Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
February 15, 2017
10:00 a.m.

Commissioners Present
Bryan Luke, Adrienne Yoshihara, Gregory Shoda, Kenneth Goodenow

Commissioners Absent
Eldon Ching

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Jessica Richey, Sandrina Lee
Supervising Deputy Attorney General Pat Ohara

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

Consideration and Approval of Minutes on 1/11/17
Chair Luke asked for comments or changes.  Vice Chair Yoshihara sought the following amendments:

• Page 1, under “Proposed Conciliation Agreement No. 17-46 – In Re the Matter of Friends of Jeffrey Coakley”, 2^nd paragraph, 1^st sentence, to read: “Vice Chair Yoshihara commented that the Proposed Conciliation Agreement should include a provision that the parties agreed that Respondents received the Commission’s letters and thus were notified of the violation.”

• Page 10, under “Report on the 2016 COGEL Conference”, 1^st paragraph, 2^nd sentence, to read: “She thanked the Commission for the opportunity for her and General Counsel Kam to attend the conference.”

Chair Luke called for a vote to approve the minutes as amended.

Vice Chair Yoshihara moved to approve the amended minutes of 1/11/17.  Motion seconded by Commissioner Shoda.  Motion carried (4-0).

Mr. Michael Palcic commented about public testimony.  Commissioner Goodenow responded that public testimony can be received on any agenda item.  He suggested that all public testimony be received after the “Call to Order.”  Ms. Corie Tanida from Common Cause – Hawaii commented that it was more helpful to the public to offer their testimony as each agenda item was addressed.

Mr. Michael Palcic inquired about the public’s opportunity to raise new issues or add agenda items to the meeting.  Commissioner Goodenow and Vice Chair Yoshihara commented that the Commission would not be able to act unless matters are duly noticed on the agenda.

Mr. Michael Palcic asked about the status of his proposal which he presented at the 1/11/17 Commission meeting.  Chair Luke responded that it was being looked at and grouped with other considerations.  Executive Director Izumi-Nitao reported that his proposal was being considered in the scope of a larger project and that staff will hopefully have an update at the March Commission meeting.

New Business
Executive Director Izumi-Nitao stated that the next seven (7) matters concern the failure to file the Late Contributions/Expenditures Report which was due on November 7, 2016 or the late filing of the Final Election Period Report which was due on December 8, 2016.  The proposed Conciliation Agreements resulted from investigations pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  The committees in all matters have been informed of the violation(s) in a letter from Commission staff.  Further, they have been notified of today’s meeting and received a copy of the proposed Conciliation Agreement.  Executive Director Izumi-Nitao 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. 17-50 – In Re the Matter of Friends of Stacey Moniz
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Election Period Report and requested that the Commission assess a reduced fine from $1,150 to $575.  Chair Luke asked if there were any comments or questions.

Vice Chair Yoshihara commented that the provision concerning Commission notification of the failure to file the report in the noncandidate committee conciliation agreement (see Proposed Conciliation Agreement No. 17-51, page 3, paragraph 9) was not in this agreement.  Executive Director Izumi-Nitao stated that she will look into the matter.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-50.  Motion seconded by Vice Chair Yoshihara.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 17-51 – In Re the Matter of Green Point Nurseries, Inc.
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file the Late Contributions/Expenditures Report and requested that the Commission 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 Goodenow moved to approve proposed Conciliation Agreement No. 17-51.  Motion seconded by Commissioner Shoda.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 17-52 – In Re the Matter of Friends to Elect Kathryn Henski
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file the Late Contributions Report and requested that the Commission 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 Goodenow moved to approve proposed Conciliation Agreement No. 17-52.  Motion seconded by Commissioner Shoda.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 17-53 – In Re the Matter of Hoaloha o Alapai Hanapi
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Election Period Report and requested that the Commission 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 Yoshihara moved to approve proposed Conciliation Agreement No. 17-53.  Motion seconded by Commissioner Goodenow.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 17-54 – In Re the Matter of Vote Lee Loy
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file the Late Contributions Report and requested that the Commission 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 Goodenow moved to approve proposed Conciliation Agreement No. 17-54.  Motion seconded by Commissioner Shoda.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 17-55 – In Re the Matter of Tiare Lawrence for Maui
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Final Election Period Report and requested that the Commission assess a reduced fine from $350 to $116.67.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-55.  Motion seconded by Commissioner Shoda.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 17-56 – In Re the Matter of Save Our City, LLC
Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the failure to file the Late Contributions/Expenditures Report and requested that the Commission assess a reduced fine from $750 to $375.  Chair Luke asked if there were any comments or questions.  There were none.  Chair Luke called for a vote.

