He Spent Funds Meant for Native Hawaiians on Polo and Porsches. The Federal Government Failed to Stop Him.
At a congressional oversight hearing in 2019, Linda McMahon, then head of the Small Business Administration, lavished praise on a Native Hawaiian defense contractor as a shining example of a federal program designed to uplift Indigenous people.Christopher Dawson and his companies had won hundreds of millions of dollars in no-bid government contracts through the SBA based on the promise that his profits would primarily be used to help Native Hawaiians by, in part, promoting the culture, building homes and supporting orphaned children.Oh my goodness, McMahon gushed to senators. They bring so many businesses in and support so many businesses. She added she wanted to work more closely with them because they seem to have such a great footprint.Two months before the hearing, however, a former employee had met with federal investigators and filed a whistleblower lawsuit accusing Dawson and executives of cheating the SBAs 8(a) program. That program, which dates to the 1960s, was designed to help business owners from historically disadvantaged groups, including racial and ethnic minorities, to win federal contracts. For Native American tribes, Alaska Native corporations and certain Native Hawaiian nonprofits, such as Dawsons Hawaiian Native Corp., the opportunity comes with no cap on the size of those no-bid contracts.Internal company records and other documents in the SBAs possession would later show just how much Dawson had indulged. There were private jets and Porsches, luxury homes in Hawaii and Florida, memberships to private social clubs, and a nearly $1 million annual salary. Dawson also funneled millions into polo, investing in a beachfront horse farm on Oahus famed North Shore and a horse breeding operation in Argentina.Justice Department prosecutors would eventually describe Dawsons actions as part of a fraud scheme and embezzlement, one that victimized the people he was supposed to be helping.The SBA has known for years about its failures in policing its business development program. Audits and investigations by the Government Accountability Office and the SBA inspector general over the past two decades have found a lack of oversight by the agency, and in 2019, just months after McMahons testimony, the GAO again cited the agency for persistent weaknesses. McMahon did not respond to a request for comment.Controversies have included large corporations using Indigenous firms to access big contracts, government officials accepting bribes to steer no-bid awards, and white contractors pretending to be Native to win federal work. Congressional lawmakers have launched their own inquiries into the program, saying at different times that it was rife with waste, fraud and abuse. Federal prosecutors, too, have pursued numerous criminal cases, including a $30 million bribery scandal that investigators described as one of the most brazen corruption schemes in the history of federal contracting. Four men later pleaded guilty in that case.Yet as was the case with Dawson, the SBA has often been slow to act and done little to make meaningful reforms. The agency did not respond to detailed questions from Honolulu Civil Beat and ProPublica.The allegations targeting Dawson are the first major controversy where the founder of a Native Hawaiian organization is at its center, and it comes as President Donald Trumps second administration has begun auditing the 8(a) program, with officials saying it is plagued by rampant fraud.Robin Danner, a prominent figure in the Native Hawaiian community who was an early advocate for expanding no-bid contracting privileges to Native Hawaiians through the 8(a) program, has cautioned for years about the potential for abuse in the program and now worries about its future.Its a handful of people making millions of dollars off the backs of our people and our suffering, Danner said, referring to the historical plight of Native Hawaiians. What theyre giving back is pennies.Yet even after allegations of wrongdoing began to surface, Dawsons companies, operating under the brand DAWSON and including a suite of defense, construction and environmental firms, pulled down more than $500 million in new and existing contract payments on no-bid work ranging from cybersecurity operations at an air base in Qatar to plowing snow in Colorado.It wasnt until the summer of 2023 that federal agents raided the Hawaiian Native Corp. and DAWSON company offices in Honolulu, seizing computers and cellphones; workers were told to go home and the offices were closed. Five months later, Justice Department prosecutors took steps to seize four of Dawsons properties that prosecutors said were bought using money he stole from Native Hawaiians.Honolulu offices for Chris Dawsons Hawaiian Native Corp. stood empty in 2023 following a federal raid. Kevin Fujii/Civil BeatWhen the SBA eventually took action in early 2024, it was in the form of a letter threatening to suspend or terminate