FY 2012-2013 Annual Report
HAWAII CAMPAIGN SPENDING COMMISSION
Fiscal Year July 1, 2012 to June 30, 2013
The Hawaii Campaign Spending Commission’s (“Commission”) mission is to maintain the integrity and transparency of the campaign finance process by enforcing the law, educating the public, administering public financing, and training campaign committees in order to encourage timely compliance. The Commission is guided by a 5-year Strategic Plan to assist the organization in shaping its future, set longer term priorities, and to establish a framework to make decisions and allocate resources. This report discusses activities as applied to the Strategic Plan that occurred in fiscal year 2013 covering the period July 1, 2012 to June 30, 2013 as well as documents other significant events. It also includes a discussion of future considerations for fiscal year 2014.
GOAL – TO SIMPLIFY AND CLARIFY CAMPAIGN FINANCE LAWS IN ORDER TO IMPROVE IMPLEMENTATION AND COMPLIANCE.
- Propose legislation. For the 2013 Legislative Session, the Commission’s bills were H.B. 201 and its companion bill S.B. 555. The Senate Judiciary and Labor Committee extracted portions of H.B. 201 and introduced S.B. 30 and S.B. 31 which were subsequently enacted (see discussion below). The remaining provisions in H.B. 201 which did not pass included a definition of “matching payment period” that is relevant to the partial public financing program and a requirement that candidate committees file the January 31st Supplemental Report regardless of whether it is after an election year. Although the House passed H.B. 201, the Senate Judiciary and Labor Committee declined to hear H.B. 201 and its companion bill S.B. 555.
The Commission will seek to adopt the definition of “matching payment period” through the administrative rule making process, and the Commission will again seek the Legislature to amend Hawaii Revised Statutes (“HRS”) §11-334 to ensure that candidate committees, along with noncandidate committees, file the January 31st Supplemental Report each and every year.
- Other legislation of significance that the Commission provided written and oral testimony and/or tracked included the following:
Act 63, SLH 2013 (S.B. 30) – Act 63 affects the partial public financing program by amending HRS §11-423(b) to require candidates to file the affidavit to voluntarily abide by statutory expenditure limits no later than the time to file nomination papers. This allows the Commission to better implement the partial public financing program and achieve compliance with state election laws. Act 63 also amends the expenditure limit to permit candidates running for the office of the prosecuting attorney, along with state senators, state representatives, and county council members participating in the partial public financing program, to spend $1.40 multiplied by the number of registered voters in the voting district instead of $.20.
Act 111, SLH 2013 (S.B. 31) – Act 111 affects noncandidate committees by amending HRS §11-335 to require noncandidate committees to separate the reporting of contributions into “contributions received” and “contributions made,” and to identify the name of the candidate supported or opposed by the committee’s independent expenditures. Act 111 also amends HRS §11-336 to require noncandidate committees to file the Supplemental Report on January 31st regardless of whether it is after an election year.
Act 112, SLH 2013 (H.B. 1147) – Act 112 substantially enhances disclosure requirements pertaining to noncandidate committees and further promotes transparency in the campaign finance process based on the following provisions. (1) Adding a new section to HRS chapter 11 to require SuperPacs (that is, noncandidate committees solely making independent expenditures) to identify up to three top contributors to the SuperPac’s political advertisement in the advertisement itself. If the SuperPac cannot identify any top contributors to its advertisement, then the SuperPac must disclose its three top contributors in general. A “top contributor” is defined as a contributor who has contributed in the aggregate of $10,000 or more to the SuperPac. (2) Require committees that make independent expenditures to file a new report called the Late Expenditure Report if they have independent expenditures that aggregate more than $500 made fourteen and four calendar days prior to an election. This report must be filed with the Commission on the third calendar day prior to the election. (3) Increases the amount of information that needs to be disclosed for electioneering communications. The statement of information must identify the names and titles of the executives or board of directors who authorized the expenditure for the electioneering communication as well as the state of formation and address of the noncandidate committee, business entity, or organization that made the expenditure. If an individual made the expenditure, the individual’s occupation and employer must be disclosed. Act 112 also expands the definition of electioneering communication by adding advertisements conveyed “by electronic means” as well as amends HRS §11-391 by expanding the definition of advertisements to include advertisements conveyed “by electronic means.” (4) Requires that information contained in disclosure reports be made available to the public on the Commission’s website in a searchable database (which the Commission has completed). (5) Repeals HRS §11-332 which enacted the corporate reporting system. In Yamada v. Weaver, et. al., Civil No. CV10-0497, U.S. District Court Judge Michael Seabright held that the noncandidate committee reporting system (HRS §11-335) already includes corporations that incur expenditures exceeding $1,000 in an election period and that reporting system requires more disclosure than did the corporate reporting system. Notably, the effective date of Act 112 is November 5, 2014, the day after the 2014 general election.