Commissioner Goodenow moved to approve proposed Conciliation Agreement No. 17-56.  Motion seconded by Commissioner Shoda.  Motion carried (4-0).

*Consideration, Discussion, and Approval of Amendments to the Commission’s Administrative Fine Guidelines
Commissioner Goodenow moved to convene in executive session 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 concerning the Administrative Fine Guidelines.  He further moved that the matter be placed at the end of the agenda when the Commission goes into Executive Session to permit the meeting to continue in open session.  Motion seconded by Vice Chair Yoshihara.  Motion carried (4-0).

Old Business
*Docket No. 17-26 – In Re the Matter of Sharon Har, Ian Caitano, and Friends of Sharon Har
and
*Docket No. 17-29 – In Re the Matter of James Tokioka, Ian Caitano, and Friends of James Kunane Tokioka
Chair Luke stated that these matters were continued from the 1/11/17 Commission meeting because there was insufficient time to review the materials submitted by Respondent Har.  He asked Respondent Har if she was appearing on behalf of Respondents Tokioka and Caitano, and if both dockets will continue to be heard together.  Respondent Har responded in the affirmative.

General Counsel Kam reported that he reviewed the memorandum and exhibits that were submitted in support of Respondents in both dockets.  He stated that the exhibits supported Respondents’ “Background Facts” and that staff has no basis to dispute the authenticity of the exhibits.  Therefore, staff has accepted the “Background Facts” as true.  General Counsel Kam then stated that Respondents’ materials do not change staff’s recommendation of the assessment of a $300 fine for the late filing of the Final Election Period Report.  He stated that under HRS §11-333(a) and §11-334(a), both candidates and treasurers are obligated to file timely and accurate reports.  However, he agreed with Respondents’ assertion that under HRS §11-340, the Commission is not required to assess a fine for a late filed report.

Respondent Har stated that HRS §11-340 provides that the Commission has discretion to assess fines and may consider exigent circumstances.  She then went over the circumstances as presented at the 1/11/17 Commission meeting as to why the report was filed late and asked the Commission to waive the fines and expunge the committee records so that future opponents could not use these complaints against them.

Commissioner Goodenow stated that he reviewed the 1/11/17 Commission minutes and that he was inclined to not impose a late report fine, but not inclined to expunge Respondents’ records because there was a violation by not filing the report on time.  He asked if there was any statutory authority to permit expungement.

Respondent Har maintained that there was no statute concerning expungement, but that the violation was outside Respondents Har’s and Tokioka’s control.

Discussion ensued on the Commission’s discretion to waive fines for late reports for exigent circumstances under HRS §11-340.

Vice Chair Yoshihara expressed concern over the precedential impact their decision will have for another candidate to claim lesser and/or other situations to be exigent circumstances.  She stated that the law obligates candidates to file reports along with their treasurers, and commented whether Respondents created a situation where the candidate did not have access to the financial information they were required to file by putting the onus on their treasurer, Respondent Caitano.  Respondent Har responded that HRS §11-324 places the responsibility with the campaign treasurer to maintain records.  General Counsel Kam stated that the statute requires candidates and treasurers to file reports, and commented that HAR §3-160-23 provides that candidates, in addition to treasurers, are also responsible to keep records.

Mr. Michael Palcic stated that Respondents’ complaints should be dismissed in the interests of justice.

Commissioner Goodenow stated that it was clear that there was a violation but that the late report fine should be waived.

Commissioner Shoda commented that Respondent Har provided the best explanation of a late report that he has seen.  He stated that he would be agreeable to no fine but could not agree to expunge Respondents’ records of the late report.

