CSC Newsletter – July 2018, Vol. 24, No. 2

Posted on Jul 11, 2018 in Newsletter

REMINDER TO ALL COMMITTEES TO FILE THE UPCOMING REPORTS

For Candidates Running in the 2018 Election and on the Primary Election Ballot, the first report due in 2018 is the 1st Preliminary Primary Report covering the period January 1 through June 30, 2018.  The report must be added to your reporting schedule and electronically filed on the Candidate Filing System no later than 11:59 p.m. Hawaiian Standard Time on Thursday, July 12, 2018.  Note: Candidates that have indicated to the Commission that their aggregate contributions and aggregate expenditures for the 2018 election period will total $1,000 or less and candidates that will only appear on the 2018 General Election Ballot are not required to file this report.

For Candidates Not Running in the 2018 Election, the next report due is the Supplemental Report covering the period January 1 through June 30, 2018.  The report must be added to your reporting schedule and electronically filed on the Candidate Filing System no later than 11:59 p.m. Hawaiian Standard Time on Tuesday, July 31, 2018.

For Noncandidate Committees, the first report due in 2018 is the Preliminary Primary Report covering the period January 1 through July 27, 2018.  The report must be added to your reporting schedule and electronically filed on the Noncandidate Committee Filing System no later than 11:59 p.m. Hawaiian Standard Time on Wednesday, August 1, 2018.

Failure to file your report by the deadline will result in a fine and the posting of your committee’s name on the Commission website under “Candidate Committees That Failed to File or Correct a Report” or “Noncandidate Committees That Failed to File or Correct a Report.”  Moreover, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting.  Therefore, we encourage all committees to timely file their reports.

NEW LAWS GOING INTO EFFECT AND REVIEW OF 2018 LEGISLATIVE SESSION

There are two new laws from the 2018 Legislative Session that went into effect on July 1, 2018.  They are:

  • Act 80 (S.B. No. 2153) – Repeals the requirement that candidate committee 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. No. 2154) – Repeals the requirement that noncandidate committee organizational reports include contributions.

On July 10, 2018, S.B. 2992 was vetoed by Governor Ige which would have exempted signs and banners from the advertisement disclaimer requirement for all committees except for ballot issue committees.

The Commission submitted seven bills this year and the two mentioned above were the only ones that passed.

ADVERTISEMENT DISCLAIMERS AND ADMINISTRATIVE FINES FOR VIOLATIONS

Advertisement disclaimers must be on all committees’ signs and banners because these items are no longer considered sundry items.  Under HRS §11-391(a), “any advertisement that is broadcast, televised, circulated, published, distributed, or otherwise communicated, including by electronic means, shall:

(1)  Contain the name and address of the candidate, candidate committee, noncandidate committee, or other person paying for the advertisement;
(2)  Contain a notice in a prominent location stating either that:

(A)  The advertisement has the approval and authority of the candidate; provided that an advertisement paid for by a candidate, candidate committee, or ballot issue committee does not need to include the notice; or
(B)  The advertisement has not been approved by the candidate; and

(3)  Not contain false information about the time, date, place, or means of voting.”

Failure to have the advertisement disclaimer will result in a fine pursuant to HRS §11-391(b) which provides that “[t]he fine for violation of this section, if assessed by the commission, shall not exceed $25 for each advertisement that lacks the information required by this section or provides prohibited information, and shall not exceed an aggregate amount of $5,000.”

The Commission has adopted a Schedule of Fines pursuant to Hawaii Administrative Rules (HAR) §3-160-73(a).  For advertisements missing a disclaimer, the fine schedule provides for a fine of $25 per advertisement for the 1st violation, a fine of $100 per advertisement for the 2nd violation, and a fine of $500 per advertisement for the 3rd violation.  Fines for further violations shall be determined by the Commission via a complaint, but shall not exceed an aggregate amount of $5,000.

