Campaign Spending Commission

CSC Newsletter – January 2016, Vol. 22, No. 1

REMINDER TO FILE THE SUPPLEMENTAL REPORT

The next report for all committees is the Supplemental Report covering the period July 1, 2015 to December 31, 2015. This report must be electronically filed on your respective filing systems (i.e., candidate filing system (CFS) or noncandidate committee filing system (NCFS)) no later than 11:59 p.m. Hawaiian standard time on February 1, 2016.

Failure to file this report by the deadline may result in a fine and, if you are a candidate committee, your committee’s name will be posted on the Commission website under “Committees That Failed to File or Correct a Report.” Moreover, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting. Be advised that at this meeting it is very possible that a higher fine may be assessed. Therefore, we encourage all committees to timely file their reports to avoid having to pay any fines.

As a reminder, the reporting period for the Supplemental Report ended on December 31^st so the report can be filed as early as January 1st but no later than February 1^st. Committees do not have to wait until the February 1^st deadline to file this report.

YAMADA & A-1 A-LECTRICIAN, INC. V. SHODA, ET AL.

On December 1, 2015, the U.S. Supreme Court denied certiorari on Plaintiffs’ appeal of the May 20, 2015 Ninth Circuit Court of Appeals decision. This means that the U.S. District Court for the District of Hawaii’s decision, which had rejected a comprehensive challenge to Hawaii’s campaign finance law, was upheld by the appellate courts. The lower court had ruled that (1) the definitions of “noncandidate committee,” “expenditure,” and “advertisement” are not unconstitutionally vague or overbroad, (2) the noncandidate committee disclosure requirements are constitutional under the First Amendment, (3) the noncandidate committee disclosure requirements may be applied to organizations that do not have political activity as their primary or only purpose, (4) the disclaimer requirement for advertisements is constitutional, (5) the electrical contractor plaintiff did not have standing to challenge the electioneering communication’s registration requirements because by administrative rule, the contractor, as a noncandidate committee, was not required to comply with the requirements, and (6) the ban on government contractors’ contribution contained in HRS §11-355 is constitutionally permissible.

View the case here – Yamada, et al. v. Shoda, et al.

NEW LAWS IN EFFECT

For the 2015 Legislative Session, three bills were signed into law by Governor David Ige. They are:

o Act 79 (SB 508) – Effective July 1, 2015, HRS §11-336(a) was amended to require noncandidate committees to file an additional preliminary report on October 1 of the year of a general election. This report will be called the 1st Preliminary General Report.

o Act 78 (SB 654) – Effective January 1, 2016, HRS §11-353(d), relating to the prohibition of anonymous contributions, was amended to reduce the threshold amount on the calabash bowl exception from less than $500 to less than $100 from 10 or more persons at the same political function.

o Act 209 (HB 1491) – Effective January 1, 2016, HRS §11-323(a), HRS §11-335(b), and HRS §11-338(b) were amended to require additional reporting by noncandidate committees solely making independent expenditures (i.e., Super PACs) for contributions aggregating more than $10,000 on their disclosure reports and greater than $5,000 on their late contribution reports from contributing entities that are not individuals, for-profit business entities or labor unions. This bill requires independent expenditure committees to report the internet address where a contributing entity’s disclosure report can be publicly accessed if the contributing entity is subject to any state or federal disclosure reporting requirements regarding the source of the contributing entity’s funds or coordinate with the contributing entity in providing a list to the Commission containing the name, address, occupation, and employer of each funding source that contributed $100 or more in the aggregate in an election period to that contributing entity if the contributing entity’s disclosure report is not publicly accessible on the internet.

Notably, this is the fourth year that the Commission has unsuccessfully attempted to amend HRS §11-334(a)(4) to require candidate committees to file supplemental reports on January 31^st regardless of whether it is an election year. This comports with present practice as well as conforms with the reporting requirements of noncandidate committees.

PROPOSED LEGISLATION FOR THE 2016 LEGISLATIVE SESSION

For the 2016 legislative session, the Commission has submitted four measures to the President of the Senate and the Speaker of the House for introduction.