Vice Chair Yoshihara agreed with Commissioner Goodenow’s comment that the statute requiring committees to file reports was one of strict liability and would not dismiss the complaint.  She stated that to dismiss this kind of case would be gutting the law and not furthering campaign disclosure.  Further, she stated that Respondent Har was responsible as a candidate to file reports and keep records.

Respondent Har then asserted that under HRS §11-406, the Commission may waive further proceedings if Respondents remedy the violation, including the payment of any fine.  Commissioner Goodenow asked General Counsel Kam for a response.  General Counsel Kam stated that HRS §11-406 was placed after the provision addressing a preliminary determination of probable cause and before the provision concerning contested case hearings.  Thus, he stated that it would appear that after the Commission makes a preliminary determination of probable cause, if Respondents remedy the violation, including payment of a fine, then further proceedings would be waived.

Commissioner Goodenow moved to make a preliminary determination that probable cause existed that a violation had been committed in Docket No. 17-26 and Docket No. 17-29, but to not enforce the administrative fine due to extenuating circumstances presented by Respondents.  Motion seconded by Commissioner Shoda.  Motion carried (3-1) with Vice Chair Yoshihara opposing.

*Consideration, Discussion, Update, and Approval of Commission Legislation/Testimony and/or Other Campaign Finance Related Bills/Resolutions for the 2017 Legislative Session
General Counsel Kam referenced the 2017 legislative spreadsheet and proceeded to inform the Commission as to the status of the Commission’s 11 bills as well as the 13 House bills and 8 Senate bills introduced by others that affected Commission operations/business.

With respect to the Commission’s 11 bills, he reported the following:

CSC-01 (17) – H.B. 280 was heard before the House Judiciary Committee (“JUD”) on 2/9/17.  It was passed with the following amendment(s):  Effective date was defected but H.D. 1 has not been released.  Companion bill S.B. 437 has not received a hearing before the Senate Judiciary & Labor Committee (“JDL”).  If S.B. 437 does not get a hearing by 3/9/17 (First Crossover), it is dead this legislative session but may be revived next session.

CSC-02 (17) – S.B. 438 was heard before the Senate JDL on 2/2/17.  It was passed unamended.  Companion bill H.B. 281 was heard before the House JUD on 2/9/17.  It was passed with the following amendment(s):  Effective date was defected but H.D. 1 has not been released.  Bills will crossover to the other side for consideration.

CSC-03 (17) – H.B. 282 was heard before the House JUD on 2/9/17.  It was passed with the following amendment(s):  Effective date was defected but H.D. 1 has not been released.  Companion bill S.B. 439 has not received a hearing before the Senate JDL.

CSC-04 (17) – S.B. 440 was heard before the Senate JDL on 2/2/17.  It was passed with technical amendments.  It has a 2^nd referral so must go to the Senate Ways & Means Committee (“WAM”) which has not set a hearing.  Companion bill H.B. 283 was heard before the House JUD on 2/9/17.  It was passed with the following amendments(s):  Effective date was defected but H.D. 1 has not been released.  It has a 2^nd referral so must go to the House Finance Committee (“FIN”) which has not set a hearing.  Because of the 2^nd referral to WAM/FIN, these bills must have a hearing before their respective finance committees by 3/3/17 (First Decking) to remain alive.

CSC-05 (17) – S.B. 441 was heard before the Senate JDL on 2/2/17.  It was passed with the following amendment(s):  Effective date was defected to 1/7/2059.  It has a 2^nd referral so must go to the Senate WAM which has not set a hearing.  Companion bill H.B. 284 has not received a hearing before the House JUD.  It does not have a 2^nd referral to House FIN.

CSC-06 (17) – H.B. 285 has not received a hearing before the House JUD.  Companion bill S.B. 442 has not received a hearing before the Senate JDL.  If it does not get a hearing in either House JUD or Senate JDL by 3/9/17 (First Crossover), it will not survive this legislative session.

CSC-07 (17) – S.B. 443 was heard before the Senate JDL on 2/2/17.  It was passed unamended.  Companion bill H.B. 286 has not received a hearing before the House JUD.

