A key side issue that arose during the debate over the proposed ceded land revenues settlement is the discussion about whom the Office of Hawaiian Affairs is supposed to serve.

OHA officials say they are mandated to serve all Hawaiians and that by doing so, everyone benefits. But a growing number of native Hawaiians, those having 50 percent or more Hawaiian blood, say OHA is obligated to serve only them under an original 1921 mandate that preceded the agency by 57 years.

Though the courts have found for OHA on several occasions, the issue resurfaced during debate over the ceded lands settlement between OHA and the state.

Ceded lands are the crown and government lands that once belonged to the Hawaiian government.

OHA was established in the 1978 Constitutional Convention and tasked with administering the share of ceded land revenues, also known as public land trust revenues, that, according to the Hawaiian Homes Commission Act of 1920-21 and the state Admissions Act of 1959, are supposed to go to the "betterment of conditions of native Hawaiians."

But ConCon officials went on to give OHA a broader mandate, the "betterment of conditions of Hawaiians," which has commonly been interpreted to mean anyone with any amount of Hawaiian blood.

The bulk of OHA's $400 million trust has come from the ceded land revenues and interest generated from those revenues. Today, OHA gets $15.1 million annually from the state for its share of ceded land revenues. Its other chief revenue sources are about $18 million in interest from its investments, and about $3 million in general funds from the state.

Kamaki Kanahele, chairman of the Sovereign Councils of the Hawaiian Homelands Assembly, said more, if not all, ceded land revenues should go to native Hawaiians.

A former OHA trustee and administrator, Kanahele said that in the early 1980s, the state began giving "matching" money to OHA.

"That gave OHA the flexibility to service all Hawaiians," Kanahele said. But from that point forward, he said, OHA no longer kept count of how much the 50 percent-plus Hawaiians were getting compared to everyone else.

Attorney Bill Meheula, hired by OHA to help negotiate the ceded land revenues settlement and who has done other work for the agency, said the Admissions Act and the revised Hawai'i Constitution spelled out that the money is to be used for both native Hawaiians and Hawaiians.

The Constitution says there are two beneficiaries — the native Hawaiians and Hawaiians, Meheula said. "But then it went on to say that in managing and administering any of its funds, including the incomes and proceeds from the public lands trust, it was to be used for native Hawaiians and Hawaiians, not just native Hawaiians," Meheula said.

Prior challenges against OHA's use of ceded land revenues for all Hawaiians were unsuccessful, Meheula said.

More recently, the Day v. Apoliona lawsuit challenges OHA's discretion to use ceded land revenues for non-Hawaiians. Filed by five men, all of whom are at least 50 percent Hawaiian, it was dismissed by U.S. District Judge Susan Oki Mollway only to be ordered reinstated by the 9th Circuit appeals court in August 2007. The issue is slated to be back in Mollway's court next month.

Samuel Kealoha, one of the five plaintiffs, said the 1978 ConCon "scammed" 50 percent Hawaiians of the ceded land revenues. Kealoha, 59 and a seven-eighths Hawaiians, said: "The scheme was to undermine native Hawaiians as recognized by the state of Hawai'i. When they put in 'and Hawaiians,' that was the scam. Congress did not say anything about 'and Hawaiians.'"

Ray Soon, a former chairman of the Department of Hawaiian Home Lands, said there was no mass objection by 50 percent Hawaiians when ceded land revenues were diverted to help all Hawaiians. The native Hawaiians have been more than generous, he said.

"That's 30 years of redirection of funds to another beneficiary class, without protest," Soon said. "Many of us held back our criticism because we thought it critical that all Hawaiians be working together, pulling together in the same canoe, so to speak."

Soon believes OHA and DHHL, which is mandated to providing home ownership to those with 50 percent or more Hawaiian blood, should work more cooperatively.

Leaders at both agencies agree they need to work more closely with each other, said DHHL Director Micah Kane. "How we go about it is important; we need to go about it in a respectful way," Kane said.

Mel Kalahiki, chairman of the group Living Nation of Hawaii, said Hawaiians of all blood quantums need to recall the days before OHA existed.

"We had nothing, no place to go," Kalahiki said. "The money was collected and it was going to the general funds of the state."

Today, he said, "look at the money OHA is putting into schools and the language, etc. It's a lot of help. "

University of Hawai'i law professor Jon Van Dyke, author of the book "Who Owns the Crown Lands of Hawai'i?" and a paid consultant for OHA on several projects, said that in 1921, conservative interests locally and in Congress inserted language into the Hawaiian Homes Act that limited the amount of Hawaiians entitled to benefit from the ceded lands.

"The sugar planters here in the Islands wanted to limit the number of people that would be eligible to be on home lands," Van Dyke said. That's how the 50 percent eligibility requirement got into the Hawaiian Homes Act.

"No Hawaiians supported that," Van Dyke said.