Campaign Spending Commission

Campaign Spending Commission
Leiopapa A Kamehameha Building, Room 204
October 14, 2015
10:00 a.m.

Commissioners Present
Gregory Shoda, Eldon Ching, Bryan Luke
Excused – Adrienne Yoshihara

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Ellen Kojima
Deputy Attorney General Valri Kunimoto

Call to Order
Chair Shoda called the meeting to order at 10:05 a.m.

Consideration and Approval of Minutes of September 9, 2015 Meeting
Amendments proposed by Deputy Attorney General Kunimoto –

Page 1, New Business – Draft Advisory Opinion No. 16-01 – Government Contractors, first sentence amended to read:  “Vice Chair Yoshihara recused herself because her firm, Chun Kerr LLP, represents the contractor who is requesting the advisory opinion.”

Page 1, last paragraph, first sentence amended to read:  “In response to the first question of whether contributions made by Y PAC based on a list compiled by Corporation X, the government contractor, would be in violation of HRS §11-355(a)(1), staff believe it would be a violation.”

Page 2, second paragraph, first sentence amended to read: “Mr. Imran Naeemullah of Chun Kerr LLP, representing the contractor, stated that they have reviewed and agreed with the draft advisory opinion.”

Page 9, Docket No. 16-11 – In Re the Matter of American Resort Development Association Resort Owners Coalition PAC, paragraph 8, amended to read:  “On 9/8/15, Respondents filed a response recommending that the Commission find that the report was timely field on 7/31/15 and not assess a fine, or in the alternative reduce the fine to $50.”

Page 9, paragraph 10, second sentence amended to read:  “Respondents claim that the report was filed on 7/28/15 and that they did not receive the 8/3/15 “Notice of Late Report” until 8/10/15.”

Page 11, Hawaii Administrative Rules
Second paragraph amended to read: “The proposed amendments were submitted to Governor Abercrombie for consideration, but no action was taken.  Staff intends to resubmit a new draft with additional amendments for Governor Ige’s consideration this fiscal year.”

Page 14, Old Business – Docket No. 15-113 – In Re the Matter of Debbie Hecht and Friends of Debbie Hecht, first paragraph, second sentence amended to read:  “She was informed that she needed to file a report which shows that she has no surplus or deficit to complete the termination process.”

Commissioner Luke moved to approve the minutes of September 9, 2015 as amended.  Motion seconded by Commissioner Ching.  Motion carried (3-0).

New Business
Docket No. 16-18 – In Re the Matter of Creighton Higa and Friends of Creighton Pono Higa
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents failed to file the Supplemental Report which was due on 7/31/15.

On 8/3/15, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

On 1/22/13, Commission staff received from Respondents a request to terminate registration which staff was unable to process because Respondents were showing a deficit on their report.  Staff attempted to contact Respondents, but the phone number listed on the Organizational Report was disconnected, and the last known email address was a delivery failure.

On 9/3/15, Commission staff sent Respondents a letter of “Unresolved Issues” informing them of the steps they needed to take that would bring them back into compliance with campaign spending laws and rules.  Respondents have not filed the Supplemental Report nor responded to staff’s efforts to obtain compliance.

On 10/2/15, Commission staff sent Respondents a copy of the complaint and informed Respondents that the matter would be set on the 10/14/15 Commission agenda.

The Executive Director recommended that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause exists to believe a violation of the campaign spending law has been committed, assess an administrative fine of $750, and order that Respondents file the Supplemental Report within 2 weeks of receipt of the Order.

The Executive Director also noted that at the 3/11/15 meeting, the Commission issued a preliminary determination in Docket No. 15-114 for Respondents’ failure to file the Supplemental Report.  Respondents were ordered to pay an administrative fine of $500 and file the report.  To date, the order has not been complied with.

Commissioner Ching moved to make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine and terms as stated in Docket No. 16-18 (i.e., assess a fine of $750 and order that the report be filed).  Motion seconded by Commissioner Luke.  Motion carried (3-0).

Docket No. 16-19 – In Re the Matter of Christy Ann Gusman, Aysia Valdez, and Friends of Christy Ann Gusman
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents were late in filing the Supplemental Report which was due on 7/31/15 and failed to pay the late filing report fine.

On 8/3/15, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

On 8/21/15, Respondents’ electronically filed the report.  On 8/24/15, Commission staff sent Respondents a “Notice of Fine” notifying them that a fine of $200 had been assessed for the late filing of the report with a requirement that payment be made by 9/7/15.

On 9/10/15, Commission staff called Respondents concerning the payment of the fine and left a message to contact Commission staff.

On 9/14/15, Commission staff called Respondent Valdez who said that she has not been in contact with Respondent Gusman, that she does not actively check her P.O. Box, and that she asked Respondent Gusman to remove her as treasurer from the committee.  Respondents did not pay the late filing report fine.