CSC-08 (17) – S.B. 444 was heard before the Senate JDL on 2/2/17.  It was passed unamended.  Companion bill H.B. 287 has not received a hearing before the House JUD.

CSC-09 (17) – S.B. 445 was heard before the Senate JDL on 2/2/17.  It was passed with the following amendment(s):  Adopted language proposed by Commission staff to make it clearer and effective date was defected but S.D. 1 has not been released.  Companion bill H.B. 288 has not received a hearing before the House JUD.

CSC-10 (17) – H.B. 289 was heard before the House JUD on 2/9/17.  It was passed with the following amendment(s):  Effective date was defected but H.D. 1 has not been released.  Companion bill S.B. 446 has not received a hearing before the Senate JDL.

CSC-11 (17) – H.B. 279 was heard before the House JUD on 2/9/17.  It was passed with the following amendment(s):  Effective date was defected but H.D. 1 has not been released.  Companion bill S.B. 447 has not received a hearing before the Senate JDL.  It has a 2^nd referral to Senate WAM.

General Counsel Kam reported on the following bills introduced by others that, if passed, would affect Commission operations/business, that received hearings:

S.B. 309 – Amends HRS §11-341 to exempt candidate committees from filing statements of information for electioneering communications where the communication contains the advertisement disclaimer required by HRS §11-391.  It was heard before the Senate JDL on 2/2/17.  Staff appeared at the hearing and submitted testimony opposing the bill as it would reduce transparency in the political process.  Senate JDL deferred the bill for decision making on 2/28/17.  Companion bill H.B. 1399 has not received a hearing before the House JUD.

General Counsel Kam stated that the statement of information for electioneering communications contains different information from that which is included in a disclosure report.  He asked the Commissioners whether they had any concerns over opposing the bill.  There were none.

Commissioner Goodenow commented that the electioneering communications form also discloses information earlier than the disclosure reports and is important.

General Counsel Kam stated that the Commission submitted a bill concerning electioneering communications this session.  The bill would amend “disclosure date” to when the electioneering communication was publicly disseminated rather than when it was paid for.  He also commented that the 2016 election was the first election in which the Commission enforced the electioneering communications provisions after having consulted also with the Attorney General’s Office.

S.B. 336 – Amends HRS §11-302 and §11-341(d) to exclude from the definitions of advertisements and electioneering communications the communications of a candidate’s name on clothing or attire not directly associated with that candidate’s committee.  It was heard before the Senate JDL on 2/2/17 and was passed with the following amendment(s):  Effective date was defected but S.D. 1 has not been released.  Staff appeared at the hearing and submitted testimony supporting the bill as it would support/codify Hawaii Administrative Rule §3-160-2 which exempts clothing from the advertising disclaimer requirement.  Also, the definition of “electioneering communication” does not include the wearing of clothing.  An electioneering communication has to be disseminated via television, radio or other electronic means, or mailed.  Companion bill H.B. 1237 has not received a hearing before the House JUD.  The Commissioners had no concerns about supporting the bill.

Mr. Brian Yamane asked about purchases for products/t-shirts from a non-profit organization.  General Counsel Kam responded that staff will treat the payment to the charitable organization in the same manner as to how the charitable organization treated the payment.  Mr. Brian Yamane asked about purchases for advertising at charitable events.  General Counsel Kam replied that if a committee gave $1,000 to a charitable organization and was merely thanked for the contribution at the event, it would probably be deemed to be a contribution to the charitable organization rather than advertising.  He stated that it would depend on how the charitable organization reported the $1,000 payment to the IRS.

Chair Luke asked about candidate names on a shirt and whether it needed a disclaimer.  General Counsel Kam stated that clothing, by rule, is not a sundry item.  Thus, the disclaimer would not have to be on the shirt.

S.B. 337 – Amends HRS §11-341 to exempt candidate committees from filing a statement of information for electioneering communications where the communication clearly identifies the communication as being paid for by the candidate committee.  It was heard before the Senate JDL on 2/2/17.  Staff appeared at the hearing and submitted testimony opposing the bill as it would reduce transparency in the political process.  Senate JDL deferred the bill for decision making on 2/28/17.  Companion bill H.B. 1238 has not received a hearing before the House JUD.  The Commissioners had no concerns about opposing the bill.