the Hawaiian Native Corp. and DAWSON companies from the program. In the letter, Donna Peebles, an administrator overseeing the 8(a) program, said the SBA had evidence, including an audit presentation, tax records, credit card statements and other documents, some dating back to 2015, showing funds paying for luxury car leases, mortgages on private residences, stays at extravagant hotels and an opulent trip to Dubai. More than $1.6 million went to Dawsons North Shore polo farm.Peebles alleged that Dawson also diverted $25,000 per month to Hawaii Polo Life, describing it in records as a subcontractor even though it was actually his personal brand, which included a line of luxury athleisure wear.The amount of money pulled out of the companies for Dawsons use in just five years far exceeded what the Hawaiian Native Corp. gave back over 10, Peebles wrote, and was the antithesis of the programs intent and a gross breach of trust.The Hawaiian Native Corp. and DAWSON companies said in written statements that they have been cooperating with the DOJ and working with the SBA on reforms. They said that the investigation focused on individual employees and does not allege criminal activities by Hawaiian Native Corp. or the DAWSON operating companies. Neither agency, the statement said, has ever issued a finding of any wrongdoing by the Hawaiian Native Corp. or its companies.Almost immediately after Dawson became the target of the criminal investigation, the companies said they took swift action to suspend and then fire him.It was a blow from which he would never recover.If you or someone you know needs help, here are a few resources:Call theNational Suicide Prevention Lifeline: 988Text theCrisis Text Linefrom anywhere in the U.S. to reach a crisis counselor: 741741Dawsons family would later tell Honolulu police officers that after he was cut off, he said he was worried about running out of money. He faced six-figure tax debts, growing legal fees and costs related to his polo horses.As Christmas 2024 neared, he discussed the federal investigation at the familys home in the Nuuanu Valley, telling one of his sisters that he felt like he was in no-mans-land.The next morning, he was found off a nearby hiking trail, where he had died by suicide.Program in Need of Tailored OversightDawson came from a well-heeled family with deep political connections. He was the son of a Canadian businessman, and his mother, Beadie Kanahele Dawson, was a Native Hawaiian activist and lawyer. They lived in a historic villa and owned a contracting firm that focused on environmental remediation.As an adult, Dawson began running the family company. He also dabbled in politics, including making a bid for the state House and giving political contributions to lawmakers, most notably U.S. Sen. Dan Inouye, then the states most powerful politician.Native American tribes and Alaska Native corporations already had federal contracting advantages through the 8(a) program. The intention was that in exchange for access to the largest no-bid contracts, they would use company profits to support their people and provide other benefits, such as dividends, scholarships and burial assistance.Alaska Natives, in particular, had made good use of these privileges and by the early 2000s were winning hundreds of millions of dollars in federal contracts. Dawson and his mother wanted in, so they made the 5,000-mile pilgrimage from Hawaii to Washington, D.C., to lobby Inouye.For Inouye, the SBA program was a way to right the wrongs Native Hawaiians endured after U.S.-backed plantation owners overthrew their kingdom in 1893, stripping them of their political sovereignty and 1.8 million acres of land. For the Dawsons, it wasnt just about equity; it was about protecting their turf from Alaska Native firms.Beadie Dawson recalled in an oral history years later that Alaska Natives had told her and other Native Hawaiian contractors that the only way their businesses would succeed would be by working for the Alaskans.My son and I decided that wasnt going to happen, she said.But in trying to open up access to Native Hawaiians, Inouye faced a problem. Native Hawaiians did not have a federally recognized tribe or tribal government that could direct how company profits would flow back into the community and that would be accountable to its members. To get around that, Inouye and the SBA adopted a system that would allow private nonprofits, known as Native Hawaiian Organizations, to act as stand-ins. Even then they were treated differently from their tribal and Alaska Native peers in that the contracting advantages the 8(a) program provided them, including access to no-bid awards of unlimited size, only applied to defense contracts.Around the same time NHOs were finding their footing, the SBA was coming under scrutiny for failures of oversight in Alaska.As Alaska Native corporations won more contracts, particularly after 9/11, members of Congress called for an investigation. In 2005, one GOP lawmaker noted, This could be turning into