Rep. Herkes requests AG opinion on HHSC loan to Alii Health Center

State Representative Robert Herkes has sent a letter to Governor Lingle requesting that the Attorney General review and issue a legal opinion on a case involving the Hawaii Health System Corporation (HHSC) and the Alii Health Center in Kailua-Kona.

At issue is a loan of $2.9 million from Kona Hospital, which is part of the HHSC system, to the Alii Health Center, which is a private, non-profit facility. The Alii Health Center is not part of the Kona Hospital, but is a subsidiary of HHSC and falls under the jurisdiction of the West Hawaii Regional Board (WHRB) of HHSC. Over the past few years, the board has taken action to forgive parts of the loan, now totaling about $1.4 million of the loan. HHSC recently told the Governor that the board will be reviewing the legality of its actions.

“It hardly seems appropriate for the WHRB to investigate its own actions, and then report back to you as to whether or not it has broken the law,” said Rep. Herkes in his letter to Governor Lingle. “It would seem more appropriate to place the task of issuing a legal opinion regarding this matter in the hands of the Attorney General.”

Herkes added that the former chief development officer for the Kona Hospital Foundation (KHF) has been indicted on theft and forgery counts related to her work for the KHF, and suggests that the Attorney General could broaden the scope of the review and examine this issue as well.