Minutes for December 9, 2020 Meeting

Posted in Main, Minutes

Campaign Spending Commission
Zoom Video Conference
December 9, 2020
10:00 a.m.

Commissioners Present
Bryan Luke, Stanley Lum, Maryellen Markley, Ph.D., Neal Herbert

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Yayoi Tumamao, Ellisa Vendiola
Deputy Attorney General Candace Park

Guests
Vic Bonfiglio, Kevin McDonald, Josh Silva, Sandy Ma (Common Cause)

Call to Order
Chair Luke called the meeting to order at 10:06 a.m.

Chair Luke went over the rules for this video conference meeting.

Consideration and Approval of Minutes of Meeting on 11/18/20
Chair Luke asked for comments or changes to the minutes.  There were none.  Chair Luke called for a motion to approve the minutes.

Vice Chair Lum moved to approve the minutes of the 11/18/20 meeting.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

New Business
Executive Director Izumi-Nitao stated that the fifteen (15) Conciliation Agreements on the agenda were a result of investigations initiated by Commission staff pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  She stated that Respondents have been informed in a letter from Commission staff of the violation and have been notified of today’s meeting as well as received a copy of the proposed conciliation agreement.  She recommended that the Commission make a preliminary determination of probable cause that a violation had been committed, waive further proceedings, and approve the settlement amounts stated in each of the proposed agreements.

*Proposed Conciliation Agreement No. 21-68 – In Re the Matter of Rick Nava, Friends of Rick Nava – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of twelve (12) Statements of Information for Electioneering Communications and requests that they assess a reduced fine from $3,000 to $1,000.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-69 – In Re the Matter of Kaapunialiionalanikiekie Kanaloa Aiwohi – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to have the proper advertisement disclaimers and requests that they assess a reduced fine from $50 to $16.67.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-70 – In Re the Matter of Friends of Tess Abalos – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 2nd Preliminary General Report and requests that they assess a reduced fine from $300 to $100.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-71 – In Re the Matter of Friends of Kristina Kim-Marshall – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 2nd Preliminary General Report and requests that they assess a reduced fine from $300 to $100.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-72 – In Re the Matter of Friends of Aaron Johanson
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Late Contributions Report and requests that they assess a reduced fine from $500 to $166.67.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-73 – In Re the Matter of Friends of Sylvia Luke – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Late Contributions Report and requests that they assess a reduced fine from $500 to $166.67.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-74 – In Re the Matter of Hawaii Credit Union League (HCUL) Political Action Committee – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Late Contributions Report and requests that they assess a reduced fine from $500 to $166.67.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-75 – In Re the Matter of Friends of Justin Woodson – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Statement of Information for Electioneering Communications and requests that they assess a reduced fine from $750 to $250.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-76 – In Re the Matter of Friends of Kevin McDonald
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 1B Preliminary Primary Report and requests that they assess a reduced fine from $793.75 to $264.58.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.

Mr. Kevin McDonald was present and requested for a reduction to his conciliation agreement fine.  He stated that it was a simple error and he did not know about the filing deadline.  Mr. McDonald said $264.58 is still too high and that he only has $15.99 left in his committee bank account.  He also said that HRS §11-340(b) provides that the Commission may assess a fine, but does not say that they are required to do so; therefore, the statute allows for flexibility and the Commission has discretion on the fine.

Chair Luke asked Mr. McDonald if he was not in agreement with the conciliation agreement.  Mr. McDonald answered that he does not agree with the conciliation agreement.

Vice Chair Lum moved to rescind the original motion based on Mr. McDonald’s statement and not approve the conciliation agreement.  Commissioner Markley seconded.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-77 – In Re the Matter of Lanakila for OHA – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Statement of Information for Electioneering Communications and requests that they assess a reduced fine from $1,000 to $333.33.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.

Mr. Josh Silva, Treasurer for Lanakila for OHA, was present and requested for a further reduction of the proposed conciliation agreement fine.  He stated that Facebook ads were set up by the committee with a budgeted amount and they were not informed of the actual cost until Facebook sent them an invoice.  Mr. Silva said Respondent filed the statement as soon as they were notified by Facebook of the actual cost.

Chair Luke asked Mr. Silva if he is asking the Commission to reject the conciliation agreement.  Mr. Silva said he would like the Commission to consider his testimony.  Chair Luke explained to Mr. Silva that if Respondent is not in agreement with the conciliation agreement, they will dismiss the conciliation agreement and pursue a complaint to be heard at the next meeting.

