Minutes for October 17, 2018 Meeting

Posted on Nov 14, 2018 in Main, Minutes

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
October 17, 2018
10:00 a.m.

Commissioners Present
Bryan Luke, Kenneth Goodenow, Gregory Shoda, Stanley Lum, Maryellen Markley, Ph.D.

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Yayoi Tumamao, Sandrina Lee

Absent
Deputy Attorney General Valri Kunimoto

Call to Order
Chair Luke called the meeting to order at 10:03 a.m.

Consideration and Approval of Minutes of Meeting on 9/12/18
Chair Luke asked for comments or changes to the minutes.  There were none.  Chair Luke called for a motion to approve the minutes.

Commissioner Markley moved to approve the minutes of the 9/12/18 meeting.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

New Business
Executive Director Izumi-Nitao stated that the twenty-five (25) Conciliation Agreements 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.

*Chair Luke asked if there was any objection to taking Proposed Conciliation Agreement No. 19-97 out of order of business on the agenda.  There was none.

*Proposed Conciliation Agreement No. 19-97 – In Re the Matter of Friends of Elton Fukumoto
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 $1,750 to $583.33.  Chair Luke asked if there were any comments or questions.

Elton Fukumoto was present and distributed a hand-out which highlighted HRS §11-341(d). He urged the Commission to accept the conciliation agreement and stated that he would sign it and pay the fine.  However, he was before the Commission to argue that the statutory exception was defective and wanted their input.  Discussion ensued and the Commission informed Mr. Fukumoto that a legislative bill to clarify this area was submitted last year and will be submitted again this session.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Chair Luke returned to the order of business on the agenda.

*Proposed Conciliation Agreement No. 19-72 – In Re the Matter of Dolphin Quest/Quest Global Management
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Primary Report and the Final Primary Report, and requests that they assess a reduced fine from $2,200 to $733.33.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-79 – In Re the Matter of Friends of Boyd Ready
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.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-80 – In Re the Matter of Friends of Pat Cariaga Bolo
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-81 – In Re the Matter of Friends of Alan Yim
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 2nd Preliminary Primary Report and requests that they assess a reduced fine from $300 to $100.  She reminded the Commission that this matter was heard at the last meeting as Docket No. 19-06 and that the Commission agreed to permit Respondents an opportunity for the matter to be conciliated.  If the Commission approves this agreement, she recommended that the Commission dismiss Docket No. 19-06 under “Old Business.”  Chair Luke asked if there were any comments or questions.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-82 – In Re the Matter of Friends of Francine Kanani Murray
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.  There were none.  Chair Luke called for a vote.

Commissioner Markley moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-84 – In Re the Matter of HBM Acquisitions LLC dba Hawaiian Building Maintenance
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-85 – In Re the Matter of Friends of Jake Schafer
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file the Statement of Information for Electioneering Communications and requests that they assess a reduced fine from $500 to $166.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-86 – In Re the Matter of Friends of Kim Coco
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $50 to $16.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-87 – In Re the Matter of Friends of Jessica Wooley
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 $250 to $83.33.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-88 – In Re the Matter of Friends of Cynthia Nazara
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-89 – In Re the Matter of Hawaii Future Project
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $324.35 to $162.18.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioenr Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-90 – In Re the Matter of Republican Party of Honolulu County Central Committee
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-91 – In Re the Matter of Vidinha 2018
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-92 – In Re the Matter of East West Partners PAC
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-93 – In Re the Matter of Friends to Elect Michael Victorino
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file the Statement of Information for Electioneering Communications and requests that they assess a reduced fine from $8,500 to $2,833.33.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Shoda moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-94 – In Re the Matter of Defend Hawaii Now
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $1,750 to $583.33.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Markley moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-95 – In Re the Matter of Kokua Keani
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 $250 to $83.33.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-96 – In Re the Matter of Kaiaulu Builders
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file and the late filing of the Statement of Information for Electioneering Communications, and requests that they assess a reduced fine from $1,250 to $416.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-98 – In Re the Matter of Friends of Jeanne Kapela
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $288.50 to $96.17.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-99 – In Re the Matter of ORMAT Nevada, Inc.
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Primary Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Markley.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-100 – In Re the Matter of KAPAA I, LLC
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 1st Preliminary General Report and requests that they assess a reduced fine from $50 to $16.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-101 – In Re the Matter of Kia’aina 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 $750 to $250.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-102 – In Re the Matter of Friends of Takashi Ohno
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 $250 to $83.33.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Lum moved to approve the proposed conciliation agreement.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

