New – Commission Releases Update To Candidate Filing System Expenditure and Unpaid Expenditure Schedules

Posted on Jun 30, 2014 in Main

Effective July 3, 2014, candidate committees will have a new field to complete concerning campaign expenditures in the Candidate Filing System (“CFS”).   The new “Authorized” drop-down is a required field in the CFS that must be completed for any new expenditures or unpaid expenditures entered on Schedule B or Schedule E from the time of the updated release at 8:00 am on July 3, 2014.  Any expenditure or unpaid expenditure entries entered on Schedule B or Schedule E prior to this updated release will not require the completion of this new field.  However, completion of this new field will be required for any new expenditures or unpaid expenditures entered as part of an amended filing. 

This modification is meant to track the campaign finance law which provides that candidates may use campaign funds for one of eight authorized uses:  (1) Directly Related to Candidate’s Campaign; (2) Charitable Donations; (3) Public School or Public Library Donations; (4) Full-Time Student Scholarship Awards; (5) Two (2) Fundraiser Tickets; (6) Political Party Contributions; and (7) Ordinary and Necessary Expenses as an Office Holder; and (8) Mixed Benefit Expenses.  See, HRS §11-381.

In an effort to provide further information on the nuances of these permissible expenses, please be aware of the following:

(1) Directly Related to Candidate’s Campaign – These are expenses for purposes directly related to your campaign and include, but are not limited to these typical expenditures:

o   Advertisements
o   Banners & signs
o   Brochures
o   Food for volunteer signholders
o   Newsletters, reports, surveys, polls
o   Office rent & utilities for campaign headquarters
o   Legal expenses related to your campaign (including Commission fines)
o   Airfare & hotel accommodation (e.g., running in a canoe district requiring you to travel between islands to campaign)
o   Attending state & county political conventions (i.e., travel, meals, registration, but not clothing & entertainment expenses)
o   Reasonable expenses of a “mahalo party”
o   Food, beverage, & entertainment expenses incurred at a fundraising event or other campaign activity
o   Durable assets (e.g., computer, software, printer, cell phone)

(2) Charitable Donations – Donations are limited to up to twice the contribution limit of your office in an election period (i.e., $4,000, $8,000, or $12,000).  However, your committee is prohibited from making charitable donations from the date your candidate filed nomination papers to the date of the general election.

(3) Public School or Public Library Donations – Donations are limited to up to twice the contribution limit of your office in an election period (i.e., $4,000, $8,000, or $12,000).  There is no prohibited period for making public school or public library donations.

(4) Full-Time Student Scholarship Awards – Awards are limited to up to twice the contribution limit of your office in an election period (i.e., $4,000, $8,000, or $12,000).  However, your committee is prohibited from making full-time scholarship awards from the filing deadline for nomination papers to the date of the general election.

(5) Two (2) Fundraiser Tickets – There must actually be a fundraiser and you should receive tickets which we advise that you keep in the event that the Commission asks you to produce them in an inquiry or audit situation.

(6) Political Party Contributions – These are contributions to your party which is limited to $25,000 in any two-year election period.

(7) Ordinary and Necessary Expenses as an Office Holder – This expense is applicable only to elected officials who must ensure that these are not personal expenses or expenses that would exist irrespective of their holding office.  These expenses must be reasonable, usual, and directly related to the office.  Examples of permissible expenses include:

o   Chair in the office reception area so visitors have a place to sit
o   Costs to establish & close down a legislative office
o   Food & beverage for Opening Day & inaugural activities
o   Food & beverage for meeting constituents or office meetings that include others that are not staff members

Examples of prohibited expenses include:

o   Staff food & beverage (meals, refreshments, appreciation meals)
o   Opening Day gifts
o   Leis for other legislators
o   Airfare for staff
o   Community/business organization membership dues/fees
o   Gifts (retirement, birthday, funeral, Christmas, wedding)
o   Dry cleaning
o   Everyday wear clothing
o   Tuition & educational fees that are not directly related to the performance of duties or responsibilities
o   Dues, fees, or other expenses to a country club, health club, recreational, or exercise facility

(8) Mixed Benefit Expenses – These are expenses that provide a campaign and personal use, but you must reimburse your campaign for any personal use.  For example, if you purchase or lease a vehicle in the name of the candidate committee, you may use campaign funds to pay expenses to maintain, repair, or tow the vehicle, but you must reimburse the campaign for any personal use of the vehicle.  Therefore, we recommend that you keep a log or record on when you use the vehicle for campaign purposes and for personal purposes.

Be aware that prohibited expenditures are subject to Commission fines and reimbursement to the campaign account by the candidate using personal funds.