Act 287, SLH 2013 (S.B. 3) – Act 287 amends HRS §13D-4 to require candidates for the Board of Trustees of the Office of Hawaiian Affairs (“OHA”) to be nominated at a primary election and elected at the general election in even-numbered years. Prior law provided for the election of board members in a special election held in conjunction with the general election.
Legislation was also proposed by others to enhance the partial public funding program and Hawaii County Council Comprehensive Public Funding Program (“HCCCPF”), but were unsuccessful.
- Draft and submit administrative rules. This action item will be addressed in fiscal year 2014.
- Advisory Opinions. Under HRS §11-315, the Commission may render written advisory opinions upon the request of any candidate, candidate committee, noncandidate committee, or other person or entity subject to campaign finance laws, as to whether the facts and circumstances of a particular case constitutes or will constitute a violation of the laws. If no advisory opinion is rendered within ninety (90) days after all information necessary to issue an opinion has been obtained, it shall be deemed that an advisory opinion was rendered and that the facts and circumstances of that particular case do not constitute a violation of the campaign finance laws. During this period, two (2) Advisory Opinions were issued.
Advisory Opinion No. 13-01 – On September 12, 2012, the Commission advised the ActRight Fund, an I.R.C. §527 organization, that Hawaii law permitted the ActRight Fund to register as a noncandidate committee to receive and distribute contributions earmarked for state and local candidates. The Commission further advised ActRight Fund that the earmarked contributions would not be subject to the $1,000 per election contribution limit applicable to noncandidate committees, but would be subject to the appropriate contribution limit of the earmarked candidate.
Advisory Opinion No. 13-02 – On February 13, 2013, the Commission advised the General Contractors Association of Hawaii (“GCA”) that it could form a noncandidate committee so long as GCA members, who are also government contractors (state or local), do not provide funds that are to be used by the GCA noncandidate committee for contributions to candidate or noncandidate committees.
GOAL – TO INCREASE PUBLIC EDUCATION, AWARENESS AND ACCESS.
- Direct the public to the Commission’s website and continue to improve web-based information. The Commission has an ongoing partnership with the State of Hawaii’s Information & Communication Services Division (“ICSD”) to improve the Commission’s website which contains three (3) statutorily required electronic filing systems for candidate committees, noncandidate committees, and corporations. For purposes of transparency, much of the Commission’s operations, business, and finances are posted online including Commissioners’ biographies, meeting agendas and minutes, newsletters, advisory opinions, Hawaii Election Campaign Fund (“HECF”) information, annual reports, campaign finance statistics, and the Strategic Plan. Information of current interest is constantly identified and posted on the Commission’s website including statute and rule changes, new legislation, reporting deadlines, enforcement issues, and contribution limits. There are also links for viewing reports, filing reports, seeking guidance including e-learning presentations, forms, guidebooks, and qualifying for public funding. Presentations concerning candidate committees, partial public financing, and noncandidate committees were updated and recorded in 2010 as e-learning videos which were then posted online and thus available 24/7. Based on the results of our annual online survey, we understand that our website continues to be our strongest resource in providing stakeholders and interested parties with campaign finance information. As such, we revamped our website and relaunched it on May 9, 2013 to create a more efficient and user friendly navigation tool which includes a searchable database of all the campaign finance data filed by committees. This was done at zero cost to the Commission.
