A group of Hawai'i taxpayers can challenge the expenditure of about $2.8 million a year in state tax money for the Office of Hawaiian Affairs, a federal appeals court ruled yesterday in yet another appellate decision jeopardizing programs that benefit Native Hawaiians.

But because the 9th U.S. Circuit Court of Appeals ruling limited the lawsuit to that money, the decision isn't expected to have the far-reaching impact of the U.S. Supreme Court's 2000 decision that struck down the Hawaiians-only voting for OHA trustees or the 9th Circuit's recent decision that declared Kamehameha Schools' admissions policy a violation of federal civil rights law.

In a 40-page decision, a three-member panel of the appeals court unanimously overturned a 2002 decision by U.S. District Judge Susan Oki Mollway and ruled that the taxpayers can contest the constitutionality of taxpayer funding equal to about 10 percent of OHA's budget.

The court, however, affirmed Mollway's dismissal of the rest of the suit and said taxpayers cannot challenge other revenues for OHA and cannot contest the constitutionality of government funding for the Department of Hawaiian Home Lands and Hawaiian Homes Commission.

Basing its ruling on a legal technicality, the 9th Circuit recognized a legal distinction between the creation of OHA and the DHHL.

The court found that DHHL was the creation of the federal government's Admissions Act that made Hawaii a state in 1959 and that OHA was the creation of the state's 1978 Constitutional Convention. The court said that because DHHL was created under the direction of the federal government, the plaintiffs have no standing to challenge it as state taxpayers.

The Hawaiian Homes Commission Act of 1921 set aside about 200,000 acres for homesteads staked by Hawaiians with at least 50 percent aboriginal blood. The intent of the act was to establish "a permanent land base for the beneficial use of native Hawaiians."

When Hawaii became a state in 1959, Congress required it to incorporate the HHCA into its state Constitution. Because of the federal role in the creation of HHCA, the court ruled that the plaintiffs could not sue the federal government as taxpayers under existing law.

The case of OHA is different.

The 9th Circuit found that the state tax money going to OHA could be challenged by a group of state taxpayers. OHA receives the bulk of its revenues from rents on leased lands. Last year, the state gave OHA about $2.8 million from state collections, which represents about 10 percent of its $25 million budget.
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The court ruled his clients had no standing to challenge the federal government and DHHL.

However, Hui Pu, an umbrella group of Native Hawaiians opposing the Akaka bill, said in a statement yesterday that it's wrong to use the court's decision to support the Akaka bill because "it actually hurts the group which this ruling protects — Hawaiian Homeland lessees. With ... new amendments, the bill takes away their right to file legitimate claims against the government. From 1959 to 1995 alone, more than 4,000 claims have been filed. The state Office of Hawaiian Affairs betrays the Hawaiian people by spending millions on Washington, D.C., lobbyists to pass a bad bill, instead of addressing the socio-economic conditions of the Hawaiian people."