New Generation of Native Hawaiians Rises Up Over Slow Return of Ancestral Lands : Rights: Predecessors accepted snail’s pace of state bureaucracy. Now protesters ‘occupy’ lots on many islands, sovereignty groups band together.

The Department of Hawaiian Home Lands, after failing for decades to improve appreciably the lives of native Hawaiians, had something to crow about when it developed a tract of houses near here with $1-a-year lot leases.

The Panaewa Homes, 50 single-family dwellings opened to residents in 1991, were part of a “fast track” effort to help the estimated 14,000 native Hawaiians who have waited generations for a chance to move onto department land scattered across the state.

It didn’t turn out that way.

Some of the “quality homes at an affordable price” are 95% out of compliance with building codes and are ridden with termites. Concrete foundation slabs are badly cracked. Septic tanks are tilted. For a while, house keys opened neighboring front doors.

Now, 46 Panaewa homeowners are locked in a costly and frustrating battle--in court and in the state Legislature--with officials who reject their demand that the homes be torn down and rebuilt, correctly.

And they might be considered lucky. At least they have house lots. Many other eligible Hawaiians, including relatives of some department employees, have died waiting for their homesteads.

The Panaewa homeowners join Hawaiians statewide in rising up against the department that was created to enable Hawaiians to return to lands taken from them at the turn of the century, become self-sufficient and preserve their values, traditions and culture.

People of at least 50% native ancestry are entitled to lease homestead lots for $1 a year for 99 years on close to 200,000 acres of land scattered across the islands of Hawaii, Maui, Molokai, Oahu and Kauai.

So far, only 6,000 native Hawaiians have been homesteaded since 1921. And the number of applications has far outpaced the number of lots awarded.

Unlike their predecessors, who quietly accepted the snail’s pace of department programs, a new generation of Hawaiians is taking its frustration to court and into the streets. And serious questions are being raised about the agency’s ability to survive the onslaught of criticism and active resistance.

“It’s King Kong swatting at attacking planes,” said state Rep. Virginia Isbell, a critic of the agency. “Perhaps the mission of the Department of Hawaiian Home Lands is obsolete, as well as the way it functions.”

Supporters who point to successful housing projects shepherded by the department call such assessments unfair. They say that the department, understaffed and poorly funded, is doing the best it can.

“People are making critical remarks because they only see the faults, not the good that has come about,” said Clarence Kamai, 67, who lives on Hawaiian Home Lands on Maui. “Because of the department, I have a house.”

But from one end of the islands to the other, Hawaiians are “occupying” Hawaiian Home Lands by erecting lava-rock shrines, ramshackle huts and permanent homes--all in violation of department rules.

On a wind-battered spit of Hawaiian Home Lands at the remote southern tip of the island of Hawaii, Joseph Kauwe is among a handful of families defiantly living in abandoned Army structures. A life-size lava statue of a Hawaiian bound in heavy chains stands on his front lawn.

On Kauai, a couple was jailed for 45 days for appropriating unused beachfront land at Anahola. Michael Grace and his wife have worked the land for several years, growing local crops and building a “cultural center” that was bulldozed by the state in 1991, but rebuilt last year.

“I’ve felt intimidated before. I don’t feel intimidated now,” he declared. “I’ve seen the movement growing. I see it coming faster and faster.”

Other Hawaiians are risking trespassing charges by staging noisy demonstrations on Home Lands property leased to non-natives for commercial centers, airports and ranches. In October, 25 people were arrested while protesting the lease held by the 46-acre Prince Kuhio Plaza, the only regional shopping center on the island of Hawaii.

These and other actions have tied the beleaguered department up in knots--and energized a growing movement for sovereignty, or self determination and control of native lands.

It all began in 1921 when Congress passed the Hawaiian Home Lands Act to put a coda to the sad history of federal seizures of lands belonging to native Hawaiians and to preserve their dying culture.

But glaring problems were built into the department that still haunt it today. The federal government failed to fund the department, which came under local control as a condition of statehood in 1959. In addition, lobbyists for the then-powerful sugar plantations managed to have their vast fields exempted from the Hawaiian Home Lands.

What’s more, the department’s voluminous files, critical to resolving disputes, still are not computerized.

“The program was designed to fail,” said Honolulu attorney Hayden Burgess, a Hawaiian sovereignty advocate, “and the state inherited the baggage.” The department was left to dispense some of the steepest and least tillable acreage on the islands. Strapped for funding, it began leasing some of the choicest parcels to mostly non-natives for commercial purposes under contractual agreements that funneled a portion of their profits back into agency coffers.

In this way, the Army was able to lease 295 acres for its training center at Pohakuloa, on the island of Hawaii, for $1 for 65 years. The immense Parker Ranch here leased 7,512 acres of pasture in 1977 for $31,300. That lease expires in 2002.