*Proposed Conciliation Agreement No. 19-103 – In Re the Matter of Manaolana Partners, LLC
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the 1st Preliminary General Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Vice Chair Goodenow moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

*Docket No. 19-13 – In Re the Matter of Friends of Trinette Furtado and Trinette Furtado
General Counsel Kam reported that a complaint had been filed against Respondents Friends of Trinette Furtado and Trinette Furtado for an excess contribution, the filing of two false reports, the prohibited use of campaign funds, the late filing of the 2nd Preliminary Primary Report, and the failure to timely repay a loan.

General Counsel Kam stated that Respondent Furtado is a candidate for a seat on the Maui County Council in the 2018 election.  He stated that Respondents reported receiving a $500 contribution on 3/30/16 and a $1,400 contribution on 4/15/16 from John Grant (“Grant”).  Respondents also reported receiving an $8,100 loan from Grant on 10/31/16.  A $200 payment towards the loan was repaid on 12/21/16.  No further repayments of this loan have been made.

General Counsel Kam stated that on 6/12/18, staff received an anonymous complaint against Respondents which attached a copy of a $10,000 Bank of Hawaii check dated 10/11/16 from Grant to Respondents which was deposited by Respondents on 10/13/18 into the campaign bank account.  Respondents had reported an $8,100 loan from Grant and not a $10,000 loan.  As such, on 7/5/18, Commission staff subpoenaed Respondents’ campaign bank account records. Upon receipt of the bank records, General Counsel Kam stated that in addition to the $10,000 Grant check which was deposited by Respondents, Respondent Furtado had negotiated a check drawn upon the campaign account in the amount of $1,900 made payable to “cash” for “Reimb. of overpymt. of campaign loan” on 11/2/16.  Respondents did not report the $1,900 expenditure in their report with the Commission.  On August 9, 2018, Commission staff sent Respondents a letter asking them to explain the $1,900 withdrawn from the campaign account, to prove that that amount was used to repay or reimburse Grant, to inform them that the full amount of loan was $10,000, and that the withdrawal of $1,900 was not reported to the Commission. On August 28, 2018, Commission staff sent another letter requesting a response from the Respondents to the August 9, 2018 letter by September 5, 2018. Despite sending two letters to Respondents, Respondents did not respond.

General Counsel Kam mentioned that he received a message from Commission staff that Brian Bardellini, Respondents’ chairperson, called the Commission office’s main line to speak with him right before this meeting started. Commission staff informed Mr. Bardellini that General Counsel Kam was about to attend this meeting and that she will take a message.  Mr. Bardellini responded that he will call back later and did not specify what he wanted to discuss.

Pursuant to HRS §11-334, on 8/1/18, Respondents were required to file the 2nd Preliminary Primary Report for the period covering 7/1/18 through 7/27/18.  Respondents did not file this report by the deadline.

On 8/2/18, Commission staff sent Respondents a letter via first class mail informing them that the 2nd Preliminary Primary Report had not been filed and that a fine would be imposed.  On 8/3/18, Respondents electronically filed the 2nd Preliminary Primary Report.

On 8/3/18, Commission staff sent Respondents a letter via first class mail informing them that a fine of $300 would be assessed for the late filing of the report and that the deadline to pay the fine was 8/20/18.  Respondents did not pay the fine.

On 10/3/18, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 10/17/18 Commission Agenda.

With respect to Count I, General Counsel Kam stated that Respondent Furtado received an excess contribution in the amount of $1,800 from contributor Grant in violation of HRS §11-357.  He recommended an escheat of $1,800 to the Hawaii Election Campaign Fund.

With respect to Count II, General Counsel Kam stated that Respondents filed a false Preliminary General Report for the period covering 8/14/16 to 10/24/16 in violation of HRS §11-331(a) and §11-333(a).  More specifically, Respondents reported a loan from Grant in the amount of $8,100; however, the bank records showed that the Grant check deposited by Respondents was in the amount of $10,000.  He recommended an administrative fine of $500 and an order to file amended reports.

