Minutes for September 18, 2019 Meeting

Posted on Oct 23, 2019 in Main, Minutes

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
September 18, 2019
10:00 a.m.

Commissioners Present
Bryan Luke, Gregory Shoda, Stanley Lum, Maryellen Markley, Ph.D., Russell Tsuji

Excused
Stanley Lum (10:30 a.m.)

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

Call to Order
Chair Luke called the meeting to order at 10:02 a.m.

Consideration and Approval of Minutes of Meeting on 7/10/19
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 7/10/19 meeting.  Motion seconded by Commissioner Lum.  Motion carried (4-0) (Commissioner Tsuji did not vote because he was not present at the 7/10/19 meeting).

New Business
*Welcome and Introduction of New Commissioner Russell Tsuji
Executive Director Izumi-Nitao welcomed and introduced new Commissioner Russell Tsuji who is the Administrator of the Land Division at the Department of Land and Natural Resources (DLNR) which assists the Land Board in overseeing the management of approximately 1.3 million acres of state lands, including the shoreline area and Hawaiian waters.  Prior to joining DLNR in 2005, Mr. Tsuji was a Deputy Attorney General where he assisted the DLNR and other departments and agencies on a variety of legal matters.  And prior to joining the State in 2001, Mr. Tsuji was in private practice primarily focusing on commercial and real estate litigation.  He has a BA from the University of Hawaii at Manoa and a JD from Washburn Law School.  His term expires on June 30, 2023.

*Chair Luke asked if there was any objection to taking “Docket No. 19-17 – In Re the Matter of Save Our City LLC and Sarah Houghtailing” out of order of business on the agenda.  He stated that Commissioner Lum needs to leave the meeting early.  There was none.

*Docket No. 19-17 – In Re the Matter of Save Our City LLC and Sarah Houghtailing
General Counsel Kam reported that a complaint had been filed against Respondents Save our City LLC (“SOC”) and Sarah Houghtailing for the late filing of 2 reports, the failure to file 7 reports, 6 false reports, and 2 false name contributions.

General Counsel Kam stated that Respondent SOC is a Super PAC registered with the Commission since October 3, 2016.  Respondent Houghtailing is the chairperson and treasurer of Respondent SOC.

On August 28, 2018, Respondents filed the Preliminary Primary Report for the reporting period of January 1, 2018 to July 27, 2018.  This report was due on August 1, 2018, and thus, it was filed 27 days late.  Respondents reported cash on hand for this period of $118,039.  Although staff sent Respondents a Notice of Late Report, a fine was not pursued since Respondents reported zero activity, and thus, under HRS §11-339, with $1,000 or less activity in an election period, Respondents would only need to file the Final Election Period Report and Supplemental Reports.

Respondents did not file the Final Primary Report which was due on August 31, 2018.

On October 17, 2018, Respondents filed the 1st Preliminary General Report for the reporting period of August 12, 2018 to September 26, 2018.  This report was due on October 1, 2018, and thus, it was filed 16 days late.  In this report, Respondents reported cash on hand of $0 and zero activity.  The cash on hand previously reported in August had simply vanished with no reports of any expenditures.

On October 18, 2018, Commission received Respondents’ Request for Termination of Registration.

Due to the disappearance of the $118,039 between the August and October reports, staff subpoenaed Respondents’ bank records on October 23, 2018 for the period of August 1, 2016 to October 31, 2018.

Respondents did not file the 2nd Preliminary General Report that was due on October 29, 2018.

On November 9, 2018, Commission staff received Respondents’ bank records.  Upon review, the records showed that, among other things, Respondent Houghtailing, who is the only authorized account holder, zeroed out and closed the account on March 20, 2018 by negotiating a First Hawaiian Bank (“FHB”) check made payable to “Cash-Sarah Houghtailing” withdrawn upon Respondent SOC’s account in the amount of $24,059.94.  Thus, Respondents’ late-filed Preliminary Primary Report falsely reported zero activity during that reporting period and a false opening/closing balance of $118,039.  The opening balance was $24,059.94 and the closing balance was zero.  There were also numerous expenditures and contributions that were in the bank statements, but not reported by Respondents, and numerous expenditures and contributions that were reported by Respondents, but not reflected in the bank records.  Furthermore, since Respondents’ activity in the 2018 election period (withdrawal of $24,059.94) far exceeded $1,000, HRS §11-339 did not apply and Respondents were required to file all the 2018 election period reports.