If this is your first or second advertisement disclaimer violation, and the fine exceeds $25, a Conciliation Agreement which will result in a lower fine amount may be discussed with Commission staff subject to approval by the Commission at a public meeting conducted pursuant to HRS chapter 92.

With respect to committee signs and banners, because of the introduction of S.B. 2992, the Commission was awaiting the bill’s outcome with regard to enforcement of advertisement disclaimers and issuing fines.  Because it was vetoed, the Commission intends to discuss the issue at its July 25, 2018 meeting.  Please be aware of their decision which will be e-blasted and posted on the Commission’s website, Facebook and Twitter pages.

The Commission is taking these matters very seriously.  If you receive a notification from the Commission, we strongly recommend that you review all of your pending advertisements to see that they have the proper disclaimers, and if not, take the necessary measures to rectify them before the advertisements are made public.

ELECTIONEERING COMMUNICATIONS

An electioneering communication means any advertisement that is broadcast from a cable, satellite, television, or radio broadcast station; published in any periodical or newspaper or by electronic means; or sent by mail at a bulk rate, and that:  (1) Refers to a clearly identifiable candidate; (2) Is made, or scheduled to be made, either within 30 days prior to a primary or initial special election (i.e., July 12, 2018) or within 60 days prior to a general or special election (i.e., September 7, 2018); and (3) Is not susceptible to any reasonable interpretation other than as an appeal to vote for or against a specific candidate.

Persons, which include an individual, a partnership, a candidate committee or noncandidate committee, a party, an association, a corporation, a business entity, an organization, or a labor union and its auxiliary committees, who make electioneering communications in an aggregate amount of more than $2,000 during any calendar year, are statutorily required to file a Statement of Information for Electioneering Communications within 24 hours of executing a contract relating to an electioneering communication advertisement.

Once you have filed a Statement of Information, you will need to continue to file Statements of Information for all future electioneering communications even if the amount is under $2,000 because your committee met this threshold with the previous filing.

The Statement of Information is available on the Commission’s website and it must contain information set forth in HRS §11-341 and HRS §11-393.  It can be submitted by eSign or by printing and signing a writeable/printable PDF.  Persons who fail to submit this form timely will be in violation of the campaign finance laws.

Notably, this form must be filed in addition to the filing of any other required report.

The Commission will be considering at its July 25, 2018 meeting whether the fines for filing a late electioneering communications form and/or failing to file an electioneering communications form may be subject to a conciliation agreement.  Please be aware of their decision which will be e-blasted and posted on the Commission’s website, Facebook and Twitter pages.

REMINDER OF UPCOMING REPORTS

The reporting schedules have been posted on our website and are provided via the link below for your convenience to track upcoming reporting deadlines.  The reporting schedules are also available in the Commission’s downloadable calendar and can be downloaded to your digital calendar or your computer or mobile device.

Remember to add the necessary reports to your schedule in your respective electronic filing system (CFS and NCFS).  These reports must be electronically filed no later than 11:59 p.m. Hawaiian standard time on the day of the deadline.  You may also want to consider filing the reports early to avoid penalties because the reporting deadline is always a few days or weeks after the reporting period has closed.

Failure to file any report by the deadline will result in a fine and the name of your committee will be posted on the Commission’s website under “Candidate Committees That Failed to File or Correct a Report” or “Noncandidate Committees That Failed to File or Correct a Report.”  Further, if a fine is assessed against your committee and you fail to timely pay it, Commission staff will issue a complaint against your committee and set it for consideration at the next public Commission meeting.  Therefore, we encourage all committees to timely file their reports and pay any fines.

Lastly, please remember that when you electronically file your reports with the Commission, candidates, treasurers, and chairpersons (in noncandidate committees) are certifying that the information contained in the filed reports are true, complete, and accurate.  Therefore, it is strongly advised that you verify and validate your reports before you file them since the Commission will rely on the electronically filed information which could generate an inquiry/investigation.