- Disseminate to the public information on contributions, expenditures, and other pertinent topics of interest. During this period, working with ICSD, the Commission launched a new searchable database which permits the public to more readily search data filed by the committees over the last six and a half years. By clicking on either “Candidate Committees” or “Noncandidate Committees” on the right hand side of the Commission’s website’s home page, links are available to “View Searchable Data.” By clicking on this link, anyone can search for information such as names of contributors who gave money to candidates or noncandidate committees and how much they gave, how candidates and noncandidate committees spent/expended their money, who made loans to candidates and how much the loan was for, and much more. Essentially, this database allows anyone to search any electronically filed report of candidate and noncandidate committees by any identifying element required in the reports such as names of contributors, employer, occupation, amount, expenditures, etc. The Commission is now working towards building graphics or visualization tools of this data. These projects are being done at zero cost to the Commission.
Other mechanisms to disseminate to the public information concerning campaign finance include regular posts of anything new/interesting on our website under “What’s New,” biannual newsletters, e-blasts, Facebook posts, and tweets on Twitter. New candidates, new noncandidate committees (including SuperPacs), new corporations, notice of fundraisers, notice of Commission meetings, new guidebooks or manuals, requests to take/submit our annual online survey, registering for training classes, electioneering communication statements of information, etc., are tweeted.
- Plan, organize, participate, and host trainings to inform and educate on campaign finance laws and rules. Community presentations to candidate and noncandidate committees, corporations, legislators, community groups, contractors, certified public accountants, political parties, etc., on various areas of campaign finance laws are regularly delivered when requested. In anticipation of the 2012 election, campaign finance presentations to candidates and committees were planned and delivered in July 2012 on Kauai (7/17/12), Maui (7/19/12), Honolulu (7/24/12), and Hilo (7/27/12). Other informational meetings provided during this period included meeting with general contractors and open government groups as well as meeting with the Senate Majority Caucus in January 2013. Chair/Commissioner Weaver participated as part of a panel of commissioners at the Council on Governmental Ethics Laws’ (“COGEL”) Annual Conference in December 2012. Additionally, requests to respond to media inquiries are accepted where practicable.
- Explore and implement social and other media applications to inform and educate on campaign finance laws and rules. The Commission regularly uses e-blasts as well as Facebook and Twitter accounts to inform and educate committees, interested parties, subscribers, and the public on campaign finance. We have found the e-blasts to be especially effective in sending out time sensitive information such as reporting deadline reminders and changes in the law. It also permits us to notify interested parties about registering for training classes, publication of new guidebooks, and other campaign finance information. Efforts to not overuse the email system or rather reserve it for distribution of important announcements is always a consideration. During this period, the CSC email system was employed 69 times and we have 780 subscribers. Notably, these subscribers are separated into four (4) groups – candidates (320 subscribers), noncandidate committees (185 subscribers), corporations (136 subscribers), and the public (139 subscribers), thereby permitting us to target relevant audiences with the e-blast.
Since July 2011, we have been employing social media tools such as Facebook and Twitter to leverage our capabilities to increase, enhance, and supplement our communication efforts to inform the public of important and time sensitive campaign finance information. During this fiscal year, we issued 738 tweets
Every year, we attend the PCATT IT Summit / Conference to identify and learn new ways to improve and educate committees and the general public in campaign finance. This year, this conference highlighted open data and creating data visualizations or graphics. This topic was very instructional and relevant as we consider our next steps in building out our searchable database.
- Raise public awareness and increase visibility of the Commission’s work, hold at least one Commission meeting in a neighbor island county each year. This action item will be addressed in fiscal year 2014, but raising public awareness and increasing visibility of the Commission’s work are always considerations when the Commission communicates with the public.
GOAL – INCREASE THE TECHNOLOGICAL CAPACITY TO IMPROVE ACCESS, REDUCE PAPERWORK, AND INCREASE COMPLIANCE.
- Increase the Commission’s analytical capability. During this fiscal year, Act 112, SLH 2013, passed which requires the Commission to build and maintain a searchable database to permit people to search any electronically filed report by any committee by any identifying element required in the report. Even though the effective date of Act 112 is November 5, 2014, this searchable database went live on May 9, 2013. The Commission was fortunate to have worked with ICSD to create this meaningful tool which we believe not only greatly increases our analyses capability, but also improves access to the data contained in committee reports filed in the electronic systems. Media groups have been particularly interested in the data contained in these reports, and therefore, if made available in a more user-friendly form, we hope will also encourage compliance with campaign finance laws.
