Campaign Spending Commission

Campaign Spending Commission
Zoom Video Conference
January 12, 2022
10:00 a.m.

Commissioners Present
Stanley Lum, Bryan Luke, Neal Herbert, Vic Bonfiglio

Staff Present
Kristin Izumi-Nitao, Tony Baldomero, Gary Kam, Yayoi Tumamao, Janelle Tanna
Deputy Attorney General Candace Park

Guest
Sandy Ma (Common Cause), Ed Hahn (Hawaii Electricians Market Enhancement Program Political Fund), Robert Hanamoto (Hawaii Electricians Market Enhancement Program Political Fund), Travis Umemoto (Hawaii Electricians Market Enhancement Program Political Fund), Sylvia Litchfield (Green Party of Hawaii), Pane Meatoga

Excused
Maryellen Markley, Ph.D.

Call to Order
Chair Lum called the meeting to order at 10:03 a.m.

Chair Lum went over the procedures for this meeting via Zoom and introduced all who were present.  He asked the Commissioners if anyone else was with them in the room.  All the Commissioners present responded that no one else was with them.

Consideration and Approval of Minutes of Meeting on 12/15/21
Chair Lum asked for comments or changes to the minutes.  There were none.  Chair Lum called for a motion to approve the minutes.

Commissioner Luke moved to approve the minutes of the 12/15/21 meeting.  Motion was seconded by Commissioner Herbert.  Motion carried (4-0).

New Business
Executive Director Izumi-Nitao stated that the four (4) Conciliation Agreements on the agenda were a result of investigations initiated by Commission staff pursuant to HRS §11-314(7) to determine whether there had been a violation of the Hawaii campaign spending laws.  She stated that Respondents have been informed in a letter from Commission staff of the violation and have been notified of today’s meeting as well as received a copy of 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 amounts stated in each of the proposed agreements.

*Proposed Conciliation Agreement No. 22-09 – In Re the Matter of Ironworkers Local 625 PAC – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Primary Report and requests that they assess a reduced fine from $300 to $100 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 22-10 – In Re the Matter of Maui’s Green Future Project – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Primary Report and requests that they assess a reduced fine from $300 to $100 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Herbert moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Luke.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 22-11 – In Re the Matter of Hawaii Carpenters Political Action Fund – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Primary Report and requests that they assess a reduced fine from $1,500 to $750 as it is Respondent’s second violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Bonfiglio.  Motion carried (4-0).

*Proposed Conciliation Agreement No. 22-12 – In Re the Matter of Evergreen Adult Day Care Hawaii – Executive Director Izumi-Nitao explained that this proposed conciliation agreement concerns the late filing of the Preliminary Primary Report and requests that they assess a reduced fine from $300 to $100 as it is Respondent’s first violation. Chair Lum asked if there were any comments or questions.

Commissioner Luke moved to approve the proposed conciliation agreement.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

*Docket No. 22-04 – In Re the Matter of Damien Kim, Robert Hanamoto, and Hawaii Electricians Market Enhancement Program Political Fund – Respondent Robert Hanamoto, Treasurer and Trustee of the Hawaii Electricians Market Enhancement Program Political Fund, was present along with Mr. Travis Umemoto, Administrator, and Mr. Ed Hahn, Office Manager.

Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Damien Kim, Robert Hanamoto, and Hawaii Electricians Market Enhancement Program Political Fund for the late filing of the Preliminary Primary Report and the Late Contributions Report.

She reported that in the Organizational Report filed with the Commission, Respondent Damien Kim is the chairperson and Respondent Robert Hanamoto is the treasurer of the noncandidate committee called Hawaii Electricians Market Enhancement Program Political Fund.

Pursuant to HRS §11-336(a), Respondents were required to file the Preliminary Primary Report for the period covering 7/1/21 through 12/3/21 by 11:59 p.m. Hawaii standard time on 12/8/21.  Respondents did not file the report by the deadline.

On 12/9/21, Commission staff notified Respondents via first class mail of their failure to file the Preliminary Primary Report and that a fine would be imposed.

Pursuant to HRS §11-335(d) and §11-338, Respondents were required to file the Late Contributions Report by 11:59 p.m. Hawaii standard time on 12/15/21 because they received a contribution over $500 in the amount of $854.94 on 12/14/21 which was within the period of 14 calendar days through 4 calendar days prior to the primary election on 12/18/21.

On 12/20/21, Commission staff called Respondent Hanamoto about the late filing of the Preliminary Primary Report.  Respondents’ office manager Ed Hahn asked Commission staff if the fine could be waived.  Commission staff informed Mr. Hahn that the staff could not waive the fine, and further, that they were not eligible for a Conciliation Agreement because this was Respondents’ third late report.  Mr. Hahn was informed that Commission staff would file a complaint for the 1/12/22 Commission meeting and Respondents could then request a fine waiver.

