House Republicans yesterday called on lawmakers to reform the Legislature's system of awarding grants to nonprofits, saying the current process is flawed and lacks transparency.

House Democratic leaders, meanwhile, said they already plan to propose changes to the system.

Yesterday's news conference by the House minority follows an investigative series in The Advertiser into how the Legislature distributes grants to nonprofit organizations. The Advertiser reported, among other things, that the Legislature awarded about $200 million in grants over the last five years using a process in which only a handful of lawmakers select charities behind closed doors without any formal criteria.

"We're here to call on all members of both the House and the Senate to demand that we change the grants-in-aid process to provide an open, fair and effective process containing accountability measures," said House Minority Leader Lynn Finnegan, R-32nd (Lower Pearlridge, 'Aiea, Halawa).

The House Republicans, who created a resolution calling for the reforms, said they want a process that allows public input at every step and uses a third party of "professionals" — not legislators — to decide which organizations receive money. That would remove the temptation for a lawmaker's campaign to use that power to solicit nonprofits, they said.

Lawmakers who make grant decisions have said the system is fair and provides critical dollars to many nonprofits that deliver important services in the community.

But House Finance Chairman Marcus Oshiro, D-39th (Wahiawa), said yesterday and in a letter to the editor dated Wednesday that he will recommend various changes to the grants-in-aid approval process, including holding public briefings on all grant requests and posting grant applications online so the public can review and comment on them.

He also said he will propose an amendment to the House rules to abolish subcommittees on grants-in-aid and capital improvements "so there's no appearance of any impropriety."

Oshiro also said the state administration already reviews all grant applications and provides comments to the Legislature. He said the Legislature applies "broad criteria" in the selection process, including whether a program fills a void in the community and how much money it receives from other funding sources.

House Republicans yesterday also targeted state Rep. Michael Magaoay, who manages the grants process in the House.

Magaoay could not be reached for comment yesterday.

The Advertiser reported that Magaoay, D-46th (Schofield, Mokule'ia, North Shore), has been the top fundraiser in the House since getting the grants position five years ago and that much of his individual donor support in the past two elections were from people linked to the nonprofit sector.

State Rep. Colleen Meyer, R-47th (La'ie, Hau'ula, Punalu'u), said she's asking House Speaker Calvin Say to launch an investigation into Magaoay's grants position in relation to his campaign fundraising. State Rep. Cynthia Thielen, R-50th (Kailua, Kane'ohe Bay), also requested that Magaoay return campaign contributions from those with ties to nonprofits.

Say, D-20th (St. Louis Heights, Palolo Valley, Wilhemina Rise), said he'd rather "move forward" with the proposals that Oshiro outlined than convene an investigative committee.

"We are proposing reforms ... and let's take it from there," he said.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.

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