On November 14, 2018, staff informed Respondents that their Request for Termination of Registration could not be processed because of the pending review of bank records and reports.

Respondents did not file the Final Election Period Report for the reporting period of October 23, 2018 to November 6, 2018, that was due on December 6, 2018.  Respondents also failed to file the Supplemental Report for the reporting period of November 7, 2018 to December 31, 2018, that was due on January 31, 2019.

On February 1, 2019, Respondent Houghtailing inquired about the status of Respondents’ Request for Termination of Registration.  On February 7, 2019, Commission staff responded that Respondents’ registration could not be terminated at this time due to discrepancies in the reports and bank records.

Respondents did not file the Preliminary Special Report for the reporting period of January 1, 2019 to March 29, 2019, that was due on April 3, 2019.  Respondents also did not file the Final Election Period Report for the reporting period of March 30, 2019 to April 13, 2019 for the Special Election that was due on May 13, 2019.  Lastly, Respondents did not file the Supplemental Report for the reporting period of April 14, 2019 to June 30, 2019, that was due on July 31, 2019.

On May 20, 2019 and July 22, 2019, Commission staff sent Respondents letters inquiring about additional bank accounts and expenditures, including the unreported $24,059.94 bank check made payable to “Cash-Sarah Houghtailing.” Prior to the filing of the complaint, Respondents did not respond to staff’s inquiries.

General Counsel Kam discussed Counts I through IX in the complaint and the fine amount for each count where a fine been assessed for the violation:

  • Count I – Late filing of the Preliminary Primary Report (1/1/18 – 7/27/18): If the report had been filed correctly to include the $24,059.94 check dated March 20, 2018 made payable to “Cash – Sarah Houghtailing,” then the fine would have been $6,014.99 which is 25% of the total amount of expenditures for the period.
  • Count II – Late filing of the 1st Preliminary General Report (8/12/18 – 9/26/18): $200 which is the minimum fine.
  • Count III – Failure to file the Final Primary Report (7/28/18 – 8/11/18): $500 fine.
  • Count IV – Failure to file the 2nd Preliminary General Report (9/27/18 – 10/22/18): $500 fine.
  • Count V – Failure to file the Final Election Period Report (10/23/18 – 11/6/18): $500 fine.
  • Count VI – Failure to file the Supplemental Report (11/7/18 – 12/31/18): $500 fine.
  • Count VII – Failure to file the Preliminary Special Report (1/1/19 – 3/29/19): $500 fine.
  • Count VIII – Failure to file the Final Election Period Report (3/30/19 – 4/13/19): $500 fine.
  • Count IX – Failure to file the Supplemental Report (4/14/19 – 6/30/19): $500 fine.
  • Count X – False Reporting: General Counsel Kam explained that Respondents’ reports were inconsistent with the subpoenaed bank records.

Between September 30, 2016 and October 19, 2016, Respondents reported 3 contributions totaling $171,000 that were not accounted for in the bank records.  Between October 2016 and March 2018, there were 23 expenditures totaling $163,265.43 that were reflected in the bank records, but were not reported by Respondents.  During this time period, Respondents only reported 1 expenditure, a $5,000 expenditure paid to Heinrich Marketing, Inc., on November 3, 2016.  Moreover, Respondents reported 26 expenditures to 14 vendors totaling $208,636.99 from October 3, 2016 through November 7, 2016 that were not reflected in the bank records.  Respondents also failed to report a contribution deposited on December 5, 2016 in the amount of $2,500 from Patrick Ariki.