a scam because of the sole-source nature of these contracts.The following year the Government Accountability Office issued its first report finding that the 8(a) program, as applied to Native groups, needed tailored oversight. It found that the SBA was ill-equipped to handle the complexities of the growing program in part due to poor staffing and shoddy data collection. Auditors noted that the SBA could not provide the GAO with reliable data on revenues or how those funds were spent.Its a handful of people making millions of dollars off the backs of our people and our suffering.Robin Danner, who early on pushed to make Native Hawaiian organizations eligible to win large no-bid contracts through the Small Business Administrations 8(a) programBy then some of the first signs of worry about bad actors in the Native Hawaiian program were beginning to emerge. In 2007, Inouyes chief of staff warned him in a memo that some NHO founders, including Dawsons mother, feared some of their peers really have no idea what theyre doing and had formed their own trade group to help police themselves.We cannot afford to have a few ill-informed or ill-motivated NHOs to screw it up for everybody, the staffer wrote.Every few years the SBA 8(a) program saw a new scandal, including a 2008 revelation that two Alaska Native firms agreed to funnel more than $23 million to non-Native companies and news reports in 2010 by The Washington Post and ProPublica showing that Alaska Native shareholders received little while non-Native contractors took huge payouts.The SBA responded by requiring participants to self-report each year how they were giving back to their communities. But the agency declared those reports confidential, leaving no opportunity for outside scrutiny. Information is also limited because NHOs are not required to file public disclosures and many dont reveal comprehensive information voluntarily.The public usually only hears about NHO giveback efforts when a company promotes them either on its own websites or in press releases. One of Chris Dawsons most recognizable contributions to Native Hawaiians was a 30-second radio spot on Hawaii Public Radio known as the Hawaiian Word of the Day, which was listed on the Hawaiian Native Corp.s website under the heading Community Impact. The company also sponsored the broadcast of the Merrie Monarch hula competition on the Big Island and helped pay the electric bills at Iolani Palace, a historic Honolulu landmark that once served as the official residence for the rulers of the Hawaiian Kingdom.Such voluntary reports should be met with skepticism, according to Colin Kippen, a Native Hawaiian lawyer who worked to set up the NHO program in the early 2000s.Anecdotal evidence is whatever part of the elephant you touch as a blind man, Kippen said. You could get misled.Polo, a Porsche and a Private JetOne set of expenditures that caught the eye of federal investigators and SBA officials was Dawsons investment in polo.Polo was a decadeslong obsession for Dawson and one that he connected to his Native Hawaiian heritage. He was fond of talking about polos arrival in the islands during the 1880s when British naval officers challenged local residents to a match while King Kalakaua still reigned over the kingdom. But he also tied it back to the islands paniolo, or cowboy, culture that itself was imported to the islands from Mexico in the 1800s.A promotional image of Dawson from the Hawaii Polo Life Instagram account Screenshot by ProPublicaHe boasted on various websites, including his own, about his growing stature in the sport and how it benefitted Native Hawaiians. As one site declared: Chris is dedicated to supporting the Native Hawaiian community through philanthropy, his business enterprises, and his work to teach Hawaiian history and culture through the lens of polo.Some of Dawsons spending on polo began around 2015 when SBA records show he started diverting $1.6 million into Anuenue Farms Hawaii, his oceanfront polo training and horse riding stable on the North Shore. The SBA said internal accounting records showed he often would label these transfers as payments for marketing and branding.By 2019, budget documents show, he started paying Hawaii Polo Life $25,000 a month as a subcontractor to the Hawaiian Native Corp. The money was paid through one of Dawsons personal businesses that federal prosecutors later described as a shell company that did not provide any goods or services to the nonprofit or its subsidiaries. Around the same time, Dawson was hosting swanky polo tournaments in the islands and sponsoring some of the top polo players in the world, including a womens team that would go on to win multiple national championships.Eventually he would partner with Argentinian polo star Adolfo Cambiaso, one of the greatest to ever play the game, to start the horse breeding operation in Argentina where he planned to clone some of the sports top specimens.Court records show that the DOJ considered Dawsons investments in polo, and in particular his