State’s Embattled Ag Corporation Has Chance For A Reset As It Seeks New Leadership

The Agribusiness Development Corp. is taking steps to fill the leadership vacuum left by the sudden death of executive director James Nakatani in April.

Nakatani’s death raised questions about the embattled state-owned corporation’s future.

The longtime state worker led ADC for a decade, acquiring thousands of acres of agricultural lands with little oversight using millions in state funds.

The ADC has plenty to gain and little to lose when it comes to public trust given the agency has been the subject of a savage state audit and a legislative investigation in the past two years.

Both painted a sorry picture of ADC’s affairs, detailing poor record-keeping, a lack of direction from its board and that it “had done little – if anything – toward achieving its statutory purpose” of reinvigorating the agricultural economy. Two University of Hawaii economists chastised the agency too.

While the hiring pool is yet to be filled and the timeline for an appointment uncertain, the first known applicant is the now former chair of the ADC’s board of directors, Frederick Lau.

The seasoned Oahu farmer stepped down from the role on May 25, after almost two years at the helm, indicating that he would apply for the executive directorship.

Leaving the chair position open, the board is scheduled to vote on Lau’s replacement June 15.

The change of leadership comes at a pivotal time, as the Legislature has thrown tens of millions of dollars into several initiatives led by, or including, the ADC.

Those include the more than $20 million acquisition of the Wahiawa Dam and irrigation system, a $3 million small animal slaughterhouse in Kapolei and $10 million for a Food and Product Innovation Network.

The timing leaves the ADC in a quandary, as the need for strong leadership is paired with replacing Nakatani promptly, according to Hawaii Farm Bureau executive director Brian Miyamoto.

“I would hope that it’s not going to take too long, a couple of months at most,” Miyamoto said in an interview.  

Lau’s exit has extended the search time though, given he had already helped arrange the hiring committee before stepping down.

Ethics Commission Raises Concerns

The State Ethics Commission then raised concerns about public trust and transparency, given Lau would be vying for the role, so the ADC’s board reformed the hiring committee and reconstituted its process.

It now includes an open call for the job, posted on the state career website on Monday, which will run until June 26.

The hiring committee will then recommend the best three candidates to the board, which will make the hire.

In an email statement, the ADC board said it “is committed to conducting the search for its new executive director in a full, fair, open, and transparent manner.”

The organization has traditionally been resistant to reforms.

Rep. Amy Perruso, who was on the legislative committee investigating ADC, has introduced several reform bills, including this year.

In 2021, a bill introduced by Perruso would have dissolved the ADC and transferred its entire staff and more than 22,000 acre portfolio.

And while the ADC has powerful friends at the capitol, new leadership could yet yield some form of change, Perruso says.

The central Oahu representative says she wants to see the ADC increase access to farmland for small farmers, make tangible steps to increase local agricultural production and consumption and cut ties with the international seed companies it leases land to.

“They do not support our food sustainability,” Perruso said in an interview. “It’s for me a conversation that we really have to have, but nobody is really willing to have it.”

What direction the next operational chief takes for ADC remains uncertain but in Lau’s last board meeting as chair, he noted that he and Nakatani met weekly for a couple of hours.

Lau highlighted Nakatani’s foresight and how he made “a lot of connections in planning for what he saw and what he was trying to bring around to ADC,” according to the meeting’s minutes.

But change is inevitable, according to Miyamoto of the Farm Bureau.

“Any time you have any transition, be it a planned transition or something like this, ultimately there will be some change,” Miyamoto said. “What that change is, I can’t speculate.”

“Hawaii Grown” is funded in part by grants from Ulupono Fund at the Hawaii Community Foundation and the Frost Family Foundation.