In sum, either due to unreported expenditures and contributions, reported expenditures and contributions not accounted for in the bank records, or false account balances, six reports were false:

  1. 2nd Preliminary General Report (Sept. 27-Oct. 24, 2016);
  2. Final Election Period Report (Oct. 25-Nov. 8, 2016);
  3. Supplemental Report (Nov. 9-Dec. 31, 2016);
  4. Supplemental Report (Jan. 1-June 30, 2017);
  5. Supplemental Report (July 1-Dec. 31, 2017); and
  6. Preliminary Primary Report (Jan. 1-July 27, 2018).

If an administrative fine had been assessed, it would have been $6,000 ($1,000 for each false report).

  • Count XI – False-Name Contributions: General Counsel Kam stated that Respondents reported a $20,000 contribution from Amana Associates on October 17, 2016. However, according to the bank records, the $20,000 check deposited into the committee’s bank account was from a business called KMJ Realty LLC Client Account.  Staff could not find any connection between KMJ Realty LLC and Amana Associates.

In addition, Respondents reported a $1,000 contribution from John Uyemura and a $1,000 contribution from Karen Uyemura on October 24, 2016.  Bank records show that Karen Uyemura wrote one check in the amount of $2,000.  The $2,000 contribution should have been attributed to Karen Uyemura.  Based upon Respondents’ report, both Uyemuras are associated with KMJ Realty LLC.  If an administrative fine had been assessed, $1,000 would have been assessed against the contributors only if the committee had no involvement.  Further, $21,000 would escheat to the Hawaii Election Campaign Fund for false name contributions.

General Counsel Kam acknowledged that Commission staff received a response letter from Respondents last week which was provided to the Commission.  However, the response only addressed five individuals who received payments from the committee and did not address the counts in the complaint.

General Counsel Kam recommended that the Commission refer the matter to the Attorney General’s office for prosecution since it appears that Respondents intentionally, knowingly, or at the very least, recklessly violated several provisions of the campaign finance law.

Respondent Houghtailing and her attorney Ms. Sheri Tanaka, Esq., were present.  Ms. Tanaka stated that she was retained by Respondent Houghtailing to represent her in this case yesterday.  She explained that the irregularities alleged by the Commission staff, even if they were true, were nothing more than an honest mistake.  She requested the Commission to summarily dismiss the complaint and allow Respondents to work with the Commission staff to resolve the issues.  She then said they are prepared to address any questions that the Commissioners may have for them.

Commissioner Markley asked Respondent Houghtailing what the $24,059.94 check withdrawn in her name was for.  Ms. Tanaka responded that the check was withdrawn in an attempt to close the account and that it was to reimburse Respondent Houghtailing for the money she spent on the committee.  Commissioner Markley sought to confirm that the amount she reimbursed herself was exactly the same amount needed to be withdrawn to close the account.  Ms. Tanaka replied yes.  She then explained that Respondent Houghtailing attempted to report everything accurately in the Noncandidate Committee Filing System (“NCFS”) and provided the Commissioners with hand-outs that were printed off the committee’s NCFS account listing entries of contributions received and expenditures made.  She noted that the total amount of contributions received that were inputted into the system was $21,580.99 less than the total amount of expenditures reported.

General Counsel Kam stated that the lists of contributions received and expenditures made that were printed out by Respondent Houghtailing through Respondents’ NCFS account was not something that the public has access to and was not electronically filed.  The information might have been inputted into the system, but if the applicable reports were not filed, the public cannot see them.  He emphasized that the complaint was brought against Respondents based on the reports accessible to the public and stressed the importance of transparency.  Ms. Tanaka responded that Respondent Houghtailing did not act in a matter that was intentional or reckless as set forth in the complaint and that she believes Respondent Houghtailing could work with the Commission staff to rectify the problem.

Chair Luke asked Respondent Houghtailing if this was her first time in charge of a noncandidate committee, to which she responded yes.  He also asked if she attended any of the trainings provided by Commission staff, to which she responded no.  Ms. Tanaka added that Respondent Houghtailing is not an accountant or an attorney.