“I agree that’s ridiculous,” said Donald Pakele, district supervisor at the Hawaiian Home Lands office in Hilo.

But Pakele hastened to add that other so-called “general lease” agreements with non-natives have proved profitable for the department. For example, the lease given to the Prince Kuhio Plaza pumps about $500,000 a year back into the department and has helped pay for floating bonds used to buy 600 homes statewide over the past two years.

Patrick Kahawaiola’a, a postal worker and Vietnam veteran involved in a yearlong battle against the department over the Kuhio Plaza lease and his use of beach land for a shrine, is not impressed.

“We believe the DHHL will continue to use these lands for parks, schools and shopping centers because economics controls the program,” said Kahawaiola’a, who has practically memorized the department’s confusing bylaws. “Here’s why: These lands, since statehood, have become too valuable to allow Hawaiians to control them.”

Hoping to signal a fresh start, the state last year began administrative hearings on financial compensation claims filed by Hawaiians who applied for homesteads between 1959 and 1988.

Only three claims have been processed so far by the office, which is due to close in 1997.

“We have a very big job ahead of us,” said Melody MacKenzie, the Hawaiian Claims Office’s executive director.

“Although we are looking at thousands of people on the homestead waiting list, we only have 280 claims pending,” she added. “We believe that is partly because many native Hawaiians are suspicious of state programs.”

Indeed, Hawaiian sovereignty groups say that the hearings can’t begin to rectify the situation.

“There isn’t much hope in the hearings process,” said Mililani Trask, governor of Ka Lahui, Hawaii, (the Nation of Hawaii), which represents 20,000 Hawaiians. “The community is saying: ‘We don’t give a damn about the Department of Hawaiian Home Lands. Our parents lived and died waiting. It’s time for us to take our land.’ ”

Many of the 200,000 people in this state with a drop of Hawaiian blood in their veins neither belong to sovereignty groups nor sympathize with their mission. But what’s new is the fact that more mainstream Hawaiians are embracing the cause, and once-fractious groups are beginning to band together.

More than 40 groups have joined forces to educate people about sovereignty, which could range from nation-within-a-nation status--similar to that accorded Native Americans--to secession from the United States. The largest group, Ka Lahui, sees Hawaiian Home Lands and other trust lands as the foundation of the nation it is trying to establish.

The department also has come under fire from state officials concerned that it is far from fulfilling its purpose. Roughly 20% of the 6,000 leases awarded Hawaiians over the past 74 years remain unimproved raw land without infrastructure, according to a recent state audit. The agency has an operating budget of $5.9 million this year, with $13.9 million to spend on capital improvements.

The audit criticized the department for its lack of written policies and for pursuing unrealistic goals. For example, in 1991 the department announced plans to build 14,000 homes within 10 years. In 1992, it built 529 homes. In 1993, it built 530. But given the department’s historical record, such production represents remarkable progress.

Hoaliku Drake, a 72-year-old native Hawaiian who is chairwoman of the Hawaiian Homes Commission that governs the department, claimed that state investigators failed to obtain complete and accurate information in reaching conclusions that “cast the department in the most unfavorable light without justification.”

Drake pointed out a number of significant achievements under her watch. More homestead lots are being developed than at any period in the department’s history. Water reserves for Hawaiian Home Lands have been secured on Oahu and Molokai. The department has developed new mortgage loan financing sources.

An emotional Drake emphasized that she has pleaded for adequate funding: “If you have money, you can do many things. If the state and federal government would do their duty to us, we’d be able to get the job done.”

She also recoiled at suggestions that the department is hurting its own people.

“I’ve always been a Hawaiian who practices her culture, and the basis of our culture is love; the love that emanates from a Hawaiian naturally,” she said. “The Hawaiian would rather give than receive.”

At Panaewa, that attitude is fading fast.

The Panaewa homeowners, who stopped paying their mortgages in November after two years of fruitless efforts to negotiate, are suing the contractor and the Department of Hawaiian Home Lands. The lawsuit cites extensive termite damage, cracked foundations, faulty electrical work and defective roofs, windows and plumbing.

The legal battle is taking its toll on these families, whose lives are strained to the limit with new obligations: public hearings, massive documentation and fund-raisers. To help pay attorney fees that have reached $40,000, they stage fund-raising concerts--and have been overwhelmed by Hawaiian entertainers wanting to donate their time.

“We’re not going to give up--and that’s what’s bugging the department,” said Panaewa homeowner Florence Keliikoa, 60. “We’ve got nothing to lose but a defective house,” added neighbor Gerrianne Perriera, a mother of four who waited 20 years on the agency list before her name was called.

“Before, Hawaiian people were thankful for crumbs,” she said, her eyes welling with tears. “But we’re saying no more of that. It stops here, at Panaewa.”

Sahagun is a Times staff writer and Essoyan is a special correspondent.