Minutes for July 25, 2018 Meeting

Posted on Aug 9, 2018 in Minutes

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
July 25, 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
Deputy Attorney General Valri Kunimoto

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

Consideration and Approval of Minutes of Meeting on 6/20/18
Chair Luke asked for comments or changes to the minutes.  The following amendments were sought:

  • Page 6, paragraph 2, 1st sentence to read: “Vice Chair Goodenow stated that this case was different than the other matters referred for criminal prosecution while he has been on the Commission to the extent that the other candidates had notice.”
  • Page 6, paragraph 2, last sentence to read: “Vice Chair Goodenow said that if this were to go to trial, he believed that it was very possible that proof beyond a reasonable doubt would be found that campaign finance violations occurred.”
  • Page 6, paragraph 5, 1st sentence to read: “General Counsel Kam stated that Respondents are required by law to certify that everything reported is true, complete, and accurate when they file their report.”

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

Vice Chair Goodenow moved to approve the amended minutes of the 6/20/18 meeting.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

New Business
*Proposed Conciliation Agreement No. 19-01 – In Re the Matter of Jeffrey Bronfman
Executive Director Izumi-Nitao proposed Conciliation Agreement No. 19-01 to resolve a claim by the Commission regarding the excess contribution made by Respondent Jeffrey Bronfman to Friends of Kaniela Ing in violation of HRS §11-357.  Executive Director Izumi-Nitao stated that this matter was a result of an investigation initiated by General Counsel Kam pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  She stated that Respondent Bronfman has been informed of the violation, was notified of today’s meeting, and received a copy of the proposed conciliation agreement.  Executive Director Izumi-Nitao went over the facts in the case as stated in 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 amount of $166.67 set forth in the proposed agreement.

Vice Chair Goodenow moved to approve proposed Conciliation Agreement No. 19-01 as recommended by staff.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).

*Docket No. 19-02 – In Re the Matter of Ana-Lucia Desmarais and Ana Mo Des
Executive Director Izumi-Nitao reported that a complaint had been filed against Respondents Ana-Lucia Desmarais and Ana Mo Des for the failure to register with the Commission by timely filing an Organizational Report.

Respondent filed nomination papers on 6/5/18 to be a 2018 mayoral candidate for Kauai County.  Pursuant to HRS §11-321, Respondent was required to register with the Commission and file an Organizational Report by 6/15/18 which is 10 days from the date Respondent filed nomination papers.

On 6/12/18, Commission staff sent Respondent a letter via first class mail informing them that their Organizational Report was due on 6/15/18, that their failure to register violates campaign finance laws, and of the imposition of an administrative fine if it was not filed.  Respondent did not file their Organizational Report by 6/15/18.

On 6/21/18, Commission staff called Respondent but could not leave a message because the mailbox was not set up.  On 6/22/18, Commission staff sent Respondent a letter assessing a $100 fine for the failure to file the Organizational Report.

On 7/2/18, Respondent filed their Organizational Report.

On 7/2/18, Respondent called the Commission and said that she filed the Organizational Report on 6/15/18.  She thought that there might have been some kind of glitch.  Commission staff looked into the matter and upon review of the electronic records, found that there was no record of Respondent filing their Organizational Report on 6/15/18.  Respondent was informed that she could challenge the fine by way of this complaint.

On 7/6/18, Commission staff sent Respondent a copy of the complaint and informed her that the matter would be set on the 7/25/18 Commission Agenda.

On 7/24/18, Respondent emailed her position to the Commission asking that the complaint be dismissed and the $100 fine waived because she filed the report on time and is struggling financially.

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 $100, and order that the fine be deposited into the general fund of the state pursuant to HRS §11-340(g).

Chair Luke and Vice Chair Goodenow asked about the electronic records of filing reports.  Associate Director Baldomero responded that there was no record that Respondent filed the Organizational Report on 6/15/18, and no trace of the same computer used on 7/2/18 to submit the report being used on 6/15/18 when Respondent claimed to have filed the report. Chair Goodenow asked whether she would have received a confirmation that the report had been submitted even if she had used another computer. Associate Director Baldomero responded that she would have received a confirmation.

Commissioner Markley asked whether staff recalled speaking with Respondent.  Administrative Assistant Tumamao replied that there was no discussion about submitting the report.

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 Markley.  Motion carried (5-0).

*Consideration, Discussion, and Approval of the Enforcement of HRS §11-391(a)
Executive Director Izumi-Nitao stated that the Commission revised the Hawaii Administrative Rules in December 2016 to require all committees to have advertisement disclaimers on their signs and banners.  She stated that revising the administrative rules required notice and discussion in several Sunshine meetings with the Commission as well as providing a public hearing for the proposed rules to be discussed and approval by the Attorney General’s Office and the Governor.  She explained that the advertisement disclaimer requirement did not apply to sundry items and that before the revision, sundry items included signs and banners. She further explained that when the revision was submitted, the Commission at the time generally felt that signs and banners were much larger items such that including advertisement disclaimer would not be unreasonable. When the rule was approved and signed by the Governor in December 2016, all committees were required to have the disclaimer on their signs and banners. She stated that there were also 2 Commission newsletters in 2017 that informed committees of this requirement.  However, when S.B. 2992 was introduced last legislative session (which would have exempted signs and banners from the advertisement disclaimer requirement for all committees except for ballot issue committees), staff was not willing to enforce the requirement and communicated this position to committees attending trainings or seeking advice from the Commission.  Because S.B. 2992 was vetoed by Governor Ige on 7/10/18, staff discussed options with the Commission.