With respect to Count III, General Counsel Kam stated that Respondents filed a false Final Election Period Report for the period covering 10/25/16 to 11/8/16 in violation of HRS §11-331(a) and §11-333(a).  More specifically, Respondent Furtado withdrew $1,900 from Respondents’ campaign account on 11/2/16 which was not reported.  He recommended an administrative fine of $500 and an order to file amended reports.

With respect to Count IV, General Counsel Kam stated that Respondents used campaign funds for personal use in violation of HRS §11-382(3).  Respondent Furtado withdrew $1,900 from Respondents’ campaign account on 11/2/16 and did not report this expenditure to the Commission nor explain the purpose for the expenditure.  He recommended a $950 fine (50% of personal expenses) as provided in the fine guidelines, or in the alternative, $5,700 which is three times the amount of the prohibited expenditure, and order Respondent Furtado to personally reimburse her campaign account in the amount of $1,900.

With respect to Count V, General Counsel Kam stated that Respondents failed to timely file the 2nd Preliminary Primary Report in violation of HRS §11-334.  He recommended an administrative fine of $300 pursuant to HRS §11-340(c).

With respect to Count VI, General Counsel Kam stated that Respondents failed to timely repay the Grant loan in violation of HRS §11-371(a)(4)(B).  He recommended an order to use all remaining campaign funds to pay off the loan balance (i.e., $7,900) and apply all subsequent contributions received by Respondents to the loan until the loan is fully repaid.

General Counsel Kam 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 finance laws has been committed, assess an administrative fine of $2,250 and order Respondent Furtado to use personal funds to pay the fine if her candidate committee did not have sufficient campaign funds, order that the fines be deposited into the general fund of the state pursuant to HRS §11-410(e), order that Respondents escheat $1,800 to the Hawaii Election Campaign Fund, order that Respondent Furtado personally reimburse her campaign $1,900, order that Respondents amend all affected reports within 20 days of receipt of the Order, and repay the $7,900 loan.

Chair Luke asked to clarify how many times the Respondents were contacted regarding these matters. General Counsel Kam responded that they were sent two letters which led to no response. He also stated that Respondents did not respond to the complaint.

Discussion ensued about what happened to the $1,900 and whether Respondents are being deceptive, but because Respondents have not responded, staff was unable to respond.

Executive Director Izumi-Nitao commented that Respondent Furtado is a candidate in the general election and, if she wins, she will need to take care of this matter in order to be sworn into office.

Vice Chair Goodenow 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 Shoda.  Motion carried (5-0).

*Docket No. 19-14 – In Re the Matter of Christy Gusman and Christy Kajiwara-Gusman
Executive Director Izumi-Nitao reported that a complaint had been filed against Respondents Christy Gusman and Christy Kajiwara-Gusman for the late filing of the Supplemental Report.

Respondent Gusman did not run in the 2018 election.  Pursuant to HRS §11-334, Respondents were required to file the Supplemental Report for the period covering 1/1/18 through 6/30/18 no later than 11:59 p.m. Hawaii standard time on 7/31/18.  Respondents did not file this report by the deadline.

On 8/1/18, Commission staff sent Respondents a letter via first class mail informing them that the Supplemental Report had not been filed and that a fine would be imposed.  On 8/28/18, Respondents electronically filed the Supplemental Report.

On 8/28/18, Commission staff sent Respondents a letter via first class mail informing them that a fine of $200 would be assessed for the late filing of the report and that the deadline to pay the fine was 9/11/18.  Respondents did not pay the fine.

On 10/3/18, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 10/17/18 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 $200, and order that the fine be deposited into the general fund of the state pursuant to HRS §11-340(g).

Vice Chair Goodenow 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 Shoda.  Motion carried (5-0).

*Docket No. 19-16 – In Re the Matter of Robertson Properties Group and John Manavian
Executive Director Izumi-Nitao reported that a complaint had been filed against Respondents Robertson Properties Group and John Manavian for the late filing of the Preliminary Primary Report.

Respondent is a noncandidate committee registered with the Commission and Respondent Manavian is the chairperson and treasurer.  Pursuant to HRS §11-336, Respondents were required to file the Preliminary Primary Report for the period covering 1/1/18 through 7/27/18 no later than 11:59 p.m. Hawaii standard time on 8/1/18.  Respondents did not file this report by the deadline.