- Maintain awareness of newer technology, including electronic filing systems and hardware/software or applications, for consideration of integration and/or implementation. The Commission works closely with ICSD and as a result has benefitted from their expertise and assistance in consolidating and maximizing our hardware/software applications.
The annual COGEL conference is another source from which we learn about other campaign finance systems and technology. During this period, however, there were no plans nor funding to alter our electronic filing systems.
- Maintain awareness of the implications of technological changes on all aspects of campaign finance including political contributions. The annual COGEL conference has been a great venue for the Commission to learn about technological changes or advances employed by other campaign finance offices. During this fiscal year, there were no technological changes that the Commission deemed viable for employment in Hawaii; however, we remain receptive to all new ideas.
GOAL – UPGRADE THE TRAINING FOR AND ABILITY OF THE COMMITTEES TO COMPLY WITH CAMPAIGN FINANCE LAWS.
- Explore new methods for training and disseminating information. During this period, no new methods for training and disseminating information were identified or examined. However, in the next fiscal year, the Commission will be reediting our e-learning videos and continuing their “bite-size” modules of assistance with a particular focus on electronically filing campaign finance reports. We anticipate that this will be completed sometime during the next fiscal year and will be integrated with the new manuals.
The Commission continues to work with the Office of Elections in arranging joint training presentations concerning the election process for candidates. We also provide informational packets to the Office of Elections to be given to candidates who file their nomination papers. Because this was a reapportionment year, we closely followed developments in the redistricting of districts and resulting lawsuits as to any impact to campaign finance (i.e., computation of public funding amounts). During this period, the Commission also met with County Clerks in preparation for the 2012 elections and identified areas requiring better coordination and collaboration – especially, in the area of certifying compliance with campaign finance reports of candidates who won in the 2012 election so that they were able to be timely sworn into office.
- Offer training to committees to improve compliance with campaign finance laws and rules. In an effort to prepare candidates of the numerous reporting requirements and laws regarding campaign finance, training classes were offered across the State. There were classes offered on Kauai, Maui, Hilo, and Honolulu in July 2012 with 140 registrants who attended presentations on candidate committees, noncandidate committees, and public financing. In consideration of new case law and entering into an election year, powerpoint training presentations were revised.
As early as 2007, certified public accountants were attending these trainings because they were often employed or asked to assist with treasurer duties of candidate and noncandidate committees. Accordingly, with the assistance of former Chair/Commissioner Paul Kuramoto, we were approved to provide Continuing Professional Education credits by the Board of Accountancy to certified public accountants. Seven (7) CPAS received credit from our trainings this fiscal year. Our instructor certification must be annually renewed and our current certification will expire in December 2014.
- Publish guidebooks, manuals, and e-learning videos on how to comply with campaign finance laws and rules as well as how to use the electronic filing systems. Guidebooks, manuals, and e-learning videos were available on the Commission’s website for the 2012 election. However, when the 2012 election concluded, the Commission took a look at these materials and decided to revise all of them for the 2014 election. These revisions to these mediums will be realized in fiscal year 2014.
GOAL – ENCOURAGE COMPLIANCE.
- Develop escalating penalties for repeat and gross violations, and disseminate information about the penalties. The Commission continues to find that there are some candidate and noncandidate committees who do not file their reports timely or not at all. In consideration of staff resources in getting these committees to file their reports, the Commission decided to consider other approaches to encourage compliance including filing complaints against violators, and if no compliance was obtained, filing a First Circuit Court application seeking judicial enforcement of Commission orders. During this period, twenty-nine (29) complaints were filed of which thirteen (13) were resolved which resulted in fines totaling $5,563.50, eight (8) remain outstanding, one (1) was withdrawn, three (3) were dismissed, and four (4) were no actioned.
- Simplify and expedite disposition of campaign finance violations. Representative of this strategy are conciliation agreements which are essentially settlement agreements negotiated by the staff and approved by the Commissioners in a publicly noticed meeting. In this fiscal year, there were sixty-six (66) conciliation agreements which were approved resulting in a total of $11,856.09 in administrative fines.