purchase of a six-bedroom Florida estate next to the national polo grounds, to be indications he had shortcharged Native Hawaiians because financial records obtained by prosecutors showed that he purchased the home using $1.3 million he took from one of his 8(a) companies.A Department of Justice document compared the intended process for the Small Business Administrations 8(a) program to the practices they say Dawson used, showing that he diverted funds for personal use. Diverted funds circled by ProPublica. Obtained by Honolulu Civil Beat and ProPublicaFrom 2015 to 2020, Dawsons company saw its annual revenue from federal contracts grow from $72 million to more than $200 million. By 2019, Dawson was paying himself a $946,500 salary, according to the SBAs letter. The agency called the salaries Dawson paid himself during that period exorbitant. It found he had also set aside $2.3 million over three years to pay his credit cards.Dawson and other executives had allegedly used shell companies and hollow invoices to line their own pockets, according to the DOJs asset forfeiture case. One of these shell companies, prosecutors said, siphoned off over $17 million between 2015 and 2021 nearly double the amount given to the Hawaiian Native Corp. for the benefit of Native Hawaiians.In short, prosecutors wrote, the investigation revealed Mr. Dawson and his associates abused the SBA 8(a) program to perpetuate a fraud scheme and embezzlement that victimized HNC and Native Hawaiians.Dawsons criminal defense attorney, Michael Purpura, said in a statement to Civil Beat and ProPublica that Dawson and his companies had for years filed detailed financial statements with the agency and relied on the advice of fully informed accountants and attorneys at all times and on all issues related to the SBA 8(a) program.A police record included a photograph of a set of polo mallets in one of Dawsons cars. Obtained by Honolulu Civil Beat and ProPublicaThe Dawson familys historic villa, photographed after Chris Dawson was found dead Obtained by Honolulu Civil Beat and ProPublicaBlowing the Whistle on Phantom WorkYears before the DOJ investigators raided Dawsons company, two of his employees witnessed similar behavior and filed federal lawsuits detailing their concerns.Eugene Sellers worked for Dawson for four years between 2014 and 2018 and said he was invited to attend one of his polo exhibitions in the islands. While he heard the Hawaiian Word of the Day on the local radio and participated in the annual day of service named after Dawsons mother, Sellers didnt see much in terms of meaningful investment in the Native Hawaiian community, such as the purchase of ancestral lands or paying for housing.Its like the old commercial, Sellers said in an interview. Wheres the beef?In 2018, Sellers filed a federal whistleblower lawsuit that foreshadowed many of the accusations contained in the DOJs asset forfeiture case. His complaint detailed how side companies were used to bill for phantom work to get around SBA limits on excessive withdrawals, including for salaries. There were suspicious expenditures, too, he alleged, including season tickets to Dallas Cowboy football games and courtside seats for the San Antonio Spurs.His complaint also pointed to an unexplained payment of $500,000 to a Texas-based company managed by Dawson and two other high-ranking executives. To Sellers, a retired fraud investigator for the Air Force, that payment was a red flag for an illegal disbursement, the lawsuit stated, because it was a round number and it was going to a side company owned by insiders.Among the executives referenced in Sellers complaint were Hawaiian Native Corp. chief financial officer Bryan Hara and Billy Cress, the DAWSON president and chief operating officer. Both would eventually be accused by the DOJ in court records of working with Dawson to divert money away from Hawaiian Native Corp. and DAWSON companies.Tommy Otake, a Honolulu-based criminal defense attorney representing Hara, declined to comment on the allegations Sellers made in his civil suit and did not reply to requests for comment on the DOJ allegations. Cress did not respond to phone calls and emails. Neither Cress nor Hara have been charged with any crimes. In a statement to Civil Beat and ProPublica, the Hawaiian Native Corp. and DAWSON companies denied Sellers allegations.Shortly after filing his lawsuit, Sellers met with federal investigators in San Diego, including representatives from the DOJ and SBA office of inspector general, but said in an interview that nothing ever came of that meeting. The DOJ and SBA inspector generals office declined to comment.Three years later, another senior executive at one of Dawsons 8(a) companies filed a lawsuit, alleging he was fired after discovering irregularities in the companys finances.Lyan DeSouza alleged that subcontracting firms owned by Dawson executives were getting paid for management and consulting services that didnt exist, leading DeSouza to believe Dawson was defrauding the Federal