On 12/20/21, Respondents filed the Preliminary Primary Report.

On 12/21/21, Respondents filed the Late Contributions Report.

On 12/22/21, Commission staff notified Respondents via first class mail that a fine of $3,600 would be assessed against them for filing the Preliminary Primary Report 12 days late pursuant to HRS §11-340. The letter informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine by 1/5/22.

On 12/23/21, Commission staff notified Respondents via first class mail that a fine of $500 would be assessed against them for the late filing of the Late Contributions Report pursuant to HRS §11-340. The letter informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine by 1/6/22.

On 12/23/21, Respondents faxed a letter to the Commission requesting that the fines for the late filing of the Preliminary Primary Report and the Late Contributions Report be abated.

On 12/28/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 1/12/22 Commission agenda.

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 $3,600 for the late filing of the Preliminary Primary Report and $500 for the late filing of the Late Contributions Report, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) and §11-410(e)  within two (2) weeks of receipt of the order.

Mr. Travis Umemoto addressed the Commission and asked for a waiver of the late filing fees.  He stated that he has always made it a point to be aware of the reporting deadlines due to past late filings and having to pay fines for them.  In the past, he had met with then Executive Director Bob Watada to make sure that the committee understood the campaign spending laws, attended a training session, and throughout the years had multiple phone conversations with Associate Director Baldomero.  Up until mid-2019, he was receiving all the mailings and emails from the Commission.  However, when the committee updated its contact information, he stopped receiving them.  When he was made aware of the late reports, he learned that Respondent Hanamoto’s email address was listed as the email contact, but according to Respondent Hanamoto, he did not receive any emails from the Commission.  Due to this issue, the committee updated its organizational report to list Mr. Ed Hahn’s email address, and since then, he has been receiving emails from the Commission.  Mr. Umemoto assured the Commission that this will not be a problem again moving forward.

Commissioner Luke asked about the communications that were sent to the committees about the Special Election and how many committees filed the Preliminary Primary Report on time.  He also asked Mr. Umemoto when was the last time anyone from the committee attended training or watched the training videos online.

Associate Director Baldomero responded that staff was made aware of the Special Election on 8/13/21 when Justin Kollar resigned from his position as the Kauai Prosecutor.  On 8/19/21, the Kauai County Council passed a resolution setting forth the Special Election to be held on 12/18/21 (Primary) and 2/26/22 (General).  On 9/9/21, the updated electronic filing systems, revised forms and reporting schedules were posted on the Commission’s website.  On 9/10/21, a memorandum about the Special Election was sent out to the prospective candidates and all noncandidate committees.  Subsequently, 7 additional emails were sent to the committees about the Preliminary Primary Report up until the deadline on 12/8/21.

All of the Commission’s email notifications were sent to the email address listed on Respondents’ organizational report which at the time belonged to Respondent Hanamoto and none of them bounced.  Associate Director Baldomero confirmed that the committee updated its email address on 12/23/21, 15 days after the 12/8/21 deadline.

With respect to the number of committees that filed on time, Associate Director Baldomero stated that 81% of noncandidate committees that were required to file filed on time.  There were 43 noncandidate committees that filed late and 23 of them were fined with the fine amounts ranging from $300 to $4,500.  The reason why 20 of them were not fined was because they were $1,000 or less committees and therefore were not required to file the Preliminary Primary Report.

With respect to trainings, Mr. Umemoto stated that the last training session he had attended was about 5 years ago.  He also stated that he looks at the Commission’s website every so often and went over the Commission’s website with Mr. Hahn.  Mr. Hahn added that he went through the reporting schedules, FAQs, and the guidebooks.

Commissioner Herbert asked about the past late report fines that were assessed against the Respondents.  He also asked how the $3,600 fine was calculated.  Administrative Assistant Tumamao stated that the Respondents were fined $350 for a late Preliminary Special Election Report on 4/13/09, $150 for another late Preliminary Special Election Report on 8/3/09, and $150 for a late Supplemental Report on 8/3/21.  With respect to the fine calculation, Associate Director Baldomero explained that the daily fine of $300 per day applied in this case because the 25% cap was higher.  The law provides for a fine of $300 a day not to exceed 25% of the total contributions or expenditures, whichever is greater.  Since the Respondents were 12 days late, $300 x 12 days is $3,600.  When looking at the activity of the report, there were $22,416.83 in expenses and therefore, the 25% cap which the fine amount cannot exceed came out to be $5,604.  Because the 25% cap is higher than the daily fine, the daily fine of $3,600 was assessed.