- Seek enforcement of the campaign finance laws and rules against violators. Most of the Commission’s enforcement actions have focused on the late or unfiled reports. However, other campaign finance violations occurring during this period include fourteen (14) advertising violations (i.e., not having the proper disclaimers displayed) resulting in a total of $425 in administrative fines, fifteen (15) excess contributions to candidate or noncandidate committees resulting in a total of $41,939.95 escheat to the HECF and $3,725 in administrative fines, prohibited donations resulting in administrative fines totaling $333.25, prohibited loans resulting in administrative fines totaling $2,500, contributions not properly reported resulting in administrative fines totaling $250, loan documents not being filed resulting in administrative fines totaling $200, late Organizational Reports being filed resulting in administrative fines totaling $100, and late notices of fundraiser being filed resulting in administrative fines totaling $50.
As for our federal lawsuit, Yamada v. Weaver, et. al., Civil No. CV10-0497 (formerly, Yamada v. Kuramoto, et. al.), it is pending 9th Circuit Court of Appeals review; however, a hearing has been set for October 9, 2013. Also, pending appellate review concerns plaintiff attorneys’ fees and costs which were substantially reduced by the district court at a hearing conducted in fiscal year 2013.
- Evaluate the effectiveness of training modules and revise them as needed.
The Commission is in the process of revising all of its training modules (i.e., guidebooks, manuals, e-learning videos, powerpoint presentations) in preparation for the 2014 election as a result of having concluded the 2012 election and identifying areas of concern.
- Evaluate the effectiveness of communication efforts and revise them as needed. Current efforts to communicate have been successful – especially, our website and the e-blasts. The Commission will continue to identify other mechanisms to communicate with multi-generational audiences and employ such tools as needed.
- Encourage compliance to call the Commission, visit the Commission’s office, and/or go to the Commission’s website for information to comply with campaign finance laws and rules. The Commission handles numerous phone calls, walk-ins, and inquiries daily. There are computers located in our office for committees to file their reports and to seek our assistance.
GOAL – INCREASE AND STABILIZE CSC’S INSTITUTIONAL CAPACITY TO CARRY OUT ITS MISSION.
- Develop proposals to stabilize funding. The Commission’s operating expenses and public financing programs are funded by the HECF which is a trust fund within the state treasury. See, HRS §11-421. Primary revenue sources for the HECF are generated from the $3 state income tax check-off, the interest generated from the principal, and any funds that escheat to the HECF pursuant to campaign finance laws. Although regular requests are made to the Comptroller to approve paystub messages to government employees to remind them of the $3 check-off on State tax returns, the number of $3 tax check-offs continues to decline. The Commission therefore remains concerned about funding. In fiscal year 2013, a total of $257,182.61 in revenue was generated and a total of $745,747.36 in expenditures/encumbrances was incurred, thereby closing fiscal year 2013 with a balance of $2,936,143.80.
As for public funding, the Commission funds and services two (2) public financing programs – partial public financing and a pilot comprehensive public funding for the Hawaii County Council which is the HCCCPF program. By law, the HCCCPF program provides for a statutory ceiling of $300,000 for all qualifying candidates during election years 2010, 2012, and 2014 if the fund has at least $3.5 million as of September 1st of the year prior to the election. See, Act 244, SLH 2008, Section 12. Because the balance of the HECF is below $3.5 million, the HCCCPF program will not be available for the 2014 election. The Commission continues to emphasize in legislative testimony and in meetings with legislators that, unlike Hawaii, the Arizona, Maine, and Connecticut clean election programs all have substantial revenue for their programs coming primarily from sources other than the state tax check-off.
In consideration of the HECF’s declining balance, the Commission must develop strategies to address the depletion of its funds.
- Plan for potential staff transitions and ensure position descriptions are current. All Commission staff position descriptions were revised and approved by DAGS in July 2013. The revised position descriptions more accurately account for job duties and responsibilities. They will be instrumental when staff evaluations occur in late 2013 and provide the basis for which evaluation forms were developed. Commission staff continue to build binders to document their duties and responsibilities as well as the steps necessary to carry out their duties and responsibilities. It is expected that as processes and procedures are added, revised, or eliminated, that the binders will be amended accordingly.