Vice Chair Shoda stated that he understands Respondent Houghtailing is justifying the check she wrote to herself as reimbursement for the money she gave the committee at a time when it faced a deficit.  However, Respondents did not report everything accurately.  He stated that cases before the Commission have been referred for prosecution in the past, and that he is inclined to do so in this case because there were gross errors in reporting, false reporting, and non-reporting.  He added that the public had no understanding of the Respondents’ expenses during the election and that their reporting was an insult to the Commission.

Chair Luke asked what happens if the Commission refers this case for prosecution.  General Counsel Kam explained the process.

*Commissioner Lum left the meeting at 10:30 a.m.

Ms. Tanaka reiterated Respondents’ request to allow them to work with the Commission staff and that they understand the gravity of the situation.  She then addressed Count XI (False-Name Contribution) of the complaint to explain that the contribution in the amount of $20,000 through the KMJ Realty LLC Client Account check was actually from Amana Associates.  She explained that KMJ Realty LLC did not have any rights to that money as it was merely a client account that held money in trust for Amana Associates.  Therefore, when Respondent Houghtailing reported that the $20,000 contribution was from Amana Associates, and not from KMJ Realty LLC, she was being accurate or attempting to be accurate in her reporting.  Ms. Tanaka then distributed a copy of the KMJ Realty LLC Client Account check to the Commissioners as well as a copy of the check from Karen and John Uyemura signed by Karen Uyemura in the amount of $2,000.  In reference to the Uyemura check, Ms. Tanaka explained that it was from a joint account held by both Karen and John Uyemura and that $1,000 of that check was specifically allocated as a contribution from John Uyemura and $1,000 from Karen Uyemura.

Chair Luke asked where on the check was it indicated that the contribution amount was allocated that way or how would anyone know that was the intention.  Ms. Tanaka responded that the intention was indicated based on the names on the account as listed on the check and a verbal communication between the contributors and Respondent Houghtailing.  As such, Respondent Houghtailing reported $1,000 from John Uyemura and $1,000 from Karen Uyemura.  Ms. Tanaka argued that Respondent Houghtailing did not attempt to input any false name contributions.  As for the KMJ Realty LLC Client Account check, Chair Luke asked how anyone would have been able to tell that the money was being held for Amana Associates.  Ms. Tanaka responded that there is nothing obviously stated on the check to indicate that, however, Respondent Houghtailing was trying to be honest in her reporting because she knew that the money belonged to Amana Associates.

Commissioner Tsuji asked Respondent Houghtailing if she owned TJ’s Bar and Grill to which she responded in the affirmative.  Commissioner Tsuji asked her whether in her business she dealt with money and had an attorney.  Respondent Houghtailing responded that she did not have an attorney.

Vice Chair Shoda asked Respondents if they would like to address the other counts.  Ms. Tanaka addressed Count I to X:

  • Count I – Ms. Tanaka stated that since the suggested fine amount of $6,014.99 is 25% of $24,059.94, which is the amount Respondent Houghtailing withdrew from the Respondents’ bank account, she proposed that Respondent Houghtailing return $24,059.94 to the committee by opening a bank account. Although Respondents believed that the withdrawal was proper, in order for Respondent Houghtailing to show good faith and effort, she would like to return the $24,059.94.

Chair Luke stated that this count addresses the late filing of the report and commented that there was no transparency for this reporting period because the money was not reported accurately.  Further, he stated that returning the $24,059.94 now was not going to rectify the problem.  Executive Director Izumi-Nitao added that Respondents must amend the report to properly reflect what is on the bank records.  Ultimately, Ms. Tanaka stated the Respondents would like to amend the report and pay the $6,014.99 fine.  Commissioner Markley asked Ms. Tanaka how soon Respondents plan on amending the report.  Ms. Tanaka responded that they will do so immediately.

