A small nonprofit group headed by a former Army colonel has emerged as a force in the debate over the Akaka bill and may have played a role in delaying debate in the Senate until next month.

Once known primarily for its opposition to tax increases and government intrusion on individual liberties, the five-year-old Grassroot Institute of Hawaii this year suddenly thrust itself to the forefront of opposition to the Native Hawaiian Government Reorganization Act, known as the Akaka bill for lead sponsor U.S. Sen. Dan Akaka, D-Hawai'i.

The bill would create a process for federal recognition of Native Hawaiians as a political entity, and Akaka and U.S. Sen. Daniel Inouye, D-Hawai'i had been promised the measure would come to the floor of the Senate by this month.

But several Republican senators put holds on the measure, and a move is pending to force action on it in September.

The wrangling in Washington comes as Hawaiians-only programs are being challenged in the courts.

A federal appeals court ruling this month that Kamehameha Schools' admissions policy gives preference to Hawaiians in violation of civil rights laws ignited debate over whether federal recognition would have helped the school.

In its effort to reach the public and lawmakers about objections to the bill, the institute in recent months has bought newspaper advertisements, conducted two large-scale opinion polls and hired a Washington-based attorney. Along the way, the group has not only enraged bill supporters such as the Office of Hawaiian Affairs, but independent nation advocates who also oppose the bill for vastly different reasons than the institute.

Neal Milner, a political science professor at the University of Hawai'i-Manoa, believes the institute has played a pivotal role in the debate in recent months by helping to raise the bill's profile.

"I always thought the best chance for the Akaka bill passing would be if it stayed pretty well below the radar, that is if our two (Hawai'i) senators could convince others, particularly Republicans, that it wasn't such a big deal (and) didn't involve serious principles," Milner said.

But that strategy is no longer in play, he said, thanks in part to the Grassroot Institute and a network of similar organizations across the Mainland that have been able to play up ideological issues such as race and Hawaiians-only legislation.

The issue has received national attention, drawing editorials in both The New York Times and The Wall Street Journal, as well as news stories on the Fox television network and National Public Radio.

The institute's underlying argument is that the bill is race-based, and therefore unconstitutional. Proponents of the bill argue instead that the United States has a "special political responsibility" to Hawaiians because of the prior relationship between what were two countries.

"Once this issue began to become more visible, it wasn't that they changed so many people's minds," Milner said, "it's just that they reinforced this kind of Republican objection so that it no longer was something that the Senate would be willing to grant to our two senior senators, as much out of respect than anything else."

UNCERTAIN ORIGINS

OHA administrator Clyde Namu'o said he couldn't be certain how much of a direct influence the institute's efforts had on senators. The agency has been among the bill's staunchest supporters.

"I just don't know because I don't have enough information about their origins and who's really funding them," Namu'o said.

Officials with the institute are sure their efforts paid off.

Institute president Richard "Dick" Rowland said he was told that the Akaka bill took up a large chunk of discussion time at a conservative think-tank meeting in Washington several weeks ago when the bill was expected to be up for a Senate vote. "It's so much more on the radar screen than even a month ago," Rowland said.

Theresa Rudacille, director of planning and performance review for the organization, said the institute and its supporters have persuaded some senators to "take a look at the unintended consequences."

While institute officials have resisted being labeled, the group clearly is aligned with other organizations that are rooted in conservative and libertarian values.

Rowland, distinguishable by his Texas drawl and penchant for cowboy hats, is a businessman and one-time political candidate who once headed the local Libertarian Party.

Rudacille said the group has three main principles: individual liberty, the free market and "limited and responsible government."

Rowland said members believe that if the public and politicians are educated about the specifics of the bill, they will have no choice but to reject it. That's the reason the institute supports a delay and, ultimately, wants a referendum of Hawai'i voters — both Hawaiian and non-Hawaiian — before the bill goes to Congress, he said.

Among the institute's affiliates is the State Policy Network, described on the organization's Web site as "the professional service organization for America's state-based, free-market think-tank community."

Rudacille said the group has been able to network with think-tanks like itself on the Mainland that helped spread the word about the bill. Grassroot Institute officials have said repeatedly that theirs is strictly an educational campaign, not a lobbying effort.

The group also has allies at home.

A key argument for supporters of the bill is that it is necessary to help stave off lawsuits that challenge the legality of existing Hawaiians-only programs, including OHA and the Department of Hawaiian Home Lands. Those lawsuits are coming from groups closely aligned with the institute such as Aloha for All.

The lead attorney for Aloha for All, H. William Burgess, is also legal counsel for the Grassroot Institute.

Another key ally is Hawaii Reporter, an Internet news site that publishes articles focused on small business, conservative and libertarian issues. Hawaii Reporter editor and publisher Malia Zimmerman co-founded the Grassroot Institute with Rowland and is listed as its vice president. The two organizations also share office space on South King Street.

Zimmerman and Hawaii Reporter have done some contractual work for the institute, and the institute has a daily column on the Hawaii Reporter's Web site. Zimmerman said Hawaii Reporter has taken no editorial position on the bill and is primarily interested in proper discourse before it goes to a vote in Congress.