Proposal CSC-01 (HB 1553) seeks to amend Hawaii Revised Statutes (“HRS”) § 11-334 by clarifying the language pertaining to the due dates of disclosure reports for candidates. The proposed amendment also will make clear that candidates must file the Supplemental Report due January 31 every year and not just “after an election year.” The same amendment was made in 2013 to HRS §11-336 concerning the filing of the Supplemental Report on January 31 by noncandidate committees.
Proposal CSC-02 (HB 1552) seeks to amend HRS §11-340(c) to include the new 1st Preliminary General Report due October 1 of the year of a general election in the schedule of fines for noncandidate committees.

Proposal CSC-03 (HB 1551) seeks to amend HRS §11-363 by placing the treatment of the republication of a candidate’s campaign material by entities other than a candidate committee in a separate subsection and to add four allowable uses of a candidate’s campaign material.

Proposal CSC-04 (HB 1550) seeks to amend HRS §11-410 by raising the amount of the fine that can be assessed against a person other than an individual from $1,000 to $5,000 and to permit for the fine to be up to three times the amount of the unlawful contribution or expenditure. It also seeks to allow the Commission to recover its costs (e.g., investigative services) when pursuing violations of the law.

REPORTING SCHEDULES

The new reporting schedules have been posted on our website and are provided via the link below for your convenience to track upcoming reporting deadlines:

These reports must be electronically filed on your respective filing systems (CFS and NCFS) no later than 11:59 p.m. Hawaiian standard time on the day of the deadline. Failure to file any of these reports by the deadline may result in a fine and, if you are a candidate committee, posting of your committee’s name on the Commission website under “Committees That Failed to File or Correct a Report.” Moreover, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting. Be advised that at this meeting it is very possible that a higher fine may be assessed. Therefore, we encourage all committees to timely file their reports and pay any fines. As a reminder, the reporting deadline is always a few days or weeks after the reporting period is over so you can always file the report early to avoid any penalties.

We recommend that you add these reports now to your schedule in the CFS/NCFS.

VIOLATIONS OF THE CAMPAIGN FINANCE LAWS

The following candidate and noncandidate committees violated the Hawaii campaign finance laws and have failed to comply with the Commission’s orders by refusing to file required disclosure reports and/or pay assessed fines. Pursuant to HRS §11-410(d), we will be pursuing court enforcement up to and including contempt orders with the assistance from the Attorney General’s Office. Furthermore, pursuant to HRS §11-156, a candidate who has unfiled disclosure reports or unpaid fines will not receive a certificate of election should that candidate win in a subsequent election.

CANDIDATE COMMITTEES

Richard Fale
Larry Gering
Creighton Higa
Henry Kahula, Jr.
Curtis Lake
Noralyn Pajimola
Hanalei Aipolani
Faye Hanohano
Leslie McKeague-Gomes
Christy Ann Gusman

NONCANDIDATE COMMITTEES

Change Hawaii
Protect Our Keiki
Save Ewa Beach
West Oahu 2010
Learning Matters

REMINDERS & TIPS IF YOU ARE RUNNING IN THE 2016 ELECTION

As February 1, 2016 marks the opening day of filing nomination papers for the 2016 election, we offer the following reminders and tips to all candidates and their committees. Of course, this is not a conclusive list so for more information please call us at (808) 586-0285, stop by our office at 235 South Beretania Street, Room 300, or visit our website. Good luck to all of you as we enter the 2016 election season!