REMINDERS FOR CANDIDATES RUNNING IN THE 2018 ELECTION

As the Primary Election is August 11, 2018, we offer the following reminders and tips to all candidates and their committees.  This is not a conclusive list so for more information please call us at (808) 586-0285, stop by our office at 235 S. Beretania Street, Room 300, or visit our website.

  • From the date a candidate files nomination papers to the date of the general election on November 6, 2018, candidate committees are prohibited from making charitable donations with campaign funds.
  • From the nomination paper deadline on June 5, 2018, or June 22, 2018 for candidates running in Senate District 19, to the general election on November 6, 2018, candidate committees are prohibited from using campaign funds to award scholarships to full-time students attending an institution of higher learning or a vocational education school.
  • If you use campaign funds to purchase 2 tickets to another candidate’s fundraiser, remember to keep the tickets for your records.
  • If you plan on having a fundraiser for which the amount of the ticket is more than $25 per person, you must file a Notice of Intent to Hold a Fundraiser with the Commission prior to the fundraiser’s start time and before the Commission’s office closes for the day at 4:30 p.m., Hawaiian Standard Time. Failure to comply with this requirement will result in a fine.
  • If your committee is using a debit card, please keep detailed records that will allow you to timely and accurately report all expenditures on the committee’s disclosure report.
  • If a Super PAC approaches your candidate committee, it is important to remember that its support of your nomination to election to office must be “independent” and that you and your agents such as committee officers are not “coordinating” campaign activities with them. If either of these circumstances occur, then the spending done by the Super PAC on your behalf will be deemed to be a contribution to your campaign subject to your contribution limit and the Super PAC will lose its status as a Super PAC.
  • A Super PAC’s use of your campaign material, without your knowledge or consent, in the Super PAC’s “independent” advertising on your behalf, will be considered a contribution to your campaign. This will likely result in an excess contribution on the part of the Super PAC for which a fine will be assessed by the Commission against the Super PAC.

If you need assistance and the Commission’s office is closed, please visit our website to see the various tools available (i.e., cyber videos, guidebooks and manuals) that will assist you, answer any questions, and/or help you to file reports in the electronic filing system.

2018 ELECTION OBSERVATIONS

In 2018, there are 295 candidates running for 102 seats up for election out of 128 elective seats in the state of Hawaii and its four counties.  The 102 seats up for election this year are: Governor (1), Lt. Governor (1), Senate (13), House (51), Honolulu City Council (4), Hawaii County Council (9), Maui Mayor (1), Maui County Council (9), Kauai Mayor (1), Kauai County Council (7), and Office of Hawaiian Affairs (5).  View the list of candidates running in 2018 and their Organizational Reports which includes their committee officers such as their appointed chairperson and treasurer.  19 candidates are unopposed this year, 27 incumbent candidates will not run for their seat, 14 incumbent candidates are running for higher office, and 19 former elected officials are attempting to make a comeback.  Notably, there are 40 out of 64 legislative races (i.e., 63%) that do not have a Republican Party candidate.  163 or 55% of the 295 candidates running this year have filed the Affidavit to voluntarily agree with the expenditure limit set for their office and 39 or 13% of the 295 candidates running this year have filed the Statement to notify the Commission of their intent to seek partial public funding.  View the list of Affidavit filers and the list of Statement filers.  So far this year, 3 candidates have received a total of $15,945 in partial public funding.  Future updates can be viewed on the “Public Funds Disbursed in 2018” page.  Also, 251 fundraisers have been held in 2018 with 77 of those fundraisers being held during the 2018 legislative session by legislators. View a list of fundraisers held in 2018 and an interactive chart of the same information.  There are 261 registered noncandidate committees of which 17 are Super PACs and 1 ballot issue committee.

RUNNING IN THE 2018 ELECTION?  TAKE A LOOK AT YOUR COMMITTEE DATA (OR YOUR OPPONENT’S COMMITTEE DATA) IN A VISUAL REPRESENTATION

Did you know that the Commission has transformed committee data into searchable data and visual graphics?  In colorful visuals, you will see pie charts, geo maps, and bar graphs of candidate committee and noncandidate committee data entered into our system.