Discussion ensued regarding whether to enforce this requirement in the 2018 election.  Factors considered and discussed were notice, fairness, transparency, enforcement, accountability, and litigation.

Executive Director Izumi-Nitao stated that staff has come up with three options for the Commissioners to consider. The first option is to not enforce the requirement in the 2018 election as we are only 17 days away from the Primary Election, and it would be complicated to enforce. There are about 600 committees of which about 160 of them are new candidates. Of the new candidates, about 150 of them did not receive the Commission’s 2017 newsletters, although they received the most recent newsletter informing all committees that this issue will be discussed at this meeting. The second option is to enforce it immediately because the status of the law requires all committees to have disclaimers on their signs and banners. Finally, the third option is to allow committees to have a grace period to fix their signs and banners by delaying enforcement until 8/20/18. Executive Director Izumi-Nitao stated that implementation of the third option would allow the Commission to enforce the law while displaying accountability and transparency as the public and the committees will know who is putting forth signs and banners. She further stated that enforcement will become increasingly relevant as we move into the General Election, and that if we do not enforce this requirement, the public will not know who is putting up signs and banners including those put forth by ballot issue committees and Super PACs.

Chair Luke stated that the Commission must enforce the law while considering the staff’s budget and how this requirement will be enforced.

Commissioner Markley asked staff if they knew why the Governor vetoed SB 2992. General Counsel Kam responded that when staff was called into the Governor’s office, it was during the time when a poster was put up by a committee in opposition to Senator Hee. The committee followed the law by putting the advertisement disclaimer on the signs and banners which allowed the public to see who put up the posters. As a result of this incident, the Governor’s office felt that it was important to have the disclaimers on all signs and banners. Staff was notified of his intention to veto at this time.

Common Cause Executive Director Corie Tanida commented that advertisement disclaimers on signs and banners are good and promote transparency so enforcement is recommended.

Discussion ensued regarding the timing of enforcing the disclaimer requirement.

Vice Chair Goodenow moved to amend the agenda to include an 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 enforcement of HRS §11-391(a).  Motion seconded by Commissioner Markley.  Motion carried (5-0).

Vice Chair Goodenow moved to go into Executive Session for the aforementioned reason.  Motion seconded by Commissioner Markley.  Motion carried (5-0).

Public Session reconvened at 11:02 a.m.

Discussion ensued on enforcement with a delayed effective date or grace period (i.e., 8/1/18, 8/11/18, 8/12/18, or 8/20/18).  Notice of the requirement as well as time to comply (e.g., printing advertisement disclaimers stickers, locating all signs and banners) and potential problems of enforcement were discussed.  It was generally agreed that compliance was the preferred outcome rather than enforcement for purposes of transparency and accountability so that a grace period would help encourage corrective action.  Further, it was discussed that if the effective date was delayed until after the Primary Election, it would permit committees to focus on the General Election and remove noncompliant signs and banners for committees who do not prevail in the Primary Election.  As such, the later proposed date of 8/20/18 seemed more appropriate to the Commission.

Vice Chair Goodenow moved to approve enforcement of advertisement disclaimers on all committee signs and banners effective 8/20/18.  Motion seconded by Commissioner Markley.  Motion carried (5-0).

Discussion ensued regarding the administrative fine for committees who fail to have the advertisement disclaimer on their signs and banners pursuant to HRS §11-391(b).  Commissioners agreed that the fines set forth in the present Schedule of Fines was sufficient (i.e., $25 for the 1st violation, $100 for the 2nd violation, $500 for the 3rd violation, and need to go before the Commission to determine appropriate remedy for the 4th time and thereafter).

*Consideration, Discussion, and Approval of Amendments to the Commission’s Administrative Fine Guidelines Concerning Conciliation Agreements
Executive Director Izumi-Nitao sought Commission approval  to amend the Schedule of Fines concerning Conciliation Agreements for the non-filing and late filing of the Statement of Information for Electioneering Communications (“Statement”).  If approved, the fine for the non-filing of the Statement would be reduced from $500 to $166.67 (1st time) or $225 (2nd time), and the fine for the late filing of the Statement would be reduced from $250 to $83.33 (1st time) or $125 (2nd time).  All third violations would not be eligible for a Conciliation Agreement.  She further stated that the Commission submitted a bill in the 2018 legislative session that would have helped clarify the disclosure date of the Statement, but unfortunately, that bill did not get a hearing.  She recommended that the Commission try again in the next legislative session.