Make sure all your candidate committee’s contact information on the Organizational Report is updated and correct in the event that the Commission needs to contact you. If not, please update this information and file an amended Organizational Report. By law, any change in information previously reported in the Organizational Report must be electronically filed with the Commission within ten days of the change being brought to the attention of the committee chairperson or treasurer.
Once you file nomination papers until the date of the general election, candidate committees are prohibited from making charitable donations with campaign funds.
From the nomination paper deadline until the general election, candidate committees are prohibited from using campaign funds to award scholarships to full-time students attending an institution of higher learning or a vocational education school.
If your committee’s aggregate contributions and aggregate expenditures for the election period will total $1,000 or less, remember to check off the box on the “CC Electronic Filing Form” and file the form with the Commission. Pursuant to HRS §11-339, you need only electronically file the Final Election Period Report. If you exceed the $1,000 limit, you will then be required to electronically file all the other required reports.
When you electronically file your reports with the Commission, candidates and treasurers are certifying that the information contained in the filed reports are true, complete, and accurate. Therefore, it is strongly advised that you verify your reports before you file them since the Commission will rely on the electronically filed information which could generate an inquiry/investigation.
Be sure to check your [reporting schedule] and add the necessary reports to your schedule in the Candidate Filing System. You may also want to consider filing the reports early to avoid penalties because the reporting deadline is always a few days or weeks after the reporting period has closed.
Remember if you use campaign funds to purchase 2 tickets to another candidate’s fundraiser that you retain the tickets for your records.
Remember to file the “Affidavit to Voluntarily Agree with Campaign Expenditure Limits” form for a reduced filing fee and to be eligible for partial public funding. The deadline to file this form is the date you file your nomination papers.
If you are interested in participating in the partial public funding program, please remember to file the “Statement of Intent to Seek Public Funds” form. The form must be filed before contributions can be considered qualifying contributions, which can occur as early as January 1, 2016, for the purpose of receiving matching public funds. There is no specific deadline for filing the Statement.
Be on the lookout for upcoming training announcements. In the meantime, check out the various tools available on our website (i.e., cyber videos, guidebooks, & manuals).
If you are a new committee, consider setting up an appointment with the Commission if you have questions.

NEW “AUTHORIZED USE EXPLANATIONS” LINK IN THE CANDIDATE FILING SYSTEM TO ASSIST WITH EXPENDITURE ENTRIES ON SCHEDULES B & E

The Commission has added a new link on Schedule B – Expenditures Made and Schedule E – Unpaid Expenditure which is entitled “Authorized Use Explanations.” Clicking this link will direct you to a reminder and explanation regarding the eight statutorily authorized uses of campaign funds for candidate committees (i.e., Directly Related to Candidate’s Campaign, Charitable Donations, Public School or Public Library Donations, Full-Time Student Scholarship Awards, Two Fundraiser Tickets, Political Party Contributions, Ordinary and Necessary Expenses as an Office Holder, and Mixed Benefit Expenses).

The Commission would also like to remind office holders of Advisory Opinion 10-01 which addresses permissible “ordinary and necessary expenses incurred in connection with the candidate’s duties as a holder of an elected state or county office.”

NEW eSIGN FORMS

In addition to hard copy and writable PDF forms which must be completed, printed, signed, and mailed or delivered to the Commission, the Commission will soon be offering eSign forms for committees to use as an additional and alternative way to submit forms for the 2016 election.

For candidate committees, eSign will be offered for the following forms: (1) Electronic Filing Form; (2) Executed Loan Document; (3) Notice of Intent to Hold a Fundraiser; (4) Request for Termination of Registration; and (5) Public Funding – Statement of Intent to Seek Public Funds.

For noncandidate committees, eSign will be offered for the following forms: (1) Electronic Filing Form; (2) Notice of Intent to Hold a Fundraiser; and (3) Request for Termination of Registration.

eSign forms must be completed, esigned, and emailed to [email protected]. Forms requiring multiple signatures (i.e., Electronic Filing Form and Executed Loan Document) must be completed, esigned, and emailed separately by each person required to sign the form. The Commission will not process a multiple signature form until the form is complete with all the required signatures and will leave it to the committee to ensure that a proper and complete form has been submitted.

The Commission will eblast all registered candidate and noncandidate committees when eSign becomes operational, and post an announcement on our website, Facebook and Twitter.

2016 STANDARD MILEAGE RATE ANNOUNCED BY INTERNAL REVENUE SERVICE (IRS)

For those committees that seek reimbursement from campaign funds for the campaign related use of a personal vehicle, the federal standard mileage rate for 2016 is 54 cents per mile (which is less than last year). See IRS Notice 2016-01 which was adopted by Comptroller’s Memorandum No. 2015-27. The Commission reminds these committees that a daily mileage log noting the campaign use and personal use of the personal vehicle satisfies recordkeeping requirements of Hawaii Administrative Rules §3-160-23. See Hawaii Administrative Rules §3-160-45(b)(1)(B).

RUNNING IN THE 2016 ELECTION? TAKE A LOOK AT YOUR COMMITTEE DATA (OR YOUR OPPONENT’S COMMITTEE DATA) IN A VISUAL REPRESENTATION

Did you know that the Commission has transformed committee data into searchable data and visual graphics? In colorful visuals, you will see pie charts, geo maps, and bar graphs of candidate committee and noncandidate committee data entered into our system.

