The Native Hawaiian Organizations Association is urging President Donald Trump’s administration to distinguish between “isolated allegations” about the Small Business Administration’s program aimed at developing native-run businesses and its success expanding economic opportunity, as U.S. Rep. Ed Case calls for a formal review.
In a statement to the Honolulu Star-Advertiser, NHOA acknowledged the ongoing interest in the U.S. Small Business Administration’s 8(a) Business Development Program and its oversight mechanisms, saying transparency and accountability are
essential to “maintaining public trust in any federal program, particularly one designed to expand economic opportunity.”
“Native Hawaiian Organizations participate in the 8(a) program pursuant to clear congressional authorization and are subject to eligibility requirements, annual reporting, and ongoing compliance reviews. NHOA supports efforts to increase clarity around how the 8(a) program operates, including the statutory requirement for NHOs to reinvest capital into their communities. Such efforts should be grounded in facts and an accurate understanding of how existing oversight functions,” said NHOA, which was founded in March 2007. “It is also important to distinguish between isolated allegations that may arise in any large federal program and the many NHOs that operate in full compliance with SBA regulations while delivering measurable value to the government and Native Hawaiian communities.”
Small businesses owned by Native entities such as Native Hawaiian organizations, tribes and Alaska
Native corporations are authorized to participate in the SBA 8(a) program under special rules and have access to no-bid federal contracts. While the rules differ depending on the entity, the intent of the SBA 8(a) program is to provide native communities with the ability to develop self-sufficient economic ventures by using profits to improve the plight of their communities.
On Dec.5, the U.S. Small Business Administration sent letters to all 4,300 8(a) participants informing them an audit requiring them to “produce financial records as part of a comprehensive effort to protect taxpayers and legitimate small businesses by rooting out fraud, waste, and abuse,” according to a SBA news release.
Firms that failed to comply by Jan. 5 could lose their eligibility to participate in the 8(a) Program, the Trump administration cautioned.
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On Jan. 2, Case formally requested the Inspector General for the U.S. Small Business Association to review “reported abuses in the federal contracting programs for Native Hawaiian companies.”
Case told Deputy Inspector General Sheldon Shoemaker that the program helps “level the playing field” by helping “certain small businesses” compete in the federal marketplace by providing them training, technical assistance and enhanced access to government contracts for businesses owned by the “indigenous peoples of our country …”
“While I strongly support federal efforts to help the indigenous peoples of our nation, recent news reports have highlighted potential concerns with the contracting preferences provided to at least one NHO,” wrote Case who is running for reelection. “Such allegations and publicly acknowledged criminal investigations undermine Americans’ trust in the 8(a) Program and the goal of ensuring our nation’s indigenous peoples have a fair opportunity to participate in federal contracting opportunities.”
Case did not reference a specific allegation about the programs in his letter to Shoemaker but included a footnote to media coverage.
Negative attention to
the 8(a) programs also
came after the suicide of Christopher Mailani Hookaamomi Dawson amid federal criminal allegations that he stole millions from his companies to fund his lavish lifestyle and polo obsession.
Federal prosecutors are seeking to recoup about
$17 million meant for Native Hawaiian charitable causes that they allege Dawson
embezzled to pay for polo, homes in Hawaii and Florida, and other personal expenses of the late founder of Hawaiian Native Corp.
Dawson killed himself Dec. 19, 18 months after federal agents raided Hawaiian Native Corp.’s Fort Street Mall offices in June 2023. His death did not end the federal criminal investigation into the alleged conspiracy to embezzle millions from the company he founded in 2004.
Between 2008 and 2023, Dawson’s companies received $892,386,181 in federal contracts to do U.S. Department of Defense and other federal work, including facility design, construction, maintenance, renovation and demolition; engineering and environmental services; and information technology and cybersecurity.
In a Nov. 6, 2023, federal court filing and an amended complaint filed Nov. 10, the U.S. Department of Justice detailed how Dawson and his enablers at his companies allegedly used money meant for charity to buy homes in Hawaii and Florida and pay for the expenses created by Dawson’s luxurious lifestyle.
Case told Shoemaker that in order to assist his oversight and effective support of the 8(a) Program, he wants the investigation’s findings to include the total number and names of Native 8(a) organizations; an assessment of the effectiveness and transparency of participants’ give-back efforts; the adequacy of community benefits plans; and a timeline for issuing new regulations on community benefits plans and give-back requirements to ensure sustainable development and accountability in Native American, Native Hawaiian and Alaskan Native
communities.
In a statement to the Star-
Advertiser, Case said he has “long supported the 8(a) programs including those for Native Hawaiians.”
“They have been good for our federal government, good for our Hawaii and good for our Native Hawaiian community. In the current administration and political environment, in which there is outright opposition to Native 8(a)s, the 8(a)s are especially vulnerable to accusations that they are broadly not operating properly so that the program should be canceled altogether,” said Case. The
review is intended to “directly address any such
arguments.”
He said he believes the review will demonstrate that “our 8(a)s are largely operating within the law.”
“Where that is not true or reforms to strengthen the programs are suggested, we should address that based on a full review of the facts and not accept broad accusations as an excuse for eliminating 8(a)s,” Case said.
U.S. Sen. Mazie Hirono joined Sen. Ed Markey (D-Mass.), to send a letter
to SBA Administrator Kelly Loeffler expressing their “deep concerns” with the audits’ demands.
Hirono, who sits on the U.S. Senate Committee on Small Business and Entrepreneurship, has been pushing back on efforts by Trump and his SBA to sow doubt in the 8a program.
“It appears the Trump regime has set its sights on the 8(a) program as part of its war on DEI and diverse communities,” said Hirono, who sits on the U.S. Senate Committee on Small Business and Entrepreneurship, in a statement. “The SBA has a duty to conduct rigorous, evidence-based oversight of all programs it administers, including the 8(a) program, which is why I’ve expressed concerns about the nature of this sudden review and whether the SBA has the resources and manpower to adequately conduct such a review in a timely manner. As this regime works to sow doubt in the 8(a) program,
it is critical we work to strengthen the program and other programs like it that support our diverse
communities.”
U.S. Sen. Brian Schatz told the Star-Advertiser in a statement that “public dollars demand public trust.”
“I support any effort that brings more transparency and accountability to all federal programs, including the Native 8(a) program,” Schatz said.
U.S. Rep. Jill Tokuda told the Star-Advertiser that while programs should always be evaluated and held accountable, this administration has repeatedly “demonstrated its willingness to dismantle initiatives it opposes, going so far as to rewrite history or take unlawful actions to further its agenda,” she said.
“Native Hawaiian Organizations have long been
pillars of economic self-
determination, lifting families, supporting local businesses, and reinvesting in communities that for generations were denied opportunity. Protecting the integrity of this program means strengthening it — not dismantling the very tools Native Hawaiians use to build prosperity and resilience,” Tokuda said.
