Eva Laird-Smith, the executive director of the State Foundation on Culture and the Arts is to step down at the end of the year.
She left on a previously scheduled vacation Wednesday night after a contentious meeting that called her leadership into question.
"We all agreed that the resignation was in the best interest of the state foundation," said foundation chairwoman Barbara Saromines-Ganne.
The digitally manipulated and cropped image used to promote Fashion Month is what triggered the firestorm.
It happened to be an image of revered hula dancer Iolani Luahine that outraged the native Hawaiian community.
"Do you understand that she is cultural icon, that she is adored by us. Do the values of the Hawaiian community matter to you at all, at all?" said Annelle Amaral of the Association of Hawaiian Civic Clubs.
The original copyrighted photo was taken by photographer Frances Haar.
His son recognized the image and wrote to the foundation that it was being used without permission.
The foundation says to its horror, realized the altered image was used on coffee mugs. t-shirts and tote bags to raise money for the agency.
"You have an electronic document here and for all we know this document could be in Japan, and other images are of Luahine without a head and hands and are now being produced and you now have no control over this," said Amaral.
That spurred a call for action by a University of Hawaii law professor who was speaking at a digital summit in Waikiki about the care of art in the digital age.
“The new director has to come in with a progressive platform for the rights of indigenous people and the rights of intellectual property This is a new age and we have to respond to it," Conway–Jones said.
Conway-Jones says this art flap over the commercialism of the image used for Fashion Month goes right to the issue--sadly it involved the very agency that is supposed to be the watchdog of artists.
"If the exact office that was supposed to protect these type of interests will not do the due diligence themselves, then how do we expect the public to?" said Danielle Conway-Jones.
"This was a horrible mistake. I don't know what else to say," said Saromines-Ganne.
The chairwoman said the merchandise that was branded with the altered image was destroyed. Any money that was raised before the items were taken off the shelves will be given to the Haar family.