If you are a candidate who ran in the last election, you may want to see how your committee performed with regard to monies raised and spent. You may want to compare this data with your opponent or see how other candidates did in other districts or races. If you are thinking about running in the next election, you may want to look at the candidate’s data who won in your district. Click here to view their data in visual graphics.

You might also be interested in seeing noncandidate committees, Super PACS, and ballot issue committee data. Of interest might be what races they got involved in, which candidates they supported (or opposed), who gave them money, or how they spent their money. Click here to view their data in visual graphics.

NOT RUNNING IN THE 2016 ELECTION? CONSIDER TERMINATING YOUR COMMITTEE REGISTRATION WITH THE COMMISSION

If you are a candidate who does not anticipate running in a future State or county election, or you are a noncandidate committee that does not intend to participate in future State or county elections, and your committee has no surplus in campaign funds or deficit, you may want to consider terminating your registration with the Commission. If so, you will need to complete and submit the following documents: (1) A completed and signed “CC Request for Termination of Registration” or “NCC Request for Termination of Registration” form; and (2) A closing bank statement verifying that your committee’s bank account(s) have been closed. Further, you must not have any outstanding fines or unresolved matters with the Commission. Assuming everything is in order, the Commission will approve your termination request and you will no longer be required to electronically file reports with the Commission.

STATUS OF THE HAWAII ELECTION CAMPAIGN FUND AND REMINDER TO CHECK OFF $3 ON YOUR 2015 TAX RETURN

As many of you know, the Commission operates from a trust fund called the Hawaii Election Campaign Fund. However, you may not know that in addition to providing public funding to qualified candidates, this fund pays for operations such as staff salaries, investigative services, expenses for subpoenas and process servers, training, and office supplies.

For the past nine fiscal years (FY 2007-FY 2016), the Commission has been operating at a net deficit and the fund has not been generating enough revenue to sustain operations. The health and sustainability of this Commission depends on greater participation of Hawaii taxpayers in checking off the $3 “yes” box which permits $3 from state funds (or $6 if married and filing a joint return) to be allocated to the Hawaii Election Campaign Fund. Checking off this box does not increase your tax or reduce your refund.

Common Cause–Hawaii has piloted the following campaign that asks Hawaii taxpayers to mark the $3 tax check-off on their 2016 state income tax return so that the Commission can continue to “follow the money” of state and county elected officials, candidates, noncandidate committees, ballot issue committees, and Super PACs.

Choose “Yes” for the Hawaii Election Campaign Fund on your state income tax return.

By marking the $3 “Yes” checkbox for the Hawaii Election Campaign Fund, you support the work of the Hawaii Campaign Spending Commission. The Commission serves Hawaii voters by helping to ensure that:

political candidates’ donations and how candidates spend these donations are lawful and transparent.
more qualified candidates have an opportunity to run for office

Choose “Yes” on your tax return.

It does NOT reduce the amount of your refund or increase the amount of your tax payment.

REVISING THE COMMISSION’S HAWAII ADMINISTRATIVE RULES

The Commission is proposing amendments to Chapter 3-160 (Election Campaign Contributions and Expenditures) and Chapter 3-161 (Administrative Practice and Procedures Before the Commission) of the Hawaii Administrative Rules. The proposed amendments for the most part updates obsolete references to the HRS and makes technical and grammatical corrections. It also proposes a hardship waiver in a new section that implements section 2 of Act 112, Haw. Sess. Laws 2013, which requires Super PACs to identify its top contributors in their advertisements.

RESULTS OF THE COMMISSION’S 2015 ONLINE SURVEY

Mahalo to everyone who responded to our 2015 Online Survey. View the 2015 Survey Results and the Report on 2015 Annual Online Survey in the minutes of the Commission’s monthly meeting held on November 18, 2015.

2016 MEETING SCHEDULE

Commission meetings for 2016 are scheduled for the 2nd Wednesday of each month at 10:00 a.m. in Conference Room 204, Leiopapa A Kamehameha Building, 235 S. Beretania Street, Honolulu, Hawaii 96813. View the 2016 Meeting Schedule. Meeting location, dates and times are subject to change so please check the “2016 Meeting Schedule” page prior to attending a meeting.