Representative requests Attorney General review of $2.9 million loan to Alii Health Center

HONOLULU—State Rep. Robert Herkes has sent a letter to Governor Linda 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.  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 Herkes in his letter to 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.

View a copy of the letter from Rep. Herkes to Gov. Lingle here.