  • Count II – Ms. Tanaka stated Respondents will pay the $200 fine and amend the report.
  • Count III through IX – Ms. Tanaka stated Respondents will pay the $500 fine for each count and file the unfiled reports.
  • Count X – Ms. Tanaka stated Respondent Houghtailing did not intentionally attempt to report falsely and would like to work with Commission staff to amend the reports. Discussion ensued about the amount of discrepancies between the reported contributions and expenses, and the committee’s bank records. General Counsel Kam emphasized that the law requires money spent by the committees to go through their bank account, otherwise someone from the outside could be paying for the committee’s expenses without anyone knowing where the money came from.  Tanaka stated that Respondents had a difficult time opening a bank account and that there were instances where contributors directly paid for advertisements for the committee.

Discussion ensued about Respondent Houghtailing’s explanation to the withdrawing of $24,059.94. General Counsel Kam stated that it is concerning that the withdrawal was made to reimburse Respondent Houghtailing for the money she spent on the committee because it is unlawful for noncandidate committees to accept loans.  He continued that the advancement of money made by Respondent Houghtailing to the committee was illegal.  Deputy Attorney General Kunimoto concurred with General Counsel Kam.

Commissioner Markley moved to continue the matter to the next Commission meeting by allowing Respondents up to 25 days to work with the Commission staff to resolve the issues.  Motion seconded by Commissioner Tsuji.

Discussion ensued about whether Respondent Houghtailing had any intention of resolving the issues earlier. Commissioner Tsuji asked why an attorney was only retained yesterday if Respondents have been aware of being investigated by Commission staff for some time.  Respondent Houghtailing responded that she did not realize how serious the matter was.  Executive Director Izumi-Nitao stressed the numerous attempts Commission staff made to try to communicate with the Respondents including letters, phone calls, and emails in order to convey the seriousness of the matter.  She continued that regardless of all the efforts, Commission staff did not receive any response from them and that for an entire election, Respondents’ reporting failed to properly disclose their activities to the public.

Associate Director Baldomero asserted that if the Commission is willing to accept Respondents’ explanation to Count XI regarding the $20,000 check from KMJ Realty LLC Client Account, he suggested that Commission staff be provided with verification that the money indeed belonged to Amana Associates because the KMJ Realty LLC Client Account check did not bear any indication that the money was associated with Amana Associate.  Ms. Tanaka responded that Respondents will provide that information.

Chair Luke called for votes to Commissioner Markley’s motion to continue the matter to the next Commission meeting and to allow Respondents up to 25 days to resolve the issues with the Commission staff.  Motion failed (2-2) (Chair Luke and Vice Chair Shoda opposed).

Chair Luke moved to make a preliminary determination that probable cause exists that a violation had been committed and assess the administrative fine in the amount of $15,714.99, order Respondents to escheat $21,000 of false name contributions, file any unfiled reports, and amend the necessary reports.  Motion was seconded by Commissioner Tsuji.

Discussion ensued about Count XI.  Vice Chair Shoda stated that he is willing to accept Respondents’ explanation for Count XI.  Commissioner Markley agreed.  Ultimately, the Commission decided to dismiss Count XI.

Vice Chair Shoda moved to amend the motion to assess the administrative fine in the amount of $15,714.99, file any unfiled reports, and amend the necessary reports.  Amended motion seconded by Commissioner Markley.  Motion carried (4-0).

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

Executive Director Izumi-Nitao stated that the nine (9) 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.

*Proposed Conciliation Agreement No. 20-01 – In Re the Matter of Friends of John E. Miller
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-02 – In Re the Matter of Friends of Ernie Martin
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $950 to $475.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-03 – In Re the Matter of Ohana Ainoa
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-04 – In Re the Matter of Friends of Ola Souza
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $344.41 to $114.80.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-05 – In Re the Matter of Friends of Kelly Kitashima
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $253.69 to $126.85.  Chair Luke asked if there were any comments or questions.

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

Ms. Kelly Kitashima was present and thanked the Commission for their consideration.

*Proposed Conciliation Agreement No. 20-06 – In Re the Matter of Friends of Lei Learmont
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $66.67.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-07 – In Re the Matter of Selina T. Blackwell
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-08 – In Re the Matter of Friends of Ernest Magaoay
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.