On 10/5/15, Commission staff sent Respondents a copy of the complaint and informed Respondents that the matter would be set on the 10/14/15 Commission agenda.

The Executive Director recommended that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause exists to believe a violation of the campaign spending law has been committed and assess an administrative fine of $200.

Commissioner Luke moved to make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine and terms as stated in Docket No. 16-19 (i.e., assess a fine of $200).  Motion seconded by Commissioner Ching.  Motion carried (3-0).

Docket No. 16-20 – In Re the Matter of Hawaii Independent Party and JoAnne Trask
Executive Director Izumi-Nitao reported that a complaint was filed alleging that Respondents were late in filing the Supplemental Report which was due on 7/31/15 and failed to pay the late filing report fine.

On 8/3/15, Commission staff sent a “Notice of Late Report” informing Respondents that the Supplemental Report had not been filed and the imposition of a fine.

On 8/6/15, Respondents’ electronically filed the report.  On 8/7/15, Commission staff sent Respondents a “Notice of Fine” notifying them that a fine of $200 has been assessed for the late filing of the report with a requirement that payment be made by 8/25/15.  The Commission staff, made numerous calls to the Respondents concerning payment of the fine, but payment has not been received.

On 10/5/15, Commission staff sent Respondents a copy of the complaint and informed Respondents that the matter would be set on the 10/14/15 Commission agenda.

The Executive Director asked that the complaint be amended to correct on page 2, paragraph 11, the date of the Commission’s meeting should be 10/14/15 and not 3/11/15.  She also stated that all communications to Respondents noticed the correct 10/14/15 date.

The Executive Director recommended that the Commission make a preliminary determination pursuant to HRS §11-405(a) that probable cause exists to believe a violation of the campaign spending law has been committed, assess an administrative fine of $200.

Commissioner Ching moved to make a preliminary determination that probable cause exists that a violation has been committed and to accept the fine and terms as stated in Docket No. 16-20 (i.e., assess a fine of $200).  Motion seconded by Commissioner Luke.  Motion carried (3-0).

Old Business
Draft Advisory Opinion 16-01 – Government Contractors
General Counsel Kam presented Commissioners a revised draft advisory opinion that addressed the requestor’s second supplemental letter.  The Attorney General’s Office has requested that the Commission defer approval until after they have had a chance to review the draft advisory opinion.

Mr. Imran Naeemullah of Chun Kerr LLP, representing the contractor, stated that they have reviewed the latest draft and agree with the draft advisory opinion.

Commissioner Ching moved to defer the matter until the next meeting.  Motion seconded by Commissioner Luke.  Motion carried (3-0).

Discussion and Approval of Proposed Amendments to the Hawaii Administrative Rules Affecting Campaign Spending Commission
General Counsel Kam stated that since the last meeting, he is proposing a new section to the Hawaii Administrative Rules (“HAR”) titled “Depletion of fund.”  The proposed rule is necessary to implement HRS §11-422.  General Counsel Kam stated that the proposed rule defines when the Hawaii Election Campaign Fund is “near depletion.”

Executive Director Izumi-Nitao stated that this is an important and necessary discussion because when the trust funds are deemed “near depletion,” under HRS §11-422(a), the Commission shall be under no obligation to prove public funding to candidates.

General Counsel Kam stated that using Associate Director Baldomero’s proposed calculations the “near depletion” amount would be a little over $800,000 sometime after the start of fiscal year 2018.

Associate Director Baldomero stated that the $800,000 represents operating expenses for a year and 3 or 4 months.

Discussion ensued regarding “near depletion” and “close to depletion” and whether the proposed calculation should provide for public financing.  After some discussion, it was determined that the proposed calculation for “near depletion” more closely defines “close to depletion” as set forth in HRS §11-422(b), and that there should be another definition for “near depletion,” at which point the Commission would be under no obligation to provide public funding.

Commissioners deferred further discussion until the next meeting.  The Commissioners asked for a new definition and projected calculations for “near depletion.” It was also recommended that a formula be drafted for “near depletion.”

Commissioner Ching moved to defer further discussion until the next meeting.  Motion seconded by Commissioner Luke.  Motion carried (3-0).

Docket Nos. 16-07, 15-78, and 15-36 – In Re the Matter of Gene Leslie, Laurie Aquino, and Friends of Bucky
Executive Director Izumi-Nitao reported that Respondents are requesting a reconsideration of fines totaling $1,750 assessed for Respondents’ failure to file reports and pay late filing report fines.

Executive Director Izumi-Nitao noted the prior complaints that have been filed against Respondents:

-At the 11/19/14 meeting, the Commission issued a preliminary determination in Docket No. 15-36 for Respondents’ failure to pay a fine for the late filing of the Final Primary Report.  Respondents were ordered to pay an administrative fine of $500.