With regards to when the statement should have been filed, Executive Director Izumi-Nitao explained that the operative date is the disclosure date.  The statement should have been filed within 24 hours of agreeing with Facebook for the ads, not the date of invoice.  She said there may have been a discrepancy in Mr. Silva’s interpretation of what “disclosure date” is.  Mr. Silva said in agreement that there may have been an issue with the interpretation of “disclosure date,” but explained that the statement asks for the cost and because they were not charged the budgeted amount when they signed the contract with Facebook, they did not know the actual cost until they received the invoice. He said he just wanted the records to reflect that Respondent was honest and transparent in filing the statement and that Respondent is willing to accept the proposed conciliation agreement.

Chair Luke asked if there were any further discussions.  There was none.

Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-78 – In Re the Matter of Hawaii Republican Party
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Statement of Information for Electioneering Communications and requests that they assess a reduced fine from $500 to $250.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.

Commissioner Herbert asked why the reduction was half and not by two-thirds.  Executive Director Izumi-Nitao responded that Respondent was offered a half reduction because it was their second violation.  Commissioner Herbert asked for that information to be stated.

Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-79 – In Re the Matter of Russell K. Takemoto – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns an excess contribution of $550 to a noncandidate committee and requests that they assess a reduced fine from $350 to $116.67.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-80 – In Re the Matter of Kuali’i for Kaua’i – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Statement of Information for Electioneering Communications and requests that they assess a reduced fine from $1,000 to $500.  She added that this was Respondent’s second violation.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-81 – In Re the Matter of Waalani Enterprises, LLC – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns an excess contribution of $400 to a candidate committee and requests that they assess a reduced fine from $250 to $83.33.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 21-82 – In Re the Matter of Mike Gabbard – State Senate – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file two (2) Statements of Information for Electioneering Communications and requests that they assess a reduced fine from $1,000 to $333.33.  Chair Luke asked if there were any comments or questions.

Vice Chair Lum moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

*Docket No. 21-27 – In Re the Matter of Russell K. Takemoto
Executive Director Izumi-Nitao reported that this matter was deferred from the 11/18/20 Commission meeting because Respondent Takemoto had not received notice of the meeting.  In consideration that Respondent Takemoto was granted a conciliation agreement at this meeting (i.e., Conciliation Agreement No. 21-79), she recommended that the aforementioned matter be dismissed.

Vice Chair Lum moved to dismiss the matter.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

*Docket No. 21-30 – In Re the Matter of HIRA Action and Eric Ryan
Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against HIRA Action and Eric Ryan for the late filing of the 2nd Preliminary General Report.

In the Organizational Report filed with the Commission, Respondent Ryan is listed as the chairperson and the treasurer of the noncandidate committee called HIRA Action.

Pursuant to HRS §11-336(a)(2), Respondents were required to file the 2nd Preliminary General Report for the period covering 9/27/20 to 10/19/20 by 11:59 p.m. Hawaii standard time on 10/26/20.  Respondents did not file this report by the deadline.

On 10/27/20, Commission staff notified Respondents via first class mail of their failure to file this report and that a fine would be imposed.

On 10/28/20, Respondents filed the report.

On 10/30/20, Commission staff notified Respondents via first class mail that a fine of $300 would be assessed for the late filing of the report.  The letter informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine amount by 11/13/20.  This letter was addressed to Respondents at the addresses listed on their current Organizational Report.

Respondents did not voluntarily pay the late report fine.

On 12/2/20, Commission staff sent Respondents a copy of the complaint and set the matter on the 12/9/20 Commission agenda.

Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination, pursuant to HRS §11-405(a), that probable cause exists to believe that a violation of the campaign spending law has been committed, assess an administrative fine of $300 for the late filing of the 2nd Preliminary General Report and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of this order.

Vice Chair Lum moved to make a preliminary determination that probable cause exists that a violation had been committed and to accept the fine and terms stated in the complaint.  Motion seconded by Commissioner Markley.  Motion carried (4-0).

Old Business
*Docket No. 21-08 – In Re the Matter of Kevin McDonald and Friends of Kevin McDonald
Executive Director Izumi-Nitao reported that this matter was deferred from the 11/18/20 Commission meeting to allow Respondent McDonald to work out a conciliation agreement with staff.  At Mr. McDonald’s request, the conciliation agreement presented earlier in this meeting was not accepted (i.e., Conciliation Agreement No. 21-76).

Executive Director Izumi-Nitao summarized that this matter concerns the late filing of the 1B Preliminary Primary Report which was due on 7/9/20.  Respondents did not file this report until 7/23/20.  After the 11/18/20 meeting, a conciliation agreement was worked out and put on this meeting’s agenda.  She added that absent mitigating circumstances, the Commission has not reduced late report fines other than through a conciliation agreement.

Mr. McDonald stated that he did not work out any agreement with staff.  Chair Luke responded that Mr. McDonald asked for the opportunity for a conciliation agreement in the last meeting.  Mr. McDonald agreed that he asked for the opportunity for an agreement to reduce the fine.  Commissioner Herbert asked if staff sent Mr. McDonald a copy of the proposed conciliation agreement.  Executive Director Izumi-Nitao responded yes.  Mr. McDonald said he received and read the agreement, but did not discuss it with staff.  He explained that he was under the impression that he would be able to discuss the proposed conciliation agreement in this meeting and that he did not agree with it.