On 8/2/18, Commission staff sent Respondents a letter via first class mail informing them that the Preliminary Primary Report had not been filed and that a fine would be imposed.  On 8/9/18, Respondents electronically filed the Preliminary Primary Report.

On 8/13/18, Commission staff sent Respondents a letter via first class mail informing them that a fine of $300 would be assessed for the late filing of the report and that the deadline to pay the fine was 8/27/18.  Respondents did not pay the fine.

On 10/10/18, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 10/17/18 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, and order that the fine be deposited into the general fund of the state pursuant to HRS §11-340(g).

Commissioner Markley 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 Shoda.  Motion carried (5-0).

*Consideration, Discussion, and Approval of Amendments to the Commission’s Schedule of Fines
Executive Director Izumi-Nitao stated that this matter was requested by the Commissioners at the 9/12/18 meeting.  Discussion ensued regarding whether to change the fines for false reports.  She stated that presently the fines are tiered (i.e., 1st time violation is $500, 2nd time violation is $750, and 3rd time is $1,000), but, in the alternative, they could consider increasing the first violation to $750 and the second violation to $1,000 since the third violation may result in a criminal referral.

Discussion ensued on whether the present fine structure was effective or not an adequate deterrent in consideration of the number of false report violations recently set forth in complaints before the Commission.

Vice Chair Goodenow asked how the staff determines false report violations as opposed to other violations involving discrepancies in disclosure reports. General Counsel Kam responded that usually false report violations involve multiple deviations that are found upon reviewing committee bank records.

Commissioner Shoda stated that the maximum fine of $1,000 should be the fine amount.  After some discussion, it was generally agreed that a $1,000 fine would be a deterrent and that the Commission could always consider whether Respondents present mitigating factors to lower the amount at the meeting.

Commissioner Shoda moved to amend the Schedule of Fines to provide for an administrative fine of $1,000 for filing a False Report.  Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

Executive Director Izumi-Nitao suggested adjusting the fines for exceeding the expenditure limit.  She recommended that the fines be tiered (i.e., 1st time violation would be $500, 2nd time violation would be $750, and 3rd time violation would be $1,000).  She stated that the law provides that any candidate may voluntarily agree to limit their expenditures by filing an affidavit with the Commission and pay a reduced filing fee for nominations papers.  However, if the candidate exceeds the expenditure limit which is prescribed by law, the candidate must notify all opponents, Office of Elections, and the Commission by phone and in writing on the day the expenditure limit is exceeded; pay the balance of the full filing fee for nominations papers; and provide reasonable notice to all contributors within 30 days of exceeding the limit.  This increase was recommended because candidates who exceed the expenditure limit in a subsequent election should be fined more to encourage compliance.

Vice Chair Goodenow moved to amend the Schedule of Fines to provide for a tiered fine schedule as recommended by staff for Exceeding the Expenditure Limit.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

Executive Director Izumi-Nitao asked if there are other areas of concern or which should be discussed.  There were none.

Executive Director Izumi-Nitao stated that the Schedule of Fines will be so amended and posted on the Commission’s website.

*Presentation, Discussion, and Approval of the Commission’s Annual Report for FY 2018
Executive Director Izumi-Nitao presented the proposed draft of the Commission’s Annual Report for FY 2018 which discussed Commission activities covering the period July 1, 2017 to June 30, 2018 as applied to the Commission’s Strategic Plan.  She commented that upon approval, the annual report will be posted on the Commission’s website.

Chair Luke asked if there were any comments or questions.  There were none.

Commissioner Markley moved to approve the Annual Report for FY 2018.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

Old Business
*Docket No. 19-06 – In Re the Matter of Alan Yim, David Liang, and Friends of Alan Yim
Executive Director Izumi-Nitao reported that a complaint had been filed against Respondents Alan Yim, David Liang, and Friends of Alan Yim for the late filing of the 2nd Preliminary Primary Report.  Because this matter was handled earlier (see Proposed Conciliation Agreement No. 19-81), she recommended that this complaint be dismissed.

Vice Chair Goodenow moved to dismiss the complaint.  Motion seconded by Commissioner Lum.  Motion carried (5-0).