-At the 1/14/15 meeting, the Commission issued a preliminary determination in Docket No. 15-78 for Respondents’ failure to pay a fine for the late filing of the Final Election Period Report.  Respondents were ordered to pay an administrative fine of $500.

-At the 9/9/15 meeting, the Commission issued a preliminary determination in Docket No. 16-07 for Respondents’ failure to file the Supplemental Report.  Respondents were ordered to pay an administrative fine of $750 and to file the report.

On 9/14/15, Respondents filed outstanding reports and contacted staff regarding terminating the committee’s registration.

On 9/21/15, Respondents sent a letter requesting reconsideration of fines assessed at prior meetings, a check for the balance of the committee’s fund to partially pay outstanding fines (i.e., $485.85), and requested non-enforcement of the fine balance. Respondents also submitted the committee’s request to terminate its registration with the Commission.

Commissioner Luke moved to accept Respondent’s request for reconsideration and the balance of the committee’s fund in satisfaction of fines assessed.  Motion seconded by Commissioner Ching.  Motion carried (3-0).

Docket Nos. 15-110 and 16-03 – In Re the Matter of Stuart Gregory and If You Didn’t Vote For Me Then You Paid Too Much
Executive Director Izumi-Nitao recommended that the matter be deferred until after agenda item “Report from the Executive Director” to permit the Commission to then go into executive session.

Report from Executive Director
Report on Compliance of Filing Timely Disclosure Reports
Executive Director Izumi-Nitao reported that there were no new updates on the Supplemental Report that was due on 7/31/15.

Update on Status of Appointment of New Commissioner
Executive Director Izumi-Nitao reported she contacted the Boards and Commissions Office regarding appointment of a fifth member.  She informed Commissioners that the applicant files are with the Governor’s Chief of Staff.

Update on 2015 CSC Annual Online Survey
Executive Director Izumi-Nitao reported that the survey was launched on 9/14/15 and will close on 11/1/15.  The survey consists of 36 questions in 6 areas: Relationship to the Commission; Communication with/or Access to the Commission; Education and Training provided by the Commission; Compliance and Enforcement; Public Funding; and other General Matters.

Associate Director Baldomero reported that this is the 4^th year that we are doing this survey which reviews fiscal year 2015.  To date, there have been 121 responses which surpasses the 114 responses in 2012, 93 responses in 2013, and 82 responses in 2014.  Results of the survey will be presented at the next meeting.

Acknowledgments were given to Common Cause for retweeting the Commission’s tweet about the survey.

Update on Submission of CSC Budget to DAGS for Fiscal Biennium 2015-17
Executive Director Izumi-Nitao reported that staff submitted the Commission’s budget request on 10/4/15, and after amendments were made, it was resubmitted on 10/5/15.

Docket Nos. 15-110 and 16-03 – In Re the Matter of Stuart Gregory and If You Didn’t Vote For Me Then You Paid Too Much
Executive Director Izumi-Nitao reported that Respondents are requesting reconsideration of fines assessed for failure to file two Supplemental Reports.

Executive Director Izumi-Nitao noted the prior complaints that have been filed against Respondents:

-At the 3/11/15 meeting, the Commission issued a preliminary determination in Docket 15-110 for Respondents’ failure to file the Supplemental Report.  Respondents were ordered to pay an administrative fine of $500 and to file the report.

-At the 9/9/15 meeting, the Commission issued a preliminary determination in Docket No. 16-03 for Respondents’ failure to file the Supplemental Report.  Respondents were ordered to pay an administrative fine of $750 and to file the report.

In July 2015, the notices sent to Respondents were returned to the Commission by the U.S. Postal Office as “Return to Sender, Box Closed and Unable to Forward.”

Executive Director Izumi-Nitao asked to convene executive session pursuant to HRS §92-5(a)(4) to continue discussion regarding this matter.

Chair Shoda moved to convene Executive Session to consult with attorney pursuant to HRS §92-5(a)(4).  Motion seconded by Commissioner Luke.  Motion carried (3-0).

Public session reconvened – 11:30 a.m.

Docket Nos. 15-110 and 16-03 – In Re the Matter of Stuart Gregory and If You Didn’t Vote For Me Then You Paid Too Much
Commissioner Luke moved to take no further administrative action on Docket Nos. 15-110 and 16-03 and approve the committee’s request for termination.  Motion seconded by Commissioner Ching.  Motion carried (3-0).

Next Meeting:
Scheduled for Wednesday, October 14, 2015.  Meeting will be held in Conference Room 1403 in the Leiopapa A Kamehameha Building.

To accommodate the scheduled 11:00 a.m. contested case hearing, Commissioners agreed to an earlier meeting start time if it is needed.

December meeting is scheduled for Wednesday, December 16, 2015.

Commissioner Ching moved to adjourn meeting.  Motion seconded Chair Shoda. Motion carried (3-0).  Meeting adjourned at 11:40 a.m.