Executive Director explained that through a conciliation agreement, the staff can only offer a two-third reduction for the first violation or a half reduction for second violation.

Mr. McDonald asked the Commission to take into consideration that his business has been closed since COVID and his campaign has only $15.99 left.

Chair Luke asked for staff’s recommendation under the complaint.  Executive Director Izumi-Nitao recommended that the Commission make a preliminary determination, pursuant to HRS §11-405(a), that probable cause exists to believe that a violation of the campaign spending law has been committed, assess an administrative fine of $793.75, order that the fine be paid from the candidate’s personal funds, if the candidate committee’s funds are insufficient to pay the fine, or if the Commission so order that the fine, or any portion, be paid from the candidate’s funds, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of this order.

Chair Luke asked for a motion.

Commissioner Herbert moved to assess an administrative fine in the amount of $264.58.  Motion seconded by Vice Chair Lum.

Chair Luke asked for any further discussions.

Commissioner Markley stated that she would like the Commission to consider reducing the fine to $15.99.  Chair Luke explained that if the current motion does not pass then they will entertain a new motion.

Motion carried (3-1).  Commissioner Markley opposed.

*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2021 Legislative Session
General Counsel Kam reported that 8 bills have been approved by the Commission at a prior meeting and were submitted to the Legislature for the 2021 Legislative Session.  He reported that meetings are being scheduled with the leadership, finance, and subject matter committee chairs.  Staff met with House Finance Committee Chair Sylvia Luke on December 7th.

Chair Luke asked if there were any comments or questions.

Commissioner Herbert shared his concerns about the 24-hour deadline for electioneering communications.  General Counsel Kam stated that CSC-01 (21) proposes changes to the disclosure date for electioneering communications.  Commissioner Herbert also asked if the electioneering communications law comes from the federal level.  General Counsel responded that it was modeled after a federal law.

Report from the Executive Director
Executive Director Izumi-Nitao reported the following:

  • Final Election Period Report was due on 11/27/20 for successful Kauai candidates since they were sworn in on 12/1/20. The report was due on 12/3/20 for all other candidate and noncandidate committees:
    • 287 candidate committees were expected to file
    • 236 (82%) candidate committees filed on time
    • 48 (17%) candidate committees failed to file on time
    • 3 (1%) candidate committees filed late
    • 257 noncandidate committees were expected to file
    • 245 (95%) noncandidate committees filed on time
    • 12 (5%) noncandidate committees failed to file on time
    • As of today, 33 candidate committees and 9 noncandidate committees still have not filed
    • 23 candidate committees terminated their registration
  • Expenditures of Public Funding Report was due on 12/3/20:
    • 8 candidate committees were expected to file
    • 7 (99%) candidate committees filed on time
    • 1 (1%) candidate committee filed late
    • As of today, all candidate committees filed the report

With respect to prior reports, there are 1-3 candidate committees and 4 noncandidate committees that have not filed their reports.  They have been referred to the Attorney General – Civil Recoveries Division (“AG-CRD”).

*Certification Process of Candidates Elected in the 2020 Election
Executive Director Izumi-Nitao reported that although they have agreed with the Office of Elections and County Clerks’ offices that certification memorandums will be sent once a week on Tuesdays, Elections Assistant Vendiola has been sending additional certification memorandums before candidates’ sworn-in dates.

Elections Assistant Vendiola stated that out of 104 candidates who won in the 2020 election, 27 candidates have been certified.  She added that all Kauai and Hawaii County candidates have been certified and sworn in.

*Report on the 2020 ElectionAssociate Director Baldomero reported the following data for the 2020 election:

Candidates:

  • 104 State/County seats up for election
  • 310 candidates
  • 77 incumbents were reelected (95% return rate); 4 incumbents were defeated (Hawaii Mayor Harry Kim, Representative Tom Brower, Representative Romy Cachola, and OHA Trustee Collette Machado); and 23 candidates won open seats (7 are candidates that were elected officials running for a different office or candidates that held elected office in the past)
  • Total Contributions Received – $15,277,674.80 (70% from individuals, 87% from Hawaii residents, 50/50 split between contributions that were less than $1,000 vs. contributions that were more than $1,000)
    • Top Contributions Received:
      • Keith Amemiya ($2,041,325.47)
      • Rick Blangiardi ($1,462,921.82)
  • Total Loans – $1,205,555.71 (95% from candidates)
    • Top Loans:
      • Rick Blangiardi ($465,000)
      • Keith Amemiya ($268,712.49)
  • Total Expenditures Made – $15,994,882.87 (45% for advertising, 30% for contract, employee and professional services)
    • Top Expenditures:
      • Keith Amemiya ($2,439,062.31)
      • Rick Blangiardi ($1,859,171.33)
  • Top Candidates Supported by Independent Expenditures:
    • Rick Blangiardi ($1,393,424.44)
    • Esther Kiaaina ($189,370.13)
  • Top Candidates Opposed by Independent Expenditures:
    • Keith Amemiya ($111,189.72)
    • Mufi Hannemann ($750)

