code states. “Any member of the council who knows he or she has a personal interest, direct or indirect, in any action proposed or pending before the council shall immediately disclose such interest. A copy of any disclosure of interest filed under this subsection shall be filed by the employee or officer with the County clerk which shall be a matter of public record.”

Solemsaas wasn’t worried about Kierkiewicz following the rules.

“For people like Ashley and including myself, integrity is huge,” she said. “I believe she has disclosed it and she has recused herself.”

The County Council, including Kierkiewicz, voted unanimously Aug. 6 on a fast-tracked resolution giving each of its nine council members $100,000 of the CARES money to disburse in their districts to qualified organizations. The council grants didn’t have to go out to bid, but they had to follow federal procurement rules as well as the specific CARES rules.

“Because it’s federal funding we have to follow all the rules,” Finance Director Deanna Sako said at the time. “We have to follow procurement.”

Vibrant Hawaii, based in Hilo, registered its articles of incorporation Sept. 25, according to documents filed with the state Department of Commerce and Consumer Affairs. It hasn’t yet received its letter of determination from the IRS to make it an official nonprofit.

Because Vibrant Hawaii didn’t meet requirements for the county to disburse money to it directly, the funds were instead awarded to the nonprofit Hawaii Rise Foundation to pass through to the other organization.

“Hawaii Rise Foundation was the sole applicant on the RFP for CARES Act funding through the County of Hawaii; therefore, none of the Coronavirus Relief Fund monies have been directly awarded to Vibrant Hawaii,” Deputy Finance Director Steven Hunt said in response to questions from the newspaper. “Nevertheless, in order to carry out the scope of work cited in Hawaii Rise Foundation’s application, Vibrant Hawaii was named in the application as a collaborating nonprofit organization that would assist Hawaii Rise Foundation in their mission.”

In all, Hawaii Rise received $2.1 million in CARES money, including $649,100 in food assistance, $450,000 in connectivity enhancements, and $985,000 in community and family resilience projects, according to the county Finance Department. That includes $172,100 coming from Kierkiewicz and four other council members. All of that money except for an unspecfied amount of administrative expenses passed through to Vibrant Hawaii, Solemsaas said.

“Since Vibrant Hawaii did not receive CARES Act monies directly from the county and Hawaii Rise Foundation has financial control of those monies, Vibrant Hawaii would not be a considered a direct conflict of interest for councilmember Kierkiewicz,” Hunt said.

West Hawaii Today on Monday requested, under the state Uniform Information Practices Act, all weekly status reports and other documents submitted by Hawaii Rise and Vibrant Hawaii in order to track how the money was spent. The documents, requested from the county Department of Research and Development, had not been provided by press-time Friday.

Hawaii Rise was incorporated in 2017, according to records filed with the state, and reported donations of $108,511 in 2018, the most recent report available on the Internal Revenue Service website. A detailed telephone message left Thursday with its president, Michael Sohriakoff, was not returned by press-time Friday.

This isn’t the first time Kierkiewicz’s relationship with fundraising organizations has raised questions.

In May, her fundraising for lava relief for the unregistered community group Pu‘uhonua o Puna, known colloquially as “the Hub,” where she served as board secretary, was brought to public attention when board President Ikaika Marzo posted videos on his mayoral campaign Facebook page giving away masks that were donated to Pu‘uhonua o Puna for lava relief.

Kierkiewicz, who raised $77,355 from 664 donors on a GoFundMe page for victims of the 2018 lava flow, subsequently transferred the money to two community nonprofits and resigned from the board.

Nor is it the first time her nongovernmental relationships have pushed the envelope.

The county Board of Ethics in June 2019, ruled Kierkiewicz had a conflict of interest in introducing a bill, chairing a committee considering the bill and voting on the bill without disclosing that she was employed by a public relations company that represents officers of the landowner in the zoning application. The board required her to file an after-the-fact written disclosure of her possible conflict.

Email Nancy Cook Lauer at ncook-lauer@westhawaiitoday.com.