Minutes for June 19, 2014 Meeting

Posted on Aug 1, 2014 in Minutes

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
June 19, 2014
10:00 a.m.

Commissioners Present:
G. William Snipes, Tina Gomes, Eldon Ching, Gregory Shoda, Adrienne Yoshihara

Staff Present:
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Ellen Kojima

Call to Order:
Meeting convened at 10:20 a.m. with Chair Snipes presiding.

Consideration and Approval of Minutes on 5/14/2014:
Commissioner Ching moved to approve the minutes of May 14, 2014.  Motion seconded by Commissioner Yoshihara.  Motion carried unanimously.

Old Business:
Docket No. 14-22 – In Re the Matter of Romy Cachola, Friends of Romy Cachola

A complaint was filed alleging Respondent Romy Cachola failed to reimburse his candidate committee for the personal use of the campaign committee vehicle and for improper expenditures.

General Counsel Kam reported that a written motion for continuance has been filed by Respondents.  The grounds for the continuance is their request for answers to interrogatories that has been filed with Commission staff.  Staff’s position is that the rules of discovery do not apply to administrative matters, and therefore, staff recommends that the written motion be denied which is presented in the Executive Director’s written opposition to Respondents’ motion.

General Counsel Kam further reported that he is currently engaged in settlement negotiations with Respondent’s attorney because it appears that contemporaneous records were not kept concerning the matters in question.

Attorney Michael Green was present representing Respondent Romy Cachola.  He stated that preliminary discussions with staff have resulted in recommendations to resolve this matter.  He also stated that he intended to take suggested recommendations to his client.

Chair Snipes asked whether discussions have been productive and whether it was just a matter of arriving at some kind of agreement.  General Counsel Kam responded affirming that discussions are progressing.

General Counsel Kam noted that there are two motions to continue, one in writing, and another that is not in writing.  Based on recent discussions to settle this matter, staff does not oppose the motion to continue.  But, staff opposes the written motion regarding Respondents’ request for answers to interrogatories.

Chair Snipes moved to deny Respondents’ written motion to continue.  Motion seconded by Commissioner Shoda.  Motion carried unanimously.

Commissioner Ching questioned the status of the interrogatories now that the motion has been denied.  Mr. Green withdrew the request for answers to interrogatories.

Chair Snipes moved to continue the matter until the July meeting on grounds of the ongoing settlement negotiations.  Motion seconded by Commissioner Shoda.  Motion carried unanimously.

Commissioner Yoshihara asked whether the fine discussions are in line with previously approved fines.  General Counsel Kam stated in the affirmative but noted that there is the matter of reimbursement which must be addressed.

General Counsel Kam summarized for Commissioners current settlement discussions.  For Court I (Vehicle Expenses), staff is asking for a percentage of the total reimbursement which reflects personal versus campaign use.  Regarding fines, for Count I, it is $1,000 for failure to keep records, and for Counts II and III, it is 25% of the total amount of improper expenditures.

Executive Director Izumi-Nitao noted for Commissioners that the reason for the current discussions is because of concerns that this matter would be difficult to resolve.  She stated that the records staff has received from Respondent have been scattered, incomplete, and would require verification.  With regard to the records that have been produced concerning the use of the vehicle purchased with campaign funds, because the records were not contemporaneous with the expenditures (i.e., Respondent is now creating a record identifying to the best of his recollection of what is personal versus campaign use), staff would have to recommend 100% reimbursement which staff knows is not a fair or reasonable position since staff acknowledges that there must have been some percentage of legitimate campaign use.

Discussion and Update of Proposed Amendments to the Hawaii Administrative Rules Affecting Campaign Spending Commission
General Counsel Kam reported that the request to proceed with public hearing is still awaiting Governor’s approval.

Discussion and Update of Commission Related Legislation for 2014 Legislative Session
General Counsel Kam reported that he met with the Governor’s office on June 5, 2014 on the following bills which he indicated that he would sign/approve.

HB 1604, HD 2 / SB 2119 – Requires the filing of CSC disclosure reports and payment of all outstanding fines to obtain certificate of elections.

– HB 1603 / SB 2118, HD 1 – If a candidate exceeds the expenditure limit, he/she must notify the Office of Elections, instead of the Chief Election Officer

Discussion and Consideration of Legislators’ Expenditures
Executive Director Izumi-Nitao reported that the issue with campaign expenditures and legislators’ allowance is that both permit use of either campaign funds or State funds for ordinary and necessary expenses as an officeholder.  The State Ethics Commission recently voted to approve staff to work on guidelines addressing the use of the legislative allowance.

State Ethics Commission Executive Director and General Counsel Les Kondo briefed the Commissioners on the Ethics Commission’s recent decision to provide guidelines addressing the legislative allowance.  He stated that an issue Ethics Commissioners addressed was whether they had oversight over the use of the legislative allowance.  Legislators felt that they have sole authority over the use of the legislative allowance and not the Ethics Commission.