S.B. 412 – Amends HRS §11-314 by providing that the Commission’s operating expenses, including staff salaries and fringe benefits, shall be paid from the state’s general fund rather than the Hawaii Election Campaign Fund.  It was heard before the Senate JDL on 2/2/17 and was passed with the following amendment(s):  Allows the Commission to use moneys from the Hawaii Election Campaign Fund for investigations if general fund appropriation for operating expenses is insufficient, changed the appropriation amount to $505,585, and changed the effective date to 1/7/2059.  Staff appeared at the hearing and submitted testimony in support requesting the amendments that were reflected in S.D. 1.  It has a 2^nd referral so must go to the Senate WAM which has not set a hearing.  Companion bill H.B. 1363 has not received a hearing before the House JUD.  The Commissioners had no concerns about supporting the bill.

S.B. 1153 – Amends HRS Chapter 11 by adding a new section that would make unlawful the posting on public property campaign signs that urge voters to vote for a candidate.  The bill assigned the responsibility for enforcement to the Commission to include ordering the candidate to remove the sign, assess fines against the candidate, and to place a lien on the candidate’s campaign account until the sign is removed.  It was heard before the Senate JDL on 2/3/17.  Staff appeared at the hearing and submitted testimony in opposition because the Commission is not suited to remedy encroachments on public lands and noted that the bill might have First Amendment concerns because it is a content-based restriction on speech.  The Attorney General’s Office submitted testimony in opposition to the bill.  Senate JDL deferred the bill so it does not move to its 2^nd referral to Senate WAM.  Thus, the bill was dead for this session.  It has no companion House bill.  The Commissioners had no concerns about opposing the bill.

General Counsel Kam reported on the remaining bills introduced by others that, if passed, would affect Commission operations/business, that did not receive hearings to date:

S.B. 251 & H.B. 1189 – Amends HRS §11-381(a) to exempt from the prohibition against using campaign funds to make charitable donations or to award scholarships during the period from filing nomination papers to the date of the general election, for candidates who are declared elected to office after running unopposed.  It has a Senate JDL referral and a House JUD and FIN referral.  Staff recommended taking no position should the bill get a hearing.  The Commissioners agreed.

S.B. 574 & H.B. 268 – Makes various changes to the campaign finance laws and tax laws:  (1) Allows people to make direct tax deductible donations to the Hawaii Election Campaign Fund; (2) Enables HECF to increase the amount of funding per dollar raised by a candidate; and (3) Requires that candidates applying for matching funds use only donations from Hawaii residents in the qualification computation.  To take effect in taxable years after 12/31/17.  It has a Senate JDL and WAM referral and a House JUD and FIN referral.  Staff recommended opposing the bill should it get a hearing because it eliminates the $3 tax check-off.  The Commissioners agreed.

S.B. 813 – Adds a new section to the campaign finance laws to prohibit campaign contributions from certain entities to legislators during legislative session, during the 5 days following adjournment sine die, and during a special session.  Prohibits a legislator from knowingly soliciting or accepting a contribution from a lobbyist or a lobbyist’s principal during a legislative session, during the 5 days following adjournment sine die, and during a special session.  Prohibits fundraisers for legislators to be held during any regular legislative session, during the 5 days following adjournment sine die, and during a special session.  To take effect on 1/1/2018.  It has a Senate JDL referral.  Staff recommended taking no position should the bill get a hearing.  The Commissioners agreed.

H.B. 112 – Amends HRS §11-411 to delete the element of recklessness in determining whether a person has violated the campaign finance laws for purposes of a criminal referral.  It has a House JUD referral.  Staff recommended opposing the bill should it get a hearing.  The Commissioners agreed.

H.B. 127 – Adds a new section to the campaign finance law to require a 501(c)(4) tax exempt organization to file semi-annual reports with the Commission if the organization spends more than $10,000 in a calendar year to make communications that advocate for/against an elected official.  It has a House JUD referral.  Staff recommended opposing the bill should it get a hearing and has asked Deputy Attorney General Marie-Iha to review the bill.  The Commissioners agreed.

