Hawaiian Shores -- Slow Simmer over $20k

WATCHDOG © 2012

This question was raised recently: "Why hasn’t the treasurer reviewed the invoices for previous corporate attorneys?" The answer is not immediately known. There are a couple of reasons:

1. He does not know they are in the office and can ask to review them.
2. The records are in the office and he has not taken the time to review them. 
3. The records are no longer in the office and he cannot review them.

CONTEXT: Apparently the Treasurer recently stated he'd like to review the former corporate counsel's itemized bill and phone records. 

WATCHDOG © 2012

 Obviously, the remainder of this article will cover number 3. 

Should the records be kept in the office? That is an interesting question. According to our Articles of Incorporation the business office, located at 15-2793 Honu Street,  is designated as the principal office which is generally required when forming a corporation. This is the Article:  SECOND: The location of the principal office of the corporation shall be Hawaiian Shores Recreational Estates subdivision, Pahoa, Hawaii and its mailing address shall be 15-2793 South Honu St., Pahoa, Hawaii 96778 or such other place or address as its board of directors may from time to time determine.

The Bylaws support the AI here:  Section 1.05. Principle Office. The principle office of the association shall be maintained within Hawaiian Shores Recreational Estates, Pahoa, Hawaii, State of Hawaii and its mailing address shall be 15-2793 S. Honu Street or at such other place or address in the State of Hawaii as its Board of Directors from time to time shall determine.

This is what Hawaii Revised Statutes says about the records Membership [the Treasurer is a member] can review: 

There is a larger portion than what is pasted here and it should be the responsibility of each member to review the laws pertinent to the their membership. Nowhere in the law does it say the records he is looking for must be kept in the office. Bylaw 8.08 states the Secretary must keep or cause to be kept certain documentation but again invoices are not listed.

But, Financial statements, audits, etc., are part of the documents Membership has a right to access. For a few reasons one can suppose a request to see the supporting documentation [invoices/receipts] for any financial entry could be a stretch of HRS and 'financial records' and in some instances perhaps crossing some ‘secret’ line. The annual Audit brings all the documentation and the figures into the equation [pun intended] and it may be then the Membership will be up to date on the current questionable $20,000.00 figure that is alleged to be held in trust with the corporate attorney. 

Does the President maintain any records in her residence? As of last year, the answer is yes. What records? Good question. Should she? Debatable. Here are a few reasons why. When records are kept off site from the principal office more than ‘trust’ issues arise. There is a pseudo forensic sort of violation to the keeping of the records; there is a chance the records which should be kept confidential could be digitized and retained by a Member who may not be entitled to those records in the future; someone now -- who is not entitled to view confidential information -- may view the records. Perhaps the most convincing argument, in this case, is the location of offsite storage -- ostensibly is to preserve records. The current president lives in an inundation zone and frankly if a REAL tsunami was approaching of significance to inundate the area it may not be feasible for the president to evacuate all the records she has therefore creating a void in the audit trail of any and all legal and financial activities covered in those records! 

Lastly, once digitized, any record can be altered and if the original documents are all in the same place as an altered document there could be no proof the documents were altered. This is not an accusation lobbed in that direction. However, there have been too many questionable actions and statements made to prevent such notions from being uttered. Confidence in integrity was shattered once the records were removed and in many ways since. 

The motive for sequestering these particular docs may be noble. Some will balk at the thought of noble motive and this president – for some that perception seems to be at odds. 

Is the desire to review old legal invoices a red herring? Is it relative to the apparent unnecessary expense of $20,000.00 paid to a trust for friends in case they decide to sue?  Or, paid to their friends via the trust to keep them from suing? 

If by reviewing those financial records the $20,000.00 could be returned to the treasure of the Membership, then definitely locate those records.

 

The case to which this ‘out of court settlement’ was attributed has been closed with a SATISFACTION OF JUDGMENT --- now $20,000.00 more?

WHY