Government.DeSouza also said in his complaint that Hara, the chief financial officer, was withdrawing large sums of money and writing them off as personal loans to Mr. Dawson. When DeSouza raised these concerns, the complaint states, he was fired. The company denied the allegations and Haras attorney declined to comment.Both suits ended in confidential settlement agreements in 2020 and 2023.By 2022, SBA officials proposed reforms that would have required a set percentage of company revenues to be used as cash contributions to Indigenous communities. The SBA also considered whether tribes, Alaska Native corporations and NHOs should be penalized if they didnt make good faith efforts to follow through on their promises to help their people.The proposal, the agency explained, came in response to an observation that not all entities appear to be allocating an appropriate share of their 8(a) receipts to the communities they serve.Dawson and other NHO leaders, including his sister Lani Dawson Arena, who was the president of the Native Hawaiian Organization Association, testified that the one-size-fits-all approach would hurt businesses with small margins that might not be able to afford the giveback percentages the SBA put in place.They were part of a chorus of opposition that ultimately helped sink the proposal.Raymond Jardine, a Native Hawaiian contractor who relied on SBA contracting privileges, was among the few who hoped for more oversight. Like others, he saw the high potential for misuse of the NHO program. He had also seen for himself Dawsons sumptuous spending, particularly on polo, and was worried Dawson might be taking advantage of the SBAs loose rules and lax oversight.So when he heard in 2023 that federal investigators were sniffing around Dawsons companies and talking to current and former employees, he decided to call Dawson directly.Despite rumors going around the islands, he tried to assure me that nothing really was going on and that my information was not accurate, Jardine said. I told him, Chris, the coconut wireless is rarely wrong.Corruption a Fact of LifeOnce federal agents walked through the door, the Hawaiian Native Corp. and DAWSON company officials moved quickly to salvage their contracting privileges.Dawson and his family were removed from their positions within the Hawaiian Native Corp., according to a joint statement to ProPublica and Civil Beat from the nonprofit and its companies. Dawsons sister Donne Dawson, and his mother, Beadie Dawson, who served with him on the Hawaiian Native Corp. board of directors, did not return multiple calls seeking comment.The Hawaiian Native Corp. board of directors was reconstituted to include Andy Winer, a Washington lobbyist who was previously chief of staff to Hawaii U.S. Sen. Brian Schatz, the top Democrat on the Indian Affairs Committee. And the companies have hired a forensic accountant to the leadership team to make sure theyre adhering to SBA rules.You cant manage toward the 1% of the bad actors.John Shoraka, a former associate administrator for the Small Business AdministrationIn addition, the Hawaiian Native Corp. has vowed to be more transparent. For the first time, it posted a detailed report on its website showing how much it gave back to Native Hawaiians. The report shows that in 2024 it provided $3.8 million to various Native Hawaiian causes, including canoe paddling clubs, a language immersion center and a group promoting the preservation of lua, a Native Hawaiian martial art.In a joint statement, nonprofit and company officials said they plan to continue to do so even though the SBA regulations on impact reporting do not require public posting.They are also working to liquidate assets that Dawson owned so that the proceeds can be properly directed in accordance with SBA 8(a) regulations.Rather than cut the Hawaiian Native Corp. and DAWSON companies out of the program, the SBA entered into an administrative agreement that company officials said includes enhanced mandates, although neither side provided specifics.At the same time, the companies have continued to win large, no-bid contracts, including immediately following the raid, to help clean up toxic debris from the Lahaina wildfire burn site on Maui.Although current agency officials have declined to discuss Dawsons case, John Shoraka, who oversaw the 8(a) program during the Obama administration, said the SBA is not built to catch everyone who is cheating the system and that fraud, waste and abuse in government contracting is a fact of life.You cant manage toward the 1% of the bad actors, he said. He also pointed to high case loads and short staffing, which he said can turn oversight into an exercise of checking the box.While the Trump administration has vowed to audit the program, it has not yet announced any results or proposed reforms.The post He Spent Funds Meant for Native Hawaiians on Polo and Porsches. The Federal Government Failed to Stop Him. appeared first on ProPublica.
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