H.B. 366 – Adds a new section to the campaign finance laws to prohibit corporations from making contributions, expenditures, and/or independent expenditures except in accordance with the majority vote of the corporation’s shareholders.  Requires corporations to provide notices to shareholders and on their websites within 48 hours of making contributions, expenditures, or independent expenditures.  It has a House JUD referral.  Staff recommended taking no position and deferring to the Attorney General’s Office should the bill get a hearing.  The Commissioners agreed.

H.B. 443 – Adds a new subpart to the campaign finance laws to provide a comprehensive public funding program to the state House of Representatives.  Repeals those candidate’s eligibility for partial public funding.  Appropriates funds to the Commission including FTE (or temporary) positions.  It has a House JUD and FIN referral.  Staff recommended submitting comments concerning the need for adequate funding should the bill get a hearing.  The Commissioners agreed.

H.B. 447 – Adds a new section to the campaign finance laws to prohibit corporate contributions, expenditures, or independent expenditures except in accordance with the will of a majority of the corporation’s shareholders.  It has a House JUD referral.  Staff recommended opposing the bill should it get a hearing.  The Commissioners agreed.

H.B. 504 – Amends HRS §235-7 (tax laws) to establish an income tax deduction for political contributions.  To take effect in taxable years after 12/31/2017.  It has a House JUD and FIN referral.  Staff recommended taking no position should the bill get a hearing.  The Commissioners agreed.

H.B. 528 – Amends HRS §264-77 and §445-121 (transportation laws) to define political signs and authorize fines to candidate and noncandidate committees whose political signs are found on state property or highways.  It has a House JUD referral.  Staff recommended watching the bill and taking no position should the bill get a hearing as it does not impact the Commission.  The Commissioners agreed.

General Counsel Kam noted Senate Resolution 3 and Senate Concurrent Resolution 2.

S.R. 3 and S.C.R. 2 – Urges Hawaii’s Congressional delegation to propose and pass an amendment to the U.S. Constitution clarifying that corporations are not people with constitutional rights, and that unlimited campaign spending is not free speech.  These resolutions have a Senate Public Safety, Intergovernmental, and Military Affairs (“PSM”) and JDL referral.  Staff recommended watching the resolutions and taking no position should they get a hearing.  The Commissioners agreed.

General Counsel Kam asked if there were any questions.  He noted that staff will continue to update the legislative spreadsheet and inform the Commissioners of the bills’ status at each meeting.

Report from Executive Director
Update on Gubernatorial Appointment of New Commissioners
Executive Director Izumi-Nitao reported no new update from Sharon Ibarra, Director of Boards & Commissions.

Report on Compliance of Filing Timely Disclosure Reports
With respect to the Commission orders that were referred to the Attorney General’s Office – Civil Recoveries Division (“AG-CRD”), AG-CRD reported that out of the 13 referrals, only 5 have not been addressed (i.e., Henry Kahula, Creighton Higa, Eric Ryan, Raymond Banda, and Junior Mataafa).

As for the report on compliance of filing timely disclosure reports in the 2016 election, Executive Director Izumi-Nitao reported that for the Supplemental Report, 61 out of 364 candidate committees did not file and 21 out of 256 noncandidate committees did not file.  To date, she stated there were 6 candidate committees and 6 noncandidate committees that have yet to file.  The next report will be the Supplemental Report for all registered candidate and noncandidate committees which is due 7/31/17.

Report on Super PAC Activity in the 2016 Election
Associate Director Baldomero reported the following:

