Turmoil in the office that administers the state's blind vendors program is threatening the loss of $1 million or more in federal funds, according to the ousted director of the program, Stephen Teeter.

It's called the Business Enterprise Program, and it's a fascinating little corner of state government.

There are some 40 licensed blind clients of the program, operating snack shops and other food service programs in buildings around the state, mostly government-owned.

Last year, the average net profit to each vendor was $77,579. That's average net profit.

In 2005, according to a consultant's study, the average net income was "$67,989 — over 50 percent higher than the national average."

However, the consultant, Terry C. Smith, noted that the median vendor income in 2005 was $36,406, "suggesting the high-income facilities artificially inflate the earnings picture."

Smith noted that 10 vendors "earn less than $10,000 per year" and "12 vendors have in excess of $100,000 in annual net income."

And Smith noted "significant problems" in the program. Among them: a "lack of trust that permeates the program," vendor unhappiness with Teeter's management style, an "undercurrent of racial attitudes" affecting the program and a long history of lawsuits filed by unhappy vendors.

Teeter, who joined the program in 2002, has now been reassigned to another job. In a December letter to the governor, he complained that his reassignment and the departure of two other staffers meant "the program will have over $1 million in reversals from lost (federal) moneys and lost business opportunities."

Teeter declined comment yesterday. Joseph Cordova, Teeter's boss and head of the state's Vocational Rehabilitation and Services for the Blind Division, took over the job last year. He acknowledged that Hawai'i's "BEP has had history of quite a bit of turmoil. It's a great program and I think most of the vendors would say we're starting to turn things around and get them back on track."

One thing that's virtually guaranteed: continuing lawsuits. In 1995, a group of blind vendors sued the state and city alleging that some $3.7 million in vending machine revenue had been improperly withheld from them. They won that case in 2000. The state late last year won an appeal at the Hawai'i Supreme Court. The vendors have now taken the matter to the U.S. Supreme Court.

If you know that a particular money trail will lead to boondoggle, excessive spending or white elephants, reach Jim Dooley at 535-2447 or jdooley@honoluluadvertiser.com