- Continue Commissioner development through trainings and conferences as well as issuing a Commissioner handbook and orientation of new Commissioners. With respect to trainings, two (2) trainings were arranged and commissioners from the State Ethics Commission and Honolulu Ethics Commission were invited to attend. The first training occurred in January 2013 and was from the Office of Information Practices (“OIP”) to familiarize Commissioners with the Sunshine law that governs state/county boards and commissions conducting public meetings. The second training occurred in April 2013 and was from Senior Hearings Officer David Karlen with the Department of Commerce and Consumer Affairs to train Commissioners on conducting contested case hearings and familiarize them with the administrative agency appeals process.
Commissioners are also regularly updated on any new or developing issues (e.g., court cases, public financing concerns, tax laws, etc.) and provided information from annual COGEL conferences. This year’s COGEL conference was held in Columbus, Ohio, in December 2012 and was attended by Mike Weaver and G. William (“Bill”) Snipes. Mike Weaver sat on a panel of Commissioners in one of the workshops to discuss Commissioner roles and working with staff and executive directors.
As for the Commissioner handbook, it was developed in fiscal year 2008 and is reviewed and updated as needed (the latest update occurred in May 2013). The handbook is given to new Commissioners along with an orientation. In this fiscal year, two (2) orientations occurred in November 2012 and June 2013 for three (3) new Commissioners (i.e., Eldon Ching, Gregory Shoda, and Adrienne Yoshihara).
SIGNIFICANT EVENTS IN FISCAL YEAR 2013
Approval of 2013-2018 Strategic Plan & New Mission Statement. With the assistance of Director Elizabeth Kent, Center for Alternative Dispute Resolution, State of Hawaii, the Commission entered into a series of public meetings and discussions to develop and approve its next 5-year strategic plan for 2013-2018 Strategic Plan and issued a new Mission Statement. On May 8, 2013, the Commission approved its 2013-2018 Strategic Plan and revised its Mission Statement. This process occurred at no cost to the Commission.
New Website. The Commission revamped its website to create a more efficient and user friendly navigation tool which includes a searchable database of all the campaign finance data filed by committees at no cost to the Commission.
New Searchable Database. On the Commission’s website, anyone can now more readily search all electronic data filed by the committees over the last six and a half years. This database was created at no cost to the Commission.
New Commissioners. At the commencement of this fiscal year, Commissioner Dean Robb’s term expired and Commissioner Mara Miller resigned in August 2012. Two (2) new Commissioners, Eldon M. Ching and Gregory M. Shoda, were appointed to serve until June 30, 2016. At the end of this fiscal year, Commissioner Michael Weaver’s term expired and Commissioner Adrienne Yoshihara was appointed to serve until June 30, 2017.
Supplemental Time-Off Without Pay (“STOWOP”). Effective June 30, 2013, STOWOP concluded.
Revised Position Descriptions and Evaluation Forms of CSC Personnel. Commission staff have revised position descriptions which were approved by DAGS and new evaluation forms.
2nd Annual Online Survey. In July 2013, the Commission invited registered committees, corporations, and email subscribers to participate in an online survey to help the Commission evaluate and improve the effectiveness of operations and communications. The survey was divided into five areas: 1) general background information of the survey taker; 2) communication with or access to the Commission; 3) education and training provided by the Commission; 4) public funding; and 5) questions related to the Hawaii Election Campaign Fund, independent expenditures, and a general comment question. The Commission was very pleased with the responses and plans to use them to improve efforts to better serve electronic filers and the public. The survey results are posted on the Commission’s website.
FUTURE CONSIDERATIONS FOR FISCAL YEAR 2014
Hawaii Election Campaign Fund. It is essential that the Commission continues to examine other campaign finance systems to identify revenue streams to sustain operations and programs. This will be a difficult challenge in consideration of our State’s economic situation, and therefore, strategies will be presented and discussed.
Amendments to HAR. Revisions and updates to our Hawaii Administrative Rules will be undertaken.
2014 Elections. The offices for Governor, Lieutenant Governor, Maui Mayor, and Kauai Mayor are among the larger races set to occur in fall 2014.
Hawaii County Council Comprehensive Public Funding Program (Act 244, SLH 2008) – Insufficient Funds for the 2014 Election. Pursuant to Act 244, SLH 2008, the Hawaii Election Campaign Fund has insufficient funds to provide comprehensive public funding to Hawaii County Council candidates in the 2014 election. Hawaii County Council candidates may however seek partial public funding.
Data Visualization/Graphics. Efforts to move our searchable database towards more user friendly tools will be explored.