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

*Proposed Conciliation Agreement No. 20-09 – In Re the Matter of Angela Kaaihue Campaign
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Supplemental Report and requests that they assess a reduced fine from $200 to $100.  Chair Luke asked if there were any comments or questions.

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

*Docket No. 20-01 – In Re the Matter of Laurent Zahnd and Team Mr. L-Laurent R.B. Zahnd (L) For Mayor
Executive Director Izumi-Nitao reported that a complaint had been filed against Respondents Laurent Zahnd and Team Mr. L-Laurent R.B. Zahnd (L) For Mayor for the failure to file the Supplemental Report.

Respondent Zahnd is the candidate and treasurer of the candidate committee called Team Mr. L-Laurent R.B. Zahnd (L) For Mayor.  Pursuant to HRS §11-334, Respondents were required to file the Supplemental Report for the period covering 1/1/19 through 6/30/19 no later than 11:59 p.m. Hawaii standard time on 7/31/19.  Respondents did not file this report by the deadline.

On 8/1/19, 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.  Respondents have not filed the Supplemental Report.

On 8/19/19, Commission staff contacted Respondent Zahnd by phone concerning the status of the unfiled report.  Respondent Zahnd informed Commission staff that he thought he had terminated his candidate committee.  Commission staff informed him that his candidate committee was still registered and emailed him instructions on how to terminate and file his Supplemental Report per his request.

Upon reviewing Respondents’ records, Commission staff noted that Respondent Zahnd had requested to terminate his committee on 2/7/19.  On 2/13/19, Commission staff sent Respondents a letter via first class mail informing him as to the reasons he was not eligible to terminate.  Commission staff further followed up on 2/21/19 and 2/27/19 to assist Respondent in reconciling his surplus for purposes of termination.  To date, Respondent has not addressed his surplus which remains one of the reasons Respondent is unable to terminate his candidate committee.

On 8/22/19, Commission staff emailed Respondent Zahnd to ask about the status of the unfiled report to which he replied objecting to the Commission’s authority and requesting a refund on a fine he previously paid.  Respondent has not filed the Supplemental Report.

On 8/28/19, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 9/18/19 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 $500, order that the fine be deposited into the general fund of the state pursuant to HRS §11-410(e), and order that Respondents file the Supplemental Report within 2 weeks of receipt of the order.

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 Tsuji.  Motion carried (4-0).

*Docket No. 20-02 – In Re the Matter of Tiare Lawrence and Tiare Lawrence for Maui
Executive Director Izumi-Nitao requested as a housekeeping measure to delete the phrase “Click here to enter text” on page 5 of the complaint.

Executive Director Izumi-Nitao reported that a complaint had been filed against Respondents Tiare Lawrence and Tiare Lawrence for Maui for the failure to file the Supplemental Report.

Respondent Lawrence is the candidate and treasurer of the candidate committee called Tiare Lawrence for Maui.  Pursuant to HRS §11-334, Respondents were required to file the Supplemental Report for the period covering 1/1/19 through 6/30/19 no later than 11:59 p.m. Hawaii standard time on 7/31/19.  Respondents did not file this report by the deadline.

On 8/1/19, 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.  Respondents have not filed the Supplemental Report.

On 8/19/19, 8/21/19, and 8/23/19, Commission staff contacted Respondent Lawrence by phone and email concerning the status of the unfiled report.  Respondents have not responded.

On 9/3/19, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 9/18/19 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 $500, order that the fine be deposited into the general fund of the state pursuant to HRS §11-410(e), and order that Respondents file the Supplemental Report within 2 weeks of receipt of the order.

Vice Chair Shoda 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).

*Docket No. 20-03 – In Re the Matter of John White and Friends of John White
Executive Director Izumi-Nitao reported that a complaint had been filed against Respondents John White and Friends of John White for the late filing of the Supplemental Report.