Chair Luke asked about prior enforcement of this area.  General Counsel Kam responded that it was not enforced prior to the Ninth Circuit’s decision in the Yamada lawsuit and the Commission had an administrative rule that exempted noncandidate committees from filing the Statement.  After Yamada was decided, the Attorney General’s Office advised us to repeal the administrative rule and begin to enforce the requirement that all committees file the Statement.  The repeal of the administrative rule was adopted in December 2016.  Thus, he commented that this is the first election that the Commission is enforcing fines for violation of this section.

Commissioner Markley moved to approve amending the Schedule of Fines to include Conciliation Agreements for the non-filing and late filing of the Statement of Information for Electioneering Communications. Motion seconded by Vice Chair Goodenow.  Motion carried (5-0).

Discussion ensued about whether to treat multiple Statements as the first violation or each one separately.  Executive Director Izumi-Nitao commented that it seemed fairer to treat all as a first time violation because committees were only getting notice of the violation, and that all subsequent violations moving forward would be treated as the second violation.  The Commissioners agreed.

Discussion ensued about whether to bundle 2 expenditures if it involved the same electioneering communication (i.e., printing and mailing of a bulk mailer).  The Commissioners agreed that this would be a difficult application as it requires two different contracts with different broadcast/publication/mailing dates and prices.

As a point of procedure, because there are multiple committees that have requested Conciliation Agreements, Executive Director Izumi-Nitao requested that at the 8/8/18 Commission meeting, she be allowed to provide a blanket statement as to the violation and then proceed with a request for the appropriate reduction in each matter.  The Commissioners agreed. 

Old Business
*Discussion and Update of Commission Legislation/Testimony and/or Other Campaign Finance Related Bills/Resolutions for the 2018 Legislative Session
General Counsel Kam provided an update on the 2 Commission’s bills that were signed into law and took effect on 7/1/18.

  • Act 80, S.B. 2153, H.D. 1, C.D. 1 → Repeals the requirement under HRS §11-322(a) that candidate committees organizational reports include the name and address of each contributor who contributed an aggregate amount of more than $100 to the candidate committee since the last election.
  • Act 81, S.B. 2154, H.D. 1, C.D. 1 → Repeals the requirement under HRS §11-323(a) that noncandidate committee organizational reports include contributions.

On 7/10/18, General Counsel Kam reported that Governor Ige vetoed S.B. 2992, S.D. 1, H.D. 1, C.D. 1 which exempted the advertising disclaimer requirement on all signs and banners except for ballot issue committees.

Report from the Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that one of the remaining 5 committees referred to the Attorney General – Civil Recoveries Division has satisfied payment of an outstanding Commission fine (i.e., Nora Pajimola).

As for upcoming reports, Executive Director Izumi-Nitao reported the following:

  • 1st Preliminary Primary Report (reporting period 1/1/18 to 6/30/18) due on 7/12/18 → 229 committees were expected to file
    • 211 (92%) filed on time
    • 3 (1%) filed late
    • 15 (7%) did not file (names posted on the Commission’s website)
    • As of today, all candidate committees have filed this report
  • Supplemental Report (reporting period 1/1/18 to 6/30/18) due on 7/31/18 – 150 committees are expected approximately to file
  • 2nd Preliminary Primary Report (reporting period 7/1/18 to 7/27/18) due on 8/1/18 – 233 committees are expected to file
  • Preliminary Primary Report (reporting period 1/1/18 to 7/27/18) due on 8/1/18 – 266 committees are expected to file

Chair Luke asked about the status of Kaniela Ing.  General Counsel Kam reported that the $2,000 excess was escheated and that a payment plan has been agreed upon whereupon Respondent Ing would pay $350 on the 1st of every month starting September 1, 2018.   He also stated that Respondent Ing has personally reimbursed his campaign for the prohibited expenses.  As for amending the 23 reports and filing the 2012 General Election Late Contributions Report, he has until October 26, 2018 to comply. General Counsel Kam reported that if Respondent Ing fails to comply with the terms and conditions of the Commission’s order, the matter will be referred to the Attorney General – Civil Recoveries Division. 

Update on the July CSC Newsletter
Executive Director Izumi-Nitao reported that on 7/11/18, the Commission’s July newsletter was emailed  to 980 committee members and members of the public.  The newsletter contained 17 articles.  The next newsletter will go out in January 2019.

Update on New 2018 Election Tool Sets
Associate Director Baldomero reported that a $19,000 contract with Socrata was successfully executed to build new dashboards for the 2018 Primary Election for the public to visualize the candidate’s data.  He stated that there have been multiple meetings with Socrata to develop the dashboard which will permit the public to see candidates’ data side-by-side.  He concluded that the launch date is on track for sometime before the Primary Election.

EXECUTIVE SESSION
Chair Luke asked for a motion to convene Executive Session to consider and approve Executive Session minutes from the Commission meeting on 6/20/18.

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

Public Session reconvened at 12:03 p.m.

Vice Chair Goodenow moved to adjourn the meeting.  Motion seconded by Commissioner Shoda.  Motion carried (5-0).  Meeting adjourned at 12:04 p.m.

Next Meeting:
Scheduled for Wednesday, August 8, 2018, at 12 p.m.