If you are a candidate running in the 2018 election, you may want to see how your committee performed with regard to monies raised and spent.  You may want to compare this data with your opponent or see how other candidates did in other districts or races or how they fared in a prior election.  Click here to view candidate data in visual graphics.

You might also be interested in seeing noncandidate committees, Super PACS, and ballot issue committee data.  Of interest might be what races they got involved in, which candidates they supported (or opposed), who gave them money, or how they spent their money.  Click here to view noncandidate committee data in visual graphics.

GUIDANCE ON CANDIDATE COMMITTEE CONTRIBUTIONS TO CHARITABLE/COMMUNITY OR NON-PROFIT ORGANIZATIONS

Under HRS §11-381(a)(3), candidate committees may make donations to any community service, educational, youth, recreational, charitable, scientific, or literary organization as long as the total amount of all donations is no more than twice the maximum amount that one person may contribute to that candidate pursuant to HRS §11-357 and the donations cannot be made from the date the candidate files nomination papers to the date of the general election.

The Commission has been aware of candidate committees’ donations to charitable/community or non-profit organizations being reported as advertising that is directly related to the candidate’s campaign under HRS §11-381(a)(1).  In these instances, the candidate committee is characterizing its donation as advertising because the candidate committee is being recognized as a sponsor in the charitable/community or non-profit organization’s program or acknowledgment materials.  Given these circumstances, the Commission is likely to inquire further since HRS §11-381(a)(3) has amount and time limitations for donations to charitable or community organizations, while advertising directly related to a candidate’s campaign provision (i.e., HRS §11-381(a)(1)) has no limitations.  Generally, if the nonprofit organization reports the expenditure by the candidate committee as a tax-exempt donation to the IRS or records the expenditure as a gift on its books, the Commission will treat the expenditure likewise, and thus, the statutory amount and time limitations will apply.  However, if the nonprofit organization reports the expenditure as income to the IRS, or otherwise treats the expenditure as income on its books, the Commission will consider whether the expenditure is permissible as being directly related to the candidate’s campaign.  If the person soliciting the expenditure does not know if the organization will be treating the expenditure as a donation or income, the Commission advises that the candidate committee not make the payment to the nonprofit organization from campaign funds.  Of course, a candidate is always allowed to make an expenditure to these organizations from personal funds.

UPDATING ORGANIZATIONAL REPORTS

Beginning this year, candidate committees that login to the candidate filing system (CFS) and noncandidate committees that login to the noncandidate committee filing system (NCFS) will be presented with their Organizational Report. Please take the time to review your Organizational Report and make any needed changes.

HRS §§11-322(b) and 11-323(b) provides that any change in information previously reported in the organizational report shall be electronically filed with the commission within 10 days of the change being brought to the attention of the committee chairperson or treasurer.  Failure to do so may result in a fine as well as prevent the Commission from communicating with you.

$1,000 OR LESS AGGREGATE CONTRIBUTIONS AND EXPENDITURES

If your committee’s aggregate contributions and aggregate expenditures for the 2018 election period will total $1,000 or less, remember to check off the box on your Organizational Report with the Commission.  Pursuant to HRS §11-339, you need only electronically file the Final Election Period Report due on December 6, 2018, and subsequent Supplemental Reports if your committee has a surplus or deficit after the election.  If you exceed the $1,000 limit, you will then be required to electronically file all the other required reports.

VIOLATIONS OF THE CAMPAIGN FINANCE LAWS

The following candidate and noncandidate committees violated the Hawaii campaign finance laws and have failed to comply with the Commission’s orders by refusing to file required disclosure reports and/or pay assessed fines.  Pursuant to HRS §11-410(d), the Commission has been pursuing enforcement actions with the assistance from the Attorney General’s Office – Civil Recoveries Division.  Furthermore, pursuant to HRS §11-156, a candidate who has unfiled disclosure reports or unpaid fines will not receive a certificate of election should that candidate win in a subsequent election.