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that four (4) referrals to the Attorney General – Civil Recoveries Division remain.  She added that staff recently referred Jason Eno as a result of non-compliance with the Commission’s order.

As for the reports that were due since the last meeting, Executive Director Izumi-Nitao reported the following:

  • 1st Preliminary General Report (reporting period 8/12/18 to 9/26/18) due on 10/1/18
    • 254 noncandidate committees were expected to file
    • 237 (93%) filed on time
    • 1 (1%) filed late
    • 16 (6%) did not file (names posted on the Commission’s website)
    • As of today, 4 have not filed (all have been previously referred to the Attorney General – Civil Recoveries Division for non-compliance)
  • Update on Final Primary Report (reporting period 7/28/18 to 8/11/18) due on 8/31/18
    • All 233 candidate committees filed
      • 4 noncandidate committees have not filed (all have been previously referred to the Attorney General – Civil Recoveries Division for non-compliance)
  • Update on Supplemental Report
    • 6 candidate committees have not filed (3 have been previously referred and 1 was recently referred to the Attorney General – Civil Recoveries Division for non-compliance, 1 is awaiting compliance, and 1 went inactive)
  • Update on Preliminary Primary Report
    • 4 noncandidate committees have not filed (all have been previously referred to the Attorney General – Civil Recoveries Division for non-compliance)
  • Upcoming Reports
    • Preliminary General Report (reporting period 8/12/18 to 10/22/18 or 1/1/18 to 10/22/18) due on 10/29/18 for candidate committees running in the 2018 election
    • 2nd Preliminary General Report (reporting period 9/27/18 to 10/22/18) due on 10/29/18 for noncandidate committees
    • Late Contributions Report (reporting period 10/23/18 to 11/2/18) due on 11/5/18
  • Update on Compliance of Prior Matters
    • Kaniela Ing – General Counsel Kam reported that Mr. Ing was late paying his first fine payment (which is due the first of every month) in September, but that he paid it on time for the month of October. As for amending the 23 reports, nothing has been submitted but he has until 10/27/18.  Failure to comply with these outstanding items may result in a referral to the Attorney General’s Office to obtain a court order to enforce the Commission’s order.
  • Alika Atay – General Counsel Kam reported that Respondents received the Commission’s order and have not done anything to comply with the Commission’s order (i.e., pay $2,700 fine and amend 6 reports). The matter will be referred to the Attorney General’s Office for non-compliance.
  • Eric Ching – General Counsel Kam reported that Defendants’ motion to dismiss was continued to 12/10/18.
  • Alan Arakawa – General Counsel Kam reported that Hearing Officer Randal Lee will be ruling on Respondents’ motion to disqualify General Counsel Kam on 10/19/18. If the motion is denied, the matter will proceed and a scheduling conference will occur.  If it is granted, the parties will need to discuss how to proceed.

Update on the 2018 Election
Associate Director Baldomero provided an update on the 2018 election by reporting the number of seats (102) and candidates (294) up for election in 2018, number of seats decided in the primary election (47) with the notable candidates that won outright, number of unsuccessful candidates in the primary election (132) with the notable candidates that lost, and the number of seats (55) and candidates (115) remaining in the general election.  AD Baldomero further reported on the races to watch in the general election, the number of fundraiser notices filed by candidates running in the 2018 election (460), number of candidates that filed the affidavit to agree to the voluntary expenditure limit for their office (163) and the number of candidates that exceeded the expenditure limit in the primary election (4), number of candidates that filed the statement of intent to seek public funds (43), number of candidates receiving public funds in the primary (14 totaling $63,098.46) and general (1 totaling $2,316) elections, number of noncandidate committees (270), number of SuperPACs (22), and number of ballot issue committees (6).

EXECUTIVE SESSION
Chair Luke asked for a motion to convene Executive Session to consider and approve Executive Session minutes from the Commission meeting on 9/12/18.

Vice Chair Goodenow moved to convene in Executive Session for the aforementioned reason(s).  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

Public Session reconvened at 12:10 p.m.

Vice Chair Goodenow moved to adjourn the meeting.  Motion seconded by Commissioner Markley.  Motion carried (5-0).  Meeting adjourned at 12:11 p.m.

Next Meeting:
Scheduled for Wednesday, November 14, 2018, at 10 a.m.