Respondent White is the candidate and treasurer of the candidate committee called Friends of John White.  Pursuant to HRS §11-334, Respondents were required to file the Supplemental Report for the period covering 1/1/19 through 6/30/19 no later than 11:59 p.m. Hawaii standard time on 7/31/19.  Respondents did not file this report by the deadline.

On 8/1/19, 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 8/5/19, Respondents electronically filed the Supplemental Report.

On 8/5/19, 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 8/19/19.  Respondents did not pay the fine.

On 8/21/19 and 8/28/19, Commission staff contacted Respondent White by phone and email concerning the fine payment.  Respondents have not responded.

On 9/5/19, Commission staff sent Respondents a copy of the complaint and informed them that the matter would be set on the 9/18/19 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).

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 Vice Chair Shoda.  Motion carried (4-0).

*Presentation, Discussion, and Approval of the Commission’s Annual Report for FY 2019
Executive Director Izumi-Nitao presented the proposed draft of the Commission’s Annual Report for FY 2019 which discussed Commission activities covering the period July 1, 2018 to June 20, 2019 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.

Vice Chair Shoda moved to approve the Annual Report for FY 2019.  Motion seconded by Commissioner Markley.  Motion carried (4-0). 

Old Business – None

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that since the last meeting, the Supplemental Report was due on 7/31/19:

  • Candidate Committees – 361 were required to file
  • 304 filed on time (84%)
  • 4 filed late (1%)
  • 53 did not file (15%)
  • As of today, 6 have not filed
  • Noncandidate Committees – 241 were required to file
    • 229 filed on time (95%)
    • 0 filed late
    • 12 did not file (5%)
    • As of today, 5 have not filed

With respect to prior reports, there are 1 to 3 candidate committees and 5 noncandidate committees that have not filed their reports.  All have been referred to Attorney General – Civil Recoveries Division (AG-CRD).

With respect to an update on the status of the cases referred to AG-CRD:  (1) Creighton Higa – made final payment of the outstanding fine and is now waiting for the check to be cleared; (2) Junior Mataafa – sheriffs to serve warrant; (3) Alika Atay – appeared at Circuit Court and working with AG-CRD to comply with the Commission’s order; (4) Debra Kekaualua – pending; (5) Thomas Belekanich – pending; and (6) Michael Juarez – pending.

With respect to an update on the compliance of prior matters:  (1) Kaniela Ing – fine payments are current and Commission staff is reviewing his amended reports and new filings; and (2) Trinette Furtado – pending HRS chapter 91 contested case proceeding.  A hearing was scheduled in September but will be continued to a later date.

Discussion on Topics for 2019 Annual Online Survey
Associate Director Baldomero reported that this is the 8th year of the survey and that it is a 5-10 min web-based survey to help the Commission improve and evaluate the effectiveness of Commission operations and communications for fiscal year 2019 (i.e., 7/1/18 to 6/30/19) as well as provide feedback.  He stated that it covers 6 areas:  Background Information (to understand the evaluator’s relationship to the Commission); Communication/Access to the Commission; Education/Training provided by the Commission; Compliance and Enforcement Information; Public Funding; and Other General Matters.  The survey will go out on 9/18/19 and close on 10/16/19.  He stated that the Commission’s direct outreach is to 1,900 people via email and social media.  Last year, 125 responses were received, and the most responses was 140 in 2016.

Executive Director Izumi-Nitao stated that staff will report its findings and comments at the November Commission meeting.  The results will also be posted on Commission’s website.

EXECUTIVE SESSION
Chair Luke asked for a motion to convene Executive Session to: (1) Consider and approve Executive Session minutes from the Commission meeting on 7/10/19; 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 Shoda moved to convene in Executive Session for the aforementioned reason(s).  Motion seconded by Commissioner Tsuji.  Motion carried (4-0).

Public Session reconvened at 12:35 p.m.

Commissioner Markley moved to adjourn the meeting.  Motion seconded by Vice Chair Shoda. Motion carried (4-0).  Meeting adjourned at 12:35 p.m.

Next Meeting:
Scheduled for Wednesday, October 9, 2019, at 10 a.m.