CANDIDATE COMMITTEES

  • Raymond Banda, Friends of Raymond Banda
  • Henry Kahula, Jr., Henry Kahula for Council
  • Toagaifasa Mataafa, Friends of Junior Mataafa
  • Creighton Higa, Friends of Creighton Pono Higa

NONCANDIDATE COMMITTEES

  • Change Hawaii
  • Protect Our Keiki
  • Save Ewa Beach
  • West Oahu 2010

ALTERNATIVE METHOD TO MAKE PAYMENTS FOR CAMPAIGN FINANCE VIOLATIONS

Committees who are assessed an administrative fine will be informed by the Commission that they have the option of paying their fine by check, money order, cash, and online via PayPal using their PayPal account or a guest account.  Committees that pay using a PayPal account may use a credit or debit card, Automated Clearing House (ACH), or their PayPal balance.  Committees that pay as a guest may only use a credit or debit card.  Once you have chosen which method you will use to pay (i.e., PayPal account or guest account), then you will need to enter the appropriate information (i.e., debit/credit card information, ACH information, etc.), your email address, and click Pay Now.  You will then receive a PayPal confirmation at the email address you provided and Commission staff will receive an email that a payment had been made.  The Commission staff will then attribute the payment accordingly.

Notably, there will be no fee to use this alternative option for paying an administrative fine.  The Commission will be absorbing the fee of 2.9% of the total payment plus $0.30.  However, if at any point in time the Commission is unable to afford these fees or the fees are approaching the state procurement threshold, we will so notify the committees that we must stop accepting online payments.  Until then, the Commission would like to extend this alternative payment method to achieve a higher level of compliance and offer better convenience to the committees.

2018 STANDARD MILEAGE RATE ANNOUNCED BY INTERNAL REVENUE SERVICE (IRS)

For those committees that seek reimbursement from campaign funds for the campaign related use of a personal vehicle, the federal standard mileage rate for 2018 is 54.5 cents per mile (which is more than last year).  See IRS Notice 2018-03 (Section 3) which was adopted by Comptroller’s Memorandum No. 2017-30.  The Commission reminds these committees that a daily mileage log noting the campaign use and personal use of the personal vehicle satisfies recordkeeping requirements of Hawaii Administrative Rules §3-160-23.  See, Hawaii Administrative Rules §3-160-45(b)(2).

DOWNLOADABLE CALENDAR AVAILABLE ON THE COMMISSION’S WEBSITE

An updated and downloadable calendar of events including (but not limited to) the candidate committee and noncandidate committee reporting schedules, the Commission’s monthly meeting schedule, and the State holidays can be downloaded by individuals into their Apple, Google, Microsoft, Outlook, and Yahoo calendars as well as many other calendar programs that use the standard iCal format, from the Commission’s website.  View the Commission’s Downloadable Calendar.

2018 MEETING SCHEDULE

Commission meetings for 2018 are scheduled for the 2nd Wednesday of each month at 10:00 a.m. in Conference Room 204, Leiopapa A Kamehameha Building, 235 S. Beretania Street, Honolulu, Hawaii 96813.  View the 2018 Meeting Schedule.  Meeting location, dates and times are subject to change so please check the “2018 Meeting Schedule” page prior to attending a meeting.

RESTORATION OF OPERATIONS TO STATE GENERAL FUNDS AND REMINDER TO CHECK OFF THE $3 BOX ON YOUR 2018 TAX RETURN

Although the Commission was successful in restoring operations to general funds in the 2017 legislative session, we still urge you to continue to check off the $3 “yes” box on your 2018 tax return which permits $3 from state funds (or $6 if married and filing a joint return) to be allocated to the Hawaii Election Campaign Fund.  The health and sustainability of public funding depends on greater participation of Hawaii taxpayers in checking off the $3 box.  Checking off this box does not increase your tax or reduce your refund.