Robert Klein, an OHA attorney, recently criticized an article in the Hawaii Reporter for "deliberately distorting" the transcript of a National Public Radio interview done with OHA board Chairwoman Haunani Apoliona "in order to ridicule the chairperson of OHA." The article described Apoliona as "not too persuasive" and focused on a section of the interview in which Apoliona gave shorter, indirect responses during a discussion on the interview's use of the words "white Hawaiians" to describe Caucasians who live in Hawai'i.

Zimmerman acknowledged that she incorrectly attributed one quote to the interviewer that should have been attributed to Apoliona at the very end of her article, but otherwise stood by her article. "It's not fabricated, it's not distorted," she said.

While the institute appears to have spent large sums of money in recent months, it has refused to say how much.

A nearly full-page advertisement such as one the institute ran in The Advertiser in late June typically costs about $8,500, according to published Advertiser rates. The ad, which ran just after Kamehameha Day, said that while Kamehameha united Hawai'i, "Akaka would divide us forever." The institute also ran two smaller ads.

OHA, in support of the Akaka bill, last month ran a two-page advertisement in the Sunday Advertiser, which would typically cost $35,000.

The Grassroot Institute conducted two automated polls, done by ccAdvertising of Herndon, Va., saying the polls showed that respondents opposed the Akaka bill by a 2-1 margin. But the group drew fire from pollsters based in Hawai'i who charged that it asked misleading questions.

Rowland said the two surveys, one of which called 280,000 phone numbers in the state, cost less than $100,000.

Rebecca Ward, president of Ward Research, said it is unclear what kind of impact the polls would have had in the decision by some senators to put a hold on the bill last month. "I would hope that a poll with questions that were so obviously biased would not have any impact on Congress," she said.

Ward Research, which has conducted polls for The Advertiser, also conducted a poll for OHA in 2003 showing a majority of the state's residents supporting federal recognition. The OHA survey also was criticized by opponents, including the institute, which said it asked misleading questions.

In its efforts, the institute hired Washington attorney Bruce Fein, a constitutional authority often used by conservative organizations.

Fein said he met with some Republican senators and worked with his staff and conservative allies to spread word about the opposition's points within the Senate and House.

Some lawmakers, he said, are only now taking a careful look at the bill's details.

"We have certainly communicated to them," Fein said. "It shows that there is some very serious concern about the bill."

Rowland would not disclose the institute's donors but insisted the money is local.

The organization stepped up its Akaka campaign this year realizing a vote was imminent, Rudacille said. "We saw the bill moving forward under the radar screen without people here and back on the Mainland understanding what the implications were," she said.

30 TO 40 DONORS

Rowland said the organization specifically solicited money for its Akaka bill effort and keeps that money separate from other money. He estimated there are roughly 30 to 40 donors who have contributed specifically toward the Akaka bill.

"We don't have any Mainland money that has come in about Akaka, although we'd welcome it," Rowland said.

The organization receives grants for its educational programs on other issues, but none goes to the Akaka initiative, he said.

Among those who have contributed to the cause is former Advertiser publisher Thurston Twigg-Smith, a key figure in Aloha for All and its lawsuits. Twigg-Smith estimated that he has probably contributed "in the low five figures" and estimated that, while he had nothing to base it on, there are probably up to 10 other donors who have given "in the high fours, low fives."

The institute has provided a rallying point for people who have objections to the bill, he said. "It's performed a very valuable service, in that respect," Twigg-Smith said.

As a 501(c)(3) organization, the nonprofit institute must submit a Form 990 detailing its total revenues and expenses to the Internal Revenue Service, and also make the information public annually. The institute has filed for an extension to submit its 2004 returns, Rowland said, because the staff has been busy with its Akaka bill efforts, the debate over Honolulu's general excise tax increase for mass transit and other issues.

According to its first three Form 990 reports, the institute's revenues and expenses have grown steadily. For 2001, it reported $5,314 in revenues and $2,383 in expenses. In 2002, the group reported $27,280 in revenues and $18,422 in expenses. For 2003, it reported $73,845 in revenues and $57,346 in expenses.

Rowland said whatever the institute and other opponents may have spent on the Akaka bill pales in comparison to the amount and significance of what OHA has spent, expenses that have been paid by taxpayers.

OHA's Namu'o said that since May 2003, about $1 million has been paid to Washington-based law and lobbying firm Patton Boggs to push congressional members for passage of the bill. Namu'o said he did not have costs available for expenses for trustees traveling to Washington to support the bill. He also acknowledged that the Ward poll and OHA's Kau Inoa initiative to get Native Hawaiians on a registry are related to the Akaka bill.

OHA stands by its decision to make those expenditures, he said, because the trustees have a duty to protect its assets for the benefit of those they serve.

Donalyn Dela Cruz, spokeswoman for Akaka, noted that institute lobbyist Fein was able to get bill opponent Sen. Jon Kyl, R-Ariz., to insert his essays criticizing the bill into the Congressional Record. "They've made some impact, in terms of conservative circles," she said. Fein's arguments have also been used in a Republican Policy Committee report that also raised questions about the bill, Dela Cruz noted.

Dela Cruz said she believes the effort has been less successful back home.

"The impact that they've had on people who have lived in Hawai'i and know Hawai'i's history, I don't believe they've made that much of an impact," she said.