• There were 17 Super PACs registered with the Commission for the 2016 election (compared to 29 in the 2014 election and 16 in the 2012 election)
• There were 5 new Super PACs in 2016, 7 carryover Super PACs from 2014, and 5 carryover Super PACs from 2012
• The 5 new Super PACs in 2016 were Coalition for Green Jobs NOW!, Hawaii Realtors for Good Government, Kuleana Coalition for Change, S.A.F.E. Sustainable Action Fund for the Environment, and Save Our City LLC
• Total receipts by all 17 Super PACs in 2016 were $2,029,255.81 and total expenditures by all 17 Super PACs were $1,663,481.83
• The $1,663,481.83 that was spent in 2016 was a decrease from the $7,919,493.71 that was spent in 2014 due largely in part because 2016 was not a gubernatorial election
• Of the $1,663,483.83 that was spent, $1,293,121.66 was specifically for independent expenditures supporting or opposing candidates that ran in 2016
• Of the $1,293,121.66 that was specifically for independent expenditures, a total of $857,478 was for positive advertising in support of candidates and $435,642.80 was for negative advertising to oppose candidates
• The most controversial Super PAC in the 2016 election was Save Our City LLC who raised $331,675.99 and spent $213,636.99 in independent spending to oppose Honolulu Mayor Kirk Caldwell. Save Our City LLC received the highest contribution from any one individual at $170,000 which came from engineer Dennis Mitsunaga
• The Super PACs that raised the most money in 2016 was Workers for a Better Hawaii at $983,000 followed by One Ohana Political Action Committee at $380,380 and then Save Our City LLC at $331,675.99
• Of the $983,000 in contributions received by Workers for a Better Hawaii, $500,000 was from the Regional Council of Carpenters, $208,000 from the Hawaii Government Employees Association, $150,000 from the Hawaii State AFL-CIO, $100,000 from AFSCME, and $25,000 from Operating Engineers Local No 3
• The Super PACs that spent the most money was Workers for a Better Hawaii at $966,014.56 followed by One Ohana Political Action Committee at $169,981.58 and then Save Our City LLC at $213,636.99
• Honolulu Mayor Kirk Caldwell received the most support in Super PAC spending at $624,784.18 followed by three Maui County Council candidates (Alika Atay, Trinette Furtado and Napua Greig-Nakasone) who each received Super PAC support in the amount of $71,884.01.
• Candidate Charles Djou saw the most Super PAC spending in opposition to his candidacy at $215,168.08 by HIRA Action ($2,065.50) and Workers for a Better Hawaii ($213,102.58) followed by Honolulu Mayor Kirk Caldwell who saw Save Our City LLC spend $213,636.99 to oppose his reelection
• One Ohana Political Action Committee finished the 2016 election period (November 8, 2016) with the highest closing cash on hand of all 17 Super PACs at $699,965.77. This surplus is carried forward into the 2018 election period and can be used in the 2018 election or beyond

*Vice Chair Yoshihara left the meeting.

Update on the Issuance of Certification of Compliance with Office of Elections & County Clerks
All candidates who won in the 2016 election were certified and sworn into office.

Update on the CSC Budget
Executive Director Izumi-Nitao reported that she has no update on the Commission’s efforts to seek $505,585 in general funds to pay for Commission salaries and operations.

Report from Commissioner Kenneth Goodenow on the 2016 COGEL Conference
Commissioner Goodenow referenced his 2/6/17 letter to Chair Luke and the Commissioners and commented that the conference was worthwhile.

Chair Luke asked for a motion to convene Executive Session to:  (1) Pursuant to HRS §92-5(a)(4) to consult with the Commission’s attorney on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning the Administrative Fine Guidelines; (2) Consider and approve Executive Session minutes from the Commission meeting on 1/11/17; and (3) Pursuant to HRS §92-5(a)(4), to consult with the Commission’s attorney on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning Docket No. 17-24 – In Re the Matter of Alan Arakawa and Friends of Alan Arakawa for the prohibited use of campaign funds.

Chair Luke moved to convene Executive Session for the aforementioned reasons.  Motion seconded by Commissioner Shoda.  Motion carried (3-0).

Public session reconvened at 12:30 p.m.

*Pursuant to Hawaii Revised Statutes section 92-5(a)(4) – To consult with the Commission’s attorney on questions and issues pertaining to the Commission’s powers, duties, privileges, immunities, and liabilities concerning the Administrative Fine Guidelines
Chair Luke announced that the matter will be continued to the March Commission meeting.

Commissioner Goodenow moved to adjourn the meeting.  Motion seconded by Commissioner Shoda.  Motion carried (3-0).  Meeting adjourned at 12:30 p.m.

Next Meeting:
Scheduled for Wednesday, March 8, 2017.