Commissioner Herbert asked if this was the Respondents’ first time filing the Late Contribution Report late.  Executive Director Izumi-Nitao responded that it was.

Commissioner Herbert moved to make a preliminary determination that probable cause exists that a violation had been committed and to accept the fines and terms stated in the complaint.  Motion seconded by Commissioner Luke.

Commissioner Luke stated that his vote is not to say that Respondents meant to violate the law, but to acknowledge that the violation occurred and that the reports were in fact filed late.  Commissioner Bonfiglio agreed.  Commissioner Herbert also agreed with Commissioner Luke and reminded Respondents that the emails are sent as a courtesy notification and that they are still responsible for following the laws.

Motion carried (4-0).

*Docket No. 22-05 – In Re the Matter of William Dickinson, Jeff Turner, and Green Party of Hawaii – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against William Dickinson, Jeff Turner, and Green Party of Hawaii for the late filing of the Preliminary Primary Report.

She reported that in the Organizational Report filed with the Commission, Respondent William Dickinson is the chairperson and Respondent Jeff Turner is the treasurer of the noncandidate committee called Green Party of Hawaii.

Pursuant to HRS §11-336(a), Respondents were required to file the Preliminary Primary Report for the period covering 7/1/21 through 12/3/21 by 11:59 p.m. Hawaii standard time on 12/8/21.  Respondents did not file the report by the deadline.

On 12/9/21, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 12/22/21, Respondents filed the report.

On 12/22/21, Commission staff returned Respondent Turner’s call.  Respondent Turner informed Commission staff that his assistant had entered his email address wrong on the Organizational Report, and therefore, he had not been receiving the eBlasts for the Special Election for the Kauai Prosecutor.  On 12/22/21, Respondents amended their Organizational Report with the correct email address.  Respondent Turner was informed that they were eligible for a conciliation agreement which would reduce the fine by one-half because this was their second violation, but Respondent Turner was not interested.

On 12/23/21, Commission staff notified Respondents via first class mail that a fine of $300 would be assessed against them for filing the report 14 days late pursuant to HRS §11-340. The letter informed Respondents that they could avoid the complaint process by waiving their rights to be heard at a HRS chapter 92 public meeting and a HRS chapter 91 contested case hearing, and voluntarily paying the fine by 1/6/22.

On 12/27/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 1/12/22 Commission agenda.

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 $300 for the late filing of the Preliminary Primary Report, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-340(g) within two (2) weeks of receipt of the order.

Ms. Sylvia Litchfield, Deputy Treasurer for the Green Party of Hawaii, was present and addressed the Commission.  She stated that she wanted to apologize for the trouble and spoke about the issues concerning Respondent Turner.  Ms. Litchfield explained that she is currently in training to take over or at least supervise him to straighten things out.  She further explained that she was sent by the Respondents to ask for a fine reduction because the fine amount of $300 would take away 20% of what they have in their bank account.  She asked for clarification on the fine and whether the $1,000 or less status applied to Respondents.

Associate Director Baldomero explained that the minimum fine of $300 was assessed because the 25% cap was lower.  There were $211.63 in expenditures reported for this reporting period.  25% of $211.63 is about $50.  Because the 25% cap is lower than the minimum fine amount of $300, the minimum fine was assessed.  He further added that Respondents went over the $1,000 threshold during this period, and therefore, did not qualify for the $1,000 or less status.

Commissioner Luke stated that the Respondents are eligible for a half reduction of the fine through a conciliation agreement.  However, he expressed his concerns about whether Ms. Litchfield had the authority to speak on behalf of the Respondents to agree to the conciliation agreement given the fact that Respondent Turner had turned it down when he was offered the reduction.

Ms. Litchfield responded that she has the authority to speak on behalf of the Respondents and that Respondent Turner sent her to appear before the Commission to ask for a reduction of the fine.  She explained that Respondent Turner did not mention to her that it was already offered to him, but she is certain he will agree to the conciliation agreement.

Commissioner Herbert asked if Ms. Litchfield as the deputy treasurer, has the authority to sign the conciliation agreement.  General Counsel Kam responded that she does.

Commissioner Luke moved to defer Docket No. 22-05 to the next meeting for Ms. Litchfield to work on a conciliation agreement with staff.  Motion seconded by Commissioner Bonfiglio.  Motion carried (4-0).

*Docket No. 22-06 – In Re the Matter of Joshua Reynolds, John Krueger, and Associations Inc. PAC (Associa PAC) – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Joshua Reynolds, John Krueger, and Associations Inc. PAC (Associa PAC) for the failure to file the Preliminary Primary Report.

She reported that in the Organizational Report filed with the Commission, Respondent Joshua Reynolds is the chairperson and Respondent John Krueger is the treasurer of the noncandidate committee called Associations Inc. PAC (Associa PAC).