The Ethics Commission rejected the legislators’ position that they did not have authority and decided to issue guidelines consistent with what staff has recommended.  The guidelines have been published on the Ethics Commission’s website and have been provided to Senate and House leadership.  The Ethics Commission’s position is that the legislative allowance is public funds and should only be used for public purposes; that it needs to be used for necessary and ordinary legislative expenses.  Les Kondo provided some examples such as:  Food expenses would be allowable as long as it is related to the legislator’s official duties, but appreciation meals and snack for staff would not be allowed; political and charitable donations would not be allowed because they are personal in nature; and membership dues/fees would be allowable only if they are to legislative organizations and related to the legislator’s office.

Executive Director Izumi-Nitao stated that because of this project and prior discussions with Commissioners, the Candidate Filing System has been modified to include an “Authorized Uses” field.  Candidates will be required to select one of eight permissible expenditures.  She recommended that the Commission issue a notification that on July 1st, the new requirement will go “live” and issue a reminder of what are permissible campaign fund expenditures.

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

Report on Compliance of Filing Timely Disclosure Reports
General Counsel Kam reported on the following matters:  (1) Noralyn Pajimola – A First Circuit Court hearing has been scheduled for July 10, 2014 before Judge Sakamoto concerning the nonpayment of a fine for an unfiled Supplemental Report; and (2) Adam Reeder – Mr. Reeder has indicated that he will pay the outstanding fine by 6/23/14.

Report on 2014 Committee Training Schedule
The deadline for filing nomination papers was 6/3/14.  Training sessions have been confirmed for Kauai on 6/24/15 and on Oahu for 6/25/14.  As of today, there is an insufficient number registered for Hawaii and Maui to confirm training.

Update on Civic*Celerator Project
Associate Director Tony Baldomero handed out a listing of the six (6) developed apps with a description of each app and their links.  He further reported that Common Cause is currently in the promotion phase and that on 6/2/14, they issued a press release announcing the apps.  Staff also contributed to the press release by acknowledging and thanking Common Cause and developers for their efforts.

Update on Data Visualization
Executive Director Izumi-Nitao reported that a contract has been signed with Socrata to develop an app for noncandidate committee data.  The Commission will be paying for the development of the app and OIMT/ICSC will absorb the cost for hosting the app.

Report on 2014 Election
Associate Director Baldomero presented a statistical snapshot of the 2014 election.  There are 128 elective seats in the State of Hawaii and its four counties with 102 seats up for election this year.  There are a total of 303 candidates with 4 non-partisan gubernatorial candidates have been disqualified by the Office of Elections because there are no non-partisan Lt. Governor candidates running.

There are 165 candidates who have filed the “Affidavit to Voluntarily Agree with the Campaign Expenditure Limit, “and of the 165 candidates, 24 incumbents have filed the Affidavit.  There are two benefits to filing the Affidavit: (1) a reduced filing fee; and (2) candidates are able to apply for public funding.

In 2012, we distributed $146,000 in public funds.  To date, 38 candidates have filed the “Statement of Intent to Seek Public Funds” with one application for funds having been filed. The deadline to file an application is December 4, 2014.

To date, there have been 138 fundraisers held, and 49 fundraisers were held during the 2014 legislative session.  The Governor has held 27 fundraisers since his election in 2010, with 15 in 2014.

Associate Director Baldomero also noted that are 20 Super PACs currently registered with the Commission.

Report on CSC July 2014 Newsletter
The targeted release of the CSC biannual newsletter is scheduled for the week of July 21st.  Topics for the newsletter include:

-Reminder of upcoming reports;
-2014 Election Observations;
-New Legislation for the 2014 Legislative Session;
-New Cyber-learning videos;
-Reminder of the searchable database and data visualization app;
-Modifications to the CFS – Authorized expenditures dropdown;
-Modifications to NCFS for independent expenditures;
-Update on public funding program;
-Repeal of the Corporate Reporting System;
-McCutcheon Decision;
-Reminder on Prohibited Campaign Expenditures;
-Reminder of the $3 Tax Check-off; and
-Upcoming Events (annual online survey, 2014 annual report)

Discussion of Scheduling July 2014 Meeting
Executive Director Izumi-Nitao suggested rescheduling the Commission’s July 9th meeting to July 23rd, 24th or 31st because of upcoming reporting dates.

A consensus of the Commissioners determined that July 31st  is the best date.  Executive Director Izumi-Nitao to confirm the meeting date once all the Commissioners have checked their schedules.

Chair Snipes moved to convene executive session to consult with attorney.  Motion seconded by Vice Chair Gomes.  Motion carried unanimously.

Public Session reconvened – 11:20 a.m

Chair Snipes moved to adjourn the meeting.  Motion seconded by Commissioner Yoshihara.  Meeting adjourned at 11:20 a.m.