Noncandidate Committees:

  • 258 noncandidate committees
    • 25 Super PACS (Independent Expenditure Committees)
    • 6 political parties
    • 3 ballot issue committees
      • 33 county charter amendments (Honolulu-4, Hawaii-16, Maui-7, Kauai-6)
      • 100% of ballot issue spending was for the Maui county charter amendments
  • Total Contributions Received – $21,124,793.28
    • Top Contributions Received:
      • Hawaii Carpenters Market Recovery Fund ($5,035,858.55)
      • Be Change Now ($5,029,558.55)
  • Total Expenditures Made – $12,477,182.16
    • Top Expenditures:
      • Hawaii Carpenters Market Recovery Fund ($5,029,558.55)
      • Be Change Now ($3,410,147.84)
  • Top Contributions Received by Super PACs:
    • Be Change Now ($5,029,558.55)
    • Hui O Maui Citizens for Change ($192,500)
  • Top Independent Expenditures Made by Super PACS:
    • Be Change Now ($1,881,619.17)
    • AiKea UNITE HERE ($182,370.72)
  • Top Contributions Received by Ballot Issue Committees:
    • Vote No on Charter Amendments Hui O Maui Nui. We Can’t Afford It ($135,000)
    • Holomuma for Professional Management ($27,420)
  • Top Expenditures Made by Ballot Issue Committees:
    • Vote No on Charter Amendments Hui O Maui Nui. We Can’t Afford It ($133,475.06)
    • Holomuma for Professional Management ($24,776.44)

Public Funding:

  • 153 Affidavits filed
    • 2 candidates exceeded their expenditure limit
      • Patricia La Chica (She was approved for $2,550 in public funding which was returned)
      • Rebecca Villegas
  • 35 Statement of Intent filed
  • Total Candidates Approved for Public Funds – 16 (46% of those that stated their intent to seek public funds but only 5% of the 310 candidates that ran in 2020)
    • Ikaika Marzo – Hawaii Mayor received the most ($24,412)
  • 3 out of the 16 candidates won their race (Arryl Kaneshiro – Kauai Council, KipuKai Kualii – Kauai Council, and Keani Rawlins-Fernandez – Maui Council)
  • Total Public Funds Approved – $85,361.97 (4th lowest out of the 21 elections that public funds have been disbursed and the lowest since 1992 when $56,319.39 was disbursed)

Fundraising:

  • 166 fundraisers held in 2020 (110 held since stay-at-home order issued in late March with 73 of those being held virtually via Zoom or Facebook Live)

Ms. Sandy Ma of Common Cause asked if most of the candidates who used public funding were state or county candidates.  Associate Director Baldomero answered that historically Maui and Kauai county candidates receive the most because their spending limit is high.  However, this year, most of the public fund monies were disbursed to House candidates.

Ms. Ma asked if vote-by-mail had any impact on how candidates used their public funds.  Associate Director Baldomero responded that he saw most of the public funds being used for mail-outs and digital ads.

Commissioner Herbert asked Associate Director Baldomero if what he just reported will be posted on the Commission’s website.  Associate Director Baldomero responded that his report summary comes from data posted on the Commission’s dashboards, within the committee data sets, and on the Commission website.

Executive Director Izumi-Nitao asked if the COVID-19 situation had any significant impact on the total contributions and expenditures for 2020 election.  Associate Director Baldomero responded that he saw things slow down around March through May.  However, there were spikes after that.  He stated that COVID-19 definitely changed the way candidates campaigned, but the total contributions and expenditures remained status quo.

EXECUTIVE SESSION
Chair Luke asked for a motion to convene in Executive Session to: (1) Consider and approve Executive Session minutes from the Commission meeting on 11/18/20; and (2) Pursuant to HRS §92-5(a)(4), to consult with the Commission’s attorneys on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities regarding McGee v. Campaign Spending Commission and Friends of Calvin Say.

Vice Chair Lum moved to convene in Executive Session for the aforementioned reasons.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

Public Session reconvened at 11:36 a.m.

Commissioner Markley moved to adjourn the meeting.  Motion seconded by Vice Chair Lum.  Motion carried (4-0).  Meeting adjourned at 11:36 a.m.

Next Meeting:
Scheduled for Wednesday, January 6, 2021 at 10 a.m.