Pursuant to HRS §11-336(a), Respondents were required to file the Preliminary Primary Report for the period covering 7/1/21 through 12/3/21 by 11:59 p.m. Hawaii standard time on 12/8/21.  Respondents did not file the report by the deadline.

On 12/9/21, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 12/20/21, Commission staff phoned Respondents and left a voicemail informing them that if they do not file the report by 12/24/21, a complaint would be filed.  The report was never filed.

On 12/29/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 1/12/22 Commission agenda.

On 1/5/22, Respondents filed the report.  Respondents do not qualify for $1,000 or less status such that they would only have to file the Final Election Period Report.

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 $500 for failure to file the Preliminary Primary Report, and order that any and all administrative penalties be deposited into the general fund pursuant to HRS §11-410(e) within two (2) weeks of receipt of the order.

Commissioner Herbert 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 Luke.  Motion carried (4-0).

*Docket No. 22-07 – In Re the Matter of Jennifer Cuthbert and ASTS Management, LLC – Executive Director Izumi-Nitao reported that a complaint by the Executive Director had been filed against Jennifer Cuthbert and ASTS Management, LLC for the failure to file the Preliminary Primary Report.

She reported that in the Organizational Report filed with the Commission, Respondent Jennifer Cuthbert is the chairperson and treasurer of the noncandidate committee called ASTS Management, LLC.

Pursuant to HRS §11-336(a), Respondents were required to file the Preliminary Primary Report for the period covering 7/1/21 through 12/3/21 by 11:59 p.m. Hawaii standard time on 12/8/21.  Respondents did not file the report by the deadline.

On 12/9/21, Commission staff notified Respondents via first class mail of their failure to file the report and that a fine would be imposed.

On 12/20/21, Commission staff phoned Respondents and left a voicemail with Respondent Cuthbert’s assistant that if they do not file the report by 12/24/21, a complaint would be filed.  The report was never filed.

On 12/29/21, Commission staff sent Respondents a copy of the complaint and set the matter on the 1/12/22 Commission agenda.

On 1/7/22, Respondents filed the report.  Upon review, Commission staff noted that Respondents qualify as a $1,000 or less committee such that they would only have to file the Final Election Period Report.  Commission staff confirmed this with Respondent Cuthbert.  As such, Executive Director Izumi-Nitao recommended that this matter be dismissed.

Commissioner Bonfiglio moved to dismiss the complaint.  Motion seconded by Commissioner Herbert.  Motion carried (4-0).

Old Business
*Consideration, Discussion, and/or Update of Commission Legislation and Other Campaign Finance Related Bills/Resolutions for the 2022 Legislative Session – General Counsel Kam reported that since the Commission’s last meeting on 12/15/21, Commission staff met with Senator Sharon Moriwaki (GVO) on 12/16/21, Senate President Ron Kouchi on 12/17/21, Representative Angus McKelvey (GVR) on 1/5/22, and House Speaker Scott Saiki and Representative Scot Matayoshi (JHA) on 1/10/22.

Executive Director Izumi-Nitao reported that informational briefings were held 1/6/22 before Senate Ways & Means and House Finance.

Chair Lum asked if there were any questions or comments.  There were none.

Report from the Executive Director
*Report on Compliance of Filing Timely Disclosure Reports – Executive Director Izumi-Nitao reported the following:

• Supplemental Report for the period covering 7/1/21 through 12/31/21 is due on 1/31/22. 402 candidate committees are required to file this report.
• Final Primary Report for the period covering 12/4/21 through 12/18/21 was due on 1/7/22:
  • 2 candidate committees were required to file
    • Both candidate committees filed on time (100%)
  • 215 noncandidate committees were required to file
    • 202 (94%) filed on time
    • 13 (6%) failed to file on time
    • 37 noncandidate committees declared $1,000 or less status, so were not required to file this report
    • As of today, 9 noncandidate committees still have not filed

With regard to prior reports, Executive Director Izumi-Nitao reported that the number of committees that have not filed their reports remains the same.  She added that Commission staff continues to work with AG-CRD to obtain full compliance.

*Update on Special Election for Kauai Prosecutor – Executive Director Izumi-Nitao reported that Rebecca Like won the Special Primary Election on 12/18/21 with 70% of the vote against Shaylene Iseri.  Voter turnout was 26%.  Both Like and Iseri will be running again for the Special General Election on 2/26/22.

Commissioner Herbert moved to adjourn the meeting.  Motion was seconded by Commissioner Luke.  Motion carried (4-0).  Meeting adjourned at 11:12 a.m.

Next Meeting:
Scheduled for Wednesday, February 9, 2022 at 10 a.m. via Zoom